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o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Jurisdiction of incorporation)
28660 Boadilla del Monte (Madrid), Spain
(address of principal executive offices)
Banco Santander, S.A.
Ciudad Grupo Santander
28660 Boadilla del Monte
Madrid, Spain
Tel: +34 91 289 32 80
Fax: +34 91 257 12 82
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Title of each class | Name of each exchange on which registered | |
American Depositary Shares, each representing the right to receive one Share of Capital Stock of Banco Santander, S.A., par value Euro 0.50 each | New York Stock Exchange | |
Shares of Capital Stock of Banco Santander, S.A., par value Euro 0.50 each | New York Stock Exchange * | |
Guarantee of Non-cumulative Guaranteed Preferred Stock of Santander Finance Preferred, S.A. Unipersonal, Series 1, 4, 5, 6, 10 and 11 | New York Stock Exchange ** |
* | Banco Santander Shares are not listed for trading, but are only listed in connection with the registration of the American Depositary Shares, pursuant to requirements of the New York Stock Exchange. | |
** | The guarantee is not listed for trading, but is listed only in connection with the registration of the corresponding Non-cumulative Guaranteed Preferred Stock of Santander Finance Preferred, S.A. Unipersonal (a wholly owned subsidiary of Banco Santander, S.A.) |
None.
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None.
Large accelerated filerþ | Accelerated filero | Non-accelerated filero |
US GAAPo | International Financial Reporting Standards as issued by the International Accounting Standards Boardþ | Othero |
of business covered by the annual report.
8,228,826,135 shares
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Exhibit 1.1 | ||||||||
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Exhibit 4.1 | ||||||||
Exhibit 12.1 | ||||||||
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Exhibit 12.3 | ||||||||
Exhibit 13.1 | ||||||||
Exhibit 15.1 |
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• | “dollars”, “US$” or “$”, we mean United States dollars; | ||
• | “pounds” or “£”, we mean United Kingdom pounds; and | ||
• | “one billion”, we mean 1,000 million. |
• | exposure to various types of market risks; |
• | management strategy; |
• | capital expenditures; |
• | earnings and other targets; and |
• | asset portfolios. |
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• | exposure to various types of market risks, principally including interest rate risk, foreign exchange rate risk and equity price risk; |
• | general economic or industry conditions in Spain, the United Kingdom, the United States, other European countries, Latin America and the other areas in which we have significant business activities or investments; |
• | the sovereign debt rating for Spain and the other countries where we operate; |
• | continued deterioration in the global economy or in the economies of Spain, the United Kingdom, other European countries, Latin America, and the United States, and continued volatility in the capital markets; |
• | the effects of a continued decline in real estate prices, particularly in Spain, the UK and the US; |
• | monetary and interest rate policies of the European Central Bank and various central banks; |
• | inflation or deflation; |
• | the effects of non-linear market behavior that cannot be captured by linear statistical models, such as the VaR/DCaR/ACaR model we use; |
• | changes in competition and pricing environments; |
• | the inability to hedge some risks economically; |
• | the adequacy of loss reserves; |
• | acquisitions or restructurings of businesses that may not perform in accordance with our expectations; |
• | changes in demographics, consumer spending, investment or saving habits; and |
• | changes in competition and pricing environments as a result of the progressive adoption of the internet for conducting financial services and/or other factors. |
• | political stability in Spain, the United Kingdom, other European countries, Latin America and the US; |
• | changes in Spanish, UK, EU, Latin American, US or foreign laws, regulations or taxes, and |
• | increased regulation in light of the global financial crisis. |
• | damage to our reputation; |
• | our ability to integrate successfully our acquisitions and the challenges inherent in diverting management’s focus and resources from other strategic opportunities and from operational matters while we integrate these acquisitions; and |
• | the outcome of our negotiations with business partners and governments. |
• | technical difficulties and the development and use of new technologies by us and our competitors; |
• | the occurrence of force majeure, such as natural disasters, that impact our operations or impair the asset quality of our loan portfolio; |
• | the impact of changes in the composition of our balance sheet on future net interest income; and |
• | potential losses associated with an increase in the level of substandard loans or non-performance by counterparties to other types of financial instruments. |
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Year Ended December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
(in thousands of euros, except percentages and per share data) | ||||||||||||||||||||
Interest and similar income | 53,173,004 | 55,043,546 | 45,512,258 | 36,669,337 | 33,343,659 | |||||||||||||||
Interest expense and similar charges | (26,874,462 | ) | (37,505,084 | ) | (31,069,486 | ) | (24,879,598 | ) | (23,258,149 | ) | ||||||||||
Interest income / (charges) | 26,298,542 | 17,538,462 | 14,442,772 | 11,789,739 | 10,085,510 | |||||||||||||||
Income from equity instruments | 436,474 | 552,757 | 419,997 | 412,554 | 335,257 | |||||||||||||||
Income from companies accounting for by the equity method | (520 | ) | 791,754 | 438,049 | 423,875 | 615,607 | ||||||||||||||
Fee and commission income | 10,726,368 | 9,741,400 | 9,290,043 | 8,147,164 | 7,051,487 | |||||||||||||||
Fee and commission expense | (1,646,234 | ) | (1,475,105 | ) | (1,421,538 | ) | (1,251,132 | ) | (1,080,662 | ) | ||||||||||
Gains/losses on financial assets and liabilities (net) | 3,801,645 | 2,892,249 | 2,306,384 | 2,048,725 | 1,435,370 | |||||||||||||||
Exchange differences (net) | 444,127 | 582,215 | 648,528 | 95,936 | 54,257 | |||||||||||||||
Other operating income | 7,928,538 | 9,436,308 | 6,739,670 | 6,075,564 | 3,353,935 | |||||||||||||||
Other operating expenses | (7,784,621 | ) | (9,164,487 | ) | (6,449,120 | ) | (5,800,019 | ) | (3,025,586 | ) | ||||||||||
Total income | 40,204,319 | 30,895,553 | 26,414,785 | 21,942,406 | 18,825,175 | |||||||||||||||
Administrative expenses | (14,824,605 | ) | (11,665,857 | ) | (10,776,670 | ) | (9,783,902 | ) | (9,207,125 | ) | ||||||||||
Personnel expenses | (8,450,283 | ) | (6,813,351 | ) | (6,434,343 | ) | (5,886,871 | ) | (5,542,192 | ) | ||||||||||
Other general expenses | (6,374,322 | ) | (4,852,506 | ) | (4,342,327 | ) | (3,897,031 | ) | (3,664,933 | ) | ||||||||||
Depreciation and amortization | (1,596,445 | ) | (1,239,590 | ) | (1,247,207 | ) | (1,130,159 | ) | (1,000,050 | ) | ||||||||||
Provisions (net) | (1,792,123 | ) | (1,640,561 | ) | (895,552 | ) | (1,007,037 | ) | (1,791,355 | ) | ||||||||||
Impairment losses on financial assets (net) | (11,578,322 | ) | (6,283,052 | ) | (3,430,122 | ) | (2,454,985 | ) | (1,913,890 | ) | ||||||||||
Impairment losses on other assets (net) | (164,630 | ) | (1,049,226 | ) | (1,548,218 | ) | (20,066 | ) | (154,475 | ) | ||||||||||
Gains/(loss) on disposal of assets not classified as non-current assets held for sale | 1,565,013 | 101,156 | 1,810,428 | 348,199 | 1,373,508 | |||||||||||||||
Gains/(loss) on disposal of non-current assets held for sale not classified as discontinued operations | (1,225,407 | ) | 1,730,902 | 643,050 | 959,318 | 1,063,606 | ||||||||||||||
Operating profit/(loss) before tax | 10,587,800 | 10,849,325 | 10,970,494 | 8,853,774 | 7,195,394 | |||||||||||||||
Income tax | (1,206,610 | ) | (1,836,052 | ) | (2,322,107 | ) | (2,255,585 | ) | (1,132,220 | ) | ||||||||||
Profit from continuing operations | 9,381,190 | 9,013,273 | 8,648,387 | 6,598,189 | 6,063,174 | |||||||||||||||
Profit/(loss) from discontinued operations (net) | 30,870 | 319,141 | 987,763 | 1,647,564 | 490,275 | |||||||||||||||
Consolidated profit for the year | 9,412,060 | 9,332,414 | 9,636,150 | 8,245,753 | 6,553,449 | |||||||||||||||
Profit attributable to the Parent | 8,942,538 | 8,876,414 | 9,060,258 | 7,595,947 | 6,023,783 | |||||||||||||||
Profit attributable to minority interests | 469,522 | 456,000 | 575,892 | 649,806 | 529,666 | |||||||||||||||
Per share information: | ||||||||||||||||||||
Average number of shares (thousands) (1) | 8,554,224 | 7,271,470 | 6,801,899 | 6,701,728 | 6,693,400 | |||||||||||||||
Basic earnings per share (in euros) | 1.0454 | 1.2207 | 1.3320 | 1.1334 | 0.9000 | |||||||||||||||
Basic earnings per share continuing operation (in euros) | 1.0422 | 1.1780 | 1.2003 | 0.9233 | 0.8422 | |||||||||||||||
Diluted earnings per share (in euros) | 1.0382 | 1.2133 | 1.3191 | 1.1277 | 0.8968 | |||||||||||||||
Diluted earnings per share continuing operation (in euros) | 1.0350 | 1.1709 | 1.1887 | 0.9186 | 0.8393 | |||||||||||||||
Dividends paid (in euros) (2) | 0.6000 | 0.6325 | 0.6068 | 0.4854 | 0.3883 | |||||||||||||||
Dividends paid (in US$) (2) | 0.8644 | 0.8802 | 0.8932 | 0.6393 | 0.4581 |
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Year Ended December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
(in thousands of euros, except percentages and per share data) | ||||||||||||||||||||
Total assets | 1,110,529,458 | 1,049,631,550 | 912,914,971 | 833,872,715 | 809,961,664 | |||||||||||||||
Loans and advances to credit institutions (net) (3) | 79,836,607 | 78,792,277 | 57,642,604 | 69,757,056 | 66,127,043 | |||||||||||||||
Loans and advances to customers (net) (3) | 682,550,926 | 626,888,435 | 571,098,513 | 527,035,514 | 439,964,442 | |||||||||||||||
Investment Securities (net) (4) | 173,990,918 | 124,673,342 | 132,035,268 | 136,760,433 | 203,938,360 | |||||||||||||||
Investments: Associates | 164,473 | 1,323,453 | 15,689,127 | 5,006,109 | 3,031,482 | |||||||||||||||
Contingent liabilities (net) | 59,256,076 | 65,323,194 | 76,216,585 | 58,769,309 | 48,453,575 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits from central banks and credit institutions (5) | 142,091,587 | 129,877,370 | 112,897,308 | 113,038,061 | 148,624,811 | |||||||||||||||
Customer deposits (5) | 506,976,237 | 420,229,450 | 355,406,519 | 330,947,770 | 305,631,794 | |||||||||||||||
Debt securities (5) | 211,963,173 | 236,403,290 | 233,286,688 | 203,742,817 | 148,829,300 | |||||||||||||||
Capitalization | ||||||||||||||||||||
Guaranteed Subordinated debt excluding preferred securities and preferred shares (6) | 13,866,889 | 15,747,915 | 16,742,134 | 11,186,480 | 8,973,699 | |||||||||||||||
Secured Subordinated debt | — | — | — | — | — | |||||||||||||||
Other Subordinated debt | 15,192,269 | 14,452,488 | 11,666,663 | 12,399,771 | 13,016,989 | |||||||||||||||
Preferred securities (6) | 7,315,291 | 7,621,575 | 7,261,382 | 6,836,570 | 6,772,768 | |||||||||||||||
Preferred shares (6) | 430,152 | 1,051,272 | 522,558 | 668,328 | 1,308,847 | |||||||||||||||
Minority interest (including net income of the period) | 5,204,058 | 2,414,606 | 2,358,269 | 2,220,743 | 2,848,223 | |||||||||||||||
Stockholders’ equity (7) | 68,666,584 | 57,586,886 | 55,199,882 | 44,851,559 | 40,334,064 | |||||||||||||||
Total capitalization | 110,675,243 | 98,874,742 | 93,750,888 | 78,163,451 | 73,254,590 | |||||||||||||||
Stockholders’ Equity per Share (7) | 8.03 | 7.92 | 8.12 | 6.69 | 6.03 | |||||||||||||||
Other managed funds | ||||||||||||||||||||
Mutual funds | 105,216,486 | 90,305,714 | 119,210,503 | 119,838,418 | 109,480,095 | |||||||||||||||
Pension funds | 11,309,649 | 11,127,918 | 11,952,437 | 29,450,103 | 28,619,183 | |||||||||||||||
Managed portfolio | 18,364,168 | 17,289,448 | 19,814,340 | 17,835,031 | 14,746,329 | |||||||||||||||
Savings -insurance policies | 9,422,386 | 12,338,405 | 9,008,968 | 6,384,994 | 15,145,607 | |||||||||||||||
Total other managed funds | 144,312,689 | 131,061,485 | 159,986,248 | 173,508,546 | 167,991,214 | |||||||||||||||
Consolidated Ratios | ||||||||||||||||||||
Profitability Ratios: | ||||||||||||||||||||
Net Yield (8) | 2.62 | % | 2.05 | % | 1.80 | % | 1.68 | % | 1.63 | % | ||||||||||
Return on average total assets (ROA) | 0.86 | % | 1.00 | % | 1.10 | % | 1.01 | % | 0.89 | % | ||||||||||
Return on average stockholders’ equity (ROE) | 13.90 | % | 17.07 | % | 21.91 | % | 21.39 | % | 18.84 | % | ||||||||||
Capital Ratio: | ||||||||||||||||||||
Average stockholders’ equity to average total assets | 5.85 | % | 5.55 | % | 4.71 | % | 4.36 | % | 4.32 | % | ||||||||||
Ratio of earnings to fixed charges (9) | ||||||||||||||||||||
Excluding interest on deposits | 2.01 | % | 1.57 | % | 1.67 | % | 1.78 | % | 1.75 | % | ||||||||||
Including interest on deposits | 1.40 | % | 1.27 | % | 1.35 | % | 1.36 | % | 1.30 | % | ||||||||||
Credit Quality Data (excluding country risk) | ||||||||||||||||||||
Allowances for impaired balances (*) (excluding country risk) | 18,497,070 | 12,862,981 | 9,302,230 | 8,626,937 | 7,047,475 | |||||||||||||||
Allowances for impaired balances (*) as a percentage of total loans and contingent liabilities | 2.44 | % | 1.83 | % | 1.42 | % | 1.45 | % | 1.43 | % | ||||||||||
Impaired balances (*) (10) | 24,553,624 | 14,190,813 | 6,178,655 | 4,607,547 | 4,341,500 | |||||||||||||||
Impaired balances (*) as a percentage of total loans and contingent liabilities | 3.24 | % | 2.02 | % | 0.94 | % | 0.78 | % | 0.88 | % | ||||||||||
Allowances for impaired balances (*) as a percentage of impaired balances (*) | 75.33 | % | 90.64 | % | 150.55 | % | 187.23 | % | 162.33 | % | ||||||||||
Balances (*) charged-off as a percentage of total loans and contingent liabilities | 1.17 | % | 0.55 | % | 0.41 | % | 0.31 | % | 0.21 | % |
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IFRS-IASB | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
(in thousands of euros) | ||||||||||||||||||||
Allowances refers to: | ||||||||||||||||||||
Allowances for impaired balances (*) (excluding country risk) | 18,497,070 | 12,862,981 | 9,302,230 | 8,626,937 | 7,047,475 | |||||||||||||||
Allowances for contingent liabilities (excluding country risk) | (573,836 | ) | (603,372 | ) | (571,957 | ) | (541,519 | ) | (475,519 | ) | ||||||||||
Allowances for Balances of Loans: | 17,923,234 | 12,259,609 | 8,730,273 | 8,085,418 | 6,571,956 | |||||||||||||||
Allowances referred to country risk and other | 142,120 | 641,192 | 157,851 | 293,032 | 409,969 | |||||||||||||||
Allowances for impaired balances (excluding contingent liabilities) | 18,065,354 | 12,900,801 | 8,888,124 | 8,378,450 | 6,981,925 | |||||||||||||||
Of which: | ||||||||||||||||||||
Allowances for customers and Credit institutions and other financial assets: | 17,898,632 | 12,719,623 | 8,796,371 | 8,288,128 | 6,901,925 | |||||||||||||||
Allowances for Customers | 17,873,096 | 12,466,056 | 8,695,204 | 8,163,444 | 6,755,175 | |||||||||||||||
Allowances for Credit institutions and other financial assets | 25,536 | 253,567 | 101,167 | 124,684 | 146,750 | |||||||||||||||
Allowances for investment securities | 166,722 | 181,178 | 91,753 | 90,322 | 80,000 |
(*) | Balances of loans and contingent liabilities | |
(1) | Average number of shares has been calculated on the basis of the weighted average number of shares outstanding in the relevant year, net of treasury stock. | |
(2) | The shareholders at the annual shareholders’ meeting held on June 19, 2009 approved a dividend of€0.6508 per share to be paid out of our profits for 2008. In accordance with IAS 33, for comparative purposes, dividends per share paid, as disclosed in the table above, take into account the adjustment arising from the capital increase with pre-emptive subscription rights carried out in December 2008. As a result of this adjustment, the dividend per share for 2008 amounts to€0.6325. The shareholders also approved a new remuneration scheme (scrip dividend), whereby the Bank offered the shareholders the possibility to opt to receive an amount equivalent to the second interim dividend on account of the 2009 financial year in cash or new shares. The dividend per share for 2009 disclosed above,€0.60, is calculated assuming that the four dividends for the year were paid in cash. | |
(3) | Equals the sum of the amounts included under the headings “Financial assets held for trading”, “Other financial assets at fair value through profit or loss” and “Loans and receivables” as stated in our consolidated financial statements. | |
(4) | Equals the amounts included as “Debt instruments” and “Other equity instruments” under the headings “Financial assets held for trading”, “Other financial assets at fair value through profit or loss”, “Available-for-sale financial assets” and “Loans and receivables” as stated in our consolidated financial statements. | |
(5) | Equals the sum of the amounts included under the headings “Financial liabilities held for trading”, “Other financial liabilities at fair value through profit or loss” and “Financial liabilities at amortized cost” included in Notes 20, 21 and 22 to our consolidated financial statements. | |
(6) | In our consolidated financial statements, preferred securities and preferred shares are included under “Subordinated liabilities”. | |
(7) | Equals the sum of the amounts included at the end of each year as “Own funds” and “Valuation adjustments” as stated in our consolidated financial statements. We have deducted the book value of treasury stock from stockholders’ equity. | |
(8) | Net yield is the total of net interest income (including dividends on equity securities) divided by average earning assets. See “Item 4. Information on the Company—B. Business Overview—Selected Statistical Information—Assets—Earning Assets—Yield Spread”. | |
(9) | For the purpose of calculating the ratio of earnings to fixed charges, earnings consist of income from continuing operations before taxation and minority interests plus fixed charges and after deduction of the unremitted pre-tax income of companies accounted for by the equity method. Fixed charges consist of total interest expense, including or excluding interest on deposits as appropriate, and the proportion of rental expense deemed representative of the interest factor. Fixed charges include dividends and interest paid on preferred shares. | |
(10) | Impaired loans reflect Bank of Spain classifications. Such classifications differ from the classifications applied by U.S. banks in reporting loans as non-accrual, past due, restructured and potential problem loans. See “Item 4. Information on the Company—B. Business Overview—Classified Assets—Bank of Spain Classification Requirements”. |
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Rate During Period | ||||||||
Period End | Average Rate(1) | |||||||
Calendar Period | ($) | ($) | ||||||
2005 | 1.1842 | 1.2449 | ||||||
2006 | 1.3197 | 1.2661 | ||||||
2007 | 1.4603 | 1.3797 | ||||||
2008 | 1.3919 | 1.4695 | ||||||
2009 | 1.4406 | 1.3948 |
(1) | The average of the Noon Buying Rates for euros on the last day of each month during the period. |
Rate During Period | ||||||||
Last six months | High $ | Low $ | ||||||
2009 | ||||||||
December | 1.5120 | 1.4276 | ||||||
2010 | ||||||||
January | 1.4563 | 1.3966 | ||||||
February | 1.3984 | 1.3489 | ||||||
March | 1.3765 | 1.3338 | ||||||
April | 1.3615 | 1.3245 | ||||||
May | 1.3238 | 1.2223 | ||||||
June (through June 4) | 1.2268 | 1.2060 |
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• | Commercial Banking: in which Santander Brasil provides a broad range of products and services and centralize banking transactions of its customers in order to increase the number of products used per customer. Deposit-taking activities, credit operations, retail lending, personal loans, credit card, account overdraft loans, consumer finance, mortgages, corporate lending, BNDES On-lending, agricultural lending, leasing and private banking are the main areas of this segment. |
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• | Global Wholesale Banking: Santander Brasil leads wholesale banking in Brazil and offer financial services and sophisticated and structured solutions to its customers. Santander Brasil maintains focus on four core pillars: (1) strengthening customer relationships, (2) emphasizing performance and productivity to ensure growth, (3) managing risk profiles and (4) solidifying the recognition of its global brand for product distribution. Santander Brasil’s wholesale business provides its customers with a wide range of domestic and international services, and seeks to provide solutions specifically tailored to the needs of each customer. The Global Wholesale Banking segment’s products and services are available not only to GB&M clients, but also to corporate and small and medium enterprise (“SME”) customers. Global transaction banking, credit markets, corporate finance, equities, rates, market making, proprietary trading and correspondent banking are the main areas of this segment. |
• | Asset Management and Insurance: Santander Brasil manages and administers third-party funds on a discretionary and non-discretionary basis, by means of mutual funds, pension funds and individual and corporate investment portfolios. In addition, it offers to its retail and SME customers various insurance products, including life and personal injury insurance, homeowner’s insurance, credit life insurance, credit card loss and theft insurance and private retirement plans. |
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• | Alliance & Leicester plc acquisition:There was a capital increase of 140,950,944 new shares of€0.50 par value each in accordance with the resolutions adopted by the Bank’s extraordinary shareholder general meeting held on September 22, 2008. One new Santander share was issued for every three Alliance & Leicester plc shares. These shares were issued on October 10, 2008. |
• | Banco Santander rights offering:There was a capital increase of 1,598,811,880 new shares of€0.50 par value each at an issue price of€4.50 per share, which was fully paid on December 3, 2008, in connection with a right offering conducted by Banco Santander. The total amount of the issue was€7,194,653,460. |
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• | Sovereign acquisition:The acquisition of Sovereign involved the issuance, on January 30, 2009, of 0.3206 ordinary shares of Banco Santander for each ordinary share of Sovereign. To this end, 161,546,320 ordinary shares were issued by Santander for a cash amount (par value plus share premium) of€1.3 billion. |
• | “Valores Santander”: Conversion of 754 “Valores Santander” was requested in the ordinary conversion period that ended on October 5, 2009. Pursuant to the terms of such securities, we issued 257,647 new shares in exchange for those “Valores Santander” which commenced trading in the Spanish Stock Exchanges on October 15, 2009. |
• | “Scrip Dividend Scheme”:On November 2, 2009 we issued 72,962,765 ordinary shares par value€0.5 in the free-of-charge capital increase, corresponding to 0.89% of our share capital. The amount of the capital increase was€36,481,382.50. |
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• | Continental Europe. This covers all retail banking business (including Banco Banif, S.A. (“Banif”), our specialized private bank), wholesale banking and asset management and insurance conducted in Europe, with the exception of the United Kingdom. This segment includes the following units: the Santander Branch Network, Banco Español de Crédito, S.A. (“Banesto”), Santander Consumer Finance (including Santander Consumer USA) and Portugal. |
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• | United Kingdom. This includes retail and wholesale banking, asset management and insurance conducted by the various units and branches of the Group in the UK. |
• | Latin America. This embraces all the financial activities conducted via our subsidiary banks and other subsidiaries in Latin America. It also includes the specialized units in Santander Private Banking, as an independent globally managed unit. Santander’s business in New York is also managed in this area. |
• | Sovereign. Sovereign’s figures are recorded on their own. Sovereign began to be consolidated in the first quarter of 2009, after its acquisition became effective. |
• | Retail Banking. This covers all customer banking businesses (except those of Corporate Banking, which are managed globally throughout the world). |
• | Global Wholesale Banking. This business reflects the returns from Global Corporate Banking, Investment Banking and Markets worldwide, including all treasury activities under global management, as well as our equities business. |
• | Asset Management and Insurance. This includes our units that design and manage mutual and pension funds and insurance. |
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Percentage Held | ||||
at December 31, 2009 | ||||
Banco Santander (Brasil), S.A. | 83.55 | |||
Banco Santander Chile | 76.74 | |||
Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander | 74.95 | |||
Banco Santander Río, S.A. (Argentina) | 99.30 | |||
Banco Santander, S.A. (Uruguay) | 100.00 | |||
Banco Santander Colombia, S.A. | 97.85 | |||
Banco Santander Puerto Rico | 90.59 | |||
Banco Santander Perú, S.A. | 100.00 |
(1) | When we indicate “variations in local currency”, we calculate the variation of the balance sheet data in the currency of the country that is being described, eliminating the effect of exchange rates from the local currency to euros. |
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• | We have included interest received on non-accruing assets in interest income only if we received such interest during the period in which it was due; |
• | We have included loan fees in interest income; |
• | We have not recalculated tax-exempt income on a tax-equivalent basis because the effect of doing so would not be significant; |
• | We have included income and expenses from interest-rate hedging transactions as a separate line item under interest income and expenses if these transactions qualify for hedge accounting under IFRS. If these transactions did not qualify for such treatment, we have included income and expenses on these transactions elsewhere in our income statement. See Note 2 to our consolidated financial statements for a discussion of our accounting policies for hedging activities; |
• | We have stated average balances on a gross basis, before netting our allowances for credit losses, except for the total average asset figures, which includes such netting; and |
• | All average data have been calculated using month-end balances, which is not significantly different from having used daily averages. |
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2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||
ASSETS | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | |||||||||||||||||||||||||||
(in thousand of euros, except percentages) | ||||||||||||||||||||||||||||||||||||
Cash and due from central banks | ||||||||||||||||||||||||||||||||||||
Domestic | 7,916,042 | 86,918 | 1.10 | % | 7,629,805 | 242,954 | 3.18 | % | 3,502,564 | 123,432 | 3.52 | % | ||||||||||||||||||||||||
International | 25,933,209 | 268,921 | 1.04 | % | 21,224,830 | 514,997 | 2.43 | % | 14,745,386 | 415,071 | 2.81 | % | ||||||||||||||||||||||||
33,849,251 | 355,839 | 1.05 | % | 28,854,635 | 757,951 | 2.63 | % | 18,247,950 | 538,503 | 2.95 | % | |||||||||||||||||||||||||
Due from credit entities | ||||||||||||||||||||||||||||||||||||
Domestic | 20,934,738 | 366,521 | 1.75 | % | 14,858,817 | 726,287 | 4.89 | % | 10,040,530 | 574,735 | 5.72 | % | ||||||||||||||||||||||||
International | 58,290,277 | 2,155,515 | 3.70 | % | 61,173,074 | 3,095,167 | 5.06 | % | 59,125,638 | 2,265,509 | 3.83 | % | ||||||||||||||||||||||||
79,225,015 | 2,522,036 | 3.18 | % | 76,031,891 | 3,821,454 | 5.03 | % | 69,166,168 | 2,840,244 | 4.11 | % | |||||||||||||||||||||||||
Loans and credits | ||||||||||||||||||||||||||||||||||||
Domestic | 230,641,779 | 10,297,581 | 4.46 | % | 235,002,141 | 13,968,547 | 5.94 | % | 215,521,349 | 11,437,122 | 5.31 | % | ||||||||||||||||||||||||
International | 436,857,260 | 31,784,344 | 7.28 | % | 340,938,627 | 27,397,524 | 8.04 | % | 330,253,241 | 23,144,396 | 7.01 | % | ||||||||||||||||||||||||
667,499,039 | 42,081,925 | 6.30 | % | 575,940,768 | 41,366,071 | 7.18 | % | 545,774,590 | 34,581,518 | 6.34 | % | |||||||||||||||||||||||||
Debt securities | ||||||||||||||||||||||||||||||||||||
Domestic | 40,146,418 | 1,157,953 | 2.88 | % | 24,948,203 | 951,353 | 3.81 | % | 20,222,647 | 747,248 | 3.70 | % | ||||||||||||||||||||||||
International | 92,776,382 | 4,428,624 | 4.77 | % | 73,645,946 | 3,555,521 | 4.83 | % | 91,880,249 | 3,259,557 | 3.55 | % | ||||||||||||||||||||||||
132,922,800 | 5,586,577 | 4.20 | % | 98,594,149 | 4,506,874 | 4.57 | % | 112,102,896 | 4,006,805 | 3.57 | % | |||||||||||||||||||||||||
Income from hedging operations | ||||||||||||||||||||||||||||||||||||
Domestic | 304,669 | 695,086 | 580,530 | |||||||||||||||||||||||||||||||||
International | 586,600 | 2,548,537 | 2,010,890 | |||||||||||||||||||||||||||||||||
891,269 | 3,243,623 | 2,591,420 | ||||||||||||||||||||||||||||||||||
Other interest-earning assets | ||||||||||||||||||||||||||||||||||||
Domestic | 29,389,475 | 609,652 | 2.07 | % | 23,577,214 | 618,246 | 2.62 | % | 29,729,778 | 692,339 | 2.33 | % | ||||||||||||||||||||||||
International | 60,208,919 | 1,125,706 | 1.87 | % | 41,486,705 | 729,327 | 1.76 | % | 18,454,627 | 261,428 | 1.42 | % | ||||||||||||||||||||||||
89,598,394 | 1,735,358 | 1.94 | % | 65,063,919 | 1,347,573 | 2.07 | % | 48,184,405 | 953,767 | 1.98 | % | |||||||||||||||||||||||||
Total interest-earning assets | ||||||||||||||||||||||||||||||||||||
Domestic | 329,028,452 | 12,823,294 | 3.90 | % | 306,016,180 | 17,202,473 | 5.62 | % | 279,016,868 | 14,155,406 | 5.07 | % | ||||||||||||||||||||||||
International | 674,066,047 | 40,349,710 | 5.99 | % | 538,469,182 | 37,841,073 | 7.03 | % | 514,459,141 | 31,356,851 | 6.10 | % | ||||||||||||||||||||||||
1,003,094,499 | 53,173,004 | 5.30 | % | 844,485,362 | 55,043,546 | 6.52 | % | 793,476,009 | 45,512,257 | 5.74 | % | |||||||||||||||||||||||||
Investments in affiliated companies | ||||||||||||||||||||||||||||||||||||
Domestic | 152,893 | — | 0.00 | % | 2,576,136 | — | 0.00 | % | 2,547,829 | — | 0.00 | % | ||||||||||||||||||||||||
International | 708,988 | — | 0.00 | % | 10,044,991 | — | 0.00 | % | 6,194,828 | — | 0.00 | % | ||||||||||||||||||||||||
861,881 | — | 0.00 | % | 12,621,127 | — | 0.00 | % | 8,742,657 | — | 0.00 | % | |||||||||||||||||||||||||
Total earning assets | ||||||||||||||||||||||||||||||||||||
Domestic | 329,181,345 | 12,823,294 | 3.90 | % | 308,592,316 | 17,202,473 | 5.57 | % | 281,564,697 | 14,155,406 | 5.03 | % | ||||||||||||||||||||||||
International | 674,775,035 | 40,349,710 | 5.98 | % | 548,514,173 | 37,841,073 | 6.90 | % | 520,653,969 | 31,356,851 | 6.02 | % | ||||||||||||||||||||||||
1,003,956,380 | 53,173,004 | 5.30 | % | 857,106,489 | 55,043,546 | 6.42 | % | 802,218,666 | 45,512,257 | 5.67 | % | |||||||||||||||||||||||||
Other assets | 90,198,410 | 75,975,026 | 70,466,632 | |||||||||||||||||||||||||||||||||
Assets from discontinued operations | 4,980,696 | 8,024,216 | 4,996,980 | |||||||||||||||||||||||||||||||||
Total average assets | 1,099,135,486 | 53,173,004 | 941,105,731 | 55,043,546 | 877,682,278 | 45,512,257 |
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Year Ended December 31, | ||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | Average Balance | Interest | Average Rate | |||||||||||||||||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||||||||||||||||||||||
Due to credit entities | ||||||||||||||||||||||||||||||||||||
Domestic | 21,713,054 | 424,084 | 1.95 | % | 18,468,695 | 830,324 | 4.50 | % | 16,252,861 | 713,579 | 4.39 | % | ||||||||||||||||||||||||
International | 120,217,372 | 2,861,280 | 2.38 | % | 95,892,266 | 2,858,266 | 2.98 | % | 95,716,945 | 3,140,863 | 3.28 | % | ||||||||||||||||||||||||
141,930,426 | 3,285,364 | 2.31 | % | 114,360,961 | 3,688,590 | 3.23 | % | 111,969,806 | 3,854,442 | 3.44 | % | |||||||||||||||||||||||||
Customers deposits | ||||||||||||||||||||||||||||||||||||
Domestic | 130,580,883 | 2,694,867 | 2.06 | % | 119,381,247 | 3,830,610 | 3.21 | % | 111,160,325 | 2,974,509 | 2.68 | % | ||||||||||||||||||||||||
International | 333,021,416 | 9,115,847 | 2.74 | % | 234,812,668 | 11,169,783 | 4.76 | % | 221,517,887 | 9,097,691 | 4.11 | % | ||||||||||||||||||||||||
463,602,299 | 11,810,714 | 2.55 | % | 354,193,915 | 15,000,393 | 4.24 | % | 332,678,212 | 12,072,200 | 3.63 | % | |||||||||||||||||||||||||
Marketable debt securities | ||||||||||||||||||||||||||||||||||||
Domestic | 125,931,287 | 3,598,181 | 2.86 | % | 145,061,770 | 6,487,367 | 4.47 | % | 119,274,612 | 5,231,367 | 4.39 | % | ||||||||||||||||||||||||
International | 95,298,804 | 2,638,566 | 2.77 | % | 92,762,877 | 4,330,281 | 4.67 | % | 108,172,479 | 4,120,238 | 3.81 | % | ||||||||||||||||||||||||
221,230,091 | 6,236,747 | 2.82 | % | 237,824,647 | 10,817,648 | 4.55 | % | 227,447,091 | 9,351,605 | 4.11 | % | |||||||||||||||||||||||||
Subordinated debt | ||||||||||||||||||||||||||||||||||||
Domestic | 21,704,442 | 1,028,748 | 4.74 | % | 20,532,672 | 1,111,241 | 5.41 | % | 16,649,935 | 846,949 | 5.09 | % | ||||||||||||||||||||||||
International | 17,304,105 | 1,325,301 | 7.66 | % | 15,724,436 | 1,303,801 | 8.29 | % | 16,862,344 | 1,253,049 | 7.43 | % | ||||||||||||||||||||||||
39,008,547 | 2,354,049 | 6.03 | % | 36,257,108 | 2,415,042 | 6.66 | % | 33,512,279 | 2,099,998 | 6.27 | % | |||||||||||||||||||||||||
Other interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||
Domestic | 37,347,808 | 1,128,882 | 3.02 | % | 36,605,703 | 876,041 | 2.39 | % | 28,510,083 | 1,001,797 | 3.51 | % | ||||||||||||||||||||||||
International | 70,461,483 | 1,241,760 | 1.76 | % | 52,981,507 | 573,773 | 1.08 | % | 47,882,027 | 197,244 | 0.41 | % | ||||||||||||||||||||||||
107,809,291 | 2,370,642 | 2.20 | % | 89,587,210 | 1,449,814 | 1.62 | % | 76,392,110 | 1,199,041 | 1.57 | % | |||||||||||||||||||||||||
Expenses from hedging operations | ||||||||||||||||||||||||||||||||||||
Domestic | (622,758 | ) | 1,402,069 | 480,014 | ||||||||||||||||||||||||||||||||
International | 1,439,704 | 2,731,528 | 2,012,186 | |||||||||||||||||||||||||||||||||
816,946 | 4,133,597 | 2,492,200 | ||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||
Domestic | 337,277,474 | 8,252,004 | 2.45 | % | 340,050,087 | 14,537,652 | 4.28 | % | 291,847,816 | 11,248,215 | 3.85 | % | ||||||||||||||||||||||||
International | 636,303,180 | 18,622,458 | 2.93 | % | 492,173,754 | 22,967,432 | 4.67 | % | 490,151,682 | 19,821,271 | 4.04 | % | ||||||||||||||||||||||||
973,580,654 | 26,874,462 | 2.76 | % | 832,223,841 | 37,505,084 | 4.51 | % | 781,999,498 | 31,069,486 | 3.97 | % | |||||||||||||||||||||||||
Other liabilities | 54,382,807 | 44,784,845 | 41,501,911 | |||||||||||||||||||||||||||||||||
Minority interest | 3,191,835 | 2,432,563 | 2,239,676 | |||||||||||||||||||||||||||||||||
Stockholders’ Equity | 63,393,172 | 54,149,565 | 47,147,854 | |||||||||||||||||||||||||||||||||
Liabilities from discontinued operations | 4,587,018 | 7,514,918 | 4,793,339 | |||||||||||||||||||||||||||||||||
Total average Liabilities and Stockholders’ Equity | 1,099,135,486 | 26,874,462 | 941,105,732 | 37,505,084 | 877,682,278 | 31,069,486 |
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IFRS-IASB | ||||||||||||
2009/2008 | ||||||||||||
Increase (Decrease) due to changes in | ||||||||||||
Volume | Rate | Net change | ||||||||||
(in thousands of euros) | ||||||||||||
Interest income | ||||||||||||
Cash and due from central banks | ||||||||||||
Domestic | 2,664 | (158,700 | ) | (156,036 | ) | |||||||
International | 48,949 | (295,025 | ) | (246,076 | ) | |||||||
51,613 | (453,725 | ) | (402,112 | ) | ||||||||
Due from credit entities | ||||||||||||
Domestic | 106,801 | (466,567 | ) | (359,766 | ) | |||||||
International | (107,698 | ) | (831,954 | ) | (939,652 | ) | ||||||
(897 | ) | (1,298,521 | ) | (1,299,418 | ) | |||||||
Loans and credits | ||||||||||||
Domestic | (192,934 | ) | (3,478,032 | ) | (3,670,966 | ) | ||||||
International | 6,977,954 | (2,591,134 | ) | 4,386,820 | ||||||||
6,785,020 | (6,069,166 | ) | 715,854 | |||||||||
Debt securities | ||||||||||||
Domestic | 438,618 | (232,018 | ) | 206,600 | ||||||||
International | 917,291 | (44,188 | ) | 873,103 | ||||||||
1,355,909 | (276,206 | ) | 1,079,703 | |||||||||
Other interest-earning assets | ||||||||||||
Domestic | 121,081 | (129,675 | ) | (8,594 | ) | |||||||
International | 350,744 | 45,635 | 396,379 | |||||||||
471,825 | (84,040 | ) | 387,785 | |||||||||
Total interest-earning assets without hedging operations | ||||||||||||
Domestic | 476,230 | (4,464,992 | ) | (3,988,762 | ) | |||||||
International | 8,187,240 | (3,716,666 | ) | 4,470,574 | ||||||||
8,663,470 | (8,181,658 | ) | 481,812 | |||||||||
Income from hedging operations | ||||||||||||
Domestic | (390,417 | ) | — | (390,417 | ) | |||||||
International | (1,961,937 | ) | — | (1,961,937 | ) | |||||||
(2,352,354 | ) | — | (2,352,354 | ) | ||||||||
Total interest-earning assets | ||||||||||||
Domestic | 85,813 | (4,464,992 | ) | (4,379,179 | ) | |||||||
International | 6,225,303 | (3,716,666 | ) | 2,508,637 | ||||||||
6,311,116 | (8,181,658 | ) | (1,870,542 | ) | ||||||||
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IFRS-IASB | ||||||||||||
2008/2007 | ||||||||||||
Increase (Decrease) due to changes in | ||||||||||||
Volume | Rate | Net change | ||||||||||
(in thousands of euros) | ||||||||||||
Interest income | ||||||||||||
Cash and due from central banks | ||||||||||||
Domestic | 131,431 | (11,909 | ) | 119,522 | ||||||||
International | 155,958 | (56,032 | ) | 99,926 | ||||||||
287,389 | (67,941 | ) | 219,448 | |||||||||
Due from credit entities | ||||||||||||
Domestic | 234,888 | (83,336 | ) | 151,552 | ||||||||
International | 102,413 | 727,245 | 829,658 | |||||||||
337,301 | 643,909 | 981,210 | ||||||||||
Loans and credits | ||||||||||||
Domestic | 1,173,641 | 1,357,784 | 2,531,425 | |||||||||
International | 851,520 | 3,401,608 | 4,253,128 | |||||||||
2,025,161 | 4,759,392 | 6,784,553 | ||||||||||
Debt securities | ||||||||||||
Domestic | 181,860 | 22,245 | 204,105 | |||||||||
International | (880,103 | ) | 1,176,067 | 295,964 | ||||||||
(698,243 | ) | 1,198,312 | 500,069 | |||||||||
Other interest-earning assets | ||||||||||||
Domestic | (160,309 | ) | 86,216 | (74,093 | ) | |||||||
International | 405,153 | 62,746 | 467,899 | |||||||||
244,844 | 148,962 | 393,806 | ||||||||||
Total interest-earning assets without hedging operations | ||||||||||||
Domestic | 1,561,511 | 1,371,000 | 2,932,511 | |||||||||
International | 634,941 | 5,311,634 | 5,946,575 | |||||||||
2,196,452 | 6,682,634 | 8,879,086 | ||||||||||
Income from hedging operations | ||||||||||||
Domestic | 114,556 | — | 114,556 | |||||||||
International | 537,647 | — | 537,647 | |||||||||
652,203 | — | 652,203 | ||||||||||
Total interest-earning assets | ||||||||||||
Domestic | 1,676,067 | 1,371,000 | 3,047,067 | |||||||||
International | 1,172,588 | 5,311,634 | 6,484,222 | |||||||||
2,848,655 | 6,682,634 | 9,531,289 |
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IFRS-IASB | ||||||||||||
2009/2008 | ||||||||||||
Increase (Decrease) due to changes in | ||||||||||||
Volume | Rate | Net change | ||||||||||
(in thousands of euros) | ||||||||||||
Interest charges | ||||||||||||
Due to credit entities | ||||||||||||
Domestic | 64,712 | (470,952 | ) | (406,240 | ) | |||||||
International | 578,368 | (575,354 | ) | 3,014 | ||||||||
643,080 | (1,046,306 | ) | (403,226 | ) | ||||||||
Customers deposits | ||||||||||||
Domestic | 237,141 | (1,372,884 | ) | (1,135,743 | ) | |||||||
International | 2,689,280 | (4,743,216 | ) | (2,053,936 | ) | |||||||
2,926,421 | (6,116,100 | ) | (3,189,679 | ) | ||||||||
Marketable debt securities | ||||||||||||
Domestic | (553,692 | ) | (2,335,494 | ) | (2,889,186 | ) | ||||||
International | 70,780 | (1,762,495 | ) | (1,691,715 | ) | |||||||
(482,912 | ) | (4,097,989 | ) | (4,580,901 | ) | |||||||
Subordinated debt | ||||||||||||
Domestic | 55,076 | (137,569 | ) | (82,493 | ) | |||||||
International | 120,564 | (99,064 | ) | 21,500 | ||||||||
175,640 | (236,633 | ) | (60,993 | ) | ||||||||
Other interest-bearing liabilities | ||||||||||||
Domestic | 22,225 | 230,616 | 252,841 | |||||||||
International | 307,713 | 360,274 | 667,987 | |||||||||
329,938 | 590,890 | 920,828 | ||||||||||
Total interest-bearing liabilities without hedging operations | ||||||||||||
Domestic | �� | (174,538 | ) | (4,086,283 | ) | (4,260,821 | ) | |||||
International | 3,766,705 | (6,819,855 | ) | (3,053,150 | ) | |||||||
3,592,167 | (10,906,138 | ) | (7,313,971 | ) | ||||||||
Expenses from hedging operations | ||||||||||||
Domestic | (2,024,827 | ) | — | (2,024,827 | ) | |||||||
International | (1,291,824 | ) | — | (1,291,824 | ) | |||||||
(3,316,651 | ) | — | (3,316,651 | ) | ||||||||
Total interest-bearing liabilities | ||||||||||||
Domestic | (2,199,365 | ) | (4,086,283 | ) | (6,285,648 | ) | ||||||
International | 2,474,881 | (6,819,855 | ) | (4,344,974 | ) | |||||||
275,516 | (10,906,138 | ) | (10,630,622 | ) |
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IFRS-IASB | ||||||||||||
2008/2007 | ||||||||||||
Increase (Decrease) due to changes in | ||||||||||||
Volume | Rate | Net change | ||||||||||
(in thousands of euros) | ||||||||||||
Interest charges | ||||||||||||
Due to credit entities | ||||||||||||
Domestic | 98,867 | 17,878 | 116,745 | |||||||||
International | 4,554 | (287,151 | ) | (282,597 | ) | |||||||
103,421 | (269,273 | ) | (165,852 | ) | ||||||||
Customers deposits | ||||||||||||
Domestic | 266,951 | 589,150 | 856,101 | |||||||||
International | 632,226 | 1,439,866 | 2,072,092 | |||||||||
899,177 | 2,029,016 | 2,928,193 | ||||||||||
Marketable debt securities | ||||||||||||
Domestic | 1,160,580 | 95,420 | 1,256,000 | |||||||||
International | (720,240 | ) | 930,283 | 210,043 | ||||||||
440,340 | 1,025,703 | 1,466,043 | ||||||||||
Subordinated debt | ||||||||||||
Domestic | 211,012 | 53,280 | 264,292 | |||||||||
International | (94,264 | ) | 145,016 | 50,752 | ||||||||
116,748 | 198,296 | 315,044 | ||||||||||
Other interest-bearing liabilities | ||||||||||||
Domestic | 193,557 | (319,313 | ) | (125,756 | ) | |||||||
International | 55,719 | 320,810 | 376,529 | |||||||||
249,276 | 1,497 | 250,773 | ||||||||||
Total interest-bearing liabilities without hedging operations | ||||||||||||
Domestic | 1,930,967 | 436,415 | 2,367,382 | |||||||||
International | (122,005 | ) | 2,548,824 | 2,426,819 | ||||||||
1,808,962 | 2,985,239 | 4,794,201 | ||||||||||
Expenses from hedging operations | ||||||||||||
Domestic | 922,055 | — | 922,055 | |||||||||
International | 719,342 | — | 719,342 | |||||||||
1,641,397 | — | 1,641,397 | ||||||||||
Total interest-bearing liabilities | ||||||||||||
Domestic | 2,853,022 | 436,415 | 3,289,437 | |||||||||
International | 597,337 | 2,548,824 | 3,146,161 | |||||||||
3,450,359 | 2,985,239 | 6,435,598 |
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IFRS-IASB | ||||||||||||
Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
(in thousands of euros, except percentages) | ||||||||||||
Average earning assets | ||||||||||||
Domestic | 329,181,345 | 308,592,316 | 281,564,697 | |||||||||
International | 674,775,035 | 548,514,173 | 520,653,969 | |||||||||
1,003,956,380 | 857,106,489 | 802,218,666 | ||||||||||
Interest | ||||||||||||
Domestic | 12,823,294 | 17,202,473 | 14,155,406 | |||||||||
International | 40,349,710 | 37,841,073 | 31,356,851 | |||||||||
53,173,004 | 55,043,546 | 45,512,257 | ||||||||||
Net interest income | ||||||||||||
Domestic | 4,571,290 | 2,664,821 | 2,907,192 | |||||||||
International | 21,727,252 | 14,873,641 | 11,535,580 | |||||||||
26,298,542 | 17,538,462 | 14,442,772 | ||||||||||
Gross yield (1) | ||||||||||||
Domestic | 3.90 | % | 5.57 | % | 5.03 | % | ||||||
International | 5.98 | % | 6.90 | % | 6.02 | % | ||||||
5.30 | % | 6.42 | % | 5.67 | % | |||||||
Net yield (2) | ||||||||||||
Domestic | 1.39 | % | 0.86 | % | 1.03 | % | ||||||
International | 3.22 | % | 2.71 | % | 2.22 | % | ||||||
2.62 | % | 2.05 | % | 1.80 | % | |||||||
Yield spread (3) | ||||||||||||
Domestic | 1.45 | % | 1.29 | % | 1.18 | % | ||||||
International | 3.05 | % | 2.23 | % | 1.98 | % | ||||||
2.54 | % | 1.91 | % | 1.70 | % |
(1) | Gross yield is the quotient of interest on equity securities divided by average earning assets. | |
(2) | Net yield is the quotient of net interest income divided by average earning assets. | |
(3) | Yield spread is the difference between gross yield on earning assets and the average cost of interest-bearing liabilities. For a discussion of the changes in yield spread over the periods presented, see “Item 5. Operating and Financial Review and Prospects—A. Operating results—Results of Operations for Santander—Interest Income / (Charges)”. |
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Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
ROA: Return on average total assets | 0.86 | % | 1.00 | % | 1.10 | % | ||||||
ROE:Return on average stockholders’ equity | 13.90 | % | 17.07 | % | 21.91 | % | ||||||
PAY-OUT:Dividends per average share as a percentage of net attributable income per average share | 55.00 | % | 54.21 | % | 44.92 | % | ||||||
Average stockholders’ equity as a percentage of average total assets | 5.85 | % | 5.55 | % | 4.71 | % |
IFRS-IASB | ||||||||||||
Year Ended December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Cash and due from Central Banks | ||||||||||||
Domestic | 0.79 | % | 0.92 | % | 0.43 | % | ||||||
International | 2.59 | % | 2.51 | % | 1.86 | % | ||||||
3.38 | % | 3.43 | % | 2.29 | % | |||||||
Due from credit entities | ||||||||||||
Domestic | 2.09 | % | 1.76 | % | 1.27 | % | ||||||
International | 5.81 | % | 7.24 | % | 7.45 | % | ||||||
7.90 | % | 9.00 | % | 8.72 | % | |||||||
Loans and credits | ||||||||||||
Domestic | 22.99 | % | 27.83 | % | 27.16 | % | ||||||
International | 43.55 | % | 40.37 | % | 41.62 | % | ||||||
66.54 | % | 68.20 | % | 68.78 | % | |||||||
Debt securities | ||||||||||||
Domestic | 4.00 | % | 2.95 | % | 2.55 | % | ||||||
International | 9.25 | % | 8.72 | % | 11.58 | % | ||||||
13.25 | % | 11.67 | % | 14.13 | % | |||||||
Other interest-earning assets | ||||||||||||
Domestic | 2.93 | % | 2.79 | % | 3.75 | % | ||||||
International | 6.00 | % | 4.91 | % | 2.33 | % | ||||||
8.93 | % | 7.70 | % | 6.08 | % | |||||||
Total interest-earning assets | ||||||||||||
Domestic | 32.80 | % | 36.25 | % | 35.16 | % | ||||||
International | 67.20 | % | 63.75 | % | 64.84 | % | ||||||
100.00 | % | 100.00 | % | 100.00 | % |
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IFRS-IASB | ||||||||||||||||||||
At December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
(in thousands of euros) | ||||||||||||||||||||
Reciprocal accounts | 712,503 | 663,230 | 417,438 | 503,299 | 345,104 | |||||||||||||||
Time deposits | 21,382,542 | 25,455,903 | 13,569,362 | 16,842,601 | 21,962,477 | |||||||||||||||
Reverse repurchase agreements | 29,489,895 | 18,568,747 | 30,276,080 | 37,010,008 | 33,634,326 | |||||||||||||||
Other accounts | 28,251,667 | 34,104,397 | 13,379,724 | 15,401,148 | 10,185,136 | |||||||||||||||
79,836,607 | 78,792,277 | 57,642,604 | 69,757,056 | 66,127,043 | ||||||||||||||||
Of which Impairment allowances | (25,536 | ) | (253,567 | ) | (18,487 | ) | (12,727 | ) | (36,046 | ) |
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IFRS-IASB | ||||||||||||
At December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
(in thousands of euros) | ||||||||||||
Debt securities | ||||||||||||
Domestic- | ||||||||||||
Spanish Government | 37,770,101 | 20,267,964 | 14,471,176 | |||||||||
Other domestic issuer: | ||||||||||||
Public authorities | 542,577 | 231,529 | 904,382 | |||||||||
Other domestic issuer | 8,124,835 | 9,076,564 | 9,988,780 | |||||||||
Total domestic | 46,437,513 | 29,576,057 | 25,364,338 | |||||||||
International- | ||||||||||||
United States: | ||||||||||||
U.S. Treasury and other U.S. Government agencies | 1,183,550 | 881,579 | 1,870,152 | |||||||||
States and political subdivisions | 1,714,940 | 1,260,494 | 281,453 | |||||||||
Other securities | 12,964,869 | 6,155,609 | 9,717,624 | |||||||||
Total United States | 15,863,359 | 8,297,682 | 11,869,229 | |||||||||
Other: | ||||||||||||
Governments | 41,108,209 | 20,990,003 | 19,465,853 | |||||||||
Other securities | 48,292,040 | 50,567,953 | 52,650,983 | |||||||||
Total Other | 89,400,249 | 71,557,956 | 72,116,836 | |||||||||
Total International | 105,263,608 | 79,855,638 | 83,986,065 | |||||||||
Less- Allowance for credit losses | (166,722 | ) | (181,178 | ) | (91,753 | ) | ||||||
Less- Price fluctuation allowance | — | — | — | |||||||||
Total Debt Securities | 151,534,399 | 109,250,517 | 109,258,650 | |||||||||
Equity securities | ||||||||||||
Domestic | 6,070,228 | 4,447,197 | 8,283,198 | |||||||||
International- | ||||||||||||
United States | 1,489,681 | 938,265 | 1,629,755 | |||||||||
Other | 14,896,610 | 10,046,522 | 12,874,902 | |||||||||
Total international | 16,386,291 | 10,984,787 | 14,504,658 | |||||||||
Less- Price fluctuation allowance | — | (9,159 | ) | (11,238 | ) | |||||||
Total Equity Securities | 22,456,519 | 15,422,825 | 22,776,618 | |||||||||
Total Investment Securities | 173,990,918 | 124,673,342 | 132,035,268 |
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Aggregate as of December 31, 2009 | ||||||||
Book value | Market value | |||||||
(in thousands of euros) | ||||||||
Debt securities: | ||||||||
Exceed 10% of stockholders’ equity: | ||||||||
Spanish Government | 38,312,678 | 38,312,678 | ||||||
Near 10% of stockholders’ equity: | ||||||||
Telefónica | 4,940,425 | 4,940,425 | ||||||
República Federal do Brasil | 4,621,989 | 4,621,989 | ||||||
ACS — Dragados | 4,295,266 | 4,295,266 |
At December 31, 2009 | ||||||||||||||||||||
Maturing | Maturing | |||||||||||||||||||
Maturing | Between | Between | Maturing | |||||||||||||||||
Within | 1 and | 5 and | After | |||||||||||||||||
1 Year | 5 Years | 10 Years | 10 Years | Total | ||||||||||||||||
(in thousands of euros) | ||||||||||||||||||||
DEBT SECURITIES | ||||||||||||||||||||
Domestic: | ||||||||||||||||||||
Spanish Government | 8,761,922 | 14,342,993 | 10,814,302 | 3,850,884 | 37,770,101 | |||||||||||||||
Other domestic issuer: | ||||||||||||||||||||
Public authorities | 4,588 | 155,103 | 270,547 | 112,339 | 542,577 | |||||||||||||||
Other domestic issuer | 1,134,551 | 3,502,215 | 961,475 | 2,526,594 | 8,124,835 | |||||||||||||||
Total domestic | 9,901,061 | 18,000,311 | 12,046,324 | 6,489,817 | 46,437,513 | |||||||||||||||
International: | ||||||||||||||||||||
United States: | ||||||||||||||||||||
U.S. Treasury and other U.S. Government agencies | 546,799 | 337,297 | 269,200 | 30,253 | 1,183,550 | |||||||||||||||
States and political subdivisions | 77,104 | 113,801 | 112,804 | 1,411,231 | 1,714,940 | |||||||||||||||
Other securities | 2,265,756 | 5,228,793 | 2,969,823 | 2,500,498 | 12,964,869 | |||||||||||||||
Total United States | 2,889,659 | 5,679,891 | 3,351,827 | 3,941,982 | 15,863,359 | |||||||||||||||
Other: | ||||||||||||||||||||
Governments | 12,868,462 | 23,589,516 | 2,504,733 | 2,145,498 | 41,108,209 | |||||||||||||||
Other securities | 13,401,128 | 22,901,979 | 4,029,869 | 7,959,064 | 48,292,040 | |||||||||||||||
Total Other | 26,269,590 | 46,491,495 | 6,534,602 | 10,104,562 | 89,400,249 | |||||||||||||||
Total International | 29,159,249 | 52,171,386 | 9,886,429 | 14,046,544 | 105,263,608 | |||||||||||||||
Total debt investment securities | 39,060,310 | 70,171,697 | 21,932,753 | 20,536,361 | 151,701,121 |
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IFRS-IASB | ||||||||||||||||||||
At December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
(in thousands of euros) | ||||||||||||||||||||
Borrowers in Spain: | ||||||||||||||||||||
Spanish Government | 9,802,511 | 7,668,408 | 5,633,422 | 5,328,526 | 5,242,938 | |||||||||||||||
Commercial, financial, agricultural and industrial | 70,136,946 | 56,289,775 | 45,169,824 | 71,412,545 | 54,799,113 | |||||||||||||||
Real estate and construction | 42,514,809 | 48,098,886 | 46,837,281 | 12,391,306 | 7,834,447 | |||||||||||||||
Other mortgages | 68,865,914 | 59,784,116 | 59,268,463 | 81,718,186 | 65,940,697 | |||||||||||||||
Installment loans to individuals | 20,070,626 | 21,505,725 | 21,533,074 | 20,058,666 | 14,343,281 | |||||||||||||||
Lease financing | 7,533,857 | 9,252,949 | 9,643,516 | 8,668,599 | 7,276,200 | |||||||||||||||
Other | 11,420,172 | 37,647,241 | 49,995,313 | 9,357,884 | 5,388,149 | |||||||||||||||
Total | 230,344,835 | 240,247,100 | 238,080,893 | 208,935,712 | 160,824,825 | |||||||||||||||
Borrowers outside Spain (*): | ||||||||||||||||||||
Governments | 2,860,902 | 3,029,373 | 2,295,763 | 4,969,713 | 6,608,103 | |||||||||||||||
Commercial and industrial | 174,763,552 | 127,838,494 | 143,045,869 | 128,438,265 | 108,145,797 | |||||||||||||||
Mortgage loans | 249,065,126 | 201,112,142 | 179,163,680 | 177,631,731 | 161,147,496 | |||||||||||||||
Other | 43,389,607 | 67,127,381 | 17,207,512 | 15,223,537 | 9,993,396 | |||||||||||||||
Total | 470,079,187 | 399,107,390 | 341,712,824 | 326,263,246 | 285,894,792 | |||||||||||||||
Total loans and leases, gross | 700,424,022 | 639,354,490 | 579,793,717 | 535,198,958 | 446,719,617 | |||||||||||||||
Allowance for possible loan losses (**) | (17,873,096 | ) | (12,466,055 | ) | (8,695,204 | ) | (8,163,444 | ) | (6,755,175 | ) | ||||||||||
Loans and leases, net of allowances | 682,550,926 | 626,888,435 | 571,098,513 | 527,035,514 | 439,964,442 |
(*) | Credit of any nature in the name of credit institutions is included in the “Loans and advances to credit institutions” caption of our balance sheet. | |
(**) | Refers to loan losses of “Loans and Advances to customers”, excluding balances to credit institutions. See “Item 3. Key information — A. Selected Financial Data”. |
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Maturity | ||||||||||||||||||||||||||||||||
Less than | One to five | Over five | ||||||||||||||||||||||||||||||
one year | years | years | Total | |||||||||||||||||||||||||||||
Balance | % of Total | Balance | % of Total | Balance | % of Total | Balance | % of Total | |||||||||||||||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||||||||||||||||||
Loans to borrowers in Spain: | ||||||||||||||||||||||||||||||||
Spanish Government | 3,520,801 | 2.08 | % | 1,812,281 | 1.10 | % | 4,469,429 | 1.22 | % | 9,802,511 | 1.40 | % | ||||||||||||||||||||
Commercial, financial, agriculture and industrial | 32,292,736 | 19.12 | % | 21,750,921 | 13.22 | % | 16,093,289 | 4.39 | % | 70,136,946 | 10.01 | % | ||||||||||||||||||||
Real estate and construction | 1,628,732 | 0.96 | % | 3,728,295 | 2.27 | % | 37,157,782 | 10.12 | % | 42,514,809 | 6.07 | % | ||||||||||||||||||||
Other mortgages | 3,403,341 | 2.01 | % | 6,723,164 | 4.09 | % | 58,739,409 | 16.01 | % | 68,865,914 | 9.83 | % | ||||||||||||||||||||
Installment loans to individuals | 8,444,238 | 5.00 | % | 8,065,868 | 4.90 | % | 3,560,520 | 0.97 | % | 20,070,626 | 2.87 | % | ||||||||||||||||||||
Lease financing | 1,158,716 | 0.69 | % | 4,044,102 | 2.46 | % | 2,331,039 | 0.64 | % | 7,533,857 | 1.08 | % | ||||||||||||||||||||
Other | 2,101,010 | 1.24 | % | 2,326,763 | 1.41 | % | 6,992,399 | 1.91 | % | 11,420,172 | 1.63 | % | ||||||||||||||||||||
Total borrowers in Spain | 52,549,574 | 31.11 | % | 48,451,394 | 29.45 | % | 129,343,867 | 35.24 | % | 230,344,835 | 32.89 | % | ||||||||||||||||||||
Loans to borrowers outside Spain (*) | ||||||||||||||||||||||||||||||||
Other Governments | 1,196,193 | 0.71 | % | 941,372 | 0.57 | % | 723,337 | 0.20 | % | 2,860,902 | 0.41 | % | ||||||||||||||||||||
Commercial and Industrial | 73,658,231 | 43.61 | % | 76,907,628 | 46.74 | % | 24,197,693 | 6.59 | % | 174,763,552 | 24.95 | % | ||||||||||||||||||||
Mortgage loans | 14,115,583 | 8.36 | % | 30,753,706 | 18.69 | % | 204,195,837 | 55.64 | % | 249,065,126 | 35.56 | % | ||||||||||||||||||||
Other | 27,383,600 | 16.21 | % | 7,474,075 | 4.54 | % | 8,531,932 | 2.32 | % | 43,389,607 | 6.19 | % | ||||||||||||||||||||
Total loans to borrowers outside Spain | 116,353,607 | 68.89 | % | 116,076,781 | 70.55 | % | 237,648,799 | 64.76 | % | 470,079,187 | 67.11 | % | ||||||||||||||||||||
Total loans and leases, gross | 168,903,181 | 100.00 | % | 164,528,175 | 100.00 | % | 366,992,666 | 100.00 | % | 700,424,022 | 100.00 | % |
(*) | Credit of any nature in the name of credit institutions is included in the “Loans and advances to credit institutions” caption of our balance sheet. |
Fixed and variable rate loans | ||||||||||||
having a maturity of more than one year | ||||||||||||
Domestic | International | Total | ||||||||||
(in thousands of euros, except percentages) | ||||||||||||
Fixed rate | 32,675,335 | 164,169,475 | 196,844,810 | |||||||||
Variable rate | 145,119,926 | 189,556,104 | 334,676,030 | |||||||||
Total | 177,795,261 | 353,725,579 | 531,520,840 |
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IFRS-IASB | ||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
% of | % of | % of | ||||||||||||||||||||||
total | total | total | ||||||||||||||||||||||
assets | assets | assets | ||||||||||||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||||||||||
OECD (1) Countries: | ||||||||||||||||||||||||
United Kingdom | 3,119,719 | 0.28 | % | 3,546,946 | 0.34 | % | 10,553,863 | 1.16 | % | |||||||||||||||
Other OECD Countries (2) | 11,207,465 | 1.01 | % | 9,384,789 | 0.90 | % | 13,371,250 | 1.46 | % | |||||||||||||||
Total OECD | 14,327,184 | 1.29 | % | 12,931,735 | 1.24 | % | 23,925,113 | 2.62 | % | |||||||||||||||
Non-OECD Countries | ||||||||||||||||||||||||
Brazil | 5,316,717 | 0.48 | % | 10,169,495 | 0.97 | % | 3,732,687 | 0.41 | % | |||||||||||||||
Other Latin American Countries (2) (3) | 8,297,908 | 0.75 | % | 7,728,016 | 0.74 | % | 4,488,341 | 0.49 | % | |||||||||||||||
Other (2) | 6,600,333 | 0.59 | % | 5,847,896 | 0.56 | % | 2,379,944 | 0.26 | % | |||||||||||||||
Total Non-OECD | 20,214,958 | 1.82 | % | 23,745,407 | 2.27 | % | 10,600,972 | 1.16 | % | |||||||||||||||
Total | 34,542,142 | 3.11 | % | 36,677,142 | 3.50 | % | 34,526,085 | 3.78 | % |
(1) | The Organization for Economic Cooperation and Development. | |
(2) | Aggregate outstandings in any single country in this category do not exceed 0.75% of our total assets. | |
(3) | With regards to these cross-border outstandings, at December 31, 2007, 2008 and 2009, we had allowances for country-risk equal to€105.0 million,€555.5 million and€30.3 million, respectively. Such allowances for country-risk exceeded the Bank of Spain’s minimum requirements at such dates. |
Banks and other | ||||||||||||||||
Financial | Commercial and | |||||||||||||||
Government | Institutions | Industrial | Total | |||||||||||||
(in thousands of euros) | ||||||||||||||||
2007 | ||||||||||||||||
United Kingdom | 616 | 3,870,351 | 6,682,896 | 10,553,863 | ||||||||||||
Total | 616 | 3,870,351 | 6,682,896 | 10,553,863 | ||||||||||||
2008 | ||||||||||||||||
Brazil | 193,734 | 3,939,252 | 6,036,509 | 10,169,495 | ||||||||||||
Total | 193,734 | 3,939,252 | 6,036,509 | 10,169,495 | ||||||||||||
2009 | ||||||||||||||||
N/A | — | — | — | — | ||||||||||||
Total | — | — | — | — |
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(i) Negligible risk | • All types of credits made to, or guaranteed by, any European Union country or certain other specified public entities of the countries classified in category 1 of the country-risk categories; | |
• Advance payments for pensions or payrolls for the following month, when paid by any public entity and deposited at Santander; | ||
• Those credits guaranteed by public entities of the countries classified in category 1 of the country-risk categories whose principal activity is to provide guarantees; | ||
• Credits made to banks; | ||
• Credits personally, jointly and unconditionally guaranteed by banks or mutual guaranty companies payable on first demand; | ||
• Credits guaranteed under the name of theFondo de Garantía de Depósitosif their credit risk quality is comparable with that of the European Union; or | ||
• All credits collateralized by cash or by money market and treasury funds or securities issued by the central administrations or credit entities of countries listed in category 1 for country-risk purposes when the outstanding exposure is 90% or less than the redemption value of the money market and treasury funds and of the market value of the securities given as collateral. | ||
(ii) Low risk | Assets in this category include: | |
• assets qualified as collateral for monetary policy transactions in the European System of Central Banks, except those included in (i) above; | ||
• fully-secured mortgages and financial leases on finished residential properties when outstanding risk is less than 80% of the appraised value of such property; | ||
• ordinary mortgage backed securities; |
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• assets from entities whose long term debt is rated “A” or better by a qualified rating agency; and | ||
• securities denominated in local currency and issued by government entities in countries other than those classified in category 1 of the country-risk categories, when such securities are registered in the books of the bank’s branch located in the issuer country. | ||
(iii) Medium-low risk | Assets in this category include financial leases and mortgages and pledges on tangible assets that are not included in other categories, provided that the estimated value of the financial leases and the collateral totally covers the outstanding risk. | |
(iv) Medium risk | Assets in this category include those with Spanish residents or residents of countries classified in categories 1 or 2, provided that such assets are not included in other categories. | |
(v) Medium-high risk | Assets in this category include (unless these assets qualify as “high risk” assets) loans to individuals for the acquisition of durable consumption goods, other goods or current services not for professional use, except those registered in the Registry of Sales of Movable Assets (Registro de Ventas de Bienes Muebles); and risks with residents of countries classified in categories 3 to 6, to the extent not covered by country-risk allowances. | |
(vi) High risk | Assets in this category include credit card balances; current account overdrafts and excesses in credit accounts (except those included in categories (i) and (ii)). |
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• | Outstandings guaranteed by residents in other countries in a better category should be classified in the category of the guarantor. | |
• | Fully secured loans, when the security covers sufficiently the outstanding risk and can be enforced in Spain or in any other “category 1” country, should be classified as category 1. | |
• | Outstanding risks with foreign branches of a bank should be classified according to the residence of the headquarters of those branches. |
Country-Risk Categories | Description | |
1 | European Union, Norway, Switzerland, Iceland, USA, Canada, Japan, Australia and New Zealand | |
2 | Low risk countries not included in 1 | |
3 | Countries with transitory difficulties | |
4 | Countries with serious difficulties | |
5 | Doubtful countries | |
6 | Bankrupt countries |
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• | Sub-standard assets: All outstandings in categories 3 and 4 except when they should be classified as non-performing or charged-off assets due to credit risk attributable to the client. | |
• | Non-performing assets: All outstandings in category 5 and off-balance sheet risks classified in category 6, except when they should be classified as non-performing or charged-off assets due to credit risk attributable to the client. | |
• | Charged-off assets: All other outstandings in category 6 except when they should be classified as charged-off assets due to credit risk attributable to the client. |
IFRS-IASB | ||||||||||||
At December 31, | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
(in thousands of euros) | ||||||||||||
Interest owed on non-accruing assets | ||||||||||||
Domestic | 765,101 | 231,486 | 80,133 | |||||||||
International | 1,829,676 | 489,241 | 291,987 | |||||||||
Total | 2,594,777 | 720,727 | 372,120 | |||||||||
Interest received on non-accruing assets | ||||||||||||
Domestic | 151,459 | 95,428 | 81,233 | |||||||||
International | 157,724 | 125,386 | 103,031 | |||||||||
Total | 309,183 | 220,814 | 184,264 |
Thousands of Euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Other impaired loans (*) | 3,283,860 | 2,417,529 | 1,260,497 | |||||||||
Impaired loans more than ninety days past due | 21,269,764 | 11,773,284 | 4,918,158 | |||||||||
Total impaired loans | 24,553,624 | 14,190,813 | 6,178,655 |
(*) | See above “Bank of Spain Classification Requirements-d) Other Non-Performing Assets”for a detailed explanation of assets included under this category. |
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• | Assets classified as doubtful due to counterparty arrears: debt instruments, whoever the obligor and whatever the guarantee or collateral, with amounts more than three months past due are assessed individually, taking into account the age of the past-due amounts, the guarantees or collateral provided and the financial situation of the counterparty and the guarantors. The allowance percentages applied, based on the age of the past-due amounts, are described in Note 2.g) to our consolidated financial statements. |
• | Assets classified as doubtful for reasons other than counterparty arrears: Debt instruments which are not classifiable as doubtful due to arrears but for which there are reasonable doubts as to their repayment under the contractual terms are assessed individually, and their allowance is the difference between the amount recognized in assets and the present value of the cash flows expected to be received. |
• | General allowance for inherent losses: The Group covers its losses inherent in debt instruments not measured at fair value through profit or loss and in contingent liabilities taking into account the historical experience of impairment and other circumstances known at the time of assessment. For these purposes, inherent losses are losses incurred at the reporting date, calculated using statistical methods that have not yet been allocated to specific transactions. |
• | Our methodology for determining the loans general allowance for incurred loan losses, intends to identify the amount of incurred losses as of the balance sheet date of loans that have not yet been identified as impaired, but that we estimate based on our past history and specific facts that will manifest within a one year lead time period from the balance sheet date. The above demonstrates those loans were having problems as of the balance sheet date. That is what we call inherent losses in the context of our internal models in which loan loss allowances are calculated. |
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• | Exposure at default (EaD) is the amount of risk exposure at the date of default by the counterparty. | ||
• | Probability of default (PD) is the probability of the counterparty failing to meet its principal and/or interest payment obligations. The probability of default is associated with the rating/scoring of each counterparty/transaction. | ||
• | PD is measured using a time horizon of one year; i.e. it quantifies the probability of the counterparty defaulting in the coming year. The definition of default used includes past-dues by 90 days or more and cases in which there is no default but there are doubts as to the solvency of the counterparty (subjective doubtful assets). | ||
• | Loss given default (LGD) is the loss arising in the event of default. It depends mainly on the guarantees associated with the transaction. |
• | In portfolios where the internal experience of defaults is scant, such as banks, sovereigns or global wholesale banking, estimates of the parameters come from alternative sources: market prices or studies of outside agencies which draw on the shared experience of a sufficient number of institutions. These portfolios are called low default portfolios. |
• | For the rest of portfolios, estimates are based on the institution’s internal experience. |
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IFRS-IASB | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
(in thousands of euros) | ||||||||||||||||||||
Allowance for credit losses at beginning of year | ||||||||||||||||||||
Borrowers in Spain | 5,948,950 | 4,512,000 | 4,318,320 | 2,809,599 | 1,679,781 | |||||||||||||||
Borrowers outside Spain | 6,770,673 | 4,284,371 | 3,969,808 | 4,092,326 | 4,160,864 | |||||||||||||||
Total | 12,719,623 | 8,796,371 | 8,288,128 | 6,901,925 | 5,840,645 | |||||||||||||||
Inclusion of acquired companies’ credit loss allowances | ||||||||||||||||||||
Borrowers in Spain | — | — | — | — | — | |||||||||||||||
Borrowers outside Spain | 1,426,104 | 2,310,095 | 7,356 | 164,530 | 4,006 | |||||||||||||||
Total | 1,426,104 | 2,310,095 | 7,356 | 164,530 | 4,006 | |||||||||||||||
Recoveries of loans previously charged off (1) | ||||||||||||||||||||
Borrowers in Spain | 115,069 | 129,660 | 148,849 | 123,566 | 105,800 | |||||||||||||||
Borrowers outside Spain | 799,652 | 570,087 | 463,602 | 418,402 | 373,934 | |||||||||||||||
Total | 914,721 | 699,747 | 612,451 | 541,968 | 479,734 | |||||||||||||||
Net provisions for credit losses (1) | ||||||||||||||||||||
Borrowers in Spain | 2,499,843 | 928,236 | 658,990 | 793,898 | 1,048,552 | |||||||||||||||
Borrowers outside Spain | 8,588,153 | 4,968,652 | 2,761,606 | 1,669,466 | 976,315 | |||||||||||||||
Total | 11,087,996 | 5,896,888 | 3,420,596 | 2,463,364 | 2,024,867 | |||||||||||||||
Charge offs against credit loss allowance | ||||||||||||||||||||
Borrowers in Spain | (1,236,859 | ) | (731,588 | ) | (573,787 | ) | (269,559 | ) | (226,036 | ) | ||||||||||
Borrowers outside Spain | (8,557,769 | ) | (3,820,805 | ) | (2,746,375 | ) | (2,100,306 | ) | (1,293,458 | ) | ||||||||||
Total | (9,794,628 | ) | (4,552,393 | ) | (3,320,162 | ) | (2,369,865 | ) | (1,519,494 | ) | ||||||||||
Other movements (2) | 1,544,817 | (431,084 | ) | (211,998 | ) | 586,206 | 72,167 | |||||||||||||
Allowance for credit losses at end of year (*) | ||||||||||||||||||||
Borrowers in Spain | 6,992,818 | 5,948,950 | 4,512,000 | 4,318,320 | 2,809,599 | |||||||||||||||
Borrowers outside Spain | 10,905,814 | 6,770,673 | 4,284,371 | 3,969,808 | 4,092,326 | |||||||||||||||
Total | 17,898,632 | 12,719,623 | 8,796,371 | 8,288,128 | 6,901,925 |
(*) | Allowances for the impairment losses on the assets making up the balances of “Loans and receivables — Loans and advances to customers” and “Loans and receivables — Loans and advances to credit institutions”. See “Item 3. Key information — A. Selected Financial Data”. | |
(1) | We have not included separate line items for charge-offs of loans not previously provided for (loans charged-off against income) and recoveries of loans previously charged-off as these are not permitted under Spanish regulation. | |
(2) | The changes in “Other Movements” from 2005, to 2006, to 2007, to 2008 and to 2009 principally reflects foreign exchange differences. |
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Year Ended December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
(in thousands of euros) | ||||||||||||||||||||
Recoveries of loans previously charged off- | ||||||||||||||||||||
Domestic: | ||||||||||||||||||||
Commercial, financial, agricultural, industrial | 31,969 | 30,136 | 32,045 | 37,879 | 51,649 | |||||||||||||||
Real estate and construction | 15,162 | 4,860 | 10,718 | 5,646 | 140 | |||||||||||||||
Other mortgages | 24,340 | 11,480 | 17,644 | 11,249 | 5,226 | |||||||||||||||
Installment loans to individuals | 42,946 | 74,974 | 70,082 | 59,726 | 32,303 | |||||||||||||||
Lease finance | 621 | 6,198 | 4,517 | 5,023 | 2,903 | |||||||||||||||
Other | 31 | 2,012 | 13,843 | 4,043 | 13,579 | |||||||||||||||
Total Borrowers in Spain | 115,069 | 129,660 | 148,849 | 123,566 | 105,800 | |||||||||||||||
Borrowers outside Spain | ||||||||||||||||||||
Government and official institutions | 34 | — | 8 | 1,126 | 1 | |||||||||||||||
Commercial and industrial | 731,641 | 483,589 | 397,126 | 299,302 | 292,279 | |||||||||||||||
Mortgage loans | 35,047 | 28,494 | 30,360 | 7,751 | 3,468 | |||||||||||||||
Other | 32,930 | 58,004 | 36,108 | 110,223 | 78,186 | |||||||||||||||
Borrowers outside Spain | 799,652 | 570,087 | 463,602 | 418,402 | 373,934 | |||||||||||||||
Total | 914,721 | 699,747 | 612,451 | 541,968 | 479,734 | |||||||||||||||
Net provisions for credit losses- | ||||||||||||||||||||
Domestic: | ||||||||||||||||||||
Commercial, financial, agricultural, industrial | 752,961 | 265,121 | (278,355 | ) | 405,914 | 416,993 | ||||||||||||||
Real estate and construction | 528,124 | (76,668 | ) | 240,462 | 20,430 | 70,124 | ||||||||||||||
Other mortgages | 263,700 | 276,578 | 298,645 | 96,209 | 87,823 | |||||||||||||||
Installment loans to individuals | 848,450 | 399,651 | 383,582 | 278,223 | 226,177 | |||||||||||||||
Lease finance | 73,055 | 26,619 | 16,038 | 55,894 | 27,864 | |||||||||||||||
Other | 33,553 | 36,935 | (1,382 | ) | (62,772 | ) | 219,571 | |||||||||||||
Total Borrowers in Spain | 2,499,843 | 928,236 | 658,990 | 793,898 | 1,048,552 | |||||||||||||||
Borrowers outside Spain | ||||||||||||||||||||
Government and official institutions | 14,218 | (8,344 | ) | (1,797 | ) | 2,035 | 16,836 | |||||||||||||
Commercial and industrial | 7,667,916 | 2,709,732 | 2,016,115 | 1,128,005 | 820,912 | |||||||||||||||
Mortgage loans | 532,539 | 242,965 | 237,553 | 11,612 | 88,812 | |||||||||||||||
Other | 373,480 | 2,024,299 | 509,735 | 527,814 | 49,755 | |||||||||||||||
Borrowers outside Spain | 8,588,153 | 4,968,652 | 2,761,606 | 1,669,466 | 976,315 | |||||||||||||||
Total | 11,087,996 | 5,896,888 | 3,420,596 | 2,463,364 | 2,024,867 | |||||||||||||||
Charge offs against credit loss allowance | ||||||||||||||||||||
Domestic: | ||||||||||||||||||||
Commercial, financial, agricultural, industrial | (355,554 | ) | (121,751 | ) | (140,715 | ) | (55,982 | ) | (113,357 | ) | ||||||||||
Real estate and construction | (137,183 | ) | (34,429 | ) | (29,466 | ) | (18,911 | ) | (8 | ) | ||||||||||
Other mortgages | (235,659 | ) | (61,618 | ) | (11,807 | ) | (7,284 | ) | (14,674 | ) | ||||||||||
Installment loans to individuals | (481,164 | ) | (503,166 | ) | (356,532 | ) | (184,218 | ) | (67,554 | ) | ||||||||||
Lease finance | (25,681 | ) | (2,693 | ) | (1,344 | ) | (1,775 | ) | (8,007 | ) | ||||||||||
Other | (1,618 | ) | (7,931 | ) | (33,923 | ) | (1,389 | ) | (22,436 | ) | ||||||||||
Total Borrowers in Spain | (1,236,859 | ) | (731,588 | ) | (573,787 | ) | (269,559 | ) | (226,036 | ) | ||||||||||
Borrowers outside Spain | ||||||||||||||||||||
Government and official institutions | (213 | ) | — | — | (174 | ) | — | |||||||||||||
Commercial and industrial | (7,826,967 | ) | (2,807,232 | ) | (1,969,576 | ) | (1,333,617 | ) | (1,120,180 | ) | ||||||||||
Mortgage loans | (393,104 | ) | (1,736 | ) | (6,693 | ) | (46,603 | ) | (30,562 | ) | ||||||||||
Other | (337,485 | ) | (1,011,837 | ) | (770,106 | ) | (719,912 | ) | (142,716 | ) | ||||||||||
Borrowers outside Spain | (8,557,769 | ) | (3,820,805 | ) | (2,746,375 | ) | (2,100,306 | ) | (1,293,458 | ) | ||||||||||
Total | (9,794,628 | ) | (4,552,393 | ) | (3,320,162 | ) | (2,369,865 | ) | (1,519,494 | ) |
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IFRS-IASB | ||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||
2009 | % | 2008 | % | 2007 | % | 2006 | % | 2005 | % | |||||||||||||||||||||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||||||||||||||||||||||||||
Borrowers in Spain: | ||||||||||||||||||||||||||||||||||||||||
Commercial, financial, agricultural, industrial | 1,742,508 | 9.74 | 1,690,171 | 13.29 | 1,121,382 | 12.75 | 2,054,720 | 24.79 | 1,419,729 | 20.57 | ||||||||||||||||||||||||||||||
Real estate and construction | 1,896,177 | 10.59 | 1,490,138 | 11.72 | 1,412,652 | 16.06 | 515,597 | 6.22 | 363,991 | 5.27 | ||||||||||||||||||||||||||||||
Other mortgages | 1,375,447 | 7.68 | 1,271,684 | 10.00 | 805,437 | 9.16 | 457,132 | 5.52 | 186,574 | 2.70 | ||||||||||||||||||||||||||||||
Installment loans to individuals | 1,673,557 | 9.35 | 1,182,274 | 9.29 | 926,917 | 10.53 | 889,283 | 10.73 | 469,677 | 6.81 | ||||||||||||||||||||||||||||||
Lease finance | 215,785 | 1.21 | 112,874 | 0.89 | 162,405 | 1.85 | 166,542 | 2.01 | 75,777 | 1.10 | ||||||||||||||||||||||||||||||
Other | 89,344 | 0.50 | 201,809 | 1.59 | 83,207 | 0.95 | 235,046 | 2.84 | 293,851 | 4.26 | ||||||||||||||||||||||||||||||
Total Borrowers in Spain | 6,992,818 | 39.07 | 5,948,950 | 46.77 | 4,512,000 | 51.30 | 4,318,320 | 52.10 | 2,809,599 | 40.71 | ||||||||||||||||||||||||||||||
Borrowers outside Spain: | ||||||||||||||||||||||||||||||||||||||||
Government and official institutions | 19,149 | 0.11 | 13,653 | 0.11 | 25,650 | 0.29 | 30,054 | 0.36 | 41,302 | 0.60 | ||||||||||||||||||||||||||||||
Commercial and industrial | 8,529,010 | 47.65 | 4,517,625 | 35.52 | 2,762,325 | 31.40 | 2,670,075 | 32.22 | 3,413,736 | 49.46 | ||||||||||||||||||||||||||||||
Mortgage loans | 1,555,212 | 8.69 | 1,615,112 | 12.70 | 1,354,866 | 15.40 | 831,972 | 10.04 | 363,980 | 5.27 | ||||||||||||||||||||||||||||||
Other | 802,443 | 4.48 | 624,283 | 4.91 | 141,530 | 1.61 | 437,707 | 5.28 | 273,308 | 3.96 | ||||||||||||||||||||||||||||||
Total Borrowers outside Spain | 10,905,814 | 60.93 | 6,770,673 | 53.23 | 4,284,371 | 48.70 | 3,969,808 | 47.90 | 4,092,326 | 59.29 | ||||||||||||||||||||||||||||||
Total | 17,898,632 | 100.00 | 12,719,623 | 100.00 | 8,796,371 | 100.00 | 8,288,128 | 100.00 | 6,901,925 | 100.00 |
IFRS | ||||||||||||||||||||
At December 31, | ||||||||||||||||||||
Non-performing balances | 2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||||||
Past-due and other non-performing balances (1) (2) (3): | ||||||||||||||||||||
Domestic | 10,405,450 | 6,405,803 | 1,887,167 | 1,288,857 | 1,110,784 | |||||||||||||||
International | 14,148,174 | 7,785,010 | 4,291,488 | 3,318,690 | 3,230,716 | |||||||||||||||
Total | 24,553,624 | 14,190,813 | 6,178,655 | 4,607,547 | 4,341,500 |
(1) | We estimate that the total amount of our non-performing balances fully provisioned under IFRS and which under U.S. GAAP would have been charged-off from the balance sheet was€1,302.6 million,€1,206.5 million,€1,582.0 million,€2,877.6 million and€2,996,6 million at December 31, 2005, 2006, 2007, 2008 and 2009, respectively. | |
(2) | Non-performing balances due to country risk were€121.1 million,€83.0 million,€6.7 million,€2.6 million and€7.8 million at December 31, 2005, 2006, 2007, 2008 and 2009, respectively. | |
(3) | We estimate that at December 31, 2005, 2006, 2007, 2008 and 2009 (i) the total amount of our non-performing past-due balances was€3,367.1 million,€3,841.2 million, 4,918.2 million,€11,773.3 million and€21,269.8 million respectively, and (ii) the total amount of our other non-performing balances was€974.4 million,€766.3 million,€1,260.5 million,€2,417.5 million and€3,283,9 million, respectively. |
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IFRS | ||||||||||||||||||||||||||||||||||||
Quarter ended | Year ended | Year ended | Year ended | Year ended | Year ended | |||||||||||||||||||||||||||||||
Mar. 31, | Jun. 30, | Sep. 30, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | ||||||||||||||||||||||||||||
(in thousands of euros) | 2009 | 2009 | 2009 | 2009 | 2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||||||||||||||||||
Opening balance | 14,190,813 | 18,967,529 | 21,751,606 | 22,666,379 | 14,190,813 | 6,178,655 | 4,607,547 | 4,341,500 | 4,114,691 | |||||||||||||||||||||||||||
Net additions | 5,290,126 | 4,877,401 | 4,169,928 | 3,896,875 | 18,234,330 | 11,346,183 | 5,014,270 | 2,567,912 | 1,473,809 | |||||||||||||||||||||||||||
Increase in scope of consolidation | 1,033,001 | — | — | — | 1,033,001 | 2,088,943 | 1,000 | 164,000 | (33,000 | ) | ||||||||||||||||||||||||||
Exchange differences | 211,246 | 369,976 | (301,581 | ) | 610,468 | 890,109 | (870,575 | ) | (124,000 | ) | (96,000 | ) | 300,000 | |||||||||||||||||||||||
Writeoffs | (1,757,657 | ) | (2,463,300 | ) | (2,953,574 | ) | (2,620,098 | ) | (9,794,629 | ) | (4,552,393 | ) | (3,320,162 | ) | (2,369,865 | ) | (1,514,000 | ) | ||||||||||||||||||
Closing balance | 18,967,529 | 21,751,606 | 22,666,379 | 24,553,624 | 24,553,624 | 14,190,813 | 6,178,655 | 4,607,547 | 4,341,500 |
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IFRS | ||||||||||||||||||||
At December 31, | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||||||
Computable credit risk (1) | 758,346,873 | 697,199,713 | 649,342,484 | 588,372,837 | 489,662,040 | |||||||||||||||
Non-performing balances by segments: | ||||||||||||||||||||
Individuals | 14,589,806 | 10,113,539 | 4,774,589 | 3,707,554 | 3,109,299 | |||||||||||||||
Mortgages | 6,110,013 | 3,238,670 | 1,584,517 | 1,230,406 | 1,031,866 | |||||||||||||||
Consumer loans | 6,164,477 | 5,711,326 | 2,695,997 | 2,093,490 | 1,755,682 | |||||||||||||||
Credit cards and others | 2,315,316 | 1,163,543 | 494,075 | 383,658 | 321,751 | |||||||||||||||
Enterprises | 7,811,870 | 2,860,333 | 1,309,738 | 843,807 | 1,165,851 | |||||||||||||||
Corporate Banking | 2,127,493 | 1,130,459 | 62,224 | 38,300 | 63,758 | |||||||||||||||
Public sector | 24,455 | 86,481 | 32,105 | 17,886 | 2,592 | |||||||||||||||
Total non performing balances | 24,553,624 | 14,190,812 | 6,178,656 | 4,607,547 | 4,341,500 | |||||||||||||||
Allowances for non-performing balances | 18,497,070 | 12,862,981 | 9,302,230 | 8,626,937 | 7,047,475 | |||||||||||||||
Ratios | ||||||||||||||||||||
Non-performing balances to computable credit risk | 3.24 | % | 2.04 | % | 0.95 | % | 0.78 | % | 0.89 | % | ||||||||||
Coverage ratio (2) | 75.33 | % | 90.64 | % | 150.55 | % | 187.23 | % | 162.33 | % | ||||||||||
Balances charged-off to total loans and contingent liabilities | 1.17 | % | 0.55 | % | 0.41 | % | 0.31 | % | 0.21 | % |
(1) | Computable credit risk is the sum of the face amounts of loans and leases (including non-performing assets but excluding country risk loans), guarantees and documentary credits. | |
(2) | Allowances for non-performing balances as a percentage of non-performing balances. |
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IFRS-IASB | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
Summary of non-accrual balances | 2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||||||
(in millions of euros) | ||||||||||||||||||||
Balances classified as Non-Performing Balances | 24,553.6 | 14,190.8 | 6,178.7 | 4,607.5 | 4,341.5 | |||||||||||||||
Non-Performing Balances due to country risk | 7.8 | 2.6 | 6.7 | 83.0 | 121.1 | |||||||||||||||
Total non-accruing balances | 24,561.4 | 14,193.4 | 6,185.4 | 4,690.5 | 4,462.6 |
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IFRS-IASB | ||||||||||||||||||||||||||||
Year Ended | ||||||||||||||||||||||||||||
Quarterly movements | December 31, | |||||||||||||||||||||||||||
Mar. 31, | Jun. 30, | Sep. 30, | Dec. 31, | |||||||||||||||||||||||||
2009 | 2009 | 2009 | 2009 | 2009 | 2008 | 2007 | ||||||||||||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||||||||||||||
Opening balance | 1,309,989 | 1,800,682 | 2,211,633 | 2,472,401 | 1,309,989 | 494,567 | 408,450 | |||||||||||||||||||||
Foreclosures | 859,462 | 933,761 | 764,437 | 826,232 | 3,383,892 | 1,712,821 | 851,152 | |||||||||||||||||||||
Sales | (368,769 | ) | (522,810 | ) | (503,669 | ) | (582,759 | ) | (1,978,007 | ) | (897,399 | ) | (765,035 | ) | ||||||||||||||
Gross foreclosed assets | 1,800,682 | 2,211,633 | 2,472,401 | 2,715,874 | 2,715,874 | 1,309,989 | 494,567 | |||||||||||||||||||||
Allowances established | (185,163 | ) | (239,684 | ) | (276,178 | ) | (713,373 | ) | (713,373 | ) | (169,030 | ) | (111,026 | ) | ||||||||||||||
Allowance as a percentage of foreclosed assets | 10.28 | % | 10.84 | % | 11.17 | % | 26.27 | % | 26.27 | % | 12.90 | % | 22.45 | % | ||||||||||||||
Closing balance (net) | 1,615,519 | 1,971,949 | 2,196,223 | 2,002,501 | 2,002,501 | 1,140,959 | 383,541 |
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IFRS-IASB | ||||||||||||
At December 31, | ||||||||||||
Deposits from central banks and credit institutions- | 2009 | 2008 | 2007 | |||||||||
(in thousands of euros) | ||||||||||||
Reciprocal accounts | 948,049 | 509,282 | 562,619 | |||||||||
Time deposits | 78,325,126 | 82,559,946 | 71,227,723 | |||||||||
Other demand accounts | 3,340,932 | 2,527,834 | 2,466,369 | |||||||||
Repurchase agreements | 56,818,092 | 41,651,446 | 36,615,910 | |||||||||
Central bank credit account drawdowns | 2,658,925 | 2,626,262 | 2,008,927 | |||||||||
Other financial liabilities associated with transferred financial assets | — | — | — | |||||||||
Hybrid financial liabilities | 463 | 2,600 | 15,760 | |||||||||
Total | 142,091,587 | 129,877,370 | 112,897,308 | |||||||||
Customer deposits- | ||||||||||||
Demand deposits- | ||||||||||||
Current accounts | 135,895,002 | 94,773,159 | 87,136,743 | |||||||||
Savings accounts | 127,940,647 | 115,673,794 | 90,727,525 | |||||||||
Other demand deposits | 3,570,326 | 3,035,757 | 3,593,720 | |||||||||
Time deposits- | ||||||||||||
Fixed-term deposits | 192,244,789 | 143,130,514 | 92,375,364 | |||||||||
Home-purchase savings accounts | 315,867 | 295,458 | 296,768 | |||||||||
Discount deposits | 448,432 | 11,625,840 | 9,933,139 | |||||||||
Funds received under financial asset transfers | 2 | 2 | 0 | |||||||||
Hybrid financial liabilities | 5,447,496 | 8,159,893 | 8,494,773 | |||||||||
Other financial liabilities associated with transferred financial assets | — | — | — | |||||||||
Other time deposits | 212,111 | 290,053 | 113,562 | |||||||||
Notice deposits | 2,208,116 | 1,764,954 | 283,301 | |||||||||
Repurchase agreements | 38,693,449 | 41,480,026 | 62,451,624 | |||||||||
Total | 506,976,237 | 420,229,450 | 355,406,519 | |||||||||
Total deposits | 649,067,824 | 550,106,820 | 468,303,827 |
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IFRS-IASB | ||||||||||||
At December 31, | ||||||||||||
Deposits from central banks and credit institutions- | 2009 | 2008 | 2007 | |||||||||
(in thousands of euros) | ||||||||||||
Due to credit institutions | ||||||||||||
Offices in Spain | 68,500,717 | 61,175,697 | 66,139,163 | |||||||||
Offices outside Spain: | ||||||||||||
Other EU countries | 56,157,152 | 55,594,532 | 31,782,431 | |||||||||
United States | 1,002,056 | 722,833 | 421,513 | |||||||||
Other OECD countries (1) | 38,669 | 38,067 | 44,136 | |||||||||
Central and South America (1) | 16,371,115 | 12,291,897 | 14,502,083 | |||||||||
Other | 21,878 | 54,344 | 7,982 | |||||||||
Total offices outside Spain | 73,590,870 | 68,701,673 | 46,758,145 | |||||||||
Total | 142,091,587 | 129,877,370 | 112,897,308 | |||||||||
Customer deposits | ||||||||||||
Offices in Spain | 170,760,231 | 142,376,596 | 131,833,844 | |||||||||
Offices outside Spain: | ||||||||||||
Other EU countries | 199,169,106 | 170,778,310 | 134,505,644 | |||||||||
United States | 37,851,345 | 8,440,893 | 17,881,211 | |||||||||
Other OECD countries (1) | 1,101,108 | 470,721 | 189,548 | |||||||||
Central and South America (1) | 96,804,592 | 96,103,045 | 69,360,898 | |||||||||
Other | 1,289,855 | 2,059,885 | 1,635,374 | |||||||||
Total offices outside Spain | 336,216,006 | 277,852,854 | 223,572,675 | |||||||||
Total | 506,976,237 | 420,229,450 | 355,406,519 | |||||||||
Total deposits | 649,067,824 | 550,106,820 | 468,303,827 |
(1) | In this schedule Mexico is classified under “Central and South America” |
December 31, 2009 | ||||||||||||
Domestic | International | Total | ||||||||||
(in thousands of euros) | ||||||||||||
Under 3 months | 14,481,824 | 27,067,550 | 41,549,374 | |||||||||
3 to 6 months | 3,604,073 | 10,665,456 | 14,269,529 | |||||||||
6 to 12 months | 4,347,421 | 17,860,482 | 22,207,903 | |||||||||
Over 12 months | 4,081,087 | 26,264,353 | 30,345,440 | |||||||||
Total | 26,514,405 | 81,857,841 | 108,372,246 |
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IFRS-IASB | ||||||||||||||||||||||||
At December 31, | ||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Short-Term Borrowings | Amount | Rate | Amount | Rate | Amount | Rate | ||||||||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||||||||||
Securities sold under agreements to repurchase (principally Spanish Treasury notes and bills): | ||||||||||||||||||||||||
At December 31 | 95,511,541 | 1.85 | % | 83,531,515 | 4.12 | % | 99,067,534 | 3.66 | % | |||||||||||||||
Average during year | 90,542,348 | 2.24 | % | 84,194,507 | 3.78 | % | 90,977,794 | 3.86 | % | |||||||||||||||
Maximum month-end balance | 101,311,947 | 99,067,534 | 99,067,534 | |||||||||||||||||||||
Other short-term borrowings: | ||||||||||||||||||||||||
At December 31 | 28,678,183 | 3.75 | % | 41,759,661 | 4.89 | % | 32,706,892 | 7.29 | % | |||||||||||||||
Average during year | 34,032,816 | 2.65 | % | 45,106,644 | 5.13 | % | 27,071,238 | 5.42 | % | |||||||||||||||
Maximum month-end balance | 41,759,661 | 49,522,970 | 44,052,354 | |||||||||||||||||||||
Total short-term borrowings at year-end | 124,189,724 | 2.29 | % | 125,291,176 | 4.37 | % | 131,774,426 | 4.56 | % |
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• | Program of activities detailing the transactions to be made and the corporate structure of the branch; |
• | Address in Spain of the branch; |
• | Name and curriculum vitae of the branch’s managers; |
• | Stockholders’ equity and solvency ratio of the financial institution and its consolidated group; and |
• | Detailed information about any deposit guarantee scheme that assures the protection of the branch’s depositors. |
• | amount of the investment; |
• | percentage of the share capital and of the total voting rights; |
• | name of the companies through which the investment will be made; |
• | draft of the By-laws; |
• | program of activities, setting out the types of business envisaged, the administrative and accounting organization and the internal control procedures, including those established to prevent money laundering transactions; |
• | list of the persons who will be members of the first board of directors and of the senior management; |
• | list of partners with significant holdings, and |
• | detailed description of the banking, tax and anti-money laundering regulations of the country where it will be located. |
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• | In the valuation of financial instruments permitting static hedging (principally, forwards and swaps), and in the valuation of loans and advances, the “present value” method is used. Expected future cash flows are discounted using the interest rate curves of the applicable currencies. The interest rate curves are generally observable market data. |
• | In the valuation of financial instruments requiring dynamic hedging (principally structured options and other structured instruments), the Black-Scholes model is generally used. Certain observable market inputs are used in the Black-Scholes model to generate variables such as the bid-offer spread, exchange rates, volatility, correlation between indexes and market liquidity, as appropriate. |
• | In the valuation of financial instruments exposed to interest rate risk (such as interest rate futures, caps and floors), the present value method (futures) and Black-Scholes model (plain vanilla options) are used. For more structured instruments that require dynamic hedging, the Heath-Jarrow-Morton model is used. The main inputs used in these models are principally observable market data, including appropriate interest rate curves, volatilities, correlations and exchange rates. |
• | In the case of linear instruments (such as bonds and fixed-income derivatives), credit risk is measured using dynamic models similar to those used in the measurement of interest rate risk. In the case of non-linear instruments, if they are exposed to portfolio credit risk (such as credit derivatives), the joint probability of default is determined using the Standard Gaussian Copula model. The main inputs used in the Standard Gaussian Copula model are generally data relating to individual issuers in the portfolio and correlations thereto. The main inputs used in determining the underlying cost of credit for credit risk derivatives are quoted credit spreads, and the correlation between individual issuers’ quoted credit derivatives. |
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• | Individually, for all significant debt instruments and for instruments which, although not material, are not susceptible to being classified in homogeneous groups of instruments with similar risk characteristics: instrument type, debtor’s industry and geographical location, type of guarantee or collateral, and age of past-due amounts, taking into account: (i) the present value of future cash flows, discounted at an appropriate discount rate; (ii) the debtor’s financial situation; and (iii) any guarantees in place. |
• | Collectively, in all other cases, we group transactions on the basis of the nature of the obligors, the conditions of the countries in which they reside, transaction status, type of collateral or guarantee, and age of past-due amounts. For each group, we establish the appropriate impairment losses (“identified losses”) that must be recognized. |
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• | assumed interest rates; |
• | mortality tables; |
• | annual social security pension revision rate; |
• | price inflation; |
• | annual salary growth rate, and |
• | the method used to calculate vested commitments to current employees. |
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Contributions to Net Income (1) | ||||||||
Investment | December 31, 2009 | December 31, 2008 | ||||||
(in thousands of euros) | ||||||||
Grupo Real (2) | 15,341 | 711,146 | ||||||
CEPSA (3) | — | 130,932 | ||||||
Sovereign (4) | (15,691 | ) | (110,251 | ) | ||||
Attijariwafa Bank Société Anonyme (5) | — | 27,560 |
(1) | Contributions to income from companies accounted for by the equity method include dividends. | |
(2) | Banco Real was fully consolidated in the Group’s consolidated financial statements in the fourth quarter of 2008. Until then, Banco Real had been accounted for using the equity method through ownership interest. The amount of€15,341 thousand corresponds to 3 companies that were still accounted for by the equity method during 2009. | |
(3) | CEPSA was classified on December 31, 2008 as a “non-current asset held for sale” and was finally sold during 2009. | |
(4) | Sovereign’s contribution to net income was accounted for by the equity method until February 2009 when it was fully consolidated. The losses disclosed above for 2009 correspond only to January (prior to our full consolidation of Sovereign). | |
(5) | Reclassified to available-for-sale in the second half of 2008. |
Amount | % | |||||||||||||||
2009 | 2008 | Change | Change | |||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||
Mutual and pension funds | 1,177,934 | 1,542,470 | (364,536 | ) | (23.63 | ) | ||||||||||
Insurance | 1,861,169 | 1,755,336 | 105,833 | 6.03 | ||||||||||||
Securities services | 774,296 | 704,525 | 69,771 | 9.90 | ||||||||||||
Commissions for services | 5,266,735 | 4,263,964 | 1,002,771 | 23.52 | ||||||||||||
Credit and debit cards | 1,033,383 | 856,642 | 176,741 | 20.63 | ||||||||||||
Account management | 858,696 | 570,446 | 288,250 | 50.53 | ||||||||||||
Bill discounting | 318,750 | 300,042 | 18,708 | 6.24 | ||||||||||||
Contingent liabilities | 422,065 | 384,254 | 37,811 | 9.84 | ||||||||||||
Other operations | 2,633,841 | 2,152,580 | 481,261 | 22.36 | ||||||||||||
Total fee and commission income | 9,080,134 | 8,266,295 | 813,839 | 9.85 |
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Amount | % | |||||||||||||||
2008 | 2007 | Change | Change | |||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||
Mutual and pension funds | 1,542,470 | 1,891,417 | (348,947 | ) | (18.45 | ) | ||||||||||
Insurance | 1,755,336 | 1,414,796 | 340,540 | 24.07 | ||||||||||||
Securities services | 704,525 | 970,639 | (266,114 | ) | (27.42 | ) | ||||||||||
Commissions for services | 4,263,964 | 3,591,653 | 672,311 | 18.72 | ||||||||||||
Credit and debit cards | 856,642 | 775,134 | 81,508 | 10.52 | ||||||||||||
Account management | 570,446 | 555,902 | 14,544 | 2.62 | ||||||||||||
Bill discounting | 300,042 | 222,835 | 77,207 | 34.65 | ||||||||||||
Contingent liabilities | 384,254 | 341,956 | 42,298 | 12.37 | ||||||||||||
Other operations | 2,152,580 | 1,695,826 | 456,754 | 26.93 | ||||||||||||
Total fee and commission income | 8,266,295 | 7,868,505 | 397,790 | 5.06 |
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Amount | % | |||||||||||||||
2009 | 2008 | Change | Change | |||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||
Personnel expenses | 8,450,283 | 6,813,351 | 1,636,932 | 24.03 | ||||||||||||
Other general expenses | 6,374,322 | 4,852,506 | 1,521,816 | 31.36 | ||||||||||||
Building and premises | 1,613,675 | 1,206,895 | 406,780 | 33.70 | ||||||||||||
Other expenses | 1,435,743 | 1,048,392 | 387,351 | 36.95 | ||||||||||||
Information technology | 785,504 | 504,196 | 281,308 | 55.79 | ||||||||||||
Advertising | 594,432 | 534,876 | 59,556 | 11.13 | ||||||||||||
Communications | 631,806 | 452,900 | 178,906 | 39.50 | ||||||||||||
Technical reports | 359,753 | 298,037 | 61,716 | 20.71 | ||||||||||||
Per diems and travel expenses | 262,097 | 257,079 | 5,018 | 1.95 | ||||||||||||
Taxes (other than income tax) | 312,994 | 279,250 | 33,744 | 12.08 | ||||||||||||
Guard and cash courier services | 331,220 | 235,207 | 96,013 | 40.82 | ||||||||||||
Insurance premiums | 47,098 | 35,674 | 11,424 | 32.02 | ||||||||||||
Total administrative expenses | 14,824,605 | 11,665,857 | 3,158,748 | 27.08 |
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Amount | % | |||||||||||||||
2008 | 2007 | Change | Change | |||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||
Personnel expenses | 6,813,351 | 6,434,343 | 379,008 | 5.89 | ||||||||||||
Other general expenses | 4,852,506 | 4,342,327 | 510,179 | 11.75 | ||||||||||||
Building and premises | 1,206,895 | 965,937 | 240,958 | 24.95 | ||||||||||||
Other expenses | 1,048,392 | 897,877 | 150,515 | 16.76 | ||||||||||||
Information technology | 504,196 | 468,273 | 35,923 | 7.67 | ||||||||||||
Advertising | 534,876 | 553,967 | (19,091 | ) | (3.45 | ) | ||||||||||
Communications | 452,900 | 401,057 | 51,843 | 12.93 | ||||||||||||
Technical reports | 298,037 | 294,058 | 3,979 | 1.35 | ||||||||||||
Per diems and travel expenses | 257,079 | 271,842 | (14,763 | ) | (5.43 | ) | ||||||||||
Taxes (other than income tax) | 279,250 | 265,542 | 13,708 | 5.16 | ||||||||||||
Guard and cash courier services | 235,207 | 188,717 | 46,490 | 24.63 | ||||||||||||
Insurance premiums | 35,674 | 35,057 | 617 | 1.76 | ||||||||||||
Total administrative expenses | 11,665,857 | 10,776,670 | 889,187 | 8.25 |
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2009 | 2008 | 2007 | ||||||||||
(in thousands of euros) | ||||||||||||
Impairment losses on financial assets: | 11,578,322 | 6,283,053 | 3,430,122 | |||||||||
Loans and receivables | 11,087,996 | 5,896,888 | 3,420,596 | |||||||||
Other financial assets not measured at fair value through profit and loss | 490,326 | 386,165 | 9,526 | |||||||||
Impairment losses on other assets: | 164,630 | 1,049,226 | 1,548,218 | |||||||||
Goodwill and other intangible assets | 31,249 | 983,929 | 1,162,872 | |||||||||
Other assets | 133,381 | 65,297 | 385,346 | |||||||||
Total impairment losses (net) | 11,742,952 | 7,332,279 | 4,978,340 |
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Amount | % | |||||||||||||||
2009 | 2008 | Change | Change | |||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||
Gains / (losses) on disposal of assets not classified as non-current assets held for sale | 1,565,013 | 101,156 | 1,463,857 | 1,447.1 | ||||||||||||
Of which: | ||||||||||||||||
Disposal of investments (1) | 1,527,734 | 49,967 | 1,477,767 | 2,957.5 | ||||||||||||
Gains / (losses) on disposal of non-current assets held for sale not classified as discontinued operations | (1,225,407 | ) | 1,730,902 | (2,956,309 | ) | (170.8 | ) | |||||||||
Of which: | ||||||||||||||||
Sale of Grupo Santander City | — | 836,742 | (836,742 | ) | — | |||||||||||
Antonveneta | — | 3,045,647 | (3,045,647 | ) | — | |||||||||||
Impairment and sale of RBS and Fortis | — | (2,042,695 | ) | 2,042,695 | — | |||||||||||
Sale of Attijariwafa Bank | 218,223 | — | 218,223 | — | ||||||||||||
Losses on impairment of tangible assets (2) | (1,350,592 | ) | (70,027 | ) | (1,280,565 | ) | 1,828.7 |
(1) | €1,498.9 million refer to the sale of shares in Santander Brasil as part of the initial public offering (see Item 4 “Information on the Company—A. History and Development of the Company—Principal Capital Expenditures and Divestitures—Acquisitions, Dispositions, Reorganizations—Initial Public Offering of Banco Santander (Brasil), S.A.”). | |
(2) | In 2009 includes impairment due to assets acquired for a gross amount of€814 million (€554 million net of taxes). For additional information, see note 50 to our consolidated financial statements. |
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Amount | % | |||||||||||||||
2008 | 2007 | Change | Change | |||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||
Gains / (losses) on disposal of assets not classified as non-current assets held for sale | 101,156 | 1,810,428 | (1,709,272 | ) | (94.4 | ) | ||||||||||
Of which: | ||||||||||||||||
Disposal of investments | 49,967 | 16,388 | 33,579 | 204.9 | ||||||||||||
Sale of real state assets | 51,189 | 1,794,040 | (1,742,851 | ) | (97.1 | ) | ||||||||||
Gains / (losses) on disposal of non-current assets held for sale not classified as discontinued operations | 1,730,902 | 643,050 | 1,087,852 | 169.2 | ||||||||||||
Of which: | ||||||||||||||||
Sale of Grupo Santander City | 836,742 | — | 836,742 | — | ||||||||||||
Antonveneta | 3,045,647 | — | 3,045,647 | — | ||||||||||||
Intesa San Paolo | — | 566,090 | (566,090 | ) | — | |||||||||||
Impairment and sale of RBS and Fortis(*) | (2,042,695 | ) | — | (2,042,695 | ) | — |
(*) | Write-down recognized in the income statement of ownership interests in RBS and Fortis. See note 50 to our consolidated financial statements. |
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Variations | ||||||||||||||||||||
2009 | 2008 | 2007 | 2009/2008 | 2008/2007 | ||||||||||||||||
(in millions of euros, except percentages) | ||||||||||||||||||||
INTEREST INCOME / (CHARGES) | 11,456 | 9,259 | 7,742 | 23.7 | % | 19.6 | % | |||||||||||||
Income from equity instruments | 218 | 266 | 202 | (18.0 | %) | 31.7 | % | |||||||||||||
Income from companies accounted for by the equity method | 7 | 15 | 9 | (53.3 | %) | 66.7 | % | |||||||||||||
Net fees and commissions | 3,787 | 4,074 | 4,137 | (7.0 | %) | (1.5 | %) | |||||||||||||
Gains/losses on financial assets and liabilities (net) | 687 | 764 | 732 | (10.1 | %) | 4.4 | % | |||||||||||||
Other operating income/(expenses) (net) | 139 | 181 | 133 | (23.2 | %) | 36.1 | % | |||||||||||||
TOTAL INCOME | 16,294 | 14,559 | 12,955 | 11.9 | % | 12.4 | % | |||||||||||||
Administrative expenses | (5,334 | ) | (4,956 | ) | (4,564 | ) | 7.6 | % | 8.6 | % | ||||||||||
Personnel expenses | (3,306 | ) | (3,123 | ) | (3,037 | ) | 5.9 | % | 2.8 | % | ||||||||||
Other general expenses | (2,028 | ) | (1,833 | ) | (1,527 | ) | 10.6 | % | 20.0 | % | ||||||||||
Depreciation and amortization | (570 | ) | (500 | ) | (559 | ) | 14.0 | % | (10.6 | %) | ||||||||||
Impairment losses on financial assets (net) | (3,286 | ) | (2,476 | ) | (1,557 | ) | 32.7 | % | 59.0 | % | ||||||||||
Provisions (net) | (311 | ) | (89 | ) | 45 | 249.4 | % | (297.8 | %) | |||||||||||
Impairment losses on other assets (net) | (41 | ) | (16 | ) | (8 | ) | 156.3 | % | 100.0 | % | ||||||||||
Gains/(losses) on other assets (net) | (81 | ) | (38 | ) | 11 | 113.2 | % | (445.5 | %) | |||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 6,671 | 6,484 | 6,323 | 2.9 | % | 2.5 | % | |||||||||||||
Income tax | (1,768 | ) | (1,686 | ) | (1,777 | ) | 4.9 | % | (5.1 | %) | ||||||||||
PROFIT FROM CONTINUING OPERATIONS | 4,903 | 4,798 | 4,546 | 2.2 | % | 5.5 | % | |||||||||||||
Profit/(loss) from discontinued operations (net) | (45 | ) | (21 | ) | — | 114.3 | % | n/a | ||||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 4,858 | 4,777 | 4,546 | 1.7 | % | 5.1 | % | |||||||||||||
Profit attributable to minority interests | 65 | 109 | 107 | (40.4 | %) | 1.9 | % | |||||||||||||
Profit attributable to the Parent | 4,793 | 4,668 | 4,439 | 2.7 | % | 5.2 | % |
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Variations | ||||||||||||||||||||
2009 | 2008 | 2007 | 2009/2008 | 2008/2007 | ||||||||||||||||
(in millions of euros, except percentages) | ||||||||||||||||||||
INTEREST INCOME / (CHARGES) | 3,934 | 2,411 | 2,334 | 63.2 | % | 3.3 | % | |||||||||||||
Income from equity instruments | — | — | 1 | n/a | n/a | |||||||||||||||
Income from companies accounted for by the equity method | — | 1 | 2 | n/a | (50.0 | %) | ||||||||||||||
Net fees and commissions | 993 | 926 | 1,007 | 7.2 | % | (8.0 | %) | |||||||||||||
Gains/losses on financial assets and liabilities (net) | 506 | 500 | 436 | 1.2 | % | 14.7 | % | |||||||||||||
Other operating income/(expenses) (net) | 27 | 49 | 65 | (44.9 | %) | (24.6 | %) | |||||||||||||
TOTAL INCOME | 5,460 | 3,887 | 3,845 | 40.5 | % | 1.1 | % | |||||||||||||
Administrative expenses | (1,997 | ) | (1,603 | ) | (1,829 | ) | 24.6 | % | (12.4 | %) | ||||||||||
Personnel expenses | (1,170 | ) | (986 | ) | (1,045 | ) | 18.7 | % | (5.6 | %) | ||||||||||
Other general expenses | (827 | ) | (617 | ) | (784 | ) | 34.0 | % | (21.3 | %) | ||||||||||
Depreciation and amortization | (231 | ) | (158 | ) | (101 | ) | 46.2 | % | 56.4 | % | ||||||||||
Impairment losses on financial assets (net) | (881 | ) | (457 | ) | (312 | ) | 92.8 | % | 46.5 | % | ||||||||||
Provisions (net) | 16 | (29 | ) | 5 | (155.2 | %) | (680.0 | %) | ||||||||||||
Impairment losses on other assets (net) | — | — | (1 | ) | n/a | n/a | ||||||||||||||
Gains/(losses) on other assets (net) | — | 32 | 15 | n/a | 113.3 | % | ||||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 2,367 | 1,672 | 1,622 | 41.6 | % | 3.1 | % | |||||||||||||
Income tax | (641 | ) | (425 | ) | (421 | ) | 50.8 | % | 1.0 | % | ||||||||||
PROFIT FROM CONTINUING OPERATIONS | 1,726 | 1,247 | 1,201 | 38.4 | % | 3.8 | % | |||||||||||||
Profit/(loss) from discontinued operations (net) | — | — | — | n/a | n/a | |||||||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 1,726 | 1,247 | 1,201 | 38.4 | % | 3.8 | % | |||||||||||||
Profit attributable to minority interests | — | — | — | n/a | n/a | |||||||||||||||
Profit attributable to the Parent | 1,726 | 1,247 | 1,201 | 38.4 | % | 3.8 | % |
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2009 | 2008 | 2007 | 2009/2008 | 2008/2007 | ||||||||||||||||
(in millions of euros, except percentages) | ||||||||||||||||||||
INTEREST INCOME / (CHARGES) | 11,959 | 8,025 | 6,144 | 49.0 | % | 30.6 | % | |||||||||||||
Income from equity instruments | 96 | 58 | 34 | 65.5 | % | 70.6 | % | |||||||||||||
Income from companies accounted for by the equity method | 10 | 680 | — | (98.5 | %) | n/a | ||||||||||||||
Net fees and commissions | 3,925 | 3,208 | 2,694 | 22.4 | % | 19.1 | % | |||||||||||||
Gains/losses on financial assets and liabilities (net) | 1,663 | 857 | 674 | 94.0 | % | 27.2 | % | |||||||||||||
Other operating income/(expenses) (net) | 15 | 10 | 49 | 50.0 | % | (79.6 | %) | |||||||||||||
TOTAL INCOME | 17,668 | 12,838 | 9,595 | 37.6 | % | 33.8 | % | |||||||||||||
Administrative expenses | (6,032 | ) | (4,651 | ) | (3,847 | ) | 29.7 | % | 20.9 | % | ||||||||||
Personnel expenses | (3,210 | ) | (2,504 | ) | (2,105 | ) | 28.2 | % | 19.0 | % | ||||||||||
Other general expenses | (2,822 | ) | (2,147 | ) | (1,742 | ) | 31.4 | % | 23.2 | % | ||||||||||
Depreciation and amortization | (566 | ) | (404 | ) | (328 | ) | 40.1 | % | 23.2 | % | ||||||||||
Impairment losses on financial assets (net) | (4,979 | ) | (3,020 | ) | (1,546 | ) | 64.9 | % | 95.3 | % | ||||||||||
Provisions (net) | (681 | ) | (533 | ) | (437 | ) | 27.8 | % | 22.0 | % | ||||||||||
Impairment losses on other assets (net) | (22 | ) | (6 | ) | (30 | ) | 266.7 | % | (80.0 | %) | ||||||||||
Gains/(losses) on other assets (net) | 40 | 54 | 169 | (25.9 | %) | (68.0 | %) | |||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 5,428 | 4,278 | 3,576 | 26.9 | % | 19.6 | % | |||||||||||||
Income tax | (1,257 | ) | (663 | ) | (809 | ) | 89.6 | % | (18.0 | %) | ||||||||||
PROFIT FROM CONTINUING OPERATIONS | 4,171 | 3,615 | 2,767 | 15.4 | % | 30.6 | % | |||||||||||||
Profit/(loss) from discontinued operations (net) | 91 | 340 | 303 | (73.2 | %) | 12.2 | % | |||||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 4,262 | 3,955 | 3,070 | 7.8 | % | 28.8 | % | |||||||||||||
Profit attributable to minority interests | 428 | 346 | 404 | 23.7 | % | (14.4 | %) | |||||||||||||
Profit attributable to the Parent | 3,834 | 3,609 | 2,666 | 6.2 | % | 35.4 | % |
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(in millions of euros) | 2009 (1) | |||
INTEREST INCOME / (CHARGES) | 1,160 | |||
Income from equity instruments | 1 | |||
Income from companies accounted for by the equity method | (3 | ) | ||
Net fees and commissions | 380 | |||
Gains/losses on financial assets and liabilities (net) | 14 | |||
Other operating income/(expenses) (net) | (89 | ) | ||
TOTAL INCOME | 1,463 | |||
Administrative expenses | (766 | ) | ||
Personnel expenses | (457 | ) | ||
Other general expenses | (309 | ) | ||
Depreciation and amortization | (115 | ) | ||
Impairment losses on financial assets (net) | (571 | ) | ||
Provisions (net) | (55 | ) | ||
Impairment losses on other assets (net) | (1 | ) | ||
Gains/(losses) on other assets (net) | (2 | ) | ||
OPERATING PROFIT/(LOSS) BEFORE TAX | (47 | ) | ||
Income tax | 22 | |||
PROFIT FROM CONTINUING OPERATIONS | (25 | ) | ||
Profit/(loss) from discontinued operations (net) | — | |||
CONSOLIDATED PROFIT FOR THE YEAR | (25 | ) | ||
Profit attributable to minority interests | — | |||
Profit attributable to the Parent | (25 | ) |
(1) | As Sovereign was fully acquired on January 30, 2009, only 11 months for 2009 are presented here. |
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Variations | ||||||||||||||||||||
2009 | 2008 | 2007 | 2009/2008 | 2008/2007 | ||||||||||||||||
(in millions of euros, except percentages) | ||||||||||||||||||||
INTEREST INCOME / (CHARGES) | (2,210 | ) | (2,157 | ) | (1,777 | ) | 2.5 | % | 21.4 | % | ||||||||||
Income from equity instruments | 121 | 229 | 183 | (47.2 | %) | 25.1 | % | |||||||||||||
Income from companies accounted for by the equity method | (15 | ) | 96 | 427 | (115.6 | %) | (77.5 | %) | ||||||||||||
Net fees and commissions | (5 | ) | 59 | 30 | (108.5 | %) | 96.7 | % | ||||||||||||
Gains/losses on financial assets and liabilities (net) | 1,376 | 1,353 | 1,113 | 1.7 | % | 21.6 | % | |||||||||||||
Other operating income/(expenses) (net) | 52 | 32 | 43 | 62.5 | % | (25.6 | %) | |||||||||||||
TOTAL INCOME | (681 | ) | (388 | ) | 19 | 75.5 | % | n/a | ||||||||||||
Administrative expenses | (695 | ) | (455 | ) | (536 | ) | 52.7 | % | (15.1 | %) | ||||||||||
Personnel expenses | (307 | ) | (200 | ) | (247 | ) | 53.5 | % | (19.0 | %) | ||||||||||
Other general expenses | (388 | ) | (255 | ) | (289 | ) | 52.2 | % | (11.8 | %) | ||||||||||
Depreciation and amortization | (114 | ) | (177 | ) | (259 | ) | (35.6 | %) | (31.7 | %) | ||||||||||
Impairment losses on financial assets (net) | (1,861 | ) | (331 | ) | (14 | ) | 462.2 | % | 2,264.3 | % | ||||||||||
Provisions (net) | (762 | ) | (989 | ) | (509 | ) | (23.0 | %) | 94.3 | % | ||||||||||
Impairment losses on other assets (net) | (100 | ) | (1,027 | ) | (1,510 | ) | (90.3 | %) | (32.0 | %) | ||||||||||
Gains/(losses) on other assets (net) | 382 | 1,783 | 2,259 | (78.6 | %) | (21.1 | %) | |||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | (3,831 | ) | (1,584 | ) | (550 | ) | 141.9 | % | 188.0 | % | ||||||||||
Income tax | 2,437 | 938 | 684 | 159.8 | % | 37.1 | % | |||||||||||||
PROFIT FROM CONTINUING OPERATIONS | (1,394 | ) | (646 | ) | 134 | 115.8 | % | (582.1 | %) | |||||||||||
Profit/(loss) from discontinued operations (net) | (15 | ) | — | 685 | n/a | n/a | ||||||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | (1,409 | ) | (646 | ) | 819 | 118.1 | % | (178.9 | %) | |||||||||||
Profit attributable to minority interests | (24 | ) | 1 | 65 | n/a | (98.5 | %) | |||||||||||||
Profit attributable to the Parent | (1,385 | ) | (647 | ) | 754 | 114.1 | % | (185.8 | %) |
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2009 | 2008 | 2007 | 2009/2008 | 2008/2007 | ||||||||||||||||
(in millions of euros, except percentages) | ||||||||||||||||||||
INTEREST INCOME / (CHARGES) | 25,942 | 17,613 | 14,771 | 47.3 | % | 19.2 | % | |||||||||||||
Income from equity instruments | 127 | 154 | 77 | (17.5 | %) | 100.0 | % | |||||||||||||
Income from companies accounted for by the equity method | 12 | 556 | 9 | (97.8 | %) | 6,077.8 | % | |||||||||||||
Net fees and commissions | 7,523 | 6,861 | 6,432 | 9.6 | % | 6.7 | % | |||||||||||||
Gains/losses on financial assets and liabilities (net) | 1,454 | 1,100 | 957 | 32.2 | % | 14.9 | % | |||||||||||||
Other operating income/(expenses) (net) | (230 | ) | 31 | 47 | (841.9 | %) | (34.0 | %) | ||||||||||||
TOTAL INCOME | 34,828 | 26,315 | 22,293 | 32.4 | % | 18.0 | % | |||||||||||||
Administrative expenses | (12,734 | ) | (9,857 | ) | (8,942 | ) | 29.2 | % | 10.2 | % | ||||||||||
Personnel expenses | (7,280 | ) | (5,806 | ) | (5,430 | ) | 25.4 | % | 6.9 | % | ||||||||||
Other general expenses | (5,454 | ) | (4,051 | ) | (3,512 | ) | 34.6 | % | 15.3 | % | ||||||||||
Depreciation and amortization | (1,367 | ) | (946 | ) | (878 | ) | 44.5 | % | 7.7 | % | ||||||||||
Impairment losses on financial assets (net) | (9,744 | ) | (5,672 | ) | (3,357 | ) | 71.8 | % | 69.0 | % | ||||||||||
Provisions (net) | (1,001 | ) | (607 | ) | (423 | ) | 64.9 | % | 43.5 | % | ||||||||||
Impairment losses on other assets (net) | (61 | ) | (24 | ) | (38 | ) | 154.2 | % | (36.8 | %) | ||||||||||
Gains/(losses) on other assets (net) | (43 | ) | 43 | 289 | (200.0 | %) | (85.1 | %) | ||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 9,878 | 9,252 | 8,944 | 6.8 | % | 3.4 | % | |||||||||||||
Income tax | (2,300 | ) | (1,825 | ) | (2,347 | ) | 26.0 | % | (22.2 | %) | ||||||||||
PROFIT FROM CONTINUING OPERATIONS | 7,578 | 7,427 | 6,597 | 2.0 | % | 12.6 | % | |||||||||||||
Profit/(loss) from discontinued operations (net) | 46 | 319 | 151 | (85.6 | %) | 111.3 | % | |||||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 7,624 | 7,746 | 6,748 | (1.6 | %) | 14.8 | % | |||||||||||||
Profit attributable to minority interests | 465 | 434 | 457 | 7.1 | % | (5.0 | %) | |||||||||||||
Profit attributable to the Parent | 7,159 | 7,312 | 6,291 | (2.1 | %) | 16.2 | % |
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Variations | ||||||||||||||||||||
2009 | 2008 | 2007 | 2009/2008 | 2008/2007 | ||||||||||||||||
(in millions of euros, except percentages) | ||||||||||||||||||||
INTEREST INCOME / (CHARGES) | 2,366 | 1,892 | 1,303 | 25.1 | % | 45.2 | % | |||||||||||||
Income from equity instruments | 188 | 164 | 148 | 14.6 | % | 10.8 | % | |||||||||||||
Income from companies accounted for by the equity method | 2 | 87 | 2 | (97.7 | %) | 4,250.0 | % | |||||||||||||
Net fees and commissions | 1,131 | 883 | 911 | 28.1 | % | (3.1 | %) | |||||||||||||
Gains/losses on financial assets and liabilities (net) | 1,382 | 995 | 855 | 38.9 | % | 16.4 | % | |||||||||||||
Other operating income/(expenses) (net) | (16 | ) | (45 | ) | (29 | ) | (64.4 | %) | 55.2 | % | ||||||||||
TOTAL INCOME | 5,053 | 3,976 | 3,190 | 27.1 | % | 24.6 | % | |||||||||||||
Administrative expenses | (1,117 | ) | (1,060 | ) | (1,012 | ) | 5.4 | % | 4.7 | % | ||||||||||
Personnel expenses | (725 | ) | (672 | ) | (625 | ) | 7.9 | % | 7.5 | % | ||||||||||
Other general expenses | (392 | ) | (388 | ) | (387 | ) | 1.0 | % | 0.3 | % | ||||||||||
Depreciation and amortization | (86 | ) | (98 | ) | (90 | ) | (12.2 | %) | 8.9 | % | ||||||||||
Impairment losses on financial assets (net) | 37 | (281 | ) | (58 | ) | (113.2 | %) | 384.5 | % | |||||||||||
Provisions (net) | 6 | (26 | ) | 58 | (123.1 | %) | (144.8 | %) | ||||||||||||
Impairment losses on other assets (net) | (3 | ) | — | — | n/a | n/a | ||||||||||||||
Gains/(losses) on other assets (net) | — | 4 | (94 | ) | n/a | (104.3 | %) | |||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 3,890 | 2,515 | 1,994 | 54.7 | % | 26.1 | % | |||||||||||||
Income tax | (1,125 | ) | (775 | ) | (486 | ) | 45.2 | % | 59.5 | % | ||||||||||
PROFIT FROM CONTINUING OPERATIONS | 2,765 | 1,740 | 1,508 | 58.9 | % | 15.4 | % | |||||||||||||
Profit/(loss) from discontinued operations (net) | — | — | 40 | n/a | n/a | |||||||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 2,765 | 1,740 | 1,548 | 58.9 | % | 12.4 | % | |||||||||||||
Profit attributable to minority interests | — | (1 | ) | 9 | n/a | n/a | ||||||||||||||
Profit attributable to the Parent | 2,765 | 1,741 | 1,539 | 58.8 | % | 13.1 | % |
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Variations | ||||||||||||||||||||
2009 | 2008 | 2007 | 2009/2008 | 2008/2007 | ||||||||||||||||
(in millions of euros, except percentages) | ||||||||||||||||||||
INTEREST INCOME / (CHARGES) | 201 | 190 | 146 | 5.8 | % | 30.1 | % | |||||||||||||
Income from equity instruments | — | 6 | 12 | n/a | (50.0 | %) | ||||||||||||||
Income from companies accounted for by the equity method | — | 53 | — | n/a | n/a | |||||||||||||||
Net fees and commissions | 431 | 464 | 495 | (7.1 | %) | (6.3 | %) | |||||||||||||
Gains/losses on financial assets and liabilities (net) | 34 | 26 | 30 | 30.8 | % | (13.3 | %) | |||||||||||||
Other operating income/(expenses) (net) | 338 | 254 | 229 | 33.1 | % | 10.9 | % | |||||||||||||
TOTAL INCOME | 1,004 | 993 | 912 | 1.1 | % | 8.9 | % | |||||||||||||
Administrative expenses | (278 | ) | (293 | ) | (286 | ) | (5.1 | %) | 2.4 | % | ||||||||||
Personnel expenses | (138 | ) | (135 | ) | (132 | ) | 2.2 | % | 2.3 | % | ||||||||||
Other general expenses | (140 | ) | (158 | ) | (154 | ) | (11.4 | %) | 2.6 | % | ||||||||||
Depreciation and amortization | (29 | ) | (18 | ) | (20 | ) | 61.1 | % | (10.0 | %) | ||||||||||
Impairment losses on financial assets (net) | (10 | ) | — | — | n/a | n/a | ||||||||||||||
Provisions (net) | (36 | ) | (18 | ) | (22 | ) | 100.0 | % | (18.2 | %) | ||||||||||
Impairment losses on other assets (net) | — | 2 | (1 | ) | n/a | n/a | ||||||||||||||
Gains/(losses) on other assets (net) | — | 1 | — | n/a | n/a | |||||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 651 | 667 | 583 | (2.4 | %) | 14.4 | % | |||||||||||||
Income tax | (219 | ) | (174 | ) | (174 | ) | 25.9 | % | 0.0 | % | ||||||||||
PROFIT FROM CONTINUING OPERATIONS | 432 | 493 | 409 | (12.4 | %) | 20.5 | % | |||||||||||||
Profit/(loss) from discontinued operations (net) | — | — | 112 | n/a | n/a | |||||||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 432 | 493 | 521 | (12.4 | %) | (5.4 | %) | |||||||||||||
Profit attributable to minority interests | 28 | 22 | 45 | 27.3 | % | (51.1 | %) | |||||||||||||
Profit attributable to the Parent | 404 | 471 | 476 | (14.2 | %) | (1.1 | %) |
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2009 | 2008 | 2007 | ||||||||||
(in thousands of euros) | ||||||||||||
Due to credit entities | 141,930,426 | 114,360,961 | 111,969,806 | |||||||||
Customer deposits | 463,602,299 | 354,193,915 | 332,678,212 | |||||||||
Marketable debt securities | 221,230,091 | 237,824,647 | 227,447,091 | |||||||||
Subordinated debt | 39,008,547 | 36,257,108 | 33,512,279 | |||||||||
Total | 865,771,363 | 742,636,631 | 705,607,388 |
(1) Senior debt | 3.0 years | |||
(2) Mortgage debt | 11.8 years | |||
(3) Dated subordinated debt | 7.5 years |
Long-Term | Short-Term | Financial Strength | ||||||||||
Standard & Poor’s | AA | A1+ | ||||||||||
Fitch | AA | F1+ | A/B | |||||||||
Moody’s | Aa2 | P1 | B- | |||||||||
DBRS | AA | R1 (high) |
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• | a continued downturn in the Spanish and the United Kingdom real estate markets, and a corresponding increase in mortgage defaults, which could impact our NPL and decrease consumer confidence and disposable income; |
• | uncertainty regarding interest rates in the United States and other countries; |
• | uncertainties relating to economic growth expectations and interest rates cycles, especially in the United States, Spain, the United Kingdom, other European countries and Latin America, and the impact they may have over the yield curve and exchange rates; |
• | the resulting effect of the global economic slowdown on Europe, the US and Latin America and fluctuations in local interest and exchange rates; |
• | continued changes in the macroeconomic environment, such as sustained unemployment above historical levels, could further deteriorate the quality of our customers’ credit; |
• | increases in our cost of funding, partially as a result of the fragility of the Greek economy, could adversely affect our net interest margin as a consequence of timing differences in the repricing of our assets and liabilities; |
• | the effects of withdrawal of significant monetary and fiscal stimulus programs and uncertainty over government responses to growing public deficits; |
• | continued instability and volatility in the financial markets; |
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• | a drop in the value of the euro relative to the US dollar, the Sterling pound or Latin American currencies; |
• | inflationary pressures, because of the effect they may have in relation to increases of interest rates and decreases of growth; |
• | increased consolidation of the global financial services sector, which could further reduce our spreads; |
• | although it is foreseeable that entry barriers to domestic markets in Europe will eventually be lowered, our possible plans of expansion into other markets could be affected by regulatory requirements of the national authorities of these countries; |
• | acquisitions or restructurings of businesses that do not perform in accordance with our expectations or that subject us to previously unknown risks; |
• | increased regulation, government intervention and new laws prompted by the recent turmoil in global financial markets which could change our industry and require us to modify our businesses or operations; |
• | the risk of further reductions in liquidity and increases of credit spreads as a consequence of the crisis in the financial markets, which could affect not only our cost of funding but also the value of our proprietary portfolios and our assets under management; and |
• | future regulatory changes that may increase the overall level of regulation in the markets. |
2009 | 2008 | 2007 | ||||||||||
(in thousands of euros) | ||||||||||||
Contingent liabilities: | ||||||||||||
Financial guarantees and other sureties | 20,974,258 | 15,614,342 | 17,172,878 | |||||||||
Irrevocable documentary credits | 2,636,618 | 3,590,454 | 5,803,088 | |||||||||
Other guarantees | 35,192,187 | 45,613,498 | 52,632,118 | |||||||||
Other contingent liabilities | 453,013 | 504,900 | 608,501 | |||||||||
59,256,076 | 65,323,194 | 76,216,585 | ||||||||||
Commitments: | ||||||||||||
Balances drawable by third parties | 150,562,786 | 123,329,168 | 102,215,927 | |||||||||
Other commitments | 12,967,970 | 8,395,838 | 12,460,636 | |||||||||
163,530,756 | 131,725,006 | 114,676,563 | ||||||||||
222,786,832 | 197,048,200 | 190,893,148 | ||||||||||
2009 | 2008 | 2007 | ||||||||||
(in thousands of euros) | ||||||||||||
Off-balance sheet funds: | ||||||||||||
Mutual funds | 105,216,486 | 90,305,714 | 119,210,503 | |||||||||
Pension funds | 11,309,649 | 11,127,918 | 11,952,437 | |||||||||
Other managed funds | 18,364,168 | 17,289,448 | 19,814,340 | |||||||||
134,890,303 | 118,723,080 | 150,977,280 |
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More than | More than | |||||||||||||||||||
Contractual obligations | Less than | 1 year but | 3 years but | More than | ||||||||||||||||
(in millions of euros) | 1 year | less than 3 years | less than 5 years | 5 years | Total | |||||||||||||||
Deposits from credit institutions | 39,003 | 5,238 | 4,962 | 1,578 | 50,781 | |||||||||||||||
Customer deposits | 418,115 | 34,147 | 30,571 | 4,848 | 487,681 | |||||||||||||||
Marketable debt securities | 67,366 | 50,302 | 31,498 | 57,324 | 206,490 | |||||||||||||||
Subordinated debt | 6,039 | 1,714 | 3,097 | 25,955 | 36,805 | |||||||||||||||
Operating lease obligations | 318 | 701 | 428 | 2,293 | 3,740 | |||||||||||||||
Purchase obligations | 2 | 2 | 1 | — | 5 | |||||||||||||||
Other long-term liabilities (1) | — | — | — | 10,629 | 10,629 | |||||||||||||||
Total | 530,843 | 92,104 | 70,557 | 102,627 | 796,131 |
(1) | Other long-term liabilities relate to pensions and similar obligations |
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1 | The Rules and Regulations of the Board are available on the Group’s website, which does not form part of this annual report on Form 20-F, atwww.santander.com under the heading “Information for shareholders and investors—Corporate governance—Board of directors—Rules and Regulations of the Board of Directors”. |
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Name | Position with Santander | Director Since | ||||
Emilio Botín (1) | Chairman | 1960 | ||||
Fernando de Asúa | First vice chairman | 1999 | ||||
Alfredo Sáenz | Second vice chairman and chief executive officer | 1994 | ||||
Matías R. Inciarte (2) | Third vice chairman | 1988 | ||||
Manuel Soto | Fourth vice chairman | 1999 | ||||
Assicurazioni Generali, S.p.A. | Director | �� | 1999 | |||
Antonio Basagoiti | Director | 1999 | ||||
Ana P. Botín (1) | Director | 1989 | ||||
Javier Botín (1) | Director | 2004 | ||||
Lord Burns | Director | 2004 | ||||
Guillermo de la Dehesa | Director | 2002 | ||||
Rodrigo Echenique | Director | 1988 | ||||
Antonio Escámez | Director | 1999 | ||||
Francisco Luzón | Director | 1997 | ||||
Abel Matutes | Director | 2002 | ||||
Juan R. Inciarte (2) | Director | 2008 | ||||
Luis Ángel Rojo | Director | 2005 | ||||
Luis Alberto Salazar-Simpson | Director | 1999 | ||||
Isabel Tocino | Director | 2007 |
(1) | Ana P. Botín and Javier Botín are daughter and son, respectively, of Emilio Botín. | |
(2) | Matías R. Inciarte and Juan R. Inciarte are brothers. |
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Name | Position with Banco Santander | |
Emilio Botín | Chairman of the board of directors and of the executive committee | |
Alfredo Sáenz | Second vice chairman of the board of directors and chief executive officer | |
Matías R. Inciarte | Third vice chairman of the board of directors and chairman of the risk committee | |
Ana P. Botín | Chairwoman, Banesto | |
Francisco Luzón | Director, executive vice president, America | |
Juan R. Inciarte | Director, executive vice president, strategy | |
José A. Alvarez | Executive vice president, financial management and investor relations | |
Nuno Amado | Executive vice president, Santander Totta | |
Ignacio Benjumea | Executive vice president, general secretariat | |
Juan Manuel Cendoya | Executive vice president, communications, corporate marketing and research | |
José María Espí | Executive vice president, risk | |
José María Fuster | Executive vice president, technology and operations | |
José Luis G. Alciturri | Executive vice president, human resources | |
Enrique G. Candelas | Executive vice president, Santander branch network — Spain | |
Juan Guitard | Executive vice president, internal auditing | |
Antonio H. Osorio | Chief executive officer, Santander UK | |
Adolfo Lagos | Executive vice president, global wholesale banking | |
Jorge Maortua | Executive vice president, global wholesale banking | |
Javier Marín | Executive vice president, global private banking and asset management | |
Jorge Morán | Executive vice president, insurance and global direct banking | |
César Ortega | Executive vice president, general secretariat | |
Javier Peralta | Executive vice president, risk | |
Jaime P. Renovales | Executive vice president, general secretariat | |
Marcial Portela | Executive vice president, America | |
Magda Salarich | Executive vice president, Santander Consumer Finance | |
José Tejón | Executive vice president, financial accounting and control | |
Jesús Ma Zabalza | Executive vice president, America |
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Thousands of Euros | ||||||||||||
2009 | 2008 | 2007 (*) | ||||||||||
Total salaries | 25,784 | 25,489 | 24,315 | |||||||||
Of which: variable remuneration in cash (or bonus) | 15,240 | 15,240 | 16,088 |
(*) | The balances for 2007 do not include the remuneration for Juan R. Inciarte and, therefore, are not comparable. |
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Thousands of Euros | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bylaw-Stipulated Retainers | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Retainer | Attendance Fees | Salary of Executive Directors (1) | Remuneration | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Appointments | Remuneration | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Audit and | and | in Cash (or | Share | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive | Compliance | Remuneration | Other | Fixed | Bonus) | Plan | ||||||||||||||||||||||||||||||||||||||||||||||||||
Directors | Board | Committee | Committee | Committee | Board | Fees | Remuneration | (a) | Total | (b) | Other | Total | Total | Total | ||||||||||||||||||||||||||||||||||||||||||
Emilio Botín | 106 | 213 | — | — | 25 | 5 | 1,344 | 1,987 | 3,331 | 310 | 1 | 3,992 | 5,420 | 3,910 | ||||||||||||||||||||||||||||||||||||||||||
Fernando de Asúa | 142 | 213 | 50 | 30 | 25 | 188 | — | — | — | — | — | 647 | 642 | 677 | ||||||||||||||||||||||||||||||||||||||||||
Alfredo Sáenz | 106 | 213 | — | — | 25 | 5 | 3,703 | 4,745 | 8,447 | 837 | 602 | 10,237 | 9,295 | 9,604 | ||||||||||||||||||||||||||||||||||||||||||
Matías R. Inciarte | 106 | 213 | — | — | 25 | 162 | 1,710 | 2,503 | 4,213 | 398 | 221 | 5,339 | 6,541 | 5,154 | ||||||||||||||||||||||||||||||||||||||||||
Manuel Soto | 142 | — | 50 | 30 | 25 | 31 | — | — | — | — | — | 277 | 274 | 306 | ||||||||||||||||||||||||||||||||||||||||||
Assicurazioni Generali, SpA. | 123 | — | — | — | 10 | — | — | — | — | — | — | 134 | 140 | 143 | ||||||||||||||||||||||||||||||||||||||||||
Antonio Basagoiti | 106 | 213 | — | — | 25 | 158 | — | — | — | — | 7 | 510 | 517 | 523 | ||||||||||||||||||||||||||||||||||||||||||
Ana P. Botín | 106 | 213 | — | — | 25 | 5 | 1,294 | 1,786 | 3,081 | 203 | 13 | 3,647 | 4,021 | 3,517 | ||||||||||||||||||||||||||||||||||||||||||
Javier Botín (2) | 106 | — | — | — | 23 | — | — | — | — | — | — | 129 | 129 | 143 | ||||||||||||||||||||||||||||||||||||||||||
Lord Terence Burns | 106 | — | — | — | 19 | — | — | — | — | — | — | 125 | 123 | 135 | ||||||||||||||||||||||||||||||||||||||||||
Guillermo de la Dehesa | 106 | 213 | — | 30 | 25 | 11 | — | — | — | — | — | 386 | 384 | 427 | ||||||||||||||||||||||||||||||||||||||||||
Rodrigo Echenique (**) | 106 | 213 | — | 30 | 25 | 10 | — | — | — | — | 33 | 418 | 443 | 562 | ||||||||||||||||||||||||||||||||||||||||||
Antonio Escámez | 106 | 213 | — | — | 23 | 157 | — | — | — | — | 38 | 537 | 535 | 550 | ||||||||||||||||||||||||||||||||||||||||||
Francisco Luzón | 106 | 213 | — | — | 25 | 3 | 1,505 | 2,753 | 4,258 | 333 | 872 | 5,811 | 6,851 | 5,620 | ||||||||||||||||||||||||||||||||||||||||||
Abel Matutes | 106 | — | 50 | — | 20 | 16 | — | — | — | — | — | 192 | 194 | 213 | ||||||||||||||||||||||||||||||||||||||||||
Juan R. Inciarte (*) | 106 | — | — | — | 25 | 106 | 987 | 1,466 | 2,453 | 322 | 108 | 3,121 | 3,830 | — | ||||||||||||||||||||||||||||||||||||||||||
Luis Ángel Rojo | 106 | — | 50 | 30 | 15 | 24 | — | — | — | — | — | 225 | 229 | 249 | ||||||||||||||||||||||||||||||||||||||||||
Luis Alberto Salazar-Simpson | 106 | — | 50 | — | 25 | 21 | — | — | — | — | — | 202 | 198 | 214 | ||||||||||||||||||||||||||||||||||||||||||
Isabel Tocino (***) | 106 | — | — | — | 25 | — | — | — | — | — | — | 132 | 129 | 103 | ||||||||||||||||||||||||||||||||||||||||||
Mutua Madrileña Automovilística (3) | — | — | — | — | — | — | — | — | — | — | — | — | — | 153 | ||||||||||||||||||||||||||||||||||||||||||
Total 2009 | 2,108 | 2,132 | 248 | 149 | 440 | 900 | 10,544 | 15,240 | 25,784 | 2,403 | 1,897 | 36,061 | — | — | ||||||||||||||||||||||||||||||||||||||||||
Total 2008 | 2,084 | 2,132 | 248 | 149 | 411 | 942 | 10,249 | 15,240 | 25,489 | 6,612 | 1,827 | — | 39,894 | — | ||||||||||||||||||||||||||||||||||||||||||
Total 2007 | 2,324 | 2,370 | 275 | 165 | 424 | 813 | 8,227 | 16,088 | 24,315 | — | 1,517 | — | — | 32,203 | ||||||||||||||||||||||||||||||||||||||||||
(*) | Appointed as member of the Bank’s board of directors on January 28, 2008, Juan R. Inciarte took office and was appointed as a member of the risk committee on March 24, 2008. | |
(**) | Ceased to be a member of the risk committee on March 24, 2008. | |
(***) | Appointed by co-optation by the board of directors at its meeting on March 26, 2007, Isabel Tocino took office at the meeting held on April 23, 2007. Her appointment was ratified by the shareholders at the annual shareholders’ meeting held on June 23, 2007. | |
(a) | Relating to 2009. | |
(b) | Amounts received in 2009 in respect of the variable remuneration in shares granted through the I-09 plan approved by the shareholders at the general meeting held on June 23, 2007. | |
(1) | Recognized under personnel expenses in the income statement of the Bank, except for the salary of Ana P. Botín, which is recognized at Banco Español de Crédito, S.A. | |
(2) | Amounts contributed to Marcelino Botín foundation. | |
(3) | Ceased to be a director on December 19, 2007. |
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Thousands of Euros | ||||||||||||||
Company | 2009 | 2008 | 2007 | |||||||||||
Emilio Botín | Shinsei Bank, Ltd. | 30.1 | 53.0 | 50.1 | ||||||||||
Fernando de Asúa | CEPSA | 100.2 | 97.2 | 97.2 | ||||||||||
Antonio Escámez | Attijariwafa Bank Société Anonyme | 5.0 | 14.8 | 9.9 | ||||||||||
135.3 | 165.0 | 157.2 | ||||||||||||
Thousands of Euros | ||||||||||||||||||||||||
Number of | Salary | Other | ||||||||||||||||||||||
Year | Managers(1) | Fixed | Variable | Total | Remuneration | Total | ||||||||||||||||||
2007 | 26 | 19,504 | 42,768 | 62,272 | 10,092 | 72,364 | ||||||||||||||||||
2008 | 24 | 21,219 | 34,674 | 55,893 | 27,598 | 83,491 | ||||||||||||||||||
2009 | 24 | 21,512 | 36,468 | 57,980 | 16,745 | 74,725 |
(1) | At some point in the year they occupied the position of executive vice president. The amounts reflect the annual remuneration regardless of the number of months in which the position of executive vice president was occupied. |
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Thousands of Euros | ||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
Accrued | Accrued | Accrued | ||||||||||||||||||||||
Pension | Other | Pension | Other | Pension | Other | |||||||||||||||||||
Obligations | Insurance | Obligations | Insurance | Obligations | Insurance | |||||||||||||||||||
Emilio Botín | 24,642 | — | 25,579 | — | 22,926 | — | ||||||||||||||||||
Alfredo Sáenz | 85,740 | 11,108 | 80,049 | 10,785 | 68,070 | 9,378 | ||||||||||||||||||
Matías R. Inciarte | 52,536 | 5,131 | 50,894 | 4,982 | 44,226 | 4,529 | ||||||||||||||||||
Ana P. Botín | 23,775 | 1,403 | 21,737 | 1,403 | 17,975 | 1,403 | ||||||||||||||||||
Francisco Luzón | 53,513 | 9,031 | 53,083 | 7,624 | 45,468 | 7,624 | ||||||||||||||||||
Juan R. Inciarte | 10,969 | 2,961 | 9,918 | 2,875 | — | — | ||||||||||||||||||
251,175 | 29,634 | 241,260 | 27,669 | 198,665 | 22,934 | |||||||||||||||||||
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Options | Options Exercised | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
at | Number | Market | Remuneration | Options | Options | Date of | Date of | |||||||||||||||||||||||||||||||||||||||||||||||||
December 31, | Exercise | Options | Number of | of Shares | Exercise | Price | Allocated | at | Number of | at | Exercise | Commencement | Expiry of | |||||||||||||||||||||||||||||||||||||||||||
2005, | Price | Granted | Options | Acquired | Price | Applied | (Thousands | December 31, | Options | December 31, | Price | of Exercise | Exercise | |||||||||||||||||||||||||||||||||||||||||||
2006 and 2007 | (Euros) | Number | Exercised | (***) | (Euros) | (Euros) | of Euros) | 2008 | Cancelled | 2009 | (Euros) | Period | Period | |||||||||||||||||||||||||||||||||||||||||||
I-06 plan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Emilio Botín | 541,400 | 9.09 | — | (541,400 | ) | 541,400 | 9.09 | 12.40 | 1,780 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Alfredo Sáenz | 1,209,100 | 9.09 | — | — | — | — | — | 1,209,100 | (1,209,100 | ) | — | 9.09 | 01/15/08 | 01/15/09 | ||||||||||||||||||||||||||||||||||||||||||
Matías R. Inciarte | 665,200 | 9.09 | — | (332,600 | ) | 67,901 | 9.09 | 14.12 | 1,661 | 332,600 | (332,600 | ) | — | 9.09 | 01/15/08 | 01/15/09 | ||||||||||||||||||||||||||||||||||||||||
Ana P. Botín (*) | 293,692 | 9.09 | — | — | — | — | — | 293,692 | (293,692 | ) | — | 9.09 | 01/15/08 | 01/15/09 | ||||||||||||||||||||||||||||||||||||||||||
Francisco Luzón | 639,400 | 9.09 | — | (300,000 | ) | 60,656 | 9.09 | 14.04 | 1,473 | 339,400 | (339,400 | ) | — | 9.09 | 01/15/08 | 01/15/09 | ||||||||||||||||||||||||||||||||||||||||
Juan R. Inciarte (**) | 419,000 | 9.09 | — | (419,000 | ) | 419,000 | 9.09 | 11.72 | 1,090 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
3,767,792 | 9.09 | (1,593,000 | ) | 6,004 | 2,174,792 | (2,174,792 | ) | — | 9.09 | |||||||||||||||||||||||||||||||||||||||||||||||
(*) | Approved by Banesto’s shareholders at its annual shareholders’ meeting on February 28, 2006. | |
(**) | Juan R. Inciarte was appointed as member of the board of directors in 2008. The data on his options for prior dates relate to the options granted to him as an executive prior to his appointment as director. | |
(***) | Under the three-year I-06 incentive plan (see Note 47 to our consolidated financial statements), each purchase option granted entitles the beneficiary to acquire one Bank share at a price of€9.09, and the number of shares acquired on the exercise of the options is determined on the basis of the settlement method used, which can be cash for stock or cashless for cash. In the case of cash-for-stock settlements, the number of shares granted as consideration for the payment in cash of the exercise price is equal to the number of options exercised. |
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Rights | Rights | Shares | Rights | Rights | Share | |||||||||||||||||||||||
at December | Granted | Delivered | Cancelled | at December | Grant | Delivery | ||||||||||||||||||||||
31, 2008 | (Number) | (Number) | (Number) | 31, 2009 | Date | Deadline | ||||||||||||||||||||||
I-09 plan: | ||||||||||||||||||||||||||||
Emilio Botín | 41,785 | — | (37,937 | ) | (3,848 | ) | — | 06/23/07 | 07/31/09 | |||||||||||||||||||
Alfredo Sáenz | 110,084 | — | (99,945 | ) | (10,139 | ) | — | 06/23/07 | 07/31/09 | |||||||||||||||||||
Matías R. Inciarte | 53,160 | — | (48,264 | ) | (4,896 | ) | — | 06/23/07 | 07/31/09 | |||||||||||||||||||
Ana P. Botín (*) | 27,929 | — | (25,357 | ) | (2,572 | ) | — | 06/23/07 | 07/31/09 | |||||||||||||||||||
Francisco Luzón | 44,749 | — | (40,628 | ) | (4,121 | ) | — | 06/23/07 | 07/31/09 | |||||||||||||||||||
Juan R. Inciarte (**) | 43,322 | — | (39,332 | ) | (3,990 | ) | — | 06/23/07 | 07/31/09 | |||||||||||||||||||
321,029 | — | (291,463 | ) | (29,566 | ) | — | ||||||||||||||||||||||
I-10 plan: | ||||||||||||||||||||||||||||
Emilio Botín | 62,589 | — | — | — | 62,589 | 06/23/07 | 07/31/10 | |||||||||||||||||||||
Alfredo Sáenz | 164,894 | — | — | — | 164,894 | 06/23/07 | 07/31/10 | |||||||||||||||||||||
Matías R. Inciarte | 79,627 | — | — | — | 79,627 | 06/23/07 | 07/31/10 | |||||||||||||||||||||
Ana P. Botín (*) | 41,835 | — | — | — | 41,835 | 06/23/07 | 07/31/10 | |||||||||||||||||||||
Francisco Luzón | 67,029 | — | — | — | 67,029 | 06/23/07 | 07/31/10 | |||||||||||||||||||||
Juan R. Inciarte (**) | 64,983 | — | — | — | 64,983 | 06/23/07 | 07/31/10 | |||||||||||||||||||||
480,957 | — | — | — | 480,957 | ||||||||||||||||||||||||
I-11 plan: | ||||||||||||||||||||||||||||
Emilio Botín | 68,848 | — | — | — | 68,848 | 06/21/08 | 07/31/11 | |||||||||||||||||||||
Alfredo Sáenz | 189,628 | — | — | — | 189,628 | 06/21/08 | 07/31/11 | |||||||||||||||||||||
Matías R. Inciarte | 87,590 | — | — | — | 87,590 | 06/21/08 | 07/31/11 | |||||||||||||||||||||
Ana P. Botín (***) | 46,855 | — | — | — | 46,855 | 06/21/08 | 07/31/11 | |||||||||||||||||||||
Francisco Luzón | 77,083 | — | — | — | 77,083 | 06/21/08 | 07/31/11 | |||||||||||||||||||||
Juan R. Inciarte | 50,555 | — | — | — | 50,555 | 06/21/08 | 07/31/11 | |||||||||||||||||||||
520,559 | — | — | — | 520,559 | ||||||||||||||||||||||||
I-12 plan: | ||||||||||||||||||||||||||||
Emilio Botín | — | 82,941 | — | — | 82,941 | 06/19/09 | 07/31/12 | |||||||||||||||||||||
Alfredo Sáenz | — | 228,445 | — | — | 228,445 | 06/19/09 | 07/31/12 | |||||||||||||||||||||
Matías R. Inciarte | — | 105,520 | — | — | 105,520 | 06/19/09 | 07/31/12 | |||||||||||||||||||||
Ana P. Botín | — | 56,447 | — | — | 56,447 | 06/19/09 | 07/31/12 | |||||||||||||||||||||
Francisco Luzón | — | 92,862 | — | — | 92,862 | 06/19/09 | 07/31/12 | |||||||||||||||||||||
Juan R. Inciarte | — | 60,904 | — | — | 60,904 | 06/19/09 | 07/31/12 | |||||||||||||||||||||
— | 627,119 | — | — | 627,119 | ||||||||||||||||||||||||
(*) | Without prejudice to the Banesto shares relating to Ana P. Botín by virtue of the Banesto Share-Based Payment Incentive Plan approved by the shareholders at the annual shareholders’ meeting of Banesto held on June 27, 2007, the maximum number of shares shown in the foregoing table relates to the aforementioned executive director, based on the resolution adopted at the aforementioned annual shareholders’ meeting. |
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(**) | Juan R. Inciarte was appointed as member of the board of directors in 2008. The data on his options include the options granted to him as an executive prior to his appointment as director. | |
(***) | Without prejudice to the Banesto shares that might correspond to Ana P. Botín by virtue of the Banesto Share-Based Incentive Plan approved by the shareholders at the annual shareholders’ meeting of Banesto held on February 24, 2010, the maximum number of shares shown in the foregoing table relates to the aforementioned executive director in accordance with the resolution adopted at Banesto’s general shareholders’meeting. |
3rd Cycle | 2nd Cycle | 1st Cycle | ||||||||||
Executive Directors | 2010-2012 | 2009-2011 | 2008-2010 | |||||||||
Emilio Botín | 20,515 | 19,968 | 16,306 | |||||||||
Alfredo Sáenz | 49,000 | 47,692 | 37,324 | |||||||||
Matías R. Inciarte | 25,849 | 25,159 | 20,195 | |||||||||
Ana P. Botín (*) | 18,446 | 16,956 | 13,610 | |||||||||
Francisco Luzón | 28,434 | 27,675 | 22,214 | |||||||||
Juan R. Inciarte | 15,142 | 14,738 | 14,617 | |||||||||
157,386 | 152,188 | 124,266 | ||||||||||
(*) | In accordance with the resolution adopted by the shareholders at the annual shareholders’ meeting of Banco Santander held on June 23, 2007, the maximum number of shares relating to Ana P. Botín for the 2008-2010 cycle is that shown in the foregoing table, as approved by the annual shareholders’ meeting of Banesto held on June 27, 2007. Also, the maximum number of shares relating to Ana P. Botín for the 2009-2011 and 2010-2012 cycles as beneficiary of this plan is in line with the resolution adopted at the annual shareholders’ meeting of Banco Santander held on June 21, 2008 and by the shareholders at the annual shareholders’ meeting of Banesto held on February 24, 2010. |
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1. | Performance shares plan; | |
2. | Obligatory investment plan with matched deferred bonus in shares or matched deferred bonus plan; | |
3. | Restricted shares plan; and | |
4. | Share ownership guidelines. |
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Number of | Year | Number of | Deadline for | |||||||||||||||||
shares | granted | persons | Date granted | delivery of shares | ||||||||||||||||
Plans in effect at December 31, 2009 | 51,726,420 | |||||||||||||||||||
Of which: | ||||||||||||||||||||
I-10 plan | 15,736,843 | 2007 | 5,507 | June 23, 2007 | July 31, 2010 | |||||||||||||||
I-11 plan | 17,122,650 | 2008 | 5,771 | June 21, 2008 | July 31, 2011 | |||||||||||||||
I-12 plan | 18,866,927 | 2009 | 6,510 | June 19, 2009 | July 31, 2012 |
I-10 plan | Earned | Maximum | ||||||
Emilio Botín | 56,825 | 62,589 | ||||||
Alfredo Sáenz | 149,707 | 164,894 | ||||||
Matías R. Inciarte | 72,293 | 79,627 | ||||||
Ana P. Botín | 37,982 | 41,835 | ||||||
Francisco Luzón | 60,856 | 67,029 | ||||||
Juan R. Inciarte | 58,998 | 64,983 |
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Santander’s position in the | Percentage shares earned of | |
TSR ranking | the maximum | |
1st to 5th | 100.0% | |
6th | 82.5% | |
7th | 65.0% | |
8th | 47.5% | |
9th | 30.0% | |
10th or lower | 0% |
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Bank | Country | |
Itaú Unibanco Banco Múltiplo | Brazil | |
BBVA | Spain | |
BNP Paribas | France | |
Credit Suisse | Switzerland | |
HSBC Holdings | United Kingdom | |
ING Group | The Netherlands | |
Intesa Sanpaolo | Italy | |
JP Morgan Chase & Co. | United States | |
Mitsubishi UFJ Financial Group | Japan | |
Nordea Bank | Sweden | |
Royal Bank of Canada | Canada | |
Société Générale | France | |
Standard Chartered | United Kingdom | |
UBS | Switzerland | |
UniCredit | Italy | |
Wells Fargo & Co. | United States |
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Maximum | ||||
Executive directors | number of shares | |||
Emilio Botín | 82,941 | |||
Alfredo Sáenz | 228,445 | |||
Matías R. Inciarte | 105,520 | |||
Ana P. Botín | 56,447 | |||
Francisco Luzón | 92,862 | |||
Juan R. Inciarte | 60,904 |
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Santander’s position in the | Percentage shares earned of | |
TSR ranking | the maximum | |
1st to 5th | 100.0% | |
6th | 82.5% | |
7th | 65.0% | |
8th | 47.5% | |
9th | 30.0% | |
10th onwards | 0% |
Bank | Country | |
Itaú Unibanco Banco Múltiplo | Brazil | |
BBVA | Spain | |
BNP Paribas | France | |
Credit Suisse | Switzerland | |
HSBC Holdings | United Kingdom | |
ING Group | The Netherlands | |
Intesa Sanpaolo | Italy | |
JP Morgan Chase & Co. | United States | |
Mitsubishi UFJ Financial Group | Japan | |
Nordea Bank | Sweden | |
Royal Bank of Canada | Canada | |
Société Générale | France | |
Standard Chartered | United Kingdom | |
UBS | Switzerland | |
UniCredit | Italy | |
Wells Fargo & Co. | United States |
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Executive directors | Maximum no. of shares | |||
Emilio Botín | 82,941 | |||
Alfredo Sáenz | 228,445 | |||
Matías R. Inciarte | 105,520 | |||
Ana P. Botín | 56,447 | |||
Francisco Luzón | 92,862 | |||
Juan R. Inciarte | 60,904 |
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2009 | 2008 | 2007 | ||||||||||
Executive directors | Third Cycle | Second Cycle | First Cycle | |||||||||
(No. of shares) | ||||||||||||
Emilio Botín | 20,515 | 19,968 | 16,306 | |||||||||
Alfredo Sáenz | 49,000 | 47,692 | 37,324 | |||||||||
Matías R. Inciarte | 25,849 | 25,159 | 20,195 | |||||||||
Ana P. Botín | 18,446 | 16,956 | 13,610 | |||||||||
Francisco Luzón | 28,434 | 27,675 | 22,214 | |||||||||
Juan R. Inciarte | 15,142 | 14,738 | 14,617 |
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Executive directors | No. of shares | |||
Emilio Botín | 20,515 | |||
Alfredo Sáenz | 49,000 | |||
Matías R. Inciarte | 25,849 | |||
Ana P. Botín | 18,446 | |||
Francisco Luzón | 28,434 | |||
Juan R. Inciarte | 15,142 |
2 | The new model includes the value of the additional 10% bonus (in shares) to which the directors were entitled under the obligatory investment plan (matched deferred bonus), which disappears. |
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a) | poor financial performance of the Group; |
b) | breach by the beneficiary of the internal regulations, including in particular those related to risks; |
c) | material re-statement of the Bank’s financial statements, except when pursuant to a change in the accounting standards; or |
d) | significant changes in financial capital and the qualitative assessment of the risks. |
Reference bonus | ||
(thousands of euros) | % deferred | |
Less than or equal to 300 | 0% | |
More than 300 to 600 (inclusive) | 20% | |
More than 600 to 1,200 (inclusive) | 30% | |
More than 1,200 to 2,400 (inclusive) | 40% | |
More than 2,400 | 50% |
Deferred and Conditional Share Plan Limit = | Maximum Amount Distributable in Shares |
Executive Directors Share Limit = | Maximum Amount Distributable in Shares for Executive Directors |
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% of Bank’s | ||||||||||||||||
Executive directors | Direct | Indirect | Total | share capital | ||||||||||||
Emilio Botín | 8,137,775 | 40,936,473 | 49,074,248 | 0.596 | % | |||||||||||
Alfredo Sáenz | 805,747 | 1,243,532 | 2,049,279 | 0.025 | % | |||||||||||
Matías R. Inciarte | 887,710 | 82,521 | 970,231 | 0.012 | % | |||||||||||
Ana P. Botín | 5,036,774 | 4,024,136 | 9,060,910 | 0.110 | % | |||||||||||
Francisco Luzón | 1,132,264 | 26,964 | 1,159,228 | 0.014 | % | |||||||||||
Juan R. Inciarte | 1,318,267 | — | 1,318,267 | 0.016 | % | |||||||||||
Total | 17,318,537 | 46,313,626 | 63,632,163 | 0.773 | % | |||||||||||
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Pounds | Date of | Date of | ||||||||||||||||||
sterling (*) | commencement | expiry | ||||||||||||||||||
Number | Exercise | Employee | Number | of exercise | of exercise | |||||||||||||||
of shares | price | Year granted | group | of persons | period | period | ||||||||||||||
Plans outstanding at 01/01/07 | 10,354,232 | 4.32 | ||||||||||||||||||
Options exercised | (1,535,325 | ) | 3.81 | |||||||||||||||||
Of which: | ||||||||||||||||||||
Executive Options | (33,904 | ) | 3.96 | |||||||||||||||||
Sharesave | (1,501,421 | ) | 3.81 | |||||||||||||||||
Options cancelled (net) or not exercised | (770,595 | ) | — | |||||||||||||||||
Plans outstanding at 12/31/07 | 8,048,312 | 5.34 | ||||||||||||||||||
Options granted (Sharesave) | 5,196,807 | 7.69 | 2008 | Employees | 6,556 | (**) | 01/11/08 01/11/08 | 01/11/11 01/11/13 | ||||||||||||
Options exercised | (6,829,255 | ) | 4.91 | |||||||||||||||||
Of which: | ||||||||||||||||||||
Executive Options | (132,107 | ) | 4.11 | |||||||||||||||||
Sharesave | (4,506,307 | ) | 3.07 | |||||||||||||||||
MTIP | (2,190,841 | ) | 8.73 | |||||||||||||||||
Options cancelled (net) or not exercised | (262,868 | ) | 4.87 | |||||||||||||||||
Of which: | ||||||||||||||||||||
Sharesave | (233,859 | ) | 4.13 | |||||||||||||||||
MTIP | (29,009 | ) | 10.88 | |||||||||||||||||
Plans outstanding at 12/31/08 | 6,152,996 | 7.00 | ||||||||||||||||||
Options granted (Sharesave) | 4,527,576 | 7.26 | 2009 | Employees | 7,066 | (**) | 01/11/09 01/11/09 | 01/11/12 01/11/14 | ||||||||||||
Options exercised | (678,453 | ) | ||||||||||||||||||
Of which: | ||||||||||||||||||||
Sharesave | (678,453 | ) | 3.85 | |||||||||||||||||
Options cancelled (net) or not exercised | (1,277,590 | ) | ||||||||||||||||||
Of which: | ||||||||||||||||||||
Sharesave | (1,277,590 | ) | 7.48 | |||||||||||||||||
Plans outstanding at 12/31/09 | 8,724,529 | |||||||||||||||||||
Of which: | ||||||||||||||||||||
Executive Options | 12,015 | 4.54 | 2003-2004 | Managers | 2 | 26/03/06 | 24/03/13 | |||||||||||||
Sharesave | 8,712,514 | 7.24 | 2004-2008-2009 | Employees | 11,919 | (**) | 01/04/06 | 01/11/14 |
(*) | At December 31, 2009, 2008 and 2007 the euro/pound sterling exchange rate was€1.12600/GBP 1,€1.04987/GBP 1 and€1.36360/GBP 1, respectively. | |
(**) | Number of accounts/contracts. A single employee may have more than one account/contract. On September 30, 2008, 4,493 contracts were delivered with an execution date three years thereafter and 2,063 contracts with an execution date five years thereafter. The date of commencement of all these contracts is November 1, 2008. |
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Date of | ||
Name | expiration (1) | |
Emilio Botín | 1st half 2013 | |
Fernando de Asúa | 1st half 2011 | |
Alfredo Sáenz | 1st half 2011 | |
Matías R. Inciarte | 1st half 2014 | |
Manuel Soto | 1st half 2014 | |
Assicurazioni Generali, S.p.A | 1st half 2012 | |
Antonio Basagoiti | 1st half 2012 | |
Ana P. Botín | 1st half 2011 | |
Javier Botín | 1st half 2010 | |
Lord Burns | 1st half 2011 | |
Guillermo de la Dehesa | 1st half 2014 | |
Rodrigo Echenique | 1st half 2011 | |
Antonio Escámez | 1st half 2012 | |
Francisco Luzón | 1st half 2012 | |
Abel Matutes | 1st half 2014 | |
Juan R. Inciarte | 1st half 2013 | |
Luis Ángel Rojo | 1st half 2013 | |
Luis Alberto Salazar-Simpson | 1st half 2013 | |
Isabel Tocino | 1st half 2011 |
(1) | Pursuant to the provisions of our By-laws, one-fifth of the board will be renewed every year, based on length of service and according to the date and order of their respective appointments. |
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Change | ||||||||||||||||
Thousands of euros | 2009 | (%) | 2008 | 2007 | ||||||||||||
Emilio Botín | 1,344 | 3.0 | % | 1,305 | 1,187 | |||||||||||
Alfredo Sáenz | 3,703 | 3.0 | % | 3,595 | 3,126 | |||||||||||
Matías R. Inciarte | 1,710 | 3.0 | % | 1,661 | 1,510 | |||||||||||
Ana P. Botín | 1,294 | 2.0 | % | 1,269 | 1,133 | |||||||||||
Francisco Luzón | 1,505 | 3.0 | % | 1,461 | 1,271 | |||||||||||
Juan R. Inciarte(*) | 987 | 3.0 | % | 958 | — | |||||||||||
Total | 10,543 | 2.9 | % | 10,249 | 8,227 |
(*) | Juan R. Inciarte was appointed as a director in 2008 and as such his 2007 information is not included. |
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Change | ||||||||||||||||
Thousands of euros | 2009 | (%) | 2008 | 2007 | ||||||||||||
Emilio Botín | 1,987 | 0.0 | % | 1,987 | 2,337 | |||||||||||
Alfredo Sáenz | 4,745 | 0.0 | % | 4,745 | 5,582 | |||||||||||
Matías R. Inciarte | 2,503 | 0.0 | % | 2,503 | 2,945 | |||||||||||
Ana P. Botín | 1,786 | 0.0 | % | 1,786 | 1,985 | |||||||||||
Francisco Luzón | 2,753 | 0.0 | % | 2,753 | 3,239 | |||||||||||
Juan R. Inciarte(1) | 1,466 | 0.0 | % | 1,466 | — | |||||||||||
Total | 15,240 | 0.0 | % | 15,240 | 16,088 |
(1) | Juan R. Inciarte was appointed as a director in 2008 and as such his 2007 information is not included. |
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• | In the cases of Emilio Botín and Alfredo Sáenz, on proceeding to retired status, to receive the amounts corresponding to accrued pension (€24.6 million and€85.7 million, respectively), in the form of capital, with no additional amount accruing by way of pension in the future, after the exercising by each of the directors of the consolidation option referred to under “B. Compensation — Compensation to the board members as representatives of the Bank and to Senior Management — Pension commitments, other insurance and other items”. |
• | In the cases of Matías R. Inciarte and Francisco Luzón, to take early retirement and to accrue pension supplements which, as of December 31, 2009, would amount to€2,507,000 for Matías R. Inciarte and€2,701,000 for Francisco Luzón. |
• | In the case of Ana P. Botín, to receive a termination benefit amounting to five years’ annual fixed salary at the date of termination, which, as of December 31, 2009, would amount to€6,472,000. In the event of termination attributable to the Bank, Ana P. Botín may opt to take early retirement and accrue an annual retainer. At December 31, 2009, this retainer would amount to€1,841,000 per year. The two alternatives are mutually exclusive and, therefore, if Ana P. Botín were to opt to receive the termination benefit she would not receive any retainer. |
• | In the case of Juan R. Inciarte, to receive a termination benefit amounting to five years’ annual fixed salary at the date of termination, which, as of December 31, 2009, would amount to€4,936,000. In the event of termination attributable to the Bank, Juan R. Inciarte may opt to take early retirement and accrue an annual retainer. At December 31, 2009, this retainer would amount to€869,000 per year. The two alternatives are mutually exclusive and, therefore, if Juan R. Inciarte were to opt to receive the termination benefit he would not receive any retainer. |
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Date of current contract | By decision of the | By decision of the | ||||||||||
Advance notice period | (month/day/year)(*) | Bank (months) | director (months) | |||||||||
Emilio Botín | 04/29/2009 | (** | ) | (** | ) | |||||||
Alfredo Sáenz | 04/29/2009 | 4 | 4 | |||||||||
Matías R. Inciarte | 04/29/2009 | 4 | 4 | |||||||||
Ana P. Botín | 04/29/2009 | 4 | 4 | |||||||||
Francisco Luzón | 04/29/2009 | 6 | 4 | |||||||||
Juan R. Inciarte | 04/29/2009 | 4 | 4 |
(*) | The board at its December 21, 2009 meeting authorized an amendment to the contracts with the executive directors Matías R. Inciarte, Ana P. Botín, Francisco Luzón and Juan R. Inciarte. | |
(**) | It is not contractually established. |
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Name | Position | |
Luis Ángel Rojo | Chairman | |
Fernando de Asúa | Member | |
Manuel Soto | Member | |
Abel Matutes | Member | |
Luis Alberto Salazar-Simpson | Member |
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Name | Position | |
Fernando de Asúa | Chairman | |
Manuel Soto | Member | |
Guillermo de la Dehesa | Member | |
Rodrigo Echenique | Member | |
Luis Ángel Rojo | Member |
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Number of employees | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
SPAIN | 35,076 | 36,376 | 36,558 | |||||||||
LATIN AMERICA | 84,976 | 95,375 | 64,899 | |||||||||
Argentina | 5,753 | 6,313 | 6,621 | |||||||||
Brazil | 50,904 | 53,198 | 21,876 | |||||||||
Chile | 11,850 | 12,081 | 13,025 | |||||||||
Colombia | 1,304 | 1,415 | 1,312 | |||||||||
Mexico | 12,509 | 13,924 | 14,053 | |||||||||
Peru | 47 | 52 | 43 | |||||||||
Puerto Rico | 1,796 | 1,885 | 2,227 | |||||||||
Uruguay | 757 | 847 | 302 | |||||||||
Venezuela | 56 | 5,659 | 5,439 | |||||||||
EUROPE | 37,871 | 36,778 | 28,060 | |||||||||
Austria | 467 | — | — | |||||||||
Czech Republic | 166 | 205 | 195 | |||||||||
Germany | 2,852 | 2,431 | 1,846 | |||||||||
Belgium | 13 | 12 | 12 | |||||||||
Finland | 89 | 28 | 29 | |||||||||
France | 32 | 51 | 32 | |||||||||
Greece | 19 | 21 | 20 | |||||||||
Hungary | 47 | 84 | 90 | |||||||||
Ireland | 7 | 7 | 4 | |||||||||
Italy | 931 | 879 | 798 | |||||||||
Luxembourg | 3 | 3 | — | |||||||||
Norway | 385 | 361 | 330 | |||||||||
Poland | 867 | 852 | 638 | |||||||||
Portugal | 6,522 | 6,839 | 6,759 | |||||||||
Russia | 85 | — | — | |||||||||
Slovakia | — | — | 10 | |||||||||
Switzerland | 178 | 198 | 203 | |||||||||
The Netherlands | 423 | 289 | 51 | |||||||||
United Kingdom | 24,785 | 24,518 | 17,043 | |||||||||
USA | 11,355 | 2,051 | 1,978 | |||||||||
ASIA | 103 | 82 | 17 | |||||||||
Hong Kong | 72 | 75 | 13 | |||||||||
China | 23 | — | — | |||||||||
Japan | 5 | 5 | 4 | |||||||||
Others | 3 | 2 | — | |||||||||
OTHERS | 79 | 299 | 307 | |||||||||
Bahamas | 56 | 55 | 56 | |||||||||
Others | 23 | 244 | 251 | |||||||||
Total | 169,460 | 170,961 | 131,819 | |||||||||
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Number of employees | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Retail Banking | 163,184 | 165,244 | 126,119 | |||||||||
Asset Management and Insurance | 1,558 | 1,435 | 1,585 | |||||||||
Global Wholesale Banking | 2,898 | 2,572 | 2,589 | |||||||||
Corporate Activities | 1,820 | 1,710 | 1,526 | |||||||||
Total | 169,460 | 170,961 | 131,819 | |||||||||
Direct | Indirect stake and | % of | ||||||||||||||
Directors | Stake | represented | Total shares | Capital stock | ||||||||||||
Emilio Botín (1) | 8,158,290 | 149,942,027 | 158,100,317 | 2.146 | % | |||||||||||
Fernando de Asúa | 59,604 | 50,000 | 109,604 | 0.001 | % | |||||||||||
Alfredo Sáenz | 854,747 | 1,243,532 | 2,098,279 | 0.025 | % | |||||||||||
Matías R. Inciarte (3) | 913,559 | 160,657 | 1,074,216 | 0.013 | % | |||||||||||
Manuel Soto | 60,659 | 360,109 | 420,768 | 0.005 | % | |||||||||||
Assicurazioni Generali S.p.A | 1,072,277 | 92,690,958 | 93,763,235 | 1.139 | % | |||||||||||
Antonio Basagoiti | 704,400 | — | 704,400 | 0.009 | % | |||||||||||
Ana P. Botín (1) | 5,055,220 | 4,024,136 | 9,079,356 | 0.000 | % | |||||||||||
Javier Botín (1)(2) | 4,793,481 | 4,652,747 | 9,446,228 | 0.000 | % | |||||||||||
Lord Burns (Terence) | 30,101 | 27,001 | 57,102 | 0.001 | % | |||||||||||
Guillermo de la Dehesa | 101 | — | 101 | 0.000 | % | |||||||||||
Rodrigo Echenique | 658,758 | 9,280 | 668,038 | 0.008 | % | |||||||||||
Antonio Escámez | 757,593 | — | 757,593 | 0.009 | % | |||||||||||
Francisco Luzón | 1,171,933 | 39,864 | 1,211,797 | 0.015 | % | |||||||||||
Abel Matutes | 123,388 | 2,590,104 | 2,713,492 | 0.033 | % | |||||||||||
Juan R. Inciarte | 1,333,409 | — | 1,333,409 | 0.016 | % | |||||||||||
Luis Ángel Rojo | 1 | — | 1 | 0.000 | % | |||||||||||
Luis Alberto Salazar-Simpson | 250,000 | 5,641 | 255,641 | 0.003 | % | |||||||||||
Isabel Tocino | 36,394 | — | 36,394 | 0.000 | % | |||||||||||
26,033,915 | 255,796,056 | 281,829,971 | 3.516 | % |
(1) | Emilio Botín has attributed the right of vote in a general shareholders’ meeting of 91,866,035 shares (1.12% of the capital stock) held by the Marcelino Botín Foundation, of 8,096,742 shares held by Jaime Botín, of 9,042,777 shares held by Emilio Botín O., of 9,079,356 shares held by Ana P. Botín and of 9,446,228 shares held by Javier Botín. This table shows the direct and indirect shareholding of the two latter who are directors, but in the column showing the percentage of capital stock, these shareholdings are presented together with those that belong or are also represented by Emilio Botín. | |
(2) | Javier Botín is a proprietary non-executive director as he represents in the board of directors a 2.146% of the Bank’s capital stock which corresponds to the holdings of the Marcelino Botín Foundation, Emilio Botín, Ana P. Botín, Emilio Botín O., Jaime Botín, Paloma O’Shea and his own. | |
(3) | Matías R. Inciarte has the right to vote 78,136 shares owned by two of his children. |
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Thousands of Euros | ||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||
Loans | Loans | Loans | ||||||||||||||||||||||||||||||||||
and | and | and | ||||||||||||||||||||||||||||||||||
Credits | Guarantees | Total | Credits | Guarantees | Total | Credits | Guarantees | Total | ||||||||||||||||||||||||||||
Alfredo Sáenz | 16 | — | 16 | 25 | — | 25 | 6 | — | 6 | |||||||||||||||||||||||||||
Matías R. Inciarte | 7 | 10 | 17 | 20 | 10 | 30 | 18 | 10 | 28 | |||||||||||||||||||||||||||
Manuel Soto | — | — | — | 5 | — | 5 | 4 | — | 4 | |||||||||||||||||||||||||||
Antonio Basagoiti | 47 | 1 | 48 | 66 | 1 | 67 | 94 | 1 | 95 | |||||||||||||||||||||||||||
Ana P. Botín | 3 | — | 3 | 5 | — | 5 | — | — | — | |||||||||||||||||||||||||||
Javier Botín | 2 | — | 2 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Rodrigo Echenique | 9 | — | 9 | 12 | — | 12 | 7 | — | 7 | |||||||||||||||||||||||||||
Antonio Escámez | 1,488 | — | 1,488 | 1,474 | — | 1,474 | 309 | — | 309 | |||||||||||||||||||||||||||
Francisco Luzón | 5,004 | — | 5,004 | 1,649 | — | 1,649 | 722 | — | 722 | |||||||||||||||||||||||||||
Juan R. Inciarte | 421 | — | 421 | 465 | — | 465 | — | — | — | |||||||||||||||||||||||||||
Luis Alberto Salazar-Simpson | 434 | — | 434 | 461 | — | 461 | — | — | — | |||||||||||||||||||||||||||
Isabel Tocino | 40 | — | 40 | 49 | — | 49 | — | — | — | |||||||||||||||||||||||||||
7,471 | 11 | 7,482 | 4,231 | 11 | 4,242 | 1,160 | 11 | 1,171 |
• | overnight call deposits; |
• | foreign exchange purchases and sales; |
• | derivative transactions, such as forward purchases and sales; |
• | money market fund transfers; |
• | letters of credit for imports and exports; |
• | in the ordinary course of business; |
• | on substantially the same terms, including interest rates and collateral, as those prevailing for comparable transactions with other persons; and |
• | did not involve more than the normal risk of collectibility or other unfavorable features. |
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Page | ||||
Report of Deloitte, S.L. | F-1 | |||
Consolidated Balance Sheets as of December 31, 2009, 2008 and 2007 | F-2 | |||
Consolidated Income Statements for the Years Ended December 31, 2009, 2008 and 2007 | F-3 | |||
Consolidated Statements of Recognized Income and Expense for the Years Ended December 31, 2009, 2008 and 2007 | F-4 | |||
Consolidated Statements of Changes in Total Equity for the Years Ended December 31, 2009, 2008 and 2007 | F-5 | |||
Consolidated Statement of Cash Flows for the Years Ended December 31, 2009, 2008 and 2007 | F-8 | |||
Notes to the Consolidated Financial Statements | F-9 |
• | The “Mandados de Segurança” filed by Banco Santander Brasil, S.A. and other Group companies in Brazil challenging the increase in the rate of Brazilian Social Contribution tax on net income from 9% to 15% stipulated by Interim Measure 413/2008, ratified by Law 11,727/2008. |
• | The “Mandados de Segurança” filed by Group companies in Brazil claiming their right to pay the Brazilian Social Contribution tax on net income at a rate of 8%. |
• | The “Mandados de Segurança” filed by Banco Santander, S.A. and other Group entities claiming their right to pay the Brazilian PIS and COFINS Social Contributions only on the income from the provision of services. In the case of Banco Santander, S.A., the “Mandado de Segurança” was declared unwarranted and an appeal was filed at the Federal Regional Court. On September 13, 2007, the Federal Regional Court found in favor of Banco Santander, S.A. The Brazilian authorities have filed an appeal against this judgment at a higher court. In the case of Banco ABN AMRO Real, S.A., on March 9, 2007 the court found in its favor although the Brazilian authorities have also filed an appeal against this judgment at a higher court. On September 29, 2009 a resolution was issued whereby it partially admitted the appeal. |
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• | Real Leasing S.A. Arrendamiento Mercantil and Banco ABN AMRO Real S.A. have filed various administrative and legal claims in connection with the deductibility of the provision for doubtful debts for 1995. |
• | Banco Santander Brasil, S.A. and other Group companies in Brazil are involved in several administrative and legal proceedings against various municipalities that demand payment of the Service Tax on certain items of income from transactions not classified as provisions of services. |
• | In November 2009 Banco Santander Brasil, S.A. and certain of its subsidiaries availed themselves of the program for the deferral and payment in cash of tax and Social Security debts established in Law 11,941/2009. The main processes included in this program, which were reported in prior years, refer to litigation related to: (i) the right to consider the Social Contribution tax on net income as deductible in the calculation of Brazilian Legal Entities Income Tax, (ii) the right to pay the Brazilian Social Contribution tax on net income at a rate of 8%, and (iii) the deductibility for Income tax purposes of the depreciation and amortization expense in the same period as that in which lease Income is recognized in finance lease companies. The participation in this program entails payment of the disputed amounts and the discontinuance before the end of February 2010 of the related court proceedings. |
• | A claim was filed against Abbey National Treasury Services plc by tax authorities abroad in relation to the refund of certain tax credits and other associated amounts. The legal advisers of Abbey National Treasury Services plc considered that the grounds to contest this claim were well-founded, proof of which is that a favorable judgment was handed down at first instance in September 2006, although the judgment was appealed against by the tax authorities in January 2007. However, in December 2006 an unfavorable judgment for another taxpayer was handed down on another proceeding which might affect this case. |
• | Legal action filed by Sovereign Bancorp Inc. claiming entitlement to an international double taxation tax credit in connection with taxes paid outside of the United States in fiscal years 2003 to 2005 in relation to financial transactions carried out with an international bank. |
• | Misselling: claims associated with the sale by Abbey of certain financial products to its customers. |
• | LANETRO, S.A.: claim (Ordinary Lawsuit no. 558/2002) filed by LANETRO, S.A. against Banco Santander, S.A. at Madrid Court of First Instance no. 34, requesting that the Bank comply with the obligation to subscribe to€30.05 million of a capital increase of the complainant. |
• | Ordinary proceedings filed by Galesa de Promociones, S.A., against the Bank, at Elche Court of First Instance no. 5, Alicante (Ordinary Lawsuit no. 1946/2008). The claim sought damages amounting to€51,396,971.43 as a result of a judgment handed down by the Supreme Court on November 24, 2004 setting aside a summary mortgage proceeding filed by the Bank against the complainant company, which concluded in the foreclosure by the Bank of the mortgaged properties and their subsequent sale by the Bank to third-party buyers. The judgment of the Supreme Court ordered the reversal of the court foreclosure proceeding prior to the date on which the auctions were held, a circumstance impossible to comply with due to the sale by the Bank of the properties to the aforementioned third parties, which therefore prevented the reincorporation of the properties into the debtor company’s assets and their re-auction. |
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• | Declaratory large claims action brought at Madrid Court of First Instance no. 19 (Ordinary Lawsuit no. 87/2001) in connection with a claim filed by Inversión Hogar, S.A. against the Bank. This claim sought the termination of a settlement agreement entered into between the Bank and the complainant on December 11, 1992. |
• | Claim in an ordinary proceeding filed by Inés Arias Domínguez and a further 17 persons against Santander Investment, S.A. at Madrid Court of First Instance no. 13 (Ordinary Lawsuit no. 928/2007), seeking damages of approximately€43 million, plus interest and costs. The complainants, who are former shareholders of Yesocentro, S.A. (Yesos y Prefabricados del Centro, S.A.), allege that Santander Investment, S.A. breached the advisory services agreement entered into on October 19, 1989 between the former Banco Santander de Negocios, S.A. and the complainants, the purpose of which was the sale of shares owned by the complainants to another company called Invercámara, S.A. |
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• | On February 6, 2008, Banco Santander, S.A. filed a request for arbitration with the Secretary of the Spanish Arbitration Court against Gaesco Bolsa, Sociedad de Valores, S.A., in respect of the claim for€66,418,077.27 that the latter owes Banco Santander, S.A. as a result of the early termination of the financial transaction framework agreement entered into with Banco Santander, S.A. and of the financial transactions performed under the agreement. In the same proceedings Gaesco filed a counterclaim against the Bank. On May 12, 2009, an arbitral award was issued upholding all the claims of Banco Santander, S.A. and dismissing the counterclaim filed by Gaesco. Gaesco has filed for the annulment of the arbitral award at the Madrid Provincial Appellate Court. |
• | Former Banco do Estado de São Paulo S.A. — “Banespa” — employees: a claim was filed in 1998 by the association of retired Banespa employees (AFABESP) on behalf of its members, requesting the payment of a half-yearly bonus initially envisaged in the entity’s bylaws in the event that the entity obtained a profit and that the distribution of this profit, in the form of bonus, were approved by the board of directors. The bonus was not paid in 1994 and 1995 since the bank did not make a profit and partial payments were made from 1996 to 2000 in variable percentages as agreed by the board of directors, and the aforementioned clause was eliminated from the bylaws in 2001. After the Regional Labor Court ordered Banco Santander Banespa, S.A. (currently Banco Santander (Brasil), S.A.) to pay the half-yearly bonus in September 2005, the Bank filed an appeal at the High Labor Court which handed down a decision on June 25, 2008, ordering the Bank to pay the half-yearly bonus from 1996 onwards for a maximum amount equivalent to the share in the profits. Appeals against this decision were filed at the High Labor Court and at the Federal Supreme Court, and are currently in process. |
• | Padrão Comércio e Incorporacão de Imóveis Ltda: Claim for BRL 87 million against Banco Santander Brasil, S.A. for purported wrongful charges made by its predecessor, Banco do Estado de São Paulo, S.A. (Banespa), since the opening of a current account in the city of Recife in 1994 to 1996. In 2006, the Pernambuco Court of Justice handed down a decision at first instance against Banespa for not having submitted all the relevant documentation. Banespa then filed an appeal, dismissed in 2009, in which a new expert’s report was requested and additional documentation was provided which evidenced that at least a portion of the funds under dispute were used by the complainant. Banco Santander Brasil requested clarification of this decision and a decision has yet to be handed down. Subsequently, Banco Santander Brasil intends to appeal to the High Court. |
• | The bankruptcy of various Lehman Group companies was made public on September 15, 2008. Various customers of Santander Group were affected by this situation since they had invested in securities issued by Lehman or in other products which had such assets as their underlying security. |
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• | The investigation by the US Securities and Exchange Commission (“SEC”) into the alleged fraud of Bernard L. Madoff Investment Securities LLC (“Madoff Securities”) took place in December 2008. The exposure of customers of the Group through the subfund Optimal Strategic US Equity (Optimal Strategic) was€2,330 million, of which€2,010 million related to institutional investors and international private banking customers, and the remaining€320 million were in the investment portfolios of the Group’s private banking customers in Spain. |
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• | Three claims filed by minority shareholders of Banco Noroeste requesting, in addition to compensation for damage and losses, the annulment of the general shareholders’ meeting that approved the merger between Banco Noroeste and Banco Santander Brasil, S.A., arguing that when the merger took place Banco Noroeste shareholders should have been offered a market value that would have enabled them to decide whether or not to sell their shares at that value. |
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Euro per Share Interim | Dollars per ADS Interim | |||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | First | Second | Third | Fourth | Total | |||||||||||||||||||||||||||||||
2004 | 0.0830 | 0.0830 | 0.0830 | 0.0842 | 0.3332 | 0.08484 | 0.08971 | 0.09175 | 0.09191 | 0.35821 | ||||||||||||||||||||||||||||||
2005 | 0.09296 | 0.09296 | 0.09296 | 0.13762 | 0.4165 | 0.09591 | 0.09466 | 0.09523 | 0.147016 | 0.432816 | ||||||||||||||||||||||||||||||
2006 | 0.106904 | 0.106904 | 0.106904 | 0.199913 | 0.5206 | 0.11582 | 0.11593 | 0.11400 | 0.222418 | 0.568168 | ||||||||||||||||||||||||||||||
2007 | 0.122940 | 0.122940 | 0.122940 | 0.281961 | 0.650781 | 0.137526 | 0.145308 | 0.149199 | 0.355829 | 0.787862 | ||||||||||||||||||||||||||||||
2008 | 0.135234 | 0.135234 | 0.122940 | 0.257373 | 0.650781 | 0.172148 | 0.137700 | 0.126043 | 0.266604 | 0.702495 | ||||||||||||||||||||||||||||||
2009 | 0.135234 | 0.12 | 0.12294 | 0.221826 | 0.60 | 0.156275 | 0.142827 | 0.136266 | 0.239545 | 0.674913 |
• | Distribution of dividends already paid prior to the general shareholders’ meeting (€3,939.9 million) and acquisition of free-of-charge allotment rights, with a waiver of the exercise, of those shareholders who chose to receive cash remuneration, equivalent to the second interim dividend (€182.0 million) under theSantander Scrip Dividend program. |
• | €29 million to voluntary reserves. |
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Year Ended December 31, | ||||||||
IFRS-IASB | ||||||||
2005 | 2006 | 2007 | 2008 | 2009 | ||||
(in thousands of euros) | ||||||||
2,605,009 | 3,256,190 | 4,070,247 | 4,826,218 | 4,150,813 |
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Euros per Share | ||||||||||||
High | Low | Last | ||||||||||
2005 Annual | 11.18 | 8.92 | 11.15 | |||||||||
2006 Annual | 14.37 | 10.54 | 14.14 | |||||||||
2007 Annual | 15.00 | 12.56 | 14.79 | |||||||||
2008 Annual | 14.59 | 5.11 | 6.75 | |||||||||
First Quarter | 14.59 | 11.17 | 12.62 | |||||||||
Second Quarter | 14.22 | 11.67 | 11.67 | |||||||||
Third Quarter | 12.48 | 9.95 | 10.50 | |||||||||
Fourth Quarter | 11.69 | 5.11 | 6.75 | |||||||||
2009 Annual | 11.96 | 4.00 | 11.55 | |||||||||
First Quarter | 7.24 | 4.00 | 5.19 | |||||||||
Second Quarter | 8.60 | 5.39 | 8.56 | |||||||||
Third Quarter | 11.22 | 8.12 | 11.00 | |||||||||
Fourth Quarter | 11.96 | 10.42 | 11.55 | |||||||||
Last six months | ||||||||||||
2009 | ||||||||||||
December | 11.96 | 11.17 | 11.55 | |||||||||
2010 | ||||||||||||
January | 11.98 | 10.03 | 10.30 | |||||||||
February | 10.62 | 9.24 | 9.55 | |||||||||
March | 10.48 | 9.66 | 9.84 | |||||||||
April | 10.79 | 9.10 | 9.55 | |||||||||
May | 9.50 | 7.71 | 8.33 | |||||||||
June (through June 4, 2010) | 8.20 | 7.55 | 7.55 |
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Dollars Per ADS | ||||||||||||
High | Low | Last | ||||||||||
2005 Annual | 13.27 | 11.37 | 13.19 | |||||||||
2006 Annual | 18.73 | 13.16 | 18.66 | |||||||||
2007 Annual | 22.14 | 17.29 | 21.54 | |||||||||
2008 Annual | 22.24 | 6.06 | 9.49 | |||||||||
First Quarter | 21.35 | 16.52 | 19.94 | |||||||||
Second Quarter | 22.24 | 18.19 | 18.19 | |||||||||
Third Quarter | 19.25 | 13.91 | 15.02 | |||||||||
Fourth Quarter | 16.44 | 6.06 | 9.49 | |||||||||
2009 Annual | 17.83 | 4.90 | 16.44 | |||||||||
First Quarter | 9.86 | 4.90 | 6.90 | |||||||||
Second Quarter | 12.17 | 7.15 | 12.10 | |||||||||
Third Quarter | 16.50 | 11.34 | 16.15 | |||||||||
Fourth Quarter | 17.83 | 15.22 | 16.44 | |||||||||
Last six months | ||||||||||||
2009 | ||||||||||||
December | 17.70 | 16.05 | 16.44 | |||||||||
2010 | ||||||||||||
January | 17.50 | 14.02 | 14.08 | |||||||||
February | 14.96 | 12.65 | 13.04 | |||||||||
March | 14.30 | 12.99 | 13.27 | |||||||||
April | 14.77 | 11.99 | 12.34 | |||||||||
May | 12.22 | 9.83 | 10.15 | |||||||||
June (through June 4, 2010) | 10.03 | 8.92 | 8.92 |
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• | established an independent regulatory authority, the CNMV, to supervise the securities markets; |
• | established a framework for the regulation of trading practices, tender offers and insider trading; |
• | required stock exchange members to be corporate entities; |
• | required companies listed on a Spanish stock exchange to file annual audited financial statements and to make public quarterly financial information; |
• | established a framework for integrating quotations on the four Spanish stock exchanges by computer; |
• | exempted the sale of securities from transfer and value added taxes; |
• | deregulated brokerage commissions as of 1992; and |
• | provided for transfer of shares by book-entry or by delivery of evidence of title. |
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• | provisions regarding market transparency such as: requiring listed companies to establish an audit committee, redefining the reporting requirements for relevant events, rules relating to the treatment of confidential and insider information and related party transactions, and prevention of manipulative and fraudulent practices with respect to market prices; |
• | the establishment of Iberclear; and |
• | the authorization of the Minister of Economy and Finance to regulate financial services electronic contracts. |
• | information and transparency obligations including detailed requirements of the contents of the corporate website of listed companies and the obligation to file with the CNMV an annual corporate governance report; and |
• | the obligation to implement a series of corporate governance rules including, among others, regulations regarding the boards of directors and the general shareholders’ meeting. |
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• | Anyone with a right to acquire, transfer or exercise voting rights granted by the shares, regardless of the actual ownership of the shares; and anyone owing, acquiring or transferring other securities or financial instruments which grant a right to acquire shares with voting rights, will also have to notify the holding of a significant stake in accordance with the developing regulations; |
• | Directors of listed companies, in addition to notifying any transaction concerning the shares or other securities or financial instruments of the issuer which are linked to these shares, will have to inform the CNMV of their stake upon appointment or resignation; |
• | Listed companies will be required to notify transactions concerning their treasury shares in certain cases, which will be established in the developing regulations. |
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• | his appointment or ratification, removal, dismissal or withdrawal as director; |
• | the institution of a derivative action against him; or |
• | the approval or ratification of transactions between Santander and the director in question, companies controlled or represented by him, or persons acting for his account. |
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• | issuance of bonds; |
• | increase or reduction of share capital; |
• | rescission or limitation of the preferential right to subscribe new issuance of shares; |
• | change of the registered address of Santander to a foreign country; |
• | transformation of Santander (change in corporate nature) or merger, novation, split or spin-off; and |
• | any other amendment of our By-laws. |
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• | the property or securities to be distributed are of the same nature; |
• | the property or securities have been admitted to listing on an official market as of the effective date of the resolution, or liquidity is guaranteed by Santander within a maximum period of one year; and |
• | the property or securities are not distributed for a value that is lower than the value at which they are recorded on Santander’s balance sheet. |
• | capital increases following conversion of convertible bonds into Santander shares; |
• | capital increases due to the absorption of another company or of part of the spun-off assets of another company, when the new shares are issued in exchange for the new assets received; or |
• | capital increases due to Santander’s tender offer for securities using Santander’s shares as all or part of the consideration. |
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• | a Spanish 210 Form, |
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• | the certificate referred to in the preceding section, and |
• | evidence that Spanish non-resident income tax was withheld with respect to you. |
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• | certain financial institutions; |
• | insurance companies; |
• | dealers and traders in securities that use a mark-to-market method of tax accounting; |
• | holders holding ADSs or shares as part of a hedge, “straddle”, conversion transaction or integrated transaction; |
• | holders whose “functional currency” is not the US dollar; |
• | holders liable for the alternative minimum tax; |
• | tax exempt entities, including “individual retirement accounts” and “Roth IRAs”; |
• | partnerships or other entities classified as partnerships for US federal income tax purposes; |
• | holders that own or are deemed to own 10% or more of our voting shares; |
• | holders that acquired our ADSs or shares pursuant to the exercise of an employee stock option or otherwise as compensation; |
• | holders holding ADSs or shares in connection with a trade or business outside the United States. |
(i) | a citizen or resident of the United States; |
(ii) | a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or of any political subdivision thereof; or |
(iii) | an estate or trust the income of which is subject to US federal income taxation regardless of its source. |
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• | Corporate principles of risk management; |
• | Corporate governance of the risk function; |
• | Integral control of risk; |
• | Credit risk; |
• | Operational risk; |
• | Reputational risk; |
• | Adjustment to the new regulatory framework; |
• | Economic capital; |
• | Risk training activities; and |
• | Market risk. |
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– | The different types of risk (financial, operational, technological, legal and reputational, among others) facing it; |
– | The information and internal control systems used to control and manage these risks; | ||
– | The level of risk considered acceptable; and | ||
– | The measures envisaged to mitigate the impact of identified risks, in the event that they materialize; |
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Million euros
Sovereign fixed | Private fixed | Outstanding | Drawable | Commitments | ||||||||||||||||||||||||||||||||||||
Outstanding | Commitments | income | income | to credit | credit | to credit | ||||||||||||||||||||||||||||||||||
to customers | to customers | (exc trading.) | (exc trading.) | entitles | entities | entities | Total | % | %/dec. 08 | |||||||||||||||||||||||||||||||
Spain | 281,621 | 57,179 | 29,602 | 11,835 | 28,440 | 1,113 | 27,911 | 437,700 | 39.6 | % | (7.1 | %) | ||||||||||||||||||||||||||||
Parent bank | 170,692 | 39,716 | 20,769 | 8,049 | 19,038 | 736 | 19,053 | 278,053 | 25.2 | % | (8.6 | %) | ||||||||||||||||||||||||||||
Bonesto | 80,109 | 11,167 | 6,204 | 2,003 | 6,696 | 225 | 8,701 | 115,104 | 10.4 | % | 3.2 | % | ||||||||||||||||||||||||||||
Others | 30,819 | 6,296 | 2,629 | 1,784 | 2,706 | 152 | 157 | 44,543 | 4.0 | % | (19.4 | %) | ||||||||||||||||||||||||||||
Rest of Europe | 305,831 | 36,827 | 3,844 | 16,025 | 9,025 | 155 | 18,877 | 390,583 | 35.3 | % | 10.8 | % | ||||||||||||||||||||||||||||
Germany | 22,256 | 9 | — | 159 | 432 | — | 5 | 22,861 | 2.1 | % | (5.0 | %) | ||||||||||||||||||||||||||||
Portugal | 22,143 | 8,276 | 2,734 | 1,410 | 2,425 | — | 1,519 | 38,507 | 3.5 | % | 6.9 | % | ||||||||||||||||||||||||||||
United Kingdom | 228,044 | 26,484 | 464 | 14,136 | 5,172 | 155 | 17,132 | 291,587 | 26.4 | % | 12.9 | % | ||||||||||||||||||||||||||||
Others | 33,387 | 2,058 | 646 | 320 | 996 | — | 220 | 37,627 | 3.4 | % | 10.6 | % | ||||||||||||||||||||||||||||
Latin America | 104,965 | 45,537 | 24,280 | 1,821 | 20,684 | 19 | 10,648 | 207,953 | 18.8 | % | 15.4 | % | ||||||||||||||||||||||||||||
Brazil | 62,952 | 30,996 | 16,719 | 1,212 | 14,535 | — | 5,564 | 131,978 | 11.9 | % | 38.3 | % | ||||||||||||||||||||||||||||
Chile | 20,200 | 6,300 | 2,220 | 502 | 1,812 | 19 | 3,209 | 34,261 | 3.1 | % | 22.0 | % | ||||||||||||||||||||||||||||
Mexico | 11,611 | 6,724 | 4,252 | — | 2,220 | — | 1,573 | 26,379 | 2.4 | % | (7.3 | %) | ||||||||||||||||||||||||||||
Others | 10,202 | 1,516 | 1,089 | 108 | 2,118 | — | 303 | 15,335 | 1.4 | % | (45.6 | %) | ||||||||||||||||||||||||||||
United States | 43,814 | 9,395 | 1,742 | 9,157 | 2,970 | 77 | 105 | 67,260 | 6.1 | % | ||||||||||||||||||||||||||||||
Rest of the world | 1,017 | 262 | 80 | 1 | 167 | — | — | 1,526 | 0.1 | % | ||||||||||||||||||||||||||||||
Total Group | 737,246 | 149,200 | 59,547 | 38,839 | 61,287 | 1,363 | 57,540 | 1,105,022 | 100.00 | % | 8.8 | % | ||||||||||||||||||||||||||||
% of total | 66.7 | % | 13.5 | % | 5.4 | % | 3.5 | % | 5.5 | % | 0.1 | % | 5.2 | % | 100 | % | ||||||||||||||||||||||||
%change/dec. 08 | 6.5 | % | 27.2 | % | 68.5 | % | 45.3 | % | (30.8 | %) | (77.3 | %) | 16.9 | % | 8.8 | % |
Data at December 31, 2009, drawn up on the basis of legal company criteria. | ||
ECR (equivalent credit risk net value or replacement plus the maximum potential value, includes mitigants) | ||
Derivatives and repos exclude Sovereign and Alliance & Leicester. | ||
Balances with customers exclude repos (EUR 13,439 million) and other customer create assets (EUR 7,661 million) | ||
Balances with credit entities (excluding repos and trading) include EUR 29,718 million of deposits in central banks. |
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Credit risk | Spec, prov net of | |||||||||||||||||||||||||||||||||||||||
with customers* | NPL ratio | Coverage | recovered write-offs** | Credit cost | ||||||||||||||||||||||||||||||||||||
(million euros) | % | % | (million euros) | (% of risk) | ||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |||||||||||||||||||||||||||||||
Continental Europe | 366,970 | 368,512 | 3.64 | 2.31 | 76.6 | 90.0 | 5,084 | 3,201 | 1.39 | 0.89 | ||||||||||||||||||||||||||||||
Santander Branch network | 129,099 | 135,508 | 4.38 | 2.58 | 64.9 | 74.9 | 1,851 | 1,204 | 1.41 | 0.91 | ||||||||||||||||||||||||||||||
Banesto | 86,681 | 87,925 | 2.97 | 1.64 | 64.1 | 106.5 | 737 | 450 | 0.89 | 0,53 | ||||||||||||||||||||||||||||||
Santander Consumer Finance | 60,245 | 56,245 | 5.39 | 4.18 | 96.8 | 85.5 | 2,005 | 1,402 | 3.38 | 2.71 | ||||||||||||||||||||||||||||||
Portugal | 34,501 | 34,760 | 2.27 | 1.72 | 64.6 | 77.2 | 95 | 6 | 0.27 | 0.02 | ||||||||||||||||||||||||||||||
United Kingdom | 238,215 | 217,063 | 1.71 | 1.04 | 43.8 | 68.5 | 1,018 | 442 | 0.43 | 0.23 | ||||||||||||||||||||||||||||||
Latin America | 117,146 | 112,040 | 4.25 | 2.95 | 105.2 | 108.3 | 5,053 | 3,965 | 4.44 | 3.44 | ||||||||||||||||||||||||||||||
Brazil | 65,611 | 53,764 | 5.27 | 3.58 | 99.2 | 102.4 | 3,537 | 2,493 | 5.88 | 4.30 | ||||||||||||||||||||||||||||||
Mexico | 12,676 | 13,482 | 1.84 | 2.41 | 264.4 | 132.1 | 824 | 879 | 6.13 | 5.44 | ||||||||||||||||||||||||||||||
Chile | 21,384 | 18,848 | 3.20 | 2.64 | 89.0 | 102.4 | 402 | 350 | 1.98 | 1.73 | ||||||||||||||||||||||||||||||
Puerto Rico | 4,132 | 4,810 | 9.60 | 6.92 | 53,3 | 61.0 | 89 | 138 | 1.99 | 2.84 | ||||||||||||||||||||||||||||||
Colombia | 1,719 | 1,464 | 1.83 | 1.79 | 187.5 | 204.1 | 31 | 44 | 1.94 | 2.83 | ||||||||||||||||||||||||||||||
Argentina | 2,936 | 3,271 | 2.60 | 1.83 | 141.0 | 178.6 | 91 | 49 | 2.99 | 1.54 | ||||||||||||||||||||||||||||||
Sovereign | 38,770 | 5.35 | 62.5 | 578 | ||||||||||||||||||||||||||||||||||||
Total Group | 758,347 | 697,200 | 3.24 | 2.04 | 75.3 | 90.6 | 11,760 | 7,659 | 1.57 | 1.16 | ||||||||||||||||||||||||||||||
Memo item: | ||||||||||||||||||||||||||||||||||||||||
Spain | 284,307 | 300,524 | 3.41 | 1.95 | 73.4 | 98.5 | 3,497 | 2,150 | 1.20 | 0.71 |
Data drawn up on the basis of management criteria, Memo item, on the basis of accounting criterion — Financial Control | ||
The figures for 2008 have been restated, consolidating Banco Real by global integration for the year | ||
(*) Includes gross loans to customers, guarantees and documentary credits | ||
(**) Bad debts recovered |
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Internal rating | PD Wholesale Banking | PD Banks | ||||||
9.3 | 0.018 | % | 0.013 | % | ||||
9.2 | 0.020 | % | 0.014 | % | ||||
9.0 | 0.024 | % | 0.018 | % | ||||
8.5 | 0.037 | % | 0.029 | % | ||||
8.0 | 0.060 | % | 0.049 | % | ||||
7.5 | 0.095 | % | 0.083 | % | ||||
7.0 | 0.151 | % | 0.139 | % | ||||
6.5 | 0.240 | % | 0.232 | % | ||||
6.0 | 0.382 | % | 0.390 | % | ||||
5.5 | 0.607 | % | 0.653 | % | ||||
5.0 | 0.965 | % | 1.095 | % | ||||
4.5 | 1.535 | % | 1.835 | % | ||||
4.0 | 2.442 | % | 3.076 | % | ||||
3.5 | 3.884 | % | 5.157 | % | ||||
3.0 | 6.178 | % | 8.645 | % | ||||
2.5 | 9.826 | % | 14.492 | % | ||||
2.0 | 15.627 | % | 24.294 | % | ||||
1.5 | 24.855 | % | 40.725 | % | ||||
1.0 | 39.532 | % | 68.268 | % |
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Average | Average | |||||||||||||||||||
EaD1 | % | PD | LGD | EL | ||||||||||||||||
Sovereign debt | 104,457 | 11.0 | % | 0.23 | % | 14.54 | % | 0.03 | % | |||||||||||
Counterparty | 76,888 | 8.1 | % | 0.29 | % | 70.34 | % | 0.21 | % | |||||||||||
Public sector | 3,129 | 0.3 | % | 0.70 | % | 21.32 | % | 0.15 | % | |||||||||||
Corporate | 131,703 | 13.8 | % | 0.51 | % | 39.68 | % | 0.20 | % | |||||||||||
SMEs | 186,321 | 19.5 | % | 4.65 | % | 28.11 | % | 1.31 | % | |||||||||||
Mortgages (individuals) | 302,395 | 31.7 | % | 3.30 | % | 7.04 | % | 0.23 | % | |||||||||||
Consumer loans (individuals) | 111,452 | 11.7 | % | 6.51 | % | 52.42 | % | 3.41 | % | |||||||||||
Credit cards of individuals | 24,297 | 2.5 | % | 6.73 | % | 64.94 | % | 4.37 | % | |||||||||||
Other assets | 13,066 | 1.4 | % | 2.47 | % | 29.73 | % | 0.74 | % | |||||||||||
Memorandum item customers2 | 759,296 | 79.6 | % | 3.72 | % | 29.32 | % | 1.09 | % | |||||||||||
Total | 953,707 | 100.00 | % | 3.04 | % | 29.52 | % | 0.90 | % |
Data at December 09 | ||
(1) | Excluding doubtful loans. | |
(2) | Excluding sovereign, counterparty and other assets. |
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to the FEVE monitoring system
Million euros at December 2009
Extinguish | Secure | Reduce | Monitor | Total FEVE | ||||||||||||||||
Retail Banking Spain | 4,425 | 1,065 | 11,956 | 12,137 | 29,583 | |||||||||||||||
Banesto | 9,230 | 1,290 | 2,582 | 11,447 | 24,549 | |||||||||||||||
Portugal | 425 | 130 | 787 | 1,690 | 3,031 | |||||||||||||||
UK | 1,225 | 86 | 387 | 3,259 | 4,957 | |||||||||||||||
Latin America | 480 | 93 | 818 | 2,377 | 3,768 | |||||||||||||||
Total | 15,785 | 2,664 | 16,531 | 30,908 | 65,888 |
Note: | excluding Sovereign. | |
The risk classifications in FEVE are independent in each institution and respond to the different criteria for rating these risks and the management of them on the basis of the category in which they are classfied. |
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Million euros
Dec. 09 | ||||||||
Portfolio | % | |||||||
Residential mortgages | 68,601 | 31.8 | ||||||
First home | 64,403 | 93.9 | ||||||
Second home and others | 4,198 | 6.1 |
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• | Developments completed and with the final certificate of work: 66.7% of outstanding risk. | ||
• | Developments more than 80% completed: 14.5% of outstanding risk. | ||
• | Developments between 50% and 80% completed: 8.9% of outstanding risk. | ||
• | Developments less than 50% completed: 9.8%. |
• | The length of legal proceedings as against the immediate availability of these assets. | ||
• | Cost savings. |
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• | It facilitates the viability of companies as liquidity is injected into their activity. | ||
• | Reduction in the possible loss of value in the loans of these clients. | ||
• | Reduction in exposure and in expected loss. |
(1) | This information is given in order to follow the systematics of the Bank of Spain’s March 2010 Financial Stability Report. For the whole system, this report puts coverage at 71%. |
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Total System | Grupo Santander Spain | |||||||||||||||
Million euros | % | Million euros | % | |||||||||||||
Exposure | 445,000 | 48,299 | 1 | |||||||||||||
Non-performing loans | 42,800 | 9.6 | 2,972 | 6.2 | ||||||||||||
Sub-standard | 59,000 | 13.3 | 4,332 | 9.0 | ||||||||||||
Acquired and awarded (gross) | 59,700 | 11.8 | 2 | 6,521 | 11.9 | 2 | ||||||||||
Write-offs | 4,000 | 0.9 | 137 | 3 | 0.3 | |||||||||||
Potentially problematic exposure | 165,500 | 33 | 2 | 13,961 | 25 | 2 | ||||||||||
Coverage | ||||||||||||||||
Specific provisions | 42,300 | 26 | 4,024 | 29 | ||||||||||||
Non-performing loans | 17,700 | 41 | 1.323 | 45 | ||||||||||||
Sub-standard | 7,600 | 13 | 573 | 13 | ||||||||||||
Acquired and awarded (gross) | 13,000 | 22 | 1,991 | 31 | ||||||||||||
Write-offs4 | 4,000 | 137 | ||||||||||||||
Specific plus generic | 35 | 50 |
(1) | Consolidated figure of EUR 42,256 million. | |
(2) | The percentage is calculated over total non-consolidated investment+acquired and awarded assets. | |
(3) | Data for 2009. | |
(4) | Fully covered with provisions. |
• | viable transactions, | ||
• | where the customer intends to pay, | ||
• | which improve the Bank’s position in terms of expected loss, and | ||
• | where the refinancing does not discourage additional effort by the customer. |
• | The customer’s risk is assessed overall, irrespective of the situation of each individual contract, and all the risks are provided with the highest possible level of guarantees. | ||
• | As a general rule, the risk with the customer is not increased. | ||
• | All the alternatives to the refinancing and its effects are evaluated, ensuring that the results of it are better than what might have been obtained if nothing was done. | ||
• | Particular attention is paid to collateral and the possible future evolution of its value. |
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• | Its use is restricted, giving precedence to the renewal of risks with additional efforts by the customer and avoiding situations that only postpone the problem. | ||
• | The refinanced transactions are put under special watch. |
• | They meet the criteria in the regulations based on Bank of Spain circulars (payment of ordinary interest pending and new effective guarantees or reasonable certainty of payment capacity). | ||
• | They fulfill the precautions which under prudent criteria are set out in the Group’s Corporate Policy (sustained payment for between 3 and 12 months, on the basis of the operation’s features and the type of guarantees). |
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Mortgage portfolio United Kingdom | Dec. 09 | |||||||
Million euros | Portfolio | % of loans | ||||||
Residential mortgages | 180,694 | 75.9 | * | |||||
First home buyer | 26,540 | 14.7 | ||||||
Mover | 66,171 | 36.6 | ||||||
Remortgage | 87,983 | 48.7 |
(*) | the total UK portfolio. | |
First time buyer: customers who buys home for the first time. | ||
Mover: customers who change home with or without changing the bank that granted the mortgage. | ||
Remortgage: customers who Transfer their mortgage from another bank. |
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• | Determines the sensitivity of risk factors (PD and LGD) in the face of certain macroeconomic variables. | ||
• | Defines reference scenarios (at the global level as well as for each of the Group’s units). | ||
• | Identifies “rupture scenarios” (levels as of which the sensitivity of risk factors to macroeconomic variables is more accentuated) and the distance of these scenarios from the current situation and the reference scenarios. | ||
• | Estimates the expected loss of each scenario and the evolution of the risk profile of each portfolio in the face of movements in certain macroeconomic variables. |
• | The unemployment rate | ||
• | Property prices | ||
• | GDP | ||
• | Interest rates | ||
• | Inflation |
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• | Obtain payment and regularization of the pending balances so that an account returns to its normal state; if this is not possible the objective is total or partial recovery of debts, in any of the accounting or management situations in which they find themselves. | ||
• | Maintain and strengthen our relations with the customer and nurture the payment performance. |
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Million euros at December 31, 2009
Total ECR | Total net replacement value | |||||||||||||||||||||||
Trading | Hedging | Total | Trading | Hedging | Total | |||||||||||||||||||
CDS protection acquired | 812 | 822 | 1,634 | 462 | 614 | 1,076 | ||||||||||||||||||
CDS protection sold | 95 | 71 | 166 | (679 | ) | 33 | (646 | ) | ||||||||||||||||
TRS total return swap | — | 142 | 142 | — | 511 | 511 | ||||||||||||||||||
CDS options | — | — | — | — | — | — | ||||||||||||||||||
Total credit derivatives | 907 | 1,034 | 1,941 | (217 | ) | 1,159 | 942 | |||||||||||||||||
Equity forwards | 2 | 55 | 57 | — | (163 | ) | (163 | ) | ||||||||||||||||
Equity options | 407 | 1,524 | 1,931 | (195 | ) | (208 | ) | (403 | ) | |||||||||||||||
Equity swaps | — | 816 | 816 | — | 208 | 208 | ||||||||||||||||||
Equity spot | — | — | — | — | — | — | ||||||||||||||||||
Total equity derivative | 409 | 2,396 | 2,805 | (195 | ) | (163 | ) | (358 | ) | |||||||||||||||
Fixed-income forwards | 6 | 24 | 29 | 1 | — | 1 | ||||||||||||||||||
Fixed-income options | 1 | — | 1 | — | — | — | ||||||||||||||||||
Fixed-income spot | — | — | — | — | — | — | ||||||||||||||||||
Total fixed income derivatives | 6 | 24 | 30 | 1 | — | 1 | ||||||||||||||||||
Asset swaps | 1,011 | 2,812 | 3,822 | (752 | ) | 486 | (266 | ) | ||||||||||||||||
Exchange-rate options | 240 | 159 | 399 | 1 | (37 | ) | (36 | ) | ||||||||||||||||
Exchange-rate swaps | 5,222 | 12,079 | 17,301 | 1,257 | 2,834 | 4,092 | ||||||||||||||||||
Other exchange-rate derivative | — | 3 | 3 | — | 1 | 1 | ||||||||||||||||||
Total exchange rates | 6,473 | 15,053 | 21,525 | 506 | 3,285 | 3,791 | ||||||||||||||||||
Asset swaps | — | 279 | 279 | — | (40 | ) | (40 | ) | ||||||||||||||||
Call money swaps | 176 | 31 | 207 | (160 | ) | (60 | ) | (220 | ) | |||||||||||||||
IRS | 8,367 | 8,379 | 16,746 | (865 | ) | 3,032 | 2,167 | |||||||||||||||||
Forward interest rates | 2 | 13 | 15 | (25 | ) | (10 | ) | (35 | ) | |||||||||||||||
Other interest-rate derivatives | 580 | 1,193 | 1,772 | 412 | (798 | ) | (386 | ) | ||||||||||||||||
Interest rate structures | 75 | 620 | 695 | 46 | (79 | ) | (33 | ) | ||||||||||||||||
Total interest-rate derivatives | 9,199 | 10,514 | 19,714 | (593 | ) | 2,047 | 1,454 | |||||||||||||||||
Commodities | 103 | 35 | 138 | 202 | 9 | 211 | ||||||||||||||||||
Total commodity derivatives | 103 | 35 | 138 | 202 | 9 | 211 | ||||||||||||||||||
Total OTC derivatives | 17,097 | 29,055 | 46,153 | (296 | ) | 6,337 | 6,041 | |||||||||||||||||
Collateral | — | (7,449 | ) | (7,449 | ) | |||||||||||||||||||
Total | 17,097 | 21,606 | 38,704 | |||||||||||||||||||||
(*) | Excluding A&L and Sovereign. |
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Million euros at December 31, 2009
1 year | 1-5 years | 5-10 years | over 10 years | total rec | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trading | Hedging | Total | Trading | Hedging | Total | Trading | Hedging | Total | Trading | Hedging | Total | Trading | Hedging | Total | ||||||||||||||||||||||||||||||||||||||||||||||
CDS protection acquired | 3 | 13 | 16 | 123 | 65 | 188 | 41 | 52 | 94 | 645 | 692 | 1,337 | 812 | 822 | 1,634 | |||||||||||||||||||||||||||||||||||||||||||||
CDS protection sold | 5 | 2 | 7 | 77 | 1 | 78 | 13 | — | 13 | — | 67 | 67 | 95 | 71 | 166 | |||||||||||||||||||||||||||||||||||||||||||||
TRS total return swap | — | — | — | — | 1 | 1 | — | 5 | 5 | — | 136 | 136 | — | 142 | 142 | |||||||||||||||||||||||||||||||||||||||||||||
CDS options | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Total credit derivatives | 8 | 15 | 23 | 200 | 68 | 267 | 54 | 57 | 111 | 645 | 894 | 1,540 | 907 | 1,034 | 1,941 | |||||||||||||||||||||||||||||||||||||||||||||
Equity forwards | 2 | 55 | 57 | — | — | — | — | — | — | — | — | — | 2 | 55 | 57 | |||||||||||||||||||||||||||||||||||||||||||||
Equity options | 193 | 363 | 555 | 192 | 1,050 | 1,242 | 22 | 105 | 127 | — | 6 | 6 | 407 | 1,524 | 1,931 | |||||||||||||||||||||||||||||||||||||||||||||
Equity swaps | — | 80 | 80 | — | 364 | 364 | — | 315 | 315 | — | 58 | 58 | — | 816 | 816 | |||||||||||||||||||||||||||||||||||||||||||||
Equity spot | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Total equity derivative | 195 | 498 | 692 | 192 | 1,414 | 1,606 | 22 | 420 | 442 | — | 64 | 64 | 409 | 2,396 | 2,805 | |||||||||||||||||||||||||||||||||||||||||||||
Fixed-income towards | 6 | 1 | 7 | — | 22 | 22 | — | — | — | — | — | — | 6 | 24 | 29 | |||||||||||||||||||||||||||||||||||||||||||||
Fixed-income options | 1 | — | 1 | — | — | — | — | — | — | — | — | — | 1 | — | 1 | |||||||||||||||||||||||||||||||||||||||||||||
Fixed-income spot | — | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Total fixed income derivatives | 6 | 1 | 7 | — | 22 | 22 | — | — | — | — | — | — | 6 | 24 | 30 | |||||||||||||||||||||||||||||||||||||||||||||
Asset swaps | 605 | 2,647 | 3,252 | 313 | 165 | 478 | 37 | — | 37 | 55 | — | 55 | 1.011 | 2,812 | 3,822 | |||||||||||||||||||||||||||||||||||||||||||||
Exchange-rate options | 157 | 148 | 306 | 82 | 11 | 93 | — | — | — | — | — | — | 240 | 159 | 399 | |||||||||||||||||||||||||||||||||||||||||||||
Exchange-rate swaps | 2,299 | 3,195 | 5,495 | 1,787 | 4,833 | 6,620 | 1,136 | 2,935 | 4,071 | 1 | 1,116 | 1,116 | 5,222 | 12,079 | 17,301 | |||||||||||||||||||||||||||||||||||||||||||||
Other exchange-rate derivative | — | 3 | 3 | — | — | — | — | — | — | — | — | — | — | 3 | 3 | |||||||||||||||||||||||||||||||||||||||||||||
Total exchange rates | 3,062 | 5,994 | 9,055 | 2,182 | 5,009 | 7,191 | 1,174 | 2,935 | 4,108 | 55 | 1,116 | 1,171 | 6,473 | 15,053 | 21,525 | |||||||||||||||||||||||||||||||||||||||||||||
Asset swaps | — | 5 | 5 | — | 22 | 22 | — | 27 | 27 | — | 225 | 225 | — | 279 | 279 | |||||||||||||||||||||||||||||||||||||||||||||
Call money swaps | 55 | 30 | 85 | 118 | 1 | 118 | 3 | — | 3 | 1 | — | 1 | 176 | 31 | 207 | |||||||||||||||||||||||||||||||||||||||||||||
IRS | 299 | 1,022 | 1,320 | 2,220 | 3,400 | 5,621 | 1,520 | 2,101 | 3,621 | 4,328 | 2,324 | 6,652 | 8,367 | 8,846 | 17,213 | |||||||||||||||||||||||||||||||||||||||||||||
Forward interest rates | 2 | 13 | 15 | — | — | — | — | — | — | — | — | — | 2 | 13 | 15 | |||||||||||||||||||||||||||||||||||||||||||||
Other interest-rate derivatives | 1 | 287 | 288 | 30 | 548 | 579 | 94 | 130 | 225 | 454 | 227 | 681 | 580 | 1,193 | 1,772 | |||||||||||||||||||||||||||||||||||||||||||||
Interest rate structures | 4 | 2 | 7 | 49 | 11 | 60 | 19 | 23 | 42 | 2 | 120 | 122 | 75 | 156 | 231 | |||||||||||||||||||||||||||||||||||||||||||||
Total interest-rate derivatives | 361 | 1,358 | 1,719 | 2,418 | 3,982 | 6,400 | 1,636 | 2,281 | 3,917 | 4,785 | 2,896 | 7,681 | 9,199 | 10,518 | 19,718 | |||||||||||||||||||||||||||||||||||||||||||||
Commodities | 37 | 5 | 42 | 42 | 26 | 68 | 24 | — | 24 | — | — | — | 103 | 31 | 134 | |||||||||||||||||||||||||||||||||||||||||||||
Total commodity derivatives | 37 | 5 | 42 | 42 | 26 | 68 | 24 | — | 24 | — | — | — | 103 | 31 | 134 | |||||||||||||||||||||||||||||||||||||||||||||
Total OTC derivatives | 3,669 | 7,870 | 11,539 | 5,033 | 10,522 | 15,554 | 2,911 | 5,693 | 8,604 | 5,485 | 4,970 | 10,456 | 17,097 | 22,055 | 46,153 | |||||||||||||||||||||||||||||||||||||||||||||
Collateral | — | (7,449 | ) | (7,449 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | 17,097 | 21,606 | 38,704 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(*) | Excluding A&L and Sovereign. |
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Rating | % | |||
AAA | 4.6 | |||
AA | 12.6 | |||
A | 51.2 | |||
BBB | 21.3 | |||
BB | 5.3 | |||
B | 2.2 | |||
Rest | 2.8 |
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Million euros | ||||||||
Main segments | RORAC | Creation of value | ||||||
Continental Europe | 32.3 | % | 3,243 | |||||
United Kingdom | 37.2 | % | 1,168 | |||||
Latin America | 29.7 | % | 2,479 | |||||
Sovereign | -1.5 | % | (225 | ) | ||||
Subtotal of operating areas | 30.4 | % | 6,665 | |||||
Financial management & equity stakes | -22.2 | % | (2,484 | ) | ||||
Group total | 21.6 | % | 4,180 | |||||
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• | Trading in financial instruments, which involves interest rate, foreign exchange rate, equity price, commodity price and volatility risks. |
• | Engaging in retail banking activities, which involves interest rate risk since a change in interest rates affects interest income, interest expense and customer behavior. This interest rate risk arises from the gap (maturity and repricing) between assets and liabilities. |
• | Investing in assets (including subsidiaries) whose returns or accounts are denominated in currencies other than the Euro, which involves foreign exchange rate risk between the Euro and such other currencies. |
• | Investing in subsidiaries and other companies, which subject us to equity price risk; and |
• | Trading and non-trading activities which entail liquidity risk. |
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• | Identify and define the main types of risk incurred efficiently and comprehensively to be consistent with the management and strategy of the business. |
• | Quantify and inform the business areas of the risk levels and profile that senior management believes can be assumed, in order to avoid undesired risks. |
• | Give flexibility to the business areas to build risk positions efficiently and on a timely basis according to changes in the market and in the business strategies, and always within the risk levels regarded as acceptable by the Group. |
• | Allow the generators of business to take prudent risks which are sufficient to attain budgeted results. |
• | Establish investment alternatives by limiting equity consumption. |
• | Define the range of products and underlying assets with which each unit of Treasury can operate, taking into consideration features such as the model and valuation systems, the liquidity of the tools used, etc. This will help to constrain all market risk within the business management and defined risk strategy. |
• | Providing risk reducing levels suggestions and controls. These actions are the result of breaking “alarm” limits. |
• | Taking executive actions that require risk takers to close out positions to reduce risk levels. |
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• | A one-day time horizon may not fully capture the market risk of positions that cannot be liquidated or hedged within one day. |
• | At present, we compute DCaR at the close of business and trading positions may change substantially during the course of the trading day. |
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• | Loans / net assets |
• | Customer deposits, insurance and medium and long-term financing / lending |
• | Customer deposits, insurance and medium and long-term financing, shareholders’ funds and other liabilities / sum of credits and fixed assets. |
• | Short-term financing / net liabilities. |
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1. | The “International framework for liquidity risk measurement, standards and monitoring” (Basel Committee on Banking Supervision, Consultative Document, December 2009) | |
2. | Including Banesto and Sovereign. Venezuela was excluded from the perimeter as of April 1. |
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3. | Total Trading VaR includes operations that are not assigned to any particular country, such as Active Credit Portfolio Management and Non-core Legacy Portfolio |
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Minimum | Average | Maximum | Last | |||||||||||||||
TOTAL TRADING | Total VaR | 21.9 | 30.2 | 45.1 | 27.5 | |||||||||||||
Diversification effect | (19.2 | ) | (24.8 | ) | (31.4 | ) | (29.2 | ) | ||||||||||
Fixed-Income VaR | 11.3 | 20.0 | 31.9 | 18.3 | ||||||||||||||
Equity VaR | 4.2 | 6.9 | 11.6 | 5.9 | ||||||||||||||
FX VaR | 10.5 | 15.5 | 23.1 | 16.1 | ||||||||||||||
Credit Spread VaR | 8.2 | 11.9 | 15.8 | 15.0 | ||||||||||||||
Commodities VaR | 0.1 | 0.8 | 1.6 | 1.4 | ||||||||||||||
LATIN AMERICA | VaR Total | 9.0 | 19.6 | 33.8 | 16.6 | |||||||||||||
Diversification effect | (6.3 | ) | (12.3 | ) | (16.8 | ) | (7.7 | ) | ||||||||||
Fixed-Income VaR | 8.9 | 16.6 | 29.2 | 16.0 | ||||||||||||||
Equity VaR | 0.7 | 3.9 | 10.3 | 2.8 | ||||||||||||||
FX VaR | 1.7 | 7.1 | 16.7 | 6.0 | ||||||||||||||
USA and Asia | VaR Total | 1.0 | 3.3 | 11.0 | 1.2 | |||||||||||||
Diversification effect | (0.0 | ) | (1.0 | ) | (2.6 | ) | (0.3 | ) | ||||||||||
Fixed-Income VaR | 0.7 | 3.1 | 11.2 | 0.9 | ||||||||||||||
Equity VaR | 0.0 | 0.3 | 2.1 | 0.0 | ||||||||||||||
FX VaR | 0.3 | 0.9 | 5.9 | 0.6 | ||||||||||||||
EUROPE | VaR Total | 11.2 | 14.6 | 23.9 | 13.5 | |||||||||||||
Diversification effect | (10.3 | ) | (16.5 | ) | (23.2 | ) | (18.1 | ) | ||||||||||
Fixed-Income VaR | 5.2 | 8.6 | 19.1 | 6.6 | ||||||||||||||
Equity VaR | 3.2 | 5.5 | 8.8 | 5.2 | ||||||||||||||
FX VaR | 6.1 | 11.6 | 18.7 | 13.8 | ||||||||||||||
Credit Spread VaR | 1.9 | 4.6 | 8.3 | 4.7 | ||||||||||||||
Commodities VaR | 0.1 | 0.8 | 1.6 | 1.4 |
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• | Geographic distribution |
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4 | Yields “clean” of commissions and results of intraday operations |
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€ million | Interest rate | Equities | Exchange rate | Credit Spread | Commodities | Total | ||||||||||||||||||
Total Trading | (52.6 | ) | 4.8 | (62.1 | ) | (122.0 | ) | (2.2 | ) | (234.0 | ) | |||||||||||||
Europe | (10.2 | ) | 20.3 | (51.5 | ) | (64.4 | ) | (2.2 | ) | (136.7 | ) | |||||||||||||
Latin America | (40.2 | ) | (15.4 | ) | (10.5 | ) | 0.0 | 0.0 | (66.1 | ) | ||||||||||||||
USA (New York) | (1.0 | ) | (0.1 | ) | 0.0 | 0.0 | 0.0 | (1.1 | ) | |||||||||||||||
Global Activities | (1.2 | ) | 0.0 | (0.1 | ) | (57.6 | ) | 0.0 | (58.9 | ) |
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Up to 1 | More than 5 | |||||||||||||||||||||||
€million | Not sensitive | year | 1-3 years | 3-5 years | years | TOTAL | ||||||||||||||||||
Money and securities market | 40,570 | 9,101 | 1,093 | 12,104 | 62,868 | |||||||||||||||||||
Loans | 112 | 117,973 | 10,833 | 1,498 | 1,758 | 132,174 | ||||||||||||||||||
Permanent equity stakes | 58,783 | 58,783 | ||||||||||||||||||||||
Other assets | 15,847 | 49,367 | 51 | 52 | 120 | 65,437 | ||||||||||||||||||
Total assets | 74,742 | 207,910 | 19,985 | 2,643 | 13,982 | 319,262 | ||||||||||||||||||
Money market | — | 34,081 | 125 | 1,500 | 300 | 36,006 | ||||||||||||||||||
Customer deposits | — | 32,917 | 10,318 | 8,099 | 13,016 | 64,350 | ||||||||||||||||||
Debt Issues and securitizations | — | 85,021 | 18,761 | 11,979 | 11,150 | 126,911 | ||||||||||||||||||
Stockholders’ equity and other liabilities | 77,502 | 39,923 | 1,100 | 830 | 1,370 | 120,725 | ||||||||||||||||||
Total liabilities | 77,502 | 191,942 | 30,304 | 22,408 | 25,836 | 347,992 | ||||||||||||||||||
Balance sheet Gap | (2,761 | ) | 15,968 | (10,320 | ) | (19,765 | ) | (11,854 | ) | (28,732 | ) | |||||||||||||
Off-balance sheet structural Gap | — | 645 | 17,041 | 9,808 | 4,333 | 31,827 | ||||||||||||||||||
Total structural Gap | (2,761 | ) | 16,613 | 6,721 | (9,957 | ) | (7,521 | ) | 3,095 | |||||||||||||||
Accumulated Gap | — | 16,613 | 23,334 | 13,378 | 5,857 | — |
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Gaps in Local | Not | |||||||||||||||||||||||
Currency | sensitive | 0-6 months | 6-12 months | 1-3 years | > 3 years | TOTAL | ||||||||||||||||||
Assets | 42,421 | 74,918 | 18,703 | 21,685 | 21,661 | 179,467 | ||||||||||||||||||
Liabilities | 57,326 | 83,356 | 14,585 | 14,353 | 6,469 | 176,090 | ||||||||||||||||||
Off-balance Sheet | 2 | 1,894 | (2,590 | ) | (1,109 | ) | (783 | ) | (2,586 | ) | ||||||||||||||
Gap | (14,626 | ) | (6,828 | ) | 2,384 | 5,692 | 14,169 | 792 |
Gaps in Foreign | Not | |||||||||||||||||||||||
Currency | sensitive | 0-6 months | 6-12 months | 1-3 years | > 3 years | TOTAL | ||||||||||||||||||
Assets | 2,591 | 21,752 | 2,229 | 2,359 | 3,767 | 32,698 | ||||||||||||||||||
Liabilities | 1,466 | 24,461 | 3,404 | 3,625 | 3,119 | 36,075 | ||||||||||||||||||
Off-balance Sheet | 0 | (2,221 | ) | 704 | 1,951 | 2,152 | 2,586 | |||||||||||||||||
Gap | 1,125 | (4,930 | ) | (471 | ) | 685 | 2,800 | (792 | ) |
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• | € 16 billion of assets were securitized. Given the difficulties of the securitization market since August 2007, all the issues were retained by the Group’s various units. These securitizations significantly increased the Group’s liquidity position through its discounting capacity in central banks, and |
• | Repurchases were made in the secondary market of AAA securitization bonds by Group issuers (€ 2 billion). |
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• | Organizational and governance model: a solid model of governance that ensures the involvement of senior management and the board in taking decisions and facilitating their integration with the Group’s global strategy. |
• | Management: adapted to each business’s liquidity needs, in accordance with the decentralized organizational model. |
• | Balance sheet analysis and liquidity risk management: profound analysis of the balance sheet and its evolution in order to support decisions. |
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Metrics | 2009 | 2008 | ||||||
Loans/net assets | 79 | % | 79 | % | ||||
Customer deposits, insurance and medium and long-term financing/loans | 106 | % | 104 | % | ||||
Customer deposits, insurance and medium and long-term financing, shareholders’ funds and other liabilities/total loans and fixed assets | 110 | % | 103 | % | ||||
Short-term financing/net liabilities | 5 | % | 7 | % |
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• | CDOs/CLOs: exposure amounting to€637 million, mainly as a result of the integration of the Alliance&Leicester portfolio in 2008. 56% of this portfolio was rated AAA and 85% had a rating of A or above. |
• | Non-Agency CMOs and pass-throughs with underlying mortgage alt-A5: exposure of€730 million at 2009 year-end. |
• | Hedge funds: the total exposure was not material (€549 million at 2009 year-end) and consisted largely of the financing provided to these funds (€342 million), the remainder being direct portfolio investment. This exposure involved low levels of loan-to-value risk -around 50% (collateral of€1,095 million at year-end). The risk exposure to this type of counterparty is analyzed on a case-by-case basis, and the percentages of collateral are established according to the features and assets of each fund. Exposure decreased significantly -by 52%-with respect to the previous year. |
• | Conduits: the only exposure resulted from the acquisition of Alliance&Leicester, which gave rise to the integration of a conduit, with assets amounting to€657 million at 2009 year-end, of which 42% had an AAA rating and 83% a rating of A or above. |
• | Monolines: Santander’s exposure to monoline insurers amounted to€396 million6 in December 2009, and related mainly to indirect exposure, totaling€191 million, by virtue of the guarantee provided by entities of this kind for various traditional financing or securitization transactions. The exposure was to double-default risk in this case. The primary underlying aspects had high credit ratings, mostly “AA”. The small remainder was direct exposure (e.g. through the purchase of a credit default swap to protect it against the risk of default of these insurance companies). |
5 | Alternative A-paper: mortgages originated in the US market which for various reasons are considered as having an intermediate risk level between prime and subprime mortgages (not having all the necessary information, loan-to-value levels higher than usual, etc). | |
6 | Guarantees provided by monolines for bonds issued by US states (municipal bonds) are not considered as exposure. As a result of the acquisition of Sovereign Bank, the Group integrated a€1,260 million portfolio of these bonds. |
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• | whether there is an adequate valuation model (mark-to-market, mark-to-model or mark-to-liquidity) to monitor the value of each exposure. |
• | whether the inputs enabling application of this valuation model are observable in the market. |
• | the availability of adequate systems duly adapted for the calculation and daily monitoring of the results, positions and risks of the new transactions. |
• | the degree of liquidity of the product or underlying asset, with a view to arranging the related hedge on a timely basis. |
7 | “Strengthening the resilience of the banking sector” and “International framework for liquidity risk measurement, standards and monitoring.” |
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December 31, 2009 | ||||||||||||||||||||
December 31, 2008 | Low | Average | High | Period End | ||||||||||||||||
TOTAL | 782.0 | 612.5 | 785.9 | 983.6 | 983.6 | |||||||||||||||
Trading | 31.9 | 21.9 | 30.2 | 45.1 | 27.5 | |||||||||||||||
Non-Trading | 807.4 | 614.7 | 783.4 | 1,015.0 | 1,015.0 | |||||||||||||||
Diversification Effect | (57.3 | ) | (24.0 | ) | (27.7 | ) | (76.6 | ) | (58.9 | ) |
8 | Risk factors such as credit spread and commodities are not shown in this table because they are not relevant in comparative terms and affect only to the trading portfolio. They will be shown in a table below along with the rest of the trading factors. |
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December 31, 2009 | ||||||||||||||||||||
December 31, 2008 | Low | Average | High | Period End | ||||||||||||||||
Interest Rate Risk | ||||||||||||||||||||
Trading | 29.8 | 11.3 | 20.0 | 31.9 | 18.3 | |||||||||||||||
Non-Trading | 154.9 | 151.6 | 187.5 | 242.8 | 210.6 | |||||||||||||||
Diversification Effect | (26.9 | ) | (10.8 | ) | (18.9 | ) | (29.8 | ) | (17.5 | ) | ||||||||||
TOTAL | 157.7 | 152.0 | 188.6 | 244.9 | 211.4 |
December 31, 2009 | ||||||||||||||||||||
December 31, 2008 | Low | Average | High | Period End | ||||||||||||||||
Exchange Rate Risk | ||||||||||||||||||||
Trading | 12.4 | 10.5 | 15.5 | 23.1 | 16.1 | |||||||||||||||
Non-Trading | 382.5 | 356.8 | 493.8 | 619.9 | 579.8 | |||||||||||||||
Diversification Effect | (12.2 | ) | (10.3 | ) | (15.3 | ) | (22.6 | ) | (15.9 | ) | ||||||||||
TOTAL | 382.7 | 357.0 | 494.1 | 620.4 | 580.0 |
December 31, 2009 | ||||||||||||||||||||
December 31, 2008 | Low | Average | High | Period End | ||||||||||||||||
Equity Price Risk | ||||||||||||||||||||
Trading | 4.9 | 4.2 | 6.9 | 11.6 | 5.9 | |||||||||||||||
Non-Trading | 521.5 | 322.6 | 358.4 | 399.0 | 369.4 | |||||||||||||||
Diversification Effect | (4.9 | ) | (4.2 | ) | (6.8 | ) | (11.5 | ) | (5.8 | ) | ||||||||||
TOTAL | 521.5 | 322.7 | 358.4 | 399.1 | 369.5 |
9 | Two new factors in Trading are given differentiated treatment in 2009 compared to 2008: the credit spread (previously integrated partly in interest rates) and the price of commodities (previously integrated in equities, with a small relative share compared to the rest of factors). |
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December 31, 2009 | ||||||||||||||||||||
December 31, 2008 | Low | Average | High | Period End | ||||||||||||||||
Trading | ||||||||||||||||||||
Interest Rate | 29.8 | 11.3 | 20.0 | 31.9 | 18.3 | |||||||||||||||
Exchange Rate | 12.4 | 10.5 | 15.5 | 23.1 | 16.1 | |||||||||||||||
Equity | 4.9 | 4.2 | 6.9 | 11.6 | 5.9 | |||||||||||||||
Credit Spread | 8.2 | 11.9 | 15.8 | 15.0 | ||||||||||||||||
Commodities | 0.1 | 0.8 | 1.6 | 1.4 | ||||||||||||||||
TOTAL | 31.9 | 21.9 | 30.2 | 45.1 | 27.5 | |||||||||||||||
Non-Trading Interest Rate | ||||||||||||||||||||
Interest Rate | 154.9 | 151.6 | 187.5 | 242.8 | 210.6 | |||||||||||||||
Non-Trading Foreign Exchange | ||||||||||||||||||||
Exchange Rate | 382.5 | 356.8 | 493.8 | 619.9 | 579.8 | |||||||||||||||
Non-Trading Equity | ||||||||||||||||||||
Equity | 521.5 | 322.6 | 358.4 | 399.0 | 369.4 | |||||||||||||||
TOTAL | 782.0 | 612.5 | 785.9 | 983.6 | 983.6 | |||||||||||||||
Interest Rate | 157.7 | 152.0 | 188.6 | 244.9 | 211.4 | |||||||||||||||
Exchange Rate | 382.7 | 357.0 | 494.1 | 620.4 | 580.0 | |||||||||||||||
Equity | 521.5 | 322.7 | 358.4 | 399.1 | 369.5 |
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• | Fees charged to investors as outlined in the deposit agreement are the following: |
Category of Service | Depositary Actions | Associated Fee | ||
(a) Deposit or substituting the underlying shares | Each person to whom ADSs are issued against deposits of shares, including deposits in respect of share distributions, rights and other distributions. 1 Each person surrendering ADRs for the withdrawal of deposited securities. | $5.00 for each 100 ADSs (or portion thereof) delivered or surrendered. | ||
(b) Receiving or distributing dividends | Distribution of dividends. | $0.01 per ADS. | ||
(c) Selling or Exercising Rights | Distribution or sale of securities, the fee being in an amount equal to the fee for the execution and delivery of ADSs which would have been charged as a result of the deposit of such securities. | $5.00 for each 100 ADSs (or portion thereof). | ||
(d) Withdrawing an underlying security | Acceptance of ADRs surrendered for withdrawal of deposited securities. | $5.00 for each 100 ADSs (or portion thereof) evidenced by the ADRs surrendered. | ||
(d) Expenses of the Depositary | Expenses incurred on behalf of Holders in connection with: i) Stock transfer or other taxes and other governmental charges. ii) Cable, telex and facsimile transmission and delivery. iii) Expenses of the Depositary in connection with the conversion of foreign currency into US dollars (which are paid out of such foreign currency). iv) Such fees and expenses as are incurred by the Depositary (including without limitation expenses incurred on behalf of Holders in connection with compliance with foreign exchange control regulations or any law or regulation relating to foreign investment) in delivery of deposited securities or otherwise in connection with the Depositary’s or its Custodian’s compliance with applicable law, rule or regulation. | Expenses payable at the sole discretion of the depositary. |
1 | The Depositary may sell (by public or private sale) sufficient securities and property received in respect of such share distributions, rights and other distributions prior to such deposit to cover such charge. |
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• | Fees received from our depositary in connection with the ADR program are the following: |
Dividend fees collected that Santander gets as per 90% revenue share: $1,674,219.71
Total: $3,574,219.71
Dividend fees collected: $1,674,219.71
Total: $2,874,219.71
Annual meeting services: $15,000
Investor Relations advisory services: $185,000
Total: $350,000
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• | Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; |
• | Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
• | Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
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2009 | 2008 | 2007 | ||||||||||
(in millions of euros) | ||||||||||||
Audit fees (1) | 19.6 | 18.3 | 15.9 | |||||||||
Audit related fees (2) | 11.0 | 10.4 | 9.9 | |||||||||
Non-audit related fees (excluding tax services) (3) | 1.5 | 3.4 | 2.8 | |||||||||
Tax fees (4) | 3.2 | 1.9 | 2.5 | |||||||||
Other fees paid (5) | 3.7 | 3.8 | 3.7 | |||||||||
39.0 | 37.8 | 34.8 |
(1) | In 2009,€14.6 million was paid for the audit of annual financial statements considering that the Group had the same composition as in the previous year, and€5.0 million was paid for the annual audit of the companies that became part of the Group in this year. | |
(2) | Comprising€4.7 million in 2009,€5.9 million in 2008 and€6.2 million in 2007 for the audit of internal control pursuant to the requirements of the Sarbanes-Oxley Act and the calculation of regulatory capital (Basel) and€6.3 million in 2009,€4.5 million in 2008 and€3.7 million in 2007 for other reports required by legal regulations issuing from the national supervisory bodies of the countries where the Group does business, notably the semi-annual audits and the reports prepared in compliance with the requirements of the US securities market (other than those required by the Sarbanes-Oxley Act). | |
(3) | The amounts invoiced for services other than audit which, during the past fiscal year, were principally those relating to securitization processes and preparation of financial studies. | |
(4) | All tax services have been approved by the audit and compliance committee of the board of directors. | |
(5) | Amounts invoiced for audits on purchases and other corporate transactions (due diligence). |
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(c) Total number of | (d) Maximum number (or | |||||||||||||||
shares (or units) | approximate dollar value) of | |||||||||||||||
(a) Total number of | (b) Average | purchased as part of | shares (or units) that may yet be | |||||||||||||
shares (or units) | price paid per | publicly announced | purchased under the plans or | |||||||||||||
2009 | purchased | share (or unit) in euros | plans or programs | programs | ||||||||||||
January | 106,770,816 | 6.36 | — | — | ||||||||||||
February | 75,465,757 | 5.49 | — | — | ||||||||||||
March | 76,056,976 | 4.72 | — | — | ||||||||||||
April | 342,956,241 | 6.17 | — | — | ||||||||||||
May | 126,408,973 | 7.14 | — | — | ||||||||||||
June | 140,328,484 | 8.16 | — | — | ||||||||||||
July | 86,770,535 | 9.51 | — | — | ||||||||||||
August | 88,740,880 | 10.12 | — | — | ||||||||||||
September | 37,489,370 | 9.45 | — | — | ||||||||||||
October | 71,689,779 | 10.35 | — | — | ||||||||||||
November | 47,593,919 | 9.05 | — | — | ||||||||||||
December | 40,287,486 | 9.89 | — | — | ||||||||||||
Total | 1,240,559,216 | 7.47 |
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Page | ||||
Report of Deloitte, S.L. | F-1 | |||
Consolidated Balance Sheets as of December 31, 2009, 2008 and 2007 | F-2 | |||
Consolidated Statements of Income for the Years Ended December 31, 2009, 2008 and 2007 | F-3 | |||
Consolidated Statements Of Changes In Stockholders’ Equity for the Years Ended December 31, 2009, 2008 and 2007 | F-5 | |||
Consolidated Cash Flow Statement for the Years Ended December 31, 2009, 2008 and 2007 | F-8 | |||
Notes to the Consolidated Financial Statements | F-9 |
Exhibit | ||||
Number | Description | |||
1.1 | By-laws (Estatutos) of Banco Santander, S.A. | |||
1.2 | By-laws (Estatutos) of Banco Santander, S.A., (English translation of By-laws set forth in Exhibit 1.1 hereto). | |||
4.1 | * | Restated Consortium and Shareholders Agreement dated April 1, 2010, among the Royal Bank of Scotland Group plc, Banco Santander, S.A., the State of the Netherlands and RFS Holdings B.V. | ||
4.2 | Transaction Agreement dated as of October 13, 2008 by and between Sovereign Bancorp, Inc. and Banco Santander, S.A. (incorporated by reference to Exhibit 2.1 to our Registration Statement on Form F-4, filed with the Securities and Exchange Commission on November 17, 2008). | |||
8.1 | List of Subsidiaries (incorporated by reference as Exhibits I, II and III of our Financial Statements filed with this Form 20-F). | |||
12.1 | Section 302 Certification by the chief executive officer. | |||
12.2 | Section 302 Certification by the chief financial officer. | |||
12.3 | Section 302 Certification by the chief accounting officer. | |||
13.1 | Section 906 Certification by the chief executive officer, the chief financial officer and the chief accounting officer. | |||
15.1 | Consent of Deloitte, S.L. |
* | Pursuant to a request for confidential treatment filed with the Security and Exchange Commission, the confidential portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission. |
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BANCO SANTANDER, S.A. | ||||
By: | /s/ José Antonio Álvarez | |||
Name: | José Antonio Álvarez | |||
Title: | Chief financial officer |
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Page | ||||
F-1 | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-8 | ||||
F-9 |
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Banco Santander, S.A.:
June 10, 2010
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(Thousands of euros)
Note | 2009 | 2008 | 2007 | |||||||||||||
ASSETS | ||||||||||||||||
CASH AND BALANCES WITH CENTRAL BANKS | 34,889,413 | 45,781,345 | 31,062,775 | |||||||||||||
FINANCIAL ASSETS HELD FOR TRADING: | 135,054,321 | 151,817,192 | 158,806,860 | |||||||||||||
Loans and advances to credit institutions | 6 | 5,952,956 | 5,149,584 | 12,294,559 | ||||||||||||
Loans and advances to customers | 10 | 10,076,412 | 684,348 | 23,704,481 | ||||||||||||
Debt instruments | 7 | 49,920,518 | 43,895,548 | 66,330,811 | ||||||||||||
Equity instruments | 8 | 9,248,022 | 6,272,403 | 9,744,466 | ||||||||||||
Trading derivatives | 9 | 59,856,413 | 95,815,309 | 46,732,543 | ||||||||||||
OTHER FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS: | 37,813,669 | 25,817,138 | 24,829,441 | |||||||||||||
Loans and advances to credit institutions | 6 | 16,242,609 | 8,911,906 | 6,865,073 | ||||||||||||
Loans and advances to customers | 10 | 8,328,516 | 8,972,707 | 8,021,623 | ||||||||||||
Debt instruments | 7 | 7,365,213 | 5,154,732 | 7,072,423 | ||||||||||||
Equity instruments | 8 | 5,877,331 | 2,777,793 | 2,870,322 | ||||||||||||
AVAILABLE-FOR-SALE FINANCIAL ASSETS: | 86,620,503 | 48,920,306 | 44,348,907 | |||||||||||||
Debt instruments | 7 | 79,289,337 | 42,547,677 | 34,187,077 | ||||||||||||
Equity instruments | 8 | 7,331,166 | 6,372,629 | 10,161,830 | ||||||||||||
LOANS AND RECEIVABLES: | 736,746,371 | 699,614,727 | 579,523,720 | |||||||||||||
Loans and advances to credit institutions | 6 | 57,641,042 | 64,730,787 | 38,482,972 | ||||||||||||
Loans and advances to customers | 10 | 664,145,998 | 617,231,380 | 539,372,409 | ||||||||||||
Debt instruments | 7 | 14,959,331 | 17,652,560 | 1,668,339 | ||||||||||||
HELD-TO-MATURITY INVESTMENTS | — | — | — | |||||||||||||
CHANGES IN THE FAIR VALUE OF HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK | 36 | 1,419,841 | 2,402,736 | 297,131 | ||||||||||||
HEDGING DERIVATIVES | 11 | 7,833,850 | 9,698,132 | 3,063,169 | ||||||||||||
NON-CURRENT ASSETS HELD FOR SALE | 12 | 5,789,189 | 9,267,486 | 10,156,429 | ||||||||||||
INVESTMENTS: | 164,473 | 1,323,453 | 15,689,127 | |||||||||||||
Associates | 13 | 164,473 | 1,323,453 | 15,689,127 | ||||||||||||
Jointly controlled entities | — | — | — | |||||||||||||
INSURANCE CONTRACTS LINKED TO PENSIONS | 14 | 2,356,151 | 2,446,989 | 2,525,550 | ||||||||||||
REINSURANCE ASSETS | 15 | 416,822 | 458,388 | 309,774 | ||||||||||||
TANGIBLE ASSETS: | 8,995,735 | 8,501,552 | 9,459,033 | |||||||||||||
Property, plant and equipment- | 7,904,819 | 7,630,935 | 8,998,308 | |||||||||||||
For own use | 16 | 6,202,162 | 5,664,616 | 4,287,612 | ||||||||||||
Leased out under an operating lease | 16 | 1,702,657 | 1,966,319 | 4,710,696 | ||||||||||||
Investment property | 16 | 1,090,916 | 870,617 | 460,725 | ||||||||||||
INTANGIBLE ASSETS: | 25,643,414 | 20,623,267 | 16,033,042 | |||||||||||||
Goodwill | 17 | 22,865,056 | 18,836,199 | 13,830,708 | ||||||||||||
Other intangible assets | 18 | 2,778,358 | 1,787,068 | 2,202,334 | ||||||||||||
TAX ASSETS: | 20,654,815 | 16,953,613 | 12,698,072 | |||||||||||||
Current | 4,827,554 | 2,309,465 | 1,845,310 | |||||||||||||
Deferred | 27 | 15,827,261 | 14,644,148 | 10,852,762 | ||||||||||||
OTHER ASSETS: | 19 | 6,130,891 | 6,005,226 | 4,111,941 | ||||||||||||
Inventories | 518,833 | 620,774 | 231,734 | |||||||||||||
Other | 5,612,058 | 5,384,452 | 3,880,207 | |||||||||||||
TOTAL ASSETS | 1,110,529,458 | 1,049,631,550 | 912,914,971 | |||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||
FINANCIAL LIABILITIES HELD FOR TRADING: | 115,516,474 | 136,620,235 | 123,398,293 | |||||||||||||
Deposits from central banks | 20 | 2,985,488 | 9,109,857 | — | ||||||||||||
Deposits from credit institutions | 20 | 43,131,718 | 26,841,854 | 23,254,111 | ||||||||||||
Customer deposits | 21 | 4,658,372 | 4,896,065 | 27,992,480 | ||||||||||||
Marketable debt securities | 22 | 586,022 | 3,569,795 | 17,090,935 | ||||||||||||
Trading derivatives | 9 | 58,712,624 | 89,167,433 | 49,447,533 | ||||||||||||
Short positions | 9 | 5,139,730 | 3,035,231 | 5,613,234 | ||||||||||||
Other financial liabilities | 24 | 302,520 | — | — | ||||||||||||
OTHER FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS: | 42,371,301 | 28,639,359 | 39,718,002 | |||||||||||||
Deposits from central banks | 20 | 10,103,147 | 4,396,901 | 6,562,328 | ||||||||||||
Deposits from credit institutions | 20 | 12,744,848 | 9,733,268 | 12,207,579 | ||||||||||||
Customer deposits | 21 | 14,636,466 | 9,318,117 | 10,669,058 | ||||||||||||
Marketable debt securities | 22 | 4,886,840 | 5,191,073 | 10,279,037 | ||||||||||||
Subordinated liabilities | — | — | — | |||||||||||||
Other financial liabilities | — | — | — | |||||||||||||
FINANCIAL LIABILITIES AT AMORTIZED COST: | 823,402,745 | 770,007,599 | 646,411,202 | |||||||||||||
Deposits from central banks | 20 | 22,345,110 | 9,211,957 | 22,185,751 | ||||||||||||
Deposits from credit institutions | 20 | 50,781,276 | 70,583,533 | 48,687,539 | ||||||||||||
Customer deposits | 21 | 487,681,399 | 406,015,268 | 316,744,981 | ||||||||||||
Marketable debt securities | 22 | 206,490,311 | 227,642,422 | 205,916,716 | ||||||||||||
Subordinated liabilities | 23 | 36,804,601 | 38,873,250 | 36,192,737 | ||||||||||||
Other financial liabilities | 24 | 19,300,048 | 17,681,169 | 16,683,478 | ||||||||||||
CHANGES IN THE FAIR VALUE OF HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK | 36 | 806,418 | 440,136 | (516,725 | ) | |||||||||||
HEDGING DERIVATIVES | 11 | 5,191,077 | 5,957,611 | 4,134,571 | ||||||||||||
LIABILITIES ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE | 293,512 | 49,688 | 63,420 | |||||||||||||
LIABILITIES UNDER INSURANCE CONTRACTS | 15 | 16,916,446 | 16,849,511 | 13,033,617 | ||||||||||||
PROVISIONS: | 17,532,739 | 17,736,259 | 16,570,899 | |||||||||||||
Provisions for pensions and similar obligations | 25 | 10,628,684 | 11,198,117 | 11,819,748 | ||||||||||||
Provisions for taxes and other legal contingencies | 25 | 3,283,339 | 2,363,706 | 1,715,967 | ||||||||||||
Provisions for contingent liabilities and commitments | 25 | 641,620 | 678,584 | 636,316 | ||||||||||||
Other provisions | 25 | 2,979,096 | 3,495,852 | 2,398,868 | ||||||||||||
TAX LIABILITIES: | 7,003,945 | 5,768,665 | 6,156,365 | |||||||||||||
Current | 3,337,444 | 2,304,599 | 2,412,133 | |||||||||||||
Deferred | 27 | 3,666,501 | 3,464,066 | 3,744,232 | ||||||||||||
OTHER LIABILITIES | 26 | 7,624,159 | 7,560,995 | 6,387,176 | ||||||||||||
TOTAL LIABILITIES | 1,036,658,816 | 989,630,058 | 855,356,820 | |||||||||||||
EQUITY | ||||||||||||||||
SHAREHOLDERS’ EQUITY: | 30 | 71,831,688 | 65,886,582 | 54,477,846 | ||||||||||||
Share capital | 31 | 4,114,413 | 3,997,030 | 3,127,148 | ||||||||||||
Registered | 4,114,413 | 3,997,030 | 3,127,148 | |||||||||||||
Less: Uncalled capital | — | — | — | |||||||||||||
Share premium | 32 | 29,305,257 | 28,103,802 | 20,370,128 | ||||||||||||
Reserves | 33 | 24,607,287 | 20,868,406 | 16,371,430 | ||||||||||||
Accumulated reserves (losses) | 33 | 24,539,624 | 21,158,869 | 15,475,993 | ||||||||||||
Reserves (losses) of entities accounted for using the equity method | 33 | 67,663 | (290,463 | ) | 895,437 | |||||||||||
Other equity instruments | 34 | 7,188,465 | 7,155,566 | 7,086,881 | ||||||||||||
Equity component of compound financial instruments | — | — | — | |||||||||||||
Other | 7,188,465 | 7,155,566 | 7,086,881 | |||||||||||||
Less: Treasury shares | 34 | (29,755 | ) | (421,198 | ) | (192 | ) | |||||||||
Profit for the year attributable to the Parent | 8,942,538 | 8,876,414 | 9,060,258 | |||||||||||||
Less: Dividends and remuneration | 4 | (2,296,517 | ) | (2,693,438 | ) | (1,537,807 | ) | |||||||||
VALUATION ADJUSTMENTS: | (3,165,104 | ) | (8,299,696 | ) | 722,036 | |||||||||||
Available-for-sale financial assets | 29 | 645,345 | 79,293 | 1,393,202 | ||||||||||||
Cash flow hedges | 11 | (255,498 | ) | (309,883 | ) | (31,051 | ) | |||||||||
Hedges of net investments in foreign operations | 29 | 296,686 | 1,467,289 | 638,474 | ||||||||||||
Exchange differences | 29 | (3,851,826 | ) | (9,424,871 | ) | (1,276,749 | ) | |||||||||
Non-current assets held for sale | 189 | 36,878 | — | |||||||||||||
Entities accounted for using the equity method | 29 | — | (148,402 | ) | (1,840 | ) | ||||||||||
Other valuation adjustments | — | — | — | |||||||||||||
MINORITY INTERESTS: | 28 | 5,204,058 | 2,414,606 | 2,358,269 | ||||||||||||
Valuation adjustments | 45,228 | (371,310 | ) | (73,622 | ) | |||||||||||
Other | 5,158,830 | 2,785,916 | 2,431,891 | |||||||||||||
TOTAL EQUITY | 73,870,642 | 60,001,492 | 57,558,151 | |||||||||||||
TOTAL LIABILITIES AND EQUITY | 1,110,529,458 | 1,049,631,550 | 912,914,971 | |||||||||||||
MEMORANDUM ITEMS: | ||||||||||||||||
CONTINGENT LIABILITIES | 35 | 59,256,076 | 65,323,194 | 76,216,585 | ||||||||||||
CONTINGENT COMMITMENTS | 35 | 163,530,756 | 131,725,006 | 114,676,563 |
F-2
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007 (NOTES 1 TO 4)
(Thousands of euros)
(Debit) Credit | ||||||||||||||||
Notes | 2009 | 2008 | 2007 | |||||||||||||
Interest and similar income | 38 | 53,173,004 | 55,043,546 | 45,512,258 | ||||||||||||
Interest expense and similar charges | 39 | (26,874,462 | ) | (37,505,084 | ) | (31,069,486 | ) | |||||||||
INTEREST INCOME / (CHARGES) | 26,298,542 | 17,538,462 | 14,442,772 | |||||||||||||
Income from equity instruments | 40 | 436,474 | 552,757 | 419,997 | ||||||||||||
Income from companies accounted for using the equity method | 41 | (520 | ) | 791,754 | 438,049 | |||||||||||
Fee and commission income | 42 | 10,726,368 | 9,741,400 | 9,290,043 | ||||||||||||
Fee and commission expense | 43 | (1,646,234 | ) | (1,475,105 | ) | (1,421,538 | ) | |||||||||
Gains/losses on financial assets and liabilities (net) | 44 | 3,801,645 | 2,892,249 | 2,306,384 | ||||||||||||
Held for trading | 2,098,449 | 566,828 | 1,407,938 | |||||||||||||
Other financial instruments at fair value through profit or loss | 197,993 | 607,309 | 125,774 | |||||||||||||
Financial instruments not measured at fair value through profit or loss | 1,630,858 | 1,722,651 | 873,018 | |||||||||||||
Other | (125,655 | ) | (4,539 | ) | (100,346 | ) | ||||||||||
Exchange differences (net) | 45 | 444,127 | 582,215 | 648,528 | ||||||||||||
Other operating income | 7,928,538 | 9,436,308 | 6,739,670 | |||||||||||||
Income from insurance and reinsurance contracts issued | 46 | 7,112,856 | 8,385,788 | 5,529,987 | ||||||||||||
Sales and income from the provision of non-financial services | 46 | 377,800 | 586,872 | 771,027 | ||||||||||||
Other | 46 | 437,882 | 463,648 | 438,656 | ||||||||||||
Other operating expenses | (7,784,621 | ) | (9,164,487 | ) | (6,449,120 | ) | ||||||||||
Expenses of insurance and reinsurance contracts | 46 | (6,773,996 | ) | (8,134,199 | ) | (5,300,054 | ) | |||||||||
Changes in inventories | 46 | (237,396 | ) | (469,154 | ) | (618,955 | ) | |||||||||
Other | 46 | (773,229 | ) | (561,134 | ) | (530,111 | ) | |||||||||
TOTAL INCOME | 40,204,319 | 30,895,553 | 26,414,785 | |||||||||||||
Administrative expenses | (14,824,605 | ) | (11,665,857 | ) | (10,776,670 | ) | ||||||||||
Personnel expenses | 47 | (8,450,283 | ) | (6,813,351 | ) | (6,434,343 | ) | |||||||||
Other general administrative expenses | 48 | (6,374,322 | ) | (4,852,506 | ) | (4,342,327 | ) | |||||||||
Depreciation and amortization | 16 and 18 | (1,596,445 | ) | (1,239,590 | ) | (1,247,207 | ) | |||||||||
Provisions (net) | 25 | (1,792,123 | ) | (1,640,561 | ) | (895,552 | ) | |||||||||
Impairment losses on financial assets (net) | (11,578,322 | ) | (6,283,052 | ) | (3,430,122 | ) | ||||||||||
Loans and receivables | 10 | (11,087,996 | ) | (5,896,888 | ) | (3,420,596 | ) | |||||||||
Other financial instruments not measured at fair value through profit or loss | 8 | (490,326 | ) | (386,164 | ) | (9,526 | ) | |||||||||
Impairment losses on other assets (net) | (164,630 | ) | (1,049,226 | ) | (1,548,218 | ) | ||||||||||
Goodwill and other intangible assets | 17 and 18 | (31,249 | ) | (983,929 | ) | (1,162,872 | ) | |||||||||
Other assets | (133,381 | ) | (65,297 | ) | (385,346 | ) | ||||||||||
Gains/(losses) on disposal of assets not classified as non-current assets held for sale | 49 | 1,565,013 | 101,156 | 1,810,428 | ||||||||||||
Gains/(losses) on disposal of non-current assets held for sale not classified as discontinued operations | 50 | (1,225,407 | ) | 1,730,902 | 643,050 | |||||||||||
OPERATING PROFIT / (LOSS) BEFORE TAX | 10,587,800 | 10,849,325 | 10,970,494 | |||||||||||||
Income tax | 27 | (1,206,610 | ) | (1,836,052 | ) | (2,322,107 | ) | |||||||||
PROFIT FROM CONTINUING OPERATIONS | 9,381,190 | 9,013,273 | 8,648,387 | |||||||||||||
PROFIT / (LOSS) FROM DISCONTINUED OPERATIONS (Net) | 37 | 30,870 | 319,141 | 987,763 | ||||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 9,412,060 | 9,332,414 | 9,636,150 | |||||||||||||
Profit attributable to the Parent | 8,942,538 | 8,876,414 | 9,060,258 | |||||||||||||
Profit attributable to minority interests | 28 | 469,522 | 456,000 | 575,892 | ||||||||||||
EARNINGS PER SHARE | ||||||||||||||||
From continuing and discontinued operations | ||||||||||||||||
Basic earnings per share (euros) | 4 | 1.0454 | 1.2207 | 1.3320 | ||||||||||||
Diluted earnings per share (euros) | 4 | 1.0382 | 1.2133 | 1.3191 | ||||||||||||
From continuing operations | ||||||||||||||||
Basic earnings per share (euros) | 4 | 1.0422 | 1.1780 | 1.2003 | ||||||||||||
Diluted earnings per share (euros) | 4 | 1.0350 | 1.1709 | 1.1887 |
for the year ended December 31, 2009.
F-3
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007 (NOTES 1 TO 4)
(Thousands of euros)
2009 | 2008 | 2007 | ||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 9,412,060 | 9,332,414 | 9,636,150 | |||||||||
OTHER RECOGNIZED INCOME AND EXPENSE | 5,551,130 | (9,319,420 | ) | (2,285,213 | ) | |||||||
Available-for-sale financial assets: | 1,253,709 | (2,043,666 | ) | (766,544 | ) | |||||||
Revaluation gains/(losses) | 2,132,897 | (3,539,079 | ) | 851,460 | ||||||||
Amounts transferred to income statement | (777,149 | ) | 1,571,044 | (1,618,004 | ) | |||||||
Other reclassifications | (102,039 | ) | (75,631 | ) | — | |||||||
Cash flow hedges: | 73,172 | (374,700 | ) | (185,603 | ) | |||||||
Revaluation gains/(losses) | 160,387 | (479,905 | ) | (170,537 | ) | |||||||
Amounts transferred to income statement | (40,852 | ) | 15,060 | (15,066 | ) | |||||||
Amounts transferred to initial carrying amount of hedged items | — | — | — | |||||||||
Other reclassifications | (46,363 | ) | 90,145 | — | ||||||||
Hedges of net investments in foreign operations: | (1,170,603 | ) | 828,815 | 811,977 | ||||||||
Revaluation gains/(losses) | (1,221,590 | ) | 828,815 | 811,977 | ||||||||
Amounts transferred to income statement | 50,987 | — | — | |||||||||
Other reclassifications | — | — | — | |||||||||
Exchange differences: | 5,914,974 | (8,423,459 | ) | (2,062,211 | ) | |||||||
Revaluation gains/(losses) | 5,943,755 | (8,640,444 | ) | (2,122,207 | ) | |||||||
Amounts transferred to income statement | (28,781 | ) | 216,985 | 59,996 | ||||||||
Other reclassifications | — | — | — | |||||||||
Non-current assets held for sale: | (36,830 | ) | 36,878 | — | ||||||||
Revaluation gains/(losses) | (36,830 | ) | — | — | ||||||||
Amounts transferred to income statement | — | — | — | |||||||||
Other reclassifications | — | 36,878 | — | |||||||||
Actuarial gains/(losses) on pension plans | — | — | — | |||||||||
Entities accounted for using the equity method: | 148,402 | (146,562 | ) | (59,277 | ) | |||||||
Revaluation gains/(losses) | — | (149,073 | ) | (59,277 | ) | |||||||
Amounts transferred to income statement | — | 43,728 | — | |||||||||
Other reclassifications | 148,402 | (41,217 | ) | — | ||||||||
Other recognized income and expense | — | — | — | |||||||||
Income tax | (631,694 | ) | 803,274 | (23,555 | ) | |||||||
TOTAL RECOGNIZED INCOME AND EXPENSE | 14,963,190 | 12,994 | 7,350,937 | |||||||||
Attributable to the Parent | 14,077,130 | (145,318 | ) | 6,911,537 | ||||||||
Attributable to minority interests | 886,060 | 158,312 | 439,400 |
F-4
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007 (NOTES 1 TO 4)
(Thousands of euros)
Equity Attributable to the Parent | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(Losses) of | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Entities | Profit | |||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated | Accounted for | Other | Less: | for the Year | Less: | Total | Non- | |||||||||||||||||||||||||||||||||||||||||||||
Share | Share | Reserves | Using the Equity | Equity | Treasury | Attributable to | Dividends and | Shareholders’ | Valuation | Controlling | Total | |||||||||||||||||||||||||||||||||||||||||
Capital | Premium | (Losses) | Method | Instruments | Shares | the Parent | Remuneration | Equity | Adjustments | Total | Interests | Equity | ||||||||||||||||||||||||||||||||||||||||
Ending balance at 12/31/08 | 3,997,030 | 28,103,802 | 21,158,869 | (290,463 | ) | 7,155,566 | (421,198 | ) | 8,876,414 | (2,693,438 | ) | 65,886,582 | (8,299,696 | ) | 57,586,886 | 2,414,606 | 60,001,492 | |||||||||||||||||||||||||||||||||||
Adjustments due to changes in accounting policies | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Adjustments due to errors | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Adjusted beginning balance | 3,997,030 | 28,103,802 | 21,158,869 | (290,463 | ) | 7,155,566 | (421,198 | ) | 8,876,414 | (2,693,438 | ) | 65,886,582 | (8,299,696 | ) | 57,586,886 | 2,414,606 | 60,001,492 | |||||||||||||||||||||||||||||||||||
Total recognized income and expense | — | — | — | — | — | — | 8,942,538 | — | 8,942,538 | 5,134,592 | 14,077,130 | 886,060 | 14,963,190 | |||||||||||||||||||||||||||||||||||||||
Other changes in equity | 117,383 | 1,201,455 | 3,380,755 | 358,126 | 32,899 | 391,443 | (8,876,414 | ) | 396,921 | (2,997,432 | ) | — | (2,997,432 | ) | 1,903,392 | (1,094,040 | ) | |||||||||||||||||||||||||||||||||||
Capital increases | 117,383 | 1,224,930 | (88,431 | ) | — | (3,769 | ) | — | — | — | 1,250,113 | — | 1,250,113 | 2,187,547 | 3,437,660 | |||||||||||||||||||||||||||||||||||||
Capital reductions | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Conversion of financial liabilities into equity | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Increases in other equity instruments | — | — | — | — | 147,805 | — | — | — | 147,805 | — | 147,805 | — | 147,805 | |||||||||||||||||||||||||||||||||||||||
Reclassification of financial liabilities to other equity instruments | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Reclassification of other equity instruments to financial liabilities | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Distribution of dividends | — | — | (2,118,895 | ) | — | — | — | — | (2,296,517 | ) | (4,415,412 | ) | — | (4,415,412 | ) | (232,948 | ) | (4,648,360 | ) | |||||||||||||||||||||||||||||||||
Transactions involving own equity instruments (net) | — | — | 320,761 | — | — | 391,443 | — | — | 712,204 | — | 712,204 | — | 712,204 | |||||||||||||||||||||||||||||||||||||||
Transfers between equity items | — | (23,475 | ) | 5,890,770 | 358,126 | (42,445 | ) | — | (8,876,414 | ) | 2,693,438 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Increases (decreases) due to business combinations | — | — | — | — | — | — | — | — | — | — | — | (10,330 | ) | (10,330 | ) | |||||||||||||||||||||||||||||||||||||
Equity-instrument-based payments | — | — | — | — | (76,252 | ) | — | — | — | (76,252 | ) | — | (76,252 | ) | — | (76,252 | ) | |||||||||||||||||||||||||||||||||||
Other increases/(decreases) in equity | — | — | (623,450 | ) | — | 7,560 | — | — | — | (615,890 | ) | — | (615,890 | ) | (40,877 | ) | (656,767 | ) | ||||||||||||||||||||||||||||||||||
Ending balance at 12/31/09 | 4,114,413 | 29,305,257 | 24,539,624 | 67,663 | 7,188,465 | (29,755 | ) | 8,942,538 | (2,296,517 | ) | 71,831,688 | (3,165,104 | ) | 68,666,584 | 5,204,058 | 73,870,642 | ||||||||||||||||||||||||||||||||||||
F-5
Table of Contents
CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007 (NOTES 1 TO 4)(Continued)
(Thousands of euros)
Equity Attributable to the Parent | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(Losses) of | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Entities | Profit | Non- | ||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated | Accounted for | Other | Less: | for the Year | Less: | Total | Controlling | Total | ||||||||||||||||||||||||||||||||||||||||||||
Share | Share | Reserves | Using the Equity | Equity | Treasury | Attributable to | Dividends and | Shareholders’ | Valuation | Interests | Equity | |||||||||||||||||||||||||||||||||||||||||
Capital | Premium | (Losses) | Method | Instruments | Shares | the Parent | Remuneration | Equity | Adjustments | Total | (*) | (*) | ||||||||||||||||||||||||||||||||||||||||
Ending balance at 12/31/07 | 3,127,148 | 20,370,128 | 15,475,993 | 895,437 | 7,086,881 | (192 | ) | 9,060,258 | (1,537,807 | ) | 54,477,846 | 722,036 | 55,199,882 | 2,358,269 | 57,558,151 | |||||||||||||||||||||||||||||||||||||
Adjustments due to changes in accounting policies | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Adjustments due to errors | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Adjusted beginning balance | 3,127,148 | 20,370,128 | 15,475,993 | 895,437 | 7,086,881 | (192 | ) | 9,060,258 | (1,537,807 | ) | 54,477,846 | 722,036 | 55,199,882 | 2,358,269 | 57,558,151 | |||||||||||||||||||||||||||||||||||||
Total recognized income and expense | — | — | — | — | — | — | 8,876,414 | — | 8,876,414 | (9,021,732 | ) | (145,318 | ) | 158,312 | 12,994 | |||||||||||||||||||||||||||||||||||||
Other changes in equity | 869,882 | 7,733,674 | 5,682,876 | (1,185,900 | ) | 68,685 | (421,006 | ) | (9,060,258 | ) | (1,155,631 | ) | 2,532,322 | — | 2,532,322 | (101,975 | ) | 2,430,347 | ||||||||||||||||||||||||||||||||||
Capital increases | 869,882 | 7,907,651 | (134,197 | ) | — | — | — | — | — | 8,643,336 | — | 8,643,336 | 73,975 | 8,717,311 | ||||||||||||||||||||||||||||||||||||||
Capital reductions | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Conversion of financial liabilities into equity | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Increases in other equity instruments | — | — | — | — | 107,644 | — | — | — | 107,644 | — | 107,644 | — | 107,644 | |||||||||||||||||||||||||||||||||||||||
Reclassification of financial liabilities to other equity instruments | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Reclassification of other equity instruments to financial liabilities | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Distribution of dividends | — | — | (4,070,179 | ) | — | — | — | — | (1,155,631 | ) | (5,225,810 | ) | — | (5,225,810 | ) | (240,620 | ) | (5,466,430 | ) | |||||||||||||||||||||||||||||||||
Transactions involving own equity instruments (net) | — | — | 12,249 | — | — | (421,006 | ) | — | — | (408,757 | ) | — | (408,757 | ) | — | (408,757 | ) | |||||||||||||||||||||||||||||||||||
Transfers between equity items | — | (173,977 | ) | 10,421,154 | (1,185,900 | ) | (1,019 | ) | — | (9,060,258 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Increases (decreases) due to business combinations | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Equity-instrument-based payments | — | — | — | — | (37,940 | ) | — | — | — | (37,940 | ) | — | (37,940 | ) | — | (37,940 | ) | |||||||||||||||||||||||||||||||||||
Other increases/(decreases) in equity | — | — | (546,151 | ) | — | — | — | — | — | (546,151 | ) | — | (546,151 | ) | 64,670 | (481,481 | ) | |||||||||||||||||||||||||||||||||||
Ending balance at 12/31/08 | 3,997,030 | 28,103,802 | 21,158,869 | (290,463 | ) | 7,155,566 | (421,198 | ) | 8,876,414 | (2,693,438 | ) | 65,886,582 | (8,299,696 | ) | 57,586,886 | 2,414,606 | 60,001,492 | |||||||||||||||||||||||||||||||||||
F-6
Table of Contents
CONSOLIDATED STATEMENTS OF CHANGES IN TOTAL EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007 (NOTES 1 TO 4)(Continued)
(Thousands of euros)
Equity Attributable to the Parent | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(Losses) of | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Entities | Profit | Non- | ||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated | Accounted for | Other | Less: | for the Year | Less: | Total | Controlling | Total | ||||||||||||||||||||||||||||||||||||||||||||
Share | Share | Reserves | Using the Equity | Equity | Treasury | Attributable to | Dividends and | Shareholders’ | Valuation | Interests | Equity | |||||||||||||||||||||||||||||||||||||||||
Capital | Premium | (Losses) | Method | Instruments | Shares | the Parent | Remuneration | Equity | Adjustments | Total | (*) | (*) | ||||||||||||||||||||||||||||||||||||||||
Ending balance at 12/31/06 | 3,127,148 | 20,370,128 | 11,491,670 | 797,810 | 62,118 | (126,801 | ) | 7,595,947 | (1,337,218 | ) | 41,980,802 | 2,870,757 | 44,851,559 | 2,220,743 | 47,072,302 | |||||||||||||||||||||||||||||||||||||
Adjustments due to changes in accounting policies | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Adjustments due to errors | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Adjusted beginning balance | 3,127,148 | 20,370,128 | 11,491,670 | 797,810 | 62,118 | (126,801 | ) | 7,595,947 | (1,337,218 | ) | 41,980,802 | 2,870,757 | 44,851,559 | 2,220,743 | 47,072,302 | |||||||||||||||||||||||||||||||||||||
Total recognized income and expense | — | — | — | — | — | — | 9,060,258 | — | 9,060,258 | (2,148,721 | ) | 6,911,537 | 439,400 | 7,350,937 | ||||||||||||||||||||||||||||||||||||||
Other changes in equity | — | — | 3,984,323 | 97,627 | 7,024,763 | 126,609 | (7,595,947 | ) | (200,589 | ) | 3,436,786 | — | 3,436,786 | (301,874 | ) | 3,134,912 | ||||||||||||||||||||||||||||||||||||
Capital increases | — | — | — | — | — | — | — | — | — | — | — | 220,356 | 220,356 | |||||||||||||||||||||||||||||||||||||||
Capital reductions | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Conversion of financial liabilities into equity | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Increases in other equity instruments | — | — | — | — | 7,048,548 | — | — | — | 7,048,548 | — | 7,048,548 | — | 7,048,548 | |||||||||||||||||||||||||||||||||||||||
Reclassification of financial liabilities to other equity instruments | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Reclassification of other equity instruments to financial liabilities | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Distribution of dividends | — | — | (3,117,057 | ) | (139,086 | ) | — | — | — | (200,589 | ) | (3,456,732 | ) | — | (3,456,732 | ) | (360,478 | ) | (3,817,210 | ) | ||||||||||||||||||||||||||||||||
Transactions involving own equity instruments (net) | — | — | 4,575 | — | — | 126,609 | — | — | 131,184 | — | 131,184 | — | 131,184 | |||||||||||||||||||||||||||||||||||||||
Transfers between equity items | — | — | 7,376,694 | 231,371 | (12,118 | ) | — | (7,595,947 | ) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Increases (decreases) due to business combinations | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Equity-instrument-based payments | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Other increases/(decreases) in equity | — | — | (279,889 | ) | 5,342 | (11,667 | ) | — | — | — | (286,214 | ) | — | (286,214 | ) | (161,752 | ) | (447,966 | ) | |||||||||||||||||||||||||||||||||
Ending balance at 12/31/07 | 3,127,148 | 20,370,128 | 15,475,993 | 895,437 | 7,086,881 | (192 | ) | 9,060,258 | (1,537,807 | ) | 54,477,846 | 722,036 | 55,199,882 | 2,358,269 | 57,558,151 | |||||||||||||||||||||||||||||||||||||
F-7
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007 (NOTES 1 TO 4)
(Thousands of euros)
2009 | 2008 | 2007 | ||||||||||
A. CASH FLOWS FROM OPERATING ACTIVITIES | (18,035,526 | ) | 15,827,165 | 31,645,675 | ||||||||
Consolidated profit for the year | 9,412,060 | 9,332,414 | 9,636,150 | |||||||||
Adjustments made to obtain the cash flows from operating activities: | 15,558,115 | 10,254,304 | 9,603,413 | |||||||||
Depreciation and amortization charge | 1,596,445 | 1,269,527 | 1,267,880 | |||||||||
Other adjustments | 13,961,670 | 8,984,777 | 8,335,533 | |||||||||
Net increase/decrease in operating assets: | 23,749,168 | 70,560,851 | 47,926,000 | |||||||||
Financial assets held for trading | (10,145,789 | ) | (8,175,164 | ) | (11,285,918 | ) | ||||||
Other financial assets at fair value through profit or loss | 11,553,038 | (453,996 | ) | (3,578,501 | ) | |||||||
Available-for-sale financial assets | 30,417,303 | (3,249,597 | ) | 6,392,745 | ||||||||
Loans and receivables | (11,195,718 | ) | 79,907,831 | 53,841,742 | ||||||||
Other operating assets | 3,120,334 | 2,531,777 | 2,555,932 | |||||||||
Net increase/decrease in operating liabilities: | (17,729,540 | ) | 68,246,416 | 63,513,210 | ||||||||
Financial liabilities held for trading | (14,436,807 | ) | 11,080,000 | (1,197,432 | ) | |||||||
Other financial liabilities at fair value through profit or loss | 6,729,640 | (11,078,643 | ) | 1,682,061 | ||||||||
Financial liabilities at amortized cost | (10,206,053 | ) | 70,455,437 | 61,529,461 | ||||||||
Other operating liabilities | 183,680 | (2,210,378 | ) | 1,499,120 | ||||||||
Income tax recovered/paid | (1,526,993 | ) | (1,445,118 | ) | (3,181,098 | ) | ||||||
B. CASH FLOWS FROM INVESTING ACTIVITIES | 7,968,968 | 950,026 | (21,144,056 | ) | ||||||||
Payments: | 5,340,862 | 4,241,797 | 26,303,306 | |||||||||
Tangible assets | 1,879,565 | 2,737,784 | 2,797,760 | |||||||||
Intangible assets | 3,222,774 | 750,440 | 1,862,422 | |||||||||
Investments | 13,523 | 753,573 | 12,285,132 | |||||||||
Subsidiaries and other business units | 225,000 | — | — | |||||||||
Non-current assets held for sale and associated liabilities | — | — | 9,357,992 | |||||||||
Held-to-maturity investments | — | — | — | |||||||||
Other payments related to investing activities | — | — | — | |||||||||
Proceeds: | 13,309,830 | 5,191,823 | 5,159,250 | |||||||||
Tangible assets | 1,175,834 | 1,509,291 | 3,496,430 | |||||||||
Intangible assets | 1,320,677 | — | — | |||||||||
Investments | 13,888 | 44,607 | 978,584 | |||||||||
Subsidiaries and other business units | 5,840,956 | 828,346 | — | |||||||||
Non-current assets held for sale and associated liabilities | 4,958,475 | 2,809,579 | 684,236 | |||||||||
Held-to-maturity investments | — | — | — | |||||||||
Other proceeds related to investing activities | — | — | — | |||||||||
C. CASH FLOWS FROM FINANCING ACTIVITIES | (4,651,696 | ) | 432,327 | 6,897,537 | ||||||||
Payments: | 18,281,063 | 14,321,999 | 17,056,690 | |||||||||
Dividends | 4,386,550 | 4,243,021 | 3,456,732 | |||||||||
Subordinated liabilities | 4,245,272 | 1,315,190 | 2,434,893 | |||||||||
Redemption of own equity instruments | — | — | — | |||||||||
Acquisition of own equity instruments | 9,263,615 | 7,842,820 | 8,473,038 | |||||||||
Other payments related to financing activities | 385,626 | 920,968 | 2,692,027 | |||||||||
Proceeds: | 13,629,367 | 14,754,326 | 23,954,227 | |||||||||
Subordinated liabilities | 3,653,548 | 311,835 | 8,329,817 | |||||||||
Issuance of own equity instruments | — | 7,020,677 | — | |||||||||
Disposal of own equity instruments | 9,975,819 | 7,421,814 | 8,599,647 | |||||||||
Other proceeds related to financing activities | — | — | 7,024,763 | |||||||||
D. EFFECT OF FOREIGN EXCHANGE RATE CHANGES | 3,826,322 | (2,490,948 | ) | (171,530 | ) | |||||||
E. NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | (10,891,932 | ) | 14,718,570 | 17,227,626 | ||||||||
F. CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 45,781,345 | 31,062,775 | 13,835,149 | |||||||||
G. CASH AND CASH EQUIVALENTS AT END OF YEAR | 34,889,413 | 45,781,345 | 31,062,775 | |||||||||
COMPONENTS OF CASH AND CASH EQUIVALENTS AT END OF YEAR | ||||||||||||
Cash | 5,171,858 | 4,407,124 | 3,292,536 | |||||||||
Cash equivalents at central banks | 29,717,555 | 41,374,221 | 27,770,239 | |||||||||
Other financial assets | — | — | — | |||||||||
Less: Bank overdrafts refundable on demand | — | — | — | |||||||||
TOTAL CASH AND CASH EQUIVALENTS AT END OF YEAR | 34,889,413 | 45,781,345 | 31,062,775 | |||||||||
for the year ended December 31, 2009.
F-8
Table of Contents
for the year ended December 31, 2009
1. | Introduction, basis of presentation of the consolidated financial statements and other information |
a) | Introduction |
b) | Basis of presentation of the consolidated financial statements |
F-9
Table of Contents
• | The following standards and interpretations, which were adopted in full by the European Union, came into force in 2009: |
• | IFRS 8, Operating Segments: this standard replaces IAS 14. A management approach is adopted for reporting on the financial performance of the business segments. The information to be reported will be that used internally by management to assess the performance of the segments and to allocate resources among them. |
• | Revision of IAS 23, Borrowing Costs: the option of the immediate recognition as an expense of the borrowing costs relating to assets that take a substantial period of time to get ready for use or sale is eliminated and, therefore, these borrowing costs must be capitalized. |
• | Revision of IAS 1, Presentation of Financial Statements: introduces certain changes in the presentation of financial statements. The statement of changes in equity will only include changes in equity arising from transactions with owners acting in their capacity as owners. As regards non-owner changes (e.g. transactions with third parties or income and expenses recognized directly in equity), the revised standard provides the option of presenting income and expense items and components of other comprehensive income either in a single statement of comprehensive income with subtotals or in two separate statements. IAS 1 also introduces new reporting requirements when the entity applies a change in accounting policy retrospectively, makes a restatement or reclassifies items in previously issued statements. |
• | The balance sheet becomes the statement of financial position. | ||
• | The income statement becomes the separate income statement. | ||
• | The statement of recognized income and expense becomes the statement of comprehensive income. | ||
• | The statement of changes in total equity becomes the statement of changes in equity. | ||
• | The title of the statement of cash flows remains unchanged. |
• | Amendment to IFRS 2, Share-based Payment: the objective of the amendment is basically to clarify the concepts of vesting conditions and cancellations in share-based payments. |
• | Amendments to IAS 32, Financial Instruments: Presentation and IAS 1, Presentation of Financial Statements: the amendments will permit certain financial instruments, whose features include that of being redeemable, to be classified as equity, provided that they meet certain criteria including that of being the most subordinated class, and provided that they evidence a residual interest in the net assets of the entity. |
• | Amendments to IFRS 7, Financial Instruments — Disclosures: the objective of these amendments is basically to enhance the disclosure requirements with respect to fair value measurements and liquidity risk. |
• | Amendments to IAS 39 and IFRIC 9, clarifying the treatment of embedded derivatives for companies that have applied the amendment to IAS 39 on reclassifications. These amendments clarify that when a financial asset is reclassified out of the fair value through profit or loss category, all the embedded derivatives must be assessed and, if necessary, accounted for separately in the financial statements. The Group did not apply these amendments, since it has not performed any such reclassifications. |
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Table of Contents
• | IFRIC 14 IAS 19, The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction: this interpretation provides general guidance on how to ascertain the limit in IAS 19, Employee Benefits, on the amount of the surplus that can be recognized as an asset. It also explains how pension assets or liabilities can be affected when there is a statutory or contractual minimum funding requirement and establishes that the entity needs to recognize an additional liability if it has a contractual obligation to make additional contributions to the plan and its capacity to recover them is restricted. The interpretation standardizes the practice and ensures that the entities recognize an asset in relation to a surplus on a consistent basis. |
• | IFRIC 15, Agreements for the Construction of Real Estate: this interpretation clarifies the recognition of revenue and expenses associated with the construction of real estate. |
• | IFRIC 16, Hedges of a Net Investment in a Foreign Operation: this interpretation clarifies the following matters: firstly, the exposure to foreign exchange differences between the functional currency of the foreign operation and the presentation currency of the parent cannot be designated as a hedged risk, and only the foreign currency exposure arising between the functional currency of the parent and that of its foreign operation qualifies for hedge accounting; secondly, the hedging instrument used to hedge the net investment may be held by any entity within the group, not necessarily by the parent of the foreign operation; and, lastly, it addresses how an entity should determine the amounts to be reclassified from equity to profit or loss on disposal of the foreign operation. |
• | Also, at the date of preparation of these consolidated financial statements the following standards and interpretations with effective dates subsequent to December 31, 2009 were in force: |
• | Amendments to IFRS 2, Share-based Payment: these amendments relate to the recognition of share-based payment transactions among group entities. The main change is that the amendments supersede IFRIC 8 and IFRIC 11 and, accordingly, these interpretations will be repealed since their content is included in the main body of the standard. It is clarified that an entity that receives services from employees or suppliers should account for the transaction even if another group entity settles the arrangement and irrespective of whether it is cash-settled or equity-settled. |
• | Revision of IFRS 3, Business Combinations and Amendment to IAS 27, Consolidated and Separate Financial Statements (obligatory for years beginning on or after July 1, 2009): introduce significant changes in several matters relating to accounting for business combinations. These changes include most notably the following: acquisition costs must be expensed, rather than recognized as an increase in the cost of the business combination; in step acquisitions the acquirer must remeasure at fair value the investment held prior to the date that control is obtained; and there is an option to measure at fair value the non-controlling interests of the acquire, as opposed to the single current treatment of measuring them as the proportionate share of the fair value of the net assets acquired. Since the standard will be applied prospectively, and is applicable from January 1, 2010, in general the directors do not expect it to have a significant effect on the business combinations performed. |
• | Amendment to IAS 39, Eligible Hedged Items (obligatory for years beginning on or after July 1, 2009): this amendment establishes that inflation may only be designated as a hedged item if it is a contractually specified portion of the cash flows to be hedged. Only the intrinsic value and not the time value of a purchased option may be used as a hedging instrument. |
• | Amendment to IAS 32, Classification of Rights Issues (obligatory for years beginning on or after February 1, 2010): this amendment relates to the classification of foreign currency denominated rights issues (rights, options or warrants). Pursuant to this amendment, when these rights are to acquire a fixed number of shares in exchange for a fixed amount, they are equity instruments, irrespective of the currency in which that fixed amount is denominated and provided that other requirements of the standard are fulfilled. |
• | IFRIC 12, Service Concession Arrangements (obligatory following its adoption by the European Union for years beginning on or after April 1, 2009): owing to the nature of this interpretation, its application does not affect the consolidated financial statements. |
• | IFRIC 17, Distributions of Non-cash Assets to Owners (obligatory for years beginning on or after July 1, 2009): this interpretation addresses the accounting treatment of the distribution of non-cash assets to owners (dividends payable), although its scope does not include distributions of assets within a group or between entities under common control. The interpretation requires an entity to measure such liabilities at the fair value of the asset to be distributed and to recognize any difference between the carrying amount of the dividend payable and the carrying amount of the asset distributed in profit or loss. |
• | IFRIC 18, Transfers of Assets from Customers (obligatory for years beginning on or after July 1, 2009): this interpretation clarifies the requirements for agreements in which an entity receives from customers items of property, plant or equipment (or cash to construct such items) that must be used to connect those customers to a network (e.g. electricity, gas or water supply). |
F-11
Table of Contents
• | At the date of preparation of these consolidated financial statements, the following standards and interpretations had not yet been adopted by the European Union: |
• | Revision of IAS 24, Related Party Disclosures: the revised IAS 24 addresses related party disclosures in financial statements. There are two new basic features. Firstly, it provides a partial exemption from certain disclosure requirements when the transactions are between State-controlled entities or government-related entities (or equivalent government institution) and, secondly, it simplifies the definition of a related party, clarifying its intended meaning and eliminating inconsistencies from the definition. |
• | Amendments to IFRIC 14, Prepayments of a Minimum Funding Requirement: these amendments remedy the fact that in some circumstances entities could not recognize certain voluntary prepayments as assets. |
• | IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments: this interpretation addresses the accounting by a debtor when all or part of a financial liability is extinguished through the issue of equity instruments to the creditor. The interpretation does not apply to transactions in situations where the counterparties in question are shareholders or related parties, acting in their capacity as such, or where extinguishing the financial liability by issuing equity instruments is in accordance with the original terms of the financial liability. In this case, the equity instruments issued are measured at fair value at the date the liability is extinguished and any difference between this value and the carrying amount of the liability is recognized in profit or loss. |
• | Lastly, it should be noted that the adoption of IFRS 9, Financial Instruments: Classification and Measurement, which will in the future replace the part of the current IAS 39 relating to the classification and measurement of financial assets, has been postponed by the European Union. IFRS 9 presents significant differences with respect to the current standard, including the approval of a new classification model based on only two categories, namely instruments measured at amortized cost and those measured at fair value, the disappearance of the current Held-to-maturity investments and Available-for-sale financial assets categories, impairment analyses only for assets measured at amortized cost and the non-separation of embedded derivatives in financial contracts. |
• | Royal Decree-Law 6/2008, of 10 October, creating the Fund for the Acquisition of Financial Assets (FAAF), and Ministry of Economy and Finance Order EHA/3118/2008, of 31 October, implementing the aforementioned Royal Decree-Law. The purpose of the FAAF is to use Public Treasury money and market criteria to acquire, by means of the auction procedure, financial instruments issued by Spanish credit institutions and securitization special-purpose vehicles, backed by loans granted to individuals, companies and non-financial entities. |
F-12
Table of Contents
• | Royal Decree-Law 7/2008, of 13 October, on Urgent Economic Measures in relation to the Concerted European Action Plan of the Euro Area Countries, and Ministry of Economy and Finance Order EHA/3364/2008, of 21 November, implementing Article 1 of the aforementioned Royal Decree-Law, which includes the following measures, applicable until December 31, 2009. Firstly, the grant of State guarantees for the issues of promissory notes, bonds and debentures launched by credit institutions resident in Spain which meet certain requirements; and, secondly, the exceptional authorization for the Ministry of Economy and Finance to acquire securities, including preferred participating securities and non-voting equity units, issued by credit institutions resident in Spain which need to strengthen their capital and request such acquisition. |
• | Other assets and Other liabilities group together the balance sheet line items Prepayments and accrued income and Other assets, and Accrued expenses and deferred income and Other liabilities, respectively, included in the Group’s consolidated financial statements for 2007. |
• | The balance of Equity having the substance of a financial liability (because it is not refundable on demand) was transferred to financial liabilities at amortized cost on the liability side of the consolidated balance sheet. |
• | A new item included in the valuation adjustments in consolidated equity entitled Entities accounted for using the equity method was created, which includes separately the valuation adjustments recognized in equity originating from associates accounted for using the equity method. |
• | Balances with central banks are classified in the corresponding portfolios. |
• | A new Interest income margin is introduced which is calculated as the difference between Interest and similar income and Interest expense and similar charges. The aforementioned interest currently also includes financial income and expenses from insurance activities and other non-financial activities that used to be presented separately. |
• | Income and expenses from the Group’s insurance activity are no longer grouped together as a separate item and are recognized, according to their nature, under the various consolidated income statement items, with the consequent effect on each margin and item in this statement. |
• | A new margin entitled Total income is presented which is similar to the former Gross income (now eliminated), except, basically, for the fact that it includes other operating income and expenses, which formerly were not part of total income, and for the effect of including the interest expenses and financial charges from non-financial activities according to their nature. |
• | Sales and income from the provision of non-financial services and Cost of sales are excluded and these items are recognized mainly under Other operating income and Other operating expenses, respectively. |
F-13
Table of Contents
• | The balance of Impairment losses (net) is split into two line items: Impairment losses on financial assets (net), which includes net impairment losses on financial assets other than equity instruments classified as Investments; and Impairment losses on other assets (net), which includes the net impairment losses on equity instruments classified as Investments and on other non-financial assets. |
• | Net operating income is eliminated and Profit from operations is created. The difference between the two margins is basically that the latter includes the finance income and costs from the Group’s non-financial activities, the net charge to impairment losses on financial instruments and the net charge to provisions. |
• | The line items Other gains and Other losses are eliminated. They are replaced by the line items: Gains/(losses) on disposal of assets not classified as non-current assets held for sale and Gains/(losses) on disposal of non-current assets held for sale not classified as discontinued operations, which include mainly the balances of the excluded line items mentioned above. The remaining gains or losses which were recognized in the two eliminated line items and are not now included in the aforementioned two new line items have been classified according to their nature in the consolidated income statement. |
c) | Use of estimates |
• | The impairment losses on certain assets (see Notes 6, 7, 8, 10, 12, 13, 16, 17 and 18); |
• | The assumptions used in the actuarial calculation of the post-employment benefit liabilities and commitments and other obligations (see Note 25); | ||
• | The useful life of the tangible and intangible assets (see Notes 16 and 18); | ||
• | The measurement of goodwill arising on consolidation (see Note 17); and | ||
• | The fair value of certain unquoted assets (see Notes 7, 8, 9 and 11). |
d) | Other matters |
i. | Disputed corporate resolutions |
F-14
Table of Contents
F-15
Table of Contents
ii. | Credit assignment transactions |
e) | Capital management |
F-16
Table of Contents
f) | Environmental impact | ||
In view of the business activities carried on by the Group entities, the Group does not have any environmental liability, expenses, assets, provisions or contingencies that might be material with respect to its consolidated equity, financial position or results. Therefore, no specific disclosures relating to environmental issues are included in these notes to the consolidated financial statements. | |||
g) | Events after the reporting period |
F-17
Table of Contents
h) | Comparative information | ||
As indicated in Note 1-b above, the comparative information for 2007 was modified in 2008 to adapt its presentation to the presentation formats of the main financial statements established in Bank of Spain Circular 6/2008, of 26 November. | |||
Also, the consolidated income statements for 2008 and 2007 included in these consolidated financial statements differ from those published in the statutory consolidated financial statements for those years, since, as a result of the Group’s divestment of the business in Venezuela through the sale of Banco de Venezuela, S.A., Banco Universal (see Note 3), the results arising from the consolidation of this company (€332 million and€191 million in 2008 and 2007, respectively) were reclassified, pursuant to current accounting regulations, from each of the line items in which they were previously recognized to Profit from discontinued operations. |
• | Banco Real has been fully consolidated in the Group’s consolidated financial statements since the fourth quarter of 2008; until then, it had been accounted for using the equity method through the ownership interest in RFS Holdings. Also, in the second half of 2008 the Group acquired, inter alia, Alliance & Leicester and the distribution channels and retail deposits of Bradford & Bingley, and in the first half of 2009 it acquired various companies (see Note 3), including most notably Sovereign Bancorp (which changed its name to Santander Holdings USA, Inc. on February 1, 2010), all of which have been fully consolidated since their respective acquisition dates. |
• | In 2009 the Group obtained extraordinary gains totaling€2,587 million, net of tax, which were allocated in full to extraordinary write-downs. Accordingly, the net gains arising from the public offering of Banco Santander Brasil (€1,499 million, recognized under Gains/(losses) on disposal of assets not classified as non-current assets held for sale — see Note 49) and from the exchange of issues (€724 million — see Note 44), and other gains on the sale of 10% of Attijariwafa Bank and other transactions (€364 million) were allocated to provisions to credit loss allowances (€1,041 million), to the write-down of assets acquired (€554 million — see Note 50), to the write-down of the ownership interest held in Metrovacesa (€269 million — see Note 8), to additions to provisions for restructuring costs (€260 million, recognized under Provisions (net)) and to other provisions and write-downs (€463 million, including provisions for early retirement benefits recognized under Provisions (net)), all net of taxes and minority interests. |
• | In 2008 the Group obtained extraordinary gains totaling€3,572 million, net of tax, which were allocated in full to extraordinary write-downs. Accordingly, the net gains arising from the sale of the Business Campus (€586 million, recognized gross under Gains/(losses) on disposal of non-current assets held for sale not classified as discontinued operations — see Note 50), ABN’s liabilities (€741 million, recognized under Gains/losses on financial assets and liabilities (net) — see Note 44) and the Italian businesses acquired from ABN (€2,245 million, recognized gross under Gains/(losses) on disposal of non-current assets held for sale not classified as discontinued operations - see Note 50) were allocated to the write-down of the ownership interests in Fortis and The Royal Bank of Scotland (€1,430 million, recognized gross under Gains/(losses) on disposal of non-current assets held for sale not classified as discontinued operations — see Note 50), to the write-down of the intangible assets of Abbey (€904 million, recognized under Impairment losses on other assets (net) — see Note 18), to additions to provisions for restructuring costs and for early retirement benefits (€386 million and€382 million, respectively, recognized under Provisions (net)), to the amortization of goodwill at the Santander Consumer Finance Group and portfolio write-downs (€295 million) and to other period provisions (€175 million). |
F-18
Table of Contents
• | The gains arising in 2007 on the disposal of the investment in Intesa Sanpaolo and of the properties in Spain (€566 million and€1,620 million, respectively, recognized under Gains on disposal of non-current assets held for sale not classified as discontinued operations and Gains on disposal of assets not classified as non-current assets held for sale — see Notes 50 and 49), the proceeds from the divestment of the pensions business in Latin America (€831 million, recognized under Profit/loss from discontinued operations - see Note 37) and the gains on the disposal of the investment in Banco Português do Investimento (€107 million, recognized under Gains/losses on financial assets and liabilities — see Note 44) were allocated to the write-down of the investment in Sovereign (€1,053 million — see Note 13.c), to the write-down of intangible assets (€542 million — see Note 18), to the recognition of special provisions for retirement and pension plans (€317 million — see Note 25) and to other provisions and write-downs (€117 million). Therefore, the gross gains obtained in 2007 (€3,124 million) contributed€950 million, after the aforementioned allocations and net of tax and non-controlling interests, to Profit attributable to the Parent. |
2. | Accounting policies and measurement bases |
a) | Foreign currency transactions |
i. | Functional currency |
ii. | Translation of foreign currency balances |
• | Translation of foreign currency to the functional currency (currency of the main economic environment in which the Group operates), and |
• | Translation to euros of the balances held in the functional currencies of entities whose functional currency is not the euro. |
• | Non-monetary items measured at historical cost are translated to the functional currency at the exchange rate at the date of acquisition. |
• | Non-monetary items measured at fair value are translated at the exchange rate at the date when the fair value was determined. |
• | Income and expenses are translated at the average exchange rates for the period for all the transactions performed during the year. When applying this criterion, the Group considers whether there have been significant changes in the exchange rates in the year which, in view of their materiality with respect to the consolidated financial statements taken as a whole, would make it necessary to use the exchange rates at the transaction date rather than the aforementioned average exchange rates. |
• | The balances arising from non-hedging forward foreign currency/foreign currency and foreign currency/euro purchase and sale transactions are translated at the closing rates prevailing in the forward foreign currency market for the related maturity. |
F-19
Table of Contents
• | Assets and liabilities, at the closing rates. | ||
• | Income and expenses, at the average exchange rates for the year. | ||
• | Equity items, at the historical exchange rates. |
iii. | Recognition of exchange differences |
iv. | Entities located in hyperinflationary economies |
v. | Exposure to foreign currency risk |
F-20
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Millions of euros | ||||||||||||||||||||||||
Effect on consolidated equity | Effect on consolidated profit | |||||||||||||||||||||||
Currency | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | ||||||||||||||||||
US dollar | — | — | — | 2.8 | 3.9 | 20.1 | ||||||||||||||||||
Chilean peso | (12.7 | ) | (12.4 | ) | (13.7 | ) | 7.0 | 3.1 | — | |||||||||||||||
Pound sterling | (21.5 | ) | (5.2 | ) | (4.3 | ) | 16.2 | 14.4 | 12.2 | |||||||||||||||
Mexican peso | (20.5 | ) | (23.1 | ) | (16.3 | ) | 4.7 | 3.6 | — | |||||||||||||||
Brazilian real | (111.4 | ) | (60.1 | ) | (68.5 | ) | — | 13.6 | — |
Millions of euros | ||||||||||||||||||||||||
Effect on consolidated equity | Effect on consolidated profit | |||||||||||||||||||||||
Currency | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | ||||||||||||||||||
US dollar | — | — | — | (2.8 | ) | (4.0 | ) | (20.5 | ) | |||||||||||||||
Chilean peso | 12.9 | 12.6 | 14.6 | (7.2 | ) | (3.0 | ) | — | ||||||||||||||||
Pound sterling | 21.9 | 5.3 | 8.5 | (16.5 | ) | (14.7 | ) | (12.5 | ) | |||||||||||||||
Mexican peso | 16.5 | 26.8 | 16.5 | (4.8 | ) | (3.6 | ) | — | ||||||||||||||||
Brazilian real | 81.9 | 65.2 | 69.4 | — | (13.4 | ) | — |
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b) | Basis of consolidation |
i. | Subsidiaries |
ii. | Interests in joint ventures (jointly controlled entities) |
iii. | Associates |
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iv. | Special purpose entities |
v. | Other matters |
vi. | Business Combinations |
• | The Group measures the cost of the business combination, defined as the fair value of the assets given, the liabilities incurred and the equity instruments issued, if any, by the entity, plus any cost directly attributable to the business combinations, including the fees paid to the auditors, legal advisers, investment banks and other consultants. In 2009€5.7 million were paid to the auditors for the half-yearly audits required by the Group (in 2008€6.2 million were recognized as an increase in the cost of the business combinations effected in that year). |
• | The fair values of the assets, liabilities and contingent liabilities of the acquired entity or business, including any intangible assets which might not have been recognized by the acquired, are estimated and recognized in the consolidated balance sheet. |
• | Any negative difference between the net fair value of the assets, liabilities and contingent liabilities of the acquired and the cost of the business combination is recognized as discussed in Note 2-m; any positive difference is recognized in Negative goodwill on business combinations in the consolidated income statement. |
vii. | Acquisitions and disposals |
c) | Definitions and classification of financial instruments |
i. | Definitions |
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• | Investments in subsidiaries, jointly controlled entities and associates (see Note 13). | ||
• | Rights and obligations under employee benefit plans (see Note 25). | ||
• | Rights and obligations under insurance contracts (see Note 15). |
• | Contracts and obligations relating to employee remuneration based on own equity instruments (see Note 34). |
ii. | Classification of financial assets for measurement purposes |
• | Financial assets held for trading (at fair value through profit or loss): this category includes the financial assets acquired for the purpose of generating a profit in the near term from fluctuations in their prices and financial derivatives that are not designated as hedging instruments. |
• | Other financial assets at fair value through profit or loss: this category includes hybrid financial assets not held for trading that are measured entirely at fair value and financial assets not held for trading that are included in this category in order to obtain more relevant information, either because this eliminates or significantly reduces recognition or measurement inconsistencies (accounting mismatches) that would arise from measuring assets or liabilities or recognizing the gains or losses on them on different bases, or because a group of financial assets or financial assets and liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided on that basis to the Group’s key management personnel. Financial assets may only be included in this category on the date they are acquired or originated. |
• | Available-for-sale financial assets: this category includes debt instruments not classified as Held-to-maturity investments, Loans and receivables or Financial assets at fair value through profit or loss, and equity instruments issued by entities other than subsidiaries, associates and jointly controlled entities, provided that such instruments have not been classified as Financial assets held for trading or as Other financial assets at fair value through profit or loss. |
• | Loans and receivables; this category includes the investment arising from ordinary lending activities, such as the cash amounts of loans drawn down and not yet repaid by customers or the deposits placed with other institutions, whatever the legal instrument, unquoted debt securities and the debt incurred by the purchasers of goods, or the users of services, constituting part of the Group’s business. |
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• | Held-to-maturity investments: this category includes debt instruments traded in an active market, with fixed maturity and with fixed or determinable payments, for which the Group has both the intention and proven ability to hold to maturity. |
iii. | Classification of financial assets for presentation purposes |
• | Cash and balances with central banks: cash balances and balances receivable on demand relating to deposits with the Bank of Spain and other central banks. |
• | Loans and advances: includes the debit balances of all credit and loans granted by the Group, other than those represented by securities, as well as finance lease receivables and other debit balances of a financial nature in favor of the Group, such as cheques drawn on credit institutions, balances receivable from clearing houses and settlement agencies for transactions on the stock exchange and organized markets, bonds given in cash, capital calls, fees and commissions receivable for financial guarantees and debit balances arising from transactions not originating in banking transactions and services, such as the collection of rentals and similar items. They are classified, depending on the institutional sector to which the borrower belongs, under: |
• | Loans and advances to credit institutions: credit of any nature, including credit received and money market operations in the name of credit institutions. |
• | Loans and advances to customers: includes the debit balances of all the remaining credit and loans granted by the Group, other than those represented by securities, including money market operations through central counterparties. |
• | Debt instruments: bonds and other securities that represent a debt for their issuer, that generate an interest return, and that are in the form of certificates or book entries. |
• | Other equity instruments: financial instruments issued by other entities, such as shares, which have the nature of equity instruments for the issuer, unless they are investments in subsidiaries, jointly controlled entities or associates. Investment fund units are included in this item. |
• | Trading derivatives: includes the fair value in favor of the Group of derivatives which do not form part of hedge accounting, including embedded derivatives separated from hybrid financial instruments. |
• | Changes in the fair value of hedged items in portfolio hedges of interest rate risk: this item is the balancing entry for the amounts credited to the consolidated income statement in respect of the measurement of the portfolios of financial instruments which are efficiently hedged against interest rate risk through fair value hedging derivatives. |
• | Hedging derivatives: includes the fair value in favor of the Group of derivatives designated as hedging instruments in hedge accounting, including the embedded derivatives separated from hybrid financial instruments designated as hedging instruments in hedge accounting. | ||
• | Investments: includes the investments in the share capital of associates. |
iv. | Classification of financial liabilities for measurement purposes |
• | Financial liabilities held for trading (at fair value through profit or loss): this category includes the financial liabilities issued for the purpose of generating a profit in the near term from fluctuations in their prices, financial derivatives not considered to qualify for hedge accounting and financial liabilities arising from the outright sale of financial assets purchased under resale agreements or borrowed (short positions). |
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• | Other financial liabilities at fair value through profit or loss: financial liabilities are included in this category when more relevant information is obtained, either because this eliminates or significantly reduces recognition or measurement inconsistencies (accounting mismatches) that would arise from measuring assets or liabilities or recognizing the gains or losses on them on different bases, or because a group of financial liabilities or financial assets and liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided on that basis to the Group’s key management personnel. |
• | Financial liabilities at amortized cost: financial liabilities, irrespective of their instrumentation and maturity, not included in any of the above-mentioned categories which arise from the funding-taking activities carried on by financial institutions. |
v. | Classification of financial liabilities for presentation purposes |
• | Deposits: includes all repayable balances received in cash by the Group, other than instruments such as renegotiable securities and those having the substance of subordinated liabilities. This item also includes cash bonds and cash consignments the amount of which may be invested without restriction. Deposits are classified on the basis of the creditor’s institutional sector into: |
• | Deposits from central banks: deposits of any nature, including credit received and money market operations received from the Bank of Spain or other central banks. |
• | Deposits from credit institutions: deposits of any nature, including credit received and money market operations in the name of credit institutions. |
• | Customer deposits: includes all repayable balances received in cash by the Group, other than those represented by marketable securities, money market operations through central counterparties, subordinated liabilities and deposits from central banks and credit institutions. |
• | Marketable debt securities: includes the amount of bonds and other debt represented by marketable securities, other than subordinated liabilities. This item includes the component considered to be a financial liability of issued securities that are compound financial instruments. |
• | Trading derivatives: includes the fair value, with a negative balance for the Group, of derivatives, including embedded derivatives separated from the host contract, which do not form part of hedge accounting. |
• | Short positions: includes the amount of financial liabilities arising from the outright sale of financial assets purchased under reverse repurchase agreements or borrowed. |
• | Subordinated liabilities: amount of financing received which, for the purposes of payment priority, ranks behind ordinary debt. This category also includes the financial instruments issued by the Group which, although equity for legal purposes, do not meet the requirements for classification as equity, such as certain preference shares issued. |
• | Other financial liabilities: includes the amount of payment obligations having the nature of financial liabilities not included in other items, and liabilities under financial guarantee contracts, unless they have been classified as doubtful. |
• | Changes in the fair value of hedged items in portfolio hedges of interest rate risk: this item is the balancing entry for the amounts charged to the consolidated income statement in respect of the measurement of the portfolios of financial instruments which are efficiently hedged against interest rate risk through fair value hedging derivatives. |
• | Hedging derivatives: includes the fair value of the Group’s liability in respect of derivatives, including embedded derivatives separated from hybrid financial instruments, designated as hedging instruments in hedge accounting. |
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d) | Measurement of financial assets and liabilities and recognition of fair value changes |
i. | Measurement of financial assets |
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ii. | Measurement of financial liabilities |
iii. | Valuation techniques |
Millions of euros | ||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||
Published | Published | Published | ||||||||||||||||||||||||||||||||||
price | price | price | ||||||||||||||||||||||||||||||||||
quotations | quotations | quotations | ||||||||||||||||||||||||||||||||||
in active | Internal | in active | Internal | in active | Internal | |||||||||||||||||||||||||||||||
markets | models | Total | markets | models | Total | markets | models | Total | ||||||||||||||||||||||||||||
Financial assets held for trading | 61,056 | 73,998 | 135,054 | 51,947 | 99,870 | 151,817 | 76,310 | 82,497 | 158,807 | |||||||||||||||||||||||||||
Other financial assets at fair value through profit or loss | 8,938 | 28,876 | 37,814 | 6,137 | 19,680 | 25,817 | 6,945 | 17,884 | 24,829 | |||||||||||||||||||||||||||
Available-for-sale financial assets | 75,469 | 11,152 | 86,621 | 43,747 | 5,173 | 48,920 | 37,908 | 6,441 | 44,349 | |||||||||||||||||||||||||||
Hedging derivatives (assets) | 1,226 | 6,608 | 7,834 | 244 | 9,454 | 9,698 | — | 3,063 | 3,063 | |||||||||||||||||||||||||||
Financial liabilities held for trading | 12,013 | 103,503 | 115,516 | 12,265 | 124,355 | 136,620 | 24,447 | 98,951 | 123,398 | |||||||||||||||||||||||||||
Other financial liabilities at fair value through profit or loss | — | 42,371 | 42,371 | — | 28,639 | 28,639 | 117 | 39,601 | 39,718 | |||||||||||||||||||||||||||
Hedging derivatives (liabilities) | 318 | 4,873 | 5,191 | 261 | 5,697 | 5,958 | 111 | 4,024 | 4,135 | |||||||||||||||||||||||||||
Liabilities under insurance contracts | 5,006 | 11,910 | 16,916 | 5,286 | 11,564 | 16,850 | 5,678 | 7,356 | 13,034 |
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• | In the valuation of financial instruments permitting static hedging (basically forwards and swaps) and in the valuation of loans and advances to customers, the present value method is used. Estimated future cash flows are discounted using the interest rate curves of the related currencies. The interest rate curves are generally observable market data. |
• | In the valuation of financial instruments requiring dynamic hedging (basically structured options and other structured instruments), the Black-Scholes model is normally used. Where appropriate, observable market inputs are used to obtain factors such as the bid-offer spread, exchange rates, volatility, correlation between indices and market liquidity. In certain very specific cases, unobservable market inputs can be used, such as the volatility of the UK Halifax House Price Index (HPI), the estimated future HPI growth, the HPI spot rate, and mortality. |
• | In the valuation of certain financial instruments exposed to interest rate risk, such as interest rate futures, caps and floors, the present value method (futures) and the Black-Scholes model (plain vanilla options) are used; in the case of more structured instruments requiring dynamic hedging, the Heath-Jarrow-Morton and Hull-White models are used. The main inputs used in these models are basically observable market data, including the related interest rate curves, volatilities, correlations and exchange rates. In certain very specific cases, unobservable market inputs can be used, such as the volatility of the UK Halifax House Price Index (HPI), the estimated future HPI growth, the HPI spot rate, mortality, and the credit spread for the specific financial instrument. |
• | In the case of linear instruments (e.g. credit risk and fixed-income derivatives), credit risk is measured using dynamic models similar to those used in the measurement of interest rate risk. In the case of non-linear instruments, if the portfolio is exposed to credit risk (e.g. credit derivatives), the joint probability of default is determined using the Standard Gaussian Copula model. The main inputs used to determine the underlying cost of credit of credit derivatives are quoted credit risk premiums and the correlation between the quoted credit derivatives of various issuers. |
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Figures in millions of euros | ||||||||||||||||||||||||
Fair values | Fair values | Fair values | ||||||||||||||||||||||
calculated | calculated | calculated | Effect of reasonable | |||||||||||||||||||||
using | using | using | assumptions on fair | |||||||||||||||||||||
internal | internal | internal | values at 12/31/09 | |||||||||||||||||||||
models at | models at | models at | More | Less | ||||||||||||||||||||
12/31/09 | 12/31/08 | 12/31/07 | Valuation techniques | Main assumptions | favorable | favorable | ||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||
Financial assets held for trading | 73,998 | 99,870 | 82,490 | |||||||||||||||||||||
Loans and advances to credit institutions | 5,953 | 5,150 | 12,295 | Present Value Method | Observable market data | 352 | (255 | ) | ||||||||||||||||
Loans and advances to customers (b) | 10,076 | 684 | 23,704 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Debt and equity interests | 4,898 | 6,074 | 2,087 | Present Value Method | Observable market data, HPI | 1 | (1 | ) | ||||||||||||||||
Trading derivatives | 53,070 | 87,962 | 44,404 | 350 | (253 | ) | ||||||||||||||||||
Swaps | 26,390 | 72,693 | 28,312 | Present Value Method, Gaussian Copula (c) | Observable market data, liquidity | 17 | (e) | (17 | )(e) | |||||||||||||||
Exchange rate options | 818 | 3,524 | 375 | Black-Scholes Model | Observable market data, liquidity | 3 | (e) | (3 | )(e) | |||||||||||||||
Interest rate options | 17,185 | 4,926 | 8,683 | Black-Scholes Model Heath-Jarrow-Morton Model | Observable market data, liquidity, correlation | 130 | (e) | (122 | )(e) | |||||||||||||||
Interest rate futures | 2,109 | 339 | 1,039 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Index and securities options | 3,849 | 6,127 | 3,799 | Black-Scholes Model | Observable market data, dividends, correlation, liquidity, HPI | 83 | (65 | ) | ||||||||||||||||
Equity futures | — | — | 28 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Other | 2,720 | 353 | 2,168 | N/A | N/A | 117 | (47 | ) | ||||||||||||||||
Hedging derivatives | 6,608 | 9,454 | 3,063 | |||||||||||||||||||||
Swaps | 6,465 | 9,029 | 2,614 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Exchange rate options | 47 | 265 | 359 | Black-Scholes Model | Observable market data | — | — | |||||||||||||||||
Interest rate options | 56 | 157 | 86 | Black-Scholes Model | Observable market data | — | — | |||||||||||||||||
Other | 40 | 3 | 4 | N/A | N/A | — | — | |||||||||||||||||
Other financial assets at fair value through profit or loss | 28,876 | 19,681 | 17,884 | |||||||||||||||||||||
Loans and advances to credit institutions | 16,243 | 8,912 | 6,865 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Loans and advances to customers (d) | 8,329 | 8,973 | 8,022 | Present Value Method | Observable market data, HPI | — | — | |||||||||||||||||
Debt and equity interests | 4,304 | 1,796 | 2,997 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Available-for-sale financial assets | 11,152 | 5,173 | 6,441 | 154 | (154 | ) | ||||||||||||||||||
Debt and equity interests | 11,152 | 5,173 | 6,441 | Present Value Method | Observable market data | 154 | 154 | |||||||||||||||||
LIABILITIES: | ||||||||||||||||||||||||
Financial liabilities held for trading | 103,503 | 124,355 | 98,307 | 68 | (40 | ) | ||||||||||||||||||
Deposits from central banks | 2,985 | 9,110 | — | Present Value Method | Observable market data | — | — | |||||||||||||||||
Deposits from credit institutions | 43,132 | 26,842 | 23,254 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Customer deposits | 4,658 | 4,896 | 27,992 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Debt and equity interests | 586 | 1,075 | — | Present Value Method | Observable market data, liquidity | (a) | (a) | |||||||||||||||||
Trading derivatives | 52,141 | 82,432 | 47,061 | 68 | (40 | ) | ||||||||||||||||||
Swaps | 35,916 | 67,288 | 39,204 | Present Value Method, Gaussian Copula (c) | Observable market data, liquidity, HPI | (e) | (e) | |||||||||||||||||
Exchange rate options | 898 | 3,515 | 907 | Black-Scholes Model | Observable market data, liquidity | (e) | (e) | |||||||||||||||||
Interest rate options | 3,974 | 5,402 | 1,325 | Black-Scholes Model, Heath-Jarrow-Morton Model | Observable market data, liquidity, correlation | (e) | (e) | |||||||||||||||||
Index and securities options | 4,518 | 4,694 | 2,527 | Black-Scholes Model | Observable market data, dividends, correlation, liquidity, HPI | 68 | (40 | ) | ||||||||||||||||
Forward purchase and sale contracts | — | — | 1,411 | N/A | N/A | — | — | |||||||||||||||||
Interest rate and equity futures | 2,596 | 1,189 | 1,100 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Other | 4,239 | 344 | 587 | N/A | N/A | — | — | |||||||||||||||||
Hedging derivatives | 4,873 | 5,697 | 4,024 | |||||||||||||||||||||
Swaps | 4,558 | 5,586 | 3,924 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Exchange rate options | 175 | 20 | 27 | Black-Scholes Model | Observable market data | — | — | |||||||||||||||||
Interest rate options | 67 | 91 | 73 | Black-Scholes Model | Observable market data | — | — | |||||||||||||||||
Other | 72 | — | — | N/A | N/A | |||||||||||||||||||
Other financial liabilities at fair value through profit or loss | 42,371 | 28,639 | 33,039 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Liabilities under insurance contracts | 11,910 | 11,564 | 7,356 | Note 15 | ||||||||||||||||||||
TOTAL | 283,290 | 304,433 | 252,604 | 574 | (449 | ) |
(a) | The sensitivity of the issued debt and equity instruments in liabilities calculated using HPI assumptions is not detailed, since these instruments are perfectly hedged. Consequently, any change in the valuation of these issued instruments would be offset exactly by an equal and opposite change in the valuation of the associated foreign currency derivatives. | |
(b) | Includes mainly short-term loans and reverse repurchase agreements with corporate customers (mainly brokerage and investment companies). | |
(c) | Includes credit risk derivatives with a positive net fair value of€1,165 million recognized in the consolidated balance sheet (December 31, 2008:€900 million). These assets and liabilities are measured using the aforementioned Standard Gaussian Copula Model. | |
(d) | Includes home mortgage loans to financial institutions in the UK (which are regulated and partly financed by the Government). The fair value of these loans was obtained using observable market variables, including current market transactions with similar amounts and collateral facilitated by the UK Housing Association. Since the Government is involved in these financial institutions, the credit risk spreads have remained stable and are homogenous in this sector. The results arising from the valuation model are checked against current market transactions. | |
(e) | The Group calculates the potential impact on the measurement of each instrument on a joint basis, regardless of whether the individual value is positive (assets) or negative (liabilities), disclosing the joint effect associated with the related instruments classified on the asset side of the consolidated balance sheet. |
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• | Correlation: the assumptions relating to the correlation between the value of quoted and unquoted assets are based on historical correlations between the impact of adverse changes in market variables and the corresponding valuation of the associated unquoted assets. The measurement of the assets will vary depending on whether a more or less conservative scenario is selected. | ||
• | Dividends: the estimates of the dividends used as inputs in the internal models are based on the expected dividend payments of the issuers. Since the dividend expectations can change or vary depending on the source of the price (normally historical data or market consensus for the measurement of options) and the companies’ dividend policies can vary, the valuation is adjusted to the best estimate of the reasonable dividend level expected in more or less conservative scenarios. | ||
• | Liquidity: the assumptions include estimates in response to market liquidity. For example, they take market liquidity into consideration when very long-term estimates of exchange rates or interest rates are used, or when the instrument is part of a new or developing market where, due to the absence of market prices that reflect a reasonable price for these products, the standard valuation methods and the estimates available might give rise to less precise results in the measurement of these instruments at that time. | ||
• | Halifax House Price Index (HPI): the assumptions include estimates of the future growth and the volatility of the HPI, mortality and the credit spreads of the specific financial instruments in relation to home mortgage loans to financial institutions in the UK (which are regulated and partially financed by the Government), credit derivatives and property asset derivatives. | ||
The unobservable market data that constitute significant inputs of the internal models (Level 3) are, basically, those related to the House Price Index. The detail of the financial assets and liabilities measured using these models, included in the foregoing table, is as follows: |
Fair values calculated using | ||||||||
internal models | ||||||||
Millions of euros | ||||||||
2009 | 2008 | |||||||
ASSETS: | ||||||||
Level 2 | 118,001 | 132,861 | ||||||
Level 3 | 2,632 | 1,316 | ||||||
120,633 | 134,177 | |||||||
LIABILITIES: | ||||||||
Level 2 | 162,179 | 169,630 | ||||||
Level 3 | 477 | 626 | ||||||
162,656 | 170,256 | |||||||
283,290 | 304,433 | |||||||
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iv. | Recognition of fair value changes |
• | Available-for-sale financial assets are recognized temporarily in equity under Valuation adjustments — Available-for-sale financial assets, unless they relate to exchange differences, in which case they are recognized in Valuation adjustments — Exchange differences (exchange differences arising on monetary financial assets are recognized in Exchange differences in the consolidated income statement). |
• | Items charged or credited to Valuation adjustments — Available-for-sale financial assets and Valuation adjustments — Exchange differences remain in the Group’s consolidated equity until the related assets are derecognized, whereupon they are charged to the consolidated income statement. |
• | Unrealized gains on available-for-sale financial assets classified as Non-current assets held for sale because they form part of a disposal group or a discontinued operation are recognized in Valuation adjustments — Non-current assets held for sale. |
v. | Hedging transactions |
1. | The derivative hedges one of the following three types of exposure: |
a. | Changes in the fair value of assets and liabilities due to fluctuations, among others, in the interest rate and/or exchange rate to which the position or balance to be hedged is subject (fair value hedge); | ||
b. | Changes in the estimated cash flows arising from financial assets and liabilities, commitments and highly probable forecast transactions (cash flow hedge); | ||
c. | The net investment in a foreign operation (hedge of a net investment in a foreign operation). |
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2. | It is effective in offsetting exposure inherent in the hedged item or position throughout the expected term of the hedge, which means that: |
a. | At the date of arrangement the hedge is expected, under normal conditions, to be highly effective (prospective effectiveness). | ||
b. | There is sufficient evidence that the hedge was actually effective during the whole life of the hedged item or position (retrospective effectiveness). |
3. | There must be adequate documentation evidencing the specific designation of the financial derivative to hedge certain balances or transactions and how this effective hedge was expected to be achieved and measured, provided that this is consistent with the Group’s management of own risks. |
a. | In fair value hedges, the gains or losses arising on both the hedging instruments and the hedged items attributable to the type of risk being hedged are recognized directly in the consolidated income statement. | ||
In fair value hedges of interest rate risk on a portfolio of financial instruments, the gains or losses that arise on measuring the hedging instruments are recognized directly in the consolidated income statement, whereas the gains or losses due to changes in the fair value of the hedged amount (attributable to the hedged risk) are recognized in the consolidated income statement with a balancing entry under Changes in the fair value of hedged items in portfolio hedges of interest rate risk on the asset or liability side of the balance sheet, as appropriate. | |||
b. | In cash flow hedges, the effective portion of the change in value of the hedging instrument is recognized temporarily in equity under Valuation adjustments — Cash flow hedges until the forecast transactions occur, when it is recognized in the consolidated income statement, unless, if the forecast transactions result in the recognition of non-financial assets or liabilities, it is included in the cost of the non-financial asset or liability. | ||
c. | In hedges of a net investment in a foreign operation, the gains and losses attributable to the portion of the hedging instruments qualifying as an effective hedge are recognized temporarily in equity under Valuation adjustments — Hedges of net investments in foreign operations until the gains or losses on the hedged item are recognized in the consolidated income statement. | ||
d. | The ineffective portion of the gains and losses on the hedging instruments of cash flow hedges and hedges of a net investment in a foreign operation are recognized directly under Gains/losses on financial assets and liabilities in the consolidated income statement. |
vi. | Derivatives embedded in hybrid financial instruments |
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e) | Derecognizing of financial assets and liabilities |
1. | If the Group transfers substantially all the risks and rewards to third parties - -unconditional sale of financial assets, sale of financial assets under an agreement to repurchase them at their fair value at the date of repurchase, sale of financial assets with a purchased call option or written put option that is deeply out of the money, securitization of assets in which the transferor does not retain a subordinated debt or grant any credit enhancement to the new holders, and other similar cases-, the transferred financial asset is derecognized and any rights or obligations retained or created in the transfer are recognized simultaneously. |
2. | If the Group retains substantially all the risks and rewards associated with the transferred financial asset -sale of financial assets under an agreement to repurchase them at a fixed price or at the sale price plus interest, a securities lending agreement in which the borrower undertakes to return the same or similar assets, and other similar cases-, the transferred financial asset is not derecognized and continues to be measured by the same criteria as those used before the transfer. However, the following items are recognized: |
a. | An associated financial liability, which is recognized for an amount equal to the consideration received and is subsequently measured at amortized cost, unless it meets the requirements for classification under Other financial liabilities at fair value through profit or loss. | ||
b. | The income from the transferred financial asset not derecognized and any expense incurred on the new financial liability, without offsetting. |
3. | If the Group neither transfers nor retains substantially all the risks and rewards associated with the transferred financial asset -sale of financial assets with a purchased call option or written put option that is not deeply in or out of the money, securitization of assets in which the transferor retains a subordinated debt or other type of credit enhancement for a portion of the transferred asset, and other similar cases- the following distinction is made: |
a. | If the transferor does not retain control of the transferred financial asset, the asset is derecognized and any rights or obligations retained or created in the transfer are recognized. | ||
b. | If the transferor retains control of the transferred financial asset, it continues to recognize it for an amount equal to its exposure to changes in value and recognizes a financial liability associated with the transferred financial asset. The carrying amount of the transferred asset and the associated liability is the amortized cost of the rights and obligations retained, if the transferred asset is measured at amortized cost, or the fair value of the rights and obligations retained, if the transferred asset is measured at fair value. |
f) | Offsetting of financial instruments |
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g) | Impairment of financial assets |
i. | Definition |
• | In the case of debt instruments (loans and debt securities), give rise to an adverse impact on the future cash flows that were estimated at the transaction date. |
• | In the case of equity instruments, mean that their carrying amount may not be fully recovered. |
ii. | Debt instruments carried at amortized cost |
• | All the amounts that are expected to be obtained over the remaining life of the instrument; including, where appropriate, those which may result from the collateral provided for the instrument (less the costs for obtaining and subsequently selling the collateral). The impairment loss takes into account the likelihood of collecting accrued past-due interest receivable; | ||
• | The various types of risk to which each instrument is subject; and | ||
• | The circumstances in which collections will foreseeable be made. |
• | When there is evidence of a deterioration of the obligor’s ability to pay, either because it is in arrears or for other reasons; and/or |
• | When country risk materializes: country risk is considered to be the risk associated with debtors resident in a given country due to circumstances other than normal commercial risk. |
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a. | Specific allowance: | ||
The impairment of debt instruments not measured at fair value through profit or loss that are classified as doubtful are generally recognized in accordance with the criteria set forth below: |
i. | Assets classified as doubtful due to counterparty arrears: | ||
Debt instruments, whoever the obligor and whatever the guarantee or collateral, with amounts more than three months past due are assessed individually, taking into account the age of the past-due amounts, the guarantees or collateral provided and the financial situation of the counterparty and the guarantors. | |||
ii. | Assets classified as doubtful for reasons other than counterparty arrears: | ||
Debt instruments which are not classifiable as doubtful due to arrears but for which there are reasonable doubts as to their repayment under the contractual terms are assessed individually, and their allowance is the difference between the amount recognized in assets and the present value of the cash flows expected to be received. |
b. | General allowance for inherent losses: |
• | Exposure at default (EAD) is the amount of risk exposure at the date of default by the counterparty. |
• | Probability of default (PD) is the probability of the counterparty failing to meet its principal and/or interest payment obligations. The probability of default is associated with the rating/scoring of each counterparty/transaction. |
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• | Loss given default (LGD) is the loss arising in the event of default. It depends mainly on the guarantees associated with the transaction. |
1. | Low default portfolios |
2. | Top-down units |
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h) | Repurchase agreements and reverse repurchase agreements |
i) | Non-current assets held for sale and Liabilities associated with non-current assets held for sale |
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j) | Reinsurance assets and Liabilities under insurance contracts |
• | By applying of a strict methodology in the launch of products and in the assignment of value thereto. | ||
• | By using deterministic and stochastic models for measuring commitments. |
• | By using reinsurance as a risk mitigation technique as part of the credit quality guidelines in line with the Group’s general risk policy. |
• | By establishing an operating framework for credit risks. | ||
• | By actively managing asset and liability matching. | ||
• | By applying security measures in processes. |
• | Current estimates of future cash flows under the insurance contracts of the consolidated entities. These estimates include all contractual cash flows and any related cash flows, such as claims handling costs; and |
• | The value recognized in the consolidated balance sheet for insurance liabilities (see Note 15), net of any related deferred acquisition costs or related intangible assets, such as the amount paid to acquire, in the event of purchase by the entity, the economic rights held by a broker deriving from policies in the entity’s portfolio. |
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k) | Tangible assets |
i. | Property, plant and equipment for own use |
Annual | ||||
rate | ||||
Buildings for own use | 2 | |||
Furniture | 7.5 to 10 | |||
Fixtures | 6 to 10 | |||
Office and IT equipment | 10 to 25 | |||
Leasehold improvements | 5 to 10 |
ii. | Investment property |
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iii. | Assets leased out under an operating lease |
l) | Accounting for leases |
i. | Finance leases |
ii. | Operating leases |
iii. | Sale and leaseback transactions |
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m) | Intangible assets |
i. | Goodwill |
• | If it is attributable to specific assets and liabilities of the companies acquired, by increasing the value of the assets (or reducing the value of the liabilities) whose fair values were higher (lower) than the carrying amounts at which they had been recognized in the acquired entities’ balance sheets. |
• | If it is attributable to specific intangible assets, by recognizing it explicitly in the consolidated balance sheet provided that the fair value of these assets within 12 months following the date of acquisition can be measured reliably. |
• | The remaining amount is recognized as goodwill, which is allocated to one or more specific cash-generating units (a cash generating unit is the smallest identifiable group of assets that, as a result of continuing operation, generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets). The cash-generating units represent the Group’s geographical and/or business segments. |
ii. | Other intangible assets |
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n) | Other assets |
• | Inventories: this item includes the amount of assets, other than financial instruments, that are held for sale in the ordinary course of business, that are in the process of production, construction or development for such purpose, or that are to be consumed in the production process or in the provision of services. Inventories includes land and other property held for sale in the property development business. |
• | Other: this item includes the balance of all prepayments and accrued income (excluding accrued interest), the net amount of the difference between pension plan obligations and the value of the plan assets with a balance in the entity’s favor, when this net amount is to be reported in the consolidated balance sheet, and the amount of any other assets not included in other items. |
ñ) | Other liabilities | ||
Other liabilities includes the balance of all accrued expenses and deferred income, excluding accrued interest, and the amount of any other liabilities not included in other categories. |
o) | Provisions and contingent assets and liabilities |
• | Provisions: credit balances covering present obligations at the reporting date arising from past events which could give rise to a loss for the entities, which is considered to be likely to occur and certain as to its nature but uncertain as to its amount and/or timing; and |
• | Contingent liabilities: possible obligations that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more future events not wholly within the control of the consolidated entities. They include the present obligations of the consolidated entities when it is not probable that an outflow of resources embodying economic benefits will be required to settle them. |
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• | Contingent assets: possible assets that arise from past events and whose existence is conditional on, and will be confirmed only by, the occurrence or non-occurrence of events beyond the control of the Group. Contingent assets are not recognized in the consolidated balance sheet or in the consolidated income statement, but rather are disclosed in the notes, provided that it is probable that these assets will give rise to an increase in resources embodying economic benefits. |
• | Provisions for pensions and similar obligations: includes the amount of all the provisions made to cover post-employment benefits, including obligations to early retirees and similar obligations. |
• | Provisions for contingent liabilities and commitments: includes the amount of the provisions made to cover contingent liabilities -defined as those transactions in which the Group guarantees the obligations of a third party, arising as a result of financial guarantees granted or contracts of another kind- and contingent commitments -defined as irrevocable commitments that may give rise to the recognition of financial assets. |
• | Provisions for taxes and other legal contingencies and Other provisions: include the amount of the provisions recognized to cover tax and legal contingencies and litigation and the other provisions recognized by the consolidated entities. Other provisions includes, inter alia, any provisions for restructuring costs and environmental measures (see Note 25). |
p) | Litigation and/or claims in process |
q) | Own equity instruments |
• | The instruments do not include any contractual obligation for the issuer: (i) to deliver cash or another financial asset to a third party; or (ii) to exchange financial assets or financial liabilities with a third party under conditions that are potentially unfavorable to the issuer. |
• | The instruments will or may be settled in the issuer’s own equity instruments and are: (i) a non-derivative that includes no contractual obligation for the issuer to deliver a variable number of its own equity instruments; or (ii) a derivative that will be settled by the issuer through the exchange of a fixed amount of cash or another financial asset for a fixed number of its own equity instruments. |
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r) | Equity-instrument-based employee remuneration |
s) | Recognition of income and expenses |
i. | Interest income, interest expenses and similar items |
ii. | Commissions, fees and similar items |
• | Fee and commission income and expenses relating to financial assets and financial liabilities measured at fair value through profit or loss are recognized when paid. |
• | Those arising from transactions or services that are performed over a period of time are recognized over the life of these transactions or services. | ||
• | Those relating to services provided in a single act are recognized when the single act is carried out. |
iii. | Non-finance income and expenses |
iv. | Deferred collections and payments |
v. | Loan arrangement fees |
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t) | Financial guarantees |
u) | Assets under management and investment and pension funds managed by the Group |
v) | Post-employment benefits |
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• | They are not owned by the consolidated entities, but by a legally separate third party that is not a party related to the Group. |
• | They can only be used to pay or finance post-employment benefits and cannot be returned to the consolidated entities unless the assets remaining in the plan are sufficient to meet all obligations of the plan and of the entity relating to current or former employee benefits, or to reimburse employee benefits already paid by the Group. |
• | Current service cost -defined as the increase in the present value of the obligations resulting from employee service in the current period-, under Personnel expenses. |
• | Interest cost -defined as the increase during the year in the present value of the obligations as a result of the passage of time-, under Interest expense and similar charges. When obligations are presented on the liability side of the consolidated balance sheet, net of the plan assets, the cost of the liabilities recognized in the income statement relates exclusively to the obligations recognized as liabilities. |
• | The expected return on plan assets and the gains or losses on the value of the plan assets under Interest and similar income. |
• | The actuarial gains and losses calculated using the corridor approach and the unrecognized past service cost, under Provisions (net) in the consolidated income statement. |
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w) | Other long-term employee benefits |
x) | Termination benefits |
y) | Income tax |
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z) | Residual maturity periods and average interest rates | ||
The analysis of the maturities of the balances of certain items in the consolidated balance sheets and the average interest rates at 2009, 2008 and 2007 year-end is provided in Note 51. | |||
aa) | Consolidated statements of cash flows | ||
The following terms are used in the consolidated statements of cash flows with the meanings specified: |
• | Cash flows: inflows and outflows of cash and cash equivalents, which are short-term, highly liquid investments that are subject to an insignificant risk of changes in value, irrespective of the portfolio in which they are classified. |
• | Operating activities: the principal revenue-producing activities of credit institutions and other activities that are not investing or financing activities. |
• | Investing activities: the acquisition and disposal of long-term assets and other investments not included in cash and cash equivalents. |
• | Financing activities: activities that result in changes in the size and composition of the equity and liabilities that are not operating activities. |
ab) | Consolidated statement of recognized income and expense | ||
This statement presents the income and expenses generated by the Group as a result of its business activity in the year, and a distinction is made between the income and expenses recognized in the consolidated income statement for the year and the other income and expenses recognized directly in consolidated equity. |
a. | Consolidated profit/loss for the year. |
b. | The net amount of the income and expenses recognized temporarily in consolidated equity under Valuation adjustments. |
c. | The net amount of the income and expenses recognized definitively in consolidated equity. |
d. | The income tax incurred in respect of the items indicated in b) and c) above, except for the valuation adjustments arising from investments in associates or jointly controlled entities accounted for using the equity method, which are presented net. |
e. | Total consolidated recognized income and expense, calculated as the sum of a) to d) above, presenting separately the amount attributable to the Parent and the amount relating to minority interests. |
ac) | Consolidated statement of changes in total equity | ||
This statement presents all the changes in equity, including those arising from changes in accounting policies and from the correction of errors. Accordingly, this statement presents a reconciliation of the carrying amount at the beginning and end of the year of all the consolidated equity items, and the changes are grouped together on the basis of their nature into the following items: |
a. | Adjustments due to changes in accounting policies and to errors: include the changes in consolidated equity arising as a result of the retrospective restatement of the balances in the consolidated financial statements, distinguishing between those resulting from changes in accounting policies and those relating to the correction of errors. |
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b. | Income and expense recognized in the year: includes, in aggregate form, the total of the aforementioned items recognized in the consolidated statement of recognized income and expense. |
c. | Other changes in equity: includes the remaining items recognized in equity, including, inter alia, increases and decreases in capital, distribution of profit, transactions involving own equity instruments, equity-instrument-based payments, transfers between equity items and any other increases or decreases in consolidated equity. |
3. | Santander Group |
a) | Banco Santander, S.A. and international Group structure |
b) | Acquisitions and disposals |
i. | ABN AMRO Holding N.V. (ABN AMRO) |
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ii. | Interbanco, S.A. (Interbanco) |
iii. | Compañía Española de Petróleos, S.A. (Cepsa) |
iv. | Drive Consumer USA, Inc. (Drive) (Santander Consumer USA) |
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v. | Santander Consumer Chile, S.A. |
vi. | Orígenes AFJP, S.A. and Orígenes Seguros de Retiro, S.A. |
vii. | Pension fund managers |
viii. | CB Extrobank |
ix. | Acquisition of the European consumer finance business from The Royal Bank of Scotland (RBS) |
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x. | Alliance & Leicester plc |
• | At the time of the announcement each Alliance & Leicester plc share was worth 299 pence, and the total issued share capital, approximately GBP 1,259 million, whereby the proposed exchange represented a premium of approximately 36.4% on the closing price at July 11, 2008. Considering the above interim dividend, the premium amounted to approximately 44.6% on the aforementioned closing price. |
• | The acquisition affords the integration of the ancillary businesses of Alliance & Leicester and Abbey, thereby strengthening the competitive positioning of the products and services offered by the Group and benefiting its customers. It can be expected that the combined group will also benefit in terms of increased efficiency and that the borrowing costs relating to Alliance & Leicester may be reduced over time from the current high levels. |
• | It will increase the critical mass of the Group’s business in the UK market, as part of our vertical strategy. |
• | In-market cost synergies through the Group’s presence in the UK, estimated at GBP 180 million per year (before tax) at the end of 2011. |
• | Complementary geographical nature of both distribution networks (Alliance & Leicester has a major presence in the Midlands and Abbey in the London area). | ||
• | Abbey’s expansion process in the SMEs and retail business will be speeded up two to three years. | ||
• | This transaction complies with Santander Group’s financial requirements. |
xi. | Acquisition of the distribution channels and retail deposits of Bradford & Bingley |
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• | Retail deposits totaling GBP 20 billion; and |
• | The direct distribution channels, including 197 commercial branches, 141 agencies (distribution points in third-party premises) and the related employees. |
xii. | Sale of Porterbrook Leasing Company |
xiii. | Sovereign Bancorp Inc. (Sovereign) |
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xiv. | Acquisition of Real Tokio Marine Vida e Previdência |
xv. | General Electric Money and Interbanca |
xvi. | Banco de Venezuela |
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xvii. | Triad Financial Corporation |
xviii. | Initial public offering of Banco Santander (Brasil) S.A. |
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• | Commercial Banking, in which Santander Brasil provides a broad range of products and services and centralizes the banking operations of its customers in order to increase cross-selling. The main areas of this business segment are deposit-taking activities, lending, personal loans, credit cards, account overdraft loans, consumer finance, mortgages, corporate lending, BNDESon-lendingfacilities, agricultural lending,leasing and private banking. |
• | Global Wholesale Banking: Santander Brasil is the wholesale banking leader in Brazil and offers financial services and sophisticated structured solutions to its customers. Santander Brasil is based on four core pillars: (1) strengthening customer relationships, (2) emphasis on performance and productivity as a means to ensure growth, (3) risk management and (4) consolidating the global recognition of its brand for product distribution. Santander Brasil’s wholesale banking business provides its customers with a broad range of domestic and international services as well as solutions tailored to the needs of each customer. The products and services of the Global Wholesale Banking segment are offered not only to GB&M (Global Banking & Markets) customers, but also to other corporate and SME customers. The main areas of this segment are global transaction banking, credit markets, corporate finance, equities, rates, market making, proprietary trading and correspondent banking. |
• | Asset management and insurance: Santander Brasil engages in the discretionary and non-discretionary management and administration of third-party funds structured in investment funds, pension funds and individual and corporate investment portfolios. Additionally, Santander Brasil offers to its retail and SME customers insurance products, including life and personal injury insurance, homeowner’s insurance, credit insurance, credit card loss and theft insurance, and private retirement plans. |
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c) | Off-shore entities |
i. | Operating subsidiaries engaging in banking or financial activities or in services: |
• | Santander Trade Services Limited (Hong Kong), an intermediary in export documentary credits. |
• | Abbey National International Limited in Jersey, which engages in remote banking for British customers not resident in the UK, to whom it offers traditional savings products. |
• | Alliance & Leicester International Limited and Bradford & Bingley International Limited, two banks located in the Isle of Man which focus on attracting funds through savings accounts and deposits. |
ii. | Scantly active, inactive or mere asset holding subsidiaries: |
• | Alliance & Leicester International Holdings Limited, in the Isle of Man, whose only assets are the shares of Alliance & Leicester International Limited. | ||
• | Banco Santander (Panamá), S.A., which conducts a scant banking activity. | ||
• | Serfin International Bank and Trust, Limited (Cayman Islands), a bank which is virtually inactive. |
• | Baker Street Risk and Insurance (Guernsey) Limited, an insurance company located in Guernsey which has a residual portfolio and is expected to be liquidated in the medium term. | ||
• | Whitewick Limited, an inactive company located in Jersey. |
iii. | Issuing companies |
• | Banesto Holdings, Ltd. (Guernsey) | ||
• | Totta & Açores Financing, Limited (Cayman Islands) |
• | Santander Central Hispano Financial Services, Ltd. (Cayman Islands) | ||
• | Santander Central Hispano International, Ltd. (Cayman Islands) | ||
• | Santander Central Hispano Issuances, Ltd. (Cayman Islands) |
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4. | Distribution of the Bank’s profit and Earnings per share |
a) | Distribution of the Bank’s profit |
Millions | ||||
of euros | ||||
Distribution of dividends already paid prior to the general shareholders’ meeting (€3,939.9 million) and acquisition of bonus share rights from the shareholders which, under the Santander Dividendo Elección program, opted to receive in cash remuneration equivalent to the second interim dividend (€182.0 million) | 4,122 | |||
Of which: | ||||
Distributed at December 31, 2009 (*) | 1,285 | |||
Third interim dividend -declared in December 2009- (*) | 1,012 | |||
Fourth interim dividend | 1,825 | |||
To voluntary reserves | 29 | |||
Net profit for the year | 4,151 | |||
(*) | Recognized under Shareholders’ equity — Dividends and remuneration. |
Millions of euros | ||||||||||||||||
05/31/09 | 09/30/09 | 12/31/09 | 12/31/09 | |||||||||||||
First | Second | Third (*) | Fourth (*) | |||||||||||||
Profit after tax | 1,630 | 3,328 | 4,151 | 4,151 | ||||||||||||
Dividends paid | — | (1,103 | ) | (1,285 | ) | (2,297 | ) | |||||||||
1,630 | 2,225 | 2,866 | 1,854 | |||||||||||||
Interim dividends in cash | 1,103 | 182 | 1,012 | 1,825 | ||||||||||||
Accumulated interim dividends | 1,103 | 1,285 | 2,297 | 4,122 | ||||||||||||
Gross dividend per share (euros) | 0.13523 | 0.12 | 0.12294 | 0.22183 | ||||||||||||
Date of payment | 08/01/09 | 11/01/09 | 02/01/10 | 05/01/10 |
(*) | Dividends not distributed at December 31, 2009. |
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b) | Earnings per share in ordinary activities and discontinued operations |
i. | Basic earnings per share |
12/31/09 | 12/31/08 | 12/31/07 | ||||||||||
Profit attributable to the Group (thousands of euros) | 8,942,538 | 8,876,414 | 9,060,258 | |||||||||
Profit from discontinued operations (net of minority interests) (thousands of euros) | 27,431 | 310,804 | 896,222 | |||||||||
Profit from continuing operations (net of minority interests) (thousands of euros) | 8,915,107 | 8,565,610 | 8,164,036 | |||||||||
Weighted average number of shares outstanding | 8,075,814,950 | 6,802,545,788 | 6,693,869,621 | |||||||||
Assumed conversion of convertible debt | 478,409,443 | 468,923,871 | 108,029,643 | |||||||||
Adjusted number of shares | 8,554,224,393 | 7,271,469,659 | 6,801,899,264 | |||||||||
Basic earnings per share (euros) | 1.0454 | 1.2207 | 1.3320 | |||||||||
Basic earnings per share from discontinued operations (euros) | 0.0032 | 0.0427 | 0.1318 | |||||||||
Basic earnings per share from continuing operations (euros) | 1.0422 | 1.1780 | 1.2003 | |||||||||
ii. | Diluted earnings per share |
12/31/2009 | 12/31/2008 | 12/31/2007 | ||||||||||
Profit attributable to the Group (thousands of euros) | 8,942,538 | 8,876,414 | 9,060,258 | |||||||||
Profit from discontinued operations (net of minority interests) (thousands of euros) | 27,431 | 310,804 | 896,222 | |||||||||
Profit from continuing operations (net of minority interests) (thousands of euros) | 8,915,107 | 8,565,610 | 8,164,036 | |||||||||
Dilutive effect of changes in profit for the year arising from potential conversion of ordinary shares | — | — | — | |||||||||
Weighted average number of shares outstanding | 8,075,814,950 | 6,802,545,788 | 6,693,869,621 | |||||||||
Assumed conversion of convertible debt | 478,409,443 | 468,923,871 | 108,029,643 | |||||||||
Dilutive effect of options | 59,108,134 | 44,244,806 | 66,362,931 | |||||||||
Adjusted number of shares | 8,613,332,527 | 7,315,714,465 | 6,868,262,195 | |||||||||
Diluted earnings per share (euros) | 1.0382 | 1.2133 | 1.3191 | |||||||||
Diluted earnings per share from discontinued operations (euros) | 0.0032 | 0.0425 | 0.1305 | |||||||||
Diluted earnings per share from continuing operations (euros) | 1.0350 | 1.1709 | 1.1887 | |||||||||
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5. | Remuneration and other benefits paid to the Bank’s directors and senior managers |
a) | Remuneration of directors |
i. | Bylaw-stipulated directors’ emoluments and attendance fees |
• | Board of directors:€2,540 for resident directors and€2,057 for non-resident directors. | ||
• | Risk committee and audit and compliance committee:€1,650 for resident directors and€1,335 for non-resident directors. | ||
• | Other committees:€1,270 for resident directors and€1,028 for non-resident directors. |
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ii. | Salaries |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 (*) | ||||||||||
Total salaries | 25,784 | 25,489 | 24,315 | |||||||||
Of which: variable remuneration in cash (or bonus) | 15,240 | 15,240 | 16,088 |
(*) | The balances for 2007 do not include the remuneration for Mr. Juan Rodríguez Inciarte and, therefore, they are not comparable. |
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iii. | Detail by director |
Thousands of euros | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bylaw-stipulated emoluments | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual emolument | Attendance fees | Salary of executive directors (1) | remuneration | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Appointments | remuneration | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Audit and | and | in cash (or | Share | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive | compliance | remuneration | Other | Fixed | bonus) | plan | ||||||||||||||||||||||||||||||||||||||||||||||||||
Directors | Board | committee | committee | committee | Board | fees | remuneration | (a) | Total | (b) | Other | Total | Total | Total | ||||||||||||||||||||||||||||||||||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | 106 | 213 | — | — | 25 | 5 | 1,344 | 1,987 | 3,331 | 310 | 1 | 3,992 | 5,420 | 3,910 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Fernando de Asúa Álvarez | 142 | 213 | 50 | 30 | 25 | 188 | — | — | — | — | — | 647 | 642 | 677 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Alfredo Sáenz Abad | 106 | 213 | — | — | 25 | 5 | 3,703 | 4,745 | 8,447 | 837 | 602 | 10,237 | 9,295 | 9,604 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Matías Rodríguez Inciarte | 106 | 213 | — | — | 25 | 162 | 1,710 | 2,503 | 4,213 | 398 | 221 | 5,339 | 6,541 | 5,154 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Manuel Soto Serrano | 142 | — | 50 | 30 | 25 | 31 | — | — | — | — | — | 277 | 274 | 306 | ||||||||||||||||||||||||||||||||||||||||||
Assicurazioni Generali, SpA. | 123 | — | — | — | 10 | — | — | — | — | — | — | 134 | 140 | 143 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Antonio Basagoiti García-Tuñón | 106 | 213 | — | — | 25 | 158 | — | — | — | — | 7 | 510 | 517 | 523 | ||||||||||||||||||||||||||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea | 106 | 213 | — | — | 25 | 5 | 1,294 | 1,786 | 3,081 | 203 | 13 | 3,647 | 4,021 | 3,517 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Francisco Javier Botín-Sanz de Sautuola y O’Shea (2) | 106 | — | — | — | 23 | — | — | — | — | — | — | 129 | 129 | 143 | ||||||||||||||||||||||||||||||||||||||||||
Lord Terence Burns | 106 | — | — | — | 19 | — | — | — | — | — | — | 125 | 123 | 135 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Guillermo de la Dehesa Romero | 106 | 213 | — | 30 | 25 | 11 | — | — | — | — | — | 386 | 384 | 427 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Rodrigo Echenique Gordillo (**) | 106 | 213 | — | 30 | 25 | 10 | — | — | — | — | 33 | 418 | 443 | 562 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Antonio Escámez Torres | 106 | 213 | — | — | 23 | 157 | — | — | — | — | 38 | 537 | 535 | 550 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Francisco Luzón López | 106 | 213 | — | — | 25 | 3 | 1,505 | 2,753 | 4,258 | 333 | 872 | 5,811 | 6,851 | 5,620 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Abel Matutes Juan | 106 | — | 50 | — | 20 | 16 | — | — | — | — | — | 192 | 194 | 213 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Juan Rodríguez Inciarte (*) | 106 | — | — | — | 25 | 106 | 987 | 1,466 | 2,453 | 322 | 108 | 3,121 | 3,830 | — | ||||||||||||||||||||||||||||||||||||||||||
Mr. Luis Ángel Rojo Duque | 106 | — | 50 | 30 | 15 | 24 | — | — | — | — | — | 225 | 229 | 249 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Luis Alberto Salazar-Simpson Bos | 106 | — | 50 | — | 25 | 21 | — | — | — | — | — | 202 | 198 | 214 | ||||||||||||||||||||||||||||||||||||||||||
Ms. Isabel Tocino Biscarolasaga (***) | 106 | — | — | — | 25 | — | — | — | — | — | — | 132 | 129 | 103 | ||||||||||||||||||||||||||||||||||||||||||
Mutua Madrileña Automovilística (3) | — | — | — | — | — | — | — | — | — | — | — | — | — | 153 | ||||||||||||||||||||||||||||||||||||||||||
Total 2009 | 2,108 | 2,132 | 248 | 149 | 440 | 900 | 10,544 | 15,240 | 25,784 | 2,403 | 1,897 | 36,061 | — | — | ||||||||||||||||||||||||||||||||||||||||||
Total 2008 | 2,084 | 2,132 | 248 | 149 | 411 | 942 | 10,249 | 15,240 | 25,489 | 6,612 | 1,827 | — | 39,894 | — | ||||||||||||||||||||||||||||||||||||||||||
Total 2007 | 2,324 | 2,370 | 275 | 165 | 424 | 813 | 8,227 | 16,088 | 24,315 | — | 1,517 | — | — | 32,203 | ||||||||||||||||||||||||||||||||||||||||||
(*) | Appointed as member of the Bank’s board of directors on January 28, 2008, Mr. Juan Rodríguez Inciarte took office on March 24, 2008. He was appointed as a member of the risk committee on March 24, 2008. | |
(**) | Ceased to be a member of the risk committee on March 24, 2008. | |
(***) | Appointed by co-optation by the board of directors at its meeting on March 26, 2007, Ms. Isabel Tocino Biscarolasaga took office at the meeting held on April 23, 2007. Her appointment was ratified by the shareholders at the annual general meeting held on June 23, 2007. | |
(a) | Relating to 2009. | |
(b) | Amounts received in 2009 in respect of the variable remuneration in shares granted through the Plan I09 approved by the shareholders at the general shareholders’ meeting held on June 23, 2007. | |
(1) | Recognized under Personnel expenses in the income statement of the Bank, except for the salary of Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea, which is recognized at Banco Español de Crédito, S.A. | |
(2) | Amounts contributed to Marcelino Botín Foundation. | |
(3) | Ceased to be a director on December 19, 2007. |
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iv. | Other remuneration |
b) | Remuneration of the board members as representatives of the Bank |
Thousands of euros | ||||||||||||||
Company | 2009 | 2008 | 2007 | |||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | Shinsei Bank, Ltd. | 30.1 | 53.0 | 50.1 | ||||||||||
Mr. Fernando de Asúa Álvarez | Cepsa | 100.2 | 97.2 | 97.2 | ||||||||||
Mr. Antonio Escámez Torres | Attijariwafa Bank Société Anonyme | 5.0 | 14.8 | 9.9 | ||||||||||
135.3 | 165.0 | 157.2 | ||||||||||||
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c) | Post-employment and other long-term benefits |
Thousands of euros | ||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
Accrued | Accrued | Accrued | ||||||||||||||||||||||
pension | Other | pension | Other | pension | Other | |||||||||||||||||||
obligations | insurance | obligations | insurance | obligations | insurance | |||||||||||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | 24,642 | — | 25,579 | — | 22,926 | — | ||||||||||||||||||
Mr. Alfredo Sáenz Abad | 85,740 | 11,108 | 80,049 | 10,785 | 68,070 | 9,378 | ||||||||||||||||||
Mr. Matías Rodríguez Inciarte | 52,536 | 5,131 | 50,894 | 4,982 | 44,226 | 4,529 | ||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea | 23,775 | 1,403 | 21,737 | 1,403 | 17,975 | 1,403 | ||||||||||||||||||
Mr. Francisco Luzón López | 53,513 | 9,031 | 53,083 | 7,624 | 45,468 | 7,624 | ||||||||||||||||||
Mr. Juan Rodríguez Inciarte | 10,969 | 2,961 | 9,918 | 2,875 | — | — | ||||||||||||||||||
251,175 | 29,634 | 241,260 | 27,669 | 198,665 | 22,934 | |||||||||||||||||||
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d) | Deferred variable share-based remuneration systems |
i) | Plan I06 (see Note 47) |
Rights | Rights granted | Rights exercised | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
at | Number | Market | Remuneration | Rights | Rights | Date of | Date of | |||||||||||||||||||||||||||||||||||||||||||||||||
December 31, | Exercise | Number of | of shares | Exercise | price | allocated | at | Number of | at | Exercise | commencement | expiry of | ||||||||||||||||||||||||||||||||||||||||||||
2005, | price | rights | acquired | price | applied | (thousands | December 31, | rights | December 31, | price | of exercise | exercise | ||||||||||||||||||||||||||||||||||||||||||||
2006 and 2007 | (euros) | Number | exercised | (***) | (euros) | (euros) | of euros) | 2008 | cancelled | 2009 | (euros) | period | period | |||||||||||||||||||||||||||||||||||||||||||
Plan I06 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | 541,400 | 9.09 | — | (541,400 | ) | 541,400 | 9.09 | 12.40 | 1,780 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Mr. Alfredo Sáenz Abad | 1,209,100 | 9.09 | — | — | — | — | — | 1,209,100 | (1,209,100 | ) | — | 9.09 | 01/15/08 | 01/15/09 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Matías Rodríguez Inciarte | 665,200 | 9.09 | — | (332,600 | ) | 67,901 | 9.09 | 14.12 | 1,661 | 332,600 | (332,600 | ) | — | 9.09 | 01/15/08 | 01/15/09 | ||||||||||||||||||||||||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea (*) | 293,692 | 9.09 | — | — | — | — | — | 293,692 | (293,692 | ) | — | 9.09 | 01/15/08 | 01/15/09 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Francisco Luzón López | 639,400 | 9.09 | — | (300,000 | ) | 60,656 | 9.09 | 14.04 | 1,473 | 339,400 | (339,400 | ) | — | 9.09 | 01/15/08 | 01/15/09 | ||||||||||||||||||||||||||||||||||||||||
Mr. Juan Rodríguez Inciarte (**) | 419,000 | 9.09 | — | (419,000 | ) | 419,000 | 9.09 | 11.72 | 1,090 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
3,767,792 | 9.09 | (1,593,000 | ) | 6,004 | 2,174,792 | (2,174,792 | ) | — | 9.09 | |||||||||||||||||||||||||||||||||||||||||||||||
(*) | Approved by Banesto’s shareholders at its general shareholders’ meeting on February 28, 2006. | |
(**) | Mr. Juan Rodríguez Inciarte was appointed as member of the board of directors in 2008. The data on his options for prior dates relate to the options granted to him as an executive prior to his appointment as director. | |
(***) | Under the three-year I06 incentive plan (see Note 47), each purchase option granted entitles the beneficiary to acquire one Bank share at a price of€9.09, and the number of shares acquired on the exercise of the options is determined on the basis of the settlement method used, which can be cash for stock or cashless for cash. In the case of cash-for-stock settlements, the number of shares granted as consideration for the payment in cash of the exercise price is equal to the number of options exercised. |
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ii) | Performance share plan (see Note 47) |
Rights | Rights | Shares | Rights | Rights | ||||||||||||||||||||||||
at December 31, | granted | delivered | cancelled | at December 31, | Grant | Share delivery | ||||||||||||||||||||||
2008 | (number) | (number) | (number) | 2009 | date | deadline | ||||||||||||||||||||||
Plan I09: | ||||||||||||||||||||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | 41,785 | — | (37,937 | ) | (3,848 | ) | — | 06/23/07 | 07/31/09 | |||||||||||||||||||
Mr. Alfredo Sáenz Abad | 110,084 | — | (99,945 | ) | (10,139 | ) | — | 06/23/07 | 07/31/09 | |||||||||||||||||||
Mr. Matías Rodríguez Inciarte | 53,160 | — | (48,264 | ) | (4,896 | ) | — | 06/23/07 | 07/31/09 | |||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea (*) | 27,929 | — | (25,357 | ) | (2,572 | ) | — | 06/23/07 | 07/31/09 | |||||||||||||||||||
Mr. Francisco Luzón López | 44,749 | — | (40,628 | ) | (4,121 | ) | — | 06/23/07 | 07/31/09 | |||||||||||||||||||
Mr. Juan Rodríguez Inciarte (**) | 43,322 | — | (39,332 | ) | (3,990 | ) | — | 06/23/07 | 07/31/09 | |||||||||||||||||||
321,029 | — | (291,463 | ) | (29,566 | ) | — | ||||||||||||||||||||||
Plan I10: | ||||||||||||||||||||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | 62,589 | — | — | — | 62,589 | 06/23/07 | 07/31/10 | |||||||||||||||||||||
Mr. Alfredo Sáenz Abad | 164,894 | — | — | — | 164,894 | 06/23/07 | 07/31/10 | |||||||||||||||||||||
Mr. Matías Rodríguez Inciarte | 79,627 | — | — | — | 79,627 | 06/23/07 | 07/31/10 | |||||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea (*) | 41,835 | — | — | — | 41,835 | 06/23/07 | 07/31/10 | |||||||||||||||||||||
Mr. Francisco Luzón López | 67,029 | — | — | — | 67,029 | 06/23/07 | 07/31/10 | |||||||||||||||||||||
Mr. Juan Rodríguez Inciarte (**) | 64,983 | — | — | — | 64,983 | 06/23/07 | 07/31/10 | |||||||||||||||||||||
480,957 | — | — | — | 480,957 | ||||||||||||||||||||||||
Plan I11: | ||||||||||||||||||||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | 68,848 | — | — | — | 68,848 | 06/21/08 | 07/31/11 | |||||||||||||||||||||
Mr. Alfredo Sáenz Abad | 189,628 | — | — | — | 189,628 | 06/21/08 | 07/31/11 | |||||||||||||||||||||
Mr. Matías Rodríguez Inciarte | 87,590 | — | — | — | 87,590 | 06/21/08 | 07/31/11 | |||||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea (***) | 46,855 | — | — | — | 46,855 | 06/21/08 | 07/31/11 | |||||||||||||||||||||
Mr. Francisco Luzón López | 77,083 | — | — | — | 77,083 | 06/21/08 | 07/31/11 | |||||||||||||||||||||
Mr. Juan Rodríguez Inciarte | 50,555 | — | — | — | 50,555 | 06/21/08 | 07/31/11 | |||||||||||||||||||||
520,559 | — | — | — | �� | 520,559 | |||||||||||||||||||||||
Plan I12: | ||||||||||||||||||||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | — | 82,941 | — | — | 82,941 | 06/19/09 | 07/31/12 | |||||||||||||||||||||
Mr. Alfredo Sáenz Abad | — | 228,445 | — | — | 228,445 | 06/19/09 | 07/31/12 | |||||||||||||||||||||
Mr. Matías Rodríguez Inciarte | — | 105,520 | — | — | 105,520 | 06/19/09 | 07/31/12 | |||||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea | — | 56,447 | — | — | 56,447 | 06/19/09 | 07/31/12 | |||||||||||||||||||||
Mr. Francisco Luzón López | — | 92,862 | — | — | 92,862 | 06/19/09 | 07/31/12 | |||||||||||||||||||||
Mr. Juan Rodríguez Inciarte | — | 60,904 | — | — | 60,904 | 06/19/09 | 07/31/12 | |||||||||||||||||||||
— | 627,119 | — | — | 627,119 | ||||||||||||||||||||||||
(*) | Without prejudice to the Banesto shares relating to Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea by virtue of the Banesto Share-Based Payment Incentive Plan approved by the shareholders at the general shareholders’ meeting of Banesto held on June 27, 2007, the maximum number of shares shown in the foregoing table relates to the aforementioned executive director, based on the resolution adopted at the aforementioned general shareholders’ meeting. |
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(**) | Mr. Juan Rodríguez Inciarte was appointed as member of the board of directors in 2008. The data on his rights include the rights granted to him as an executive prior to his appointment as director. | |
(***) | Without prejudice to the Banesto shares that might correspond to Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea by virtue of the Banesto Share-Based Incentive Plan approved by the shareholders at the general shareholders’ meeting of Banesto held on February 24, 2010, the maximum number of shares shown in the foregoing table relates to the aforementioned executive director in accordance with the resolution adopted at Banesto’s general shareholders’ meeting. |
iii) | Obligatory investment share plan |
3rd cycle | 2nd cycle | 1st cycle | ||||||||||
Executive directors | 2010-2012 | 2009-2011 | 2008-2010 | |||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | 20,515 | 19,968 | 16,306 | |||||||||
Mr. Alfredo Sáenz Abad | 49,000 | 47,692 | 37,324 | |||||||||
Mr. Matías Rodríguez Inciarte | 25,849 | 25,159 | 20,195 | |||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea (*) | 18,446 | 16,956 | 13,610 | |||||||||
Mr. Francisco Luzón López | 28,434 | 27,675 | 22,214 | |||||||||
Mr. Juan Rodríguez Inciarte | 15,142 | 14,738 | 14,617 | |||||||||
157,386 | 152,188 | 124,266 | ||||||||||
(*) | In accordance with the resolution adopted by the shareholders at the general shareholders’ meeting of Banco Santander held on June 23, 2007, the maximum number of shares relating to Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea for the 2008-2010 cycle is that shown in the foregoing table, as approved by the general shareholders’ meeting of Banesto held on June 27, 2007. Also, the maximum number of shares relating to Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea for the 2009-2011 and 2010-2012 cycles as beneficiary of this plan is in line with the resolution adopted by the shareholders at the general shareholders’ meeting of Banco Santander held on June 21, 2008 and by the shareholders at the general shareholders’ meeting of Banesto held on February 24, 2010. |
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e) | Loans |
Thousands of euros | ||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||
Loans and | Loans and | Loans and | ||||||||||||||||||||||||||||||||||
credits | Guarantees | Total | credits | Guarantees | Total | credits | Guarantees | Total | ||||||||||||||||||||||||||||
Mr. Alfredo Sáenz Abad | 16 | — | 16 | 25 | — | 25 | 6 | — | 6 | |||||||||||||||||||||||||||
Mr. Matías Rodríguez Inciarte | 7 | 10 | 17 | 20 | 10 | 30 | 18 | 10 | 28 | |||||||||||||||||||||||||||
Mr. Manuel Soto Serrano | — | — | — | 5 | — | 5 | 4 | — | 4 | |||||||||||||||||||||||||||
Mr. Antonio Basagoiti García-Tuñón | 47 | 1 | 48 | 66 | 1 | 67 | 94 | 1 | 95 | |||||||||||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea | 3 | — | 3 | 5 | — | 5 | — | — | — | |||||||||||||||||||||||||||
Mr. Javier Botín-Sanz de Sautuola y O’Shea | 2 | — | 2 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Mr. Rodrigo Echenique Gordillo | 9 | — | 9 | 12 | — | 12 | 7 | — | 7 | |||||||||||||||||||||||||||
Mr. Antonio Escámez Torres | 1,488 | — | 1,488 | 1,473 | — | 1,473 | 309 | — | 309 | |||||||||||||||||||||||||||
Mr. Francisco Luzón López | 5,004 | — | 5,004 | 1,649 | — | 1,649 | 722 | — | 722 | |||||||||||||||||||||||||||
Mr. Juan Rodríguez Inciarte | 421 | — | 421 | 465 | — | 465 | — | — | — | |||||||||||||||||||||||||||
Mr. Luis Alberto Salazar-Simpson Bos | 434 | — | 434 | 461 | — | 461 | — | — | — | |||||||||||||||||||||||||||
Ms. Isabel Tocino Biscarolasaga | 40 | — | 40 | 49 | — | 49 | — | — | — | |||||||||||||||||||||||||||
7,471 | 11 | 7,482 | 4,231 | 11 | 4,242 | 1,160 | 11 | 1,171 | ||||||||||||||||||||||||||||
f) | Senior managers |
Thousands of euros | ||||||||||||||||||||||||
Number of | Salary | Other | ||||||||||||||||||||||
Year | managers(1) | Fixed | Variable | Total | remuneration | Total | ||||||||||||||||||
2007 | 26 | 19,504 | 42,768 | 62,272 | 10,092 | 72,364 | ||||||||||||||||||
2008 | 24 | 21,219 | 34,674 | 55,893 | 27,598 | 83,491 | ||||||||||||||||||
2009 | 24 | 21,512 | 36,468 | 57,980 | 16,745 | 74,725 |
(*) | Excluding executive directors’ remuneration, which is detailed above. | |
(1) | At some point in the year they occupied the position of executive vice president. The amounts reflect the annual remuneration regardless of the number of months in which the position of executive vice president was occupied. |
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Maximum number of options/rights | 12/31/09 | 12/31/08 | 12/31/07 | |||||||||
Plan I06 (*) | — | 1,499,010 | 7,235,988 | |||||||||
Plan I09 | — | 822,508 | 889,109 | |||||||||
Plan I10 | 1,154,158 | 1,280,124 | 1,333,465 | |||||||||
Plan I11 | 1,312,214 | 1,446,259 | — | |||||||||
Plan I12 | 1,562,227 | — | — |
(*) | The exercise period was from January 15, 2008 to January 15, 2009. |
g) | Post-employment benefits to former directors and former executive vice presidents |
h) | Termination benefits |
• | In the cases of Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos and Mr. Alfredo Sáenz Abad, to retire and to receive the amounts relating to the accrued pensions in the form of capital (€24,642 thousand and€85,740 thousand, respectively), without any additional amounts accruing in respect of pensions in the future in both cases, once the consolidation option referred to in Note 5.c has been exercised by both executive directors. |
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• | In the cases of Mr. Matías Rodríguez Inciarte and Mr. Francisco Luzón López, to take early retirement and to accrue pension supplements. At December 31, 2009, the annual pension supplements would amount to€2,507 thousand for Mr. Matías Rodríguez Inciarte and€2,701 thousand for Mr. Francisco Luzón López (2008:€2,416 thousand and€2,648 thousand, respectively; 2007:€2,146 thousand and€2,293 thousand, respectively). |
• | In the case of Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea, to receive a termination benefit amounting to five years’ annual fixed salary at the date of termination. At December 31, 2009, this benefit would amount to€6,472 thousand (December 31, 2008:€6,345 thousand; December 31, 2007:€3,399 thousand). In the event of termination due to withdrawal at the will of the Bank, Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea may opt to take early retirement and accrue an annual emolument. At December 31, 2009, this emolument would amount to€1,841 thousand per year. The two alternatives are mutually exclusive and, therefore, if Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea were to opt to receive the termination benefit she would not receive any emolument. |
• | In the case of Mr. Juan Rodríguez Inciarte, to receive a termination benefit amounting to five years’ annual fixed salary at the date of termination. At December 31, 2009, this benefit would amount to€4,936 thousand (December 31, 2008:€4,792 thousand; December 31, 2007:€4,652 thousand). In the event of termination due to withdrawal at the will of the Bank, Mr. Juan Rodríguez Inciarte may opt to take early retirement and accrue an annual emolument. At December 31, 2009, this emolument would amount to€869 thousand per year (December 31, 2008:€958 thousand per year; December 31, 2007:€930 thousand per year). The two alternatives are mutually exclusive and, therefore, if Mr. Juan Rodríguez Inciarte were to opt to receive the termination benefit he would not receive any emolument. |
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i) | Detail of the directors’ investments in companies with similar business activities and performance by directors, as independent professionals or as employees, of similar activities |
Corporate | Number | |||||
Director | name | of shares | Functions | |||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | Bankinter, S.A. | 3,295,300 | — | |||
Bank of America Corporation | 560 | — | ||||
Santander Investment, S.A. | — | Chairman (1) | ||||
Mr. Alfredo Sáenz Abad | Banco Bilbao Vizcaya Argentaria, S.A. | 25,000 | — | |||
HSBC Holdings | 13,074 | — | ||||
Lloyds TSB | 522 | — | ||||
Banco Banif, S.A. | — | Chairman (1) | ||||
Santander Private Banking S.p.A. | — | Chairman (1) | ||||
Mr. Matías Rodríguez Inciarte | Banesto | 27,575 | Director (1) | |||
Banco Santander Totta, S.A. | — | Deputy Chairman (1) | ||||
Mr. Manuel Soto Serrano | Intesa Sanpaolo | 108,483 | — | |||
UniCredito Italiano S.p.A. | 150,000 | — | ||||
Istituto per le Opere di Religione (IOR) | — | Director (2) | ||||
Assicurazioni Generali S.p.A. (3) | Commerzbank, AG | 66,531,286 | — | |||
Intesa Sanpaolo | 617,113,776 | — | ||||
Mediobanca — Banca di Credito Finanziario S.p.A. | 16,381,963 | — | ||||
Bank Leumi le-Israel B.M. | 19,711,333 | — | ||||
Erste Group Bank AG | 3,796,516 | — | ||||
UniCredito Italiano S.p.A. | 117,276,064 | — | ||||
Banca Monte dei Paschi di Siena S.p.A. | 26,431,550 | — | ||||
Crédit Agricole, S.A. | 5,114,340 | — | ||||
Société Générale | 1,207,129 | — | ||||
Banco Bilbao Vizcaya Argentaria, S.A. | 6,805,838 | — | ||||
Deustche Bank, A.G. | 772,452 | — | ||||
Banesto | 753,429 | — | ||||
Mr. Antonio Basagoiti García-Tuñón | Banco Popular Español, S.A. | 510 | — | |||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea | Banesto | 560,214 | Chairman | |||
Santander Investment, S.A. | — | Director (1) | ||||
BSN - Banco Santander de Negocios Portugal, S.A. | — | Director (1) |
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Corporate | Number | |||||
Director | name | of shares | Functions | |||
Lord Burns (Terence) | Santander UK plc | — | Chairman (1) | |||
Alliance & Leicester plc | — | Chairman (1) | ||||
Mr. Guillermo de la Dehesa Romero | Goldman Sachs & Co. | 19,546 | — | |||
Banco Pastor, S.A. | 11,088 | — | ||||
Mr. Rodrigo Echenique Gordillo | JP Morgan Chase | 3,000 | — | |||
Mitsubishi UFJ Financial Group, Inc. | 6,000 | — | ||||
Mizuho Financial Group, Inc. | 5,000 | — | ||||
HSBC | 11,000 | — | ||||
Banco Banif, S.A. | — | 2nd Deputy Chairman (1) | ||||
Santander Investment, S.A. | — | Director (1) | ||||
Allfunds Bank, S.A. | — | Deputy Chairman (1) | ||||
Banco Santander International | — | Director (1) | ||||
Mr. Antonio Escámez Torres | Attijariwafa Bank Societé Anonyme | 10 | Deputy Chairman (1) | |||
Banco de Valencia, S.A. | 349 | — | ||||
Santander Consumer Finance, S.A. | — | Chairman (1) | ||||
Open Bank, S.A. | — | Chairman (1) | ||||
Mr. Francisco Luzón López | Banco Bilbao Vizcaya Argentaria, S.A. | 24,658 | — | |||
UBS, AG | 42,460 | — | ||||
Bank of America | 27,100 | — | ||||
Goldman Sachs & Co. | 460 | — | ||||
Morgan Stanley | 2,490 | — | ||||
Citigroup Inc. | 139,411 | — | ||||
Wells Fargo | 15,361 | — | ||||
Barclays | 185,441 | — | ||||
HSBC | 39,019 | — | ||||
Lloyds Bank | 3,307,838 | — | ||||
Royal Bank of Scotland | 2,626,919 | |||||
Banco Santander (México), S.A., Institución de Banca Múltiple. Grupo Financiero Santander | — | Director (1) | ||||
Banco Santander International | — | Director (1) | ||||
Santander Consumo, S.A. de C.V., SOFOM, E.R. | — | Director (1) |
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Corporate | Number | |||||
Director | name | of shares | Functions | |||
Mr. Abel Matutes Juan | Intesa Sanpaolo | 3,619,665 | — | |||
Banco Bilbao Vizcaya Argentaria, S.A. | 563,708 | — | ||||
Banesto | 11,980 | — | ||||
Mr. Juan Rodríguez Inciarte | Banco Bilbao Vizcaya Argentaria, S.A. | 1,016 | — | |||
Wachovia | 540 | — | ||||
Santander UK plc | — | Deputy Chairman (1) | ||||
Alliance & Leicester plc | — | Director (1) | ||||
Banco Banif, S.A. | — | Director (1) | ||||
Santander Consumer Finance, S.A. | — | Director (1) | ||||
RFS Holding NV | — | Director | ||||
ABN AMRO Holding NV | — | Director (4) | ||||
ABN AMRO Bank NV | — | Director (4) | ||||
Ms. Isabel Tocino Biscarolasaga | Banco Bilbao Vizcaya Argentaria, S.A. | 1,000 | — | |||
Citigroup Inc. | 10,000 | — | ||||
Mr. Antoine Bernheim (5) | Credit Suisse | 40,900 | — | |||
BNP Paribas | 16,179 | — | ||||
UBS | 82,863 | — | ||||
Intesa Sanpaolo | 398,533 | Deputy Chairman (6) | ||||
Mediobanca — Banca di Credito Finanziario S.p.A. | 63,000 | Director (1) | ||||
UniCredito Italiano S.p.A. | 149,519 | — | ||||
Royal Bank of Scotland Group plc | 12,298 | — | ||||
Bank of New York Mellon | 10,000 | — | ||||
BSI SA | — | Director (1) |
(1) | Non-executive. | |
(2) | Non-executive member of the control committee. | |
(3) | More detailed information on the ownership interests held by Assicurazioni Generali, S.p.A. can be consulted in the notes to the financial statements of this company or on its website (www.generali.com). | |
(4) | Non-executive member of the supervisory board. | |
(5) | Representative on the Bank’s board of directors of the non-executive proprietary director Assicurazioni Generali S.p.A. | |
(6) | (Non-executive) deputy chairman of the supervisory board. | |
(7) | Non-executive director of Shinsei Bank, Limited until June 23, 2009. |
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6. | Loans and advances to credit institutions |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Classification: | ||||||||||||
Financial assets held for trading | 5,952,956 | 5,149,584 | 12,294,559 | |||||||||
Other financial assets at fair value through profit or loss | 16,242,609 | 8,911,906 | 6,865,073 | |||||||||
Loans and receivables | 57,641,042 | 64,730,787 | 38,482,972 | |||||||||
79,836,607 | 78,792,277 | 57,642,604 | ||||||||||
Type: | ||||||||||||
Reciprocal accounts | 712,503 | 663,230 | 417,438 | |||||||||
Term deposits | 21,382,542 | 25,455,903 | 13,569,362 | |||||||||
Reverse repurchase agreements | 29,489,895 | 18,568,747 | 30,276,080 | |||||||||
Other accounts | 28,251,667 | 34,104,397 | 13,379,724 | |||||||||
79,836,607 | 78,792,277 | 57,642,604 | ||||||||||
Currency: | ||||||||||||
Euro | 50,346,410 | 44,157,708 | 32,327,552 | |||||||||
Pound sterling | 4,631,696 | 8,094,238 | 6,952,096 | |||||||||
US dollar | 11,209,610 | 13,079,671 | 13,007,374 | |||||||||
Other currencies | 13,674,427 | 13,714,227 | 5,374,069 | |||||||||
Impairment losses | (25,536 | ) | (253,567 | ) | (18,487 | ) | ||||||
Of which: Country risk | (8,460 | ) | (250,024 | ) | (16,748 | ) | ||||||
79,836,607 | 78,792,277 | 57,642,604 | ||||||||||
7. | Debt instruments |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Classification: | ||||||||||||
Financial assets held for trading | 49,920,518 | 43,895,548 | 66,330,811 | |||||||||
Other financial assets at fair value through profit or loss | 7,365,213 | 5,154,732 | 7,072,423 | |||||||||
Available-for-sale financial assets | 79,289,337 | 42,547,677 | 34,187,077 | |||||||||
Loans and receivables | 14,959,331 | 17,652,560 | 1,668,339 | |||||||||
151,534,399 | 109,250,517 | 109,258,650 | ||||||||||
Type: | ||||||||||||
Spanish government debt securities | ||||||||||||
Treasury bills | 8,256,207 | 5,544,658 | 5,558,420 | |||||||||
Government bonds | 2,649,096 | 419,083 | 376,393 | |||||||||
Other book-entry debt securities | 27,407,375 | 14,535,752 | 9,440,746 | |||||||||
Foreign government debt securities | 44,006,698 | 23,132,075 | 21,617,457 | |||||||||
Issued by financial institutions | 39,853,240 | 39,096,714 | 43,443,566 | |||||||||
Other fixed-income securities | 29,528,505 | 26,703,413 | 28,913,821 | |||||||||
Impairment losses | (166,722 | ) | (181,178 | ) | (91,753 | ) | ||||||
151,534,399 | 109,250,517 | 109,258,650 | ||||||||||
Currency: | ||||||||||||
Euro | 72,745,088 | 51,577,517 | 55,013,063 | |||||||||
Pound sterling | 11,882,570 | 16,345,483 | 16,164,296 | |||||||||
US dollar | 25,744,623 | 15,396,510 | 13,341,949 | |||||||||
Other currencies | 41,328,840 | 26,112,185 | 24,831,095 | |||||||||
Impairment losses | (166,722 | ) | (181,178 | ) | (91,753 | ) | ||||||
151,534,399 | 109,250,517 | 109,258,650 | ||||||||||
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8. | Other equity instruments |
a) | Breakdown |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Classification: | ||||||||||||
Financial assets held for trading | 9,248,022 | 6,272,403 | 9,744,466 | |||||||||
Other financial assets at fair value through profit or loss | 5,877,331 | 2,777,793 | 2,870,322 | |||||||||
Available-for-sale financial assets | 7,331,166 | 6,372,629 | 10,161,830 | |||||||||
Of which: | ||||||||||||
Disregarding allowances for impairment losses | 7,331,166 | 6,381,788 | 10,173,068 | |||||||||
Allowances for impairment losses | — | (9,159 | ) | (11,238 | ) | |||||||
22,456,519 | 15,422,825 | 22,776,618 | ||||||||||
Type: | ||||||||||||
Shares of Spanish companies | 4,981,812 | 3,219,901 | 6,375,891 | |||||||||
Shares of foreign companies | 7,526,087 | 5,897,681 | 9,787,139 | |||||||||
Investment fund units and shares | 4,254,774 | 3,614,329 | 4,068,215 | |||||||||
Other securities | 5,693,846 | 2,700,073 | 2,556,611 | |||||||||
Of which: unit linked | 5,693,846 | 2,700,073 | 2,556,611 | |||||||||
Impairment losses | — | (9,159 | ) | (11,238 | ) | |||||||
22,456,519 | 15,422,825 | 22,776,618 | ||||||||||
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b) | Changes |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Balance at beginning of year | 6,382 | 10,173 | 5,985 | |||||||||
Changes in the scope of consolidation | 467 | 366 | — | |||||||||
Transfers (Note 13) | 53 | 204 | — | |||||||||
Net additions /disposals | (192 | ) | (454 | ) | 3,096 | |||||||
Of which: | ||||||||||||
Shinsei | — | 322 | — | |||||||||
Metrovacesa | 938 | — | — | |||||||||
France Telecom | (378 | ) | — | — | ||||||||
Attijariwafa Bank | (367 | ) | — | — | ||||||||
Royal Bank of Scotland Group, plc | — | — | 1,368 | |||||||||
Fortis SA/NV | — | — | 892 | |||||||||
Iberdrola, S.A. | — | (846 | ) | 1,503 | ||||||||
BPI | — | — | (229 | ) | ||||||||
Intesa Sanpaolo | — | — | (1,206 | ) | ||||||||
Valuation adjustments (*) | 621 | (3,907 | ) | 1,092 | ||||||||
Balance at end of year | 7,331 | 6,382 | 10,173 | |||||||||
(*) | The valuation adjustments in 2008 included the write-downs of the ownership interests held in that year in The Royal Bank of Scotland (€1,293 million) and Fortis Bank (€749 million). |
i. | Metrovacesa, S.A. (Metrovacesa) |
ii. | France Telecom España, S.A. (France Telecom) |
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iii. | Attijariwafa Bank (Attijari) |
iv. | Intesa Sanpaolo |
v. | Banco BPI, S.A. (BPI) |
vi. | The Royal Bank of Scotland Group Plc (RBS) |
vii. | Other holdings |
c) | Notifications of acquisitions of investments |
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d) | Allowances for impairment losses |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Balance at beginning of year | 190,337 | 102,991 | 104,181 | |||||||||
Net impairment losses for the year | 490,326 | 386,164 | 9,526 | |||||||||
Of which: | ||||||||||||
Impairment losses charged to income | 536,567 | 400,858 | 37,321 | |||||||||
Impairment losses reversed with a credit to income | (46,241 | ) | (14,694 | ) | (27,795 | ) | ||||||
Net changes in the scope of consolidation | — | 19,654 | (6,737 | ) | ||||||||
Write-off of assets due to impairment | (505,017 | ) | (370,498 | ) | (97 | ) | ||||||
Exchange differences and other items | (8,924 | ) | 52,026 | (3,882 | ) | |||||||
Balance at end of year | 166,722 | 190,337 | 102,991 | |||||||||
Of which: | ||||||||||||
By geographical location of risk: | ||||||||||||
Spain | 97,746 | 144,796 | 57,931 | |||||||||
Rest of Europe | — | 1,271 | 6,964 | |||||||||
Latin America | 68,976 | 44,270 | 38,096 | |||||||||
By type of asset covered: | ||||||||||||
Debt instruments — Available-for-sale financial assets (Note 7) | 166,722 | 181,178 | 91,753 | |||||||||
Other equity instruments — Available-for-sale financial assets | — | 9,159 | 11,238 |
9. | Trading derivatives (assets and liabilities) and Short positions |
a) | Trading derivatives |
Thousands of euros | ||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
Debit | Credit | Debit | Credit | Debit | Credit | |||||||||||||||||||
balance | balance | balance | balance | balance | balance | |||||||||||||||||||
Interest rate risk | 43,413,018 | 43,135,683 | 68,145,560 | 67,005,552 | 33,298,794 | 35,195,843 | ||||||||||||||||||
Currency risk | 11,364,400 | 9,892,032 | 19,001,043 | 14,381,752 | 4,369,032 | 6,809,887 | ||||||||||||||||||
Price risk | 3,995,032 | 5,075,830 | 8,129,606 | 7,237,843 | 6,365,243 | 6,589,179 | ||||||||||||||||||
Other risks | 1,083,963 | 609,079 | 539,100 | 542,286 | 2,699,474 | 852,624 | ||||||||||||||||||
59,856,413 | 58,712,624 | 95,815,309 | 89,167,433 | 46,732,543 | 49,447,533 | |||||||||||||||||||
b) | Short positions |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Borrowed securities: | ||||||||||||
Debt instruments | 1,536,689 | 1,054,527 | 2,424,447 | |||||||||
Of which, Santander UK | 896,439 | 775,094 | 1,783,832 | |||||||||
Equity instruments | 106,199 | 57,263 | 1,596,775 | |||||||||
Of which, Santander UK | 6,784 | 13,670 | 1,285,989 | |||||||||
Short sales: | ||||||||||||
Debt instruments | 3,496,842 | 1,912,854 | 1,582,052 | |||||||||
Of which: the Bank | 2,529,586 | 1,903,554 | 1,485,173 | |||||||||
Equity instruments | — | 10,587 | 9,960 | |||||||||
5,139,730 | 3,035,231 | 5,613,234 | ||||||||||
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10. | Loans and advances to customers |
a) | Breakdown |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Financial assets held for trading | 10,076,412 | 684,348 | 23,704,481 | |||||||||
Other financial assets at fair value through profit or loss | 8,328,516 | 8,972,707 | 8,021,623 | |||||||||
Loans and receivables | 664,145,998 | 617,231,380 | 539,372,409 | |||||||||
Of which: | ||||||||||||
Disregarding impairment losses | 682,019,094 | 629,697,436 | 548,067,613 | |||||||||
Impairment losses | (17,873,096 | ) | (12,466,056 | ) | (8,695,204 | ) | ||||||
Of which, Country risk | (37,234 | ) | (304,207 | ) | (51,522 | ) | ||||||
682,550,926 | 626,888,435 | 571,098,513 | ||||||||||
Loans and advances to customers disregarding impairment losses | 700,424,022 | 639,354,490 | 579,793,717 | |||||||||
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b) | Breakdown |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
By loan type and status: | ||||||||||||
Commercial credit | 17,454 | 22,250 | 22,364 | |||||||||
Secured loans | 411,778 | 351,609 | 322,269 | |||||||||
Reverse repurchase agreements | 13,958 | 5,228 | 29,089 | |||||||||
Other term loans | 204,224 | 216,690 | 177,553 | |||||||||
Finance leases | 20,873 | 21,011 | 15,727 | |||||||||
Receivable on demand | 8,088 | 8,572 | 6,722 | |||||||||
Impaired assets | 24,049 | 13,994 | 6,070 | |||||||||
700,424 | 639,354 | 579,794 | ||||||||||
By borrower sector: | ||||||||||||
Public sector — Spain | 9,802 | 7,668 | 5,633 | |||||||||
Public sector — Other countries | 2,861 | 3,029 | 2,296 | |||||||||
Individuals | 379,297 | 347,201 | 316,129 | |||||||||
Energy | 11,521 | 10,476 | 7,820 | |||||||||
Construction | 22,696 | 24,341 | 21,137 | |||||||||
Manufacturing | 40,534 | 43,993 | 31,839 | |||||||||
Services | 134,638 | 123,895 | 98,548 | |||||||||
Other sectors | 99,074 | 78,751 | 96,392 | |||||||||
700,424 | 639,354 | 579,794 | ||||||||||
Geographical area: | ||||||||||||
Spain | 230,345 | 240,247 | 238,081 | |||||||||
European Union (excluding Spain) | 311,776 | 279,664 | 237,535 | |||||||||
United States and Puerto Rico | 49,501 | 15,096 | 32,071 | |||||||||
Other OECD countries | 5,256 | 8,104 | 6,633 | |||||||||
Latin America | 96,470 | 88,720 | 60,753 | |||||||||
Rest of the world | 7,075 | 7,523 | 4,721 | |||||||||
700,424 | 639,354 | 579,794 | ||||||||||
By interest rate formula: | ||||||||||||
Fixed interest rate | 286,445 | 256,506 | 228,434 | |||||||||
Floating rate | 413,979 | 382,848 | 351,360 | |||||||||
700,424 | 639,354 | 579,794 | ||||||||||
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c) | Impairment losses |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Balance at beginning of year | 12,719,623 | 8,796,371 | 8,288,128 | |||||||||
Impairment losses charged to income for the year: | 12,002,717 | 6,596,635 | 4,033,047 | |||||||||
Of which: | ||||||||||||
Individually assessed | 13,948,358 | 7,683,692 | 4,177,811 | |||||||||
Collectively assessed | 2,205,598 | 640,424 | 1,027,495 | |||||||||
Impairment losses reversed with a credit to income | (4,151,239 | ) | (1,727,481 | ) | (1,172,259 | ) | ||||||
Inclusion of entities in the Group in the year (Note 3) | 1,426,104 | 2,310,095 | 7,356 | |||||||||
Write-off of impaired balances against recorded impairment allowance | (9,794,628 | ) | (4,552,393 | ) | (3,320,162 | ) | ||||||
Exchange differences and other changes | 1,332,362 | (532,847 | ) | (228,938 | ) | |||||||
Transfers between allowances | 212,453 | 101,762 | 16,940 | |||||||||
Balance at end of year | 17,898,632 | 12,719,623 | 8,796,371 | |||||||||
Of which: | ||||||||||||
By method of assessment: | ||||||||||||
Individually | 11,627,929 | 7,183,237 | 3,356,264 | |||||||||
Of which: country risk (Note 2.g) | 45,694 | 554,230 | 75,171 | |||||||||
Collectively | 6,270,703 | 5,536,386 | 5,440,107 | |||||||||
By geographical location of risk: | ||||||||||||
Spain | 6,992,818 | 5,948,950 | 4,512,000 | |||||||||
Rest of Europe | 4,435,269 | 3,307,313 | 2,250,127 | |||||||||
Americas | 6,470,545 | 3,463,360 | 2,034,244 |
d) | Impaired assets |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Balance at beginning of year | 13,994 | 6,070 | 4,613 | |||||||||
Net additions | 18,046 | 11,200 | 4,898 | |||||||||
Written-off assets | (9,795 | ) | (4,552 | ) | (3,320 | ) | ||||||
Increase in scope of consolidation | 1,006 | 1,945 | 1 | |||||||||
Exchange differences and other | 798 | (669 | ) | (122 | ) | |||||||
Balance at end of year | 24,049 | 13,994 | 6,070 | |||||||||
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Millions of euros | ||||||||||||||||||||||||||||
With no | ||||||||||||||||||||||||||||
past-due | ||||||||||||||||||||||||||||
balances or | ||||||||||||||||||||||||||||
less than 3 | With balances past due by | |||||||||||||||||||||||||||
months | 3 to 6 | 6 to 12 | 12 to 18 | 18 to 24 | More than | |||||||||||||||||||||||
past-due | months | months | months | months | 24 months | Total | ||||||||||||||||||||||
Spain | 2,171 | 1,431 | 2,311 | 2,831 | 1,164 | 292 | 10,201 | |||||||||||||||||||||
European Union (excluding Spain) | 276 | 3,343 | 1,666 | 751 | 231 | 436 | 6,703 | |||||||||||||||||||||
United States and Puerto Rico | 361 | 1,024 | 600 | 331 | 150 | 91 | 2,557 | |||||||||||||||||||||
Other OECD countries | 5 | 35 | 40 | 23 | — | — | 102 | |||||||||||||||||||||
Latin America | 398 | 1,893 | 1,665 | 341 | 91 | 84 | 4,472 | |||||||||||||||||||||
Rest of the world | — | 4 | 5 | 2 | — | 2 | 13 | |||||||||||||||||||||
3,212 | 7,730 | 6,287 | 4,279 | 1,636 | 905 | 24,049 | ||||||||||||||||||||||
Millions of euros | ||||||||||||||||||||||||||||
With no | ||||||||||||||||||||||||||||
past-due | ||||||||||||||||||||||||||||
balances or | ||||||||||||||||||||||||||||
less than 3 | With balances past due by | |||||||||||||||||||||||||||
months | 3 to 6 | 6 to 12 | 12 to 18 | 18 to 24 | More than | |||||||||||||||||||||||
past-due | months | months | months | months | 24 months | Total | ||||||||||||||||||||||
Spain | 637 | 2,461 | 1,678 | 981 | 211 | 294 | 6,262 | |||||||||||||||||||||
European Union (excluding Spain) | 38 | 2,447 | 938 | 306 | 174 | 336 | 4,239 | |||||||||||||||||||||
United States and Puerto Rico | 102 | 261 | 106 | 55 | 10 | 20 | 554 | |||||||||||||||||||||
Other OECD countries | 28 | 284 | 5 | 3 | 1 | — | 321 | |||||||||||||||||||||
Latin America | 274 | 1,359 | 780 | 94 | 50 | 56 | 2,613 | |||||||||||||||||||||
Rest of the world | 2 | 1 | 1 | — | — | 1 | 5 | |||||||||||||||||||||
1,081 | 6,813 | 3,508 | 1,439 | 446 | 707 | 13,994 | ||||||||||||||||||||||
Millions of euros | ||||||||||||||||||||||||||||
With no | ||||||||||||||||||||||||||||
past-due | ||||||||||||||||||||||||||||
balances or | ||||||||||||||||||||||||||||
less than 3 | With balances past due by | |||||||||||||||||||||||||||
months | 3 to 6 | 6 to 12 | 12 to 18 | 18 to 24 | More than | |||||||||||||||||||||||
past-due | months | months | months | months | 24 months | Total | ||||||||||||||||||||||
Spain | 209 | 708 | 524 | 206 | 71 | 64 | 1,782 | |||||||||||||||||||||
European Union (excluding Spain) | 121 | 1,422 | 530 | 172 | 115 | 244 | 2,604 | |||||||||||||||||||||
United States and Puerto Rico | 32 | 168 | 22 | 15 | 8 | 35 | 279 | |||||||||||||||||||||
Other OECD countries | 15 | 146 | 14 | 2 | 1 | 1 | 178 | |||||||||||||||||||||
Latin America | 53 | 350 | 348 | 42 | 17 | 409 | 1,219 | |||||||||||||||||||||
Rest of the world | — | 6 | 1 | — | — | — | 7 | |||||||||||||||||||||
429 | 2,799 | 1,440 | 436 | 212 | 754 | 6,070 | ||||||||||||||||||||||
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e) | Securitization |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Derecognized | 10,836 | 2,882 | 3,742 | |||||||||
Of which | ||||||||||||
Mortgage assets (*) | 10,232 | 2,088 | 2,479 | |||||||||
Other securitized assets | 604 | 794 | 1,263 | |||||||||
Retained on the balance sheet | 123,706 | 126,497 | 92,023 | |||||||||
Of which | ||||||||||||
Securitized mortgage assets | 90,182 | 90,264 | 60,056 | |||||||||
Of which: the UK | 64,592 | 66,615 | 40,216 | |||||||||
Other securitized assets | 33,524 | 36,233 | 31,967 | |||||||||
Total | 134,542 | 129,380 | 95,765 | |||||||||
(*) | The amount relating to 2009 includes assets of Sovereign amounting to€8,538 million that were sold, prior to this company’s inclusion in the Group, on the secondary market for multifamily loans, and over which control was transferred and substantially all the associated risks and rewards were not retained. |
11. | Hedging derivatives |
Thousands of euros | ||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |||||||||||||||||||
Fair value hedges | 7,585,383 | 4,296,012 | 8,553,353 | 5,213,389 | 2,662,762 | 3,862,500 | ||||||||||||||||||
Of which: Portfolio hedges | 1,552,732 | 2,820,008 | 971,284 | 2,956,415 | 398,143 | 826,178 | ||||||||||||||||||
Cash flow hedges | 201,626 | 719,726 | 879,230 | 694,328 | 101,629 | 238,277 | ||||||||||||||||||
Of which: Recognized in equity (Note 29) | — | 363,600 | — | 436,772 | — | 62,073 | ||||||||||||||||||
Hedges of net investments in foreign operations | 46,841 | 175,339 | 265,549 | 49,894 | 298,778 | 33,794 | ||||||||||||||||||
7,833,850 | 5,191,077 | 9,698,132 | 5,957,611 | 3,063,169 | 4,134,571 | |||||||||||||||||||
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12. | Non-current assets held for sale |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Equity instruments | 4,014 | 3,890,215 | 9,025,936 | |||||||||
Of which: | ||||||||||||
Cepsa | — | 2,846,300 | — | |||||||||
Interbanca (Note 3-b) | — | 1,000,000 | — | |||||||||
Tangible assets | 5,110,723 | 5,265,868 | 1,061,743 | |||||||||
Of which: | ||||||||||||
Foreclosed assets | 2,002,501 | 1,113,006 | 364,345 | |||||||||
Other tangible assets held for sale (*) | 3,108,222 | 4,152,862 | 697,398 | |||||||||
Of which: Ciudad Financiera business campus | — | — | 625,124 | |||||||||
Other assets | 674,452 | 111,403 | 68,750 | |||||||||
5,789,189 | 9,267,486 | 10,156,429 | ||||||||||
(*) | Includes land and buildings acquired from borrowers in payment of their debts in 2009 and 2008 amounting to€2,936 million and€3,768 million, respectively, net of impairment losses and costs to sell. |
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13. | Investments — Associates |
a) | Breakdown |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Sovereign (Note 3) | — | 1,103,623 | 1,026,826 | |||||||||
RFS Holdings B.V. (Note 3) | — | — | 11,778,624 | |||||||||
Cepsa (Note 12) | — | — | 2,548,035 | |||||||||
Other companies | 164,473 | 219,830 | 335,642 | |||||||||
164,473 | 1,323,453 | 15,689,127 | ||||||||||
Of which: | ||||||||||||
Euros | 72,755 | 130,079 | 14,431,945 | |||||||||
Listed | — | 1,103,623 | 3,763,010 |
b) | Changes |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Balance at beginning of year | 1,323 | 15,689 | 5,006 | |||||||||
Acquisitions and capital increases (Note 3) | 13 | 754 | 11,774 | |||||||||
Of which: | ||||||||||||
Sovereign | — | 228 | — | |||||||||
RFS Holdings B.V. | — | 408 | 11,615 | |||||||||
Disposals and capital reductions (Note 3) | (14 | ) | (41 | ) | (27 | ) | ||||||
Of which: | ||||||||||||
RFS Holdings B.V. | — | (36 | ) | — | ||||||||
Transfers | (53 | ) | (3,955 | ) | — | |||||||
Of which: | ||||||||||||
Interbanca (Note 12) | — | (800 | ) | — | ||||||||
Cepsa (Note 12) | — | (2,736 | ) | — | ||||||||
Attijariwafa (Note 8) | — | (204 | ) | — | ||||||||
Effect of equity accounting | — | 792 | 441 | |||||||||
Impairment losses | — | (8 | ) | (1,053 | ) | |||||||
Dividends paid | (5 | ) | (550 | ) | (148 | ) | ||||||
Change in consolidation method (Note 3) | (1,346 | ) | (10,658 | ) | (13 | ) | ||||||
Exchange differences and other changes (*) | 246 | (700 | ) | (291 | ) | |||||||
Balance at end of year | 164 | 1,323 | 15,689 | |||||||||
(*) | In 2008 Exchange differences and other changes included€723 million relating to the exchange losses incurred on RFS Holdings B.V. |
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c) | Impairment losses |
d) | Other disclosures |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Total assets | 2,604 | 59,915 | 168,320 | |||||||||
Total liabilities | (2,160 | ) | (54,643 | ) | (151,891 | ) | ||||||
Minority interests | — | (196 | ) | (355 | ) | |||||||
Net assets | 444 | 5,076 | 16,074 | |||||||||
Group’s share of the net assets of associates | 155 | 1,314 | 6,746 | |||||||||
Goodwill | 9 | 9 | 8,943 | |||||||||
Total Group share | 164 | 1,323 | 15,689 | |||||||||
Total income | 311 | 21,849 | 16,058 | |||||||||
Total profit | 77 | 1,050 | 1,211 | |||||||||
Group’s share of the profit of associates | — | 792 | 438 | |||||||||
14. | Insurance contracts linked to pensions |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Assets relating to insurance contracts covering post-employment benefit plan obligations: | ||||||||||||
Bank | 2,094,039 | 2,159,707 | 2,220,638 | |||||||||
Banesto | 227,609 | 248,025 | 257,633 | |||||||||
Other Spanish companies | 31,159 | 32,035 | 33,286 | |||||||||
Assets relating to insurance contracts covering other similar obligations: | ||||||||||||
Bank | 1,791 | 4,794 | 10,663 | |||||||||
Other Spanish companies | 1,553 | 2,428 | 3,330 | |||||||||
2,356,151 | 2,446,989 | 2,525,550 | ||||||||||
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15. | Liabilities under insurance contracts and Reinsurance assets |
Thousands of euros | ||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||
Direct | Direct | Direct | ||||||||||||||||||||||||||||||||||
insurance and | Total | insurance and | Total | insurance and | Total | |||||||||||||||||||||||||||||||
reinsurance | Reinsurance | (balance | reinsurance | Reinsurance | (balance | reinsurance | Reinsurance | (balance | ||||||||||||||||||||||||||||
Technical Provisions for: | assumed | ceded | payable) | assumed | ceded | payable) | assumed | ceded | payable) | |||||||||||||||||||||||||||
Unearned premiums and unexpired risks | 455,181 | (195,688 | ) | 259,493 | 409,187 | (194,646 | ) | 214,541 | 351,799 | (128,663 | ) | 223,136 | ||||||||||||||||||||||||
Life insurance: | ||||||||||||||||||||||||||||||||||||
Unearned premiums and risks | 555,597 | (55,891 | ) | 499,706 | 332,507 | (25,401 | ) | 307,106 | 120,747 | (23,580 | ) | 97,167 | ||||||||||||||||||||||||
Mathematical provisions | 4,189,032 | — | 4,189,032 | 3,798,070 | (26,244 | ) | 3,771,826 | 2,885,581 | (17,727 | ) | 2,867,854 | |||||||||||||||||||||||||
Claims outstanding | 483,234 | (52,529 | ) | 430,705 | 407,121 | (46,856 | ) | 360,265 | 364,878 | (29,213 | ) | 335,665 | ||||||||||||||||||||||||
Bonuses and rebates | 18,605 | — | 18,605 | 17,440 | (5,937 | ) | 11,503 | 15,957 | (13,359 | ) | 2,598 | |||||||||||||||||||||||||
Equalization | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Life insurance policies where the investment risk is borne by the policyholders | 10,939,477 | (50 | ) | 10,939,427 | 11,713,993 | (135,854 | ) | 11,578,139 | 9,097,620 | (90,395 | ) | 9,007,225 | ||||||||||||||||||||||||
Other technical provisions | 275,320 | (112,664 | ) | 162,656 | 171,193 | (23,450 | ) | 147,743 | 197,035 | (6,837 | ) | 190,198 | ||||||||||||||||||||||||
16,916,446 | (416,822 | ) | 16,499,624 | 16,849,511 | (458,388 | ) | 16,391,123 | 13,033,617 | (309,774 | ) | 12,723,843 | |||||||||||||||||||||||||
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16. | Tangible assets |
a) | Changes | ||
The changes in Tangible assets in the consolidated balance sheets were as follows: |
Thousands of euros | ||||||||||||||||
Property, | ||||||||||||||||
plant and | Leased out | |||||||||||||||
equipment | under an | Investment | ||||||||||||||
for own use | operating lease | property | Total | |||||||||||||
Cost: | ||||||||||||||||
Balances at January 1, 2007 | 9,841,308 | 6,618,326 | 400,994 | 16,860,629 | ||||||||||||
Additions/Disposals (net) due to change in the scope of consolidation | (43,055 | ) | — | — | (43,055 | ) | ||||||||||
Additions/Disposals (net) | (1,156,036 | ) | 545,769 | 77,285 | (532,982 | ) | ||||||||||
Transfers and other changes | (713,511 | ) | 86,768 | 9,680 | (617,063 | ) | ||||||||||
Exchange differences (net) | (97,641 | ) | (411,297 | ) | (511 | ) | (509,449 | ) | ||||||||
Balances at December 31, 2007 | 7,831,065 | 6,839,566 | 487,448 | 15,158,079 | ||||||||||||
Additions/Disposals (net) due to change in the scope of consolidation (*) | 1,569,298 | (3,634,372 | ) | 190,232 | (1,874,842 | ) | ||||||||||
Additions/Disposals (net) | 1,168,177 | (38,474 | ) | 98,790 | 1,228,493 | |||||||||||
Transfers and other changes | (126,811 | ) | (140,635 | ) | 130,857 | (136,589 | ) | |||||||||
Exchange differences (net) | (535,316 | ) | (551,757 | ) | 5 | (1,087,068 | ) | |||||||||
Balances at December 31, 2008 | 9,906,413 | 2,474,328 | 907,332 | 13,288,073 | ||||||||||||
Additions/Disposals (net) due to change in the scope of consolidation | 463,730 | 62,695 | (19 | ) | 526,406 | |||||||||||
Additions/Disposals (net) | 263,707 | (187,545 | ) | 38,474 | 114,635 | |||||||||||
Transfers and other changes | (188,297 | ) | 12,962 | 279,498 | 104,163 | |||||||||||
Exchange differences (net) | 793,761 | 36,906 | (2,086 | ) | 828,581 | |||||||||||
Balances at December 31, 2009 | 11,239,314 | 2,399,346 | 1,223,199 | 14,861,859 | ||||||||||||
Accumulated depreciation: | ||||||||||||||||
Balances at January 1, 2007 | (4,546,051 | ) | (2,094,670 | ) | (15,999 | ) | (6,656,720 | ) | ||||||||
Additions/Disposals (net) due to change in the scope of consolidation | 21,681 | — | — | 21,681 | ||||||||||||
Disposals | 1,440,435 | 202,503 | 14,363 | 1,657,301 | ||||||||||||
Transfers and other changes | 110,941 | (304,805 | ) | (12,629 | ) | (206,493 | ) | |||||||||
Charge for the year | (589,153 | ) | (17,256 | ) | (3,561 | ) | (609,970 | ) | ||||||||
Exchange differences and other items | 29,547 | 156,020 | 1,451 | 187,018 | ||||||||||||
Balances at December 31, 2007 | (3,532,600 | ) | (2,058,208 | ) | (16,375 | ) | (5,607,183 | ) | ||||||||
Additions/Disposals (net) due to change in the scope of consolidation (*) | (816,487 | ) | 1,529,887 | (4,206 | ) | 709,194 | ||||||||||
Disposals | 347,031 | 56,819 | 2,402 | 406,252 | ||||||||||||
Transfers and other changes | 99,030 | (233,015 | ) | (3,220 | ) | (137,205 | ) | |||||||||
Charge for the year | (577,291 | ) | (3,091 | ) | (3,997 | ) | (584,379 | ) | ||||||||
Exchange differences and other items | 250,977 | 199,599 | (2 | ) | 450,573 | |||||||||||
Balances at December 31, 2008 | (4,229,340 | ) | (508,009 | ) | (25,399 | ) | (4,762,748 | ) | ||||||||
Additions/Disposals (net) due to change in the scope of consolidation | (256,214 | ) | (14,794 | ) | (851 | ) | (271,860 | ) | ||||||||
Disposals | 583,508 | 40,089 | 2,777 | 626,374 | ||||||||||||
Transfers and other changes | 8,883 | (194,196 | ) | (5,111 | ) | (190,423 | ) | |||||||||
Charge for the year | (762,387 | ) | (276 | ) | (7,643 | ) | (770,306 | ) | ||||||||
Exchange differences and other items | (353,229 | ) | (9,760 | ) | 50 | (362,939 | ) | |||||||||
Balances at December 31, 2009 | (5,008,779 | ) | (686,946 | ) | (36,177 | ) | (5,731,902 | ) | ||||||||
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Thousands of euros | ||||||||||||||||
Property, | Leased out | |||||||||||||||
plant and | under an | |||||||||||||||
equipment | operating | Investment | ||||||||||||||
for own use | lease | property | Total | |||||||||||||
Impairment losses: | ||||||||||||||||
Balances at January 1, 2007 | (11,080 | ) | (71,385 | ) | (10,448 | ) | (92,913 | ) | ||||||||
Impairment charge for the year | (1,060 | ) | — | 8 | (1,052 | ) | ||||||||||
Additions/Disposals (net) due to change in the scope of consolidation | 549 | — | — | 549 | ||||||||||||
Exchange differences | 738 | 723 | 92 | 1,553 | ||||||||||||
Balances at December 31, 2007 | (10,853 | ) | (70,662 | ) | (10,348 | ) | (91,863 | ) | ||||||||
Impairment charge for the year | (16,699 | ) | — | (1,801 | ) | (18,500 | ) | |||||||||
Additions/Disposals (net) due to change in the scope of consolidation (*) | (2,406 | ) | 54,404 | — | 51,998 | |||||||||||
Exchange differences and other | 17,501 | 16,258 | 833 | 34,592 | ||||||||||||
Balances at December 31, 2008 | (12,457 | ) | — | (11,316 | ) | (23,773 | ) | |||||||||
Impairment charge for the year | (29,683 | ) | (1,554 | ) | (84,856 | ) | (116,093 | ) | ||||||||
Additions/Disposals (net) due to change in the scope of consolidation | (22,597 | ) | — | — | (22,597 | ) | ||||||||||
Exchange differences and other | 36,364 | (8,189 | ) | 66 | 28,241 | |||||||||||
Balances at December 31, 2009 | (28,373 | ) | (9,743 | ) | (96,106 | ) | (134,222 | ) | ||||||||
Tangible assets, net: | ||||||||||||||||
Balances at December 31, 2007 | 4,287,612 | 4,710,696 | 460,725 | 9,459,033 | ||||||||||||
Balances at December 31, 2008 | 5,664,616 | 1,966,319 | 870,617 | 8,501,552 | ||||||||||||
Balances at December 31, 2009 | 6,202,162 | 1,702,657 | 1,090,916 | 8,995,735 |
(*) | The additions relate mainly to the acquisition of Banco Real and the reductions relate mainly to the disposal of Porterbrook. |
b) | Property, plant and equipment for own use | ||
The detail, by class of asset, of Property, plant and equipment — For own use in the consolidated balance sheets is as follows: |
Millions of euros | ||||||||||||||||
Accumulated | Impairment | Carrying | ||||||||||||||
Cost | depreciation | losses | amount | |||||||||||||
Land and buildings | 2,632 | (682 | ) | (11 | ) | 1,939 | ||||||||||
IT equipment and fixtures | 1,903 | (1,303 | ) | — | 601 | |||||||||||
Furniture and vehicles | 3,019 | (1,460 | ) | — | 1,559 | |||||||||||
Construction in progress and other items | 277 | (88 | ) | — | 189 | |||||||||||
Balances at December 31, 2007 | 7,831 | (3,533 | ) | (11 | ) | 4,288 | ||||||||||
Land and buildings | 3,767 | (923 | ) | (12 | ) | 2,832 | ||||||||||
IT equipment and fixtures | 2,093 | (1,410 | ) | — | 683 | |||||||||||
Furniture and vehicles | 3,705 | (1,814 | ) | — | 1,891 | |||||||||||
Construction in progress and other items | 341 | (82 | ) | — | 259 | |||||||||||
Balances at December 31, 2008 | 9,906 | (4,229 | ) | (12 | ) | 5,665 | ||||||||||
Land and buildings | 4,431 | (1,116 | ) | (28 | ) | 3,287 | ||||||||||
IT equipment and fixtures | 2,525 | (1,754 | ) | — | 772 | |||||||||||
Furniture and vehicles | 4,118 | (2,081 | ) | — | 2,037 | |||||||||||
Construction in progress and other items | 165 | (58 | ) | — | 106 | |||||||||||
Balances at December 31, 2009 | 11,239 | (5,009 | ) | (28 | ) | 6,202 | ||||||||||
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• | €4,717 million relating to property, plant and equipment owned by Group entities and branches located abroad (December 31, 2008:€4,063 million; December 31, 2007:€5,335 million). | ||
• | €196 million relating to property, plant and equipment being acquired under finance leases by the consolidated entities (December 31, 2008:€118 million; December 31, 2007:€394 million) (Note 2.l discloses additional information on these items). |
c) | Investment property |
d) | Sale of properties |
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17. | Intangible assets — Goodwill |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Santander Brasil | 7,706 | 6,850 | 501 | |||||||||
Santander UK Group (formerly Abbey) (United Kingdom) (*) | 7,996 | 6,921 | 8,168 | |||||||||
Totta Group (Portugal) | 1,641 | 1,641 | 1,641 | |||||||||
Sovereign Bancorp (Note 3) | 1,425 | — | — | |||||||||
Santander Consumer Bank AG (formerly CC-Holding) (Germany) | 878 | 875 | 824 | |||||||||
Banco Santander Chile | 683 | 563 | 681 | |||||||||
Drive Group | 493 | 484 | 419 | |||||||||
Grupo Financiero Santander Serfin (Mexico) | 423 | 416 | 498 | |||||||||
Banco Español de Crédito, S.A. | 369 | 369 | 373 | |||||||||
Santander Cards UK Limited (Note 3) | 365 | — | — | |||||||||
Santander Consumer Bank, A.S. (Norway) | 129 | 112 | 134 | |||||||||
Interbanco, S.A. | 122 | 122 | 163 | |||||||||
Finconsumo Banca S.p.A. (Italy) | 106 | 106 | 106 | |||||||||
GE Money Bank, GmbH (Austria) | 98 | — | — | |||||||||
Other companies | 431 | 377 | 323 | |||||||||
22,865 | 18,836 | 13,831 | ||||||||||
(*) | Including Abbey, Alliance & Leicester and Bradford & Bingley. |
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Millions of euros | |||||||||||||||
2009 | 2008 | 2007 | |||||||||||||
Balance at beginning of year | 18,836 | 13,831 | 14,513 | ||||||||||||
Transfer of goodwill from Investments (Note 3) | — | 8,000 | — | ||||||||||||
Additions (Note 3) | 2,300 | 941 | 252 | ||||||||||||
Of which: | |||||||||||||||
Sovereign Bancorp | 1,601 | — | — | ||||||||||||
Santander UK Group (Bradford & Bingley) | — | 202 | — | ||||||||||||
Santander UK Group (Alliance & Leicester) | — | 554 | — | ||||||||||||
Santander Consumer USA Group (formerly Drive) | 26 | 42 | 97 | ||||||||||||
Santander Cards UK Limited | 359 | — | — | ||||||||||||
Real Tokio Marine | 152 | — | — | ||||||||||||
GE Money Bank GmbH (Austria) | 98 | — | — | ||||||||||||
GE Money Oy (Finland) | 42 | — | — | ||||||||||||
Banco Santander Consumer Portugal, S.A. | — | — | 74 | ||||||||||||
CB Extrobank | — | — | 38 | ||||||||||||
Adjustments to initial acquisition price allocation | 628 | (413 | ) | (50 | ) | ||||||||||
Of which, transfer to other intangible assets | — | (447 | ) | — | |||||||||||
Impairment losses | (3 | ) | (73 | ) | (15 | ) | |||||||||
Disposals | (1,288 | ) | (3 | ) | (6 | ) | |||||||||
Of which: | |||||||||||||||
Banco Santander Brasil, S.A. (Note 3) | (1,286 | ) | — | — | |||||||||||
Exchange differences and other items | 2,392 | (3,447 | ) | (863 | ) | ||||||||||
Balance at end of year | 22,865 | 18,836 | 13,831 | ||||||||||||
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18. | Intangible assets — Other intangible assets |
Net | Application of | |||||||||||||||||||||||||||||||
additions | Change in | Amortization | amortization | Exchange | ||||||||||||||||||||||||||||
Thousands | Estimated | December | and | scope of | and | and | differences | December 31, | ||||||||||||||||||||||||
of euros | useful life | 31, 2008 | disposals | consolidation | impairment | impairment | and other | 2009 | ||||||||||||||||||||||||
With indefinite useful life: | ||||||||||||||||||||||||||||||||
Other brand names | 41,011 | 1,388 | — | — | — | (1,525 | ) | 40,874 | ||||||||||||||||||||||||
With finite useful life: | ||||||||||||||||||||||||||||||||
Credit cards (Abbey) | 5 years | 25,197 | — | — | — | — | 1,827 | 27,024 | ||||||||||||||||||||||||
IT developments | 3 years | 2,174,528 | 856,169 | 24,910 | — | (501,904 | ) | 388,168 | 2,941,871 | |||||||||||||||||||||||
Other | 885,577 | 487,153 | 160,316 | — | (35,513 | ) | 199,284 | 1,696,817 | ||||||||||||||||||||||||
Accumulated amortization | (1,332,187 | ) | — | (40,774 | ) | (826,139 | ) | 515,036 | (236,436 | ) | (1,920,500 | ) | ||||||||||||||||||||
Impairment losses | (7,058 | ) | — | (28,618 | ) | 22,382 | 5,666 | (7,728 | ) | |||||||||||||||||||||||
1,787,068 | 1,344,711 | 144,452 | (854,757 | ) | — | 356,884 | 2,778,358 | |||||||||||||||||||||||||
Net | Application of | |||||||||||||||||||||||||||||||
additions | Change in | Amortization | amortization | Exchange | ||||||||||||||||||||||||||||
Thousands | Estimated | December 31, | and | scope of | and | and | differences | December 31, | ||||||||||||||||||||||||
of euros | useful life | 2007 | disposals | consolidation | impairment | impairment | and other | 2008 | ||||||||||||||||||||||||
With indefinite useful life: | ||||||||||||||||||||||||||||||||
Brand name (Abbey) | 429,536 | — | — | — | (331,829 | ) | (97,707 | ) | — | |||||||||||||||||||||||
Other brand names | 16,639 | — | — | — | — | 24,372 | 41,011 | |||||||||||||||||||||||||
With finite useful life: | ||||||||||||||||||||||||||||||||
Customer deposits (Abbey) | 10 years | 1,175,428 | — | — | — | (903,867 | ) | (271,561 | ) | — | ||||||||||||||||||||||
Credit cards (Abbey) | 5 years | 32,727 | — | — | — | — | (7,530 | ) | 25,197 | |||||||||||||||||||||||
IT developments | 3 years | 1,574,969 | 726,322 | 209,873 | — | (159,527 | ) | (177,108 | ) | 2,174,528 | ||||||||||||||||||||||
Other | 233,352 | 24,118 | 183,391 | — | (11,571 | ) | 456,287 | 885,577 | ||||||||||||||||||||||||
Accumulated amortization | (1,234,838 | ) | — | (171,372 | ) | (655,211 | ) | 482,266 | 246,968 | (1,332,187 | ) | |||||||||||||||||||||
Impairment losses | (25,479 | ) | — | — | (911,203 | ) | 924,528 | 5,096 | (7,058 | ) | ||||||||||||||||||||||
2,202,334 | 750,440 | 221,892 | (1,566,414 | ) | — | 178,816 | 1,787,068 | |||||||||||||||||||||||||
Net | Application of | |||||||||||||||||||||||||||||||
additions | Change in | Amortization | amortization | Exchange | ||||||||||||||||||||||||||||
Thousands | Estimated | December | and | scope of | and | and | differences | December | ||||||||||||||||||||||||
of euros | useful life | 31, 2006 | disposals | consolidation | impairment | impairment | and other | 31, 2007 | ||||||||||||||||||||||||
With indefinite useful life: | ||||||||||||||||||||||||||||||||
Brand name (Abbey) | 469,099 | — | — | — | — | (39,563 | ) | 429,536 | ||||||||||||||||||||||||
Other brand names | 18,078 | — | — | — | — | (1,439 | ) | 16,639 | ||||||||||||||||||||||||
With finite useful life: | ||||||||||||||||||||||||||||||||
Customer deposits (Abbey) | 10 years | 1,283,693 | — | — | — | — | (108,265 | ) | 1,175,428 | |||||||||||||||||||||||
Credit cards (Abbey) | 5 years | 35,741 | — | — | — | — | (3,014 | ) | 32,727 | |||||||||||||||||||||||
IT developments | 3 years | 1,309,678 | 624,178 | — | — | (470,219 | ) | 111,333 | 1,574,969 | |||||||||||||||||||||||
Other | 323,026 | 449,418 | — | — | (555,587 | ) | 16,495 | 233,352 | ||||||||||||||||||||||||
Accumulated amortization | (980,530 | ) | — | — | (637,237 | ) | 470,219 | (87,290 | ) | (1,234,838 | ) | |||||||||||||||||||||
Impairment losses | (14,679 | ) | — | — | (562,883 | ) | 555,587 | (3,504 | ) | (25,479 | ) | |||||||||||||||||||||
Total | 2,444,106 | 1,073,594 | — | (1,200,120 | ) | — | (115,246 | ) | 2,202,334 | |||||||||||||||||||||||
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19. | Other assets |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Transactions in transit | 439,739 | 204,780 | 147,392 | |||||||||
Net pension plan assets (Note 25) | 502,041 | 510,028 | 239,392 | |||||||||
Prepayments and accrued income | 2,259,262 | 1,952,843 | 1,749,193 | |||||||||
Other | 2,411,016 | 2,716,801 | 1,744,230 | |||||||||
Inventories | 518,833 | 620,774 | 231,734 | |||||||||
6,130,891 | 6,005,226 | 4,111,941 | ||||||||||
20. | Deposits from central banks and Deposits from credit institutions |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Classification: | ||||||||||||
Financial liabilities held for trading | 46,117,206 | 35,951,711 | 23,254,111 | |||||||||
Of which: | ||||||||||||
Deposits from central banks | 2,985,488 | 9,109,857 | — | |||||||||
Deposits from credit institutions | 43,131,718 | 26,841,854 | 23,254,111 | |||||||||
Other financial liabilities at fair value through profit or loss | 22,847,995 | 14,130,169 | 18,769,907 | |||||||||
Of which: | ||||||||||||
Deposits from central banks | 10,103,147 | 4,396,901 | 6,562,328 | |||||||||
Deposits from credit institutions | 12,744,848 | 9,733,268 | 12,207,579 | |||||||||
Financial liabilities at amortized cost | 73,126,386 | 79,795,490 | 70,873,290 | |||||||||
Of which: | ||||||||||||
Deposits from central banks | 22,345,110 | 9,211,957 | 22,185,751 | |||||||||
Deposits from credit institutions | 50,781,276 | 70,583,533 | 48,687,539 | |||||||||
142,091,587 | 129,877,370 | 112,897,308 | ||||||||||
Type: | ||||||||||||
Reciprocal accounts | 948,049 | 509,282 | 562,619 | |||||||||
Term deposits | 78,325,126 | 82,559,946 | 71,227,723 | |||||||||
Other demand accounts | 3,340,932 | 2,527,834 | 2,466,369 | |||||||||
Repurchase agreements | 56,818,092 | 41,651,446 | 36,615,910 | |||||||||
Central bank credit account drawdowns | 2,658,925 | 2,626,262 | 2,008,927 | |||||||||
Hybrid financial liabilities | 463 | 2,600 | 15,760 | |||||||||
142,091,587 | 129,877,370 | 112,897,308 | ||||||||||
Currency: | ||||||||||||
Euro | 58,457,951 | 59,833,384 | 58,327,694 | |||||||||
Pound sterling | 34,719,824 | 27,275,168 | 14,948,909 | |||||||||
US dollar | 37,066,057 | 33,490,478 | 28,930,017 | |||||||||
Other currencies | 11,847,756 | 9,278,340 | 10,690,688 | |||||||||
142,091,587 | 129,877,370 | 112,897,308 | ||||||||||
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21. | Customer deposits |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Classification: | ||||||||||||
Financial liabilities held for trading | 4,658,372 | 4,896,065 | 27,992,480 | |||||||||
Other financial liabilities at fair value through profit or loss | 14,636,466 | 9,318,117 | 10,669,058 | |||||||||
Financial liabilities at amortized cost | 487,681,399 | 406,015,268 | 316,744,981 | |||||||||
506,976,237 | 420,229,450 | 355,406,519 | ||||||||||
Geographical area: | ||||||||||||
Spain | 170,760,231 | 142,376,596 | 131,833,844 | |||||||||
European Union (excluding Spain) | 199,169,106 | 170,778,310 | 134,505,644 | |||||||||
United States and Puerto Rico | 37,851,345 | 8,440,893 | 17,881,211 | |||||||||
Other OECD countries | 1,101,108 | 470,721 | 189,548 | |||||||||
Latin America | 96,804,592 | 96,103,045 | 69,360,898 | |||||||||
Rest of the world | 1,289,855 | 2,059,885 | 1,635,374 | |||||||||
506,976,237 | 420,229,450 | 355,406,519 | ||||||||||
Type: | ||||||||||||
On demand- | ||||||||||||
Current accounts | 135,895,002 | 94,773,159 | 87,136,743 | |||||||||
Savings accounts | 127,940,647 | 115,673,794 | 90,727,525 | |||||||||
Other demand deposits | 3,570,326 | 3,035,757 | 3,593,720 | |||||||||
Term deposits- | ||||||||||||
Fixed-term deposits | 192,244,789 | 143,130,514 | 92,375,364 | |||||||||
Home-purchase savings accounts | 315,867 | 295,458 | 296,768 | |||||||||
Discount deposits | 448,432 | 11,625,840 | 9,933,139 | |||||||||
Hybrid financial liabilities | 5,447,496 | 8,159,893 | 8,494,773 | |||||||||
Other term deposits | 212,113 | 290,055 | 113,562 | |||||||||
Notice deposits | 2,208,116 | 1,764,954 | 283,301 | |||||||||
Repurchase agreements | 38,693,449 | 41,480,026 | 62,451,624 | |||||||||
506,976,237 | 420,229,450 | 355,406,519 | ||||||||||
22. | Marketable debt securities |
a) | Breakdown |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Classification: | ||||||||||||
Financial liabilities held for trading | 586,022 | 3,569,795 | 17,090,935 | |||||||||
Other financial liabilities at fair value through profit or loss | 4,886,840 | 5,191,073 | 10,279,037 | |||||||||
Financial liabilities at amortized cost | 206,490,311 | 227,642,422 | 205,916,716 | |||||||||
211,963,173 | 236,403,290 | 233,286,688 | ||||||||||
Type: | ||||||||||||
Bonds and debentures outstanding | 183,250,197 | 194,291,014 | 200,557,274 | |||||||||
Notes and other securities | 28,712,976 | 42,112,276 | 32,729,414 | |||||||||
211,963,173 | 236,403,290 | 233,286,688 | ||||||||||
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b) | Bonds and debentures outstanding |
December 31, 2009 | ||||||||||||||||||||
Outstanding | ||||||||||||||||||||
issue amount in | ||||||||||||||||||||
foreign | Annual | |||||||||||||||||||
Millions of euros | currency | interest | ||||||||||||||||||
Currency of issue | 2009 | 2008 | 2007 | (Millions) | rate (%) | |||||||||||||||
Euro | 122,454 | 135,330 | 131,684 | 122,454 | 2.90 | % | ||||||||||||||
US dollar | 36,535 | 27,459 | 38,864 | 52,632 | 2.15 | % | ||||||||||||||
Pound sterling | 13,829 | 21,493 | 23,154 | 12,281 | 2.72 | % | ||||||||||||||
Chilean peso | 3,180 | 2,380 | 2,239 | 2,323,523 | 3.99 | % | ||||||||||||||
Other currencies | 7,252 | 7,629 | 4,616 | |||||||||||||||||
Ending balance | 183,250 | 194,291 | 200,557 | |||||||||||||||||
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Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Balance at beginning of year | 194,291 | 200,557 | 168,335 | |||||||||
Net inclusion of entities in the Group | 10,760 | 20,333 | 36 | |||||||||
Of which, Alliance & Leicester Group | — | 18,676 | — | |||||||||
Sovereign Bancorp, Inc. | 10,759 | — | — | |||||||||
Issues | 60,999 | 76,786 | 122,530 | |||||||||
Banco Santander, S.A.- | ||||||||||||
Mortgage-backed bonds — fixed rate | 1,500 | — | 4,500 | |||||||||
Banesto- | ||||||||||||
Mortgage-backed bonds — fixed rate | 2,807 | 100 | 1,708 | |||||||||
Bonds | 4,556 | 3,818 | 5,006 | |||||||||
Santander International Debt, S.A., Sole-Shareholder Company- | ||||||||||||
Bonds — floating rate | 2,928 | 16,007 | 10,059 | |||||||||
Santander UK (formerly Abbey)- | ||||||||||||
Holmes Master Issuer plc | — | — | 15,924 | |||||||||
Bonds in pound sterling | 4,945 | 21,667 | 26,613 | |||||||||
Bonds in other currencies | 33,257 | 29,599 | 41,122 | |||||||||
Santander US Debt, S.A. Sole-Shareholder Company- | ||||||||||||
Debentures — floating rate | 1,032 | — | 2,038 | |||||||||
Santander Consumer Bank AG- | ||||||||||||
Asset-backed securities | — | 677 | 2,585 | |||||||||
Banco Santander Totta, S.A.- | ||||||||||||
Bonds | 1,520 | 1,496 | 890 | |||||||||
Mortgage debentures | 1,000 | 1,000 | — | |||||||||
Totta (Ireland) Plc — floating rate bonds | 3,380 | 849 | — | |||||||||
Banco Santander S.A. (Brasil) | ||||||||||||
Agricultural letters of credit | 458 | — | — | |||||||||
Real estate letters of credit | 2,311 | 663 | — | |||||||||
Bonds | 80 | 556 | ||||||||||
Banco Santander, S.A. (Chile) | ||||||||||||
Bonds | 859 | — | — | |||||||||
Banco Santander, S.A. (Mexico) | ||||||||||||
Bonds | 164 | — | — | |||||||||
Redemptions and repurchases | (75,614 | ) | (93,872 | ) | (85,674 | ) | ||||||
Of which: | ||||||||||||
Banco Santander, S.A. | (1,545 | ) | (1,783 | ) | (3,987 | ) | ||||||
Banesto | (4,971 | ) | (7,407 | ) | (2,358 | ) | ||||||
Santander Consumer Bank S.p.A. | — | (217 | ) | (26 | ) | |||||||
Santander UK (formerly Abbey)- | (41,401 | ) | (65,039 | ) | (70,535 | ) | ||||||
Banco Santander S.A. (formerly Banespa) | (2,278 | ) | (555 | ) | — | |||||||
Santander Consumer Bank AG | (149 | ) | (203 | ) | — | |||||||
Santander Central Hispano International Limited | (46 | ) | (979 | ) | — | |||||||
Banco Santander Totta, S.A. | (1,430 | ) | (2,637 | ) | — | |||||||
Totta (Ireland) Plc | (849 | ) | (1,189 | ) | — | |||||||
Santander US Debt, S.A. Sole-Shareholder Company | (13,156 | ) | (4,178 | ) | (1,329 | ) | ||||||
Santander International Debt, S.A. Sole-Shareholder Company | (2,672 | ) | (6,239 | ) | (3,037 | ) | ||||||
Drive Group | (155 | ) | (960 | ) | — | |||||||
Fondo de Titulización de Activos Santander Empresas 1 | — | (468 | ) | — | ||||||||
Fondo de Titulización de Activos Santander Empresas 2 | — | (691 | ) | — | ||||||||
Fondo de Titulización de Activos Santander Empresas 3 | — | (883 | ) | — | ||||||||
Exchange differences | 1,459 | (5,806 | ) | (2,864 | ) | |||||||
Other changes | (8,645 | ) | (3,707 | ) | (1,806 | ) | ||||||
Balance at end of year | 183,250 | 194,291 | 200,557 | |||||||||
c) | Notes and other securities |
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d) | Guarantees |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Commercial paper (promissory notes) | — | — | 183 | |||||||||
Asset-backed securities | 37,945 | 50,153 | 63,172 | |||||||||
Other mortgage securities | 53,994 | 47,758 | 45,664 | |||||||||
Of which: mortgage-backed bonds | 42,204 | 37,726 | 39,264 | |||||||||
91,939 | 97,911 | 109,019 | ||||||||||
1. | Transactions securing mortgage-backed securities: |
• | First mortgage for acquisition and/or refurbishment of principal or second residence, which at the date of securitization must not have any amounts more than 30 days past due. For these purposes, financing granted to property developers is excluded. | ||
• | Appraisal conducted by specialist valuer. | ||
• | The amount of the loan must not exceed 80% of the appraised value, unless additional guarantees are provided (bank guarantee given by a credit institution other than the creditor bank or credit insurance on the terms established in Legislative Royal Decree 6/2004, of 29 October), in which case this limit may be extended up to a maximum of 95%. | ||
• | Each of the mortgaged properties must have at least one liability insurance policy in force. The capital insured must not be lower than either the appraised value (excluding the land) or the amount of the loan. |
2. | With respect to issues of mortgage-backed bonds (cédulas hipotecarias), in order to calculate the amount of the qualifying assets, the following transactions are excluded from the total base of the unsecuritized mortgage portfolio: |
• | Transactions classified as non-performing, at pre-action stage and at procedural stage. | ||
• | Transactions without appraisal by a specialist valuer. | ||
• | Transactions exceeding 80% of the appraised value in residential financing and 60% in the case of other assets. | ||
• | Second mortgages or mortgages with insufficient collateral. | ||
• | Transactions without insurance or with insufficient insurance. |
• | Mortgage loans to individuals to finance the acquisition and refurbishment of homes with an average maturity of over ten years. |
• | Personal consumer finance loans with no specific guarantee and unsecured loans with an average maturity of five years. |
• | Loans to SMEs (non-financial small and medium-sized enterprises) secured by State guarantees, and loans to companies (micro companies, SMEs, companies and large companies) secured by property mortgages, the borrower’s personal guarantee, guarantees and other collateral other than property mortgages, with an average maturity of seven years. |
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• | Mortgage and non-mortgage loans to finance municipalities, autonomous communities and subsidiaries with an average maturity of over ten years. |
• | Asset-backed securities issued by various European special-purpose vehicles backed by loans for the purchase of German and Italian vehicles and Italian personal loans with an average maturity of eight years. |
• | Commercial credit of Banco Santander (ordinary invoice discounting, occasional discounting and advances to customers on legitimate receivables) with an average maturity of 45 days. |
23. | Subordinated liabilities |
a) | Breakdown |
Thousands of euros | December 31, 2009 | |||||||||||||||||||
Outstanding | ||||||||||||||||||||
issue amount | ||||||||||||||||||||
in foreign | Annual | |||||||||||||||||||
currency | interest rate | |||||||||||||||||||
Currency of issue | 2009 | 2008 | 2007 | (Millions) | (%) | |||||||||||||||
Euro | 16,598,441 | 19,660,053 | 19,224,529 | 16,598 | 4.22 | % | ||||||||||||||
US dollar | 9,297,611 | 7,877,340 | 7,412,454 | 13,394 | 6.27 | % | ||||||||||||||
Pound sterling | 6,440,827 | 7,952,179 | 7,387,191 | 5,720 | 7.14 | % | ||||||||||||||
Other currencies | 4,467,722 | 3,383,678 | 2,168,563 | |||||||||||||||||
Balance at end of year | 36,804,601 | 38,873,250 | 36,192,737 | |||||||||||||||||
Of which, preference shares | 430,152 | 1,051,272 | 522,558 |
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b) | Changes |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Balance at beginning of year | 38,873 | 36,193 | 31,091 | |||||||||
Net inclusion of entities in the Group | 1,598 | 2,776 | — | |||||||||
Of which: | ||||||||||||
Sovereign Bancorp, Inc. | 1,598 | — | — | |||||||||
Alliance & Leicester Group | — | 1,648 | — | |||||||||
Banco Real S.A. | — | 1,128 | — | |||||||||
Issues | 6,874 | 312 | 8,330 | |||||||||
Of which: | ||||||||||||
Santander Finance Capital, S.A., Sole-Shareholder Company | 2,463 | — | — | |||||||||
Santander Finance Preferred, S.A., Sole-Shareholder Company | 1,576 | — | 1,072 | |||||||||
Santander Issuances, S.A. | 1,544 | — | — | |||||||||
Santander International Preferred, S.A., Sole-Shareholder Company | 690 | — | — | |||||||||
Banesto | 497 | — | — | |||||||||
Santander Central Hispano Issuances Limited | — | — | 5,908 | |||||||||
Santander Perpetual, S.A., Sole-Shareholder Company | — | — | 1,019 | |||||||||
Redemptions | (9,316 | ) | (1,315 | ) | (2,340 | ) | ||||||
Of which: | ||||||||||||
Santander UK (formerly Abbey National plc) | (2,775 | ) | (409 | ) | (944 | ) | ||||||
Santander Finance Capital, S.A., Sole-Shareholder Company | (2,280 | ) | — | — | ||||||||
Santander Finance Preferred, S.A., Sole-Shareholder Company | (1,174 | ) | — | — | ||||||||
Santander Central Hispano Issuances Limited | (1,027 | ) | (153 | ) | (1,188 | ) | ||||||
Alliance & Leicester | (693 | ) | — | — | ||||||||
Santander Perpetual, S.A., Sole-Shareholder Company | (588 | ) | — | — | ||||||||
Santander Issuances, S.A. | (500 | ) | — | — | ||||||||
Banesto | (131 | ) | (500 | ) | — | |||||||
Exchange differences | 708 | (2,066 | ) | (1,353 | ) | |||||||
Other changes | (1,932 | ) | 2,973 | 465 | ||||||||
Balance at end of year | 36,805 | 38,873 | 36,193 | |||||||||
c) | Other disclosures |
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24. | Other financial liabilities |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Trade payables | 1,902,249 | 2,282,759 | 3,350,422 | |||||||||
Clearing houses | 734,873 | 761,534 | 1,106,714 | |||||||||
Tax collection accounts: | ||||||||||||
Tax payables | 1,915,373 | 2,066,685 | 2,040,547 | |||||||||
Factoring accounts payable | 448,985 | 283,478 | 326,107 | |||||||||
Unsettled financial transactions | 2,753,781 | 3,628,473 | 2,994,299 | |||||||||
Other financial liabilities | 11,847,307 | 8,658,240 | 6,865,389 | |||||||||
Of which: recognized in financial liabilities held for trading | 302,520 | — | — | |||||||||
19,602,568 | 17,681,169 | 16,683,478 | ||||||||||
25. | Provisions |
a) | Breakdown |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Provisions for pensions and similar obligations | 10,628,684 | 11,198,117 | 11,819,748 | |||||||||
Provisions for taxes and other legal contingencies | 3,283,339 | 2,363,706 | 1,715,967 | |||||||||
Provisions for contingent liabilities and commitments (Note 2): | 641,620 | 678,584 | 636,316 | |||||||||
Of which: country risk | 18,418 | 56,254 | 48,831 | |||||||||
Other provisions | 2,979,096 | 3,495,852 | 2,398,868 | |||||||||
Provisions | 17,532,739 | 17,736,259 | 16,570,899 | |||||||||
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b) | Changes |
Millions of euros | ||||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||
Contingent | Contingent | Contingent | ||||||||||||||||||||||||||||||||||||||||||||||
liabilities and | Other | liabilities and | Other | liabilities and | Other | |||||||||||||||||||||||||||||||||||||||||||
Pensions | commitments | provisions | Total | Pensions | commitments | provisions | Total | Pensions | commitments | provisions | Total | |||||||||||||||||||||||||||||||||||||
Balances at beginning of year | 11,198 | 679 | 5,860 | 17,737 | 11,820 | 636 | 4,115 | 16,571 | 14,014 | 599 | 4,614 | 19,227 | ||||||||||||||||||||||||||||||||||||
Net inclusion of entities in the Group | 44 | 125 | (26 | ) | 143 | 175 | 73 | 2,816 | 3,064 | (2 | ) | (35 | ) | (37 | ) | |||||||||||||||||||||||||||||||||
Additions charged to income: | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense and similar charges (Note 39) | 482 | — | — | 482 | 454 | — | — | 454 | 487 | — | — | 487 | ||||||||||||||||||||||||||||||||||||
Personnel expenses (Note 47) | 176 | — | — | 176 | 184 | — | — | 184 | 209 | — | — | 209 | ||||||||||||||||||||||||||||||||||||
Period provisions | 339 | 46 | 1,407 | 1,792 | 598 | (3 | ) | 1,045 | 1,640 | 431 | 95 | 369 | 895 | |||||||||||||||||||||||||||||||||||
Other additions arising from insurance contracts linked to pensions | (30 | ) | — | — | (30 | ) | (17 | ) | — | — | (17 | ) | (17 | ) | — | — | (17 | ) | ||||||||||||||||||||||||||||||
Payments to pensioners and early retirees with a charge to internal provisions | (1,191 | ) | — | — | (1,191 | ) | (1,086 | ) | — | — | (1,086 | ) | (1,109 | ) | — | — | (1,109 | ) | ||||||||||||||||||||||||||||||
Insurance premiums paid | (1 | ) | — | — | (1 | ) | (8 | ) | — | — | (8 | ) | (6 | ) | — | — | (6 | ) | ||||||||||||||||||||||||||||||
Payments to external funds | (594 | ) | — | — | (594 | ) | (563 | ) | — | — | (563 | ) | (2,168 | ) | — | — | (2,168 | ) | ||||||||||||||||||||||||||||||
Amount used | — | — | (1,412 | ) | (1,412 | ) | — | — | (1,523 | ) | (1,523 | ) | — | — | (921 | ) | (921 | ) | ||||||||||||||||||||||||||||||
Transfers, exchange differences and other changes | 206 | (208 | ) | 433 | 431 | (359 | ) | (27 | ) | (594 | ) | (980 | ) | (19 | ) | (58 | ) | 88 | 11 | |||||||||||||||||||||||||||||
Balances at end of year | 10,629 | 642 | 6,262 | 17,533 | 11,198 | 679 | 5,860 | 17,736 | 11,820 | 636 | 4,115 | 16,571 | ||||||||||||||||||||||||||||||||||||
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c) | Provisions for pensions and similar obligations |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Provisions for post-employment plans — Spanish entities | 5,443 | 5,596 | 5,723 | |||||||||
Of which: defined benefit | 5,439 | 5,593 | 5,626 | |||||||||
Provisions for other similar obligations — Spanish entities | 3,851 | 4,166 | 4,001 | |||||||||
Of which: early retirements | 3,842 | 4,158 | 3,950 | |||||||||
Provisions for post-employment plans — Abbey | 496 | 744 | 1,275 | |||||||||
Provisions for post-employment plans and other similar obligations — Other foreign subsidiaries | 839 | 692 | 821 | |||||||||
Of which: defined benefit | 829 | 688 | 821 | |||||||||
Provisions for pensions and similar obligations | 10,629 | 11,198 | 11,820 | |||||||||
i. | Spanish entities — Post-employment plans and other similar obligations |
1. | Valuation method: projected unit credit method, which sees each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately. | ||
2. | Actuarial assumptions used: unbiased and mutually compatible. Specifically, the most significant actuarial assumptions used in the calculations were as follows: |
Post-employment plans | Other similar obligations | |||||||||||
2009 | 2008 | 2007 | 2009 | 2008 | 2007 | |||||||
Annual discount rate | 4.0% | 4.0% | 4.0% | 4.0% | 4.0% | 4.0% | ||||||
Mortality tables | GRM/F-95 (PERM/F-2000 in the case of Banesto) | GRM/F-95 (PERM/F-2000 in the case of Banesto) | GRM/F-95 (PERM/F-2000 in the case of Banesto) | GRM/F-95 (PERM/F-2000 in the case of Banesto) | GRM/F-95 (PERM/F-2000 in the case of Banesto) | GRM/F-95 (PERM/F-2000 in the case of Banesto) | ||||||
Cumulative annual CPI growth | 1.5% | 1.5% | 1.5% | 1.5% | 1.5% | 1.5% | ||||||
Annual salary increase rate | 2.50% (2.9% in the case of Banesto) | 2.50% (2.9% in the case of Banesto) | 2.50% (2.9% in the case of Banesto) | n/a | n/a | n/a | ||||||
Annual social security pension increase rate | 1.5% | 1.5% | 1.5% | n/a | n/a | n/a | ||||||
Annual benefit increase rate | n/a | n/a | n/a | 0% to 1.5% | 0% to 1.5% | 0% to 1.5% |
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3. | The estimated retirement age of each employee is the first at which the employee is entitled to retire or the agreed-upon age, as appropriate. |
Post-employment plans | Other similar obligations | |||||||||||||||||||||||
2009 | 2008 | 2007 | 2009 | 2008 | 2007 | |||||||||||||||||||
Expected rate of return on plan assets | 4.0 | % | 4.0 | % | 4.0 | % | — | — | — | |||||||||||||||
Expected rate of return on reimbursement rights | 4.0 | % | 4.0 | % | 4.0 | % | 4.0 | % | 4.0 | % | 4.0 | % |
Millions of euros | ||||||||||||||||||||||||||||||||||||||||
Post-employment plans | Other similar obligations | |||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | 2009 | 2008 | 2007 | 2006 | 2005 | |||||||||||||||||||||||||||||||
Present value of the obligations: | ||||||||||||||||||||||||||||||||||||||||
To current employees | 1,200 | 1,273 | 1,259 | 1,215 | 1,207 | — | — | — | — | — | ||||||||||||||||||||||||||||||
Vested obligations to retired employees | 4,708 | 4,828 | 4,876 | 4,958 | 4,942 | — | — | — | — | — | ||||||||||||||||||||||||||||||
To early retirees | — | — | — | — | — | 3,842 | 4,158 | 3,950 | 4,481 | 4,215 | ||||||||||||||||||||||||||||||
Long-service bonuses and other obligations | — | — | — | — | — | 9 | 8 | 50 | 46 | 54 | ||||||||||||||||||||||||||||||
Other | 183 | 181 | 174 | 164 | 225 | — | — | 1 | — | — | ||||||||||||||||||||||||||||||
6,091 | 6,282 | 6,309 | 6,337 | 6,374 | 3,851 | 4,166 | 4,001 | 4,527 | 4,269 | |||||||||||||||||||||||||||||||
Less- | ||||||||||||||||||||||||||||||||||||||||
Fair value of plan assets | 184 | 193 | 192 | 203 | 211 | — | — | — | — | — | ||||||||||||||||||||||||||||||
Unrecognized actuarial (gains)/losses | 462 | 489 | 487 | 482 | 506 | — | — | — | — | — | ||||||||||||||||||||||||||||||
Unrecognized past service cost | 6 | 7 | 4 | 5 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Provisions — Provisions for pensions | 5,439 | 5,593 | 5,626 | 5,647 | 5,657 | 3,851 | 4,166 | 4,001 | 4,527 | 4,269 | ||||||||||||||||||||||||||||||
Of which: | ||||||||||||||||||||||||||||||||||||||||
Internal provisions for pensions | 3,086 | 3,153 | 3,114 | 3,065 | 3,015 | 3,848 | 4,159 | 3,987 | 4,504 | 4,235 | ||||||||||||||||||||||||||||||
Insurance contracts linked to pensions (Note 14) | 2,353 | 2,440 | 2,512 | 2,582 | 2,642 | 3 | 7 | 14 | 23 | 34 |
Millions of euros | ||||||||||||||||||||||||
Post-employment plans | Other similar obligations | |||||||||||||||||||||||
2009 | 2008 | 2007 | 2009 | 2008 | 2007 | |||||||||||||||||||
Current service cost | 55 | 56 | 56 | 1 | 5 | 5 | ||||||||||||||||||
Interest cost | 226 | 240 | 242 | 153 | 145 | 166 | ||||||||||||||||||
Expected return on plan assets | (7 | ) | (8 | ) | (8 | ) | — | — | — | |||||||||||||||
Expected return on insurance contracts linked to pensions | (95 | ) | (95 | ) | (102 | ) | — | — | (1 | ) | ||||||||||||||
Extraordinary charges- | ||||||||||||||||||||||||
Actuarial (gains)/losses recognized in the year | 10 | 6 | 6 | 38 | 4 | 13 | ||||||||||||||||||
Past service cost | 29 | 63 | 58 | — | — | — | ||||||||||||||||||
Early retirement cost | (19 | ) | (23 | ) | 2 | 257 | 587 | 40 | ||||||||||||||||
Other | (51 | ) | (20 | ) | (16 | ) | — | (53 | ) | (22 | ) | |||||||||||||
Total | 148 | 219 | 238 | 449 | 688 | 201 | ||||||||||||||||||
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Millions of euros | ||||||||||||||||||||||||
Post-employment plans | Other similar obligations | |||||||||||||||||||||||
2009 | 2008 | 2007 | 2009 | 2008 | 2007 | |||||||||||||||||||
Present value of the obligations at beginning of year | 6,282 | 6,309 | 6,337 | 4,166 | 4,001 | 4,527 | ||||||||||||||||||
Net inclusion of entities in the Group | — | — | — | — | — | |||||||||||||||||||
Current service cost | 55 | 56 | 56 | 1 | 5 | 5 | ||||||||||||||||||
Interest cost | 226 | 240 | 242 | 153 | 145 | 166 | ||||||||||||||||||
Early retirement cost | (19 | ) | (23 | ) | 2 | 257 | 587 | 39 | ||||||||||||||||
Effect of curtailment/settlement | (51 | ) | (21 | ) | (16 | ) | — | (54 | ) | (22 | ) | |||||||||||||
Benefits paid | (383 | ) | (334 | ) | (350 | ) | (765 | ) | (726 | ) | (729 | ) | ||||||||||||
Past service cost | 29 | 66 | 58 | — | — | 1 | ||||||||||||||||||
Actuarial (gains)/losses | (52 | ) | (11 | ) | (19 | ) | 38 | 4 | 13 | |||||||||||||||
Other | 4 | (1 | ) | 1 | 204 | 1 | ||||||||||||||||||
Present value of the obligations at end of year | 6,091 | 6,282 | 6,309 | 3,851 | 4,166 | 4,001 | ||||||||||||||||||
Millions of euros | ||||||||||||
Post-employment plans | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Fair value of plan assets at beginning of year | 193 | 192 | 203 | |||||||||
Expected return on plan assets | 7 | 8 | 8 | |||||||||
Actuarial gains/(losses) | (4 | ) | (2 | ) | (12 | ) | ||||||
Contributions | (1 | ) | 8 | 6 | ||||||||
Benefits paid | (11 | ) | (13 | ) | (13 | ) | ||||||
Fair value of plan assets at end of year | 184 | 193 | 192 | |||||||||
Millions of euros | ||||||||||||||||||||||||
Post-employment plans | Other similar obligations | |||||||||||||||||||||||
2009 | 2008 | 2007 | 2009 | 2008 | 2007 | |||||||||||||||||||
Fair value of insurance contracts linked to pensions at beginning of year | 2,440 | 2,512 | 2,582 | 7 | 14 | 23 | ||||||||||||||||||
Expected return on insurance contracts (Note 38) | 95 | 95 | 102 | — | — | 1 | ||||||||||||||||||
Actuarial gains/(losses) | (31 | ) | (17 | ) | (17 | ) | — | — | — | |||||||||||||||
Premiums paid | 7 | 11 | 12 | — | — | — | ||||||||||||||||||
Benefits paid | (158 | ) | (161 | ) | (165 | ) | (4 | ) | (7 | ) | (10 | ) | ||||||||||||
Exchange differences | — | — | (2 | ) | — | — | — | |||||||||||||||||
Fair value of insurance contracts linked to pensions at end of year | 2,353 | 2,440 | 2,512 | 3 | 7 | 14 | ||||||||||||||||||
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Millions | ||||
of euros | ||||
2010 | 1,091 | |||
2011 | 1,031 | |||
2012 | 958 | |||
2013 | 896 | |||
2014 | 824 | |||
2015 to 2019 | 2,775 | |||
7,575 | ||||
ii. | United Kingdom |
1. | Valuation method: projected unit credit method, which sees each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately. | ||
2. | Actuarial assumptions used: unbiased and mutually compatible. Specifically, the most significant actuarial assumptions used in the calculations were as follows: |
2009 | 2008 | 2007 | ||||||||||
Annual discount rate | 5.75% | 6.40% | 5.30% | |||||||||
Mortality tables | PX92MC C2009 | PX92MC C2008 | PA92MC C2006 | |||||||||
Cumulative annual CPI growth | 3.4% | 3.0% | 3.0% | |||||||||
Annual salary increase rate | 3.4% | 3.5% | 4.0% | |||||||||
Annual pension increase rate | 3.3% | 3.0% | 3.0% |
Millions of euros | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
Present value of the obligations | 7,116 | 5,445 | 6,248 | 6,350 | 6,337 | |||||||||||||||
Less- | ||||||||||||||||||||
Fair value of plan assets | 5,910 | 4,591 | 4,913 | 4,810 | 4,326 | |||||||||||||||
Unrecognized actuarial (gains)/losses | 787 | 202 | 60 | (102 | ) | 223 | ||||||||||||||
Provisions — Provisions for pensions | 419 | 652 | 1,275 | 1,642 | 1,788 | |||||||||||||||
Of which: | ||||||||||||||||||||
Internal provisions for pensions | 496 | 744 | 1,275 | 1,642 | 1,788 | |||||||||||||||
Net assets for pensions | (77 | ) | (92 | ) | — | — | — |
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Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Current service cost | 72 | 69 | 97 | |||||||||
Interest cost | 367 | 331 | 322 | |||||||||
Expected return on plan assets | (320 | ) | (298 | ) | (284 | ) | ||||||
Extraordinary charges: | ||||||||||||
Actuarial gains/losses recognized in the year | — | (1 | ) | (1 | ) | |||||||
Past service cost | (1 | ) | — | — | ||||||||
Total | 118 | 101 | 134 | |||||||||
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Present value of the obligations at beginning of year | 5,445 | 6,248 | 6,350 | |||||||||
Net inclusion of entities in the Group | — | 1,252 | — | |||||||||
Current service cost | 72 | 69 | 97 | |||||||||
Interest cost | 367 | 331 | 322 | |||||||||
Past service cost | (1 | ) | — | — | ||||||||
Benefits paid | (261 | ) | (199 | ) | (175 | ) | ||||||
Actuarial (gains)/losses | 1,050 | (802 | ) | 200 | ||||||||
Exchange differences and other items | 444 | (1,454 | ) | (546 | ) | |||||||
Present value of the obligations at end of year | 7,116 | 5,445 | 6,248 | |||||||||
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Fair value of plan assets at beginning of year | 4,591 | 4,913 | 4,810 | |||||||||
Net inclusion of entities in the Group | — | 1,335 | — | |||||||||
Expected return on plan assets | 320 | 298 | 284 | |||||||||
Actuarial gains/losses | 364 | (954 | ) | 45 | ||||||||
Contributions | 564 | 413 | 387 | |||||||||
Benefits paid | (261 | ) | (199 | ) | (175 | ) | ||||||
Exchange differences | 333 | (1,215 | ) | (438 | ) | |||||||
Fair value of plan assets at end of year | 5,910 | 4,591 | 4,913 | |||||||||
2009 | 2008 | 2007 | ||||||||||
Equity instruments | 39 | % | 41 | % | 46 | % | ||||||
Debt instruments | 54 | % | 56 | % | 52 | % | ||||||
Properties | 1 | % | 2 | % | — | |||||||
Other | 6 | % | 1 | % | 2 | % |
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Millions | ||||
of euros | ||||
2010 | 279 | |||
2011 | 298 | |||
2012 | 318 | |||
2013 | 340 | |||
2014 | 363 | |||
2015 to 2019 | 2,234 | |||
3,832 | ||||
iii. | Other foreign subsidiaries |
Millions of euros | ||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
Present value of the obligations | 9,078 | 6,735 | 7,264 | 6,198 | 5,481 | |||||||||||||||
Less- | ||||||||||||||||||||
Fair value of plan assets | 8,497 | 6,307 | 6,725 | 3,917 | 2,523 | |||||||||||||||
Unrecognized actuarial (gains)/losses | 632 | 386 | 134 | 517 | 760 | |||||||||||||||
Unrecognized past service cost | 3 | — | — | — | 2 | |||||||||||||||
Provisions — Provisions for pensions | (54 | ) | 42 | 405 | 1,764 | 2,196 | ||||||||||||||
Of which: | ||||||||||||||||||||
Internal provisions for pensions | 829 | 688 | 821 | 2,198 | 2,459 | |||||||||||||||
Net assets for pensions | (425 | ) | (418 | ) | (239 | ) | (224 | ) | (55 | ) | ||||||||||
Unrecognized net assets for pensions | (458 | ) | (228 | ) | (177 | ) | (210 | ) | (208 | ) |
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Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Current service cost | 49 | 54 | 50 | |||||||||
Interest cost | 736 | 670 | 607 | |||||||||
Expected return on plan assets | (672 | ) | (627 | ) | (559 | ) | ||||||
Extraordinary charges: | ||||||||||||
Actuarial gains/losses recognized in the year | 73 | 31 | 22 | |||||||||
Early retirement cost | 9 | 5 | 16 | |||||||||
Other | (10 | ) | (2 | ) | 216 | |||||||
Total | 185 | 131 | 352 | |||||||||
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Present value of the obligations at beginning of year | 6,735 | 7,264 | 6,198 | |||||||||
Net inclusion of entities in the Group | 68 | 673 | — | |||||||||
Current service cost | 49 | 54 | 50 | |||||||||
Interest cost | 736 | 670 | 607 | |||||||||
Early retirement cost | 9 | 5 | 16 | |||||||||
Effect of curtailment/settlement | (209 | ) | (2 | ) | (4 | ) | ||||||
Benefits paid | (587 | ) | (535 | ) | (492 | ) | ||||||
Past service cost | 3 | — | — | |||||||||
Actuarial (gains)/losses | 830 | (10 | ) | 707 | ||||||||
Exchange differences and other items | 1,444 | (1,384 | ) | 182 | ||||||||
Present value of the obligations at end of year | 9,078 | 6,735 | 7,264 | |||||||||
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Fair value of plan assets at beginning of year | 6,307 | 6,725 | 3,917 | |||||||||
Net inclusion of entities in the Group | 49 | 618 | — | |||||||||
Expected return on plan assets | 672 | 627 | 559 | |||||||||
Actuarial gains/(losses) | 449 | (351 | ) | 586 | ||||||||
Contributions | 158 | 285 | 1,863 | |||||||||
Benefits paid | (533 | ) | (495 | ) | (452 | ) | ||||||
Exchange differences and other items | 1,395 | (1,102 | ) | 252 | ||||||||
Fair value of plan assets at end of year | 8,497 | 6,307 | 6,725 | |||||||||
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2009 | 2008 | 2007 | ||||||||||
Equity instruments | 12 | % | 12 | % | 27 | % | ||||||
Debt instruments | 83 | % | 83 | % | 66 | % | ||||||
Properties | 1 | % | 2 | % | 2 | % | ||||||
Other | 4 | % | 3 | % | 5 | % |
Millions | ||||
of euros | ||||
2010 | 625 | |||
2011 | 644 | |||
2012 | 667 | |||
2013 | 689 | |||
2014 | 714 | |||
2015 to 2019 | 4,119 | |||
7,458 | ||||
d) | Provisions for taxes and other legal contingencies and Other provisions | ||
The balance of Provisions — Provisions for taxes and other legal contingencies and Provisions — Other provisions, which includes, inter alia, provisions for restructuring costs and tax and legal litigation, was estimated using prudent calculation procedures in keeping with the uncertainty inherent in the obligations covered. The definitive date of the outflow of resources embodying economic benefits for the Group depends on each obligation; in certain cases, these obligations have no fixed settlement period and, in other cases, are based on litigation in progress. |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Recognized by Spanish companies | 828 | 1,061 | 814 | |||||||||
Recognized by other EU companies | 537 | 721 | 886 | |||||||||
Recognized by other companies | 4,897 | 4,078 | 2,415 | |||||||||
Of which: | ||||||||||||
Brazil | 3,428 | 2,920 | 1,989 | |||||||||
6,262 | 5,860 | 4,115 | ||||||||||
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e) | Litigation |
i. | Tax litigation |
At December 31, 2009, the main tax litigation concerning the Group was as follows: |
• | TheMandados de Segurançafiled by Banco Santander Brasil, S.A. and other Group companies in Brazil challenging the increase in the rate of Brazilian Social Contribution tax on net income from 9% to 15% stipulated by Interim Measure 413/2008, ratified by Law 11,727/2008. | ||
• | TheMandados de Segurançafiled by Group companies in Brazil claiming their right to pay the Brazilian Social Contribution tax on net income at a rate of 8%. | ||
• | TheMandados de Segurançafiled by Banco Santander, S.A. and other Group entities claiming their right to pay the Brazilian PIS and COFINS Social Contributions only on the income from the provision of services. In the case of Banco Santander, S.A., the “Mandado de Segurança” was declared unwarranted and an appeal was filed at the Federal Regional Court. On September 13, 2007, the Federal Regional Court found in favor of Banco Santander, S.A. The Brazilian authorities have filed an appeal against this judgment at a higher court. In the case of Banco ABN AMRO Real, S.A., on March 9, 2007 the court found in its favor although the Brazilian authorities have also filed an appeal against this judgment at a higher court. On September 29, 2009 a resolution was issued whereby it partially admitted the appeal. | ||
• | Real Leasing S.A. Arrendamiento Mercantil and Banco ABN AMRO Real S.A. have filed various administrative and legal claims in connection with the deductibility of the provision for doubtful debts for 1995. | ||
• | Banco Santander Brasil, S.A. and other Group companies in Brazil are involved in several administrative and legal proceedings against various municipalities that demand payment of the Service Tax on certain items of income from transactions not classified as provisions of services. | ||
• | In November 2009 Banco Santander Brasil, S.A. and certain of its subsidiaries availed themselves of the program for the deferral and payment in cash of tax and Social Security debts established in Law 11,941/2009. The main processes included in this program, which were reported in prior years, refer to litigation related to (i) the right to consider the Social Contribution tax on net income as deductible in the calculation of Brazilian Legal Entities Income Tax, (ii) the right to pay the Brazilian Social Contribution tax on net income at a rate of 8%, and (iii) the deductibility for Income tax purposes of the depreciation and amortization expense in the same period as that in which lease Income is recognized in finance lease companies. The participation in this program entails payment of the disputed amounts and the discontinuance before the end of February 2010 of the related court proceedings. | ||
• | A claim was filed against Abbey National Treasury Services plc by tax authorities abroad in relation to the refund of certain tax credits and other associated amounts. The legal advisers of Abbey National Treasury Services plc considered that the grounds to contest this claim were well-founded, proof of which is that a favorable judgment was handed down at first instance in September 2006, although the judgment was appealed against by the tax authorities in January 2007. However, in December 2006 an unfavorable judgment for another taxpayer was handed down on another proceeding which might affect this case. | ||
• | Legal action filed by Sovereign Bancorp Inc. claiming entitlement to an international double taxation tax credit in connection with taxes paid outside of the United States in fiscal years 2003 to 2005 in relation to financial transactions carried out with an international bank. |
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ii. | Non-tax-related proceedings |
At December 31, 2009, the main non-tax-related proceedings concerning the Group were as follows: |
• | Misselling: claims associated with the sale by Abbey of certain financial products to its customers. | ||
The provisions recorded by Abbey in this respect were calculated on the basis of the best estimate of the number of claims that will be received, of the percentage of claims that will be upheld and of the related amounts. | |||
• | LANETRO, S.A.: claim (Ordinary Lawsuit no. 558/2002) filed by LANETRO, S.A. against Banco Santander, S.A. at Madrid Court of First Instance no. 34, requesting that the Bank comply with the obligation to subscribe to €30.05 million of a capital increase at the complainant. | ||
On December 16, 2003, a judgment was handed down dismissing the plaintiff’s request. The subsequent appeal filed by LANETRO was upheld by a decision of the Madrid Provincial Appellate Court on October 27, 2006. On March 30, 2010, the Spanish Supreme Court dismissed the extraordinary appeal on the grounds of procedural infringements, and partially admitted the appeal in cassation, which were both filed by the Bank against the decision of the Madrid Provincial Appellate Court. | |||
• | Ordinary proceedings filed by Galesa de Promociones, S.A., against the Bank, at Elche Court of First Instance no. 5, Alicante (Ordinary Lawsuit no. 1946/2008). The claim sought damages amounting to €51,396,971.43 as a result of a judgment handed down by the Supreme Court on November 24, 2004 setting aside a summary mortgage proceeding filed by the Bank against the complainant company, which concluded in the foreclosure by the Bank of the mortgaged properties and their subsequent sale by the Bank to third-party buyers. The judgment of the Supreme Court ordered the reversal of the court foreclosure proceeding prior to the date on which the auctions were held, a circumstance impossible to comply with due to the sale by the Bank of the properties to the aforementioned third parties, which therefore prevented the reincorporation of the properties into the debtor company’s assets and their re-auction. | ||
The damages claimed are broken down as follows: (i) €18,428,076.43 relating to the value of the property auctioned; (ii) €32,608,895 relating to the loss of profit on the properties lost by the complainant, which was prevented from continuing its business activity as a property developer; and (iii) €360,000 relating to rental income. | |||
On October 31, 2008, a summons to respond to and oppose the claim was served on the Bank, which responded to the complainant’s requests on a timely basis and, at the same time, filed a counterclaim against Galesa de Promociones, S.A. for the amount owed to the Bank, basing its calculation on the difference between the value of the properties and the amount of the loan. | |||
Galesa de Promociones, S.A. replied to the counterclaim on January 12, 2009 and the preliminary hearings took place on April 7, 2009 and September 30, 2009. | |||
On March 2, 2010 the Court of First Instance handed down a judgment partially upholding both the claim and the counterclaim, ordering the Bank to pay the claimant an amount of €4,458,960.61, and Galesa Promociones, S.A. to pay the Bank an amount of €1,428,075.70, giving rise to a total loss of €3,030,874.91 for the Bank. Appeals have been prepared by Galesa and the Bank. The Bank filed its appeal on May 31, 2010. | |||
• | Declaratory large claims action brought at Madrid Court of First Instance no. 19 (Ordinary Lawsuit no. 87/2001) in connection with a claim filed by Inversión Hogar, S.A. against the Bank. This claim sought the termination of a settlement agreement entered into between the Bank and the complainant on December 11, 1992. | ||
On May 19, 2006, a judgment was handed down at first instance, whereby the agreement was declared to be terminated and the Bank was ordered to pay €1.8 million, plus the related legal interest since February 1997, to return a property that was given in payment under the aforementioned agreement, to pay an additional €72.9 million relating to the replacement value of the assets foreclosed, and subsequently sold, by the Bank, and to pay all the related court costs. The Bank and Inversión Hogar, S.A. filed appeals against the judgment. |
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On July 30, 2007, the Madrid Provincial Appellate Court handed down a decision upholding in full the appeal filed by the Bank, reversing the judgment issued at first instance and dismissing the appeal filed by Inversión Hogar, S.A. On completion of the clarification procedure, as it had announced previously, Inversión Hogar, S.A. filed a cassation appeal against the aforementioned decision and an extraordinary appeal on the grounds of procedural infringements at the Civil Division of the Supreme Court, which issued an order on December 1, 2009, admitting for consideration the appeals filed by Inversión Hogar, S.A. and its subsidiaries, with a summons to the Bank to present the related notice of opposition to these appeals, which was carried out on January 21, 2010. | |||
• | Claim in an ordinary proceeding filed by Inés Arias Domínguez and a further 17 persons against Santander Investment, S.A. at Madrid Court of First Instance no. 13 (Ordinary Lawsuit no. 928/2007), seeking damages of approximately €43 million, plus interest and costs. The complainants, who are former shareholders of Yesocentro, S.A. (Yesos y Prefabricados del Centro, S.A.), allege that Santander Investment, S.A. breached the advisory services agreement entered into on October 19, 1989 between the former Banco Santander de Negocios, S.A. and the complainants, the purpose of which was the sale of shares owned by the complainants to another company called Invercámara, S.A. | ||
This claim was duly contested by Santander Investment, S.A. on November 5, 2007. The preliminary hearing was set for April 28, 2008 although it was subsequently postponed until the application for a resolution on a preliminary civil issue filed by the Bank was resolved. | |||
In the order issued by Madrid Court of First Instance no. 13 on September 11, 2008 the proceedings were stayed due to a preliminary civil issue. The complainants appealed the decision and the Bank responded to and opposed the complainant’s appeal on December 16, 2008. | |||
In a decision issued by the Madrid Provincial Appellate Court on March 24, 2010 the plaintiffs’ appeal was dismissed, maintaining the stay of proceedings on the basis of the civil preliminary ruling until a ruling is issued in the proceeding filed by other shareholders of Yesocentro (Mr. Siro Díaz Díaz and his wife), filed at the Madrid Court of First Instance nº 47 (Ordinary Lawsuit no. 1051/2004). | |||
• | On February 6, 2008, Banco Santander, S.A. filed a request for arbitration with the Secretary of the Spanish Arbitration Court against Gaesco Bolsa, Sociedad de Valores, S.A., in respect of the claim for €66,418,077.27 that the latter owes Banco Santander, S.A. as a result of the early termination of the financial transaction framework agreement entered into with Banco Santander, S.A. and of the financial transactions performed under the agreement. In the same proceedings Gaesco filed a counterclaim against the Bank. On May 12, 2009, an arbitral award was issued upholding all the claims of Banco Santander, S.A. and dismissing the counterclaim filed by Gaesco. Gaesco has filed for the annulment of the arbitral award at the Madrid Provincial Appellate Court. | ||
Additionally, Mobilaria Monesa, S.L. (parent of the former Gaesco) has filed a claim against Banco Santander, S.A. at Santander Court of First Instance no. 5, on the same grounds as previously mentioned, and which were resolved in arbitration, a circumstance that has been brought to the Court’s attention in the notice of opposition thereto prepared by the Bank. | |||
• | Former Banco do Estado de São Paulo S.A. — Banespa — employees: a claim was filed in 1998 by the association of retired Banespa employees (AFABESP) on behalf of its members, requesting the payment of a half-yearly bonus initially envisaged in the entity’s bylaws in the event that the entity obtained a profit and that the distribution of this profit, in the form of bonus, were approved by the board of directors. The bonus was not paid in 1994 and 1995 since the bank did not make a profit and partial payments were made from 1996 to 2000 in variable percentages as agreed by the board of directors, and the aforementioned clause was eliminated from the bylaws in 2001. After the Regional Labor Court ordered Banco Santander Banespa, S.A. (currently Banco Santander (Brasil), S.A.) to pay the half-yearly bonus in September 2005, the Bank filed an appeal at the High Labor Court which handed down a decision on June 25, 2008, ordering the Bank to pay the half-yearly bonus from 1996 onwards for a maximum amount equivalent to the share in the profits. Appeals against this decision were filed at the High Labor Court and at the Federal Supreme Court, and are currently in process. |
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• | Padrão Comércio e Incorporacão de Imóveis Ltda: Claim for BRL 87 million against Banco Santander Brasil, S.A. for purported wrongful charges made by its predecessor, Banco do Estado de São Paulo, S.A. (Banespa), since the opening of a current account in the city of Recife in 1994 to 1996. In 2006, the Pernambuco Court of Justice handed down a decision at first instance against Banespa for not having submitted all the relevant documentation. Banespa then filed an appeal, dismissed in 2009, in which a new expert’s report was requested and additional documentation was provided which evidenced that at least a portion of the funds under dispute were used by the complainant. Banco Santander Brasil requested clarification of this decision and a decision has yet to be handed down. Subsequently, Banco Santander Brasil intends to appeal to the High Court. | ||
• | The bankruptcy of various Lehman Group companies was made public on September 15, 2008. Various customers of Santander Group were affected by this situation since they had invested in securities issued by Lehman or in other products which had such assets as their underlying security. | ||
On November 12, 2008, the Group announced the implementation of a solution (which was of a strictly commercial, exceptional nature and did not imply any admission of misselling) for holders of one of the products sold -Seguro Banif Estructurado- issued by the insurance company Axa Aurora Vida, which had as its underlying security a bond issued and guaranteed by Lehman. The solution involved replacing the Lehman issuer risk with the issuer risk of Grupo Santander subsidiaries. The exchange period ended on December 23, 2008. As a result of the exchange, at 2008 year-end a loss was recognized under Gains/losses on financial assets and liabilities (net) in the consolidated income statement for the difference of €46 million (€33 million after tax) between the fair value of the bonds received and the bonds delivered in the exchange. | |||
In February 2009 the Group offered a similar solution to other customers affected by the Lehman bankruptcy. The cost of this transaction, before tax, was €143 million (€100 million after tax), which were recognized under Gains/losses on financial assets and liabilities (net) in the consolidated income statement for 2008. | |||
At the date of preparation of these consolidated financial statements, it was known that certain claims had been filed in relation to this matter. The Bank’s directors and its legal advisers consider that the various Lehman products were sold in accordance with the applicable legal regulations in force at the time of each sale or subscription and that the fact that the Group acted as intermediary would not give rise to any liability in relation to the insolvency of Lehman. Accordingly, it has not been necessary to recognize any liability in this connection in the consolidated financial statements for 2009. | |||
• | The investigation by the US Securities and Exchange Commission (“SEC”) into the alleged fraud of Bernard L. Madoff Investment Securities LLC (“Madoff Securities”) took place in December 2008. The exposure of customers of the Group through the subfund Optimal Strategic US Equity (“Optimal Strategic”) was €2,330 million, of which €2,010 million related to institutional investors and international private banking customers, and the remaining €320 million were in the investment portfolios of the Group’s private banking customers in Spain. | ||
• | On January 27, 2009, the Group announced its decision to offer a solution to those of its private banking customers who had invested in Optimal Strategic and had been affected by the alleged fraud. This solution, which was applied to the principal amount invested, net of redemptions, totaled €1,380 million. It consisted of a replacement of assets whereby the private banking customers could exchange their investments in Optimal Strategic for preference shares (participaciones preferentes) to be issued by the Group for the aforementioned amount of €1,380 million, with an annual coupon of 2% and a call option that can be exercised by the issuer in year ten. At December 31, 2008, the Group determined that these events should be classified as “adjusting events after the reporting period”, as defined in IAS 10.3, since they provided evidence of conditions that existed at the end of the reporting period and, accordingly, in accordance with IAS 37.14, it recognized the pre-tax cost of this transaction for the Group (€500 million or €350 million after tax) under Gains/losses on financial assets and liabilities (net) in the consolidated income statement for 2008. | ||
The Group believes it has at all times exercised due diligence in the management of its customers’ investments in the Optimal Strategic fund. These products have always been sold in a transparent way pursuant to applicable legislation and established Group procedures and, accordingly, the decision to offer a solution was taken in view of the exceptional circumstances attaching to this case and based on solely commercial reasons, due to the interest the Group has in maintaining its business relationship with these customers. |
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At the time of the intervention, Madoff Securities was a broker-dealer authorized, registered and supervised by the SEC and was also authorized as an investment advisor by the US Financial Industry Regulatory Authority (FINRA). | |||
At the date of these consolidated financial statements, it was known that certain claims have been filed in relation to this matter. Some of the claims have been submitted in several forums and jurisdictions. The claims have been initiated by investors with investments with exposure to Madoff Securities, including holders of shares in Optimal Strategic, holders of financial structured products whose value and profitability were linked to the evolution of some Optimal funds (among them, Optimal Strategic) and holders of life insurance products which had as its underlying security a bond whose value and profitability was linked to the evolution of Optimal funds (among them, Optimal Strategic). All these proceedings are ongoing. | |||
On March 18, 2009, the Group issued the preference shares earmarked for the replacement of assets offered to the private banking customers affected by the intervention of Madoff Securities and those affected by the Lehman bankruptcy who were not able to participate in the exchange made on December 23, 2008 (referred to above). The preference shares have been listed on the London Stock Exchange since March 23, 2009. The level of acceptance of the exchange proposal is close to 97%. | |||
On May 26, 2009, two funds managed by Optimal Investment Services, S.A., a subsidiary indirectly owned by Banco Santander, S.A., announced that they had entered into an agreement with Irving H. Picard, the court-appointed Trustee for the liquidation of Madoff Securities. Under the agreement, the Trustee will allow the funds’ claims in the liquidation proceeding and reduce his clawback demands on the funds by the amounts withdrawn by the latter from Madoff Securities, in the 90 days prior to bankruptcy, which American legislation allows him to claim, in exchange for the partial payment of those demands by the funds. The funds are Optimal Strategic U.S. Equity Limited and Optimal Arbitrage Limited. These are the only Optimal funds that had accounts at Madoff Securities. | |||
Pursuant to the agreement, the funds’ claims against Madoff Securities were allowed in their full amounts, calculated on a cash-in, cash-out basis, of $1,540,141,277.60 and $9,807,768.40, respectively, and the funds were entitled to Securities Investor Protection Corporation advances of $500,000 each. The funds have paid 85% of the clawback claims asserted by the Trustee. The payments totaled $129,057,094.60 for Optimal Strategic and USD 106,323,953.40 for Arbitrage. | |||
The funds agreed not to file any other claims against Madoff Securities’ estate. The agreement also contains an “equal treatment” provision, so that if the Trustee settled similar clawback claims for less than 85%, the funds would receive a rebate of a portion of their payments to equalize the percentages applied to the funds with respect to other comparable investors. | |||
The agreement followed the Trustee’s investigation of Optimal companies and affiliates’ conduct in dealing with Madoff Securities, including a review of Optimal companies and affiliates’ documents relating to its due diligence, in which the Trustee concluded that their conduct does not provide grounds to assert any claim against the Optimal companies or any entity of Santander Group (other than the clawback claims described above, which did not arise from any inappropriate conduct by the funds). | |||
The agreement contains releases of all clawback and other claims the Trustee may have against the funds for any matters arising out of the funds’ investments with Madoff Securities. The Trustee’s release applies to all potential claims against other Optimal companies, Santander Group companies and their investors, directors, officers and employees who agree to release the Trustee and the Madoff Securities estate, to the extent the claims arose out of the funds’ dealings with Madoff Securities. It also releases both funds from potential clawback liability for any other withdrawals made by them. | |||
The agreement between the Trustee and the aforementioned Optimal funds was approved by the United States Bankruptcy Court of the Southern District of New York on June 16, 2009. | |||
Madoff Securities is currently in liquidation in accordance with the Securities Investor Protection Act of 1970 in the United States Bankruptcy Court of the Southern District of New York. Bernard L. Madoff, the chief executive of Madoff Securities, has pleaded guilty to perpetrating what was probably the largest pyramid fraud in history and has been sentenced to 150 years imprisonment. |
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Additionally, the development of the litigation in 2009 arising from the absorption of Banco Santander Noroeste S.A. — “Banco Noroeste” by Banco Santander Brasil, S.A. is detailed below: |
• | Three claims filed by minority shareholders of Banco Noroeste requesting, in addition to compensation for damage and losses, the annulment of the general shareholders’ meeting that approved the merger between Banco Noroeste and Banco Santander Brasil, S.A. arguing that when the merger took place Banco Noroeste shareholders should have been offered a market value that would have enabled them to decide whether or not to sell their shares at that value. | ||
In the three cases, judgments were handed down at first instance, one of which found in favor of Banco Santander (Brasil), S.A. and the other two against it. In the latter two cases the general shareholders’ meeting was not declared null and void but rather Banco Santander (Brasil), S.A. was ordered to pay compensation. Appeals were filed against these judgments by Banco Santander (Brasil), S.A. | |||
The São Paulo Court of Justice recently handed down a joint judgment on the three appeals at second instance, finding that Banco Santander (Brasil), S.A. should have duly prepared a valuation report using the disposal value method, thereby concluding that the minority shareholders be indemnified. | |||
In the case of the shareholders that sold their shares, the Court indicated that they should receive the difference between the value at which they sold their shares (equity value) and market value (calculated as the disposal value) at that time, plus interest. In the case of the shareholders that did not sell, the Court considered that they should receive the market value at that time plus interest, less the present value of their shares. Unlike the judgments handed down at first instance, lost profits and damages were excluded and the amount of lawyers’ fees was reduced. Banco Santander (Brasil), S.A. plans to file appeals against this judgment at higher courts. | |||
In August 2009, an agreement was reached with the minority shareholders of the former Banco Noroeste by virtue of which Banco Santander (Brasil) S.A. made a payment of BRL 106 million as compensation for damages related to the absorption of Banco Noroeste by Banco Santander (Brasil) S.A. Such compensation included the repurchase from the shareholders of the shares of Banco Santander (Brasil) S.A. that they held and payment of all other expenses. Based on the agreement, the minority shareholders accepted the annulment of all actions against Banco Santander (Brasil) S.A. and agreed not to file any further claims for the same reasons. | |||
The total amount of payments made by the Group arising from litigation in 2009, 2008 and 2007 is not material with respect to these consolidated financial statements. |
26. | Other liabilities |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Transactions in transit | 325,987 | 401,977 | 150,609 | |||||||||
Accrued expenses and deferred income | 5,438,831 | 4,593,557 | 3,907,719 | |||||||||
Other | 1,859,341 | 2,565,461 | 2,328,848 | |||||||||
7,624,159 | 7,560,995 | 6,387,176 | ||||||||||
27. | Tax matters |
a) | Consolidated tax group | ||
Pursuant to current legislation, the Consolidated Tax Group includes Banco Santander, S.A. (as the Parent) and the Spanish subsidiaries that meet the requirements provided for in Spanish legislation regulating the taxation of the consolidated profits of corporate groups (as the controlled entities). | |||
The other Group companies file income tax returns in accordance with the tax regulations applicable to them. |
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b) | Years open for review by the tax authorities | ||
At December 31, 2009, the Consolidated Tax Group had the years from 2003 to 2009 open for review in relation to the main taxes applicable to it. | |||
The other entities have the corresponding years open for review, pursuant to their respective tax regulations. | |||
The tax audit of 2001 and 2002 for the main taxes applicable to the Consolidated Tax Group was completed in March 2007. Most of the tax assessments issued were signed on a contested basis. | |||
In 2009 there were no significant developments in connection with the tax disputes at the different instances, which were pending resolution at December 31, 2008. | |||
Because of the possible different interpretations which can be made of the tax regulations, the outcome of the tax audits of the years reviewed and of the open years might give rise to contingent tax liabilities which cannot be objectively quantified. However, the Group’s tax advisers consider that it is unlikely that such contingent liabilities will become actual liabilities, and that in any event the tax charge which might arise therefrom would not materially affect the consolidated financial statements of the Group. | |||
c) | Reconciliation | ||
The reconciliation of the income tax expense calculated at the standard tax rate to the income tax expense and the detail of the effective tax rate are as follows: |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Consolidated Operating profit before tax: | ||||||||||||
From ordinary activities | 10,588 | 10,849 | 10,970 | |||||||||
From discontinued operations | 46 | 372 | 1,178 | |||||||||
10,634 | 11,221 | 12,148 | ||||||||||
Income tax at 30% (*) | 3,190 | 3,366 | 3,948 | |||||||||
Decreases due to permanent differences | (1,460 | ) | (1,419 | ) | (1,062 | ) | ||||||
Of which: | ||||||||||||
Due to effect of different tax rates | (1,180 | ) | (1,039 | ) | (851 | ) | ||||||
Income tax of Group companies, per local books | 1,730 | 1,947 | 2,886 | |||||||||
Net increases (decreases) due to other permanent differences | (556 | ) | (346 | ) | (577 | ) | ||||||
Other, net | 48 | 287 | 204 | |||||||||
Current income tax | 1,222 | 1,888 | 2,513 | |||||||||
Effective tax rate | 11.49 | % | 16.83 | % | 20.69 | % | ||||||
Of which: | ||||||||||||
Ordinary activities | 1,207 | 1,836 | 2,322 | |||||||||
Discontinued operations | 15 | 52 | 191 | |||||||||
Of which: | ||||||||||||
Current tax | 2,082 | 2,689 | 2,805 | |||||||||
Deferred taxes | (860 | ) | (801 | ) | (292 | ) | ||||||
Taxes paid in the year | 1,527 | 1,445 | 3,181 |
(*) | 32.5% for 2007. |
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d) | Tax recognized in equity |
In addition to the income tax recognized in the consolidated income statement, the Group recognized the following amounts in consolidated equity: |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Tax charged to equity: | ||||||||||||
Measurement of non-current assets held for sale | — | (16 | ) | — | ||||||||
Measurement of available-for-sale fixed-income securities | (373 | ) | — | (104 | ) | |||||||
Measurement of available-for-sale equity securities | — | — | (393 | ) | ||||||||
(373 | ) | (16 | ) | (497 | ) | |||||||
Tax credited to equity: | ||||||||||||
Measurement of available-for-sale fixed-income securities | — | 30 | — | |||||||||
Measurement of available-for-sale equity securities | 35 | 247 | — | |||||||||
Measurement of cash flow hedges | 106 | 163 | 20 | |||||||||
141 | 440 | 20 | ||||||||||
Total | (232 | ) | 424 | (477 | ) | |||||||
e) | Deferred taxes | ||
Tax assets in the consolidated balance sheets includes debit balances with the Spanish Public Treasury relating to deferred tax assets. Tax liabilities includes the liability for the Group’s various deferred tax liabilities. | |||
The detail of Tax assets — Deferred and Tax liabilities — Deferred is as follows: |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Tax assets: | ||||||||||||
Of which: | ||||||||||||
Banco Santander (Brasil) S.A. | 3,410 | 1,775 | 1,905 | |||||||||
Banco ABN AMRO Real S.A. (*) | — | 2,191 | — | |||||||||
Sovereign Bancorp | 1,925 | — | — | |||||||||
Grupo Santander UK (**) | 909 | 1,303 | 1,257 | |||||||||
Early retirements | 989 | 1,242 | 1,167 | |||||||||
Other pensions | 910 | 1,084 | 1,167 | |||||||||
Prepaid taxes- Investments | — | 965 | 965 | |||||||||
15,827 | 14,644 | 10,853 | ||||||||||
�� | ||||||||||||
Tax liabilities: | ||||||||||||
Of which: | ||||||||||||
Banco Santander (Brasil) S.A. | 553 | 472 | 253 | |||||||||
Banco ABN AMRO Real S.A. (*). | — | 376 | — | |||||||||
Sovereign Bancorp | 107 | — | — | |||||||||
Grupo Santander UK (**) | 405 | 418 | 741 | |||||||||
Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander | 65 | 113 | 101 | |||||||||
Santander Consumer Bank AG | 92 | 89 | 104 | |||||||||
Valuation adjustments | 744 | 341 | 534 | |||||||||
3,667 | 3,464 | 3,744 | ||||||||||
(*) | Merged into Banco Santander (Brazil), S.A. in 2009. | |
(**) | Including Alliance & Leicester in 2009 and 2008. |
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The detail of the deferred tax assets and liabilities at December 31, 2009, on the basis of their expected recovery/payment, is as follows: |
Millions | ||||
of euros | ||||
Deferred tax assets | 15,827 | |||
That do not depend on the Group’s ability to generate future profit | 11,624 | |||
That depend on the Group’s ability to generate future profit | 4,203 | |||
Deferred tax liabilities | (3,667 | ) | ||
Net | 536 | |||
The changes in Tax Assets — Deferred and Tax Liabilities — Deferred in the last three years were as follows: |
Millions of euros | ||||||||||||||||||||||||||||
(Charge)/ | ||||||||||||||||||||||||||||
Foreign currency | credit to | |||||||||||||||||||||||||||
balance | asset and | |||||||||||||||||||||||||||
Balances at | (Charge)/ | translation | liability | Acquisitions | Balances at | |||||||||||||||||||||||
December 31, | credit to | differences and | revaluation | Prepaid | for the | December 31, | ||||||||||||||||||||||
2008 | income | other items | reserve | taxes | year (net) | 2009 | ||||||||||||||||||||||
Deferred tax assets | 14,644 | 895 | (1,736 | ) | (165 | ) | — | 2,189 | 15,827 | |||||||||||||||||||
Deferred tax liabilities | (3,464 | ) | (35 | ) | 246 | (307 | ) | — | (107 | ) | (3,667 | ) | ||||||||||||||||
Total | 11,180 | 860 | (1,490 | ) | (472 | ) | — | 2,082 | 12,160 | |||||||||||||||||||
Millions of euros | ||||||||||||||||||||||||||||
Foreign | ||||||||||||||||||||||||||||
currency | (Charge)/ | |||||||||||||||||||||||||||
balance | credit to | |||||||||||||||||||||||||||
translation | asset and | |||||||||||||||||||||||||||
Balances at | (Charge)/ | differences | liability | Acquisitions for | Balances at | |||||||||||||||||||||||
December 31, | credit to | and other | revaluation | Prepaid | the | December 31, | ||||||||||||||||||||||
2007 | income | items | reserve | taxes | year (net) | 2008 | ||||||||||||||||||||||
Deferred tax assets | 10,853 | 837 | (374 | ) | 696 | — | 2,632 | 14,644 | ||||||||||||||||||||
Deferred tax liabilities | (3,744 | ) | (36 | ) | 461 | 107 | — | (252 | ) | (3,464 | ) | |||||||||||||||||
Total | 7,109 | 801 | 87 | 803 | — | 2,380 | 11,180 | |||||||||||||||||||||
Millions of euros | ||||||||||||||||||||||||||||
Foreign | ||||||||||||||||||||||||||||
currency | (Charge)/ | |||||||||||||||||||||||||||
balance | credit to | |||||||||||||||||||||||||||
translation | asset and | |||||||||||||||||||||||||||
Balances at | (Charge)/ | differences | liability | Acquisitions for | Balances at | |||||||||||||||||||||||
December 31, | credit to | and other | revaluation | Prepaid | the | December 31, | ||||||||||||||||||||||
2006 | income | items | reserve | taxes | year (net) | 2007 | ||||||||||||||||||||||
Deferred tax assets | 9,156 | 419 | 230 | 110 | 965 | (27 | ) | 10,853 | ||||||||||||||||||||
Deferred tax liabilities | (3,778 | ) | (127 | ) | 252 | (128 | ) | — | 37 | (3,744 | ) | |||||||||||||||||
Total | 5,378 | 292 | 482 | (18 | ) | 965 | 10 | 7,109 | ||||||||||||||||||||
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f) | Other disclosures | ||
In conformity with the Listing Rules Instrument 2005 published by the UK Financial Services Authority, it is hereby stated that shareholders of the Bank resident in the United Kingdom will be entitled to a tax credit in respect of the withholdings the Bank is required to make from the dividends to be paid to them. The shareholders of the Bank resident in the United Kingdom who hold their ownership interest in the Bank through Grupo Santander Nominee Service and Santander UK Nominee will be informed directly of the amount thus withheld and of any other data they may require to complete their tax returns in the United Kingdom. The other shareholders of the Bank resident in the United Kingdom should contact their bank or securities broker. |
28. | Minority interests | |
Minority interests include the net amount of the equity of subsidiaries attributable to equity instruments that do not belong, directly or indirectly, to the Bank, including the portion attributed to them of profit for the year. |
a) | Breakdown | ||
The detail, by Group company, of Equity — Minority interests is as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Grupo Financiero Santander, S.A. de C.V. | 787,351 | 707,603 | 649,291 | |||||||||
Banesto | 555,368 | 495,021 | 476,152 | |||||||||
Banco Santander Chile | 383,191 | 245,229 | 241,726 | |||||||||
Santander Brasil | 2,571,235 | 122,067 | 56,062 | |||||||||
Santander BanCorp | 35,340 | 34,751 | 30,701 | |||||||||
Other companies | 402,051 | 353,935 | 328,445 | |||||||||
4,734,536 | 1,958,606 | 1,782,377 | ||||||||||
Profit for the year attributable to minority interests | 469,522 | 456,000 | 575,892 | |||||||||
Of which: | ||||||||||||
Banesto Group | 26,773 | 75,294 | 81,467 | |||||||||
Grupo Financiero Santander, S.A. de C.V. | 160,478 | 182,927 | 281,186 | |||||||||
Banco Santander Chile | 134,913 | 129,758 | 138,781 | |||||||||
Santander Brasil | 114,151 | 22,042 | 7,005 | |||||||||
Santander BanCorp | 3,178 | 2,434 | 1,626 | |||||||||
5,204,058 | 2,414,606 | 2,358,269 | ||||||||||
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b) | Changes | ||
The changes in Minority interests are summarized as follows: |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Balance at beginning of year | 2,415 | 2,358 | 2,221 | |||||||||
Change in consolidation method | — | 105 | — | |||||||||
(Net) inclusion of companies in the Group and changes in scope of consolidation | (12 | ) | 13 | (9 | ) | |||||||
Change in proportion of ownership interest | (2 | ) | (41 | ) | (117 | ) | ||||||
Valuation adjustments | 75 | (26 | ) | (57 | ) | |||||||
Dividends paid to minority interests | (233 | ) | (241 | ) | (360 | ) | ||||||
Changes in share capital (*) | 2,187 | 74 | 220 | |||||||||
Exchange differences and other items | 305 | (283 | ) | (116 | ) | |||||||
Profit for the year attributable to minority interests | 469 | 456 | 576 | |||||||||
Balance at end of year | 5,204 | 2,415 | 2,358 | |||||||||
(*) | In 2009 including mainly the minority interests arising from the initial public offering of Santander Brasil launched by the Group amounting to €2,360 million at the closing exchange rate (see Note 3). This change is also shown as a capital increase in the consolidated statement of changes in total equity for 2009. |
29. | Valuation adjustments | |
The balances of Valuation adjustments include the amounts, net of the related tax effect, of the adjustments to assets and liabilities recognized temporarily in equity through the statement of changes in equity (recognized income and expense) until they are extinguished or realized, when they are recognized definitively as shareholders’ equity through the consolidated income statement. The amounts arising from subsidiaries and jointly controlled entities are presented, on a line by line basis, in the appropriate items according to their nature. | ||
It should be noted that the consolidated statement of recognized income and expense includes the changes to “Valuation adjustments” as follows: |
• | Revaluation gains (losses): includes the amount of the income, net of the expenses incurred in the year, recognized directly in equity. The amounts recognized in equity in the year remain under this item, even if in the same year they are transferred to the income statement or to the initial carrying amount of the assets or liabilities or are reclassified to another line item. | ||
• | Amounts transferred to income statement: includes the amount of the revaluation gains and losses previously recognized in equity, even in the same year, which are recognized in the income statement. | ||
• | Amounts transferred to initial carrying amount of hedged items: includes the amount of the revaluation gains and losses previously recognized in equity, even in the same year, which are recognized in the initial carrying amount of assets or liabilities as a result of cash flow hedges. | ||
• | Other reclassifications: includes the amount of the transfers made in the year between the various valuation adjustment items. |
The amounts of these items are recognized gross, including the amount of the valuation adjustments relating to minority interests, and the corresponding tax effect is presented under a separate item, except in the case of entities accounted for using the equity method, the amounts for which are presented net of the tax effect. |
a) | Available-for-sale financial assets | ||
“Valuation adjustments — Available-for-sale financial assets” includes the net amount of unrealized changes in the fair value of assets classified as available-for-sale financial assets. | |||
At December 31, 2008, the consolidated statement of recognized income and expense included €2,042 million, the result of the negative balance of revaluation gains/losses and the positive balance of amounts transferred to the income statement, relating to the write-down recognized in income of the ownership interests in Royal Bank of Scotland and Fortis (see Notes 1.i and 50). |
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The remaining changes in the balance at December 31, 2008 with respect to the previous year related mainly to the reduction arising from the loss of unrealized gains that were recognized in equity at 2007 year-end. | |||
The changes in 2009 reflect the recovery in the equities markets and the positive effect that falls in interest rates had on debt securities. | |||
b) | Cash flow hedges | ||
Valuation adjustments — Cash flow hedges includes the gains or losses attributable to hedging instruments that qualify as effective hedges. These amounts will remain under this heading until they are recognized in the consolidated income statement in the periods in which the hedged items affect it (see Note 11). | |||
Accordingly, amounts representing valuation losses will be offset in the future by gains generated by the hedged instruments. | |||
c) | Hedges of net investments in foreign operations and Exchange differences | ||
Valuation adjustments — Hedges of net investments in foreign operations includes the net amount of changes in the value of hedging instruments in hedges of net investments in foreign operations, for the portion of these changes considered as effective hedges (see Note 11). | |||
Valuation adjustments — Exchange differences includes the net amount of exchange differences arising on non-monetary items whose fair value is adjusted against equity and the differences arising on the translation to euros of the balances of the consolidated entities whose functional currency is not the euro (see Note 2.a). | |||
The net changes in these two headings in the consolidated statement of recognized income and expense include the valuation gain or loss relating to the exchange difference arising from the goodwill held by the Group in foreign currency. At December 31, 2008, the balance recognized in the consolidated statement of recognized income and expense in this connection represented a loss of approximately €3,500 million. This change was offset by a negative change in the balance of goodwill at the corresponding date and, accordingly, it did not affect the Group’s equity (see Note 17). | |||
The changes in 2009 reflect the positive effect of the fluctuations in exchange rates, mainly the pound sterling and the Brazilian real, giving rise to a gain of approximately €2,390 million with regard to the measurement of goodwill. | |||
The detail, by country, of Valuation adjustments — Hedges of net investments in foreign operations and Valuation adjustments — Exchange differences is as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Net balance at end of year | (3,555,140 | ) | (7,957,582 | ) | (638,275 | ) | ||||||
Of which: | ||||||||||||
Arising on consolidation: | ||||||||||||
Subsidiaries: | (3,558,042 | ) | (7,949,868 | ) | (663,779 | ) | ||||||
Brazil Group | 1,124,699 | (2,819,871 | ) | 696,462 | ||||||||
Chile Group | (89,222 | ) | (475,525 | ) | (130,186 | ) | ||||||
Mexico Group | (1,010,852 | ) | (977,254 | ) | (508,264 | ) | ||||||
Abbey Group | (2,964,878 | ) | (3,280,445 | ) | (562,990 | ) | ||||||
Other | (617,789 | ) | (396,773 | ) | (158,801 | ) | ||||||
Associates | 2,902 | (7,714 | ) | 25,504 |
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d) | Entities accounted for using the equity method | ||
Valuation adjustments — Entities accounted for using the equity method includes the amounts of valuation adjustments recognized in equity arising from associates. | |||
The net changes in Valuation adjustments — Entities accounted for using the equity method were as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Balance at beginning of year | (148,402 | ) | (1,840 | ) | 57,437 | |||||||
Revaluation gains (losses) | — | (149,073 | ) | (59,277 | ) | |||||||
Amounts transferred to income | — | 43,728 | — | |||||||||
Transfers | 148,402 | (41,217 | ) | — | ||||||||
Balance at end of year | — | (148,402 | ) | (1,840 | ) | |||||||
Of which: | ||||||||||||
Sovereign | — | (148,402 | ) | (27,068 | ) | |||||||
Cepsa | — | — | 25,213 |
30. | Shareholders’ equity | |
Shareholders’ equity includes the amounts of equity contributions from shareholders, accumulated profit or loss recognized through the consolidated income statement, and components of compound financial instruments having the substance of permanent equity. Amounts arising from subsidiaries and jointly controlled entities are presented in the appropriate items based on their nature. | ||
The changes in Shareholders’ equity are presented in the consolidated statement of changes in total equity. Significant information on certain items of Shareholders’ equity and the changes therein in 2009 is set forth below. |
31. | Issued capital |
a) | Changes | ||
At December 31, 2008, the share capital consisted of 7,994,059,403 shares with a total par value of €3,997,029,701.50. | |||
On January 28, 2009 the shareholders at the general shareholders’ meeting of Sovereign approved its acquisition by the Bank and on January 30, 2009 the Bank increased capital through the issue of 161,546,320 ordinary shares for an effective amount (par value plus premium) of €1,302,063,339. | |||
Additionally, after completion on October 5, 2009 of the period for the voluntary conversion ofValores Santanderinto shares, and in accordance with the terms established in the related prospectus, on October 13, 2009, 257,647 new shares were issued to cater for this exchange. | |||
Lastly, on November 2, 2009 the bonus issue through which theSantander Dividendo Elección program (see Note 4) is instrumented took place, whereby 72,962,765 shares (0.89% of the share capital) relating to bonus share rights were issued in the proportion of one new share for 91 existing shares, for an amount of €36,481,382.5. | |||
Following these transactions, at December 31, 2009 the Bank’s share capital consisted of 8,228,826,135 shares with a par value of €4,114,413,067.5. | |||
The Bank’s shares are listed on the computerized trading system of the Spanish Stock Exchanges and on the New York, London, Milan, Lisbon, Buenos Aires and Mexico Stock Exchanges, and all of them have the same features and rights. At December 31, 2009, the only shareholders with an ownership interest in the Bank’s share capital of over 3% were Chase Nominees Ltd. (with a 12.51% holding), State Street Bank & Trust (with a 9.06% holding), EC Nominees Ltd. (with a 6.91% holding), Bank of New York Mellon (with a 5.57% holding), Société Generale (with a 3.59% holding) and Caceis Bank (with a 3.42% holding). These ownership interests are held on behalf of customers, and the Bank is not aware of any of these shareholders individually holding a stake of 3% or more. |
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b) | Other considerations | ||
The additional share capital authorized by the shareholders at the annual general meeting of June 19, 2009 was €2,038,901,430.50. The Bank’s directors have until June 19, 2012 to carry out capital increases up to this limit. The resolution empowers the board to fully or partially disapply the pre-emption right in accordance with the terms of Article 159.2 of the Spanish Public Limited Liability Companies Law (Ley de Sociedades Anónimas). At December 31, 2009, this power had not been exercised. | |||
The shareholders at the annual general meeting of 2009 resolved to increase the Bank’s capital by a par value of €500 million and granted the board the broadest powers to set the date and establish the terms and conditions of this capital increase within one year from the date of the aforementioned general shareholders’ meeting. If the board does not exercise the powers delegated to it within the period established by the general shareholders’ meeting, these powers will be rendered null and void. | |||
In addition, the aforementioned general shareholders’ meeting authorized the board to issue fixed-income securities, convertible into or exchangeable for shares of the Bank, for up to a total of €7,000 million or the equivalent amount in another currency. The Bank’s directors have until June 19, 2014 to execute this resolution. | |||
At December 31, 2009, the shares of the following companies were listed on official stock markets: Banco Santander Río S.A.; Banco Universal; Banco Santander Colombia, S.A.; Santander BanCorp (Puerto Rico); Grupo Financiero Santander, S.A. de C.V.; Banco Santander Chile; Cartera Mobiliaria, S.A., S.I.C.A.V.; Santander Chile Holding, S.A.; Banco Santander (Brazil), S.A. and Banco Español de Crédito. | |||
At December 31, 2009, the number of Bank shares owned by third parties and managed by Group management companies (mainly portfolio, collective investment undertaking and pension fund managers) was 21,770,053, which represented 0.26% of the Bank’s share capital. In addition, the number of Bank shares owned by third parties and received as security was 42.5 million (equal to 0.52% of the Bank’s share capital). | |||
At December 31, 2009, the capital increases in progress at Group companies and the additional capital authorized by their shareholders at the respective general shareholders’ meetings were not material at Group level. |
32. | Share premium | |
Share premium includes the amount paid up by the Bank’s shareholders in capital issues in excess of the par value. | ||
The Consolidated Spanish Public Limited Liability Companies Law(Ley de Sociedades Anónimas) expressly permits the use of the Share premium account balance to increase capital at the entities at which it is recognized and does not establish any specific restrictions as to its use. | ||
The increase in the balance of the Share premium in 2009 relates to the capital increases detailed in Note 31.a. Also in 2009, an amount of €23 million was transferred from the Share premium account to the Legal reserve (see Note 33.b.i). |
33. | Reserves |
a) | Definitions | ||
Shareholders’ equity — Reserves — Accumulated reserves includes the net amount of the accumulated profit or loss recognized in previous years through the consolidated income statement that, in the distribution of profit, was appropriated to equity, and the own equity instrument issuance expenses and the differences between the selling price of treasury shares and the cost of acquisition thereof. |
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Shareholders’ equity — Reserves of entities accounted for using the equity method includes the net amount of the accumulated profit or loss generated in previous years by entities accounted for using the equity method, recognized through the consolidated income statement. | |||
b) | Breakdown | ||
The detail of Accumulated reserves and Reserves of entities accounted for using the equity method is as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Accumulated reserves: | ||||||||||||
Restricted reserves- | ||||||||||||
Legal reserve | 822,883 | 799,406 | 625,430 | |||||||||
Reserve for treasury shares | 531,695 | 871,994 | 218,603 | |||||||||
Revaluation reserve Royal Decree-Law 7/1996 | 42,666 | 42,666 | 42,666 | |||||||||
Reserve for retired capital | 10,610 | 10,610 | 10,610 | |||||||||
Voluntary reserves (*) | 2,282,098 | 2,479,352 | 3,668,316 | |||||||||
Consolidation reserves attributed to the Bank | 6,752,138 | 5,591,045 | 3,131,239 | |||||||||
Reserves at subsidiaries | 14,097,534 | 11,363,796 | 7,779,129 | |||||||||
24,539,624 | 21,158,869 | 15,475,993 | ||||||||||
Reserves of entities accounted for using the equity method: | ||||||||||||
Associates | 67,663 | (290,463 | ) | 895,437 | ||||||||
Of which: | ||||||||||||
Sovereign | — | (352,986 | ) | 3,357 | ||||||||
Cepsa | — | — | 734,719 | |||||||||
Attijariwafa Bank | — | — | 126,626 | |||||||||
24,607,298 | 20,868,406 | 16,371,430 | ||||||||||
(*) | Include the reserves stipulated by Article 81 of the Consolidated Spanish Public Limited Liability Companies Law(Ley de Sociedades Anónimas) for an amount equal to the loans granted by Group companies to third parties for the acquisition of treasury shares. |
i. | Legal reserve |
Pursuant to the Consolidated Spanish Public Limited Liability Companies Law (Ley de Sociedades Anónimas), 10% of net profit for each year must be transferred to the legal reserve until the balance of this reserve reaches 20% of the share capital. The legal reserve can be used to increase capital provided that the remaining reserve balance does not fall below 10% of the increased share capital amount. | |||
In 2009 the Bank transferred €23 million from the share Premium account to the Legal reserve so that, once again, after the capital increases described in Note 31 had been carried out, the balance of the Legal reserve reached 20% of the share capital, and at December 31, 2009 the Legal reserve was at the stipulated level. |
ii. | Reserve for treasury shares |
Pursuant to the Consolidated Spanish Public Limited Liability Companies Law (Ley de Sociedades Anónimas),a restricted reserve has been recognized for an amount equal to the carrying amount of the Bank shares owned by subsidiaries. The balance of this reserve will become unrestricted when the circumstances that made it necessary to recognize it cease to exist. Additionally, this reserve covers the outstanding balance of the loans granted by the Group secured by Bank shares. |
iii. | Revaluation reserve Royal Decree Law 7/1996, of 7 June: |
The balance of Revaluation reserve Royal Decree-Law 7/1996 can be used, free of tax, to increase share capital. From January 1, 2007, the balance of this account can be taken to unrestricted reserves, provided that the monetary surplus has been realized. The surplus will be deemed to have been realized in respect of the portion on which depreciation has been taken for accounting purposes or when the revalued assets have been transferred or derecognized. |
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If the balance of this reserve were used in a manner other than that provided for in Royal Decree-Law 7/1996, of 7 June, it would be subject to taxation. |
iv. | Reserves at subsidiaries and jointly controlled entities |
The detail, by company, of Reserves at subsidiaries and jointly controlled entities, based on the companies’ contribution to the Group (considering the effect of consolidation adjustments) is as follows: |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Banco Español de Crédito, S.A. (Banesto) (Consolidated Group) | 4,031 | 3,703 | 3,319 | |||||||||
Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander (Consolidated Group) | 1,623 | 1,630 | 1,819 | |||||||||
Abbey Group | 2,689 | 2,040 | 1,419 | |||||||||
Banco Santander, S.A. (Banespa) (Consolidated Group) | 1,940 | 1,596 | 1,036 | |||||||||
Banco Santander Totta, S.A. (Consolidated Group) | 1,589 | 1,273 | 939 | |||||||||
Banco Santander Chile (Consolidated Group) | 1,598 | 1,031 | 589 | |||||||||
Banco de Venezuela, S.A., Banco Universal (Consolidated Group) | — | 663 | 502 | |||||||||
Grupo Santander Consumer Finance, S.A. | 723 | 559 | 323 | |||||||||
Cartera Mobiliaria, S.A., S.I.C.A.V. | 315 | 324 | 298 | |||||||||
Santander Investment, S.A. | 230 | 207 | 181 | |||||||||
Banco Santander International (United States) | 241 | 203 | 178 | |||||||||
Banco Banif, S.A. | 210 | 188 | 133 | |||||||||
Banco Santander (Suisse) SA | 151 | 175 | 139 | |||||||||
Santander Seguros y Reaseguros, Compañía Aseguradora, S.A. | 237 | 149 | 72 | |||||||||
BSN — Banco Santander de Negocios Portugal, S.A. | 94 | 116 | 78 | |||||||||
Banco Santander Río, S.A. | (412 | ) | (449 | ) | (525 | ) | ||||||
Exchange differences, consolidation adjustments and other companies (*) | (1,161 | ) | (2,044 | ) | (2,721 | ) | ||||||
Total | 14,098 | 11,364 | 7,779 | |||||||||
Of which: restricted | 1,271 | 1,466 | 925 |
(*) | Includes the charge relating to cumulative exchange differences in the transition to International Financial Reporting Standards. |
34. | Other equity instruments and Treasury shares |
a) | Other equity instruments | ||
Other equity instruments includes the equity component of compound financial instruments, the increase in equity due to personnel remuneration, and other items not recognized in other Shareholders’ equity items. | |||
Valores Santander | |||
In 2007, in order to partially finance the takeover bid launched on ABN AMRO, Santander Emisora 150, S.A.U. issued securities mandatorily convertible into newly-issued ordinary shares of the Bank (Valores Santander) amounting to €7 billion. These securities can be voluntarily exchanged for Bank shares on October 4, 2010 and 2011, and must be mandatorily exchanged on October 4, 2012. | |||
The reference price of the Bank’s share for conversion purposes was set at €16.04 per share, and the conversion ratio of the bonds -i.e. the number of Bank shares corresponding to eachValor Santanderfor conversion purposes- is 311.76 shares for eachValor Santander. The nominal interest rate on these securities was 7.30% until October 4, 2008 and Euribor plus 2.75% thereafter until the securities are exchanged for shares. |
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Subsequent to issue, Banco Santander resolved in several occasions, in accordance with the prospectus, to change the conversion ratio of these securities. The latest revision was carried out in view of the bonus share issue performed by Banco Santander, through which the Santander Dividendo Elección program was put into effect, and the new reference price of the shares of Banco Santander for conversion purposes was set at €14.48 per share. Consequently, the new conversion ratio applicable to theValores Santanderis 345.30 shares of Banco Santander for eachValor Santander, the result of dividing the face value of eachValor Santander(€5,000) by the aforementioned reference price (€14.48). | |||
b) | Treasury shares | ||
Shareholders’ equity — Treasury shares includes the amount of own equity instruments held by all the Group entities. | |||
Transactions involving own equity instruments, including their issuance and cancellation, are recognized directly in equity, and no profit or loss may be recognized on these transactions. The costs of any transaction involving own equity instruments are deducted directly from equity, net of any related tax effect. | |||
The shareholders at the Bank’s annual general meeting on June 21, 2008 set the maximum number of Bank shares that the Bank and/or any Group subsidiary are authorized to acquire at a number equivalent to 5% of the fully paid share capital amount, at a minimum share price not lower than par value and a maximum share price of up to 3% higher than the latest quoted price with respect to which the Bank did not trade for its own account in the Spanish Stock Market Interconnection System (including the block market) on the acquisition date concerned. | |||
The Bank’s shares owned by the consolidated companies accounted for 0.031% of issued share capital at December 31, 2009 (December 31, 2008: 0.81%; December 31, 2007: less than 0.01%). | |||
The average purchase price of the Bank’s shares in 2009 was €7.5 per share and the average selling price was €7.79 per share. | |||
The effect on equity arising from transactions involving Bank shares (gains of €321 million in 2009, gains of €12 million in 2008 and gains of €5 million in 2007) was recognized in equity. |
35. | Memorandum items | |
Memorandum items relates to balances representing rights, obligations and other legal situations that in the future may have an impact on net assets, as well as any other balances needed to reflect all transactions performed by the consolidated entities although they may not impinge on their net assets. |
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a) | Contingent liabilities | ||
Contingent liabilities includes all transactions under which an entity guarantees the obligations of a third party and which result from financial guarantees granted by the entity or from other types of contract. The detail is as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Financial guarantees | 20,974,258 | 15,614,342 | 17,172,878 | |||||||||
Financial bank guarantees | 19,725,382 | 14,514,126 | 16,386,413 | |||||||||
Doubtful guarantees | 489,367 | 196,862 | 77,815 | |||||||||
Credit derivatives sold | 759,224 | 903,067 | 708,250 | |||||||||
Other financial guarantees | 285 | 287 | 400 | |||||||||
Irrevocable documentary credits | 2,636,618 | 3,590,454 | 5,803,088 | |||||||||
Other bank guarantees and indemnities provided | 35,192,187 | 45,613,498 | 52,632,118 | |||||||||
Other guarantees | 28,025,392 | 38,905,912 | 34,657,158 | |||||||||
Undertakings to provide bank guarantees | 7,166,795 | 6,707,586 | 17,974,960 | |||||||||
Other contingent liabilities | 453,013 | 504,900 | 608,501 | |||||||||
Assets earmarked for third-party obligations | 3 | 4 | 3 | |||||||||
Other doubtful contingent liabilities | 6 | — | 112 | |||||||||
Other contingent liabilities | 453,004 | 504,896 | 608,386 | |||||||||
59,256,076 | 65,323,194 | 76,216,585 | ||||||||||
A significant portion of these guarantees will expire without any payment obligation materializing for the consolidated entities and, therefore, the aggregate balance of these commitments cannot be considered as an actual future need for financing or liquidity to be provided by the Group to third parties. |
Income from guarantee instruments is recognized under Fee and commission income in the consolidated income statements and is calculated by applying the rate established in the related contract to the nominal amount of the guarantee. |
At December 31, 2009, the Group had recognized provisions of €641,620 thousand to cover contingent liabilities (December 31, 2008: €678,584 thousand; December 31, 2007: €636,316 thousand) (see Note 25). |
i. | Financial guarantees |
Financial guarantees includes, inter alia, financial guarantee contracts such as financial bank guarantees, credit derivatives sold, and risks arising from derivatives arranged for the account of third parties. |
ii. | Other bank guarantees and indemnities provided |
Other bank guarantees and indemnities provided includes guarantees other than those classified as financial, such as technical guarantees, guarantees covering the import and export of goods and services, irrevocable formal undertakings to provide bank guarantees, legally enforceable letters of guarantee and other guarantees of any kind. |
iii. | Other contingent liabilities |
Other contingent liabilities includes the amount of any contingent liability not included in other items. |
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b) | Contingent commitments | ||
“Contingent commitments” includes those irrevocable commitments that could give rise to the recognition of financial assets. | |||
The detail is as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Drawable by third parties | 150,562,786 | 123,329,168 | 102,215,927 | |||||||||
Financial asset forward purchase commitments | 3,302,484 | 856,212 | 1,439,956 | |||||||||
Regular way financial asset purchase contracts | 3,446,834 | 1,626,097 | 4,181,396 | |||||||||
Securities subscribed but not paid | 29,141 | 42,467 | 107,244 | |||||||||
Securities placement and underwriting commitments | 11 | 50,006 | 33,032 | |||||||||
Documents delivered to clearing houses | 4,764,584 | 5,348,689 | 5,987,879 | |||||||||
Other contingent commitments | 1,424,916 | 472,367 | 711,129 | |||||||||
163,530,756 | 131,725,006 | 114,676,563 | ||||||||||
36. | Other disclosures |
a) | Notional amounts and market values of trading and hedging derivatives | ||
The detail of the notional and/or contractual amounts and the market values of the trading and hedging derivatives held by the Group is as follows: |
Millions of euros | ||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
Notional | Market | Notional | Market | Notional | Market | |||||||||||||||||||
amount | value | amount | value | amount | value | |||||||||||||||||||
Trading derivatives: | ||||||||||||||||||||||||
Interest rate risk- | ||||||||||||||||||||||||
Forward rate agreements | 150,906 | (1,177 | ) | 328,743 | (31 | ) | 330,315 | (995 | ) | |||||||||||||||
Interest rate swaps | 1,693,804 | 918 | 1,742,448 | 2,424 | 1,923,372 | (455 | ) | |||||||||||||||||
Options and futures | 1,001,660 | 537 | 848,479 | (1,252 | ) | 953,315 | (463 | ) | ||||||||||||||||
Foreign currency risk- | ||||||||||||||||||||||||
Foreign currency purchases and sales | 108,031 | (525 | ) | 110,049 | (1,261 | ) | 117,868 | (505 | ) | |||||||||||||||
Foreign currency options | 45,983 | (81 | ) | 71,114 | 9 | 62,723 | (566 | ) | ||||||||||||||||
Currency swaps | 112,361 | 2,079 | 82,080 | 5,871 | 75,090 | (1,020 | ) | |||||||||||||||||
Securities and commodities derivatives | 160,867 | (606 | ) | 156,094 | 889 | 157,807 | 1,288 | |||||||||||||||||
3,273,612 | 1,144 | 3,339,007 | 6,648 | 3,620,490 | (2,716 | ) | ||||||||||||||||||
Hedging derivatives: | ||||||||||||||||||||||||
Interest rate risk- | ||||||||||||||||||||||||
Forward rate agreements | — | — | 653 | 1 | — | — | ||||||||||||||||||
Interest rate swaps | 218,539 | 1,751 | 164,800 | 2,205 | 120,822 | (1,159 | ) | |||||||||||||||||
Options and futures | 21,144 | (26 | ) | 27,140 | 33 | 10,660 | (112 | ) | ||||||||||||||||
Foreign currency risk- | ||||||||||||||||||||||||
Foreign currency purchases and sales | 1,714 | (14 | ) | 8,329 | (69 | ) | 29 | 6 | ||||||||||||||||
Foreign currency options | 21,784 | (128 | ) | 4,209 | 246 | 16,630 | 292 | |||||||||||||||||
Currency swaps | 14,715 | 1,091 | 12,889 | 1,595 | 16,372 | (99 | ) | |||||||||||||||||
Securities and commodities derivatives | 1,007 | (32 | ) | 3,593 | (270 | ) | 155 | 1 | ||||||||||||||||
278,903 | 2,643 | 221,613 | 3,741 | 164,667 | (1,071 | ) | ||||||||||||||||||
Total | 3,552,515 | 3,787 | 3,560,620 | 10,389 | 3,785,156 | (3,788 | ) | |||||||||||||||||
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The notional and/or contractual amounts of the contracts entered into do not reflect the actual risk assumed by the Group, since the net position in these financial instruments is the result of offsetting and/or combining them. This net position is used by the Group basically to hedge the interest rate, underlying asset price or foreign currency risk; the results on these financial instruments are recognized under Gains/losses on financial assets and liabilities (net) in the consolidated income statements and increase or offset, as appropriate, the gains or losses on the investments hedged (see Note 11). |
Additionally, in order to interpret correctly the results on the Securities and commodities derivatives shown in the foregoing table, it should be considered that these items relate mostly to securities options for which a premium has been received which offsets their negative market value. Also, this market value is offset by positive market values generated by symmetrical positions in the Group’s held-for-trading portfolio. |
The Group manages the credit risk exposure of these contracts through netting arrangements with its main counterparties and by receiving assets as collateral for its risk positions. |
The detail of the cumulative credit risk exposure, by financial derivative, is as follows: |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Credit derivatives | 1,942 | 3,186 | 1,008 | |||||||||
Securities derivatives | 2,763 | 4,322 | 3,227 | |||||||||
Fixed-income derivatives | 343 | 345 | 405 | |||||||||
Currency derivatives | 21,568 | 15,277 | 7,990 | |||||||||
Interest rate derivatives | 23,438 | 25,117 | 17,507 | |||||||||
Commodities derivatives | 138 | 138 | 23 | |||||||||
Collateral received | (7,430 | ) | (9,366 | ) | (3,084 | ) | ||||||
Total | 42,761 | 39,019 | 27,076 | |||||||||
The notional amounts and fair values of the hedging derivatives, by type of hedge, is as follows: |
Millions of euros | ||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
Notional | Fair | Notional | Fair | Notional | Fair | |||||||||||||||||||
amount | value | amount | value | amount | value | |||||||||||||||||||
Fair value hedges | 203,975 | 3,289 | 169,623 | 3,340 | 126,388 | (1,199 | ) | |||||||||||||||||
Cash flow hedges | 66,194 | (518 | ) | 45,162 | 185 | 10,696 | (137 | ) | ||||||||||||||||
Hedges of net investments in foreign operations | 8,735 | (128 | ) | 6,828 | 216 | 27,583 | 265 | |||||||||||||||||
278,904 | 2,643 | 221,613 | 3,741 | 164,667 | (1,071 | ) | ||||||||||||||||||
Following is the description of the main hedges (including the results of the hedging instrument and the hedged item attributable to the hedged risk): |
i. | Fair value and cash flow hedges |
Micro-hedges | |||
The Group hedges the interest rate risk of the issues guaranteed by the Parent Bank. At 2009 year-end, the Group held derivative contracts to hedge the interest rate risk of issues, with an equivalent euro nominal value of €50,477 million, of which €41,590 million were denominated in euros, €4,159 million in US dollars and €3,659 million in pounds sterling. The fair value of these transactions at that date represented a gain of €1,958.5 million, which was offset by the loss on the hedged items, giving rise to a net loss of €23.1 million. In addition, there was an unrealized loss of €15.6 million relating to cash flow hedges. | |||
At 2008 year-end, the Group held derivative contracts to hedge the interest rate risk of issues, with an equivalent euro nominal value of €52,369 million, of which €41,180 million were denominated in euros, €5,263 million in US dollars and €4,263 million in pounds sterling. The fair value of these transactions at that date represented a gain of €2,305.5 million, which was offset by the loss on the hedged items, giving rise to a net loss of €150.9 million. In addition, there was an unrealized gain of €4.2 million relating to a cash flow hedge on a floating rate issue. |
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Interest rate risk hedges of portfolios of financial instruments | |||
The main hedges of portfolios of financial instruments in the Group are described below: |
• | Hedges for the purpose of eliminating exposure to the interest rate risk of mortgage loan portfolios | ||
• | Hedges for the purpose of covering the interest rate risk of issued liabilities -issues of subordinated debt and mortgage-backed bonds (cédulas hipotecarias) | ||
• | Hedges for the purpose of covering the interest rate risk of fixed-rate consumer loans |
These hedges are mainly recognized in the financial statements of Abbey, Alliance & Leicester, Banesto and the Santander Consumer Finance Group. |
In the case of fair value hedges of interest rate risk on financial instrument portfolios, the gain or loss on the hedged items is recognized in assets or liabilities under Changes in the fair value of hedged items in portfolio hedges of interest rate risk. At December 31, 2009, there were gains of €1,420 million and losses of €806 million, associated with assets and liabilities thus hedged, respectively (December 31, 2008: gains of €2,403 million and losses of €440 million, respectively). |
In 2009 a revenue of €8 million and an expense of €146 million, attributable to the hedged risk, were recognized in profit or loss (see Note 44) on the hedging instruments and on the hedged items, respectively (2008: a revenue of €4,685 million and an expense of €4,776 million, respectively). |
The fair value of the cash flow hedges, net of the related tax effect, is recognized against the Group’s equity under Valuation adjustments — Cash flow hedges. The detail of the terms, from December 31, 2009, within which it is expected that the amounts recognized in consolidated equity under Valuation adjustments — Cash flow hedges at that date will be recognized in future consolidated income statements is as follows: |
Millions of euros | ||||||||||||||||
Less than | 1 to 5 | More than | ||||||||||||||
2009 | 1 Year | Years | 5 years | Total | ||||||||||||
Debit balances (loss) | (197 | ) | (238 | ) | (83 | ) | (518 | ) |
ii. | Foreign currency hedges (net investments in foreign operations) |
As part of its financial strategy, the Group hedges the foreign currency risk arising from its investments in non-euro-zone countries. To this end, it arranges foreign currency derivatives in order to take a long position in euros vis-à-vis the local currency of the investment. At 2009 year-end, the Group held foreign currency options in this connection with an equivalent euro nominal value of €9,404 million, of which €7,461 million were denominated in Brazilian reais and €1,943 million in Mexican pesos. In 2009 losses amounting to €292 million arising from the settlement of options that were exercised in the year were taken to reserves. At 2009 year-end, the market value of the options not yet exercised represented an unrealized loss of €153 million. In addition to these options, the Group arranged other derivatives hedging the exposure to Chilean pesos with an equivalent euro value of €1,478 million, which gave rise to a loss of €107 million in 2009. The hedge, through short currency positions, of the underlying carrying amount in pounds sterling, for a notional amount of GBP 4,485 million, recorded a loss of €339 million in 2009. The overall losses incurred by the hedging derivatives are offset from an equity position by the appreciation in euros of the value of the Group’s investments in the related entities. |
At 2008 year-end, the Group held foreign currency options in this connection with an equivalent euro nominal value of €3,438 million, of which €1,151 million were denominated in Brazilian reais, €1,520 million in Mexican pesos and €767 million in Chilean pesos. In addition to these options, the underlying carrying amount in pounds sterling was hedged through short positions for a notional amount of GBP 4,832 million. In 2008 gains amounting to €499.8 million arising from the settlement of options that were exercised in the year were taken to reserves. At December 31, 2008, the market value of the options not yet exercised represented an unrealized gain of €379 million, which was supplemented by the gain of €306 million on the sterling hedge. |
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At 2007 year-end, the Group held foreign currency options in this connection with an equivalent euro nominal value of €12,878 million, of which €5,046 million were denominated in pounds sterling, €3,592 million in Brazilian reais, €2,560 million in Mexican pesos and €1,320 million in Chilean pesos. In 2007 gains amounting to €37.6 million arising from the settlement of options that matured in the year were taken to reserves. At 2007 year-end, the unrealized gain on the options not yet exercised amounted to €256 million. |
b) | Off-balance-sheet funds under management | ||
The detail of off-balance-sheet funds managed by the Group is as follows: |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Investment funds | 105,216 | 90,305 | 119,211 | |||||||||
Pension funds | 11,310 | 11,128 | 11,952 | |||||||||
Assets under management | 18,364 | 17,289 | 19,814 | |||||||||
134,890 | 118,722 | 150,977 | ||||||||||
c) | Third-party securities held in custody | ||
At December 31, 2009, the Group held in custody debt securities and equity instruments totaling €935,343 million entrusted to it by third parties. |
37. | Discontinued operations |
a) | Description of divestments (see Note 3) |
i. | Banco de Venezuela |
On July 6, 2009, Banco Santander announced that it had closed the sale of the stake in Banco de Venezuela to Banco de Desarrollo Económico y Social de Venezuela, a public institution of the Bolivarian Republic of Venezuela, for USD 1,050 million, of which USD 630 million were received in cash on that date and the remainder was received before year-end. This sale did not have a material impact on the Group’s consolidated income statement. |
ii. | Pension fund managers (AFPs) |
The agreement to sell the obligatory pension fund managers in Latin America (AFPs) to ING Groep NV for €906 million was executed in December 2007. The agreement covered the AFPs in Chile (AFP Bansander, S.A.), Colombia (AFP Cesantías Santander), Mexico (Afore Santander, S.A. de C.V.) and Uruguay (Afinidad AFAP, S.A.). These disposals gave rise to gross gains totaling €747 million. |
Also, an agreement was entered into for the sale of the Argentine companies Orígenes AFJP, S.A. and Orígenes Seguro de Retiro, S.A. to ING Groep NV. The agreement was executed in December 2007 for €112 million, giving rise to a pre-tax gain of €84 million. |
No significant operations were discontinued in 2008. |
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b) | Profit and net cash flows from discontinued operations | ||
The detail of the profit from discontinued operations is set forth below. | |||
The comparative figures for 2008 and 2007 were restated in order to include the operations classified as discontinued in 2009. |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Interest income / (Charges) | 248 | 645 | 516 | |||||||||
Income from equity instruments | — | — | 3 | |||||||||
Income from entities accounted for using the equity method | 1 | 6 | 3 | |||||||||
Net fee and commission income | 48 | 184 | 350 | |||||||||
Gains/losses on financial assets and liabilities | 10 | 63 | 43 | |||||||||
Exchange differences | (1 | ) | (1 | ) | 2 | |||||||
Other operating income (net) | (8 | ) | (52 | ) | 19 | |||||||
Total income | 298 | 845 | 936 | |||||||||
Personnel expenses | (59 | ) | (162 | ) | (191 | ) | ||||||
Other general administrative expenses | (61 | ) | (170 | ) | (170 | ) | ||||||
Depreciation and amortization charge | (11 | ) | (33 | ) | (25 | ) | ||||||
Provisions | (19 | ) | (62 | ) | (136 | ) | ||||||
Impairment losses on financial assets | (104 | ) | (63 | ) | (72 | ) | ||||||
Profit from operations | 44 | 355 | 342 | |||||||||
Gains (losses) on disposal of assets not classified as non-current assets held for sale | 2 | 17 | 5 | |||||||||
Operating Profit / (Loss) before tax | 46 | 372 | 347 | |||||||||
Income tax | (15 | ) | (53 | ) | (43 | ) | ||||||
Gains on divestments (Note 1.i) | — | — | 831 | |||||||||
Income tax on gains on divestments | — | — | (147 | ) | ||||||||
Profit from discontinued operations | 31 | 319 | 988 | |||||||||
Additionally, following is a detail of the net cash flows attributable to the operating, investing and financing activities of discontinued operations. |
The comparative figures for 2008 and 2007 were restated in order to include the operations classified as discontinued in 2009. |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Cash and cash equivalents at beginning of year | 2,623 | 1,807 | 1,322 | |||||||||
Cash flows from operating activities | (2,043 | ) | 751 | 523 | ||||||||
Cash flows from investing activities | 143 | (30 | ) | (25 | ) | |||||||
Cash flows from financing activities | (723 | ) | 94 | (12 | ) | |||||||
Cash and cash equivalents at end of year | — | 2,623 | 1,807 | |||||||||
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c) | Consideration received | ||
The detail of the assets and liabilities associated with the operations discontinued in 2009 and 2007 is as follows: |
Millions of euros | ||||||||
2009 | 2007 | |||||||
ASSETS: | 8,839 | 1,081 | ||||||
Cash and balances with central banks | 2,832 | — | ||||||
Financial assets held for trading | 7 | 426 | ||||||
Other financial assets at fair value through profit or loss | — | 110 | ||||||
Available-for-sale financial assets | 544 | 43 | ||||||
Loans and receivables | 5,125 | 422 | ||||||
Investments | 7 | — | ||||||
Tangible assets and intangible assets | 132 | 18 | ||||||
Tax assets | 128 | — | ||||||
Other assets | 63 | 62 | ||||||
LIABILITIES: | (8,089 | ) | (880 | ) | ||||
Financial liabilities at amortized cost | (7,619 | ) | (68 | ) | ||||
Liabilities under insurance contracts | — | (640 | ) | |||||
Provisions | (309 | ) | (55 | ) | ||||
Tax liabilities | (12 | ) | — | |||||
Other liabilities | (149 | ) | (117 | ) | ||||
Carrying amount | 750 | 201 | ||||||
Goodwill | 2 | 5 | ||||||
Minority interests | (12 | ) | (19 | ) | ||||
Net amount | 740 | 187 | ||||||
Gains on divestments | — | 831 | ||||||
Consideration received | 740 | 1,018 | ||||||
Of which: in cash | 740 | 1,018 | ||||||
d) | Earnings per share relating to discontinued operations | ||
The earnings per share relating to discontinued operations were as follows: |
2009 | 2008 | 2007 | ||||||||||
Basic earnings per share (euros) | 0.0032 | 0.0427 | 0.1318 | |||||||||
Diluted earnings per share (euros) | 0.0032 | 0.0425 | 0.1305 |
38. | Interest and similar income | |
Interest and similar income in the consolidated income statement comprises the interest accruing in the year on all financial assets with an implicit or explicit return, calculated by applying the effective interest method, irrespective of measurement at fair value; and the rectifications of income as a result of hedge accounting. Interest is recognized gross, without deducting any tax withheld at source. |
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The detail of the main interest and similar income items earned in 2009, 2008 and 2007 is as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Balances with the Bank of Spain and other central banks | 357,017 | 759,952 | 541,813 | |||||||||
Loans and advances to credit institutions | 2,520,858 | 3,819,453 | 2,836,935 | |||||||||
Debt instruments | 5,586,577 | 4,506,874 | 4,006,805 | |||||||||
Loans and advances to customers | 42,081,922 | 41,366,071 | 34,581,518 | |||||||||
Insurance contracts linked to pensions (Note 25) | 94,626 | 95,319 | 102,604 | |||||||||
Other interest | 2,532,004 | 4,495,877 | 3,442,583 | |||||||||
Total | 53,173,004 | 55,043,546 | 45,512,258 | |||||||||
39. | Interest expense and similar charges | |
Interest expense and similar charges in the consolidated income statement includes the interest accruing in the year on all financial liabilities with an implicit or explicit return, including remuneration in kind, calculated by applying the effective interest method, irrespective of measurement at fair value; the rectifications of cost as a result of hedge accounting; and the interest cost attributable to pension funds. | ||
The detail of the main items of interest expense and similar charges accrued in 2009, 2008 and 2007 is as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Deposits from the Bank of Spain and other central banks | 296,449 | 422,265 | 279,624 | |||||||||
Deposits from credit institutions | 2,988,915 | 3,266,323 | 3,574,818 | |||||||||
Customer deposits | 11,810,713 | 15,000,393 | 12,072,200 | |||||||||
Marketable debt securities and subordinated liabilities | 8,590,796 | 13,232,690 | 11,451,605 | |||||||||
Marketable debt securities | 6,236,747 | 10,817,648 | 9,351,606 | |||||||||
Subordinated liabilities (Note 23) | 2,354,049 | 2,415,042 | 2,099,999 | |||||||||
Provisions for pensions (Note 25) | 481,771 | 453,852 | 487,165 | |||||||||
Other interest | 2,705,818 | 5,129,561 | 3,204,074 | |||||||||
Total | 26,874,462 | 37,505,084 | 31,069,486 | |||||||||
40. | Income from equity instruments | |
Income from equity instruments includes the dividends and payments on equity instruments out of profits generated by investees after the acquisition of the equity interest. | ||
The detail of Income from equity instruments is as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Equity instruments classified as: | ||||||||||||
Financial assets held for trading | 238,209 | 222,795 | 210,562 | |||||||||
Available-for-sale financial assets | 198,265 | 329,962 | 209,435 | |||||||||
Of which: | ||||||||||||
San Paolo IMI, S.p.A. | — | — | 80,500 | |||||||||
Royal Bank of Scotland | — | 74,575 | — | |||||||||
436,474 | 552,757 | 419,997 | ||||||||||
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41. | Income from entities accounted for using the equity method — Associates | |
Share of results of entities accounted for using the equity method — Associates comprises the amount of profit or loss attributable to the Group generated during the year by associates. | ||
The detail of this item is as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Cepsa (Note 12) | — | 130,932 | 206,706 | |||||||||
Attijariwafa (Note 8) | — | 27,560 | 25,700 | |||||||||
Sovereign Bancorp (**) | (15,691 | ) | (110,251 | ) | 43,355 | |||||||
RFS Holdings B.V. (*) | — | 711,146 | 141,348 | |||||||||
Other companies | 15,171 | 32,367 | 20,940 | |||||||||
(520 | ) | 791,754 | 438,049 | |||||||||
(*) | Of the 2008 result of entities accounted for using the equity method relating to RFS Holdings B.V., €675 million correspond to Banco Real, an entity which was accounted for using the equity method in the first three quarters of 2008 and was fully consolidated in the last quarter of that year (see Note 3). | |
(**) | Fully consolidated from February 2009. |
42. | Fee and commission income | |
Fee and commission income comprises the amount of all fees and commissions accruing in favor of the Group in the year, except those that form an integral part of the effective interest rate on financial instruments. | ||
The detail of Fee and commission income is as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Collection and payment services: | ||||||||||||
Bills | 326,974 | 313,312 | 238,460 | |||||||||
Demand accounts | 858,696 | 570,404 | 555,826 | |||||||||
Cards | 1,761,868 | 1,566,972 | 1,428,820 | |||||||||
Cheques and other | 279,882 | 347,879 | 403,204 | |||||||||
Orders | 309,582 | 247,502 | 231,596 | |||||||||
3,537,002 | 3,046,069 | 2,857,906 | ||||||||||
Marketing of non-banking financial products: | ||||||||||||
Investment funds | 1,070,672 | 1,458,148 | 1,812,975 | |||||||||
Pension funds | 148,986 | 160,331 | 171,935 | |||||||||
Insurance | 1,963,847 | 1,864,109 | 1,459,122 | |||||||||
3,183,505 | 3,482,588 | 3,444,032 | ||||||||||
Securities services: | ||||||||||||
Securities underwriting and placement | 254,298 | 102,199 | 260,641 | |||||||||
Securities trading | 324,672 | 353,603 | 434,182 | |||||||||
Administration and custody | 242,665 | 247,612 | 266,084 | |||||||||
Asset management | 67,490 | 79,100 | 87,152 | |||||||||
889,125 | 782,514 | 1,048,059 | ||||||||||
Other: | ||||||||||||
Foreign exchange | 154,847 | 96,187 | 56,594 | |||||||||
Financial guarantees | 485,149 | 391,280 | 352,971 | |||||||||
Commitment fees | 199,563 | 265,807 | 166,374 | |||||||||
Other fees and commissions | 2,277,177 | 1,676,955 | 1,364,107 | |||||||||
3,116,736 | 2,430,229 | 1,940,046 | ||||||||||
10,726,368 | 9,741,400 | 9,290,043 | ||||||||||
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43. | Fee and commission expense | |
Fee and commission expense shows the amount of all fees and commissions paid or payable by the Group in the year, except those that form an integral part of the effective interest rate on financial instruments. | ||
The detail of Fee and commission expense is as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Fees and commissions assigned to third parties | 1,050,665 | 936,713 | 906,831 | |||||||||
Of which: Cards | 728,485 | 710,330 | 653,686 | |||||||||
Brokerage fees on lending and deposit transactions | 29,591 | 26,925 | 21,882 | |||||||||
Other fees and commissions | 565,978 | 511,467 | 492,825 | |||||||||
1,646,234 | 1,475,105 | 1,421,538 | ||||||||||
44. | Gains/losses on financial assets and liabilities | |
Gains/losses on financial assets and liabilities includes the amount of the valuation adjustments of financial instruments, except those attributable to interest accrued as a result of application of the effective interest method and to allowances, and the gains or losses obtained from the sale and purchase thereof. |
a) | Breakdown | ||
The detail, by origin, of Gains/losses on financial assets and liabilities is as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Other financial instruments at fair value through profit or loss (*) | 197,993 | 607,309 | 125,774 | |||||||||
Financial instruments not measured at fair value through profit or loss | 1,630,858 | 1,722,651 | 873,018 | |||||||||
Of which: Available-for-sale financial assets | 861,901 | 767,131 | 1,015,013 | |||||||||
Of which: | ||||||||||||
Debt instruments | 439,633 | 397,213 | 311,761 | |||||||||
Equity instruments | 422,268 | 369,918 | 703,252 | |||||||||
Bolsas y Mercados Españoles | — | — | 110,587 | |||||||||
BPI (Note 1.i) | — | — | 107,000 | |||||||||
Telefónica, S.A. | — | — | 138,410 | |||||||||
Of which: Other | 768,957 | 955,520 | (141,995 | ) | ||||||||
Of which: | ||||||||||||
Due to exchange of shares (Note 1.i) | 723,917 | — | — | |||||||||
Due to repurchase of securitizations | 97,459 | — | — | |||||||||
Disposal of ABN liabilities (Note 1.i) | — | 741,100 | — | |||||||||
Hedging derivatives and other | (125,655 | ) | (4,539 | ) | (100,346 | ) | ||||||
Losses on assets to be delivered to Madoff/Lehman victims (Note 25) | — | (643,000 | ) | — | ||||||||
Other financial assets and liabilities held for trading (*) | 2,098,449 | 1,209,828 | 1,407,938 | |||||||||
3,801,645 | 2,892,249 | 2,306,384 | ||||||||||
(*) | Includes the net gain or loss arising from transactions involving debt securities, equity instruments and derivatives included in this portfolio, since the Group manages its risk in these instruments on a global basis. |
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Gains/losses due to exchange of shares and repurchase of securitizations | |||
In July 2009 the Group offered the holders of certain securities issued by various Group companies (with a total nominal amount of approximately €9,100 million) the possibility of exchanging these securities for newly-issued Group securities plus a cash premium. Holders of securities with a cumulative nominal amount of €4,527 million subscribed to this exchange. Since the characteristics of the securities received and delivered in the exchange differ substantially, the Group wrote down the original financial liability and recognized a new financial liability for the securities delivered, and recognized with a credit to income an amount of €724 million relating to the difference between the carrying amount of the financial liability written down and the value of the consideration delivered. | |||
Additionally, in August 2009 the Group invited the holders of securitization bonds to submit offers for the sale of their securities. The end nominal amount of bonds repurchased by the Group amounted to €609 million, and the Group recognized with a credit to income an amount of €97 million relating to the difference between the carrying amount of the financial liability written down and the value of the consideration delivered in cash. | |||
b) | Financial assets and liabilities at fair value through profit or loss | ||
The detail of the amount of the asset balances is as follows: |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Loans and advances to credit institutions | 22,196 | 14,061 | 19,160 | |||||||||
Loans and advances to customers | 18,405 | 9,657 | 31,726 | |||||||||
Debt instruments | 57,286 | 49,050 | 73,403 | |||||||||
Other equity instruments | 15,125 | 9,051 | 12,614 | |||||||||
Derivatives | 59,856 | 95,815 | 46,733 | |||||||||
172,868 | 177,634 | 183,636 | ||||||||||
The foregoing table shows the maximum credit risk exposure of these assets. The Group mitigates and reduces this exposure as explained below. |
With respect to derivatives, the Group has entered into framework agreements with a large number of credit institutions and customers for the netting-off of asset positions and the provision of collateral for non-payment. For derivatives arranged with customers, the Group applies a risk premium accrual policy. At December 31, 2009, the actual credit risk exposure of the derivatives was €42,761 million (December 31, 2008: €39,019 million) (see Note 36). |
Loans and advances to credit institutions and Loans and advances to customers included repos amounting to €28,298 million at December 31, 2009 (December 31, 2008: €9,028 million). Also, mortgage-backed assets totaled €6,828 million (December 31, 2008: €7,020 million). |
Debt instruments included €27,909 million of Spanish and foreign government debt securities at December 31, 2009 (December 31, 2008: €17,049 million). |
At December 31, 2009 and 2008, the amount of the change in the year in the fair value of financial assets at fair value through profit or loss attributable to variations in their credit risk (spread) was not material, taking into account the Group’s management of these risks by purchasing protection through credit derivatives. |
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The detail of the amount of the liability balances is as follows: |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Derivatives | (58,713 | ) | (89,167 | ) | (49,448 | ) | ||||||
Other liabilities | (99,175 | ) | (76,093 | ) | (113,668 | ) | ||||||
(157,888 | ) | (165,260 | ) | (163,116 | ) | |||||||
The difference between the amount recognized as liabilities at fair value and the amount which the Group would contractually be required to pay to the holders of the related obligations at maturity, in other than derivative transactions, was €352 million at December 31, 2009 (December 31, 2008: €605 million). |
45. | Exchange differences | |
Exchange differences shows basically the gains or losses on currency dealings, the differences that arise on translations of monetary items in foreign currencies to the functional currency, and those disclosed on non-monetary assets in foreign currency at the time of their disposal. |
46. | Other operating income and Other operating expenses | |
Other operating income and Other operating expenses in the consolidated income statement include: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Insurance activity income | 338,860 | 251,589 | 229,933 | |||||||||
Income from insurance and reinsurance contracts issued | 7,112,856 | 8,385,788 | 5,529,987 | |||||||||
Of which: | ||||||||||||
Insurance and reinsurance premium income | 6,950,140 | 8,150,685 | 5,377,949 | |||||||||
Reinsurance income | 162,716 | 235,103 | 152,038 | |||||||||
Expenses of insurance and reinsurance contracts | (6,773,996 | ) | (8,134,199 | ) | (5,300,054 | ) | ||||||
Of which: | ||||||||||||
Claims paid and other insurance-related expenses | (3,015,508 | ) | (3,480,255 | ) | (2,862,786 | ) | ||||||
Net provisions for insurance contract liabilities | (3,540,038 | ) | (4,381,487 | ) | (2,239,778 | ) | ||||||
Reinsurance premiums paid | (218,450 | ) | (272,457 | ) | (197,490 | ) | ||||||
Non-financial services | 140,404 | 117,718 | 152,072 | |||||||||
Sales and income from the provision of non-financial services | 377,800 | 586,872 | 771,027 | |||||||||
Cost of sales | (237,396 | ) | (469,154 | ) | (618,955 | ) | ||||||
Other operating income and expenses | (335,347 | ) | (97,486 | ) | (91,455 | ) | ||||||
Other operating income | 437,882 | 463,648 | 438,656 | |||||||||
Of which, fees and commissions offsetting direct costs | 116,851 | 155,785 | 195,272 | |||||||||
Other operating expenses | (773,229 | ) | (561,134 | ) | (530,111 | ) | ||||||
Of which, Deposit Guarantee Fund | (317,708 | ) | (179,023 | ) | (144,988 | ) | ||||||
143,917 | 271,821 | 290,550 | ||||||||||
Most of the Bank’s insurance activity is carried on in life insurance. |
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47. | Personnel expenses |
a) | Breakdown | ||
The detail of Personnel expenses is as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Wages and salaries | 6,060,541 | 4,941,871 | 4,762,049 | |||||||||
Social security costs | 1,054,906 | 815,864 | 724,882 | |||||||||
Additions to provisions for defined benefit pension plans (Note 25) | 175,810 | 184,072 | 208,648 | |||||||||
Contributions to defined contribution pension funds (Note 25) | 114,080 | 77,703 | 47,485 | |||||||||
Share-based payment costs | 147,805 | 107,644 | 48,546 | |||||||||
Of which: | ||||||||||||
Payments granted to the Bank’s directors | 5,724 | 3,560 | 1,424 | |||||||||
Other personnel expenses | 897,141 | 686,197 | 642,733 | |||||||||
8,450,283 | 6,813,351 | 6,434,343 | ||||||||||
b) | Headcount | ||
The average number of employees in the Group, by professional category, was as follows: |
Average number of employees (**) | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
The Bank: | ||||||||||||
Senior management (*) | 87 | 90 | 93 | |||||||||
Other line personnel | 16,292 | 16,364 | 16,153 | |||||||||
Clerical staff | 3,625 | 3,816 | 4,147 | |||||||||
General services personnel | 33 | 36 | 42 | |||||||||
20,037 | 20,306 | 20,435 | ||||||||||
Banesto | 9,678 | 10,330 | 10,524 | |||||||||
Rest of Spain | 5,970 | 5,940 | 5,582 | |||||||||
Santander UK | 20,809 | 15,593 | 15,771 | |||||||||
Other companies (**) | 113,582 | 82,168 | 71,751 | |||||||||
170,076 | 134,337 | 124,063 | ||||||||||
(*) | Categories of deputy assistant executive vice presidents and above, including senior management. | |
(**) | Excluding personnel assigned to discontinued operations. |
The functional breakdown, by gender, at December 31, 2009 is as follows: |
Functional breakdown by gender | ||||||||||||||||||||||||
Managers | Other line personnel | Clerical staff | ||||||||||||||||||||||
Men | Women | Men | Women | Men | Women | |||||||||||||||||||
Continental Europe | 2,659 | 651 | 18,413 | 13,735 | 6,920 | 5,784 | ||||||||||||||||||
United Kingdom | 369 | 108 | 4,058 | 4,234 | 4,881 | 11,135 | ||||||||||||||||||
Latin America | 1,926 | 667 | 16,343 | 13,329 | 24,180 | 40,068 | ||||||||||||||||||
Total | 4,954 | 1,426 | 38,814 | 31,298 | 35,981 | 56,987 | ||||||||||||||||||
The same information, expressed in percentage terms at December 31, 2009, is as follows: |
Functional breakdown by gender | ||||||||||||||||||||||||
Managers | Other line personnel | Clerical staff | ||||||||||||||||||||||
Men | Women | Men | Women | Men | Women | |||||||||||||||||||
Continental Europe | 80 | % | 20 | % | 57 | % | 43 | % | 54 | % | 46 | % | ||||||||||||
United Kingdom | 77 | % | 23 | % | 49 | % | 51 | % | 30 | % | 70 | % | ||||||||||||
Latin America | 74 | % | 26 | % | 55 | % | 45 | % | 38 | % | 62 | % | ||||||||||||
Total | 78 | % | 22 | % | 55 | % | 45 | % | 39 | % | 61 | % | ||||||||||||
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The labor relations between employees and the various Group companies are governed by the related collective labor agreements or similar regulations. | |||
c) | Share-based payments |
i. | The Bank |
In recent years, as part of the deferred variable remuneration, the Group has set up remuneration systems tied to the performance of the stock market price of the shares of the Bank, based on the achievement of certain targets indicated below: |
Date of | Date of | |||||||||||||||||||
Euros | commencement | expiry of | ||||||||||||||||||
Number | Exercise | Year | Employee | Number | of exercise | exercise | ||||||||||||||
of shares | price | granted | group | of persons | period | period | ||||||||||||||
Plans outstanding at 01/01/07 | 96,251,390 | |||||||||||||||||||
Rights granted (Plan I09) | 10,448,480 | — | 2007 | Managers | 5,476 | 06/23/07 | 07/31/09 | |||||||||||||
Rights granted (Plan I10) | 15,690,283 | — | 2007 | Managers | 5,506 | 06/23/07 | 07/31/10 | |||||||||||||
Options cancelled, net (Plan I06) | (1,195,371 | ) | 9.09 | Managers | (45 | ) | 01/15/08 | 01/15/09 | ||||||||||||
Plans outstanding at 12/31/07 | 121,194,782 | |||||||||||||||||||
Options exercised (Plan I06) | (65,983,402 | ) | 9.09 | — | Managers | (1,555 | ) | 01/15/08 | 01/15/09 | |||||||||||
Rights granted (Plan I10) | 46,560 | — | 2008 | Managers | 1 | 06/23/07 | 07/31/10 | |||||||||||||
Rights granted (Plan I11) | 17,122,650 | — | 2008 | Managers | 5,771 | 06/21/08 | 07/31/11 | |||||||||||||
Plans outstanding at 12/31/08 | 72,380,590 | |||||||||||||||||||
Shares delivered (Plan I09) | (8,978,865 | ) | — | 2007 | Managers | (5,066 | ) | 06/23/07 | 07/31/09 | |||||||||||
Options cancelled, net (Plan I06) | (29,072,617 | ) | 9.09 | — | Managers | (957 | ) | 01/15/08 | 01/15/09 | |||||||||||
Rights cancelled, net (Plan I09) | (1,469,615 | ) | — | 2007 | Managers | (410 | ) | 06/23/07 | 07/31/09 | |||||||||||
Rights granted (Plan I12) | 18,866,927 | — | 2009 | Managers | 6,510 | 06/19/09 | 07/31/12 | |||||||||||||
Plans outstanding at 12/31/09 | 51,726,420 | |||||||||||||||||||
Of which: | ||||||||||||||||||||
Plan I10 | 15,736,843 | — | 2007 | Managers | 5,507 | 06/23/07 | 07/31/10 | |||||||||||||
Plan I11 | 17,122,650 | — | 2008 | Managers | 5,771 | 06/21/08 | 07/31/11 | |||||||||||||
Plan I12 | 18,866,927 | — | 2009 | Managers | 6,510 | 06/19/09 | 07/31/12 |
Plan I06 |
In 2004 a long-term incentive plan (I06) was designed which, consisting of options on shares of the Bank, was tied to the achievement of two targets: appreciation of the Bank’s share price and growth in earnings per share, in both cases above a sample of comparable banks. These targets were achieved. The exercise period was from January 15, 2008 to January 15, 2009. This Plan was approved by the shareholders at the general shareholders’ meeting on June 18, 2005 and was cancelled at December 31, 2009. |
The fair value of the equity instruments granted (€57.5 million) was charged to income (see Note 47.a), with a credit to equity, in the specific period in which the beneficiaries provided their services to the Group. |
The executive directors were beneficiaries under this plan; the number of Bank share options held by them is indicated in Note 5.d. | |||
Long-term incentive policy |
At the board meeting on March 26, 2007, following the report of the appointments and remuneration committee, the Bank’s directors approved a long-term incentive policy aimed at the Bank’s executive directors and certain executive personnel of the Bank and of other Santander Group companies. This policy, through which the deferred share-based variable remuneration is paid, includes Bank share-based payments, and its implementation requires, in conformity with the law and the Bank’s Bylaws, specific resolutions to be adopted by the general shareholders’ meeting. |
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Were it necessary or advisable for legal, regulatory or other similar reasons, the delivery mechanisms described below may be adapted in specific cases without altering the maximum number of shares linked to the plan or the essential conditions to which the delivery thereof is subject. These adaptations may involve replacing the delivery of shares with the delivery of cash amounts of an equal value. |
The plans shaping the aforementioned incentive policy are as follows: (i) performance share plan; (ii) obligatory investment share plan; (iii) selective delivery share plan; and (iv) minimum investment program. The characteristics of the plans are set forth below: |
(i) | Performance share plan |
The deferred share-based variable remuneration is instrumented through a multiannual incentive plan, which is payable in shares of the Bank. The beneficiaries of the plan are the executive directors and other members of senior management, together with any other Group executives determined by the board of directors or, when delegated by it, the executive committee. |
This plan involves successive three-year cycles of share deliveries to the beneficiaries, so that each year one cycle will begin and, from 2009 onwards, another cycle will also end. The aim is to establish an adequate sequence between the end of the incentive program linked to the previous Plan I06 and the successive cycles of this plan. Thus, the first two cycles commenced in July 2007, the first cycle having a duration of two years (PI09) and the second cycle having a standard three-year term (PI10). The first cycle (PI09) was cancelled on July 31, 2009. In June 2008 and June 2009 the third and fourth cycles of the performance share plan (PI11 and PI12, respectively), both of which were to run for three years, were approved. |
For each cycle a maximum number of shares is established for each beneficiary who remains in the Group’s employ for the duration of the plan. The targets, which, if met, will determine the number of shares to be delivered with respect to the cycles approved until June 2008, were defined by comparing the Group’s performance with that of a benchmark group of financial institutions and were linked to two parameters, namely Total Shareholder Return (TSR) and growth in Earnings per Share (EPS). The targets, which, if met, will determine the number of shares to be delivered under Plan PI12, are defined by comparing the Group’s performance with that of a benchmark group of financial institutions and are linked to only one parameter, namely Total Shareholder Return (TSR). |
The ultimate number of shares to be delivered will be determined in each of the cycles by the degree of achievement of the targets on the third anniversary of commencement of each cycle (with the exception of the first cycle, for which the second anniversary was considered), and the shares will be delivered within a maximum period of seven months from the end of the cycle. |
At the end of the cycles of Plan PI10 and Plan PI11, the TSR and the EPS growth will be calculated for Santander and each of the benchmark entities and the results will be ranked from first to last. Each of the two criteria (TSR and EPS growth) will be weighted at 50% in the calculation of the percentage of shares to be delivered, based on the following scale and in accordance with Santander’s relative position among the group of benchmark financial institutions: |
Percentage of | Santander’s place | Percentage of | |||||
Santander’s place | maximum shares | in the EPS | maximum shares | ||||
in the TSR ranking | to be delivered | growth ranking | to be delivered | ||||
1st to 6th | 50 | % | 1st to 6th | 50 | % | ||
7th | 43 | % | 7th | 43 | % | ||
8th | 36 | % | 8th | 36 | % | ||
9th | 29 | % | 9th | 29 | % | ||
10th | 22 | % | 10th | 22 | % | ||
11th | 15 | % | 11th | 15 | % | ||
12th and below | 0 | % | 12th and below | 0 | % |
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In the case of Plan PI12 the TSR criterion will determine the percentage of shares to be delivered, based on the following scale and in accordance with Santander’s relative position among the group of benchmark financial institutions: |
Percentage of | ||||
Santander’s place | maximum shares | |||
in the TSR ranking | to be delivered | |||
1st to 5th | 100.0 | % | ||
6th | 82.5 | % | ||
7th | 65.0 | % | ||
8th | 47.5 | % | ||
9th | 30.0 | % | ||
10th and below | 0 | % |
Any benchmark group entity that is acquired by another company, whose shares cease trading or that ceases to exist will be excluded from the benchmark group. In an event of this or any similar nature, the comparison with the benchmark group will be performed in such a way that, for each of the measures considered (TSR and EPS growth, as appropriate), the maximum percentage of shares will be delivered if Santander ranks within the first quartile (including the 25th percentile) of the benchmark group; no shares will be delivered if Santander ranks below the median (50th percentile); 30% of the maximum amount of shares will be delivered if Santander is placed at the median (50th percentile). The linear interpolation method will be used for calculating the corresponding percentage for positions between the median and the first quartile (25th percentile) (neither included). |
The fair value of the equity instruments granted under these plans is €268 million (of which €85 million correspond to PI12), and this amount is being charged to Personnel expenses, with a credit to equity, over the specific period in which the beneficiaries provide their services to the Group. |
Plan I09 matured in 2009. As established in the aforementioned plan, the number of shares received by each beneficiary was determined by the degree of achievement of the targets to which Plan I09 was tied and, since it fell short of the maximum number established, the unearned options were cancelled. |
(ii) | Obligatory investment share plan |
The deferred share-based variable remuneration is instrumented through this multiannual incentive plan, which is payable in shares of the Bank and is conditional upon compliance with certain investment and continued service requirements. |
The current beneficiaries of the plan are the Group’s top 32 executives, who include the executive directors, non-director members of senior management and other executives (see Note 5). |
This plan is structured in three-year cycles which start each year. The beneficiaries of the plan must use 10% of their gross annual variable cash-based remuneration (or bonus) to acquire shares of the Bank in the market (the Obligatory Investment). As resolved by the shareholders at the relevant general shareholders’ meeting, the Obligatory Investments were made before February 29, 2008, February 28, 2009 and February 28, 2010, respectively. |
Participants who hold the shares acquired through the Obligatory Investment and remain in the Group’s employ for three years from the date on which the Obligatory Investment is made will be entitled to receive the same number of Bank shares as that composing their initial Obligatory Investment. |
The shares will be delivered within a maximum period of one month from the third anniversary of the date on which the Obligatory Investment was made. |
The shareholders at the general shareholders’ meeting of June 19, 2009 introduced, for the third cycle, a requirement additional to that of remaining in the Group’s employ, which is that in the three-year period from the investment in the shares, none of the following circumstances should concur: (i) poor financial performance of the Group; (ii) breach by the beneficiary of the codes of conduct or other internal regulations, including, in particular, that relating to risks that is applicable to the executive in question; or (iii) a material restatement of the Bank’s financial statements, except when it is required pursuant to a change in accounting standards. |
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(iii) | Selective delivery share plan |
This plan envisages the selective delivery of shares in special circumstances relating to the hiring or retention of executives or employees of the Bank or other Group entities, except for executive directors. The board of directors, or by delegation thereof, the executive committee, shall decide when this instrument is to be used. |
Each participant must have completed a minimum of three to four years of service at the Group. Each participant will be entitled to receive the shares upon completion of the minimum period of service. |
The authorization may be used to assume share delivery obligations in the twelve months following the date it was granted. At the general shareholders’ meeting on June 19, 2009, the shareholders approved the delivery of shares of the Bank up to a maximum of 2,478,000 shares to be used selectively. |
(iv) | Minimum investment program |
This program consists of the obligation of the Group’s top 32 executives (including executive directors) to hold Bank shares equal to one year’s fixed remuneration. This amount must be reached within a maximum period of five years from March 26, 2007. |
ii. | Abbey |
The long-term incentive plans on shares of the Bank originally granted by management of Abbey to its employees (on Abbey shares) are as follows: |
Pounds | Date of | Date of | ||||||||||||||||||
sterling (*) | commencement | expiry of | ||||||||||||||||||
Number | Exercise | Employee | Number | of exercise | exercise | |||||||||||||||
of shares | price | Year granted | group | of persons | period | period | ||||||||||||||
Plans outstanding at 01/01/07 | 10,354,232 | 4.32 | ||||||||||||||||||
Options exercised | (1,535,325 | ) | 3.81 | |||||||||||||||||
Of which: | ||||||||||||||||||||
Executive Options | (33,904 | ) | 3.96 | |||||||||||||||||
Sharesave | (1,501,421 | ) | 3.81 | |||||||||||||||||
Options cancelled (net) or not exercised | (770,595 | ) | — | |||||||||||||||||
Plans outstanding at 12/31/07 | 8,048,312 | 5.34 | ||||||||||||||||||
Options granted (Sharesave) | 5,196,807 | 7.69 | 2008 | Employees | 6,556 | (**) | 11/01/08 | 11/01/11 | ||||||||||||
11/01/08 | 11/01/13 | |||||||||||||||||||
Options exercised | (6,829,255 | ) | 4.91 | |||||||||||||||||
Of which: | ||||||||||||||||||||
Executive Options | (132,107 | ) | 4.11 | |||||||||||||||||
Sharesave | (4,506,307 | ) | 3.07 | |||||||||||||||||
MTIP | (2,190,841 | ) | 8.73 | |||||||||||||||||
Options cancelled (net) or not exercised | (262,868 | ) | 4.87 | |||||||||||||||||
Of which: | ||||||||||||||||||||
Sharesave | (233,859 | ) | 4.13 | |||||||||||||||||
MTIP | (29,009 | ) | 10.88 | |||||||||||||||||
Plans outstanding at 12/31/08 | 6,152,996 | 7.00 | ||||||||||||||||||
Options granted (Sharesave) | 4,527,576 | 7.26 | 2009 | Employees | 7,066 | (**) | 11/01/09 | 11/01/12 | ||||||||||||
11/01/09 | 11/01/14 | |||||||||||||||||||
Options exercised | (678,453 | ) | ||||||||||||||||||
Of which: | ||||||||||||||||||||
Sharesave | (678,453 | ) | 3.85 | |||||||||||||||||
Options cancelled (net) or not exercised | (1,277,590 | ) | ||||||||||||||||||
Of which: | ||||||||||||||||||||
Sharesave | (1,277,590 | ) | 7.48 | |||||||||||||||||
Plans outstanding at 12/31/09 | 8,724,529 | 7.24 | ||||||||||||||||||
Of which: | ||||||||||||||||||||
Executive Options | 12,015 | 4.54 | 2003-2004 | Managers | 2 | 03/26/06 | 03/24/13 | |||||||||||||
Sharesave | 8,712,514 | 7.24 | 2004-2008-2009 | Employees | 11,919 | (**) | 04/01/06 | 11/01/14 |
(*) | At December 31, 2009, 2008 and 2007 the euro/pound sterling exchange rate was €1.12600/GBP 1, €1.04987/GBP 1 and €1.36360/GBP 1, respectively. | |
(**) | Number of accounts/contracts. A single employee may have more than one account/contract. On September 30, 2008, 4,493 contracts were delivered with an execution date three years thereafter and 2,063 contracts with an execution date five years thereafter. The date of commencement of all these contracts is November 1, 2008. |
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In 2005 the Group designed a Medium-Term Incentive Plan (MTIP) involving the delivery of Bank shares to Abbey executives. Under the plan, effective allocation of the shares in 2008 was tied to the achievement of business targets by Abbey (in terms of net profit and income). This plan was approved by the shareholders at the general shareholders’ meeting on June 17, 2006. Subsequently, it was considered necessary to amend the conditions of the plan in order to reflect the impact of the sale of Abbey’s life insurance business to Resolution on the income targets of Abbey for 2007. The board of directors, after obtaining a favorable report from the appointments and remuneration committee, submitted this amendment for ratification by the shareholders at the general shareholders’ meeting held on June 23, 2007. The amendment was approved thereat. In the first half of 2008, all the shares under this plan were delivered, and the plan was cancelled on June 30, 2008. |
In 2008 the Group launched a voluntary savings scheme for Abbey employees (Sharesave Scheme) whereby employees who join the scheme will have between GBP 5 and GBP 250 deducted from their net monthly pay over a period of three or five years. When this period has ended, the employees may use the amount saved to exercise options on shares of the Bank at an exercise price calculated by reducing by up to 20% the average purchase and sale prices of the Bank shares in the first three trading days of September 2008. This scheme, which commenced in September 2009, was approved by the shareholders at the general shareholders’ meeting held on June 21, 2008 and is authorized by the UK tax authorities (HMRC). At the general shareholders’ meeting on June 19, 2009, the shareholders approved a new plan with similar features to the plan approved in 2008. |
iii. | Fair value |
The fair value of each option granted by the Group is calculated at the grant date. In order to value Plan I06 two valuation reports were performed by two multinational investment banks. These experts used the Black-Scholes equity option pricing model considering the following parameters: the expected life of the options, interest rates, volatility, exercise price, market price and dividends of the Bank shares and the shares of comparable banks. The fair value of the options granted was calculated by the Group on the basis of the two valuations. | |||
With the exception of the share option plans which include terms relating to market conditions, the transfer terms included in the vesting conditions are not taken into account to estimate fair value. The transfer terms that are not based on market conditions are taken into account by adjusting the number of shares or share options included in the measurement of the service cost of the employee so that, ultimately, the amount recognized in the consolidated income statement is based on the number of shares or share options transferred. When the transfer terms are related to market conditions, the charge for the services received is recognized regardless of whether the market conditions for the transfer are met, although the non-market transfer terms must be satisfied. The share price volatility is based on the implicit volatility scale for the Bank’s shares at the exercise prices and the duration corresponding to most of the sensitivities. | |||
The fair value of the performance share plans was calculated as follows: |
• | It was assumed that the beneficiaries will not leave the Group’s employ during the term of each plan. | ||
• | The fair value of the 50% linked to the Bank’s relative TSR position (100% in the case of PI12) was calculated, on the grant date, on the basis of the report of an independent expert whose assessment was carried out using a Monte Carlo valuation model, performing 10,000 simulations to determine the TSR of each of the companies in the benchmark group, taking into account the variables set forth below. The results (each of which represents the delivery of a number of shares) are classified in decreasing order by calculating the weighted average and discounting the amount at the risk-free interest rate. |
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PI09 | PI10 | PI11 | PI12 | |||||||||||||
Expected volatility (*) | 16.25 | % | 15.67 | % | 19.31 | % | 42.36 | % | ||||||||
Annual dividend yield based on last few years | 3.23 | % | 3.24 | % | 3.47 | % | 4.88 | % | ||||||||
Risk-free interest rate (Treasury Bond yield — zero coupon) over the period of the plan | 4.473 | % | 4.497 | % | 4.835 | % | 2.040 | % |
(*) | Calculated on the basis of historical volatility over the corresponding period (two or three years). |
The application of the simulation model results in percentage values of 42.7% for the I-09 plan, 42.3% for the I-10 plan and 44.9% for the I-11 plan, which are applied to 50% of the value of the options granted in order to determine the cost per books of the TSR-based portion of the incentive, and a percentage value of 55.42% for the I-12 plan. Since this valuation refers to a market condition, it cannot be adjusted after the grant date. |
• | In view of the high correlation between TSR and EPS, it was considered feasible to extrapolate that, in a high percentage of cases, the TSR value is also valid for EPS. Therefore, it was initially determined that the fair value of the portion of the plans linked to the Bank’s relative EPS position, i.e. of the remaining 50% of the options granted, was the same as that of the 50% corresponding to the TSR. Since this valuation refers to a non-market condition, it is reviewed and adjusted on a yearly basis. |
The fair value of each option granted by Abbey was estimated at the grant date using a European/American Partial Differential Equation model with the following assumptions: |
2009 | 2008 | 2007 | ||||
Risk-free interest rate | 2.5%-3.5% | 2.9%-6.5% | 5.0%-5.8% | |||
Dividend increase, based solely on the average increase since 1989 | 10% | 10% | 10% | |||
Volatility of underlying shares based on historical volatility over 5 years | 29.0%-34.4% | 20.2%-29.6% | 19.8%-26.9% | |||
Expected life of options granted under: | ||||||
Employee Sharesave Plan | 3, 5 and 7 years | 3, 5 and 7 years | 3, 5 and 7 years | |||
Executive Share Option Plan | 10 years | 10 years | 10 years | |||
Medium-Term Incentive Plan | — | — | 3 years | |||
48. | Other general administrative expenses |
a) | Breakdown | ||
The detail of Other general administrative expenses is as follows: |
Thousands of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Property, fixtures and supplies | 1,613,675 | 1,206,895 | 965,937 | |||||||||
Other administrative expenses | 1,435,743 | 1,048,392 | 897,877 | |||||||||
Technology and systems | 785,504 | 504,196 | 468,273 | |||||||||
Advertising | 594,432 | 534,876 | 553,967 | |||||||||
Communications | 631,806 | 452,900 | 401,057 | |||||||||
Technical reports | 359,753 | 298,037 | 294,058 | |||||||||
Per diems and travel expenses | 262,097 | 257,079 | 271,842 | |||||||||
Taxes other than income tax | 312,994 | 279,250 | 265,542 | |||||||||
Surveillance and cash courier services | 331,220 | 235,207 | 188,717 | |||||||||
Insurance premiums | 47,098 | 35,674 | 35,057 | |||||||||
6,374,322 | 4,852,506 | 4,342,327 | ||||||||||
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b) | Other information | ||
Technical reports includes the fees paid by the various Group companies (detailed in the accompanying Appendices) to their respective auditors, the detail being as follows: |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Audit of the annual financial statements of the companies audited by Deloitte (constant scope of consolidation) | 14.6 | 18.3 | 15.9 | |||||||||
Of which: | ||||||||||||
Abbey | 2.7 | 3.3 | 4.1 | |||||||||
Santander Brasil | 1.5 | 2.4 | 0.8 | |||||||||
Audit of the Bank’s separate and consolidated financial statements | 1.0 | 1.0 | 1.0 | |||||||||
Audit of the annual financial statements of the companies included in the Group in 2009 | 5.0 | |||||||||||
Of which: | ||||||||||||
Sovereign | 2.3 | |||||||||||
Alliance & Leicester, Bradford & Bingley | 1.0 |
In recent years, in addition to the audits of financial statements, the internal control audit (Sarbanes-Oxley) and the regulatory capital audit (BIS) were performed (for €4.7 million in 2009, €5.9 million in 2008 and €6.2 million in 2007) and other reports were prepared in accordance with the requirements of the legal and tax regulations issued by the national supervisory authorities of the countries in which the Group operates, totaling €3.6 million, €4.5 million and €3.7 million in 2009, 2008 and 2007, respectively (€2.7 million relate to companies included in the Group in 2009). |
The detail of the other services provided to the various Group companies is as follows: |
1. | Due diligence review and other corporate transaction services: €3.7 million (2008: €3.8 million; 2007: €3.7 million). Additionally, the Group’s auditors provided other non-attest services to various Group companies for €4.7 million in 2009, €5.3 million in 2008 and €5.3 million in 2007. |
The services commissioned from the Group’s auditors meet the independence requirements stipulated by Law 44/2002, of 22 November, on Financial System Reform Measures and by the Sarbanes-Oxley Act of 2002, and they did not involve the performance of any work that is incompatible with the audit function. |
2. | Services provided by audit firms other than Deloitte: €14.0 million (2008: €13.9 million; 2007: €12.5 million). |
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49. | Gains/(losses) on disposal of assets not classified as non-current assets held for sale |
The detail of Gains/(losses) on disposal of assets not classified as non-current assets held for sale is as follows: |
Millions of euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Gains | ||||||||||||
On disposal of tangible assets | 51 | 115 | 1,849 | |||||||||
Of which: | ||||||||||||
Disposal of properties (Note 16) | — | — | 1,620 | |||||||||
On disposal of investments | 1,531 | 53 | 17 | |||||||||
Of which: | ||||||||||||
Banco Santander Brasil (Note 3) | 1,499 | — | — | |||||||||
Disposal of Porterbrook (Note 3) | — | 50 | — | |||||||||
1,582 | 168 | 1,866 | ||||||||||
Losses | ||||||||||||
On disposal of tangible assets | (14 | ) | (64 | ) | (55 | ) | ||||||
On disposal of investments | (4 | ) | (3 | ) | (1 | ) | ||||||
(18 | ) | (67 | ) | (56 | ) | |||||||
1,565 | 101 | 1,810 | ||||||||||
50. | Gains/(losses) on disposal of non-current assets held for sale not classified as discontinued operations |
The detail of Gains/(losses) on non-current assets held for sale not classified as discontinued operations is as follows: |
Millions of euros | ||||||||||||
Net Balance | 2009 | 2008 | 2007 | |||||||||
Tangible assets | (1,362 | ) | 799 | (23 | ) | |||||||
Impairment (Note 12) (*) | (1,350 | ) | (70 | ) | (27 | ) | ||||||
Gain on disposals | (12 | ) | 868 | 5 | ||||||||
Of which, on disposal of the Ciudad Financiera business campus (Note 1.i) | — | 836 | — | |||||||||
Other gains | 243 | 3,046 | 666 | |||||||||
Of which: | ||||||||||||
Antonveneta (Note 1.i) | — | 3,046 | — | |||||||||
Intesa San Paolo (Note 1.i) | — | — | 566 | |||||||||
Attijariwafa Bank (Note 1.i) | 218 | — | — | |||||||||
Other losses | (106 | ) | (2,113 | ) | — | |||||||
Of which, write-down of ownership interests in Royal Bank of Scotland and Fortis (Note 1.i) | — | (2,043 | ) | — | ||||||||
Total | (1,225 | ) | 1,731 | 643 | ||||||||
(*) | Including in 2009 the write-downs performed at year-end of €814 million (€554 million net of tax) (see Note 1.i). |
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51. | Other disclosures |
a) | Residual maturity periods and average interest rates | ||
The detail, by maturity, of the balances of certain items in the consolidated balance sheets is as follows: |
December 31, 2009 | ||||||||||||||||||||||||||||||||||||
Millions of euros | Average | |||||||||||||||||||||||||||||||||||
On | Less than | 1 to 3 | 3 to 12 | 1 to 3 | 3 to 5 | More than | Interest | |||||||||||||||||||||||||||||
Demand | 1 Month | Months | Months | Years | Years | 5 Years | Total | Rate | ||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||
Cash and balances with central banks | 19,998 | 10,585 | 521 | 3,310 | 475 | — | — | 34,889 | 4.07 | % | ||||||||||||||||||||||||||
Available-for-sale financial assets: | ||||||||||||||||||||||||||||||||||||
Debt instruments | 67 | 5,180 | 1,082 | 4,163 | 10,224 | 28,967 | 29,606 | 79,289 | 5.01 | % | ||||||||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||||||||||||||||||
Loans and advances to credit institutions | 9,834 | 22,660 | 5,893 | 6,893 | 1,692 | 2,190 | 8,479 | 57,641 | 3.15 | % | ||||||||||||||||||||||||||
Loans and advances to customers | 12,401 | 35,749 | 33,408 | 69,955 | 82,397 | 82,769 | 347,467 | 664,146 | 6.08 | % | ||||||||||||||||||||||||||
Debt instruments | 70 | 321 | 506 | 1,738 | 2,387 | 4,297 | 5,640 | 14,959 | 4.57 | % | ||||||||||||||||||||||||||
42,370 | 74,495 | 41,410 | 86,059 | 97,175 | 118,223 | 391,192 | 850,924 | 5.67 | % | |||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||
Financial liabilities at amortized cost: | ||||||||||||||||||||||||||||||||||||
Deposits from central banks | 383 | 7,359 | 258 | 14,109 | 6 | 227 | 3 | 22,345 | 1.69 | % | ||||||||||||||||||||||||||
Deposits from credit institutions | 7,978 | 13,161 | 2,611 | 15,253 | 5,238 | 4,962 | 1,578 | 50,781 | 2.68 | % | ||||||||||||||||||||||||||
Customer deposits | 235,974 | 69,839 | 47,546 | 64,755 | 34,148 | 30,571 | 4,848 | 487,681 | 2.70 | % | ||||||||||||||||||||||||||
Marketable debt securities (*) | 1,079 | 16,545 | 12,709 | 37,033 | 50,302 | 31,498 | 57,324 | 206,490 | 2.38 | % | ||||||||||||||||||||||||||
Subordinated liabilities | 3,412 | 752 | 34 | 1,841 | 1,714 | 3,097 | 25,955 | 36,805 | 5.69 | % | ||||||||||||||||||||||||||
Other financial liabilities | 6,765 | 5,992 | 1,680 | 2,072 | 1,675 | 646 | 470 | 19,300 | N/A | |||||||||||||||||||||||||||
255,591 | 113,648 | 64,838 | 135,063 | 93,083 | 71,001 | 90,178 | 823,402 | 2.73 | % | |||||||||||||||||||||||||||
Difference (assets less liabilities) | (213,221 | ) | (39,153 | ) | (23,428 | ) | (49,004 | ) | 4,092 | 47,222 | 301,014 | 27,522 | ||||||||||||||||||||||||
(*) | Includes promissory notes, certificates of deposit and other short-term debt issues. |
December 31, 2008 | ||||||||||||||||||||||||||||||||||||
Millions of euros | Average | |||||||||||||||||||||||||||||||||||
On | Less than | 1 to 3 | 3 to 12 | 1 to 3 | 3 to 5 | More than | interest | |||||||||||||||||||||||||||||
demand | 1 month | months | months | years | years | 5 years | Total | rate | ||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||
Cash and balances with central banks | 20,920 | 22,121 | 846 | 621 | — | — | 1,272 | 45,781 | 4.51 | % | ||||||||||||||||||||||||||
Available-for-sale financial assets: | ||||||||||||||||||||||||||||||||||||
Debt instruments | 21 | 4,630 | 385 | 5,123 | 9,534 | 6,522 | 16,333 | 42,548 | 5.13 | % | ||||||||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||||||||||||||||||
Loans and advances to credit institutions | 16,111 | 15,394 | 6,448 | 20,947 | 367 | 2,598 | 2,865 | 64,731 | 4.98 | % | ||||||||||||||||||||||||||
Loans and advances to customers | 35,010 | 29,706 | 51,500 | 64,061 | 103,164 | 72,172 | 261,619 | 617,231 | 7.56 | % | ||||||||||||||||||||||||||
Debt instruments | 38 | — | 600 | 6,071 | 30 | 173 | 10,741 | 17,652 | 3.15 | % | ||||||||||||||||||||||||||
72,100 | 71,851 | 59,779 | 96,824 | 113,096 | 81,464 | 292,829 | 787,944 | 6.94 | % | |||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||
Financial liabilities at amortized cost: | ||||||||||||||||||||||||||||||||||||
Deposits from central banks | 1,681 | 366 | 2,427 | 4,720 | — | 14 | 4 | 9,212 | 4.38 | % | ||||||||||||||||||||||||||
Deposits from credit institutions | 10,411 | 16,243 | 24,200 | 10,550 | 4,006 | 3,740 | 1,432 | 70,584 | 3.20 | % | ||||||||||||||||||||||||||
Customer deposits | 182,475 | 64,213 | 70,655 | 49,707 | 20,349 | 9,602 | 9,014 | 406,015 | 5.08 | % | ||||||||||||||||||||||||||
Marketable debt securities (*) | 7,250 | 22,168 | 26,241 | 25,125 | 42,132 | 23,509 | 81,218 | 227,642 | 4.21 | % | ||||||||||||||||||||||||||
Subordinated liabilities | 190 | 571 | 41 | 1,103 | 3,506 | 1,283 | 32,179 | 38,873 | 5.69 | % | ||||||||||||||||||||||||||
Other financial liabilities | 9,453 | 2,646 | 1,760 | 1,209 | 461 | 1,873 | 278 | 17,681 | ||||||||||||||||||||||||||||
211,461 | 106,208 | 125,324 | 92,415 | 70,453 | 40,022 | 124,124 | 770,008 | 4.66 | % | |||||||||||||||||||||||||||
Difference (assets less liabilities) | (139,361 | ) | (34,356 | ) | (65,545 | ) | 4,409 | 42,642 | 41,442 | 168,705 | 17,936 | |||||||||||||||||||||||||
(*) | Includes promissory notes, certificates of deposit and other short-term debt issues. |
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December 31, 2007 | ||||||||||||||||||||||||||||||||||||
Millions of euros | Average | |||||||||||||||||||||||||||||||||||
On | Less than | 1 to 3 | 3 to 12 | 1 to 3 | 3 to 5 | More than | interest | |||||||||||||||||||||||||||||
demand | 1 month | months | months | years | years | 5 years | Total | rate | ||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||
Cash and balances with central banks | 14,102 | 10,278 | 5 | 10 | 1,265 | 4,295 | 1,108 | 31,063 | 5.93 | % | ||||||||||||||||||||||||||
Available-for-sale financial assets: | ||||||||||||||||||||||||||||||||||||
Debt instruments | 31 | 953 | 1,070 | 2,060 | 5,837 | 6,450 | 17,786 | 34,187 | 5.11 | % | ||||||||||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||||||||||||||||||
Loans and advances to credit institutions | 8,227 | 13,147 | 6,333 | 4,113 | 884 | 759 | 5,021 | 38,483 | 4.53 | % | ||||||||||||||||||||||||||
Loans and advances to customers | 9,848 | 29,446 | 34,228 | 65,696 | 58,124 | 62,048 | 279,982 | 539,372 | 6.75 | % | ||||||||||||||||||||||||||
Debt instruments | 1 | 4 | — | 5 | 634 | 65 | 959 | 1,668 | 4.55 | % | ||||||||||||||||||||||||||
32,209 | 53,828 | 41,636 | 71,884 | 66,744 | 73,617 | 304,856 | 644,773 | 6.51 | % | |||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||
Financial liabilities at amortized cost: | ||||||||||||||||||||||||||||||||||||
Deposits from central banks | 2,727 | 16,387 | 2,917 | 155 | — | — | — | 22,186 | 4.45 | % | ||||||||||||||||||||||||||
Deposits from credit institutions | 5,706 | 22,412 | 6,504 | 6,197 | 3,002 | 3,111 | 1,756 | 48,688 | 4.55 | % | ||||||||||||||||||||||||||
Customer deposits | 178,240 | 55,381 | 27,839 | 28,959 | 13,141 | 11,145 | 2,040 | 316,745 | 4.12 | % | ||||||||||||||||||||||||||
Marketable debt securities | 520 | 13,310 | 17,600 | 24,198 | 35,294 | 26,745 | 88,250 | 205,917 | 4.61 | % | ||||||||||||||||||||||||||
Subordinated liabilities | 88 | 8 | 61 | 569 | 4,065 | 2,357 | 29,045 | 36,193 | 5.69 | % | ||||||||||||||||||||||||||
Other financial liabilities | 11,393 | 931 | 1,343 | 1,034 | 79 | 1,780 | 123 | 16,683 | — | |||||||||||||||||||||||||||
198,674 | 108,429 | 56,264 | 61,112 | 55,581 | 45,138 | 121,214 | 646,412 | 4.41 | % | |||||||||||||||||||||||||||
Difference (assets less liabilities) | (166,466 | ) | (54,602 | ) | (14,628 | ) | 10,772 | 11,163 | 28,479 | 183,642 | (1,639 | ) | ||||||||||||||||||||||||
b) | Equivalent euro value of assets and liabilities | ||
The detail of the main foreign currency balances in the consolidated balance sheet, based on the nature of the related items, is as follows: |
Equivalent value in millions of euros | ||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |||||||||||||||||||
Cash and balances with central banks | 28,198 | — | 26,685 | — | 16,155 | — | ||||||||||||||||||
Financial assets/liabilities held for trading | 94,069 | 87,066 | 104,429 | 96,666 | 124,409 | 100,719 | ||||||||||||||||||
Other financial instruments at fair value | 18,407 | 27,195 | 14,478 | 22,025 | 15,815 | 28,553 | ||||||||||||||||||
Available-for-sale financial assets | 43,048 | — | 25,338 | — | 15,395 | — | ||||||||||||||||||
Loans and receivables | 408,161 | — | 351,302 | — | 260,435 | — | ||||||||||||||||||
Investments | 92 | — | 1,169 | — | 13,036 | — | ||||||||||||||||||
Tangible assets | 3,918 | — | 3,286 | — | 4,665 | — | ||||||||||||||||||
Intangible assets | 21,659 | — | 16,940 | — | 12,557 | — | ||||||||||||||||||
Financial liabilities at amortized cost | — | 456,697 | — | 406,270 | — | 308,166 | ||||||||||||||||||
Liabilities under insurance contracts | — | 6,675 | — | 2,985 | — | 2,139 | ||||||||||||||||||
Other | 20,864 | 32,207 | 18,945 | 25,230 | 8,388 | 19,120 | ||||||||||||||||||
638,416 | 609,840 | 562,572 | 553,176 | 470,855 | 458,697 | |||||||||||||||||||
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c) | Fair value of financial assets and liabilities not measured at fair value | ||
The financial assets owned by the Group are measured at fair value in the accompanying consolidated balance sheet, except for loans and receivables, equity instruments whose market value cannot be estimated reliably and derivatives that have these instruments as their underlyings and are settled by delivery thereof. | |||
Similarly, the Group’s financial liabilities -except for financial liabilities held for trading, those measured at fair value and derivatives other than those having as their underlyings equity instruments whose market value cannot be estimated reliably- are measured at amortized cost in the accompanying consolidated balance sheet. |
i) | Financial assets measured at other than fair value |
Following is a comparison of the carrying amounts of the Group’s financial assets measured at other than fair value and their respective fair values at year-end: |
Millions of euros | ||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | Carrying | Fair | |||||||||||||||||||
Assets | amount | value | amount | value | amount | value | ||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||||||
Loans and advances to credit institutions | 57,641 | 58,121 | 64,731 | 65,059 | 38,483 | 38,482 | ||||||||||||||||||
Loans and advances to customers | 664,146 | 676,218 | 617,231 | 627,006 | 539,372 | 541,129 | ||||||||||||||||||
Debt instruments | 14,959 | 13,718 | 17,653 | 17,645 | 1,668 | 1,668 | ||||||||||||||||||
736,746 | 748,057 | 699,615 | 709,710 | 579,524 | 581,280 | |||||||||||||||||||
ii) | Financial liabilities measured at other than fair value |
Following is a comparison of the carrying amounts of the Group’s financial liabilities measured at other than fair value and their respective fair values at year-end: |
Millions of euros | ||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | Carrying | Fair | |||||||||||||||||||
Liabilities | amount | value | amount | value | amount | value | ||||||||||||||||||
Financial liabilities at amortized cost: | ||||||||||||||||||||||||
Deposits from central banks | 22,345 | 22,349 | 9,212 | 9,212 | 22,186 | 22,186 | ||||||||||||||||||
Deposits from credit institutions | 50,781 | 50,905 | 70,583 | 70,740 | 48,687 | 48,728 | ||||||||||||||||||
Customer deposits | 487,681 | 488,675 | 406,015 | 407,537 | 316,745 | 316,886 | ||||||||||||||||||
Marketable debt securities | 206,490 | 206,765 | 227,642 | 227,413 | 205,917 | 206,132 | ||||||||||||||||||
Subordinated liabilities | 36,805 | 37,685 | 38,873 | 36,705 | 36,193 | 36,808 | ||||||||||||||||||
Other financial liabilities | 19,300 | 19,636 | 17,681 | 17,677 | 16,683 | 16,681 | ||||||||||||||||||
823,403 | 826,015 | 770,007 | 769,285 | 646,411 | 647,422 | |||||||||||||||||||
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52. | Geographical and business segment reporting |
a) | Geographical segments |
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Millions of euros | ||||||||||||||||||||||||||||
2009 | ||||||||||||||||||||||||||||
Financial | ||||||||||||||||||||||||||||
Continental | management and | Intra-Group | ||||||||||||||||||||||||||
(Condensed) Balance sheet | Europe | United Kingdom | Latin America | Sovereign | holdings | eliminations | Total | |||||||||||||||||||||
Loans and advances to customers | 322,026 | 277,713 | 97,901 | 34,605 | 306 | — | 682,551 | |||||||||||||||||||||
Financial assets held for trading (excluding loans and advances) | 50,764 | 41,245 | 22,521 | 163 | 4,331 | — | 119,024 | |||||||||||||||||||||
Available-for-sale financial assets | 20,132 | 897 | 29,154 | 9,568 | 26,870 | — | 86,621 | |||||||||||||||||||||
Loans and advances to credit institutions | 88,508 | 28,745 | 22,146 | 496 | 43,550 | (103,608 | ) | 79,837 | ||||||||||||||||||||
Non-current assets | 5,054 | 1,424 | 3,926 | 391 | 979 | — | 11,774 | |||||||||||||||||||||
Other asset accounts | 21,955 | 24,522 | 38,105 | 3,568 | 144,697 | (102,125 | ) | 130,722 | ||||||||||||||||||||
Total assets/liabilities | 508,439 | 324,546 | 213,753 | 48,791 | 220,733 | (205,733 | ) | 1,110,529 | ||||||||||||||||||||
Customer deposits | 198,144 | 166,607 | 108,122 | 30,888 | 3,216 | — | 506,977 | |||||||||||||||||||||
Marketable debt securities | 50,610 | 58,611 | 8,411 | 11,236 | 83,094 | — | 211,962 | |||||||||||||||||||||
Subordinated liabilities | 2,079 | 8,577 | 4,888 | 2,129 | 19,131 | — | 36,804 | |||||||||||||||||||||
Liabilities under insurance contracts | 10,287 | 3 | 6,627 | — | — | — | 16,917 | |||||||||||||||||||||
Deposits from central banks and credit institutions | 115,487 | 57,879 | 32,765 | 736 | 38,832 | (103,608 | ) | 142,091 | ||||||||||||||||||||
Other liability accounts | 105,366 | 26,946 | 34,994 | 1,689 | 11,274 | (49,677 | ) | 130,592 | ||||||||||||||||||||
Equity (share capital + reserves) | 26,466 | 5,923 | 17,946 | 2,113 | 65,186 | (52,448 | ) | 65,186 | ||||||||||||||||||||
Other customer funds under management | 70,289 | 10,937 | 62,759 | 327 | — | — | 144,312 | |||||||||||||||||||||
Investment funds | 44,598 | 10,937 | 49,681 | — | — | — | 105,216 | |||||||||||||||||||||
Pension funds | 11,310 | — | — | — | — | — | 11,310 | |||||||||||||||||||||
Assets under management | 5,499 | — | 12,538 | 327 | — | — | 18,364 | |||||||||||||||||||||
Savings insurance | 8,882 | — | 540 | — | — | — | 9,422 | |||||||||||||||||||||
Customer funds under management | 321,122 | 244,732 | 184,180 | 44,580 | 105,441 | — | 900,055 | |||||||||||||||||||||
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Millions of euros | ||||||||||||||||||||||||||||
2008 | ||||||||||||||||||||||||||||
Financial | ||||||||||||||||||||||||||||
Continental | management and | Intra-Group | ||||||||||||||||||||||||||
(Condensed) Balance sheet | Europe | United Kingdom | Latin America | Sovereign | holdings | eliminations | Total | |||||||||||||||||||||
Loans and advances to customers | 325,378 | 202,622 | 96,054 | — | 2,836 | — | 626,890 | |||||||||||||||||||||
Financial assets held for trading (excluding loans and advances) | 72,303 | 50,029 | 20,965 | — | 2,686 | — | 145,983 | |||||||||||||||||||||
Available-for-sale financial assets | 12,806 | 2,785 | 19,208 | — | 14,122 | — | 48,921 | |||||||||||||||||||||
Loans and advances to credit institutions | 63,296 | 31,518 | 19,946 | — | 48,222 | (84,189 | ) | 78,793 | ||||||||||||||||||||
Non-current assets | 4,612 | 1,210 | 3,272 | — | 1,195 | — | 10,289 | |||||||||||||||||||||
Other asset accounts | 17,644 | 30,626 | 30,496 | — | 178,563 | (118,573 | ) | 138,756 | ||||||||||||||||||||
Total assets/liabilities | 496,039 | 318,790 | 189,941 | — | 247,624 | (202,762 | ) | 1,049,632 | ||||||||||||||||||||
Customer deposits | 165,762 | 143,200 | 108,257 | — | 3,010 | — | 420,229 | |||||||||||||||||||||
Marketable debt securities | 52,077 | 67,996 | 8,674 | — | 107,657 | — | 236,404 | |||||||||||||||||||||
Subordinated liabilities | 1,752 | 9,890 | 3,847 | — | 23,384 | — | 38,873 | |||||||||||||||||||||
Liabilities under insurance contracts | 13,889 | 3 | 2,958 | — | — | — | 16,850 | |||||||||||||||||||||
Deposits from central banks and credit institutions | 85,232 | 60,063 | 29,331 | — | 39,434 | (84,183 | ) | 129,877 | ||||||||||||||||||||
Other liability accounts | 153,674 | 32,306 | 24,291 | — | 14,435 | (77,011 | ) | 147,695 | ||||||||||||||||||||
Equity (share capital + reserves) | 23,653 | 5,332 | 12,583 | — | 59,704 | (41,568 | ) | 59,704 | ||||||||||||||||||||
Other customer funds under management | 75,473 | 7,180 | 48,408 | — | — | — | 131,061 | |||||||||||||||||||||
Investment funds | 47,725 | 7,180 | 35,400 | — | — | — | 90,305 | |||||||||||||||||||||
Pension funds | 11,128 | — | — | — | — | — | 11,128 | |||||||||||||||||||||
Assets under management | 4,479 | — | 12,810 | — | — | — | 17,289 | |||||||||||||||||||||
Savings insurance | 12,141 | — | 198 | — | — | — | 12,339 | |||||||||||||||||||||
Customer funds under management | 295,064 | 228,266 | 169,186 | — | 134,051 | — | 826,567 | |||||||||||||||||||||
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Millions of euros | ||||||||||||||||||||||||||||
2007 | ||||||||||||||||||||||||||||
Financial | ||||||||||||||||||||||||||||
Continental | management and | Intra-Group | ||||||||||||||||||||||||||
(Condensed) Balance sheet | Europe | United Kingdom | Latin America | Sovereign | holdings | eliminations | Total | |||||||||||||||||||||
Loans and advances to customers | 314,715 | 184,080 | 70,228 | — | 2,076 | — | 571,099 | |||||||||||||||||||||
Financial assets held for trading (excluding loans and advances) | 44,847 | 53,787 | 22,846 | — | 1,328 | — | 122,808 | |||||||||||||||||||||
Available-for-sale financial assets | 10,149 | 44 | 12,628 | — | 21,528 | — | 44,349 | |||||||||||||||||||||
Loans and advances to credit institutions | 54,798 | 22,166 | 12,847 | — | 26,502 | (58,670 | ) | 57,643 | ||||||||||||||||||||
Non-current assets | 5,373 | 4,685 | 1,805 | — | (202 | ) | — | 11,661 | ||||||||||||||||||||
Other asset accounts | 20,185 | 7,103 | 21,631 | — | 168,924 | (112,488 | ) | 103,355 | ||||||||||||||||||||
Total assets/liabilities | 450,067 | 271,865 | 141,985 | — | 220,156 | (171,158 | ) | 912,915 | ||||||||||||||||||||
Customer deposits | 149,061 | 122,500 | 82,046 | — | 1,800 | — | 355,407 | |||||||||||||||||||||
Marketable debt securities | 70,004 | 76,056 | 5,031 | — | 82,196 | — | 233,287 | |||||||||||||||||||||
Subordinated liabilities | 2,433 | 8,345 | 2,540 | — | 22,875 | — | 36,193 | |||||||||||||||||||||
Liabilities under insurance contracts | 10,907 | 6 | 2,121 | — | — | — | 13,034 | |||||||||||||||||||||
Deposits from central banks and credit institutions | 66,027 | 38,687 | 19,064 | — | 47,789 | (58,670 | ) | 112,897 | ||||||||||||||||||||
Other liability accounts | 131,362 | 23,094 | 22,595 | — | 18,541 | (80,450 | ) | 115,142 | ||||||||||||||||||||
Equity (share capital + reserves) | 20,273 | 3,177 | 8,588 | — | 46,955 | (32,038 | ) | 46,955 | ||||||||||||||||||||
Other customer funds under management | 101,713 | 10,225 | 48,048 | — | — | — | 159,986 | |||||||||||||||||||||
Investment funds | 72,945 | 10,225 | 36,041 | — | — | — | 119,211 | |||||||||||||||||||||
Pension funds | 11,952 | — | — | — | — | — | 11,952 | |||||||||||||||||||||
Assets under management | 7,865 | — | 11,949 | — | — | — | 19,814 | |||||||||||||||||||||
Savings insurance | 8,951 | — | 58 | — | — | — | 9,009 | |||||||||||||||||||||
Customer funds under management | 323,211 | 217,126 | 137,665 | — | 106,871 | — | 784,873 | |||||||||||||||||||||
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Millions of euros | ||||||||||||||||||||||||
2009 | ||||||||||||||||||||||||
Financial | ||||||||||||||||||||||||
Continental | management and | |||||||||||||||||||||||
(Condensed) Income statement | Europe | United Kingdom | Latin America | Sovereign | holdings | Total | ||||||||||||||||||
INTEREST INCOME / (CHARGES) | 11,456 | 3,934 | 11,959 | 1,160 | (2,210 | ) | 26,299 | |||||||||||||||||
Income from equity instruments | 218 | — | 96 | 1 | 121 | 436 | ||||||||||||||||||
Income from companiess accounted for using the equity method | 7 | — | 10 | (3 | ) | (15 | ) | (1 | ) | |||||||||||||||
Net fee and commission income | 3,787 | 993 | 3,925 | 380 | (5 | ) | 9,080 | |||||||||||||||||
Gains/losses on financial assets and liabilities | 687 | 506 | 1,663 | 14 | 1,376 | 4,246 | ||||||||||||||||||
Other operating income/(expenses) | 139 | 27 | 15 | (89 | ) | 52 | 144 | |||||||||||||||||
TOTAL INCOME | 16,294 | 5,460 | 17,668 | 1,463 | (681 | ) | 40,204 | |||||||||||||||||
Personnel expenses | (3,306 | ) | (1,170 | ) | (3,210 | ) | (457 | ) | (307 | ) | (8,450 | ) | ||||||||||||
Other administrative expenses | (2,028 | ) | (827 | ) | (2,822 | ) | (309 | ) | (388 | ) | (6,374 | ) | ||||||||||||
Depreciation and amortization of tangible and intangible assets | (570 | ) | (231 | ) | (566 | ) | (115 | ) | (114 | ) | (1,596 | ) | ||||||||||||
Net impairment losses on financial assets | (3,286 | ) | (881 | ) | (4,979 | ) | (571 | ) | (1,861 | ) | (11,578 | ) | ||||||||||||
Provisions (net) | (311 | ) | 16 | (681 | ) | (55 | ) | (762 | ) | (1,793 | ) | |||||||||||||
Net impairment losses on non-financial assets | (41 | ) | — | (22 | ) | (1 | ) | (100 | ) | (164 | ) | |||||||||||||
Other non-financial gains/(losses) | (81 | ) | — | 40 | (2 | ) | 382 | 339 | ||||||||||||||||
OPERATING PROFIT (LOSS) BEFORE TAX | 6,671 | 2,367 | 5,428 | (47 | ) | (3,831 | ) | 10,588 | ||||||||||||||||
Income tax | (1,768 | ) | (641 | ) | (1,257 | ) | 22 | 2,437 | (1,207 | ) | ||||||||||||||
PROFIT (LOSS) FROM CONTINUING OPERATIONS | 4,903 | 1,726 | 4,171 | (25 | ) | (1,394 | ) | 9,381 | ||||||||||||||||
Profit (loss) from discontinued operations | (45 | ) | — | 91 | — | (15 | ) | 31 | ||||||||||||||||
CONSOLIDATED PROFIT (LOSS) FOR THE YEAR | 4,858 | 1,726 | 4,262 | (25 | ) | (1,409 | ) | 9,412 | ||||||||||||||||
Attributable to minority interests | 65 | — | 428 | — | (24 | ) | 469 | |||||||||||||||||
PROFIT ATTRIBUTABLE TO THE PARENT | 4,793 | 1,726 | 3,834 | (25 | ) | (1,385 | ) | 8,943 |
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Millions of euros | ||||||||||||||||||||||||||||||||||||||||||||||||
2008 | 2007 | |||||||||||||||||||||||||||||||||||||||||||||||
Financial | Financial | |||||||||||||||||||||||||||||||||||||||||||||||
Continental | United | management and | Continental | United | management and | |||||||||||||||||||||||||||||||||||||||||||
(Condensed) Income statement | Europe | Kingdom | Latin America | Sovereign | holdings | Total | Europe | Kingdom | Latin America | Sovereign | holdings | Total | ||||||||||||||||||||||||||||||||||||
INTEREST INCOME / (CHARGES) | 9,259 | 2,411 | 8,025 | — | (2,157 | ) | 17,538 | 7,742 | 2,334 | 6,144 | — | (1,777 | ) | 14,443 | ||||||||||||||||||||||||||||||||||
Income from equity instruments | 266 | — | 58 | — | 229 | 553 | 202 | 1 | 34 | — | 183 | 420 | ||||||||||||||||||||||||||||||||||||
Income from companies accounted for using the equity method | 15 | 1 | 680 | — | 96 | 792 | 9 | 2 | — | — | 427 | 438 | ||||||||||||||||||||||||||||||||||||
Net fee and commission income | 4,074 | 926 | 3,208 | — | 59 | 8,267 | 4,137 | 1,007 | 2,694 | — | 30 | 7,868 | ||||||||||||||||||||||||||||||||||||
Gains/losses on financial assets and liabilities | 764 | 500 | 857 | — | 1,353 | 3,474 | 732 | 436 | 674 | — | 1,113 | 2,955 | ||||||||||||||||||||||||||||||||||||
Other operating income/(expenses) | 181 | 49 | 10 | — | 32 | 272 | 133 | 65 | 49 | — | 43 | 290 | ||||||||||||||||||||||||||||||||||||
TOTAL INCOME | 14,559 | 3,887 | 12,838 | — | (388 | ) | 30,896 | 12,955 | 3,845 | 9,595 | — | 19 | 26,414 | |||||||||||||||||||||||||||||||||||
Personnel expenses | (3,123 | ) | (986 | ) | (2,504 | ) | — | (200 | ) | (6,813 | ) | (3,037 | ) | (1,045 | ) | (2,105 | ) | — | (247 | ) | (6,434 | ) | ||||||||||||||||||||||||||
Other administrative expenses | (1,833 | ) | (617 | ) | (2,147 | ) | — | (255 | ) | (4,852 | ) | (1,527 | ) | (784 | ) | (1,742 | ) | — | (289 | ) | (4,342 | ) | ||||||||||||||||||||||||||
Depreciation and amortization of tangible and intangible assets | (500 | ) | (158 | ) | (404 | ) | — | (177 | ) | (1,239 | ) | (559 | ) | (101 | ) | (328 | ) | — | (259 | ) | (1,247 | ) | ||||||||||||||||||||||||||
Net impairment losses on financial assets | (2,476 | ) | (457 | ) | (3,020 | ) | — | (331 | ) | (6,284 | ) | (1,557 | ) | (312 | ) | (1,546 | ) | — | (14 | ) | (3,429 | ) | ||||||||||||||||||||||||||
Provisions (net) | (89 | ) | (29 | ) | (533 | ) | — | (989 | ) | (1,640 | ) | 45 | 5 | (437 | ) | — | (509 | ) | (896 | ) | ||||||||||||||||||||||||||||
Net impairment losses on non-financial assets | (16 | ) | — | (6 | ) | — | (1,027 | ) | (1,049 | ) | (8 | ) | (1 | ) | (30 | ) | — | (1,510 | ) | (1,549 | ) | |||||||||||||||||||||||||||
Other non-financial gains/(losses) | (38 | ) | 32 | 54 | — | 1,783 | 1,831 | 11 | 15 | 169 | — | 2,259 | 2,454 | |||||||||||||||||||||||||||||||||||
OPERATING PROFIT(LOSS) BEFORE TAX | 6,484 | 1,672 | 4,278 | — | (1,584 | ) | 10,850 | 6,323 | 1,622 | 3,576 | — | (550 | ) | 10,971 | ||||||||||||||||||||||||||||||||||
Income tax | (1,686 | ) | (425 | ) | (663 | ) | — | 938 | (1,836 | ) | (1,777 | ) | (421 | ) | (809 | ) | — | 684 | (2,323 | ) | ||||||||||||||||||||||||||||
PROFIT (LOSS) FROM CONTINUING OPERATIONS | 4,798 | 1,247 | 3,615 | — | (646 | ) | 9,014 | 4,546 | 1,201 | 2,767 | — | 134 | 8,648 | |||||||||||||||||||||||||||||||||||
Profit (loss) from discontinued operations | (21 | ) | — | 340 | — | — | 319 | — | — | 303 | — | 685 | 988 | |||||||||||||||||||||||||||||||||||
CONSOLIDATED PROFIT (LOSS) FOR THE YEAR | 4,777 | 1,247 | 3,955 | — | (646 | ) | 9,333 | 4,546 | 1,201 | 3,070 | — | 819 | 9,636 | |||||||||||||||||||||||||||||||||||
Attributable to minority interests | 109 | — | 346 | — | 1 | 456 | 107 | — | 404 | — | 65 | 576 | ||||||||||||||||||||||||||||||||||||
PROFIT ATTRIBUTABLE TO THE PARENT | 4,668 | 1,247 | 3,609 | — | (647 | ) | 8,877 | 4,439 | 1,201 | 2,666 | — | 754 | 9,060 |
(*) | Presented for comparison purposes only. |
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Revenue (Millions of euros) | ||||||||||||||||||||||||||||||||||||
Revenue from external | ||||||||||||||||||||||||||||||||||||
customers | Inter-segment revenue | Total revenue | ||||||||||||||||||||||||||||||||||
Segment | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | 2009 | 2008 | 2007 | |||||||||||||||||||||||||||
Continental Europe | 31,968 | 40,396 | 33,364 | 1,297 | 1,108 | 1,245 | 33,265 | 41,504 | 34,609 | |||||||||||||||||||||||||||
United Kingdom | 10,595 | 13,621 | 12,602 | 1,287 | 2,099 | 389 | 11,882 | 15,721 | 12,991 | |||||||||||||||||||||||||||
Latin America | 30,101 | 23,184 | 18,194 | 480 | 1,169 | 1,375 | 30,581 | 24,353 | 19,570 | |||||||||||||||||||||||||||
Sovereign | 2,496 | — | — | (19 | ) | — | — | 2,477 | — | — | ||||||||||||||||||||||||||
Financial management and holdings | 906 | 464 | 107 | 5,206 | 9,378 | 5,988 | 6,112 | 9,843 | 6,095 | |||||||||||||||||||||||||||
Inter-segment revenue adjustments and eliminations | — | — | — | (8,251 | ) | (13,755 | ) | (8,998 | ) | (8,251 | ) | (13,755 | ) | (8,998 | ) | |||||||||||||||||||||
TOTAL | 76,066 | 77,666 | 64,268 | — | — | — | 76,066 | 77,666 | 64,268 | |||||||||||||||||||||||||||
b) | Business segments | ||
At this second level of segment reporting, the Group is structured into commercial banking, asset management and insurance and global wholesale banking; the sum of these three segments is equal to that of the primary operating geographical segments. Total figures for the Group are obtained by adding to the business segments the data for the financial management and holdings segment. | |||
The commercial banking segment encompasses the entire commercial banking business (except for the corporate banking business managed globally using the global relationship model). The asset management and insurance segment includes the contribution to the Group arising from the design and management of the investment fund, pension and insurance businesses of the various units. The global wholesale banking segment reflects the returns on the global corporate banking business, those on investment banking and markets worldwide, including all the globally managed treasury departments and the equities business. |
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Millions of euros | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Global | Asset | Financial | Global | Asset | Financial | Global | Asset | Financial | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial | wholesale | management | management | Commercial | wholesale | management | management | Commercial | wholesale | management | management | |||||||||||||||||||||||||||||||||||||||||||||||||
(Condensed) Income statement | banking | banking | and insurance | and holdings | Total | banking | banking | and insurance | and holdings | Total | banking | banking | and insurance | and holdings | Total | |||||||||||||||||||||||||||||||||||||||||||||
INTEREST INCOME / (CHARGES) | 25,942 | 2,366 | 201 | (2,210 | ) | 26,299 | 17,613 | 1,892 | 190 | (2,157 | ) | 17,538 | 14,771 | 1,303 | 146 | (1,777 | ) | 14,443 | ||||||||||||||||||||||||||||||||||||||||||
Income from equity instruments | 127 | 188 | — | 121 | 436 | 154 | 164 | 6 | 229 | 553 | 77 | 148 | 12 | 183 | 420 | |||||||||||||||||||||||||||||||||||||||||||||
Income from companies accounted for using the equity method | 12 | 2 | — | (15 | ) | (1 | ) | 556 | 87 | 53 | 96 | 792 | 9 | 2 | — | 427 | 438 | |||||||||||||||||||||||||||||||||||||||||||
Net fee and commission income | 7,523 | 1,131 | 431 | (5 | ) | 9,080 | 6,861 | 883 | 464 | 59 | 8,267 | 6,432 | 911 | 495 | 30 | 7,868 | ||||||||||||||||||||||||||||||||||||||||||||
Gains/losses on financial assets and liabilities | 1,454 | 1,382 | 34 | 1,376 | 4,246 | 1,100 | 995 | 26 | 1,353 | 3,474 | 957 | 855 | 30 | 1,113 | 2,955 | |||||||||||||||||||||||||||||||||||||||||||||
Other operating income/(expenses) | (230 | ) | (16 | ) | 338 | 52 | 144 | 31 | (45 | ) | 254 | 32 | 272 | 47 | (29 | ) | 229 | 43 | 290 | |||||||||||||||||||||||||||||||||||||||||
TOTAL INCOME | 34,828 | 5,053 | 1,004 | (681 | ) | 40,204 | 26,315 | 3,976 | 993 | (388 | ) | 30,896 | 22,293 | 3,190 | 912 | 19 | 26,414 | |||||||||||||||||||||||||||||||||||||||||||
Personnel expenses | (7,280 | ) | (725 | ) | (138 | ) | (307 | ) | (8,450 | ) | (5,806 | ) | (672 | ) | (135 | ) | (200 | ) | (6,813 | ) | (5,430 | ) | (625 | ) | (132 | ) | (247 | ) | (6,434 | ) | ||||||||||||||||||||||||||||||
Other administrative expenses | (5,454 | ) | (392 | ) | (140 | ) | (388 | ) | (6,374 | ) | (4,051 | ) | (388 | ) | (158 | ) | (255 | ) | (4,852 | ) | (3,512 | ) | (387 | ) | (154 | ) | (289 | ) | (4,342 | ) | ||||||||||||||||||||||||||||||
Depreciation and amortization of tangible and intangible assets | (1,367 | ) | (86 | ) | (29 | ) | (114 | ) | (1,596 | ) | (946 | ) | (98 | ) | (18 | ) | (177 | ) | (1,239 | ) | (878 | ) | (90 | ) | (20 | ) | (259 | ) | (1,247 | ) | ||||||||||||||||||||||||||||||
Net impairment losses on financial assets | (9,744 | ) | 37 | (10 | ) | (1,861 | ) | (11,578 | ) | (5,672 | ) | (281 | ) | — | (331 | ) | (6,284 | ) | (3,357 | ) | (58 | ) | — | (14 | ) | (3,429 | ) | |||||||||||||||||||||||||||||||||
Provisions (net) | (1,001 | ) | 6 | (36 | ) | (762 | ) | (1,793 | ) | (607 | ) | (26 | ) | (18 | ) | (989 | ) | (1,640 | ) | (423 | ) | 58 | (22 | ) | (509 | ) | (896 | ) | ||||||||||||||||||||||||||||||||
Net impairment losses on non-financial assets | (61 | ) | (3 | ) | — | (100 | ) | (164 | ) | (24 | ) | — | 2 | (1,027 | ) | (1,049 | ) | (38 | ) | — | (1 | ) | (1,510 | ) | (1,549 | ) | ||||||||||||||||||||||||||||||||||
Other non-financial gains/(losses) | (43 | ) | — | — | 382 | 339 | 43 | 4 | 1 | 1,783 | 1,831 | 289 | (94 | ) | — | 2,259 | 2,454 | |||||||||||||||||||||||||||||||||||||||||||
OPERATING PROFIT (LOSS) BEFORE TAX | 9,878 | 3,890 | 651 | (3,831 | ) | 10,588 | 9,252 | 2,515 | 667 | (1,584 | ) | 10,850 | 8,944 | 1,994 | 583 | (550 | ) | 10,971 | ||||||||||||||||||||||||||||||||||||||||||
Income tax | (2,300 | ) | (1,125 | ) | (219 | ) | 2,437 | (1,207 | ) | (1,825 | ) | (775 | ) | (174 | ) | 938 | (1,836 | ) | (2,347 | ) | (486 | ) | (174 | ) | 684 | (2,323 | ) | |||||||||||||||||||||||||||||||||
PROFIT (LOSS) FROM CONTINUING OPERATIONS | 7,578 | 2,765 | 432 | (1,394 | ) | 9,381 | 7,427 | 1,740 | 493 | (646 | ) | 9,014 | 6,597 | 1,508 | 409 | 134 | 8,648 | |||||||||||||||||||||||||||||||||||||||||||
Profit (loss) from discontinued operations | 46 | — | — | (15 | ) | 31 | 319 | — | — | — | 319 | 151 | 40 | 112 | 685 | 988 | ||||||||||||||||||||||||||||||||||||||||||||
CONSOLIDATED PROFIT (LOSS) FOR THE YEAR | 7,624 | 2,765 | 432 | (1,409 | ) | 9,412 | 7,746 | 1,740 | 493 | (646 | ) | 9,333 | 6,748 | 1,548 | 521 | 819 | 9,636 | |||||||||||||||||||||||||||||||||||||||||||
Attributable to minority interests | 465 | — | 28 | (24 | ) | 469 | 434 | (1 | ) | 22 | 1 | 456 | 457 | 9 | 45 | 65 | 576 | |||||||||||||||||||||||||||||||||||||||||||
PROFIT ATTRIBUTABLE TO THE PARENT | 7,159 | 2,765 | 404 | (1,385 | ) | 8,943 | 7,312 | 1,741 | 471 | (647 | ) | 8,877 | 6,291 | 1,539 | 476 | 754 | 9,060 |
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53. | Related parties |
The parties related to the Group are deemed to include, in addition to its subsidiaries, associates and jointly controlled entities, the Bank’s key management personnel (the members of its board of directors and the executive vice presidents, together with their close family members) and the entities over which the key management personnel may exercise significant influence or control. | ||
Following is a detail of the ordinary business transactions performed by the Group with its related parties, distinguishing between associates and jointly controlled entities, members of the Bank’s board of directors, the Bank’s executive vice presidents, and other related parties. Related-party transactions were made on terms equivalent to those prevailing in arm’s-length transactions or, when this was not the case, the related compensation in kind was recognized. |
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Millions of euros | ||||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | ||||||||||||||||||||||||||||||||||||||||||||||
Associates | Associates | Associates | ||||||||||||||||||||||||||||||||||||||||||||||
and jointly | Members of | Executive | Other | and jointly | Members of | Executive | and jointly | Members of | Executive | Other | ||||||||||||||||||||||||||||||||||||||
controlled | the board of | vice | related | controlled | the board of | vice | Other related | controlled | the board of | vice | related | |||||||||||||||||||||||||||||||||||||
entities | directors | presidents | parties | entities | directors | presidents | parties | entities | directors | presidents | parties | |||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Loans and advances to credit institutions | 3,990 | — | — | — | 4,019 | — | — | — | 3,169 | — | — | 136 | ||||||||||||||||||||||||||||||||||||
Loans and advances to customers | 149 | 7 | 24 | 1,664 | 221 | 4 | 21 | 1,728 | 262 | 1 | 14 | 2,040 | ||||||||||||||||||||||||||||||||||||
Debt instruments | 609 | — | — | 117 | 510 | — | — | 464 | — | — | — | 293 | ||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||
Deposits from credit institutions | (204 | ) | — | — | — | (136 | ) | — | — | — | (284 | ) | — | — | — | |||||||||||||||||||||||||||||||||
Customer deposits | (217 | ) | (8 | ) | (41 | ) | (551 | ) | (143 | ) | (11 | ) | (22 | ) | (405 | ) | (4 | ) | (7 | ) | (18 | ) | (265 | ) | ||||||||||||||||||||||||
Income statement: | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest and similar income | 96 | — | 1 | 111 | 203 | — | 1 | 83 | 110 | — | — | 117 | ||||||||||||||||||||||||||||||||||||
Interest expense and similar charges | (9 | ) | — | (1 | ) | (31 | ) | (25 | ) | — | (1 | ) | (10 | ) | (11 | ) | — | — | (6 | ) | ||||||||||||||||||||||||||||
Gains/losses on financial assets and liabilities | 57 | — | — | 8 | 3 | — | 1 | 32 | 6 | — | — | 21 | ||||||||||||||||||||||||||||||||||||
Fee and commission income | 22 | — | — | 10 | 28 | — | — | 25 | 48 | — | — | 15 | ||||||||||||||||||||||||||||||||||||
Fee and commission expense | (11 | ) | — | — | — | (23 | ) | — | — | — | (16 | ) | — | — | — | |||||||||||||||||||||||||||||||||
Other: | ||||||||||||||||||||||||||||||||||||||||||||||||
Contingent liabilities | — | — | — | 491 | 293 | — | — | 479 | 365 | — | 2 | 968 | ||||||||||||||||||||||||||||||||||||
Contingent commitments | 137 | 1 | 3 | 3 | 164 | 1 | 7 | 13 | 358 | 1 | 1 | 280 | ||||||||||||||||||||||||||||||||||||
Derivative financial instruments | 6,868 | — | — | 3,153 | 7,074 | — | — | 1,314 | 7,823 | — | 4 | 831 |
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54. | Risk management | |
Risk management at Santander is based on the following principles: |
• | Involvement of senior management. Banco Santander’s risk committee and the Group units’ senior management committees are structured so as to involve senior management in the overall risk oversight process. | ||
• | Independence of the risk function with respect to the business. The head of the Group’s risk division, Mr. Matías Rodríguez Inciarte, as third deputy chairman and in his capacity as chairman of the risk committee, reports directly to the board of directors. The segregation of functions between the business areas (which assume risk) and the risk areas entrusted with risk measurement, analysis, control and reporting provides sufficient independence and autonomy for proper risk control. | ||
• | Decisions by consensus (even at branch level), which ensure that different opinions are taken into account and avoid individual decision making. | ||
• | Decisions on credit transactions taken jointly by the risk and commercial areas. | ||
• | Definition of powers. The type of activities to be performed, segments, risks to be assumed and risk decisions to be made are clearly defined for each risk taking unit and, if appropriate, for each risk management unit, based on their delegated powers. How transactions should be arranged and managed and where they should be accounted for is also defined. | ||
• | Risk measurement. Risk measurement takes into account all risk exposures assumed across the business spectrum and uses measures based on risk components and dimensions, over the entire risk cycle, for the management of risk at any given time. | ||
• | From a qualitative standpoint, this integrated vision translates into the use of certain integrating measures, which are mainly the risk capital requirement and return on risk-adjusted capital (RORAC). | ||
• | Limitation of risk. The limitation of risk is intended to limit, in an efficient and comprehensive manner, the maximum levels of risk for the various risk measures, based on a knowledge of the risks incurred and supported by the necessary infrastructure for risk management, control and reporting, and to ensure that no undesired risks are assumed and that the risk-based-capital charge, risk exposures and losses do not exceed, in any case, the approved maximum levels. | ||
• | Establishment of risk policies and procedures. The risk policies and procedures represent the basic regulatory framework, consisting of circulars, frameworks and operating rules, through which risk activities and processes are regulated. | ||
• | Definition and assessment of risk methodologies. Risk methodologies provide the definitions of the internal risk models applicable by the Group and, therefore, stipulate the risk measures, product valuation methods, yield curve and market data series building methods, calculation of risk-based capital requirements and other risk analysis methods, and the respective calibration and testing processes. |
• | Establishment of risk management frameworks and policies that reflect the principles and standards governing the general modus operandi of Santander Group’s risk activities, based on a corporate risk management framework, which comprises the organizational model and the management model, and on a series of more specific corporate frameworks of the functions reporting to the risk unit. Local risk units transpose corporate risk regulations into their internal policies and develop the procedures required to implement them. | ||
• | Identification of risks, through the constant review and monitoring of exposures, the assessment of new products and businesses and the specific analysis of singular transactions. |
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• | Measurement of risks using methodologies and models implemented subject to a validation and approval process. |
• | Definition of the Group’s risk appetite by setting overall and specific limits for the various types of risks, products, customers, groups, sectors and geographical locations. |
• | Preparation and distribution of a complete set of reports that are reviewed daily by the heads at all levels of Santander management. |
• | Implementation of a risk control system which checks, on a daily basis, the degree to which Santander’s risk profile matches the risk policies approved and the risk limits set. |
• | Internal ratings- and scorings-based models which, by assessing the various qualitative and quantitative risk components by customer and transaction, make it possible to estimate, firstly, the probability of default and, subsequently, the expected loss, based on LGD estimates. | ||
• | Economic capital, as a homogeneous measure of the risk assumed and a basis for the measurement of the management performed. | ||
• | RORAC, which is used both as a transaction pricing tool (bottom-up approach) and in the analysis of portfolios and units (top-down approach). | ||
• | VaR, which is used for controlling market risk and setting the market risk limits for the various trading portfolios. | ||
• | Scenario analysis and stress testing to supplement market and credit risk analyses in order to assess the impact of alternative scenarios, even on provisions and capital. |
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• | To propose to the board the Group’s risk policy, which will identify, in particular: |
• | The various types of risk (financial, operational, technological, legal and reputational, inter alia) facing the Group; | ||
• | The information and internal control systems to be used to control and manage these risks; | ||
• | The level of risk deemed acceptable by the Group; | ||
• | The measures envisaged to mitigate the impact of the identified risks in the event that they materialize. |
• | To conduct systematic reviews of the Group’s exposure to its main customers, economic activity sectors, geographical areas and types of risk. |
• | To authorize the management tools and risk models and ascertain the result of their internal validation. |
• | To ensure that the Group’s actions are consistent with the level of risk tolerance previously defined. |
• | To be informed of, assess and follow any remarks and recommendations that may be periodically made by the supervisory authorities in discharging their function. |
• | To resolve transactions outside the powers delegated to lower-ranking bodies and the overall limits for pre-classified risk categories for economic groups or in relation to exposure by type of risk. |
• | The integrated risk control and internal risk validation unit, with global-reaching corporate responsibilities, which provide support to the Group’s governing bodies, namely: |
• | Validation of the internal risk models in order to assess the appropriateness and adequacy of the rating systems, internal processes and data processing systems, in conformity with Basel II. | ||
• | Integrated risk control in order to ensure that the risk management and control systems are consistent with the Bank’s global risk profile. |
• | The risk unit, whose functions are divided into two blocks: |
• | Acorporate structure, with global-reaching responsibilities (all risks, all geographical areas), which establishes the risk policies, methodologies and control systems: solvency, market and methodology. | ||
• | Abusiness structure, centred on the performance and management integration of the risk function in the Group’s commercial, global and local businesses. Within this structure, the Brazil corporate risk area was created in 2009 as part of the Group’s risk division. The objectives of this area include enhancing the relationship and cooperation between the global risk areas and the local unit in Brazil; boosting the globalization of the risk models; and obtaining and systematizing risk management information. |
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• | Global and corporate approach: all risks, all businesses, all geographical areas. | ||
• | It is a third layer of control, which follows the control performed in the first instance by the officer responsible for managing and controlling each risk at each business or functional unit (first layer of control) and by the officer responsible for the control of each risk at corporate level (second layer of control). This system ensures a vision and, therefore, the integrated control of all the risks incurred as a result of Santander Group’s business activities. | ||
• | Special attention is paid to the development of best practices in the financial services industry, so that the Group is in a position to promptly incorporate any relevant advance. | ||
• | The available information and the resources assigned by Santander Group to the control of the various risks are optimized in order to avoid overlaps. |
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• | Individualized customers are defined as those to which a risk analyst has been assigned, basically because of the risk assumed. This category includes wholesale banking customers, financial institutions and certain enterprises belonging to retail banking. Risk management is performed through expert analysis supplemented by decision-making support tools based on internal risk assessment models. | ||
• | Standardized customers are those which have not been expressly assigned a risk analyst. This category generally includes individuals, individual entrepreneurs, and retail banking enterprises not classified as individualized customers. Management of these risks is based on internal risk assessment and automatic decision-making models, supplemented subsidiarily, when the model is not comprehensive enough or is not sufficiently accurate, by teams of analysts specializing in this type of risk. |
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Sovereign | Private | |||||||||||||||||||||||||||||||||||||||
Customer | Drawable | Fixed- | Fixed- | Credit | Drawable by | Derivatives | ||||||||||||||||||||||||||||||||||
Draw- | by | Income | Income | Institution | Credit | and Repos | Change/ | |||||||||||||||||||||||||||||||||
Downs | Customers | (Excl. Trad.) | (Excl. Trad.) | Drawdowns | Institutions | (CRE) | Total | % | Dec-08 | |||||||||||||||||||||||||||||||
SPAIN | 281,621 | 57,179 | 29,602 | 11,835 | 28,440 | 1,113 | 27,911 | 437,700 | 39.6 | % | -7.1 | % | ||||||||||||||||||||||||||||
Parent bank | 170,692 | 39,716 | 20,769 | 8,049 | 19,038 | 736 | 19,053 | 278,053 | 25.2 | % | -8.6 | % | ||||||||||||||||||||||||||||
Banesto | 80,109 | 11,167 | 6,204 | 2,003 | 6,696 | 225 | 8,701 | 115,104 | 10.4 | % | 3.2 | % | ||||||||||||||||||||||||||||
Other | 30,819 | 6,296 | 2,629 | 1,784 | 2,706 | 152 | 157 | 44,543 | 4.0 | % | -19.4 | % | ||||||||||||||||||||||||||||
OTHER EUROPEAN COUNTRIES | 305,831 | 36,827 | 3,844 | 16,025 | 9,025 | 155 | 18,877 | 390,583 | 35.3 | % | 10.8 | % | ||||||||||||||||||||||||||||
Germany | 22,256 | 9 | 0 | 159 | 432 | 0 | 5 | 22,861 | 2.1 | % | -5.0 | % | ||||||||||||||||||||||||||||
Portugal | 22,143 | 8,276 | 2,734 | 1,410 | 2,425 | 0 | 1,519 | 38,507 | 3.5 | % | 6.9 | % | ||||||||||||||||||||||||||||
United Kingdom | 228,044 | 26,484 | 464 | 14,136 | 5,172 | 155 | 17,132 | 291,587 | 26.4 | % | 12.9 | % | ||||||||||||||||||||||||||||
Other | 33,387 | 2,058 | 646 | 320 | 996 | 0 | 220 | 37,627 | 3.4 | % | 10.6 | % | ||||||||||||||||||||||||||||
LATIN AMERICA | 104,965 | 45,537 | 24,280 | 1,821 | 20,684 | 19 | 10,648 | 207,953 | 18.8 | % | 15.4 | % | ||||||||||||||||||||||||||||
Brazil | 62,952 | 30,996 | 16,719 | 1,212 | 14,535 | 0 | 5,564 | 131,978 | 11.9 | % | 38.3 | % | ||||||||||||||||||||||||||||
Chile | 20,200 | 6,300 | 2,220 | 502 | 1,812 | 19 | 3,209 | 34,261 | 3.1 | % | 22.0 | % | ||||||||||||||||||||||||||||
Mexico | 11,611 | 6,724 | 4,252 | 0 | 2,220 | 0 | 1,573 | 26,379 | 2.4 | % | -7.3 | % | ||||||||||||||||||||||||||||
Other | 10,202 | 1,516 | 1,089 | 108 | 2,118 | 0 | 303 | 15,335 | 1.4 | % | -45.6 | % | ||||||||||||||||||||||||||||
UNITED STATES | 43,814 | 9,395 | 1,742 | 9,157 | 2,970 | 77 | 105 | 67,260 | 6.1 | % | ||||||||||||||||||||||||||||||
REST OF THE WORLD | 1,017 | 262 | 80 | 1 | 167 | 0 | 0 | 1,526 | 0.1 | % | ||||||||||||||||||||||||||||||
TOTAL GROUP | 737,246 | 149,200 | 59,547 | 38,839 | 61,287 | 1,363 | 57,540 | 1,105,022 | 100 | % | 8.8 | % | ||||||||||||||||||||||||||||
% /Total | 66.7 | % | 13.5 | % | 5.4 | % | 3.5 | % | 5.5 | % | 0.1 | % | 5.2 | % | 100.0 | % | ||||||||||||||||||||||||
% Change/Dec-08 | 6.5 | % | 27.2 | % | 68.5 | % | 45.3 | % | -30.8 | % | -77.3 | % | 16.9 | % | 8.8 | % | ||||||||||||||||||||||||
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Credit Risk Exposure to | Non-Performing Loans | Specific Credit Loss | ||||||||||||||||||||||||||||||||||||||
Customers * | Ratio | Coverage Ratio | Provisions, Net of RAWO ** | Cost of Credit(1) | ||||||||||||||||||||||||||||||||||||
(Millions of Euros) | (%) | (%) | (Millions of Euros) | (% of Risk) | ||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | |||||||||||||||||||||||||||||||
Continental Europe | 366,970 | 368,512 | 3.64 | 2.31 | 76.6 | 90.0 | 5,084 | 3,201 | 1.39 | 0.89 | ||||||||||||||||||||||||||||||
Santander Network | 129,099 | 135,508 | 4.38 | 2.58 | 64.9 | 74.9 | 1,851 | 1,204 | 1.41 | 0.91 | ||||||||||||||||||||||||||||||
Banesto | 86,681 | 87,925 | 2.97 | 1.64 | 64.1 | 106.5 | 737 | 450 | 0.89 | 0.53 | ||||||||||||||||||||||||||||||
Santander Consumer Finance | 60,245 | 56,245 | 5.39 | 4.18 | 96.8 | 85.5 | 2,005 | 1,402 | 3.38 | 2.71 | ||||||||||||||||||||||||||||||
Portugal | 34,501 | 34,760 | 2.27 | 1.72 | 64.6 | 77.2 | 95 | 6 | 0.27 | 0.02 | ||||||||||||||||||||||||||||||
United Kingdom | 238,215 | 217,063 | 1.71 | 1.04 | 43.8 | 68.5 | 1,018 | 442 | 0.43 | 0.23 | ||||||||||||||||||||||||||||||
Latin America | 117,146 | 112,040 | 4.25 | 2.95 | 105.2 | 108.3 | 5,053 | 3,965 | 4.44 | 3.44 | ||||||||||||||||||||||||||||||
Brazil | 65,611 | 53,764 | 5.27 | 3.58 | 99.2 | 102.4 | 3,537 | 2,493 | 5.88 | 4.30 | ||||||||||||||||||||||||||||||
Mexico | 12,676 | 13,482 | 1.84 | 2.41 | 264.4 | 132.1 | 824 | 879 | 6.13 | 5.44 | ||||||||||||||||||||||||||||||
Chile | 21,384 | 18,848 | 3.20 | 2.64 | 89.0 | 102.4 | 402 | 350 | 1.98 | 1.73 | ||||||||||||||||||||||||||||||
Puerto Rico | 4,132 | 4,810 | 9.60 | 6.92 | 53.3 | 61.0 | 89 | 138 | 1.99 | 2.84 | ||||||||||||||||||||||||||||||
Colombia | 1,719 | 1,464 | 1.83 | 1.79 | 187.5 | 204.1 | 31 | 44 | 1.94 | 2.83 | ||||||||||||||||||||||||||||||
Argentina | 2,936 | 3,271 | 2.60 | 1.83 | 141.0 | 178.6 | 91 | 49 | 2.99 | 1.54 | ||||||||||||||||||||||||||||||
Sovereign | 38,770 | 5.35 | 62.5 | 578 | ||||||||||||||||||||||||||||||||||||
Total Group | 758,347 | 697,200 | 3.24 | 2.04 | 75.3 | 90.6 | 11,760 | 7,659 | 1.57 | 1.16 | ||||||||||||||||||||||||||||||
Memorandum item: | ||||||||||||||||||||||||||||||||||||||||
Spain | 284,307 | 300,524 | 3.41 | 1.95 | 73.4 | 98.5 | 3,497 | 2,150 | 1.20 | 0.71 |
Data prepared on the basis of management criteria. Memorandum item Spain, on the basis of controller’s unit accounting criteria. | ||
Data for 2008 have been restated including the full consolidation of Banco Real throughout the year. | ||
* | Includes gross loans and advances to customers, guarantees and documentary credits. | |
** | RAWO = Recoveries of Assets Written Off. | |
(1) | Excludes Sovereign |
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Internal Rating | PD | |||
9.3 | 0.018 | % | ||
9.2 | 0.020 | % | ||
9.0 | 0.024 | % | ||
8.5 | 0.037 | % | ||
8.0 | 0.060 | % | ||
7.5 | 0.095 | % | ||
7.0 | 0.151 | % | ||
6.5 | 0.240 | % | ||
6.0 | 0.382 | % | ||
5.5 | 0.607 | % | ||
5.0 | 0.965 | % | ||
4.5 | 1.535 | % | ||
4.0 | 2.442 | % | ||
3.5 | 3.884 | % | ||
3.0 | 6.178 | % | ||
2.5 | 9.826 | % | ||
2.0 | 15.627 | % | ||
1.5 | 24.855 | % | ||
1.0 | 39.532 | % |
Internal Rating | PD | |||
9.3 | 0.013 | % | ||
9.2 | 0.014 | % | ||
9.0 | 0.018 | % | ||
8.5 | 0.029 | % | ||
8.0 | 0.049 | % | ||
7.5 | 0.083 | % | ||
7.0 | 0.139 | % | ||
6.5 | 0.232 | % | ||
6.0 | 0.390 | % | ||
5.5 | 0.653 | % | ||
5.0 | 1.095 | % | ||
4.5 | 1.835 | % | ||
4.0 | 3.076 | % | ||
3.5 | 5.157 | % | ||
3.0 | 8.645 | % | ||
2.5 | 14.492 | % | ||
2.0 | 24.294 | % | ||
1.5 | 40.725 | % | ||
1.0 | 68.268 | % |
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Segmentation of Credit Risk Exposure | ||||||||||||||||||||
Average | Average | |||||||||||||||||||
EAD (1) | % | PD | LGD | EL | ||||||||||||||||
Sovereign debt | 104,457 | 11.0 | % | 0.23 | % | 14.54 | % | 0.03 | % | |||||||||||
Counterparty | 76,888 | 8.1 | % | 0.29 | % | 70.34 | % | 0.21 | % | |||||||||||
Public sector | 3,129 | 0.3 | % | 0.70 | % | 21.32 | % | 0.15 | % | |||||||||||
Corporate | 131,703 | 13.8 | % | 0.51 | % | 39.68 | % | 0.20 | % | |||||||||||
SMEs | 186,321 | 19.5 | % | 4.65 | % | 28.11 | % | 1.31 | % | |||||||||||
Mortgage loans to individuals | 302,395 | 31.7 | % | 3.30 | % | 7.04 | % | 0.23 | % | |||||||||||
Consumer loans to individuals | 111,452 | 11.7 | % | 6.51 | % | 52.42 | % | 3.41 | % | |||||||||||
Credit cards — individuals | 24,297 | 2.5 | % | 6.73 | % | 64.94 | % | 4.37 | % | |||||||||||
Other assets | 13,066 | 1.4 | % | 2.47 | % | 29.73 | % | 0.74 | % | |||||||||||
Memorandum item — customers (2) | 759,296 | 79.6 | % | 3.72 | % | 29.32 | % | 1.09 | % | |||||||||||
Total | 953,707 | 100.00 | % | 3.04 | % | 29.52 | % | 0.90 | % | |||||||||||
Data at December 2009 | ||
(1) | Excluding doubtful assets | |
(2) | Excluding sovereign, counterparty and other assets |
• | Pre-sale: this phase includes the risk planning and target setting processes, determination of the Group’s risk appetite, approval of new products, risk analysis and credit rating process, and limit setting. | ||
• | Sale: this is the decision-making phase for both pre-classified and specific transactions. | ||
• | Post-sale: this phase comprises the risk monitoring, measurement and control processes and the recovery process. |
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• | Developments with completed work / certificate of final completion obtained: 66.7% of outstanding risk. | ||
• | Developments with a percentage of completion of more than 80%: 14.5% of outstanding risk. | ||
• | Developments with a percentage of completion of between 50% and 80%: 8.9% of outstanding risk. | ||
• | Percentage of completion of less than 50%: only 9.8%. |
• | Longer duration of legal proceedings as compared with the immediate availability of the assets. | ||
• | Cost saving. | ||
• | Enhanced viability of companies as a result of the injection of liquidity for their business activity | ||
• | Reduction of potential loss in value of the loans to these customers. | ||
• | Reduced exposure and expected loss. |
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• | Viable transactions, | ||
• | In which customers have a willingness to pay, | ||
• | That improve the Bank’s position in terms of expected loss, and | ||
• | In which refinancing does not discourage an additional effort by customers. |
• | The overall customer risk is assessed, regardless of the situation of each individual contract, and the highest possible level of guarantees is assigned to all customer risks. | ||
• | As a general rule, the customer exposure is not increased. | ||
• | All the alternatives to refinancing and their impacts are assessed, making sure that the results of this solution exceed those which would foreseeable be obtained if no refinancing were performed. | ||
• | Special attention is paid to the guarantees and the possible future changes in their value. | ||
• | Its use is restricted, and priority is given to the restructuring of loans that requires an additional effort from customers, and actions that only postpone the problem are avoided. | ||
• | Refinanced transactions are subject to special monitoring. |
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• | The criteria established in the regulations based on Bank of Spain circulars are met (i.e. collection of ordinary interest outstanding and new efficient guarantees or reasonable assurance of payment capacity); | ||
• | The precautionary provisions included, using the principle of prudence, in the Group’s corporate policy (sustained payment for a period of between three and twelve months, depending on the transaction features and the type of guarantee) are met. |
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• | It determines the sensitivity of risk factors (PD, LGD) to certain macroeconomic variables. | ||
• | It characterizes benchmark scenarios (globally and for each Group unit). | ||
• | It identifies “break-off scenarios” (the levels above which the sensitivity of the risk factors to macroeconomic variables is more accentuated) and the distance of these break-off scenarios from the current situation and the benchmark scenarios. | ||
• | It estimates the expected loss associated with each scenario and the changes in the risk profile of each portfolio arising from variations in certain macroeconomic variables. |
• | Unemployment rate | ||
• | Housing price | ||
• | GDP | ||
• | Interest rate | ||
• | Inflation |
• | To achieve collection or regularization of unpaid balances, so that accounts can return to the performing status; if this is not possible, the aim is to fully or partially recover debts, regardless of their status for accounting or management purposes. | ||
• | To maintain and strengthen the relationship with customers, paying attention to customer payment behavior. |
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RATING | % | |||
AAA | 4.6 | % | ||
AA | 12.6 | % | ||
A | 51.2 | % | ||
BBB | 21.3 | % | ||
BB | 5.3 | % | ||
B | 2.2 | % | ||
Other | 2.8 | % |
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• | The Equator Principles: an initiative of the International Finance Corporation of the World Bank. These principles constitute an international standard for the analysis of the social and environmental implications of project finance transactions. The adoption of these principles involves the commitment to assess the social and environmental risks of projects financed in developing countries, using a sequential methodology. For this purpose, a questionnaire must be completed for all project finance transactions. This questionnaire has been designed to determine the sensitivity of the related transactions to social and environmental issues and their degree of compliance with the principles. |
• | The VIDA tool: implemented since 2004, the main aim of this tool is to assess the environmental risk of both current and potential customer companies, using a system that classifies each of the companies into one of seven categories, depending on the degree of environmental risk incurred. In 2009, 38,510 companies in Spain were assessed using this tool. |
4. | MARKET RISK | ||
4.1 | Activities subject to market risk |
1 | Unlike in 2008, in 2009 two new factors are treated separately: the credit spread (previously included partially in interest rate) and commodity prices (previously included in equities, with a very low weight with respect to other factors). |
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a) | Trading: this item includes financial services for customers, trading operations and positioning mainly in fixed-income, equity and foreign currency products. | ||
b) | Balance sheet management: interest rate risk and liquidity risk arising as a result of the maturity and repricing gaps of all assets and liabilities. This item also includes the active management of the credit risk inherent in the Group’s balance sheet. | ||
c) | Structural risks: |
• | Structural foreign currency risk/hedges of results: foreign currency risk arising from the currency in which investments in consolidable and non-consolidable companies are made (structural exchange rate). This item also includes the positions taken to hedge the foreign currency risk on future results generated in currencies other than the euro (hedges of results). | ||
• | Structural equities risk: this item includes equity investments in non-consolidated financial and non-financial companies that give rise to equities risk. |
4.2 | Methodologies |
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a) | Interest rate gap of assets and liabilities |
b) | Net interest margin (NIM) sensitivity |
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c) | Market value of equity (MVE) sensitivity |
d) | Value at risk (VaR) |
e) | Scenario analysis |
a) | Liquidity gap |
b) | Liquidity ratios |
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• | Loans to net assets | ||
• | Customer deposits, insurance and medium/long-term financing to loans | ||
• | Customer deposits, insurance and medium/long-term financing, equity and other liabilities to total loans and fixed assets | ||
• | Short-term funding to net liabilities |
c) | Scenario analysis/Contingency plan |
2 | International framework for liquidity risk measurement, standards and monitoring (Basel Committee on Banking Supervision, Consultative Document, December 2009) |
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4.3. | Control system | ||
A. | Limit setting |
• | To identify and delimit, in an efficient and comprehensive manner, the main types of financial risk incurred, so that they are consistent with business management and the defined strategy. | ||
• | To quantify and communicate to the business areas the risk levels and profile deemed acceptable by senior management so as to avoid undesired risks. | ||
• | To give flexibility to the business areas for the efficient and timely assumption of financial risks, depending on market changes, and for the implementation of the business strategies, provided that the acceptable levels of risk are not exceeded. | ||
• | To allow business makers to assume risks which, although prudent, are sufficient to obtain the budgeted results. | ||
• | To delimit the range of products and underlyings with which each treasury unit can operate, taking into account features such as assessment model and systems, liquidity of the instruments involved, etc. |
4.4. | Risks and results in 2009 | ||
A. | Trading |
B. | Balance sheet management3 | ||
B1. Interest rate risk |
3 | Includes the total balance sheet, except for financial assets and liabilities held for trading. |
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• | Assets amounting to€16 billion were securitized. In view of the difficulties experienced by the securitization market since August 2007, all the issues were retained by the Group’s various units. These securitization transactions increase the Group’s liquidity position since they can be discounted at central banks. | ||
• | AAA asset-backed bonds issued by Group companies were repurchased in the secondary market (€2 billion). |
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A. | Organizational and governance model |
B. | Management |
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C. | Balance sheet analysis and liquidity risk measurement |
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A. | Robust balance sheet |
B. | Funding dynamics |
C. | Structural foreign currency risk/hedges of results |
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D. | Structured financing operations |
E. | Exposures related to complex structured assets |
• | CDOs/CLOs: exposure amounting to€637 million, mainly as a result of the integration of the Alliance & Leicester portfolio in 2008. 56% of this portfolio was rated AAA and 85% had a rating of A or above. | ||
• | Non-Agency CMOs and pass-throughs with alt-A4 mortgage underlying: exposure of€730 million at 2009 year-end. | ||
• | Hedge funds: the total exposure was not material (€549 million at 2009 year-end) and consisted largely of the financing provided to these funds (€342 million), the remainder being direct portfolio investment. This exposure involved low levels of loan-to-value risk -around 50% (collateral of€1,095 million at year-end). The risk exposure to this type of counterparty is analyzed on a case-by-case basis, and the percentages of collateral are established according to the features and assets of each fund. Exposure decreased significantly -by 52%-with respect to the previous year. | ||
• | Conduits: the only exposure resulted from the acquisition of Alliance&Leicester, which gave rise to the integration of a conduit, with assets amounting to€657 million at 2009 year-end, of which 42% had an AAA rating and 83% a rating of A or above. | ||
• | Monolines: Santander’s exposure to monoline insurers amounted to€396 million in December 20095, and related mainly to indirect exposure, totaling€191 million, by virtue of the guarantee provided by entities of this kind for various traditional financing or securitization transactions. The exposure was to double-default risk in this case. The primary underlyings had high credit ratings, mostly “AA”. The small remainder was direct exposure (e.g. through the purchase of a credit default swap to protect it against the risk of default of these insurance companies). |
4 | Alternative A-paper: mortgages arising in the US market which, for various reasons, are deemed to have an intermediate level of risk, between prime and subprime mortgages (not all the required information is available, loan-to-value levels above standard levels, etc.). | |
5 | The guarantees provided by monoline insurers in US Municipal Bonds are not treated as exposure. As a result of the purchase of Sovereign Bank, the Group included a portfolio of US municipal bonds amounting to€1,260��million. |
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• | whether there is an adequate valuation model (mark-to-market, mark-to-model or mark-to-liquidity) to monitor the value of each exposure. | ||
• | whether the inputs enabling application of this valuation model are observable in the market. |
• | the availability of adequate systems duly adapted for the calculation and daily monitoring of the results, positions and risks of the new transactions envisaged. | ||
• | the degree of liquidity of the product or underlying, with a view to arranging the related hedge on a timely basis. |
4.5. | Internal model |
5. | OPERATIONAL RISK |
6 | Strengthening the resilience of the banking sector and International framework for liquidity risk measurement, standards and monitoring |
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• | First level: control functions performed by the Group’s units | ||
• | Second level: functions performed by the corporate areas | ||
• | Third level: integrated control functions performed by the risk division — integrated risk control and internal risk validation area (CIVIR, using the Spanish acronym). |
• | Identification of the operational risk inherent in all the Bank’s activities, products, processes and systems. | ||
• | Objective and continued measurement and assessment of operational risk, consistent with the industry and regulatory standards (Basel II, Bank of Spain,...), and setting of risk appetite limits. | ||
• | Continuous monitoring of operational risk exposures in order to detect unassumed levels of risk, implement control procedures, improve internal awareness and mitigate losses. | ||
• | Establishment of mitigation measures to eliminate or minimize operational risk. | ||
• | Generation of periodic reports on the exposure to operational risk and the level of control for senior management and the Group’s areas/units, and reporting to the market and the regulatory authorities. | ||
• | Definition and implementation of systems enabling the Group to monitor and control operational risk exposures. These systems are integrated into the Group’s daily management, using the current technology and maximizing the automation of applications. | ||
• | Definition and documentation of operational risk management policies and implementation of the related methodologies consistent with current regulations and best practices. |
• | Integrated and effective management of operational risk (identification, measurement / assessment, control / mitigation and information). | ||
• | Improved knowledge of actual and potential operational risks and better assignment to business and support lines. | ||
• | The information on operational risk helps improve processes and controls and reduce losses and income volatility. |
• | Designation of head coordinators and creation of operational risk departments. | ||
• | Training and experience sharing: communication of best practices within the Group. | ||
• | Fostering of mitigation plans: control of both the implementation of corrective measures and projects under development. |
• | Security of information systems. | ||
• | Promotion of contingency and business continuity plans. | ||
• | Management of technology risk (risk associated with the use of technology -development and maintenance of applications, design, implementation and maintenance of technology platforms, production of computer processes, etc.). |
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• | Review of the valuation models and, in general, of the values of the portfolios. | ||
• | Processes for the capture and independent validation of prices. | ||
• | Adequate confirmation of transactions with counterparties. | ||
• | Review of transaction cancellations/modifications. | ||
• | Review and monitoring of the effectiveness of guarantees, collateral and risk mitigators. |
• | Cooperation in the presentation of Santander Group’s operational risk management and control model to insurers and reinsurers. | ||
• | Analysis and follow-up of the recommendations and suggestions for improving operational risks made by insurance companies, through previous audits performed by specialized companies, and of the subsequent implementation thereof. | ||
• | Sharing of the information generated in the two areas in order to strengthen the quality of error bases and the cover of insurance policies for the various operational risks. | ||
• | Close cooperation between local operational risk officers and local insurance coordinators in order to enhance operational risk mitigation. | ||
• | Regular meetings to report on specific activities, statements of position and projects in the two areas. | ||
• | Active participation of the two areas in the global insurance sourcing desk, the highest technical body in the Group responsible for the definition of insurance coverage and arrangement strategies. |
6. | REPUTATIONAL RISK |
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• | Each product or service is sold by people who know how to sell it. | ||
• | Customers know what they are investing in and are aware of the risk involved in the particular product or service, and this can be evidenced by supporting documentation. | ||
• | The product or service fits the customer’s risk profile. | ||
• | Each product or service is sold where its sale is possible, not only from a legal or tax standpoint (i.e. it complies with the legal or tax regime of the country in question), but also with regard to the local financial culture. | ||
• | When a given product or service is approved, maximum placement limits are set. |
7. | COMPLIANCE WITH THE NEW REGULATORY FRAMEWORK |
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8. | ECONOMIC CAPITAL |
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• | Calculation of economic capital requirement and of the return thereon for the Group’s business units and for business segments, portfolios or customers, in order to facilitate an optimal allocation of economic capital. | ||
• | Budgeting of capital requirement and RORAC of the Group’s business units and inclusion thereof in their compensation plans. | ||
• | Analysis and setting of prices in the decision-making process for transactions (loan approval) and customers (monitoring). |
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55. | Other Disclosures |
55.1 | Consolidated financial statements |
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Thousands of Euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Assets | ||||||||||||
Cash and due from banks | 28,231,681 | 41,131,292 | 25,341,083 | |||||||||
Interest earning deposits in other banks | 29,288,269 | 43,553,958 | 16,766,716 | |||||||||
Securities purchased under agreements to resell | 21,288,275 | 19,391,367 | 26,147,541 | |||||||||
Trading account assets | 172,867,988 | 177,451,940 | 183,629,876 | |||||||||
Banks | 22,714,580 | 13,998,287 | 19,159,632 | |||||||||
Loans | 17,885,911 | 9,537,868 | 31,726,104 | |||||||||
Derivatives | 59,856,413 | 95,815,309 | 46,726,118 | |||||||||
Debt securities | 57,285,731 | 49,050,280 | 73,403,234 | |||||||||
Equity securities | 15,125,353 | 9,050,196 | 12,614,788 | |||||||||
Investment securities | 101,579,834 | 66,572,866 | 46,017,246 | |||||||||
Available-for-sale | 101,579,834 | 66,572,866 | 46,017,246 | |||||||||
Net Loans and leases | 653,348,725 | 607,424,343 | 528,318,209 | |||||||||
Loans and leases, net of unearned income | 671,184,116 | 619,890,400 | 537,013,413 | |||||||||
Less-Allowance for loan losses | (17,835,391 | ) | (12,466,057 | ) | (8,695,204 | ) | ||||||
Premises and equipment, net | 11,499,449 | 11,953,856 | 9,272,962 | |||||||||
Investment in affiliated companies | 164,473 | 1,323,452 | 15,689,127 | |||||||||
Other assets | 89,904,613 | 78,381,486 | 59,206,661 | |||||||||
Intangible Assets | 2,778,358 | 1,787,068 | 2,202,334 | |||||||||
Goodwill in consolidation | 22,865,056 | 18,836,199 | 13,830,708 | |||||||||
Accrual Accounts | 2,259,262 | 1,952,843 | 1,749,193 | |||||||||
Hedge derivatives | 7,833,850 | 9,698,132 | 3,063,169 | |||||||||
Others | 54,168,087 | 46,107,244 | 38,361,257 | |||||||||
Total assets | 1,108,173,307 | 1,047,184,560 | 910,389,421 | |||||||||
Liabilities | ||||||||||||
Deposits | 554,133,789 | 468,641,990 | 371,573,338 | |||||||||
Non interest deposits | 5,393,916 | 4,608,242 | 4,507,057 | |||||||||
Interest bearing | 548,739,873 | 464,033,748 | 367,066,281 | |||||||||
Demand deposits | 142,483,882 | 99,670,268 | 91,576,243 | |||||||||
Savings deposits | 127,940,647 | 115,673,794 | 90,727,525 | |||||||||
Time deposits | 278,315,344 | 248,689,686 | 184,762,513 | |||||||||
Certificates of deposit | — | — | — | |||||||||
Short-term debt | 124,189,724 | 125,291,176 | 131,774,426 | |||||||||
Long-term debt | 220,089,591 | 233,516,879 | 237,120,341 | |||||||||
Other liabilities | 135,889,561 | 159,733,023 | 112,363,165 | |||||||||
Taxes Payable | 7,003,945 | 5,768,665 | 6,156,365 | |||||||||
Accounts Payable | 7,859,466 | 8,738,047 | 7,656,262 | |||||||||
Accrual Accounts | 5,502,958 | 4,669,160 | 4,050,992 | |||||||||
Pension Allowance | 8,272,533 | 8,751,128 | 9,294,198 | |||||||||
Stock borrowing liabilities | — | — | — | |||||||||
Derivatives | 63,903,701 | 95,125,044 | 52,937,798 | |||||||||
Liabilities under insurance contracts | 16,916,446 | 16,849,511 | 13,033,617 | |||||||||
Other Provisions | 6,904,055 | 6,538,142 | 4,751,151 | |||||||||
Short securities positions | 5,139,730 | 3,035,231 | 5,613,234 | |||||||||
Others | 14,386,727 | 10,258,095 | 8,869,548 | |||||||||
Total liabilities | 1,034,302,665 | 987,183,068 | 852,831,270 | |||||||||
Minority interest | 5,204,058 | 2,414,606 | 2,358,269 | |||||||||
Stockholders’ equity | ||||||||||||
Capital stock | 4,114,413 | 3,997,030 | 3,127,148 | |||||||||
Additional paid-in-capital | 29,305,257 | 28,103,802 | 20,370,128 | |||||||||
Other additional capital | (2,326,272 | ) | (3,114,636 | ) | (1,537,999 | ) | ||||||
Current year earnings | 8,942,538 | 8,876,414 | 9,060,258 | |||||||||
Other reserves | 28,630,648 | 19,724,276 | 24,180,347 | |||||||||
Total stockholders’ equity | 68,666,584 | 57,586,886 | 55,199,882 | |||||||||
Total liabilities and Stockholders’ equity | 1,108,173,307 | 1,047,184,560 | 910,389,421 | |||||||||
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Thousands of Euros | ||||||||||||
2009 | 2008 | 2007 | ||||||||||
Interest income: | ||||||||||||
Interest and fees on loans and leases | 42,707,534 | 42,574,139 | 35,615,053 | |||||||||
Interest on deposits in other banks | 3,362,476 | 5,561,810 | 3,336,520 | |||||||||
Interest on securities purchased under agreements to resell | 1,155,892 | 1,788,147 | 1,952,621 | |||||||||
Interest on investment securities | 6,285,097 | 5,567,274 | 5,004,275 | |||||||||
Dividends | 5,350 | 92,017 | 145,323 | |||||||||
Total interest income | 53,516,349 | 55,583,387 | 46,053,792 | |||||||||
Interest expenses: | ||||||||||||
Interest on deposits | (15,852,047 | ) | (18,814,100 | ) | (14,356,301 | ) | ||||||
Interest on short-term borrowings | (2,929,118 | ) | (5,437,822 | ) | (4,924,638 | ) | ||||||
Interest on long-term debt | (6,561,801 | ) | (12,174,778 | ) | (10,864,167 | ) | ||||||
Total interest expense | (25,342,966 | ) | (36,426,700 | ) | (30,145,106 | ) | ||||||
Interest income / (Charges) | 28,173,383 | 19,156,687 | 15,908,686 | |||||||||
Provision for credit losses | (11,010,021 | ) | (5,909,252 | ) | (3,426,746 | ) | ||||||
Interest income / (Charges) after provision for credit losses | 17,163,362 | 13,247,435 | 12,481,940 | |||||||||
Non interest income: | ||||||||||||
Commissions and fees from fiduciary activities | 1,219,658 | 1,618,479 | 1,984,910 | |||||||||
Commissions and fees from securities activities, net | 774,296 | 704,525 | 970,639 | |||||||||
Fees and commissions from insurance activities | 8,858,253 | 9,977,441 | 6,791,619 | |||||||||
Other Fees and commissions, net | 5,122,333 | 4,079,182 | 3,453,834 | |||||||||
Gains (losses) from: | ||||||||||||
Affiliated companies’ securities | 1,521,863 | 3,791,479 | 307,789 | |||||||||
Investment securities | 4,551,719 | (6,767,774 | ) | 792,727 | ||||||||
Foreign exchange, derivatives and other, net | (811,761 | ) | 7,757,144 | 1,168,599 | ||||||||
Sale of premises | 37,279 | 887,931 | 1,798,669 | |||||||||
Income from non financial entities | 381,653 | 591,177 | 775,644 | |||||||||
Gains on sale of non-current assets / liabilities held for sale not classified as discontinued operations | 414,802 | 36,419 | — | |||||||||
Other income | 485,908 | 558,812 | 1,769,689 | |||||||||
Total non interest income | 22,556,003 | 23,234,815 | 19,814,119 | |||||||||
Non interest expense: | ||||||||||||
Salaries and employee benefits | (9,176,648 | ) | (7,774,565 | ) | (7,261,755 | ) | ||||||
Occupancy expense of premises, depreciation and maintenance, net | (2,254,891 | ) | (1,665,057 | ) | (1,462,414 | ) | ||||||
General and administrative expenses | (4,889,737 | ) | (3,771,527 | ) | (3,489,649 | ) | ||||||
Impairment of goodwill | (2,631 | ) | (72,726 | ) | (599,989 | ) | ||||||
Impairment / amortization of intangible assets | (854,757 | ) | (1,566,414 | ) | (1,200,173 | ) | ||||||
Impairment of tangible assets | (1,503,048 | ) | (111,114 | ) | (74,522 | ) | ||||||
Provisions for specific allowances | (1,444,074 | ) | (1,034,102 | ) | (458,649 | ) | ||||||
Payments to Deposit Guarantee Fund | (317,708 | ) | (179,023 | ) | (144,988 | ) | ||||||
Insurance claims | (7,604,807 | ) | (8,472,523 | ) | (5,601,487 | ) | ||||||
Expenses of non financial entities | (244,083 | ) | (489,283 | ) | (622,280 | ) | ||||||
Losses on sale of non-current assets / liabilities held for sale not classified as discontinued operations | (289,617 | ) | (75,184 | ) | — | |||||||
Other expenses | (549,564 | ) | (421,407 | ) | (409,659 | ) | ||||||
Total non interest expense | (29,131,565 | ) | (25,632,925 | ) | (21,325,565 | ) | ||||||
Income before income taxes | 10,587,800 | 10,849,325 | 10,970,494 | |||||||||
Income tax expense | (1,206,610 | ) | (1,836,052 | ) | (2,322,107 | ) | ||||||
Net consolidated income for the year | 9,381,190 | 9,013,273 | 8,648,387 | |||||||||
Net income attributed to minority interest | 466,083 | 447,662 | 484,351 | |||||||||
Income from discontinued operation, net of taxes | 27,431 | 310,803 | 896,222 | |||||||||
NET INCOME ATTRIBUTED TO THE GROUP | 8,942,538 | 8,876,414 | 9,060,258 | |||||||||
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CONDENSED BALANCE SHEETS (Parent company only) | 2009 | 2008 | 2007 | |||||||||
(Thousands of Euros) | ||||||||||||
Assets | ||||||||||||
Cash and due from banks | 70,922,607 | 78,827,627 | 52,548,200 | |||||||||
Trading account assets | 57,262,358 | 79,641,722 | 51,349,204 | |||||||||
Investment securities | 34,033,734 | 16,061,930 | 17,074,175 | |||||||||
Net Loans and leases | 174,645,173 | 183,754,083 | 163,903,007 | |||||||||
Investment in affiliated companies | 67,430,284 | 62,232,929 | 59,256,377 | |||||||||
Premises and equipment, net | 1,338,600 | 728,588 | 714,212 | |||||||||
Other assets | 10,436,136 | 13,943,826 | 18,543,369 | |||||||||
Total assets | 416,068,892 | 435,190,705 | 363,388,544 | |||||||||
Liabilities | ||||||||||||
Deposits | 236,833,251 | 213,464,786 | 173,660,916 | |||||||||
Short-term debt | 13,597,783 | 34,337,021 | 35,077,018 | |||||||||
Long-term debt | 59,884,683 | 57,769,675 | 57,005,977 | |||||||||
Other liabilities | 59,571,695 | 84,257,494 | 59,762,058 | |||||||||
Total liabilities | 369,887,412 | 389,828,976 | 325,505,969 | |||||||||
Stockholders’ equity | ||||||||||||
Capital stock | 4,114,413 | 3,997,030 | 3,127,148 | |||||||||
Retained earnings and other reserves | 42,067,067 | 41,364,699 | 34,755,427 | |||||||||
Total stockholders’ equity | 46,181,480 | 45,361,729 | 37,882,575 | |||||||||
Total liabilities and Stockholders’ equity | 416,068,892 | 435,190,705 | 363,388,544 | |||||||||
CONDENSED STATEMENTS OF INCOME (Parent company only) | 2009 | 2008 | 2007 | |||||||||
(Thousands of Euros) | ||||||||||||
Interest income | ||||||||||||
Interest from earning assets | 11,410,345 | 15,233,869 | 11,766,647 | |||||||||
Dividends from affiliated companies | 2,456,785 | 4,541,565 | 2,863,829 | |||||||||
13,867,130 | 19,775,434 | 14,630,476 | ||||||||||
Interest expense | (7,117,004 | ) | (13,318,953 | ) | (10,028,500 | ) | ||||||
Interest income / (Charges) | 6,750,126 | 6,456,481 | 4,601,976 | |||||||||
Provision for credit losses | (331,241 | ) | (1,387,505 | ) | (288,386 | ) | ||||||
Interest income / (Charges) after provision for credit losses | 6,418,885 | 5,068,976 | 4,313,590 | |||||||||
Non interest income: | 1,483,843 | 4,369,576 | 2,996,666 | |||||||||
Non interest expense: | (3,688,492 | ) | (4,555,202 | ) | (3,231,707 | ) | ||||||
Income before income taxes | 4,214,236 | 4,883,350 | 4,078,549 | |||||||||
Income tax expense | (63,423 | ) | (57,132 | ) | (8,302 | ) | ||||||
Net income | 4,150,813 | 4,826,218 | 4,070,247 | |||||||||
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CONDENSED CASH FLOW STATEMENTS (Parent company only) | 2009 | 2008 | 2007 | |||||||||
(Thousands of Euros) | ||||||||||||
1. Cash flows from operating activities | ||||||||||||
Consolidated profit | 4,150,813 | 4,826,218 | 4,070,247 | |||||||||
Adjustments to profit | 1,305,971 | 2,895,285 | 164,914 | |||||||||
Net increase/decrease in operating assets | (12,900,811 | ) | 63,231,280 | 49,949,432 | ||||||||
Net increase/decrease in operating liabilities | (26,129,154 | ) | 61,252,781 | 56,657,110 | ||||||||
Reimbusements/payments of income tax | 254,105 | 57,132 | 8,302 | |||||||||
Total net cash flows from operating activities (1) | (7,517,454 | ) | 5,800,136 | 10,951,141 | ||||||||
2. Cash flows from investing activities | ||||||||||||
Investments (-) | (3,641,824 | ) | (3,686,280 | ) | (22,068,312 | ) | ||||||
Divestments (+) | 2,026,980 | 524,116 | 3,438,200 | |||||||||
Total net cash flows from investment activities (2) | (1,614,844 | ) | (3,162,164 | ) | (18,630,112 | ) | ||||||
3. Cash flows from financing activities | ||||||||||||
Disposal of own equity instruments | 32,345 | — | 21,640 | |||||||||
Acquisition of own equity instruments | (61,059 | ) | (61,471 | ) | — | |||||||
Issuance of debt securities | 1,945,877 | 200,039 | 13,132,494 | |||||||||
Dividends paid | (4,386,550 | ) | (4,243,021 | ) | (3,456,731 | ) | ||||||
Issuance/Redemption of equity instruments | — | 7,020,677 | — | |||||||||
Other collections/payments related to financing activities | (438,283 | ) | 1,162,017 | 7,560,549 | ||||||||
Total net cash flows from financing activities (3) | (2,907,670 | ) | 4,078,241 | 17,257,952 | ||||||||
4. Effect of exchange rate changes on cash and cash equivalents (4) | 112,740 | (468,668 | ) | 445,697 | ||||||||
5. Net increase/decrease in cash and cash equivalents (1+2+3+4) | (11,927,228 | ) | 6,247,545 | 10,024,676 | ||||||||
Cash and cash equivalents at beginning of period | 18,554,099 | 12,306,554 | 2,281,878 | |||||||||
Cash and cash equivalents at end of period | 6,626,871 | 18,554,099 | 12,306,554 |
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55.2 | Preference Shares and Preferred Securities |
2009 | 2008 | 2007 | ||||||||||
(Thousands of Euros) | ||||||||||||
Preference shares | 430,152 | 1,051,272 | 522,558 | |||||||||
Preferred securities | 7,315,291 | 7,621,575 | 7,261,382 | |||||||||
Total at year-end | 7,745,443 | 8,672,847 | 7,783,940 | |||||||||
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Outstanding at December 31, 2009 | ||||||||||||
Amount in | ||||||||||||
Preference Shares | currency | |||||||||||
Issuer/Date of issue | Currency | (million) | Interest rate | Redemption Option (1) | ||||||||
Banesto Holding, Ltd, December 1992 | US Dollar | 77.3 | 10.500 | % | June 30, 2012 | |||||||
Abbey National plc, October 1995 | Pounds Sterling | 80.3 | 10.375 | % | No option | |||||||
Abbey National plc, February 1996 | Pounds Sterling | 80.3 | 10.375 | % | No option | |||||||
Alliance & Leicester plc, March 2004 | Pounds Sterling | 21.1 | 5.827 | % | March 22, 2016 | |||||||
Alliance & Leicester plc, May 2006 | Pounds Sterling | 21.1 | 6.222 | %(2) | May 24, 2019 | |||||||
Santander Holding USA, Inc, August 2000 | US Dollar | 147.9 | 12.000 | % | May 16, 2020 | |||||||
Santander Holding USA, Inc, May 2006 | US Dollar | 73.7 | 7.300 | % | May 15, 2011 |
Outstanding at December 31, 2009 | ||||||||||
Amount in | ||||||||||
Preferred Securities | currency | |||||||||
Issuer/Date of issue | Currency | (million) | Interest rate | Maturity date | ||||||
Banesto Group | ||||||||||
Banco Español de Crédito, October 2004 | Euro | 110.8 | €CMS 10 + 0.125% | Perpetuity | ||||||
Banco Español de Crédito (1), November 2004 | Euro | 161.3 | 5.5% | Perpetuity | ||||||
Banco Español de Crédito, June 2009 | Euro | 497.5 | 6.0% | Perpetuity | ||||||
Santander Finance Capital, S.A. (Unipersonal) | ||||||||||
April 2005 | Euro | 1,000 | Euribor (3M) + 0.1% | Perpetuity | ||||||
March 2009 | US Dollar | 18.2 | 2.0% | Perpetuity | ||||||
March 2009 | US Dollar | 25.0 | 2.0% | Perpetuity | ||||||
March 2009 | Euro | 313.8 | 2.0% | Perpetuity | ||||||
March 2009 | Euro | 153.7 | 2.0% | Perpetuity | ||||||
June 2009 | Euro | 1,965.6 | Euribor (3M) + 2.2% | Perpetuity | ||||||
Santander Finance Preferred, S.A. (Unipersonal) | ||||||||||
March 2004 | US Dollar | 89.3 | 6.41% | Perpetuity | ||||||
September 2004 | Euro | 174.38 | €CMS 10 +0.05% subject to a maximum distribution of 8% per annum | Perpetuity | ||||||
October 2004 | Euro | 165.1 | 5.75% | Perpetuity | ||||||
November 2006 | US Dollar | 161.8 | 6.80% | Perpetuity | ||||||
January 2007 | US Dollar | 109.5 | 6.50% | Perpetuity | ||||||
March 2007 | US Dollar | 210.4 | US3M + 0.52% | Perpetuity | ||||||
July 2007 | Pounds Sterling | 9.0 | 7.01% | Perpetuity | ||||||
July 2009 | Pounds Sterling | 679.4 | Libor (3M) + 7.66% | Perpetuity | ||||||
July 2009 | Euro | 125.7 | Euribor (3M) + 7.66% | Perpetuity | ||||||
September 2009 | US Dollar | 161.6 | USD Libor (3M) + 7.67% | Perpetuity | ||||||
September 2009 | US Dollar | 825.1 | 10.50% | Perpetuity | ||||||
Santander International Preferred S.A. (Sociedad Unipersonal) | ||||||||||
March 2009 | US Dollar | 981.0 | 2.00% | Perpetuity | ||||||
March 2009 | Euro | 8.6 | 2.00% | Perpetuity | ||||||
Abbey Group | ||||||||||
Abbey National Capital Trust I, February 2000 | US Dollar | 621.2 | Fixed to 8.963% until June 30, 2030, and from this date, 2.825% + Libor USD (3M) | Perpetuity | ||||||
Abbey National Plc, February 2001(3) | Pounds Sterling | 104.8 | 7.037% | Perpetuity | ||||||
Abbey National Plc, August 2002 | Pounds Sterling | 15.9 | Fixed to 6.984% until February 9, 2018, and thereafter, at a rate reset semi-annually of 1.86% per annum + Libor GBP (6M) | Perpetuity | ||||||
Santander PR Capital Trust I | ||||||||||
February 2006 | US Dollar | 125 | 6.750% | July 2036 |
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(1) | From these date the issuer can redeem the shares, subject to prior authorization by the national supervisor. | |
(2) | That issuance is a Fixed/Floating Rate Non-Cumulative Callable Preference Shares. Dividends will accrue on a principal amount equal to £1,000 per Preference Share at a rate of 6.222 per cent. per annum in respect of the period from (and including) May 24, 2006 (the Issue Date) to (but excluding) May 24, 2019 (the First Call Date) and thereafter at a rate reset quarterly equal to 1.13 per cent. per annum above the London interbank offered rate for three-month sterling deposits. From (and including) the Issue Date to (but excluding) the First Call Date, dividends, if declared, will be paid annually in arrear on May 24, in each year. Subject as provided herein, the first such dividend payment date will be May 24, 2007 and the last such dividend payment date will be the First Call Date. From (and including) the First Call Date, dividends, if declared, will be paid quarterly in arrear on May 24, August 24, November 24 and February 24, in each year. Subject as provided herein, the first such dividend payment date will be August 24, 2019. | |
(3) | From February 14, 2026, this issue will bear interest at a rate, reset every five years, of 3.75% per annum above the gross redemption yield on a five-year specified United Kingdom government security. |
• | Santander Finance Preferred, S.A. (Unipersonal) is 100% owned finance subsidiary of Banco Santander, S.A. who fully and unconditionally guarantees the preferred securities (Series 1, 4, 5, 6, 10 and 11 are listed in the United States). No other subsidiary of the Bank guarantees such securities. | ||
• | Santander Finance Capital, S.A. (Unipersonal) is 100% owned finance subsidiary of Banco Santander, S.A. that fully and unconditionally guarantees the preferred securities (not listed in United States). No other subsidiary of the Bank guarantees such securities. | ||
• | Santander International Preferred, S.A. (Unipersonal) is 100% owned finance subsidiary of Banco Santander, S.A. that fully and unconditionally guarantees the preferred securities (not listed in United States). No other subsidiary of the Bank guarantees such securities. |
Thousands of Euros | ||||||||
SANTANDER FINANCE CAPITAL, S.A. (UNIPERSONAL) | 2009 | 2008 | ||||||
Assets: | ||||||||
Cash | 22,965 | 56,490 | ||||||
Deposits with Parent Bank | 3,442,226 | 3,214,769 | ||||||
Accrual accounts | 11,201 | 27,756 | ||||||
Other assets | — | |||||||
Total Assets | 3,476,392 | 3,299,015 | ||||||
Liabilities and stockholders’ equity: | ||||||||
LIABILITIES: | ||||||||
Public entities | 4,409 | 1,567 | ||||||
Accrual accounts | 10,043 | 26,153 | ||||||
Non-commercial debts | — | — | ||||||
Commercial debts | 74 | 40 | ||||||
Debts with Group companies | 69 | 18 | ||||||
Provisions for taxes | — | — | ||||||
Preferred securities | 3,461,648 | 3,270,842 | ||||||
Total Liabilities | 3,476,243 | 3,298,620 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Capital stock | 151 | 151 | ||||||
Retained earnings | 243 | 123 | ||||||
Net income | (245 | ) | 121 | |||||
Total Stockholders’ Equity | 149 | 395 | ||||||
Total Liabilities and Stockholders’ Equity | 3,476,392 | 3,299,015 | ||||||
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Thousands of Euros | ||||||||
SANTANDER FINANCE CAPITAL, S.A. (UNIPERSONAL) | 2009 | 2008 | ||||||
Interest income | 118,253 | 175,020 | ||||||
Interest expenses | (118,236 | ) | (174,770 | ) | ||||
Non interest expenses | (262 | ) | (77 | ) | ||||
Corporate income tax | — | (52 | ) | |||||
Net income / (loss) | (245 | ) | 121 | |||||
Total | ||||||||||||||||||||
Retained | Stockholders’ | |||||||||||||||||||
Capital stock | Earnings | Net income | Equity | |||||||||||||||||
Changes in Stockholders’ | Common | |||||||||||||||||||
Equity | Shares | Thousands of Euros | ||||||||||||||||||
Balance at January 1, 2008 | 1,505 | 151 | 70 | 53 | 274 | |||||||||||||||
2007 Income allocation | — | — | 53 | |||||||||||||||||
Net income 2008 | — | — | — | 121 | 121 | |||||||||||||||
Balance at December 31, 2008 | 1,505 | 151 | 123 | 121 | 395 | |||||||||||||||
2008 Income allocation | — | — | 120 | (121 | ) | (1 | ) | |||||||||||||
Net income 2009 | — | — | — | (245 | ) | (245 | ) | |||||||||||||
Balance at December 31, 2009 | 1,505 | 151 | 243 | (245 | ) | 149 | ||||||||||||||
Thousands of | ||||||||
Issuances | Issue Date | Euros at 12/31/09 | ||||||
Series V | 04/12/2005 | 1,000,000 | ||||||
Series VI | 03/18/2009 | 12,622 | ||||||
Series VII | 03/18/2009 | 17,336 | ||||||
Series VIII | 03/18/2009 | 313,745 | ||||||
Series IX | 03/18/2009 | 153,700 | ||||||
Series X | 06/30/2009 | 1,965,616 | ||||||
Total | 3,463,019 | |||||||
Issuances expenses | ||||||||
Series V | (1,100 | ) | ||||||
Series VI | (4 | ) | ||||||
Series VII | (27 | ) | ||||||
Series VIII | (103 | ) | ||||||
Series IX | (50 | ) | ||||||
Series X | (87 | ) | ||||||
Total | (1,371 | ) | ||||||
Total | 3,461,648 | |||||||
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• | Series I: on October 3, 2003, Santander Finance Capital, S.A. (Unipersonal) issued 18,000,000 preference securities, at€25 par value. On April 7, 2009 the company redeemed the whole series. | ||
• | Series II: on February 18, 2004, Santander Finance Capital, S.A. (Unipersonal) issued 16,000,000 preference securities, at€25 par value. On March 31, 2009 the company redeemed the whole series. | ||
• | Series III: on July 30, 2004, Santander Finance Capital, S.A. (Unipersonal) issued 30,000,000 preference securities, at€25 par value. On August 17, 2009 the company redeemed the whole series. | ||
• | Series IV: on September 30, 2004, Santander Finance Capital, S.A. (Unipersonal) issued 27,200,000 preference securities, at€25 par value. On August 17, 2009 the company redeemed the whole series. | ||
• | Series V: on April 12, 2005, Santander Finance Capital, S.A. (Unipersonal) issued 40,000,000 preference securities, at€25 par value. | ||
• | Series VI: on March 18, 2009, Santander Finance Capital, S.A. (Unipersonal) issued 12,122 preference securities, at€1,500 par value. | ||
• | Series VII: on March 18, 2009, Santander Finance Capital, S.A. (Unipersonal) issued 333 preference securities, at€75,000 par value. | ||
• | Series VIII: on March 18, 2009, Santander Finance Capital, S.A. (Unipersonal) issued 313,745 preference securities, at€1,000 par value. | ||
• | Series IX: on March 18, 2009, Santander Finance Capital, S.A. (Unipersonal) issued 3,074 preference securities, at€50,000 par value. | ||
• | Series X: on June 30, 2009, Santander Finance Capital, S.A. (Unipersonal) issued 78,624,629 preference securities, at€25 par value. | ||
• | These issues are perpetual and can be redeemable at the option of the issuer, subject to the consent of the Bank of Spain, in whole or in part, at any time after five years from the issue date. | ||
• | All the issues of Santander Finance Capital, S.A. (Unipersonal) are guaranteed by Banco Santander, S.A. |
Thousands of Euros | ||||||||
SANTANDER FINANCE PREFERRED, S.A. (UNIPERSONAL) | 2009 | 2008 | ||||||
Assets: | ||||||||
Cash | 24,917 | 16,086 | ||||||
Deposits with Parent Bank | 3,626,360 | 1,912,206 | ||||||
Accrual accounts | 69,304 | 26,735 | ||||||
Total Assets | 3,720,581 | 1,955,027 | ||||||
Liabilities and stockholders’ equity: | ||||||||
LIABILITIES: | ||||||||
Public entities | 254 | 153 | ||||||
Accrual accounts | 69,017 | 23,485 | ||||||
Commercial debts | 25 | 36 | ||||||
Non-commercial debts | — | — | ||||||
Deferred income | — | 863 | ||||||
Debts with group companies | 928,206 | 9 | ||||||
Provisions for taxes | — | — | ||||||
Preferred securities | 2,720,256 | 1,928,990 | ||||||
Total Liabilities | 3,717,758 | 1,953,536 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Capital stock | 151 | 151 | ||||||
Retained earnings | 1,340 | 2,084 | ||||||
Net income | 1,332 | (744 | ) | |||||
Total Stockholders’ Equity | 2,823 | 1,491 | ||||||
Total Liabilities and Stockholders’ Equity | 3,720,581 | 1,955,027 | ||||||
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Thousands of Euros | ||||||||
SANTANDER FINANCE PREFERRED, S.A. (UNIPERSONAL) | 2009 | 2008 | ||||||
Interest income | 182,125 | 123,313 | ||||||
Interest expenses | (179,748 | ) | (122,172 | ) | ||||
Non interest income | — | — | ||||||
Non interest expensive | (1,042 | ) | (1,885 | ) | ||||
Corporate income tax | (3 | ) | — | |||||
Net income / (loss) | 1,332 | (744 | ) | |||||
Total | ||||||||||||||||||||
Retained | Stockholders’ | |||||||||||||||||||
Capital stock | Earnings | Net income | Equity | |||||||||||||||||
Changes in Stockholders’ | Common | |||||||||||||||||||
Equity | Shares | Thousands of Euros | ||||||||||||||||||
Balance at January 1, 2008 | 1,505 | 151 | 421 | 1,663 | 2,235 | |||||||||||||||
2007 Income allocation | — | — | 1,663 | (1,663 | ) | — | ||||||||||||||
Net income 2008 | — | — | — | (744 | ) | (744 | ) | |||||||||||||
Balance at December 31, 2008 | 1,505 | 151 | 2,084 | (744 | ) | 1,491 | ||||||||||||||
2008 Income allocation | — | — | (744 | ) | 744 | — | ||||||||||||||
Net income 2009 | — | — | — | 1,332 | 1,332 | |||||||||||||||
Balance at December 31, 2009 | 1,505 | 151 | 1,340 | 1,332 | 2,823 | |||||||||||||||
F-215
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Thousands of | ||||||||
Issue Date | Euros at 12/31/09 | |||||||
Issuances | ||||||||
Series 1- $190,000 | 03/11/2004 | 131,889 | ||||||
Series 2-€300,000 | 09/30/2004 | 300,000 | ||||||
Series 3-€200,000 | 10/08/2004 | 200,000 | ||||||
Series 4- $500,000 | 11/21/2006 | 347,078 | ||||||
Series 5- $600,000 | 31/01/2007 | 416,493 | ||||||
Series 6- $350,000 | 05/03/2007 | 242,954 | ||||||
Series 7- £250,000 | 07/10/2007 | 281,500 | ||||||
Series 8- £679,400 | 07/27/2009 | 765,004 | ||||||
Series 9-€125,700 | 07/27/2009 | 125,700 | ||||||
Series 10- $825,110 | 09/29/2009 | 572,754 | ||||||
Series 11- $161,587 | 09/29/2009 | 112,166 | ||||||
3,495,538 | ||||||||
Issuances expenses | ||||||||
Series 1 | — | — | ||||||
Series 2 | — | — | ||||||
Series 3 | — | — | ||||||
Series 4 | — | (2.988 | ) | |||||
Series 5 | — | (3.792 | ) | |||||
Series 6 | — | (109 | ) | |||||
Series 7 | — | (45 | ) | |||||
Series 8 | — | (114 | ) | |||||
Series 9 | — | (114 | ) | |||||
Series 10 | — | (119 | ) | |||||
Series 11 | — | (119 | ) | |||||
(7,400 | ) | |||||||
Total | 3,488,138 | |||||||
• | Series 1: on March 11, 2004, Santander Finance Preferred, S.A. (Unipersonal) issued 7,600,000 preferred securities, at $25 par value. | ||
• | Series 2: on September 30, 2004, Santander Finance Preferred, S.A. (Unipersonal) issued 300,000 preferred securities, at€1,000 par value. | ||
• | Series 3: on October 8, 2004, Santander Finance Preferred, S.A. (Unipersonal) issued 200,000 preferred securities, at€1,000 par value. | ||
• | Series 4: on November 21, 2006 Santander Finance Preferred, S.A. (Unipersonal) issued 20,000,000 preferred securities, at€25 par value. | ||
• | Series 5: on January 31, 2007 Santander Finance Preferred, S.A. (Unipersonal) issued 24,000,000 preferred securities, at $25 par value. | ||
• | Series 6: on March 5, 2007 Santander Finance Preferred, S.A. (Unipersonal) issued 14,000,000 preferred securities, at $25 par value. | ||
• | Series 7: on July 10, 2007 Santander Finance Preferred, S.A. (Unipersonal) issued 5,000 preferred securities, at £50,000 par value. | ||
• | Series 8: on July 27, 2009, Santander Finance Preferred, S.A. (Unipersonal) issued 13,588 preferred securities, at £50,000 par value. | ||
• | Series 9: on July 27, 2009, Santander Finance Preferred, S.A. (Unipersonal) issued 2,514 preferred securities, at€50,000 par value. | ||
• | Series 10: on September 29, 2009, Santander Finance Preferred, S.A. (Unipersonal) issued 33,004,383 preferred securities, at $25 par value. | ||
• | Series 11: on September 29, 2009, Santander Finance Preferred, S.A. (Unipersonal) issued 161,587 preferred securities, at $1,000 par value. | ||
• | These issues are perpetual and can be redeemable at the option of the issuer, subject to the consent of the Bank of Spain, in whole or in part, at any time after five years from the issue date. | ||
• | All the issues of Santander Finance Preferred, S.A. (Unipersonal) are guaranteed by Banco Santander, S.A. | ||
• | On July 9, 2009, we published on the international markets offers to exchange issues of securities eligible to be included in capital issued by Santander and its subsidiaries. The exchange envisaged the delivery of new securities that meet the current market standards and regulatory requirements to be classified as equity at the consolidated Group level. For this purpose Santander Finance Preferred, S.A. (Unipersonal) issued Series 8, 9, 10 and 11 above. |
F-216
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Thousands of Euros | ||||
SANTANDER INTERNATIONAL PREFERRED, S.A. (SOCIEDAD UNIPERSONAL) | 2009 | |||
Assets: | ||||
Cash | 225 | |||
Deposits with Parent Bank | 689,271 | |||
Accrual accounts | 10,904 | |||
Other current assets | 4 | |||
Total Assets | 700,404 | |||
Liabilities and stockholders’ equity: | ||||
LIABILITIES: | ||||
Public entities | 7 | |||
Commercial debts | 71 | |||
Accrual accounts | 10,882 | |||
Preferred securities | 689,401 | |||
Total Liabilities | 700,361 | |||
STOCKHOLDERS’ EQUITY: | ||||
Capital stock | 60 | |||
Net income | (17 | ) | ||
Total Stockholders’ Equity | 43 | |||
Total Liabilities and Stockholders’ Equity | 700,404 | |||
Thousands of Euros | ||||
SANTANDER INTERNATIONAL PREFERRED, S.A. (SOCIEDAD UNIPERSONAL) | 2009 | |||
Interest income | 11,078 | |||
Interest expenses | (11,066 | ) | ||
Non interest income | 2 | |||
Non interest expensive | (31 | ) | ||
Corporate income tax | — | |||
Net income / (loss) | (17 | ) | ||
Total | ||||||||||||||||||||
Retained | Stockholders’ | |||||||||||||||||||
Capital stock | Earnings | Net income | Equity | |||||||||||||||||
Changes in Stockholders’ | Common | |||||||||||||||||||
Equity | Shares | Thousands of Euros | ||||||||||||||||||
Balance at February 17, 2009 | — | — | — | — | — | |||||||||||||||
Capital increase | — | 60 | — | — | 60 | |||||||||||||||
Net income 2009 | — | — | — | (17 | ) | (17 | ) | |||||||||||||
Balance at December 31, 2009 | 602 | 60 | — | (17 | ) | 43 | ||||||||||||||
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Thousands of | ||||||||||||
Issue Date | Euros at 12/31/09 | |||||||||||
Issuances | ||||||||||||
Series 1 ($) | 03/19/2009 | 680,961 | ||||||||||
Series 2 (€) | 03/19/2009 | 8,582 | ||||||||||
689,543 | ||||||||||||
Issuances expenses | (142 | ) | ||||||||||
Total | 689,401 | |||||||||||
• | Series 1: on March 19, 2009, Santander International Preferred, S.A. (Sociedad Unipersonal) issued 653,995 preferred securities, at $1,500 par value. | ||
• | Series 2: on March 19, 2009, Santander International Preferred, S.A. (Sociedad Unipersonal) issued 8,582 preferred securities, at€1,000 par value. | ||
• | These issues are perpetual and can be redeemable at the option of the issuer, subject to the consent of the Bank of Spain, in whole or in part, at any time after ten years from the issue date. | ||
• | All the issues of Santander Finance Preferred, S.A. (Sociedad Unipersonal) are guaranteed by Banco Santander, S.A. |
55.3 | Acquisition of Sovereign Bancorp, Inc (“Sovereign”). |
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CONSOLIDATED BALANCE SHEET — SOVEREIGN BANCORP, INC. | 2008 | 2007 | ||||||
(Thousands of euros) | ||||||||
Assets | ||||||||
Cash and amounts due from depository institutions | 2,697,796 | 2,126,737 | ||||||
Investment securities available for sale | 6,683,437 | 9,470,720 | ||||||
Investment securities held to maturity | — | — | ||||||
Other investments | 516,470 | 815,532 | ||||||
Net loans held for investment | 39,117,012 | 38,536,772 | ||||||
Loans held for sale | 235,203 | 372,094 | ||||||
Premises and equipment | 395,308 | 381,993 | ||||||
Accrued interest receivable | 180,795 | 238,118 | ||||||
Goodwill | 2,465,676 | 2,327,455 | ||||||
Core deposits and other intangibles | 192,909 | 252,779 | ||||||
Bank owned life insurance | 1,327,648 | 1,218,734 | ||||||
Other assets | 1,583,067 | 1,827,435 | ||||||
Total assets | 55,395,321 | 57,568,369 | ||||||
Liabilities | ||||||||
Deposits and other customer accounts | 34,805,327 | 33,907,958 | ||||||
Borrowings and other debt obligations | 15,063,724 | 17,846,961 | ||||||
Advance payments by borrowers for taxes and insurance | 66,986 | 56,444 | ||||||
Other liabilities | 1,437,789 | 1,007,108 | ||||||
Total liabilities | 51,373,826 | 52,818,471 | ||||||
Minority interest-preferred securities of subsidiaries | — | — | ||||||
Stockholders’ Equity | ||||||||
Preferred stock | 140,436 | 132,766 | ||||||
Common stock | 5,546,289 | 4,276,593 | ||||||
Warrants and employee stock options issued | 251,902 | 236,645 | ||||||
Unallocated common stock held by Employee Stock Ownership Plan | — | — | ||||||
Treasury stock | (6,739 | ) | (13,486 | ) | ||||
Accumulated other comprehensive loss | (564,642 | ) | (221,543 | ) | ||||
Retained earnings | (1,345,751 | ) | 338,923 | |||||
Total Stockholders’ Equity | 4,021,495 | 4,749,898 | ||||||
Total Liabilities and Stockholders’ Equity | 55,395,321 | 57,568,369 |
CONSOLIDATED INCOME STATEMENT — SOVEREIGN BANCORP, INC. | 2008 | 2007 | ||||||
(Thousands of euros) | ||||||||
Interest income | 2,679,882 | 3,402,988 | ||||||
Interest expense | (1,394,001 | ) | (2,055,868 | ) | ||||
Provision for credit losses | (622,297 | ) | (297,958 | ) | ||||
Interest income / (Charges) after provision for credit losses | 663,584 | 1,049,161 | ||||||
Fees and other income | 434,746 | 387,895 | ||||||
Net (loss)/gain on investment securities | (994,022 | ) | (128,888 | ) | ||||
Non-interest income | (559,277 | ) | 259,008 | |||||
General and administrative expenses | (1,013,917 | ) | (977,037 | ) | ||||
Other expenses | (206,312 | ) | (1,361,408 | ) | ||||
Income before income taxes | (1,115,922 | ) | (1,030,277 | ) | ||||
Income tax benefit/(provision) | (494,269 | ) | 44,179 | |||||
Net income | (1,610,191 | ) | (986,098 | ) |
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Table of Contents
Subsidiaries of Banco Santander, S.A. (1)
Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
2 & 3 Triton Limited (m) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 125 | 7 | 12 | |||||||||||||||||
A & L CF (Guernsey) Limited (n) | Guernsey | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF (Jersey) Limited (n) | Jersey | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 88 | 1 | 85 | |||||||||||||||||
A & L CF (Jersey) No.2 Limited (n) | Jersey | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 93 | 11 | 89 | |||||||||||||||||
A & L CF December (1) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 13 | 0 | 0 | |||||||||||||||||
A & L CF December (10) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 35 | 0 | 32 | |||||||||||||||||
A & L CF December (11) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 12 | 0 | 10 | |||||||||||||||||
A & L CF December (2) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 1 | (2 | ) | 0 | ||||||||||||||||
A & L CF June (1) Limited (e) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 3 | 0 | 1 | |||||||||||||||||
A & L CF June (2) Limited (e) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 1 | 0 | 0 | |||||||||||||||||
A & L CF June (3) Limited (e) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | (1 | ) | 0 | 0 | ||||||||||||||||
A & L CF June (4) Limited (j) (e) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF June (5) Limited (e) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF June (6) Limited (e) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF June (7) Limited (e) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF June (8) Limited (e) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF March (1) Limited (d) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | (1 | ) | 1 | 0 | ||||||||||||||||
A & L CF March (3) Limited (d) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF March (4) Limited (j) (d) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 5 | 0 | 3 | |||||||||||||||||
A & L CF March (5) Limited (d) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF March (6) Limited (d) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF March (7) Limited (d) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF March (8) Limited (d) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF March (9) Limited (d) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF September (1) Limited (f) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 3 | 0 | 0 | |||||||||||||||||
A & L CF September (2) Limited (f) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF September (3) Limited (f) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF September (4) Limited (f) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | (3 | ) | 0 | 0 | ||||||||||||||||
A & L CF September (5) Limited (f) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 2 | 0 | 0 | |||||||||||||||||
A & L Direct Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
A & L Insurance Services plc (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE | 0 | 0 | 0 | |||||||||||||||||
A & L Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
A N (123) plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 960 | 16 | 964 | |||||||||||||||||
Abbey Business Services (India) Private Limited (d) | India | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 1 | 0 | 0 | |||||||||||||||||
Abbey Covered Bonds (Holdings) Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Abbey Covered Bonds (LM) Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Abbey Covered Bonds LLP | United Kingdom | — | (b | ) | — | SECURITIZATION | (548 | ) | (33 | ) | 0 | |||||||||||||||||
Abbey National (America) Holdings Inc. | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 31 | 0 | 31 | |||||||||||||||||
Abbey National (America) Holdings Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 31 | 0 | 26 | |||||||||||||||||
Abbey National (CF Trustee) Limited (d) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ASSET MANAGEMENT COMPANY | 0 | 0 | 0 | |||||||||||||||||
Abbey National (Gibraltar) Limited | Gibraltar | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 6 | 0 | 5 | |||||||||||||||||
Abbey National (Holdings) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 21 | 0 | 18 | |||||||||||||||||
Abbey National 1986 Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 7 | 0 | 5 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Abbey National Alpha Investments (d) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 2 | 0 | 1 | |||||||||||||||||
Abbey National American Investments Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 291 | 2 | 285 | |||||||||||||||||
Abbey National Baker Street Investments | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 4 | 0 | 4 | |||||||||||||||||
Abbey National Beta Investments Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 130 | (1 | ) | 96 | ||||||||||||||||
Abbey National Business Cashflow Finance Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FACTORING | 6 | 0 | 5 | |||||||||||||||||
Abbey National Business Equipment Leasing Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 1 | 0 | 6 | |||||||||||||||||
Abbey National Business Office Equipment Leasing Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 5 | 0 | 0 | |||||||||||||||||
Abbey National Capital LP I | United States | — | (b | ) | — | FINANCE | 0 | 0 | 0 | |||||||||||||||||||
Abbey National Charitable Trust Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 10 | 1 | 0 | |||||||||||||||||||
Abbey National Financial Investments 3 B.V. | Netherlands | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 5 | (1 | ) | 1 | ||||||||||||||||
Abbey National Financial Investments 4 B.V. | Netherlands | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 298 | 3 | 282 | |||||||||||||||||
Abbey National General Insurance Services Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ADVISORY SERVICES | (43 | ) | 0 | 0 | ||||||||||||||||
Abbey National GP (Jersey) Limited | Jersey | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Abbey National Group Pension Schemes Trustees Limited (d) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ASSET MANAGEMENT COMPANY | 0 | 0 | 0 | |||||||||||||||||
Abbey National Guarantee Company | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 4 | 0 | 3 | |||||||||||||||||
Abbey National Homes Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | (43 | ) | 0 | 0 | ||||||||||||||||
Abbey National International Limited | Jersey | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 293 | 23 | 168 | |||||||||||||||||
Abbey National Investments | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 144 | 1 | 120 | |||||||||||||||||
Abbey National Legacy Holdings Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 152 | (6 | ) | 0 | ||||||||||||||||
Abbey National Legacy Leasing Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 85 | 0 | 0 | |||||||||||||||||
Abbey National Legacy Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 310 | 2 | 0 | |||||||||||||||||
Abbey National Nominees Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 0 | 0 | 0 | |||||||||||||||||
Abbey National North America Holdings Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Abbey National North America LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 1 | (1 | ) | 0 | ||||||||||||||||
Abbey National Pension (Escrow Services) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PENSION FUND MANAGEMENT COMPANY | 7 | 11 | 0 | |||||||||||||||||
Abbey National PEP & ISA Managers Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FUND AND PORTFOLIO MANAGER | 45 | 2 | 12 | |||||||||||||||||
Abbey National Personal Pensions Trustee Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ASSET MANAGEMENT COMPANY | 0 | 0 | 0 | |||||||||||||||||
Abbey National plc | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | BANKING | 6,642 | 818 | 14,968 | |||||||||||||||||
Abbey National PLP (UK) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Abbey National Property Investments | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 368 | 14 | 156 | |||||||||||||||||
Abbey National Property Services Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | (15 | ) | 0 | 0 | ||||||||||||||||
Abbey National Secretariat Services Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FUND AND PORTFOLIO MANAGER | 0 | 0 | 0 | |||||||||||||||||
Abbey National Securities Inc. | United States | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 40 | 0 | 31 | |||||||||||||||||
Abbey National September Leasing (3) Limited (f) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | (9 | ) | 0 | 0 | ||||||||||||||||
Abbey National Shelf Co. (4) Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | INACTIVE | 0 | 0 | 0 | |||||||||||||||||
Abbey National Sterling Capital plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 3 | 0 | 0 | |||||||||||||||||
Abbey National Treasury International (IOM) Limited (j) | Isle of Man | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 4 | 0 | 0 | |||||||||||||||||
Abbey National Treasury Investments | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 307 | 2 | 207 | |||||||||||||||||
Abbey National Treasury Services (Transport Holdings) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Abbey National Treasury Services Investments Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 951 | 3 | 845 | |||||||||||||||||
Abbey National Treasury Services Overseas Holdings | United Kingdom | 0.00 | % | 99.99 | % | 99.99 | % | HOLDING COMPANY | 1,389 | 252 | 1,148 | |||||||||||||||||
Abbey National Treasury Services plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 3,272 | 621 | 3,208 | |||||||||||||||||
Abbey National UK Investments | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 811 | 15 | 683 | |||||||||||||||||
Abbey Stockbrokers (Nominees) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 0 | 0 | 0 | |||||||||||||||||
Abbey Stockbrokers Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 6 | 0 | 7 | |||||||||||||||||
ABN AMRO Administradora de Cartões de Crédito Ltda. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | CARDS | — | — | — |
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�� | Millions of euros (a) | |||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
ABN AMRO Brasil dois Participações S.A. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | HOLDING COMPANY | — | — | — | |||||||||||||||||
ABN AMRO Brasil Partipações e Investimentos S.A. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | HOLDING COMPANY | — | — | — | |||||||||||||||||
ABN AMRO Real Corretora de Câmbio e Valores Mobiliários S.A. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | BROKER-DEALER | 15 | 1 | 14 | |||||||||||||||||
ABN AMRO Securities (Brasil) Corretora de Valores Mobiliários S.A. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | BROKER-DEALER | 25 | 2 | 21 | |||||||||||||||||
Administración de Bancos Latinoamericanos Santander, S.L. | Spain | 24.11 | % | 75.89 | % | 100.00 | % | HOLDING COMPANY | 541 | 10 | 156 | |||||||||||||||||
AEH Purchasing, Ltd. | Ireland | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Afisa S.A. | Chile | 0.00 | % | 100.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 7 | 1 | 3 | |||||||||||||||||
Agencia de Seguros Santander, Ltda. | Colombia | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE | 1 | 0 | 2 | |||||||||||||||||
Agrícola Tabaibal, S.A. | Spain | 0.00 | % | 66.56 | % | 100.00 | % | AGRICULTURE AND LIVESTOCK | 0 | 0 | 0 | |||||||||||||||||
Agropecuaria Tapirapé S.A. | Brazil | 0.00 | % | 82.77 | % | 99.07 | % | AGRICULTURE AND LIVESTOCK | 3 | 0 | 0 | |||||||||||||||||
Aguas Araucanía S.A. | Chile | 0.00 | % | 100.00 | % | 100.00 | % | WATER TREATMENT AND DISTRIBUTION | 54 | 7 | 32 | |||||||||||||||||
Aguas del Altiplano S.A. | Chile | 0.00 | % | 100.00 | % | 100.00 | % | WATER TREATMENT AND DISTRIBUTION | 37 | 11 | 38 | |||||||||||||||||
Aguas Magallanes S.A. | Chile | 0.00 | % | 100.00 | % | 100.00 | % | WATER TREATMENT AND DISTRIBUTION | 17 | 6 | 18 | |||||||||||||||||
Aguas Nuevas S.A. | Chile | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 75 | 23 | 302 | |||||||||||||||||
AKB Marketing Services Sp. Z.o.o. | Poland | 0.00 | % | 100.00 | % | 100.00 | % | MARKETING | 6 | 0 | 0 | |||||||||||||||||
Aktúa Soluciones Financieras, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | FINANCIAL SERVICES | 1 | 6 | 0 | |||||||||||||||||
Alcaidesa Golf, S.L. | Spain | 0.00 | % | 44.87 | % | 50.01 | % | SPORTS OPERATIONS | 5 | (1 | ) | 3 | ||||||||||||||||
Alcaidesa Holding, S.A. (consolidated) | Spain | 0.00 | % | 44.87 | % | 50.01 | % | PROPERTY | 71 | (4 | ) | 28 | ||||||||||||||||
Alcaidesa Inmobiliaria, S.A. | Spain | 0.00 | % | 44.87 | % | 50.01 | % | PROPERTY | 64 | (2 | ) | 15 | ||||||||||||||||
Alcaidesa Servicios, S.A. | Spain | 0.00 | % | 44.87 | % | 50.01 | % | SERVICES | 9 | 0 | 4 | |||||||||||||||||
Alce Tenedora, S.L. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | SECURITIES INVESTMENT | (22 | ) | 1 | 0 | ||||||||||||||||
ALCF Investments Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Aljarafe Golf, S.A. | Spain | 0.00 | % | 80.22 | % | 89.41 | % | PROPERTY | 14 | 0 | 1 | |||||||||||||||||
Aljardi SGPS, Lda. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 1,382 | 4 | 1,148 | |||||||||||||||||
Alliance & Leicester (Europe) Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester (Holdings) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester (Isle of Man) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 6 | 0 | 6 | |||||||||||||||||
Alliance & Leicester (Jersey) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 9 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Cash Solutions Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | (23 | ) | 0 | 0 | ||||||||||||||||
Alliance & Leicester Commercial Bank plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 25 | 0 | 25 | |||||||||||||||||
Alliance & Leicester Commercial Finance (Holdings) plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 44 | 0 | 77 | |||||||||||||||||
Alliance & Leicester Commercial Finance plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 79 | 24 | 163 | |||||||||||||||||
Alliance & Leicester Covered Bonds LLP | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Alliance & Leicester Covered Bonds (LM) Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Alliance & Leicester Direct Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Employee Share Scheme Trustees Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Equity Investments (Guarantee) Limited | United Kingdom | — | (b | ) | — | FINANCE | 0 | 0 | 0 | |||||||||||||||||||
Alliance & Leicester Estate Agents (Holdings) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Estate Agents (Mortgage & Finance) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Estates Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 6 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Finance Company Limited (j) (n) | Cayman Islands | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 14 | (8 | ) | 0 | ||||||||||||||||
Alliance & Leicester Financing plc (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 7 | 0 | 7 | |||||||||||||||||
Alliance & Leicester Independent Financial Advisers Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester International Holdings Limited | Isle of Man | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 29 | 56 | 29 | |||||||||||||||||
Alliance & Leicester International Limited | Isle of Man | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 204 | (9 | ) | 29 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Alliance & Leicester Investment (Derivatives No 3) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 21 | 1 | 16 | |||||||||||||||||
Alliance & Leicester Investment (Derivatives) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Investment (No 3) LLP | United Kingdom | — | (b | ) | — | FINANCE | 24 | 0 | 0 | |||||||||||||||||||
Alliance & Leicester Investment (No 4) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 10 | (1 | ) | 11 | ||||||||||||||||
Alliance & Leicester Investments (Derivatives No.2) Limited (j) (n) | Jersey | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Investments (Jersey) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Investments (No 2) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 260 | 1 | 254 | |||||||||||||||||
Alliance & Leicester Investments Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 486 | 10 | 450 | |||||||||||||||||
Alliance & Leicester LM Holdings Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Alliance & Leicester Mortgage Loans Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester North America (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Personal Finance Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | (59 | ) | (189 | ) | 0 | |||||||||||||||
Alliance & Leicester plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 1,345 | (128 | ) | 2,210 | ||||||||||||||||
Alliance & Leicester Print Services Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 3 | 0 | 0 | |||||||||||||||||
Alliance & Leicester QUEST Trustee Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Share Incentive Plan Trustee Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Share Ownership Trust Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Syndicated Loans Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Trade Services Limited (f) (j) | Hong Kong | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Unit Trust Managers Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FUND AND PORTFOLIO MANAGER | 9 | 0 | 5 | |||||||||||||||||
Alliance Bank (U.K) Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance Bank Limited | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance Business Bank Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance Business Banking Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance Business Finance Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance Cash Solutions Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance Commercial Bank Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance Commercial Banking Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance Corporate Banking Services Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance Corporate Services Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 9 | 0 | 0 | |||||||||||||||||
Alliance Estate Agents Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 0 | 0 | 0 | |||||||||||||||||
Alliance Group Public Limited Company (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance Life Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance Mutual plc (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Almacenadora Serfin, S.A. De C.V. | Mexico | 0.00 | % | 73.99 | % | 98.71 | % | WAREHOUSING | 1 | 0 | 1 | |||||||||||||||||
Almacenadora Somex, S.A. De C.V. | Mexico | 0.00 | % | 72.88 | % | 97.24 | % | WAREHOUSING | 7 | 0 | 1 | |||||||||||||||||
Altamira Santander Real Estate, S.A. | Spain | 93.62 | % | 6.38 | % | 100.00 | % | PROPERTY | 20 | (425 | ) | 0 | ||||||||||||||||
Andaluza de Inversiones, S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 44 | 1 | 27 | |||||||||||||||||
ANDSH Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 3 | 0 | 2 | |||||||||||||||||
ANFP (US) LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
ANITCO Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Aquanima Brasil Ltda. | Brazil | 0.00 | % | 99.43 | % | 100.00 | % | e-COMMERCE | 0 | 1 | 0 | |||||||||||||||||
Aquanima Chile S.A. | Chile | 0.00 | % | 99.43 | % | 100.00 | % | e-COMMERCE | 1 | 0 | 0 | |||||||||||||||||
Aquanima México S. de R.L. de C.V. | Mexico | 0.00 | % | 99.43 | % | 100.00 | % | e-COMMERCE | 1 | 0 | 1 | |||||||||||||||||
Aquanima S.A. | Argentina | 0.00 | % | 99.43 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Argenline, S.A. | Uruguay | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Asesoría Estratega, S.C. | Mexico | 0.00 | % | 85.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Aurum S.A. | Chile | 0.72 | % | 99.28 | % | 100.00 | % | HOLDING COMPANY | 2 | 3 | 68 | |||||||||||||||||
Ausant Holding Gesellschaft m.b.H. | Austria | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 9 | 0 | 10 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Aviación Intercontinental, A.I.E. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | LEASING | 16 | 0 | 16 | |||||||||||||||||
Aviación Real, A.I.E. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | LEASING | 7 | (1 | ) | 11 | ||||||||||||||||
Aviación Regional Cántabra, A.I.E. | Spain | 73.58 | % | 0.00 | % | 73.58 | % | LEASING | 29 | 2 | 22 | |||||||||||||||||
Aviación Tritón, A.I.E. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | LEASING | 9 | 0 | 9 | |||||||||||||||||
Aymoré Crédito, Financiamento e Investimento S.A. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | FINANCE | 248 | 25 | 252 | |||||||||||||||||
Bajondillo, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | PROPERTY | 0 | 0 | 0 | |||||||||||||||||
Baker Street Risk and Insurance (Guernsey) Limited (e) | Guernsey | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE | 14 | 2 | 2 | |||||||||||||||||
Banbou S.A.R.L. | France | 0.00 | % | 90.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
BANBY PRO S.C.I. | France | 0.00 | % | 90.00 | % | 100.00 | % | PROPERTY | 54 | (4 | ) | 43 | ||||||||||||||||
BANBY S.A.S. | France | 0.00 | % | 90.00 | % | 90.00 | % | PROPERTY | 52 | (4 | ) | 47 | ||||||||||||||||
Banco ABN AMRO Real S.A. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | BANKING | — | — | — | |||||||||||||||||
Banco Alicantino de Comercio, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | BANKING | 9 | 0 | 8 | |||||||||||||||||
Banco Bandepe S.A. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | BANKING | 1,460 | 139 | 1,131 | |||||||||||||||||
Banco Banif, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | BANKING | 377 | 35 | 184 | |||||||||||||||||
Banco Comercial e de Investimento Sudameris S.A. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | BANKING | — | — | — | |||||||||||||||||
Banco de Albacete, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | BANKING | 12 | 0 | 9 | |||||||||||||||||
Banco de Asunción, S.A. (j) | Paraguay | 0.00 | % | 99.33 | % | 99.33 | % | BANKING | 1 | 0 | 33 | |||||||||||||||||
Banco Español de Crédito, S.A. | Spain | 88.65 | % | 1.07 | % | 89.72 | % | BANKING | 4,619 | 504 | 1,289 | |||||||||||||||||
Banco Madesant — Sociedade Unipessoal, S.A. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 1,287 | 52 | 1,159 | |||||||||||||||||
Banco Santander — Chile | Chile | 0.00 | % | 76.74 | % | 76.91 | % | BANKING | 1,856 | 590 | 1,159 | |||||||||||||||||
Banco Santander (Brasil) S.A. | Brazil | 0.00 | % | 83.55 | % | 83.55 | % | BANKING | 25,306 | 389 | 9,995 | |||||||||||||||||
Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander | Mexico | 0.00 | % | 74.95 | % | 99.99 | % | BANKING | 3,164 | 591 | 1,586 | |||||||||||||||||
Banco Santander (Panamá), S.A. | Panama | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 7 | 0 | 7 | |||||||||||||||||
Banco Santander (Suisse) SA | Switzerland | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 480 | (310 | ) | 325 | ||||||||||||||||
Banco Santander Bahamas International Limited | Bahamas | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 1,233 | 61 | 785 | |||||||||||||||||
Banco Santander Colombia, S.A. | Colombia | 0.00 | % | 97.85 | % | 97.85 | % | BANKING | 191 | 28 | 481 | |||||||||||||||||
Banco Santander Consumer Portugal, S.A. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 110 | 10 | 240 | |||||||||||||||||
Banco Santander International | United States | 95.88 | % | 4.12 | % | 100.00 | % | BANKING | 507 | (143 | ) | 383 | ||||||||||||||||
Banco Santander Perú S.A. | Peru | 99.00 | % | 1.00 | % | 100.00 | % | BANKING | 19 | 0 | 18 | |||||||||||||||||
Banco Santander Puerto Rico | Puerto Rico | 0.00 | % | 90.59 | % | 100.00 | % | BANKING | 427 | 18 | 351 | |||||||||||||||||
Banco Santander Río S.A. | Argentina | 8.23 | % | 91.07 | % | 99.30 | % | BANKING | 349 | 213 | 275 | |||||||||||||||||
Banco Santander Totta, S.A. | Portugal | 0.00 | % | 99.72 | % | 99.86 | % | BANKING | 1,650 | 439 | 2,343 | |||||||||||||||||
Banco Santander, S.A. | Uruguay | 90.93 | % | 9.07 | % | 100.00 | % | BANKING | 250 | 41 | 203 | |||||||||||||||||
Banesto Banca Privada Gestión, S.A. S.G.I.I.C. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 2 | 0 | 2 | |||||||||||||||||
Banesto Banca Privada Inversiones SICAV, S.A. | Spain | 0.00 | % | 61.44 | % | 68.48 | % | OPEN-END INVESTMENT COMPANY | 8 | 0 | 3 | |||||||||||||||||
Banesto Banco de Emisiones, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | BANKING | 101 | 1 | 87 | |||||||||||||||||
Banesto Bolsa, S.A., Sdad. Valores y Bolsa | Spain | 0.00 | % | 89.72 | % | 100.00 | % | BROKER-DEALER | 110 | 2 | 31 | |||||||||||||||||
Banesto Financial Products, Plc. | Ireland | 0.00 | % | 89.72 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Banesto Renting, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | FINANCE | 10 | 0 | 2 | |||||||||||||||||
Banesto Securities, Inc. | United States | 0.00 | % | 89.72 | % | 100.00 | % | FINANCE | 3 | 0 | 2 | |||||||||||||||||
Banif Gestión, S.A., S.G.I.I.C. | Spain | 0.00 | % | 97.94 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 25 | 0 | 15 | |||||||||||||||||
Bansa Santander, S.A. | Chile | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 4 | (1 | ) | 30 | ||||||||||||||||
Bansamex, S.A. | Spain | 50.00 | % | 0.00 | % | 50.00 | % | CARDS | 5 | 1 | 1 | |||||||||||||||||
Beacon Abstract, L.P. | United States | 0.00 | % | 70.00 | % | 70.00 | % | INSURANCE | 0 | 1 | 0 | |||||||||||||||||
Bel Canto SICAV Erodiade (c) | Luxembourg | 0.00 | % | 100.00 | % | 100.00 | % | OPEN-END INVESTMENT COMPANY | 1 | 0 | 1 | |||||||||||||||||
Beta Cero, S.A. | Spain | 0.00 | % | 78.95 | % | 88.00 | % | FINANCE | 0 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Billpay Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Bracken Securities Holdings Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Bracken Securities Option Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Bracken Securities plc | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Bradford & Bingley International Limited | Isle of Man | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 242 | 14 | 236 | |||||||||||||||||
Brazil Foreign Diversified Payment Rights Finance Company | Cayman Islands | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Brettwood Limited (j) | Jersey | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
BRS Investments, S.A. | Argentina | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 24 | 6 | 77 | |||||||||||||||||
BSN — Banco Santander de Negocios Portugal, S.A. | Portugal | 0.00 | % | 99.86 | % | 100.00 | % | BANKING | 84 | 18 | 28 | |||||||||||||||||
BST International Bank, Inc. | Puerto Rico | 0.00 | % | 99.72 | % | 100.00 | % | BANKING | 5 | 16 | 3 | |||||||||||||||||
CA Premier Banking Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 5 | 0 | 5 | |||||||||||||||||
Caja de Emisiones con Garantía de Anualidades Debidas por el Estado, S.A. | Spain | 0.00 | % | 56.41 | % | 62.87 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Cántabra de Inversiones, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 53 | (71 | ) | 170 | ||||||||||||||||
Cantabric Financing LLC. | United States | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Cantabric Financing, Plc. | Ireland | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Cántabro Catalana de Inversiones, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 187 | 2 | 140 | |||||||||||||||||
Capital Riesgo Global, SCR de Régimen Simplificado, S.A. | Spain | 91.77 | % | 8.23 | % | 100.00 | % | VENTURE CAPITAL COMPANY | 532 | 6 | 482 | |||||||||||||||||
Capital Street GP | Cayman Islands | — | (b | ) | — | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||||
Capital Street LP (o) | Cayman Islands | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 15 | 38 | 0 | |||||||||||||||||
Capital Street S.A. | Luxembourg | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | (1 | ) | 0 | 0 | ||||||||||||||||
Carfax (Guernsey) Limited (n) | Guernsey | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE BROKERAGE | 25 | 0 | 23 | |||||||||||||||||
Carlton Park Developments Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 0 | 0 | 0 | |||||||||||||||||
Carlton Park Properties Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 0 | 0 | 0 | |||||||||||||||||
Carlton Park Property (Holdings) Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Carpe Diem Salud, S.L. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | SECURITIES INVESTMENT | 0 | 0 | 0 | |||||||||||||||||
Cartera Mobiliaria, S.A., SICAV | Spain | 0.00 | % | 80.05 | % | 92.46 | % | SECURITIES INVESTMENT | 617 | 26 | 224 | |||||||||||||||||
Casa de Bolsa Santander, S.A. de C.V., Grupo Financiero Santander | Mexico | 0.00 | % | 74.94 | % | 99.97 | % | BROKER-DEALER | 38 | 12 | 24 | |||||||||||||||||
Cater Allen Holdings Limited | United Kingdom | 0.00 | % | 99.99 | % | 100.00 | % | HOLDING COMPANY | 119 | 223 | 97 | |||||||||||||||||
Cater Allen International Limited | United Kingdom | 0.00 | % | 99.99 | % | 100.00 | % | BROKER-DEALER | 446 | 155 | 133 | |||||||||||||||||
Cater Allen Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 245 | 26 | 251 | |||||||||||||||||
Cater Allen Lloyd’s Holdings Limited | United Kingdom | 0.00 | % | 99.99 | % | 100.00 | % | HOLDING COMPANY | (10 | ) | 0 | 0 | ||||||||||||||||
Cater Allen Pensions Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PENSION FUND MANAGEMENT COMPANY | 0 | 0 | 0 | |||||||||||||||||
Cater Allen Syndicate Management Limited | United Kingdom | 0.00 | % | 99.99 | % | 100.00 | % | ADVISORY SERVICES | 2 | 0 | 0 | |||||||||||||||||
Cater Tyndall Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 32 | (1 | ) | 150 | ||||||||||||||||
Catmoll, S.L. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | CONCESSION HOLDER | 9 | 0 | 6 | |||||||||||||||||
Certidesa, S.L. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | LEASE OF AIRCRAFT | (13 | ) | (5 | ) | 0 | |||||||||||||||
Chatsworth Securities (LM) Holdings Limited (j) (g) | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Chatsworth Securities (LM) Limited (j) (g) | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Chatsworth Securities LLP (j) (g) | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Clínica Sear, S.A. | Spain | 0.00 | % | 45.38 | % | 50.58 | % | HEALTHCARE | 5 | 0 | 1 | |||||||||||||||||
Club Zaudin Golf, S.A. | Spain | 0.00 | % | 76.30 | % | 95.11 | % | SERVICES | 15 | 0 | 12 | |||||||||||||||||
Comercializadora Al-fin, S.A. de C.V. | Mexico | 0.00 | % | 85.00 | % | 100.00 | % | RETAIL TRADE | 0 | 0 | 0 | |||||||||||||||||
Companhia Real de Valores Distribuidora de Títulos e Valores Mobiliários S.A. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | ASSET MANAGEMENT | 30 | 3 | 25 | |||||||||||||||||
Costa Canaria de Veneguera, S.A. | Spain | 0.00 | % | 66.56 | % | 74.19 | % | PROPERTY | 14 | 0 | 9 | |||||||||||||||||
Crawfall, S.A. | Uruguay | 100.00 | % | 0.00 | % | 100.00 | % | SERVICES | 5 | (8 | ) | 0 | ||||||||||||||||
Credicenter Empreendimentos e Promoçôes Ltda. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | FINANCIAL SERVICES | — | — | — |
F-225
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Credisol, S.A. | Uruguay | 0.00 | % | 100.00 | % | 100.00 | % | CARDS | 0 | 0 | 6 | |||||||||||||||||
Crefisa, Inc. | Puerto Rico | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 428 | (19 | ) | 387 | ||||||||||||||||
Cruzeiro Factoring Sociedade de Fomento Comercial Ltda. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | FACTORING | — | — | — | |||||||||||||||||
Darep Limited | Ireland | 0.00 | % | 100.00 | % | 100.00 | % | REINSURANCE | 5 | 0 | 4 | |||||||||||||||||
Depósitos Portuarios, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Digital Procurement Holdings N.V. | Netherlands | 0.00 | % | 99.43 | % | 100.00 | % | HOLDING COMPANY | 4 | (1 | ) | 1 | ||||||||||||||||
Diners Club Spain, S.A. | Spain | 75.00 | % | 0.00 | % | 75.00 | % | CARDS | 9 | 1 | 9 | |||||||||||||||||
Dirección Estratega, S.C. | Mexico | 0.00 | % | 85.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Drive Auto Receivables Trust 2006-1 | United States | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Drive Auto Receivables Trust 2006-2 | United States | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Drive Consumer GP LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | INACTIVE | 0 | 0 | 0 | |||||||||||||||||
Drive Consumer LP | United States | 0.00 | % | 91.50 | % | 100.00 | % | INACTIVE | 25 | 0 | 25 | |||||||||||||||||
Drive Receivables Corp. 11 | United States | 0.00 | % | 91.50 | % | 100.00 | % | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||
Drive Receivables Corp. 12 | United States | 0.00 | % | 91.50 | % | 100.00 | % | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||
Drive Residual Holdings GP LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Drive Residual Holdings LP | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 0 | 0 | 0 | |||||||||||||||||
Drive Trademark Holdings LP | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 0 | 0 | 0 | |||||||||||||||||
Drive Warehouse GP LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Drive Warehouse LP | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 136 | 324 | 0 | |||||||||||||||||
Dudebasa, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | FINANCE | 32 | 0 | 22 | |||||||||||||||||
Efearvi, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | PROPERTY | (1 | ) | 0 | 0 | ||||||||||||||||
Elerco, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | PROPERTY | 206 | (1 | ) | 192 | ||||||||||||||||
Empresas Banesto 1, Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Empresas Banesto 2, Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Empresas Banesto 3, Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Empresas Banesto 4, Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Enernuevas S.A. | Chile | 0.00 | % | 99.90 | % | 99.90 | % | ELECTRICITY | 0 | 0 | 0 | |||||||||||||||||
Euro Alliance Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Eurobank Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Eurogiro Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Evansgrove Limited (f) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Fábricas Agrupadas de Muñecas de Onil, S.A. (consolidated) (g) | Spain | 0.00 | % | 95.05 | % | 95.05 | % | HOLDING COMPANY | 9 | (27 | ) | 0 | ||||||||||||||||
FFB — Participaçoes e Serviços, Sociedade Unipessoal, S.A. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 3,869 | (202 | ) | 1,020 | ||||||||||||||||
Fideicomiso 100740 SLPT | Mexico | 0.00 | % | 74.95 | % | 100.00 | % | FINANCE | 43 | 4 | 23 | |||||||||||||||||
Fideicomiso Financiero Río Personales I | Argentina | — | (b | ) | — | SECURITIES | 5 | 1 | 0 | |||||||||||||||||||
Fideicomiso GFSSLPT Banca Serfín, S.A. | Mexico | 0.00 | % | 74.95 | % | 100.00 | % | FINANCE | 40 | 2 | 19 | |||||||||||||||||
Fideicomiso Super Letras Hipotecarias Clase I | Argentina | — | (b | ) | — | SECURITIES | 1 | 0 | 0 | |||||||||||||||||||
Fideicomiso Super Letras Hipotecarias Clase II | Argentina | — | (b | ) | — | SECURITIES | 3 | 0 | 0 | |||||||||||||||||||
Financiación Banesto 1, Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Financiera Alcanza, S.A. de C.V., Sociedad Financiera de Objeto Múltiple, Entidad Regulada | Mexico | 0.00 | % | 85.00 | % | 100.00 | % | FINANCE | 11 | (11 | ) | 0 | ||||||||||||||||
First Essex Capital Trust I | United States | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
First National Motor Business Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
First National Motor Contracts Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
First National Motor Facilities Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
First National Motor Finance Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ADVISORY SERVICES | 0 | 0 | 0 | |||||||||||||||||
First National Motor Leasing Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
First National Motor plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | (5 | ) | 5 | 0 | ||||||||||||||||
First National Tricity Finance Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 206 | 1 | 115 | |||||||||||||||||
Fomento e Inversiones, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 44 | (9 | ) | 17 | ||||||||||||||||
Fondo de Titulización de Activos Santander 1 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Fondo de Titulización de Activos Santander 2 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Empresas 1 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Empresas 2 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Empresas 3 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Empresas 4 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Empresas 5 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Empresas 6 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Empresas 7 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Público 1 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Santander Financiación 1 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Santander Financiación 2 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Santander Financiación 3 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Santander Financiación 4 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fondos Santander, S.A. Administradora de Fondos de Inversión | Uruguay | 0.00 | % | 100.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 0 | 0 | 0 | |||||||||||||||||
Formación Integral, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | TRAINING | 1 | 0 | 1 | |||||||||||||||||
Fortensky Trading, Ltd. | Ireland | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Fosse (Master Issuer) Holdings Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fosse Funding (No.1) Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | (84 | ) | 134 | 0 | ||||||||||||||||||
Fosse Master Issuer PLC | United Kingdom | — | (b | ) | — | SECURITIZATION | (2 | ) | 7 | 0 | ||||||||||||||||||
Fosse PECOH Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Fosse Trustee Limited | Jersey | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
FTA Santander Consumer Spain 09-1 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
FTA Santander Consumer Spain Auto 06 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
FTA Santander Consumer Spain Auto 08-1 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
FTPYME Banesto 2 Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
FTPYME Santander 2 Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
GE Money Services GmbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 1 | (1 | ) | 0 | ||||||||||||||||
Geoban UK Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Geoban, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | SERVICES | 17 | 0 | 24 | |||||||||||||||||
Gesban México Servicios Administrativos Globales, S.A. De C.V. | Mexico | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Gesban Santander Servicios Profesionales Contable Limitada | Chile | 0.00 | % | 100.00 | % | 100.00 | % | INTERNET | 0 | 0 | 0 | |||||||||||||||||
Gesban Servicios Administrativos Globales, S.L. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | SERVICES | 0 | 0 | 1 | |||||||||||||||||
Gesban UK Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | COLLECTION AND PAYMENT SERVICES | 0 | 0 | 0 | |||||||||||||||||
Gescoban Soluciones, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | FINANCE | 5 | 1 | 1 | |||||||||||||||||
Gestión de Instalaciones Fotovoltáicas, S.L., Sole-Shareholder Company | Spain | 0.00 | % | 100.00 | % | 100.00 | % | ELECTRICITY | 0 | 0 | 0 | |||||||||||||||||
Gestión Industrial Hispamer, S.A. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | SECURITIES INVESTMENT | (37 | ) | (7 | ) | 0 | |||||||||||||||
Gestión Santander, S.A. de C.V., Sociedad Operadora de Sociedades de Inversión, Grupo Financiero Santander | Mexico | 0.00 | % | 74.96 | % | 100.00 | % | FINANCE | 5 | 3 | 0 | |||||||||||||||||
Gestora de Procesos S.A., in liquidation (j) | Peru | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 1 | 0 | 1 | |||||||||||||||||
Gire S.A. | Argentina | 0.00 | % | 57.92 | % | 58.33 | % | COLLECTION AND PAYMENT SERVICES | 8 | 4 | 1 | |||||||||||||||||
Giro Investments (Jersey) Limited (j) (n) | Jersey | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 1 | 2 | 0 | |||||||||||||||||
Giro Investments Limited (j) (n) | Cayman Islands | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 3 | 0 | |||||||||||||||||
Girobank Carlton Investments Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 113 | 34 | 113 | |||||||||||||||||
Girobank Investments Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 1 | 0 | 0 | |||||||||||||||||
Girobank Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Global Debt Management Services Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | COLLECTION AND PAYMENT SERVICES | 0 | 0 | 0 | |||||||||||||||||
Golden Bar (SECURITIZATION) S.r.l. | Italy | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Golden Bar Securitization Programme I | Italy | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Golden Bar Securitization Programme II | Italy | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Golden Bar Securitization Programme III | Italy | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Golden Bar Securitization Programme IV | Italy | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Grupo Alcanza, S.A. de C.V. | Mexico | 85.00 | % | 0.00 | % | 85.00 | % | HOLDING COMPANY | 12 | (11 | ) | 11 | ||||||||||||||||
Grupo Empresarial Santander, S.L. | Spain | 99.11 | % | 0.89 | % | 100.00 | % | HOLDING COMPANY | 3,186 | 255 | 3,770 | |||||||||||||||||
Grupo Financiero Santander, S.A. B de C.V. | Mexico | 74.75 | % | 0.21 | % | 74.96 | % | HOLDING COMPANY | 3,284 | 625 | 1,789 | |||||||||||||||||
Guaranty Car, S.A., Sole-Shareholder Company | Spain | 0.00 | % | 100.00 | % | 100.00 | % | AUTOMOTIVE | 3 | 0 | 1 | |||||||||||||||||
Hansar Finance Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 8 | 0 | 1 | |||||||||||||||||
HBF Aluguer e Comercio de Viaturas, S.A. (j) | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | FULL-SERVICE LEASE | 0 | 0 | 0 | |||||||||||||||||
Hipototta No. 10 FTC | Portugal | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Hipototta No 10 Plc | Ireland | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Hipototta No. 1 FTC | Portugal | — | (b | ) | — | SECURITIZATION | 3 | (1 | ) | 0 | ||||||||||||||||||
Hipototta No. 1 plc | Ireland | — | (b | ) | — | SECURITIZATION | (3 | ) | 0 | 0 | ||||||||||||||||||
Hipototta No. 2 FTC | Portugal | — | (b | ) | — | SECURITIZATION | 10 | (4 | ) | 0 | ||||||||||||||||||
Hipototta No. 2 plc | Ireland | — | (b | ) | — | SECURITIZATION | (10 | ) | (2 | ) | 0 | |||||||||||||||||
Hipototta No. 3 FTC | Portugal | — | (b | ) | — | SECURITIZATION | 13 | (7 | ) | 0 | ||||||||||||||||||
Hipototta No. 3 plc | Ireland | — | (b | ) | — | SECURITIZATION | (16 | ) | (5 | ) | 0 | |||||||||||||||||
Hipototta No. 4 FTC | Portugal | — | (b | ) | — | SECURITIZATION | 12 | (6 | ) | 0 | ||||||||||||||||||
Hipototta No. 4 plc | Ireland | — | (b | ) | — | SECURITIZATION | (15 | ) | (3 | ) | 0 | |||||||||||||||||
Hipototta No. 5 FTC | Portugal | — | (b | ) | — | SECURITIZATION | 5 | (4 | ) | 0 | ||||||||||||||||||
Hipototta No. 5 plc | Ireland | — | (b | ) | — | SECURITIZATION | (6 | ) | (2 | ) | 0 | |||||||||||||||||
Hipototta No. 6 FTC | Portugal | — | (b | ) | — | SECURITIZATION | 5 | (4 | ) | 0 | ||||||||||||||||||
Hipototta No. 6 plc | Ireland | — | (b | ) | — | SECURITIZATION | (7 | ) | (2 | ) | 0 | |||||||||||||||||
Hipototta No. 7 FTC | Portugal | — | (b | ) | — | SECURITIZATION | 5 | (3 | ) | 0 | ||||||||||||||||||
Hipototta No. 7 plc | Ireland | — | (b | ) | — | SECURITIZATION | (7 | ) | (2 | ) | 0 | |||||||||||||||||
Hipototta No. 8 FTC | Portugal | — | (b | ) | — | SECURITIZATION | 3 | 1 | 0 | |||||||||||||||||||
Hipototta No. 8 plc | Ireland | — | (b | ) | — | SECURITIZATION | (4 | ) | (1 | ) | 0 | |||||||||||||||||
Hispamer Renting, S.A.U. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | FULL-SERVICE LEASE | 13 | (1 | ) | 1 | ||||||||||||||||
Holbah II Limited | Bahamas | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 985 | 1 | 1,243 | |||||||||||||||||
Holbah Limited | Bahamas | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 32 | 402 | 0 | |||||||||||||||||
Holmes Financing (Nº1) plc | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 8 | 0 | |||||||||||||||||||
Holmes Financing (Nº10) plc | United Kingdom | — | (b | ) | — | SECURITIZATION | 1 | (2 | ) | 0 | ||||||||||||||||||
Holmes Financing (Nº8) plc (j) | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Holmes Financing (Nº9) plc | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 1 | 0 | |||||||||||||||||||
Holmes Funding 2 Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | (267 | ) | 0 | ||||||||||||||||||
Holmes Funding Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 7 | (104 | ) | 0 | ||||||||||||||||||
Holmes Holdings Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Holmes Master Issuer 2 PLC | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 141 | 0 | |||||||||||||||||||
Holmes Master Issuer plc | United Kingdom | — | (b | ) | — | SECURITIZATION | 308 | (308 | ) | 0 | ||||||||||||||||||
Holmes Trustees Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Holneth B.V. | Netherlands | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 46 | (3 | ) | 10 | ||||||||||||||||
Honeycomb SB Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
HRE Investment Holdings II-A S.à.r.l. (c) | Luxembourg | 0.00 | % | 73.70 | % | 0.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
HSH Delaware L.P. (c) | United States | 0.00 | % | 69.20 | % | 0.00 | % | HOLDING COMPANY | 83 | (70 | ) | 5 | ||||||||||||||||
Hualle, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | SECURITIES INVESTMENT | 73 | 1 | 5 | |||||||||||||||||
Ibérica de Compras Corporativas, S.L. | Spain | 91.63 | % | 7.80 | % | 100.00 | % | e-COMMERCE | 10 | 4 | 5 | |||||||||||||||||
IEM (Holland) Aircraft Lease B.V. | Netherlands | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
IEM 757 Leasing I B.V. | Netherlands | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
IEM Airfinance B.V. | Netherlands | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | (1 | ) | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
IEM Lease Aircraft B.V. | Netherlands | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
Independence Community Bank Corp. | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 2,400 | (8 | ) | 2,424 | ||||||||||||||||
Independence Community Commercial Reinvestment Corp. | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 93 | 0 | 96 | |||||||||||||||||
Infraestructuras Americanas, S.L. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 64 | (19 | ) | 65 | ||||||||||||||||
Ingeniería de Software Bancario, S.L. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | IT SERVICES | 70 | 6 | 86 | |||||||||||||||||
Inmo Francia 2, S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 47 | 0 | 48 | |||||||||||||||||
Instituto Santander Serfin, A.C. | Mexico | 0.00 | % | 74.95 | % | 100.00 | % | NOT-FOR-PROFIT INSTITUTE | 1 | 0 | 0 | |||||||||||||||||
Insurance Funding Solutions Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | (7 | ) | 0 | 0 | ||||||||||||||||
Integritas (Canada) Trustee Corporation Ltd. | Canada | 100.00 | % | 0.00 | % | 100.00 | % | ASSET MANAGEMENT COMPANY | 1 | 0 | 0 | |||||||||||||||||
Integritas New Zealand Ltd. | New Zealand | 0.00 | % | 100.00 | % | 100.00 | % | ASSET MANAGEMENT COMPANY | 0 | 0 | 0 | |||||||||||||||||
Integritas Trust SA | Switzerland | 0.00 | % | 100.00 | % | 100.00 | % | ASSET MANAGEMENT COMPANY | 3 | 1 | 0 | |||||||||||||||||
Internacional Compañía de Seguros de Vida S.A. | Argentina | 0.00 | % | 59.22 | % | 59.22 | % | INSURANCE | 25 | 2 | 0 | |||||||||||||||||
Intursa, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | PROPERTY | (16 | ) | (92 | ) | 0 | |||||||||||||||
Inversiones ASP S.A. | Chile | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 294 | 16 | 310 | |||||||||||||||||
Inversiones AyS Cuatro Limitada | Chile | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 294 | 16 | 310 | |||||||||||||||||
Inversiones AyS Dos Limitada | Chile | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 155 | (2 | ) | 154 | ||||||||||||||||
Inversiones AyS Tres Limitada | Chile | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 155 | (2 | ) | 153 | ||||||||||||||||
Inversiones AyS Uno Limitada | Chile | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 58 | (14 | ) | 53 | ||||||||||||||||
Inversiones Marítimas del Mediterráneo, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | INACTIVE | 12 | (8 | ) | 3 | ||||||||||||||||
Isban Argentina S.A. | Argentina | 87.42 | % | 12.58 | % | 100.00 | % | FINANCIAL SERVICES | 2 | 0 | 2 | |||||||||||||||||
Isban Brasil S.A. | Brazil | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 16 | 0 | 22 | |||||||||||||||||
Isban Chile S.A. | Chile | 0.00 | % | 100.00 | % | 100.00 | % | IT SERVICES | 11 | 0 | 20 | |||||||||||||||||
Isban DE GmbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | IT SERVICES | 0 | 1 | 0 | |||||||||||||||||
Isban México, S.A. De C.V. | Mexico | 100.00 | % | 0.00 | % | 100.00 | % | IT SERVICES | 66 | 2 | 48 | |||||||||||||||||
ISBAN PT — Engenheria e Software Bancário, S.A. | Portugal | 0.00 | % | 99.93 | % | 100.00 | % | IT SERVICES | 1 | 0 | 0 | |||||||||||||||||
Isban U.K., Ltd. | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | IT SERVICES | 4 | 2 | 0 | |||||||||||||||||
Island Insurance Corporation | Puerto Rico | 0.00 | % | 90.59 | % | 100.00 | % | INSURANCE | 3 | 0 | 4 | |||||||||||||||||
Itasant — Sociedade Gestora de Participações Sociais Sociedade Unipessoal, Lda. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 253 | (22 | ) | 92 | ||||||||||||||||
J.C. Flowers II-A L.P. (c) | Canada | 0.00 | % | 69.90 | % | 4.43 | % | HOLDING COMPANY | 68 | (19 | ) | 54 | ||||||||||||||||
James Hay Administration Company Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FUND AND PORTFOLIO MANAGER | 16 | 16 | 10 | |||||||||||||||||
James Hay Holdings Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | (5 | ) | 18 | 43 | ||||||||||||||||
James Hay Insurance Company Limited (n) | Jersey | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE BROKERAGE | 16 | 10 | 13 | |||||||||||||||||
James Hay Pension Trustees Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ASSET MANAGEMENT COMPANY | 2 | 0 | 2 | |||||||||||||||||
James Hay Wrap Managers Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FUND AND PORTFOLIO MANAGER | 4 | 2 | 17 | |||||||||||||||||
JCF BIN II-A (p) | Mauritania | 0.00 | % | 69.53 | % | 4.43 | % | HOLDING COMPANY | 4 | 0 | 3 | |||||||||||||||||
JCF II-A AIV K L.P. (c) | Canada | 0.00 | % | 69.54 | % | 0.00 | % | HOLDING COMPANY | 4 | (1 | ) | 4 | ||||||||||||||||
JCF II-A Special AIV K L.P. (c) | Canada | 0.00 | % | 72.29 | % | 4.99 | % | HOLDING COMPANY | 4 | (1 | ) | 4 | ||||||||||||||||
JSC Santander Consumer Bank | Russia | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 35 | (4 | ) | 32 | ||||||||||||||||
Jupiter JCF AIV II A C.V. (c) | Netherlands | 0.00 | % | 69.41 | % | 4.99 | % | HOLDING COMPANY | 61 | (37 | ) | 42 | ||||||||||||||||
Jupiter III C.V. (c) | Netherlands | 0.00 | % | 72.75 | % | 4.99 | % | HOLDING COMPANY | 362 | (241 | ) | 278 | ||||||||||||||||
La Unión Resinera Española, S.A. (consolidated) | Spain | 74.87 | % | 21.29 | % | 96.25 | % | CHEMICALS | 48 | 0 | 28 | |||||||||||||||||
Laboratorios Indas, S.A. (e) | Spain | 0.00 | % | 73.22 | % | 100.00 | % | HEALTH PRODUCTS | 63 | 27 | 266 | |||||||||||||||||
Langton Funding (No.1) Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 |
F-229
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Langton Mortgages Trustee Limited | Jersey | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Langton PECOH Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Langton Securities (2008-1) plc | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Langton Securities (2008-2) plc | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Langton Securities (2008-3) plc | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Langton Securities Holdings Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Laparanza, S.A. | Spain | 61.59 | % | 0.00 | % | 61.59 | % | AGRICULTURE AND LIVESTOCK | 30 | 1 | 16 | |||||||||||||||||
Larix Chile Inversiones Limitada | Chile | 0.00 | % | 89.72 | % | 100.00 | % | PROPERTY | 0 | 0 | 0 | |||||||||||||||||
Lease Totta No. 1 FTC | Portugal | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Lease Totta No. 1 Limited | Ireland | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Legal Debt Recovery Services Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | COLLECTION AND PAYMENT SERVICES | 0 | 0 | 0 | |||||||||||||||||
Liquidity Import Finance Limited (f) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FACTORING | 0 | 0 | 0 | |||||||||||||||||
Liquidity Limited (f) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FACTORING | (1 | ) | (1 | ) | 1 | |||||||||||||||
Luresa Inmobiliaria, S.A. | Spain | 0.00 | % | 96.16 | % | 100.00 | % | PROPERTY | 21 | 1 | 9 | |||||||||||||||||
Luri 1, S.A. | Spain | 0.00 | % | 5.58 | % | 100.00 | % | PROPERTY | 101 | 1 | 6 | |||||||||||||||||
Luri 2, S.A. | Spain | 0.00 | % | 4.81 | % | 100.00 | % | PROPERTY | 97 | 0 | 5 | |||||||||||||||||
Luri 3, S.A. | Spain | 0.00 | % | 9.62 | % | 10.00 | % | PROPERTY | 30 | 1 | 3 | |||||||||||||||||
Luri Land, S.A. | Belgium | 0.00 | % | 5.15 | % | 100.00 | % | PROPERTY | 6 | 0 | 0 | |||||||||||||||||
MAC No. 1 Limited (i) | United Kingdom | — | (b | ) | — | MORTGAGE LOAN COMPANY | 0 | 0 | 0 | |||||||||||||||||||
Magnolia Termosolar, S.L. | Spain | 0.00 | % | 65.00 | % | 65.00 | % | ELECTRICITY | 0 | 0 | 0 | |||||||||||||||||
Marylebone Road CBO 3 BV | Netherlands | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Mata Alta, S.L. | Spain | 0.00 | % | 61.59 | % | 100.00 | % | PROPERTY | 0 | 0 | 0 | |||||||||||||||||
Merciver, S.L. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | SHIPPING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Mesena Servicios de Gestión Inmobiliaria, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | SECURITIES INVESTMENT | (17 | ) | (114 | ) | 0 | |||||||||||||||
Mitre Capital Partners Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | MORTGAGE LOAN COMPANY | (44 | ) | (17 | ) | 0 | |||||||||||||||
Money Card (Holdings) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 2 | 0 | 10 | |||||||||||||||||
Money Card Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCIAL SERVICES | 20 | 0 | 0 | |||||||||||||||||
Money Movers Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Mortgage Alliance Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Mugo Termosolar, S.L. | Spain | 0.00 | % | 65.00 | % | 65.00 | % | ELECTRICITY | 0 | 0 | 0 | |||||||||||||||||
Multinegocios S.A. | Chile | 0.00 | % | 99.53 | % | 100.00 | % | ADVISORY SERVICES | 0 | 0 | 0 | |||||||||||||||||
Multirent — Aluguer e Comércio de Automóveis, S.A. | Portugal | 0.00 | % | 60.00 | % | 100.00 | % | FULL-SERVICE LEASE | 18 | (3 | ) | 17 | ||||||||||||||||
Multiservicios de Negocios Limitada | Chile | 0.00 | % | 100.00 | % | 100.00 | % | FINANCIAL SERVICES | 0 | 0 | 0 | |||||||||||||||||
N&P (B.E.S.) Loans Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 3 | 0 | 4 | |||||||||||||||||
National Alliance Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Naviera Mirambel, S.L. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Naviera Trans Gas, A.I.E. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | SHIPPING COMPANY | 10 | (2 | ) | 33 | ||||||||||||||||
Netbank Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
NIB Special Investors IV-A LP (c) | Canada | 0.00 | % | 99.70 | % | 4.99 | % | HOLDING COMPANY | 57 | (21 | ) | 66 | ||||||||||||||||
NIB Special Investors IV-B LP (c) | Canada | 0.00 | % | 95.86 | % | 4.99 | % | HOLDING COMPANY | 22 | (9 | ) | 29 | ||||||||||||||||
Norbest AS | Norway | 7.94 | % | 92.06 | % | 100.00 | % | SECURITIES INVESTMENT | 246 | (213 | ) | 954 | ||||||||||||||||
NW Services CO. | United States | 0.00 | % | 99.43 | % | 100.00 | % | e-COMMERCE | 1 | 0 | 2 | |||||||||||||||||
Oil-Dor, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | FINANCE | 155 | 3 | 110 | |||||||||||||||||
Open Bank, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | BANKING | 85 | 2 | 62 | |||||||||||||||||
Optimal Alternative Investments, S.G.I.I.C., S.A. | Spain | 0.00 | % | 99.99 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 1 | 0 | 1 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Optimal Investment Services (Asia) Pte. Ltd. (j) | Singapore | 0.00 | % | 99.96 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 0 | 0 | 0 | |||||||||||||||||
Optimal Investment Services SA | Switzerland | 0.00 | % | 99.96 | % | 99.96 | % | FUND MANAGEMENT COMPANY | 42 | (5 | ) | 5 | ||||||||||||||||
Optimal Multiadvisors Ireland Plc / Optimal Strategic US Equity Ireland€Fund | Ireland | 73.24 | % | 7.94 | % | 79.69 | % | FUND MANAGEMENT COMPANY | 27 | 0 | 0 | |||||||||||||||||
Optimal Multiadvisors Ireland Plc / Optimal Strategic US Equity Ireland USD Fund | Ireland | 2.98 | % | 90.22 | % | 93.09 | % | FUND MANAGEMENT COMPANY | 2 | 0 | 0 | |||||||||||||||||
Optimal Multiadvisors Ltd — Strategic US Equity Series (consolidated) | Bahamas | 0.00 | % | 72.56 | % | 67.57 | % | FUND MANAGEMENT COMPANY | 26 | 1 | 0 | |||||||||||||||||
Pan American Bank Limited (j) | Bahamas | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 0 | 0 | 0 | |||||||||||||||||
Parasant SA | Switzerland | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 1,288 | 0 | 1,214 | |||||||||||||||||
Patagon Euro, S.L. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 689 | 5 | 590 | |||||||||||||||||
PBE Companies, LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 49 | 0 | 64 | |||||||||||||||||
PECOH Limited | United Kingdom | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Pereda Gestión, S.A. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | HOLDING COMPANY | 74 | 308 | 4 | |||||||||||||||||
Pingham International, S.A. | Uruguay | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Plus Direct Insurance Services Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Plus Direct Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Plus Insurance Services Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Plus Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Polskie Towarzystwo Finansowe S.A. | Poland | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 3 | 0 | 35 | |||||||||||||||||
Portada S.A., in liquidation (j) | Chile | 0.00 | % | 96.17 | % | 96.17 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Portal Universia Argentina S.A. | Argentina | 0.00 | % | 96.50 | % | 96.50 | % | INTERNET | 1 | 0 | 0 | |||||||||||||||||
Portal Universia Portugal, Prestaçao de Serviços de Informática, S.A. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | INTERNET | 1 | (1 | ) | 0 | ||||||||||||||||
Portal Universia, S.A. | Spain | 0.00 | % | 67.77 | % | 67.77 | % | INTERNET | 2 | 0 | 2 | |||||||||||||||||
Préstamos de Consumo S.A. | Argentina | 0.00 | % | 99.97 | % | 100.00 | % | FINANCE | 0 | 0 | 4 | |||||||||||||||||
Procura Digital de Venezuela, S.A. | Venezuela | 0.00 | % | 99.43 | % | 100.00 | % | e-COMMERCE | 1 | (1 | ) | 0 | ||||||||||||||||
Produban Servicios Informáticos Generales, S.L. | Spain | 98.44 | % | 1.56 | % | 100.00 | % | SERVICES | (12 | ) | 13 | 0 | ||||||||||||||||
Produban Serviços de Informática S.A. | Brazil | 0.00 | % | 100.00 | % | 100.00 | % | IT | 3 | 4 | 5 | |||||||||||||||||
Programa Hogar Montigalá, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | PROPERTY | (21 | ) | (75 | ) | 0 | |||||||||||||||
Promociones y Servicios Monterrey, S.A. de C.V. | Mexico | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 6 | 0 | 6 | |||||||||||||||||
Promociones y Servicios Polanco, S.A. de C.V. | Mexico | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 58 | 0 | 58 | |||||||||||||||||
Promociones y Servicios Santiago, S.A. de C.V. | Mexico | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 62 | 1 | 64 | |||||||||||||||||
Promodomus Desarrollo de Activos, S.L. | Spain | 0.00 | % | 45.76 | % | 51.00 | % | PROPERTY | 2 | (4 | ) | 0 | ||||||||||||||||
PSB Inmobilien GmbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 0 | 0 | 0 | |||||||||||||||||
Real Argentina S.A. | Argentina | 0.00 | % | 82.71 | % | 99.00 | % | PROPERTY | 0 | 0 | 0 | |||||||||||||||||
Real Capitalização, S.A. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | INSURANCE | — | — | — | |||||||||||||||||
Real CHP, S.A. | Brazil | 0.00 | % | 77.51 | % | 92.78 | % | ASSET MANAGEMENT | 0 | 1 | 1 | |||||||||||||||||
Real Corretora de Seguros, S.A. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | INSURANCE BROKERAGE | 7 | 19 | 17 | |||||||||||||||||
Real Microcrédito Assessoria Financeira, S.A. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | FINANCIAL SERVICES | 3 | 1 | 1 | |||||||||||||||||
REB Empreendimentos e Administradora de Bens, S.A. | Brazil | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | (9 | ) | 9 | 0 | ||||||||||||||||
Redes y Procesos, S.A. | Spain | 52.17 | % | 13.19 | % | 66.87 | % | CARDS | 1 | 1 | 1 | |||||||||||||||||
Retail Financial Services Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | (45 | ) | 1 | 0 | ||||||||||||||||
Riobank International (Uruguay) SAIFE (j) | Uruguay | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 0 | 0 | 0 | |||||||||||||||||
Ruevilliot 26, S.L. | Spain | 0.00 | % | 70.00 | % | 70.00 | % | PROPERTY | 25 | 0 | 18 | |||||||||||||||||
S C Servicios y Cobranzas S.A. (j) | Colombia | 0.00 | % | 97.96 | % | 100.00 | % | COLLECTION AND PAYMENT SERVICES | 0 | 0 | 0 | |||||||||||||||||
SAG International Finance Company Limited | Ireland | 0.00 | % | 60.00 | % | 100.00 | % | SECURITIZATION | 1 | 0 | 0 | |||||||||||||||||
Sánchez Ramade Santander Financiera, S.L. | Spain | 0.00 | % | 50.00 | % | 50.00 | % | FINANCIAL SERVICES | 0 | 0 | 0 | |||||||||||||||||
Sandgate S.á.r.l. | Luxembourg | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | (18 | ) | 1 | ||||||||||||||||
Saninv Gestao e Investimentos, S.A. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 66 | (47 | ) | 19 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Sansol S.r.l. | Italy | 0.00 | % | 100.00 | % | 100.00 | % | ELECTRICITY PRODUCTION | 0 | 0 | 0 | |||||||||||||||||
Saniso S.r.l. | Italy | 0.00 | % | 100.00 | % | 100.00 | % | ELECTRICITY PRODUCTION | 0 | 0 | 0 | |||||||||||||||||
Santander Administradora de Consórcios Ltda. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | FINANCE | 1 | 0 | 1 | |||||||||||||||||
Santander Advisory Services S.A. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | ADVISORY SERVICES | 47 | 6 | 39 | |||||||||||||||||
Santander Ahorro Inmobiliario 2 S.I.I., S.A. | Spain | 69.11 | % | 0.01 | % | 69.12 | % | PROPERTY | 60 | (1 | ) | 41 | ||||||||||||||||
Santander Airplus Corporate Payment Solutions, S.A. | Spain | 75.00 | % | 0.00 | % | 75.00 | % | PAYMENT SYSTEMS | 0 | 0 | 0 | |||||||||||||||||
Santander AM Holding, S.L. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 105 | (13 | ) | 29 | ||||||||||||||||
Santander Asset Management — Sociedade Gestora de Fundos de Investimento Mobiliário, S.A. | Portugal | 0.00 | % | 99.86 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 16 | 5 | 7 | |||||||||||||||||
Santander Asset Management Chile S.A. | Chile | 0.01 | % | 99.83 | % | 100.00 | % | SECURITIES INVESTMENT | 1 | 0 | 9 | |||||||||||||||||
Santander Asset Management Corporation | Puerto Rico | 0.00 | % | 90.59 | % | 100.00 | % | ASSET MANAGEMENT | (2 | ) | 8 | 2 | ||||||||||||||||
Santander Asset Management Distribuidora de Títulos e Valores Mobiliários Ltda. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | ASSET MANAGEMENT | — | — | — | |||||||||||||||||
Santander Asset Management Ireland, Ltd. | Ireland | 0.00 | % | 100.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 16 | 1 | 0 | |||||||||||||||||
Santander Asset Management Luxembourg, S.A. | Luxembourg | 0.00 | % | 97.94 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 6 | 4 | 0 | |||||||||||||||||
Santander Asset Management S.A. Administradora General de Fondos | Chile | 0.00 | % | 76.75 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 46 | 29 | 8 | |||||||||||||||||
Santander Asset Management UK Holdings Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 106 | 0 | 106 | |||||||||||||||||
Santander Asset Management UK Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FUND AND PORTFOLIO MANAGER | 12 | 1 | 7 | |||||||||||||||||
Santander Asset Management, S.A., S.G.I.I.C. | Spain | 28.30 | % | 69.64 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 96 | (2 | ) | 33 | ||||||||||||||||
Santander Back-Offices Globales Mayoristas, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | SERVICES | 1 | 0 | 1 | |||||||||||||||||
Santander BanCorp | Puerto Rico | 0.00 | % | 90.59 | % | 90.59 | % | HOLDING COMPANY | 433 | 28 | 202 | |||||||||||||||||
Santander Bank Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | (3 | ) | 0 | 0 | ||||||||||||||||
Santander Bank & Trust Ltd. | Bahamas | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 1,454 | 34 | 1,102 | |||||||||||||||||
Santander Benelux, S.A./N.V. | Belgium | 100.00 | % | 0.00 | % | 100.00 | % | BANKING | 946 | 64 | 925 | |||||||||||||||||
Santander Brasil Administradora de Consórcio Ltda. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | SERVICES | 22 | 15 | 7 | |||||||||||||||||
Santander Brasil Arrendamento Mercantil S.A. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | LEASING | — | — | — | |||||||||||||||||
Santander Brasil Asset Management Distribuidora de Títulos e Valores Mobiliários S.A. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | ASSET MANAGEMENT | 82 | 12 | 61 | |||||||||||||||||
Santander Brasil S.A. Corretora de Títulos e Valores Mobiliários (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | BROKER-DEALER | — | — | — | |||||||||||||||||
Santander Brasil Seguros S.A. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | INSURANCE | 52 | 6 | 39 | |||||||||||||||||
Santander Capital Desarrollo, SGECR, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | VENTURE CAPITAL COMPANY | 2 | 0 | 0 | |||||||||||||||||
Santander Capitalização S.A. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | INSURANCE | 99 | 55 | 91 | |||||||||||||||||
Santander Carbón Finance, S.A. | Spain | 99.98 | % | 0.02 | % | 100.00 | % | SECURITIES INVESTMENT | (19 | ) | 0 | 0 | ||||||||||||||||
Santander Cards Ireland Limited | Ireland | 100.00 | % | 0.00 | % | 100.00 | % | CARDS | 0 | (4 | ) | 0 | ||||||||||||||||
Santander Cards Limited | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | FINANCIAL SERVICES | 107 | (20 | ) | 254 | ||||||||||||||||
Santander Cards UK Limited | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 680 | (149 | ) | 1,041 | ||||||||||||||||
Santander Carteras, S.G.C., S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 20 | 0 | 8 | |||||||||||||||||
Santander Central Hispano Finance (Delaware) Inc. | United States | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 2 | 0 | 0 | |||||||||||||||||
Santander Central Hispano Financial Services Limited | Cayman Islands | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 2 | 1 | 0 | |||||||||||||||||
Santander Central Hispano International Limited | Cayman Islands | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 3 | (1 | ) | 0 | ||||||||||||||||
Santander Central Hispano Issuances Limited | Cayman Islands | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 2 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Santander Chile Holding S.A. | Chile | 22.11 | % | 77.42 | % | 99.53 | % | HOLDING COMPANY | 808 | 229 | 280 | |||||||||||||||||
Santander Commercial Paper, S.A., Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Santander Consumer (UK) plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ADVISORY SERVICES | 153 | 12 | 181 | |||||||||||||||||
Santander Consumer autoboerse.de AG | Germany | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 1 | 0 | 1 | |||||||||||||||||
Santander Consumer Bank AG | Germany | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 1,366 | 407 | 1,449 | |||||||||||||||||
Santander Consumer Bank AS | Norway | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 411 | 57 | 468 | |||||||||||||||||
Santander Consumer Bank GmbH | Austria | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 836 | (11 | ) | 856 | ||||||||||||||||
Santander Consumer Bank S.p.A. | Italy | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 224 | 1 | 397 | |||||||||||||||||
Santander Consumer Bank Spólka Akcyjna | Poland | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 205 | 6 | 210 | |||||||||||||||||
Santander Consumer Chile S.A. | Chile | 89.00 | % | 0.00 | % | 89.00 | % | FINANCE | 14 | (1 | ) | 11 | ||||||||||||||||
Santander Consumer Credit Services Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | (27 | ) | (8 | ) | 0 | |||||||||||||||
Santander Consumer Debit GmbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 11 | 0 | |||||||||||||||||
Santander Consumer Finance a.s. | Czech Republic | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 48 | (14 | ) | 36 | ||||||||||||||||
Santander Consumer Finance Benelux B.V. | Netherlands | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 35 | (20 | ) | 33 | ||||||||||||||||
Santander Consumer Finance Correduría de Seguros, S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE BROKERAGE | 2 | 1 | 0 | |||||||||||||||||
Santander Consumer Finance Media S.r.l. | Italy | 0.00 | % | 65.00 | % | 65.00 | % | FINANCE | 7 | 1 | 5 | |||||||||||||||||
Santander Consumer Finance Oy | Finland | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 46 | 1 | 52 | |||||||||||||||||
Santander Consumer Finance Zrt. | Hungary | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 14 | (12 | ) | 0 | ||||||||||||||||
Santander Consumer Finance, S.A. | Spain | 63.19 | % | 36.81 | % | 100.00 | % | BANKING | 6,021 | 467 | 4,333 | |||||||||||||||||
Santander Consumer Finanzia S.r.l. | Italy | 0.00 | % | 100.00 | % | 100.00 | % | FACTORING | 31 | 3 | 31 | |||||||||||||||||
Santander Consumer France (j) | France | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 14 | (11 | ) | 2 | ||||||||||||||||
Santander Consumer Holding GmbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 838 | 193 | 1,891 | |||||||||||||||||
Santander Consumer Iber-Rent, S.L. | Spain | 0.00 | % | 60.00 | % | 60.00 | % | FULL-SERVICE LEASE | 63 | (3 | ) | 18 | ||||||||||||||||
Santander Consumer Leasing Austria GmbH | Austria | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 863 | 0 | 863 | |||||||||||||||||
Santander Consumer Leasing GmbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 6 | 15 | 6 | |||||||||||||||||
Santander Consumer Leasing s.r.o. | Czech Republic | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 1 | 0 | 1 | |||||||||||||||||
Santander Consumer Multirent Spólka z ograniczoną odpowiedzialnością | Poland | 0.00 | % | 60.00 | % | 60.00 | % | LEASING | 6 | (1 | ) | 4 | ||||||||||||||||
Santander Consumer Receivables 2 LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 0 | 0 | 0 | |||||||||||||||||
Santander Consumer Receivables LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 0 | 0 | 0 | |||||||||||||||||
Santander Consumer Services GmbH | Austria | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Santander Consumer Spain Auto 07-1 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Consumer Spain Auto 07-2 | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Consumer USA Inc. | United States | 0.00 | % | 91.50 | % | 91.50 | % | FINANCE | 191 | (179 | ) | 790 | ||||||||||||||||
Santander Consumer, EFC, S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 444 | (227 | ) | 415 | ||||||||||||||||
Santander Consumo, S.A. de C.V., SOFOM, E.R. | Mexico | 0.00 | % | 74.95 | % | 100.00 | % | CARDS | 405 | (9 | ) | 582 | ||||||||||||||||
Santander Corredora de Seguros Limitada | Chile | 0.00 | % | 76.80 | % | 100.00 | % | INSURANCE BROKERAGE | 59 | 10 | 49 | |||||||||||||||||
Santander de Desarrollos Inmobiliarios, S.A. | Spain | 98.39 | % | 1.61 | % | 100.00 | % | PROPERTY | 0 | 0 | 0 | |||||||||||||||||
Santander de Leasing, S.A., E.F.C. | Spain | 70.00 | % | 30.00 | % | 100.00 | % | LEASING | 63 | 14 | 35 | |||||||||||||||||
Santander de Titulización S.G.F.T., S.A. | Spain | 81.00 | % | 19.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 1 | 3 | 1 | |||||||||||||||||
Santander Drive Auto Receivables LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 0 | 0 | 0 | |||||||||||||||||
Santander Drive Auto Receivables Trust 2007-1 | United States | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Drive Auto Receivables Trust 2007-2 | United States | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Drive Auto Receivables Trust 2007-3 | United States | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Energías Renovables I, SCR de Régimen Simplificado, S.A. | Spain | 56.76 | % | 0.00 | % | 56.76 | % | VENTURE CAPITAL COMPANY | 9 | (1 | ) | 6 | ||||||||||||||||
Santander Envíos, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | TRANSFER OF FUNDS FOR IMMIGRANTS | 1 | 0 | 1 | |||||||||||||||||
Santander Factoring S.A. | Chile | 0.00 | % | 99.53 | % | 100.00 | % | FACTORING | 28 | 2 | 6 | |||||||||||||||||
Santander Factoring y Confirming, S.A., E.F.C. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | FACTORING | 161 | 47 | 126 | |||||||||||||||||
Santander Financial Exchanges Limited | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 300 | 4 | 300 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Santander Financial Products plc | Ireland | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 190 | 1 | 162 | |||||||||||||||||
Santander Financial Services, Inc. | Puerto Rico | 0.00 | % | 90.59 | % | 100.00 | % | LENDING COMPANY | 60 | 11 | 86 | |||||||||||||||||
Santander Gestâo de Activos, SGPS, S.A. | Portugal | 0.00 | % | 99.86 | % | 100.00 | % | HOLDING COMPANY | 13 | 22 | 7 | |||||||||||||||||
Santander Gestión de Recaudación y Cobranzas Ltda. | Chile | 0.00 | % | 99.53 | % | 100.00 | % | FINANCIAL SERVICES | 2 | 2 | 2 | |||||||||||||||||
Santander Gestión Inmobiliaria, S.A. | Spain | 0.01 | % | 99.99 | % | 100.00 | % | PROPERTY | 2 | 0 | 0 | |||||||||||||||||
Santander Global Consumer Finance Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 113 | 12 | 49 | |||||||||||||||||
Santander Global Facilities, S.A. | Spain | 99.94 | % | 0.06 | % | 100.00 | % | SERVICES | 2 | 1 | 1 | |||||||||||||||||
Santander Global Facilities, S.A. de C.V. | Mexico | 100.00 | % | 0.00 | % | 100.00 | % | PROPERTY MANAGEMENT | 108 | (4 | ) | 114 | ||||||||||||||||
Santander Global Property Alemania GmbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Santander Global Property México, S.A. de C.V. | Mexico | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 0 | 0 | 0 | |||||||||||||||||
Santander Global Property USA Inc. | United States | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Santander Global Property, S.L. | Spain | 97.21 | % | 2.79 | % | 100.00 | % | SECURITIES INVESTMENT | 239 | 5 | 227 | |||||||||||||||||
Santander Global Services, S.A. | Uruguay | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 1 | 1 | 0 | |||||||||||||||||
Santander Global Sport, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | SPORTS OPERATIONS | 37 | 0 | 32 | |||||||||||||||||
Santander Hipotecario 1 Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Hipotecario 2 Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Hipotecario 3 Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Hipotecario 4 Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Hipotecario 5 Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Holanda B.V. | Netherlands | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 12 | 0 | 0 | |||||||||||||||||
Santander Holding Gestión, S.L. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | (79 | ) | 0 | 0 | ||||||||||||||||
Santander Holding Internacional, S.A. | Spain | 99.95 | % | 0.05 | % | 100.00 | % | HOLDING COMPANY | 28 | 19 | 0 | |||||||||||||||||
Santander Infrastructure Capital Limited | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
Santander Infrastructure Capital Management Limited | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | LEASING | 2 | (1 | ) | 1 | ||||||||||||||||
Santander Insurance Agency, Inc. | Puerto Rico | 0.00 | % | 90.59 | % | 100.00 | % | INSURANCE BROKERAGE | 2 | 1 | 3 | |||||||||||||||||
Santander Insurance Holding, S.L. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | HOLDING COMPANY | 377 | 0 | 357 | |||||||||||||||||
Santander Insurance Services UK Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ASSET MANAGEMENT COMPANY | 25 | 2 | 35 | |||||||||||||||||
Santander International Bank of Puerto Rico, Inc. | Puerto Rico | 0.00 | % | 90.59 | % | 100.00 | % | BANKING | 110 | 3 | 64 | |||||||||||||||||
Santander International Debt, S.A., Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 0 | 1 | 0 | |||||||||||||||||
Santander Inversiones Limitada | Chile | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 922 | 83 | 577 | |||||||||||||||||
Santander Investimentos em Participações S.A. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | COLLECTION AND PAYMENT SERVICES | — | — | — | |||||||||||||||||
Santander Investment Bank Limited | Bahamas | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 91 | 0 | 91 | |||||||||||||||||
Santander Investment Bolsa, S.V., S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 126 | 33 | 104 | |||||||||||||||||
Santander Investment Chile Limitada | Chile | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 226 | 22 | 126 | |||||||||||||||||
Santander Investment Colombia S.A. | Colombia | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 6 | 0 | 48 | |||||||||||||||||
Santander Investment I, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | (1,520 | ) | 33 | 0 | ||||||||||||||||
Santander Investment Limited | Bahamas | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | (52 | ) | 10 | 0 | ||||||||||||||||
Santander Investment Securities Inc. | United States | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 54 | 29 | 295 | |||||||||||||||||
Santander Investment Trust Colombia S.A., Sociedad Fiduciaria | Colombia | 0.00 | % | 100.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 9 | 3 | 12 | |||||||||||||||||
Santander Investment Valores Colombia S.A., Comisionista de Bolsa Comercial | Colombia | 0.00 | % | 97.96 | % | 100.00 | % | BROKER-DEALER | 5 | 1 | 1 | |||||||||||||||||
Santander Investment, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | BANKING | 233 | 109 | 14 | |||||||||||||||||
Santander Issuances, S.A., Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Santander Leasing S.A. Arrendamento Mercantil | Brazil | 0.00 | % | 83.54 | % | 99.99 | % | LEASING | 4,246 | 421 | 3,335 | |||||||||||||||||
Santander Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | (19 | ) | 20 | 0 | ||||||||||||||||
Santander Mediación Operador de Banca-Seguros Vinculado, S.A. | Spain | 21.00 | % | 75.06 | % | 100.00 | % | ADVISORY SERVICES | 2 | 0 | 1 | |||||||||||||||||
Santander Merchant Bank Limited (j) | Bahamas | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 0 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Santander Merchant S.A. | Argentina | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 1 | 0 | 3 | |||||||||||||||||
Santander Overseas Bank, Inc. (h) | Puerto Rico | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 396 | 21 | 192 | |||||||||||||||||
Santander PB UK (Holdings) Limited | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 154 | 0 | 219 | |||||||||||||||||
Santander Pensiones, S.A., E.G.F.P. | Spain | 21.20 | % | 76.75 | % | 100.00 | % | PENSION FUND MANAGEMENT COMPANY | 45 | 11 | 50 | |||||||||||||||||
Santander Pensôes — Sociedade Gestora de Fundos de Pensôes, S.A. | Portugal | 0.00 | % | 99.86 | % | 100.00 | % | PENSION FUND MANAGEMENT COMPANY | 4 | 1 | 1 | |||||||||||||||||
Santander Perpetual, S.A., Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 1 | 0 | 0 | |||||||||||||||||
Santander Portfolio Management UK Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 33 | (2 | ) | 12 | ||||||||||||||||
Santander PR Capital Trust I | Puerto Rico | 0.00 | % | 90.59 | % | 100.00 | % | FINANCE | 9 | (6 | ) | 3 | ||||||||||||||||
Santander Private Advisors, Ltd. | United States | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 1 | 1 | 0 | |||||||||||||||||
Santander Private Banking s.p.a. | Italy | 100.00 | % | 0.00 | % | 100.00 | % | BANKING | 39 | (16 | ) | 73 | ||||||||||||||||
Santander Private Banking UK Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 301 | 0 | 307 | |||||||||||||||||
Santander Private Equity, S.A., S.G.E.C.R. | Spain | 90.00 | % | 9.97 | % | 100.00 | % | VENTURE CAPITAL MANAGEMENT COMPANY | 3 | 1 | 4 | |||||||||||||||||
Santander Private Real Estate Advisory, S.A. Sole-Shareholder Company | Spain | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 3 | 0 | 0 | |||||||||||||||||
Santander Professional Services, S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | SPORTS OPERATIONS | 0 | 0 | 0 | |||||||||||||||||
Santander Real Estate, S.G.I.I.C., S.A. | Spain | 0.00 | % | 99.18 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 101 | 6 | 6 | |||||||||||||||||
Santander Río Asset Management Gerente de Fondos Comunes de Inversión S.A. | Argentina | 0.00 | % | 100.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 3 | 1 | 0 | |||||||||||||||||
Santander Río Seguros S.A. | Argentina | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE | 7 | 4 | 8 | |||||||||||||||||
Santander Río Servicios S.A. | Argentina | 0.00 | % | 99.97 | % | 100.00 | % | ADVISORY SERVICES | 0 | 1 | 0 | |||||||||||||||||
Santander Río Sociedad de Bolsa S.A. | Argentina | 0.00 | % | 99.34 | % | 100.00 | % | BROKER-DEALER | 3 | 1 | 2 | |||||||||||||||||
Santander Río Trust S.A. | Argentina | 0.00 | % | 99.97 | % | 100.00 | % | FINANCIAL SERVICES | 0 | 0 | 0 | |||||||||||||||||
Santander S.A. — Corretora de Câmbio e Títulos | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | BROKER-DEALER | 76 | 22 | 29 | |||||||||||||||||
Santander S.A. — Serviços Técnicos, Administrativos e de Corretagem de Seguros | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | INSURANCE BROKERAGE | 21 | 4 | 34 | |||||||||||||||||
Santander S.A. Agente de Valores | Chile | 0.00 | % | 76.96 | % | 100.00 | % | BROKER-DEALER | 50 | 12 | 20 | |||||||||||||||||
Santander S.A. Corredores de Bolsa | Chile | 0.00 | % | 88.14 | % | 100.00 | % | BROKER-DEALER | 54 | 10 | 28 | |||||||||||||||||
Santander S.A. Sociedad Securitizadora | Chile | 0.00 | % | 76.83 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 1 | 0 | 0 | |||||||||||||||||
Santander Securities Corporation | Puerto Rico | 0.00 | % | 90.59 | % | 100.00 | % | BROKER-DEALER | 36 | 9 | 15 | |||||||||||||||||
Santander Seguros de Vida S.A. | Chile | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE | 135 | 42 | 9 | |||||||||||||||||
Santander Seguros Generales S.A. | Chile | 99.51 | % | 0.49 | % | 100.00 | % | INSURANCE | 12 | (3 | ) | 11 | ||||||||||||||||
Santander Seguros S.A. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | INSURANCE | 835 | 105 | 794 | |||||||||||||||||
Santander Seguros y Reaseguros, Compañía Aseguradora, S.A. | Spain | 0.00 | % | 95.99 | % | 100.00 | % | INSURANCE | 463 | 98 | 246 | |||||||||||||||||
Santander Seguros, S.A. | Uruguay | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE | 3 | 1 | 4 | |||||||||||||||||
Santander Service GmbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 2 | 0 | |||||||||||||||||
Santander Servicios de Recaudación y Pagos Limitada | Chile | 0.00 | % | 76.74 | % | 100.00 | % | SERVICES | 6 | 0 | 4 | |||||||||||||||||
Santander Totta Seguros, Companhia de Seguros de Vida, S.A. | Portugal | 0.00 | % | 99.86 | % | 100.00 | % | INSURANCE | 93 | 20 | 132 | |||||||||||||||||
Santander Totta, SGPS, S.A. | Portugal | 0.00 | % | 99.86 | % | 99.86 | % | HOLDING COMPANY | 2,781 | 266 | 3,321 | |||||||||||||||||
Santander Trade Services, Limited | Hong Kong | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 15 | 1 | 15 | |||||||||||||||||
Santander UK Investments | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | LEASING | 51 | (3 | ) | 45 | ||||||||||||||||
Santander UK Loans Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 155 | 8 | 1 | |||||||||||||||||
Santander UK Nominee Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Santander Unit Trust Managers UK Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FUND AND PORTFOLIO MANAGER | 19 | (2 | ) | 17 | ||||||||||||||||
Santander US Debt, S.A., Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 1 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Santander Venezuela Sociedad Administradora de Entidades de Inversión Colectiva, C.A. | Venezuela | 0.00 | % | 90.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 1 | 0 | 0 | |||||||||||||||||
Santander Warehouse LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 0 | 0 | 0 | |||||||||||||||||
Santotta-Internacional, SGPS, Sociedade Unipessoal, Lda. (Zona Franca da Madeira) | Portugal | 0.00 | % | 99.72 | % | 100.00 | % | HOLDING COMPANY | 54 | 13 | 14 | |||||||||||||||||
Santusa Holding, S.L. | Spain | 69.64 | % | 30.36 | % | 100.00 | % | HOLDING COMPANY | 9,388 | 660 | 9,158 | |||||||||||||||||
Sarum Trustees Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ASSET MANAGEMENT COMPANY | 0 | 0 | 0 | |||||||||||||||||
Saturn Japan II Sub C.V. (c) | Netherlands | 0.00 | % | 69.30 | % | 0.00 | % | HOLDING COMPANY | 1 | 0 | 42 | |||||||||||||||||
Saturn Japan III Sub C.V. (c) | Netherlands | 0.00 | % | 72.71 | % | 0.00 | % | HOLDING COMPANY | 354 | (236 | ) | 278 | ||||||||||||||||
Saturn Japan V C.V. (c) | Netherlands | 0.00 | % | 100.00 | % | 99.99 | % | HOLDING COMPANY | 210 | (135 | ) | 112 | ||||||||||||||||
SC Germany Auto 08-02 Limited | Ireland | — | (b | ) | — | SECURITIZATION | 0 | (4 | ) | 0 | ||||||||||||||||||
SC Germany Auto 09-1 Limited | Ireland | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
SC Germany Consumer 08-01 Limited | Ireland | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
SC Germany Consumer 09-1 Limited | Ireland | — | (b | ) | — | SECURITIZATION | 0 | 0 | 0 | |||||||||||||||||||
SCF Rahoitus Oy | Finland | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 62 | (4 | ) | 80 | ||||||||||||||||
Scottish Mutual Pensions Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 6 | 0 | 99 | |||||||||||||||||
Seacoast Capital Trust II | United States | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Seguros Santander, S.A., Grupo Financiero Santander | Mexico | 0.00 | % | 74.96 | % | 100.00 | % | INSURANCE | 51 | 25 | 21 | |||||||||||||||||
Sercoban, Gestión Administrativa de Empresas, S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 10 | 0 | 10 | |||||||||||||||||
Serfin International Bank and Trust, Limited | Cayman Islands | 0.00 | % | 99.72 | % | 100.00 | % | BANKING | 30 | 0 | 23 | |||||||||||||||||
Services and Promotions Delaware Corporation | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 80 | 0 | 72 | |||||||||||||||||
Services and Promotions Miami LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 79 | 0 | 80 | |||||||||||||||||
Servicio de Alarmas Controladas por Ordenador, S.A. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | SECURITY | 2 | 0 | 1 | |||||||||||||||||
Servicios Administrativos y Financieros Ltda. | Chile | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 1 | 0 | |||||||||||||||||
Servicios Corporativos Seguros Serfin, S.A. De C.V. | Mexico | 0.00 | % | 75.46 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Servicios de Cobranza, Recuperación y Seguimiento, S.A. De C.V. | Mexico | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 4 | 5 | 1 | |||||||||||||||||
Servicios de Cobranzas Fiscalex Ltda. | Chile | 0.00 | % | 99.53 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Servicios Universia Venezuela S.U.V., S.A. | Venezuela | 0.00 | % | 82.99 | % | 82.99 | % | INTERNET | 1 | (1 | ) | 0 | ||||||||||||||||
Sheppards Moneybrokers Limited | United Kingdom | 0.00 | % | 99.99 | % | 100.00 | % | ADVISORY SERVICES | 18 | 0 | 17 | |||||||||||||||||
Silk Finance No. 3 Limited | Ireland | — | (b | ) | — | SECURITIZATION | 0 | (10 | ) | 0 | ||||||||||||||||||
Sinvest Inversiones y Asesorías Limitada | Chile | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 70 | 6 | 2 | |||||||||||||||||
Sistema 4B, S.A. | Spain | 52.17 | % | 13.19 | % | 66.87 | % | CARDS | 38 | 4 | 9 | |||||||||||||||||
SK Charter Hire (No.2) Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 7 | (7 | ) | 0 | ||||||||||||||||
SK Marine Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
Sociedad Integral de Valoraciones Automatizadas, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | APPRAISALS | 1 | 1 | 1 | |||||||||||||||||
Sodepro, S.A. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | FINANCE | 16 | 0 | 12 | |||||||||||||||||
Solarlaser Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 54 | 0 | 45 | |||||||||||||||||
Southern Cone Water Management Ltd. | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
SOV APEX, LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 26,762 | 8 | 22,302 | |||||||||||||||||
SOV Charter LTD (UK) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 1 | 0 | 1 | |||||||||||||||||
Sovereign Agency Massachusetts, LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE | 0 | 0 | 0 | |||||||||||||||||
Sovereign Bancorp, Inc. | United States | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 6,379 | (47 | ) | 6,379 | ||||||||||||||||
Sovereign Bank | United States | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 6,586 | (37 | ) | 8,255 | ||||||||||||||||
Sovereign Capital Trust IV | United States | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 163 | 0 | 163 | |||||||||||||||||
Sovereign Capital Trust IX | United States | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 3 | 0 | 3 | |||||||||||||||||
Sovereign Capital Trust V | United States | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 4 | 0 | 4 | |||||||||||||||||
Sovereign Capital Trust VI | United States | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 7 | 0 | 7 | |||||||||||||||||
Sovereign Community Development Company | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 33 | 0 | 31 | |||||||||||||||||
Sovereign Delaware Investment Corporation | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 111 | 0 | 68 | |||||||||||||||||
Sovereign Finance (Northern) Limited (j) (g) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 1 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Sovereign Finance (Scotland) Limited (j) (e) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
Sovereign Finance Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
Sovereign Freeze Limited (n) | Bermuda | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
Sovereign Gimi Limited (n) | Bermuda | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
Sovereign Hilli Limited (n) | Bermuda | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
Sovereign Holdings Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Sovereign Khannur Limited (n) | Bermuda | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
Sovereign Leasing (Scotland) Limited (j) (e) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
Sovereign Leasing LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 1 | 0 | 0 | |||||||||||||||||
Sovereign Precious Metals, LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | TRADING OF PRECIOUS METALS | 78 | 4 | 10 | |||||||||||||||||
Sovereign REIT Holdings, Inc. | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 5,129 | 8 | 3,739 | |||||||||||||||||
Sovereign Securities Corporation, LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 39 | 0 | 37 | |||||||||||||||||
Sovereign Spirit Limited (n) | Bermuda | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
Sovereign Trade Services (HK) Limited | Hong Kong | 0.00 | % | 100.00 | % | 100.00 | % | FINANCIAL SERVICES | 0 | 0 | 0 | |||||||||||||||||
Sterrebeeck B.V. | Netherlands | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 5,185 | 305 | 15,309 | |||||||||||||||||
Suleyado 2003, S.L. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | SECURITIES INVESTMENT | 7 | (7 | ) | 0 | ||||||||||||||||
Suzuki Servicios Financieros, S.L. | Spain | 0.00 | % | 51.00 | % | 51.00 | % | INTERMEDIATION | 0 | 2 | 0 | |||||||||||||||||
Swesant SA | Switzerland | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 280 | 346 | 0 | |||||||||||||||||
Task Moraza, S.L. (e) | Spain | 0.00 | % | 73.22 | % | 73.22 | % | HOLDING COMPANY | 16 | 1 | 27 | |||||||||||||||||
Taxagest Sociedade Gestora de Participações Sociais, S.A. | Portugal | 0.00 | % | 99.86 | % | 100.00 | % | HOLDING COMPANY | 59 | 8 | 0 | |||||||||||||||||
Teatinos Siglo XXI Inversiones Limitada | Chile | 50.00 | % | 50.00 | % | 100.00 | % | HOLDING COMPANY | 795 | 278 | 457 | |||||||||||||||||
Teylada, S.A. in liquidation (j) | Spain | 11.11 | % | 88.89 | % | 100.00 | % | SECURITIES INVESTMENT | 0 | 0 | 0 | |||||||||||||||||
The Alliance & Leicester Corporation Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 14 | 0 | 16 | |||||||||||||||||
The HSH AIV 4 Trust (c) | United States | 0.00 | % | 69.20 | % | 4.99 | % | HOLDING COMPANY | 83 | (71 | ) | 5 | ||||||||||||||||
The JCF HRE AIV II-A Trust (c) | United States | 0.00 | % | 73.70 | % | 4.99 | % | HOLDING COMPANY | 46 | (39 | ) | 0 | ||||||||||||||||
The National & Provincial Building Society Pension Fund Trustees Limited (d) | United Kingdom | — | (b | ) | — | ASSET MANAGEMENT COMPANY | 0 | 0 | 0 | |||||||||||||||||||
The Prepaid Card Company Limited | United Kingdom | 0.00 | % | 80.00 | % | 80.00 | % | FINANCE | (22 | ) | (4 | ) | 10 | |||||||||||||||
The WF Company Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ADVISORY SERVICES | 1 | 0 | 0 | |||||||||||||||||
Time Finance Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Time Retail Finance Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 22 | 0 | 2 | |||||||||||||||||
Títulos de Renta Fija, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | SECURITIES INVESTMENT | 0 | 0 | 0 | |||||||||||||||||
Tornquist Asesores de Seguros S.A. (j) | Argentina | 0.00 | % | 99.99 | % | 99.99 | % | ADVISORY SERVICES | 0 | 0 | 0 | |||||||||||||||||
Totta & Açores Financing, Limited | Cayman Islands | 0.00 | % | 99.72 | % | 100.00 | % | FINANCE | (1 | ) | 12 | 0 | ||||||||||||||||
Totta & Açores Inc. Newark | United States | 0.00 | % | 99.72 | % | 100.00 | % | BANKING | 1 | 0 | 0 | |||||||||||||||||
Totta (Ireland), PLC (h) | Ireland | 0.00 | % | 99.72 | % | 100.00 | % | FINANCE | 352 | 106 | 341 | |||||||||||||||||
Totta Crédito Especializado, Instituiçao Financeira de Crédito, S.A. (IFIC) | Portugal | 0.00 | % | 99.84 | % | 100.00 | % | LEASING | 118 | 16 | 42 | |||||||||||||||||
Totta Urbe — Empresa de Administraçâo e Construçôes, S.A. | Portugal | 0.00 | % | 99.72 | % | 100.00 | % | PROPERTY | 111 | 5 | 148 | |||||||||||||||||
Tuttle & Son Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | COLLECTION AND PAYMENT SERVICES | 1 | 0 | 1 | |||||||||||||||||
UNIFIN S.p.A. | Italy | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 39 | 9 | 82 | |||||||||||||||||
Universia Brasil S.A. | Brazil | 0.00 | % | 100.00 | % | 100.00 | % | INTERNET | 3 | (2 | ) | 1 | ||||||||||||||||
Universia Chile S.A. | Chile | 0.00 | % | 84.32 | % | 84.32 | % | INTERNET | 1 | (1 | ) | 0 | ||||||||||||||||
Universia Colombia, S.A. | Colombia | 0.00 | % | 99.92 | % | 99.92 | % | INTERNET | 0 | 0 | 0 | |||||||||||||||||
Universia Holding, S.L. | Spain | 99.97 | % | 0.03 | % | 100.00 | % | HOLDING COMPANY | 27 | (17 | ) | 14 | ||||||||||||||||
Universia México, S.A. De C.V. | Mexico | 0.00 | % | 100.00 | % | 100.00 | % | INTERNET | 1 | (1 | ) | 0 | ||||||||||||||||
Universia Perú, S.A. | Peru | 0.00 | % | 82.82 | % | 82.82 | % | INTERNET | 1 | (1 | ) | 0 | ||||||||||||||||
Universia Puerto Rico, Inc. | Puerto Rico | 0.00 | % | 100.00 | % | 100.00 | % | INTERNET | 1 | 0 | 1 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Amount of | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Net Profit/Loss | Ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (k) | Line of Business | Reserves | for the Year | Interest | ||||||||||||||||||||
Valores Santander Casa de Bolsa, C.A. | Venezuela | 0.00 | % | 90.00 | % | 90.00 | % | BROKER-DEALER | 22 | 3 | 7 | |||||||||||||||||
Viking Collections Services Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Vista Capital de Expansión, S.A. SGECR | Spain | 0.00 | % | 50.00 | % | 50.00 | % | VENTURE CAPITAL MANAGEMENT COMPANY | 3 | 1 | 0 | |||||||||||||||||
Vista Desarrollo, S.A. SCR de Régimen Simplificado | Spain | 100.00 | % | 0.00 | % | 100.00 | % | VENTURE CAPITAL COMPANY | 250 | 11 | 158 | |||||||||||||||||
W.N.P.H. Gestao e Investimentos Sociedade Unipessoal, S.A. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | SECURITIES INVESTMENT | 36 | 0 | 0 | |||||||||||||||||
Wallcesa, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | SECURITIES INVESTMENT | (784 | ) | 105 | 0 | ||||||||||||||||
Waypoint Capital Trust I | United States | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Waypoint Capital Trust II | United States | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Waypoint Insurance Group, Inc. | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 3 | 0 | 13 | |||||||||||||||||
Waypoint Settlement Services, LLC | United States | 0.00 | % | 90.00 | % | 90.00 | % | INSURANCE | 0 | 0 | 0 | |||||||||||||||||
Waypoint Statutory Trust III | United States | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Webmotors S.A. | Brazil | 0.00 | % | 83.55 | % | 100.00 | % | SERVICES | 12 | 5 | 6 | |||||||||||||||||
Wex Point España, S.L. | Spain | 0.00 | % | 89.72 | % | 100.00 | % | SERVICES | 1 | 0 | 1 | |||||||||||||||||
Whitewick Limited | Jersey | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 2 | 0 | 0 | |||||||||||||||||
WIM Servicios Corporativos, S.A. de C.V. | Mexico | 0.00 | % | 100.00 | % | 100.00 | % | ADVISORY SERVICES | 0 | 0 | 0 |
(a) | Amount per books of each company at December 31, 2009, disregarding, where appropriate, any interim dividends paid in the year. The amount of the ownership interest (net of allowances) is the figure per the books of each holding company multiplied by the Group’s percentage of ownership, disregarding impairment of goodwill on consolidation. The data on foreign companies were translated to euros at the year-end exchange rates. | |
(b) | Companies over which effective control is exercised. | |
(c) | Data from the latest approved financial statements at December 31, 2008. | |
(d) | Data from the latest approved financial statements at March 31, 2009. |
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(e) | Data from the latest approved financial statements at June 30, 2009. | |
(f) | Data from the latest approved financial statements at September 30, 2009. | |
(g) | Data from the latest approved financial statements at April 30, 2009. | |
(h) | Data from the latest approved financial statements at November 30, 2009. | |
(i) | Data from the latest approved financial statements at August 31, 2009. | |
(j) | Company in liquidation at December 31, 2009. | |
(k) | Pursuant to Article 3 of Royal Decree 1815/1991, of 20 December, approving the rules for the preparation of consolidated financial statements, in order to determine voting power, the voting power relating to subsidiaries or to other parties acting in their own name but on behalf of Group companies were added to the voting power directly held by the Parent. Accordingly, the number of votes corresponding to the Parent in relation to companies over which it exercises indirect control is the number corresponding to each subsidiary holding a direct ownership interest in such companies. | |
(l) | Company in merger process with another Group company. Awaiting registration at Mercantile Registry. | |
(m) | Data from the latest approved financial statements at April 2, 2009. | |
(n) | Company resident in the UK for tax purposes. | |
(o) | Company moved its residence to the US in February 2010. | |
(p) | Data from the latest available approved financial statements at September 30, 2008. | |
(1) | The preference share and security issuer companies are detailed in Appendix III, together with other relevant information. |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Net | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Profit/Loss | |||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (f) | Line of Business | Assets | Reserves | for the Year | ||||||||||||||||||||
26 Rue Villiot S.A.S. | France | 0.00 | % | 35.00 | % | 50.00 | % | PROPERTY | 138 | 49 | 2 | |||||||||||||||||
ABSLine Multimedia, S.L. | Spain | 0.00 | % | 47.50 | % | 47.50 | % | MARKETING | 1 | 1 | 0 | |||||||||||||||||
Accordfin España, E.F.C., S.A. | Spain | 0.00 | % | 49.00 | % | 49.00 | % | FINANCE | 369 | 36 | (22 | ) | ||||||||||||||||
ACI Soluciones, S.L. | Spain | 0.00 | % | 32.03 | % | 49.00 | % | SERVICES | 3 | 2 | 0 | |||||||||||||||||
Administrador Financiero de Transantiago S.A. | Chile | 0.00 | % | 15.35 | % | 20.00 | % | COLLECTION AND PAYMENT SERVICES | 588 | 9 | (4 | ) | ||||||||||||||||
Affirmative Insurance Holdings Inc. (b) | United States | 0.00 | % | 5.00 | % | 0.00 | % | INSURANCE | 557 | 149 | 1 | |||||||||||||||||
Affirmative Investment LLC (b) | United States | 0.00 | % | 9.86 | % | 4.99 | % | HOLDING COMPANY | 8 | 56 | (48 | ) | ||||||||||||||||
Agres, Agrupación Restauradores, S.L. | Spain | 0.00 | % | 38.59 | % | 43.01 | % | RESTAURANTS | 3 | 2 | 0 | |||||||||||||||||
Aguas de Fuensanta, S.A. | Spain | 0.00 | % | 37.87 | % | 42.21 | % | FOOD | 33 | 10 | 0 | |||||||||||||||||
Alcover AG (m) | Switzerland | 0.00 | % | 27.91 | % | 27.91 | % | INSURANCE | 179 | 127 | 1 | |||||||||||||||||
Algebris Global Financials Fund (b) | Cayman Islands | 9.15 | % | 0.00 | % | 9.15 | % | HOLDING COMPANY | 929 | 982 | (202 | ) | ||||||||||||||||
Allfunds Alternative, S.V., S.A. (Sole-Shareholder Company) | Spain | 0.00 | % | 50.00 | % | 50.00 | % | BROKER-DEALER | 5 | 5 | (1 | ) | ||||||||||||||||
Allfunds Bank, S.A. | Spain | 50.00 | % | 0.00 | % | 50.00 | % | BANKING | 207 | 96 | 3 | |||||||||||||||||
Allfunds International S.A. | Luxembourg | 0.00 | % | 50.00 | % | 50.00 | % | FINANCIAL SERVICES | 4 | 4 | (2 | ) | ||||||||||||||||
Allfunds Nominee Limited | United Kingdom | 0.00 | % | 50.00 | % | 50.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Andalucarthage Holding Société Holding Offshore S.A. (b) | Morocco | 0.00 | % | 20.11 | % | 20.11 | % | HOLDING COMPANY | 149 | 126 | 0 | |||||||||||||||||
Anekis, S.A. | Spain | 24.75 | % | 24.75 | % | 49.50 | % | ADVERTISING | 3 | 3 | 0 | |||||||||||||||||
Arena Communications Network, S.L. | Spain | 20.00 | % | 0.00 | % | 20.00 | % | ADVERTISING | 44 | 3 | 0 | |||||||||||||||||
Asajanet Servicios Agropecuarios, S.L. (b) | Spain | 30.00 | % | 0.00 | % | 30.00 | % | MARKETING | 0 | 0 | 0 | |||||||||||||||||
Attijari Bank Société Anonyme (consolidated) (b) | Tunisia | 0.00 | % | 10.97 | % | 10.97 | % | BANKING | 1,517 | 69 | 17 | |||||||||||||||||
Attijari Factoring Maroc, S.A. | Morocco | 0.00 | % | 28.41 | % | 28.41 | % | FACTORING | 99 | 4 | 2 | |||||||||||||||||
Attijari International Bank Société Anonymé (b) | Morocco | 50.00 | % | 0.00 | % | 50.00 | % | BANKING | 719 | 7 | 3 | |||||||||||||||||
Autopistas del Sol S.A. (b) | Argentina | 0.00 | % | 14.17 | % | 14.17 | % | MOTORWAY CONCESSIONS | 260 | 59 | (27 | ) | ||||||||||||||||
Baie Placements S.à.r.l. (b) | Luxembourg | 0.00 | % | 24.93 | % | 25.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Banco Caixa Geral Totta de Angola, S.A. | Angola | 0.00 | % | 25.43 | % | 25.50 | % | BANKING | 535 | 135 | 32 | |||||||||||||||||
Banco Internacional da Guiné-Bissau, S.A. (d) | Guinea Bissau | 0.00 | % | 48.86 | % | 49.00 | % | BANKING | 12 | (30 | ) | (1 | ) | |||||||||||||||
Base Central — Rede Serviços Imobiliarios, S.A. | Portugal | 0.00 | % | 49.80 | % | 49.80 | % | PROPERTY SERVICES | 2 | 0 | 0 | |||||||||||||||||
Benim — Sociedade Imobiliária, S.A. (consolidated) (b) | Portugal | 0.00 | % | 24.93 | % | 25.00 | % | PROPERTY | 12 | 8 | (1 | ) | ||||||||||||||||
Bolsas y Mercados Españoles, Sociedad Holding de Mercados y Sistemas Financieros, S.A. (consolidated) (b) | Spain | 2.76 | % | 2.34 | % | 5.10 | % | FINANCIAL SERVICES | 5,798 | 367 | 191 | |||||||||||||||||
Cantabria Capital, SGECR, S.A. | Spain | 50.00 | % | 0.00 | % | 50.00 | % | VENTURE CAPITAL MANAGEMENT COMPANY | 0 | 0 | 0 | |||||||||||||||||
Carnes Estellés, S.A. | Spain | 0.00 | % | 19.21 | % | 21.41 | % | FOOD | 29 | 10 | 0 | |||||||||||||||||
Cartera del Norte, S.A. | Spain | 0.00 | % | 32.39 | % | 36.10 | % | FINANCE | 1 | 1 | 0 | |||||||||||||||||
Celta Holding S.A. | Brazil | 0.00 | % | 21.72 | % | 26.00 | % | HOLDING COMPANY | 127 | 106 | (5 | ) | ||||||||||||||||
Centradia Group, Ltd. (b) (l) | United Kingdom | 30.45 | % | 0.00 | % | 30.45 | % | ADVISORY SERVICES | 0 | 0 | 0 | |||||||||||||||||
Centro de Compensación Automatizado S.A. | Chile | 0.00 | % | 25.58 | % | 33.33 | % | COLLECTION AND PAYMENT SERVICES | 2 | 1 | 0 | |||||||||||||||||
Centro para el Desarrollo, Investigación y Aplicación de Nuevas Tecnologías, S.A. | Spain | 0.00 | % | 43.96 | % | 49.00 | % | TECHNOLOGY | 1 | 1 | 0 | |||||||||||||||||
Charta Leasing No.1 Limited (j) | United Kingdom | 0.00 | % | 50.00 | % | 50.00 | % | LEASING | 108 | (4 | ) | (5 | ) | |||||||||||||||
Charta Leasing No.2 Limited | United Kingdom | 0.00 | % | 50.00 | % | 50.00 | % | LEASING | 56 | (5 | ) | (4 | ) | |||||||||||||||
Companhia Brasileira de Meios de Pagamento (consolidated) | Brazil | 0.00 | % | 7.20 | % | 7.20 | % | CARDS | 999 | (268 | ) | 611 | ||||||||||||||||
Companhia Brasileira de Soluções e Serviços | Brazil | 0.00 | % | 15.32 | % | 15.32 | % | SERVICES | 481 | 26 | 29 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Net | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Profit/Loss | |||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (f) | Line of Business | Assets | Reserves | for the Year | ||||||||||||||||||||
Companhia de Arrendamento Mercantil RCI Brasil | Brazil | 0.00 | % | 33.32 | % | 39.88 | % | LEASING | 236 | 176 | 13 | |||||||||||||||||
Companhia de Crédito, Financiamento e Investimento RCI Brasil | Brazil | 0.00 | % | 33.12 | % | 39.64 | % | FINANCE | 800 | 85 | 17 | |||||||||||||||||
Compañía Concesionaria del Túnel de Sóller, S.A. | Spain | 0.00 | % | 29.34 | % | 32.70 | % | CONSTRUCTION | 42 | 15 | 2 | |||||||||||||||||
Compañía Española de Seguros de Crédito a la Exportación, S.A., Compañía de Seguros y Reaseguros (b) | Spain | 13.95 | % | 6.45 | % | 21.08 | % | CREDIT INSURANCE | 645 | 184 | (53 | ) | ||||||||||||||||
Comprarcasa Servicios Inmobiliarios, S.A. | Spain | 0.00 | % | 47.50 | % | 47.50 | % | PROPERTY SERVICES | 2 | 1 | 0 | |||||||||||||||||
Dirgenfin, S.L. | Spain | 0.00 | % | 35.89 | % | 40.00 | % | REAL ESTATE DEVELOPMENT | 56 | 0 | 0 | |||||||||||||||||
Ensafeca Holding Empresarial, S.L. | Spain | 0.00 | % | 31.82 | % | 31.82 | % | SECURITIES INVESTMENT | 11 | 10 | 0 | |||||||||||||||||
Espais Promocat, S.L. | Spain | 0.00 | % | 44.86 | % | 50.00 | % | PROPERTY | 27 | 1 | (1 | ) | ||||||||||||||||
FC2Egestión, S.L. | Spain | 0.00 | % | 50.00 | % | 50.00 | % | ENVIRONMENTAL MANAGEMENT | 1 | 0 | 1 | |||||||||||||||||
Federal Home Loan Bank of Pittsburgh (b) | United States | 0.00 | % | 16.00 | % | 16.00 | % | BANKING | 63,033 | 2,870 | 13 | |||||||||||||||||
Fondo de Titulización de Activos UCI 11 | Spain | — | (h | ) | — | SECURITIZATION | 324 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos UCI 14 | Spain | — | (h | ) | — | SECURITIZATION | 825 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos UCI 15 | Spain | — | (h | ) | — | SECURITIZATION | 939 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos UCI 18 | Spain | — | (h | ) | — | SECURITIZATION | 1,514 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos UCI 19 | Spain | — | (h | ) | — | SECURITIZATION | 1,030 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Hipotecaria UCI 10 | Spain | — | (h | ) | — | SECURITIZATION | 228 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Hipotecaria UCI 12 | Spain | — | (h | ) | — | SECURITIZATION | 431 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Hipotecaria UCI 16 | Spain | — | (h | ) | — | SECURITIZATION | 1,357 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Hipotecaria UCI 17 | Spain | — | (h | ) | — | SECURITIZATION | 1,153 | 0 | 0 | |||||||||||||||||||
Friedrichstrasse, S.L. | Spain | 0.00 | % | 35.68 | % | 35.68 | % | PROPERTY | 43 | 43 | 0 | |||||||||||||||||
Granoller’s Broker, S.L. | Spain | 0.00 | % | 12.50 | % | 25.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Grupo Alimentario de Exclusivas, S.A. | Spain | 0.00 | % | 36.30 | % | 40.46 | % | FOOD | 6 | 0 | 0 | |||||||||||||||||
Grupo Financiero Galicia (consolidated) (b) | Argentina | 0.00 | % | 6.67 | % | 3.50 | % | FINANCE | 4,517 | 305 | 32 | |||||||||||||||||
Grupo Konecta Centros Especiales de Empleo, S.L. | Spain | 0.00 | % | 48.21 | % | 48.21 | % | TELEMARKETING | 0 | 0 | 0 | |||||||||||||||||
Grupo Konecta Maroc S.A.R.L. à associé unique | Morocco | 0.00 | % | 48.21 | % | 48.21 | % | TELEMARKETING | 0 | (1 | ) | 0 | ||||||||||||||||
Grupo Konecta UK Limited | United Kingdom | 0.00 | % | 48.16 | % | 48.16 | % | FINANCE | 0 | (1 | ) | 0 | ||||||||||||||||
Grupo Konectanet México, S.A. de C.V. | Mexico | 0.00 | % | 48.21 | % | 48.21 | % | TELEMARKETING | 0 | 0 | 0 | |||||||||||||||||
Grupo Konectanet, S.L. | Spain | 0.00 | % | 48.21 | % | 48.21 | % | HOLDING COMPANY | 18 | 5 | 0 | |||||||||||||||||
HLC — Centrais de Cogeraçao, S.A. (c) | Portugal | 0.00 | % | 24.46 | % | 24.49 | % | ELECTRICITY | 2 | (2 | ) | (2 | ) | |||||||||||||||
Hyundai Capital Germany GmbH | Germany | 0.00 | % | 49.99 | % | 49.99 | % | SERVICES | 2 | 2 | 0 | |||||||||||||||||
Imperial Holding S.C.A. (i) | Luxembourg | 0.00 | % | 36.36 | % | 36.36 | % | SECURITIES INVESTMENT | 161 | 39 | 0 | |||||||||||||||||
Inmo Alemania Gestión de Activos Inmobiliarios, S.A. | Spain | 0.00 | % | 16.82 | % | 17.52 | % | HOLDING COMPANY | 99 | 99 | 0 | |||||||||||||||||
Inmobiliaria Sitio de Baldeazores, S.A. | Spain | 0.00 | % | 44.86 | % | 50.00 | % | PROPERTY | 0 | (5 | ) | 0 | ||||||||||||||||
J.C. Flowers I L.P. (b) | United States | 16.80 | % | 0.00 | % | 4.99 | % | HOLDING COMPANY | 73 | 171 | (98 | ) | ||||||||||||||||
JC Flowers AIV II L.P. (b) | United States | 0.00 | % | 9.80 | % | 4.99 | % | HOLDING COMPANY | 9 | 8 | 1 | |||||||||||||||||
JC Flowers AIV P L.P. (b) | Canada | 0.00 | % | 6.90 | % | 4.99 | % | HOLDING COMPANY | 123 | 129 | (8 | ) | ||||||||||||||||
Kapitalia Credit House Global, S.L. | Spain | 0.00 | % | 48.21 | % | 48.21 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Kassadesign 2005, S.L. | Spain | 0.00 | % | 44.86 | % | 50.00 | % | PROPERTY | 57 | 10 | (7 | ) | ||||||||||||||||
Kepler Weber S.A. (b) | Brazil | 0.00 | % | 5.43 | % | 6.50 | % | STORAGE SYSTEMS | 166 | 71 | (1 | ) | ||||||||||||||||
Konecta Activos Inmobiliarios, S.L. | Spain | 0.00 | % | 49.08 | % | 49.08 | % | PROPERTY | 8 | 0 | 0 | |||||||||||||||||
Konecta Brazil Outsourcing Ltda. | Brazil | 0.00 | % | 48.20 | % | 48.20 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Konecta Broker, S.L. | Spain | 0.00 | % | 48.21 | % | 48.21 | % | SERVICES | 1 | 0 | 1 | |||||||||||||||||
Konecta Bto, S.L. | Spain | 0.00 | % | 48.21 | % | 48.21 | % | TELECOMMUNICATIONS | 36 | 37 | 0 | |||||||||||||||||
Konecta Chile S.A. | Chile | 0.00 | % | 35.67 | % | 35.67 | % | SERVICES | 4 | 3 | 1 | |||||||||||||||||
Konecta Colombia Grupo Konecta Colombia Ltda | Colombia | 0.00 | % | 48.21 | % | 48.21 | % | TELEMARKETING | 0 | 0 | 0 | |||||||||||||||||
Konecta Field Marketing, S.A. | Spain | 0.00 | % | 48.21 | % | 48.21 | % | MARKETING | 0 | 0 | 0 | |||||||||||||||||
Konecta Portugal, Lda. | Portugal | 0.00 | % | 48.21 | % | 48.21 | % | MARKETING | 1 | 0 | 0 | |||||||||||||||||
Konecta Servicios Administrativos y Tecnológicos, S.L. | Spain | 0.00 | % | 48.21 | % | 48.21 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Konecta Servicios Auxiliares, S.L. | Spain | 0.00 | % | 48.21 | % | 48.21 | % | SERVICES | 0 | (1 | ) | 0 | ||||||||||||||||
Konecta Servicios de Empleo ETT, S.A. | Spain | 0.00 | % | 48.21 | % | 48.21 | % | TEMPORARY EMPLOYMENT AGENCY | 0 | 0 | (1 | ) |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Net | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Profit/Loss | |||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (f) | Line of Business | Assets | Reserves | for the Year | ||||||||||||||||||||
Konecta Servicios Integrales de Consultoría, S.L. | Spain | 0.00 | % | 12.04 | % | 24.98 | % | ADVERTISING | 0 | 0 | 0 | |||||||||||||||||
Konectanet Andalucía, S.L. | Spain | 0.00 | % | 48.21 | % | 48.21 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Konectanet Comercialización, S.L. | Spain | 0.00 | % | 48.21 | % | 48.21 | % | MARKETING | 1 | 0 | 0 | |||||||||||||||||
Kontacta Comunicaciones, S.A. | Spain | 0.00 | % | 36.16 | % | 36.16 | % | SERVICES | 1 | 1 | 0 | |||||||||||||||||
Kontacta Top Ten, S.L. | Spain | 0.00 | % | 36.16 | % | 36.16 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Maxamcorp Holding, S.L. (consolidated) (e) | Spain | 0.00 | % | 22.62 | % | 22.62 | % | HOLDING COMPANY | 1,017 | 166 | 56 | |||||||||||||||||
Medimobiliario Ediçoes Period. e Multimedia, S.A. | Portugal | 0.00 | % | 29.38 | % | 29.38 | % | PROPERTY SERVICES | 0 | 0 | 0 | |||||||||||||||||
Metrovacesa, S.A. (consolidated) (b) | Spain | 14.51 | % | 8.19 | % | 23.63 | % | PROPERTY | 9,527 | 2,529 | (731 | ) | ||||||||||||||||
New Affirmative LLC (b) | United States | 0.00 | % | 9.86 | % | 0.00 | % | HOLDING COMPANY | 8 | 56 | (48 | ) | ||||||||||||||||
New PEL S.a.r.l. (b) | Luxembourg | 0.00 | % | 6.90 | % | 0.00 | % | HOLDING COMPANY | 46 | 24 | 10 | |||||||||||||||||
Norchem Holdings e Negócios S.A. | Brazil | 0.00 | % | 18.17 | % | 21.75 | % | HOLDING COMPANY | 91 | 39 | 5 | |||||||||||||||||
Norchem Participações e Consultoria S.A. | Brazil | 0.00 | % | 41.78 | % | 50.00 | % | BROKER-DEALER | 52 | 22 | 1 | |||||||||||||||||
Olivant Investments Switzerland S.A. (b) | Luxembourg | 0,00 | % | 34,97 | % | 34,97 | % | HOLDING COMPANY | 5 | 16 | (1,555 | ) | ||||||||||||||||
Olivant Limited (consolidated) (b) | Guernsey | 0.00 | % | 9.00 | % | 9.00 | % | HOLDING COMPANY | 237 | 232 | (229 | ) | ||||||||||||||||
Omega Financial Services GmbH | Germany | 0.00 | % | 50.00 | % | 50.00 | % | SERVICES | 2 | 0 | 1 | |||||||||||||||||
Operadora de Activos Alfa, S.A. De C.V. | Mexico | 0.00 | % | 49.98 | % | 49.98 | % | FINANCE | 1 | 1 | 0 | |||||||||||||||||
Operadora de Activos Beta, S.A. de C.V. | Mexico | 0.00 | % | 49.99 | % | 49.99 | % | FINANCE | 2 | 2 | 0 | |||||||||||||||||
Partang, SGPS, S.A. | Portugal | 0.00 | % | 49.86 | % | 50.00 | % | HOLDING COMPANY | 87 | 22 | 0 | |||||||||||||||||
Private Estate Life S.A. (b) | Luxembourg | 0.00 | % | 5.87 | % | 0.00 | % | INSURANCE | 2,662 | 53 | 14 | |||||||||||||||||
Prodesur Mediterráneo, S.L. | Spain | 0.00 | % | 44.86 | % | 50.00 | % | PROPERTY | 58 | 19 | (1 | ) | ||||||||||||||||
Programa Multi Sponsor PMS, S.A. | Spain | 24.75 | % | 24.75 | % | 49.50 | % | ADVERTISING | 22 | 4 | 0 | |||||||||||||||||
Proinsur Mediterráneo, S.L. | Spain | 0.00 | % | 44.86 | % | 50.00 | % | PROPERTY | 68 | 25 | (2 | ) | ||||||||||||||||
Promoreras Desarrollo de Activos, S.L. | Spain | 0.00 | % | 31.40 | % | 35.00 | % | PROPERTY | 166 | 14 | 0 | |||||||||||||||||
PSA Finance PLC | United Kingdom | 0.00 | % | 50.00 | % | 50.00 | % | LEASING | 5 | 5 | 0 | |||||||||||||||||
Puntoform, S.L. | Spain | 0.00 | % | 48.21 | % | 48.21 | % | TRAINING | 0 | 0 | 0 | |||||||||||||||||
Q 205 Real Estate GmbH | Germany | 0.00 | % | 17.84 | % | 17.84 | % | PROPERTY | 255 | 61 | 2 | |||||||||||||||||
Quiero Televisión, S.A., Sole-Shareholder Company | Spain | 0.00 | % | 31.82 | % | 31.82 | % | TELECOMMUNICATIONS | 7 | 6 | 0 | |||||||||||||||||
Real Estate Investment Society España, S.A. | Spain | 31.80 | % | 0.00 | % | 31.80 | % | PROPERTY | 89 | 89 | 0 | |||||||||||||||||
Real Seguros Vida e Previdência S.A. (k) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | INSURANCE | — | — | — | |||||||||||||||||
Redbanc S.A. | Chile | 0.00 | % | 25.65 | % | 33.43 | % | SERVICES | 15 | 6 | 1 | |||||||||||||||||
Reintegra Contact Center, S.L.U. | Spain | 0.00 | % | 45.00 | % | 45.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Reintegra, S.A. | Spain | 0.00 | % | 45.00 | % | 45.00 | % | COLLECTION AND PAYMENT SERVICES | 6 | 4 | 1 | |||||||||||||||||
RFS Holdings B.V. | Netherlands | 27.91 | % | 0.00 | % | 27.91 | % | HOLDING COMPANY | 24,519 | 21,500 | (127 | ) | ||||||||||||||||
Saudi Hollandi Bank (consolidated) (b) (m) | Saudi Arabia | 0.00 | % | 11.16 | % | 11.16 | % | BANKING | 11,370 | 831 | 226 | |||||||||||||||||
Servicio Pan Americano de Protección, S.A. de C.V. | Mexico | 0.00 | % | 15.78 | % | 21.05 | % | SECURITY | 143 | 67 | 4 | |||||||||||||||||
Servicios Financieros Enlace S.A. de C.V. (b) | El Salvador | 21.48 | % | 0.00 | % | 21.48 | % | NOT-FOR-PROFIT COMPANY | 6 | 2 | 0 | |||||||||||||||||
Shinsei Bank, Ltd. (consolidated) (e) | Japan | 0.00 | % | 8.46 | % | 0.00 | % | BANKING | 89,735 | 6,837 | (1,074 | ) | ||||||||||||||||
Sistarbanc S.R.L. (b) | Uruguay | 0.00 | % | 20.00 | % | 20.00 | % | CARDS | 2 | 2 | (1 | ) | ||||||||||||||||
Sociedad Interbancaria de Depósitos de Valores S.A. | Chile | 0.00 | % | 22.48 | % | 29.29 | % | SECURITIES DEPOSITORY INSTITUTION | 2 | 1 | 0 | |||||||||||||||||
Sociedad Promotora Bilbao Plaza Financiera, S.A. (b) | Spain | 7.74 | % | 25.00 | % | 33.91 | % | ADVISORY SERVICES | 2 | 2 | 0 | |||||||||||||||||
Solar Energy Capital Europe S.à.r.l. | Luxembourg | 0.00 | % | 33.33 | % | 33.33 | % | HOLDING COMPANY | 6 | 1 | 0 | |||||||||||||||||
Tecnologia Bancária S.A. | Brazil | 0.00 | % | 20.69 | % | 20.69 | % | ATMs | 163 | 62 | 1 | |||||||||||||||||
Teka Industrial, S.A. (consolidated) (b) | Spain | 0.00 | % | 10.00 | % | 10.00 | % | DOMESTIC APPLIANCES | 766 | 291 | 3 | |||||||||||||||||
Trabajando.com Chile S.A. | Chile | 0.00 | % | 33.33 | % | 33.33 | % | SERVICES | 5 | 5 | (1 | ) | ||||||||||||||||
Transbank S.A. | Chile | 0.00 | % | 25.11 | % | 32.71 | % | CARDS | 273 | 8 | 1 | |||||||||||||||||
Transolver Finance EFC, S.A. | Spain | 0.00 | % | 50.00 | % | 50.00 | % | LEASING | 251 | 29 | (14 | ) | ||||||||||||||||
Turyocio Viajes y Fidelización, S.A. | Spain | 0.00 | % | 32.21 | % | 32.21 | % | TRAVEL | 0 | 0 | 0 | |||||||||||||||||
U.C.I., S.A. | Spain | 50.00 | % | 0.00 | % | 50.00 | % | HOLDING COMPANY | 218 | 115 | (7 | ) | ||||||||||||||||
UCI Servicios Inmobiliarios y Profesionales, S.L. | Spain | 0.00 | % | 50.00 | % | 50.00 | % | SERVICES | 33 | 4 | (4 | ) | ||||||||||||||||
UFI Servizi S.r.l. (b) | Italy | 0.00 | % | 23.17 | % | 23.17 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Unión de Créditos Inmobiliarios, S.A., EFC | Spain | 0.00 | % | 50.00 | % | 50.00 | % | MORTGAGE LOAN COMPANY | 7,980 | 191 | 30 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of | Net | |||||||||||||||||||||||||||
% of Ownership Held by the Bank | Voting | Capital and | Profit/Loss | |||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Power (f) | Line of Business | Assets | Reserves | for the Year | ||||||||||||||||||||
Vector Software Factory, S.L. | Spain | 0.00 | % | 19.20 | % | 19.20 | % | IT | 7 | 2 | 0 | |||||||||||||||||
Viking Consortium Holdings Limited (consolidated) | United Kingdom | 0.00 | % | 24.99 | % | 24.99 | % | HOLDING COMPANY | 1,076 | 197 | (28 | ) | ||||||||||||||||
Wtorre Empreendimentos Imobiliários S.A. (consolidated) (b) | Brazil | 0.00 | % | 7.14 | % | 8.55 | % | PROPERTY | 1,255 | 303 | (66 | ) |
(a) | Amounts per the books of each company generally at December 31, 2009, unless otherwise stated, because the financial statements have not yet been authorised for issue. The data on foreign companies were translated to euros at the year-end exchange rates. | |
(b) | Data from the latest approved financial statements at December 31, 2008. | |
(c) | Data from the latest approved financial statements at December 31, 2003. | |
(d) | Data from the latest approved financial statements at April 30, 2002. | |
(e) | Data at March 31, 2009, this entity’s year-end. | |
(f) | Pursuant to Article 3 of Royal Decree 1815/1991, of 20 December, approving the rules for the preparation of consolidated financial statements, in order to determine voting power, the voting power relating to subsidiaries or to other parties acting in their own name but on behalf of Group companies were added to the voting power directly held by the Parent. Accordingly, the number of votes corresponding to the Parent in relation to companies over which it exercises indirect control is the number corresponding to each subsidiary holding a direct ownership interest in such companies. | |
(g) | Excluding the Group companies listed in Appendix I and those the interest of which with respect to the fair presentation that the consolidated financial statements must express (pursuant to Article 48 of the Spanish Commercial Code and Article 200 of the Spanish Public Limited Liability Companies Law (Ley de Sociedades Anónimas)) is not material. | |
(h) | Companies over which effective control is exercised. | |
(i) | Data from the latest approved financial statements at July 31, 2009. | |
(j) | Data from the latest approved financial statements at September 30, 2009. | |
(k) | Company in merger process with another Group company. Awaiting registration at Mercantile Registry. | |
(l) | Company in liquidation at December 31, 2009. | |
(m) | Ownership interests held through RFS Holdings B.V. |
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Millions of euros (a) | ||||||||||||||||||||||||||||||
% of Ownership Held by the Bank | Share | Preference | Net Profit/Loss | |||||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Line of Business | Capital | Reserves | Share Cost | for the Year | ||||||||||||||||||||||
Abbey National Capital Trust I | United States | — | (b | ) | FINANCE | 0 | 0 | 0 | 0 | |||||||||||||||||||||
Banesto Holdings, Ltd. | Guernsey | 0.00 | % | 89.72 | % | SECURITIES INVESTMENT | 0 | 47 | 6 | 1 | ||||||||||||||||||||
Banesto Preferentes, S.A. | Spain | 0.00 | % | 89.72 | % | FINANCE | 0 | 0 | 2 | 0 | ||||||||||||||||||||
Santander Emisora 150, S.A., Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | FINANCE | 0 | 0 | 381 | 0 | ||||||||||||||||||||
Santander Finance Capital, S.A. Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | FINANCE | 0 | 0 | 156 | 0 | ||||||||||||||||||||
Santander Finance Preferred, S.A. Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | FINANCE | 0 | 1 | 131 | 1 | ||||||||||||||||||||
Santander International Preferred, S.A. Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | FINANCE | 0 | 0 | 0 | 0 | ||||||||||||||||||||
Sovereign Real Estate Investment Trust | United States | 0.00 | % | 100.00 | % | FINANCE | 2,828 | (2,228 | ) | 57 | 2 |
(a) | Amounts per the books of each company at December 31, 2009, translated to euros (in the case of foreign companies) at the year-end exchange rates. | |
(b) | Companies over which effective control is exercised. |
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1) | Banco Santander (Brasil) S.A. | |
a) | Number of equity instruments held by the Group |
a) | In the event of the transformation, merger, consolidation or spin-off of the company. | |
b) | In the event of approval of agreements between the company and the shareholders, either directly, through third parties or other companies in which the shareholders hold a stake, provided that, due to legal or bylaw provisions, they are submitted to a general meeting. | |
c) | In the event of an assessment of the assets used to increase the company’s share capital. | |
d) | The selection of an institution or specialized company to determine the economic value of the company. |
a) | Their dividends are 10% higher than those on ordinary shares. | |
b) | Priority in the distribution of dividends. | |
c) | Participation, on the same terms as ordinary shares, in capital increases resulting from the capitalization of reserves and profits and in the distribution of bonus shares arising from the capitalization of retained earnings, reserves or any other funds. | |
d) | Priority in the reimbursement of capital in the event of the dissolution of the company. | |
e) | In the event of a public offering due to a change in control of the company, the holders of the preference shares are guaranteed the right to sell at least 80% of the price paid for the block of shares that changed hands as part of the change of control, i.e. they are treated the same as shareholders with voting rights. | |
b) | Capital increases in progress |
c) | Capital authorized by the shareholders at the general shareholders’ meeting |
d) | Rights on founder’s shares, “rights” bonds, convertible debentures and similar securities or rights |
e) | Specific circumstances that restrict the availability of reserves |
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f) | Non-Group entities which hold, directly or through subsidiaries, 10% or more of equity |
g) | Listed equity instruments |
2) | Banco Español de Crédito, S.A. (Banesto) | |
a) | Number of equity instruments held by the Group |
b) | Capital increases in progress |
c) | Capital authorized by the shareholders at the general shareholders’ meeting |
d) | Rights on founder’s shares, “rights” bonds, convertible debentures and similar securities or rights |
e) | Specific circumstances that restrict the availability of reserves |
f) | Non-Group entities which hold, directly or through subsidiaries, 10% or more of equity |
g) | Listed equity instruments |
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3) | Banco Santander Totta, S.A. (Totta) | |
a) | Number of equity instruments held by the Group |
b) | Capital increases in progress |
c) | Capital authorized by the shareholders at the general shareholders’ meeting |
d) | Rights on founder’s shares, “rights” bonds, convertible debentures and similar securities or rights |
e) | Specific circumstances that restrict the availability of reserves |
f) | Non-Group entities which hold, directly or through subsidiaries, 10% or more of equity |
g) | Listed equity instruments |
4) | Banco Santander- Chile | |
a) | Number of equity instruments held by the Group |
b) | Capital increases in progress |
c) | Capital authorized by the shareholders at the general shareholders’ meeting |
d) | Rights on founder’s shares, “rights” bonds, convertible debentures and similar securities or rights |
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e) | Specific circumstances that restrict the availability of reserves |
f) | Non-Group entities which hold, directly or through subsidiaries, 10% or more of equity |
g) | Listed equity instruments |
5) | Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander | |
a) | Number of equity instruments held by the Group |
b) | Capital increases in progress |
c) | Capital authorized by the shareholders at the general shareholders’ meeting |
d) | Rights on founder’s shares, “rights” bonds, convertible debentures and similar securities or rights |
e) | Specific circumstances that restrict the availability of reserves |
• | The Entity increases its legal reserve annually directly from the profit obtained in the year. The legal reserve can be used for any purpose but the balance must be replenished. |
• | The Entity must recognize the various reserves as stipulated in the legal provisions applicable to credit institutions. Credit loss reserves are calculated on the basis of the credit rating assigned to each loan and are released when the rating of the related loan improves or when the loan is settled. |
f) | Non-Group entities which hold, directly or through subsidiaries, 10% or more of equity |
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6) | Abbey National plc (now Santander UK plc) | |
a) | Number of equity instruments held by the Group |
b) | Capital increases in progress |
c) | Capital authorized by the shareholders at the general shareholders’ meeting |
d) | Non-Group entities which hold, directly or through subsidiaries, 10% or more of equity |
e) | Listed equity instruments |
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7) | Sovereign Group (now Santander Holdings USA, Inc.) | |
a) | Number of equity instruments held by the Group |
b) | Capital increases in progress |
c) | Capital authorized by the shareholders at the general shareholders’ meeting |
d) | Rights on founder’s shares, “rights” bonds, convertible debentures and similar securities or rights |
e) | Specific circumstances that restrict the availability of reserves |
f) | Non-Group entities which hold, directly or through subsidiaries, 10% or more of equity |
g) | Listed equity instruments |
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Year end December 31, | ||||||||||||||||||||||||||||||||||||||||
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||||||||||||||||||||||
Including | Excluding | Including | Excluding | Including | Excluding | Including | Excluding | Including | Excluding | |||||||||||||||||||||||||||||||
interest on | interest on | interest on | interest on | interest on | interest on | interest on | interest on | interest on | interest on | |||||||||||||||||||||||||||||||
IFRS: | deposits | deposits | deposits | deposits | deposits | deposits | deposits | deposits | deposits | deposits | ||||||||||||||||||||||||||||||
FIXED CHARGES: | ||||||||||||||||||||||||||||||||||||||||
Fixed charges | 26,392,227 | 10,540,180 | 37,041,015 | 17,756,819 | 30,569,963 | 15,980,396 | 24,143,967 | 11,033,379 | 22,604,978 | 8,956,326 | ||||||||||||||||||||||||||||||
Preferred dividends | 92,294 | 92,294 | 37,374 | 37,374 | 47,290 | 47,290 | 85,229 | 85,229 | 118,389 | 118,389 | ||||||||||||||||||||||||||||||
Fixed charges less Preferred dividends | 26,299,933 | 10,447,886 | 37,003,641 | 17,719,445 | 30,522,673 | 15,933,106 | 24,058,738 | 10,948,150 | 22,486,589 | 8,837,937 | ||||||||||||||||||||||||||||||
EARNINGS: | ||||||||||||||||||||||||||||||||||||||||
Income from continuing operations before taxes and extraordinary items | 10,587,800 | 10,587,800 | 10,849,325 | 10,849,325 | 10,970,494 | 10,970,494 | 8,853,774 | 8,853,774 | 7,195,394 | 7,195,394 | ||||||||||||||||||||||||||||||
Distributed earnings from associated companies | (5,870 | ) | (5,870 | ) | 695,880 | 695,880 | 291,401 | 291,401 | 259,269 | 259,269 | 434,428 | 434,428 | ||||||||||||||||||||||||||||
Fixed charges | 26,392,227 | 10,540,180 | 37,041,015 | 17,756,819 | 30,569,963 | 15,980,396 | 24,143,967 | 11,033,379 | 22,604,978 | 8,956,326 | ||||||||||||||||||||||||||||||
Total earnings | 36,985,897 | 21,133,850 | 47,194,460 | 27,910,264 | 41,249,056 | 26,659,489 | 32,738,472 | 19,627,884 | 29,365,944 | 15,717,292 | ||||||||||||||||||||||||||||||
Less: Preferred dividends | 92,294 | 92,294 | 37,374 | 37,374 | 47,290 | 47,290 | 85,229 | 85,229 | 118,389 | 118,389 | ||||||||||||||||||||||||||||||
Total earnings less preferred stock dividends | 36,893,603 | 21,041,556 | 47,157,086 | 27,872,890 | 41,201,766 | 26,612,199 | 32,653,243 | 19,542,655 | 29,247,555 | 15,598,903 | ||||||||||||||||||||||||||||||
Ratio of earnings to fixed charges | 1.40 | 2.01 | 1.27 | 1.57 | 1.35 | 1.67 | 1.36 | 1.78 | 1.30 | 1.75 | ||||||||||||||||||||||||||||||
Ratio of earnings to fixed charges less preferred stock dividends | 1.40 | 2.01 | 1.27 | 1.57 | 1.35 | 1.67 | 1.36 | 1.79 | 1.30 | 1.76 |
F-252