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2 Annual Report 3. Business. Innovation Equity and rating The Group has an efficient equity structure, with the creation of long-term value for shareholders being one of the Bank s strategic priorities. Its prudent risk profile and clean credit portfolio have enabled it to operate with levels of capital in excess of those required by the supervisors. In the past few years both the regulators and the markets have significantly increased their capital requirements, and the Bank has adapted swiftly to the new situation, consistently increasing its capital ratios and the quality of its capital every year, without having to resort to government assistance, and thus positioning itself among the best capitalised institutions in the sector. The Group s total equity at the end of 3 stood at 3. billion as per currently applicable solvency rules, and its solvency ratio was.%. Total equity considered as Tier I amounted to. billion (Tier I ratio.%), while Tier II stood at million (Tier II ratio.%). Core Tier I capital as defined by Banco de España Circular /, which is based on European Banking Authority (EBA) criteria, amounted to.8 billion, with a Core Tier ratio of.%, which is 3. percentage points above the minimum ratio of %.

3 Annual Report 3. Business. Innovation s 3//3 3// s % Capital and Reserves 3,3,3,3, 3,3.% Other equity instruments,8,33 -,5-8.% Capital in the form of a financial liability,8,8.% Treasury shares % Intangible and other assets -, -83, 5,35-5.% Other deductions -5, -3,3 -, 5.3% Tier,,3,,38,.3% Revaluation reserve,38 -,38 -.% Subordinated financing 3,5 58,8-5, -.% Other deductions -, -, -,.% Tier,5 5,3-8,3-5.% Total Equity 3,,38 3,3, -8, -.% Risk-weighted assets,,83 5,58,3 -,3,8 -.% Tier (%).%.%.%.% Tier (%).%.% -.% -.8% Capital ratio (%).% 3.%.%.% Surplus capital,3,,5,85 3,8.3% Core Tier in accordance with EBA criteria,8,88,, 5,85.% Core Tier I ratio in accordance with EBA criteria.%.%.% 3.%

4 3 Annual Report 3. Business. Innovation During 3 carried out the following transactions to strengthen its capital: In April 3 the Bank's Board of Directors resolved to put into effect a capital increase in the form of a bonus issue charged entirely to the asset revaluation reserve, which had been approved by the General Meeting of Shareholders on March 3. This bonus issue led to an increase of million in Core Tier Capital. With regard to the issue of Mandatorily Convertible Subordinated Bonds, in both May and November of 3 voluntary conversion periods were established. As a result of these two conversion windows, Core Tier Capital increased by million. Against the backdrop of the financial crisis in the euro zone, in the past few years the credit rating agencies have made unprecedented cuts to Spain s sovereign debt rating and economic outlook, which have translated into rating downgrades for all financial institutions. In 3 we started to discern a change in trend, and Standard & Poor s rating agency twice raised its outlook on, first in July from negative to stable, and again in December from stable to positive. The agency based these decisions on 's ability to generate recurring revenue despite the adverse situation in Spain, the quality of the Bank's assets compared with those of the sector as a whole and the efforts made by the Bank to strengthen its levels of capital. Ratings Long-term Short-term Outlook Standard & Poor s BB B Positive Moody s Ba NP Negative DBRS A (low) R- (low) Negative

5 Annual Report 3. Business. Innovation shares During 3 the share price evolved very positively, both at Spanish level and compared with the sector Europe-wide. The cumulative increase in the share price in 3 was.%, which, when the returns from the dividend distributed up to the date of publication of this report are taken into account, represents a return of 5%. The graph shows the performance of shares during 3: up by %, compared with % for the Ibex 35 and % for the EuroStoxx Banks SXP. shares in 3 (%) 8 8 Dec. Dec. 3 Ibex 35 Eurostoxx banks DATE Ibex 35 EuroStoxx Banks Jan 3.3%.3% 8.5% Feb 3.% 3.%.3% Mar 3.%.%.% Apr 3 3.8% 38.% 5.8% May 3.8%.8%.% Jun 3 5.% 35.%.% July 3 3.%.53%.% Aug. 3.5%.% 8.% Sep 3.%.% 3.% Oct 3.3%.8% 8.% Nov. 3.5% 3.% 8.83% Dec 3.%.%.%

6 5 Annual Report 3. Business. Innovation Revaluation (%). in the last months The salient data for stock during the year are described in the following table: Figures per share for the period (euros) Earnings per share.8 Dividend per share. Theoretical book value per share 3.8 Share price at start of year 3. Lowest price.3 Highest price 5.35 Latest price.8 Revaluation over the last months (%). ADRs (American Depositary Receipts) ADRs (American Depositary Receipts) are a type of product enabling US residents to invest in foreign companies by means of a certificate of deposit (ADR) and to receive dividend payments in the manner most convenient to them. s ADR programme is administered by the Bank of New York Mellon. At the end of December 3 there were a total of, ADRs in circulation. Change in number of ADRs 8, The distribution of dividends for the financial year 3 as at the date of publication of this report is as follows: 5,,, Date Dividend per share (euros) Number of shares Treasury stock (own shares) Shares with rights Amount (s) Results for the year July ,5,,58 8,3,, 3 Oct ,5, 3, 8,3,83,53 3 Jan.3 85,583,8,5 85,8,3, 3 Total.55 5,, 3, J3 F3 M3 A3 M3 Jn3 Jl3 A3 S3 O3 N3 D3 8, 8, 5, 5,,,855 5,3 5,5,5,,,

7 Annual Report 3. Business. Innovation Share capital and treasury stock The share capital of S.A. was represented, as at 3 December 3, by 85,583,8 shares, each with a nominal value of.3 fully subscribed and paid up. Shareholders with significant holdings Name Total Shares % Cartival, S.A.,8, Corporación Masaveu, S.A.,,5. All the shares are represented by book entries, listed on the Madrid and Barcelona stock exchanges and traded on the Spanish computerised trading system. Stock market ratios 3 Theoretical price / book value (times).3.55 PER (price / earnings, times).. Number of shareholders,3,5 Number of shares 85,583,8 53,8, Number of shares held by non-residents 33,,8,,3 Average daily trading (number of shares) 5,5,8,,388 Average daily trading (s),5 8, has,3 shareholders. The main features of the shareholder structure are as follows: Resident shareholders hold 3.% of the share capital. Non-residents hold 3.% of the share capital. Treasury stock at year-end consisted of,5 shares. Shareholders of record holding more than 5% of the share capital at 3 year end are shown in the following table: Summary by type of shareholder Number of Shareholders % Number of Shares Residents, 8.5 5,5,8 3.8 Nonresidents ,,8 3. Total,3 85,583,8 Share ownership structure by number of shares Brackets From to shares From to, shares From, to, shares From, to, shares More than, shares No. of Shareholders % Number of Shares,33 3.3,.3,.5,3,3.5 3,85 3.8,5, 8.8 5,3.3,, ,38,. Total,3 85,583,8 % %

8 Annual Report 3. Business. Innovation At the end of 3, the Group held,5 treasury shares, compared to,3 shares in Changes in treasury stock 3 (%) 3 January February March..... April May June July..... August September..... October..... November December...3..