Q3 2009 Earning Report of Banco Santander S.A

ACTIVITY AND RESULTS

January-September 200928 October 2009

2

Banco Santander, S.A. ("Santander") cautions that this presentation contains forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995. 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 and other key 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.

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 or any advice or recommendation with respect to such securities.

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.

Nothing contained in this presentation is an offer of securities for sale into the United States or in any other jurisdiction. 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. In making this presentation available, Santander makes no recommendation to buy, sell or otherwise deal in shares in Santander or in any other securities or investments whatsoever and you should neither rely nor act upon, directly or indirectly, any of the information contained in this presentation in respect of any such investment activity.

Note: Statements as to historical performance, historical share price or financial accretion are not intended to mean that future performance, historical 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.

Important information

3

Grupo Santander Management Drivers

Group Results 9M’09

Business Areas Results 9M’09

Conclusions

Appendix

Agenda

4Summary

(*) Excluding capital gains and extraordinary allowances

Management of the basic driversSupport from operating areasCountries / businesses diversification

Q3’09: € 2,221 mill. 9M’09: € 6,740 mill.

Ordinary attributable

profit*

… generate highrecurring profit …

1

Issues exchangeSecuritisations purchase Positive impact from IPO Brazil

(**) After allocation of projected capital gains in Q3’09 and Q4’09

Generic provisions: € 7.5 Bill. Core capital: 8.4%

Sep. 09 proforma**:

… strengthen balance sheet and capital …

2

Against a complicated market backdrop, Santander was able to ...

… and maintain the dividend policy3

5

2,2212,423

2,0961,9412,205

2,5242,206

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

EUR million

Group’s ordinary* attributable profit

+0.7%

… placing us on track to reach the targets announced for the whole year

6,935 6,740

9M'08 9M'09

EUR million

Group’s ordinary* attributable profit

-2.8%

High generation of recurring profits, with improved quarterly performance ...

1

-5.0%

-4.0%

(*) Excluding impact from the latest issues exchange operations, securitisations repurchase and Brazil’s IPO

6

235 250 254374

252419372

Q1'08 Q2 Q3 Q4 Q1'09* Q2* Q3*

United Kingdom+49%£ Mill.

(*) Perimeter Q1: +60 mill.; Q2: +84 mill.; Q3: +75 mill.

314373361178104197 253

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Continental Europe:GBM and other

€ Mill.

+77%

Attributable profit* 9M’09

EUR Mill. and %

Europe Commercial

Units

1,014995875911

1,0291,013 1,036

Q1'08 Q2 Q3 Q4 Q1'09* Q2* Q3*

Continental Europe:Commercial Units

+11%€ Mill.

(*) Perimeter Q1: -1 mill.; Q2: +10 mill. Q3: +38 mill.

UK

(*) Over 9M’09 operating areas attributable profit excluding the negative EUR 29 million from Sovereign.

… backed by the operating areas diversification and high resilience to the cycle

1

815

491573574630 635 717

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Brazilconstant US$ Mill.

+42%

15%

16%27%

SAN Network+ Banesto

GlobalEurope

SCF+Portugal10% 20%

Other Latam

Brazil

512606591 588 643 582 531

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Other Latam

-20%

Venezuela’s disposal

constant US$ Mill.12%

7Strengthening the balance sheet. Capital gains and their projected allocation

Exchange of convertible issues 724

Securitisations purchase 99

IPO Brazil 1,424

Contribution to net profit 2,247

Capital gains obtained in Q309 and Q409

No impact from capital gains on profits. They will be fully allocated to strengthening the balance sheet

EUR million EUR million (Estimate)

Generic loan-loss provisions -987 (Fund: EUR 1,400 mill.)

Properties purchased -420 (Fund: EUR 600 mill.; 15% book value)

Other funds (restruct., early retirement, etc) (Fund: EUR 1,200 mill.) -840

Impact on net profit -2,247

2

Projected allocation at the end of the year

(Estimate)

8

5,667 6,027 6,181 6,261 6,163 6,069

2,960

8,905

7,469

9,564 10,55010,550

3,2756,682

18,01916,61915,72715,166

12,863

9,3028,627

Dec 06 Dec 07 Dec 08 Mar 09 Jun 09 Sep 09

Specific

Generic

EUR million

Total funds

Loan-loss provisions

(*) Including allocation of capital gains from exchange operations and securitisations purchase in Q309 and from IPO in Brazil in October

Proforma*

Spain: 3,851OtherEurope: 1,239America: 2,379

3,837 3,431 3,0002,451

3,851

Dec'08 Mar'09 Jun'09 Sep'09

Spain: Generic funds

Proforma*

Proforma*

High loan-loss provisions, after allocation of capital gains, boosted by EUR 7.5 billion of generic ones

Strengthening the balance sheet. Loan-loss provisions2

9

6.1% 5.9%6.3%

7.5%7.3%

7.7%7.5%

8.4%

2005 2006 2007 Dec'08 Mar'09 Jun'09 Sep'09 Sep'09Proforma

IPO Brazil: +60 bpScrip dividend (e): approx.10 bp

Core Capital

Note: 2008 and 2009 according to BIS II, previous data according to BIS I

Strong generation of organic capital (10/15 bp quarterly), boosted by the latest operations bringing core capital to 8.4%*

Strengthening the balance sheet. Capital ratios2

(*) Including capital increase in Brazil (before green shoe) and the capital increase for the payment of Santander Dividendo Elección, to be done in Q4’09.

10Generation of recurring profit and capital strength enable Santander to…

3

846 865

2,099

1,003 1,0001,103

1º 2º 3º 4º 1º 2*

Dividend paid (EUR million)

2008 2009

… maintain pay-out policy with quarterly payment of dividends ...

… and offer a total shareholder return (TSR) well above that of the market and of our peers in the long-, medium- and short-term

+7.6+16.5

+29.7+22.0

15 years 5 years 3 years 1 year

Difference with DJ Stoxx Banks

+4.0+14.8

+37.5

+17.0

15 years 5 years 3 years 1 year

Ranking .. 1º3º2º2º .…….. .…….. .……..

Note: “Peers Group” are 19 large banks that because of their size, charateristics and/or degree of direct competition are the reference group to surpass: Banco Itaú, Bank of America, Barclays, BBVA, BNP Paribas, Citigroup, Credit Agricole, HSBC, Intesa Sanpaolo, JP Morgan, Lloyds, Mitsubishi, Nordea, Royal Bank of Canada, RBS, Societe Generale, UBS, Unicredito, Wells Fargo.

Difference with our peers

CAGR difference in p.p. Based on data obtained from Bloomberg

5.355.98

7.587.238.20

Dec 05 Dec 06 Dec 07 Dec 08 Sep 09

EUR per share

… increase book value* per share ...

(*) Calculated as (capital + reserves + profit – own shares –dividends) / (shares + Valores Santander)(*) Santander Dividendo Elección

11




Conclusions

Appendix

Agenda

12The P&L highlights the resilience of the underlying business and the management focus for the year …

(*) With no impact from extraordinary capital gains, allocated to strengthening balance sheet(**) Including dividends, equity method and other results. Trading gains change o/9M’08: +21.6%

Basic EPS (in euro) 0.7907 0.9695 -18.4 n.s.

Var. 9M’09/9M’08 Group ordinary* results % excl. forexEUR Mill. 9M’09 9M’08 % and perimeter

Soundness of most basic revenues

Expenses management

More LLPs but decelerating

A

B

C

Net interest income 19,478 15,674 +24.3 +17.6

Fees 6,828 6,885 -0.8 -5.7

Trading gains; other** 3,065 2,842 +7.8 +16.2

Gross income 29,371 25,401 +15.6 +11.1

Operating expenses -12,139 -11,242 +8.0 +0.0

Net operating income 17,232 14,159 +21.7 +19.9

Loan-loss provisions -7,200 -4,667 +54.3 +44.6

Net op. income after loan-loss provisions 10,032 9,492 +5.7 +7.8

Ordinary* attrib. profit 6,740 6,935 -2.8 -1.6

13A better “recurring picture” than in previous quarters

+10.6 +11.3 +10.7

Q1'09 H1'09 9M '09

Sound basic revenues(Net int. inc. + Fees + Insurance)% var. o/ same period previous year

-1.7

+4.3+7.8

Q1'09 H1'09 9M '09

Net operating income afterloan-loss provisions

+1.8

+0.3 +0.0

Q1'09 H1'09 9M '09

Management of expenses

A

+67.8+51.2 +44.6

Q1'09 H1'09 9M '09

Loan-loss provisions decelerating

B

C

Note: In all cases performance excluding forex and perimeter impact

% var. o/ same period previous year



14

4.9 5.3 5.5 5.3

2.4 2.3 2.4 2.2 2.1 2.2 2.17.3 7.6 7.9 7.5

8.39.1 9.2

6.15.95.4

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

EUR billion

Fees and insurance activity

Net interest income

Net interest income + fees and insurance activity

5.55.45.15.25.14.94.7

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

LatamConstant US$ Billion

3.2 3.3 3.4 3.53.9 4.0 3.8

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Continental Europe € Billion

621 625 674 731

1,1331,0971,038

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

United Kingdom£ Million

The most commercial revenues remained solid in the quarter, mainly backed by net interest income

Perimeter

A

15

(*) Efficiency ratio with amortisations

Strict management of expenses and good evolution of the envisaged synergies resulted in …

Santander Network

Banesto

SCF

Portugal

United Kingdom (in £)

Brazil (in reales)

Mexico (in pesos)

Chile (in pesos)

Group

… expenses virtually flat in all units while declining in Brazil …

+0.7%

+0.0%

-4.0%

+0.9%

+1.2%

+0.0%

+0.4%

+0.7%

+0.0%

B

(excl. perimeter and forex) Var. (%) o/ 9M’08

35.4%

37.0%

62.8%

41.3%

40.7%

… and improvedefficiency* ratios

Variation o/ 9M’08

-2.9 p.p.

-5.5 p.p.

-6.3 p.p.

[74.5% in Q1’09]

Continental Europe

UK

Latin America

Sovereign

Group -3.0 p.p.

16

-175 -96 -158

-730

-408-193 -222

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

1,346 1,6312,000

2,8332,682 2,694 2,637

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

2,2561,967

2,111

1,2811,599

1,787 1,934

2,417 2,5742,209

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

EUR million

+44%

Group provisions*Specific provisions

Generic provisions

EUR million

EUR million

Provisions continued increasing over 2008, partly impacted by perimeter

C

Perimeter impact

**

(**) Including release of EUR 380 mill. because of substandard

(*) Including country-risk

17The release of generic provisions, particularly in Spain, continues as projected

C

Europe 3,420 1,748 +1,672 -1,035 9 -1,044

UK 687 306 +381 -37 -49 +12

LatAm 3,687 2,870 +817 148 -470 +618

Other 369 53 +316 101 81 +20

Total 8,163 4,977 +3,186 -823 -429 -394

Loan-loss provisions*

Specific**

9M’09 9M’08 Change

Generic

9M’09 9M’08 ChangeEUR million

SAN +Banesto: +860 SCF: +536

Brazil: +649Mexico: +44Chile: +78

SAN + Banesto: -947SCF: +56GBM: -124

Year-on-year change

Brazil: +646

Sovereign: +77Sovereign: +348

A & L: +168

(*) Excluding country-risk. Positive data: provision; negative data: release. (**) Specific loan-loss provisions are reduced by written-off assets recoveries

18

Against an adverse economic backdrop, Santander maintained good credit quality levels in all areas …

Credit qualityC

NPLs

Coverage ratios

Sep.’09

Sep.’09

1.24 1.43 1.71 2.042.49 2.82 3.03

Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09

NPLs and coverage. Grupo SAN

Moro

134 120 105 91 80 72 73

Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09

Percentages

48%

103%

67%

Spain UK Latam

4.20%

1,65%2.98%

Spain UK Latam

… which will be strengthened with an additional EUR 1.4 billion of generic provisions in the Group and in Spain

19

3.7% 3.9% 4.1%4.5%

5.0% 5.2%4.3% 4.5% 4.6%

5.0%

5.9%

4.0%

5.4%

4.5%

Dec'07 Mar'08 Jun'08 Sep'08 Dec'08 Mar'09 Jun'09

0.64 0.88 1.08 1.50 1.95 2.40 2.72 2.980.83 1.11

3.324.20 4.54 4.90

1.612.56

Dec'07 Mar'08 Jun'08 Sep'08 Dec'08 Mar'09 Jun'09 Sep'09

4.40%

2.82%

SAN European peers*

0.69 0.72 0.72 0.77 0.93 1.13 1.34 1.34

1.10 1.21 1.33 1.441.88

2.39 2.43

Dec'07 Mar'08 Jun'08 Sep'08 Dec'08 Mar'09 Jun'09 Sep'09

72%58%

SAN European peers*

Credit qualityC

(*) Average European banks included in our peer group(**) Data in local criteria, on a like-for-like basis with the sector sources. Latam series

restructured because of Venezuela’s disposal and estimate of regulatory changes in Chile

Our ratios still compare very well with peers at Group level and in the main markets where we operate

Group ratios (Jun.’09)

NPLs Coverage

Grupo SAN

Sector

Grupo SAN

Sector

Sector Source: Council of Mortgage Lenders Sector Source: Central Banks

NPLs in % NPLs in %

United Kingdom** Latin America**

Grupo SAN

Banks + Savings banksNPLs in %

Sector Source: Banco de España

Spain

(August)

20




Conclusions

Appendix

Agenda

21

1,210 1,133 1,0891,236 1,3291,3681,289

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Continental Europe 9M’09

+7.7%

+16.3%

+16.1%

+16.5%

+21.6%

Attributableprofit

Net oper.inc. net of

LLPs

Netoperatingincome

Expenses

Grossincome

Attributable profit

Attrib. profit: EUR 3,986 mill.

EUR million

Higher profit due to: resilience of retail revenues and very good year of GBM, costs under control and active risk management

2,166 2,157 2,2522,528

1,957 1,985

2,1762,201

1,9071,833

2,244

2,7692,605 2,620

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Net operating income

TotalGlobal

businesses

Retail banking

EUR million

+10%

0%

+16%

+15%

+15%

Perimeter impact

Var. 9M’09 / 9M’08 (%)

1,290 1,358 1,291

Excludingperimeter

22

609

820

412

483

1,541

941

1,172

1,125

555

2,272

2,496

1,499

1,948

4,074

3,125

960

1,490Other

Portugal

SantanderConsumerFinance

Banesto

SANbranchnetwork

Continental Europe main units 9M’09 EUR Mill. and % o/ 9M’08

+1.8%

+4.6%

+30.2%

+4.7%

+54.8%

+2.6%

+7.6%

+31.6%

+7.5%

+85.3%

+10.3%

+4.2%

-13.9%

+0.3%

+96.4%

+10% +13% +3%

Net operating income:7,994 mill.; +21.6%

Gross income:12,382 mill.; +16.3%

Attributable profit:3,986 mill.; +16.1%

The three large retail units and GBM increased their recurring profit. Consumer harder hit by environment and perimeter

GBM

2,275GBM GBM

23

Revenues: spreads vs. moderate growth

Santander Branch Network 9M’09

Management drivers

+1.8+0.7

Revenues Expenses

Base 100: Q1’08

Results

100 99103 103 104

97100

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

EUR million

% var. 9M’09/9M’08

39.2%

38.7%

9M'08 9M'09

+13.5%

-3.8%

698 648 574736

814 815 804 867

652725754

864773

859

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Var.Q309/Q308

2.86%3.35%

9M'08 9M'09

Var. Sep’09 / Sep’08

Volumes Net interest inc. / ATAs

Expenses: flat for 7 straight quarters

Risks: significant improvement in recoveries

100

208 212

324248

159 134

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Base 100: Q1’08

% recoveries / entriesNet entries

5966 62

75 78 7469

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Gross income Efficiency ratio

Net operating income / Provisions

Net op. income net of LLPs

Provisions

Net op. income

+20%

-0.4%Loans Deposits

24Banesto 9M’09

+1%

-1%

Loans Deposits

+4.6

+0.4

Revenues Expenses

Base 100: Q1’08

EUR million

41.5%

39.8%

9M'08 9M'09

+2.5%

+7.7%

103 103101

104

108 107

100

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

293 299 292 259

355 369 366 353

299308297

401 394378

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Var.Q309/Q308

Revenues: spreads vs. lower growth

2.58%3.01%

9M'08 9M'09

*Retail Banking

% var. 9M’09/9M’08


Expenses: flat for seven straight quarters

Risks: improved trend of net entries– credit quality ratios: of the best among its

peers


Provisions

Net op. income

Management drivers Results

Volumes Net interest inc. / ATAs*



25

+34%

+6%

Loans * Deposits*

Santander Consumer Finance 9M’09


Volumes

(*) Excl. perimeter: -8%; +21%

EUR million

28.0%

27.3%

9M'08 9M'09

+4.3%**

+24.8%*

248 307 253 196

516594 617

668

264244 253

745 770757

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

111118 125

142 144142

100

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

+30.2 +26.8

Revenues Expenses

Base 100: Q1’08

(*) Excl. perimeter: +14%; +0%

* *

(*) Excl. perimeter: +12% (**) Excl. perimeter: -9%

Var.Q309/Q308

Revenues: spreads and volume growth

Expenses: flat on a like-for-like basis

Risks: large provisions and NPLs as projected

Loans spreads

3.78 3.76 3.85 4.034.32

4.694.61

Q1'08Q2 Q3 Q4Q1'09Q2 Q3

3.87%5.46%5.14%

4.18% 4.64%

92%90%86%87% 89%

Sep'08 Dec'08 Mar'09 Jun'09 Sep'09

% var. 9M’09/9M’08

Coverage

NPLs

Net entries Provisions / Net op. inc.

100 96 89 83

Q4'08 Q1'09 Q2 Q3

71% 67% 67% 66%

Q4'08 Q1'09 Q2 Q3

Base 100: 4Q’08

– Lower entries and absorption of net operating income stable

Management drivers ResultsGross income Efficiency ratio



Provisions

Net op. income

26Portugal 9M’09

+1%+7%

+1% +3%

+25%

-3%Individuals SMEs /

BusinessesCompanies Deposits Mutual +

Pen. fundsInsurance

Savings-Inv.

Management drivers

Savings: +5%Loans: +2%

+3%+2%

Loans Deposits

+4.7

+1.2

Revenues Expenses

Base 100: Q1’08

43.7%

42.2%

9M'08 9M'09

-7.7%

+4.0%

100 99 97

107103 103100

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Results

176 166 169 154

175 173 168 162

156151185

197175182

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Revenues: assets spreads, focus on deposits and SMEs growth

Expenses: remained virtually flat

Risks: reduced provisions with NPL ratio under control (2%)

EUR million

1.72% 1.74%

9M'08 9M'09



Var.Q309/Q308

% var. 9M’09/9M’08 Volumes Net interest inc. / ATAs




Provisions

Net op. income

27

235 250 252 254

372419

374

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

+45.8%

+65.4%

+57.9%

+61.6%

+82.3%

Attributableprofit


LLPs

Netoperatingincome

Expenses

Grossincome

354

374 392 422501

373

630571

322317

595

745686 735

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

United Kingdom 9M’09

Attributable profit

Attributable profit: £ 1,164 mill. (EUR 1,314 mill.)

Var. 9M’09 / 9M’08 en £ (%)

Excellent performance fuelled by Abbey and GBM; moreover, positive contribution from the new units. Of note in the quarter: retail banking


TotalGlobal

businessesRetail

Excludingperimeter

+24%

+1%

+45%

+31%

+28%

Perimeter impact

312 335 299

Sterling million

Sterling million

28United Kingdom 9M’09Sustained results due to spreads management,

costs control and moderate provisions

314 334 334 345

374 392 422501

520570497

745 735686

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Net operating incomeSterling million

+55.5%

+74.3%

Net operating income net of provisionsProvisions

… produced strong gains in net operating income

Larger lending spreads …

+65.4

+45.8

Revenues Expenses

“Jaws”% var. 9M’09/9M’08

46.2%

40.7%

9M'08 9M'09

Percentage

0.66 0.70 0.77 0.88

1.67

1.131.44

Q108 Q2 Q3 Q4 Q1'09 Q2 Q3

… and improved efficiency …

Efficiency ratio

Including A&L since Q1’09

Net operating income more than triple provisions

29

24.123.9

Sep'08 Sep'09

Note: Data in local criteria. 2008 data including A&L(*) Including commercial, corporate and investments deposits(**) Performace impacted by Porterbrook disposal (balances: £ 2.1 bn)

United Kingdom 9M’09

Business strategy underscoring the bank’s priorities

154.6 158.1

Sep'08 Sep'09

Corporate loans stock**

140.2

123.0

Sep'08 Sep'09

+14%

+1%

Mortgages stock Deposits stock*

4.66.1

Sep'08 Sep'09

-24%

Other

UPLs

Balances in Bill. £

15.0

11.0

Dec'08 Sep'09

Securities portfolio

-27%





+2%

18% market share in gross new mortgage

loans

30

2,372 2,398 2,256 2,273 2,736

2,876 2,966 2,871 2,862

3,0952,796

3,6803,6043,874

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Total Latin AmericaPerformance in dollars very impacted by exchange rates. Excluding it, net

operating income increased 28%, comfortably absorbing the larger provisions

Total Global

businesses

Retail

Constant US$ million

Note: 2008 proforma with Banco Real

1,221 1,162 1,2171,073

8511,141

1,0741,142 1,2431,136

1,3261,240 1,249

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3


Venezuela impact

-12.1%

-10.0%

+4.4%

-19.6%

-6.0%

Attributableprofit


LLPs

Netoperatingincome

Expenses

Grossincome

Attributable profit: US$ 3,816 mill. (EUR 2,798 mill.)

Var. 9M’09 / 9M’08 in US$ (%) Excluding forex+15%

-2%

+28%

+10%

+6%

Attributable profit


31Latin America units 9M’09 Constant US$ Mill. and % o/ 9M’08

1,886

1,825

2,491

11,516

Venezuela(discontinuedoperations)

Other

Chile

Mexico

Brazil

1,673

7,273

1,221

991

+2%

+13%

+35%

Gross income:17,718 mill.; +15%

Net operating income:11,158 mill.; +28%

Attributable profit:3,816 mill.; +6%

+19%

+9%

+17%

480

2,167

533

527

108

-25%

-1%

+30%

-55%

+1%

+38% +22%

High growth rates in revenues and spreads in all countries except Mexico, as it was harder hit by recession

32

1,318

1,807 1,754 1,713 1,703

1,326

2,1911,791

1,3801,457

1,767

2,3272,291

2,656

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3*

+22.0%

+13.0%

+37.9%

-4.0%

+18.8%

Attributableprofit


LLPs

Netoperatingincome

Expenses

Grossincome

815717

491573574

630 635

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Attributable profit: US$ 2,167 mill.(EUR 1,589 mill.)

Var. 9M’09 / 9M’08 in constant US$ (%)Constant US$ million


TotalGlobal

businesses

Retail

Brazil 9M’09Higher profit for third straight quarter. Sound revenues and cost cuts

offset the larger provisions

Note: 2008 proforma with Banco Real(*) Including capital gains from Visanet green shoe (US$131 mill.) offset with generic

provisions

Attributable profit


33

+3.0%

-4.0%-2.5%-5.3%

2008 Q1'09 Q2 Q3

7.70 7.48 7.19 7.247.82

7.507.22

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

45.6%

36.8%

9M'08 9M'09

ResultsManagement drivers

+18.8

-4.0Revenues* Expenses

Base 100: Q1’08

99 99 100

114 115125

100

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3*

+30.6%

+55.1%

Brazil 9M’09

1,261 1,112 789

1,807 1,754 1,713 1,703

1.0031,3101,2421,263

2,3272,656

2,291

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3*

Note: Data in constant US$

+2% +2%

Loans Deposits excl.Repos

Var. Sep’09 /Sep’08 in local currency

Volumes

Revenues: spreads management in a lower growth scenario of the country’s private-sector banks

Var.Q309/Q308

% var. 9M’09/9M’08

Expenses: sharp fall backed by synergies

Var. o/ same period previous year

Risks: larger provisions, with stable share o/net operating income


10070

10985

Q4'08 Q1'09 Q2 Q3

54% 45% 47% 51%

Q4'08 Q1'09 Q2 Q3

Base 100: Q4’08

Expenses

Note: 2008 proforma with Banco Real(*) Including capital gains from Visanet green shoe (US$ 131 mill.) offset with generic

provisions

Net interest inc. / ATAs




Provisions

Net op. income

34

+10.1%

+2.1% +0.9%

-2.9%2008 Q1'09 Q2 Q3

111

95 97103 107

100100

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Mexico 9M’09


33.3% 32.8%

9M'08 9M'09

+1.5

+0.0

Revenues Expenses

Base 100: Q1’08

+55.8%

+9.9%

367 378186 114

533626

478 453

290283254

595525553

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Revenues: Evolution conditioned by environment and decline in cards and consumer


Expenses: Rigorous management of investments and expenses

+6%-13%


4.80 4.61 4.54

3.674.324.52

3.84

Q1'08Q2 Q3 Q4Q1'09Q2 Q3

Var. Sep’09/Sep’08 in local currency

Var.Q309/Q308

% var. 9M’09/9M’08

Risks: adjustment card business + focus on recoveries

Base 100: Q4’08

75% 54% 52% 45%

Q4'08 Q1'09 Q2 Q3

100 97 99 80

Q4'08 Q1'09 Q2 Q3

Var. o/ same period last year


Provisions

Net op. income

Volumes

Expenses





35

115

132 132 127 128121

100

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Chile 9M’09


-6%-2%


35.7%

33.1%

9M'08 9M'09

+8.6

+0.7

Revenues Expenses

Base 100: Q1’08

-17.8%

-11.3%

210 228315 295

296350

434 436

259264232

418385

418

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Revenues: good performance with customers but sharp negative impact from UF deflation

4.41 4.88 5.13

3.494.38

5.554.74

Q1'08Q2 Q3 Q4Q1'09Q2 Q3


Var. Sep’09/Sep’08 in local currency

Var.Q309/Q308

% var. 9M’09/9M’08

Expenses: already at “zero growth”

Risks: Impact from new recoveries unit

Base 100: Q4’08

32% 44% 37% 33%

Q4'08 Q1'09 Q2 Q3

100 110 81 65

Q4'08 Q1'09 Q2 Q3

+8.0%+4.2%

-0.7% -1.0%

2008 Q1'09 Q2 Q3

Var. o/ same period last year


Provisions

Net op. income


Volumes

Expenses




36Corporate ActivitiesPerformance o/9M’08: lower earnings (equity method, gains on financial

transactions and dividends), rentals and Metrovacesa provision

Attributable profit Corporate Activities (9M’09 vs. 9M’08 difference )

EUR mill.Main impacts:

Dividends and equity -169

Metrovacesa charge -195

Lower gains on financial transactions -312

Expenses (higher rentals) -106

Other items and taxes -250

Total impact on profit: -1,032

37

SECONDARY SEGMENTS

38

1,981 1,844 1,843 1,643 1,828 1,9861,752

Q1'08 Q2 Q3 Q4 Q1'09 Q2* Q3

Retail Banking Strong resilience of retail banking to the environment,

maintaining results sustainability


4,153 4,224 4,251 4,0565,142 5,403

4,822

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Attributable profit

EUR million

EUR million

-1.8%

+0.6%

+21.7%

+9.9%

+16.6%

Attributableprofit


LLPs

Netoperatingincome

Expenses

Grossincome

Retail BankingVar. 9M’09 / 9M’08 (%) in EUR

+10%

+0%

+18%

+0%

-3%

+27%

+8%

• Venezuela impact registered under discontinued operations. In Q1’09; € 81 mill. , Q2’09: € 1 mill.; Q3’09: 0 mill.

+13%

Excl. fx and perimeter

39

628 605715

951 9831,152

975

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

394 379 435533

672

879

634

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

-12.3%

+35.6%

+80.9%

+68.6%

+59.7%

Attributableprofit


LLPs

Netoperatingincome

Expenses

Grossincome

Global Wholesale Banking (GBM)Excellent business performance over 2008 backed by market share

gains and spreads ...

Attributable profit

Attributable profit: EUR 2,185 mill.Var. 9M’09 / 9M’08


EUR million

EUR million

40

805 799980 1,097 1,128

149 13461

169168

147

1,2621,148

116954 933

1,041

1,266 1,2641,430

1,275

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Global Wholesale Banking (GBM)… and the area’s management capacities

Gross income (EUR mill.)

Solid revenues generation …

Total

Trading

Customers

By customer revenues

… in our core markets …

Spain, Brazil and the UK generate around 80% of customer revenues

1,046

1,668

757

1,069

150

87

631

714

2,584

3,538

9M'08 9M'09

+37%

+13%TOTAL

Investment banking

Equities

+41%

+59%

Customer revenues (EUR mill.)

…based on a diversified product portfolio …

(*) Including Global Transaction Banking and Credit

-42%

Corporate Banking*

Hedges of interest / exchange rates

41Global Wholesale Banking (GBM)… and the area’s management capacities

Strict in costs

325 328 327 315292278290

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

-11%

Effort made in reducing structures in 2008 and 2009

Further efficiency improvement, differentiating us from our competitors

High quality of credit portfolio

Revenue growth without increasing risk …

… and without further liquidity needs

Strict commitment in risks and in capital consumption

Sep’08 = 100

10086

Sep'08 Sep'09

69 69

Sep'08 Sep'09

EUR billion

Excluding forex impact

Operating expenses (EUR mill.)

GBM Risk-weighted assetsLoans to GBM customers

42Asset Management and InsuranceHigh contribution to the Group via revenues and profit

Generates revenues for retail networks (cross-selling) …

1

Attributable profit (EUR mill.)

Asset Mgmt.

Insurance

… maintaining sustained results2

In 9M’09: EUR 2,709 mill. of gross income from mutual funds and insurance

= 9% of Group’s revenues

After costs and fees paid to the networks

7493

67 76

4143

39 21

85 104 81

19

36 8

115136

105 115 106123

89

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

440

334

292

171

217

210

26

9M’08 (const. EUR )EUR million

Brazil

Spain

Germany

UK

Other Latam

Other Europe

Sovereign

+35%

-39%

+28%

+42%

+11%

+1%

n.s.

Potential from global

management + incorporations

139115

9M'08 9M'09

Asset ManagementStarting volumes recovery, still without impact on revenues

Expenses (EUR million)

-17%

Managed assets (EUR billion)

131

101 100 105 111

D'07 D'08 M'09 J'09 S'09

Insurance (PBT + fees)

43

SOVEREIGN

44

127 212 238

374332 323

501 544 561

Q1'09* Q2'09 Q3'09

221238183

Q1'09* Q2'09 Q3'09

Sovereign: contribution to Grupo Santander results

Note: data under Group criteria (*) February-March data at a quarterly rate

Higher revenues, lower costs and provisions under control:moving toward the break-even point

Net operating income quarterly increase …

+66%

US$ million

… already higher than provisions in the third quarter

Gross income +9%

-11%

Loan-loss provisionsUS$ million

-4-10

-25

Q1'09 Q2'09 Q3'09

+12%

+3%

-3% Attributable profit


Expenses

US$ million

Provisions / gross loans (%)

2.94

2.63

3.57

Mar'09 Jun'09 Sep'09

45

27.728.327.225.8

Dec'08 Mar'09 Jun Sep

Sovereign: main business highlights

Note: data under US GAAP(*) Commercial and Industrial(**) Wholesale (demand and time deposits), government and repos

US$ billion

Gross loans

In loans: reducing of non-basic loansIn deposits: focus on reducing the financing cost

50.852.9

54.955.9


18.521.0

23.322.6


US$ billion

Deposits

Exiting non-basic segments:• Auto: -29% o/Dec.08

• C&I and other (*): -15% o/Dec.08

Focus on core depositsExiting expensive deposits

Retail demand deposits -9% Retail time and others**

-18%

+7%

46




Conclusions

Appendix

Agenda

47Amid a difficult banking scenario, Santander was able to ….

Quarterly recurring profit around EUR 2.2 billion

Obtain value from diversification

Obtain value from integrations and synergies

Maintain high profits

All of it while remaining on track to reach the targets announced for the whole year

Capacity to allocate provisions: Net operating income 2.4x provisionsGeneration of free capitalReinforced due to application of extraordinary results

Generic provisions proforma: EUR 7.5 Bill.Core capital Sep.09 proforma: 8.4%

Strengthen balance sheet and capital

Sustained increase of book value per share

Maintain pay-out policy: high quarterly dividends

Surpassing peers and the market in profitability in the long-, medium- and short term

Generate value for shareholders

48

Europe and the US: starting moderate recovery

Latin America: area of largest growth, starring Brazil …

Stable interest rates environment, with an upward trend in zones of faster recovery

Outlook for the coming quarters

Macroeconomic scenario

Revenues management differentiated by countries:spreads, balances, product mix and fees

Strict management of expenses / synergies

Management of integrations

Management of risks / recoveries

Efficient use of capital and liquidity

SAN management drivers

49




Conclusions

Appendix

Agenda

50

Continental Europe. Main units spreads (%)

3.82 3.87 3.95 3.86 3.40 3.15 2.99

2.21

1.38 1.39

2.26

1.43 1.702.31

0.681.19

2.44 2.48

0.89

2.52 2.16

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

Loans Deposits Total

1.90 1.64

3.27 3.43 3.35 3.172.51 2.27

1.961.941.531.451.421.37

1.90

0.310.57

2.011.90

0.79

2.69

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3


3.78 3.76 3.85 4.03 4.32 4.61 4.69

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3

1.96 1.94 1.90 1.57

1.721.701.61

1.481.371.391.470.400.450.74

2.122.15

3.43 3.33 3.27 3.052.35

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3


SAN Branch Network Banesto Retail Banking

Santander Consumer Lending Portugal Retail Banking

51Continental Europe. NPLs and coverage

3.87%5.46%5.14%

4.18% 4.64%

92%90%86%87% 89%


NPLs Coverage

Santander Consumer

2.13% 2.04%1.65% 1.87%1.72%

65% 68%71%82% 77%


NPLs Coverage

Portugal

Banco Santander*

69%

2.59%

63%96%137% 78%

2.82%1.93% 2.35%1.36%


NPLs Coverage

(*) Santander Branch Network NPL ratio was 3.86% and coverage 52%

73%

2.32%

70%106%146% 85%

2.62%1.64% 1.96%1.18%


NPLs Coverage

Banesto

52

0.77 0.88

1.24 1.14

2.00 1.95 2.01 2.02 2.04 2.22 2.25

1.671.44

0.700.66

1.13

0.580.78

1.251.34

0.91

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3Loans Deposits Total

United Kingdom. Spreads and NPL ratios (%)

1.54% 1.65%1.04% 1.25%0.76%

45% 48%69%57% 56%

Sep'08 Dec'08 Mar'09 Jun'09 Sep'09NPLs Coverage

Note: Including A&L since Q1’09 Note: Including A&L since Dec’08

(*)

(*) UPLs coverage >100%

Spreads Retail Banking NPLs and coverage ratios

53Exchange rates. Latin America 9M’09 Strong depreciation of Latin American currencies

against the dollar and euro

9M'09 9M'08 Var.

1.364 1.520 11%2.826 2.560 -9%

18.610 15.983 -14%779.144 732.671 -6%

9M'09 9M'08 Var.

2.072 1.684 -19%13.646 10.515 -23%

571.305 482.006 -16%

US DOLLARBRAZILIAN REALNEW MEXICAN PESOCHILEAN PESO

BRAZILIAN REALNEW MEXICAN PESOCHILEAN PESO

AVERAGE RATESEUR / LOCAL CCY.

AVERAGE RATESUS$ / LOCAL CCY.

(*) Positive sign: currency appreciation; negative sign: currency depreciation

54Spreads main countries Latin America (%)

15.00 15.59 16.39 15.81

1.29 1.28

16.76 16.44 16.29 16.87 17.01 17.43 16.68

15.2015.51 15.94

1.04 0.871.241.25 1.07

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3


3.71 3.58 2.09

14.71 14.90 14.70 14.27 14.19 13.35 12.49

10.8311.19 11.44 10.99 10.69 10.77 10.40

3.363.52 3.46 2.58

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3


8.40 8.61 8.69 8.51 7.92 7.81 7.48

5.615.895.355.245.455.33

5.90

1.871.923.45 3.163.163.07

2.02

Q1'08 Q2 Q3 Q4 Q1'09 Q2 Q3


Mexico Retail Banking

Chile Retail Banking

Brazil Retail Banking

55Latin America. NPL and coverage ratios

Mexico

Chile

4.75% 5.09%3.35% 3.58% 3.86%

92% 95%102%109% 107%


Brazil

2.06%3.04% 2.45%2.41% 2.80%

122% 221%132%134% 128%


3.30% 3.38%2.64% 3.05%2.45%

94% 94%102%111% 95%


NPLs Coverage

56

1.86

0.79

2.322.60 2.65

1.911.88

0.690.44

Q1'09 Q2 Q3


Sovereign. Spreads and NPL and coverage ratios (%)

Spreads

4.34% 4.82%3.98%

67%66% 68%

Mar'09 Jun'09 Sep'09NPLs Coverage

NPLs and Coverage

Investor Relations

Q3 2009 Earning Report of Banco Santander S.A