Analyst Presentation FY02 GROWTH AND CONSOLIDATION

Transcription

1 BancoSabadell Analyst Presentation FY02 GROWTH AND CONSOLIDATION 27th January

2 AGENDA 1. MAIN FINANCIAL HIGHLIGHTS 2. ANALYSIS FY02 FINANCIAL RESULTS 3. BUSINESS EVOLUTION 4. BANCO SABADELL CORPORATE GOVERNANCE 5. PRIORITIES FOR

3 MAIN FINANCIAL HIGHLIGHTS m % growth /2001 Total Assets , ,2 2,5 Gross loans to customers , ,7 13,3 On-balance sheet customer funds , ,7 6,1 Funds under management , ,3 7,0 GROUP NET PROFIT 216,5 220,4 1,8 3

4 GROUP NET PROFIT m % growth /2001 Net interest income 703,1 714,4 1,6 Gross operating income 1.040,0 1008,1-3,1 INCOME BEFORE TAXES 361,7 260,3-28,0 Corporate tax -135,8-29,1-78,6 Minority interests -9,4-10,8 14,8 GROUP NET PROFIT 216,5 220,4 1,8 4

5 AGENDA 1. MAIN FINANCIAL HIGHLIGHTS 2. ANALYSIS FY02 FINANCIAL RESULTS 3. BUSINESS EVOLUTION 4. BANCO SABADELL CORPORATE GOVERNANCE 5. PRIORITIES FOR

6 NET INTEREST INCOME (I) m 0,4 13,4 5,5 6, Net Int. Inc. 714,4 175,2 1Q02 2Q02 2,71% 2,62% 169,4 171,5 173,0 1Q02 2Q02 3Q02 4Q02 Adjusted net interest margin: 3Q02 4Q02 2,58% 2,57% 19,8 683,3 +1,6% 703,1 714,4 25,3 689, Net comms 285,1 ROF 8,6 Gross Oper.Inc ,1 Other op.inc 16,2 Personnel exp. -380,9 Admin. exp. -286,2 Deprec.& amort. -57,3 Other Op.costs -7,8 Net Oper. Inc. 292,0 Equity-acc hold. 45,5 Goodwill amort. -127,1 Group transac. -26,6 B&DD's provis. -101,1 Other income 177,5 Inc. before tax. 260,3 Corporate tax -29,1 Minority interes. -10,8 Group net prof 220,4 Adjusted net interest income Dividends and others 6

7 NET INTEREST INCOME (II) % 1.- 6,73 5,85 5,79 Commercial liabilities natural Floor 5,74 5,68 Loan aveg.int. rate - 50,8 m 2,80 2,10 2,12 2,13 2,11 Deposit aveg. int.rate dec-01 mar-02 jun-02 sep-02 dec ,3% % loan growth ,2 m +9,5% % deposit growth 1 Capital markets funding dec-01 mar-02 jun-02 sep-02 dec Product mix evolution economical effect - 14,8 m 1 Average volume 7

8 MORTGAGE EVOLUTION m +25,4% Mortgages 7.596, , Mortgages 39,7% 44,1% Others 60,3% 55,9%

9 COMMISSIONS m Lending 68,9 70,7 69,7 20,9 21,5 21,5 75,8 22, Net Int. Inc. 714,4 Net comms 285,1 ROF 8,6 Gross Oper.Inc ,1 Services 29,2 30,2 29,9 35,4 Other op.inc 16,2 Personnel exp. -380,9 Ass.Mgm 18,8 19,0 18,3 18,2 Admin. exp. -286,2 Deprec.& amort. -57,3 Other Op.costs -7,8 1Q02 2Q02 3Q02 4Q02 Net Oper. Inc. 292,0 Equity-acc hold. 45,5 Lending 280,5 82,4 +1,6% 285,1 86,3 +4,7% Goodwill amort. -127,1 Group transac. -26,6 B&DD's provis. -101,1 Other income 177,5 Inc. before tax. 260,3 Corporate tax -29,1 Minority interes. -10,8 Services 115,0 124,6 +8,4% Group net prof 220,4 Ass.Mgm 83,1 74,2-10,8%

10 RESULTS ON FINANCIAL TRANSACTIONS m 2002 Net Int. Inc. 714,4 Foreign exchange Other Net comms 285,1 ROF 8,6 56,4 Gross Oper.Inc ,1 Other op.inc 16,2 24,0 26,6 29,3 Personnel exp. -380,9 Admin. exp. -286,2 Deprec.& amort. -57,3 Other Op.costs -7,8 17,3 20,9 8,6 Net Oper. Inc. 292,0 Equity-acc hold. 45,5 Goodwill amort. -127,1 Group transac. -26,6 6,7 5,7 27,1 25,1 Recurrent B&DD's provis. -101,1 Other income 177,5 Inc. before tax. 260,3 Corporate tax -29,1 4Q01 4Q02-16,5 Minority interes. -10,8 Group net prof 220,

11 BANCO HERRERO SIMCAVS SALE EFFECT m ROF Minorities Others 1 1Q02 2Q02 3Q02 4Q ,4-8,8-19, ,1 4,3 9,2 1, Net Int. Inc. 714,4 Net comms 285,1 ROF 8,6 Gross Oper.Inc ,1 Other op.inc 16,2 Personnel exp. -380,9 Admin. exp. -286,2 Deprec.& amort. -57,3 Other Op.costs -7,8 Net Oper. Inc. 292,0 Equity-acc hold. 45,5 Goodwill amort. -127,1 Group transac. -26,6 0,5 B&DD's provis. -101,1 Other income 177,5 Net Result on P/L account -4,6 Results on Group transactions -3,6-8,2 Inc. before tax. 260,3 Corporate tax -29,1 Minority interes. -10,8 Group net prof 220,4 1 Other effects on the P & L account due to SIMCAVS global consolidation 11

12 OTHER OPERATING INCOME m Average volume of renting 31, Net Int. Inc. 714,4 Net comms 285,1 ROF 8,6 Gross Oper.Inc ,1 Other op.inc 16,2 21,7 8,8 6,6 2,2 16,2 9,8 6,4 Personnel exp. -380,9 Admin. exp. -286,2 Deprec.& amort. -57,3 Other Op.costs -7,8 Net Oper. Inc. 292,0 Equity-acc hold. 45,5 Goodwill amort. -127,1 Group transac. -26,6 B&DD's provis. -101,1 Other income 177,5 Inc. before tax. 260,3 Corporate tax -29,1 Minority interes. -10,8 Group net prof 220, Renting Others 12

13 PERSONNEL EXPENSES m 361,5 0,8 2,6 6,1 352,0 +1,7% 380,9 5,3 7,8 9,7 358, Recurrent personnel expenses Staff severance costs ActivoBank Remuneration and training of Sibis/Euro/ B. Herrero integration 2002 Net Int. Inc. 714,4 Net comms 285,1 ROF 8,6 Gross Oper.Inc ,1 Other op.inc 16,2 Personnel exp. -380,9 Admin. exp. -286,2 Deprec.& amort. -57,3 Other Op.costs -7,8 Net Oper. Inc. 292,0 Equity-acc hold. 45,5 Goodwill amort. -127,1 Group transac. -26,6 B&DD's provis. -101,1 Other income 177,5 Inc. before tax. 260,3 Corporate tax -29,1 Minority interes. -10,8 Group net prof 220,4 13

14 STAFF /12/01 Early retirements Redundancies New employees 31/12/02 Average age: 40 years 43,7% employees with University education Internal promotion: 786 changes of professional level 14

15 ADMINISTRATIVE EXPENSES m 192,7 1,8 1,9 8,5 22,3 286,2 12,3 5,6 47,9 34, Net Int. Inc. 714,4 Net comms 285,1 ROF 8,6 Gross Oper.Inc ,1 Other op.inc 16,2 Personnel exp. -380,9 Admin. exp. -286,2 169,4-11,2 +9,8% 186, Recurrent expenses Software amort. Listing of BS Deprec.& amort. -57,3 Other Op.costs -7,8 Net Oper. Inc. 292,0 Equity-acc hold. 45,5 Goodwill amort. -127,1 Group transac. -26,6 B&DD's provis. -101,1 Other income 177,5 Inc. before tax. 260,3 Corporate tax -29,1 Minority interes. -10,8 Group net prof 220,4 Euro/Sibis/B Herrero ActivoBank Other projects Reversion of other provisions 15

16 DEPRECIATION AND AMORTISATION OF ASSETS m 3,6 49,8 53, , Net Int. Inc. 714,4 Net comms 285,1 ROF 8,6 Gross Oper.Inc ,1 Other op.inc 16,2 Personnel exp. -380,9 Admin. exp. -286,2 Deprec.& amort. -57,3 Other Op.costs -7,8 Net Oper. Inc. 292,0 Equity-acc hold. 45,5 Goodwill amort. -127,1 Group transac. -26,6 B&DD's provis. -101,1 Other income 177,5 Inc. before tax. 260,3 Corporate tax -29,1 Minority interes. -10,8 Group net prof 220,4 ActivoBank's setting up costs amort. Assets' amortisation 16

17 EQUITY ACCOUNTED HOLDINGS m 34,9 17,9 0,5 15,7 0,7 45,5 21,6 20,9 6,1-3, Net Int. Inc. 714,4 Net comms 285,1 ROF 8,6 Gross Oper.Inc ,1 Other op.inc 16,2 Personnel exp. -380,9 Admin. exp. -286,2 Deprec.& amort. -57,3 Other Op.costs -7,8 Net Oper. Inc. 292,0 Equity-acc hold. 45,5 Goodwill amort. -127,1 Group transac. -26,6 B&DD's provis. -101,1 Other income 177,5 Inc. before tax. 260,3 Corporate tax -29,1 Minority interes. -10,8 Group net prof 220,4 Others Bs Vida Real Estate BCP 17

18 GOODWILL AMORTISATION m Amount which is balanced against write-downs of fin.fixed assets (126,2) 35,1 13,9 19,5 1,7 127,1 123,01 4, Others BH BCP Net Int. Inc. 714,4 Net comms 285,1 ROF 8,6 Gross Oper.Inc ,1 Other op.inc 16,2 Personnel exp. -380,9 Admin. exp. -286,2 Deprec.& amort. -57,3 Other Op.costs -7,8 Net Oper. Inc. 292,0 Equity-acc hold. 45,5 Goodwill amort. -127,1 Group transac. -26,6 B&DD's provis. -101,1 Other income 177,5 Inc. before tax. 260,3 Corporate tax -29,1 Minority interes. -10,8 Group net prof 220,4 1 The partial amortisation of 126,2m BCP goodwill against the general risk provision is reflected in the Banco Sabadell Group balance-sheet since 1/1/02 18

19 TAX CHARGE ANALYSIS 2002 Inc. before tax. 260,3 Corporate tax -29,1 Minority interes. -10,8 Group net prof 220,4 260,3 35,0% -36,4 11,2% 91,1-25,6 29,1 Income before taxes 31/12/02 Theorical taxes Asset sale deduc. Other Taxes 19

20 AGENDA 1. MAIN FINANCIAL HIGHLIGHTS 2. ANALYSIS FY02 FINANCIAL RESULTS 3. BUSINESS EVOLUTION 4. BANCO SABADELL CORPORATE GOVERNANCE 5. PRIORITIES FOR

21 NUMBER OF PRODUCTS PER CLIENT We are increasing our market penetration... dec-01 mar-02 jun-02 sep-02 dec-02 Commercial Banking 4,30 4,38 4,44 4,46 4,54 SMEs Banking 5,87 5,92 6,01 6,32 6,36 Banco Herrero 2,17 2,14 2,08 2,09 2,12 Solbank 3,22 3,34 3,35 3,33 3,35 Sabadell Banca Privada 4,36 4,40 4,47 4,51 4,57 TOTAL GROUP 3,55 3,61 3,63 3,66 3,73 3,55 3,61 3,63 3,66 3,73 New clients dec-01 mar-02 jun-02 sep-02 dec-02 21

22 GROSS LOANS TO CUSTOMERS (I) with a diversified business structure Of which to SMEs... 40% 20% 32% 62% 26% 14% Bill discounting Mortgages Leasing Others Of which to individuals... 6% 1% 20% Individuals SMEs Others Public Adm 80% Individuals includes shops and self-employed people Mortgages Customer lending 22

23 GROSS LOANS TO CUSTOMERS (II) m ,3 +13,3% ,7 Mortgages 7.596,8 +25,4% 9.526,8 171,3 518,5 Others , ,9 +5,1% 218,0 300,8 dec-01 dec-02 Other securitised loans Securitised mortgages 23

24 MORTGAGES: HIGH LOYALTY LEVEL 5,23 4,74 4,86 4,92 5,21 5,36 5,18 2,71 Without Mortgage <1 year 1 year 2 years 3 years 4 years 5 years >5 years Penetration ratio Average ratio with Mortgages 24

25 ON-BALANCE SHEET CUSTOMER FUNDS m ,2 +6,1% ,7 Debt securities Repo s 2.771, , , ,3 Customer deposits (ex repo s) , ,9 dec-01 dec-02 25

26 AUM (OFF BALANCE SHEET ITEMS) m 7.889, ,8 Insurance 1.871,2 +20,4% 2.253,4 Pension funds 1.348,6 +12,9% 1.522,8 Mutual funds 4.669,7-2,1% 4.569,6 dec-01 dec-02 26

27 ASSET MANAGEMENT (I) Market share evolution 2,30% 2,34% 2,28% 2,30% 2,36% 2,37% 2,23% 2,23% 2,20% dec-00 mar-01 jun-01 sep-01 dec-01 mar-02 jun-02 sep-02 dec-02 AuM evolution m dec -00 mar-01 jun-01 sep-01 dec -01 mar-02 jun-02 sep-02 dec

28 ASSET MANAGEMENT (II) Mutual funds: Breakdown by fund category Fixed-Income Funds 41% 34% Balanced Funds Equity Funds 5% 20% Fixed-Income Guaranteed Return Funds 1 Source: Inverco MUTUAL FUNDS: MARKET SHARE BY FUND CATEGORY 1 FIXED- INCOME BALANCED EQUITY FIXED-INCOME GUARANTEED TOTAL MUTUAL FUNDS dec-01 1,61% 3,61% 1,25% 3,30% 2,34% dec-02 1,50% 3,15% 1,29% 4,38% 2,37% 28

29 BANCASSURANCE (I) Technical reserves evolution m 1.871,2 +20,4% 2.253,4 333,1 313, ,0 483,7 255, ,7 dec-01 dec-02 Guaranteed interest Unit Linked Annuities Market share evolution mar-02 jun-02 sep % 1.54% 2.09% 2.12% 2.11% 2.12% Source: ICEA (Investigación cooperativa entre entidades Aseguradoras y Fondos de Pensiones) and DGS (Dirección General de Seguros) 29

30 BANCASSURANCE (II) Life risk insurance: Premium evolution m + 23,4% % Penetration 13,1% 16,3 20,

31 BANCASSURANCE (III) Pension Funds: assets under management m +12,9% 1.522, ,6 666,0 804,6 682,6 718,2 dec-01 Individuals dec-02 Companies Market share evolution mar-02 jun-02 sep % 3.76% 3.12% 3.13% 3.08% 2.99% Source: INVERCO 31

32 BASIC MARGIN % growth /2001 NET INTEREST INCOME 703,1 714,4 1,6 COMMISSIONS 280,5 285,1 1,6 OTHER COMMISSIONS 197,4 210,9 6,8 MUTUAL AND PENSION FUND COMMISSIONS 83,1 74,2-10,8 BASIC MARGIN 983,6 999,4 1,6 32

33 COMMISSIONS m % growth Related to assets 57,6 58,3 1,2% Guarantees 36,4 38,1 4,7% Lending commissions 82,4 86,3 4,7% Cards 53,3 57,7 8,3% Payment orders 36,0 37,2 3,3% Securities 19,0 14,8-22,1% Customer accounts 9,5 13,0 36,8% Currency exchange 6,4 4,6-28,8% Life insurance 3,9 5,5 41,0% Service commissions 115,0 124,6 8,3% Mutual funds 67,0 58,0-13,4% Pension funds 16,1 16,2 0,6% Asset mgm commissions 83,1 74,2-10,7% TOTAL 280,5 285,1 1,6% 33

34 CUSTOMER BASIC MARGIN Network basic margin by business units 51% Commissions Net interest income 26% 13% 3% 5% 3% BS Commercial BS SMEs BH Commercial BH SMEs SOLBANK SBP 34

35 NPL RATIO AND COVERAGE % 334, ,07 1 0,56 0,55 0,51 0,58 0,52 0,53 0,46 0,47 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Including off-balance sheet risks and their provisions 1 As of 31/12 35

36 COMMERCIAL STRUCTURE Branches by brand (908) Network employees (5.316) Banco Sabadell Banco Herrero Solbank Sabadell Banca Privada Banco Sabadell Banco Herrero Solbank Sabadell Banca Privada As of 31/12/02 36

37 CHANNELS (I) Branch expansion NETWORK 31/12/01 OPENINGS CLOSURES NETWORK REAL 31/12/02 Forecast 31/12/02 REAL 31/12/02 Forecast 31/12/02 Forecast 31/12/02 REAL 31/12/02 Banco Sabadell Banco Sabadell (SME Banking) Solbank Banco Herrero+Banco Asturias Sabadell Banca Privada TOTAL Areas of Banco Sabadell expansion: Madrid, Barcelona, Valencia basically. 37

38 CHANNELS (II) Remote and on-line contracts: companies mar-01 jun-01 sep-01 dec-01 mar-02 jun-02 sep-02 dec-02 INFOBANC MANAGERLAND Total companies 38

39 CHANNELS (III) Remote and on-line contracts: individuals mar-01 jun-01 sep-01 dec-01 mar-02 jun-02 sep-02 dec-02 39

40 CHANNELS (IV) ATMs installed 4Q02/4Q01 7,12% Q01 1Q02 2Q02 3Q02 4Q02 Market share evolution (over 4B system) (without BH) year 2000 year Q02 2Q02 3Q02 4Q02 6.3% 6.2% 6.1% 6.1% 6.2% 6.5% 40

41 CHANNELS (V) Issued cards ,4% +22,3% dec-01 mar-02 jun-02 sep-02 dec-02 Debit Credit Market share evolution (4B system) Year Q02 2Q02 3Q02 4Q02 Debit 5.9% 6.6% 6.7% 7.3% 7.6% Credit 7.4% 8.4% 8.6% 9.2% 9.5% 41

42 2003 BUDGET (I) % GROWTH 1 LOANS TO CUSTOMERS 11,7% We are going to acomplish the budget according to the following asset structure 9% 12% Bill discounting 16% Other loans Other credits 46% 17% Mortgages Leasing % Growth Bill discounting 9,9% Other loans 8,7% Other Credits 12,7% Mortgages 13,6% Leasing 10,9% 1 % Growth over simple average balances 42

43 2003 BUDGET (II) % GROWTH 1 CUSTOMER DEPOSITS 8,9% We are going to acomplish the budget according to the following deposit structure 18% 2% 27% 1% 52% Current accounts Savings accounts Fixed-term deposits Temporary asset sales Tax collection accounts % Growth Current accounts 11,4% Savings & Fixed-term ac. 11,0% Temporary asset sales -0,4% Tax collection accounts 11,6% 1 % Growth over simple average balances 43

44 2003 BUDGET (III) % GROWTH 1 OFF-BALANCE SHEET FUNDS 12,5% We are going to acomplish the budget according to the following fund structure 29% 10% Mutual Funds Technical reserves Pension Funds % Growth Mutual Funds 12,9% Technical reserves 11,2% Pension Funds 13,7% 61% 1 % Growth over simple average balances 44

45 ACTIVOBANK Incorporated into the Group as a new Business unit. Single IT Platform encompasses the savings in dual development costs. No. accounts +26,5% dec-01 mar-02 jun-02 sep-02 dec-02 45

46 IBERSECURITIES Strengthening as a reference broker in the Spanish market. Value added into BS group activities such as: Asset Management, Private Banking and Personal Banking. Market share dec-02: 2,01% First class research team: Spain, Portugal & Eurostoxx 50 coverage Independent position since 1989 (freedom of action) Leadership and innovation: On-line brokerage since jul-98 First on-line broker in derivative products First on-line broker offering leverage facilities Madrid & Barcelona Stock Exchange member 46

47 AGENDA 1. MAIN FINANCIAL HIGHLIGHTS 2. ANALYSIS FY02 FINANCIAL RESULTS 3. BUSINESS EVOLUTION 4. BANCO SABADELL CORPORATE GOVERNANCE 5. PRIORITIES FOR

48 TRANSPARENT CORPORATE GOVERNANCE (I) General Shareholders Meeting Board of Directors Executive Committee Supervisory Committees Business Units Corporate Units Risk Committee Appointment and Remuneration Committee Audit Committee Budget Control Committee 48

49 TRANSPARENT CORPORATE GOVERNANCE (II) Executive Committee- President Mr. J. Oliu President + Director-General Managers + assistant Audit Committee - President Mr. B. Garriga 3 non-executive directors Appointment and Remuneration Committee - President Mr. H. Colonques 3 non-executive directors Risk Committee - President Mr. J. Oliu President + Director-General Managers + 3 non-executive directors Budget Control Committee - President Mr. J. Llonch 3 non-executive directors 49

50 CORPORATE GOVERNANCE RULES Includes the Company Bye-laws, a specific Board Code ( Registered in the Company Registrar) and an Internal Code of Conduct (Deposited with the CNMV). An AGM Code which will include the convening, preparation, information, presence and development of any AGM, will be submitted to the next General Shareholders Meeting for its discussion and approval. The aforesaid documentation is available in the bank s web site. All the documentation to be submitted to any AGM will also become available in the bank s web site. The bank has incorporated the recommendations of the Olivencia Report and it is now undertaking the adoption of the recommendations stablished in the Aldama Report. The majority of Board members (10 out of 13) are non-executive directors and amongst them there are a significant presence of independent directors. A separate report on Corporate Governance will be presented to the next AGM. 50

51 AGENDA 1. MAIN FINANCIAL HIGHLIGHTS 2. ANALYSIS FY02 FINANCIAL RESULTS 3. BUSINESS EVOLUTION 4. BANCO SABADELL CORPORATE GOVERNANCE 5. PRIORITIES FOR

52 PRIORITIES FOR 2003 Growth and consolidation II Lending and Deposit Growth Special cost cutting programmes Banco Asturias merger with BS Banco Herrero integration into BS to be finalised ActivoBank integration into BS to be finalised Emphasis in the new IT platform, but clearly reaching the final stages Commercial organisation stable Consolidated Management Team Substitution of non recurring by ordinary income 52

53 GENERAL ADMINISTRATIVE COSTS FORECAST m 667,1-49,6 589,5 599,6 617,5 286,2 204,3 204,0 210,6 380,9 385,2 395,6 406, e 2004e 2005e Personnel costs Other costs e 5,0% 7,5% 10,0% Gross operating income 1.008, , , ,6 Efficienty ratio 66,2% 52,9% 49,3% 46,0% 53

54 COST REDUCTION ITEMS (I) m Total reduction cost Recurring cost s growth CAGR 4,4% -117,4 +67,8 NET REDUCTION -49,6 54

55 COST REDUCTION ITEMS (II) m Technology -47,7 Fit@ Programme -35,5 Other actions -34,2 TOTAL REDUCTION -117,4 55

56 IT EXPENSE EVOLUTION, m SIBIS amortisation -39,8 Recurring IT savings -21,6 Recurring IT expenditure increase 132,6-47,7 +13,7-47,7 * 62,5 73,9 79,2 4,7 10,4 84,9 19,3 70,1 69,2 68,8 65, e 2004e 2005e Costs Software amortisation 56

57 IT COST BASE m Reduction Redundant IT elimination Integration of separate IT business applications [Economies of scale]: Banco Herrero ActivoBank Cost saving in the Total Cost of Ownership of remote IT platform by the introduction of new technologies IT licensing income Rightsourcing Communication Services 6,1 7,4 4,1 1,5 2,5-21,6 57

58 PROGRAMME (I) m Fit@ Programme -35,5 Personnel costs Other administrative costs -19,7-15,8 * * 58

59 PROGRAMME (II) m Staff costs -19,7* Staff cost reductions due to process efficiency improvements Commercial structure Administration Back-Office of Risks Operations Headquarters Back-Office of Branches * Deduction of an expected restructuration cost of 2,8 m in 2005: the saving is 22,5 m for the following years. -2,0-2,5-1,1-3,1-2,2-8,8 59

60 PROGRAMME (III) m Administrative costs -15,8 Consumptions Logistics and trips Outsourcing Communications Infrastructure and others -5,8-2,7-1,9-1,9-3,5 60

61 OTHER ACTIONS m Other actions -34,2 Banco Herrero s integration ( non technological costs) ActivoBank s integration ( non technological costs) Other non recurrent costs -5,2-13,3-15,7 61

62 BancoSabadell ANNEXES

63 HIGHLIGHTS m 4Q01 3Q02 4Q02 % growth 4Q02/4Q01 % growth 4Q02/3Q02 Total Assets , , ,2 2,5 0,9 Loans to customers , , ,6 12,7 2,8 On-balance sheet customer deposits , , ,2 1,5-3,0 Mutual funds 4.669, , ,6-2,1 2,1 Pension funds 1.348, , ,8 12,9 19,9 Technical reserves (bancassurance) 1.871, , ,4 20,4 9,5 Funds under management , , ,0 2,9 0,1 Shareholders' equity 2.355, , ,3-13,0 6,0 Employees ,9-1,9 Domestic Branches ,6-0,2 ATM's ,1 2,8 GROUP NET PROFIT 54,0 50,4 49,6-8,1-1,7 1 On-balance sheet customer deposits + Mutual funds + Pension funds + Technical reserves 63

64 PROFIT AND LOSS ACCOUNT % growth % growth m 4Q01 1Q02 2Q02 3Q02 4Q02 4Q02/4Q01 4Q02/3Q02 NET INTEREST INCOME 188,4 175,5 182,8 177,0 179,06-5,0 1,2 Net commissions 72,2 68,9 70,7 69,7 75,8 5,0 8,7 BASIC REVENUE 260,6 244,4 253,4 246,7 254,9-2,2 3,3 Results on financial transactions 24,0 5,1-8,8-14,3 26,6 10,9-285,6 GROSS OPERATING INCOME 284,6 249,6 244,7 232,4 281,5-1,1 21,1 Personnel expenses -96,3-90,2-97,9-95,7-97,1 0,8 1,5 General expenses -51,3-46,5-62,5-73,2-104,0 102,7 42,0 PERSONNEL + GENERAL -147,6-136,7-160,4-168,9-201,1 36,2 19,0 Depreciation and amortisation -13,0-12,9-12,9-17,6-13,9 6,4-21,1 Other operating costs -0,7 1,0 1,9 0,7 4,7-816,5 569,8 NET OPERATING INCOME 123,3 101,0 73,2 46,6 71,2-42,2 52,9 Equity-acc holdings (net) 1,4 11,6 14,4 7,0 12,5 783,1 77,5 Group transactions 1,9-1,0-2,6-5,5-17,5-1010,5 219,6 Provisions for loan-losses 10,7-22,4-26,5-29,7-22,5-310,3-24,1 Goodwill amortisation -9,0-2,5-2,5-128,6 6,5-171,8-105,0 Other income -27,8 16,9 24,6 121,9 14,8-153,2-87,9 INCOME BEFORE TAXES 100,5 103,7 80,6 11,7 64,2-36,1 448,7 Corporate tax -40,7-36,4-27,1 37,1-2,8-93,2-107,4 Minority interests -5,8-2,9 2,4 1,6-11,9 105,4-833,1 GROUP NET PROFIT 54,0 64,4 56,0 50,4 49,6-8,1-1,7 64

65 NET INTEREST INCOME m 4Q01 1Q02 2Q02 3Q02 4Q02 Net interest income 188,4 175,5 182,8 177,0 179,1 Dividends and others -12,4-0,4-13,4-5,5-6,1 ADJUSTED NET INTEREST INCOME 176,0 175,2 169,4 171,5 172,9 65

66 EQUITY- ACCOUNTED HOLDINGS m 4Q01 1Q02 2Q02 3Q02 4Q02 Equity-acc holdings 1,4 11,6 14,4 7,0 12,5 Dividends (net interest income) 1,9 0,0 12,1 4,2 12,3 Adjusted Equity-acc holdings 3,3 11,7 26,5 11,2 24,8 66

67 GOODWILL AMORTISATION Bal. Amortisation 2001 Amortisation 2002 m Q012Q013Q014Q01 Var. Acc.BalAdj.Bal.1Q02 2Q02 3Q02 4Q02 Var. Acc.Bal BCP 269,5-3,3-3,5-3,5-3,5-5,2 250,5 124,3-1,7-1,7-1,4 8,0-18,8 108,7 Banco Herrero 0-4,9-4,9-4,9-4,9 389,6 370,1 0,0 0,0 0,0 0,0 0,0 0,0 0,0 Others 40,3-1,1 0,6-0,6-0,7 15,0 53,4 53,4-0,8-0,8-1,0-1,5 59,6 108,9 Goodwill 309,7-9,4-7,7-9,0-9,0 399,3 674,0 177,8-2,5-2,5-2,4 6,5 40,8 217,7 BCP: Goodwill arosen in BCP transaction has been partly written-of against generic provisions ( 126,2 million). Banco Herrero: Goodwill arosen in Banco Herrero transaction has been written-off against premium reserve in 3Q02. 67

68 NON-PERFORMING LOAN PROVISIONS m 4Q01 1Q02 2Q02 3Q02 4Q02 Provisions 16,7-14,9-12,5-18,1-40,5 Generic provisions 21,0-1,2-4,8-7,1-12,7 Especific provisions -4,3-13,8-7,7-11,0-27,8 Amortisations -0,6-1,0-1,4-0,4-1,9 Recoveries 3,8 3,7 5,4 3,0 3,1 Country risk 11,6-0,2 0,7 0,2 12,8 Provisions for bad and doubtful debts 31,5-12,5-8,0-15,4-26,4 Statistical provisions -20,8-9,9-18,5-14,3 3,9 TOTAL 10,7-22,4-26,5-29,7-22,5 68

69 EXTRAORDINARY ITEMS m 4Q01 1Q02 2Q02 3Q02 4Q02 Extraordinary profits -2,6 22,3 30,7-1,1 19,1 Extraordinary losses -25,2-5,6-6,1-3,0-4,4 TOTAL -27,8 16,7 24,6-4,1 14,8 69

70 MINORITY INTERESTS BREAKDOWN m 4Q01 1Q02 2Q02 3Q02 4Q02 Preference shares -2,9-2,9-2,8-2,8-2,8 SIM's Banco Herrero -3,4-0,2 5,1 4,3-9,1 Others 0,4 0,2 0,1 0,2 0,0 Minority interests -5,8-2,9 2,4 1,6-11,9 70

71 CONSOLIDATED BALANCE SHEET - ASSETS % growth % growth m 4Q01 3Q02 4Q02 4Q02/4Q01 4Q02/3Q02 Cash and deposits with Central Banks 497,5 343,2 356,3-28,4 3,8 Government securities 378,5 870,8 883,6 133,4 1,5 Financial institutions 3.711, , ,1-34,5-11,3 Total net loans and advances to customers , , ,3 10,6 3,2 Bonds and other fixed-income securities 733,2 824,5 737,1 0,5-10,6 Shares and equity investments 540,9 539,1 551,1 1,9 2,2 Goodwill on consolidation 674,0 181,0 217,7-67,7 20,3 Tangible assets 448,2 452,1 454,9 1,5 0,6 Losses of Group companies 90,6 122,0 99,9 10,3-18,1 Accrued income and other assets 738,2 824,5 766,3 3,8-7,1 TOTAL ASSETS , , ,2 2,5 0,9 71

72 CONSOLIDATED BALANCE SHEET - LIABILITIES % growth % growth m 4Q01 3Q02 4Q02 4Q02/4Q01 4Q02/3Q02 Financial institutions 2.595, , ,1 7,7 21,1 Deposits and temporary asset sales , , ,2 1,5-3,0 Liabilities on negotiable securities 2.467, , ,3 26,6 5,2 Accrued expenses and other liabilities 963,1 838,5 796,7-17,3-5,0 General reserve and other provisions 370,2 246,4 138,3-62,6-43,9 Subordinated liabilities 304,2 295,2 595,2 95,7 101,6 Shareholders' equity 2.334, , ,8-12,4-1,6 Minority interests 311,8 307,3 262,5-15,8-14,6 Consolidated profits for the year 225,9 169,7 231,2 2,3 36,2 TOTAL LIABILITIES , , ,2 2,5 0,9 72

73 LENDING BREAKDOWN % growth % growth m 4Q01 3Q02 4Q02 4Q02/4Q01 4Q02/3Q02 Loans to the public sector 222,6 106,6 114,9-48,4 7,8 Loans to the private sector , , ,4 11,4 3,2 Commercial loans 2.147, , ,9 7,0 10,5 Mortgage loans 7.220, , ,9 20,5 6,4 Personal loans 3.552, , ,1-6,7 0,7 Loan and credit accounts 2.915, , ,0 17,6-1,3 Other secured loans 205,0 331,2 308,4 50,5-6,9 Overdrafts and sundry accounts 472,3 419,4 348,6-26,2-16,9 Repo's 260,6 315,9 218,4-16,2-30,9 Leasing 1.537, , ,2 14,7 2,7 Factoring 401,0 385,0 461,8 15,2 19,9 Pro-memoria: Loans to the resident sector , , ,4 13,4 3,6 Loans to the non-resident sector 1.332, , ,9-14,3-3,4 Doubtful assets 89,0 121,7 102,5 15,3-15,8 TOTAL GROSS LOANS AND ADVANCES TO CUSTOMERS , , ,8 10,7 3,1 Provisions for bad and doubtful debts -288,4-338,6-333,5 15,6-1,5 TOTAL NET LOANS AND ADVANCES TO CUSTOMERS , , ,3 10,6 3,2 Securitised loans 389,2 875,0 819,3 110,5-6,4 TOTAL NET LENDING TO CUSTOMERS , , ,6 12,7 2,8 73

74 DEPOSITS AND ISSUES SECURITIES % growth % growth m 4Q01 3Q02 4Q02 4Q02/4Q01 4Q02/3Q02 Creditors, public sector 130,5 131,0 151,0 15,6 15,2 Current accounts 6.473, , ,2 2,6-3,1 Savings accounts 1.295, , ,3-2,0 0,5 Fixed-term deposits 7.160, , ,5 3,2 4,6 Temporary asset sales 1.913, , ,3-6,7-27,1 Creditors, private sector , , ,3 1,4-3,1 Promemoria Resident sector , , ,6 3,1-2,1 Non-resident sector 1.697, , ,6-13,4-13,0 Senior debt issuance 2.467, , ,3 26,6 5,2 Subordinated liabilities 304,2 295,2 595,2 95,7 101,6 TOTAL ON-BALANCE SHEET DEPOSITS AND ISSUED SEC , , ,7 6,1-0,3 74

75 MUTUAL AND PENSION FUNDS % growth % growth m 4Q01 3Q02 4Q02 4Q02/4Q01 4Q02/3Q02 Equity funds 286,0 216,7 210,1-26,6-3,1 Balanced funds 1.250,6 868,5 821,8-34,3-5,4 Fixed-income funds 1.322, , ,6 11,9 2,5 Guaranteed return funds 1.399, , ,5 20,0 5,8 Open-end and closed-end inv 411,3 357,0 377,7-8,2 5,8 Mutual funds 4.669, , ,6-2,1 2,1 Individual 670,6 637,5 698,8 4,2 9,6 Company 666,0 615,3 804,6 20,8 30,8 Group 12,0 17,7 19,5 62,5 10,0 Pension funds 1.348, , ,8 12,9 19,9 TOTAL FUNDS 6.018, , ,4 1,2 6,1 75

76 BAD AND DOUBTFUL DEBTS % growth % growth m 4Q01 3Q02 4Q02 4Q02/4Q01 4Q02/3Q02 Opening balance 84,4 100,9 100,9 19,6 0,0 Increase due to new loan defaults 118,2 125,6 172,5 45,9 37,3 Recoveries -66,3-69,9-97,0 46,4 38,9 Amounts written off -35,4-19,8-61,7 74,2 212,4 Total bad and doubtful debts 100,9 136,8 114,6 13,6-16,2 Total gross loans and advances to cust , , ,8 10,7 3,1 Contingent liabilities 2.773, , ,8 16,0 3,5 Total risks , , ,7 11,4 3,2 Total provisions 337,8 408,1 402,4 19,1-1,4 BAD AND DOUBTFUL DEBTS AS % OF TOTAL LENDING TOTAL PROVISIONS AS % OF BAD AND DOUBTFUL DEBTS 0,46% 0,58% 0,47% 334,9% 298,3% 351,1% TOTAL PROVISIONS AS % OF BAD AND DOUBTFUL DEBTS Pro-memoria: NPL Ratio including securitised loans 359,2% 317,6% 373,7% 0,45% 0,56% 0,46% 76

77 SHAREHOLDERS EQUITY % growth % growth m 4Q01 3Q02 4Q02 4Q02/4Q01 4Q02/3Q02 Issued capital 102,0 102,0 102,0 0,0 0,0 Reserves 2.062, , ,5-15,5-1,5 Consolidation reserves 170,5 207,3 199,3 16,9-3,9 Losses of Group companies -90,6-122,0-99,9 10,3-18,1 Treasury shares -3,2-21,8-13,0 306,0-40,5 Net attributable profit 216,5 220,4 Less: dividends -102,0-102,0 TOTAL SHAREHOLDERS' EQUITY 2.355, , ,3-13,0 6,0 77

78 RATIO BIS % growth % growth m 4Q01 3Q02 4Q02 4Q02/4Q01 4Q02/3Q02 Issued capital 102,0 102,0 102,0 0,0 0,0 Reserves 2.310, , ,8-12,4 4,3 Minority interests 311,8 307,3 262,5-15,8-14,6 Other capital accounts 132,5 6,2 6,4-95,2 2,8 Deductions -819,8-368,5-343,6-58,1-6,8 Primary capital 2.036, , ,1 0,7 3,2 TIER I (%) 8,98% 7,99% 8,16% -9,1 2,2 Revaluation reserves 37,0 37,0 37,0 0,1 0,0 Generic provisions 284,9 339,8 348,0 22,2 2,4 Subordinated liabilities 300,0 291,0 591,0 97,0 103,1 Deductions -58,6-47,1-49,7 Secondary capital 563,3 620,8 926,3 64,4 49,2 Tier II (%) 2,48% 2,50% 3,69% 48,4 47,7 Capital base 2.600, , ,0 14,5 14,2 Minimum capital requirement 1.814, , ,0 10,8 1,0 Capital surplus 785,8 617,7 967,0 23,1 56,6 BIS RATIO (%) 11,46% 10,48% 11,85% 3,3 13,0 Risk weighted assets , , ,0 11,0 1,2 78