Maqueta Memoria sem grupo 2016 EN - grupbancsabadell.com...2 Consolidated balance sheets of Banco Sabadell group At 30 June 2016 and 31 December 2015 Thousand euro Asset Note 30/06/2016

1

"Translation of financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group (see note 1). In the event of a discrepancy, the original Spanish-language version prevails".

Contents of the Contents of the Contents of the Contents of the summarisedsummarisedsummarisedsummarised consolidated halfconsolidated halfconsolidated halfconsolidated half----yearly financial statements of the yearly financial statements of the yearly financial statements of the yearly financial statements of the Banco Sabadell group for the sixBanco Sabadell group for the sixBanco Sabadell group for the sixBanco Sabadell group for the six----month period ended 30 June 2016month period ended 30 June 2016month period ended 30 June 2016month period ended 30 June 2016

FFFFinancial statementsinancial statementsinancial statementsinancial statements

Consolidated balance sheets of Banco Sabadell group ................................................................................................................ 2

Consolidated profit and loss accounts of Banco Sabadell group ................................................................................................... 5

Consolidated statements of changes in net equity of Banco Sabadell group ................................................................................. 6

Consolidated cash flow statements of Banco Sabadell group ....................................................................................................... 9

Notes to the financial statementsNotes to the financial statementsNotes to the financial statementsNotes to the financial statements

Note 1 – Activity, accounting policies and practices ................................................................................................................. 10

Note 2 – Banco Sabadell group ................................................................................................................................................. 12

Note 3 – Dividends paid ............................................................................................................................................................ 14

Note 4 – Financial risk management ......................................................................................................................................... 16

Note 5 – Capital management .................................................................................................................................................. 28

Note 6 – Fair value of assets and liabilities ............................................................................................................................... 30

Note 7 – Debt securities........................................................................................................................................................... 34

Note 8 – Loans and advances ................................................................................................................................................... 35

Note 9 – Tangible assets .......................................................................................................................................................... 37

Note 10 – Intangible assets...................................................................................................................................................... 39

Note 11 – Other assets ............................................................................................................................................................ 39

Note 12 – Non-current assets and disposal groups and liabilities included in disposal groups classified as held for sale ............... 40

Note 13 – Deposits from Central Banks and credit institutions .................................................................................................. 41

Note 14 – Customer deposits ................................................................................................................................................... 42

Note 15 – Debt securities issued .............................................................................................................................................. 42

Note 16 – Liabilities under insurance or reinsurance contracts .................................................................................................. 43

Note 17 – Equity ...................................................................................................................................................................... 43

Note 18 – Guarantees given ..................................................................................................................................................... 44

Note 19 – Contingent commitments given ................................................................................................................................ 45

Note 20 – Interest income and expenses .................................................................................................................................. 45

Note 21 – Fee and commission income and expenses ............................................................................................................... 47

Note 22 – Income from financial transactions (net) ................................................................................................................... 47

Note 23 – Other operating income ............................................................................................................................................ 47

Note 24 – Other operating expenses ......................................................................................................................................... 48

Note 25 – Administrative expenses........................................................................................................................................... 48

Note 26 – Impairment or (-) reversal of impairment on financial assets not measured at fair value through profit or loss .............. 50

Note 27 – Impairment or (-) reversal of impairment on non-financial assets ................................................................................ 50

Note 28 – Gains or (-) losses on derecognition of non-financial assets and shares, net ................................................................ 50

Note 29 – Negative goodwill recognised in profit or loss ............................................................................................................ 50

Note 30 – Profit or (-) loss from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations ................................................................................................................................................................ 51

Note 31 – Segment information ................................................................................................................................................ 51

Note 32 – Deferred tax assets and liabilities ............................................................................................................................. 52

Note 33 – Related-party transactions ........................................................................................................................................ 52

Note 34 – Remuneration of and balances with members of the Board of Directors and senior management ................................. 53

Note 35 – Subsequent events ................................................................................................................................................... 53

Schedule I - Changes to scope of consolidation ......................................................................................................................... 54

Schedule II - Financial statements of Banco Sabadell ................................................................................................................ 55

Schedule III - Information required to be kept by issuers of mortgage market securities and the special accounting mortgage register ..................................................................................................................................................................... 64

Schedule IV - Information on new issuances during the six-month period .................................................................................... 68

Directors' ReportDirectors' ReportDirectors' ReportDirectors' Report

Glossary of terms on performance measurements ...................................................................................................................... 77

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Consolidated balance sheets of Banco Sabadell groupConsolidated balance sheets of Banco Sabadell groupConsolidated balance sheets of Banco Sabadell groupConsolidated balance sheets of Banco Sabadell group At 30 June 2016 and 31 December 2015

Thousand euro

A sse t N o te 30/ 06/ 2016 31/ 12/ 2015 ( *)

C ash, cash ba lances at centra l banks and o ther dema nd depo sits (**) 8,472 ,100 7,343 ,481

F inancia l assets held fo r t rading 3,299,110 2 ,312,118Derivatives 2,069,417 1,508,446Equity instruments 18,413 11,212Debt securities 7 1,211,280 792,460Loans and advances - -

Central banks - -Credit institutions - -Customers - -

M emorandum item: provided or given as guarantee with right to sale or pledging - -

F inancia l assets designa ted at fa ir va lue thro ugh p ro f it o r lo ss 50 ,560 77 ,328Equity instruments 50,560 77,328Debt securities - -Loans and advances - -



A vailable- fo r-sa le f inanc ia l asse ts 22,483 ,844 23,460 ,356Equity instruments 574,429 572,730Debt securities 7 21,909,415 22,887,626M emorandum item: provided or given as guarantee with right to sale or pledging 3,717,389 5,778,397

Lo ans and receivables 149,532 ,265 153,550 ,281Debt securities 7 1,268,433 1,732,478Loans and advances 8 148,263,832 151,817,803

Central banks - -Credit institutions 3,775,747 5,002,066Customers 144,488,085 146,815,737

M emorandum item: provided or given as guarantee with right to sale or pledging 355,455 1,349,574

H eld- to -maturity investments - -M emorandum item: provided or given as guarantee with right to sale or pledging - -

D erivat ives - hedge acco unt ing 703 ,993 700 ,813

F a ir va lue changes o f the hedged it ems in po rt fo lio hedge o f interes t ra te risk 12 ,862 7 ,693

Investments in subsidaries, jo int ventures and asso ciates 395 ,254 340 ,996M ultigroup entities - -Associates 395,254 340,996

A sse ts co vered under insurance and re insurance co nt racts - 14 ,739

T angible assets 9 4,216 ,518 4,188 ,526Property, Plant and Equipment 1,820,622 1,846,621

For own use 1,662,892 1,709,523Leased out under operating leases 157,730 137,098

Investment property 2,395,896 2,341,905Of which: leased out under operating leases - -

M emorandum item: acquired under financial lease - -

Intangible assets 10 1,998 ,540 2,080 ,570Goodwill 1,090,737 1,092,777Other intangible assets 907,803 987,793

T ax assets 6,942 ,802 7,255 ,450Current tax assets 506,183 678,938Deferred tax assets 32 6,436,619 6,576,512

Other assets 11 4,835 ,754 4,753 ,034Insurance contracts linked to pensions 149,798 153,631Invento ries 3,480,545 3,655,548Rest of other assets 1,205,411 943,855

N o n-current assets and dispo sal gro ups c lass if ied a s held fo r sa le 12 4,947 ,133 2,542 ,386

T OT A L A SSET S 207,890 ,735 208,627 ,771

(*) Presented for comparison purposes only.

(**) See consolidated cash f lows for the group.Notes 1 to 35 of the notes to the f inancial statements and schedules are an integral part of the consolidated balance sheet at 30 June, 2016.

3


Thousand euro

Liabilit ies N o te 30/ 06/ 2016 31/ 12/ 2015 (*)

F inancial liabilit ies held fo r t rading 2,232,639 1,636,826Derivatives 2,144,569 1,484,922

Short positions 88,070 151,904Deposits - -

Central banks - -Credit institutions - -

Customers - -Debt securities issued - -

Other financial liabilities - -

F inancial liabilit ies des ignated at fa ir va lue thro ugh pro f it o r lo ss - -Deposits - -

Central banks - -

Credit institutions - -Customers - -

Debt securities issued - -Other financial liabilities - -M emorandum item: subordinated liabilities - -

F inancial liabilit ies measured at amo rt ised co st 187,288,320 189,468,677Deposits 155,533,815 159,182,125

Central banks 13 10,679,443 11,566,070

Credit institutions 13 12,237,121 14,724,718Customers 14 132,617,251 132,891,337

Debt securities issued 15 28,369,305 27,864,371Other financial liabilities 3,385,200 2,422,181M emorandum item: subordinated liabilities 1,701,627 1,472,779

D erivat ives – H edge acco unt ing 1,285,496 681,461

F air value changes o f the hedged items in po rt fo lio hedge o f interest ra te risk 82,566 16,330

Liabilit ies co vered by insurance o r reinsurance co n tracts 16 50,572 2,218,295

P ro v isio ns 359,118 346,225Pensions and other post employment defined benefit obligations 83,684 86,305Other long term employee benefits 23,334 28,713

Pending legal issues and tax litigation 50,714 51,971

Commitments and guarantees given 18 126,031 113,679Other provisions 75,355 65,557

T ax liabilit ies 487,993 580,357Current tax liabilities 76,963 88,214Deferred tax liabilities 32 411,030 492,143

Share capita l repayable o n demand - -

Other liabilit ies 982,278 911,939

Liabilit ies inc luded in disposal gro ups c lassif ied as held fo r sale 12 2,260,185 -

T OT A L LIA B ILIT IES 195,029,167 195,860,110


Notes 1 to 35 of the notes to the f inancial statements and schedules are an integral part of the consolidated balance sheet at 30 June, 2016.

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Thousand euro

N et equity N o te 30 / 06/ 2016 31/ 12/ 2015 (*)

Shareho lders equity 17 12,647 ,134 12,274 ,945Capital 695,783 679,906

Paid up capital 695,783 679,906

Unpaid capital which has been called up - -

M emorandum item: uncalled capital - -

Issue premium 7,829,217 7,935,665Equity instruments issued other than capital - -

Equity component o f compound financial instruments - -

Other equity instruments issued - -

Other components o f net equity 28,388 14,322

Retained earnings - -

Revaluation reserves - -Other reserves 3,789,580 3,175,065

Reserves or accumulated losses of investments in subsidaries, jo int ventures and associates 230,207 152,296

Other 3,559,373 3,022,769

(-) Treasury shares (121,170) (238,454)

Pro fit or loss attributable to owners of the parent 425,336 708,441

(-) Interim dividends - -

A ccumula ted o ther co mprehensive inco me 177,264 455,606Items that will not be reclassified to pro fit or loss 12,212 12,212

Actuarial gains o r (-) losses on defined benefit pension plans 12,212 12,212

Non-current assets and disposal groups held for sale - -

Share o f o ther recognised income and expense o f Investments in subsidaries, jo int ventures and associates - -

Rest o f valuation adjustments - -

Items that may be reclassified to pro fit or loss 165,052 443,394

Hedge o f net investments in foreign operations [effective portion] 137,074 17,927Foreign currency translation (371,335) (23,690)

Hedging derivatives. Cash flow hedges [effective portion] 48,495 16,412

Available-fo r-sale financial assets 219,699 416,235

Debt instruments 184,701 495,688

Equity instruments issued other than capital 34,998 83,607

Other valuation adjustments - (163,060)

Non-current assets and disposal groups classified as held fo r sale 12 112,065 -

Share o f o ther recognised income and expense o f Investments in subsidaries, jo int ventures and associates 19,054 16,510

M ino rity inte rests (no n-co nt ro lling inte rests) 37 ,170 37,110Accumulated o ther comprehensive income (67) (39)

Other items 37,237 37,149

T OT A L EQUIT Y 12,861,568 12,767,661

T OT A L EQUIT Y A N D T OT A L LIA B ILIT IES 207,890,735 208,627,771

M emo randum Item

Guarantees given 18 8,354 ,107 8,356,167C o nt ingent liabilit ies given 19 20,183 ,146 21,130,614



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Consolidated profit and loss accounts of Banco Sabadell groupConsolidated profit and loss accounts of Banco Sabadell groupConsolidated profit and loss accounts of Banco Sabadell groupConsolidated profit and loss accounts of Banco Sabadell group For the six-month periods ended 30 June 2016 and 2015

Thousand euro

N o ta 30 / 06 / 2016 30/ 06/ 2015 (*)Interest income 20 2,634,536 2,127,586(Interest expenses) 20 (692,061) (828,608)(Expenses on share capital repayable on demand) - -

Gro ss Inco me 1,942,475 1,298,978Dividend income 4,578 2,223Results of entities recognised by the equity method 44,249 25,077Fee and commission income 21 682,268 498,021(Fee and commission expenses) 21 (112,029) (43,974)Results of financial operations (net) 22

Gains o r (-) losses on derecognition o f financial assets and liabilities not measured at fair value through profit or loss, net 22 489,835 1,009,116Gains o r (-) losses on financial assets and liabilities held for trading, net 22 (1,922) 105,014Gains o r (-) losses on financial assets and liabilities designated at fair value through profit or loss, net 22 2,025 274Gains o r (-) losses from hedge accounting, net 22 12,870 (136)

Exchange differences (gain or (-) loss), net 14,694 82,281Other operating income 23 109,068 91,164(Other operating expenses) 24 (183,088) (86,244)Income from assets covered by insurance o r reinsurance contracts 16 82,332 84,022(Expenses from liabilities covered by insurance or reinsurance contracts) 16 (107,193) (105,797)

Gro ss Inco me 2,980,162 2,960,019(Administrative expenses) 25 (1,325,619) (907,998)

(Staff expenses) (828,660) (615,505)(Other general administration expenses) (496,959) (292,493)

(Amortisation) (193,984) (143,450)(Provisions or (-) reversal o f provisions) (33,176) (1,516)(Impairment or (-) reversal o f impairment on financial assets no t measured at fair value through profit or loss) 26 (599,575) (1,180,332)

(Financial assets measured at cost) -(Available- fo r-sale financial assets) (97,408) (19,364)(Loans and receivables) (502,167) (1,160,968)(Held to maturity investments) - -

R esult o f o perat ing act iv it y 827,808 726,723(Impairment or (-) reversal o f impairment o f investments in jo int ventures and associates) (2,894) (2,955)(Impairment or (-) reversal o f impairment on non-financial assets) 27 (242,320) (413,031)

(Tangible assets) (61,354) (105,914) (Intangible assets) - - (Other) (180,966) (307,117)

Gains or (-) losses on derecognition o f non financial assets, net 28 35,261 (3,315)Negative goodwill recognised in profit or loss 29 - 207,371

Profit or (-) loss from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations

30(23,880) (151,287)

P ro f it o r ( -) lo ss befo re tax f ro m co nt inuing o pera t io ns 593,975 363,506

(Tax expense or (-) income related to profit or loss from continuing operations) (166,588) (9,576)

P ro f it o r ( -) lo ss a f ter tax f ro m co nt inuing o pera t io ns 427,387 353,930Profit or (-) loss after tax from discontinued operations - -

P R OF IT F OR T H E YEA R 427,387 353,930

Attributable to minority interest (non-contro lling interests) 2,051 1,684Attributable to owners of the parent 425,336 352,246

Earnings per share 0.08 0.08

Basic 0.08 0.07

Diluted 0.08 0.07

(*) Presented for comparison purposes only.Notes 1 to 35 of the notes to the financial statements and schedules are an integral part of the consolidated balance sheet at 30 June, 2016.

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Consolidated statements of changes in net equity of Banco Sabadell groupConsolidated statements of changes in net equity of Banco Sabadell groupConsolidated statements of changes in net equity of Banco Sabadell groupConsolidated statements of changes in net equity of Banco Sabadell group Consolidated statements of recognised income and expense for Banco Sabadell group

For the six-month periods ended 30 June 2016 and 2015

Thousand euro

30/ 06/ 2016 30/ 06/ 2015 (*)

P ro f it o r lo ss fo r the perio d 427,387 353,930

Other co mprehens ive inco me (278 ,370) (961,474)Items that will no t be reclassified to pro fit or loss - -

Actuarial gains or (-) losses on defined benefit pension plans - -Non-current assets and disposal groups held for sale - -

Share of other recognised income and expenses of investments in subsidiaries, jo int ventures and associates - -Rest o f valuation adjustments - -Income tax relating to items that will not be reclassified - -

Items that may be reclassifed to profit or loss (278,370) (961,474)Hedge o f net investments in fo reign operations [effective portion] 119,147 -

Valuation gains o r (-) losses taken to equity 119,147 -

Transferred to pro fit o r loss - -Other reclassifications - -

Foreign currency translation (350,691) 35,638Translation gains or (-) losses taken to equity (350,691) 35,638Transferred to pro fit o r loss - -Other reclassifications - -

Cash flow hedges [effective portion] 45,833 (445,090)

Valuation gains o r (-) losses taken to equity 91,992 (509,557)Transferred to pro fit o r loss (46,159) 64,467Transferred to initial carrying amount of hedged items - -Other reclassifications - -

Available-for-sale financial items (280,766) (954,649)Valuation gains o r (-) losses taken to equity 312,256 5,802Transferred to pro fit o r loss (467,390) (1,018,209)Other reclassifications (125,632) 57,758

Non-current assets and disposal groups held for sale 160,093 -Valuation gains o r (-) losses taken to equity 34,461 -Transferred to pro fit o r loss - -Other reclassifications 125,632 -

Share of other recognised income and expenses of investments in subsidiaries, jo int ventures and associates 2,544 (6,602)Income tax relating to items that may be reclassified to profit o r (-) loss 25,470 409,229

T OT A L C OM P R EH EN SIVE IN C OM E F OR T H E YEA R 149,017 (607,544)

Attributable to minority interest [Non-contro lling interest] 2,023 (237)Attributable to owners of the parent 146,994 (607,307)(*) Presented for comparison purposes only.

The consolidated statement of recognised income and expenses together with the consolidated statement of changes in net equity of the Banco Sabadell Group make up the statement of changes in net equity.Notes 1 to 35 of the notes to the f inancial statements and schedules are an integral part of the consolidated balance sheet at 30 June, 2016.

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Consolidated statements of changes in net equity of Banco Sabadell groupConsolidated statements of changes in net equity of Banco Sabadell groupConsolidated statements of changes in net equity of Banco Sabadell groupConsolidated statements of changes in net equity of Banco Sabadell group Consolidated statements of total changes in net equity of Banco Sabadell group


Thousand euro

Sources of changes in net equity

Accumulated other

comprehensive income Other items

Opening balance 31/ 12/ 2015(*) 679,906 7,935 ,665 - 14,32 2 - - 3,175,065 (238,454) 708,441 - 455,606 (39) 37,149 12,767,661

Effects of corrections of errors - - - - - - - - - - - - - -Effects of changes in accounting policies - - - - - - - - - - - - - -

Opening balance 31/ 12/ 2015 (*) 679,906 7,935 ,665 - 14,3 22 - - 3,175,065 (238,454) 708,441 - 455,606 (39) 37,149 12,767,661

T o ta l co mprehensive inco me fo r the year - - - - - - - - 425,336 - (278,342) (28) 2,051 149,017

Other changes in net equity 15,877 (106,448) - 14,066 - - 614,515 117,284 (708,441) - - - (1,963) (55,110)

Issue o f ordinary shares (**) 15,877 - - - - - (15,877) - - - - - - -Issuance of preference shares - - - - - - - - - - - - - -Issuance of o ther equity instruments - - - - - - - - - - - - - -Exercise or expiration o f o ther equity instruments issued - - - - - - - - - - - - - -Conversion of debt to net equity - - - - - - - - - - - - - -Capital reduction - - - - - - - - - - - - - -Divdends (o r shareholder payments) - (106,448) - - - - (77,947) 135,695 - - - - - (48,700)Purchase of treasury shares - - - - - - - (208,103) - - - - - (208 ,103)Sale or cancellation of treasury shares - - - - - - 4,944 189,692 - - - - - 194,636Reclassification of financial instruments from net equity to liability - - - - - - - - - - - - - -Reclassification of financial instruments from liability to net equity - - - - - - - - - - - - - -Transfers among components of net equity (**) - - - 3,393 - - 705,048 - (708,441) - - - - -

Net equity increase or (-) decrease resulting from business combinations - - - - - - - - - - - - - -Share based payments (***) - - - 10,673 - - - - - - - - - 10,673Other increase or (-) decrease in net equity - - - - - (1,653) - - - - - (1,963) (3 ,616)

C lo s ing balance 30 / 06/ 2016 695,783 7,829,217 - 28,388 - - 3,789,580 (121,170) 425,336 - 177,264 (67) 37,237 12,861,568

Notes 1 to 35 of the notes to the f inancial statements and schedules are an integral part of the consolidated balance sheet at 30 June, 2016. The major movements of ordinary shares are described in note 17, unless specif ied otherwise

(**) Includes the distribut ion of prof it for the year, the purchase of f ree assignment rights and complementary remunerat ion, in addit ion to the dividend (see note 3). (***) See note 17. Other capital instruments

M inority interests

T o ta lRevaluation

reserveOther

reserves(-) Treasury

shares

Profit or (-) loss

arrtibutable to owners of

the parent(-) Interim dividends

Accumulated other

comprehensive incomeCapital

Share premium

Equity instruments issued other than Capital Other equity

Retained earnings

(*) Presented, solely and exclusively, for comparison purposes.

The consolidated statement of recognised income and expenses together with the consolidated statements of changes in net equity of the Banco Sabadell Group make up the statement of changes in net equity.

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Consolidated statements of changes in net equity oConsolidated statements of changes in net equity oConsolidated statements of changes in net equity oConsolidated statements of changes in net equity of Banco Sabadell groupf Banco Sabadell groupf Banco Sabadell groupf Banco Sabadell group Consolidated statements of total changes in net equity of Banco Sabadell group


Thousand euro


Accumulated other

comprehensive income Other items

Opening balance 31/ 12/ 2014 503,058 5,710 ,626 727,567 6,564 - - 2,991,627 (87,376) 371,677 - 937,416 1,517 53,276 11,215,952

Effects of corrections of errors - - - - - - - - - - - - - -Effects of changes in accounting policies - - - - - - - - - - - - - -

Opening balance 31/ 12/ 2014 503,058 5,710 ,626 727,567 6,564 - - 2,991,627 (87,376) 371,677 - 937,416 1,517 53,276 11,215,952

T o ta l co mprehensive inco me fo r the year - - - - - - - - 352,246 - (959,553) (1,921) 1,684 (607,544)

Other changes in equity 145,362 1,394,743 (2,698) 4,238 - - 303,076 13,028 (371,677) - - 646 (18,239) 1,468,479

Issue o f ordinary shares 145,257 1,470,867 - - - - (9,568) - - - - - - 1,606,556Issuance of preference shares - - - - - - - - - - - - - -Issuance of o ther equity instruments - - - - - - - - - - - - - -Exercise or expiration o f o ther equity instruments issued - - - - - - - - - - - - - -Conversion of debt to equity 105 2,720 (2,698) - - - (127) - - - - - - -Capital reduction - - - - - - - - - - - - -Divdends (o r shareholder payments) - (50,677) - - - - (21,172) 50,677 - - - - - (21,172)Purchase of treasury shares - - - - - - (226,346) - - - - - (226,346)Sale or cancellation of treasury shares - - - - - - 3,407 188,697 - - - - - 192,104Reclassification of financial instruments from net equity to liability - - - - - - - - - - - - - -Reclassification of financial instruments from liability to net equity - - - - - - - - - - - - - -Transfers among components of net equity - - - - - - 371,677 - (371,677) - - - - -

Equity increase o r (-) decrease resulting from business combinations - - - - - - - - - - - - - -Share based payments - - - 4,238 - - - - - - - - - 4,238Other increase or (-) decrease in net equity - (28,167) - - - - (41,141) - - - - 646 (18,239) (86 ,901)

C lo s ing balance 30 / 06/ 2015 648,420 7,105 ,369 724,869 10,802 - - 3,294,703 (74,348) 352,246 - (22,137) 242 36,721 12,076,887Presented for comparison purposes only.Notes 1 to 35 of the notes to the f inancial statements and schedules are an integral part of the consolidated balance sheet at 30 June, 2016.

CapitalShare

premium

Equity instruments issued other than Capital Other equity

Retained earnings

Revaluation reserve

Other reserves

(-) Treasury shares

Profit or (-) loss

arrtibutable to owners of

the parent(-) Interim dividends

Accumulated other

comprehensive income

M inority interests

T o ta l

9

Consolidated cash flow statements of Banco Sabadell groupConsolidated cash flow statements of Banco Sabadell groupConsolidated cash flow statements of Banco Sabadell groupConsolidated cash flow statements of Banco Sabadell group For the six-month periods ended 30 June 2016 and 2015

Thousand euro

N o te 30/ 06/ 2016 30 / 06/ 2015 (*)

C ash f lo ws f ro m o perat ing act iv it ies 1,389 ,431 5,173,657Profit/(loss) for the period 427,387 353,930Adjustments for operating cash flows 1,090,382 479,709

Amortisation 193,984 143,450Other adjustments 896,398 336,259

Increase/decrease of operating assets (net) 986,474 (1,088,064)Financial assets held for trading (986,992) 4,097

Financial assets designated at fair value through profit or loss 20,371 11,188Available-fo r-sale financial assets (1,597,921) (1,510,737)

Loans and receivables 3,544,462 301,713Other operating assets 6,554 105,675

Increase/decrease of operating liabilities (net) (1,106,471) 5,584,893Financial liabilities held for trading 595,825 (87,229)

Financial liabilities designated at fair value through profit or loss - -Financial liabilities measured at amortised cost (2,392,037) 3,702,236

Other operating liabilities 689,741 1,969,886Income tax received/paid (8,341) (156,811)

C ash f lo ws f ro m invest ing ac t iv it ies (182,615) (1,089,552)Payments made: (1,010,678) (1,494,810)

Tangible assets 9 (561,778) (235,907)Intangible assets (6,207) (63,835)

Investments in jo int ventures and associates (9,707) (378,629)Subsidiaries and other business units - -

Non current assets and liabilities held for sale 12 (432,986) (816,439)Held-to-maturity investments - -

Other payments related to investing activities - -Payments received 828,063 405,258

Tangible assets 9 and 28 355,444 73,572Intangible assets - -

Investments in jo int ventures and associates 49,567 36,253Subsidiaries and other business units - -

Non current assets and liabilities held for sale 423,052 295,433Held-to-maturity investments - -

Other payments related to investing activities - -

C ash f lo ws f ro m f inancing ac t iv it ies 150,302 1,418,343Payments made: (258,157) (380,319)

Dividends - -Subordinated liabilities - (83,689)

Redemption of own equity instruments - -Acquisition of own equity instruments (208,104) (226,346)

Other payments related to financing activities (50,053) (70,284)Payments received 408,459 1,798,662

Subordinated liabilities 213,823 -Issuance of own equity instruments - 1,606,556

Disposal of own equity instruments 194,636 192,106Other payments related to financing activities -

Ef fect o f exchange rate f luctua t io ns (228,499) 17,290

N et increase / (decrease) in cash and cash equiva len ts 1,128 ,619 5,519,738

C ash and cash equiva lents at beginning o f the perio d 7,343 ,481 2,490,592

C ash and equivalents at end o f the perio d 8,472 ,100 8,010,330

M emo randum item

C A SH F LOWS C OR R ESP ON D IN G T OInterest received 2,478,262 2,074,830

Interest paid 926,521 1,094,617Dividends received 4,578 2,223

C A SH C OM P ON EN T S A N D C A SH EQUIVA LEN T S A T C LOSE OF T H E P ER IODCash 654,202 512,935

Cash equivalent balances in central banks 6,849,176 6,714,242Other demand deposits 968,722 783,153

Other financial assets - -Less: bank overdrafts repayable on demand - -

T OT A L C A SH A N D C A SH EQUIVA LEN T S A T C LOSE OF T H E P ER IOD 8,472 ,100 8,010,330Of which: held by entities of the group but no t available to the group - -



10

NOTES TO THE NOTES TO THE NOTES TO THE NOTES TO THE SUMMARISEDSUMMARISEDSUMMARISEDSUMMARISED CONSOLIDATED FINANCIAL STATEMENTS OF THE BANCO SABADELL CONSOLIDATED FINANCIAL STATEMENTS OF THE BANCO SABADELL CONSOLIDATED FINANCIAL STATEMENTS OF THE BANCO SABADELL CONSOLIDATED FINANCIAL STATEMENTS OF THE BANCO SABADELL GROUPGROUPGROUPGROUP For the six-month period ended 30 June 2016.

Note 1 Note 1 Note 1 Note 1 –––– Activity, accounting policies and practicesActivity, accounting policies and practicesActivity, accounting policies and practicesActivity, accounting policies and practices

Activity Banco de Sabadell, S.A. (hereinafter, also referred to as "Banco Sabadell" or "the bank"), with registered office in Sabadell, Plaza de Sant Roc, 20, engages in banking business and is subject to the standards and regulations governing banking institutions operating in Spain. The functions of prudential supervision of Banco Sabadell on a consolidated basis were taken on by the European Central Bank (ECB) in November 2014. The bank is the parent company of a corporate group (see Schedule I and Note 2 to the 2015 consolidated financial statements) whose activity it controls directly or indirectly and which comprise, together with the bank, the Banco Sabadell group ("the group").

Basis of presentation The Group's consolidated financial statements for 2015 were prepared in accordance with the International Financial Reporting Standards (IFRS) adopted by the European Union applicable at the end of 2015, taking into account Bank of Spain Circular 4/2004 of 22 December and amendments thereto and other financial reporting regulations applicable to the group, in order to fairly present the group's equity and consolidated financial situation as at 31 December 2015 and the results of its consolidated operations, changes in equity and cash flows in 2015. Note 1 to the 2015 consolidated financial statements summarises the most significant accounting principles and policies and valuation criteria applied by the group. Those consolidated financial statements were authorised by the directors of Banco Sabadell at a meeting of the Board on 28 January 2016 and were approved by the shareholders at the Annual General Meeting on 31 March 2016. These summarised interim consolidated financial statements for the six months to 30 June 2016 have been prepared and are presented in accordance with IAS 34 “Interim Financial Reporting", as set out in the IFRS, and they were authorised by the group's Directors on 21 July 2016, together with the disclosures required by Circular 5/2015 of 28 October, of the Spanish National Securities Market Commission (CNMV). In accordance with IAS 34, interim financial information is prepared exclusively for the purpose of describing material events and variations that occurred during the half-year and is not intended to duplicate the information published previously in the latest authorised consolidated financial statements. For a proper comprehension of the information included in these summarised interim consolidated financial statements, they should be read together with the group's consolidated financial statements for the year ended 31 December 2015. Except as otherwise indicated, these summarised interim consolidated financial statements are expressed in thousands of euros. In order to show the amounts in thousands of euros, the accounting balances have been subject to rounding; for this reason, some of the amounts appearing in certain tables may not be the exact arithmetic sum of the preceding figures.

11

Standards and interpretations issued by the International Accounting Standards Board (IASB) coming into Standards and interpretations issued by the International Accounting Standards Board (IASB) coming into Standards and interpretations issued by the International Accounting Standards Board (IASB) coming into Standards and interpretations issued by the International Accounting Standards Board (IASB) coming into

effecteffecteffecteffect in the first half of 2016in the first half of 2016in the first half of 2016in the first half of 2016

During the first half of 2016, the standards and interpretations adopted by the European Union, together with amendments thereto, which have been applied by the group due to their entry into force or their expected application, are as follows:

S ta n d a r d s a n d i n te r p r e ta t i o n sS ta n d a r d s a n d i n te r p r e ta t i o n sS ta n d a r d s a n d i n te r p r e ta t i o n sS ta n d a r d s a n d i n te r p r e ta t i o n s T i t l eT i t l eT i t l eT i t l e

Amendment of IAS 16 and IAS 38 Clarification of acceptable methods of depreciation and amortisation

Amendment of IFRS 11 Accounting for aquis itions of interests in joint operations

Amendment of IAS 1 Disclosure initiative

There have been no significant effects caused by the application of these standards on these summarised consolidated interim financial statements. IASBIASBIASBIASB----issued standards and interpretations not yet in effectissued standards and interpretations not yet in effectissued standards and interpretations not yet in effectissued standards and interpretations not yet in effect

At the date of authorisation of these summarised interim consolidated financial statements, the most significant standards and interpretations published by the IASB but which have not yet entered into force because they had not yet been adopted by the European Union are the same as set out in Note 1 to the 2015 consolidated financial statements. In particular, this note explains the main changes that IFRS 9 entails in terms of the classification and valuation of financial assets, particularly with regards to the new value impairment model, and highlights the differences between the current incurred loss model set out in IAS 39 and the new expected loss model set out in IFRS 9.

Management estimates that the future implementation of IFRS 9 could have a significant impact on the value of financial assets and liabilities currently reported, in particular with regards to the estimates of loan loss provisions. At the end of 2014, the group began preparatory work for the implementation of this standard, which has significantly intensified throughout 2015 and 2016, particularly in terms of the work necessary to develop a methodology to calculate expected losses, which will require significant changes to be made in the group’s systems and processes, as well as the governance of financial information and its fit with the group’s current credit risk management practices. The different work plans that take into account the implementation of IFRS 9 have not been completed as of the date on which these interim financial statements were prepared.

Given the above, at present the group has been unable to quantify the potential impact of the new expected loss model.

Accounting principles and policies applied The accounting principles and policies used in preparing these summarised interim consolidated financial statements are consistent with those used in drawing up the group's consolidated financial statements at 31 December 2015. a) Use of judgements and estimates in preparing the financial statements The preparation of the summarised interim consolidated financial statements requires certain estimates to be made. It also requires that Management exercise judgement in the process of applying the group’s accounting policies. Such estimates may affect the carrying amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements, as well as income and expenses in the period covered by the financial statements. The main estimates made in these summarised interim consolidated financial statements refer to the following: • Income tax expense, in accordance with IAS 34, is recognised in interim periods on the basis of the best estimate of the weighted average tax rate that the group expects for the annual period. • Impairment losses on certain financial assets. • Assumptions used in actuarial estimates of liabilities and commitments in respect of post-employment benefits, and in estimates of liabilities under insurance contracts. • Useful lives of tangible and intangible assets.

12

• The measurement of goodwill arising on consolidation. • Fair value of unquoted financial assets. • Fair value of real estate assets held on the balance sheet. Although estimates are based on the best information available to Management about the present and foreseeable circumstances, final outcomes may be at variance with these estimates. b) Comparability The information presented in the summarised interim consolidated financial statements in connection with 2015 is provided solely and exclusively for purposes of comparison with the information for the period ended 30 June 2016 (except for the balance sheet, which is presented at 31 December 2015). On 30 June 2015, the group took control over TSB Banking Group PLC. As a result of its incorporation into the scope of consolidation, the data contained in the consolidated profit and loss account and the balance sheet are not comparable to the previous period. These consolidated interim financial statements have been adapted to Circular 5/2015 of 28 October, of the Spanish National Securities Market Commission (CNMV), and therefore the terminology and presentation of certain items of the financial accounts have been modified compared with those included in the 2015 consolidated financial statements. The main reclassification for this purpose has involved on-balance sheet assets, relative to demand deposits with credit institutions from the Loans and receivables portfolio to the Cash and cash balances at central banks portfolio, in the amount of €1,204 million (€1,300 million at 1 January 2015 and €783 as at 30 June 2015.) The reclassification in other financial statements has involved non-material items. c) Seasonal nature of the group's transactions Given the activities in which the group companies are engaged, its operations are not cyclical or seasonal in nature. Consequently, these notes to the interim consolidated financial statements for the six months ended 30 June 2016 do not contain specific disclosures in this connection. d) Materiality In accordance with IAS 34, when determining the note disclosures to be made on the various items in the financial statements or other matters, the group took into account their materiality in relation to the interim financial statements.

Note 2 Note 2 Note 2 Note 2 –––– Banco Sabadell groupBanco Sabadell groupBanco Sabadell groupBanco Sabadell group Banco Sabadell is comprised of different financial institutions, brands, subsidiaries and affiliates that cover all aspects of financial business. Schedule I to the consolidated financial statements for the year ended 31 December 2015 contains material disclosures about the group companies that were consolidated as of that date and those recognised by the equity method. Schedule I to these summarised interim consolidated financial statements gives details of the combination of business, acquisitions and sales of shares held in other institutions (subsidiaries and/or investments in investees) conducted by the group during the six-month period ended 30 June 2016.

Removals from the consolidation scope in the first half of 2016 On 13 April 2016, Banco Sabadell transferred its full holding (20.994% of its share capital) in Dexia Sabadell, S.A. to Dexia Crédit Local, S.A. (Dexia), at a price of €52,390 thousand, representing gross gains for Banco Sabadell in the same amount, under the terms ratified by the arbitration award.

13

This transfer was the result of Banco Sabadell exercising its put option on 6 July 2012 on its stake in Dexia, holder of the remaining share capital of the above-referred institution. The transfer of shares by Banco Sabadell and their acquisition by Dexia occurred after having sent the relevant communications to the corresponding regulatory authorities.

Other business transactions during the first half of the year and current relevant contracts Agreement for the sale of Mediterráneo Vida, Sociedad Anónima de Seguros y ReasegurosAgreement for the sale of Mediterráneo Vida, Sociedad Anónima de Seguros y ReasegurosAgreement for the sale of Mediterráneo Vida, Sociedad Anónima de Seguros y ReasegurosAgreement for the sale of Mediterráneo Vida, Sociedad Anónima de Seguros y Reaseguros

On 22 June 2016, the group reached an agreement to sell 100% of its shares in Mediterráneo Vida, Sociedad Anónima de Seguros y Reaseguros, a life insurance and saving/retirement insurance undertaking that has managed a portfolio with no new business since 2014 to a consortium led by Ember. The closing of this transaction is subject to obtaining the corresponding regulatory authorisation. Consequently, the group has not recorded any gains or losses from this transaction in the consolidated profit and loss statement for the six-month period ended on 30 June 2016, although it has reclassified assets and liabilities from this subsidiary company to headings of non-current assets and liabilities and disposal groups classified as held for sale, of the consolidated balance sheet at 30 June 2016 pursuant to current legislation.

Other disclosures Asset protection schemeAsset protection schemeAsset protection schemeAsset protection scheme

As a result of the acquisition of Banco CAM on 1 June 2012, the Asset Protection Scheme (APS) came into force with retroactive effect as from 31 July 2011, in accordance with the protocol on financial assistance for the restructuring of Banco CAM. Under the scheme, which covers a specified portfolio of assets with a gross value of €24,644 million at 31 July 2011, the Deposit Guarantee Fund (hereinafter, FGD) will bear 80% of losses on the portfolio for a period of ten years, once impaired allowances in respect of those assets, which amounted to €3,882 million at that date, have been fully applied. The portfolio of assets protected by the APS on the date it entered into force (31 July 2011) breaks down as follows: € million

BalanceBalanceBalanceBalance Provis ionProvis ionProvis ionProvis ion

Loans and advances to customers 19,117 2,263

Of which risk drawn down 18,460 -

Of which guarantees and contingent liabilities 657 -

Real estate assets (*) 4,663 1,096

Shareholdings 504 163

Written-off assets 360 360

TotalTotalTotalTotal 24,64424,64424,64424,644 3,8823,8823,8823,882

(*) Real estate assets including non-current assets held for sale, investment propert ies and inventories. Movements in the balance of the loans and receivables portfolio protected by the APS from its entry into force through 30 June 2016 are as follows: € millio n

B a la n c e a t 3 1 Ju l y 2 0 1 1B a la n c e a t 3 1 Ju l y 2 0 1 1B a la n c e a t 3 1 Ju l y 2 0 1 1B a la n c e a t 3 1 Ju l y 2 0 1 1 1 8 ,4 6 01 8 ,4 6 01 8 ,4 6 01 8 ,4 6 0

Acquis ition of real estate assets (5,833)

Receipts and subrogation (3,593)

Increase in written-off assets (1,039)

Credit draw-downs 30

B a la n c e a t 3 0 Ju n e 2 0 1 6B a la n c e a t 3 0 Ju n e 2 0 1 6B a la n c e a t 3 0 Ju n e 2 0 1 6B a la n c e a t 3 0 Ju n e 2 0 1 6 8 ,0 2 58 ,0 2 58 ,0 2 58 ,0 2 5

14

Movements in the balance of the real estate asset portfolio protected by the APS from its entry into force through 30 June 2016 are as follows: € millio n

B a l a n c e a t 3 1 Ju l y 2 0 1 1B a l a n c e a t 3 1 Ju l y 2 0 1 1B a l a n c e a t 3 1 Ju l y 2 0 1 1B a l a n c e a t 3 1 Ju l y 2 0 1 1 4 ,6 6 34 ,6 6 34 ,6 6 34 ,6 6 3

Acquis ition of real estate assets 4,645

Sale of real estate assets (3,945)

Changes in value -

B a l a n c e a t 3 0 Ju n e 2 0 1 6B a l a n c e a t 3 0 Ju n e 2 0 1 6B a l a n c e a t 3 0 Ju n e 2 0 1 6B a l a n c e a t 3 0 Ju n e 2 0 1 6 5 ,3 6 35 ,3 6 35 ,3 6 35 ,3 6 3

For criteria for recording and presenting assets guaranteed by the APS, see Note 2 to the 2015 consolidated financial statements.

Note 3 Note 3 Note 3 Note 3 –––– Dividends paidDividends paidDividends paidDividends paid The dividends paid by the bank in the six month periods ended 30 June 2016 and 30 June 2015 are detailed below: Tho usand euro

% o f p a r% o f p a r% o f p a r% o f p a r Eu r o p e r s h a r e Eu r o p e r s h a r e Eu r o p e r s h a r e Eu r o p e r s h a r e A m o u n tA m o u n tA m o u n tA m o u n t

Ordinary shares 0% 0 0

Other shares (non-voting, redeemable, etc.) 0 0 0

T o ta l d i v i d e n d s p a i dT o ta l d i v i d e n d s p a i dT o ta l d i v i d e n d s p a i dT o ta l d i v i d e n d s p a i d 0000

a) Dividends charged to results 0% 0 0

b) Dividends charged to reserves or issue premium 0 0 0

c) Dividends in kind 0 0 0

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

On 31 March 2016, the General Meeting of Shareholders approved a flexible remuneration to shareholders arranged in the form of a capital increase charged to reserves in the amount of €0.05 per share, offering shareholders the opportunity to receive that amount in cash and/or in new shares through the sale of rights to free assignment, with the purchase commitment of rights to free assignment to be undertaken by the bank. Each shareholder received a right to free assignment for each of the bank’s shares which they owned. When the capital increase was carried out, each bank shareholder received one new share for every 34 rights to free assignment. As a result, on 25 April 2016, a capital increase was carried out charged to reserves in the amount of €15,877 thousand through the issuance of 127,016,761 new shares with a par value of €0.125 each, since 79.40% of the owners of the rights to free assignment elected to receive new shares. The other 18.57% of holders of rights to free assignment accepted the bank's irrevocable commitment to purchase the rights, with the result that the bank acquired 1,010,122,734 rights for a total gross amount of €48,486 thousand, which is presented under Dividends (or members’ remuneration), reducing Other reserves in the statement of changes in net equity. The General Meeting of Shareholders approved shareholder remuneration, supplementary to the dividend, of €0.02 per share consisting in the delivery of shares from the bank's treasury portfolio for an equivalent amount, which was recognised at its market value against the issue premium at €106,448 thousand, and at the difference compared to the value of the delivered treasury portfolio (€135,695 thousand) and cash flow peaks (€213 thousand) against Other reserves amounting to €29,461 thousand. Both are shown under the heading Dividends (or remuneration) of the statement of changes in net equity.

15

Thousand euro

% o f p a r% o f p a r% o f p a r% o f p a r Eu r o p e r s h a r eEu r o p e r s h a r eEu r o p e r s h a r eEu r o p e r s h a r e A m o u n tA m o u n tA m o u n tA m o u n t

Ordinary shares 0% 0 0

Other shares (non-voting, reedemable, etc.) 0 0 0

T o ta l d i v i d e n d s p a i d T o ta l d i v i d e n d s p a i d T o ta l d i v i d e n d s p a i d T o ta l d i v i d e n d s p a i d 0000

a) Dividends charged to results 0% 0 0

b) Dividends charged to reserves or issue premium 0 0 0

c) Dividends in kind 0 0 0

3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

On 28 May 2015, the General Meeting of Shareholders approved a flexible remuneration to shareholders arranged in the form of a capital increase charged to reserves in the amount of €0.04 per share, offering shareholders the opportunity to receive that amount in cash and/or in new shares. Each shareholder received a right to free assignment for each of the bank’s shares which they owned. When the capital increase was carried out, each bank shareholder received one new share for every 59 rights to free assignment. As a result, on 25 June 2015, a capital increase was carried out charged to reserves in the amount of €9,568 thousand through the issuance of 76,543,124 new shares with a par value of €0.125 each, since 88.36% of the owners of the rights to free assignment elected to receive new shares. The other 10.62% of holders of rights to free assignment accepted the bank's irrevocable commitment to purchase the rights, with the result that the bank acquired 542,878,835 rights for a total gross amount of €21,172 thousand, which is presented under Dividends (or members’ remuneration), reducing Other reserves in the statement of changes in net equity. The General Meeting of Shareholders approved shareholder remuneration, supplementary to the dividend, of €0.01 per share consisting in the delivery of shares from the bank's treasury portfolio for an equivalent amount, which was charged to reserves for risk premiums for a total amount of €50,678 thousand, which is shown under the heading Dividends (or remuneration) on the statement of changes in net equity.

Earnings per share Basic earnings per share are calculated by dividing the net profit or loss attributable to the group by the weighted average number of ordinary shares outstanding in the year, excluding any treasury shares purchased by the group. Diluted earnings per share are calculated by adjusting the attributable profit or loss, and the weighted average number of ordinary shares outstanding, for the estimated effect of all potential conversions to ordinary shares. Earnings per share calculations are shown in the following table: Thousand euro

30/06/201630/06/201630/06/201630/06/2016 30/06/201530/06/201530/06/201530/06/2015

Group attributable net profit (thousand euro) 425,336 352,246

Result from discontinued operations (net) (thousand euro) - -

Weighted average number of ordinary shares outstanding (*) 5,398,556,699 4,538,794,671

Weighted average number of ordinary shares outstanding due to the correction factor (**) - 4,936,484,041

Assumed conversion of convertible debt and other equity instruments 48,826,184 286,236,956

Adjusted weighted average number of ordinary shares outstanding 5,447,382,883 5,222,720,997

Earnings per share (in euros) 0.08 0.08

Basic earnings per share adjusted for effect of mandatory convertible bonds (in euros) 0.08 0.07

Diluted earnings per share (in euros) 0.08 0.07

(*) Average number of outstanding shares (mn.), excluding the average number of own shares held as treasury throughout the period.

(**) Correct ion factor of the effects of the capital increases with pre-emptive subscript ion rights and the scrip dividend applied to the f inancial periods prior to the issue.

In the f irst half of 2015, the bank carried out several capital increases. Pursuant to IAS 13, which states that when capital increases with pre-emptive rights are carried out, earningsper share, basic and diluted, must be recalculated for the previous periods. In order to do so, a correct ion factor must be applied to the denominator (weighted average number ofshares outstanding). This correct ion factor derives from the division of the fair value per share immediately prior to the period of pre-emptive subscript ion rights between thetheoret ical fair value ex-rights per share.

As of 30 June 2016 and 2015, there were no other share-based financial instruments or commitments to employees with a material impact on the calculation of diluted earnings per shares for the periods presented. For this reason, basic earnings per share coincide with diluted earnings per share.

16

Note 4 Note 4 Note 4 Note 4 –––– Financial risk managementFinancial risk managementFinancial risk managementFinancial risk management Note 4 to the consolidated financial statements for 2015 on Financial risk management gives information on the corporate risk culture, the strategic risk framework and the overall organisation of the risk function, as well as the management and monitoring of the main financial and non-financial risks. Relevant information updated to 30 June 2016 relative to financial risk management is shown below.

4.1 Credit risk Credit risk exposureCredit risk exposureCredit risk exposureCredit risk exposure

The breakdown of the balance of loans and advances to customers and type of guarantee at 30 June 2016 and 31 December 2015, respectively, is as follows: Thousand euro

L e s s th a n o r L e s s th a n o r L e s s th a n o r L e s s th a n o r

e q u a l to 4 0 %e q u a l to 4 0 %e q u a l to 4 0 %e q u a l to 4 0 %

Gr e a te r th a n G r e a te r th a n G r e a te r th a n G r e a te r th a n

4 0 % o r eq u a l t o 4 0 % o r eq u a l t o 4 0 % o r eq u a l t o 4 0 % o r eq u a l t o

6 0 %6 0 %6 0 %6 0 %

G r e a te r th a n G r e a te r th a n G r e a te r th a n G r e a te r th a n

6 0 % a n d le s s 6 0 % a n d le s s 6 0 % a n d le s s 6 0 % a n d le s s

th a n o r e q u a l th a n o r e q u a l th a n o r e q u a l th a n o r e q u a l

to 8 0 %to 8 0 %to 8 0 %to 8 0 %


8 0 % a n d l e s s 8 0 % a n d l e s s 8 0 % a n d l e s s 8 0 % a n d l e s s


to 1 0 0 %to 1 0 0 %to 1 0 0 %to 1 0 0 %

Gr e a te r th an G r e a te r th an G r e a te r th an G r e a te r th an

1 0 0 %1 0 0 %1 0 0 %1 0 0 %

P u b l i c A d m in i s t r a t i on sP u b l i c A d m in i s t r a t i on sP u b l i c A d m in i s t r a t i on sP u b l i c A d m in i s t r a t i on s 9 ,3 2 8 ,5 3 69 ,3 2 8 ,5 3 69 ,3 2 8 ,5 3 69 ,3 2 8 ,5 3 6 6 6 ,2 8 76 6 ,2 8 76 6 ,2 8 76 6 ,2 8 7 3 2 ,0 3 53 2 ,0 3 53 2 ,0 3 53 2 ,0 3 5 2 2 ,8 3 72 2 ,8 3 72 2 ,8 3 72 2 ,8 3 7 1 9 ,6 6 91 9 ,6 6 91 9 ,6 6 91 9 ,6 6 9 4 8 ,1 0 84 8 ,1 0 84 8 ,1 0 84 8 ,1 0 8 ---- 7 ,7 0 87 ,7 0 87 ,7 0 87 ,7 0 8

O th e r f i na n c i a l c o r p o r a t io n s a n d i n d iv id u a l e n t r e p r e n e u r s O th e r f i na n c i a l c o r p o r a t io n s a n d i n d iv id u a l e n t r e p r e n e u r s O th e r f i na n c i a l c o r p o r a t io n s a n d i n d iv id u a l e n t r e p r e n e u r s O th e r f i na n c i a l c o r p o r a t io n s a n d i n d iv id u a l e n t r e p r e n e u r s

( f i n an c i a l b u s i ne s s a c t iv i t y) ( f i n an c i a l b u s i ne s s a c t iv i t y) ( f i n an c i a l b u s i ne s s a c t iv i t y) ( f i n an c i a l b u s i ne s s a c t iv i t y) 1 ,7 0 6 ,6 1 71 ,7 0 6 ,6 1 71 ,7 0 6 ,6 1 71 ,7 0 6 ,6 1 7 1 0 1 ,9 3 31 0 1 ,9 3 31 0 1 ,9 3 31 0 1 ,9 3 3 4 2 ,5 0 64 2 ,5 0 64 2 ,5 0 64 2 ,5 0 6 2 9 ,9 8 32 9 ,9 8 32 9 ,9 8 32 9 ,9 8 3 5 5 ,9 7 65 5 ,9 7 65 5 ,9 7 65 5 ,9 7 6 2 3 ,4 0 02 3 ,4 0 02 3 ,4 0 02 3 ,4 0 0 3 2 ,7 5 73 2 ,7 5 73 2 ,7 5 73 2 ,7 5 7 2 ,3 2 32 ,3 2 32 ,3 2 32 ,3 2 3

N o n f in a n c i a l c o r p o r a t io n s a nd i n d i v id u a l e n t r e p r e n e u r s N o n f in a n c i a l c o r p o r a t io n s a nd i n d i v id u a l e n t r e p r e n e u r s N o n f in a n c i a l c o r p o r a t io n s a nd i n d i v id u a l e n t r e p r e n e u r s N o n f in a n c i a l c o r p o r a t io n s a nd i n d i v id u a l e n t r e p r e n e u r s

(n o n - fi n a n c ia l bu s i n e s s a c t i v i ty)(n o n - fi n a n c ia l bu s i n e s s a c t i v i ty)(n o n - fi n a n c ia l bu s i n e s s a c t i v i ty)(n o n - fi n a n c ia l bu s i n e s s a c t i v i ty) 5 4 ,5 8 8 ,3 8 15 4 ,5 8 8 ,3 8 15 4 ,5 8 8 ,3 8 15 4 ,5 8 8 ,3 8 1 2 2 ,4 9 6 ,0 7 22 2 ,4 9 6 ,0 7 22 2 ,4 9 6 ,0 7 22 2 ,4 9 6 ,0 7 2 1 ,6 4 2 ,3 8 11 ,6 4 2 ,3 8 11 ,6 4 2 ,3 8 11 ,6 4 2 ,3 8 1 7 ,5 8 4 ,2 9 67 ,5 8 4 ,2 9 67 ,5 8 4 ,2 9 67 ,5 8 4 ,2 9 6 7 ,7 8 9 ,0 6 57 ,7 8 9 ,0 6 57 ,7 8 9 ,0 6 57 ,7 8 9 ,0 6 5 5 ,1 9 7 ,5 0 55 ,1 9 7 ,5 0 55 ,1 9 7 ,5 0 55 ,1 9 7 ,5 0 5 1 ,8 9 4 ,8 8 71 ,8 9 4 ,8 8 71 ,8 9 4 ,8 8 71 ,8 9 4 ,8 8 7 1 ,6 7 2 ,7 0 01 ,6 7 2 ,7 0 01 ,6 7 2 ,7 0 01 ,6 7 2 ,7 0 0

Construction and real estate development (including land) 7,196,142 6,521,396 197,503 1,607,918 1,707,240 1,886,599 837,362 679,780

Construction of civil works 881,097 126,618 5,926 40,214 46,884 24,487 8,362 12,597

Other purposes 46,511,142 15,848,058 1,438,952 5,936,164 6,034,941 3,286,419 1,049,163 980,323

Large companies 21,587,324 2,798,658 586,224 1,055,166 873,395 709,626 357,406 389,289

SMEs and sole proprietors 24,923,818 13,049,400 852,728 4,880,998 5,161,546 2,576,793 691,757 591,034

R e s t o f h o u s e h o ld sR e s t o f h o u s e h o ld sR e s t o f h o u s e h o ld sR e s t o f h o u s e h o ld s 7 8 ,5 7 2 ,2 9 77 8 ,5 7 2 ,2 9 77 8 ,5 7 2 ,2 9 77 8 ,5 7 2 ,2 9 7 7 1 ,9 7 4 ,2 5 67 1 ,9 7 4 ,2 5 67 1 ,9 7 4 ,2 5 67 1 ,9 7 4 ,2 5 6 2 5 5 ,2 1 72 5 5 ,2 1 72 5 5 ,2 1 72 5 5 ,2 1 7 1 6 ,2 2 1 ,7 9 41 6 ,2 2 1 ,7 9 41 6 ,2 2 1 ,7 9 41 6 ,2 2 1 ,7 9 4 2 3 ,2 5 8 ,0 3 22 3 ,2 5 8 ,0 3 22 3 ,2 5 8 ,0 3 22 3 ,2 5 8 ,0 3 2 2 3 ,8 1 7 ,3 0 02 3 ,8 1 7 ,3 0 02 3 ,8 1 7 ,3 0 02 3 ,8 1 7 ,3 0 0 7 ,5 1 6 ,1 1 87 ,5 1 6 ,1 1 87 ,5 1 6 ,1 1 87 ,5 1 6 ,1 1 8 1 ,4 1 6 ,2 2 91 ,4 1 6 ,2 2 91 ,4 1 6 ,2 2 91 ,4 1 6 ,2 2 9

Properties 66,584,482 66,564,070 19,060 14,332,282 21,603,235 22,563,776 6,986,160 1,097,677

Consumption 7,704,429 4,031,875 57,061 1,355,210 1,238,103 919,694 380,386 195,543

Other purposes 4,283,386 1,378,311 179,096 534,302 416,694 333,830 149,572 123,009

L e s s : S pe c i f ic a l l o w a nc e s fo r th e im p a i r m e n t o f a s s e t s L e s s : S pe c i f ic a l l o w a nc e s fo r th e im p a i r m e n t o f a s s e t s L e s s : S pe c i f ic a l l o w a nc e s fo r th e im p a i r m e n t o f a s s e t s L e s s : S pe c i f ic a l l o w a nc e s fo r th e im p a i r m e n t o f a s s e t s

n o t c h a r ged to s pe c f i c o p e r a t i on sn o t c h a r ged to s pe c f i c o p e r a t i on sn o t c h a r ged to s pe c f i c o p e r a t i on sn o t c h a r ged to s pe c f i c o p e r a t i on s 3 4 0 ,0 9 13 4 0 ,0 9 13 4 0 ,0 9 13 4 0 ,0 9 1 - - - - - - -

T O TA LT O TA LT O TA LT O TA L 1 4 3 ,8 5 5 ,7 4 01 4 3 ,8 5 5 ,7 4 01 4 3 ,8 5 5 ,7 4 01 4 3 ,8 5 5 ,7 4 0 9 4 ,6 3 8 ,5 4 89 4 ,6 3 8 ,5 4 89 4 ,6 3 8 ,5 4 89 4 ,6 3 8 ,5 4 8 1 ,9 7 2 ,1 3 91 ,9 7 2 ,1 3 91 ,9 7 2 ,1 3 91 ,9 7 2 ,1 3 9 2 3 ,8 5 8 ,9 1 02 3 ,8 5 8 ,9 1 02 3 ,8 5 8 ,9 1 02 3 ,8 5 8 ,9 1 0 3 1 ,1 2 2 ,7 4 23 1 ,1 2 2 ,7 4 23 1 ,1 2 2 ,7 4 23 1 ,1 2 2 ,7 4 2 2 9 ,0 8 6 ,3 1 32 9 ,0 8 6 ,3 1 32 9 ,0 8 6 ,3 1 32 9 ,0 8 6 ,3 1 3 9 ,4 4 3 ,7 6 29 ,4 4 3 ,7 6 29 ,4 4 3 ,7 6 29 ,4 4 3 ,7 6 2 3 ,0 9 8 ,9 6 03 ,0 9 8 ,9 6 03 ,0 9 8 ,9 6 03 ,0 9 8 ,9 6 0

M EM O RA N DUM IT EMM EM O RA N DUM IT EMM EM O RA N DUM IT EMM EM O RA N DUM IT EM

Refinancing, refinanced and restructured operations. 10,465,576 8,437,337 91,034 1,744,955 2,102,277 2,019,724 1,128,420 1,532,995

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

TO T A LTO T A LTO T A LTO T A LO f w h i c h :O f w h i c h :O f w h i c h :O f w h i c h :

m o r tga ge l o a n sm o r tga ge l o a n sm o r tga ge l o a n sm o r tga ge l o a n s

O f w h i c h :O f w h i c h :O f w h i c h :O f w h i c h :

o th e r o th e r o th e r o th e r

c o l l a te r i s e d c o l l a te r i s e d c o l l a te r i s e d c o l l a te r i s e d

l oa n sl oa n sl oa n sl oa n s

Co l l a te r is e d lo a n s . C a r r y i n g a m o u n t o ve r la s t a va i l ab l e ap p r a i s a l . L oa n to va l u eCo l l a te r is e d lo a n s . C a r r y i n g a m o u n t o ve r la s t a va i l ab l e ap p r a i s a l . L oa n to va l u eCo l l a te r is e d lo a n s . C a r r y i n g a m o u n t o ve r la s t a va i l ab l e ap p r a i s a l . L oa n to va l u eCo l l a te r is e d lo a n s . C a r r y i n g a m o u n t o ve r la s t a va i l ab l e ap p r a i s a l . L oa n to va l u e

Thousand euro

L e s s th a n o r L e s s th a n o r L e s s th a n o r L e s s th a n o r

e q u a l to 4 0 %e q u a l to 4 0 %e q u a l to 4 0 %e q u a l to 4 0 %


4 0 % o r eq u a l t o 4 0 % o r eq u a l t o 4 0 % o r eq u a l t o 4 0 % o r eq u a l t o

6 0 %6 0 %6 0 %6 0 %

G r e a te r th a n G r e a te r th a n G r e a te r th a n G r e a te r th a n

6 0 % a n d le s s 6 0 % a n d le s s 6 0 % a n d le s s 6 0 % a n d le s s


to 8 0 %to 8 0 %to 8 0 %to 8 0 %


8 0 % a n d l e s s 8 0 % a n d l e s s 8 0 % a n d l e s s 8 0 % a n d l e s s


to 1 0 0 %to 1 0 0 %to 1 0 0 %to 1 0 0 %

Gr e a te r th an G r e a te r th an G r e a te r th an G r e a te r th an

1 0 0 %1 0 0 %1 0 0 %1 0 0 %

P u b l i c A d m in i s t r a t i on sP u b l i c A d m in i s t r a t i on sP u b l i c A d m in i s t r a t i on sP u b l i c A d m in i s t r a t i on s 5 ,7 3 5 ,8 5 55 ,7 3 5 ,8 5 55 ,7 3 5 ,8 5 55 ,7 3 5 ,8 5 5 8 4 ,1 1 68 4 ,1 1 68 4 ,1 1 68 4 ,1 1 6 3 5 ,4 5 43 5 ,4 5 43 5 ,4 5 43 5 ,4 5 4 2 7 ,5 4 52 7 ,5 4 52 7 ,5 4 52 7 ,5 4 5 2 4 ,3 3 62 4 ,3 3 62 4 ,3 3 62 4 ,3 3 6 5 6 ,3 7 85 6 ,3 7 85 6 ,3 7 85 6 ,3 7 8 0000 1 1 ,3 1 11 1 ,3 1 11 1 ,3 1 11 1 ,3 1 1

O th e r f i na n c i a l c o r p o r a t io n s a n d i n d iv id u a l e n t r e p r e n e u r s O th e r f i na n c i a l c o r p o r a t io n s a n d i n d iv id u a l e n t r e p r e n e u r s O th e r f i na n c i a l c o r p o r a t io n s a n d i n d iv id u a l e n t r e p r e n e u r s O th e r f i na n c i a l c o r p o r a t io n s a n d i n d iv id u a l e n t r e p r e n e u r s

( f i n an c i a l b u s i ne s s a c t iv i t y) ( f i n an c i a l b u s i ne s s a c t iv i t y) ( f i n an c i a l b u s i ne s s a c t iv i t y) ( f i n an c i a l b u s i ne s s a c t iv i t y) 1 ,9 3 0 ,1 4 51 ,9 3 0 ,1 4 51 ,9 3 0 ,1 4 51 ,9 3 0 ,1 4 5 9 6 ,6 9 29 6 ,6 9 29 6 ,6 9 29 6 ,6 9 2 7 3 ,5 5 27 3 ,5 5 27 3 ,5 5 27 3 ,5 5 2 3 4 ,8 1 13 4 ,8 1 13 4 ,8 1 13 4 ,8 1 1 5 2 ,1 4 85 2 ,1 4 85 2 ,1 4 85 2 ,1 4 8 2 6 ,1 2 32 6 ,1 2 32 6 ,1 2 32 6 ,1 2 3 5 6 ,2 3 85 6 ,2 3 85 6 ,2 3 85 6 ,2 3 8 9 2 39 2 39 2 39 2 3

N o n f in a n c i a l c o r p o r a t io n s a nd i n d i v id u a l e n t r e p r e n e u r s N o n f in a n c i a l c o r p o r a t io n s a nd i n d i v id u a l e n t r e p r e n e u r s N o n f in a n c i a l c o r p o r a t io n s a nd i n d i v id u a l e n t r e p r e n e u r s N o n f in a n c i a l c o r p o r a t io n s a nd i n d i v id u a l e n t r e p r e n e u r s

(n o n - fi n a n c ia l bu s i n e s s a c t i v i ty)(n o n - fi n a n c ia l bu s i n e s s a c t i v i ty)(n o n - fi n a n c ia l bu s i n e s s a c t i v i ty)(n o n - fi n a n c ia l bu s i n e s s a c t i v i ty) 5 7 ,9 9 9 ,1 2 45 7 ,9 9 9 ,1 2 45 7 ,9 9 9 ,1 2 45 7 ,9 9 9 ,1 2 4 2 1 ,5 4 4 ,2 7 42 1 ,5 4 4 ,2 7 42 1 ,5 4 4 ,2 7 42 1 ,5 4 4 ,2 7 4 1 ,4 7 0 ,6 4 01 ,4 7 0 ,6 4 01 ,4 7 0 ,6 4 01 ,4 7 0 ,6 4 0 7 ,3 3 1 ,4 5 17 ,3 3 1 ,4 5 17 ,3 3 1 ,4 5 17 ,3 3 1 ,4 5 1 7 ,3 7 5 ,9 5 17 ,3 7 5 ,9 5 17 ,3 7 5 ,9 5 17 ,3 7 5 ,9 5 1 5 ,0 3 9 ,7 8 65 ,0 3 9 ,7 8 65 ,0 3 9 ,7 8 65 ,0 3 9 ,7 8 6 1 ,7 0 0 ,1 4 11 ,7 0 0 ,1 4 11 ,7 0 0 ,1 4 11 ,7 0 0 ,1 4 1 1 ,5 6 7 ,5 8 51 ,5 6 7 ,5 8 51 ,5 6 7 ,5 8 51 ,5 6 7 ,5 8 5

Construction and real estate development (including land) 6,482,205 5,489,223 158,548 1,389,145 1,472,436 1,601,418 618,009 566,763

Construction of civil works 928,439 129,484 7,899 42,030 49,973 25,769 9,312 10,299

Other purposes 50,588,480 15,925,567 1,304,193 5,900,276 5,853,542 3,412,598 1,072,820 990,523

Large companies 24,638,675 2,360,762 495,054 995,638 791,985 614,005 242,127 212,060

SMEs and sole proprietors 25,949,805 13,564,805 809,140 4,904,638 5,061,558 2,798,593 830,693 778,463

R e s t o f h o u s e h o ld sR e s t o f h o u s e h o ld sR e s t o f h o u s e h o ld sR e s t o f h o u s e h o ld s 8 0 ,4 1 3 ,5 6 68 0 ,4 1 3 ,5 6 68 0 ,4 1 3 ,5 6 68 0 ,4 1 3 ,5 6 6 7 4 ,1 5 0 ,8 7 47 4 ,1 5 0 ,8 7 47 4 ,1 5 0 ,8 7 47 4 ,1 5 0 ,8 7 4 3 8 0 ,1 7 73 8 0 ,1 7 73 8 0 ,1 7 73 8 0 ,1 7 7 1 6 ,4 0 1 ,0 3 91 6 ,4 0 1 ,0 3 91 6 ,4 0 1 ,0 3 91 6 ,4 0 1 ,0 3 9 2 4 ,4 2 8 ,3 9 32 4 ,4 2 8 ,3 9 32 4 ,4 2 8 ,3 9 32 4 ,4 2 8 ,3 9 3 2 4 ,3 3 6 ,0 2 02 4 ,3 3 6 ,0 2 02 4 ,3 3 6 ,0 2 02 4 ,3 3 6 ,0 2 0 7 ,8 0 4 ,2 5 97 ,8 0 4 ,2 5 97 ,8 0 4 ,2 5 97 ,8 0 4 ,2 5 9 1 ,5 6 1 ,3 4 01 ,5 6 1 ,3 4 01 ,5 6 1 ,3 4 01 ,5 6 1 ,3 4 0

Properties 69,018,520 68,704,994 157,732 14,503,321 22,762,361 23,073,052 7,269,305 1,254,687

Consumption 7,526,530 4,073,179 57,061 1,369,493 1,250,297 928,638 384,342 197,471

Other purposes 3,868,515 1,372,701 165,384 528,225 415,735 334,330 150,613 109,182

L e s s : S pe c i f ic a l l o w a nc e s fo r th e im p a i r m e n t o f a s s e t s L e s s : S pe c i f ic a l l o w a nc e s fo r th e im p a i r m e n t o f a s s e t s L e s s : S pe c i f ic a l l o w a nc e s fo r th e im p a i r m e n t o f a s s e t s L e s s : S pe c i f ic a l l o w a nc e s fo r th e im p a i r m e n t o f a s s e t s

n o t c h a r ged to s pe c f i c o p e r a t i on sn o t c h a r ged to s pe c f i c o p e r a t i on sn o t c h a r ged to s pe c f i c o p e r a t i on sn o t c h a r ged to s pe c f i c o p e r a t i on s 3 4 5 ,1 0 63 4 5 ,1 0 63 4 5 ,1 0 63 4 5 ,1 0 6 - - - - - - -

T O TA LT O TA LT O TA LT O TA L 1 4 5 ,7 3 3 ,5 8 41 4 5 ,7 3 3 ,5 8 41 4 5 ,7 3 3 ,5 8 41 4 5 ,7 3 3 ,5 8 4 9 5 ,8 7 5 ,9 5 69 5 ,8 7 5 ,9 5 69 5 ,8 7 5 ,9 5 69 5 ,8 7 5 ,9 5 6 1 ,9 5 9 ,8 2 21 ,9 5 9 ,8 2 21 ,9 5 9 ,8 2 21 ,9 5 9 ,8 2 2 2 3 ,7 9 4 ,8 4 62 3 ,7 9 4 ,8 4 62 3 ,7 9 4 ,8 4 62 3 ,7 9 4 ,8 4 6 3 1 ,8 8 0 ,8 2 83 1 ,8 8 0 ,8 2 83 1 ,8 8 0 ,8 2 83 1 ,8 8 0 ,8 2 8 2 9 ,4 5 8 ,3 0 62 9 ,4 5 8 ,3 0 62 9 ,4 5 8 ,3 0 62 9 ,4 5 8 ,3 0 6 9 ,5 6 0 ,6 3 99 ,5 6 0 ,6 3 99 ,5 6 0 ,6 3 99 ,5 6 0 ,6 3 9 3 ,1 4 1 ,1 5 93 ,1 4 1 ,1 5 93 ,1 4 1 ,1 5 93 ,1 4 1 ,1 5 9

M EM O RA N DUM IT EMM EM O RA N DUM IT EMM EM O RA N DUM IT EMM EM O RA N DUM IT EM

Refinancing, refinanced and restructured operations. 12,494,952 10,364,463 121,128 2,325,378 2,645,365 2,421,065 1,253,233 1,840,550

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

TO T A LTO T A LTO T A LTO T A LO f w h i c h :O f w h i c h :O f w h i c h :O f w h i c h :

m o r tga ge l o a n sm o r tga ge l o a n sm o r tga ge l o a n sm o r tga ge l o a n s

O f w h i c h :O f w h i c h :O f w h i c h :O f w h i c h :

o th e r o th e r o th e r o th e r

c o l l a te r i s e d c o l l a te r i s e d c o l l a te r i s e d c o l l a te r i s e d

l oa n sl oa n sl oa n sl oa n s

Co l l a te r is e d lo a n s . C a r r y i n g a m o u n t o ve r la s t a va i l ab l e ap p r a i s a l . L oa n to va l u eCo l l a te r is e d lo a n s . C a r r y i n g a m o u n t o ve r la s t a va i l ab l e ap p r a i s a l . L oa n to va l u eCo l l a te r is e d lo a n s . C a r r y i n g a m o u n t o ve r la s t a va i l ab l e ap p r a i s a l . L oa n to va l u eCo l l a te r is e d lo a n s . C a r r y i n g a m o u n t o ve r la s t a va i l ab l e ap p r a i s a l . L oa n to va l u e

17

The value of the collateral received to ensure collection, broken down into financial guarantees and other collateral, at 30 June 2016 and at 2015 year-end, are as follows: Tho usand euro

G u a r a n te e s r e c e i ve dG u a r a n te e s r e c e i ve dG u a r a n te e s r e c e i ve dG u a r a n te e s r e c e i ve d 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Collateral value 88,852,608 88,011,916

Of which: special risk monitoring guarantees 2,641,882 3,114,361

Of which: substandard risks guarantees 310,003 840,046

Of which: doubtful exposures guarantees 2,307,082 2,637,470

Value of other guarantees 9,095,212 8,816,403

Of which: special risk monitoring guarantees 429,295 377,801


Of which: doubtful exposures guarantees 54,981 105,130

T o ta l va l u e o f gu a r a n te e s r e c e i ve dT o ta l va l u e o f gu a r a n te e s r e c e i ve dT o ta l va l u e o f gu a r a n te e s r e c e i ve dT o ta l va l u e o f gu a r a n te e s r e c e i ve d 9 7 ,9 4 7 ,8 2 09 7 ,9 4 7 ,8 2 09 7 ,9 4 7 ,8 2 09 7 ,9 4 7 ,8 2 0 9 6 ,8 2 8 ,3 1 99 6 ,8 2 8 ,3 1 99 6 ,8 2 8 ,3 1 99 6 ,8 2 8 ,3 1 9

Information on the value of financial guarantees given at 30 June 2016 and 2015 year-end is shown below: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Loan commitments given 18,620,759 19,306,331

The amount of which is non-performing - -

Amount reflected under liabilities on the balance sheet - -

Financial guarantees given (*) 1,835,915 1,834,870

The amount of which is non performing 55,420 53,254

Amount reflected under liabilities on the balance sheet (**) 47,876 45,259

Other commitments given 6,518,192 6,521,297

The amount of which is non-performing 41,781 36,573

Amount reflected under liabilities on the balance sheet 78,155 68,420

(*) Of which g iven in relat io n t o co nst ruct io n and real est at e d evelo p ment 518 and 514 million euros in June 20 16 and December 2 0 15

(**) Of which amo unt ref lect ed und er liab ilit ies o n the b alance sheet in relat io n t o const ruct io n and real est at e d evelo p ment 4 3 millio n euro s in b o th p erio ds.

Refinancing and restructuring operationsRefinancing and restructuring operationsRefinancing and restructuring operationsRefinancing and restructuring operations

Information on refinancing and restructuring operations at 30 June 2016 and 2015 year-end is shown below. The refinancing policy and strategy is described in Note 4 on Abnormal risk management in the 2015 consolidated financial statements. Tho usand euro

Cr ed i t C r ed i t C r ed i t C r ed i t

i n s t i tu t i o n si n s t i tu t i o n si n s t i tu t i o n si n s t i tu t i o n s

P u b l i c P u b l i c P u b l i c P u b l i c

A d m in i s t r a t i o n sA d m in i s t r a t i o n sA d m in i s t r a t i o n sA d m in i s t r a t i o n s

O th e r f i n a nc i a l O th e r f i n a nc i a l O th e r f i n a nc i a l O th e r f i n a nc i a l

c o r p o r a t i o n s a nd c o r p o r a t i o n s a nd c o r p o r a t i o n s a nd c o r p o r a t i o n s a nd

i n d i v i d ua l i n d i v i d ua l i n d i v i d ua l i n d i v i d ua l

e n tr e p r e ne u r s e n tr e p r e ne u r s e n tr e p r e ne u r s e n tr e p r e ne u r s

( f i n a nc i a l ( f i n a nc i a l ( f i n a nc i a l ( f i n a nc i a l

b u s i n e s s a c t i v i ty )b us i n e s s a c t i v i ty )b us i n e s s a c t i v i ty )b us i n e s s a c t i v i ty )

O th e r f i n an c i a l O th e r f i n an c i a l O th e r f i n an c i a l O th e r f i n an c i a l

c o r p o r a t i o n s c o r p o r a t i o n s c o r p o r a t i o n s c o r p o r a t i o n s

a n d i n d i v i d u a l a n d i n d i v i d u a l a n d i n d i v i d u a l a n d i n d i v i d u a l

e n t r e p r e n e u r s en t r e p r e n e u r s en t r e p r e n e u r s en t r e p r e n e u r s

(n o n - f i n an c i a l (n o n - f i n an c i a l (n o n - f i n an c i a l (n o n - f i n an c i a l

b u s i ne s s bu s i ne s s bu s i ne s s bu s i ne s s

ac t i v i t y )ac t i v i t y )ac t i v i t y )ac t i v i t y )

Of wh ic h :O f wh i c h :O f wh i c h :O f wh i c h :

f i n an c i n g an d f i n an c i n g an d f i n an c i n g an d f i n an c i n g an d

c on s tr u c t i o n o f c on s tr u c t i o n o f c on s tr u c t i o n o f c on s tr u c t i o n o f

r e a l e s ta te r e a l e s ta te r e a l e s ta te r e a l e s ta te

de ve l o pm en t de ve l o pm en t de ve l o pm en t de ve l o pm en t

( i n c l ud i n g l a nd )( i n c l ud i n g l a nd )( i n c l ud i n g l a nd )( i n c l ud i n g l a nd )

R es t o f R es t o f R es t o f R es t o f

h o us e h o l d sh o us e h o l d sh o us e h o l d sh o us e h o l d s To ta lTo ta lTo ta lTo ta l

A dd i t i o na l i n fo r m a ti o n :A dd i t i o na l i n fo r m a ti o n :A dd i t i o na l i n fo r m a ti o n :A dd i t i o na l i n fo r m a ti o n :

f i n an c i ng c l a s s e d a s N on -f i n an c i ng c l a s s e d a s N on -f i n an c i ng c l a s s e d a s N on -f i n an c i ng c l a s s e d a s N on -

cu r r e n t a s s e ts a nd cu r r e n t a s s e ts a nd cu r r e n t a s s e ts a nd cu r r e n t a s s e ts a nd

d i s po s a l g r o up s d i s po s a l g r o up s d i s po s a l g r o up s d i s po s a l g r o up s

c l a s s i f i e d a s h e l d fo r c l a s s i f i e d a s h e l d fo r c l a s s i f i e d a s h e l d fo r c l a s s i f i e d a s h e l d fo r

s a l es a l es a l es a l e

S T A NDA R D R IS K S (* )S T A NDA R D R IS K S (* )S T A NDA R D R IS K S (* )S T A NDA R D R IS K S (* )

Un s e cu r edUn s e cu r edUn s e cu r edUn s e cu r ed

Number of operations - - 29 11,647 261 36,348 4 8 ,0 2 44 8 ,0 2 44 8 ,0 2 44 8 ,0 2 4 ----

Gross carrying amount - - 144,489 1,356,154 24,115 152,776 1 ,6 5 3 ,4 1 91 ,6 5 3 ,4 1 91 ,6 5 3 ,4 1 91 ,6 5 3 ,4 1 9 ----

S e c u r e dS e c u r e dS e c u r e dS e c u r e d

Number of operations - 31 15 7,212 1,052 29,933 3 7 ,1 9 13 7 ,1 9 13 7 ,1 9 13 7 ,1 9 1 ----

Gross carrying amount - 64,328 32,505 2,991,967 579,285 3,104,089 6 ,1 9 2 ,8 8 96 ,1 9 2 ,8 8 96 ,1 9 2 ,8 8 96 ,1 9 2 ,8 8 9 ----

IB NR c o ve r a g e (* * ) IB NR c o ve r a g e (* * ) IB NR c o ve r a g e (* * ) IB NR c o ve r a g e (* * ) - 307 1,654 469,437 77,102 242,270 7 1 3 ,6 6 87 1 3 ,6 6 87 1 3 ,6 6 87 1 3 ,6 6 8 ----

o f wh i c h S UBS TA NDA RD r i s ko f wh i c h S UBS TA NDA RD r i s ko f wh i c h S UBS TA NDA RD r i s ko f wh i c h S UBS TA NDA RD r i s k


Number of operations - - 1 1,593 64 5,420 7 ,0 1 47 ,0 1 47 ,0 1 47 ,0 1 4 ----

Gross carrying amount - - 2 751,522 7,199 18,218 7 6 9 ,7 4 27 6 9 ,7 4 27 6 9 ,7 4 27 6 9 ,7 4 2 ----


Number of operations - 3 4 3,300 647 12,284 1 5 ,5 9 11 5 ,5 9 11 5 ,5 9 11 5 ,5 9 1 ----

Gross carrying amount - 2 ,046 11,045 1,783,286 424,754 1,651,164 3 ,4 4 7 ,5 4 13 ,4 4 7 ,5 4 13 ,4 4 7 ,5 4 13 ,4 4 7 ,5 4 1 ----

S u b s ta n da r d c o ve r a g eS u b s ta n da r d c o ve r a g eS u b s ta n da r d c o ve r a g eS u b s ta n da r d c o ve r a g e - 307 1,654 469,384 77,089 241,145 7 1 2 ,4 9 07 1 2 ,4 9 07 1 2 ,4 9 07 1 2 ,4 9 0 ----

DOUB TF UL R IS K SDOUB TF UL R IS K SDOUB TF UL R IS K SDOUB TF UL R IS K S






Gross carrying amount - 5,560 2,685 3,176,046 1,514,582 1,617,297 4 ,8 0 1 ,5 8 84 ,8 0 1 ,5 8 84 ,8 0 1 ,5 8 84 ,8 0 1 ,5 8 8 ----

S p e c i f i c c o ve r ag eS p e c i f i c c o ve r ag eS p e c i f i c c o ve r ag eS p e c i f i c c o ve r ag e - 54 2,026 2,011,747 894,365 356,360 2 ,3 7 0 ,1 8 72 ,3 7 0 ,1 8 72 ,3 7 0 ,1 8 72 ,3 7 0 ,1 8 7 ----

TO TA LTO TA LTO TA LTO TA L

Number of operations - 37 60 34,364 8,705 107,611 1 4 2 ,0 7 21 4 2 ,0 7 21 4 2 ,0 7 21 4 2 ,0 7 2 -

Gross amount - 69,888 179,907 8,352,748 2,257,624 4,946,888 1 3 ,5 4 9 ,4 3 11 3 ,5 4 9 ,4 3 11 3 ,5 4 9 ,4 3 11 3 ,5 4 9 ,4 3 1 -

Impairment allowances - 361 3,680 2,481,184 971,467 598,630 3 ,0 8 3 ,8 5 53 ,0 8 3 ,8 5 53 ,0 8 3 ,8 5 53 ,0 8 3 ,8 5 5 -

(*) Of which Stand ard r isk in special risk mo nito r ing reached 3 ,6 29 ,0 25 tho usand euro s and imp airment al lowances o f t his r isk reached 1,178 t ho usand euros.

(**) Co llect ive vale allow ances f o r lo sses incurred but no t rep o rt ed

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

18

Tho usand euro

Cr e d i t C r e d i t C r e d i t C r e d i t

i n s t i tu t i o n sin s t i tu t i o n sin s t i tu t i o n sin s t i tu t i o n s

P u b l i c P u b l i c P u b l i c P u b l i c

A d m i n i s t r a t i o n sA d m i n i s t r a t i o n sA d m i n i s t r a t i o n sA d m i n i s t r a t i o n s

Oth e r f i n a n c ia l O th e r f i n a n c ia l O th e r f i n a n c ia l O th e r f i n a n c ia l

c o r p o r a t i o n s a n d c o r p o r a t i o n s a n d c o r p o r a t i o n s a n d c o r p o r a t i o n s a n d

i n d i v i d u a l i n d i v i d u a l i n d i v i d u a l i n d i v i d u a l

e n t r e p re n e u r s e n t r e p re n e u r s e n t r e p re n e u r s e n t r e p re n e u r s

( f i n a n c i a l ( f i n a n c i a l ( f i n a n c i a l ( f i n a n c i a l

b u s in e s s a c t i v i t y)b u s in e s s a c t i v i t y)b u s in e s s a c t i v i t y)b u s in e s s a c t i v i t y)

Oth e r f i n a n c ia l O th e r f i n a n c ia l O th e r f i n a n c ia l O th e r f i n a n c ia l

c o rp o r a t i o n s c o rp o r a t i o n s c o rp o r a t i o n s c o rp o r a t i o n s

a n d i n d i v i d u a l a n d i n d i v i d u a l a n d i n d i v i d u a l a n d i n d i v i d u a l

e n t r e p re n e u r s e n t r e p re n e u r s e n t r e p re n e u r s e n t r e p re n e u r s

(n o n - f i n a n c ia l (n o n - f i n a n c ia l (n o n - f i n a n c ia l (n o n - f i n a n c ia l

b u s in e s s b u s in e s s b u s in e s s b u s in e s s

a c t i v i t y)a c t i v i t y)a c t i v i t y)a c t i v i t y)

Of w h ic h :O f w h ic h :O f w h ic h :O f w h ic h :

f i n a n c in g a nd f i n a n c in g a nd f i n a n c in g a nd f i n a n c in g a nd

c o n s t r u c t i o n o f c o n s t r u c t i o n o f c o n s t r u c t i o n o f c o n s t r u c t i o n o f

r e a l e s ta te r e a l e s ta te r e a l e s ta te r e a l e s ta te

d e ve lo p m e n t d e ve lo p m e n t d e ve lo p m e n t d e ve lo p m e n t

( i n c lu d in g l a n d )( i n c lu d in g l a n d )( i n c lu d in g l a n d )( i n c lu d in g l a n d )

Re s t o f Re s t o f Re s t o f Re s t o f

h o u s eh o l d sh o u s eh o l d sh o u s eh o l d sh o u s eh o l d s T o ta lT o ta lT o ta lT o ta l

A d d i t i o n a l i n fo r m a ti o n :A d d i t i o n a l i n fo r m a ti o n :A d d i t i o n a l i n fo r m a ti o n :A d d i t i o n a l i n fo r m a ti o n :

f i n a nc i n g c l a s s e d a s N o n -f i n a nc i n g c l a s s e d a s N o n -f i n a nc i n g c l a s s e d a s N o n -f i n a nc i n g c l a s s e d a s N o n -

c u r r e n t a s s e ts a n d c u r r e n t a s s e ts a n d c u r r e n t a s s e ts a n d c u r r e n t a s s e ts a n d

d i s p o s a l g r o u p s c l a s s i f i e d d i s p o s a l g r o u p s c l a s s i f i e d d i s p o s a l g r o u p s c l a s s i f i e d d i s p o s a l g r o u p s c l a s s i f i e d

a s h e ld fo r s a lea s h e ld fo r s a lea s h e ld fo r s a lea s h e ld fo r s a le

S T A ND A R D R IS K (* )S T A ND A R D R IS K (* )S T A ND A R D R IS K (* )S T A ND A R D R IS K (* )

Un s e c u r e dUn s e c u r e dUn s e c u r e dUn s e c u r e d


Gross carrying amount - - 137,386 1,368,839 26,911 156,907 1 ,6 6 3 ,1 3 21 ,6 6 3 ,1 3 21 ,6 6 3 ,1 3 21 ,6 6 3 ,1 3 2 ----



Gross carrying amount - 83,137 8,542 3,298,540 622,937 3,468,832 6 ,8 5 9 ,0 5 16 ,8 5 9 ,0 5 16 ,8 5 9 ,0 5 16 ,8 5 9 ,0 5 1 ----

IB NR c o ve r a ge (* * ) IB NR c o ve r a ge (* * ) IB NR c o ve r a ge (* * ) IB NR c o ve r a ge (* * ) - 39 355 417,060 73,563 250,597 6 6 8 ,0 5 16 6 8 ,0 5 16 6 8 ,0 5 16 6 8 ,0 5 1 ----

o f w h ic h S U BS T A N DA RD r i s ko f w h ic h S U BS T A N DA RD r i s ko f w h ic h S U BS T A N DA RD r i s ko f w h ic h S U BS T A N DA RD r i s k


Number of operations - - 3 1,919 62 7,021 8 ,9 4 38 ,9 4 38 ,9 4 38 ,9 4 3 ----



Number of operations - 3 5 3,222 602 12,808 1 6 ,0 3 81 6 ,0 3 81 6 ,0 3 81 6 ,0 3 8 ----

Gross carrying amount - 258 2,358 1,808,328 395,691 1,701,061 3 ,5 1 2 ,0 0 53 ,5 1 2 ,0 0 53 ,5 1 2 ,0 0 53 ,5 1 2 ,0 0 5 ----

S u b s ta n d a r d c o ve r a geS u b s ta n d a r d c o ve r a geS u b s ta n d a r d c o ve r a geS u b s ta n d a r d c o ve r a ge - 39 355 417,052 73,563 248,135 6 6 5 ,5 8 16 6 5 ,5 8 16 6 5 ,5 8 16 6 5 ,5 8 1 ----

DO UB T F UL R IS K SDO UB T F UL R IS K SDO UB T F UL R IS K SDO UB T F UL R IS K S






Gross carrying amount - 6,487 2,562 3,768,774 2,077,150 1,646,115 5 ,4 2 3 ,9 3 85 ,4 2 3 ,9 3 85 ,4 2 3 ,9 3 85 ,4 2 3 ,9 3 8 ----

S p e c i f i c c o ve r a geS p e c i f i c c o ve r a geS p e c i f i c c o ve r a geS p e c i f i c c o ve r a ge - - 2,010 2,127,500 1,158,779 362,164 2 ,4 9 1 ,6 7 42 ,4 9 1 ,6 7 42 ,4 9 1 ,6 7 42 ,4 9 1 ,6 7 4 ----

T OT A LT OT A LT OT A LT OT A L

Number of operations - 45 62 35,082 9,751 111,034 1 4 6 ,2 2 31 4 6 ,2 2 31 4 6 ,2 2 31 4 6 ,2 2 3 -

Gross amount - 89,624 148,718 9,226,236 2,877,326 5,351,729 1 4 ,8 1 6 ,3 0 71 4 ,8 1 6 ,3 0 71 4 ,8 1 6 ,3 0 71 4 ,8 1 6 ,3 0 7 -

Impairment allowances - 39 2,365 2,544,560 1,232,342 612,761 3 ,1 5 9 ,7 2 53 ,1 5 9 ,7 2 53 ,1 5 9 ,7 2 53 ,1 5 9 ,7 2 5 -

(*) Of which St andard r isk in sp ecial mo nit or ing reached 4 ,19 1.19 3 t ho usand euro s and pro visions f o r imp airment allo wances of t his risk reached 2 ,4 70 t ho usand euro s.

(**) Co llect ive value adjust ment f o r lo sses incurred b ut no t rep o rt ed

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

The value of the collateral received to ensure collection associated with refinancing and restructuring operations, broken down into collateral and other guarantees, at 30 June 2016 and 2015 year-end, are as follows: Tho usand euro

G u a r a n te e s R e c e i ve dG u a r a n te e s R e c e i ve dG u a r a n te e s R e c e i ve dG u a r a n te e s R e c e i ve d 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Collateral value 8,873,944 8,453,534

Of which: special risk monitoring guarantees 2,552,697 2,722,237

Of which: substandard risks guarantees 2,739,952 2,648,918

Of which: non-performing risks guarantees 3,581,295 3,082,379

Amount of other guarantees 902,247 752,003

Of which: special risk monitoring guaranteese 385,377 300,958


Of which: non-performing risks guarantees 218,908 195,667

T o ta l va l u e o f gu a r a n te e s r e c e i ve dT o ta l va l u e o f gu a r a n te e s r e c e i ve dT o ta l va l u e o f gu a r a n te e s r e c e i ve dT o ta l va l u e o f gu a r a n te e s r e c e i ve d 9 ,7 7 6 ,1 9 19 ,7 7 6 ,1 9 19 ,7 7 6 ,1 9 19 ,7 7 6 ,1 9 1 9 ,2 0 5 ,5 3 79 ,2 0 5 ,5 3 79 ,2 0 5 ,5 3 79 ,2 0 5 ,5 3 7

Detailed movements of the refinancing and restructuring balance and associated provisions during the first half of 2016 are as follows: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

Opening balance 14,816,307 15,961,422

Due to TSB acqusition - 596,000

(+) Refinancing and restructuring in the period 1,515,998 1,629,131

Memorandum item: impact recorded in the profit and loss account for the period 192,850 126,572

(-) Debt amortisation (1,334,110) (315,451)

(-) Foreclosures (282,172) (636,080)

(-) Balance sheet write offs (reclassified as write offs) (94,052) (119,906)

(+)/(-) Other changes (1,072,540) (1 ,442,752)

B a l a n c e a t t h e e n d o f t h e p e r i o dB a l a n c e a t t h e e n d o f t h e p e r i o dB a l a n c e a t t h e e n d o f t h e p e r i o dB a l a n c e a t t h e e n d o f t h e p e r i o d 1 3 ,5 4 9 ,4 3 11 3 ,5 4 9 ,4 3 11 3 ,5 4 9 ,4 3 11 3 ,5 4 9 ,4 3 1 1 5 ,6 7 2 ,3 6 41 5 ,6 7 2 ,3 6 41 5 ,6 7 2 ,3 6 41 5 ,6 7 2 ,3 6 4

19

The table below shows the value of operations which, after refinancing or restructuring, have been classified as doubtful during the period: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

P u b l i c A d m in i s t r a t i o n sP u b l i c A d m in i s t r a t i o n sP u b l i c A d m in i s t r a t i o n sP u b l i c A d m in i s t r a t i o n s 5 ,4 2 85 ,4 2 85 ,4 2 85 ,4 2 8 5 ,9 6 45 ,9 6 45 ,9 6 45 ,9 6 4

Re s t o f l e ga l e n t i t i e s a n d i n d i v i d u a l e n t r e p r e n e u r sRe s t o f l e ga l e n t i t i e s a n d i n d i v i d u a l e n t r e p r e n e u r sRe s t o f l e ga l e n t i t i e s a n d i n d i v i d u a l e n t r e p r e n e u r sRe s t o f l e ga l e n t i t i e s a n d i n d i v i d u a l e n t r e p r e n e u r s 3 4 2 ,5 3 53 4 2 ,5 3 53 4 2 ,5 3 53 4 2 ,5 3 5 5 7 1 ,7 0 95 7 1 ,7 0 95 7 1 ,7 0 95 7 1 ,7 0 9

Of which: Financing of construction and development 60,050 149,605

Re s t o f n a tu r a l p e r s o n sRe s t o f n a tu r a l p e r s o n sRe s t o f n a tu r a l p e r s o n sRe s t o f n a tu r a l p e r s o n s 2 2 2 ,4 9 42 2 2 ,4 9 42 2 2 ,4 9 42 2 2 ,4 9 4 2 6 8 ,0 5 72 6 8 ,0 5 72 6 8 ,0 5 72 6 8 ,0 5 7

T o ta lT o ta lT o ta lT o ta l 5 7 0 ,4 5 75 7 0 ,4 5 75 7 0 ,4 5 75 7 0 ,4 5 7 8 4 5 ,7 3 08 4 5 ,7 3 08 4 5 ,7 3 08 4 5 ,7 3 0

The average probability of default of current refinancing and restructuring operations per activity is as follows: %

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

P u b l i c A d m in i s t r a t i o n s (* )P u b l i c A d m in i s t r a t i o n s (* )P u b l i c A d m in i s t r a t i o n s (* )P u b l i c A d m in i s t r a t i o n s (* ) - - - - - - - -

Re s t o f l e ga l e n t i t i e s a n d i n d i v i d u a l e n t r e p r e n e u r sRe s t o f l e ga l e n t i t i e s a n d i n d i v i d u a l e n t r e p r e n e u r sRe s t o f l e ga l e n t i t i e s a n d i n d i v i d u a l e n t r e p r e n e u r sRe s t o f l e ga l e n t i t i e s a n d i n d i v i d u a l e n t r e p r e n e u r s 1 11 11 11 1 1 01 01 01 0

Of which: Financing of construction and development 12 12

Re s t o f n a tu r a l p e r s o n sRe s t o f n a tu r a l p e r s o n sRe s t o f n a tu r a l p e r s o n sRe s t o f n a tu r a l p e r s o n s 1 11 11 11 1 1 11 11 11 1

T o ta lT o ta lT o ta lT o ta l 1 11 11 11 1 1 01 01 01 0

(*) The use o f internal mo d els t o calculat e cap ital req uirement s reg ard ing this info rmat io n is no t autho rised.

Concentration rConcentration rConcentration rConcentration riskiskiskisk Country risk: geographic exposure to credit risk The breakdown of risks by activity and at global level at 30 June 2016 and 31 December 2015 is as follows: Thousand euro

T O T A LT O T A LT O T A LT O T A L S p a inS p a inS p a inS p a in


Eu r o p e a n Eu r o p e a n Eu r o p e a n Eu r o p e a n

U n i o nU n i o nU n i o nU n i o n

A m e r i c a sA m e r i c a sA m e r i c a sA m e r i c a sR e s t o f th e R e s t o f th e R e s t o f th e R e s t o f th e

w o r l dw o r l dw o r l dw o r l d

C e n tr a l b a nks a n d c r e d i t i n s t i t u t i o n sC e n tr a l b a nks a n d c r e d i t i n s t i t u t i o n sC e n tr a l b a nks a n d c r e d i t i n s t i t u t i o n sC e n tr a l b a nks a n d c r e d i t i n s t i t u t i o n s 1 4 ,8 3 2 ,4 5 11 4 ,8 3 2 ,4 5 11 4 ,8 3 2 ,4 5 11 4 ,8 3 2 ,4 5 1 4 ,6 0 1 ,2 7 24 ,6 0 1 ,2 7 24 ,6 0 1 ,2 7 24 ,6 0 1 ,2 7 2 8 ,7 0 4 ,1 8 98 ,7 0 4 ,1 8 98 ,7 0 4 ,1 8 98 ,7 0 4 ,1 8 9 1 ,0 5 2 ,3 1 61 ,0 5 2 ,3 1 61 ,0 5 2 ,3 1 61 ,0 5 2 ,3 1 6 4 7 4 ,6 7 44 7 4 ,6 7 44 7 4 ,6 7 44 7 4 ,6 7 4

P u b l ic A d m in i s t r a t i o n sP u b l ic A d m in i s t r a t i o n sP u b l ic A d m in i s t r a t i o n sP u b l ic A d m in i s t r a t i o n s 3 0 ,7 8 2 ,3 2 03 0 ,7 8 2 ,3 2 03 0 ,7 8 2 ,3 2 03 0 ,7 8 2 ,3 2 0 1 9 ,2 4 5 ,9 8 91 9 ,2 4 5 ,9 8 91 9 ,2 4 5 ,9 8 91 9 ,2 4 5 ,9 8 9 8 ,5 7 4 ,5 0 88 ,5 7 4 ,5 0 88 ,5 7 4 ,5 0 88 ,5 7 4 ,5 0 8 2 ,9 2 4 ,3 9 72 ,9 2 4 ,3 9 72 ,9 2 4 ,3 9 72 ,9 2 4 ,3 9 7 3 7 ,4 2 63 7 ,4 2 63 7 ,4 2 63 7 ,4 2 6

Central Administration 23,156,219 13,442,063 8,486,869 1,203,610 23,677

Other public administrations 7,626,101 5,803,926 87,639 1,720,787 13,749

O th e r f i n a n c i a l c o r p o r a t i o n s a n d i n d iv id u a l e n t r e p r e n e u r sO th e r f i n a n c i a l c o r p o r a t i o n s a n d i n d iv id u a l e n t r e p r e n e u r sO th e r f i n a n c i a l c o r p o r a t i o n s a n d i n d iv id u a l e n t r e p r e n e u r sO th e r f i n a n c i a l c o r p o r a t i o n s a n d i n d iv id u a l e n t r e p r e n e u r s

( f in a n c i a l b u s i n e s s a c t i v i ty )( f i n a n c i a l b u s i n e s s a c t i v i ty )( f i n a n c i a l b u s i n e s s a c t i v i ty )( f i n a n c i a l b u s i n e s s a c t i v i ty )5 ,1 5 5 ,2 3 55 ,1 5 5 ,2 3 55 ,1 5 5 ,2 3 55 ,1 5 5 ,2 3 5 2 ,9 0 2 ,7 5 12 ,9 0 2 ,7 5 12 ,9 0 2 ,7 5 12 ,9 0 2 ,7 5 1 9 4 2 ,6 2 19 4 2 ,6 2 19 4 2 ,6 2 19 4 2 ,6 2 1 1 ,2 3 9 ,2 1 71 ,2 3 9 ,2 1 71 ,2 3 9 ,2 1 71 ,2 3 9 ,2 1 7 7 0 ,6 4 67 0 ,6 4 67 0 ,6 4 67 0 ,6 4 6

N o n fi n a n c i a l s e r v i c e s a n d i n d i v i d u a l e n t r e p r e n e u r sN o n fi n a n c i a l s e r v i c e s a n d i n d i v i d u a l e n t r e p r e n e u r sN o n fi n a n c i a l s e r v i c e s a n d i n d i v i d u a l e n t r e p r e n e u r sN o n fi n a n c i a l s e r v i c e s a n d i n d i v i d u a l e n t r e p r e n e u r s

(n o n f i n a n c i a l b u s i n e s s a c t i v i ty ) (n o n f i n a n c i a l b u s i n e s s a c t i v i ty ) (n o n f i n a n c i a l b u s i n e s s a c t i v i ty ) (n o n f i n a n c i a l b u s i n e s s a c t i v i ty ) 6 3 ,1 8 9 ,3 4 46 3 ,1 8 9 ,3 4 46 3 ,1 8 9 ,3 4 46 3 ,1 8 9 ,3 4 4 5 2 ,4 7 4 ,7 7 15 2 ,4 7 4 ,7 7 15 2 ,4 7 4 ,7 7 15 2 ,4 7 4 ,7 7 1 3 ,1 9 7 ,8 3 33 ,1 9 7 ,8 3 33 ,1 9 7 ,8 3 33 ,1 9 7 ,8 3 3 7 ,1 3 1 ,7 1 87 ,1 3 1 ,7 1 87 ,1 3 1 ,7 1 87 ,1 3 1 ,7 1 8 3 8 5 ,0 2 23 8 5 ,0 2 23 8 5 ,0 2 23 8 5 ,0 2 2

Construction and real estate development 7,666,661 7,108,683 170,015 387,584 379

Civil works construction 1,788,026 1,738,966 28,268 17,536 3,256

Other Purposes 53,734,657 43,627,122 2,999,550 6,726,598 381,387

Large companies 26,903,986 19,515,745 2,184,982 4,899,849 303,410

SMEs and individual proprietors 26,830,671 24,111,377 814,568 1,826,749 77,977

R e s t o f h o u s e h o l d sR e s t o f h o u s e h o l d sR e s t o f h o u s e h o l d sR e s t o f h o u s e h o l d s 7 9 ,0 1 7 ,7 7 87 9 ,0 1 7 ,7 7 87 9 ,0 1 7 ,7 7 87 9 ,0 1 7 ,7 7 8 4 0 ,9 7 0 ,5 4 04 0 ,9 7 0 ,5 4 04 0 ,9 7 0 ,5 4 04 0 ,9 7 0 ,5 4 0 3 5 ,8 1 2 ,2 5 43 5 ,8 1 2 ,2 5 43 5 ,8 1 2 ,2 5 43 5 ,8 1 2 ,2 5 4 1 ,5 1 1 ,3 1 01 ,5 1 1 ,3 1 01 ,5 1 1 ,3 1 01 ,5 1 1 ,3 1 0 7 2 3 ,6 7 47 2 3 ,6 7 47 2 3 ,6 7 47 2 3 ,6 7 4

Properties 66,808,242 31,708,850 32,945,308 1,460,641 693,443

Consumption 7,704,425 5,884,136 1,787,966 15,164 17,159

Other purposes 4,505,111 3,377,554 1,078,980 35,505 13,072

L e s s : S p e c i f i c a l lo w a n c e s fo r th e im p a i r m e n t o f a s s e ts n o t c h a r ge d L e s s : S p e c i f i c a l lo w a n c e s fo r th e im p a i r m e n t o f a s s e ts n o t c h a r ge d L e s s : S p e c i f i c a l lo w a n c e s fo r th e im p a i r m e n t o f a s s e ts n o t c h a r ge d L e s s : S p e c i f i c a l lo w a n c e s fo r th e im p a i r m e n t o f a s s e ts n o t c h a r ge d

to s pe c i f i c o p e r a t i o n sto s pe c i f i c o p e r a t i o n sto s pe c i f i c o p e r a t i o n sto s pe c i f i c o p e r a t i o n s3 4 0 ,0 9 13 4 0 ,0 9 13 4 0 ,0 9 13 4 0 ,0 9 1 - - - -

T O T A LT O T A LT O T A LT O T A L 1 9 2 ,6 3 7 ,0 3 71 9 2 ,6 3 7 ,0 3 71 9 2 ,6 3 7 ,0 3 71 9 2 ,6 3 7 ,0 3 7 1 2 0 ,1 9 5 ,3 2 31 2 0 ,1 9 5 ,3 2 31 2 0 ,1 9 5 ,3 2 31 2 0 ,1 9 5 ,3 2 3 5 7 ,2 3 1 ,4 0 55 7 ,2 3 1 ,4 0 55 7 ,2 3 1 ,4 0 55 7 ,2 3 1 ,4 0 5 1 3 ,8 5 8 ,9 5 81 3 ,8 5 8 ,9 5 81 3 ,8 5 8 ,9 5 81 3 ,8 5 8 ,9 5 8 1 ,6 9 1 ,4 4 21 ,6 9 1 ,4 4 21 ,6 9 1 ,4 4 21 ,6 9 1 ,4 4 2

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

20

Tho usand euro

T OT A LT OT A LT OT A LT OT A L S p a i nS p a i nS p a i nS p a i n


Eu r o p e a n Eu r o p e a n Eu r o p e a n Eu r o p e a n

Un i o nUn i o nUn i o nUn i o n

A m e r i c a sA m e r i c a sA m e r i c a sA m e r i c a sRe s t o f th e Re s t o f th e Re s t o f th e Re s t o f th e

w o r l dw o r l dw o r l dw o r l d

Ce n tr a l b a n ks a n d c r e d i t i n s t i tu t i o n sCe n tr a l b a n ks a n d c r e d i t i n s t i tu t i o n sCe n tr a l b a n ks a n d c r e d i t i n s t i tu t i o n sCe n tr a l b a n ks a n d c r e d i t i n s t i tu t i o n s 1 6 ,1 5 6 ,1 7 31 6 ,1 5 6 ,1 7 31 6 ,1 5 6 ,1 7 31 6 ,1 5 6 ,1 7 3 6 ,4 0 3 ,4 4 36 ,4 0 3 ,4 4 36 ,4 0 3 ,4 4 36 ,4 0 3 ,4 4 3 8 ,3 6 3 ,4 3 88 ,3 6 3 ,4 3 88 ,3 6 3 ,4 3 88 ,3 6 3 ,4 3 8 1 ,0 0 6 ,3 1 31 ,0 0 6 ,3 1 31 ,0 0 6 ,3 1 31 ,0 0 6 ,3 1 3 3 8 2 ,9 7 93 8 2 ,9 7 93 8 2 ,9 7 93 8 2 ,9 7 9

P u b l i c A d m in i s t r a t i o n sP u b l i c A d m in i s t r a t i o n sP u b l i c A d m in i s t r a t i o n sP u b l i c A d m in i s t r a t i o n s 2 6 ,9 7 6 ,1 7 72 6 ,9 7 6 ,1 7 72 6 ,9 7 6 ,1 7 72 6 ,9 7 6 ,1 7 7 1 4 ,9 7 9 ,8 4 11 4 ,9 7 9 ,8 4 11 4 ,9 7 9 ,8 4 11 4 ,9 7 9 ,8 4 1 8 ,6 7 1 ,8 3 78 ,6 7 1 ,8 3 78 ,6 7 1 ,8 3 78 ,6 7 1 ,8 3 7 3 ,2 8 9 ,0 8 33 ,2 8 9 ,0 8 33 ,2 8 9 ,0 8 33 ,2 8 9 ,0 8 3 3 5 ,4 1 53 5 ,4 1 53 5 ,4 1 53 5 ,4 1 5

Central Administration 22,187,080 10,208,886 8,653,695 3,289,083 35,415

Other public administrations 4,789,097 4,770,955 18,142 - -

O th e r f i n a n c i a l c o r p o r a t i o n s a n d i n d i v i d u a l e n t r e p r e n e u r sO th e r f i n a n c i a l c o r p o r a t i o n s a n d i n d i v i d u a l e n t r e p r e n e u r sO th e r f i n a n c i a l c o r p o r a t i o n s a n d i n d i v i d u a l e n t r e p r e n e u r sO th e r f i n a n c i a l c o r p o r a t i o n s a n d i n d i v i d u a l e n t r e p r e n e u r s

( f i n a n c i a l b u s i n e s s a c t i v i ty )( f i n a n c i a l b u s i n e s s a c t i v i ty )( f i n a n c i a l b u s i n e s s a c t i v i ty )( f i n a n c i a l b u s i n e s s a c t i v i ty ) 5 ,1 9 5 ,3 2 75 ,1 9 5 ,3 2 75 ,1 9 5 ,3 2 75 ,1 9 5 ,3 2 7 3 ,7 2 0 ,6 0 83 ,7 2 0 ,6 0 83 ,7 2 0 ,6 0 83 ,7 2 0 ,6 0 8 3 0 4 ,7 3 33 0 4 ,7 3 33 0 4 ,7 3 33 0 4 ,7 3 3 1 ,0 8 3 ,5 8 81 ,0 8 3 ,5 8 81 ,0 8 3 ,5 8 81 ,0 8 3 ,5 8 8 8 6 ,3 9 88 6 ,3 9 88 6 ,3 9 88 6 ,3 9 8

No n f i n a n c i a l s e r v i c e s a n d i n d i v i d u a l e n t r e p r e n e u r sNo n f i n a n c i a l s e r v i c e s a n d i n d i v i d u a l e n t r e p r e n e u r sNo n f i n a n c i a l s e r v i c e s a n d i n d i v i d u a l e n t r e p r e n e u r sNo n f i n a n c i a l s e r v i c e s a n d i n d i v i d u a l e n t r e p r e n e u r s

(n o n f i n a n c i a l b u s i n e s s a c t i v i t y) (n o n f i n a n c i a l b u s i n e s s a c t i v i t y) (n o n f i n a n c i a l b u s i n e s s a c t i v i t y) (n o n f i n a n c i a l b u s i n e s s a c t i v i t y) 6 8 ,0 1 7 ,6 4 86 8 ,0 1 7 ,6 4 86 8 ,0 1 7 ,6 4 86 8 ,0 1 7 ,6 4 8 5 7 ,2 8 1 ,4 2 95 7 ,2 8 1 ,4 2 95 7 ,2 8 1 ,4 2 95 7 ,2 8 1 ,4 2 9 3 ,5 3 8 ,5 8 43 ,5 3 8 ,5 8 43 ,5 3 8 ,5 8 43 ,5 3 8 ,5 8 4 6 ,8 1 8 ,5 1 86 ,8 1 8 ,5 1 86 ,8 1 8 ,5 1 86 ,8 1 8 ,5 1 8 3 7 9 ,1 1 73 7 9 ,1 1 73 7 9 ,1 1 73 7 9 ,1 1 7

Construction and real estate development 7,014,805 6,646,225 99,755 268,454 371

Civil works construction 1,916,850 1,876,893 16,776 19,722 3,459

Other Purposes 59,085,994 48,758,312 3,422,053 6,530,342 375,287

Large companies 29,826,851 22,333,342 2,447,837 4,748,993 296,679

SMEs and individual proprietors 29,259,143 26,424,969 974,216 1,781,350 78,608

Re s t o f h o u s e h o l d sRe s t o f h o u s e h o l d sRe s t o f h o u s e h o l d sRe s t o f h o u s e h o l d s 8 0 ,5 9 5 ,9 4 18 0 ,5 9 5 ,9 4 18 0 ,5 9 5 ,9 4 18 0 ,5 9 5 ,9 4 1 4 0 ,3 6 6 ,7 4 04 0 ,3 6 6 ,7 4 04 0 ,3 6 6 ,7 4 04 0 ,3 6 6 ,7 4 0 3 7 ,9 9 0 ,2 0 13 7 ,9 9 0 ,2 0 13 7 ,9 9 0 ,2 0 13 7 ,9 9 0 ,2 0 1 1 ,5 4 6 ,9 0 71 ,5 4 6 ,9 0 71 ,5 4 6 ,9 0 71 ,5 4 6 ,9 0 7 6 9 2 ,0 9 36 9 2 ,0 9 36 9 2 ,0 9 36 9 2 ,0 9 3

Properties 69,016,929 31,926,682 34,916,458 1,513,349 660,441

Consumption 7,526,497 5,607,390 1,882,205 18,323 18,579

Other purposes 4,052,514 2,832,667 1,191,539 15,235 13,073

L e s s : S p e c i f i c a l l o w a n c e s fo r th e im p a i r m e n t o f a s e ts n o t c h a r ge d to L e s s : S p e c i f i c a l l o w a n c e s fo r th e im p a i r m e n t o f a s e ts n o t c h a r ge d to L e s s : S p e c i f i c a l l o w a n c e s fo r th e im p a i r m e n t o f a s e ts n o t c h a r ge d to L e s s : S p e c i f i c a l l o w a n c e s fo r th e im p a i r m e n t o f a s e ts n o t c h a r ge d to

s p e c i f i c o p e r a t i o n ss p e c i f i c o p e r a t i o n ss p e c i f i c o p e r a t i o n ss p e c i f i c o p e r a t i o n s 3 4 5 ,1 0 63 4 5 ,1 0 63 4 5 ,1 0 63 4 5 ,1 0 6 - - - -

T OT A LT OT A LT OT A LT OT A L 1 9 6 ,5 9 6 ,1 5 91 9 6 ,5 9 6 ,1 5 91 9 6 ,5 9 6 ,1 5 91 9 6 ,5 9 6 ,1 5 9 1 2 2 ,7 5 2 ,0 6 11 2 2 ,7 5 2 ,0 6 11 2 2 ,7 5 2 ,0 6 11 2 2 ,7 5 2 ,0 6 1 5 8 ,8 6 8 ,7 9 45 8 ,8 6 8 ,7 9 45 8 ,8 6 8 ,7 9 45 8 ,8 6 8 ,7 9 4 1 3 ,7 4 4 ,4 0 91 3 ,7 4 4 ,4 0 91 3 ,7 4 4 ,4 0 91 3 ,7 4 4 ,4 0 9 1 ,5 7 6 ,0 0 11 ,5 7 6 ,0 0 11 ,5 7 6 ,0 0 11 ,5 7 6 ,0 0 1

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

The risk concentration broken down by activity, at the level of Spanish autonomous communities and at global level at 30 June 2016 and 31 December 2015, respectively, is as follows: Thousand euro

Anda lus iaAnda lus iaAnda lus iaAnda lus ia AragonAragonAragonAragon As tu r iasAs tu r iasAs tu r iasAs tu r iasBalear ic Balear ic Balear ic Balear ic

Is landsIs landsIs landsIs lands

Canary Canary Canary Canary

Is landsIs landsIs landsIs landsCantab r ia Cantab r ia Cantab r ia Cantab r ia

Cas ti l la -Cas ti l la -Cas ti l la -Cas ti l la -

L a M anchaLa M anchaLa M anchaLa M ancha

Cas ti l e and Cas ti l e and Cas ti l e and Cas ti l e and

L eónL eónL eónL eónCataloniaCataloniaCataloniaCatalonia

Central banks and c redi t ins ti tu tionsCentral banks and c redi t ins ti tu tionsCentral banks and c redi t ins ti tu tionsCentral banks and c redi t ins ti tu tions 4 ,6 01 ,2 7 14 ,6 01 ,2 7 14 ,6 01 ,2 7 14 ,6 01 ,2 7 1 24 ,7 7 324 ,7 7 324 ,7 7 324 ,7 7 3 6 1 26 1 26 1 26 1 2 11 ,0 5 711 ,0 5 711 ,0 5 711 ,0 5 7 2 ,0 4 22 ,0 4 22 ,0 4 22 ,0 4 2 52 152 152 152 1 1 05 ,14 11 05 ,14 11 05 ,14 11 05 ,14 1 34 734 734 734 7 0000 1 ,7 5 4,97 01 ,7 5 4,97 01 ,7 5 4,97 01 ,7 5 4,97 0

Publ ic Adminis trationsPubl ic Adminis trationsPubl ic Adminis trationsPubl ic Adminis trations 1 9 ,2 45 ,9 8 91 9 ,2 45 ,9 8 91 9 ,2 45 ,9 8 91 9 ,2 45 ,9 8 9 2 62 ,8 7 92 62 ,8 7 92 62 ,8 7 92 62 ,8 7 9 1 00 ,5 2 61 00 ,5 2 61 00 ,5 2 61 00 ,5 2 6 2 20 ,5 2 72 20 ,5 2 72 20 ,5 2 72 20 ,5 2 7 1 01 ,3 4 61 01 ,3 4 61 01 ,3 4 61 01 ,3 4 6 65 ,35 965 ,35 965 ,35 965 ,35 9 26 ,21 526 ,21 526 ,21 526 ,21 5 40 ,75 640 ,75 640 ,75 640 ,75 6 4 63 ,03 34 63 ,03 34 63 ,03 34 63 ,03 3 7 2 4,75 37 2 4,75 37 2 4,75 37 2 4,75 3

Central Administration (*) 13,442,063 - - - - - - - - -

Other Public Administrations 5,803,926 262,879 100,526 220,527 101,346 65,359 26,215 40,756 463,033 724,753

Other f inancial corpo rations and individua l Other f inancial corpo rations and individua l Other f inancial corpo rations and individua l Other f inancial corpo rations and individua l

prop r ietors (f inancial bus iness activity)prop r ietors (f inancial bus iness activity)prop r ietors (f inancial bus iness activity)prop r ietors (f inancial bus iness activity) 2 ,9 02 ,7 5 22 ,9 02 ,7 5 22 ,9 02 ,7 5 22 ,9 02 ,7 5 2 7 ,9 4 37 ,9 4 37 ,9 4 37 ,9 4 3 1 ,0 9 91 ,0 9 91 ,0 9 91 ,0 9 9 1 ,3 5 61 ,3 5 61 ,3 5 61 ,3 5 6 1 ,4 0 71 ,4 0 71 ,4 0 71 ,4 0 7 30 830 830 830 8 24 824 824 824 8 47 947 947 947 9 6,84 36,84 36,84 36,84 3 1 ,2 3 8,51 91 ,2 3 8,51 91 ,2 3 8,51 91 ,2 3 8,51 9

Non financia l corpora tions and i nd ividual Non financia l corpora tions and i nd ividual Non financia l corpora tions and i nd ividual Non financia l corpora tions and i nd ividual

en trep reneurs (non financ ial bus ines s entrep reneurs (non financ ial bus ines s entrep reneurs (non financ ial bus ines s entrep reneurs (non financ ial bus ines s

acti vity)acti vity)acti vity)acti vity) 5 2 ,4 74 ,7 7 05 2 ,4 74 ,7 7 05 2 ,4 74 ,7 7 05 2 ,4 74 ,7 7 0 2 ,8 29 ,0 6 02 ,8 29 ,0 6 02 ,8 29 ,0 6 02 ,8 29 ,0 6 0 8 67 ,0 0 98 67 ,0 0 98 67 ,0 0 98 67 ,0 0 9 1 ,9 45 ,6 3 11 ,9 45 ,6 3 11 ,9 45 ,6 3 11 ,9 45 ,6 3 1 1 ,7 09 ,0 5 01 ,7 09 ,0 5 01 ,7 09 ,0 5 01 ,7 09 ,0 5 0 6 78 ,5 1 06 78 ,5 1 06 78 ,5 1 06 78 ,5 1 0 2 08 ,31 62 08 ,31 62 08 ,31 62 08 ,31 6 3 94 ,25 23 94 ,25 23 94 ,25 23 94 ,25 2 1 ,2 1 4,98 91 ,2 1 4,98 91 ,2 1 4,98 91 ,2 1 4,98 9 1 6 ,0 5 0,45 71 6 ,0 5 0,45 71 6 ,0 5 0,45 71 6 ,0 5 0,45 7

Construction and real estate development 7,108,682 848,837 114,330 161,449 170,165 122,403 15,455 47,148 95,881 1,526,282

Construction of civil works 1,738,968 37,375 9,909 55,643 9,090 4,539 4,771 9,004 30,361 250,476

Other Purposes 43,627,120 1,942,848 742,770 1,728,539 1,529,795 551,568 188,090 338,100 1,088,747 14,273,699

Large Companies 19,515,744 681,851 277,384 732,536 679,227 189,006 47,632 72,104 380,847 5,704,579

SMEs and individual proprietors 24,111,376 1,260,997 465,386 996,003 850,568 362,562 140,458 265,996 707,900 8,569,120

Res t o f householdsRes t o f householdsRes t o f householdsRes t o f households 4 0 ,9 70 ,5 4 14 0 ,9 70 ,5 4 14 0 ,9 70 ,5 4 14 0 ,9 70 ,5 4 1 2 ,6 55 ,0 8 82 ,6 55 ,0 8 82 ,6 55 ,0 8 82 ,6 55 ,0 8 8 5 00 ,3 8 95 00 ,3 8 95 00 ,3 8 95 00 ,3 8 9 1 ,3 56 ,1 4 31 ,3 56 ,1 4 31 ,3 56 ,1 4 31 ,3 56 ,1 4 3 1 ,5 90 ,8 0 91 ,5 90 ,8 0 91 ,5 90 ,8 0 91 ,5 90 ,8 0 9 5 81 ,1 5 35 81 ,1 5 35 81 ,1 5 35 81 ,1 5 3 96 ,99 896 ,99 896 ,99 896 ,99 8 5 18 ,86 15 18 ,86 15 18 ,86 15 18 ,86 1 7 03 ,80 67 03 ,80 67 03 ,80 67 03 ,80 6 1 4 ,3 8 1,34 61 4 ,3 8 1,34 61 4 ,3 8 1,34 61 4 ,3 8 1,34 6

Properties 31,708,850 2,100,004 383,911 972,128 1,260,811 429,811 70,763 414,577 529,742 11,153,192

Consumption 5,884,137 381,919 83,295 224,075 207,759 116,564 18,963 74,514 104,324 2,238,800

Other Purposes 3,377,554 173,165 33,183 159,940 122,239 34,778 7,272 29,770 69,740 989,354

Less : S pecif ic al l owances for the impai rment Less : S pecif ic al l owances for the impai rment Less : S pecif ic al l owances for the impai rment Less : S pecif ic al l owances for the impai rment

of as sets not cha rged to s pec ifi c ope ra tionsof as sets not cha rged to s pec ifi c ope ra tionsof as sets not cha rged to s pec ifi c ope ra tionsof as sets not cha rged to s pec ifi c ope ra tions - - - - - - - - - - - - -

TOTALTOTALTOTALTOTAL 12 0 ,1 95 ,3 2 312 0 ,1 95 ,3 2 312 0 ,1 95 ,3 2 312 0 ,1 95 ,3 2 3 5 ,7 79 ,7 4 35 ,7 79 ,7 4 35 ,7 79 ,7 4 35 ,7 79 ,7 4 3 1 ,4 69 ,6 3 51 ,4 69 ,6 3 51 ,4 69 ,6 3 51 ,4 69 ,6 3 5 3 ,5 34 ,7 1 43 ,5 34 ,7 1 43 ,5 34 ,7 1 43 ,5 34 ,7 1 4 3 ,4 04 ,6 5 43 ,4 04 ,6 5 43 ,4 04 ,6 5 43 ,4 04 ,6 5 4 1 ,3 25 ,85 11 ,3 25 ,85 11 ,3 25 ,85 11 ,3 25 ,85 1 4 36 ,91 84 36 ,91 84 36 ,91 84 36 ,91 8 9 54 ,69 59 54 ,69 59 54 ,69 59 54 ,69 5 2 ,3 8 8,67 12 ,3 8 8,67 12 ,3 8 8,67 12 ,3 8 8,67 1 3 4 ,1 5 0,04 53 4 ,1 5 0,04 53 4 ,1 5 0,04 53 4 ,1 5 0,04 5

(*) As this is with Central Administ rat ion it is not imputed to any Autonomous Community

3 0/ 0 6/ 2 0 163 0/ 0 6/ 2 0 163 0/ 0 6/ 2 0 163 0/ 0 6/ 2 0 16

TOTALTOTALTOTALTOTAL

AUTONOMOUS COM M UNIT IESAUTONOMOUS COM M UNIT IESAUTONOMOUS COM M UNIT IESAUTONOMOUS COM M UNIT IES

Thousand euro

Ex t r e m a d u r aEx t r e m a d u r aEx t r e m a d u r aEx t r e m a d u r a Ga l i c i aGa l i c i aGa l i c i aGa l i c i a M a d r idM a d r idM a d r idM a d r id M u r c iaM u r c iaM u r c iaM u r c ia Na va r r aNa va r r aNa va r r aNa va r r aV a l e n c i a n V a l e n c i a n V a l e n c i a n V a l e n c i a n

Co m m u n i tyCo m m u n i tyCo m m u n i tyCo m m u n i ty

Ba s q u e Ba s q u e Ba s q u e Ba s q u e

Co u n t r yCo u n t r yCo u n t r yCo u n t r yL a R io j aL a R io j aL a R io j aL a R io j a

Ce u ta a n dCe u ta a n dCe u ta a n dCe u ta a n d

M e l i l l aM e l i l l aM e l i l l aM e l i l l a

Ce n t r a l b a n k s a n d c r e d i t i n s t i tu t i o n sCe n t r a l b a n k s a n d c r e d i t i n s t i tu t i o n sCe n t r a l b a n k s a n d c r e d i t i n s t i tu t i o n sCe n t r a l b a n k s a n d c r e d i t i n s t i tu t i o n s 5 25 25 25 2 1 ,6 2 41 ,6 2 41 ,6 2 41 ,6 2 4 2 ,4 3 6 ,8 3 92 ,4 3 6 ,8 3 92 ,4 3 6 ,8 3 92 ,4 3 6 ,8 3 9 2 7 ,2 2 72 7 ,2 2 72 7 ,2 2 72 7 ,2 2 7 ---- 4 1 ,2 0 54 1 ,2 0 54 1 ,2 0 54 1 ,2 0 5 1 9 4 ,6 9 61 9 4 ,6 9 61 9 4 ,6 9 61 9 4 ,6 9 6 1 2 71 2 71 2 71 2 7 3 83 83 83 8

P u b l ic A d m i n is t r a t i o n sP u b l i c A d m i n is t r a t i o n sP u b l i c A d m i n is t r a t i o n sP u b l i c A d m i n is t r a t i o n s 5 0 ,2 8 85 0 ,2 8 85 0 ,2 8 85 0 ,2 8 8 1 4 9 ,3 7 71 4 9 ,3 7 71 4 9 ,3 7 71 4 9 ,3 7 7 1 ,6 5 0 ,8 5 21 ,6 5 0 ,8 5 21 ,6 5 0 ,8 5 21 ,6 5 0 ,8 5 2 1 0 8 ,8 7 81 0 8 ,8 7 81 0 8 ,8 7 81 0 8 ,8 7 8 1 3 6 ,5 0 31 3 6 ,5 0 31 3 6 ,5 0 31 3 6 ,5 0 3 9 2 3 ,6 3 29 2 3 ,6 3 29 2 3 ,6 3 29 2 3 ,6 3 2 7 3 1 ,6 2 57 3 1 ,6 2 57 3 1 ,6 2 57 3 1 ,6 2 5 4 7 ,3 7 74 7 ,3 7 74 7 ,3 7 74 7 ,3 7 7 ----

Central Administration (*)

Other Public Administrations 50,288 149,377 1,650,852 108,878 136,503 923,632 731,625 47,377 -

O th e r f i n a n c ia l c o r p o r a t io n s a n d in d i v i d u a l O th e r f i n a n c ia l c o r p o r a t io n s a n d in d i v i d u a l O th e r f i n a n c ia l c o r p o r a t io n s a n d in d i v i d u a l O th e r f i n a n c ia l c o r p o r a t io n s a n d in d i v i d u a l

e n t r e p r e n e u r s ( f i n a n c i a l b u s in e s s a c t i v i ty)e n t r e p r e n e u r s ( f i n a n c i a l b u s in e s s a c t i v i ty)e n t r e p r e n e u r s ( f i n a n c i a l b u s in e s s a c t i v i ty)e n t r e p r e n e u r s ( f i n a n c i a l b u s in e s s a c t i v i ty) 8 18 18 18 1 4 ,7 9 04 ,7 9 04 ,7 9 04 ,7 9 0 1 ,3 7 8 ,4 2 71 ,3 7 8 ,4 2 71 ,3 7 8 ,4 2 71 ,3 7 8 ,4 2 7 4 ,9 9 64 ,9 9 64 ,9 9 64 ,9 9 6 3 8 53 8 53 8 53 8 5 2 2 8 ,8 6 82 2 8 ,8 6 82 2 8 ,8 6 82 2 8 ,8 6 8 2 6 ,8 0 62 6 ,8 0 62 6 ,8 0 62 6 ,8 0 6 1 0 11 0 11 0 11 0 1 9 69 69 69 6

No n fi n a n c ia l c o r p o r a t io n s a n d in d i v id u a l No n fi n a n c ia l c o r p o r a t io n s a n d in d i v id u a l No n fi n a n c ia l c o r p o r a t io n s a n d in d i v id u a l No n fi n a n c ia l c o r p o r a t io n s a n d in d i v id u a l

e n t r e p r e n e u r s (n o n f i n a n c i a l b u s in e s s e n t r e p r e n e u r s (n o n f i n a n c i a l b u s in e s s e n t r e p r e n e u r s (n o n f i n a n c i a l b u s in e s s e n t r e p r e n e u r s (n o n f i n a n c i a l b u s in e s s

a c t i v i ty )a c t i v i ty )a c t i v i ty )a c t i v i ty ) 6 8 ,1 3 56 8 ,1 3 56 8 ,1 3 56 8 ,1 3 5 1 ,6 6 1 ,9 1 11 ,6 6 1 ,9 1 11 ,6 6 1 ,9 1 11 ,6 6 1 ,9 1 1 1 3 ,1 8 7 ,8 5 51 3 ,1 8 7 ,8 5 51 3 ,1 8 7 ,8 5 51 3 ,1 8 7 ,8 5 5 1 ,8 0 0 ,4 6 21 ,8 0 0 ,4 6 21 ,8 0 0 ,4 6 21 ,8 0 0 ,4 6 2 5 4 2 ,5 3 95 4 2 ,5 3 95 4 2 ,5 3 95 4 2 ,5 3 9 6 ,0 9 7 ,2 5 76 ,0 9 7 ,2 5 76 ,0 9 7 ,2 5 76 ,0 9 7 ,2 5 7 2 ,9 7 0 ,5 7 92 ,9 7 0 ,5 7 92 ,9 7 0 ,5 7 92 ,9 7 0 ,5 7 9 2 3 3 ,7 7 52 3 3 ,7 7 52 3 3 ,7 7 52 3 3 ,7 7 5 1 4 ,9 8 31 4 ,9 8 31 4 ,9 8 31 4 ,9 8 3

Construction and real estate development 10,693 99,657 1,051,511 832,738 34,486 1,747,472 204,661 24,974 540

Construction of civil works 1,052 104,385 1,028,946 7,830 8,454 60,230 115,470 1,433 -

Other Purposes 56,390 1,457,869 11,107,398 959,894 499,599 4,289,555 2,650,448 207,368 14,443

Large Companies 17,890 506,822 7,136,651 211,258 220,206 1,376,862 1,205,076 74,305 1,508

SMEs and individual entrepreneurs 38,500 951,047 3,970,747 748,636 279,393 2,912,693 1,445,372 133,063 12,935

Re s t o f h o u s e h o ld sRe s t o f h o u s e h o ld sRe s t o f h o u s e h o ld sRe s t o f h o u s e h o ld s 1 1 5 ,5 0 31 1 5 ,5 0 31 1 5 ,5 0 31 1 5 ,5 0 3 7 5 1 ,1 9 17 5 1 ,1 9 17 5 1 ,1 9 17 5 1 ,1 9 1 4 ,7 4 8 ,3 0 94 ,7 4 8 ,3 0 94 ,7 4 8 ,3 0 94 ,7 4 8 ,3 0 9 2 ,9 0 4 ,2 8 62 ,9 0 4 ,2 8 62 ,9 0 4 ,2 8 62 ,9 0 4 ,2 8 6 1 4 7 ,7 1 91 4 7 ,7 1 91 4 7 ,7 1 91 4 7 ,7 1 9 8 ,8 5 7 ,0 5 78 ,8 5 7 ,0 5 78 ,8 5 7 ,0 5 78 ,8 5 7 ,0 5 7 9 4 2 ,4 2 49 4 2 ,4 2 49 4 2 ,4 2 49 4 2 ,4 2 4 7 8 ,3 4 97 8 ,3 4 97 8 ,3 4 97 8 ,3 4 9 4 1 ,1 1 04 1 ,1 1 04 1 ,1 1 04 1 ,1 1 0

Properties 87,923 520,475 3,908,576 2,098,768 113,234 6,816,444 757,498 55,434 35,559

Consumption 20,493 162,217 531,385 443,672 23,496 1,119,302 112,896 16,445 4,018

Other Purposes 7,087 68,499 308,348 361,846 10,989 921,311 72,030 6,470 1,533

L e s s : S p e c i fi c a l l o w a n c e s fo r th e im p a i r m e n t L e s s : S p e c i fi c a l l o w a n c e s fo r th e im p a i r m e n t L e s s : S p e c i fi c a l l o w a n c e s fo r th e im p a i r m e n t L e s s : S p e c i fi c a l l o w a n c e s fo r th e im p a i r m e n t

o f a s s e ts n o t c h a r ge d to s p e c i f i c o p e r a t i o n so f a s s e ts n o t c h a r ge d to s p e c i f i c o p e r a t i o n so f a s s e ts n o t c h a r ge d to s p e c i f i c o p e r a t i o n so f a s s e ts n o t c h a r ge d to s p e c i f i c o p e r a t i o n s - - - - - - - - -

T OT A LT OT A LT OT A LT OT A L 2 3 4 ,0 5 92 3 4 ,0 5 92 3 4 ,0 5 92 3 4 ,0 5 9 2 ,5 6 8 ,8 9 32 ,5 6 8 ,8 9 32 ,5 6 8 ,8 9 32 ,5 6 8 ,8 9 3 2 3 ,4 0 2 ,2 8 22 3 ,4 0 2 ,2 8 22 3 ,4 0 2 ,2 8 22 3 ,4 0 2 ,2 8 2 4 ,8 4 5 ,8 4 94 ,8 4 5 ,8 4 94 ,8 4 5 ,8 4 94 ,8 4 5 ,8 4 9 8 2 7 ,1 4 68 2 7 ,1 4 68 2 7 ,1 4 68 2 7 ,1 4 6 1 6 ,1 4 8 ,0 1 91 6 ,1 4 8 ,0 1 91 6 ,1 4 8 ,0 1 91 6 ,1 4 8 ,0 1 9 4 ,8 6 6 ,1 3 04 ,8 6 6 ,1 3 04 ,8 6 6 ,1 3 04 ,8 6 6 ,1 3 0 3 5 9 ,7 2 93 5 9 ,7 2 93 5 9 ,7 2 93 5 9 ,7 2 9 5 6 ,2 2 75 6 ,2 2 75 6 ,2 2 75 6 ,2 2 7

(*) A s t his is w it h Cent ral A dminist rat ion it is no t imput ed t o any A ut onomous Communit y.

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

A UT ONOM OUS COM M UN IT IESA UT ONOM OUS COM M UN IT IESA UT ONOM OUS COM M UN IT IESA UT ONOM OUS COM M UN IT IES

21

Tho usand euro

A n d a lu s i aA n d a lu s i aA n d a lu s i aA n d a lu s i a A r a go nA r a go nA r a go nA r a go n A s tu r i a sA s tu r i a sA s tu r i a sA s tu r i a sB a l e a r i c B a l e a r i c B a l e a r i c B a l e a r i c

Is l a n d sIs l a n d sIs l a n d sIs l a n d s

C a n a r y C a n a r y C a n a r y C a n a r y

Is l a n d sIs la n d sIs la n d sIs la n d sC a n ta b r i a C a n ta b r i a C a n ta b r i a C a n ta b r i a

C a s t i l l a -C a s t i l l a -C a s t i l l a -C a s t i l l a -

L a M a n c h aL a M a n c h aL a M a n c h aL a M a n c h a

C a s t i l e a n d C a s t i l e a n d C a s t i l e a n d C a s t i l e a n d

L e ó n L e ó n L e ó n L e ó n C a ta l o n iaC a ta l o n iaC a ta l o n iaC a ta l o n ia

C e n t r a l b a n ks a n d c r e d i t i n s t i tu t i o n sC e n t r a l b a n ks a n d c r e d i t i n s t i tu t i o n sC e n t r a l b a n ks a n d c r e d i t i n s t i tu t i o n sC e n t r a l b a n ks a n d c r e d i t i n s t i tu t i o n s 6 ,4 0 3 ,4 4 36 ,4 0 3 ,4 4 36 ,4 0 3 ,4 4 36 ,4 0 3 ,4 4 3 6 6 ,5 5 46 6 ,5 5 46 6 ,5 5 46 6 ,5 5 4 1 2 ,7 6 61 2 ,7 6 61 2 ,7 6 61 2 ,7 6 6 3 3 ,4 7 63 3 ,4 7 63 3 ,4 7 63 3 ,4 7 6 2 5 ,8 4 02 5 ,8 4 02 5 ,8 4 02 5 ,8 4 0 1 0 ,1 3 51 0 ,1 3 51 0 ,1 3 51 0 ,1 3 5 2 ,6 1 72 ,6 1 72 ,6 1 72 ,6 1 7 7 ,0 0 27 ,0 0 27 ,0 0 27 ,0 0 2 1 6 ,0 7 21 6 ,0 7 21 6 ,0 7 21 6 ,0 7 2 3 ,7 5 7 ,2 8 03 ,7 5 7 ,2 8 03 ,7 5 7 ,2 8 03 ,7 5 7 ,2 8 0

P u b l i c Ad m in i s t r a t i o n sP u b l i c Ad m in i s t r a t i o n sP u b l i c Ad m in i s t r a t i o n sP u b l i c Ad m in i s t r a t i o n s 1 4 ,9 7 9 ,8 4 21 4 ,9 7 9 ,8 4 21 4 ,9 7 9 ,8 4 21 4 ,9 7 9 ,8 4 2 2 9 5 ,7 3 42 9 5 ,7 3 42 9 5 ,7 3 42 9 5 ,7 3 4 9 ,4 1 19 ,4 1 19 ,4 1 19 ,4 1 1 1 4 4 ,0 3 01 4 4 ,0 3 01 4 4 ,0 3 01 4 4 ,0 3 0 1 0 1 ,4 0 21 0 1 ,4 0 21 0 1 ,4 0 21 0 1 ,4 0 2 7 7 ,9 5 67 7 ,9 5 67 7 ,9 5 67 7 ,9 5 6 2 7 ,6 7 42 7 ,6 7 42 7 ,6 7 42 7 ,6 7 4 4 7 ,4 2 04 7 ,4 2 04 7 ,4 2 04 7 ,4 2 0 1 8 2 ,8 4 41 8 2 ,8 4 41 8 2 ,8 4 41 8 2 ,8 4 4 9 6 2 ,0 0 29 6 2 ,0 0 29 6 2 ,0 0 29 6 2 ,0 0 2

Central Administration (*) 10,208,887 - - - - - - - - -

Other Public Administrations 4,770,955 295,734 9,411 144,030 101,402 77,956 27,674 47,420 182,844 962,002

O th e r f i n a n c i a l c o r p o r a t i o n s a n d i n d i v i d u a l O th e r f i n a n c i a l c o r p o r a t i o n s a n d i n d i v i d u a l O th e r f i n a n c i a l c o r p o r a t i o n s a n d i n d i v i d u a l O th e r f i n a n c i a l c o r p o r a t i o n s a n d i n d i v i d u a l

e n t r e p r e n e u r s ( f i n a n c ia l b u s in e s s a c t i v i ty)e n t r e p r e n e u r s ( f i n a n c ia l b u s in e s s a c t i v i ty)e n t r e p r e n e u r s ( f i n a n c ia l b u s in e s s a c t i v i ty)e n t r e p r e n e u r s ( f i n a n c ia l b u s in e s s a c t i v i ty) 3 ,7 2 0 ,6 0 83 ,7 2 0 ,6 0 83 ,7 2 0 ,6 0 83 ,7 2 0 ,6 0 8 3 3 ,6 9 53 3 ,6 9 53 3 ,6 9 53 3 ,6 9 5 6 ,8 9 16 ,8 9 16 ,8 9 16 ,8 9 1 1 5 ,4 8 31 5 ,4 8 31 5 ,4 8 31 5 ,4 8 3 1 5 ,2 0 91 5 ,2 0 91 5 ,2 0 91 5 ,2 0 9 5 ,7 0 85 ,7 0 85 ,7 0 85 ,7 0 8 1 ,6 9 11 ,6 9 11 ,6 9 11 ,6 9 1 4 ,2 7 74 ,2 7 74 ,2 7 74 ,2 7 7 1 6 ,6 1 31 6 ,6 1 31 6 ,6 1 31 6 ,6 1 3 4 1 0 ,4 3 74 1 0 ,4 3 74 1 0 ,4 3 74 1 0 ,4 3 7

N o n fi n a n c i a l c o r p o r a t i o n s a n d i n d i v i d u a l N o n f i n a n c i a l c o r p o r a t i o n s a n d i n d i v i d u a l N o n f i n a n c i a l c o r p o r a t i o n s a n d i n d i v i d u a l N o n f i n a n c i a l c o r p o r a t i o n s a n d i n d i v i d u a l

e n t r e p r e n e u r s (n o n f i n a n c ia l b u s i n e s s e n t r e p r e n e u r s (n o n f i n a n c ia l b u s i n e s s e n t r e p r e n e u r s (n o n f i n a n c ia l b u s i n e s s e n t r e p r e n e u r s (n o n f i n a n c ia l b u s i n e s s

a c t i v i ty)a c t i v i ty)a c t i v i ty)a c t i v i ty) 5 7 ,2 8 1 ,4 2 95 7 ,2 8 1 ,4 2 95 7 ,2 8 1 ,4 2 95 7 ,2 8 1 ,4 2 9 2 ,1 8 7 ,5 4 52 ,1 8 7 ,5 4 52 ,1 8 7 ,5 4 52 ,1 8 7 ,5 4 5 7 6 7 ,8 2 07 6 7 ,8 2 07 6 7 ,8 2 07 6 7 ,8 2 0 1 ,6 8 7 ,9 3 81 ,6 8 7 ,9 3 81 ,6 8 7 ,9 3 81 ,6 8 7 ,9 3 8 1 ,3 4 3 ,3 1 11 ,3 4 3 ,3 1 11 ,3 4 3 ,3 1 11 ,3 4 3 ,3 1 1 5 7 2 ,1 1 55 7 2 ,1 1 55 7 2 ,1 1 55 7 2 ,1 1 5 1 9 1 ,4 8 51 9 1 ,4 8 51 9 1 ,4 8 51 9 1 ,4 8 5 3 0 3 ,3 4 13 0 3 ,3 4 13 0 3 ,3 4 13 0 3 ,3 4 1 9 9 1 ,0 5 59 9 1 ,0 5 59 9 1 ,0 5 59 9 1 ,0 5 5 1 8 ,6 8 0 ,5 5 11 8 ,6 8 0 ,5 5 11 8 ,6 8 0 ,5 5 11 8 ,6 8 0 ,5 5 1

Construction and real estate development 6,646,225 631,075 127,920 173,724 160,246 107,166 16,222 35,197 87,612 1,517,128

Construction of civil works 1,876,893 41,451 13,170 66,230 10,428 4,748 5,559 9,806 38,783 229,203

Other Purposes 48,758,312 1,515,019 626,730 1,447,984 1,172,636 460,200 169,704 258,338 864,660 16,934,220

Large Companies 22,333,342 380,037 189,319 486,782 457,561 120,692 32,145 18,444 194,726 9,432,943

SMEs and sole proprietors 26,424,969 1,134,982 437,411 961,202 715,076 339,509 137,559 239,894 669,934 7,501,277

R e s t o f h o u s e h o ld sR e s t o f h o u s e h o ld sR e s t o f h o u s e h o ld sR e s t o f h o u s e h o ld s 4 0 ,3 6 6 ,7 4 04 0 ,3 6 6 ,7 4 04 0 ,3 6 6 ,7 4 04 0 ,3 6 6 ,7 4 0 2 ,5 8 4 ,0 9 22 ,5 8 4 ,0 9 22 ,5 8 4 ,0 9 22 ,5 8 4 ,0 9 2 4 8 8 ,1 1 94 8 8 ,1 1 94 8 8 ,1 1 94 8 8 ,1 1 9 1 ,2 6 9 ,1 0 21 ,2 6 9 ,1 0 21 ,2 6 9 ,1 0 21 ,2 6 9 ,1 0 2 1 ,5 8 7 ,9 0 71 ,5 8 7 ,9 0 71 ,5 8 7 ,9 0 71 ,5 8 7 ,9 0 7 5 6 6 ,9 7 65 6 6 ,9 7 65 6 6 ,9 7 65 6 6 ,9 7 6 9 1 ,9 6 09 1 ,9 6 09 1 ,9 6 09 1 ,9 6 0 4 8 2 ,6 0 44 8 2 ,6 0 44 8 2 ,6 0 44 8 2 ,6 0 4 6 5 2 ,8 0 36 5 2 ,8 0 36 5 2 ,8 0 36 5 2 ,8 0 3 1 4 ,1 0 9 ,6 1 61 4 ,1 0 9 ,6 1 61 4 ,1 0 9 ,6 1 61 4 ,1 0 9 ,6 1 6

Properties 31,926,682 2,086,179 378,962 965,836 1,283,895 435,331 70,564 395,120 520,832 11,170,364

Consumption 5,607,390 357,901 76,262 197,081 196,978 101,932 17,146 64,106 88,618 2,141,084

Other Purposes 2,832,667 140,011 32,894 106,186 107,034 29,713 4,250 23,378 43,353 798,168

L e s s : S p e c i f i c a l l o w a n c e s fo r th e im p a i r m e n t L e s s : S p e c i f i c a l l o w a n c e s fo r th e im p a i r m e n t L e s s : S p e c i f i c a l l o w a n c e s fo r th e im p a i r m e n t L e s s : S p e c i f i c a l l o w a n c e s fo r th e im p a i r m e n t

o f a s s e ts n o t c h a r ge d to s p e c i f i c o p e r a t i o n so f a s s e ts n o t c h a r ge d to s p e c i f i c o p e r a t i o n so f a s s e ts n o t c h a r ge d to s p e c i f i c o p e r a t i o n so f a s s e ts n o t c h a r ge d to s p e c i f i c o p e r a t i o n s - - - - - - - - - -

T O T A LT O T A LT O T A LT O T A L 1 2 2 ,7 5 2 ,0 6 11 2 2 ,7 5 2 ,0 6 11 2 2 ,7 5 2 ,0 6 11 2 2 ,7 5 2 ,0 6 1 5 ,1 6 7 ,6 2 05 ,1 6 7 ,6 2 05 ,1 6 7 ,6 2 05 ,1 6 7 ,6 2 0 1 ,2 8 5 ,0 0 71 ,2 8 5 ,0 0 71 ,2 8 5 ,0 0 71 ,2 8 5 ,0 0 7 3 ,1 5 0 ,0 2 93 ,1 5 0 ,0 2 93 ,1 5 0 ,0 2 93 ,1 5 0 ,0 2 9 3 ,0 7 3 ,6 7 03 ,0 7 3 ,6 7 03 ,0 7 3 ,6 7 03 ,0 7 3 ,6 7 0 1 ,2 3 2 ,8 8 91 ,2 3 2 ,8 8 91 ,2 3 2 ,8 8 91 ,2 3 2 ,8 8 9 3 1 5 ,4 2 63 1 5 ,4 2 63 1 5 ,4 2 63 1 5 ,4 2 6 8 4 4 ,6 4 38 4 4 ,6 4 38 4 4 ,6 4 38 4 4 ,6 4 3 1 ,8 5 9 ,3 8 81 ,8 5 9 ,3 8 81 ,8 5 9 ,3 8 81 ,8 5 9 ,3 8 8 3 7 ,9 1 9 ,8 8 63 7 ,9 1 9 ,8 8 63 7 ,9 1 9 ,8 8 63 7 ,9 1 9 ,8 8 6

(*) A s t his is wit h Cent ral A d minist rat io n it is no t imp uted t o any A ut o no mo us Co mmunit y

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

T OT ALT OT ALT OT ALT OT AL

A UT ON O M O US CO M M U N IT IESA UT ON O M O US CO M M U N IT IESA UT ON O M O US CO M M U N IT IESA UT ON O M O US CO M M U N IT IES

Tho usand euro

Ex t r e m a d u r aEx t r e m a d u r aEx t r e m a d u r aEx t r e m a d u r a Ga l i c i aGa l i c i aGa l i c i aGa l i c i a M a d r idM a d r idM a d r idM a d r id M u r c iaM u r c iaM u r c iaM u r c ia N a va r r aN a va r r aN a va r r aN a va r r aV a le n c ia n V a le n c ia n V a le n c ia n V a le n c ia n

Co m m u n i tyCo m m u n i tyCo m m u n i tyCo m m u n i ty

B a s q u e B a s q u e B a s q u e B a s q u e

C o u n tr yC o u n tr yC o u n tr yC o u n tr yL a R io jaL a R io jaL a R io jaL a R io ja

C e u ta C e u ta C e u ta C e u ta

a n da n da n da n d

M e l i l l aM e l i l l aM e l i l l aM e l i l l a

Ce n tr a l b a n ks a n d c r e d i t i n s t i t u t io n sCe n tr a l b a n ks a n d c r e d i t i n s t i t u t io n sCe n tr a l b a n ks a n d c r e d i t i n s t i t u t io n sCe n tr a l b a n ks a n d c r e d i t i n s t i t u t io n s 1 ,6 5 61 ,6 5 61 ,6 5 61 ,6 5 6 2 2 ,5 2 12 2 ,5 2 12 2 ,5 2 12 2 ,5 2 1 1 ,5 2 2 ,2 3 71 ,5 2 2 ,2 3 71 ,5 2 2 ,2 3 71 ,5 2 2 ,2 3 7 6 0 ,9 9 66 0 ,9 9 66 0 ,9 9 66 0 ,9 9 6 9 ,7 6 09 ,7 6 09 ,7 6 09 ,7 6 0 7 0 8 ,9 1 27 0 8 ,9 1 27 0 8 ,9 1 27 0 8 ,9 1 2 3 5 ,7 1 13 5 ,7 1 13 5 ,7 1 13 5 ,7 1 1 1 0 9 ,4 7 61 0 9 ,4 7 61 0 9 ,4 7 61 0 9 ,4 7 6 4 3 04 3 04 3 04 3 0

P u b l ic A d m i n i s t r a t i o n sP u b l ic A d m i n i s t r a t i o n sP u b l ic A d m i n i s t r a t i o n sP u b l ic A d m i n i s t r a t i o n s 5 2 ,7 7 75 2 ,7 7 75 2 ,7 7 75 2 ,7 7 7 4 0 8 ,2 1 64 0 8 ,2 1 64 0 8 ,2 1 64 0 8 ,2 1 6 9 0 8 ,3 0 79 0 8 ,3 0 79 0 8 ,3 0 79 0 8 ,3 0 7 5 7 ,7 8 05 7 ,7 8 05 7 ,7 8 05 7 ,7 8 0 6 2 ,2 3 26 2 ,2 3 26 2 ,2 3 26 2 ,2 3 2 9 1 2 ,1 1 19 1 2 ,1 1 19 1 2 ,1 1 19 1 2 ,1 1 1 5 0 3 ,9 7 05 0 3 ,9 7 05 0 3 ,9 7 05 0 3 ,9 7 0 1 7 ,0 8 71 7 ,0 8 71 7 ,0 8 71 7 ,0 8 7 ----

Central Administration (*) - - - - - - - - -

Other Public Administrations 52,777 408,216 908,307 57,780 62,232 912,111 503,970 17,087 -

O th e r f i n a n c i a l c o r p o r a t i o n s a n d in d i v i d u a l O th e r f i n a n c i a l c o r p o r a t i o n s a n d in d i v i d u a l O th e r f i n a n c i a l c o r p o r a t i o n s a n d in d i v i d u a l O th e r f i n a n c i a l c o r p o r a t i o n s a n d in d i v i d u a l

e n tr e p r e n e u r s ( fi n a n c ia l b u s i n e s s a c t i v i t y)e n tr e p r e n e u r s ( fi n a n c ia l b u s i n e s s a c t i v i t y)e n tr e p r e n e u r s ( fi n a n c ia l b u s i n e s s a c t i v i t y)e n tr e p r e n e u r s ( fi n a n c ia l b u s i n e s s a c t i v i t y) 9 9 69 9 69 9 69 9 6 1 6 ,6 9 71 6 ,6 9 71 6 ,6 9 71 6 ,6 9 7 4 6 3 ,2 9 44 6 3 ,2 9 44 6 3 ,2 9 44 6 3 ,2 9 4 2 3 ,3 9 32 3 ,3 9 32 3 ,3 9 32 3 ,3 9 3 3 ,6 9 13 ,6 9 13 ,6 9 13 ,6 9 1 2 ,6 5 1 ,7 8 82 ,6 5 1 ,7 8 82 ,6 5 1 ,7 8 82 ,6 5 1 ,7 8 8 4 8 ,2 6 54 8 ,2 6 54 8 ,2 6 54 8 ,2 6 5 2 ,0 9 92 ,0 9 92 ,0 9 92 ,0 9 9 3 8 03 8 03 8 03 8 0

No n fi n a n c i a l c o r p o r a t i o n s a n d in d i v i d u a l No n fi n a n c i a l c o r p o r a t i o n s a n d in d i v i d u a l No n fi n a n c i a l c o r p o r a t i o n s a n d in d i v i d u a l No n fi n a n c i a l c o r p o r a t i o n s a n d in d i v i d u a l

e n tr e p r e n e u r s ( n o n fi n a n c i a l b u s i n e s s a c t i v i ty )e n tr e p r e n e u r s ( n o n fi n a n c i a l b u s i n e s s a c t i v i ty )e n tr e p r e n e u r s ( n o n fi n a n c i a l b u s i n e s s a c t i v i ty )e n tr e p r e n e u r s ( n o n fi n a n c i a l b u s i n e s s a c t i v i ty ) 4 0 ,9 7 44 0 ,9 7 44 0 ,9 7 44 0 ,9 7 4 1 ,4 4 1 ,9 9 71 ,4 4 1 ,9 9 71 ,4 4 1 ,9 9 71 ,4 4 1 ,9 9 7 1 1 ,4 3 4 ,5 5 41 1 ,4 3 4 ,5 5 41 1 ,4 3 4 ,5 5 41 1 ,4 3 4 ,5 5 4 1 ,1 5 2 ,6 2 51 ,1 5 2 ,6 2 51 ,1 5 2 ,6 2 51 ,1 5 2 ,6 2 5 4 9 6 ,6 9 64 9 6 ,6 9 64 9 6 ,6 9 64 9 6 ,6 9 6 1 3 ,0 6 5 ,6 7 61 3 ,0 6 5 ,6 7 61 3 ,0 6 5 ,6 7 61 3 ,0 6 5 ,6 7 6 2 ,7 0 5 ,3 1 02 ,7 0 5 ,3 1 02 ,7 0 5 ,3 1 02 ,7 0 5 ,3 1 0 2 0 6 ,9 3 52 0 6 ,9 3 52 0 6 ,9 3 52 0 6 ,9 3 5 1 1 ,5 0 31 1 ,5 0 31 1 ,5 0 31 1 ,5 0 3

Construction and real estate development 5,882 91,812 914,094 549,118 31,288 1,925,077 246,507 25,869 288

Construction of civil works 1,174 124,349 1,123,183 8,244 12,531 61,532 124,796 1,706 -

Other Purposes 33,918 1,225,836 9,397,277 595,263 452,877 11,079,067 2,334,007 179,360 11,215

Large Companies 5,316 288,870 6,172,402 55,755 183,315 3,205,105 1,054,217 55,594 120

SMEs and sole proprietors 28,602 936,966 3,224,875 539,508 269,562 7,873,961 1,279,790 123,766 11,095

Re s t o f h o u s e h o l d sRe s t o f h o u s e h o l d sRe s t o f h o u s e h o l d sRe s t o f h o u s e h o l d s 1 0 9 ,0 3 61 0 9 ,0 3 61 0 9 ,0 3 61 0 9 ,0 3 6 6 9 6 ,6 0 86 9 6 ,6 0 86 9 6 ,6 0 86 9 6 ,6 0 8 4 ,7 4 4 ,1 8 04 ,7 4 4 ,1 8 04 ,7 4 4 ,1 8 04 ,7 4 4 ,1 8 0 2 ,9 0 9 ,0 2 82 ,9 0 9 ,0 2 82 ,9 0 9 ,0 2 82 ,9 0 9 ,0 2 8 1 4 2 ,0 6 51 4 2 ,0 6 51 4 2 ,0 6 51 4 2 ,0 6 5 8 ,9 2 3 ,1 7 88 ,9 2 3 ,1 7 88 ,9 2 3 ,1 7 88 ,9 2 3 ,1 7 8 9 0 1 ,6 3 39 0 1 ,6 3 39 0 1 ,6 3 39 0 1 ,6 3 3 7 2 ,1 8 97 2 ,1 8 97 2 ,1 8 97 2 ,1 8 9 3 5 ,6 4 53 5 ,6 4 53 5 ,6 4 53 5 ,6 4 5

Properties 85,016 518,296 3,926,839 2,151,181 111,158 6,999,237 740,527 56,297 31,049

Consumption 17,877 136,918 494,410 443,617 21,576 1,131,940 105,201 10,963 3,780

Other Purposes 6,143 41,394 322,931 314,230 9,331 792,001 55,905 4,929 816

L e s s : A d j u s tm e n ts d u e to a s s e t i m p a i r m e n t n o t L e s s : A d j u s tm e n ts d u e to a s s e t i m p a i r m e n t n o t L e s s : A d j u s tm e n ts d u e to a s s e t i m p a i r m e n t n o t L e s s : A d j u s tm e n ts d u e to a s s e t i m p a i r m e n t n o t

a l l o c a te d to s p e c i f i c o p e r a t i o n sa l lo c a te d to s p e c i f i c o p e r a t i o n sa l lo c a te d to s p e c i f i c o p e r a t i o n sa l lo c a te d to s p e c i f i c o p e r a t i o n s - - - - - - - - -

T OT A LT OT A LT OT A LT OT A L 2 0 5 ,4 3 92 0 5 ,4 3 92 0 5 ,4 3 92 0 5 ,4 3 9 2 ,5 8 6 ,0 3 82 ,5 8 6 ,0 3 82 ,5 8 6 ,0 3 82 ,5 8 6 ,0 3 8 1 9 ,0 7 2 ,5 7 31 9 ,0 7 2 ,5 7 31 9 ,0 7 2 ,5 7 31 9 ,0 7 2 ,5 7 3 4 ,2 0 3 ,8 2 34 ,2 0 3 ,8 2 34 ,2 0 3 ,8 2 34 ,2 0 3 ,8 2 3 7 1 4 ,4 4 37 1 4 ,4 4 37 1 4 ,4 4 37 1 4 ,4 4 3 2 6 ,2 6 1 ,6 6 52 6 ,2 6 1 ,6 6 52 6 ,2 6 1 ,6 6 52 6 ,2 6 1 ,6 6 5 4 ,1 9 4 ,8 8 94 ,1 9 4 ,8 8 94 ,1 9 4 ,8 8 94 ,1 9 4 ,8 8 9 4 0 7 ,7 8 74 0 7 ,7 8 74 0 7 ,7 8 74 0 7 ,7 8 7 4 7 ,9 5 84 7 ,9 5 84 7 ,9 5 84 7 ,9 5 8

(*) A s t his is wit h a Cent ral A dminist rat io n it is no t imp ut ed t o any A ut o no mo us Co mmunit y

A U T ON OM OU S C OM M UN IT IESA U T ON OM OU S C OM M UN IT IESA U T ON OM OU S C OM M UN IT IESA U T ON OM OU S C OM M UN IT IES

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Sovereign risk exposure The breakdown, by type of financial instrument, of the exposure to sovereign risk, applying the criteria required by the European Banking Authority (EBA), at 30 June 2016 and 31 December 2015, is as follows: Thousand euro

Sovereign r isk Sovereign r isk Sovereign r isk Sovereign r isk

exposure by country exposure by country exposure by country exposure by country

(*)(*)(*)(*)

Trading Trading Trading Trading

portfol ioportfol ioportfol ioportfol io

Shor t Shor t Shor t Shor t

pos i tionspos i tionspos i tionspos i tions

Avai lable - for -Avai lable - for -Avai lable - for -Avai lable - for -

sale portfol iosale portfol iosale portfol iosale portfol io Loan bookLoan bookLoan bookLoan book

Direct Direct Direct Direct

exposureexposureexposureexposure

Indi rect Indi rect Indi rect Indi rect


%%%%

Spain 575,453 (80,660) 8,145,222 641,282 9,661,685 - (13,935) 18,929,047 21,171 62.5%

Italty 331,333 - 5,273,182 - - - (2,917) 5,601,598 (5,403) 18.5%

USA - - 1,569,387 - 44,994 - (2) 1,614,379 - 5.3%

United Kingdom - - 1,856,196 - 19 - - 1,856,215 - 6.1%

Portugal - - 985,040 - - - - 985,040 - 3.3%

Mexico - - 850,802 - - - - 850,802 - 2.8%

Rest of the world 25,767 (7,409) 398,315 - 48,286 - - 464,959 (15,460) 1.5%

TotalTotalTotalTotal 932,553932,553932,553932,553 (88,069)(88,069)(88,069)(88,069) 19 ,078 ,14419 ,078 ,14419 ,078 ,14419 ,078 ,144 641 ,282641 ,282641 ,282641 ,282 9,754 ,9849,754 ,9849,754 ,9849,754 ,984 ---- (16 ,855)(16 ,855)(16 ,855)(16 ,855) 30 ,302,03930 ,302,03930 ,302,03930 ,302,039 308308308308 100.0%100.0%100.0%100.0%

30/06/201630/06/201630/06/201630/06/2016

DerivativesDer ivativesDer ivativesDer ivatives

TotalTotalTotalTotal

Other Other Other Other

exposures exposures exposures exposures

(***)(***)(***)(***)

Sovereign debt secur itiesSovereign debt secur itiesSovereign debt secur itiesSovereign debt secur itiesLoans and Loans and Loans and Loans and

advances to advances to advances to advances to

cus tomers cus tomers cus tomers cus tomers

(**)(**)(**)(**)

(*) Sovereign exposure posit ions shown in accordance with EBA criteria.

(**) Includes amounds not drawn under credit transactions and other contingent exposures (€ 402 million as at 30 June 2016).

(***) Relates to commitments for cash purchases and sales of f inancial assets.

22

Thousand euro

Sovereign r isk Sovereign r isk Sovereign r isk Sovereign r isk

exposure by country exposure by country exposure by country exposure by country

(* )(* )(* )(* )

Trading Trading Trading Trading

portfol ioportfol ioportfol ioportfol io

Short Short Short Short

pos itionspos itionspos itionspos itions

Avai lable- for -Avai lable- for -Avai lable- for -Avai lable- for -

sa le por tfo l iosale por tfo l iosale por tfo l iosale por tfo l io L oan bookL oan bookL oan bookL oan book

Di rect Di rect Di rect Di rect


Indirect Indirect Indirect Indirect

expos ureexpos ureexpos ureexpos ure

Spain 419,990 (151,904) 6,171,544 962,177 6,136,255 - (1,624) 13,536,438 355,677 53.8%

Italty 227,598 - 5,832,532 - - - (8,872) 6,051,258 194,111 24.2%

USA - - 2,352,299 - 46,746 - - 2,399,045 - 9.3%

United Kingdom - - 1,690,073 - - - - 1,690,073 - 6.5%

Portugal - - 675,933 - - - 212 676,145 - 2.6%

Mexico - - 582,514 - - - - 582,514 - 2.3%

Rest of the world - - 304,301 - 46,760 - - 351,061 - 1.4%

TotalTotalTotalTotal 647 ,588647 ,588647 ,588647 ,588 (151 ,904)(151 ,904)(151 ,904)(151 ,904) 17 ,609,19617 ,609,19617 ,609,19617 ,609,196 962 ,177962 ,177962 ,177962 ,177 6 ,229,7616 ,229,7616 ,229,7616 ,229,761 ---- (10 ,284)(10 ,284)(10 ,284)(10 ,284) 25 ,286,53425 ,286,53425 ,286,53425 ,286,534 549 ,788549 ,788549 ,788549 ,788 100 .0%100 .0%100 .0%100 .0%

(**) Includes amounts not drawn under credit transact ions and other contingent exposures (€ 657 million euros as at 31 December 2015).

(***) Relates to commitments for cash purchases and sales of f inancial assets.

(*) Sovereign exposure posit ions shown in accordance with EBA crit ieria. M ainly excludes sovereign risk of Group insurance undertakings (1,340 milion as at 31 December 2015).

31/12/201531/12/201531/12/201531/12/2015

Sovereign debt secur itiesSovereign debt secur itiesSovereign debt secur itiesSovereign debt secur ities Loans and Loans and Loans and Loans and

advances to advances to advances to advances to

customers customers customers customers

(**)(**)(**)(**)

Der ivativesDer ivativesDer ivativesDer ivatives

TotalTotalTotalTotal

Other Other Other Other

exposures exposures exposures exposures

(***)(***)(***)(***)

%%%%

Exposure to construction and real estate sectors Details of financing intended for construction and real estate development and its coverage are as follows: € million

G r o s s a m o u n tG r o s s a m o u n tG r o s s a m o u n tG r o s s a m o u n tOf w h i c h : O f w h i c h : O f w h i c h : O f w h i c h :

A P S (* * )A P S (* * )A P S (* * )A P S (* * )

Ex c e s s va l u e Ex c e s s va l u e Ex c e s s va l u e Ex c e s s va l u e

o f gu a r a n te e o f gu a r a n te e o f gu a r a n te e o f gu a r a n te e

Of w h ic h : O f w h ic h : O f w h ic h : O f w h ic h :

A P S (* * )A P S (* * )A P S (* * )A P S (* * )

A l l o w a n c e s fo r A l l o w a n c e s fo r A l l o w a n c e s fo r A l l o w a n c e s fo r

i m p a i r m e n t i m p a i r m e n t i m p a i r m e n t i m p a i r m e n t

l o s s e s (* * * )l o s s e s (* * * )l o s s e s (* * * )l o s s e s (* * * )

F i n a n c in g fo r c o n s t r u c t i o n a n d r e a l e s ta te d e ve lo p m e n t F i n a n c in g fo r c o n s t r u c t i o n a n d r e a l e s ta te d e ve lo p m e n t F i n a n c in g fo r c o n s t r u c t i o n a n d r e a l e s ta te d e ve lo p m e n t F i n a n c in g fo r c o n s t r u c t i o n a n d r e a l e s ta te d e ve lo p m e n t

( i n c l u d i n g l a n d ) b u s in e s s e s i n S p a in ) (* )( i n c l u d i n g l a n d ) b u s in e s s e s i n S p a in ) (* )( i n c l u d i n g l a n d ) b u s in e s s e s i n S p a in ) (* )( i n c l u d i n g l a n d ) b u s in e s s e s i n S p a in ) (* )8 ,5 8 78 ,5 8 78 ,5 8 78 ,5 8 7 3 ,2 6 93 ,2 6 93 ,2 6 93 ,2 6 9 2 ,7 7 82 ,7 7 82 ,7 7 82 ,7 7 8 1 ,1 6 51 ,1 6 51 ,1 6 51 ,1 6 5 1 ,6 5 91 ,6 5 91 ,6 5 91 ,6 5 9

Of which: special monitoring 186 31 53 10 -

Of which: doubtful 2 ,989 - 979 - 1,573

Of which: substandard 476 46 146 3 86

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

(*) Lo ans are classif ied accord ing t o t heir p urp ose and no t t he deb t o r 's CNA E.This imp lies, f o r example, t hat if the d eb t o r relat es t o : (a) a real est ate co mp any b ut the f inancing is d ed icated t o a purp ose o ther t han co nst ruct ion o r real est ate develop ment , it is no t included in t his t ab le; and (b ) a company whose core b usiness is no t co nst ruct ion but t he loan is used t o f inance p rop ert ies f o r real estat e develop ment , it is included in t his tab le.

(***) V alue ad justment reco gnised f o r the expo sure fo r which t he bank ret ains t he cred it r isk. Thus, it do es no t include value ad just ments fo r t he exp osure w ith risk t hat has been t ransf erred .

(**) Exp osure fo r which, by ap p lying t he A sset Pro t ect io n Scheme (see no te 2 ), cred it r isk has b een t ransf erred . It thus correspo nd s t o 8 0% o f t he t o t al value o f t he expo sure.

€ million

G r o s s a m o u n tG r o s s a m o u n tG r o s s a m o u n tG r o s s a m o u n tO f w h i c h : O f w h i c h : O f w h i c h : O f w h i c h :

A P S (* * )A P S (* * )A P S (* * )A P S (* * )

Ex c e s s va l u e Ex c e s s va l u e Ex c e s s va l u e Ex c e s s va l u e

o f gu a r a n te e o f gu a r a n te e o f gu a r a n te e o f gu a r a n te e

O f w h ic h : O f w h ic h : O f w h ic h : O f w h ic h :

A P S (* * )A P S (* * )A P S (* * )A P S (* * )


i m p a i r m e n t i m p a i r m e n t i m p a i r m e n t i m p a i r m e n t

l o s s e s (* * * )l o s s e s (* * * )l o s s e s (* * * )l o s s e s (* * * )

F i n a n c in g fo r c o n s t r u c t i o n a n d r e a l e s ta te d e ve lo p m e n t F i n a n c in g fo r c o n s t r u c t i o n a n d r e a l e s ta te d e ve lo p m e n t F i n a n c in g fo r c o n s t r u c t i o n a n d r e a l e s ta te d e ve lo p m e n t F i n a n c in g fo r c o n s t r u c t i o n a n d r e a l e s ta te d e ve lo p m e n t

( i n c l u d i n g l a n d ) b u s in e s s e s i n S p a in ) (* )( i n c l u d i n g l a n d ) b u s in e s s e s i n S p a in ) (* )( i n c l u d i n g l a n d ) b u s in e s s e s i n S p a in ) (* )( i n c l u d i n g l a n d ) b u s in e s s e s i n S p a in ) (* )9 ,5 1 79 ,5 1 79 ,5 1 79 ,5 1 7 3 ,5 6 63 ,5 6 63 ,5 6 63 ,5 6 6 2 ,9 0 22 ,9 0 22 ,9 0 22 ,9 0 2 1 ,1 1 91 ,1 1 91 ,1 1 91 ,1 1 9 2 ,0 3 92 ,0 3 92 ,0 3 92 ,0 3 9

Of which: special monitoring 258 31 89 6 -

Of which: doubtful 3 ,844 - 1,158 - 1,948

Of which: substandard 519 88 138 16 92

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

(**) Exp osure fo r which, by ap p lying t he A sset Pro t ect io n Scheme (see no te 2 ), cred it r isk has b een t ransf erred . It thus co rrespo nd s t o 8 0% o f t he t o t al value o f t he expo sure.

(***) V alue ad justment reco gnised f o r the expo sure fo r which t he bank ret ains t he cred it r isk. Thus, it do es no t include value ad just ments fo r t he exp osure w ith risk t hat has been t ransf erred .

(*) Lo ans are classif ied accord ing t o t heir p urp ose and no t t he deb t o r 's CNA E.This imp lies, f o r example, t hat if the d eb t o r relat es t o : (a) a real est ate co mp any b ut the f inancing is d ed icated t o a purp ose o ther t han co nst ruct ion o r real est ate develop ment , it is no t included in t his t ab le; and (b ) a company whose core b usiness is no t co nst ruct ion but t he loan is used t o f inance p rop ert ies f o r real estat e develop ment , it is included in t his tab le.

€ million

M e m o r a n d u m i te mM e m o r a n d u m i te mM e m o r a n d u m i te mM e m o r a n d u m i te m 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Assets written-off (977) 186

€ million

A m o u n tA m o u n tA m o u n tA m o u n t A m o u n tA m o u n tA m o u n tA m o u n t

M e m o r a n d u m i te mM e m o r a n d u m i te mM e m o r a n d u m i te mM e m o r a n d u m i te m 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Customer loans and advances, excluding Public Administrations

(businesses in Spain) (carrying amount)96,609 97,135

Total assets (total businesses) (carrying amount) 207,891 208,628

Allowances and provisions for exposures classed as standard (total bus inesses) 340 354

G r o s s c a r r y i n g a m o u n tG r o s s c a r r y i n g a m o u n tG r o s s c a r r y i n g a m o u n tG r o s s c a r r y i n g a m o u n t

23

The breakdown of financing intended for construction and real estate development for operations registered by credit institutions (business in Spain) is as follows: € million

Gross carrying amount Gross carrying amount Gross carrying amount Gross carrying amount

30/06/201630/06/201630/06/201630/06/2016

Of which:Of which:Of which:Of which:

APSAPSAPSAPS

Gross carrying amount Gross carrying amount Gross carrying amount Gross carrying amount

31/12/201531/12/201531/12/201531/12/2015

Of which: Of which: Of which: Of which:

APSAPSAPSAPS

UnsecuredUnsecuredUnsecuredUnsecured 690690690690 55555555 699699699699 70707070

Mortgage loanMortgage loanMortgage loanMortgage loan 7,8977,8977,8977,897 3,2143,2143,2143,214 8,8188,8188,8188,818 3,4963,4963,4963,496

Finished buildings and other constructions 5,176 1,846 5,754 2,061

Housing 3,675 1,417 3,999 1,519

Rest 1,502 429 1,755 542

Buildings and others under construction 428 263 482 273

Housing 398 245 455 261

Rest 30 18 27 11

Land 2,292 1,105 2,582 1,162

Building land 1,886 902 2,147 949

Other land 406 203 435 212

TotalTotalTotalTotal 8,5878,5878,5878,587 3,2693,2693,2693,269 9,5179,5179,5179,517 3,5673,5673,5673,567

The figures shown do not show the total value of guarantees received, but the net accounting value of the associated exposure. Guarantees received associated with financing intended for construction and real estate development are shown hereafter, for both periods: € millio n

G u a r a n te e s r e c e i ve dG u a r a n te e s r e c e i ve dG u a r a n te e s r e c e i ve dG u a r a n te e s r e c e i ve d 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Collateral value 5,714 6,266

Of which: special risk monitoring guarantees 145 228

Of which: substandard risk guarantees 34 83

Of which: doubtful risks 528 648

Value of other guarantees 267 285

Of which: special risk monitoring guarantees 21 13

Of which: substandard risk guarantees 1 1

Of which: doubtful risks 4 5

T o ta l va l u e o f gu a r a n te e s r e c e i ve dT o ta l va l u e o f gu a r a n te e s r e c e i ve dT o ta l va l u e o f gu a r a n te e s r e c e i ve dT o ta l va l u e o f gu a r a n te e s r e c e i ve d 5 ,9 8 25 ,9 8 25 ,9 8 25 ,9 8 2 6 ,5 5 16 ,5 5 16 ,5 5 16 ,5 5 1

The breakdown of loans and advances to households for the acquisition of property for transactions recorded by credit institutions (business in Spain) is as follows: € million

G r o s s c a r r y i n g G r o s s c a r r y i n g G r o s s c a r r y i n g G r o s s c a r r y i n g

a m o u n ta m o u n ta m o u n ta m o u n tOf w h ic h : A P SO f w h ic h : A P SO f w h ic h : A P SO f w h ic h : A P S


d o u b t fu ld o u b t fu ld o u b t fu ld o u b t fu l

L e n d in g fo r h o u s e p u r c h a s eL e n d in g fo r h o u s e p u r c h a s eL e n d in g fo r h o u s e p u r c h a s eL e n d in g fo r h o u s e p u r c h a s e 3 4 ,3 6 73 4 ,3 6 73 4 ,3 6 73 4 ,3 6 7 7 3 17 3 17 3 17 3 1 2 ,1 3 02 ,1 3 02 ,1 3 02 ,1 3 0

Unsecured 170 1 3

Mortgage security 34,196 730 2,127

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

€ million


a m o u n ta m o u n ta m o u n ta m o u n tOf w h ic h : A P SO f w h ic h : A P SO f w h ic h : A P SO f w h ic h : A P S


d o u b t fu ld o u b t fu ld o u b t fu ld o u b t fu l

L e n d in g fo r h o u s e p u r c h a s eL e n d in g fo r h o u s e p u r c h a s eL e n d in g fo r h o u s e p u r c h a s eL e n d in g fo r h o u s e p u r c h a s e 3 4 ,9 9 53 4 ,9 9 53 4 ,9 9 53 4 ,9 9 5 7 7 17 7 17 7 17 7 1 2 ,2 8 62 ,2 8 62 ,2 8 62 ,2 8 6

Unsecured 135 1 3

Mortgage security 34,860 770 2,283

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

24

The table below shows the breakdown of secured mortgage loans granted to households for the purchase of housing by the percentage total risk of the last available taxation amount for transactions recorded by credit institutions (business in Spain): € millio n

G r o s s c a r r y i n g a m o u n tG r o s s c a r r y i n g a m o u n tG r o s s c a r r y i n g a m o u n tG r o s s c a r r y i n g a m o u n t O f w h i c h : A P SO f w h i c h : A P SO f w h i c h : A P SO f w h i c h : A P S O f w h i c h : d o u b t fu lO f w h i c h : d o u b t fu lO f w h i c h : d o u b t fu lO f w h i c h : d o u b t fu l

Ca r r y i n g a m o u n t o f th e a m o u n t o f th e l a s t Ca r r y i n g a m o u n t o f th e a m o u n t o f th e l a s t Ca r r y i n g a m o u n t o f th e a m o u n t o f th e l a s t Ca r r y i n g a m o u n t o f th e a m o u n t o f th e l a s t

a p p r a i s a l ( l o a n to va l u e )a p p r a i s a l ( l o a n to va l u e )a p p r a i s a l ( l o a n to va l u e )a p p r a i s a l ( l o a n to va l u e )3 4 ,1 9 63 4 ,1 9 63 4 ,1 9 63 4 ,1 9 6 7 3 07 3 07 3 07 3 0 2 ,1 2 72 ,1 2 72 ,1 2 72 ,1 2 7

LTV <= 40% 8,067 173 327

40% < LTV <= 60% 11,319 261 478

60% < LTV <= 80% 10,661 214 775

80% < LTV <= 100% 2,817 53 343

LTV > 100% 1,333 29 204

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

€ millio n

G r o s s c a r r y i n g a m o u n tG r o s s c a r r y i n g a m o u n tG r o s s c a r r y i n g a m o u n tG r o s s c a r r y i n g a m o u n t O f w h i c h : A P SO f w h i c h : A P SO f w h i c h : A P SO f w h i c h : A P S O f w h i c h : d o u b t fu lO f w h i c h : d o u b t fu lO f w h i c h : d o u b t fu lO f w h i c h : d o u b t fu l

Ca r r y i n g a m o u n t o f th e a m o u n t o f th e l a s t Ca r r y i n g a m o u n t o f th e a m o u n t o f th e l a s t Ca r r y i n g a m o u n t o f th e a m o u n t o f th e l a s t Ca r r y i n g a m o u n t o f th e a m o u n t o f th e l a s t

a p p r a i s a l ( l o a n to va l u e )a p p r a i s a l ( l o a n to va l u e )a p p r a i s a l ( l o a n to va l u e )a p p r a i s a l ( l o a n to va l u e )3 4 ,8 6 03 4 ,8 6 03 4 ,8 6 03 4 ,8 6 0 7 7 07 7 07 7 07 7 0 2 ,2 8 32 ,2 8 32 ,2 8 32 ,2 8 3

LTV <= 40% 8,118 176 357

40% < LTV <= 60% 11,360 270 495

60% < LTV <= 80% 11,067 235 842

80% < LTV <= 100% 2,942 60 381

LTV > 100% 1,373 29 208

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Lastly, the table below gives details of foreclosed assets of companies in the consolidated group for transactions recorded by credit institutions in Spain: € million


a m o u n ta m o u n ta m o u n ta m o u n t


im p a i r m e n t im p a i r m e n t im p a i r m e n t im p a i r m e n t

l o s s e sl o s s e sl o s s e sl o s s e s

R e a l e s ta te a s s e ts d e r i v i n g f r o m f i n a n c in g o f c o n s t r u c t i o n a n d r e a l e s ta te R e a l e s ta te a s s e ts d e r i v i n g f r o m f i n a n c in g o f c o n s t r u c t i o n a n d r e a l e s ta te R e a l e s ta te a s s e ts d e r i v i n g f r o m f i n a n c in g o f c o n s t r u c t i o n a n d r e a l e s ta te R e a l e s ta te a s s e ts d e r i v i n g f r o m f i n a n c in g o f c o n s t r u c t i o n a n d r e a l e s ta te

d e ve l o p m e n td e ve l o p m e n td e ve l o p m e n td e ve l o p m e n t8 ,3 4 58 ,3 4 58 ,3 4 58 ,3 4 5 2 ,8 9 62 ,8 9 62 ,8 9 62 ,8 9 6

Finished buildings 3,492 785

Housing 1,943 376

Rest 1,549 409

Buildings and others under construction 559 154

Housing 456 125

Rest 103 29

Land 4,294 1,957

Building land 1,719 704

Other land 2,575 1,253

R e a l e s ta te a s s e ts d e r i v i n g f r o m h o m e l o a n m o r ta ge s fo r h o u s e p u r c h a s e sR e a l e s ta te a s s e ts d e r i v i n g f r o m h o m e l o a n m o r ta ge s fo r h o u s e p u r c h a s e sR e a l e s ta te a s s e ts d e r i v i n g f r o m h o m e l o a n m o r ta ge s fo r h o u s e p u r c h a s e sR e a l e s ta te a s s e ts d e r i v i n g f r o m h o m e l o a n m o r ta ge s fo r h o u s e p u r c h a s e s 2 ,1 8 32 ,1 8 32 ,1 8 32 ,1 8 3 4 6 64 6 64 6 64 6 6

O th e r fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d in d i s c h a r ge o f d e b tsO th e r fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d in d i s c h a r ge o f d e b tsO th e r fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d in d i s c h a r ge o f d e b tsO th e r fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d in d i s c h a r ge o f d e b ts ---- ----

F o r e c lo s e d e q u i ty i n s t r u m e n ts o r r e c e i ve d i n d i s c h a r g e o f d e b tsF o r e c lo s e d e q u i ty i n s t r u m e n ts o r r e c e i ve d i n d i s c h a r g e o f d e b tsF o r e c lo s e d e q u i ty i n s t r u m e n ts o r r e c e i ve d i n d i s c h a r g e o f d e b tsF o r e c lo s e d e q u i ty i n s t r u m e n ts o r r e c e i ve d i n d i s c h a r g e o f d e b ts ---- ----

Eq u i ty i n s t r u m e n ts o f e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e ive d i n Eq u i ty i n s t r u m e n ts o f e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e ive d i n Eq u i ty i n s t r u m e n ts o f e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e ive d i n Eq u i ty i n s t r u m e n ts o f e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e ive d i n

d is c h a r ge o f d e b tsd is c h a r ge o f d e b tsd is c h a r ge o f d e b tsd is c h a r ge o f d e b ts---- ----

F in a n c i n g to e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d i n F in a n c i n g to e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d i n F in a n c i n g to e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d i n F in a n c i n g to e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d i n

d is c h a r ge o f d e b ts (* )d is c h a r ge o f d e b ts (* )d is c h a r ge o f d e b ts (* )d is c h a r ge o f d e b ts (* )---- ----

T o ta l r e a l - e s ta te p o r t fo l i oT o ta l r e a l - e s ta te p o r t fo l i oT o ta l r e a l - e s ta te p o r t fo l i oT o ta l r e a l - e s ta te p o r t fo l i o 1 0 ,5 2 81 0 ,5 2 81 0 ,5 2 81 0 ,5 2 8 3 ,3 6 23 ,3 6 23 ,3 6 23 ,3 6 2

(*) Financing to no n-conso lidated investees is included in the f irst t ab le in t his no t e.

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

25

€ million


a m o u n ta m o u n ta m o u n ta m o u n t


im p a i r m e n t im p a i r m e n t im p a i r m e n t im p a i r m e n t

l o s s e sl o s s e sl o s s e sl o s s e s

R e a l e s ta te a s s e ts d e r i v i n g f r o m f i n a n c in g o f c o n s t r u c t i o n a n d r e a l e s ta te R e a l e s ta te a s s e ts d e r i v i n g f r o m f i n a n c in g o f c o n s t r u c t i o n a n d r e a l e s ta te R e a l e s ta te a s s e ts d e r i v i n g f r o m f i n a n c in g o f c o n s t r u c t i o n a n d r e a l e s ta te R e a l e s ta te a s s e ts d e r i v i n g f r o m f i n a n c in g o f c o n s t r u c t i o n a n d r e a l e s ta te

d e ve l o p m e n td e ve l o p m e n td e ve l o p m e n td e ve l o p m e n t8 ,5 7 78 ,5 7 78 ,5 7 78 ,5 7 7 2 ,9 6 62 ,9 6 62 ,9 6 62 ,9 6 6

Finished buildings 3 ,5 2 03 ,5 2 03 ,5 2 03 ,5 2 0 7 4 97 4 97 4 97 4 9

Housing 2,009 358

Rest 1,511 391

Buildings and others under construction 6 2 46 2 46 2 46 2 4 1 6 71 6 71 6 71 6 7

Housing 524 139

Rest 100 28

Land 4 ,4 3 34 ,4 3 34 ,4 3 34 ,4 3 3 2 ,0 5 02 ,0 5 02 ,0 5 02 ,0 5 0

Building land 1,820 719

Other land 2,613 1,331

R e a l e s ta te a s s e ts d e r i v i n g f r o m h o m e l o a n m o r ta ge s fo r h o u s e p u r c h a s e sR e a l e s ta te a s s e ts d e r i v i n g f r o m h o m e l o a n m o r ta ge s fo r h o u s e p u r c h a s e sR e a l e s ta te a s s e ts d e r i v i n g f r o m h o m e l o a n m o r ta ge s fo r h o u s e p u r c h a s e sR e a l e s ta te a s s e ts d e r i v i n g f r o m h o m e l o a n m o r ta ge s fo r h o u s e p u r c h a s e s 2 ,1 2 92 ,1 2 92 ,1 2 92 ,1 2 9 4 6 04 6 04 6 04 6 0

O th e r fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d in d i s c h a r ge o f d e b tsO th e r fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d in d i s c h a r ge o f d e b tsO th e r fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d in d i s c h a r ge o f d e b tsO th e r fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d in d i s c h a r ge o f d e b ts ---- ----

F o r e c lo s e d e q u i ty i n s t r u m e n ts o r r e c e i ve d i n d i s c h a r g e o f d e b tsF o r e c lo s e d e q u i ty i n s t r u m e n ts o r r e c e i ve d i n d i s c h a r g e o f d e b tsF o r e c lo s e d e q u i ty i n s t r u m e n ts o r r e c e i ve d i n d i s c h a r g e o f d e b tsF o r e c lo s e d e q u i ty i n s t r u m e n ts o r r e c e i ve d i n d i s c h a r g e o f d e b ts ---- ----

Eq u i ty i n s t r u m e n ts o f e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e ive d i n Eq u i ty i n s t r u m e n ts o f e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e ive d i n Eq u i ty i n s t r u m e n ts o f e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e ive d i n Eq u i ty i n s t r u m e n ts o f e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e ive d i n

d i s c h a r ge o f d e b tsd is c h a r ge o f d e b tsd is c h a r ge o f d e b tsd is c h a r ge o f d e b ts---- ----

F in a n c i n g to e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d i n F in a n c i n g to e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d i n F in a n c i n g to e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d i n F in a n c i n g to e n t i t i e s h o l d i n g fo r e c l o s e d r e a l e s ta te a s s e ts o r r e c e i ve d i n

d i s c h a r ge o f d e b ts (* )d is c h a r ge o f d e b ts (* )d is c h a r ge o f d e b ts (* )d is c h a r ge o f d e b ts (* )---- ----

T o ta l r e a l - e s ta te p o r t fo l i oT o ta l r e a l - e s ta te p o r t fo l i oT o ta l r e a l - e s ta te p o r t fo l i oT o ta l r e a l - e s ta te p o r t fo l i o 1 0 ,7 0 61 0 ,7 0 61 0 ,7 0 61 0 ,7 0 6 3 ,4 2 63 ,4 2 63 ,4 2 63 ,4 2 6

(*) Financing to no n-conso lidated investees is included in the f irst t ab le in t his no t e.

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Given that for part of these assets, the risk of loss of value is transferred by the Asset Protection Scheme, the table below shows the reconciliation with the amount corresponding to real estate problem assets, including amounts from outside Spain. € millio n

G r o s s V a l u eG r o s s V a l u eG r o s s V a l u eG r o s s V a l u eNe t c a r r y i n g Ne t c a r r y i n g Ne t c a r r y i n g Ne t c a r r y i n g

va l u eva l u eva l u eva l u e


im p a i r m e n t l o s s e sim p a i r m e n t l o s s e sim p a i r m e n t l o s s e sim p a i r m e n t l o s s e s

T o ta l b u s i n e s s S p a i nT o ta l b u s i n e s s S p a i nT o ta l b u s i n e s s S p a i nT o ta l b u s i n e s s S p a i n 1 0 ,5 2 81 0 ,5 2 81 0 ,5 2 81 0 ,5 2 8 7 ,1 6 67 ,1 6 67 ,1 6 67 ,1 6 6 3 ,3 6 23 ,3 6 23 ,3 6 23 ,3 6 2

Total bus iness outs ide of Spain and others 51 47 4

Transferred credit risk with the application of APS (2,367) (1,945) (422)

Coverage constitued in the original financing 1,053 - 1,053

T o ta lT o ta lT o ta lT o ta l 9 ,2 6 59 ,2 6 59 ,2 6 59 ,2 6 5 5 ,2 6 85 ,2 6 85 ,2 6 85 ,2 6 8 3 ,9 9 73 ,9 9 73 ,9 9 73 ,9 9 7

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

€ million

Gross ValueGross ValueGross ValueGross Value Net carrying valueNet carrying valueNet carrying valueNet carrying valueAllowances for Allowances for Allowances for Allowances for

impairment lossesimpairment lossesimpairment lossesimpairment losses

Total business SpainTotal business SpainTotal business SpainTotal business Spain 10,70610,70610,70610,706 7,2807,2807,2807,280 3,4263,4263,4263,426

Total business outside of Spain and others 53 49 4

Transferred credit risk with the application of APS (2,547) (2,139) (407)

Coverage constitued in the original financing 1,022 - 1,022

TotalTotalTotalTotal 9,2349,2349,2349,234 5,1905,1905,1905,190 4,0444,0444,0444,044

31/12/201531/12/201531/12/201531/12/2015

For the total real estate exposure, taking into consideration value adjustments, coverage in source funding and in the guarantee provided by the Asset Protection Scheme, the effective coverage of this exposure is 56% (57% in financing and 55% in real estate assets). As part of its ongoing risk management and, in particular, its policy on the construction and real estate industries, the group has a number of specific policies for mitigating risks. These can be seen in Note 4 on Financial Risk Management in the 2015 consolidated financial statements.

26

4.2 Liquidity risk Assessment of liquidity requirements and funding policyAssessment of liquidity requirements and funding policyAssessment of liquidity requirements and funding policyAssessment of liquidity requirements and funding policy

Banco Sabadell’s liquidity management seeks to ensure funding for its commercial activity at an appropriate cost and term while minimising liquidity risk. The bank’s financing policy is focused on maintaining a balanced funding structure, based mainly on customer deposits, and supplemented with access to wholesale markets that allows the group to maintain a comfortable liquidity position at all times. In this respect, in the first half of 2016, Banco Sabadell’s maturities on the wholesale market amounted to €3,095.51 million and it issued €2,882.37 million in the capital markets. In the second half of 2016, Banco Sabadell has forecast maturing medium- and long-term wholesale market debt of €1,326.15 million (excludes partial amortisations derived from securitisations placed on the market). At 30 June 2016, the drawn balance of the bank’s facility held in Bank of Spain for monetary policy transactions with the European Central Bank stands at €10,675.5 million (€11,000 million at 30 June 2015), of which €10,000 million correspond to the TLTRO2 liquidity auction of 24 June 2016, and USD 750 million from the weekly auction. The table below shows the breakdown by contractual balance maturity, excluding, in some cases, value adjustments and losses due to impairment, of certain items on the consolidated balance sheet at 30 June 2016, under business-as-usual conditions: Thousand euro

R e s i d u a l Co n t r a c tu a l M a tu r i t i e sR e s i d u a l Co n t r a c tu a l M a tu r i t i e sR e s i d u a l Co n t r a c tu a l M a tu r i t i e sR e s i d u a l Co n t r a c tu a l M a tu r i t i e s

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 S igh tS igh tS igh tS igh t Up to 1 m o n t hUp to 1 m o n t hUp to 1 m o n t hUp to 1 m o n t h

Be tw e e n 1 Be tw e e n 1 Be tw e e n 1 Be tw e e n 1

a n d 3 a n d 3 a n d 3 a n d 3

m o n th sm o n th sm o n th sm o n th s

Be t we e n 3 Be t we e n 3 Be t we e n 3 Be t we e n 3

a n d 1 2 a n d 1 2 a n d 1 2 a n d 1 2

m o n t h sm o n t h sm o n t h sm o n t h s

B e tw e e n 1 B e tw e e n 1 B e tw e e n 1 B e tw e e n 1

a n d 2 ye a r sa n d 2 ye a r sa n d 2 ye a r sa n d 2 ye a r s

Be t we e n 2 Be t we e n 2 Be t we e n 2 Be t we e n 2






M o r e th a n 5 M o r e th a n 5 M o r e th a n 5 M o r e th a n 5

ye a r sye a r sye a r sye a r s T o t a lT o t a lT o t a lT o t a l

M oney Market 479,324 8,286,363 810,410 442,905 - 1,117 14,769 - - 1 0 ,0 3 4 ,8 8 91 0 ,0 3 4 ,8 8 91 0 ,0 3 4 ,8 8 91 0 ,0 3 4 ,8 8 9

Loans and receivables 367,269 4,174,575 5,183,243 14,746,965 12,449,398 10,820,423 9,096,896 8,438,959 65,672,422 1 3 0 ,9 5 0 ,1 4 81 3 0 ,9 5 0 ,1 4 81 3 0 ,9 5 0 ,1 4 81 3 0 ,9 5 0 ,1 4 8

Debt Securities - 94,286 37,855 2,006,055 1,347,943 847,951 1,432,251 633,288 18,798,003 2 5 ,1 9 7 ,6 3 32 5 ,1 9 7 ,6 3 32 5 ,1 9 7 ,6 3 32 5 ,1 9 7 ,6 3 3

Other assets 341,789 - - - 18,025 - - - 8,736 3 6 8 ,5 5 13 6 8 ,5 5 13 6 8 ,5 5 13 6 8 ,5 5 1

T o t a l a s s e tsT o t a l a s s e tsT o t a l a s s e tsT o t a l a s s e ts 1 ,1 8 8 ,3 8 21 ,1 8 8 ,3 8 21 ,1 8 8 ,3 8 21 ,1 8 8 ,3 8 2 1 2 ,5 5 5 ,2 2 41 2 ,5 5 5 ,2 2 41 2 ,5 5 5 ,2 2 41 2 ,5 5 5 ,2 2 4 6 ,0 3 1 ,5 0 96 ,0 3 1 ,5 0 96 ,0 3 1 ,5 0 96 ,0 3 1 ,5 0 9 1 7 ,1 9 5 ,9 2 51 7 ,1 9 5 ,9 2 51 7 ,1 9 5 ,9 2 51 7 ,1 9 5 ,9 2 5 1 3 ,8 1 5 ,3 6 61 3 ,8 1 5 ,3 6 61 3 ,8 1 5 ,3 6 61 3 ,8 1 5 ,3 6 6 1 1 ,6 6 9 ,4 9 21 1 ,6 6 9 ,4 9 21 1 ,6 6 9 ,4 9 21 1 ,6 6 9 ,4 9 2 1 0 ,5 4 3 ,9 1 51 0 ,5 4 3 ,9 1 51 0 ,5 4 3 ,9 1 51 0 ,5 4 3 ,9 1 5 9 ,0 7 2 ,2 4 79 ,0 7 2 ,2 4 79 ,0 7 2 ,2 4 79 ,0 7 2 ,2 4 7 8 4 ,4 7 9 ,1 6 18 4 ,4 7 9 ,1 6 18 4 ,4 7 9 ,1 6 18 4 ,4 7 9 ,1 6 1 1 6 6 ,5 5 1 ,2 2 11 6 6 ,5 5 1 ,2 2 11 6 6 ,5 5 1 ,2 2 11 6 6 ,5 5 1 ,2 2 1

M oney Market 13,283 3,994,933 938,043 22,363 1,207,493 2,566,243 10,145,076 119,015 - 1 9 ,0 0 6 ,4 4 91 9 ,0 0 6 ,4 4 91 9 ,0 0 6 ,4 4 91 9 ,0 0 6 ,4 4 9

Customer resources 83,922,654 5,493,317 5,512,652 24,353,299 5,451,177 1,967,374 788,996 1,060,956 78,356 1 2 8 ,6 2 8 ,7 8 01 2 8 ,6 2 8 ,7 8 01 2 8 ,6 2 8 ,7 8 01 2 8 ,6 2 8 ,7 8 0

Debt securities issued - 759,091 1,728,802 10,348,286 2,752,293 1,549,378 2,069,620 4,140,321 7,336,537 3 0 ,6 8 4 ,3 2 93 0 ,6 8 4 ,3 2 93 0 ,6 8 4 ,3 2 93 0 ,6 8 4 ,3 2 9

Of which: Subordinated liabilities - - 80,250 108,288 35,360 - 424,600 506,220 832,802 1 ,9 8 7 ,5 2 01 ,9 8 7 ,5 2 01 ,9 8 7 ,5 2 01 ,9 8 7 ,5 2 0

Other L iabilities 59,290 170,858 323,144 1,687,778 1,035,591 639,137 401,478 263,152 621,067 5 ,2 0 1 ,4 9 45 ,2 0 1 ,4 9 45 ,2 0 1 ,4 9 45 ,2 0 1 ,4 9 4

T o t a l l i a b i l i t ie sT o t a l l i a b i l i t ie sT o t a l l i a b i l i t ie sT o t a l l i a b i l i t ie s 8 3 ,9 9 5 ,2 2 78 3 ,9 9 5 ,2 2 78 3 ,9 9 5 ,2 2 78 3 ,9 9 5 ,2 2 7 1 0 ,4 1 8 ,1 9 91 0 ,4 1 8 ,1 9 91 0 ,4 1 8 ,1 9 91 0 ,4 1 8 ,1 9 9 8 ,5 0 2 ,6 4 18 ,5 0 2 ,6 4 18 ,5 0 2 ,6 4 18 ,5 0 2 ,6 4 1 3 6 ,4 1 1 ,7 2 53 6 ,4 1 1 ,7 2 53 6 ,4 1 1 ,7 2 53 6 ,4 1 1 ,7 2 5 1 0 ,4 4 6 ,5 5 51 0 ,4 4 6 ,5 5 51 0 ,4 4 6 ,5 5 51 0 ,4 4 6 ,5 5 5 6 ,7 2 2 ,1 3 26 ,7 2 2 ,1 3 26 ,7 2 2 ,1 3 26 ,7 2 2 ,1 3 2 1 3 ,4 0 5 ,1 7 11 3 ,4 0 5 ,1 7 11 3 ,4 0 5 ,1 7 11 3 ,4 0 5 ,1 7 1 5 ,5 8 3 ,4 4 45 ,5 8 3 ,4 4 45 ,5 8 3 ,4 4 45 ,5 8 3 ,4 4 4 8 ,0 3 5 ,9 6 08 ,0 3 5 ,9 6 08 ,0 3 5 ,9 6 08 ,0 3 5 ,9 6 0 1 8 3 ,5 2 1 ,0 5 21 8 3 ,5 2 1 ,0 5 21 8 3 ,5 2 1 ,0 5 21 8 3 ,5 2 1 ,0 5 2

T r a d in g a n d He d g i n g De r i va t ive sT r a d in g a n d He d g i n g De r i va t ive sT r a d in g a n d He d g i n g De r i va t ive sT r a d in g a n d He d g i n g De r i va t ive s

Receipt pos itions - 7,270,244 9,478,697 28,794,629 14,447,770 9,901,765 5,039,849 6,231,885 37,388,856 1 1 8 ,5 5 3 ,6 9 61 1 8 ,5 5 3 ,6 9 61 1 8 ,5 5 3 ,6 9 61 1 8 ,5 5 3 ,6 9 6

Payment pos itions - 9,297,107 10,568,267 36,538,586 14,916,325 9,725,346 5,062,961 8,295,162 37,084,681 1 3 1 ,4 8 8 ,4 3 51 3 1 ,4 8 8 ,4 3 51 3 1 ,4 8 8 ,4 3 51 3 1 ,4 8 8 ,4 3 5

N e tN e tN e tN e t ---- (2 ,0 2 6 ,8 6 3 )(2 ,0 2 6 ,8 6 3 )(2 ,0 2 6 ,8 6 3 )(2 ,0 2 6 ,8 6 3 ) (1 ,0 8 9 ,5 7 0 )(1 ,0 8 9 ,5 7 0 )(1 ,0 8 9 ,5 7 0 )(1 ,0 8 9 ,5 7 0 ) (7 ,7 4 3 ,9 5 7 )(7 ,7 4 3 ,9 5 7 )(7 ,7 4 3 ,9 5 7 )(7 ,7 4 3 ,9 5 7 ) (4 6 8 ,5 5 5 )(4 6 8 ,5 5 5 )(4 6 8 ,5 5 5 )(4 6 8 ,5 5 5 ) 1 7 6 ,4 1 91 7 6 ,4 1 91 7 6 ,4 1 91 7 6 ,4 1 9 (2 3 ,1 1 2 )(2 3 ,1 1 2 )(2 3 ,1 1 2 )(2 3 ,1 1 2 ) (2 ,0 6 3 ,2 7 6 )(2 ,0 6 3 ,2 7 6 )(2 ,0 6 3 ,2 7 6 )(2 ,0 6 3 ,2 7 6 ) 3 0 4 ,1 7 53 0 4 ,1 7 53 0 4 ,1 7 53 0 4 ,1 7 5 (1 2 ,9 3 4 ,7 3 9 )(1 2 ,9 3 4 ,7 3 9 )(1 2 ,9 3 4 ,7 3 9 )(1 2 ,9 3 4 ,7 3 9 )

C o n t i n ge n t r i s ksC o n t i n ge n t r i s ksC o n t i n ge n t r i s ksC o n t i n ge n t r i s ks

Financial Guarantees 966 55,371 97,128 578,599 243,600 189,983 128,975 90,505 1,254,621 2 ,6 3 9 ,7 4 82 ,6 3 9 ,7 4 82 ,6 3 9 ,7 4 82 ,6 3 9 ,7 4 8

Thousand euro

R e s i d u a l Co n t r a c tu a l M a tu r i t i e sR e s i d u a l Co n t r a c tu a l M a tu r i t i e sR e s i d u a l Co n t r a c tu a l M a tu r i t i e sR e s i d u a l Co n t r a c tu a l M a tu r i t i e s

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5 S igh tS igh tS igh tS igh t Up to 1 m o n thUp to 1 m o n thUp to 1 m o n thUp to 1 m o n th

Be tw e e n 1 Be tw e e n 1 Be tw e e n 1 Be tw e e n 1

a n d 3 a n d 3 a n d 3 a n d 3


Be twe e n 3 Be twe e n 3 Be twe e n 3 Be twe e n 3

a n d 1 2 a n d 1 2 a n d 1 2 a n d 1 2




Be twe e n 2 Be twe e n 2 Be twe e n 2 Be twe e n 2






M o r e th a n 5 M o r e th a n 5 M o r e th a n 5 M o r e th a n 5

ye a r sye a r sye a r sye a r s T o ta lT o t a lT o t a lT o t a l

Money Market 391,065 9,413,792 445,450 306,027 - - - 301,580 - 1 0 ,8 5 7 ,9 1 51 0 ,8 5 7 ,9 1 51 0 ,8 5 7 ,9 1 51 0 ,8 5 7 ,9 1 5

Loans and receivables 8,680 5,805,725 7,386,137 18,498,673 20,598,107 15,271,840 11,429,305 10,484,936 41,549,170 1 3 1 ,0 3 2 ,5 7 51 3 1 ,0 3 2 ,5 7 51 3 1 ,0 3 2 ,5 7 51 3 1 ,0 3 2 ,5 7 5

Debt securities 13,749 63,365 72,594 1,799,352 1,278,195 842,971 1,082,323 1,026,202 17,927,448 2 4 ,1 0 6 ,1 9 82 4 ,1 0 6 ,1 9 82 4 ,1 0 6 ,1 9 82 4 ,1 0 6 ,1 9 8

Other assets - - - - - 12,355 - - - 1 2 ,3 5 51 2 ,3 5 51 2 ,3 5 51 2 ,3 5 5

T o ta l a s s e tsT o ta l a s s e tsT o ta l a s s e tsT o ta l a s s e ts 4 1 3 ,4 9 44 1 3 ,4 9 44 1 3 ,4 9 44 1 3 ,4 9 4 1 5 ,2 8 2 ,8 8 31 5 ,2 8 2 ,8 8 31 5 ,2 8 2 ,8 8 31 5 ,2 8 2 ,8 8 3 7 ,9 0 4 ,1 8 27 ,9 0 4 ,1 8 27 ,9 0 4 ,1 8 27 ,9 0 4 ,1 8 2 2 0 ,6 0 4 ,0 5 32 0 ,6 0 4 ,0 5 32 0 ,6 0 4 ,0 5 32 0 ,6 0 4 ,0 5 3 2 1 ,8 7 6 ,3 0 22 1 ,8 7 6 ,3 0 22 1 ,8 7 6 ,3 0 22 1 ,8 7 6 ,3 0 2 1 6 ,1 2 7 ,1 6 61 6 ,1 2 7 ,1 6 61 6 ,1 2 7 ,1 6 61 6 ,1 2 7 ,1 6 6 1 2 ,5 1 1 ,6 2 81 2 ,5 1 1 ,6 2 81 2 ,5 1 1 ,6 2 81 2 ,5 1 1 ,6 2 8 1 1 ,8 1 2 ,7 1 81 1 ,8 1 2 ,7 1 81 1 ,8 1 2 ,7 1 81 1 ,8 1 2 ,7 1 8 5 9 ,4 7 6 ,6 1 75 9 ,4 7 6 ,6 1 75 9 ,4 7 6 ,6 1 75 9 ,4 7 6 ,6 1 7 1 6 6 ,0 0 9 ,0 4 31 6 6 ,0 0 9 ,0 4 31 6 6 ,0 0 9 ,0 4 31 6 6 ,0 0 9 ,0 4 3

Money Market 3,143 5,844,513 3,339,127 462,042 - 11,000,000 3,200,491 552,585 - 2 4 ,4 0 1 ,9 0 22 4 ,4 0 1 ,9 0 22 4 ,4 0 1 ,9 0 22 4 ,4 0 1 ,9 0 2

Customer resources 78,362,599 5,802,802 7,117,230 25,203,139 5,987,693 1,984,034 311,899 770,482 96,975 1 2 5 ,6 3 6 ,8 5 41 2 5 ,6 3 6 ,8 5 41 2 5 ,6 3 6 ,8 5 41 2 5 ,6 3 6 ,8 5 4

Debt securities issued - 2,263,333 1,670,623 8,346,885 4,423,114 2,108,140 1,616,318 3,827,523 5,948,667 3 0 ,2 0 4 ,6 0 33 0 ,2 0 4 ,6 0 33 0 ,2 0 4 ,6 0 33 0 ,2 0 4 ,6 0 3

Of which: Subordinated liabilities - - 12,600 329,088 101,410 - - 424,600 598,384 1 ,4 6 6 ,0 8 21 ,4 6 6 ,0 8 21 ,4 6 6 ,0 8 21 ,4 6 6 ,0 8 2

Other liabilities - 153,040 272,013 1,498,599 1,293,407 596,506 415,350 237,867 613,301 5 ,0 8 0 ,0 8 25 ,0 8 0 ,0 8 25 ,0 8 0 ,0 8 25 ,0 8 0 ,0 8 2

T o ta l l ia b i l i t ie sT o ta l l ia b i l i t ie sT o ta l l ia b i l i t ie sT o ta l l ia b i l i t ie s 7 8 ,3 6 5 ,7 4 27 8 ,3 6 5 ,7 4 27 8 ,3 6 5 ,7 4 27 8 ,3 6 5 ,7 4 2 1 4 ,0 6 3 ,6 8 81 4 ,0 6 3 ,6 8 81 4 ,0 6 3 ,6 8 81 4 ,0 6 3 ,6 8 8 1 2 ,3 9 8 ,9 9 41 2 ,3 9 8 ,9 9 41 2 ,3 9 8 ,9 9 41 2 ,3 9 8 ,9 9 4 3 5 ,5 1 0 ,6 6 53 5 ,5 1 0 ,6 6 53 5 ,5 1 0 ,6 6 53 5 ,5 1 0 ,6 6 5 1 1 ,7 0 4 ,2 1 41 1 ,7 0 4 ,2 1 41 1 ,7 0 4 ,2 1 41 1 ,7 0 4 ,2 1 4 1 5 ,6 8 8 ,6 8 01 5 ,6 8 8 ,6 8 01 5 ,6 8 8 ,6 8 01 5 ,6 8 8 ,6 8 0 5 ,5 4 4 ,0 5 85 ,5 4 4 ,0 5 85 ,5 4 4 ,0 5 85 ,5 4 4 ,0 5 8 5 ,3 8 8 ,4 5 75 ,3 8 8 ,4 5 75 ,3 8 8 ,4 5 75 ,3 8 8 ,4 5 7 6 ,6 5 8 ,9 4 26 ,6 5 8 ,9 4 26 ,6 5 8 ,9 4 26 ,6 5 8 ,9 4 2 1 8 5 ,3 2 3 ,4 4 11 8 5 ,3 2 3 ,4 4 11 8 5 ,3 2 3 ,4 4 11 8 5 ,3 2 3 ,4 4 1

T r a d in g a n d He d g i n g De r i va t ive sT r a d in g a n d He d g i n g De r i va t ive sT r a d in g a n d He d g i n g De r i va t ive sT r a d in g a n d He d g i n g De r i va t ive s

Receipt pos itions 227 10,274,530 6,890,247 20,901,948 16,104,460 11,772,818 5,687,379 5,457,472 33,915,963 1 1 1 ,0 0 5 ,0 4 51 1 1 ,0 0 5 ,0 4 51 1 1 ,0 0 5 ,0 4 51 1 1 ,0 0 5 ,0 4 5

Payment pos itions - 11,356,744 8,560,152 23,358,811 15,153,056 11,621,381 5,696,020 8,264,069 34,621,332 1 1 8 ,6 3 1 ,5 6 61 1 8 ,6 3 1 ,5 6 61 1 8 ,6 3 1 ,5 6 61 1 8 ,6 3 1 ,5 6 6

N e tN e tN e tN e t 2 2 72 2 72 2 72 2 7 (1 ,0 8 2 ,2 1 4 )(1 ,0 8 2 ,2 1 4 )(1 ,0 8 2 ,2 1 4 )(1 ,0 8 2 ,2 1 4 ) (1 ,6 6 9 ,9 0 5 )(1 ,6 6 9 ,9 0 5 )(1 ,6 6 9 ,9 0 5 )(1 ,6 6 9 ,9 0 5 ) (2 ,4 5 6 ,8 6 3 )(2 ,4 5 6 ,8 6 3 )(2 ,4 5 6 ,8 6 3 )(2 ,4 5 6 ,8 6 3 ) 9 5 1 ,4 0 49 5 1 ,4 0 49 5 1 ,4 0 49 5 1 ,4 0 4 1 5 1 ,4 3 71 5 1 ,4 3 71 5 1 ,4 3 71 5 1 ,4 3 7 (8 ,6 4 1 )(8 ,6 4 1 )(8 ,6 4 1 )(8 ,6 4 1 ) (2 ,8 0 6 ,5 9 7 )(2 ,8 0 6 ,5 9 7 )(2 ,8 0 6 ,5 9 7 )(2 ,8 0 6 ,5 9 7 ) (7 0 5 ,3 6 9 )(7 0 5 ,3 6 9 )(7 0 5 ,3 6 9 )(7 0 5 ,3 6 9 ) (7 ,6 2 6 ,5 2 1 )(7 ,6 2 6 ,5 2 1 )(7 ,6 2 6 ,5 2 1 )(7 ,6 2 6 ,5 2 1 )

C o n t i n ge n t r is ksC o n t i n ge n t r is ksC o n t i n ge n t r is ksC o n t i n ge n t r is ks

Financial Guarantees 96 111,405 135,530 451,011 254,863 128,974 170,322 59,095 1,225,625 2 ,5 3 6 ,9 2 12 ,5 3 6 ,9 2 12 ,5 3 6 ,9 2 12 ,5 3 6 ,9 2 1

For more information, see the 2015 consolidated financial statements of Banco Sabadell group, where the policies and procedures used by the group to manage liquidity risk are described in Note 4 (Financial risk management).

27

Liquid assets

Banco Sabadell maintains a liquidity buffer in the form of liquid assets to meet eventual liquidity needs. This buffer is mainly comprised of the following assets: € million

30/06/201630/06/201630/06/201630/06/2016 31/12/201531/12/201531/12/201531/12/2015

Cash(*) + Interbank Net Position 4,452 4,016

Available under the facility 6,412 4,349

Assets pledged under the facility(**) 17,088 15,899

Drawn-down balance on Bank of Spain facility(***) 10,676 11,550

Elegible ECB assets outside of the facility 11,780 10,785

Other non-elegible marketable assets by the central bank(****) 4,237 3,097

Total Liquid Assests AvailableTotal Liquid Assests AvailableTotal Liquid Assests AvailableTotal Liquid Assests Available 26,88126,88126,88126,881 22,24722,24722,24722,247

(*) Excess reserves at Central Banks.

(**) Market value and once the ECB discount is applied for monetary policy transactions.

(***) Of which in June 2016, 10,000 million relate to the BoS TLTRO2 auction on 24 June 2016. At December 2015, 11,000 relate to the ECB four year period liquidity auction (TLTRO or Targeted Longer-term refinancing

operations).

(****) Market value after applying the Liquidity Coverage Ratio (LCR) haircut. Includes Fixed Income as a quality and liquid asset according to the LCR (HQLA) and other marketable securities of different entities of the Group.

In the case of TSB, the first line of liquidity at 30 June 2016 is mainly comprised of gilts amounting to €2,469 million (€1,718 million at 31 December 2015) and a surplus of reserves in Bank of England (BoE) amounting to €4,246 million (€3,383 million at 31 December 2015). In addition to the first line of liquidity, the bank maintains a buffer of real estate assets and loans to central governments eligible as collateral of covered mortgage bonds and covered territorial bonds respectively, which at the end of the first half of 2016 contributed €9,105 million in terms of capacity to issue new treasury bonds eligible as collateral in return for access to the ECB facility (€7,377 million at 2015 year-end). At the end of June 2016, available liquidity amounted to €35,986 million in cash, corresponding to the amount of the first line of liquidity plus the issuing capacity of the bank’s covered mortgage and territorial bonds (€29,623 million in cash at 31 December 2015). Capital Markets As a result of the deleveraging process undergone by the bank and the success in its attraction of deposits, the percentage of funding in wholesale markets has declined in recent years. At the end of June 2016, the outstanding balance of funding in capital markets stood at €26,152 million, compared with €27,436 million at 31 December 2015. By product type, as of June 2016, €12,413 million of the total amount placed in capital markets corresponded to covered mortgage bonds, €3,141 million to promissory notes and ECP placed with wholesale investors, €2,486 million to senior debt (of which €1,058 million corresponded to state secured transactions from the acquisition of Banco CAM), €1,611 million corresponded to issuances of subordinated bonds and preferred shares, €6,467 million to securitisation bonds placed on the market (of which €3,904 million correspond to TSB), and €34 million correspond to other medium and long-term financial instruments. Maturities of issuances aimed at institutional investors by product type at 30 June 2016 are analysed below: € millio n

3 Q1 63 Q1 63 Q1 63 Q1 6 4 Q1 64 Q1 64 Q1 64 Q1 6 2 0 1 72 0 1 72 0 1 72 0 1 7 2 0 1 82 0 1 82 0 1 82 0 1 8 2 0 1 92 0 1 92 0 1 92 0 1 9 2 0 2 02 0 2 02 0 2 02 0 2 0 2 0 2 12 0 2 12 0 2 12 0 2 1 > 2 0 2 2> 2 0 2 2> 2 0 2 2> 2 0 2 2

Ou ts ta n d i n g Ou ts ta n d i n g Ou ts ta n d i n g Ou ts ta n d i n g

b a l a n c eb a l a n c eb a l a n c eb a l a n c e

Mortage and mortgage covered bonds - - 2,022 1,560 1,124 2,165 2,108 3,434 12,413

Guaranteed issues - - 1,058 - - - - - 1,058

Senior Debt 197 1,049 57 100 - - - 25 1,427

Subordinated debt and preference

shares 80 - 66 - - 425 506 533 1,611

Other medium/long term financial

instruments - - - 18 - - 10 6 34

T o ta lT o ta lT o ta lT o ta l 2 7 72 7 72 7 72 7 7 1 ,0 4 91 ,0 4 91 ,0 4 91 ,0 4 9 3 ,2 0 33 ,2 0 33 ,2 0 33 ,2 0 3 1 ,6 7 81 ,6 7 81 ,6 7 81 ,6 7 8 1 ,1 2 41 ,1 2 41 ,1 2 41 ,1 2 4 2 ,5 9 02 ,5 9 02 ,5 9 02 ,5 9 0 2 ,6 2 52 ,6 2 52 ,6 2 52 ,6 2 5 3 ,9 9 83 ,9 9 83 ,9 9 83 ,9 9 8 1 6 ,5 4 31 6 ,5 4 31 6 ,5 4 31 6 ,5 4 3 During the first half of 2016, Banco Sabadell has carried out issuances under the Fixed-Income Scheme in force for a total of €2,775.6 million. Throughout this period, the bank has accessed the market on several occasions taking advantage of available liquidity windows. Specifically, in March, Banco Sabadell carried out an increase of an already existing issuance of covered mortgage bonds for the amount of €100 million, and in June it carried out a public issuance of €1,000 million in covered mortgage bonds over an 8-year term; two 8-year issuances of covered bonds totalling €600 million fully subscribed by the European Investment Bank (EIB); 3 issuances of senior debt with a 1 to 2 year term totalling €900 million, and 10 issuances of structured notes totalling €175.6 million, with terms varying between 1 and 6 years.

28

Furthermore, on 31 March 2016, Banco Sabadell registered a new Euro Medium Term Notes (EMTN) programme with the Irish Stock Exchange. On 6 May 2016, Banco Sabadell carried out an issuance of 10-year subordinated bonds amounting to €500 million under this new EMTN programme. During the first half of 2016, TSB launched a new mortgage securitisation named Duncan Funding 2016-1 PLC for an amount equivalent to €4,069 million, of which €682 million have been placed on the market.

4.3. Market Risk Structural exchange rate riskStructural exchange rate riskStructural exchange rate riskStructural exchange rate risk

Given recent events in the UK and the devaluation of the pound sterling (GBP) during the last days of the first half of 2016, information relative to Structural exchange rate risk included in the 2015 consolidated financial statements is updated hereafter to 30 June 2016. The bank’s Financial Division, through ALCO, has designed and executed the coverage of foreign exchange structural positions with the primary aim of minimising the negative impact on CET1 capital ratios caused by exchange rate fluctuations. The bank covers its structural positions using net foreign investment (see Note 13.c to the 2015 consolidated financial statements) such that a potential devaluation of the currency could result in a reduction in risk-weighted assets, and therefore a neutral impact on capital ratios. The net position of foreign currency assets and liabilities includes the structural position of the bank valued at historic exchange rates, which includes €1,335 million corresponding to permanent shareholdings in GBP, €867 million to permanent shareholdings in USD and €288 million in permanent shareholdings in MXN. At the end of June 2016, the equity exposure sensitivity to a 1% devaluation in exchange rates against the euro of the main currencies to which the bank is exposed amounted to €25 million, of which 54% correspond to the sterling pound, 35% to the US dollar and 11% to the Mexican peso. However, these effects would be offset by the proportional reduction of risk-weighted assets in the referred currencies, thereby maintaining constant capital ratios. During the first half of 2016, the bank has carried out an economic hedging of profits and flows expected from its subsidiary TSB through an open position in GBP to offset exchange rate fluctuations of this currency, recognised as a trading position. Net assets and liabilities (including the trading of currency spots) valued at a fixing exchange rate with forwards transactions and currency options following the group’s risk management policy amount to a total net open position of €38 million at 30 June 2016.

Note 5 Note 5 Note 5 Note 5 –––– Capital managementCapital managementCapital managementCapital management The group determines the bank's minimum capital requirements based on Directive 2013/36/EU (generally known as CRD-IV) and Regulation (EU) 575/2013 (CRR), which regulates the minimum capital to be held by credit institutions. This framework came into force on 1 January 2014 and was enacted in Spain through: (i) Royal Decree-Law 14/2013 on urgent measures for the transposition into Spanish law of EU regulations on supervision and solvency of financial institutions, (ii) Law 10/2014 on the regulation, supervision and solvency of credit institutions, and (iii) Royal Decree 84/2015, which implements Law 10/2014, as well as other lower-ranking provisions. Under those requirements, credit institutions must comply with a total capital ratio of 8% at all times. However, regulators may exercise their powers under the new regulatory framework and require institutions to maintain additional capital. The Bank received a notification from the European Central Bank regarding the decision on the prudential minimum requirements applicable to the bank, following a supervisory review and evaluation process (SREP), determining that Banco Sabadell must maintain a Common Equity Tier 1 (CET1) ratio of 9.25% measured against phased-in regulatory capital. This requirement includes the minimum required by Pillar 1 (4.50%) and Pillar 2 (4.75%), including the capital conservation buffer. Additionally, based on the note published by Bank of Spain on 28 December 2015, Banco of Spain set a

29

countercyclical capital buffer of 0% for 2016, and a prudential capital buffer of 0% for systemically important institutions, which is applicable to Banco Sabadell (despite being considered to be an O-SII - Other Systemically Important Institution. At 30 June 2016, the group's qualifying capital resources amounted to €11,960,879 thousand, representing a surplus of €5,020,114 thousand, as shown below: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Share capital 695,783 679,906

Reserves 11,736,531 11,428,739

Convertible bonds - -

Non-controlling interests 21,064 24,339

Deductions (2,123,136) (1,923,514)

C o r e c a p i ta l fu n d sC o r e c a p i ta l fu n d sC o r e c a p i ta l fu n d sC o r e c a p i ta l fu n d s 1 0 ,3 3 0 ,2 4 21 0 ,3 3 0 ,2 4 21 0 ,3 3 0 ,2 4 21 0 ,3 3 0 ,2 4 2 1 0 ,2 0 9 ,4 7 01 0 ,2 0 9 ,4 7 01 0 ,2 0 9 ,4 7 01 0 ,2 0 9 ,4 7 0

Core capital (%) 11.9 11.5

Preference shares, convertible bonds and deductions - -

T i e r o n e r e s o u r c e sT i e r o n e r e s o u r c e sT i e r o n e r e s o u r c e sT i e r o n e r e s o u r c e s 1 0 ,3 3 0 ,2 4 21 0 ,3 3 0 ,2 4 21 0 ,3 3 0 ,2 4 21 0 ,3 3 0 ,2 4 2 1 0 ,2 0 9 ,4 7 01 0 ,2 0 9 ,4 7 01 0 ,2 0 9 ,4 7 01 0 ,2 0 9 ,4 7 0

Tier I (%) 11.9 11.5

T i e r tw o r e s o u r c e sT i e r tw o r e s o u r c e sT i e r tw o r e s o u r c e sT i e r tw o r e s o u r c e s 1 ,6 3 0 ,6 3 71 ,6 3 0 ,6 3 71 ,6 3 0 ,6 3 71 ,6 3 0 ,6 3 7 1 ,2 0 7 ,9 1 21 ,2 0 7 ,9 1 21 ,2 0 7 ,9 1 21 ,2 0 7 ,9 1 2

Tier II (%) (*) 1.8 1.4

C a p i ta l b a s eC a p i ta l b a s eC a p i ta l b a s eC a p i ta l b a s e 1 1 ,9 6 0 ,8 7 91 1 ,9 6 0 ,8 7 91 1 ,9 6 0 ,8 7 91 1 ,9 6 0 ,8 7 9 1 1 ,4 1 7 ,3 8 21 1 ,4 1 7 ,3 8 21 1 ,4 1 7 ,3 8 21 1 ,4 1 7 ,3 8 2

Minimum capital requirement 6,940,765 7,101,497

C a p i ta l s u r p l u sC a p i ta l s u r p l u sC a p i ta l s u r p l u sC a p i ta l s u r p l u s 5 ,0 2 0 ,1 1 45 ,0 2 0 ,1 1 45 ,0 2 0 ,1 1 45 ,0 2 0 ,1 1 4 4 ,3 1 5 ,8 8 54 ,3 1 5 ,8 8 54 ,3 1 5 ,8 8 54 ,3 1 5 ,8 8 5

B IS R a t i o (% )B IS R a t i o (% )B IS R a t i o (% )B IS R a t i o (% ) 1 3 .81 3 .81 3 .81 3 .8 1 2 .91 2 .91 2 .91 2 .9

R i s k W e igh te d A s s e ts (R W A )R i s k W e igh te d A s s e ts (R W A )R i s k W e igh te d A s s e ts (R W A )R i s k W e igh te d A s s e ts (R W A ) 8 6 ,7 5 9 ,5 6 78 6 ,7 5 9 ,5 6 78 6 ,7 5 9 ,5 6 78 6 ,7 5 9 ,5 6 7 8 8 ,7 6 8 ,7 1 38 8 ,7 6 8 ,7 1 38 8 ,7 6 8 ,7 1 38 8 ,7 6 8 ,7 1 3

(*) Includ es t he issue o f sub o rd inated d eb t f o r €50 0 millio n euro s, p end ing aut horisat io n f ro m t he ECB fo r it s eleg ib ilit y. Core capital accounted for 86.4% of qualifying capital resources. Basel III Tier 1 consists of convertible bonds and the deduction of intangible assets by the same amount. Secondary or Tier II capital provide a further 13.6% of the BIS ratio and is made up very largely of subordinated bonds and generic provisions (subject to regulatory limits as to eligibility), and other required deductions. The Leverage Ratio aims to strengthen capital requirements with a supplementary measure not linked to the level of risk. The leverage ratio is the ratio between qualifying Tier 1 capital resources (Tier 1) and exposure. The CRR sets forth a leverage ratio the fulfilment of which is mandatory as of 1 January 2018. Previously, a definition and calibration period between 2014 and 2017 was set forth, during which institutions are required to disclose their leverage ratio and send information relative to the ratio to the supervisor who, based on the results, shall implement amendments as they see fit for their entry into force. At present, the bank reports to the supervisor on a quarterly basis and a reference level of 3% is considered. The level of exposure is calculated in line with the definition contained in Commission Delegated Regulation (EU) 62/2015. The leverage ratio at 30 June 2016 and 31 December 2015 is shown below: Tho usand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Tier 1 capital 10,330,242 10,209,470

Exposure 210,338,280 210,369,669

L e ve r a g e r a t i oL e ve r a g e r a t i oL e ve r a g e r a t i oL e ve r a g e r a t i o 4 .9 1 %4 .9 1 %4 .9 1 %4 .9 1 % 4 .8 5 %4 .8 5 %4 .8 5 %4 .8 5 %

30

Note 6 Note 6 Note 6 Note 6 –––– Fair value of assets and liabilities Fair value of assets and liabilities Fair value of assets and liabilities Fair value of assets and liabilities

Financial assets and liabilities The methodology and classification of fair value by level is explained in detail in the group's 2015 consolidated financial statements. Determination of the fair valuDetermination of the fair valuDetermination of the fair valuDetermination of the fair value of financial instrumentse of financial instrumentse of financial instrumentse of financial instruments

A comparison between the value at which the group's financial assets and liabilities are recognised on the accompanying consolidated balance sheets and the related fair value is as follows: Thousand euro

N o teN o teN o teN o te

A c c o u n t i n g A c c o u n t i n g A c c o u n t i n g A c c o u n t i n g

b a la n c eb a la n c eb a la n c eb a la n c e F a i r v a l u eF a i r v a l u eF a i r v a l u eF a i r v a l u e


b a l a n c eb a l a n c eb a l a n c eb a l a n c e F a i r va l u eF a i r va l u eF a i r va l u eF a i r va l u e

A s s e ts :A s s e ts :A s s e ts :A s s e ts :

Cash and cash balances at central banks 8 ,472,100 8,472,100 7,343,481 7,344,287

Financial assets held for trading 7.8 3 ,299,110 3,299,110 2,312,118 2,312,118

Financial assets designated at fair value through profit or loss 7.8 50,560 50,560 77,328 77,328

Available-for-sale financial assets 7.8 22,483,844 22,483,844 23,460,356 23,460,356

Loans and receivables 7.8 149,532,265 158,627,275 153,550,281 160,473,352

Derivatives - Hedge accounting 703,993 703,993 700,813 700,813

Fair value changes of the hedged items in portfolio hedge of interest rate

risk12,862 12,862 7,693 7,693

T o ta l a s s e tsT o ta l a s s e tsT o ta l a s s e tsT o ta l a s s e ts 1 8 4 ,5 5 4 ,7 3 41 8 4 ,5 5 4 ,7 3 41 8 4 ,5 5 4 ,7 3 41 8 4 ,5 5 4 ,7 3 4 1 9 3 ,6 4 9 ,7 4 41 9 3 ,6 4 9 ,7 4 41 9 3 ,6 4 9 ,7 4 41 9 3 ,6 4 9 ,7 4 4 1 8 7 ,4 5 2 ,0 7 01 8 7 ,4 5 2 ,0 7 01 8 7 ,4 5 2 ,0 7 01 8 7 ,4 5 2 ,0 7 0 1 9 4 ,3 7 5 ,9 4 71 9 4 ,3 7 5 ,9 4 71 9 4 ,3 7 5 ,9 4 71 9 4 ,3 7 5 ,9 4 7

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Thousand euro

N o taN o taN o taN o ta


b a la n c eb a la n c eb a la n c eb a la n c e F a i r v a lu eF a i r v a lu eF a i r v a lu eF a i r v a lu e


b a l a n c eb a l a n c eb a l a n c eb a l a n c e F a i r va lu eF a i r va lu eF a i r va lu eF a i r va lu e

L ia b i l i t i e s :L i a b i l i t i e s :L i a b i l i t i e s :L i a b i l i t i e s :

Financial liabilities held for trading 2 ,232,639 2,232,639 1,636,826 1,636,826

Financial liabilities des ignated at fair value through profit or loss - - - -

Financial liabilities measured at amortised cost 13,14,15 187,288,320 189,133,012 189,468,677 190,919,750

Derivatives - Hedge accounting 1 ,285,496 1,285,496 681,461 681,461

Fair value changes of the hedged items in portfolio hedge of interest rate

risk 82,566 82,566 16,330 16,330

T o ta l l i a b i l i t i e sT o ta l l i a b i l i t i e sT o ta l l i a b i l i t i e sT o ta l l i a b i l i t i e s 1 9 0 ,8 8 9 ,0 2 11 9 0 ,8 8 9 ,0 2 11 9 0 ,8 8 9 ,0 2 11 9 0 ,8 8 9 ,0 2 1 1 9 2 ,7 3 3 ,7 1 31 9 2 ,7 3 3 ,7 1 31 9 2 ,7 3 3 ,7 1 31 9 2 ,7 3 3 ,7 1 3 1 9 1 ,8 0 3 ,2 9 41 9 1 ,8 0 3 ,2 9 41 9 1 ,8 0 3 ,2 9 41 9 1 ,8 0 3 ,2 9 4 1 9 3 ,2 5 4 ,3 6 71 9 3 ,2 5 4 ,3 6 71 9 3 ,2 5 4 ,3 6 71 9 3 ,2 5 4 ,3 6 7

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

In relation to financial instruments whose carrying amount differs from their fair value, the latter has been calculated as follows: –The fair value of "Loans and receivables" and "Financial liabilities measured at amortised cost" has been estimated by the discounted cash flow method, using market interest rates at the end of each year. –The heading "Fair value changes of the hedged items in portfolio hedge of interest rate risk" on the accompanying consolidated balance sheets records the difference between the carrying amount of the deposits covered (recorded in "Loans and receivables") and the fair value calculated using internal models and observable market variables.

31

The following table presents the main financial instruments recognised at fair value in the accompanying consolidated balance sheets, broken down according to the valuation method used when estimating their fair value: Tho usand euro

No teNo teNo teNo te L e ve l 1L e ve l 1L e ve l 1L e ve l 1 L e ve l 2L e ve l 2L e ve l 2L e ve l 2 L e ve l 3L e ve l 3L e ve l 3L e ve l 3 T o ta lT o ta lT o ta lT o ta l


Financial assets held for trading 1 ,2 0 6 ,2 5 11 ,2 0 6 ,2 5 11 ,2 0 6 ,2 5 11 ,2 0 6 ,2 5 1 2 ,0 9 2 ,8 5 92 ,0 9 2 ,8 5 92 ,0 9 2 ,8 5 92 ,0 9 2 ,8 5 9 ---- 3 ,2 9 9 ,1 1 03 ,2 9 9 ,1 1 03 ,2 9 9 ,1 1 03 ,2 9 9 ,1 1 0

Derivatives 911 2,068,506 - 2,069,417

Equity instruments 18,083 330 - 18,413

Debt securities 7 1,187,257 24,023 - 1,211,280

Loans and advances-customers 8 - - - -

Financial assets designated at fair value through profit

or loss---- 5 0 ,5 6 05 0 ,5 6 05 0 ,5 6 05 0 ,5 6 0 ---- 5 0 ,5 6 05 0 ,5 6 05 0 ,5 6 05 0 ,5 6 0

Equity instruments - 50,560 - 50,560

Debt securities 7 - - - -

Loans and advances-credit institutions 8 - - - -

Available-for-sale financial assets 2 0 ,6 5 8 ,7 1 82 0 ,6 5 8 ,7 1 82 0 ,6 5 8 ,7 1 82 0 ,6 5 8 ,7 1 8 1 ,5 8 0 ,0 8 81 ,5 8 0 ,0 8 81 ,5 8 0 ,0 8 81 ,5 8 0 ,0 8 8 2 4 5 ,0 3 82 4 5 ,0 3 82 4 5 ,0 3 82 4 5 ,0 3 8 2 2 ,4 8 3 ,8 4 42 2 ,4 8 3 ,8 4 42 2 ,4 8 3 ,8 4 42 2 ,4 8 3 ,8 4 4

Equity instruments 118,454 210,937 245,038 574,429

Debt securities 7 20,540,264 1,369,151 - 21,909,415

Derivatives - hedge accounting 1 6 ,6 8 91 6 ,6 8 91 6 ,6 8 91 6 ,6 8 9 6 8 7 ,3 0 46 8 7 ,3 0 46 8 7 ,3 0 46 8 7 ,3 0 4 ---- 7 0 3 ,9 9 37 0 3 ,9 9 37 0 3 ,9 9 37 0 3 ,9 9 3

T o ta l a s s e tsT o ta l a s s e tsT o ta l a s s e tsT o ta l a s s e ts 2 1 ,8 8 1 ,6 5 82 1 ,8 8 1 ,6 5 82 1 ,8 8 1 ,6 5 82 1 ,8 8 1 ,6 5 8 4 ,4 1 0 ,8 1 14 ,4 1 0 ,8 1 14 ,4 1 0 ,8 1 14 ,4 1 0 ,8 1 1 2 4 5 ,0 3 82 4 5 ,0 3 82 4 5 ,0 3 82 4 5 ,0 3 8 2 6 ,5 3 7 ,5 0 72 6 ,5 3 7 ,5 0 72 6 ,5 3 7 ,5 0 72 6 ,5 3 7 ,5 0 7

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

Tho usand euro

L e ve l 1L e ve l 1L e ve l 1L e ve l 1 L e ve l 2L e ve l 2L e ve l 2L e ve l 2 L e ve l 3L e ve l 3L e ve l 3L e ve l 3 T o ta lT o ta lT o ta lT o ta l

L i a b i l i t i e s :L i a b i l i t i e s :L i a b i l i t i e s :L i a b i l i t i e s :

L iabilities held for trading 8 8 ,8 1 68 8 ,8 1 68 8 ,8 1 68 8 ,8 1 6 2 ,1 4 3 ,8 2 32 ,1 4 3 ,8 2 32 ,1 4 3 ,8 2 32 ,1 4 3 ,8 2 3 ---- 2 ,2 3 2 ,6 3 92 ,2 3 2 ,6 3 92 ,2 3 2 ,6 3 92 ,2 3 2 ,6 3 9

Derivatives 746 2,143,823 - 2,144,569

Short positions 88,070 - - 88,070

Deposits at credit institutions ---- - - -

Financial liabilities designated at fair value

through profit or loss---- ---- ---- -

Derivatives - hedge accounting ---- 1 ,2 8 5 ,4 9 61 ,2 8 5 ,4 9 61 ,2 8 5 ,4 9 61 ,2 8 5 ,4 9 6 ---- 1 ,2 8 5 ,4 9 61 ,2 8 5 ,4 9 61 ,2 8 5 ,4 9 61 ,2 8 5 ,4 9 6

T o ta l l i a b i l i t i e sT o ta l l i a b i l i t i e sT o ta l l i a b i l i t i e sT o ta l l i a b i l i t i e s 8 8 ,8 1 68 8 ,8 1 68 8 ,8 1 68 8 ,8 1 6 3 ,4 2 9 ,3 1 93 ,4 2 9 ,3 1 93 ,4 2 9 ,3 1 93 ,4 2 9 ,3 1 9 ---- 3 ,5 1 8 ,1 3 53 ,5 1 8 ,1 3 53 ,5 1 8 ,1 3 53 ,5 1 8 ,1 3 5

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

Thousand euro

No teNo teNo teNo te L e ve l 1L e ve l 1L e ve l 1L e ve l 1 L e ve l 2L e ve l 2L e ve l 2L e ve l 2 L e ve l 3L e ve l 3L e ve l 3L e ve l 3 T o ta lT o ta lT o ta lT o ta l


Financial assets held for trading 7 9 4 ,1 1 77 9 4 ,1 1 77 9 4 ,1 1 77 9 4 ,1 1 7 8 4 8 ,6 3 38 4 8 ,6 3 38 4 8 ,6 3 38 4 8 ,6 3 3 6 6 9 ,3 6 86 6 9 ,3 6 86 6 9 ,3 6 86 6 9 ,3 6 8 2 ,3 1 2 ,1 1 82 ,3 1 2 ,1 1 82 ,3 1 2 ,1 1 82 ,3 1 2 ,1 1 8

Derivatives 28 848,433 659,985 1,508,446

Equity instruments 11,212 - - 11,212

Debt securities 7 782,877 200 9,383 792,460

Loans and advances -customers 8 - - - -

Financial assets designated at fair value through profit or loss---- 7 7 ,3 2 87 7 ,3 2 87 7 ,3 2 87 7 ,3 2 8 ---- 7 7 ,3 2 87 7 ,3 2 87 7 ,3 2 87 7 ,3 2 8

Equity instruments - 77,328 - 77,328

Debt securities 7 - - - -

Loans and advances -credit institutions 8 - - - -

Available-for-sale financial assets 2 1 ,9 1 7 ,0 5 82 1 ,9 1 7 ,0 5 82 1 ,9 1 7 ,0 5 82 1 ,9 1 7 ,0 5 8 1 ,3 8 3 ,6 9 71 ,3 8 3 ,6 9 71 ,3 8 3 ,6 9 71 ,3 8 3 ,6 9 7 1 5 9 ,6 0 11 5 9 ,6 0 11 5 9 ,6 0 11 5 9 ,6 0 1 2 3 ,4 6 0 ,3 5 62 3 ,4 6 0 ,3 5 62 3 ,4 6 0 ,3 5 62 3 ,4 6 0 ,3 5 6

Equity instruments 202,301 211,677 158,752 572,730

Debt securities 7 21,714,757 1,172,020 849 22,887,626

Derivatives - hedge accounting 1 ,8 1 41 ,8 1 41 ,8 1 41 ,8 1 4 5 6 0 ,3 6 35 6 0 ,3 6 35 6 0 ,3 6 35 6 0 ,3 6 3 1 3 8 ,6 3 61 3 8 ,6 3 61 3 8 ,6 3 61 3 8 ,6 3 6 7 0 0 ,8 1 37 0 0 ,8 1 37 0 0 ,8 1 37 0 0 ,8 1 3

T o ta l a s s e tsT o ta l a s s e tsT o ta l a s s e tsT o ta l a s s e ts 2 2 ,7 1 2 ,9 8 92 2 ,7 1 2 ,9 8 92 2 ,7 1 2 ,9 8 92 2 ,7 1 2 ,9 8 9 2 ,8 7 0 ,0 2 12 ,8 7 0 ,0 2 12 ,8 7 0 ,0 2 12 ,8 7 0 ,0 2 1 9 6 7 ,6 0 59 6 7 ,6 0 59 6 7 ,6 0 59 6 7 ,6 0 5 2 6 ,5 5 0 ,6 1 52 6 ,5 5 0 ,6 1 52 6 ,5 5 0 ,6 1 52 6 ,5 5 0 ,6 1 5

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

32

Thousand euro

L e ve l 1L e ve l 1L e ve l 1L e ve l 1 L e ve l 2L e ve l 2L e ve l 2L e ve l 2 L e ve l 3L e ve l 3L e ve l 3L e ve l 3 T o ta lT o ta lT o ta lT o ta l


L iabilities held for trading 1 5 1 ,9 0 41 5 1 ,9 0 41 5 1 ,9 0 41 5 1 ,9 0 4 1 ,2 3 5 ,8 3 61 ,2 3 5 ,8 3 61 ,2 3 5 ,8 3 61 ,2 3 5 ,8 3 6 2 4 9 ,0 8 62 4 9 ,0 8 62 4 9 ,0 8 62 4 9 ,0 8 6 1 ,6 3 6 ,8 2 61 ,6 3 6 ,8 2 61 ,6 3 6 ,8 2 61 ,6 3 6 ,8 2 6

Derivatives - 1,235,836 249,086 1,484,922

Short positions 151,904 - - 151,904

Deposits at credit institutions ---- ---- ---- ----

Financial liabilities designated at fair value

con cambios en resultados---- ---- ---- ----

Derivatives - hedge accounting 1 2 ,0 9 81 2 ,0 9 81 2 ,0 9 81 2 ,0 9 8 4 8 4 ,2 1 14 8 4 ,2 1 14 8 4 ,2 1 14 8 4 ,2 1 1 1 8 5 ,1 5 21 8 5 ,1 5 21 8 5 ,1 5 21 8 5 ,1 5 2 6 8 1 ,4 6 16 8 1 ,4 6 16 8 1 ,4 6 16 8 1 ,4 6 1

T o ta l l i a b i l i t i e sT o ta l l i a b i l i t i e sT o ta l l i a b i l i t i e sT o ta l l i a b i l i t i e s 1 6 4 ,0 0 21 6 4 ,0 0 21 6 4 ,0 0 21 6 4 ,0 0 2 1 ,7 2 0 ,0 4 71 ,7 2 0 ,0 4 71 ,7 2 0 ,0 4 71 ,7 2 0 ,0 4 7 4 3 4 ,2 3 84 3 4 ,2 3 84 3 4 ,2 3 84 3 4 ,2 3 8 2 ,3 1 8 ,2 8 72 ,3 1 8 ,2 8 72 ,3 1 8 ,2 8 72 ,3 1 8 ,2 8 7

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

The movements in the balances of the financial assets and liabilities classified as Level 3 that are disclosed in the accompanying consolidated balance sheets are as follows: Thousand euro

AssetAssetAssetAsset LiabilitiesLiabilitiesLiabilitiesLiabilities

Balance at 31 December 2015Balance at 31 December 2015Balance at 31 December 2015Balance at 31 December 2015 967,605967,605967,605967,605 434,238434,238434,238434,238

Valuation adjustments recognised on income statement (*) - -

Valuation adjustments not recognised on income statement - -

Purchases, sales, write-offs 10,818 (41,428)

Net additions/(exits) on Level 3 (730,645) (392,810)

Exchange differences and other (2,740) -

Balance at 30 June 2016Balance at 30 June 2016Balance at 30 June 2016Balance at 30 June 2016 245,038245,038245,038245,038 ----

(*) Relates to securities kept on the balance sheet.

At 30 June 2016, income from sales of financial instruments classified as Level 3, recognised in the accompanying profit and loss statement, was not material. The detail of financial instruments that were transferred between valuation levels in the first six months of 2016 and during 2015 is as follows: Thousand euro

F r o m :F r o m :F r o m :F r o m :

T o :T o :T o :T o : L e ve l 2L e ve l 2L e ve l 2L e ve l 2 L e ve l 3L e ve l 3L e ve l 3L e ve l 3 L e ve l 1L e ve l 1L e ve l 1L e ve l 1 L e ve l 3L e ve l 3L e ve l 3L e ve l 3 L e ve l 1L e ve l 1L e ve l 1L e ve l 1 L e ve l 2L e ve l 2L e ve l 2L e ve l 2


Financial assets held for trading - - - - - 602,711

Financial assets at fair value through profit or loss - - - - - -

Available-for-sale financial assets - - - - - -

Derivatives - - - - - 127,934

L i a b i l i t i e sL i a b i l i t i e sL i a b i l i t i e sL i a b i l i t i e s

Financial liabilities held for trading - - - - - 224,260

Financial libailities at fair value through profit or loss - - - - - -

Derivatives-hedge accounting - - - - - 168,550

T o ta lT o ta lT o ta lT o ta l ---- ---- ---- ---- ---- 1 ,1 2 3 ,4 5 51 ,1 2 3 ,4 5 51 ,1 2 3 ,4 5 51 ,1 2 3 ,4 5 5

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

L e ve l 1L e ve l 1L e ve l 1L e ve l 1 L e ve l 2L e ve l 2L e ve l 2L e ve l 2 L e ve l 3L e ve l 3L e ve l 3L e ve l 3

Transfers from Level 3 to Level 2 are due to an assessment made of the impact of non-observable market data on the valuation of these instruments and, as such valuation is residual, it has been deemed appropriate to transfer these instruments to Level 2.

33

Thousand euro

F r o m :F r o m :F r o m :F r o m :

T o :T o :T o :T o : L e ve l 2L e ve l 2L e ve l 2L e ve l 2 L e ve l 3L e ve l 3L e ve l 3L e ve l 3 L e ve l 1L e ve l 1L e ve l 1L e ve l 1 L e ve l 3L e ve l 3L e ve l 3L e ve l 3 L e ve l 1L e ve l 1L e ve l 1L e ve l 1 L e ve l 2L e ve l 2L e ve l 2L e ve l 2


Financial assets held for trading - - - 64 ,187 - 1,380

Financial assets at fair value through profit or loss - - - - - -

Available-for-sale financial assets - - - - - -

Derivatives - - - - - -


Financial liabilities held for trading - - - 6 ,171 - 54

Financial liabilities at fair value through profit or loss - - - - - -

Derivatives-hedge accounting - - - - - -

T o ta lT o ta lT o ta lT o ta l ---- ---- ---- 7 0 ,3 5 87 0 ,3 5 87 0 ,3 5 87 0 ,3 5 8 ---- 1 ,4 3 41 ,4 3 41 ,4 3 41 ,4 3 4

L e ve l 1L e ve l 1L e ve l 1L e ve l 1 L e ve l 2L e ve l 2L e ve l 2L e ve l 2 L e ve l 3L e ve l 3L e ve l 3L e ve l 3

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

The effect of replacing the main assumptions used in the valuation of Level 3 financial instruments with other reasonably likely assumptions, taking the highest value (most favourable assumption) or lowest value (least favourable assumption) in the range that is considered likely, is as follows, indicating solely the effect on profit or loss since there were no Level 3 instruments with changes through equity. At 30 June 2016, there are no Level 3 financial instruments. Tho usand euro

Be s t c a s eBe s t c a s eBe s t c a s eBe s t c a s e W o r s e c a s eW o r s e c a s eW o r s e c a s eW o r s e c a s e


Financial assets held for trading (*) 7,999 (38,763)

Financial assets at fair value through profit or loss - -

Available-for-sale financial assets - -

Hedging derivatives (**) - -


Held for trading (*) 19 (130)

Other financial liabilities at fair value through profit or loss - -

Hedging derivatives 619 (290)

T o ta l l i a b i l i t i e sT o ta l l i a b i l i t i e sT o ta l l i a b i l i t i e sT o ta l l i a b i l i t i e s 8 ,6 3 78 ,6 3 78 ,6 3 78 ,6 3 7 (3 9 ,1 8 3 )(3 9 ,1 8 3 )(3 9 ,1 8 3 )(3 9 ,1 8 3 )

(**) P o tent ial im pact is no t m aterial

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

P o te n t i a l im p a c t o n c o n s o l i d a te d P o te n t i a l im p a c t o n c o n s o l i d a te d P o te n t i a l im p a c t o n c o n s o l i d a te d P o te n t i a l im p a c t o n c o n s o l i d a te d

In c o m e s ta te m e n tIn c o m e s ta te m e n tIn c o m e s ta te m e n tIn c o m e s ta te m e n t

(*) C lo sed po s it io ns have no t been inc luded in the calculat io n as they do no t have a po tential im pact o n results , as any change in the valuat io ns o f each o ne o f the financ ial ins trum ents are co m pensated between them selves .

Loans and financial liabilities designated at fair value through profit or loss At 30 June 2016 and 31 December 2015, there were no loans or other financial liabilities at fair value other than those recognised under "Financial assets held for trading – Loans and advances", "Financial assets designated at fair value through profit or loss" and "Financial liabilities designated at fair value through profit or loss" in the accompanying consolidated balance sheets.

Financial instruments at cost At 30 June 2016 and 31 December 2015 there were equity instruments, derivatives with equity instruments as the underlying asset and shares in the discretionary profits in certain companies which were recorded at cost in the consolidated balance sheets because their fair value could not be estimated in a sufficiently reliable manner. This was because they pertained to holdings in companies that are not quoted on organised markets and, therefore, involve a significant level of non-observable inputs. At those dates, the balance of these financial instruments, which were recognised under Available-for-sale financial assets are not material. During the period between 31 December 2015 and 30 June 2016, there were no sales of financial instruments recorded at cost.

34

Non-financial assets Real estate assetsReal estate assetsReal estate assetsReal estate assets

The methodology used by the group to determine the fair value of real estate assets is explained in detail in the group's 2015 consolidated financial statements. The methods used in the valuation of the group's portfolio based on the type of asset are as follows: - Completed works: valued in comparable terms, based on updates to income or the statistical model (Level 2). - Works in progress: valued using the cost method as a sum of the land value and the value of the work carried out (Level 3). - Land: valued using the residual method (Level 3). Significant non-observable variables used in valuations classed on Level 3 were developed not by the group but by the independent valuation companies that performed the appraisals. At 30 June 2016, net accounting values do not differ significantly from the fair values of these assets (see Note 4). The group determines the fair value of tangible assets for own use in order to detect any indications of impairment, based on the difference between its appraisal value and its value in use. At 30 June 2016, accounting values do not differ significantly from the fair values of these assets.

Note 7 Note 7 Note 7 Note 7 –––– Debt securitiesDebt securitiesDebt securitiesDebt securities Debt securities reported in the consolidated balance sheet at 30 June 2016 and 31 December 2015 are analysed below: Tho usand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

By h e a d i n g :By h e a d i n g :By h e a d i n g :By h e a d i n g :

Financial assets held for trading 1,211,280 792,460

Financial assets designated at fair value through profit or loss - -

Available-for-sale financial assets 21,909,415 22,887,626

Loans and receivables 1,268,433 1,732,478

T o ta lT o ta lT o ta lT o ta l 2 4 ,3 8 9 ,1 2 82 4 ,3 8 9 ,1 2 82 4 ,3 8 9 ,1 2 82 4 ,3 8 9 ,1 2 8 2 5 ,4 1 2 ,5 6 42 5 ,4 1 2 ,5 6 42 5 ,4 1 2 ,5 6 42 5 ,4 1 2 ,5 6 4

By n a tu r e :By n a tu r e :By n a tu r e :By n a tu r e :

Central banks - -

Central governments 21,281,354 21,091,462

Credit institutions 859,192 1,204,554

Other sectors 2,248,257 3,118,243

Doubtful assets 9,031 11,422

Impairment allowances (8,705) (13,117)


35

Note 8 Note 8 Note 8 Note 8 –––– Loans and advancesLoans and advancesLoans and advancesLoans and advances

Central banks and Credit institutions The breakdown of loans and advances - Central Banks and Credit institutions in the consolidated balance sheet at 30 June 2016 and 31 December 2015 is as follows: Tho usand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

By h e a d i n g :By h e a d i n g :By h e a d i n g :By h e a d i n g :

Financial assets held for trading - -



T o ta lT o ta lT o ta lT o ta l 3 ,7 7 5 ,7 4 73 ,7 7 5 ,7 4 73 ,7 7 5 ,7 4 73 ,7 7 5 ,7 4 7 5 ,0 0 2 ,0 6 65 ,0 0 2 ,0 6 65 ,0 0 2 ,0 6 65 ,0 0 2 ,0 6 6

By n a tu r e :By n a tu r e :By n a tu r e :By n a tu r e :

Deposits with agreed maturity 2,677,587 1,311,414

Assets acquired under repurchase agreements 693,362 3,101,716

Hybrid financial assets 90 3,176

Other 403,438 583,416

Doubtful assets 473 566

Impairment allowances (3,602) (1,801)

Other valuation adjustments (interests, fees and commissions, others) 4,400 3,579


Customer base The breakdown of loans and advances - Customer Base (Central governments and Other sectors) of the consolidated balance sheet at 30 June 2016 and 31 December 2015 is as follows: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

B y h e a d i n g :B y h e a d i n g :B y h e a d i n g :B y h e a d i n g :

Financial assets held for trading - -



T o ta lT o ta lT o ta lT o ta l 1 4 4 ,4 8 8 ,0 8 51 4 4 ,4 8 8 ,0 8 51 4 4 ,4 8 8 ,0 8 51 4 4 ,4 8 8 ,0 8 5 1 4 6 ,8 1 5 ,7 3 71 4 6 ,8 1 5 ,7 3 71 4 6 ,8 1 5 ,7 3 71 4 6 ,8 1 5 ,7 3 7

B y n a tu r e :B y n a tu r e :B y n a tu r e :B y n a tu r e :

Receivable on demand and other 6,431,008 7,206,937

Commercial credit 5 ,506,746 5,665,062

Finance leases 2,185,249 2,070,028

Secured loans 90,251,833 92,739,951

Assets acquired under repurchase agreements 276,402 728,475

Other term loans 34,968,457 32,685,849

Doubtful assets 10,714,292 12,470,413

Impairment allowances (5,708,952) (6,609,577)

Other valuation adjustments (interests, fees and commiss ions, others) (136,951) (141,401)


B y s e c to r :B y s e c to r :B y s e c to r :B y s e c to r :

Central Governments 9,352,623 8,954,620

Other sectors 130,267,073 132,141,682

Doubtful assets 10,714,292 12,470,413

Impairment allowances (5,708,952) (6,609,577)

Other valuation adjustments (interests, fees and commiss ions, others) (136,951) (141,401)


36

Doubtful assets Assets recognised as doubtful in the various asset accounts in the consolidated balance sheets at 30 June 2016 and 31 December 2015 were as follows: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Debt securities 9,031 11,422

Loans and advances

Customers 10,714,292 12,470,413

Central Banks and Credit institutions 473 566


Value adjustments Impairment allowances on the various asset accounts in the consolidated balance sheets at 30 June 2016 and 31 December 2015 were as follows: Tho usand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Debt securities 8,705 13,117

Loans and advances

Customers 5,708,952 6,609,577

Central Banks and Credit institutions 3,602 1,801

T o ta lT o ta lT o ta lT o ta l 5 ,7 2 1 ,2 5 95 ,7 2 1 ,2 5 95 ,7 2 1 ,2 5 95 ,7 2 1 ,2 5 9 6 ,6 2 4 ,4 9 56 ,6 2 4 ,4 9 56 ,6 2 4 ,4 9 56 ,6 2 4 ,4 9 5 The classification of credit risk exposure broken down by the corresponding value adjustments for impairment, at 30 June 2016 and 31 December 2015, is as follows: Tho usand euro

Gr o s s a m o u n tG r o s s a m o u n tG r o s s a m o u n tG r o s s a m o u n t

Im p a i r m e n t Im p a i r m e n t Im p a i r m e n t Im p a i r m e n t

a l l o w a n c e sa l l o w a n c e sa l l o w a n c e sa l l o w a n c e s C a r r y i n g a m o u n tC a r r y i n g a m o u n tC a r r y i n g a m o u n tC a r r y i n g a m o u n t

Normal risk 162,719,199 340,091 162,379,108

Of which, risk that requires special monitoring 3,928,954 - 3,928,954

Substandard risk 4,960,045 855,011 4,105,034

Doubtful exposure 10,723,795 4,526,157 6,197,638

T o ta l T o ta l T o ta l T o ta l 1 7 8 ,4 0 3 ,0 3 91 7 8 ,4 0 3 ,0 3 91 7 8 ,4 0 3 ,0 3 91 7 8 ,4 0 3 ,0 3 9 5 ,7 2 1 ,2 5 95 ,7 2 1 ,2 5 95 ,7 2 1 ,2 5 95 ,7 2 1 ,2 5 9 1 7 2 ,6 8 1 ,7 8 01 7 2 ,6 8 1 ,7 8 01 7 2 ,6 8 1 ,7 8 01 7 2 ,6 8 1 ,7 8 0

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

Tho usand euro

Gr o s s a m o u n tG r o s s a m o u n tG r o s s a m o u n tG r o s s a m o u n t

Im p a i r m e n t Im p a i r m e n t Im p a i r m e n t Im p a i r m e n t

a l l o w a n c e sa l l o w a n c e sa l l o w a n c e sa l l o w a n c e s C a r r y i n g a m o u n tC a r r y i n g a m o u n tC a r r y i n g a m o u n tC a r r y i n g a m o u n t

Normal risk 166,667,348 354,227 166,313,121

Of which, risk that requires special monitoring 4,709,768 - 4,709,768

Substandard risk 5,909,135 970,068 4,939,067

Doubtful exposure 12,482,401 5,300,200 7,182,201

T o ta lT o ta lT o ta lT o ta l 1 8 5 ,0 5 8 ,8 8 41 8 5 ,0 5 8 ,8 8 41 8 5 ,0 5 8 ,8 8 41 8 5 ,0 5 8 ,8 8 4 6 ,6 2 4 ,4 9 56 ,6 2 4 ,4 9 56 ,6 2 4 ,4 9 56 ,6 2 4 ,4 9 5 1 7 8 ,4 3 4 ,3 8 91 7 8 ,4 3 4 ,3 8 91 7 8 ,4 3 4 ,3 8 91 7 8 ,4 3 4 ,3 8 9

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

37

Details of the value adjustments made by the group for credit risk hedging and their cumulative amount at the start and at the end of the first half of the year is as follows: Thousand euro

D e te r m i ne d D e te r m i ne d D e te r m i ne d D e te r m i ne d

i n d i v i d u a l l yi n d i v i d u a l l yi n d i v i d u a l l yi n d i v i d u a l l y

De te r m in e d De te r m in e d De te r m in e d De te r m in e d

co l l e c t i ve l yco l l e c t i ve l yco l l e c t i ve l yco l l e c t i ve l y

IB NR c o ve r a ge IB NR c o ve r a ge IB NR c o ve r a ge IB NR c o ve r a ge

(* * )(* * )(* * )(* * ) Co u n tr y r i s kCo u n tr y r i s kCo u n tr y r i s kCo u n tr y r i s k T o ta l T o ta l T o ta l T o ta l

Ba la n c e a t 3 1 D ec e m be r 2 0 1 5Ba la n c e a t 3 1 D ec e m be r 2 0 1 5Ba la n c e a t 3 1 D ec e m be r 2 0 1 5Ba la n c e a t 3 1 D ec e m be r 2 0 1 5 2 ,3 6 4 ,2 7 22 ,3 6 4 ,2 7 22 ,3 6 4 ,2 7 22 ,3 6 4 ,2 7 2 2 ,9 3 1 ,3 7 12 ,9 3 1 ,3 7 12 ,9 3 1 ,3 7 12 ,9 3 1 ,3 7 1 1 ,3 2 4 ,2 9 71 ,3 2 4 ,2 9 71 ,3 2 4 ,2 9 71 ,3 2 4 ,2 9 7 4 ,5 5 54 ,5 5 54 ,5 5 54 ,5 5 5 6 ,6 2 4 ,4 9 56 ,6 2 4 ,4 9 56 ,6 2 4 ,4 9 56 ,6 2 4 ,4 9 5

M o ve m e n ts r e f l e c te d i n the i n c o m e s ta te m e n t (* )M o ve m e n ts r e f l e c te d i n the i n c o m e s ta te m e n t (* )M o ve m e n ts r e f l e c te d i n the i n c o m e s ta te m e n t (* )M o ve m e n ts r e f l e c te d i n the i n c o m e s ta te m e n t (* ) 2 1 7 ,6 9 42 1 7 ,6 9 42 1 7 ,6 9 42 1 7 ,6 9 4 1 8 3 ,7 4 81 8 3 ,7 4 81 8 3 ,7 4 81 8 3 ,7 4 8 8 ,5 4 38 ,5 4 38 ,5 4 38 ,5 4 3 1 ,8 4 41 ,8 4 41 ,8 4 41 ,8 4 4 4 1 1 ,8 2 94 1 1 ,8 2 94 1 1 ,8 2 94 1 1 ,8 2 9

M o ve m e n ts n o t r e f l e c te d i n th e i n c o m e s ta te m en tM o ve m e n ts n o t r e f l e c te d i n th e i n c o m e s ta te m en tM o ve m e n ts n o t r e f l e c te d i n th e i n c o m e s ta te m en tM o ve m e n ts n o t r e f l e c te d i n th e i n c o m e s ta te m en t (3 9 3 ,4 7 3 )(3 9 3 ,4 7 3 )(3 9 3 ,4 7 3 )(3 9 3 ,4 7 3 ) (7 8 8 ,9 8 1 )(7 8 8 ,9 8 1 )(7 8 8 ,9 8 1 )(7 8 8 ,9 8 1 ) (1 3 9 ,8 4 0 )(1 3 9 ,8 4 0 )(1 3 9 ,8 4 0 )(1 3 9 ,8 4 0 ) ---- (1 ,3 2 2 ,2 9 4 )(1 ,3 2 2 ,2 9 4 )(1 ,3 2 2 ,2 9 4 )(1 ,3 2 2 ,2 9 4 )

Utilisation of provis ions (695,487) (439,488) (129,597) - (1,264,572)

Other movements (***) 302,014 (349,493) (10,243) - (57,722)

A d ju s tm e n ts fo r e x c h an ge d i f fe r e n c esA d ju s tm e n ts fo r e x c h an ge d i f fe r e n c esA d ju s tm e n ts fo r e x c h an ge d i f fe r e n c esA d ju s tm e n ts fo r e x c h an ge d i f fe r e n c es 1 1 41 1 41 1 41 1 4 5 ,0 1 05 ,0 1 05 ,0 1 05 ,0 1 0 2 ,1 0 52 ,1 0 52 ,1 0 52 ,1 0 5 ---- 7 ,2 2 97 ,2 2 97 ,2 2 97 ,2 2 9

Ba la n c e a t 3 0 Ju n e 2 0 1 6Ba la n c e a t 3 0 Ju n e 2 0 1 6Ba la n c e a t 3 0 Ju n e 2 0 1 6Ba la n c e a t 3 0 Ju n e 2 0 1 6 2 ,1 8 8 ,6 0 72 ,1 8 8 ,6 0 72 ,1 8 8 ,6 0 72 ,1 8 8 ,6 0 7 2 ,3 3 1 ,1 4 82 ,3 3 1 ,1 4 82 ,3 3 1 ,1 4 82 ,3 3 1 ,1 4 8 1 ,1 9 5 ,1 0 51 ,1 9 5 ,1 0 51 ,1 9 5 ,1 0 51 ,1 9 5 ,1 0 5 6 ,3 9 96 ,3 9 96 ,3 9 96 ,3 9 9 5 ,7 2 1 ,2 5 95 ,7 2 1 ,2 5 95 ,7 2 1 ,2 5 95 ,7 2 1 ,2 5 9

(***) Corresponds to the transfer of €57,722 thousand in value adjustments for credit risk hedging to Non-current assets and liabilities and disposal groups class ified as

held for sale (see Note 12) and investment property.

(*) The sum of this amount, the depreciation charged to income from impaired financial assets that have been written off and the recovery of write-offs is reflected in the

section on Impairment or (-) reversal of impairment on financial assets not measured at fair value through profit or loss (see Note 26).

(**) Collective value adjustments for losses incurred but not reported.

The loan loss ratio, broken down by financing segment, is set out below: %

4 Q 1 54 Q 1 54 Q 1 54 Q 1 5 P r o fo r m a 2 Q1 6 (* ) P r o fo r m a 2 Q1 6 (* ) P r o fo r m a 2 Q1 6 (* ) P r o fo r m a 2 Q1 6 (* ) 2 Q1 6 2 Q1 6 2 Q1 6 2 Q1 6

Real estate development and construction 38.71 33.29 33.21

Non-real estate construction 14.35 11.76 11.75

Corporates 4.62 3.89 3.89

SMEs and sole proprietors 10.76 9.39 9.33

Individuals with 1st mortgage guarantee 4.71 7.47 4.56

Banco Sabadell group loan loss ratio 7.79 8.54 6.83

(*) Loan loss rat io w itho ut t aking int o account t he inclusio n o f TSB .

Note 9 Note 9 Note 9 Note 9 –––– Tangible assetsTangible assetsTangible assetsTangible assets The composition of this item in the consolidated balance sheets at 30 June 2016 and 31 December 2015 was as follows: Thousand euro

Cos tCos tCos tCos t Dep r ec ia t i o nDep r ec ia t i o nDep r ec ia t i o nDep r ec ia t i o n Im p a i r m e n tIm p a i r m e n tIm p a i r m e n tIm p a i r m e n t Ne t va lu eNe t va lu eNe t va lu eNe t va lu e Co s tCo s tCo s tCo s t Dep r ec ia t i o nDep r ec ia t i o nDep r ec ia t i o nDep r ec ia t i o n Im p a i r m en tIm p a i r m en tIm p a i r m en tIm p a i r m en t Ne t va lueNe t va lueNe t va lueNe t va lue

P r o pe r ty, P lan t a nd Eq u i pm en t:P r o pe r ty, P lan t a nd Eq u i pm en t:P r o pe r ty, P lan t a nd Eq u i pm en t:P r o pe r ty, P lan t a nd Eq u i pm en t: 3 ,2 3 6 ,3 5 63 ,2 3 6 ,3 5 63 ,2 3 6 ,3 5 63 ,2 3 6 ,3 5 6 (1 ,3 9 2 ,3 2 6 )(1 ,3 9 2 ,3 2 6 )(1 ,3 9 2 ,3 2 6 )(1 ,3 9 2 ,3 2 6 ) (2 3 ,4 0 9 )(2 3 ,4 0 9 )(2 3 ,4 0 9 )(2 3 ,4 0 9 ) 1 ,8 2 0 ,6 2 11 ,8 2 0 ,6 2 11 ,8 2 0 ,6 2 11 ,8 2 0 ,6 2 1 3 ,2 2 3 ,6 2 43 ,2 2 3 ,6 2 43 ,2 2 3 ,6 2 43 ,2 2 3 ,6 2 4 (1 ,3 5 1 ,8 8 0 )(1 ,3 5 1 ,8 8 0 )(1 ,3 5 1 ,8 8 0 )(1 ,3 5 1 ,8 8 0 ) (2 5 ,1 2 3 )(2 5 ,1 2 3 )(2 5 ,1 2 3 )(2 5 ,1 2 3 ) 1 ,8 4 6 ,6 2 11 ,8 4 6 ,6 2 11 ,8 4 6 ,6 2 11 ,8 4 6 ,6 2 1

For own use: 3,024,439 (1,338,959) (22,589) 1,662,892 3,034,705 (1,300,962) (24,220) 1,709,523

Computer equipment and related facilities 499,985 (371,007) - 128,978 490,400 (352,834) - 137,566

Furniture, vehicles and other facilities 1,226,484 (692,139) - 534,345 1,275,207 (683,205) (1,631) 590,371

Buildings 1,229,289 (266,518) (22,589) 940,182 1,215,047 (256,076) (22,589) 936,382

Work in progress 35,256 - - 35,256 16,060 - - 16,060

Other 33,426 (9,294) - 24,132 37,991 (8,847) - 29,144

Leased out under operating leases 211,917 (53,367) (821) 157,730 188,919 (50,918) (903) 137,098

In ve s tm e n t p r ope r t y:In ve s tm e n t p r ope r t y:In ve s tm e n t p r ope r t y:In ve s tm e n t p r ope r t y: 3 ,0 2 5 ,3 9 73 ,0 2 5 ,3 9 73 ,0 2 5 ,3 9 73 ,0 2 5 ,3 9 7 (1 6 6 ,7 0 2 )(1 6 6 ,7 0 2 )(1 6 6 ,7 0 2 )(1 6 6 ,7 0 2 ) (4 6 2 ,7 9 9 )(4 6 2 ,7 9 9 )(4 6 2 ,7 9 9 )(4 6 2 ,7 9 9 ) 2 ,3 9 5 ,8 9 72 ,3 9 5 ,8 9 72 ,3 9 5 ,8 9 72 ,3 9 5 ,8 9 7 2 ,9 4 0 ,0 8 82 ,9 4 0 ,0 8 82 ,9 4 0 ,0 8 82 ,9 4 0 ,0 8 8 (1 4 9 ,5 1 3 )(1 4 9 ,5 1 3 )(1 4 9 ,5 1 3 )(1 4 9 ,5 1 3 ) (4 4 8 ,6 7 0 )(4 4 8 ,6 7 0 )(4 4 8 ,6 7 0 )(4 4 8 ,6 7 0 ) 2 ,3 4 1 ,9 0 52 ,3 4 1 ,9 0 52 ,3 4 1 ,9 0 52 ,3 4 1 ,9 0 5

Buildings 2,986,520 (166,220) (454,628) 2,365,672 2,918,157 (147,503) (442,003) 2,328,651

Rural property, plots and s ites 38,877 (481) (8,171) 30,224 21,931 (2,010) (6,667) 13,254

T o ta lT o ta lT o ta lT o ta l 6 ,2 6 1 ,7 5 36 ,2 6 1 ,7 5 36 ,2 6 1 ,7 5 36 ,2 6 1 ,7 5 3 (1 ,5 5 9 ,0 2 7 )(1 ,5 5 9 ,0 2 7 )(1 ,5 5 9 ,0 2 7 )(1 ,5 5 9 ,0 2 7 ) (4 8 6 ,2 0 8 )(4 8 6 ,2 0 8 )(4 8 6 ,2 0 8 )(4 8 6 ,2 0 8 ) 4 ,2 1 6 ,5 1 84 ,2 1 6 ,5 1 84 ,2 1 6 ,5 1 84 ,2 1 6 ,5 1 8 6 ,1 6 3 ,7 1 26 ,1 6 3 ,7 1 26 ,1 6 3 ,7 1 26 ,1 6 3 ,7 1 2 (1 ,5 0 1 ,3 9 3 )(1 ,5 0 1 ,3 9 3 )(1 ,5 0 1 ,3 9 3 )(1 ,5 0 1 ,3 9 3 ) (4 7 3 ,7 9 3 )(4 7 3 ,7 9 3 )(4 7 3 ,7 9 3 )(4 7 3 ,7 9 3 ) 4 ,1 8 8 ,5 2 64 ,1 8 8 ,5 2 64 ,1 8 8 ,5 2 64 ,1 8 8 ,5 2 6

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

38

Changes in the balance of the tangible assets item during the first half of 2016 were as follows: Thousand euro

L a n d a n dL a n d a n dL a n d a n dL a n d a n d F u r n i s h in g sF u r n i s h in g sF u r n i s h in g sF u r n i s h in g s In ve s tm e n tIn ve s tm e n tIn ve s tm e n tIn ve s tm e n t L e a s e d u n d e rL e a s e d u n d e rL e a s e d u n d e rL e a s e d u n d e r

No teNo teNo teNo te b u i l d i n gsb u i l d i n gsb u i l d i n gsb u i l d i n gs a n d e q u i p m e n ta n d e q u i p m e n ta n d e q u i p m e n ta n d e q u i p m e n t p r o p e r t i e sp r o p e r t i e sp r o p e r t i e sp r o p e r t i e s o p e r a t i n go p e r a t i n go p e r a t i n go p e r a t i n g T o ta l T o ta l T o ta l T o ta l

Co s t :Co s t :Co s t :Co s t :

Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5 1 ,2 6 9 ,0 9 81 ,2 6 9 ,0 9 81 ,2 6 9 ,0 9 81 ,2 6 9 ,0 9 8 1 ,7 6 5 ,6 0 71 ,7 6 5 ,6 0 71 ,7 6 5 ,6 0 71 ,7 6 5 ,6 0 7 2 ,9 4 0 ,0 8 82 ,9 4 0 ,0 8 82 ,9 4 0 ,0 8 82 ,9 4 0 ,0 8 8 1 8 8 ,9 1 91 8 8 ,9 1 91 8 8 ,9 1 91 8 8 ,9 1 9 6 ,1 6 3 ,7 1 26 ,1 6 3 ,7 1 26 ,1 6 3 ,7 1 26 ,1 6 3 ,7 1 2

Additions 178,935 127,195 209,988 45,660 561,778

Disposals (131,916) (154,482) (154,711) (9,963) (451,072)

Other transfers 9,542 - 34,350 (9,542) 34,350

NPL transfers 8 - - (4 ,318) - (4 ,318)

Exchange differences (27,689) (11,851) - (3,156) (42,696)

Ba l a n c e s a t 3 0 Ju n e 2 0 1 6Ba l a n c e s a t 3 0 Ju n e 2 0 1 6Ba l a n c e s a t 3 0 Ju n e 2 0 1 6Ba l a n c e s a t 3 0 Ju n e 2 0 1 6 1 ,2 9 7 ,9 7 01 ,2 9 7 ,9 7 01 ,2 9 7 ,9 7 01 ,2 9 7 ,9 7 0 1 ,7 2 6 ,4 6 91 ,7 2 6 ,4 6 91 ,7 2 6 ,4 6 91 ,7 2 6 ,4 6 9 3 ,0 2 5 ,3 9 73 ,0 2 5 ,3 9 73 ,0 2 5 ,3 9 73 ,0 2 5 ,3 9 7 2 1 1 ,9 1 82 1 1 ,9 1 82 1 1 ,9 1 82 1 1 ,9 1 8 6 ,2 6 1 ,7 5 46 ,2 6 1 ,7 5 46 ,2 6 1 ,7 5 46 ,2 6 1 ,7 5 4

A c c u m u la te d d e p r e c i a t i o n :A c c u m u la te d d e p r e c i a t i o n :A c c u m u la te d d e p r e c i a t i o n :A c c u m u la te d d e p r e c i a t i o n :

Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5 2 6 4 ,9 2 32 6 4 ,9 2 32 6 4 ,9 2 32 6 4 ,9 2 3 1 ,0 3 6 ,0 3 91 ,0 3 6 ,0 3 91 ,0 3 6 ,0 3 91 ,0 3 6 ,0 3 9 1 4 9 ,5 1 31 4 9 ,5 1 31 4 9 ,5 1 31 4 9 ,5 1 3 5 0 ,9 1 85 0 ,9 1 85 0 ,9 1 85 0 ,9 1 8 1 ,5 0 1 ,3 9 31 ,5 0 1 ,3 9 31 ,5 0 1 ,3 9 31 ,5 0 1 ,3 9 3

Additions 15,997 51,551 28,500 11,746 107,794

Disposals (2,118) (17,308) (11,311) (485) (31,222)

Other transfers 6,704 - - (6,704) -

Exchange differences (9,694) (7,135) - (2,108) (18,937)

Ba l a n c e s a t 3 0 Ju n e 2 0 1 6Ba l a n c e s a t 3 0 Ju n e 2 0 1 6Ba l a n c e s a t 3 0 Ju n e 2 0 1 6Ba l a n c e s a t 3 0 Ju n e 2 0 1 6 2 7 5 ,8 1 22 7 5 ,8 1 22 7 5 ,8 1 22 7 5 ,8 1 2 1 ,0 6 3 ,1 4 71 ,0 6 3 ,1 4 71 ,0 6 3 ,1 4 71 ,0 6 3 ,1 4 7 1 6 6 ,7 0 21 6 6 ,7 0 21 6 6 ,7 0 21 6 6 ,7 0 2 5 3 ,3 6 75 3 ,3 6 75 3 ,3 6 75 3 ,3 6 7 1 ,5 5 9 ,0 2 81 ,5 5 9 ,0 2 81 ,5 5 9 ,0 2 81 ,5 5 9 ,0 2 8

Im p a i r m e n t l o s s e s :Im p a i r m e n t l o s s e s :Im p a i r m e n t l o s s e s :Im p a i r m e n t l o s s e s :

Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5 2 2 ,5 8 92 2 ,5 8 92 2 ,5 8 92 2 ,5 8 9 1 ,6 3 11 ,6 3 11 ,6 3 11 ,6 3 1 4 4 8 ,6 7 04 4 8 ,6 7 04 4 8 ,6 7 04 4 8 ,6 7 0 9 0 39 0 39 0 39 0 3 4 7 3 ,7 9 34 7 3 ,7 9 34 7 3 ,7 9 34 7 3 ,7 9 3

Provision with impact on income 27 - - 79,738 41 79,779

Reversal with impact on income 27 - - (18,425) - (18,425)

Utilisations - (1,631) (51,629) (123) (53,383)

Other transfers - - 4,445 - 4,445

Ba l a n c e s a t 3 0 Ju n e 2 0 1 6Ba l a n c e s a t 3 0 Ju n e 2 0 1 6Ba l a n c e s a t 3 0 Ju n e 2 0 1 6Ba l a n c e s a t 3 0 Ju n e 2 0 1 6 2 2 ,5 8 92 2 ,5 8 92 2 ,5 8 92 2 ,5 8 9 ---- 4 6 2 ,7 9 94 6 2 ,7 9 94 6 2 ,7 9 94 6 2 ,7 9 9 8 2 18 2 18 2 18 2 1 4 8 6 ,2 0 94 8 6 ,2 0 94 8 6 ,2 0 94 8 6 ,2 0 9

Ne t b a l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ne t b a l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ne t b a l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ne t b a l a n c e s a t 3 1 De c e m b e r 2 0 1 5 9 8 1 ,5 8 69 8 1 ,5 8 69 8 1 ,5 8 69 8 1 ,5 8 6 7 2 7 ,9 3 77 2 7 ,9 3 77 2 7 ,9 3 77 2 7 ,9 3 7 2 ,3 4 1 ,9 0 52 ,3 4 1 ,9 0 52 ,3 4 1 ,9 0 52 ,3 4 1 ,9 0 5 1 3 7 ,0 9 81 3 7 ,0 9 81 3 7 ,0 9 81 3 7 ,0 9 8 4 ,1 8 8 ,5 2 64 ,1 8 8 ,5 2 64 ,1 8 8 ,5 2 64 ,1 8 8 ,5 2 6

Ne t b a l a n c e s a t 3 0 Ju n e 2 0 1 6Ne t b a l a n c e s a t 3 0 Ju n e 2 0 1 6Ne t b a l a n c e s a t 3 0 Ju n e 2 0 1 6Ne t b a l a n c e s a t 3 0 Ju n e 2 0 1 6 9 9 9 ,5 6 99 9 9 ,5 6 99 9 9 ,5 6 99 9 9 ,5 6 9 6 6 3 ,3 2 26 6 3 ,3 2 26 6 3 ,3 2 26 6 3 ,3 2 2 2 ,3 9 5 ,8 9 62 ,3 9 5 ,8 9 62 ,3 9 5 ,8 9 62 ,3 9 5 ,8 9 6 1 5 7 ,7 3 01 5 7 ,7 3 01 5 7 ,7 3 01 5 7 ,7 3 0 4 ,2 1 6 ,5 1 74 ,2 1 6 ,5 1 74 ,2 1 6 ,5 1 74 ,2 1 6 ,5 1 7 Details of the source of the amortised cost of the transfers to the tangible assets item during the first half of 2016 are as follows: Tho usand euro

N o teN o teN o teN o te 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Inventories 11 14,738 65,835

Non-current assets and disposal groups class ified as held for sale 12 15,167 72,871

Impaired loans (4,318) (12,944)

T o ta lT o ta lT o ta lT o ta l 2 5 ,5 8 72 5 ,5 8 72 5 ,5 8 72 5 ,5 8 7 1 2 5 ,7 6 21 2 5 ,7 6 21 2 5 ,7 6 21 2 5 ,7 6 2

39

NNNNoteoteoteote 10 10 10 10 –––– Intangible assetsIntangible assetsIntangible assetsIntangible assets The composition of this item at 30 June 2016 and 31 December 2015 was as follows: Tho usand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Go o d w i l l :Go o d w i l l :Go o d w i l l :Go o d w i l l : 1 ,0 9 0 ,7 3 71 ,0 9 0 ,7 3 71 ,0 9 0 ,7 3 71 ,0 9 0 ,7 3 7 1 ,0 9 2 ,7 7 71 ,0 9 2 ,7 7 71 ,0 9 2 ,7 7 71 ,0 9 2 ,7 7 7

Banco Urquijo Sabadell Banca Privada, S.A. 473,837 473,837

Banco Guipuzcoano group 285,345 285,345

Sabadell United Bank, N.A. 69,288 70,645

From acquis ition of Banco BMN-Penedès assets 245,364 245,364

Rest 16,903 17,586

Oth e r i n ta n g i b l e a s s e ts :O th e r i n ta n g i b l e a s s e ts :O th e r i n ta n g i b l e a s s e ts :O th e r i n ta n g i b l e a s s e ts : 9 0 7 ,8 0 39 0 7 ,8 0 39 0 7 ,8 0 39 0 7 ,8 0 3 9 8 7 ,7 9 39 8 7 ,7 9 39 8 7 ,7 9 39 8 7 ,7 9 3

With a finite useful life: 907,803 987,793

Contractual relations with customers (Banco Guipuzcoano) 6,696 7,106

Contractual relations with customers and brand (Banco Urquijo) 25,404 26,960

Private Banking business, M iami 23,639 25,783

Contractual relations with customers (Sabadell United Bank) 13,664 15,795

Contractual relations with customers (TSB) 324,184 388,978

Computer applications 511,564 508,397

Other deferred expenses 2,652 14,774

T o ta lT o ta lT o ta lT o ta l 1 ,9 9 8 ,5 4 01 ,9 9 8 ,5 4 01 ,9 9 8 ,5 4 01 ,9 9 8 ,5 4 0 2 ,0 8 0 ,5 7 02 ,0 8 0 ,5 7 02 ,0 8 0 ,5 7 02 ,0 8 0 ,5 7 0 Changes in goodwill in the first half of 2016 were as follows: Thousand euro

Go o d w i l lGo o d w i l lGo o d w i l lGo o d w i l l Im p a i r m e n tIm p a i r m e n tIm p a i r m e n tIm p a i r m e n t T o ta lT o ta lT o ta lT o ta l

B a la n c e a t 3 1 D e c e m b e r 2 0 1 5B a la n c e a t 3 1 D e c e m b e r 2 0 1 5B a la n c e a t 3 1 D e c e m b e r 2 0 1 5B a la n c e a t 3 1 D e c e m b e r 2 0 1 5 1 ,0 9 2 ,7 7 71 ,0 9 2 ,7 7 71 ,0 9 2 ,7 7 71 ,0 9 2 ,7 7 7 ---- 1 ,0 9 2 ,7 7 71 ,0 9 2 ,7 7 71 ,0 9 2 ,7 7 71 ,0 9 2 ,7 7 7

Additions - - -

Disposals (682) - (682)

Exchange differences (1,358) - (1,358)

B a la n c e a t 3 0 Ju n e 2 0 1 6B a la n c e a t 3 0 Ju n e 2 0 1 6B a la n c e a t 3 0 Ju n e 2 0 1 6B a la n c e a t 3 0 Ju n e 2 0 1 6 1 ,0 9 0 ,7 3 71 ,0 9 0 ,7 3 71 ,0 9 0 ,7 3 71 ,0 9 0 ,7 3 7 ---- 1 ,0 9 0 ,7 3 71 ,0 9 0 ,7 3 71 ,0 9 0 ,7 3 71 ,0 9 0 ,7 3 7

Note 11 Note 11 Note 11 Note 11 –––– Other assetsOther assetsOther assetsOther assets The composition of other assets at 30 June 2016 and 31 December 2015 was as follows: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Insurance contracts linked to pensions 149,798 153,631

Inventories 3,480,545 3,655,548

Rest of other assets 1,205,412 943,855


Changes in inventories in the first half of 2016 were as follows: Thousand euro

N o teN o teN o teN o te L a n dL a n dL a n dL a n d

Bu i l d i n g s Bu i l d i n g s Bu i l d i n g s Bu i l d i n g s

u n d e r u n d e r u n d e r u n d e r

c o n s t r u c t i o nc o n s t r u c t i o nc o n s t r u c t i o nc o n s t r u c t i o n

F in i s h e d F in i s h e d F in i s h e d F in i s h e d

b u i l d in g sb u i l d in g sb u i l d in g sb u i l d in g s T o ta lT o ta lT o ta lT o ta l

Ba l a n c e a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e a t 3 1 De c e m b e r 2 0 1 5 2 ,0 8 4 ,8 0 82 ,0 8 4 ,8 0 82 ,0 8 4 ,8 0 82 ,0 8 4 ,8 0 8 3 1 3 ,5 3 33 1 3 ,5 3 33 1 3 ,5 3 33 1 3 ,5 3 3 1 ,2 5 7 ,2 0 71 ,2 5 7 ,2 0 71 ,2 5 7 ,2 0 71 ,2 5 7 ,2 0 7 3 ,6 5 5 ,5 4 83 ,6 5 5 ,5 4 83 ,6 5 5 ,5 4 83 ,6 5 5 ,5 4 8

Additions 101,947 23,757 234,167 359,871

Disposals (84,579) (81,403) (173,188) (339,170)

Impairment provision with impact on income 27 (51,254) (20,054) (109,658) (180,966)

Impairment reversal with impact on income - - - -

Other transfers 9 (1,703) (18,270) 5,235 (14,738)

Ba l a n c e a t 3 0 Ju n e 2 0 1 6Ba l a n c e a t 3 0 Ju n e 2 0 1 6Ba l a n c e a t 3 0 Ju n e 2 0 1 6Ba l a n c e a t 3 0 Ju n e 2 0 1 6 2 ,0 4 9 ,2 1 92 ,0 4 9 ,2 1 92 ,0 4 9 ,2 1 92 ,0 4 9 ,2 1 9 2 1 7 ,5 6 32 1 7 ,5 6 32 1 7 ,5 6 32 1 7 ,5 6 3 1 ,2 1 3 ,7 6 31 ,2 1 3 ,7 6 31 ,2 1 3 ,7 6 31 ,2 1 3 ,7 6 3 3 ,4 8 0 ,5 4 53 ,4 8 0 ,5 4 53 ,4 8 0 ,5 4 53 ,4 8 0 ,5 4 5

40

Note 12 Note 12 Note 12 Note 12 –––– NonNonNonNon----current assets and disposal groups and liabilities included in disposal current assets and disposal groups and liabilities included in disposal current assets and disposal groups and liabilities included in disposal current assets and disposal groups and liabilities included in disposal groups classified as held for salegroups classified as held for salegroups classified as held for salegroups classified as held for sale The composition of these items in the consolidated balance sheets at 30 June 2016 and 31 December 2015 was as follows: Tho usand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

A s s e tsA s s e tsA s s e tsA s s e ts 5 ,5 7 8 ,7 6 75 ,5 7 8 ,7 6 75 ,5 7 8 ,7 6 75 ,5 7 8 ,7 6 7 3 ,1 6 5 ,2 9 33 ,1 6 5 ,2 9 33 ,1 6 5 ,2 9 33 ,1 6 5 ,2 9 3

Loans and advances ---- ----

Credit institutions - -

Customers - -

Debt securities 2,429,102 -

Equity instruments 696 19,452

Tangible assets 3,065,851 3,145,841

Tangible assets for own use 82,120 97,351

Investment property - -

Foreclosed tangible assets 2,982,010 3,047,535

Leased out under operating leases 1,721 955

Other assets 83,117 -

Im p a i r m e n t a l l o w a n c e sIm p a i r m e n t a l l o w a n c e sIm p a i r m e n t a l l o w a n c e sIm p a i r m e n t a l l o w a n c e s (6 3 1 ,6 3 3 )(6 3 1 ,6 3 3 )(6 3 1 ,6 3 3 )(6 3 1 ,6 3 3 ) (6 2 2 ,9 0 7 )(6 2 2 ,9 0 7 )(6 2 2 ,9 0 7 )(6 2 2 ,9 0 7 )

No n - c u r r e n t a s s e ts a n d d i s p o s a l g r o u p s c la s s i f i e d a s h e l d fo r s a l eNo n - c u r r e n t a s s e ts a n d d i s p o s a l g r o u p s c la s s i f i e d a s h e l d fo r s a l eNo n - c u r r e n t a s s e ts a n d d i s p o s a l g r o u p s c la s s i f i e d a s h e l d fo r s a l eNo n - c u r r e n t a s s e ts a n d d i s p o s a l g r o u p s c la s s i f i e d a s h e l d fo r s a l e 4 ,9 4 7 ,1 3 34 ,9 4 7 ,1 3 34 ,9 4 7 ,1 3 34 ,9 4 7 ,1 3 3 2 ,5 4 2 ,3 8 62 ,5 4 2 ,3 8 62 ,5 4 2 ,3 8 62 ,5 4 2 ,3 8 6


Financial liabilities measured at amortised cost 1,519 ----

Tax liabilities 55,242 ----

L iabilities under insurance or reinsurance contracts 2,203,113 ----

Rest 311 ----

L i a b i l i t i e s i n c l u d e d i n d i s p o s a l g r o u p s c l a s s i f i e d a s h e ld fo r s a l eL i a b i l i t i e s i n c l u d e d i n d i s p o s a l g r o u p s c l a s s i f i e d a s h e ld fo r s a l eL i a b i l i t i e s i n c l u d e d i n d i s p o s a l g r o u p s c l a s s i f i e d a s h e ld fo r s a l eL i a b i l i t i e s i n c l u d e d i n d i s p o s a l g r o u p s c l a s s i f i e d a s h e ld fo r s a l e 2 ,2 6 0 ,1 8 52 ,2 6 0 ,1 8 52 ,2 6 0 ,1 8 52 ,2 6 0 ,1 8 5 ---- Balances in this heading are made up of non-current assets and disposal groups and liabilities included in disposal groups classified as held for sale whose carrying amounts are expected to be recoverable through disposal within one year from the balance sheet date. The main change during the first half of the year corresponds to the reclassification of assets and liabilities from Mediterráneo Vida, Sociedad Anónima de Seguros y Reaseguros to this heading, as explained in Note 2 to these interim financial statements. The contribution of Mediterráneo Vida to the heading “Accumulated other comprehensive income” of the consolidated statement of net equity, has been reclassified under the sub-heading “Items that may be reclassified to profit or loss - Non-current assets and disposal groups classified as held for sale". This contribution includes two items, valuation adjustments of available-for-sale financial assets and the effect of accounting mismatches arising from different valuations of financial assets and associated insurance commitments.

41

Changes in non-current assets and disposal groups classified as held for sale in the first half of 2016 were as follows: Thousand euro

No teNo teNo teNo te

No n - c u r r e n t a s s e ts a n d d i s p o s a l No n - c u r r e n t a s s e ts a n d d i s p o s a l No n - c u r r e n t a s s e ts a n d d i s p o s a l No n - c u r r e n t a s s e ts a n d d i s p o s a l

g r o u p s c l a s s i f i e d a s h e l d fo r s a l eg r o u p s c l a s s i f i e d a s h e l d fo r s a l eg r o u p s c l a s s i f i e d a s h e l d fo r s a l eg r o u p s c l a s s i f i e d a s h e l d fo r s a l e

C o s t :C o s t :C o s t :C o s t :

B a la n c e s a t 3 1 De c e m b e r 2 0 1 5B a la n c e s a t 3 1 De c e m b e r 2 0 1 5B a la n c e s a t 3 1 De c e m b e r 2 0 1 5B a la n c e s a t 3 1 De c e m b e r 2 0 1 5 3 ,1 6 5 ,2 9 33 ,1 6 5 ,2 9 33 ,1 6 5 ,2 9 33 ,1 6 5 ,2 9 3

Reclassification Mediterráneo Vida 2,487,265

Additions 432,985

Disposals (434,177)

Other transfers (*) (19,195)

Impaired assets (**) 8 (53,404)

B a la n c e s a t 3 0 Ju n e 2 0 1 6B a la n c e s a t 3 0 Ju n e 2 0 1 6B a la n c e s a t 3 0 Ju n e 2 0 1 6B a la n c e s a t 3 0 Ju n e 2 0 1 6 5 ,5 7 8 ,7 6 75 ,5 7 8 ,7 6 75 ,5 7 8 ,7 6 75 ,5 7 8 ,7 6 7

Im p a i r m e n t a d j u s tm e n ts :Im p a i r m e n t a d j u s tm e n ts :Im p a i r m e n t a d j u s tm e n ts :Im p a i r m e n t a d j u s tm e n ts :

B a la n c e s a t 3 1 De c e m b e r 2 0 1 5B a la n c e s a t 3 1 De c e m b e r 2 0 1 5B a la n c e s a t 3 1 De c e m b e r 2 0 1 5B a la n c e s a t 3 1 De c e m b e r 2 0 1 5 6 2 2 ,9 0 76 2 2 ,9 0 76 2 2 ,9 0 76 2 2 ,9 0 7

Provis ion with impact on income 30 17,459

Reversal with impact on income 30 (34,336)

Utilisations (9,516)

Other transfers (*) (4,029)

Other 39,148

B a la n c e s a t 3 0 Ju n e 2 0 1 6B a la n c e s a t 3 0 Ju n e 2 0 1 6B a la n c e s a t 3 0 Ju n e 2 0 1 6B a la n c e s a t 3 0 Ju n e 2 0 1 6 6 3 1 ,6 3 36 3 1 ,6 3 36 3 1 ,6 3 36 3 1 ,6 3 3

N e t b a l a n c e s a t 3 1 De c e m b e r 2 0 1 5N e t b a l a n c e s a t 3 1 De c e m b e r 2 0 1 5N e t b a l a n c e s a t 3 1 De c e m b e r 2 0 1 5N e t b a l a n c e s a t 3 1 De c e m b e r 2 0 1 5 2 ,5 4 2 ,3 8 62 ,5 4 2 ,3 8 62 ,5 4 2 ,3 8 62 ,5 4 2 ,3 8 6

N e t b a l a n c e s a t 3 0 Ju n e 2 0 1 6N e t b a l a n c e s a t 3 0 Ju n e 2 0 1 6N e t b a l a n c e s a t 3 0 Ju n e 2 0 1 6N e t b a l a n c e s a t 3 0 Ju n e 2 0 1 6 4 ,9 4 7 ,1 3 44 ,9 4 7 ,1 3 44 ,9 4 7 ,1 3 44 ,9 4 7 ,1 3 4

(*) Net t ransfer o f €15,166 is shown in No te 9 .

(**) Fund result ing f rom value ad just ments fo r cred it risk hedg ing .

Note 13 Note 13 Note 13 Note 13 –––– Deposits from Central BDeposits from Central BDeposits from Central BDeposits from Central Banks and credit institutionsanks and credit institutionsanks and credit institutionsanks and credit institutions The breakdown of the Deposits from Central Banks and Credit institutions headings in the consolidated balance sheet at 30 June 2016 and 31 December 2015 is as follows: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5


Financial liabilities measured at amortised cost 22,916,564 26,290,788



Demand deposits 355,905 323,546


Deposits redeemable at notice 675,554 551,116

Hybrid financial liabilities - 10

Assets ceded 4,540,859 7,181,238

Other accounts 285,587 180,233

Valuation adjustments 25,225 (4,390)


42

Note 14 Note 14 Note 14 Note 14 –––– Customer depositsCustomer depositsCustomer depositsCustomer deposits The breakdown of customer deposits in the consolidated balance sheet at 30 June 2016 and 31 December 2015 is as follows: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5


Financial liabilities measured at amortised cost 132,617,251 132,891,337



Demand depos its 88,428,867 84,536,132


Deposits redeemable at notice 34,499 -

Assets ceded 857,487 1,950,585

Valuation adjustments 205,261 13,271


B y s e c to r :B y s e c to r :B y s e c to r :B y s e c to r :

Central governments 4,144,502 5,547,511

Other sectors 128,267,488 127,330,555

Other valuation adjustments (interests, fees and commissions, and others) 205,261 13,271


Note 15 Note 15 Note 15 Note 15 –––– Debt securities issuedDebt securities issuedDebt securities issuedDebt securities issued Details of debt securities issued by the group by type of issuance and recognised on the consolidated balance sheets at 30 June 2016 and 31 December 2015 are as follows: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Straight bonds/debentures 5,929,655 5,729,404

Straight bonds 4,465,426 4,403,806

Structured bonds 405,179 266,548

Government guaranteed straight bonds 1,059,050 1,059,050

Promissory notes 4,939,941 3,937,214

M ortgage covered bonds 9,656,100 9,999,800

Territorial covered bonds - -

Securitisation trust 6,131,008 6,601,999

Subordinated debts represented by marketable securities 1,679,525 1,441,587

Subordinated bonds 1,661,125 1,423,187

Preferred shares 18,400 18,400

Valuation and other adjustments 33,076 154,367


Schedule IV shows details of new issuances during the first half of 2016.

43

Note 16 Note 16 Note 16 Note 16 –––– Liabilities under insurance or reinsurance contractsLiabilities under insurance or reinsurance contractsLiabilities under insurance or reinsurance contractsLiabilities under insurance or reinsurance contracts The balance at 30 June 2016 and 31 December 2015 of liabilities under insurance or reinsurance contracts is shown as follows: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

U n e a r n e d p r e m iu m s a n d u n e x p i r e d r i s k sU n e a r n e d p r e m iu m s a n d u n e x p i r e d r i s k sU n e a r n e d p r e m iu m s a n d u n e x p i r e d r i s k sU n e a r n e d p r e m iu m s a n d u n e x p i r e d r i s k s 6 ,7 1 26 ,7 1 26 ,7 1 26 ,7 1 2 1 ,7 8 51 ,7 8 51 ,7 8 51 ,7 8 5

N o n - l i fe i n s u r a n c e :N o n - l i fe i n s u r a n c e :N o n - l i fe i n s u r a n c e :N o n - l i fe i n s u r a n c e :

Benefits 147 147

L i fe i n s u r a n c e :L i fe i n s u r a n c e :L i fe i n s u r a n c e :L i fe i n s u r a n c e :

Mathematical reserves 1,921,721 1,873,147

Benefits 23,424 23,034

With-profits insurance and returned premiums 5,384 5,536

Life insurance in which the investment risk is borne by the policyholders 10,148 81,704

Implicit adjustments due to accounting mismatches 286,149 232,942


Of which shown as non-current liabilities included in disposal groups class ified as

held for sale 2 ,203,113 -

Liabilities under insurance or reinsurance contracts mainly include balances corresponding to Mediterráneo Vida, S.A.U. de Seguros y Reaseguros at December 2015. At the end of June 2016, these have been reclassified under Non-current assets and disposal groups and liabilities included in disposal groups classified as held for sale (see Note 12). Income and expenses of assets and liabilities under insurance and reinsurance contracts during the first half of 2016 have been recorded under the headings “Income of assets under insurance and reinsurance contracts” and “Expenses of liabilities under insurance or reinsurance contracts”, respectively, on the consolidated profit and loss account for that 6-month period.

Note 17 Note 17 Note 17 Note 17 –––– EquityEquityEquityEquity

Share capital at the end of the first half of 2016 The bank's share capital was €695,782,719.125, represented by 5,566,261,753 registered shares with a par value of €0.125 each, all of which are fully subscribed and paid.

Changes in share capital in the first half of 2016 Thousand euro

Nu m b e r o f s h a r e sNu m b e r o f s h a r e sNu m b e r o f s h a r e sNu m b e r o f s h a r e s Ca p i t a lCa p i t a lCa p i t a lCa p i t a l

Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e s a t 3 1 De c e m b e r 2 0 1 5 5 ,4 3 9 ,2 4 4 ,9 9 25 ,4 3 9 ,2 4 4 ,9 9 25 ,4 3 9 ,2 4 4 ,9 9 25 ,4 3 9 ,2 4 4 ,9 9 2 6 7 9 ,9 0 66 7 9 ,9 0 66 7 9 ,9 0 66 7 9 ,9 0 6

Capital increase due to Scrip Dividend_May 2016 127,016,761 15,877

Ba l a n c e s a t 3 0 Ju n e 2 0 1 6Ba l a n c e s a t 3 0 Ju n e 2 0 1 6Ba l a n c e s a t 3 0 Ju n e 2 0 1 6Ba l a n c e s a t 3 0 Ju n e 2 0 1 6 5 ,5 6 6 ,2 6 1 ,7 5 35 ,5 6 6 ,2 6 1 ,7 5 35 ,5 6 6 ,2 6 1 ,7 5 35 ,5 6 6 ,2 6 1 ,7 5 3 6 9 5 ,7 8 36 9 5 ,7 8 36 9 5 ,7 8 36 9 5 ,7 8 3

Due to capital increaseDue to capital increaseDue to capital increaseDue to capital increase

At a meeting on 31 March 2016, the Board of Directors of Banco Sabadell resolved to execute the resolution to increase capital with a charge to reserves that was approved by the Ordinary General Meeting of Shareholders on 31 March 2016 under the first proposal of item three of the agenda, in order to pay flexible remuneration to shareholders (scrip dividend) for an amount of approximately €0.05 per share, the par value of the capital increase being €19,997,224.125, by issuing and placing in circulation 159,977,793 new shares with a par value of €0.125 each. On 19 April 2016, date on which the negotiation period for rights to free assignment corresponding to the capital increase ended, the Executive Committee of Banco Sabadell, at its meeting on 25 April 2016, exercised the powers conferred to it by the Board of Directors on 31 March 2016, under the delegation of

44

powers conferred to the Board by the General Ordinary Meeting of Shareholders, carried out a capital increase of €15,877,095.125, by means of the issuance and allotment of 127,016,761 new ordinary shares at a par value of €0.125 each, with no issue premium, rendering the unsubscribed and unpaid part of the capital increase null and void, which amounted to €4,120,129. The public instrument of the rights issue was registered with the Barcelona Mercantile Register on 27 April 2016, and the 127,016,761 ordinary shares of €0.125 par value each that had been issued and allotted were listed on the Barcelona, Bilbao, Madrid and Valencia stock exchanges and on Spain's electronic market (Mercado Continuo) on 4 May 2016.

Other equity The balances of other equity are shown hereafter at the end of June 2016 and December 2015: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

P a ym e n ts b a s e d o n c a p i ta l i n s t r u m e n tsP a ym e n ts b a s e d o n c a p i ta l i n s t r u m e n tsP a ym e n ts b a s e d o n c a p i ta l i n s t r u m e n tsP a ym e n ts b a s e d o n c a p i ta l i n s t r u m e n ts 28,388 14,322

This heading includes payments with capital instruments accounted as capital instruments relative to incentive plans based on shares described in Note 37 to the 2015 consolidated financial statements.

Note 18 Note 18 Note 18 Note 18 –––– GuaranteesGuaranteesGuaranteesGuarantees givengivengivengiven The breakdown of guarantees given is as follows: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Financial guarantees 1,846,267 1,874,676

Assets earmarked for third-party obligations - -

Irrevocable documentary credit 1,123,408 1,112,265

Additional settlement guarantee 20,000 -

Other guarantees and sureties given 5,364,433 5,369,226

Other contingent liabilities - -


Non-performing guarantees given The balance of non-performing guarantees given at 30 June 2016 amounts to €97,201 thousand (€89,827 thousand at 31 December 2015). Credit risk hedging for non-performing guarantees given is as follows: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Co ve r a ge d e te r m in e d i n d i v i d u a l l y :Co ve r a ge d e te r m in e d i n d i v i d u a l l y :Co ve r a ge d e te r m in e d i n d i v i d u a l l y :Co ve r a ge d e te r m in e d i n d i v i d u a l l y : 1 9 ,5 4 91 9 ,5 4 91 9 ,5 4 91 9 ,5 4 9 1 5 ,5 4 21 5 ,5 4 21 5 ,5 4 21 5 ,5 4 2

Hedging of insolvency risk 19,549 15,542

Co ve r a ge d e te r m in e d c o l l e c t i ve l y :Co ve r a ge d e te r m in e d c o l l e c t i ve l y :Co ve r a ge d e te r m in e d c o l l e c t i ve l y :Co ve r a ge d e te r m in e d c o l l e c t i ve l y : 2 9 ,1 1 02 9 ,1 1 02 9 ,1 1 02 9 ,1 1 0 3 0 ,9 7 83 0 ,9 7 83 0 ,9 7 83 0 ,9 7 8

Hedging of insolvency risk 27,823 29,646

Allowance for country risk 1,287 1,332

IB NR c o ve r a ge (* )IB NR c o ve r a ge (* )IB NR c o ve r a ge (* )IB NR c o ve r a ge (* ) 7 7 ,3 7 27 7 ,3 7 27 7 ,3 7 27 7 ,3 7 2 6 7 ,1 5 96 7 ,1 5 96 7 ,1 5 96 7 ,1 5 9


(*) Co llect ive value ad justment s fo r losses incurred but no t repo rt ed . This hedging is recognised under the liabilities provision item.

45

Note 19 Note 19 Note 19 Note 19 –––– CCCContingent commitmentsontingent commitmentsontingent commitmentsontingent commitments givengivengivengiven The composition of this item at 30 June 2016 and 31 December 2015 was as follows: Tho usand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Drawable by third parties 18,620,759 19,306,331

Credit institutions 632 652

Central governments sector 372,041 615,956

Other resident sectors 10,863,422 10,567,226

Non-residents 7,384,664 8,122,497

Financial asset forward purchase commitments 1,254,982 426,102

Conventional financial asset purchase contracts 92,242 652,802

Subscribed securities pending payment 1,939 -

Securities placement and subscription commitments - -

Other contingent commitments given 213,224 745,379


Note 20 Note 20 Note 20 Note 20 –––– Interest income and expenses Interest income and expenses Interest income and expenses Interest income and expenses These items on the consolidated profit and loss statement include interests accrued during the period for all financial assets and liabilities whose yield, implicit or explicit, is obtained by applying the effective interest rate approach, regardless of whether they are valued at fair value or otherwise, and using product adjustments due to accounting hedges. Interests are recorded at gross value, without deducting any tax withholdings exercised at the source. The majority of interest income and expenses is generated by the group’s financial assets measured either at amortised cost or at fair value with changes in net equity. The quarterly net interest income since 2016 and the average income and expenses of the various components that make up the total loans and advances and customer funds are broken down as follows: Thousand euro

Average balance Rate % Profit/(loss) Average balance Rate % Profit/(loss) Average balance Rate % Profit/(loss) Average balance Rate % Profit/(loss)

Aver age yie ld o f the investmentAver age yie ld o f the investmentAver age yie ld o f the investmentAver age yie ld o f the investment 204 ,80 5 ,768204 ,80 5 ,768204 ,80 5 ,768204 ,80 5 ,768 2 .622 .622 .622 .62 1 ,3 32 ,6861 ,3 32 ,6861 ,3 32 ,6861 ,3 32 ,686 207 ,15 2 ,833207 ,15 2 ,833207 ,15 2 ,833207 ,15 2 ,833 2 .532 .532 .532 .53 1 ,3 01 ,8501 ,3 01 ,8501 ,3 01 ,8501 ,3 01 ,850 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 2 ,634 ,5362 ,634 ,5362 ,634 ,5362 ,634 ,536

Cash and cash balances at central banks 8,715,273 0.40 8,573 10,281,886 0.35 9,067 17 ,64017 ,64017 ,64017 ,640

Loans and advances 138,493,620 3.28 1,129,678 139,254,470 3.21 1,112,814 2 ,242 ,4922 ,242 ,4922 ,242 ,4922 ,242 ,492

Fixed-income portfolio (*) 27,244,720 2.60 175,880 27,415,453 2.34 159,309 335 ,189335 ,189335 ,189335 ,189

Equity portfolio 966,252 - - 980,312 - - --

Assets and intangible assets 4,801,034 - - 5,282,354 - - --

Rest of other assets 24,584,869 0.30 18,555 23,938,358 0.35 20,660 39 ,21539 ,21539 ,21539 ,215

Aver age cos t o f res our cesAver age cos t o f res our cesAver age cos t o f res our cesAver age cos t o f res our ces 204 ,80 5 ,768204 ,80 5 ,768204 ,80 5 ,768204 ,80 5 ,768 (0 .70 )(0 .70 )(0 .70 )(0 .70 ) (358 ,793 )(358 ,793 )(358 ,793 )(358 ,793 ) 207 ,15 2 ,833207 ,15 2 ,833207 ,15 2 ,833207 ,15 2 ,833 (0 .65 )(0 .65 )(0 .65 )(0 .65 ) (333 ,268 )(333 ,268 )(333 ,268 )(333 ,268 ) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (692 ,06 1 )(692 ,06 1 )(692 ,06 1 )(692 ,06 1 )

Credit institutions 18,204,599 (0.60) (27,174) 18,622,667 (0.60) (28,004) (55 ,178 )(55 ,178 )(55 ,178 )(55 ,178 )

Customer deposits 126,728,578 (0.44) (139,626) 129,503,193 (0.40) (128,697) (268 ,32 3 )(268 ,32 3 )(268 ,32 3 )(268 ,32 3 )

Capital market 30,640,997 (2.12) (161,610) 30,264,910 (1.89) (142,108) (303 ,71 8 )(303 ,71 8 )(303 ,71 8 )(303 ,71 8 )

Assignments fixed-income portfolio 6,825,602 (0.64) (10,822) 5,797,497 (0.79) (11,442) (22 ,264 )(22 ,264 )(22 ,264 )(22 ,264 )

Other liabilities 9,832,268 (0.80) (19,561) 10,046,358 (0.92) (23,017) (42 ,578 )(42 ,578 )(42 ,578 )(42 ,578 )

Own funds 12,573,724 - - 12,918,208 - - ----

Net inter es t incomeNet inter es t incomeNet inter es t incomeNet inter es t income 1 ,942 ,4751 ,942 ,4751 ,942 ,4751 ,942 ,475

Tota l ATAsTota l ATAsTota l ATAsTota l ATAs - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Ratio (margin / ATA)Ratio (margin / ATA)Ratio (margin / ATA)Ratio (margin / ATA) - - - - - - - -

(*) Includes €4,600 thousand corresponding to interests from financial assets designated at fair value through profit or loss (financial assets held for trading).


9 73 ,8939 73 ,8939 73 ,8939 73 ,893 9 68 ,5829 68 ,5829 68 ,5829 68 ,582

204 ,805 ,768204 ,805 ,768204 ,805 ,768204 ,805 ,768 207 ,152 ,833207 ,152 ,833207 ,152 ,833207 ,152 ,833

1 .911 .911 .911 .91 1 .881 .881 .881 .88

20 1620 1620 1620 16

1st quarter 2nd quarter 3rd quarter 4th quarter

Thousand euro

Average balance Rate % Profit/(loss) Average balance Rate % Profit/(loss) Average balance Rate % Profit/(loss) Average balance Rate % Profit/(loss)

Aver age yie ld o f the inves tmentAver age yie ld o f the inves tmentAver age yie ld o f the inves tmentAver age yie ld o f the inves tment 1 6 6 ,1 1 3 ,4 6 81 6 6 ,1 1 3 ,4 6 81 6 6 ,1 1 3 ,4 6 81 6 6 ,1 1 3 ,4 6 8 2 .6 32 .6 32 .6 32 .6 3 1 ,0 7 7 ,2 4 81 ,0 7 7 ,2 4 81 ,0 7 7 ,2 4 81 ,0 7 7 ,2 4 8 1 6 5 ,9 5 9 ,8 7 31 6 5 ,9 5 9 ,8 7 31 6 5 ,9 5 9 ,8 7 31 6 5 ,9 5 9 ,8 7 3 2 .5 42 .5 42 .5 42 .5 4 1 ,0 5 0 ,3 3 81 ,0 5 0 ,3 3 81 ,0 5 0 ,3 3 81 ,0 5 0 ,3 3 8 2 0 4 ,2 2 3 ,2 1 52 0 4 ,2 2 3 ,2 1 52 0 4 ,2 2 3 ,2 1 52 0 4 ,2 2 3 ,2 1 5 2 .6 32 .6 32 .6 32 .6 3 1 ,3 5 2 ,6 3 31 ,3 5 2 ,6 3 31 ,3 5 2 ,6 3 31 ,3 5 2 ,6 3 3 2 0 9 ,1 8 9 ,2 0 62 0 9 ,1 8 9 ,2 0 62 0 9 ,1 8 9 ,2 0 62 0 9 ,1 8 9 ,2 0 6 2 .5 82 .5 82 .5 82 .5 8 1 ,3 6 2 ,1 3 71 ,3 6 2 ,1 3 71 ,3 6 2 ,1 3 71 ,3 6 2 ,1 3 7 4 ,8 4 2 ,3 5 64 ,8 4 2 ,3 5 64 ,8 4 2 ,3 5 64 ,8 4 2 ,3 5 6

Cash and cash balances at central banks 4,506,907 0.69 7,620 4,239,111 0.72 7,608 10,017,261 0.58 14,711 10,593,706 0.46 12,265 4 2 ,2 0 44 2 ,2 0 44 2 ,2 0 44 2 ,2 0 4

Loans and advances 105,699,264 3.32 866,029 106,085,332 3.20 845,109 135,423,423 3.29 1,122,412 137,816,428 3.28 1,140,285 3 ,9 7 3 ,8 3 53 ,9 7 3 ,8 3 53 ,9 7 3 ,8 3 53 ,9 7 3 ,8 3 5

Fixed-income portfolio (*) 26,659,263 2.94 193,159 26,000,342 2.87 186,025 28,002,837 2.73 192,541 28,859,636 2.64 191,805 7 6 3 ,5 3 07 6 3 ,5 3 07 6 3 ,5 3 07 6 3 ,5 3 0

Equity portfolio 1,466,208 - - 1,765,119 - - 1,291,662 - - 1,207,389 - - ----

Assets and intangible assets 3,712,828 - - 3,486,114 - - 4,795,049 - - 4,900,001 - - ----

Rest of other assets 24,068,998 0.18 10,440 24,383,855 0.19 11,596 24,692,983 0.37 22,969 25,812,046 0.27 17,782 6 2 ,7 8 76 2 ,7 8 76 2 ,7 8 76 2 ,7 8 7

Aver age cos t o f res our cesAver age cos t o f res our cesAver age cos t o f res our cesAver age cos t o f res our ces 1 6 6 ,1 1 3 ,4 6 81 6 6 ,1 1 3 ,4 6 81 6 6 ,1 1 3 ,4 6 81 6 6 ,1 1 3 ,4 6 8 (1 .0 6 )(1 .0 6 )(1 .0 6 )(1 .0 6 ) (4 3 4 ,1 7 1 )(4 3 4 ,1 7 1 )(4 3 4 ,1 7 1 )(4 3 4 ,1 7 1 ) 1 6 5 ,9 5 9 ,8 7 31 6 5 ,9 5 9 ,8 7 31 6 5 ,9 5 9 ,8 7 31 6 5 ,9 5 9 ,8 7 3 (0 .9 5 )(0 .9 5 )(0 .9 5 )(0 .9 5 ) (3 9 4 ,4 3 7 )(3 9 4 ,4 3 7 )(3 9 4 ,4 3 7 )(3 9 4 ,4 3 7 ) 2 0 4 ,2 2 3 ,2 1 52 0 4 ,2 2 3 ,2 1 52 0 4 ,2 2 3 ,2 1 52 0 4 ,2 2 3 ,2 1 5 (0 .8 0 )(0 .8 0 )(0 .8 0 )(0 .8 0 ) (4 1 1 ,3 1 7 )(4 1 1 ,3 1 7 )(4 1 1 ,3 1 7 )(4 1 1 ,3 1 7 ) 2 0 9 ,1 8 9 ,2 0 62 0 9 ,1 8 9 ,2 0 62 0 9 ,1 8 9 ,2 0 62 0 9 ,1 8 9 ,2 0 6 (0 .7 6 )(0 .7 6 )(0 .7 6 )(0 .7 6 ) (3 9 9 ,6 0 1 )(3 9 9 ,6 0 1 )(3 9 9 ,6 0 1 )(3 9 9 ,6 0 1 ) (1 ,6 3 9 ,5 2 6 )(1 ,6 3 9 ,5 2 6 )(1 ,6 3 9 ,5 2 6 )(1 ,6 3 9 ,5 2 6 )

Credit institutions 15,819,325 (1.06) (41,192) 16,682,943 (0.91) (37,966) 18,932,939 (0.74) (35,120) 18,554,312 (0.56) (26,341) (1 4 0 ,6 1 9 )(1 4 0 ,6 1 9 )(1 4 0 ,6 1 9 )(1 4 0 ,6 1 9 )

Customer deposits 92,350,893 (0.88) (200,352) 93,214,329 (0.73) (169,704) 126,974,770 (0.62) (198,163) 127,755,652 (0.53) (170,767) (7 3 8 ,9 8 6 )(7 3 8 ,9 8 6 )(7 3 8 ,9 8 6 )(7 3 8 ,9 8 6 )

Capital market 25,895,734 (2.71) (173,287) 25,814,242 (2.56) (164,870) 25,989,440 (2.35) (153,697) 29,439,078 (2.27) (168,539) (6 6 0 ,3 9 3 )(6 6 0 ,3 9 3 )(6 6 0 ,3 9 3 )(6 6 0 ,3 9 3 )

Assignments fixed-income portfolio 10,118,263 (0.42) (10,564) 8,425,452 (0.43) (9,016) 9,767,542 (0.28) (6,936) 10,179,453 (0.59) (15,052) (4 1 ,5 6 7 )(4 1 ,5 6 7 )(4 1 ,5 6 7 )(4 1 ,5 6 7 )

Other liabilities 10,323,239 (0.34) (8,776) 9,485,553 (0.54) (12,881) 10,312,976 (0.67) (17,401) 10,468,171 (0.72) (18,902) (5 7 ,9 6 1 )(5 7 ,9 6 1 )(5 7 ,9 6 1 )(5 7 ,9 6 1 )

Own funds 11,606,014 - - 12,337,354 - - 12,245,548 - - 12,792,540 - - ----

Net in ter es t incomeNet in ter es t incomeNet in ter es t incomeNet in ter es t income 3 ,2 0 2 ,8 3 03 ,2 0 2 ,8 3 03 ,2 0 2 ,8 3 03 ,2 0 2 ,8 3 0

Tota l ATAsTota l ATAsTota l ATAsTota l ATAs - - - - - - - -

Ratio (margin / ATA)Ratio (margin / ATA)Ratio (margin / ATA)Ratio (margin / ATA) - - - - - - - -

(*) Includes €6,799 thousand corresponding to interests from financial assets designated at fair value through profit or loss (financial assets held for trading)


6 4 3 ,0 7 76 4 3 ,0 7 76 4 3 ,0 7 76 4 3 ,0 7 7 6 5 5 ,9 0 16 5 5 ,9 0 16 5 5 ,9 0 16 5 5 ,9 0 1 9 4 1 ,3 1 69 4 1 ,3 1 69 4 1 ,3 1 69 4 1 ,3 1 6 9 6 2 ,5 3 69 6 2 ,5 3 69 6 2 ,5 3 69 6 2 ,5 3 6

1st quarter 2nd quarter 3rd quarter 4th quarter

1 .5 71 .5 71 .5 71 .5 7 1 .5 91 .5 91 .5 91 .5 9 1 .8 31 .8 31 .8 31 .8 3 1 .8 31 .8 31 .8 31 .8 3

2 0 1 52 0 1 52 0 1 52 0 1 5

1 6 6 ,1 1 3 ,4 6 81 6 6 ,1 1 3 ,4 6 81 6 6 ,1 1 3 ,4 6 81 6 6 ,1 1 3 ,4 6 8 1 6 5 ,9 5 9 ,8 7 31 6 5 ,9 5 9 ,8 7 31 6 5 ,9 5 9 ,8 7 31 6 5 ,9 5 9 ,8 7 3 2 0 4 ,2 2 3 ,2 1 52 0 4 ,2 2 3 ,2 1 52 0 4 ,2 2 3 ,2 1 52 0 4 ,2 2 3 ,2 1 5 2 0 9 ,1 8 9 ,2 0 62 0 9 ,1 8 9 ,2 0 62 0 9 ,1 8 9 ,2 0 62 0 9 ,1 8 9 ,2 0 6

46

Good interest income performance in the first half of 2016 has been attributable mainly to the steady reduction in the cost of deposits and wholesale market funding, which offset the decline in investment yields. As a result, the spread on average total assets was 1.88% in the second quarter of 2016 (1.59% in the second quarter of 2015). The following table shows, for loans and deposits in the branch network in Spain (not including operations at foreign subsidiaries or branches), the contractual spread on transactions arranged each quarter in 2015 and 2016 (new business) and the resulting final portfolio (stock) at the end of each period: Bas is po int spreadBas is po int spreadBas is po int spreadBas is po int spread

Q1Q1Q1Q1 Q2Q2Q2Q2 Q3Q3Q3Q3 Q4Q4Q4Q4 Q1Q1Q1Q1 Q2Q2Q2Q2 Q1Q1Q1Q1 Q2Q2Q2Q2 Q3Q3Q3Q3 Q4Q4Q4Q4 Q1Q1Q1Q1 Q2Q2Q2Q2

Credit 243 275 247 271 225 257 293 276 263 272 243 234

Loans 236 247 282 279 243 261 245 239 234 230 232 238

Home mortgage loans 197 179 181 182 179 163 97 99 100 101 101 104

Leasing 322 304 279 270 294 297 198 203 206 210 214 218

Contract-hire 557 514 574 528 532 429 598 570 562 568 558 521

Discounting 364 332 315 310 316 296 386 349 344 338 342 315

Confirming 332 296 284 273 261 265 331 296 280 260 255 252

Forfaiting 579 573 586 463 469 438 609 588 656 535 534 457

Loans and receivablesLoans and receivablesLoans and receivablesLoans and receivables 293293293293 282282282282 278278278278 272272272272 263263263263 261261261261 181181181181 178178178178 176176176176 175175175175 175175175175 178178178178

1-month deposit with agreed maturity 33 32 33 34 54 76 34 30 34 35 60 76

3-month deposit with agree maturity 38 39 38 48 61 69 38 37 37 49 60 71



>12-month deposit with agreed maturity 36 30 34 39 54 46 118 106 92 71 64 53

Time depos itsTime depos itsTime depos itsTime depos its 37373737 34343434 32323232 37373737 50505050 49494949 93939393 79797979 66666666 54545454 51515151 45454545

Corresponds to Business in Spain - branch network activity.

Additions (quarter ly average)Additions (quarter ly average)Additions (quarter ly average)Additions (quarter ly average) StockStockStockStock

2015201520152015 2016201620162016 2015201520152015 2016201620162016

With respect to the existing home mortgages portfolio at 30 June 2016, the breakdown on the basis of when the interest rate on the transaction is to be reviewed is as follows: Tho usand euro

M o r tga ge r e p r i c i n g s c h e d u leM o r tga ge r e p r i c i n g s c h e d u leM o r tga ge r e p r i c i n g s c h e d u leM o r tga ge r e p r i c i n g s c h e d u le Q 3 1 6Q 3 1 6Q 3 1 6Q 3 1 6 Q4 1 6Q4 1 6Q4 1 6Q4 1 6 Q1 1 7Q1 1 7Q1 1 7Q1 1 7 Q 2 1 7Q 2 1 7Q 2 1 7Q 2 1 7 T o ta lT o ta lT o ta lT o ta l

Home mortgages 7,926,410 8,784,734 7,069,725 7,436,973 3 1 ,2 1 7 ,8 4 23 1 ,2 1 7 ,8 4 23 1 ,2 1 7 ,8 4 23 1 ,2 1 7 ,8 4 2

Co rresp onds t o B usiness in Sp ain - b ranch network act ivit y.

New deposits through 30 June 2016 and 2015, broken down by contractual maturity, are as follows: € millio n

De p o s i ts b y m a tu r i tyDe p o s i ts b y m a tu r i tyDe p o s i ts b y m a tu r i tyDe p o s i ts b y m a tu r i ty

Q 1Q 1Q 1Q 1 Q2Q2Q2Q2 Q 3Q 3Q 3Q 3 Q4Q4Q4Q4 Q 1Q 1Q 1Q 1 Q2Q2Q2Q2

Up to 3 months 2,866 3,013 2,877 2,908 2,653 2,797

from 3 to 6 months 951 917 758 908 664 635

from 6 to 12 months 3,212 4,612 4,051 4,556 4,112 4,359

from 12 to 18 months 844 1,008 753 754 629 771

more than 18 months 2,401 2,122 2,407 4,169 2,671 2,257

T o ta l d e p o s i tsT o ta l d e p o s i tsT o ta l d e p o s i tsT o ta l d e p o s i ts 1 0 ,2 7 41 0 ,2 7 41 0 ,2 7 41 0 ,2 7 4 1 1 ,6 7 21 1 ,6 7 21 1 ,6 7 21 1 ,6 7 2 1 0 ,8 4 61 0 ,8 4 61 0 ,8 4 61 0 ,8 4 6 1 3 ,2 9 51 3 ,2 9 51 3 ,2 9 51 3 ,2 9 5 1 0 ,7 2 91 0 ,7 2 91 0 ,7 2 91 0 ,7 2 9 1 0 ,8 1 91 0 ,8 1 91 0 ,8 1 91 0 ,8 1 9

%

Up to 3 months 27.9 25.8 26.5 21.9 24.7 25.9

from 3 to 6 months 9.3 7.9 7.0 6.8 6.2 5.9

from 6 to 12 months 31.3 39.5 37.4 34.3 38.3 40.3

from 12 to 18 months 8.2 8.6 6.9 5.7 5.9 7.1

more than 18 months 23.4 18.2 22.2 31.4 24.9 20.9

T o ta l d e p o s i tsT o ta l d e p o s i tsT o ta l d e p o s i tsT o ta l d e p o s i ts 1 0 01 0 01 0 01 0 0 1 0 01 0 01 0 01 0 0 1 0 01 0 01 0 01 0 0 1 0 01 0 01 0 01 0 0 1 0 01 0 01 0 01 0 0 1 0 01 0 01 0 01 0 0

A d d i t i o n s i n th e q u a r te rA d d i t i o n s i n th e q u a r te rA d d i t i o n s i n th e q u a r te rA d d i t i o n s i n th e q u a r te r

2 0 1 52 0 1 52 0 1 52 0 1 5 2 0 1 62 0 1 62 0 1 62 0 1 6

47

Note 21 Note 21 Note 21 Note 21 –––– Fee and commission income and expensesFee and commission income and expensesFee and commission income and expensesFee and commission income and expenses Fee and commission income and expenses on financial operations and the provision of services are as follows: Tho usand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

F e e s d e r i ve d f r o m r i s k o p e r a t i o n sF e e s d e r i ve d f r o m r i s k o p e r a t i o n sF e e s d e r i ve d f r o m r i s k o p e r a t i o n sF e e s d e r i ve d f r o m r i s k o p e r a t i o n s 1 5 8 ,5 9 11 5 8 ,5 9 11 5 8 ,5 9 11 5 8 ,5 9 1 1 0 8 ,7 0 61 0 8 ,7 0 61 0 8 ,7 0 61 0 8 ,7 0 6

Lending 108,147 57,183

Guarantees 50,444 51,523

S e r v i c e fe e sS e r v i c e fe e sS e r v i c e fe e sS e r v i c e fe e s 2 5 7 ,7 8 42 5 7 ,7 8 42 5 7 ,7 8 42 5 7 ,7 8 4 2 2 2 ,8 3 62 2 2 ,8 3 62 2 2 ,8 3 62 2 2 ,8 3 6

Cards 107,225 74,765

Payment orders 24,411 23,452

Securities 25,229 27,557

Demand deposits 44,659 40,744

Rest 56,260 56,318

A s s e t m a n a g e m e n t fe e sA s s e t m a n a g e m e n t fe e sA s s e t m a n a g e m e n t fe e sA s s e t m a n a g e m e n t fe e s 1 5 3 ,8 6 41 5 3 ,8 6 41 5 3 ,8 6 41 5 3 ,8 6 4 1 2 2 ,5 0 51 2 2 ,5 0 51 2 2 ,5 0 51 2 2 ,5 0 5

Investment funds 71,755 71,999

Marketing of pension funds and insurance 68,453 37,000

Asset management 13,656 13,506


M e m o r a n d u m i te mM e m o r a n d u m i te mM e m o r a n d u m i te mM e m o r a n d u m i te m

Fee and commission income 682,268 498,021

Fee and commission expenses (112,029) (43,974)

N e t fe e s a n d c o m m is s i o n sN e t fe e s a n d c o m m is s i o n sN e t fe e s a n d c o m m is s i o n sN e t fe e s a n d c o m m is s i o n s 5 7 0 ,2 3 95 7 0 ,2 3 95 7 0 ,2 3 95 7 0 ,2 3 9 4 5 4 ,0 4 74 5 4 ,0 4 74 5 4 ,0 4 74 5 4 ,0 4 7

Note 22 Note 22 Note 22 Note 22 –––– Income from financial transactions (net)Income from financial transactions (net)Income from financial transactions (net)Income from financial transactions (net) The composition of this item in the consolidated profit and loss statement at 30 June 2016 and 2015 was as follows: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

By typ e o f f i n a n c ia l i n s t r u m e n t :By typ e o f f i n a n c ia l i n s t r u m e n t :By typ e o f f i n a n c ia l i n s t r u m e n t :By typ e o f f i n a n c ia l i n s t r u m e n t :

Net gain/(loss) on debt securities 365,502 1,021,878

Net gain/(loss) on other equity instruments 111,972 20,124

Net gain/(loss) on derivatives 2,888 100,587

Net gain/(loss) other items (*) 22,445 (28,321)

T o ta lT o ta lT o ta lT o ta l 5 0 2 ,8 0 85 0 2 ,8 0 85 0 2 ,8 0 85 0 2 ,8 0 8 1 ,1 1 4 ,2 6 81 ,1 1 4 ,2 6 81 ,1 1 4 ,2 6 81 ,1 1 4 ,2 6 8

(*) M ainly includ es gain/ (lo ss) o n sale o f vario us lo an po rt f o lios so ld t hrougho ut the year. On 2 November 2015, Visa Inc. announced a tender offer to purchase 100% of Visa Europe shares, which materialised on 21 June 2016. The consideration for shares owned by the group consisted in the up-front delivery of a cash amount plus the delivery of convertible preferred shares of Visa Inc., as well as a cash amount payable within 3 years. The recorded capital gain amounted to €109 million.

NotNotNotNote 23 e 23 e 23 e 23 –––– Other operating income Other operating income Other operating income Other operating income The composition of this item in the consolidated profit and loss statement at 30 June 2016 and 2015 was as follows: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

Operating income from investment property 48,971 45,995

Sales and other income from provis ion of non-financial services 30,732 21,517

Other operating income 29,364 23,652

T o ta lT o ta lT o ta lT o ta l 1 0 9 ,0 6 81 0 9 ,0 6 81 0 9 ,0 6 81 0 9 ,0 6 8 9 1 ,1 6 49 1 ,1 6 49 1 ,1 6 49 1 ,1 6 4

48

Sales and income from the provision of non-financial services include income generated by the management of real estate asset portfolios from other entities (Sareb, the Spanish company for the management of assets proceeding from the restructuring of the banking system).

Note 24 Note 24 Note 24 Note 24 –––– Other operating expensesOther operating expensesOther operating expensesOther operating expenses The composition of this item in the consolidated profit and loss statement at 30 June 2016 and 2015 was as follows: Thousand euro

30/06/201630/06/201630/06/201630/06/2016 30/06/201530/06/201530/06/201530/06/2015

Contribution to deposit guarantee funds (12,075) (1,459)

Other items (171,012) (84,785)

Of which: Contribution to resolution fund (47,661) -

TotalTotalTotalTotal (183,088)(183,088)(183,088)(183,088) (86 ,244)(86 ,244)(86 ,244)(86 ,244) The item Contributions to deposit guarantee funds includes, at 30 June 2016, a €10.5 million contribution to the UK Financial Services Compensation Scheme. Other items includes, at 30 June 2016, the estimated financial contribution for converting deferred tax assets into credit receivable by the Spanish Tax Authority of €28.5 million, which is recognised following the accrual criteria throughout the year.

Note 25 Note 25 Note 25 Note 25 –––– Administrative expenses Administrative expenses Administrative expenses Administrative expenses This heading in the consolidated profit and loss statement includes expenses incurred by the group in respect of staff and other administrative expenses. Staff expensesStaff expensesStaff expensesStaff expenses

The staff expenses charged to the consolidated profit and loss statement at 30 June 2016 and 2015 are as follows: Thousand euro

30/06/201630/06/201630/06/201630/06/2016 30/06/201530/06/201530/06/201530/06/2015

Salaries and bonuses, serving employees (614,724) (447,107)

Social Security contributions (120,595) (100,955)

Contributions to defined benefit plans (1,502) (2,978)

Contributions to defined contribution plans (34,925) (13,469)

Other staff expenses (56,914) (50,996)

TotalTotalTotalTotal (828 ,660)(828 ,660)(828 ,660)(828 ,660) (615,505)(615,505)(615,505)(615,505)

The average workforce of the bank and group in the six-month periods ended 30 June 2016 and 30 June 2015 is detailed below: Number o f emp loyees

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

A ve r a ge w o r k fo r c eA ve r a ge w o r k fo r c eA ve r a ge w o r k fo r c eA ve r a ge w o r k fo r c e 1 6 ,0 4 61 6 ,0 4 61 6 ,0 4 61 6 ,0 4 6 1 6 ,0 5 31 6 ,0 5 31 6 ,0 5 31 6 ,0 5 3 2 6 ,0 7 32 6 ,0 7 32 6 ,0 7 32 6 ,0 7 3 1 7 ,6 3 31 7 ,6 3 31 7 ,6 3 31 7 ,6 3 3

Men 8,012 8,109 11,561 8,799

Women 8,034 7,944 14,512 8,834

B a n c o d e S a b a d e l l , S .A .B a n c o d e S a b a d e l l , S .A .B a n c o d e S a b a d e l l , S .A .B a n c o d e S a b a d e l l , S .A . Ba n c o S a b a d e l l g r o u pBa n c o S a b a d e l l g r o u pBa n c o S a b a d e l l g r o u pBa n c o S a b a d e l l g r o u p

The average workforce of the group in 2016 increased due to the incorporation of employees from TSB since 30 June 2015.

49

At 30 June 2016 and 2015, the distribution of employees by category and gender is as follows: Number o f emp loyees

M e nM e nM e nM e n W o m e nW o m e nW o m e nW o m e n T o ta lT o ta lT o ta lT o ta l M e nM e nM e nM e n W o m e nW o m e nW o m e nW o m e n T o ta lT o ta lT o ta lT o ta l

Management personnel 488 145 6 3 36 3 36 3 36 3 3 496 129 6 2 56 2 56 2 56 2 5

Technical personnel 9,392 9,650 1 9 ,0 4 21 9 ,0 4 21 9 ,0 4 21 9 ,0 4 2 9,332 9,360 1 8 ,6 9 21 8 ,6 9 21 8 ,6 9 21 8 ,6 9 2

Administrative personnel 1,638 4,677 6 ,3 1 56 ,3 1 56 ,3 1 56 ,3 1 5 1,806 5,053 6 ,8 5 96 ,8 5 96 ,8 5 96 ,8 5 9

T o ta lT o ta lT o ta lT o ta l 1 1 ,5 1 81 1 ,5 1 81 1 ,5 1 81 1 ,5 1 8 1 4 ,4 7 21 4 ,4 7 21 4 ,4 7 21 4 ,4 7 2 2 5 ,9 9 02 5 ,9 9 02 5 ,9 9 02 5 ,9 9 0 1 1 ,6 3 41 1 ,6 3 41 1 ,6 3 41 1 ,6 3 4 1 4 ,5 4 21 4 ,5 4 21 4 ,5 4 21 4 ,5 4 2 2 6 ,1 7 62 6 ,1 7 62 6 ,1 7 62 6 ,1 7 6

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

The decrease in the group’s workforce at 30 June 2016 has mainly occurred in TSB. Non-recurring staff expenses amounted to €24,075 thousand in the period ended 30 June 2016 (€24,741 thousand in the period ended 30 June 2015). Other administrative expensesOther administrative expensesOther administrative expensesOther administrative expenses

This heading includes all other administrative expenses incurred during the periods: Tho usand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

For property, plant and equipment (127,621) (75,898)

IT equipment (124,198) (50,393)

Communications (23,671) (17,836)

Advertis ing and publicity (56,060) (21,332)

Outsourced administrative services (46,916) (25,254)

Levies and taxes (50,978) (51,877)

Technical reports (16,547) (8,229)

Vigilance and fund transport services (10,119) (8,398)

Entertainment expenses and staff travel expenses (9,403) (7,440)

Membership fees (7,140) (8,162)

Other expenses (24,305) (17,674)

T o ta lT o ta lT o ta lT o ta l (4 9 6 ,9 5 9 )(4 9 6 ,9 5 9 )(4 9 6 ,9 5 9 )(4 9 6 ,9 5 9 ) (2 9 2 ,4 9 3 )(2 9 2 ,4 9 3 )(2 9 2 ,4 9 3 )(2 9 2 ,4 9 3 ) At 30 June 2016, other non-recurring administrative expenses amounted to €6,704 thousand, compared with €2,312 thousand at 30 June 2015. The cost-to-income ratio (staff expenses and other general administrative expenses / gross income) stood at 49.97% at 30 June 2016, 48.96% at 31 December 2015, and 46.53% at 30 June 2015. To calculate these cost-to-income ratios, gross income in both years has been adjusted, linearising income from financial transactions and including the linear accrual of contributions to the Deposit Guarantee Fund and the National Resolution Fund. Information about the group's branches is given below: Numb er o f b ranches

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

B r a n c h e sB r a n c h e sB r a n c h e sB r a n c h e s 2 ,8 0 62 ,8 0 62 ,8 0 62 ,8 0 6 2 ,9 1 92 ,9 1 92 ,9 1 92 ,9 1 9

Inside Spain 2,141 2,235

Outs ide Spain 665 684

50

Note 26 Note 26 Note 26 Note 26 –––– Impairment or (Impairment or (Impairment or (Impairment or (----) reversal of impairmen) reversal of impairmen) reversal of impairmen) reversal of impairment on financial assets not measured at t on financial assets not measured at t on financial assets not measured at t on financial assets not measured at fair value through profit or lossfair value through profit or lossfair value through profit or lossfair value through profit or loss The composition of this item in the consolidated profit and loss statement of the group at 30 June 2016 and 31 December 2015 was as follows: Tho usand euro

No teNo teNo teNo te 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

Available-for-sale financial assets (9 7 ,4 0 8 )(9 7 ,4 0 8 )(9 7 ,4 0 8 )(9 7 ,4 0 8 ) (1 9 ,3 6 4 )(1 9 ,3 6 4 )(1 9 ,3 6 4 )(1 9 ,3 6 4 )

Debt securities 1,481 (223)

Other equity instruments (98,889) (19,141)

Loans and receivables (*) 8 (5 0 2 ,1 6 7 )(5 0 2 ,1 6 7 )(5 0 2 ,1 6 7 )(5 0 2 ,1 6 7 ) (1 ,1 6 0 ,9 6 8 )(1 ,1 6 0 ,9 6 8 )(1 ,1 6 0 ,9 6 8 )(1 ,1 6 0 ,9 6 8 )

T o ta lT o ta lT o ta lT o ta l (5 9 9 ,5 7 5 )(5 9 9 ,5 7 5 )(5 9 9 ,5 7 5 )(5 9 9 ,5 7 5 ) (1 ,1 8 0 ,3 3 2 )(1 ,1 8 0 ,3 3 2 )(1 ,1 8 0 ,3 3 2 )(1 ,1 8 0 ,3 3 2 )

(*) This f ig ure eq uals the sum o f the p rovisions/ reversals charg ed o r cred it ed to t he inco me statement in respect o f value ad just ments mad e t o cover cred it risk, the writ e-o f f s charged to the income st at ement in relat io n to imp aired f inancial asset s writ t en o f f and the recovery o f unco llected deb t s. During the first half of the year, the group’s shareholding in Banco Comercial Português, S.A. (BCP) registered an impairment of €92 million.

Note 27 Note 27 Note 27 Note 27 –––– Impairment or (Impairment or (Impairment or (Impairment or (----) reversal of impairment on non) reversal of impairment on non) reversal of impairment on non) reversal of impairment on non----financial assets financial assets financial assets financial assets The breakdown of losses due to impairment or reversal of impairment on non-financial assets at 30 June 2016 and 2015 is as follows: Thousand euro

N o teN o teN o teN o te 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

Property plant and equipment 9 (41) 1,488

Investment property 9 (61,313) (107,402)

Goodwill and other intangible assets - -

Inventories 11 (180,966) (307,117)

T o ta lT o ta lT o ta lT o ta l (2 4 2 ,3 2 0 )(2 4 2 ,3 2 0 )(2 4 2 ,3 2 0 )(2 4 2 ,3 2 0 ) (4 1 3 ,0 3 1 )(4 1 3 ,0 3 1 )(4 1 3 ,0 3 1 )(4 1 3 ,0 3 1 ) The heading impairment or (-) reversal of impairment on non-financial assets on the consolidated profit and loss statement mainly indicates adjustments due to impairment carried out on real properties for internal use by the group and real estate inventories and investment property.

Note 28 Note 28 Note 28 Note 28 –––– Gains or (Gains or (Gains or (Gains or (----) losses on derecognition of non) losses on derecognition of non) losses on derecognition of non) losses on derecognition of non----financial assets and shares, netfinancial assets and shares, netfinancial assets and shares, netfinancial assets and shares, net The composition of this item in the consolidated profit and loss statement of the group at 30 June 2016 and 2015 was as follows: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

G a in s o r ( - ) l o s s e s o n d e r e c o g n i t i o n o f n o n - f i n a n c i a l a s s e ts , n e tG a i n s o r ( - ) l o s s e s o n d e r e c o g n i t i o n o f n o n - f i n a n c i a l a s s e ts , n e tG a i n s o r ( - ) l o s s e s o n d e r e c o g n i t i o n o f n o n - f i n a n c i a l a s s e ts , n e tG a i n s o r ( - ) l o s s e s o n d e r e c o g n i t i o n o f n o n - f i n a n c i a l a s s e ts , n e t 3 5 ,2 6 13 5 ,2 6 13 5 ,2 6 13 5 ,2 6 1 (3 ,3 1 5 )(3 ,3 1 5 )(3 ,3 1 5 )(3 ,3 1 5 )

Property plant and equipment (11,017) (12,746)


Intangible assets (8) -

Investments (*) 46,286 3,232

Other equity instruments - -

Other items - 6,199

(*) See Schedule I - Removals f ro m the sco pe o f co nso lidat ion.

Note 29 Note 29 Note 29 Note 29 –––– Negative goodwill recognised in profit or lossNegative goodwill recognised in profit or lossNegative goodwill recognised in profit or lossNegative goodwill recognised in profit or loss The negative difference in consolidation recognised in June 2015 corresponding to the business combination with TSB is detailed in Note 2 to 2015 consolidated financial statements.

51

Note 30 Note 30 Note 30 Note 30 –––– Profit or (Profit or (Profit or (Profit or (----) loss from non) loss from non) loss from non) loss from non----current assets and disposal groups classified as current assets and disposal groups classified as current assets and disposal groups classified as current assets and disposal groups classified as held for sale not qualifying as discontinued operations held for sale not qualifying as discontinued operations held for sale not qualifying as discontinued operations held for sale not qualifying as discontinued operations The breakdown of this item during the first half of 2016 and 2015 is as follows: Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

P r o f i t o r ( - ) l o s s f r o m n o n - c u r r e n t a s s e ts a n d d i s p o s a l g r o u p s c la s s i f i e d a s h e l d P r o f i t o r ( - ) l o s s f r o m n o n - c u r r e n t a s s e ts a n d d i s p o s a l g r o u p s c la s s i f i e d a s h e l d P r o f i t o r ( - ) l o s s f r o m n o n - c u r r e n t a s s e ts a n d d i s p o s a l g r o u p s c la s s i f i e d a s h e l d P r o f i t o r ( - ) l o s s f r o m n o n - c u r r e n t a s s e ts a n d d i s p o s a l g r o u p s c la s s i f i e d a s h e l d

fo r s a le n o t q u a l i fy i n g a s d i s c o n t i n u e d o p e r a t io n s (n e t )fo r s a le n o t q u a l i fy i n g a s d i s c o n t i n u e d o p e r a t io n s (n e t )fo r s a le n o t q u a l i fy i n g a s d i s c o n t i n u e d o p e r a t io n s (n e t )fo r s a le n o t q u a l i fy i n g a s d i s c o n t i n u e d o p e r a t io n s (n e t ) (2 3 ,8 8 0 )(2 3 ,8 8 0 )(2 3 ,8 8 0 )(2 3 ,8 8 0 ) (1 5 1 ,2 8 7 )(1 5 1 ,2 8 7 )(1 5 1 ,2 8 7 )(1 5 1 ,2 8 7 )

Property, Plant and Equipment for own use and foreclosed (26,999) (151,355)

Net profit/loss (43,876) (44,297)

Impairment/reversal 16,877 (107,058)


Intangible assets - -

Investments - -

Other equity instruments (99) 68

Other items 3,218 -

The impairment of non-current assets held for sale excludes income from the increase in fair value less sale costs.

Note 31 Note 31 Note 31 Note 31 –––– Segment informationSegment informationSegment informationSegment information The business units described below are based on the group’s organisational structure in force since 1 July 2015. Segment information is first structured with a breakdown by geography and then broken down based on the customers to which each segment is aimed. Key data for each business division are shown in the tables that follow: Ordinary income generated by each business unit at 30 June 2016 and 2015 is as follows: Tho usand euro

S EG M ENT SS EG M ENT SS EG M ENT SS EG M ENT S 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

Banking business Spain 2,255,284 2,305,767 86,897 123,710 2,342,181 2,429,477

Asset transformation 159,990 167,207 2,263 1,863 162,253 169,070

Banking business UK 845,184 - - - 845,184 -

Banking business Americas 188,593 136,051 - - 188,593 136,051

(-) Adjustments and eliminations of ordinary

income between segments- - (89 ,535) (127,025) (89,535) (127,025)

T o ta lT o ta lT o ta lT o ta l 3 ,4 4 9 ,0 5 13 ,4 4 9 ,0 5 13 ,4 4 9 ,0 5 13 ,4 4 9 ,0 5 1 2 ,6 0 9 ,0 2 52 ,6 0 9 ,0 2 52 ,6 0 9 ,0 2 52 ,6 0 9 ,0 2 5 (3 7 5 )(3 7 5 )(3 7 5 )(3 7 5 ) (1 ,4 5 2 )(1 ,4 5 2 )(1 ,4 5 2 )(1 ,4 5 2 ) 3 ,4 4 8 ,6 7 63 ,4 4 8 ,6 7 63 ,4 4 8 ,6 7 63 ,4 4 8 ,6 7 6 2 ,6 0 7 ,5 7 32 ,6 0 7 ,5 7 32 ,6 0 7 ,5 7 32 ,6 0 7 ,5 7 3

C o n s o l id a te dC o n s o l id a te dC o n s o l id a te dC o n s o l id a te d

O r d i n a r y i n c o m eO r d i n a r y i n c o m eO r d i n a r y i n c o m eO r d i n a r y i n c o m e O r d i n a r y i n c o m eO r d i n a r y i n c o m eO r d i n a r y i n c o m eO r d i n a r y i n c o m e

T o ta l o r d i n a r y in c o m eT o ta l o r d i n a r y in c o m eT o ta l o r d i n a r y in c o m eT o ta l o r d i n a r y in c o m efr o m c u s to m e r sf r o m c u s to m e r sf r o m c u s to m e r sf r o m c u s to m e r s b e tw e e n s e gm e n tsb e tw e e n s e gm e n tsb e tw e e n s e gm e n tsb e tw e e n s e gm e n ts

Thousand euro

S EGM ENT SS EGM ENT SS EGM ENT SS EGM ENT S 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

Business banking Spain 800,334 654,829

Asset transformation (427,054) (345,490)

Business banking UK (*) 161,147 ----

Business banking Americas (*) 53,414 44,247

T o ta l p r o f i t/ ( l o s s ) o f r e p o r te d s e gm e n tsT o ta l p r o f i t/ ( l o s s ) o f r e p o r te d s e gm e n tsT o ta l p r o f i t/ ( l o s s ) o f r e p o r te d s e gm e n tsT o ta l p r o f i t/ ( l o s s ) o f r e p o r te d s e gm e n ts 5 8 7 ,8 4 15 8 7 ,8 4 15 8 7 ,8 4 15 8 7 ,8 4 1 3 5 3 ,5 8 63 5 3 ,5 8 63 5 3 ,5 8 63 5 3 ,5 8 6

(+/-) Profits not assigned - -

(+/-) Elimination of internal results (intersegment) - -

(+/-) Other results (**) 6,135 9,921

(+/-) Tax on income and/or results from discontinued operations - -

P r o fi t/ ( l o s s ) b e fo r e ta xP r o fi t/ ( l o s s ) b e fo r e ta xP r o fi t/ ( l o s s ) b e fo r e ta xP r o fi t/ ( l o s s ) b e fo r e ta x 5 9 3 ,9 7 65 9 3 ,9 7 65 9 3 ,9 7 65 9 3 ,9 7 6 3 6 3 ,5 0 73 6 3 ,5 0 73 6 3 ,5 0 73 6 3 ,5 0 7

(**) Co rresponds to results f rom o t her unrepo rt ed geographies.

Co n s o l i da te dCo n s o l i da te dCo n s o l i da te dCo n s o l i da te d

P r o fi t/ ( l o s s )P r o fi t/ ( l o s s )P r o fi t/ ( l o s s )P r o fi t/ ( l o s s )

(*) Includes B usiness banking A mericas wit h app lied exchange rat e o f US 1.1142 and M X N 20.1577 (average) and B usiness banking UK in income statement GB P 0 .7782 (average).

52

The Directors’ Report gives a more detailed assessment of each of these business units. The distribution of interest income by geography for the period between 1 January 2016 and 30 June 2016, and the comparison with the same period of the preceding year, is as follows: Tho usand euro

G e o g r a p h i c a l a r e aG e o g r a p h i c a l a r e aG e o g r a p h i c a l a r e aG e o g r a p h i c a l a r e a

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

Domestic market 1,710,355 1,959,777 1,743,789 1,977,665

Exports :

a) European Union 21,897 23,154 725,811 29,025

b) OECD countries 53,030 36,212 156,914 120,896

c) Other countries 1,842 - 8,022 -

T o ta lT o ta lT o ta lT o ta l 1 ,7 8 7 ,1 2 41 ,7 8 7 ,1 2 41 ,7 8 7 ,1 2 41 ,7 8 7 ,1 2 4 2 ,0 1 9 ,1 4 32 ,0 1 9 ,1 4 32 ,0 1 9 ,1 4 32 ,0 1 9 ,1 4 3 2 ,6 3 4 ,5 3 62 ,6 3 4 ,5 3 62 ,6 3 4 ,5 3 62 ,6 3 4 ,5 3 6 2 ,1 2 7 ,5 8 62 ,1 2 7 ,5 8 62 ,1 2 7 ,5 8 62 ,1 2 7 ,5 8 6

G e o g r a p h i c a l d i s t r i b u t i o n o f i n te r e s t i n c o m eG e o g r a p h i c a l d i s t r i b u t i o n o f i n te r e s t i n c o m eG e o g r a p h i c a l d i s t r i b u t i o n o f i n te r e s t i n c o m eG e o g r a p h i c a l d i s t r i b u t i o n o f i n te r e s t i n c o m e

In d i v i d u a lIn d i v i d u a lIn d i v i d u a lIn d i v i d u a l C o n s o l i d a te dC o n s o l i d a te dC o n s o l i d a te dC o n s o l i d a te d

Note 32 Note 32 Note 32 Note 32 –––– Deferred tax assets and liabilitiesDeferred tax assets and liabilitiesDeferred tax assets and liabilitiesDeferred tax assets and liabilities Under current tax regulations, certain timing differences must be taken into account when quantifying the income tax expense. The origins of the deferred tax assets / liabilities recognised in the balance sheet at 30 June 2016 and 31 December 2015 are as follows: Thousand euro

De fe r r e d ta x a s s e tsDe fe r r e d ta x a s s e tsDe fe r r e d ta x a s s e tsDe fe r r e d ta x a s s e ts 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

M o n e ti s a b l eM o n e ti s a b l eM o n e ti s a b l eM o n e ti s a b l e 5 ,5 4 7 ,1 5 95 ,5 4 7 ,1 5 95 ,5 4 7 ,1 5 95 ,5 4 7 ,1 5 9 5 ,5 2 1 ,5 5 85 ,5 2 1 ,5 5 85 ,5 2 1 ,5 5 85 ,5 2 1 ,5 5 8

Due to loans impairment 3,595,403 3,555,130

Due to real estate asset impairment 1,820,660 1,836,497

Due to pension funds 131,096 129,931

No n - m o n e t i s a b leNo n - m o n e t i s a b leNo n - m o n e t i s a b leNo n - m o n e t i s a b le 5 1 0 ,1 5 95 1 0 ,1 5 95 1 0 ,1 5 95 1 0 ,1 5 9 6 1 8 ,3 4 86 1 8 ,3 4 86 1 8 ,3 4 86 1 8 ,3 4 8

Due to merger funds 135,340 141,965

Due to foreign credit impairment 62,698 77,236

Due to other non-deductible provisions 12,314 13,139

Due to impairment of equity and debt instruments 90,597 136,787

Adjustments to the value of financial assets - -

Other 209,211 249,221

T a x c r e d i ts fo r l o s s e s c a r r i e d fo r w a r dT a x c r e d i ts fo r l o s s e s c a r r i e d fo r w a r dT a x c r e d i ts fo r l o s s e s c a r r i e d fo r w a r dT a x c r e d i ts fo r l o s s e s c a r r i e d fo r w a r d 3 7 3 ,2 9 33 7 3 ,2 9 33 7 3 ,2 9 33 7 3 ,2 9 3 4 3 0 ,5 9 84 3 0 ,5 9 84 3 0 ,5 9 84 3 0 ,5 9 8

De d u c t i o n s n o t a p p l i e dDe d u c t i o n s n o t a p p l i e dDe d u c t i o n s n o t a p p l i e dDe d u c t i o n s n o t a p p l i e d 6 ,0 0 86 ,0 0 86 ,0 0 86 ,0 0 8 6 ,0 0 86 ,0 0 86 ,0 0 86 ,0 0 8


De fe r r e d ta x l i a b i l i t i e sDe fe r r e d ta x l i a b i l i t i e sDe fe r r e d ta x l i a b i l i t i e sDe fe r r e d ta x l i a b i l i t i e s 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Property appreciation 73,383 74,081

Adjustments to value of wholesale debt issuances aris ing on business

combinations 90,663 104,177

Other financial asset value adjustments 171,307 244,048

Other 75,677 69,837


Note 33 Note 33 Note 33 Note 33 –––– RelatedRelatedRelatedRelated----party transactionsparty transactionsparty transactionsparty transactions During the first half of 2016, no material transactions took place with related parties as defined in Order EHA/3050/2004. Those that did take place were in the normal course of the company's business and were performed at market prices.

53

The most significant balances recognised by the group in its dealings with related parties, and the effect on the income statement of related-party transactions, are shown below: Thousand euro

3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Jo i n t c o n tr o l o r Jo i n t c o n tr o l o r Jo i n t c o n tr o l o r Jo i n t c o n tr o l o r

s i gn i f i c a n t i n f l u e n c es i gn i f i c a n t i n f l u e n c es i gn i f i c a n t i n f l u e n c es i gn i f i c a n t i n f l u e n c e A s s o c i a te sA s s o c i a te sA s s o c i a te sA s s o c i a te s

K e y K e y K e y K e y

p e r s o n n e lp e r s o n n e lp e r s o n n e lp e r s o n n e l

O th e r r e l a te d O th e r r e l a te d O th e r r e l a te d O th e r r e l a te d

p a r t i e s (* )p a r t i e s (* )p a r t i e s (* )p a r t i e s (* ) T O T A LT O T A LT O T A LT O T A L T O T A LT O T A LT O T A LT O T A L


Loans and receivables and other financial assets 181 200,921 19,419 909,740 1 ,1 3 0 ,2 6 01 ,1 3 0 ,2 6 01 ,1 3 0 ,2 6 01 ,1 3 0 ,2 6 0 1 ,3 7 9 ,1 0 81 ,3 7 9 ,1 0 81 ,3 7 9 ,1 0 81 ,3 7 9 ,1 0 8


Customer deposits and other financial liabilities 169 598,897 13,203 81,973 6 9 4 ,2 4 26 9 4 ,2 4 26 9 4 ,2 4 26 9 4 ,2 4 2 1 ,3 3 4 ,6 4 91 ,3 3 4 ,6 4 91 ,3 3 4 ,6 4 91 ,3 3 4 ,6 4 9

M e m o r a n d u m a c c o u n ts :M e m o r a n d u m a c c o u n ts :M e m o r a n d u m a c c o u n ts :M e m o r a n d u m a c c o u n ts :

Guarantees given - 8 ,896 - 17,571 2 6 ,4 6 72 6 ,4 6 72 6 ,4 6 72 6 ,4 6 7 2 4 3 ,3 8 32 4 3 ,3 8 32 4 3 ,3 8 32 4 3 ,3 8 3

Contingent commitments given 87 32,134 3,882 49,579 8 5 ,6 8 28 5 ,6 8 28 5 ,6 8 28 5 ,6 8 2 1 6 5 ,1 9 01 6 5 ,1 9 01 6 5 ,1 9 01 6 5 ,1 9 0

In c o m e s ta te m e n t :In c o m e s ta te m e n t :In c o m e s ta te m e n t :In c o m e s ta te m e n t :

Interest income 2 2,631 67 4,933 7 ,6 3 37 ,6 3 37 ,6 3 37 ,6 3 3 1 9 ,9 3 41 9 ,9 3 41 9 ,9 3 41 9 ,9 3 4

Interest expenses - (5 ,507) (22) (368) (5 ,8 9 7 )(5 ,8 9 7 )(5 ,8 9 7 )(5 ,8 9 7 ) (2 7 ,9 1 6 )(2 7 ,9 1 6 )(2 7 ,9 1 6 )(2 7 ,9 1 6 )

Dividend income - - - - ---- 4 94 94 94 9

Net fees and commissions - 2 ,739 10 14,091 1 6 ,8 4 01 6 ,8 4 01 6 ,8 4 01 6 ,8 4 0 3 5 ,2 4 03 5 ,2 4 03 5 ,2 4 03 5 ,2 4 0

Other operating income - - - 24,147 2 4 ,1 4 72 4 ,1 4 72 4 ,1 4 72 4 ,1 4 7 2 9 ,1 5 72 9 ,1 5 72 9 ,1 5 72 9 ,1 5 7

(*) Includes emp loyee pension schemes.

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

Note 34 Note 34 Note 34 Note 34 –––– RemRemRemRemuneration of and balances with members of the Board of Directors and uneration of and balances with members of the Board of Directors and uneration of and balances with members of the Board of Directors and uneration of and balances with members of the Board of Directors and senior managementsenior managementsenior managementsenior management The remuneration collected by, and balances with, members of the Board of Directors, and the remuneration received by senior management members in the six-month periods ended 30 June 2016 and 30 June 2015 are shown below: Thousand euro

30/06/201630/06/201630/06/201630/06/2016 30/06/201530/06/201530/06/201530/06/2015

DirectorsDirectorsDirectorsDirectors

Remuneration i tem:Remuneration i tem:Remuneration i tem:Remuneration i tem:

Fixed remuneration 2,060 1,820

Variable remuneration 1,368 1,318

Articles of Association-mandated 999 909

Other 25 19

TotalTotalTotalTotal 4 ,4524,4524,4524,452 4,0664,0664,0664,066

Thousand euro

30/06/201630/06/201630/06/201630/06/2016 30/06/201530/06/201530/06/201530/06/2015

Other benefits :Other benefits :Other benefits :Other benefits :

Loans 11,307 11,898

Pension funds and plans: Contributions 2 1

Guarantees provided for directors 2,648 2,332

Thousand euro

30/06/201630/06/201630/06/201630/06/2016 30/06/201530/06/201530/06/201530/06/2015

Senior executivesSenior executivesSenior executivesSenior executives

Total remunerationTotal remunerationTotal remunerationTotal remuneration 3,713 2,029

The “Senior executives” category includes members of senior management and the Internal Audit Department, in accordance with the criteria set out in CNMV Circular 5/2013, of 12 June. It should be noted that this group has increased from 6 people at the end of 2015 to 8 people at the end of June 2016. The theoretical amounts of variable remuneration at 30 June 2016 are 50% of the variable remuneration earned in 2015, but this does not entail any vested right claimable under this heading, and it is possible that such remuneration may not materialise.

Note 35 Note 35 Note 35 Note 35 –––– SSSSubsequent eventsubsequent eventsubsequent eventsubsequent events Since 30 June 2016, there have been no events worthy of mention.

54

Schedule I Schedule I Schedule I Schedule I ---- Changes to scope of consolidationChanges to scope of consolidationChanges to scope of consolidationChanges to scope of consolidation Additions to the scope of consolidation in the first half of 2016: Tho usand euro

N a m e o f e n t i t y (o r l i n e o f b u s i n e s s ) N a m e o f e n t i t y (o r l i n e o f b u s i n e s s ) N a m e o f e n t i t y (o r l i n e o f b u s i n e s s ) N a m e o f e n t i t y (o r l i n e o f b u s i n e s s )

a c qu i r e d o r m e r g e da c qu i r e d o r m e r g e da c qu i r e d o r m e r g e da c qu i r e d o r m e r g e d C a te g o r yC a te g o r yC a te g o r yC a te g o r y

Ef fe c t i ve Ef fe c t i ve Ef fe c t i ve Ef fe c t i ve

d a te o f th e d a te o f th e d a te o f th e d a te o f th e

t r a ns a c t io nt r a ns a c t io nt r a ns a c t io nt r a ns a c t io n A c q u i s i t i o n A c q u i s i t i o n A c q u i s i t i o n A c q u i s i t i o n

c o s tc o s tc o s tc o s t

F a i r va l ue o f e qu i t y F a i r va l ue o f e qu i t y F a i r va l ue o f e qu i t y F a i r va l ue o f e qu i t y

i n s t r u m en ts i s s u e d i n s t r u m en ts i s s u e d i n s t r u m en ts i s s u e d i n s t r u m en ts i s s u e d

fo r th e a c q u i s i to nfo r th e a c q u i s i to nfo r th e a c q u i s i to nfo r th e a c q u i s i to n

% vo t i n g % vo t i n g % vo t i n g % vo t i n g

r i g h ts r i g h ts r i g h ts r i g h ts

a cq u i r e da cq u i r e da cq u i r e da cq u i r e d

% to ta l % to ta l % to ta l % to ta l

vo t i n g vo t i n g vo t i n g vo t i n g

r i g h tsr i g h tsr i g h tsr i g h ts

K i nd o f K i nd o f K i nd o f K i nd o f

h o ld i n gh o ld i n gh o ld i n gh o ld i n g M eth o dM eth o dM eth o dM eth o d

Puerto de Calella A.I.E. Subsidiary 31/01/2016 1 - 99.91% 99.91% Direc t Fu ll Conso lida tion

Rubí Gestión, S.L .U. Subsidiary 31/01/2016 3 - 100.00% 100.00% Direc t Fu ll Conso lida tion

Hotel Value Added Primera, S.L .U. Subsidiary 29/02/2016 3 - 100.00% 100.00% Ind irec t Fu ll Conso lida tion

AURICA IIIB, SOC. DE CAPITAL RIESGO, S.A Associate 29/02/2016 756 - 63.00% 63.00% Ind irec t Equity method

Parque Eólico Los Ausines, S.L Associate 29/02/2016 2,282 - 50.00% 50.00% Ind irec t Equity method

Hotel Carretera N 632, S.L .U. Subsidiary 31/03/2016 3 - 100.00% 100.00% Ind irec t Fu ll Conso lida tion

Hotel Paseo Marítimo 80, S.L .U. Subsidiary 31/03/2016 3 - 100.00% 100.00% Ind irec t Fu ll Conso lida tion

HI Partners Starwood Capital Holdco Value Added, S.L.U. Subsidiary 31/03/2016 3 - 100.00% 100.00% Ind irec t Fu ll Conso lida tion

Gate Solar Gestión, S.L . Associate 31/03/2016 1,860 - 50.00% 50.00% Direc t Equity method

Duncan 2016 -1 Holdings L imited Subsidiary 31/03/2016 - - 100.00% 100.00% Ind irec t Fu ll Conso lida tion

TSB Covered Bonds Holdings limited Subsidiary 15/05/2016 - - 100.00% 100.00% Ind irec t Fu ll Conso lida tion

C o s t o f c o m b i n a t i o nC o s t o f c o m b i n a t i o nC o s t o f c o m b i n a t i o nC o s t o f c o m b i n a t i o n

Removals from to the scope of consolidation in the first half of 2016: Tho usand euro

Na m e o f e n t i t y (o r l i n e o f b u s i n e s s ) s o l d , Na m e o f e n t i t y (o r l i n e o f b u s i n e s s ) s o l d , Na m e o f e n t i t y (o r l i n e o f b u s i n e s s ) s o l d , Na m e o f e n t i t y (o r l i n e o f b u s i n e s s ) s o l d ,

s p u n o ff o r o th e rw i s e d i s p o s e d o fs p u n o ff o r o th e rw i s e d i s p o s e d o fs p u n o ff o r o th e rw i s e d i s p o s e d o fs p u n o ff o r o th e rw i s e d i s p o s e d o f C a te g o r yC a te g o r yC a te g o r yC a te g o r y

E f fe c t i ve E f fe c t i ve E f fe c t i ve E f fe c t i ve

d a te o f th e d a te o f th e d a te o f th e d a te o f th e

t r a ns a c t i ont r a ns a c t i ont r a ns a c t i ont r a ns a c t i on

% V o t i n g % V o t i n g % V o t i n g % V o t i n g

r i g h ts r i g h ts r i g h ts r i g h ts

d i s po s e d o fd i s po s e d o fd i s po s e d o fd i s po s e d o f

% T o ta l % T o ta l % T o ta l % T o ta l

vo t i n g r i g h ts vo t i n g r i g h ts vo t i n g r i g h ts vo t i n g r i g h ts

fo l l o w in g fo l l o w in g fo l l o w in g fo l l o w in g

d i s p o s a ld i s p o s a ld i s p o s a ld i s p o s a l

P r o f i t/ L o s s P r o f i t/ L o s s P r o f i t/ L o s s P r o f i t/ L o s s

g e n e r a te d g e n e r a te d g e n e r a te d g e n e r a te d

(* )(* )(* )(* )

K i n d o f K i n d o f K i n d o f K i n d o f

h o l d i n gh o ld i n gh o ld i n gh o ld i n g M e th o dM e th o dM e th o dM e th o d

Ac tivos Va lenc ia I, S .A.U. en liqu idac ión (b) Subsid iary 31/01/2016 100.00% 0.00% (1,233) Ind irec t Fu ll Consolidation

Parque Eólic o Loma del Capón , S.L .U. (a) Subsid iary 29 /02/2016 100.00% 0.00% (517) Ind irec t Fu ll Consolidation

Energías Renovables S ierra Sesnández, S.L. (a) Assoc ia te 29 /02/2016 40.00% 0.00% (14) Ind irec t Equity me thod

Sistema Eléc tric o de Conexión Valc aire, S.L. (a) Assoc ia te 29 /02/2016 46.88% 0.00% - Ind irec t Equity me thod

Parque Eólic o Magaz, S.L . (a ) Assoc ia te 29 /02/2016 49.00% 0.00% (37) Ind irec t Equity method

Torre Sureste, S.L . (b) Assoc ia te 29 /02/2016 40.00% 0.00% (5) Ind irec t Equity me thod

Fomento de la Coruña, S.A.U. (a) Subsid iary 31/03/2016 100.00% 0.00% 6 Ind irec t Fu ll Consolidation

Gate Sola r, S.L. (c ) Assoc ia te 31/03/2016 50.00% 0.00% - Direc t Equity me thod

Blue- Lor, S.L. en liqu idac ión (b) Assoc ia te 31/03/2016 27.62% 0.00% - Ind irec t Equity me thod

Dexia Sabade ll , S .A. (a ) Assoc ia te 30 /04/2016 20.99% 0.00% 47,950 Direc t Equity me thod

Solvia Ac tividades y Servic ios Inmobiliarios, S.A.U. (b) Subsid iary 31/05/2016 100.00% 0.00% (6) Direc t Fu ll Consolidation

Mirador del Segura 21, S.L. en liquidac ión (b ) Subsid iary 31/05/2016 100.00% 0.00% 32 Ind irec t Fu ll Consolidation

Vistas de l Parque 21, S.L. en liqu idac ión (b) Subsid iary 31/05/2016 100.00% 0.00% 30 Ind irec t Fu ll Consolidation

CAM Capita l, S .A.U. en liqu idac ión (b) Subsid iary 31/05/2016 100.00% 0.00% (24) Direc t Fu ll Consolidation

Can tabria Generac ión , S.L .U. (b) Subsid iary 30 /06/2016 100.00% 0.00% 8 Direc t Fu ll Consolidation

Sabade ll Asia Trade Servic es, Ltd. (b) Subsid iary 30 /06/2016 100.00% 0.00% - Direc t Fu ll Consolidation

Pro teo Banking So ftware, S.L.U. (b) Subsid iary 30 /06/2016 100.00% 0.00% 2 Direc t Fu ll Consolidation

Easo Bolsa , S.A. (b) Subsid iary 30 /06/2016 100.00% 0.00% 11 Direc t Fu ll Consolidation

Rest of en tities 83

T o ta lT o ta lT o ta lT o ta l 4 6 ,2 8 64 6 ,2 8 64 6 ,2 8 64 6 ,2 8 6

(*) The result is present ed net o f t he co st s d irect ly relat ed t o the d isp o sal.

(a) No lo ng er co nso lid at ed d ue t o sale o f invest ment .

(b ) No long er co nso lid ated due t o d isso lut io n/ and o r liquid at io n.

(c) Due to merg ers.

55

Schedule II Schedule II Schedule II Schedule II ---- Financial statements of Banco SabadellFinancial statements of Banco SabadellFinancial statements of Banco SabadellFinancial statements of Banco Sabadell

Interim financial statements of Banco de Sabadell, S.A. Below are presented the separate balance sheets at 30 June 2016 and 31 December 2015, the separate profit and loss statements, the separate statements of recognised income and expenses, the separate statements of total changes in net equity and the separate cash flow statements of the bank for the six months ended 30 June 2016 and 2015, prepared in accordance with the same accounting principles and policies and measurement methods applied to these summarised interim consolidated financial statements for the group. It should be noted that, for comparative purposes, the balances for 2015 have been adjusted to reflect the

requirements of Law 22/2015, regulating the amortisation of goodwill on separate financial statements.

56

Separate balance sheets of Banco de Sabadell, S.A.Separate balance sheets of Banco de Sabadell, S.A.Separate balance sheets of Banco de Sabadell, S.A.Separate balance sheets of Banco de Sabadell, S.A. At 30 June 2016 and 31 December 2015

Thousand euro

A sset 30/ 06/ 2016 31/ 12/ 2015 (*)

C ash, cash balances at centra l banks and o ther dema nd depo sits 2,707 ,103 2,096,603

F inancia l assets held fo r t rading 3,071,833 2,220,948Derivatives 1,881,014 1,437,933Equity instruments - -Debt securities 1,190,819 783,015Loans and advances - -



F inancia l assets designa ted at fa ir va lue thro ugh p ro f it o r lo ss - -Equity instruments - -Debt securities - -Loans and advances - -



A va ilable- fo r-sale f inanc ia l assets 19,272 ,174 18,186,892Equity instruments 359,569 259,988Debt securities 18,912,605 17,926,904M emorandum item: provided or given as guarantee with right to sale or pledging 3,717,389 5,778,397

Lo ans and rece ivables 119,184,856 122,083,693Debt securities 1,268,433 1,732,478Loans and advances 117,916,423 120,351,215

Central banks - -Credit institutions 3,644,561 5,720,124Customers 114,271,862 114,631,091

M emorandum item: provided or given as guarantee with right to sale or pledging 355,455 1,349,574

H eld- to -maturity investments - -M emorandum item: provided or given as guarantee with right to sale or pledging - -

D eriva t ives - hedge acco unt ing 402,883 490,743

F a ir va lue changes o f the hedged items in po rt fo lio hedge o f inte rest ra te risk - -

Investments in subs idaries, jo int ventures and asso ciates 5,824,990 5,886,351Group entities 5,681,828 5,750,142Associates 143,162 136,209

T angible assets 2,072,382 2,066,352

Property, P lant and Equipment 1,309,459 1,335,821For own use 1,309,459 1,335,821Leased out under operating leases - -

Investment property 762,923 730,531Of which: leased out under operating leases - -

M emorandum item: acquired under financial lease - -Intangible assets 401,917 466,737

Goodwill 313,068 363,260Other intangible assets 88,849 103,477

T ax assets 6,523,777 6,812,909

Current tax assets 296,318 512,631Deferred tax assets 6,227,459 6,300,278

Other asse ts 279,903 345,189

Insurance contracts linked to pensions 149,798 153,631Inventories - -Rest of other assets 130,105 191,558

N o n-current asse ts and dispo sal gro ups c lass if ied a s held fo r sa le 2,280,809 2,331,014

T OT A L A SSET S 162,022,627 162,987,431(*) Presented for comparison purposes only.

57


Thousand euro

Liabilit ies 30/ 06/ 2016 31/ 12/ 2015 ( *)

F inancia l liabilit ies he ld fo r t rading 2,068 ,849 1,577 ,672Derivatives 1,980,779 1,425,768

Short positions 88,070 151,904

Deposits - -

Central banks - -Credit institutions - -

Customers - -

Debt securities issued - -


F inancia l liabilit ies designated at fa ir va lue thro ugh pro f it o r lo ss - -Deposits - -

Central banks - -

Credit institutions - -

Customers - -Debt securities issued - -


M emorandum item: subordinated liabilities - -

F inancia l liabilit ies measured at amo rt ised co st 145,887 ,819 147,763,121Deposits 119,042,498 123,026,933

Central banks 10,675,571 11,561,722

Credit institutions 10,723,818 14,208,587

Customers 97,643,109 97,256,624

Debt securities issued 23,802,764 22,634,732Other financial liabilities 3,042,557 2,101,456

M emorandum item: subordinated liabilities 1,229,698 958,344

D erivat ives – H edge acco unt ing 613 ,434 206 ,853

F a ir va lue changes o f the hedged it ems in po rt fo lio hedge o f interes t ra te risk (31,353) (42,305)

P ro vis io ns 337 ,909 319 ,993

Pensions and other post employment defined benefit obligations 83,684 86,305

Other long term employee benefits 22,817 28,384

Pending legal issues and tax litigation 49,815 51,071

Commitments and guarantees given 120,176 106,563

Other provisions 61,417 47,670

T ax liabilit ies 390,911 443 ,534

Current tax liabilities 25,493 29,109

Deferred tax liabilities 365,418 414,425

Share capita l repayable o n demand - -

Other liabilit ies 324 ,495 398 ,699

Liabilit ies inc luded in dispo sa l gro ups c lass if ied as held fo r sa le - -

T OT A L LIA B ILIT IES 149,592 ,064 150,667 ,567(*) Presented for comparison purposes only.

58


Thousand euro

Equity 30/ 06/ 2016 31/ 12/ 2015 (*)

Shareho lders equity 12,147,963 11,968,406Capital 695,783 679,906

Paid up capital 695,783 679,906

Unpaid capital which has been called uo - -M emorandum item: uncalled capital - -

Issue premium 7,829,218 7,935,665Equity instruments issued o ther than capital - -

Equity component of compound financial instruments - -

Other equity instruments issued - -Other equity instruments issued 19,058 14,322

Retained earnings - -

Revaluation reserves - -Other reserves 3,476,969 3,265,305

(-) Treasury shares (108,693) (228,690)

Profit (loss) 235,628 301,898(-) Interim dividends - -

A ccumulated o ther co mprehensive inco me 282,600 351,458Items that will not be reclassified to profit o r loss 12,212 12,212

Actuarial gains or (-) losses on defined benefit pension plans 12,212 12,212

Non-current assets and disposal groups classified as held for sale - -Rest o f valuation adjustments - -

Items that may be reclassified to profit o r loss 270,388 339,246

Hedge of net investments in foreign operations [effective portion] - -Foreign currency translation 19,840 19,706

Hedging derivatives. Cash flow hedges [effective portion] 37,742 21,754

Available-fo r-sale financial assets 212,806 297,786Debt instruments 191,574 248,773

Equity instruments 21,232 49,013

Non-current assets and disposal groups classified as held for sale - -

T OT A L EQUIT Y 12,430,563 12,319,864

T OT A L EQUIT Y A N D T OT A L LIA B ILIT IES 162,022,627 162,987,431

M emo randum Item

Guarantees given 8,519,732 8,525,763C o nt ingent liabilit ies given 15,750,222 15,936,470


59

Separate profit and loss account of Banco SabadellSeparate profit and loss account of Banco SabadellSeparate profit and loss account of Banco SabadellSeparate profit and loss account of Banco Sabadell, S.A., S.A., S.A., S.A. For the six-month periods ended 30 June 2016 and 2015

Thousand euro

30 / 06/ 2016 30/ 06/ 2015 ( *)

Interest income 1,787,124 2,019,143

(Interest expenses) (542,236) (890,185)

(Expenses on share capital repayable on demand) - -

Gro ss Inco me 1,244,888 1,128,958Dividend income 37,418 38,351

Fee and commission income 480,875 453,294

(Fee and commission expenses) (42,214) (37,582)Results of financial operations (net)

Gains or (-) losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net 433,104 1,026,724

Gains or (-) losses on financial assets and liabilities held for trading, net 12,510 119,745

Gains or (-) losses on financial assets and liabilities designated at fair value through profit or loss, net - -

Gains or (-) losses from hedge accounting, net (867) (144)

Exchange differences (gain or (-) loss), net 8,935 82,467Other operating income 39,900 34,725

(Other operating expenses) (105,116) (51,925)

Gro ss Inco me 2,109,433 2,794,613(Administrative expenses) (896,461) (881,247)

(Staff expenses) (551,414) (556,013)

(Other general administration expenses) (345,047) (325,234)

(Amortisation) (119,280) (120,993)

(Provisions or (-) reversal of provisions) (32,479) (1,083)

(Impairment or (-) reversal of impairment on financial assets not measured at fair value through profit or loss) (649,874) (1,370,686)

(Financial assets measured at cost) - -(Available- for-sale financial assets) (12,417) (19,514)

(Loans and receivables) (637,457) (1,351,172)

(Held to maturity investments) - -N et o perat ing inco me 411,339 420,604

(Impairment or (-) reversal of impairment o f investments in jo int ventures and associates) (63,039) 9,480

(Impairment or (-) reversal of impairment on non-financial assets) (23,502) (72,189)

(Tangible assets) (23,502) (72,189)

(Intangible assets) - -

(Other) - -Gains or (-) losses on derecognition of non financial assets, net 35,585 (9,153)

Negative goodwill recognised in profit or loss - -

Profit or (-) loss from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations (18,741) (145,469)

P ro f it o r ( -) lo ss befo re tax f ro m co nt inuing o pear at io ns 341,642 203,273(Tax expense or (-) income related to profit or loss from continuing operations) (106,014) (63,104)

P ro f it o r ( -) lo ss after tax f ro m co nt inuing o perat io ns 235,628 140 ,169Profit or (-) loss after tax from discontinued operations - -

P R OF IT / (LOSS) F OR T H E P ER IOD 235,628 140 ,169

Earnings per share 0.04 0.03

Basic 0.04 0.03

Diluted 0.04 0.03


60

Separate statements of changes in net equity of Banco de Sabadell, S.A.Separate statements of changes in net equity of Banco de Sabadell, S.A.Separate statements of changes in net equity of Banco de Sabadell, S.A.Separate statements of changes in net equity of Banco de Sabadell, S.A. Separate recognised income and expenses account of Banco Sabadell group


Thousand euro

30/ 06/ 2016 30 / 06/ 2015 (*)

P ro f it o r lo ss fo r the perio d 235,628 140,169

Other co mprehensive inco me (68,859) (969,941)Items that will not be reclassified to profit o r loss - -

Actuarial gains or (-) losses on defined benefit pension plans - -Non-current assets and disposal groups held for sale - -

Rest o f valuation adjustments - -Income tax relating to items that will not be reclassified - -

Items that may be reclassifed to pro fit or loss (68,859) (969,941)Hedge of net investments in foreign operations [effective portion] - -

Valuation gains or (-) losses taken to equity - -

Transferred to profit or loss - -Other reclassifications - -

Foreign currency translation 134 9,605Valuation gains or (-) losses taken to equity 134 9,605


Cash flow hedges [effective portion] 22,839 (440,050)Valuation gains or (-) losses taken to equity 17,545 (504,517)

Transferred to profit or loss 5,294 64,467

Transferred to initial carrying amount of hedged items - - Other reclassifications - -

Available-fo r-sale financial items (121,400) (955,450)Valuation gains or (-) losses taken to equity 272,464 82,083

Transferred to profit or loss (393,864) (1,037,533)Other reclassifications - -

Non-current assets and disposal groups held for sale - -Valuation gains or (-) losses taken to equity - -


Income tax relating to items that may be reclassified to profit o r (-) loss 29,567 415,954

T OT A L C OM P R EH EN SIVE IN C OM E F OR T H E YEA R 166,769 (829,772)


The consolidated statement of recognised income and expenses together with the consolidated statement of changes in total equity of the Banco Sabadell Group make up the statement of changes in net equity.

61

Separate statements of changes in net equity of Banco de Sabadell, S.ASeparate statements of changes in net equity of Banco de Sabadell, S.ASeparate statements of changes in net equity of Banco de Sabadell, S.ASeparate statements of changes in net equity of Banco de Sabadell, S.A.... Separate statements of total changes in net equity of Banco de Sabadell, S.A.


Thousand euro

Sources o f changes in net equity

Opening balance 31/ 12/ 2015 679,906 7,935,665 - 14 ,322 - - 3,265,305 (228,690) 301,898 351,458 12,319,864

Effects o f corrections of erro rs - - - - - - - - - - - -Effects o f changes in accounting policies - - - - - - - - - - - -

Opening balance 31/ 12/ 2015 679,906 7,935,665 - 14 ,322 - - 3,265,305 (228,690) 301,898 - 351,458 12,319,864

T o ta l co mprehens ive inco me fo r the year - - - - - - - - 235,628 - (68,858) 166,770

Other changes in equity 15,877 (106,447) - 4,736 - - 211,664 119,997 (301,898) - - (56,071)

Issue of ordinary shares (*) 15,877 - - - - - (15,877) - - - - -Issuance of preference shares - - - - - - - - - - - -Issuance of other equity instruments - - - - - - - - - - - -Exercise o r expiration of other equity instruments issued - - - - - - - - - - - -Conversion of debt to equity - - - - - - - - - - - -Capital reduction - - - - - - - - - - - -Divdends (or shareholder payments) - (106,447) - - - - (77,948) 135,694 - - - (48,701)Purchase o f treasury shares - - - - - - - (204,451) - - - (204,451)Sale or cancellation of treasury shares - - - - - - 4,944 188,754 - - - 193,698Reclassification of financial instruments from equity to liability - - - - - - - - - - - -Reclassification of financial instruments from liability to equity - - - - - - - - - - -Transfers among components of equity (*) - - - - - - 301,898 - (301,898) -Equity increase or (-) decrease resulting from business combinations - - - - - - - - - - - -Share based payments - - - 4,736 - - - - - - - 4,736Other increase o r (-) decrease in equity - - - - - (1,353) - - - - (1,353)

C lo s ing balance 30/ 06/ 2016 695,783 7,829 ,218 - 19 ,058 - - 3,476,969 (108,693) 235,628 - 282,600 12,430,563(*) Includes the dist ribution of profit /(loss) for the period, the purchase of free rights to f ree assignment and Complementary remuneration in addition to the dividend (see note 3).

Accumulated other

comprehensive income T o ta l

Revaluation reserve Other reserves

(-) Treasury shares

Profit/(loss) for the year

(-) Interim dividendsCapital Share premium

Equity instruments issued other than capital Other equity

Retained earnings

62

Separate statements of changes in net equity of Banco de Sabadell, S.A.Separate statements of changes in net equity of Banco de Sabadell, S.A.Separate statements of changes in net equity of Banco de Sabadell, S.A.Separate statements of changes in net equity of Banco de Sabadell, S.A. Separate statements of total changes in net equity of Banco de Sabadell, S.A.


Thousand euro


Opening balance 31/ 12/ 2014 503,058 5,710,626 734,284 6,564 - - 3,121,949 (87 ,376) 850,038 830 ,158 11,669,301

Effects of corrections of erro rs - - - - - - - - - - - -Effects of changes in accounting policies - - - - - - (441,168) - (100,551) - - (541,719)

Opening balance 31/ 12/ 2014 503,058 5,710,626 734,284 6,564 - - 2,680,781 (87 ,376) 749,487 - 830 ,158 11,127,582

T o ta l co mprehens ive inco me fo r the year - - - - - - - - 140,169 - (969,941) (829,772)

Other changes in equity 145,362 1,394,743 (2,698) 4,238 - - 701,210 13,028 (749,487) - - 1,506,396

Issue of ordinary shares 145,257 1,470,867 (9,568) - - - - 1,606,556Issuance of preference shares - - - - - - - - - - - -Issuance of other equity instruments - - - - - - - - - - - -Exercise or expiration of o ther equity instruments issued - - - - - - - - - - - -Conversion of debt to equity 105 2,720 (2,698) (127) - - - - -Capital reduction - - - - - - - - - - - -Divdends (or shareholder payments) - (50,677) - - - - (21,172) 50,677 - - - (21,172)Purchase o f treasury shares - - - - - - - (226,346) - - - (226,346)Sale or cancellation of treasury shares - - - - - - 3,407 188,697 - - - 192,104Reclassification of financial instruments from equity to liability - - - - - - - - - - - -Reclassification of financial instruments from liability to equity - - - - - - - - - - - -Transfers among components of equity - - - - - - 749,487 (749,487) - - -Equity increase or (-) decrease resulting from business combinations - - - - - - - - - - -Share based payments - - - 4,238 - - - - - - - 4,238Other increase o r (-) decrease in net equity - (28,167) - - - - (20,817) - - - - (48,984)

C lo s ing balance 30/ 06 / 2015 648,420 7,105,369 731,586 10,802 - - 3,381,991 (74 ,348) 140,169 - (139,783) 11,804,206

Presented, solely and exclusively, for comparison purposes.

The consolidated statement of recognised income and expenses together with the consolidated statements of changes in net equity of the Banco Sabadell Group make up the statement of changes in equity.

Capital Share premium

Equity instruments issued o ther than capital Other equity

Retained earnings T o ta l

Revaluation reserve Other reserves

(-) Treasury shares

Pro fit/(loss) for the year

(-) Interim dividends

Accumulated other

comprehensive income

63

Separate cash flow statements of Banco SabadellSeparate cash flow statements of Banco SabadellSeparate cash flow statements of Banco SabadellSeparate cash flow statements of Banco Sabadell, S.A., S.A., S.A., S.A. For the six-month periods ended 30 June 2016 and 2015

Thousand euro

30/ 06/ 2016 30 / 06/ 2015 (*)

C ash f lo ws f ro m o perat ing act iv it ies 725 ,018 86,387Profit/(loss) for the period 235,628 140,169

Adjustments for operating cash flows 876,065 328,645Amortisation 119,280 120,993Other adjustments 756,785 207,652

Increase/decrease of operating assets (net) 831,258 390,504Financial assets held for trading (739,080) (38,578)Financial assets designated at fair value through profit or loss - -Available-fo r-sale financial assets (1,182,679) (1,619,920)

Loans and receivables 2,294,751 1,429,849Other operating assets 458,266 619,153

Increase/decrease of operating liabilities (net) (1,211,808) (616,120)Financial liabilities held for trading 491,177 (87,238)Financial liabilities designated at fair value through profit or less - -Financial liabilities measured at amortised cost (1,985,256) 2,284,658Other operating liabilities 282,271 (2,813,540)

Income tax received/paid (6,125) (156,811)

C ash f lo ws f ro m invest ing ac t iv it ies (163,798) (977,504)Payments made: (593,618) (1,266,635)

Tangible assets (107,051) (112,675)Intangible assets - (460)Investments in jo int ventures and associates (95,190) (378,629)Subsidiaries and other business units - -Non current assets and liabilities held for sale (391,377) (774,871)

Held-to-maturity investments - -Other payments related to investing activities - -

Payments received 429,820 289,131Tangible assets 21,334 7,889Intangible assets 138 -Investments in jo int ventures and associates 54,077 38,124Subsidiaries and other business units - -

Non-current assets and liabilities classified as held for sale 354,271 243,118Held-to-maturity investments - -Other payments related to investing activities - -

C ash f lo ws f ro m f inancing ac t iv it ies 49 ,146 1,408,460Payments made: (254,505) (390,202)

Dividends - -Subordinated liabilities - (93,698)

Redemptiopn of own equity instruments - -Acquisition of own equity instruments (204,452) (226,348)Other payments related to financing activities (50,053) (70,156)

Payments received 303,651 1,798,662Subordinated liabilities 109,953 -Issuance of own equity instruments - 1,606,556Disposal of own equity instruments 193,698 192,106

Other payments related to financing activities - -

Ef fect o f exchange rate f luctua t io ns 134 4,490

N et increase / (decrease) in cash and cash equiva len ts 610,500 521,833

C ash and cash equiva lents at beginning o f the perio d 2,096,603 1,191,176

C ash and equivalents at end o f the perio d 2,707,103 1,713,009

C A SH A N D C A SH EQUIVA LEN T S F OR T H E YEA RCash 431,524 405,410

Cash equivalent balances in central banks 2,148,514 1,233,000Other demand deposits 127,065 74,599

Other financial assets - -Less: bank overdrafts repayable on demand - -


64

Schedule III Schedule III Schedule III Schedule III ---- Information required to be kept by issuers of mortgage market securities Information required to be kept by issuers of mortgage market securities Information required to be kept by issuers of mortgage market securities Information required to be kept by issuers of mortgage market securities and the special accountingand the special accountingand the special accountingand the special accounting mortgage registermortgage registermortgage registermortgage register Information concerning the data kept in the special accounting register of the issuer Banco Sabadell referred to in Article 21 of Royal Decree 716/2009, as required by Bank of Spain Circular 5/2011 is as follows, without taking account of the guarantee provided by the FGD.

a) Lending Details of the aggregate nominal values of mortgage loan and credit at 30 June 2016 and 31 December 2015 backing issues of asset-backed securities, their eligibility and the extent to which they qualify as such for mortgage market purposes, are presented in the following table: Thousand euro

30/06/201630/06/201630/06/201630/06/2016 31/12/201531/12/201531/12/201531/12/2015

Total mortgage loan and credit por tfol ioTotal mortgage loan and credit por tfol ioTotal mortgage loan and credit por tfol ioTotal mortgage loan and credit por tfol io 62 ,645,94862,645,94862,645,94862,645,948 66,147,38566,147,38566,147,38566,147,385

Mortgage secur i ties is suedMortgage secur i ties is suedMortgage secur i ties is suedMortgage secur i ties is sued 5,099,8305,099,8305,099,8305,099,830 5,530,8815,530,8815,530,8815,530,881

Of which: loans held on balance sheet 4,763,860 5,166,060

Mortgage trans fer certi ficatesMortgage trans fer certi ficatesMortgage trans fer certi ficatesMortgage trans fer certi ficates 4,088,7244,088,7244,088,7244,088,724 4,370,2754,370,2754,370,2754,370,275

Of which: Loans held on balance sheet 3,905,812 4,180,536

Mortgage loans pledged as secur i ty for financing receivedMortgage loans pledged as secur i ty for financing receivedMortgage loans pledged as secur i ty for financing receivedMortgage loans pledged as secur i ty for financing received - - - - - - - -

Loans backing is sues of mortgage bonds and mortgage covered bondsLoans backing is sues of mortgage bonds and mortgage covered bondsLoans backing is sues of mortgage bonds and mortgage covered bondsLoans backing is sues of mortgage bonds and mortgage covered bonds 53,457,39453,457,39453,457,39453,457,394 56,246,22956,246,22956,246,22956,246,229

Ineligible loans 17,032,405 19,382,351

Fulfil eligibility requirements except for limit under Article 5.1 of Royal Decree

716/200913,489,039 14,389,421

Rest 3,543,366 4,992,930

Elgible loans 36,424,989 36,863,878

Non-qualifiying portions 130,299 146,914

Qualifying portions 36,294,690 36,716,964

Loans covering mortgage bond issues - -

Loans eligible as cover for mortgage covered bond issues 36,294,690 36,716,964

Subs ti tution assets related to mortgage covered bond is suesSubs ti tution assets related to mortgage covered bond is suesSubs ti tution assets related to mortgage covered bond is suesSubs ti tution assets related to mortgage covered bond is sues - - - - - - - -

Analys is of overal l mortgage loan & credit por tfol io; el igibi l ity and quali fying amounts (Nominal Values)Analys is of overal l mortgage loan & credit por tfol io; el igibi l ity and quali fying amounts (Nominal Values)Analys is of overal l mortgage loan & credit por tfol io; el igibi l ity and quali fying amounts (Nominal Values)Analys is of overal l mortgage loan & credit por tfol io; el igibi l ity and quali fying amounts (Nominal Values)

65

A breakdown of these nominal values according to different classifications is given below: Tho usand euro

T o ta l T o ta l T o ta l T o ta l

O f w h ic h O f w h ic h O f w h ic h O f w h ic h : : : :

E l ig i b l e E l ig i b l e E l ig i b l e E l ig i b l e

l o a n sl o a n sl o a n sl o a n s

T o ta l T o ta l T o ta l T o ta l

O f w h i c h O f w h i c h O f w h i c h O f w h i c h : : : :

E l i g i b l e E l i g i b l e E l i g i b l e E l i g i b l e

lo a n slo a n slo a n slo a n s

T o ta l m o r tg a ge l o a n a n d c r e d i t p o r t fo l i oT o ta l m o r tg a ge l o a n a n d c r e d i t p o r t fo l i oT o ta l m o r tg a ge l o a n a n d c r e d i t p o r t fo l i oT o ta l m o r tg a ge l o a n a n d c r e d i t p o r t fo l i o 5 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 4 3 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 9 5 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 9 3 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 8

Or i g in o f o p e r a t i o n sOr i g in o f o p e r a t i o n sOr i g in o f o p e r a t i o n sOr i g in o f o p e r a t i o n s 5 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 4 3 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 9 5 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 9 3 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 8

Originated by the Bank 52,555,948 35,953,218 55,382,031 36,376,744

Subrogated from other entities 266,786 223,898 273,461 218,221

Rest 634,660 247,873 590,737 268,913

Cu r r e n c yCu r r e n c yCu r r e n c yCu r r e n c y 5 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 4 3 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 9 5 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 9 3 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 8

Euro 53,353,799 36,369,721 55,593,779 36,810,879

Other currencies 103,595 55,268 652,450 52,999

P a ym e n t s ta tu sP a ym e n t s ta tu sP a ym e n t s ta tu sP a ym e n t s ta tu s 5 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 4 3 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 9 5 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 9 3 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 8

Performing 42,343,590 32,242,567 43,807,302 32,165,666

Other situations 11,113,804 4,182,422 12,438,927 4,698,212

A ve r a g e r e s i d u a l p e r io d to m a tu r i tyA ve r a g e r e s i d u a l p e r io d to m a tu r i tyA ve r a g e r e s i d u a l p e r io d to m a tu r i tyA ve r a g e r e s i d u a l p e r io d to m a tu r i ty 5 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 4 3 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 9 5 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 9 3 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 8

Up to 10 years 15,477,287 8,874,307 16,958,565 8,983,758

10 to 20 years 17,517,512 13,233,724 18,041,830 13,031,187

20 to 30 years 15,093,685 11,050,818 15,529,950 11,333,611

More than 30 years 5,368,910 3,266,140 5,715,884 3,515,322

In te r e s t r a teIn te r e s t r a teIn te r e s t r a teIn te r e s t r a te 5 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 4 3 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 9 5 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 9 3 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 8

Fixed 6,933,505 4,295,874 3,443,868 1,382,883

Variable 46,523,889 32,129,115 52,802,361 35,480,995

Mixed - - - -

Ho l d e r sHo l d e r sHo l d e r sHo l d e r s 5 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 4 3 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 9 5 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 9 3 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 8

Legal entities and individual entrepreneurs 21,788,202 11,399,398 24,582,556 11,860,390

Of which: Real estate developments 7,382,050 2,830,367 8,088,495 3,102,456

Other individuals and NPISH 31,669,192 25,025,591 31,663,673 25,003,488

T yp e o f g u a r a n te eT yp e o f g u a r a n te eT yp e o f g u a r a n te eT yp e o f g u a r a n te e 5 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 45 3 ,4 5 7 ,3 9 4 3 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 9 5 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 95 6 ,2 4 6 ,2 2 9 3 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 8

Assets/finished buildings 48,296,603 34,875,563 50,519,701 35,093,621

Residential 38,238,199 28,736,132 40,175,606 28,875,792

Of which: Official housing 1,623,908 1,095,887 1,520,057 1,026,431

Purchased for resale 9,929,762 6,048,286 10,245,126 6,145,363

Other 128,642 91,145 98,969 72,466

Assets/Building under construction 615,917 428,189 690,409 483,774

Residential 573,686 391,934 643,299 443,712

Of which: Official housing 64 - 3 ,009 2,935

Purchased for resale 41,167 35,192 45,517 38,470

Other 1,064 1,063 1,593 1,592

Land 4,544,874 1,121,237 5,036,119 1,286,483

Developed 2,571,878 576,790 2,934,471 724,994

Rest 1,972,996 544,447 2,101,648 561,489

A n a l ys is o f to ta l m o r tga ge l o a n & c r e d i t p o r t fo l i o b a c k i n g m o r tga ge m a r ke t i s s u a n c e sA n a l ys is o f to ta l m o r tga ge l o a n & c r e d i t p o r t fo l i o b a c k i n g m o r tga ge m a r ke t i s s u a n c e sA n a l ys is o f to ta l m o r tga ge l o a n & c r e d i t p o r t fo l i o b a c k i n g m o r tga ge m a r ke t i s s u a n c e sA n a l ys is o f to ta l m o r tga ge l o a n & c r e d i t p o r t fo l i o b a c k i n g m o r tga ge m a r ke t i s s u a n c e s

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

66

The nominal values of drawable funds (i.e. undrawn loan commitments) within the total mortgage loan and advances portfolio were as follows: Tho usand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Potentially eligible 1,139,076 1,131,564

Ineligible 1,240,993 962,059

A va i l a b le b a l a n c e s (n o m i n a l va l u e ) . T o ta l m o r tg a ge l o a n s a n d c r e d i ts b a c k i n g th e i s s u e o f c o ve r e d b o n d s A va i l a b le b a l a n c e s (n o m i n a l va l u e ) . T o ta l m o r tg a ge l o a n s a n d c r e d i ts b a c k i n g th e i s s u e o f c o ve r e d b o n d s A va i l a b le b a l a n c e s (n o m i n a l va l u e ) . T o ta l m o r tg a ge l o a n s a n d c r e d i ts b a c k i n g th e i s s u e o f c o ve r e d b o n d s A va i l a b le b a l a n c e s (n o m i n a l va l u e ) . T o ta l m o r tg a ge l o a n s a n d c r e d i ts b a c k i n g th e i s s u e o f c o ve r e d b o n d s

a n d m o r tga ge b o n d sa n d m o r tga ge b o n d sa n d m o r tga ge b o n d sa n d m o r tga ge b o n d s

The distribution of nominal values based on the loan-to-value (LTV) ratio of the last available valuation of the mortgage loans and advances portfolio eligible for the issuance of covered mortgage bonds and mortgage-backed securities is given hereafter: Tho usand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

S e c u r e d o n r e s i d e n t i a l p r o p e r tyS e c u r e d o n r e s i d e n t i a l p r o p e r tyS e c u r e d o n r e s i d e n t i a l p r o p e r tyS e c u r e d o n r e s i d e n t i a l p r o p e r ty 2 9 ,2 6 8 ,1 8 92 9 ,2 6 8 ,1 8 92 9 ,2 6 8 ,1 8 92 9 ,2 6 8 ,1 8 9 2 9 ,5 0 9 ,4 4 82 9 ,5 0 9 ,4 4 82 9 ,5 0 9 ,4 4 82 9 ,5 0 9 ,4 4 8

Of which LTV <= 40% 8,584,141 8,733,958

Of which LTV 40%-60% 11,067,232 11,065,725

Of which LTV 60%-80% 9,616,816 9,709,765

Of which LTV > 80% - -

S e c u r e d o n o th e r p r o p e r t i e sS e c u r e d o n o th e r p r o p e r t i e sS e c u r e d o n o th e r p r o p e r t i e sS e c u r e d o n o th e r p r o p e r t i e s 7 ,1 5 6 ,8 0 07 ,1 5 6 ,8 0 07 ,1 5 6 ,8 0 07 ,1 5 6 ,8 0 0 7 ,3 5 4 ,4 3 07 ,3 5 4 ,4 3 07 ,3 5 4 ,4 3 07 ,3 5 4 ,4 3 0

Of which LTV <= 40% 4,271,007 4,441,514

Of which LTV 40%-60% 2,885,793 2,912,916

Of which LTV > 60% - -

L T V r a t i o b y typ e o f s e c u r i ty . E l i g i b l e l o a n s fo r th e i s s u e o f m o r tga ge b o n d s a n d m o r tga ge c o ve r e d b o n d sL T V r a t i o b y typ e o f s e c u r i ty . E l i g i b l e l o a n s fo r th e i s s u e o f m o r tga ge b o n d s a n d m o r tga ge c o ve r e d b o n d sL T V r a t i o b y typ e o f s e c u r i ty . E l i g i b l e l o a n s fo r th e i s s u e o f m o r tga ge b o n d s a n d m o r tga ge c o ve r e d b o n d sL T V r a t i o b y typ e o f s e c u r i ty . E l i g i b l e l o a n s fo r th e i s s u e o f m o r tga ge b o n d s a n d m o r tga ge c o ve r e d b o n d s

Changes during the first half of 2016 in the nominal values of mortgage loans that collateralise issuances of mortgage bonds and mortgage covered bonds (eligible and non-eligible) are as follows: Tho usand euro

M o ve m e n ts i n n o m i n a l va l u e s o f m o r tg a ge l o a n sM o ve m e n ts i n n o m i n a l va l u e s o f m o r tg a ge l o a n sM o ve m e n ts i n n o m i n a l va l u e s o f m o r tg a ge l o a n sM o ve m e n ts i n n o m i n a l va l u e s o f m o r tg a ge l o a n s

E l i g i b l eE l i g i b l eE l i g i b l eE l i g i b l e In e l i g i b l eIn e l i g i b l eIn e l i g i b l eIn e l i g i b l e

Ba l a n c e a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e a t 3 1 De c e m b e r 2 0 1 5Ba l a n c e a t 3 1 De c e m b e r 2 0 1 5 3 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 83 6 ,8 6 3 ,8 7 8 1 9 ,3 8 2 ,3 5 11 9 ,3 8 2 ,3 5 11 9 ,3 8 2 ,3 5 11 9 ,3 8 2 ,3 5 1

A d d i t i o n s / d e r e c o gn i t i o n s d u r i n g th e ye a rA d d i t i o n s / d e r e c o gn i t i o n s d u r i n g th e ye a rA d d i t i o n s / d e r e c o gn i t i o n s d u r i n g th e ye a rA d d i t i o n s / d e r e c o gn i t i o n s d u r i n g th e ye a r ---- ----

De r e c o gn is e d d u r i n g th e ye a rDe r e c o gn is e d d u r i n g th e ye a rDe r e c o gn is e d d u r i n g th e ye a rDe r e c o gn is e d d u r i n g th e ye a r (2 ,9 3 0 ,6 9 1 )(2 ,9 3 0 ,6 9 1 )(2 ,9 3 0 ,6 9 1 )(2 ,9 3 0 ,6 9 1 ) (4 ,0 1 7 ,6 4 1 )(4 ,0 1 7 ,6 4 1 )(4 ,0 1 7 ,6 4 1 )(4 ,0 1 7 ,6 4 1 )

Repayment at maturity (1,242,749) (269,082)

Early repayment (597,725) (315,067)

Subrogrations by other entities (16,238) (3,537)

Rest (1,073,979) (3,429,955)

A d d i t i o n s i n th e ye a rA d d i t i o n s i n th e ye a rA d d i t i o n s i n th e ye a rA d d i t i o n s i n th e ye a r 2 ,4 9 1 ,8 0 22 ,4 9 1 ,8 0 22 ,4 9 1 ,8 0 22 ,4 9 1 ,8 0 2 1 ,6 6 7 ,6 9 51 ,6 6 7 ,6 9 51 ,6 6 7 ,6 9 51 ,6 6 7 ,6 9 5

Originated by the Bank 1,270,044 722,309

Subrogations from other entities 12,729 8,034

Rest 1,209,029 937,352

Ba l a n c e a t 3 0 Ju n e 2 0 1 6Ba l a n c e a t 3 0 Ju n e 2 0 1 6Ba l a n c e a t 3 0 Ju n e 2 0 1 6Ba l a n c e a t 3 0 Ju n e 2 0 1 6 3 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 93 6 ,4 2 4 ,9 8 9 1 7 ,0 3 2 ,4 0 51 7 ,0 3 2 ,4 0 51 7 ,0 3 2 ,4 0 51 7 ,0 3 2 ,4 0 5

67

b) Funding Information on issuances of collateralised securities backed by Banco Sabadell mortgage loans and credit portfolios is provided in the following table, analysed by unexpired term and according to whether the sale was by public offering or otherwise. Tho usand euro

N o m i n a l va lu eN o m i n a l va lu eN o m i n a l va lu eN o m i n a l va lu e 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

M o r tg a g e c o ve r e d b o n d s i n i s s u eM o r tg a g e c o ve r e d b o n d s i n i s s u eM o r tg a g e c o ve r e d b o n d s i n i s s u eM o r tg a g e c o ve r e d b o n d s i n i s s u e 2 0 ,7 0 7 ,5 4 42 0 ,7 0 7 ,5 4 42 0 ,7 0 7 ,5 4 42 0 ,7 0 7 ,5 4 4 2 2 ,3 5 2 ,3 5 92 2 ,3 5 2 ,3 5 92 2 ,3 5 2 ,3 5 92 2 ,3 5 2 ,3 5 9

Of which: not reflected under liabilities on the balance sheet 8,006,900 8,133,200

D e b t s e c u r i t i e s i s s u e d th r o u gh p u b l i c o f fe r i n gD e b t s e c u r i t i e s i s s u e d th r o u gh p u b l i c o f fe r i n gD e b t s e c u r i t i e s i s s u e d th r o u gh p u b l i c o f fe r i n gD e b t s e c u r i t i e s i s s u e d th r o u gh p u b l i c o f fe r i n g 6 ,6 0 0 ,0 0 06 ,6 0 0 ,0 0 06 ,6 0 0 ,0 0 06 ,6 0 0 ,0 0 0 7 ,2 5 0 ,0 0 07 ,2 5 0 ,0 0 07 ,2 5 0 ,0 0 07 ,2 5 0 ,0 0 0

Time to maturity up to one year 1,500,000 1,750,000

Time to maturity from one to two years 1,000,000 1,500,000

Time to maturity from two to three years - 1,000,000

Time to maturity from three to five years 1,750,000 1,750,000

Time to maturity from five to ten years 2,350,000 1,250,000

Time to maturity more than ten years - -

D e b t s e c u r i t i e s . O th e r i s s u e sD e b t s e c u r i t i e s . O th e r i s s u e sD e b t s e c u r i t i e s . O th e r i s s u e sD e b t s e c u r i t i e s . O th e r i s s u e s 1 1 ,0 6 3 ,0 0 01 1 ,0 6 3 ,0 0 01 1 ,0 6 3 ,0 0 01 1 ,0 6 3 ,0 0 0 1 0 ,8 8 3 ,0 0 01 0 ,8 8 3 ,0 0 01 0 ,8 8 3 ,0 0 01 0 ,8 8 3 ,0 0 0

Time to maturity one year 300,000 420,000

Time to maturity from one to two years 200,000 500,000

Time to maturity from two to three years 4,300,000 1,150,000

Time to maturity from three to five years 4,480,000 7,530,000


Time to maturity more than ten years - -

D e p o s i tsD e p o s i tsD e p o s i tsD e p o s i ts 3 ,0 4 4 ,5 4 43 ,0 4 4 ,5 4 43 ,0 4 4 ,5 4 43 ,0 4 4 ,5 4 4 4 ,2 1 9 ,3 5 94 ,2 1 9 ,3 5 94 ,2 1 9 ,3 5 94 ,2 1 9 ,3 5 9

Time to maturity one year 30,000 1,174,815

Time to maturity from one to two years 455,000 330,000

Time to maturity from two to three years 438,710 593,710

Time to maturity from three to five years 969,980 669,980


Time to maturity more than ten years 20,000 20,000

V a l u eV a l u eV a l u eV a l u e M a tu r i t yM a tu r i t yM a tu r i t yM a tu r i t y V a l u eV a l u eV a l u eV a l u e M a tu r i tyM a tu r i tyM a tu r i tyM a tu r i ty

n o m i n a ln o m i n a ln o m i n a ln o m i n a l a ve r a g e r e s i d u a la ve r a g e r e s i d u a la ve r a g e r e s i d u a la ve r a g e r e s i d u a l n o m in a ln o m in a ln o m in a ln o m in a l a ve r a g e r e s id u a la ve r a g e r e s id u a la ve r a g e r e s id u a la ve r a g e r e s id u a l

(€ tho usand) (years ) (€ tho usand) (years)

M o r tg a g e t r a n s fe r c e r t i f i c a te sM o r tg a g e t r a n s fe r c e r t i f i c a te sM o r tg a g e t r a n s fe r c e r t i f i c a te sM o r tg a g e t r a n s fe r c e r t i f i c a te s 4 ,0 8 8 ,7 2 44 ,0 8 8 ,7 2 44 ,0 8 8 ,7 2 44 ,0 8 8 ,7 2 4 1 71 71 71 7 4 ,3 7 0 ,2 7 54 ,3 7 0 ,2 7 54 ,3 7 0 ,2 7 54 ,3 7 0 ,2 7 5 1 81 81 81 8

Issued through public offering - - - -

Other issues 4,088,724 17 4,370,275 18

M o r tg a g e s e c u r i t i e sM o r tg a g e s e c u r i t i e sM o r tg a g e s e c u r i t i e sM o r tg a g e s e c u r i t i e s 5 ,0 9 9 ,8 3 05 ,0 9 9 ,8 3 05 ,0 9 9 ,8 3 05 ,0 9 9 ,8 3 0 1 61 61 61 6 5 ,5 3 0 ,8 8 15 ,5 3 0 ,8 8 15 ,5 3 0 ,8 8 15 ,5 3 0 ,8 8 1 1 71 71 71 7

Issued through public offering - - - -

Other issues 5,099,830 16 5,530,881 17

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 53 1 / 1 2 / 2 0 1 5

Banco de Sabadell, S.A.'s over-collateralisation ratio (the nominal value of all the mortgage loans and credit backing the issuance of mortgage bonds and mortgage covered bonds, divided by the nominal value of outstanding mortgage covered bonds) stood at 258% at 30 June 2016. The policies and procedures aimed at guaranteeing fulfilment of the regulations regulating the mortgage market are described in Note 4 to the 2015 consolidated financial statements on financial risk management. With regards to financing activities, the Banco Sabadell group is an active participant in the capital markets and has a number of funding programmes in operation (see Note 4 to the 2015 consolidated financial statements). As one element of its funding strategy, Banco de Sabadell, S.A. is an issuer of mortgage covered bonds. Mortgage covered bond issues are backed by the bank’s portfolio of loans secured by real estate mortgages that meet the eligibility criteria applicable under Royal Decree 716/2009, which provides rules on the mortgage market and mortgage finance in Spain. The group has procedures in place to monitor its entire portfolio of mortgage loans and credit. These include maintaining special accounting records of all mortgage loans and credit — and any assets that replace them — used to back issues of mortgage covered bonds and mortgage bonds, and of any financial derivatives associated with them; verifying that all loans and other assets meet the eligibility criteria for use as collateral in issues of mortgage covered bonds; and ensuring that bond issues are at all times kept to within their maximum limits, as required by the applicable mortgage market legislation.

68

Schedule IV Schedule IV Schedule IV Schedule IV ---- Information on new issuances during the sixInformation on new issuances during the sixInformation on new issuances during the sixInformation on new issuances during the six----month period month period month period month period The breakdown of the group’s new issuances at 30 June 2016 is as follows: Tho usand euro

I s s u i n g e n t i t yIs s u i n g e n t i t yIs s u i n g e n t i t yIs s u i n g e n t i t y T yp e o f i s s u eT yp e o f i s s u eT yp e o f i s s u eT yp e o f i s s u e 3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

B anco de Sabadell, S.A . M o rtgage co vered bo nd 26/01/2016 550,000 EUR IB OR 3 M + 0.80 26/01/2024 Euro s Ins t itutio nal

B anco de Sabadell, S.A . Straight bo nd 03/02/2016 300,000 0.75% 03/05/2017 Euro s R etail

B anco de Sabadell, S.A . Struc tured bo nd 12/02/2016 13,500 ref . underlying assets 12/02/2021 Euro s R etail


B anco de Sabadell, S.A . M o rtgage co vered bo nd (*) 22/03/2016 100,000 0.88% 12/11/2021 Euro s Ins t itutio nal





B anco de Sabadell, S.A . M o rtgage co vered bo nd 24/05/2016 50,000 EUR IB OR 3 M + 0.535 24/05/2024 Euro s Ins t itutio nal


B anco de Sabadell, S.A . M o rtgage co vered bo nd 10/06/2016 1,000,000 0.63% 10/06/2024 Euro s Ins t itutio nal






B anco de Sabadell, S.A . Subo rdinated bo nd 06/05/2016 500,000 5.625% 06/05/2026 Euro s Ins t itutio nal

D uncan Funding 2016-1 plc Sec urit isatio n fund 27/05/2016 150,000 EUR IB OR 3 M + 0,40 17/04/2021 Euro s Ins t itutio nal

D uncan Funding 2016-1 plc Sec urit isatio n fund 27/05/2016 532,365 LIB OR 3M + 0,77 17/04/2021 P o und s terling Ins t itutio nal

(*) Increase in t he amo unt o f t he issue o f mo rt g ag e co vered b o nd s in circulat io n.

T a r g e t o f T a r g e t o f T a r g e t o f T a r g e t o f

o f fe r i n go ffe r i n go ffe r i n go ffe r i n g

Da te o f Da te o f Da te o f Da te o f

i s s u ei s s u ei s s u ei s s u e

A m o u n tA m o u n tA m o u n tA m o u n t In te r e s t r a te In te r e s t r a te In te r e s t r a te In te r e s t r a te

r u l i n g a t r u l i n g a t r u l i n g a t r u l i n g a t

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6

M a tu r i t y M a tu r i t y M a tu r i t y M a tu r i t y

d a ted a ted a ted a te

Is s u e Is s u e Is s u e Is s u e

c u r r e n c yc u r r e n c yc u r r e n c yc u r r e n c y

69

CONSOLIDATED DIRECTOCONSOLIDATED DIRECTOCONSOLIDATED DIRECTOCONSOLIDATED DIRECTORS’ REPORT FOR THE FRS’ REPORT FOR THE FRS’ REPORT FOR THE FRS’ REPORT FOR THE FIRST SIRST SIRST SIRST SIX MONTHS OF 2016IX MONTHS OF 2016IX MONTHS OF 2016IX MONTHS OF 2016 The interim consolidated directors’ report is prepared with the sole purpose of describing the significant events and changes that occurred in the six-month period but not to duplicate information already published in the most recently adopted consolidated financial statements. Consequently, for proper comprehension of the information contained in this interim report of the directors, it should be read in conjunction with that contained in the group's 2015 consolidated financial statements, which were prepared in accordance with the recommendations of the "Guide for the preparation of directors' reports of listed companies", published by the CNMV in July 2013. Global economic and financial backgroundGlobal economic and financial backgroundGlobal economic and financial backgroundGlobal economic and financial background The UK voted in favour of leaving the EU (with 51.9% of the votes cast). This event has triggered a significant political crisis in the country. David Cameron, the Prime Minister, has announced that he will resign after the summer, which has triggered a primary election process to appoint a new Conservative Party leader to replace him. The selected candidate will have to initiate the formal process to withdraw from the EU. There is also significant pressure for Jeremy Corbyn, the leader of the Labour Party (the main opposition party) to resign. The EU has stated that the process of the UK’s withdrawal should be conducted in an orderly fashion, and is urging the British government to officially request its withdrawal, indicating that no negotiations of any kind will be held until such notification is received. Given this situation, UK economic authorities have anticipated an easing of the country’s fiscal and monetary policy. In Spain, the conservative party, PP, was victorious in the general elections, although they failed to achieve an absolute majority. The performance of financial markets was poor at the beginning of the year, due to a significant fall in oil prices, continued capital outflows from China and concerns over the health of the US economy. However, financial markets then began to recover, influenced by reduced fears of a global recession, partly due to the improvement in US activity data and an upturn in crude oil prices. The new lax monetary measures adopted by China and the ECB, as well as the Fed’s more lax attitude also contributed to this improvement. FixedFixedFixedFixed----income marketsincome marketsincome marketsincome markets Central banks in developed countries have generally adopted a more accommodating attitude in this quarter. The Fed maintained its benchmark interest rate at 0.25%-0.50%, after increasing it at its December meeting. It also reduced its forecasts for increasing interest rates. The ECB announced a series of measures to strengthen economic recovery in the euro zone and accelerate the correction of inflation to the central bank’s target (2.0%). The ECB cut the deposit interest rate to -0.40% and the benchmark interest rate to 0.00% in March. It also increased the monthly rate of asset purchases (to €80 billion per month) and included corporate bonds as an eligible asset under this programme. Lastly, it began holding new long-term financing operations to encourage banks to give credit to the private sector (TLTROs 2). In January, Bank of Japan placed its deposit interest rate in negative figures for the first time (-0.10%), to favour inflation dynamics. Following Brexit, the main central banks in developed economies announced their willingness to adopt necessary measures to guarantee financial stability. In terms of long-term fixed-income markets, the yields of German and US government bonds declined during the first half of the year, with German bonds reaching negative figures for the first time. This decline was influenced by international financial turbulence at the beginning of the year, the lax attitude demonstrated by central banks and uncertainty surrounding Brexit. In the case of Germany, the downward slide of inflation forecasts was also a factor. These international developments also partly contributed to the upturn and significant movements in risk premiums for peripheral sovereign bonds. In Spain, the spread increased less than in Italy and Portugal, partly due to the results of the general elections held in June, whilst in other countries this increase was more pronounced due to doubts concerning their financial systems and their domestic political context. Currency marketCurrency marketCurrency marketCurrency market The sterling pound was devalued by 13% against the euro, reaching 0.83 GBP/EUR, as a result of the uncertainty caused by the Brexit referendum and its result. The euro appreciated by 2% against the dollar, reaching 1.11 USD/EUR due to the Fed’s delay in implementing expected increases to the benchmark interest rate and the deterioration of data from the US labour market. Following Brexit, the dollar slightly appreciated against the euro, but this appreciation was insufficient to offset the previous devaluation. Lastly, the yen appreciated by 14% against the dollar, reaching 103 JPY/USD, party caused by financial instability at the beginning of the year and increased uncertainty surrounding Brexit. This has caused Japanese authorities to make verbal statements.

70

Emerging marketsEmerging marketsEmerging marketsEmerging markets The situation in emerging economies continues to be fragile, and the deleveraging process has progressed significantly in countries like Brazil. Emerging markets have been subjected to significant episodes of volatility during the last six months. The main focus of tensions occurred at the beginning of the year, when the devaluation of the yuan and uncertainty surrounding the situation of the Chinese economy generated a climate of risk aversion with a global knock-on effect. The sharp decline in oil prices that took place affected the economies with most exposure to this commodity, with currencies of countries such as Mexico, Colombia and Russia being significantly devalued. Faced with this situation, central banks in Latin America generally decided to increase interest rates to safeguard their financial stability, whilst Chinese authorities intensified their stimulation of the economy. This, together with the accommodating attitude of the Fed and lax monetary measures adopted by the ECB, benefited emerging markets over the following months. The second cause of tension took place in June, as a result of Brexit. In this case, the impact was relatively contained for emerging markets, with the most significant effects being focused primarily in Central and Eastern European countries. In terms of currencies, the Mexican peso was one of the currencies that recorded the sharpest devaluations, given its high level of liquidity. The yuan was devalued to levels not seen since 2010. Most of the initial movements (with the exception of the yuan) were later reverted. In the case of Mexico, this was also helped by the increase of 50 b.p. of the official interest rate by the central bank at the end of June, which increased it to 4.25%. Lastly, in Brazil, the vote in Congress in favour of the impeachment of Dilma Rousseff was crucial, leaving the government temporarily in the hands of the Vice President, who has been welcomed by the market due to his more reformist profile. Business performance Business performance Business performance Business performance The process to acquire 100% of shares in TSB and thereby become holder of 100% of its share capital was completed in 2015 (see Note 2 to these financial statements). Consequently, the variations in the balance sheet amounts at the end of June 2015 were affected by the inclusion of TSB, which was consolidated for accounting purposes since 30 June 2015. In contrast, the year-on-year comparison of the profit and loss statement from the first half of 2015 was unaffected by this factor. Banco Sabadell and its group ended the first half of the year with €425.3 million in net attributable profit (€279.6 million excluding TSB), after booking €901.8 million in impairment allowances for loan losses, securities and real estate. In the same period of 2015, net attributable profit amounted to €352.2 million and impairment allowances to €1,749.1 million. Positive performance by the ordinary business, strict control of recurring operating costs, judicious management of customer spreads and rigorous control of lending quality were the main factors underlying Banco Sabadell’s business performance in the first half of 2016. Balance sheetBalance sheetBalance sheetBalance sheet At the end of the first half of 2016, the total assets of Banco Sabadell and its group amounted to €207,890.7 million, a 0.4% decrease with respect to 2015 year-end. The balance of gross loans and advances to customers, excluding repos and deposits in credit institutions, amounted to €149,920.6 million (€116,043.2 million excluding TSB), a 1.8% increase compared to the balance at 2015 year-end (-0.5% excluding TSB), due mainly to the reduced volume of doubtful assets. Mortgage loans are the largest single component of gross lending (59%), amounting to €88,109.2 million at 30 June 2016. The reduction in doubtful assets caused the loan loss ratio to reach 6.83% at the end of June 2016 (8.54% excluding TSB), compared with 7.79% as of 2015 year-end (9.86% excluding TSB). The coverage ratio of doubtful assets at the end of June 2016 stood at 54.1% (53.9% excluding TSB), compared with 53.6% (53.1% excluding TSB) at 2015 year-end. On 30 June 2016, on-balance sheet customer funds amounted to €134,151.5 million (€100,100.3 million excluding TSB), compared with €131,489.2 million (€96,277.0 million excluding TSB) at the end of 2015, representing a 2.0% increase (4.0% excluding TSB). Demand account balances amounted to €88,428.9 million (€59,527.5 million excluding TSB), representing a 4.6% increase compared to 2015 year-end (10.5% excluding TSB), and deposits to customers with agreed maturity amounted to €43,125.6 million (€37,975.8 million excluding TSB), 7.0% less than in the previous

71

year (-9.2% excluding TSB). The downward trend of interest rates in financial markets has caused a shift in the composition of on-balance sheet customer funds from deposits with agreed maturity to demand accounts. Total off-balance sheet customer funds amounted to €37,555.1 million, a 0.5% increase compared with the end of the previous year. In this chapter, the increase in third-party insurance products was particularly notable, amounting to €8,735.3 million at the end of June 2016, representing a 14.2% increase compared to 2015 year-end. Debts represented by marketable securities amounted to €26,682.7 million at the end of the first half of this year (€22,778.3 million excluding TSB), i.e. similar the level at 2015 year-end, which amounted to €26,406.6 million (€22,455.9 million excluding TSB). This increase was due to the increase in securitisation bonds and obligations. Total funds under management at 30 June 2016 amounted to €198,592.3 million (€160,137.3 million excluding TSB), compared with €200,355.1 million at 31 December 2015 (€160,605.2 million excluding TSB), representing a reduction during the first half of the year of 0.9% (-0.3% excluding TSB). Income and profit performanceIncome and profit performanceIncome and profit performanceIncome and profit performance

Net interest income amounted to €1,942.5 million in the first half of 2016, 49.5% more than in the first half of 2015. This improvement was due to reduced costs of financing and the acquisition of TSB. Excluding TSB, net interest income amounts to €1,392.4 million at the end of the first half of 2016, a 7.2% increase compared with the previous year. In cumulative average terms, the net interest margin as a percentage of average total assets stood at 1.88%, increasing by 29 basis points compared with the previous year (1.59% in 2015). This increase was due to many factors, mainly the increase in customer spreads (due mainly to the reduced cost of financing of customer deposits), cheaper capital market costs, the reduction of problem assets and the improved profitability of completed acquisitions. Dividends received and results from equity-accounted companies together amounted to €48.8 million in 1H16, compared with a significantly lower amount during 1H15 (€27.3 million). Those revenues are due mainly to the insurance and pension fund business. Net fees and commissions during the first half of the year amounted to €570.2 million (€503.8 million excluding TSB), increasing by 25.6% year-on-year (11.0% excluding TSB). This increase was due mainly to the positive trend of investment funds and asset management, as well as the inclusion of TSB into the scope of consolidation. Income from trading amounted to €502.8 million (€447.9 million excluding TSB), including, amongst others, €355.2 million in gains on the sale of available-for-sale fixed-income financial assets and €109.5 million from the purchase of 100% of Visa Europe shares. During the first half of 2015, income from trading amounted to €1,114.3 million, including €1,019.9 million in gains on the sale of available-for-sale fixed-income financial assets and €105.0 million in income from the financial assets held for trading portfolio. Net income from exchange differences amounted to €14.7 million, compared with €41.8 million in the first half of 2015. Other operating income and expenses amounted to €-98.9 million (€-82.1 million excluding TSB), compared with €-16.9 million in the first half of 2015. Under this heading, the contribution to the national resolution fund of €-47.7 million is particularly notable, as is the contribution to TSB’s guarantee fund of €-10.5 million. Administrative expenses (staff and general) during 2016 amounted to €1,325.6 million (€906.2 million excluding TSB), of which €30.8 million are attributable to non-recurrent items (mainly staff indemnities). Administrative expenses amounted to €908.0 million in the first half of 2015, of which €27.1 million were attributable to non-recurrent items (mainly staff indemnities). Despite the decline in gross income, policies applied to contain operating expenses resulted in an improvement in the cost-to-income ratio at the end of June 2016, which stood at 44.26% compared with 46.53% at the end of the first half of 2015 (excluding TSB). With TSB, the cost-to-income ratio stood at 49.97%. The cost-to-income ratio is calculated by adjusting gross income linearising income from trading and including the accrual of contributions to the Deposit Guarantee Fund and the National Resolution Fund. As a result of the above, the first half of 2016 ended with pre-provisions income of €1,460.6 million. Excluding TSB, pre-provisions income amounted to €1,262.9 million, compared with €1,908.6 million in 2015.

72

Allowances for loan losses and other impairments (primarily real estate and financial assets) amounted to €901.8 million, compared with €1,749.1 million in the first half of 2015. Provisions during the second quarter of €91.9 million for the impaired shareholding in BCP are particularly noteworthy. Gains on sales of assets amounted to €35.3 million and included mainly €52.4 million from the arbitration award for the sale of Dexia and income from the sale of real estate assets for own use. During the first half of 2015, gains on sales of assets amounted to €-3.3 million. Negative goodwill generated during the first half of 2015 corresponded to the badwill (net of tax) generated by the acquisition of TSB, amounting to €207.4 million. Profit before tax amounted to €594 million (€396.3 million excluding TSB), representing a 63.4% increase (9% excluding TSB) compared to the same item in the previous year. After deducting income tax and non-controlling interests, net profit attributed to the group amounted to €425.3 million at the end of 1H2016, i.e. 20.7% higher than in the same period of the previous year. Excluding TSB, net profit attributable to the group amounted to €279.6 million at the end of June 2016, compared with €352.2 million during the first half of 2015. BranchesBranchesBranchesBranches At the end of June 2016, Banco Sabadell had 2,806 branches (of which 604 were TSB), i.e. 67 less than at 31 December 2015. Of the total number of Banco Sabadell group branches and offices, 1,595 were operating under the Sabadell brand (including 46 business banking and 2 corporate banking branches); 129 were operating as Sabadell Gallego (including 3 business banking branches); 169 under Sabadell Herrero (including 4 business banking branches); 129 were SabadellGuipuzcoano branches (including 5 business branches); 12 were SabadellUrquijo branches; 105 were Solbank branches; and there were 665 international branches, including 27 operated by Sabadell United Bank, 7 by Sabadell Mexico, 7 by BancSabadell d'Andorra and 604 by TSB. Additionally, ActivoBank has two "Activo Centres" open to the public. BusinesBusinesBusinesBusiness reviews reviews reviews review The key financial figures associated to the group’s largest business units are shown hereafter, in line with the information by segments described in Note 43 to the consolidated financial statements.

Banking business SpainBanking business SpainBanking business SpainBanking business Spain Within banking business in Spain, the most significant businesses should be noted, on which information is shown regarding changes in income and key figures.

Commercial BankingCommercial BankingCommercial BankingCommercial Banking Commercial Banking offers both investment and savings products. In terms of investment, the marketing of mortgage products and loans is particularly noteworthy. In terms of savings, the main products are deposits (demand and with agreed maturity), mutual funds and pension plans. Insurance products and payment methods are also notable, such as credit cards and the issues of transfers, amongst others.

73

Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

N e t i n te r e s t i n c o m eN e t i n te r e s t i n c o m eN e t i n te r e s t i n c o m eN e t i n te r e s t i n c o m e 1 ,1 1 7 ,8 2 31 ,1 1 7 ,8 2 31 ,1 1 7 ,8 2 31 ,1 1 7 ,8 2 3 1 ,0 5 7 ,8 5 01 ,0 5 7 ,8 5 01 ,0 5 7 ,8 5 01 ,0 5 7 ,8 5 0 5 .75 .75 .75 .7

G r o s s i n c o m eG r o s s i n c o m eG r o s s i n c o m eG r o s s i n c o m e 1 ,4 8 6 ,2 1 31 ,4 8 6 ,2 1 31 ,4 8 6 ,2 1 31 ,4 8 6 ,2 1 3 1 ,4 2 9 ,7 8 01 ,4 2 9 ,7 8 01 ,4 2 9 ,7 8 01 ,4 2 9 ,7 8 0 3 .93 .93 .93 .9

N e t o p e r a t i n g i n c o m eN e t o p e r a t i n g i n c o m eN e t o p e r a t i n g i n c o m eN e t o p e r a t i n g i n c o m e 7 8 8 ,4 9 37 8 8 ,4 9 37 8 8 ,4 9 37 8 8 ,4 9 3 7 5 7 ,9 5 47 5 7 ,9 5 47 5 7 ,9 5 47 5 7 ,9 5 4 4 .04 .04 .04 .0

P r o f i t/ ( l o s s ) b e fo r e ta x e sP r o f i t/ ( l o s s ) b e fo r e ta x e sP r o f i t/ ( l o s s ) b e fo r e ta x e sP r o f i t/ ( l o s s ) b e fo r e ta x e s 5 9 3 ,4 7 85 9 3 ,4 7 85 9 3 ,4 7 85 9 3 ,4 7 8 2 7 5 ,4 8 62 7 5 ,4 8 62 7 5 ,4 8 62 7 5 ,4 8 6 1 1 5 .41 1 5 .41 1 5 .41 1 5 .4

R a t i o s (% ) :R a t i o s (% ) :R a t i o s (% ) :R a t i o s (% ) :

ROE (earnings divided by average equity) 26.9% 12.5%

Costs:income ratio (administrative costs divided by gross income) 46.0% 49.4%

C u s to m e r vo l u m e s (m i l l i o n e u r o s )C u s to m e r vo l u m e s (m i l l i o n e u r o s )C u s to m e r vo l u m e s (m i l l i o n e u r o s )C u s to m e r vo l u m e s (m i l l i o n e u r o s )

Loans and advances to customers 77,527 78,435 (1.2)

Customer funds 96,194 89,118 7.9

Securities 6,755 8,750 (22.8)

O th e r d a taO th e r d a taO th e r d a taO th e r d a ta

Personnel 12,299 12,484 (1.5)

Spanish branches 2,127 2,221 (4.2)

C h a n ge (% ) Y o YC h a n ge (% ) Y o YC h a n ge (% ) Y o YC h a n ge (% ) Y o Y

Corporate BankingCorporate BankingCorporate BankingCorporate Banking Corporate Banking offers financial solutions and advisory services to large companies and financial institutions, both national (Spanish) and international. Its activities encompass corporate banking, structured finance, and TradeFinance & IFI.

Tho usand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

N e t i n te r e s t i n c o m eN e t i n te r e s t i n c o m eN e t i n te r e s t i n c o m eN e t i n te r e s t i n c o m e 7 9 ,6 5 07 9 ,6 5 07 9 ,6 5 07 9 ,6 5 0 1 1 0 ,9 6 11 1 0 ,9 6 11 1 0 ,9 6 11 1 0 ,9 6 1 (2 8 .2 )(2 8 .2 )(2 8 .2 )(2 8 .2 )

G r o s s i n c o m eG r o s s i n c o m eG r o s s i n c o m eG r o s s i n c o m e 1 1 5 ,7 7 41 1 5 ,7 7 41 1 5 ,7 7 41 1 5 ,7 7 4 1 2 9 ,0 4 31 2 9 ,0 4 31 2 9 ,0 4 31 2 9 ,0 4 3 (1 0 .3 )(1 0 .3 )(1 0 .3 )(1 0 .3 )

N e t o p e r a t i n g i n c o m eN e t o p e r a t i n g i n c o m eN e t o p e r a t i n g i n c o m eN e t o p e r a t i n g i n c o m e 1 1 5 ,7 7 41 1 5 ,7 7 41 1 5 ,7 7 41 1 5 ,7 7 4 1 2 9 ,0 4 31 2 9 ,0 4 31 2 9 ,0 4 31 2 9 ,0 4 3 (1 0 .3 )(1 0 .3 )(1 0 .3 )(1 0 .3 )

P r o f i t/ ( l o s s ) b e fo r e ta x e sP r o f i t/ ( l o s s ) b e fo r e ta x e sP r o f i t/ ( l o s s ) b e fo r e ta x e sP r o f i t/ ( l o s s ) b e fo r e ta x e s 6 1 ,6 5 06 1 ,6 5 06 1 ,6 5 06 1 ,6 5 0 6 0 ,6 0 96 0 ,6 0 96 0 ,6 0 96 0 ,6 0 9 1 .71 .71 .71 .7



Costs:income ratio (administrative costs divided by gross income) 15.7% 11.8%

C u s to m e r vo l u m e s (m i l l i o n e u r o s )C u s to m e r vo l u m e s (m i l l i o n e u r o s )C u s to m e r vo l u m e s (m i l l i o n e u r o s )C u s to m e r vo l u m e s (m i l l i o n e u r o s )



Securities 2,083 2,176 (4.3)


Personnel 126 116 8.6

Spanish branches 2 2 -

Foreign branches 3 3 -


74

Markets and Private BankingMarkets and Private BankingMarkets and Private BankingMarkets and Private Banking Markets and Private Banking offers and designs products and services with a high added-value with a view to achieving good profitability for the customer, increasing and diversifying the customer base and ensuring consistency of investment processes through a rigorous analysis and with a good-quality management, while taking the customer relationship model to a multichannel level.

Tho usand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

N e t i n te r e s t i n c o m eN e t i n te r e s t i n c o m eN e t i n te r e s t i n c o m eN e t i n te r e s t i n c o m e 2 1 ,2 0 22 1 ,2 0 22 1 ,2 0 22 1 ,2 0 2 2 3 ,7 8 02 3 ,7 8 02 3 ,7 8 02 3 ,7 8 0 (1 0 .8 )(1 0 .8 )(1 0 .8 )(1 0 .8 )

G r o s s i n c o m eG r o s s i n c o m eG r o s s i n c o m eG r o s s i n c o m e 1 1 6 ,5 2 31 1 6 ,5 2 31 1 6 ,5 2 31 1 6 ,5 2 3 1 1 7 ,1 1 21 1 7 ,1 1 21 1 7 ,1 1 21 1 7 ,1 1 2 (0 .5 )(0 .5 )(0 .5 )(0 .5 )

N e t o p e r a t i n g i n c o m eN e t o p e r a t i n g i n c o m eN e t o p e r a t i n g i n c o m eN e t o p e r a t i n g i n c o m e 5 9 ,6 2 25 9 ,6 2 25 9 ,6 2 25 9 ,6 2 2 6 4 ,1 5 26 4 ,1 5 26 4 ,1 5 26 4 ,1 5 2 (7 .1 )(7 .1 )(7 .1 )(7 .1 )

P r o fi t/ ( l o s s ) b e fo r e ta x e sP r o fi t/ ( l o s s ) b e fo r e ta x e sP r o fi t/ ( l o s s ) b e fo r e ta x e sP r o fi t/ ( l o s s ) b e fo r e ta x e s 5 1 ,7 6 05 1 ,7 6 05 1 ,7 6 05 1 ,7 6 0 5 3 ,9 1 95 3 ,9 1 95 3 ,9 1 95 3 ,9 1 9 (4 .0 )(4 .0 )(4 .0 )(4 .0 )


ROE (earnings divided by average equity) 129% 104%

Costs:income ratio (adminis trative costs divided by gross income) 48% 45%

C u s to m e r vo l u m e s (m i l l i o n e u r o )C u s to m e r vo l u m e s (m i l l i o n e u r o )C u s to m e r vo l u m e s (m i l l i o n e u r o )C u s to m e r vo l u m e s (m i l l i o n e u r o )

Loans and advances to customers 989 1,142 (13.4)

Customer funds 973 893 9.0

Securities 8,786 12,605 (30.3)

Assets under management in UCITS 15,309 14,741 3.9

Total assets in UCITS including schemes sold but not managed 21,131 20,230 4.5



Spanish branches 12 12


Business banking United KingdomBusiness banking United KingdomBusiness banking United KingdomBusiness banking United Kingdom Business banking in the United Kingdom corresponds to TSB Banking Group PLC and 6 months of results. The TSB franchise includes retail business conducted in the United Kingdom, which includes current and savings accounts, personal loans, cards and mortgages. Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

N e t in te r e s t i n c o m eN e t in te r e s t i n c o m eN e t in te r e s t i n c o m eN e t in te r e s t i n c o m e 5 5 0 ,0 9 75 5 0 ,0 9 75 5 0 ,0 9 75 5 0 ,0 9 7 - - - - - - - - -

G r o s s i n c o m eG r o s s i n c o m eG r o s s i n c o m eG r o s s i n c o m e 6 4 8 ,0 2 26 4 8 ,0 2 26 4 8 ,0 2 26 4 8 ,0 2 2 - - - - - - - - -

N e t o p e r a t i n g i n c o m eN e t o p e r a t i n g i n c o m eN e t o p e r a t i n g i n c o m eN e t o p e r a t i n g i n c o m e 2 1 3 ,0 2 02 1 3 ,0 2 02 1 3 ,0 2 02 1 3 ,0 2 0 - - - - - - - - -

P r o f i t/ ( l o s s ) b e fo r e ta x e sP r o f i t/ ( l o s s ) b e fo r e ta x e sP r o f i t/ ( l o s s ) b e fo r e ta x e sP r o f i t/ ( l o s s ) b e fo r e ta x e s 1 6 1 ,1 4 71 6 1 ,1 4 71 6 1 ,1 4 71 6 1 ,1 4 7 - -


ROE (earnings divided by average equity) 10.2% - -

Costs:income ratio (administrative costs divided by gross margin) 64.5% - -

C u s to m e r vo lu m e s (m i l l i o n e u r o s )C u s to m e r vo lu m e s (m i l l i o n e u r o s )C u s to m e r vo lu m e s (m i l l i o n e u r o s )C u s to m e r vo lu m e s (m i l l i o n e u r o s )

Loans and advances to customers 33,877 - - - - - - - -

Customer funds 34,051 - -


Personnel 8 ,068 - -

Branches 605 - -

Exchange rat e o f GB P 0 .8 265 app lied to the balance sheet and GB P 0 .7782 (average) app lied to t he inco me stat ement . Fo r ROE, consider ing shareho lders' equit y.

Ch a n g e (% ) Y o YCh a n g e (% ) Y o YCh a n g e (% ) Y o YCh a n g e (% ) Y o Y

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Banking business AmericasBanking business AmericasBanking business AmericasBanking business Americas Business banking Americas offers all types of banking and financial services, from the most complex and specialist services for large corporations, such as project finance operations, to products for individual customers, offering all products and services that professionals and companies of any size might need. Tho usand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

Ne t i n te r e s t i n c o m eNe t i n te r e s t i n c o m eNe t i n te r e s t i n c o m eNe t i n te r e s t i n c o m e 1 2 0 ,7 4 11 2 0 ,7 4 11 2 0 ,7 4 11 2 0 ,7 4 1 9 6 ,7 4 89 6 ,7 4 89 6 ,7 4 89 6 ,7 4 8 2 4 .82 4 .82 4 .82 4 .8

G r o s s i n c o m eG r o s s i n c o m eG r o s s i n c o m eG r o s s i n c o m e 1 5 0 ,8 0 51 5 0 ,8 0 51 5 0 ,8 0 51 5 0 ,8 0 5 1 1 5 ,7 9 21 1 5 ,7 9 21 1 5 ,7 9 21 1 5 ,7 9 2 3 0 .23 0 .23 0 .23 0 .2

Ne t o p e r a t i n g i n c o m eNe t o p e r a t i n g i n c o m eNe t o p e r a t i n g i n c o m eNe t o p e r a t i n g i n c o m e 7 0 ,3 5 27 0 ,3 5 27 0 ,3 5 27 0 ,3 5 2 4 7 ,8 1 04 7 ,8 1 04 7 ,8 1 04 7 ,8 1 0 4 7 .14 7 .14 7 .14 7 .1

P r o fi t/ ( l o s s ) b e fo r e ta x e sP r o fi t/ ( l o s s ) b e fo r e ta x e sP r o fi t/ ( l o s s ) b e fo r e ta x e sP r o fi t/ ( l o s s ) b e fo r e ta x e s 5 3 ,4 1 45 3 ,4 1 45 3 ,4 1 45 3 ,4 1 4 4 4 ,2 4 74 4 ,2 4 74 4 ,2 4 74 4 ,2 4 7 2 0 .72 0 .72 0 .72 0 .7

Ra t io s (% ) :Ra t io s (% ) :Ra t io s (% ) :Ra t io s (% ) :


Costs: income ratio (administrative costs divided by gross income) 50.2% 54.5%

Cu s to m e r vo l u m e s (m i l l i o n e u r o s )Cu s to m e r vo l u m e s (m i l l i o n e u r o s )Cu s to m e r vo l u m e s (m i l l i o n e u r o s )Cu s to m e r vo l u m e s (m i l l i o n e u r o s )

Loans and advances to customers 7,850 6,452 21.7


Securities 2,250 2,203 2.1



Branches 35 27

Exchang e rate o f USD 1.110 2 and M X N 2 0 .6 3 4 7 ap p lied t o t he b alance sheet and USD 1.114 2 and M X N 2 0 .1577 to t he inco me statement (averag e).

Ch a n ge (% ) Y o YCh a n ge (% ) Y o YCh a n ge (% ) Y o YCh a n ge (% ) Y o Y

Real Estate Asset TransformationReal Estate Asset TransformationReal Estate Asset TransformationReal Estate Asset Transformation Asset Transformation comprehensively manages abnormal risk and real estate exposure, and also sets out and implements the strategy of real estate investee companies, such as Solvia. In terms of abnormal risk and real estate exposure, the unit focuses on developing its asset transformation strategy and integrating the overall vision of the group’s real estate balance sheet in order to maximise its value. Asset Transformation manages the bank’s real estate balance sheet with an overall perspective of the entire transformation process, providing services to the real estate portfolio of the group and of third parties, with a business vocation and added value. Thousand euro

3 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 63 0 / 0 6 / 2 0 1 6 3 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 53 0 / 0 6 / 2 0 1 5

Ne t i n te r e s t i n c o m eNe t i n te r e s t i n c o m eNe t i n te r e s t i n c o m eNe t i n te r e s t i n c o m e (1 7 ,3 3 2 )(1 7 ,3 3 2 )(1 7 ,3 3 2 )(1 7 ,3 3 2 ) (4 9 ,3 2 1 )(4 9 ,3 2 1 )(4 9 ,3 2 1 )(4 9 ,3 2 1 ) (6 4 .9 )(6 4 .9 )(6 4 .9 )(6 4 .9 )

G r o s s i n c o m eGr o s s i n c o m eGr o s s i n c o m eGr o s s i n c o m e 4 3 ,6 8 14 3 ,6 8 14 3 ,6 8 14 3 ,6 8 1 (9 ,1 8 1 )(9 ,1 8 1 )(9 ,1 8 1 )(9 ,1 8 1 ) (5 7 5 .8 )(5 7 5 .8 )(5 7 5 .8 )(5 7 5 .8 )

Ne t o p e r a t i n g i n c o m eNe t o p e r a t i n g i n c o m eNe t o p e r a t i n g i n c o m eNe t o p e r a t i n g i n c o m e (3 0 ,7 9 2 )(3 0 ,7 9 2 )(3 0 ,7 9 2 )(3 0 ,7 9 2 ) (7 9 ,4 6 8 )(7 9 ,4 6 8 )(7 9 ,4 6 8 )(7 9 ,4 6 8 ) (6 1 .3 )(6 1 .3 )(6 1 .3 )(6 1 .3 )

P r o f i t/ ( l o s s ) b e fo r e ta x e sP r o f i t/ ( l o s s ) b e fo r e ta x e sP r o f i t/ ( l o s s ) b e fo r e ta x e sP r o f i t/ ( l o s s ) b e fo r e ta x e s (4 2 7 ,0 5 4 )(4 2 7 ,0 5 4 )(4 2 7 ,0 5 4 )(4 2 7 ,0 5 4 ) (3 4 5 ,4 9 0 )(3 4 5 ,4 9 0 )(3 4 5 ,4 9 0 )(3 4 5 ,4 9 0 ) 2 3 .62 3 .62 3 .62 3 .6

Ra t i o s (% ):Ra t i o s (% ):Ra t i o s (% ):Ra t i o s (% ):

ROE (earnings divided by average equity) -24.13% -25.83%

Costs:income (administrative costs divided by gross income) 105.37% -

Cu s to m e r vo l u m e s (m i l l i o n e u r o s )Cu s to m e r vo l u m e s (m i l l i o n e u r o s )Cu s to m e r vo l u m e s (m i l l i o n e u r o s )Cu s to m e r vo l u m e s (m i l l i o n e u r o s )


Customer funds 255 302 (15.6)

Real estate assets (gross) 9,265 9,227 0.4

Oth e r d a taOth e r d a taOth e r d a taOth e r d a ta


Branches - -

Ch a n ge (% ) Y o YCh a n ge (% ) Y o YCh a n ge (% ) Y o YCh a n ge (% ) Y o Y

76

Corporate GovernanceCorporate GovernanceCorporate GovernanceCorporate Governance As required by Article 540 of the Capital Companies Act, the Banco Sabadell group has prepared an annual report on Corporate Governance for the year 2015, which, in accordance with Article 49 of the Spanish Commercial Code, forms part of the Directors’ Report for the 2015 consolidated financial statements. It includes a section on the extent to which the bank is following recommendations on corporate governance that currently exist in Spain. Information on Corporate Governance is available on the group’s corporate website (www.grupobancosabadell.com), and can be accessed directly from the “Corporate governance and remuneration policy” link on this website’s homepage.

77

Glossary of terms on performance measurementsGlossary of terms on performance measurementsGlossary of terms on performance measurementsGlossary of terms on performance measurements

Per formance indicatorPer formance indicatorPer formance indicatorPer formance indicator Defin itionDefin itionDefin itionDefin ition PurposePurposePurposePurpose

Loan to deposit ratio

Gross loans and advances divided by retail funding. Calculated

by subtracting provisions and brokerage loans from the

numerator. Liquidity indicator

Pre-provisions income

Includes gross income and administrative and depreciation

expenses.

Relevant indicator which reflects the evolution of the

Group's consolidated results.

Customer spread

Difference between returns and expenses of customer assets

and liabilities. Indicator of the profitability of our purely banking activity.

Coverage ratio of doubtful assets

Insolvency funds, including contingent liabilities funds /

doubtful risks including doubtful contingent exposures Indicator of asset quality and risk management

Cost-to-income ratio

Staff expenses and other general administrative

expenses/gross income. To calculate this ratio, grosss income

was adjusted by financial operations. Includes linear accrual for

contribution to the Deposit Guarantee Fund and National

Resolution Fund.

Main indicator of efficiency or productivity of banking

activity. It is an indicator which is monitored and included

in the Group's Strategic Plan for 2014-2016.

Loan loss ratio

Doubtful risks, including doubtful contingent exposures /

loans and advances to customers and contingent liabilities. Indicator of asset quality and risk management.

On-balance sheet customer funds

Includes customer deposits (ex-repos) and other liabilities

allocated by the branch network: Banco Sabadell straight

bonds, promissory notes and others.

Key figure in the main balances of the balance sheet, the

evolution of which is monitored.

Off-balance sheet customer funds

Includes mutual funds, equity management, pension funds and

third-party insurance products.

Key figure in the main off-sheet balances of the Group's

consolidated balance sheet, the evolution of which is

monitored.

On-balance sheet funds

Includes customer deposits, debts represented by marketable

securities, subordinated liabilities and liabilities under

insurance contracts.

Key figure in the main balances of the Group's

consolidated balance sheet.

Funds under management

Includes on-balance sheet funds, mutual funds' equity, pension

funds' equity, equity management and third-party insurance

products.

Key figure among the main balances of the Group's

consolidated balance sheet, the evolution of which is

monitored.

Doubtful risks

Doubtful risks due to customer defaults and for reasons other

than customer defaults, including doubtful balances of

contingent liabilities. Indicator of asset quality and risk management.

ROA

Consolidated result for the year/average total assets.

Considers annual accrual of earnings obtained to date,

adjusted by the contribution to the Deposit Guarantee Fund. Indicator of profit obtained from the Group's assets.

ROE

Profit attributed to the Group/average equity (without

considering profit attributed to the Group as part of equity).

Considers annual accrual of earnings obtained to date,

adjusted by the contribution to the Deposit Guarantee Fund. Indicator of profit obtained from equity.

RORWA Consolidated results for the year/ risk-weighted assets (RWA).

An additional measurement of profit, calculated through

risk-weighted assets divided by the Group's risk level.

ROTE

Profit attributed to the Group/ average equity not including

goodwill (not considering profit attributed to the Group as part

of equity and deducting goodwill). Considers annual accrual of

earnings obtained to date, adjusted by the contribution to the

Deposit Guarantee Fund.

Additional measure of profit obtained from equity, although

goodwill is excluded from the calculation. This indicator is

included in the Group's strategic plan for 2014-2016, and

its evolution is monitored.

Maqueta Memoria sem grupo 2016 EN - grupbancsabadell.com...2 Consolidated balance sheets of Banco Sabadell group At 30 June 2016 and 31 December 2015 Thousand euro Asset Note 30/06/2016

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