Banco Comercial Portugues

Investor Presentation • Sep 23, 2015

Rami Aboukhair

Country Head Spain

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 the geographical segments and the accounting principles under which their results are presented by Grupo Santander may differ from the business included in the public subsidiaries in such geographies and the accounting principles applied locally. Accordingly, the results of operations and trends shown by Grupo Santander for its geographical segments may differ materially from those disclosed locally by such subsidiaries.

Macro environment: a return to growth

GDP (annual growth, %)

Unemployment (%)

Spanish economy on the path to recovery… …backed by the adjustments and the structural reforms undertaken

Competitiveness (unit labour cost)

Financial sector back to growth but with additional challenges

We have a strong starting point

Market leaders in Affluent (17%2), Private Banking (21%2) and Corporates (18%2). Working with all top Spanish corporates

NPL ratio below system average and positive recovery rates.

Creation of Santander Spain Board of Directors, same

Leverages the value of the Santander Group, Corporate

(1) Top bank, with 27%, for customers interested in dealing with a new bank (FRS Survey for Financial Behavior of mass market customers in 2014) (2) Market share figures

With solid market share in all dimensions

Amounts in €MM	Jun'15	YoY (%)	Market share1	Market share1 vs branch market share
Gross loans2	161,357	0%	13.4%	+2.4 p.p
Deposits2	181,716	3%	13.8%	+2.8 p.p
Mutual Funds	45,471	17%	16.1%	+5.1 p.p
Total savings	227,187	6%	14.2%	+3.2 p.p
Branches	3,490	-3%	11.0%

(1) Loans, Deposits and Funds market share data as of May 2015 with data from Bank of Spain statistical bulletin (chapters 4, 8 and 19) (2) Without repos

During the consolidation process, we grew thanks to "flight to quality"

We have a great opportunity to increase our number of loyal and primary customers

Strategic priorities – a transformation based on five pillars

Strategic priorities – a transformation based on five pillars

In mass market we have a big opportunity to grow transactionality

(1) Primary c/a or Pension = Salary/Retirement pension paid monthly into current account (2) Data from Bank of Spain 2014 report Note: 1,064MM salaries paid into c/a to 12.5milllion employees in Spain excluding sole traders and freelance, 841k pension funds. Public government data. Figures May 2015

1 Mass Market

We are in process to transform our commercial model

• Large amount of customers without fees
• Complex commercial offer

• Multiple campaigns with up-front cost

• Reward customer loyalty

• More focused commercial network
• Monthly fees

1

1 Mass Market

1 Mass Market

New strategy with sound economic fundamentals

Our new strategy will create a deeper customer relationship

1 Mass Market

So far, we have opened 500,000 new 1I2I3 accounts

Initial results of the 1I2I3 account

1 Mass Market

1 Mass Market

Our target 1I2I3 account for 2018

We are market leaders in affluent and private banking, with a unique growth value proposition

Helping people and businesses prosper 21

1

Affluent and

Private

Strategic priorities – a transformation based on five pillars

We have a big opportunity to build our position in SMEs and Corporate through greater customer loyalty

2 SMEs and Corporate

In SMEs we want to be the bank of choice in Spain, increasing loyal customers

Integrated Customer Management

Customer vision as a key factor for the rest of the strategy

Focus in Assets

Lending as a vehicle for SMEs transactionality

Specialised Commercial Branches

More flexible pricing and simpler processes

Improvement in high value offer

Structural improvement of value-added products for our customers

New Multichannel strategy

Process improvements with digital focus

Relationship as primary bank

(€2-50M revenues)

Source: FRS Report December 2014. First Bank Customer Relationship

In Corporate we will continue to be leaders in Spain

2 Corporate

We have a relationship with 80% of the corporate market, and are the first-choice bank for 1/3 of them Key elements of the strategy

Corporate customers

Assets market share

• Evolution of the commercial model based on specialisation and differentiation …
• …and high value-added products and services…
• …to offer differential coverage for our TOP customers

2018 targets

• From 23% to 35% high value-added products and services
• Share of Risk: from 24% to 31% in Top Tier 1 groups

Source: Top Peer Corporate Annual Accounts

Global Corporate Banking: continue leading while improving our capital efficiency

Maintain our leadership with Global Corporate Banking customers

• Increase transactional banking share from 27% to 30%
• Implement capital optimisation initiatives
• Develop the required infrastructure to satisfy new regulatory context

Increase high value added products with Retail and Commercial Banking customers

2 Global

Corporate B.

• Increase penetration of:
• Credit (originate and distribute)
• Capital Markets & M&A
• and Structured Trade products
• Boost FX, Equity and Structured Products

Strategic priorities – a transformation based on five pillars

Our operational excellence plan is making a strong impact at all levels

(1) SLAs – Service Level Agreements

Digital will be at the core of everything we do, building on the 1|2|3 World

Customers can open a 1|2|3 account in four steps on digital channels – both on web and mobile1

(1) Applicable to Santander existing customers (2)Opened every weekday minute on digital channels

3 Operational excellence

Multichannel agenda 2015-2018 | Digital channels

New Supernet Mobile and New APPs: mobile and watch • New web functionalities for Business and corporates • Commercial lending • Valued added products integration: Confirming, factoring, leasing, renting • New look & feel and usability • Biometric authentication (voice) • Improvement of digital sales functionalities • NFC payment • 1st Bank call centre by customer experience Digitalisation for Business and Corporates New online Broker Contact Centre

• End-to-end sales in the channel
• Service to sale
• Speech & Text analytics

Cuenta 1|2|3

Santander Watch

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Strategic priorities – a transformation based on five pillars

The Advanced Risk Management (ARM) program will further strengthen our risk culture

Helping people and businesses prosper 32

4 ARM

Strategic priorities – a transformation based on five pillars

Our strategy will deliver increased profitability and a more efficient capital model

5 Profitability

2018 Spain targets

		1H'15	2018
People	Best bank to work	1st	1st
	Individual career plans	13,120	15,400
	Evaluation 180º for commercial positions	-	7,000
Customers	Total loyal customers (MM)	1.0	2.5
	1I2I3 accounts (k)	290	4,000
	Digital customers (MM)	1.9	4.2
	Best in class banks in customer satisfaction	5th	1st
	Fee income CAGR	-8%	5-10%
Shareholders	NPL ratio	6.9%	<4.5%
	RoTE	11.5%	c.14%
	C/I ratio	52%	c.50%
Communities	Number of scholarships 2016-2018 (k)		39.2

Note: Group criteria (1) 1H'14-1H'15 (2) 2015-2018

Transparent performance metrics for 2016

Key takeaways

Santander starts from a leading position

Build long-term relationships with retail customers – 1|2|3 strategy

Bank of choice for SMEs and corporates with segment-based strategy

Digital, mobile and Big Data at the core of our strategy

Embed the corporate culture: Simple | Personal | Fair