Banco Comercial Portugues

Investor Presentation • Sep 24, 2015

Andreu Plaza

Head of Technology and Operations

Banco Santander, S.A. ("Santander") cautions that this presentation contains forward-looking statements. These forward-looking statements are found in various places throughout this presentation and include, without limitation, statements concerning our future business development and economic performance. While these forward-looking statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to: (1) general market, macro-economic, governmental and regulatory trends; (2) movements in local and international securities markets, currency exchange rates and interest rates; (3) competitive pressures; (4) technological developments; and (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. The risk factors that we have indicated in our past and future filings and reports, including those with the Securities and Exchange Commission of the United States of America (the "SEC") could adversely affect our business and financial performance. Other unknown or unpredictable factors could cause actual results to differ materially from those in the forward-looking statements.

Forward-looking statements speak only as of the date on which they are made and are based on the knowledge, information available and views taken on the date on which they are made; such knowledge, information and views may change at any time. Santander does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

The information contained in this presentation is subject to, and must be read in conjunction with, all other publicly available information, including, where relevant any fuller disclosure document published by Santander. Any person at any time acquiring securities must do so only on the basis of such person's own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in the presentation. In making this presentation available, Santander gives no advice and makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever.

Neither this presentation nor any of the information contained therein constitutes an offer to sell or the solicitation of an offer to buy any securities. No offering of securities shall be made in the United States except pursuant to registration under the U.S. Securities Act of 1933, as amended, or an exemption therefrom. Nothing contained in this presentation is intended to constitute an invitation or inducement to engage in investment activity for the purposes of the prohibition on financial promotion in the U.K. Financial Services and Markets Act 2000.

Note: Statements as to historical performance, share price or financial accretion are not intended to mean that future performance, share price or future earnings (including earnings per share) for any period will necessarily match or exceed those of any prior year. Nothing in this presentation should be construed as a profit forecast.

Note: The businesses included in each of our geographical segments and the accounting principles under which their results are presented here may differ from the businesses included in our public subsidiaries in such geographies and the accounting principles applied locally. Accordingly, the results of operations and trends shown for our geographical segments may differ materially from those disclosed locally by such subsidiaries.

The IT&Ops division's aim is to deliver excellent customer service to our 117MM customers, with best in class efficiency: Operational excellence

We focus on the elements that will help Santander become the best retail and commercial bank

and lines of business, by delivering simple, flexible, reliable and efficient platforms and processes to be the best retail and commercial bank that earns the lasting loyalty of our people, customers, shareholders and communities

The division is organised in a 3 layer model

To date, the Group has invested in robust technology capabilities that are the foundations of our digitalisation

The Group has a shared infrastructure of five state-of-the-art Data Centres that manage all customer data and reduce operational risks

Our local banks and Data Centres are interconnected through a proprietary network (GSNET)

Shared infrastructure results in lower platform costs

(1) MIPS: Microprocessor without Interlocked Pipeline Stages

(2) Retail banks: Those 4 entities (among the 13) closest to Santander in terms of banking profile (Société Générale, Wells Fargo, Unicredito, BBVA)

(3) Industry benchmark: HSBC, BNP Paribas, JP Morgan Chase, Barclays, Mitsubishi, Bank of America, Citigroup, Société Générale, Royal Bank of Scotland, Wells Fargo, Lloyds, Unicredito, BBVA Source: IBM Global Technology Services benchmark. November 2014

The Group has a shared core banking structure that is considered among the best in the world

(1) Source: Oliver Wyman benchmark, November 2013. This benchmark is a comparison of vendor platforms: Infosys, TCS, Partenon/Alhambra, Temenos, SAP, Accenture, Misys, Sopra, FIS, Fiserv

Shared Service Centres serve banks on an 'arms length' basis, providing expert knowledge and economies of scale: a unique model that creates a sustainable strategic advantage

This efficiency management has helped to maintain low costs of IT, despite a very intensive agenda to build the infrastructure

Santander Group is leader in R&D3 expenditure versus peers4

(1) Outflow: IT actual cash expenditure (2) Source: McKinsey benchmark 2014 (3) Research and development (4)European Commission, public data of R&D expenditure in 2014

Going forward further efficiencies will allow us to undertake investments in digitalisation

Now it is time for customer experience (operational excellence) and innovation

We have already started the digitalisation around 5 themes

(1) P2P: Peer-to-peer banking (2) CRM: Customer relationship management

Developing operational excellence

Boosting front applications and improving customer experience

Focusing on data challenges from the regulatory world to new business opportunities

Developing a new architecture and more flexible and efficient technologies

Changing our culture

2018 targets

Key takeaways

Our IT&Ops 3 layer model (Corporate Division, banks and SSC) is unique and drives significant efficiencies

This model also helps to increase service quality and guarantees a deep control of the technological and operational risk

So far, the Group has invested in robust technology capabilities that are the foundations of our digitalisation

Now it is time for customer experience (operational excellence) and innovation, whilst maintaining our resilience