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o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR | |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2010 | |
OR | |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the transition period from to | |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Jurisdiction of incorporation)
Ciudad Grupo Santander
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)
Name of each exchange | ||
Title of each class | 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.
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act
None.
(Title of Class)
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.
8,440,275,004 shares
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Exhibit 12.1 | ||||||||
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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. |
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• | exposure to various types of market risks; | ||
• | management strategy; | ||
• | capital expenditures; | ||
• | earnings and other targets; and | ||
• | asset portfolios. |
• | 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; | |
• | a decrease or reversal of the moderate economic recovery in the economies of the United Kingdom, other European countries, Latin America, and the United States, and an increase of the volatility in the capital markets; | |
• | a further deterioration of the Spanish economy; | |
• | 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. |
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• | 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, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(in thousands of euros, except percentages and per share data) | ||||||||||||||||||||
Interest and similar income | 52,906,754 | 53,173,004 | 55,043,546 | 45,512,258 | 36,669,337 | |||||||||||||||
Interest expense and similar charges | (23,682,375 | ) | (26,874,462 | ) | (37,505,084 | ) | (31,069,486 | ) | (24,879,598 | ) | ||||||||||
Interest income / (charges) | 29,224,379 | 26,298,542 | 17,538,462 | 14,442,772 | 11,789,739 | |||||||||||||||
Income from equity instruments | 362,068 | 436,474 | 552,757 | 419,997 | 412,554 | |||||||||||||||
Income from companies accounted for using the equity method | 16,921 | (520 | ) | 791,754 | 438,049 | 423,875 | ||||||||||||||
Fee and commission income | 11,679,702 | 10,726,368 | 9,741,400 | 9,290,043 | 8,147,164 | |||||||||||||||
Fee and commission expense | (1,945,552 | ) | (1,646,234 | ) | (1,475,105 | ) | (1,421,538 | ) | (1,251,132 | ) | ||||||||||
Gains/losses on financial assets and liabilities (net) | 2,164,423 | 3,801,645 | 2,892,249 | 2,306,384 | 2,048,725 | |||||||||||||||
Exchange differences (net) | 441,148 | 444,127 | 582,215 | 648,528 | 95,936 | |||||||||||||||
Other operating income | 8,195,567 | 7,928,538 | 9,436,308 | 6,739,670 | 6,075,564 | |||||||||||||||
Other operating expenses | (8,089,330 | ) | (7,784,621 | ) | (9,164,487 | ) | (6,449,120 | ) | (5,800,019 | ) | ||||||||||
Total income | 42,049,326 | 40,204,319 | 30,895,553 | 26,414,785 | 21,942,406 | |||||||||||||||
Administrative expenses | (16,255,988 | ) | (14,824,605 | ) | (11,665,857 | ) | (10,776,670 | ) | (9,783,902 | ) | ||||||||||
Personnel expenses | (9,329,556 | ) | (8,450,283 | ) | (6,813,351 | ) | (6,434,343 | ) | (5,886,871 | ) | ||||||||||
Other general administrative expenses | (6,926,432 | ) | (6,374,322 | ) | (4,852,506 | ) | (4,342,327 | ) | (3,897,031 | ) | ||||||||||
Depreciation and amortization | (1,939,984 | ) | (1,596,445 | ) | (1,239,590 | ) | (1,247,207 | ) | (1,130,159 | ) | ||||||||||
Provisions (net) | (1,132,621 | ) | (1,792,123 | ) | (1,640,561 | ) | (895,552 | ) | (1,007,037 | ) | ||||||||||
Impairment losses on financial assets (net) | (10,443,149 | ) | (11,578,322 | ) | (6,283,052 | ) | (3,430,122 | ) | (2,454,985 | ) | ||||||||||
Impairment losses on other assets (net) | (285,864 | ) | (164,630 | ) | (1,049,226 | ) | (1,548,218 | ) | (20,066 | ) | ||||||||||
Gains/(losses) on disposal of assets not classified as non-current assets held for sale | 350,323 | 1,565,013 | 101,156 | 1,810,428 | 348,199 | |||||||||||||||
Gains/(losses) on disposal of non-current assets held for sale not classified as discontinued operations | (290,170 | ) | (1,225,407 | ) | 1,730,902 | 643,050 | 959,318 | |||||||||||||
Operating profit/(loss) before tax | 12,051,873 | 10,587,800 | 10,849,325 | 10,970,494 | 8,853,774 | |||||||||||||||
Income tax | (2,923,190 | ) | (1,206,610 | ) | (1,836,052 | ) | (2,322,107 | ) | (2,255,585 | ) | ||||||||||
Profit from continuing operations | 9,128,683 | 9,381,190 | 9,013,273 | 8,648,387 | 6,598,189 | |||||||||||||||
Profit/(loss) from discontinued operations (net) | (26,922 | ) | 30,870 | 319,141 | 987,763 | 1,647,564 | ||||||||||||||
Consolidated profit for the year | 9,101,761 | 9,412,060 | 9,332,414 | 9,636,150 | 8,245,753 | |||||||||||||||
Profit attributable to the Parent | 8,180,909 | 8,942,538 | 8,876,414 | 9,060,258 | 7,595,947 | |||||||||||||||
Profit attributable to non-controlling interest | 920,852 | 469,522 | 456,000 | 575,892 | 649,806 | |||||||||||||||
Per share information: | ||||||||||||||||||||
Average number of shares (thousands) (1) | 8,686,522 | 8,554,224 | 7,271,470 | 6,801,899 | 6,701,728 | |||||||||||||||
Basic earnings per share (euros) | 0.9418 | 1.0454 | 1.2207 | 1.3320 | 1.1334 | |||||||||||||||
Basic earnings per share continuing operation (euros) | 0.9449 | 1.0422 | 1.1780 | 1.2003 | 0.9233 | |||||||||||||||
Diluted earnings per share (euros) | 0.9356 | 1.0382 | 1.2133 | 1.3191 | 1.1277 | |||||||||||||||
Diluted earnings per share continuing operation (euros) | 0.9387 | 1.0350 | 1.1709 | 1.1887 | 0.9186 | |||||||||||||||
Remuneration paid (euros) (2) | 0.6000 | 0.6000 | 0.6325 | 0.6068 | 0.4854 | |||||||||||||||
Remuneration paid (US$) (2) | 0.8017 | 0.8644 | 0.8802 | 0.8932 | 0.6393 |
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Year ended December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(in thousands of euros, except percentages and per share data) | ||||||||||||||||||||
Total assets | 1,217,500,683 | 1,110,529,458 | 1,049,631,550 | 912,914,971 | 833,872,715 | |||||||||||||||
Loans and advances to credit institutions (net) (3) | 79,855,351 | 79,836,607 | 78,792,277 | 57,642,604 | 69,757,056 | |||||||||||||||
Loans and advances to customers (net) (3) | 724,153,897 | 682,550,926 | 626,888,435 | 571,098,513 | 527,035,514 | |||||||||||||||
Investment securities (net) (4) | 174,257,145 | 173,990,918 | 124,673,342 | 132,035,268 | 136,760,433 | |||||||||||||||
Investments: Associates | 272,915 | 164,473 | 1,323,453 | 15,689,127 | 5,006,109 | |||||||||||||||
Contingent liabilities (net) | 59,795,253 | 59,256,076 | 65,323,194 | 76,216,585 | 58,769,309 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits from central banks and credit institutions (5) | 140,112,185 | 142,091,587 | 129,877,370 | 112,897,308 | 113,038,061 | |||||||||||||||
Customer deposits (5) | 616,375,819 | 506,976,237 | 420,229,450 | 355,406,519 | 330,947,770 | |||||||||||||||
Debt securities (5) | 192,872,222 | 211,963,173 | 236,403,290 | 233,286,688 | 203,742,817 | |||||||||||||||
Capitalization | ||||||||||||||||||||
Guaranteed subordinated debt excluding preferred securities and preferred shares (6) | 10,933,818 | 13,866,889 | 15,747,915 | 16,742,134 | 11,186,480 | |||||||||||||||
Secured subordinated debt | — | — | — | — | — | |||||||||||||||
Other subordinated debt | 12,188,524 | 15,192,269 | 14,452,488 | 11,666,663 | 12,399,771 | |||||||||||||||
Preferred securities (6) | 6,916,930 | 7,315,291 | 7,621,575 | 7,261,382 | 6,836,570 | |||||||||||||||
Preferred shares (6) | 435,365 | 430,152 | 1,051,272 | 522,558 | 668,328 | |||||||||||||||
Non-controlling interest (including net income of the period) | 5,896,119 | 5,204,058 | 2,414,606 | 2,358,269 | 2,220,743 | |||||||||||||||
Stockholders’ equity (7) | 75,018,339 | 68,666,584 | 57,586,886 | 55,199,882 | 44,851,559 | |||||||||||||||
Total capitalization | 111,389,095 | 110,675,243 | 98,874,742 | 93,750,888 | 78,163,451 | |||||||||||||||
Stockholders’ equity per share (7) | 8.64 | 8.03 | 7.92 | 8.12 | 6.69 | |||||||||||||||
Other managed funds | ||||||||||||||||||||
Mutual funds | 113,509,684 | 105,216,486 | 90,305,714 | 119,210,503 | 119,838,418 | |||||||||||||||
Pension funds | 10,964,711 | 11,309,649 | 11,127,918 | 11,952,437 | 29,450,103 | |||||||||||||||
Managed portfolio | 20,314,226 | 18,364,168 | 17,289,448 | 19,814,340 | 17,835,031 | |||||||||||||||
Total other managed funds | 144,788,621 | 134,890,303 | 118,723,080 | 150,977,280 | 167,123,552 | |||||||||||||||
Consolidated ratios | ||||||||||||||||||||
Profitability ratios: | ||||||||||||||||||||
Net yield (8) | 2.68 | % | 2.62 | % | 2.05 | % | 1.80 | % | 1.68 | % | ||||||||||
Return on average total assets (ROA) | 0.76 | % | 0.86 | % | 1.00 | % | 1.10 | % | 1.01 | % | ||||||||||
Return on average stockholders’ equity (ROE) | 11.80 | % | 13.90 | % | 17.07 | % | 21.91 | % | 21.39 | % | ||||||||||
Capital ratio: | ||||||||||||||||||||
Average stockholders’ equity to average total assets | 5.82 | % | 5.85 | % | 5.55 | % | 4.71 | % | 4.36 | % | ||||||||||
Ratio of earnings to fixed charges (9) | ||||||||||||||||||||
Excluding interest on deposits | 2.28 | % | 2.01 | % | 1.57 | % | 1.67 | % | 1.79 | % | ||||||||||
Including interest on deposits | 1.52 | % | 1.40 | % | 1.27 | % | 1.35 | % | 1.36 | % | ||||||||||
Credit quality data | ||||||||||||||||||||
Loans and advances to customers | ||||||||||||||||||||
Allowances for impaired balances including country risk and excluding contingent liabilities as a percentage of total gross loans | 2.65 | % | 2.55 | % | 1.95 | % | 1.50 | % | 1.53 | % | ||||||||||
Impaired balances as a percentage of total gross loans | 3.75 | % | 3.43 | % | 2.19 | % | 1.05 | % | 0.86 | % | ||||||||||
Allowances for impaired balances as a percentage of impaired balances | 70.6 | % | 74.3 | % | 89.1 | % | 143.2 | % | 177.0 | % | ||||||||||
Net loan charge-offs as a percentage of total gross loans | 1.31 | % | 1.27 | % | 0.60 | % | 0.46 | % | 0.34 | % | ||||||||||
Ratios adding contingent liabilities to loans and advances to customers and excluding country risk (*) | ||||||||||||||||||||
Allowances for impaired balances (**) as a percentage of total loans and contingent liabilities | 2.58 | % | 2.44 | % | 1.83 | % | 1.42 | % | 1.45 | % | ||||||||||
Impaired balances (**) (10) as a percentage of total loans and contingent liabilities | 3.55 | % | 3.24 | % | 2.02 | % | 0.94 | % | 0.78 | % | ||||||||||
Allowances for impaired balances (**) as a percentage of impaired balances (**) | 72.74 | % | 75.33 | % | 90.64 | % | 150.55 | % | 187.23 | % | ||||||||||
Net loan and contingent liabilities charge-offs as a percentage of total loans and contingent liabilities | 1.21 | % | 1.17 | % | 0.55 | % | 0.41 | % | 0.31 | % |
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(*) | We disclose these ratios because our credit risk exposure comprises loans and advances to customers as well as contingent liabilities, all of which are subject to impairment and, therefore, allowances are taken in respect thereof. | |
(**) | Impaired or non-performing loans and contingent liabilities, securities and other assets to collect. | |
(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. In light of the acceptance of this remuneration program (81% of the capital opted to receive shares instead of cash), at the general shareholders’ meeting held on June 11, 2010, the shareholders approved to offer again this option to the shareholders as payment for the second and third interim dividends on account of 2010. The remuneration per share for 2009 and 2010 disclosed above,€0.60, are calculated assuming that the four dividends for both years 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 “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 pre-tax income from continuing operations before adjustment for income or loss from equity investees plus fixed charges. Fixed charges consist of total interest expense (including or excluding interest on deposits as appropriate) and the interest expense portion of rental expense. | |
(10) | Impaired loans reflect Bank of Spain classifications. These 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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IFRS-IASB | ||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||
Allowances refers to: | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||
(in thousands of euros) | ||||||||||||||||||||
Allowances for impaired balances (*) (excluding country risk) | 20,747,651 | 18,497,070 | 12,862,981 | 9,302,230 | 8,626,937 | |||||||||||||||
Allowances for contingent liabilities and commitments (excluding country risk) | (1,011,448 | ) | (623,202 | ) | (622,330 | ) | (587,485 | ) | (541,519 | ) | ||||||||||
Allowances for Balances of Loans (excluding country risk): | 19,736,203 | 17,873,868 | 12,240,651 | 8,714,745 | 8,085,418 | |||||||||||||||
Allowances referred to country risk and other | 121,409 | 191,486 | 660,150 | 173,379 | 293,032 | |||||||||||||||
Allowances for impaired balances (excluding contingent liabilities) | 19,857,612 | 18,065,354 | 12,900,801 | 8,888,124 | 8,378,450 | |||||||||||||||
Of which: | ||||||||||||||||||||
Allowances for Loans and receivables: | 19,738,975 | 17,898,632 | 12,719,623 | 8,796,371 | 8,288,128 | |||||||||||||||
Allowances for Customers | 19,696,998 | 17,873,096 | 12,466,056 | 8,695,204 | 8,163,444 | |||||||||||||||
Allowances for Credit institutions and other financial assets | 16,559 | 25,536 | 253,567 | 101,167 | 124,684 | |||||||||||||||
Allowances for Debt Instruments | 25,418 | — | — | — | — | |||||||||||||||
Allowances for Debt Instruments available for sale | 118,637 | 166,722 | 181,178 | 91,753 | 90,322 |
(*) | Impaired or non-performing loans and contingent liabilities, securities and other assets to collect. |
Rate During Period | ||||||||
Period End | Average Rate(1) | |||||||
Calendar Period | ($) | ($) | ||||||
2006 | 1.3197 | 1.2661 | ||||||
2007 | 1.4603 | 1.3797 | ||||||
2008 | 1.3919 | 1.4695 | ||||||
2009 | 1.4406 | 1.3948 | ||||||
2010 | 1.3362 | 1.3257 |
(1) | The average of the Noon Buying Rates for euros on the last day of each month during the period. |
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Rate During Period | ||||||||
Last six months | High $ | Low $ | ||||||
2010 | ||||||||
November | 1.4244 | 1.2998 | ||||||
December | 1.3435 | 1.3064 | ||||||
2011 | ||||||||
January | 1.3716 | 1.2903 | ||||||
February | 1.3834 | 1.3440 | ||||||
March | 1.4211 | 1.3773 | ||||||
April | 1.4860 | 1.4141 | ||||||
May (through May 26) | 1.4882 | 1.4020 |
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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. |
• | 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”: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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• | “Valores Santander”: On October 7, 2010, the Bank issued 11,582,632 new shares in exchange for 33,544 “Valores Santander”. | ||
• | “Scrip Dividend”:On November 2, 2010 we issued 88,713,331 ordinary shares par value€0.5 in the free-of-charge capital increase, corresponding to 1.08% of our share capital. The amount of the capital increase was€44,356,665.50. |
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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. This includes all the financial activities of Sovereign, including retail and wholesale banking, asset management and insurance. Sovereign’s operations are conducted solely in the U.S. |
• | Retail Banking. This covers all customer banking businesses (except those of Corporate Banking, which are managed globally). | ||
• | 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 | Percentage held | |||||||||
at December 31, 2010 | at December 31, 2010 | |||||||||
Banco Santander (Brasil), S.A. | 81.38 | Banco Santander, S.A. (Uruguay) | 100.00 | |||||||
Banco Santander Chile | 76.74 | Banco Santander Colombia, S.A. | 97.85 | |||||||
Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander | 99.86 | Banco Santander Puerto Rico | 100.00 | |||||||
Banco Santander Río, S.A. (Argentina) | 99.30 | 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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Year ended December, 31 | ||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | |||||||||||||||||||||||||||||||
ASSETS | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||||||||||
(in thousand of euros, except percentages) | ||||||||||||||||||||||||||||||||||||
Cash and due from central banks | ||||||||||||||||||||||||||||||||||||
Domestic | 8,441,011 | 86,686 | 1.03 | % | 7,916,042 | 86,918 | 1.10 | % | 7,629,805 | 242,954 | 3.18 | % | ||||||||||||||||||||||||
International | 52,935,719 | 1,846,399 | 3.49 | % | 25,933,209 | 268,921 | 1.04 | % | 21,224,830 | 514,997 | 2.43 | % | ||||||||||||||||||||||||
61,376,730 | 1,933,085 | 3.15 | % | 33,849,251 | 355,839 | 1.05 | % | 28,854,635 | 757,951 | 2.63 | % | |||||||||||||||||||||||||
Due from credit entities | ||||||||||||||||||||||||||||||||||||
Domestic | 29,392,464 | 205,857 | 0.70 | % | 20,934,738 | 366,521 | 1.75 | % | 14,858,817 | 726,287 | 4.89 | % | ||||||||||||||||||||||||
International | 51,382,325 | 839,110 | 1.63 | % | 58,290,277 | 2,155,515 | 3.70 | % | 61,173,074 | 3,095,167 | 5.06 | % | ||||||||||||||||||||||||
80,774,789 | 1,044,967 | 1.29 | % | 79,225,015 | 2,522,036 | 3.18 | % | 76,031,891 | 3,821,454 | 5.03 | % | |||||||||||||||||||||||||
Loans and credits | ||||||||||||||||||||||||||||||||||||
Domestic | 224,641,828 | 7,312,206 | 3.26 | % | 230,641,779 | 10,297,581 | 4.46 | % | 235,002,141 | 13,968,547 | 5.94 | % | ||||||||||||||||||||||||
International | 482,406,776 | 34,541,844 | 7.16 | % | 436,857,260 | 31,784,344 | 7.28 | % | 340,938,627 | 27,397,524 | 8.04 | % | ||||||||||||||||||||||||
707,048,604 | 41,854,050 | 5.92 | % | 667,499,039 | 42,081,925 | 6.30 | % | 575,940,768 | 41,366,071 | 7.18 | % | |||||||||||||||||||||||||
Debt securities | ||||||||||||||||||||||||||||||||||||
Domestic | 44,783,466 | 1,136,082 | 2.54 | % | 40,146,418 | 1,157,953 | 2.88 | % | 24,948,203 | 951,353 | 3.81 | % | ||||||||||||||||||||||||
International | 107,662,252 | 5,095,843 | 4.73 | % | 92,776,382 | 4,428,624 | 4.77 | % | 73,645,946 | 3,555,521 | 4.83 | % | ||||||||||||||||||||||||
152,445,718 | 6,231,925 | 4.09 | % | 132,922,800 | 5,586,577 | 4.20 | % | 98,594,149 | 4,506,874 | 4.57 | % | |||||||||||||||||||||||||
Income from hedging operations | ||||||||||||||||||||||||||||||||||||
Domestic | 169,394 | 304,669 | 695,086 | |||||||||||||||||||||||||||||||||
International | (76,312 | ) | 586,600 | 2,548,537 | ||||||||||||||||||||||||||||||||
93,082 | 891,269 | 3,243,623 | ||||||||||||||||||||||||||||||||||
Other interest-earning assets | ||||||||||||||||||||||||||||||||||||
Domestic | 27,769,273 | 697,464 | 2.51 | % | 29,389,475 | 609,652 | 2.07 | % | 23,577,214 | 618,246 | 2.62 | % | ||||||||||||||||||||||||
International | 62,756,952 | 1,052,180 | 1.68 | % | 60,208,919 | 1,125,706 | 1.87 | % | 41,486,705 | 729,327 | 1.76 | % | ||||||||||||||||||||||||
90,526,225 | 1,749,644 | 1.93 | % | 89,598,394 | 1,735,358 | 1.94 | % | 65,063,919 | 1,347,573 | 2.07 | % | |||||||||||||||||||||||||
Total interest-earning assets | ||||||||||||||||||||||||||||||||||||
Domestic | 335,028,042 | 9,607,689 | 2.87 | % | 329,028,452 | 12,823,294 | 3.90 | % | 306,016,180 | 17,202,473 | 5.62 | % | ||||||||||||||||||||||||
International | 757,144,024 | 43,299,064 | 5.72 | % | 674,066,047 | 40,349,710 | 5.99 | % | 538,469,182 | 37,841,073 | 7.03 | % | ||||||||||||||||||||||||
1,092,172,066 | 52,906,753 | 4.84 | % | 1,003,094,499 | 53,173,004 | 5.30 | % | 844,485,362 | 55,043,546 | 6.52 | % | |||||||||||||||||||||||||
Investments in affiliated companies | ||||||||||||||||||||||||||||||||||||
Domestic | 200,604 | — | 0.00 | % | 152,893 | — | 0.00 | % | 2,576,136 | — | 0.00 | % | ||||||||||||||||||||||||
International | 52,278 | — | 0.00 | % | 708,988 | — | 0.00 | % | 10,044,991 | — | 0.00 | % | ||||||||||||||||||||||||
252,882 | — | 0.00 | % | 861,881 | — | 0.00 | % | 12,621,127 | — | 0.00 | % | |||||||||||||||||||||||||
Total earning assets | ||||||||||||||||||||||||||||||||||||
Domestic | 335,228,646 | 9,607,689 | 2.87 | % | 329,181,345 | 12,823,294 | 3.90 | % | 308,592,316 | 17,202,473 | 5.57 | % | ||||||||||||||||||||||||
International | 757,196,302 | 43,299,064 | 5.72 | % | 674,775,035 | 40,349,710 | 5.98 | % | 548,514,173 | 37,841,073 | 6.90 | % | ||||||||||||||||||||||||
1,092,424,948 | 52,906,753 | 4.84 | % | 1,003,956,380 | 53,173,004 | 5.30 | % | 857,106,489 | 55,043,546 | 6.42 | % | |||||||||||||||||||||||||
Other assets | 97,936,085 | 90,198,410 | 75,975,026 | |||||||||||||||||||||||||||||||||
Assets from discontinued operations | — | 4,980,696 | 8,024,216 | |||||||||||||||||||||||||||||||||
Total average assets | 1,190,361,033 | 52,906,753 | 1,099,135,486 | 53,173,004 | 941,105,731 | 55,043,546 |
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Year Ended December, 31 | ||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||
Average | Average | Average | Average | Average | Average | |||||||||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY | Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||||||||||||||||||||||
Due to credit entities | ||||||||||||||||||||||||||||||||||||
Domestic | 28,586,452 | 389,318 | 1.36 | % | 21,713,054 | 424,084 | 1.95 | % | 18,468,695 | 830,324 | 4.50 | % | ||||||||||||||||||||||||
International | 105,990,880 | 1,283,290 | 1.21 | % | 120,217,372 | 2,861,280 | 2.38 | % | 95,892,266 | 2,858,266 | 2.98 | % | ||||||||||||||||||||||||
134,577,332 | 1,672,608 | 1.24 | % | 141,930,426 | 3,285,364 | 2.31 | % | 114,360,961 | 3,688,590 | 3.23 | % | |||||||||||||||||||||||||
Customers deposits | ||||||||||||||||||||||||||||||||||||
Domestic | 155,244,435 | 2,838,550 | 1.83 | % | 130,580,883 | 2,694,867 | 2.06 | % | 119,381,247 | 3,830,610 | 3.21 | % | ||||||||||||||||||||||||
International | 413,670,307 | 10,607,001 | 2.56 | % | 333,021,416 | 9,115,847 | 2.74 | % | 234,812,668 | 11,169,783 | 4.76 | % | ||||||||||||||||||||||||
568,914,742 | 13,445,551 | 2.36 | % | 463,602,299 | 11,810,714 | 2.55 | % | 354,193,915 | 15,000,393 | 4.24 | % | |||||||||||||||||||||||||
Marketable debt securities | ||||||||||||||||||||||||||||||||||||
Domestic | 105,410,789 | 2,876,114 | 2.73 | % | 125,931,287 | 3,598,181 | 2.86 | % | 145,061,770 | 6,487,367 | 4.47 | % | ||||||||||||||||||||||||
International | 103,595,017 | 2,082,989 | 2.01 | % | 95,298,804 | 2,638,566 | 2.77 | % | 92,762,877 | 4,330,281 | 4.67 | % | ||||||||||||||||||||||||
209,005,806 | 4,959,103 | 2.37 | % | 221,230,091 | 6,236,747 | 2.82 | % | 237,824,647 | 10,817,648 | 4.55 | % | |||||||||||||||||||||||||
Subordinated debt | ||||||||||||||||||||||||||||||||||||
Domestic | 19,701,845 | 1,019,055 | 5.17 | % | 21,704,442 | 1,028,748 | 4.74 | % | 20,532,672 | 1,111,241 | 5.41 | % | ||||||||||||||||||||||||
International | 14,393,767 | 1,211,225 | 8.41 | % | 17,304,105 | 1,325,301 | 7.66 | % | 15,724,436 | 1,303,801 | 8.29 | % | ||||||||||||||||||||||||
34,095,612 | 2,230,280 | 6.54 | % | 39,008,547 | 2,354,049 | 6.03 | % | 36,257,108 | 2,415,042 | 6.66 | % | |||||||||||||||||||||||||
Other interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||
Domestic | 39,728,726 | 1,031,180 | 2.60 | % | 37,347,808 | 1,128,882 | 3.02 | % | 36,605,703 | 876,041 | 2.39 | % | ||||||||||||||||||||||||
International | 81,998,874 | 1,184,135 | 1.44 | % | 70,461,483 | 1,241,760 | 1.76 | % | 52,981,507 | 573,773 | 1.08 | % | ||||||||||||||||||||||||
121,727,600 | 2,215,315 | 1.82 | % | 107,809,291 | 2,370,642 | 2.20 | % | 89,587,210 | 1,449,814 | 1.62 | % | |||||||||||||||||||||||||
Expenses from hedging operations | ||||||||||||||||||||||||||||||||||||
Domestic | (1,362,521 | ) | (622,758 | ) | 1,402,069 | |||||||||||||||||||||||||||||||
International | 522,040 | 1,439,704 | 2,731,528 | |||||||||||||||||||||||||||||||||
(840,481 | ) | 816,946 | 4,133,597 | |||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | ||||||||||||||||||||||||||||||||||||
Domestic | 348,672,247 | 6,791,696 | 1.95 | % | 337,277,474 | 8,252,004 | 2.45 | % | 340,050,087 | 14,537,652 | 4.28 | % | ||||||||||||||||||||||||
International | 719,648,845 | 16,890,680 | 2.35 | % | 636,303,180 | 18,622,458 | 2.93 | % | 492,173,754 | 22,967,432 | 4.67 | % | ||||||||||||||||||||||||
1,068,321,092 | 23,682,376 | 2.22 | % | 973,580,654 | 26,874,462 | 2.76 | % | 832,223,841 | 37,505,084 | 4.51 | % | |||||||||||||||||||||||||
Other liabilities | 45,192,441 | 54,382,807 | 44,784,845 | |||||||||||||||||||||||||||||||||
Non-controlling interest | 5,694,541 | 3,191,835 | 2,432,563 | |||||||||||||||||||||||||||||||||
Stockholders’ Equity | 71,152,959 | 63,393,172 | 54,149,565 | |||||||||||||||||||||||||||||||||
Liabilities from discontinued operations | — | 4,587,018 | 7,514,918 | |||||||||||||||||||||||||||||||||
Total average Liabilities and Stockholders’ Equity | 1,190,361,033 | 23,682,376 | 1,099,135,486 | 26,874,462 | 941,105,732 | 37,505,084 |
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IFRS-IASB | ||||||||||||
2010/2009 | ||||||||||||
Increase (Decrease) due to changes in | ||||||||||||
Volume | Rate | Net change | ||||||||||
(in thousands of euros) | ||||||||||||
Interest income | ||||||||||||
Cash and due from central banks | ||||||||||||
Domestic | 5,575 | (5,807 | ) | (232 | ) | |||||||
International | 482,405 | 1,095,073 | 1,577,478 | |||||||||
487,980 | 1,089,266 | 1,577,246 | ||||||||||
Due from credit entities | ||||||||||||
Domestic | 112,326 | (272,991 | ) | (160,665 | ) | |||||||
International | (230,476 | ) | (1,085,928 | ) | (1,316,404 | ) | ||||||
(118,150 | ) | (1,358,919 | ) | (1,477,069 | ) | |||||||
Loans and credits | ||||||||||||
Domestic | (261,524 | ) | (2,723,850 | ) | (2,985,374 | ) | ||||||
International | 3,268,425 | (510,925 | ) | 2,757,500 | ||||||||
3,006,901 | (3,234,775 | ) | (227,874 | ) | ||||||||
Debt securities | ||||||||||||
Domestic | 125,861 | (147,731 | ) | (21,870 | ) | |||||||
International | 704,873 | (37,655 | ) | 667,218 | ||||||||
830,734 | (185,386 | ) | 645,348 | |||||||||
Other interest-earning assets | ||||||||||||
Domestic | (35,078 | ) | 122,890 | 87,812 | ||||||||
International | 46,210 | (119,736 | ) | (73,526 | ) | |||||||
11,132 | 3,154 | 14,286 | ||||||||||
Total interest-earning assets without hedging operations | ||||||||||||
Domestic | (52,840 | ) | (3,027,489 | ) | (3,080,329 | ) | ||||||
International | 4,271,437 | (659,171 | ) | 3,612,266 | ||||||||
4,218,597 | (3,686,660 | ) | 531,937 | |||||||||
Income from hedging operations | ||||||||||||
Domestic | (135,275 | ) | — | (135,275 | ) | |||||||
International | (662,912 | ) | — | (662,912 | ) | |||||||
(798,187 | ) | — | (798,187 | ) | ||||||||
Total interest-earning assets | ||||||||||||
Domestic | (188.115 | ) | (3,027,489 | ) | (3,215,604 | ) | ||||||
International | 3,608,525 | (659,171 | ) | 2,949,354 | ||||||||
3,420,410 | (3,686,660 | ) | (266,250 | ) |
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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 | ||||||||||||
2010/2009 | ||||||||||||
Increase (Decrease) due to changes in | ||||||||||||
Volume | Rate | Net change | ||||||||||
(in thousands of euros) | ||||||||||||
Interest charges | ||||||||||||
Due to credit entities | ||||||||||||
Domestic | 113,473 | (148,239 | ) | (34,766 | ) | |||||||
International | (306,311 | ) | (1,271,679 | ) | (1,577,990 | ) | ||||||
(192,838 | ) | (1,419,918 | ) | (1,612,756 | ) | |||||||
Customers deposits | ||||||||||||
Domestic | 472,805 | (329,122 | ) | 143,683 | ||||||||
International | 2,096,869 | (605,714 | ) | 1,491,155 | ||||||||
2,569,674 | (934,836 | ) | 1,634,838 | |||||||||
Marketable debt securities | ||||||||||||
Domestic | (565,623 | ) | (156,444 | ) | (722,067 | ) | ||||||
International | 214,527 | (770,105 | ) | (555,578 | ) | |||||||
(351,096 | ) | (926,549 | ) | (1,277,645 | ) | |||||||
Subordinated debt | ||||||||||||
Domestic | (99,274 | ) | 89,581 | (9,693 | ) | |||||||
International | (236,765 | ) | 122,689 | (114,076 | ) | |||||||
(336,039 | ) | 212,270 | (123,769 | ) | ||||||||
Other interest-bearing liabilities | ||||||||||||
Domestic | 68,805 | (166,507 | ) | (97,702 | ) | |||||||
International | 185,866 | (243,491 | ) | (57,625 | ) | |||||||
254,671 | (409,998 | ) | (155,327 | ) | ||||||||
Total interest-bearing liabilities without hedging operations | ||||||||||||
Domestic | (9,814 | ) | (710,731 | ) | (720,545 | ) | ||||||
International | 1,954,186 | (2,768,300 | ) | (814,114 | ) | |||||||
1,944,372 | (3,479,031 | ) | (1,534,659 | ) | ||||||||
Expenses from hedging operations | ||||||||||||
Domestic | (739.763 | ) | — | (739,763 | ) | |||||||
International | (917,664 | ) | — | (917,664 | ) | |||||||
(1,657,427 | ) | — | (1,657,427 | ) | ||||||||
Total interest-bearing liabilities | ||||||||||||
Domestic | (749,577 | ) | (710,731 | ) | (1,460,308 | ) | ||||||
International | 1,036,522 | (2,768,300 | ) | (1,731,778 | ) | |||||||
286,945 | (3,479,031 | ) | (3,192,086 | ) |
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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 | ||||||||||||
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(in thousands of euros, except percentages) | ||||||||||||
Average earning assets | ||||||||||||
Domestic | 335,228,646 | 329,181,345 | 308,592,316 | |||||||||
International | 757,196,302 | 674,775,035 | 548,514,173 | |||||||||
1,092,424,948 | 1,003,956,380 | 857,106,489 | ||||||||||
Interest | ||||||||||||
Domestic | 9,607,689 | 12,823,294 | 17,202,473 | |||||||||
International | 43,299,065 | 40,349,710 | 37,841,073 | |||||||||
52,906,754 | 53,173,004 | 55,043,546 | ||||||||||
Net interest income (1) | ||||||||||||
Domestic | 2,815,995 | 4,571,290 | 2,664,821 | |||||||||
International | 26,408,384 | 21,727,252 | 14,873,641 | |||||||||
29,224,379 | 26,298,542 | 17,538,462 | ||||||||||
Gross yield (2) | ||||||||||||
Domestic | 2.87 | % | 3.90 | % | 5.57 | % | ||||||
International | 5.72 | % | 5.98 | % | 6.90 | % | ||||||
4.84 | % | 5.30 | % | 6.42 | % | |||||||
Net yield (3) | ||||||||||||
Domestic | 0.84 | % | 1.39 | % | 0.86 | % | ||||||
International | 3.49 | % | 3.22 | % | 2.71 | % | ||||||
2.68 | % | 2.62 | % | 2.05 | % | |||||||
Yield spread (4) | ||||||||||||
Domestic | 0.92 | % | 1.45 | % | 1.29 | % | ||||||
International | 3.37 | % | 3.05 | % | 2.23 | % | ||||||
2.62 | % | 2.54 | % | 1.91 | % |
(1) | Net interest income is the net amount of interest and similar income and interest expense and similar charges. — See “Income Statement” on page 9. — | |
(2) | Gross yield is the quotient of interest income divided by average earning assets. | |
(3) | Net yield is the quotient of net interest income divided by average earning assets. | |
(4) | 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, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
ROA: Return on average total assets | 0.76 | % | 0.86 | % | 1.00 | % | ||||||
ROE:Return on average stockholders’ equity | 11.80 | % | 13.90 | % | 17.07 | % | ||||||
PAY-OUT:Dividends per average share as a percentage of net attributable income per average share (*) | 40.70 | % | 46.09 | % | 54.21 | % | ||||||
Average stockholders’ equity as a percentage of average total assets | 5.82 | % | 5.85 | % | 5.55 | % |
(*) | The pay-out ratio does not include in the numerator the amounts paid under theSantander Dividendo Elecciónprogram (scrip dividends) which are not dividends paid on account of the net attributable income of the period. Such dividends amount to€1,668.8 million and€796.8 million for 2010 and 2009, respectively. |
IFRS-IASB | ||||||||||||
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Cash and due from Central Banks | ||||||||||||
Domestic | 0.77 | % | 0.79 | % | 0.92 | % | ||||||
International | 4.85 | % | 2.59 | % | 2.51 | % | ||||||
5.62 | % | 3.38 | % | 3.43 | % | |||||||
Due from credit entities | ||||||||||||
Domestic | 2.69 | % | 2.09 | % | 1.76 | % | ||||||
International | 4.70 | % | 5.81 | % | 7.24 | % | ||||||
7.39 | % | 7.90 | % | 9.00 | % | |||||||
Loans and credits | ||||||||||||
Domestic | 20.56 | % | 22.99 | % | 27.83 | % | ||||||
International | 44.18 | % | 43.55 | % | 40.37 | % | ||||||
64.74 | % | 66.54 | % | 68.20 | % | |||||||
Debt securities | ||||||||||||
Domestic | 4.10 | % | 4.00 | % | 2.95 | % | ||||||
International | 9.86 | % | 9.25 | % | 8.72 | % | ||||||
13.96 | % | 13.25 | % | 11.67 | % | |||||||
Other interest-earning assets | ||||||||||||
Domestic | 2.53 | % | 2.93 | % | 2.79 | % | ||||||
International | 5.76 | % | 6.00 | % | 4.91 | % | ||||||
8.29 | % | 8.93 | % | 7.70 | % | |||||||
Total interest-earning assets | ||||||||||||
Domestic | 30.65 | % | 32.80 | % | 36.25 | % | ||||||
International | 69.35 | % | 67.20 | % | 63.75 | % | ||||||
100.00 | % | 100.00 | % | 100.00 | % |
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IFRS-IASB | ||||||||||||||||||||
At December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(in thousands of euros) | ||||||||||||||||||||
Reciprocal accounts | 1,264,072 | 712,503 | 663,230 | 417,438 | 503,299 | |||||||||||||||
Time deposits | 13,548,408 | 21,382,542 | 25,455,903 | 13,569,362 | 16,842,601 | |||||||||||||||
Reverse repurchase agreements | 36,720,631 | 29,489,895 | 18,568,747 | 30,276,080 | 37,010,008 | |||||||||||||||
Other accounts | 28,322,240 | 28,251,667 | 34,104,397 | 13,379,724 | 15,401,148 | |||||||||||||||
79,855,351 | 79,836,607 | 78,792,277 | 57,642,604 | 69,757,056 | ||||||||||||||||
Of which Impairment allowances | (16,559 | ) | (25,536 | ) | (253,567 | ) | (18,487 | ) | (12,727 | ) |
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IFRS-IASB | ||||||||||||
At December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(in thousands of euros) | ||||||||||||
Debt securities | ||||||||||||
Domestic- | ||||||||||||
Spanish Government | 35,109,766 | 37,770,101 | 20,267,964 | |||||||||
Other domestic issuer: | ||||||||||||
Public authorities | 553,390 | 542,577 | 231,529 | |||||||||
Other domestic issuer | 7,915,055 | 8,124,835 | 9,076,564 | |||||||||
Total domestic | 43,578,211 | 46,437,513 | 29,576,057 | |||||||||
International- | ||||||||||||
United States: | ||||||||||||
U.S. Treasury and other U.S. Government agencies | 1,121,904 | 1,183,550 | 881,579 | |||||||||
States and political subdivisions | 1,741,307 | 1,714,940 | 1,260,494 | |||||||||
Other securities | 11,598,384 | 12,964,869 | 6,155,609 | |||||||||
Total United States | 14,461,595 | 15,863,359 | 8,297,682 | |||||||||
Other: | ||||||||||||
Governments | 60,736,942 | 41,108,209 | 20,990,003 | |||||||||
Other securities | 31,960,770 | 48,292,040 | 50,567,953 | |||||||||
Total Other | 92,697,712 | 89,400,249 | 71,557,956 | |||||||||
Total International | 107,159,307 | 105,263,608 | 79,855,638 | |||||||||
Less- Allowance for credit losses | (144,055 | ) | (166,722 | ) | (181,178 | ) | ||||||
Less- Price fluctuation allowance | — | — | — | |||||||||
Total Debt Securities | 150,593,463 | 151,534,399 | 109,250,517 | |||||||||
Equity securities | ||||||||||||
Domestic | 5,458,251 | 6,070,228 | 4,447,197 | |||||||||
International- | ||||||||||||
United States | 1,931,078 | 1,489,681 | 938,265 | |||||||||
Other | 16,274,353 | 14,896,610 | 10,046,522 | |||||||||
Total international | 18,205,431 | 16,386,291 | 10,984,787 | |||||||||
Less- Price fluctuation allowance | — | — | (9,159 | ) | ||||||||
Total Equity Securities | 23,663,682 | 22,456,519 | 15,422,825 | |||||||||
Total Investment Securities | 174,257,145 | 173,990,918 | 124,673,342 |
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Aggregate as of December 31, 2010 | ||||||||
Book value | Market value | |||||||
(in thousands of euros) | ||||||||
Debt securities: | ||||||||
Exceed 10% of stockholders’ equity: | ||||||||
Spanish Government | 35,663,155 | 35,663,155 | ||||||
Near 10% of stockholders’ equity: | ||||||||
Telefónica | 6,449,567 | 6,449,567 | ||||||
República Federal do Brasil | 5,925,144 | 5,925,144 |
At December 31, 2010 | ||||||||||||||||||||
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 | 7,522,658 | 9,391,929 | 14,162,508 | 4,032,671 | 35,109,766 | |||||||||||||||
Other domestic issuer: | ||||||||||||||||||||
Public authorities | 32,272 | 206,117 | 313,476 | 1,525 | 553,390 | |||||||||||||||
Other domestic issuer | 1,170,848 | 4,554,481 | 551,093 | 1,638,633 | 7,915,055 | |||||||||||||||
Total domestic | 8,725,778 | 14,152,527 | 15,027,077 | 5,672,829 | 43,578,211 | |||||||||||||||
International: | ||||||||||||||||||||
United States: | ||||||||||||||||||||
U.S. Treasury and other U.S. Government agencies | 883,202 | 27,875 | 29,426 | 181,401 | 1,121,904 | |||||||||||||||
States and political subdivisions | 10,180 | 130,940 | 19,344 | 1,580,843 | 1,741,307 | |||||||||||||||
Other securities | 1,019,309 | 3,464,639 | 1,885,836 | 5,228,600 | 11,598,384 | |||||||||||||||
Total United States | 1,912,691 | 3,623,454 | 1,934,606 | 6,990,844 | 14,461,595 | |||||||||||||||
Other: | ||||||||||||||||||||
Governments | 19,734,439 | 31,220,289 | 4,654,725 | 5,127,489 | 60,736,942 | |||||||||||||||
Other securities | 8,918,767 | 14,689,885 | 3,474,800 | 4,877,318 | 31,960,770 | |||||||||||||||
Total Other | 28,653,206 | 45,910,174 | 8,129,525 | 10,004,807 | 92,697,712 | |||||||||||||||
Total International | 30,565,897 | 49,533,628 | 10,064,131 | 16,995,651 | 107,159,307 | |||||||||||||||
Total debt investment securities | 39,291,675 | 63,686,155 | 25,091,208 | 22,668,480 | 150,737,518 |
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IFRS-IASB | ||||||||||||||||||||
At December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(in thousands of euros) | ||||||||||||||||||||
Loans to borrowers in Spain: | ||||||||||||||||||||
Spanish Government | 12,137,098 | 9,802,511 | 7,668,408 | 5,633,422 | 5,328,526 | |||||||||||||||
Commercial, financial, agricultural and industrial | 67,940,259 | 70,136,946 | 56,289,775 | 45,169,824 | 71,412,545 | |||||||||||||||
Real estate and construction (*) | 38,419,193 | 42,514,809 | 48,098,886 | 46,837,281 | 12,391,306 | |||||||||||||||
Other mortgages | 74,462,191 | 68,865,914 | 59,784,116 | 59,268,463 | 81,718,186 | |||||||||||||||
Installment loans to individuals | 15,984,557 | 20,070,626 | 21,505,725 | 21,533,074 | 20,058,666 | |||||||||||||||
Lease financing | 6,195,295 | 7,533,857 | 9,252,949 | 9,643,516 | 8,668,599 | |||||||||||||||
Other | 12,474,313 | 11,420,172 | 37,647,241 | 49,995,313 | 9,357,884 | |||||||||||||||
Total | 227,612,906 | 230,344,835 | 240,247,100 | 238,080,893 | 208,935,712 | |||||||||||||||
Loans to borrowers outside Spain (**): | ||||||||||||||||||||
Non-Spanish Governments | 3,527,188 | 2,860,902 | 3,029,373 | 2,295,763 | 4,969,713 | |||||||||||||||
Commercial and industrial | 217,747,143 | 174,763,552 | 127,838,494 | 143,045,869 | 128,438,265 | |||||||||||||||
Mortgage loans | 269,893,288 | 249,065,126 | 201,112,142 | 179,163,680 | 177,631,731 | |||||||||||||||
Other | 25,070,370 | 43,389,607 | 67,127,381 | 17,207,512 | 15,223,537 | |||||||||||||||
Total | 516,237,989 | 470,079,187 | 399,107,390 | 341,712,824 | 326,263,246 | |||||||||||||||
Total loans and leases, gross | 743,850,895 | 700,424,022 | 639,354,490 | 579,793,717 | 535,198,958 | |||||||||||||||
Allowance for possible loan losses (***) | (19,696,998 | ) | (17,873,096 | ) | (12,466,055 | ) | (8,695,204 | ) | (8,163,444 | ) | ||||||||||
Loans and leases, net of allowances | 724,153,897 | 682,550,926 | 626,888,435 | 571,098,513 | 527,035,514 |
(*) | As of December 31, 2010, the portfolio of loans to construction and property development companies with real estate purposes, defined in accordance with the Bank of Spain’s purpose-based classification guidelines, amounted to€27,334 million. | |
(**) | 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”. 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 | 3,460,176 | 2.02 | % | 2,822,277 | 1.54 | % | 5,854,645 | 1.50 | % | 12,137,098 | 1.63 | % | ||||||||||||||||||||
Commercial, financial, agriculture and industrial | 29,973,685 | 17.52 | % | 21,387,835 | 11.70 | % | 16,578,739 | 4.25 | % | 67,940,259 | 9.13 | % | ||||||||||||||||||||
Real estate and construction | 2,578,028 | 1.51 | % | 2,987,685 | 1.64 | % | 32,853,480 | 8.42 | % | 38,419,193 | 5.16 | % | ||||||||||||||||||||
Other mortgages | 5,444,769 | 3.18 | % | 7,603,566 | 4.16 | % | 61,413,856 | 15.75 | % | 74,462,191 | 10.02 | % | ||||||||||||||||||||
Installment loans to individuals | 6,822,886 | 3.99 | % | 6,460,833 | 3.54 | % | 2,700,838 | 0.69 | % | 15,984,557 | 2.15 | % | ||||||||||||||||||||
Lease financing | 1,158,186 | 0.68 | % | 3,135,190 | 1.72 | % | 1,901,919 | 0.49 | % | 6,195,295 | 0.83 | % | ||||||||||||||||||||
Other | 2,583,892 | 1.51 | % | 2,287,188 | 1.25 | % | 7,603,233 | 1.95 | % | 12,474,313 | 1.68 | % | ||||||||||||||||||||
Total borrowers in Spain | 52,021,622 | 30.41 | % | 46,684,574 | 25.55 | % | 128,906,710 | 33.05 | % | 227,612,906 | 30.60 | % | ||||||||||||||||||||
Loans to borrowers outside Spain (*) | ||||||||||||||||||||||||||||||||
Non-Spanish Governments | 1,378,011 | 0.81 | % | 804,835 | 0.44 | % | 1,344,342 | 0.34 | % | 3,527,188 | 0.47 | % | ||||||||||||||||||||
Commercial and Industrial | 92,985,048 | 54.36 | % | 93,619,861 | 51.24 | % | 31,142,233 | 7.98 | % | 217,747,143 | 29.27 | % | ||||||||||||||||||||
Mortgage loans | 15,709,736 | 9.18 | % | 34,527,245 | 18.90 | % | 219,656,306 | 56.31 | % | 269,893,288 | 36.29 | % | ||||||||||||||||||||
Other | 8,963,764 | 5.24 | % | 7,072,674 | 3.87 | % | 9,033,933 | 2.32 | % | 25,070,370 | 3.37 | % | ||||||||||||||||||||
Total loans to borrowers outside Spain | 119,036,559 | 69.59 | % | 136,024,615 | 74.45 | % | 261,176,814 | 66.95 | % | 516,237,989 | 69.40 | % | ||||||||||||||||||||
Total loans and leases, gross | 171,058,181 | 100.00 | % | 182,709,189 | 100.00 | % | 390,083,524 | 100.00 | % | 743,850,895 | 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) | ||||||||||||
Fixed rate | 34,509,184 | 175,056,724 | 209,565,907 | |||||||||
Variable rate | 141,082,101 | 222,144,705 | 363,226,806 | |||||||||
Total | 175,591,285 | 397,201,429 | 572,792,713 |
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IFRS-IASB | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
% of | % of | % of | ||||||||||||||||||||||
total | total | total | ||||||||||||||||||||||
assets | assets | assets | ||||||||||||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||||||||||
OECD (1) (2) Countries: | ||||||||||||||||||||||||
Total OECD Countries | 13,612,706 | 1.12 | % | 14,327,184 | 1.29 | % | 12,931,735 | 1.24 | % | |||||||||||||||
Non-OECD Countries | ||||||||||||||||||||||||
Brazil | 6,058,247 | 0.50 | % | 5,316,717 | 0.48 | % | 10,169,495 | 0.97 | % | |||||||||||||||
Other Latin American Countries (2) (3) | 7,885,167 | 0.65 | % | 8,297,908 | 0.75 | % | 7,728,016 | 0.74 | % | |||||||||||||||
Other (2) | 7,153,022 | 0.59 | % | 6,600,333 | 0.59 | % | 5,847,896 | 0.56 | % | |||||||||||||||
Total Non-OECD | 21,096,436 | 1.73 | % | 20,214,958 | 1.82 | % | 23,745,407 | 2.27 | % | |||||||||||||||
Total | 34,709,142 | 2.85 | % | 34,542,142 | 3.11 | % | 36,677,142 | 3.50 | % |
(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, 2008, 2009 and 2010, we had allowances for country-risk equal to€555.5 million,€30.3 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) | ||||||||||||||||
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 | — | — | — | — | ||||||||||||
2010 | ||||||||||||||||
N/A | — | — | — | — | ||||||||||||
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Rating of sovereign | ||||
counterparties (Fitch and | In millions of euros | |||
S&P) | Sovereign debt | |||
AAA | 14,036 | |||
AA | 35,842 | |||
A | 6,067 | |||
BBB (*) | 41,732 | |||
Below BBB | 1,586 | |||
Unrated | — | |||
TOTAL | 99,263 |
(*) | Including mainly Brazil and Mexico. |
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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; | ||||
• 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. |
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(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, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(in thousands of euros) | ||||||||||||
Non accrued interest on the basis of contractual terms owed on impaired assets | ||||||||||||
Domestic | 717,338 | 765,101 | 231,486 | |||||||||
International | 2,235,336 | 1,829,676 | 489,241 | |||||||||
Total | 2,952,674 | 2,594,777 | 720,727 | |||||||||
Non accrued interest on the basis of contractual terms received on impaired assets | ||||||||||||
Domestic | 165,498 | 151,459 | 95,428 | |||||||||
International | 179,668 | 157,724 | 125,386 | |||||||||
Total | 345,166 | 309,183 | 220,814 |
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Thousands of Euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Other impaired loans (*) | 4,872,163 | 3,283,860 | 2,417,529 | |||||||||
Impaired loans more than ninety days past due | 23,650,203 | 21,269,764 | 11,773,284 | |||||||||
Total impaired loans | 28,522,366 | 24,553,624 | 14,190,813 |
(*) | See above “Bank of Spain Classification Requirements-d) Other Non-Performing Assets” for a detailed explanation of assets included under this category. |
• | 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. |
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• | Collectively assessed allowance for inherent losses: We cover our 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 collectively assessed 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, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(in thousands of euros) | ||||||||||||||||||||
Allowance for credit losses at beginning 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 | |||||||||||||||
Addition of acquired companies’ credit loss allowances (1) | ||||||||||||||||||||
Borrowers in Spain | — | — | — | — | — | |||||||||||||||
Borrowers outside Spain | — | 1,426,104 | 2,310,095 | 7,356 | 164,530 | |||||||||||||||
Total | — | 1,426,104 | 2,310,095 | 7,356 | 164,530 | |||||||||||||||
Recoveries of loans previously charged off (2) | ||||||||||||||||||||
Borrowers in Spain | 201,545 | 115,069 | 129,660 | 148,849 | 123,566 | |||||||||||||||
Borrowers outside Spain | 999,772 | 799,652 | 570,087 | 463,602 | 418,402 | |||||||||||||||
Total | 1,201,317 | 914,721 | 699,747 | 612,451 | 541,968 | |||||||||||||||
Net provisions for credit losses (2) | ||||||||||||||||||||
Borrowers in Spain | 2,124,521 | 2,499,843 | 928,236 | 658,990 | 793,898 | |||||||||||||||
Borrowers outside Spain | 8,142,378 | 8,588,153 | 4,968,652 | 2,761,606 | 1,669,466 | |||||||||||||||
Total | 10,266,899 | 11,087,996 | 5,896,888 | 3,420,596 | 2,463,364 | |||||||||||||||
Charge offs against credit loss allowance | ||||||||||||||||||||
Borrowers in Spain | (2,173,734 | ) | (1,236,859 | ) | (731,588 | ) | (573,787 | ) | (269,559 | ) | ||||||||||
Borrowers outside Spain | (8,739,438 | ) | (8,557,769 | ) | (3,820,805 | ) | (2,746,375 | ) | (2,100,306 | ) | ||||||||||
Total | (10,913,172 | ) | (9,794,628 | ) | (4,552,393 | ) | (3,320,162 | ) | (2,369,865 | ) | ||||||||||
Other movements (3) | 1,285,299 | 1,544,817 | (431,084 | ) | (211,998 | ) | 586,206 | |||||||||||||
Allowance for credit losses at end of year (*) | ||||||||||||||||||||
Borrowers in Spain | 6,810,296 | 6,992,818 | 5,948,950 | 4,512,000 | 4,318,320 | |||||||||||||||
Borrowers outside Spain | 12,928,679 | 10,905,814 | 6,770,673 | 4,284,371 | 3,969,808 | |||||||||||||||
Total | 19,738,975 | 17,898,632 | 12,719,623 | 8,796,371 | 8,288,128 | |||||||||||||||
Average loans outstanding | ||||||||||||||||||||
Borrowers in Spain | 224,641,828 | 230,641,779 | 235,002,141 | 215,521,349 | 177,426,121 | |||||||||||||||
Borrowers outside Spain | 482,406,776 | 436,857,260 | 340,938,627 | 330,253,241 | 297,802,187 | |||||||||||||||
Total | 707,048,604 | 667,499,039 | 575,940,768 | 545,774,590 | 475,228,308 | |||||||||||||||
Net charge-offs against loan loss allowance to average loans ratio | ||||||||||||||||||||
Borrowers in Spain | 0.88 | % | 0.49 | % | 0.26 | % | 0.20 | % | 0.08 | % | ||||||||||
Borrowers outside Spain | 1.60 | % | 1.78 | % | 0.95 | % | 0.69 | % | 0.56 | % | ||||||||||
Total | 2.48 | % | 2.26 | % | 1.21 | % | 0.89 | % | 0.65 | % |
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(*) | Allowances for the impairment losses on the assets making up the balances of “Loans and receivables — Loans and advances to customers”, “Loans and receivables — Loans and advances to credit institutions” and “Loans and receivables — Debt securities”. See “Item 3. Key information — A. Selected Financial Data” | |
(1) | The line items titled “Addition of acquired companies’ credit loss allowances” refer to the valuation allowance as of the acquisition date for the loans acquired in the business combinations carried out during the period after the acquired receivables have been measured at their acquisition fair values. This disclosure is no longer applicable in 2010 because the fair value of loans acquired in business combinations is disclosed net of allowances. | |
(2) | 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. | |
(3) | The changes in “Other Movements” from 2006, to 2007, to 2008, to 2009 and to 2010 principally reflect foreign exchange differences. |
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Year Ended December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(in thousands of euros) | ||||||||||||||||||||
Recoveries of loans previously charged off- | ||||||||||||||||||||
Domestic: | ||||||||||||||||||||
Commercial, financial, agricultural, industrial | 40,605 | 31,969 | 30,136 | 32,045 | 37,879 | |||||||||||||||
Real estate and construction | 31,690 | 15,162 | 4,860 | 10,718 | 5,646 | |||||||||||||||
Other mortgages | 32,143 | 24,340 | 11,480 | 17,644 | 11,249 | |||||||||||||||
Installment loans to individuals | 89,285 | 42,946 | 74,974 | 70,082 | 59,726 | |||||||||||||||
Lease finance | 1,386 | 621 | 6,198 | 4,517 | 5,023 | |||||||||||||||
Other | 6,436 | 31 | 2,012 | 13,843 | 4,043 | |||||||||||||||
Total Borrowers in Spain | 201,545 | 115,069 | 129,660 | 148,849 | 123,566 | |||||||||||||||
Borrowers outside Spain | ||||||||||||||||||||
Government and official institutions | 4,261 | 34 | — | 8 | 1,126 | |||||||||||||||
Commercial and industrial | 876,956 | 731,641 | 483,589 | 397,126 | 299,302 | |||||||||||||||
Mortgage loans | 72,051 | 35,047 | 28,494 | 30,360 | 7,751 | |||||||||||||||
Other | 46,504 | 32,930 | 58,004 | 36,108 | 110,223 | |||||||||||||||
Borrowers outside Spain | 999,772 | 799,652 | 570,087 | 463,602 | 418,402 | |||||||||||||||
Total | 1,201,317 | 914,721 | 699,747 | 612,451 | 541,968 | |||||||||||||||
Net provisions for credit losses- | ||||||||||||||||||||
Domestic: | ||||||||||||||||||||
Commercial, financial, agricultural, industrial | 647,088 | 752,961 | 265,121 | (278,355 | ) | 405,914 | ||||||||||||||
Real estate and construction | 674,447 | 528,124 | (76,668 | ) | 240,462 | 20,430 | ||||||||||||||
Other mortgages | 131,361 | 263,700 | 276,578 | 298,645 | 96,209 | |||||||||||||||
Installment loans to individuals | 573,827 | 848,450 | 399,651 | 383,582 | 278,223 | |||||||||||||||
Lease finance | 82,103 | 73,055 | 26,619 | 16,038 | 55,894 | |||||||||||||||
Other | 15,695 | 33,553 | 36,935 | (1,382 | ) | (62,772 | ) | |||||||||||||
Total Borrowers in Spain | 2,124,521 | 2,499,843 | 928,236 | 658,990 | 793,898 | |||||||||||||||
Borrowers outside Spain | ||||||||||||||||||||
Government and official institutions | 44,057 | 14,218 | (8,344 | ) | (1,797 | ) | 2,035 | |||||||||||||
Commercial and industrial | 7,257,093 | 7,667,916 | 2,709,732 | 2,016,115 | 1,128,005 | |||||||||||||||
Mortgage loans | 452,650 | 532,539 | 242,965 | 237,553 | 11,612 | |||||||||||||||
Other | 388,578 | 373,480 | 2,024,299 | 509,735 | 527,814 | |||||||||||||||
Borrowers outside Spain | 8,142,378 | 8,588,153 | 4,968,652 | 2,761,606 | 1,669,466 | |||||||||||||||
Total | 10,266,899 | 11,087,996 | 5,896,888 | 3,420,596 | 2,463,364 | |||||||||||||||
Charge offs against credit loss allowance | ||||||||||||||||||||
Domestic: | ||||||||||||||||||||
Commercial, financial, agricultural, industrial | (704,422 | ) | (355,554 | ) | (121,751 | ) | (140,715 | ) | (55,982 | ) | ||||||||||
Real estate and construction | (191,194 | ) | (137,183 | ) | (34,429 | ) | (29,466 | ) | (18,911 | ) | ||||||||||
Other mortgages | (369,433 | ) | (235,659 | ) | (61,618 | ) | (11,807 | ) | (7,284 | ) | ||||||||||
Installment loans to individuals | (840,733 | ) | (481,164 | ) | (503,166 | ) | (356,532 | ) | (184,218 | ) | ||||||||||
Lease finance | (60,960 | ) | (25,681 | ) | (2,693 | ) | (1,344 | ) | (1,775 | ) | ||||||||||
Other | (6,992 | ) | (1,618 | ) | (7,931 | ) | (33,923 | ) | (1,389 | ) | ||||||||||
Total Borrowers in Spain | (2,173,734 | ) | (1,236,859 | ) | (731,588 | ) | (573,787 | ) | (269,559 | ) | ||||||||||
Borrowers outside Spain | ||||||||||||||||||||
Government and official institutions | (43,254 | ) | (213 | ) | — | — | (174 | ) | ||||||||||||
Commercial and industrial | (7,993,694 | ) | (7,826,967 | ) | (2,807,232 | ) | (1,969,576 | ) | (1,333,617 | ) | ||||||||||
Mortgage loans | (444,849 | ) | (393,104 | ) | (1,736 | ) | (6,693 | ) | (46,603 | ) | ||||||||||
Other | (257,641 | ) | (337,485 | ) | (1,011,837 | ) | (770,106 | ) | (719,912 | ) | ||||||||||
Borrowers outside Spain | (8,739,438 | ) | (8,557,769 | ) | (3,820,805 | ) | (2,746,375 | ) | (2,100,306 | ) | ||||||||||
Total | (10,913,172 | ) | (9,794,628 | ) | (4,552,393 | ) | (3,320,162 | ) | (2,369,865 | ) |
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IFRS-IASB | ||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||||||||||
2010 | % | 2009 | % | 2008 | % | 2007 | % | 2006 | % | |||||||||||||||||||||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||||||||||||||||||||||||||
Borrowers in Spain: | ||||||||||||||||||||||||||||||||||||||||
Commercial, financial, agricultural, industrial | 1,498,686 | 7.59 | 1,742,508 | 9.74 | 1,690,171 | 13.29 | 1,121,382 | 12.75 | 2,054,720 | 24.79 | ||||||||||||||||||||||||||||||
Real estate and construction (*) | 2,723,155 | 13.80 | 1,896,177 | 10.59 | 1,490,138 | 11.72 | 1,412,652 | 16.06 | 515,597 | 6.22 | ||||||||||||||||||||||||||||||
Other mortgages | 1,329,421 | 6.73 | 1,375,447 | 7.68 | 1,271,684 | 10.00 | 805,437 | 9.16 | 457,132 | 5.52 | ||||||||||||||||||||||||||||||
Installment loans to individuals | 1,065,189 | 5.40 | 1,673,557 | 9.35 | 1,182,274 | 9.29 | 926,917 | 10.53 | 889,283 | 10.73 | ||||||||||||||||||||||||||||||
Lease finance | 169,148 | 0.85 | 215,785 | 1.21 | 112,874 | 0.89 | 162,405 | 1.85 | 166,542 | 2.01 | ||||||||||||||||||||||||||||||
Other | 24,697 | 0.13 | 89,344 | 0.50 | 201,809 | 1.59 | 83,207 | 0.95 | 235,046 | 2.84 | ||||||||||||||||||||||||||||||
Total Borrowers in Spain | 6,810,296 | 34.50 | 6,992,818 | 39.07 | 5,948,950 | 46.77 | 4,512,000 | 51.30 | 4,318,320 | 52.10 | ||||||||||||||||||||||||||||||
Borrowers outside Spain: | ||||||||||||||||||||||||||||||||||||||||
Government and official institutions | 31,190 | 0.16 | 19,149 | 0.11 | 13,653 | 0.11 | 25,650 | 0.29 | 30,054 | 0.36 | ||||||||||||||||||||||||||||||
Commercial and industrial | 9,810,664 | 49,70 | 8,529,010 | 47.65 | 4,517,625 | 35.52 | 2,762,325 | 31.40 | 2,670,075 | 32.22 | ||||||||||||||||||||||||||||||
Mortgage loans | 1,875,810 | 9.50 | 1,555,212 | 8.69 | 1,615,112 | 12.70 | 1,354,866 | 15.40 | 831,972 | 10.04 | ||||||||||||||||||||||||||||||
Other | 1,211,015 | 6.14 | 802,443 | 4.48 | 624,283 | 4.91 | 141,530 | 1.61 | 437,707 | 5.28 | ||||||||||||||||||||||||||||||
Total Borrowers outside Spain | 12,928,679 | 65.50 | 10,905,814 | 60.93 | 6,770,673 | 53.23 | 4,284,371 | 48.70 | 3,969,808 | 47.90 | ||||||||||||||||||||||||||||||
Total | 19,738,975 | 100.00 | 17,898,632 | 100.00 | 12,719,623 | 100.00 | 8,796,371 | 100.00 | 8,288,128 | 100.00 |
(*) | As of December 31, 2010, the allowances of the portfolio of loans to construction and property development companies with real estate purposes, defined in accordance with the Bank of Spain’s purpose-based classification guidelines, amounted to€1,890 million. |
IFRS | ||||||||||||||||||||
At December 31, | ||||||||||||||||||||
Non-performing balances | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||
(in thousands of euros) | ||||||||||||||||||||
Past-due and other non-performing balances (1) (2) (3): | ||||||||||||||||||||
Domestic | 12,474,076 | 10,405,450 | 6,405,803 | 1,887,167 | 1,288,857 | |||||||||||||||
International | 16,048,290 | 14,148,174 | 7,785,010 | 4,291,488 | 3,318,690 | |||||||||||||||
Total | 28,522,366 | 24,553,624 | 14,190,813 | 6,178,655 | 4,607,547 |
(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€1,206.5 million,€1,582.0 million,€2,877.6 million,€2,996.6 million and€4,843.1 million at December 31, 2006, 2007, 2008, 2009 and 2010, respectively. | |
(2) | Non-performing balances due to country risk were€83.0 million,€6.7 million,€2.6 million,€7.8 million and€7.9 million at December 31, 2006, 2007, 2008, 2009 and 2010, respectively. | |
(3) | We estimate that at December 31, 2006, 2007, 2008, 2009 and 2010 (i) the total amount of our non-performing past-due balances was€3,841.2 million, 4,918.2 million,€11,773.3 million,€21,269.8 million and€23,650.2 million respectively, and (ii) the total amount of our other non-performing balances was€766.3 million,€1,260.5 million,€2,417.5 million,€3,283.9 million and€4,872.2 million, respectively. |
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Millions of euros | ||||||||||||||||||||||||
With no past-due | ||||||||||||||||||||||||
balances or | ||||||||||||||||||||||||
less than 3 | With balances past due by | |||||||||||||||||||||||
months past due | 3 to 6 months | 6 to 9 months | 9 to 12 months | More than 12 months | Total | |||||||||||||||||||
Spain | 2,726 | 1,835 | 1,511 | 1,001 | 5,240 | 12,313 | ||||||||||||||||||
European Union (excluding Spain) | 308 | 2,782 | 1,192 | 759 | 2,190 | 7,231 | ||||||||||||||||||
United States and Puerto Rico | 898 | 567 | 231 | 139 | 817 | 2,652 | ||||||||||||||||||
Other OECD countries | 18 | 35 | 37 | 34 | — | 124 | ||||||||||||||||||
Latin America | 768 | 2,310 | 894 | 791 | 822 | 5,585 | ||||||||||||||||||
Rest of the world | — | 3 | — | — | — | 3 | ||||||||||||||||||
4,718 | 7,532 | 3,865 | 2,724 | 9,069 | 27,908 | |||||||||||||||||||
IFRS | ||||||||||||||||||||||||||||||||||||
Year ended | Year ended | Year ended | Year ended | Year ended | ||||||||||||||||||||||||||||||||
Quarter ended | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | Dec. 31, | |||||||||||||||||||||||||||||||
(in thousands of euros) | Mar. 31, 2010 | Jun. 30, 2010 | Sep. 30, 2010 | Dec. 31, 2010 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||||||||||
Opening balance | 24,553,624 | 25,511,694 | 27,324,576 | 27,194,565 | 24,553,624 | 14,190,813 | 6,178,655 | 4,607,547 | 4,341,500 | |||||||||||||||||||||||||||
Net additions | 3,423,414 | 3,388,930 | 2,894,984 | 3,771,040 | 13,478,368 | 18,234,330 | 11,346,183 | 5,014,270 | 2,567,912 | |||||||||||||||||||||||||||
Increase in scope of consolidation | — | — | 253,868 | 3,008 | 256,876 | 1,033,001 | 2,088,943 | 1,000 | 164,000 | |||||||||||||||||||||||||||
Exchange differences | 419,574 | 1,307,477 | (1,060,011 | ) | 479,629 | 1,146,669 | 890,109 | (870,575 | ) | (124,000 | ) | (96,000 | ) | |||||||||||||||||||||||
Writeoffs | (2,884,918 | ) | (2,883,525 | ) | (2,218,852 | ) | (2,925,876 | ) | (10,913,171 | ) | (9,794,629 | ) | (4,552,393 | ) | (3,320,162 | ) | (2,369,865 | ) | ||||||||||||||||||
Closing balance | 25,511,694 | 27,324,576 | 27,194,565 | 28,522,366 | 28,522,366 | 24,553,624 | 14,190,813 | 6,178,655 | 4,607,547 |
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IFRS | ||||||||||||||||||||
At December 31, | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||||||
Computable credit risk (1) | 804,035,990 | 758,346,873 | 697,199,713 | 649,342,484 | 588,372,837 | |||||||||||||||
Non-performing balances by segments: | ||||||||||||||||||||
Individuals | 15,605,820 | 14,589,806 | 10,113,539 | 4,774,589 | 3,707,554 | |||||||||||||||
Mortgages | 6,303,854 | 6,110,013 | 3,238,670 | 1,584,517 | 1,230,406 | |||||||||||||||
Consumer loans | 6,486,893 | 6,164,477 | 5,711,326 | 2,695,997 | 2,093,490 | |||||||||||||||
Credit cards and others | 2,815,073 | 2,315,316 | 1,163,543 | 494,075 | 383,658 | |||||||||||||||
Enterprises | 11,320,871 | 7,811,870 | 2,860,333 | 1,309,738 | 843,807 | |||||||||||||||
Corporate Banking | 1,549,980 | 2,127,493 | 1,130,459 | 62,224 | 38,300 | |||||||||||||||
Public sector | 45,695 | 24,455 | 86,481 | 32,105 | 17,886 | |||||||||||||||
Total non performing balances | 28,522,366 | 24,553,624 | 14,190,812 | 6,178,656 | 4,607,547 | |||||||||||||||
Allowances for non-performing balances | 20,747,651 | 18,497,070 | 12,862,981 | 9,302,230 | 8,626,937 | |||||||||||||||
Ratios | ||||||||||||||||||||
Non-performing balances to computable credit risk | 3.55 | % | 3.24 | % | 2.04 | % | 0.95 | % | 0.78 | % | ||||||||||
Coverage ratio (2) | 72.74 | % | 75.33 | % | 90.64 | % | 150.55 | % | 187.23 | % | ||||||||||
Balances charged-off to total loans and contingent liabilities | 1.21 | % | 1.17 | % | 0.55 | % | 0.41 | % | 0.31 | % |
(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 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||
(in millions of euros) | ||||||||||||||||||||
Balances classified as Non-Performing Balances | 28,522.4 | 24,553.6 | 14,190.8 | 6,178.7 | 4,607.5 | |||||||||||||||
Non-Performing Balances due to country risk | 7.9 | 7.8 | 2.6 | 6.7 | 83.0 | |||||||||||||||
Total non-accruing balances | 28,530.3 | 24,561.4 | 14,193.4 | 6,185.4 | 4,690.5 |
IFRS-IASB | ||||||||||||||||||||||||||||
Quarterly movements | Year Ended | |||||||||||||||||||||||||||
Mar. 31, | Jun. 30, | Sep. 30, | Dec. 31, | December 31, | ||||||||||||||||||||||||
2010 | 2010 | 2010 | 2010 | 2010 | 2009 | 2008 | ||||||||||||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||||||||||||||
Opening balance | 2,715,874 | 3,043,490 | 3,395,469 | 3,780,483 | 2,715,874 | 1,309,989 | 494,567 | |||||||||||||||||||||
Foreclosures | 702,325 | 823,206 | 807,868 | 831,087 | 3,164,487 | 3,383,892 | 1,712,821 | |||||||||||||||||||||
Sales | (374,709 | ) | (471,227 | ) | (422,853 | ) | (565,547 | ) | (1,834,338 | ) | (1,978,007 | ) | (897,399 | ) | ||||||||||||||
Gross foreclosed assets | 3,043,490 | 3,395,469 | 3,780,484 | 4,046,023 | 4,046,023 | 2,715,874 | 1,309,989 | |||||||||||||||||||||
Allowances established | (832,299 | ) | (894,543 | ) | (991,686 | ) | (1,138,454 | ) | (1,138,454 | ) | (713,373 | ) | (169,030 | ) | ||||||||||||||
Closing balance (net) | 2,211,191 | 2,500,926 | 2,788,798 | 2,907,569 | 2,907,569 | 2,002,501 | 1,140,959 | |||||||||||||||||||||
Allowance as a percentage of foreclosed assets | 27.35 | % | 26.35 | % | 26.23 | % | 28.14 | % | 28.14 | % | 26.27 | % | 12.90 | % | ||||||||||||||
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IFRS-IASB | ||||||||||||
At December 31, | ||||||||||||
Deposits from central banks and credit institutions- | 2010 | 2009 | 2008 | |||||||||
(in thousands of euros) | ||||||||||||
Reciprocal accounts | 423,304 | 948,049 | 509,282 | |||||||||
Time deposits | 57,233,213 | 78,325,126 | 82,559,946 | |||||||||
Other demand accounts | 2,677,990 | 3,340,932 | 2,527,834 | |||||||||
Repurchase agreements | 78,196,555 | 56,818,092 | 41,651,446 | |||||||||
Central bank credit account drawdowns | 1,579,723 | 2,658,925 | 2,626,262 | |||||||||
Other financial liabilities associated with transferred financial assets | — | — | — | |||||||||
Hybrid financial liabilities | 1,400 | 463 | 2,600 | |||||||||
Total | 140,112,185 | 142,091,587 | 129,877,370 | |||||||||
Customer deposits- | ||||||||||||
Demand deposits- | ||||||||||||
Current accounts | 148,066,306 | 135,895,002 | 94,773,159 | |||||||||
Savings accounts | 136,693,907 | 127,940,647 | 115,673,794 | |||||||||
Other demand deposits | 3,430,804 | 3,570,326 | 3,035,757 | |||||||||
Time deposits- | ||||||||||||
Fixed-term deposits | 275,628,965 | 192,244,789 | 143,130,514 | |||||||||
Home-purchase savings accounts | 230,791 | 315,867 | 295,458 | |||||||||
Discount deposits | 448,432 | 448,432 | 11,625,840 | |||||||||
Funds received under financial asset transfers | — | 2 | 2 | |||||||||
Hybrid financial liabilities | 4,754,258 | 5,447,496 | 8,159,893 | |||||||||
Other financial liabilities associated with transferred financial assets | — | — | — | |||||||||
Other time deposits | 153,812 | 212,111 | 290,053 | |||||||||
Notice deposits | 1,316,203 | 2,208,116 | 1,764,954 | |||||||||
Repurchase agreements | 45,652,341 | 38,693,449 | 41,480,026 | |||||||||
Total | 616,375,819 | 506,976,237 | 420,229,450 | |||||||||
Total deposits | 756,488,004 | 649,067,824 | 550,106,820 |
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IFRS-IASB | ||||||||||||
At December 31, | ||||||||||||
Deposits from central banks and credit institutions- | 2010 | 2009 | 2008 | |||||||||
(in thousands of euros) | ||||||||||||
Due to credit institutions | ||||||||||||
Offices in Spain | 43,998,347 | 68,500,717 | 61,175,697 | |||||||||
Offices outside Spain: | ||||||||||||
Other EU countries | 60,145,164 | 56,157,152 | 55,594,532 | |||||||||
United States | 11,529,173 | 1,002,056 | 722,833 | |||||||||
Other OECD countries (1) | 25,421 | 38,669 | 38,067 | |||||||||
Central and South America (1) | 24,414,050 | 16,371,115 | 12,291,897 | |||||||||
Other | 30 | 21,878 | 54,344 | |||||||||
Total offices outside Spain | 96,113,838 | 73,590,870 | 68,701,673 | |||||||||
Total | 140,112,185 | 142,091,587 | 129,877,370 | |||||||||
Customer deposits | ||||||||||||
Offices in Spain | 218,788,099 | 170,760,231 | 142,376,596 | |||||||||
Offices outside Spain: | ||||||||||||
Other EU countries | 230,929,334 | 199,169,106 | 170,778,310 | |||||||||
United States | 40,854,747 | 37,851,345 | 8,440,893 | |||||||||
Other OECD countries (1) | 997,944 | 1,101,108 | 470,721 | |||||||||
Central and South America (1) | 124,333,911 | 96,804,592 | 96,103,045 | |||||||||
Other | 471,784 | 1,289,855 | 2,059,885 | |||||||||
Total offices outside Spain | 397,587,720 | 336,216,006 | 277,852,854 | |||||||||
Total | 616,375,819 | 506,976,237 | 420,229,450 | �� | ||||||||
Total deposits | 756,488,004 | 649,067,824 | 550,106,820 |
(1) | In this schedule Mexico is classified under “Central and South America”. |
December 31, 2010 | ||||||||||||
Domestic | International | Total | ||||||||||
(in thousands of euros) | ||||||||||||
Under 3 months | 20,769,469 | 23,479,730 | 44,249,199 | |||||||||
3 to 6 months | 12,676,183 | 17,929,400 | 30,605,583 | |||||||||
6 to 12 months | 3,966,096 | 24,089,811 | 28,055,907 | |||||||||
Over 12 months | 15,705,549 | 36,575,365 | 52,280,914 | |||||||||
Total | 53,117,297 | 102,074,306 | 155,191,603 |
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IFRS-IASB | ||||||||||||||||||||||||
At December 31, | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
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 | 123,858,677 | 2.38 | % | 95,511,541 | 1.85 | % | 83,531,515 | 4.12 | % | |||||||||||||||
Average during year | 98,170,699 | 3.01 | % | 90,542,348 | 2.24 | % | 84,194,507 | 3.78 | % | |||||||||||||||
Maximum month-end balance | 123,858,677 | 101,311,947 | 99,067,534 | |||||||||||||||||||||
Other short-term borrowings: | ||||||||||||||||||||||||
At December 31 | 6,871,187 | 4.48 | % | 28,678,183 | 3.75 | % | 41,759,661 | 4.89 | % | |||||||||||||||
Average during year | 20,384,244 | 1.51 | % | 34,032,816 | 2.65 | % | 45,106,644 | 5.13 | % | |||||||||||||||
Maximum month-end balance | 29,273,424 | 41,759,661 | 49,522,970 | |||||||||||||||||||||
Total short-term borrowings at year-end | 130,729,864 | 2.49 | % | 124,189,724 | 2.29 | % | 125,291,176 | 4.37 | % |
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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; | ||
• | Shareholders’ 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 (basically forwards and swaps) and in the valuation of loans and advances to customers classified as Other financial assets at fair value through profit or loss, the present value method is used. Estimated future cash flows are discounted using the yield curves of the related currencies. The yield 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; for more complex instruments, the Dupire (local volatility) and Heston (stochastic volatility) models are 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, and the Markov Functional Model are used. The main inputs used in these models are basically observable market data, including the related yield 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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• | 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. |
(i) | No appreciable risk. | ||
(ii) | Low risk. | ||
(iii) | Medium-low risk. | ||
(iv) | Medium risk. | ||
(v) | Medium-high risk. | ||
(vi) | High risk. |
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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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Amount | % | |||||||||||||||
2010 | 2009 | Change | Change | |||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||
Mutual and pension funds | 1,266,730 | 1,177,934 | 88,796 | 7.5 | % | |||||||||||
Insurance | 2,050,990 | 1,861,169 | 189,821 | 10.2 | % | |||||||||||
Securities services | 784,129 | 774,296 | 9,833 | 1.3 | % | |||||||||||
Commissions for services | 5,632,301 | 5,266,735 | 365,566 | 6.9 | % | |||||||||||
Credit and debit cards | 1,138,079 | 1,033,383 | 104,696 | 10.1 | % | |||||||||||
Account management | 995,078 | 858,696 | 136,382 | 15.9 | % | |||||||||||
Bill discounting | 301,251 | 318,750 | (17,499 | ) | (5.5 | %) | ||||||||||
Contingent liabilities | 438,601 | 422,065 | 16,536 | 3.9 | % | |||||||||||
Other operations | 2,759,292 | 2,633,841 | 125,451 | 4.8 | % | |||||||||||
Total fee and commission income (net) | 9,734,150 | 9,080,134 | 654,016 | 7.2 | % |
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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 | % | |||||||||||||||
2010 | 2009 | Change | Change | |||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||
Personnel expenses | 9,329,556 | 8,450,283 | 879,274 | 10.4 | % | |||||||||||
Other general administrative expenses | 6,926,432 | 6,374,322 | 552,109 | 8.7 | % | |||||||||||
Building and premises | 1,731,165 | 1,613,675 | 117,490 | 7.3 | % | |||||||||||
Other expenses | 1,554,732 | 1,435,743 | 118,989 | 8.3 | % | |||||||||||
Information technology | 797,701 | 785,504 | 12,197 | 1.6 | % | |||||||||||
Advertising | 633,511 | 594,432 | 39,079 | 6.6 | % | |||||||||||
Communications | 670,307 | 631,806 | 38,501 | 6.1 | % | |||||||||||
Technical reports | 428,470 | 359,753 | 68,717 | 19.1 | % | |||||||||||
Per diems and travel expenses | 276,397 | 262,097 | 14,300 | 5.5 | % | |||||||||||
Taxes (other than income tax) | 376,115 | 312,994 | 63,121 | 20.2 | % | |||||||||||
Guard and cash courier services | 401,367 | 331,220 | 70,147 | 21.2 | % | |||||||||||
Insurance premiums | 56,666 | 47,098 | 9,568 | 20.3 | % | |||||||||||
Total administrative expenses | 16,255,988 | 14,824,605 | 1,431,383 | 9.7 | % |
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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 administrative 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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2010 | 2009 | 2008 | ||||||||||
(in thousands of euros) | ||||||||||||
Impairment losses on financial assets (net): | 10,443,149 | 11,578,322 | 6,283,053 | |||||||||
Loans and receivables | 10,266,899 | 11,087,996 | 5,896,888 | |||||||||
Other financial assets not measured at fair value through profit and loss | 176,250 | 490,326 | 386,165 | |||||||||
Impairment losses on other assets (net): | 285,864 | 164,630 | 1,049,226 | |||||||||
Goodwill and other intangible assets | 69,399 | 31,249 | 983,929 | |||||||||
Other assets | 216,465 | 133,381 | 65,297 | |||||||||
Total impairment losses (net) | 10,729,013 | 11,742,952 | 7,332,279 |
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Amount | % | |||||||||||||||
2010 | 2009 | Change | Change | |||||||||||||
(in thousands of euros, except percentages) | ||||||||||||||||
Gains / (losses) on disposal of assets not classified as non-current assets held for sale | 350,323 | 1,565,013 | (1,214,691 | ) | (77.6 | ) | ||||||||||
Of which: | ||||||||||||||||
Disposal of investments | 153,265 | 1,527,734 | (1,374,469 | ) | (90.0 | ) | ||||||||||
Gains / (losses) on disposal of non-current assets held for sale not classified as discontinued operations | (290,170 | ) | (1,225,407 | ) | 935,236 | (76.3 | ) | |||||||||
Of which: | ||||||||||||||||
Sale of Attijariwafa Bank | — | 218,223 | (218,223 | ) | — | |||||||||||
Losses on impairment of tangible assets | (298,337 | ) | (1,350,592 | ) | 1,052,255 | (-77.9 | ) |
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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 of 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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Variations | ||||||||||||||||||||
2010 | 2009 | 2008 | 2010/2009 | 2009/2008 | ||||||||||||||||
(in millions of euros, except percentages) | ||||||||||||||||||||
INTEREST INCOME / (CHARGES) | 10,957 | 11,456 | 9,259 | (4.4 | %) | 23.7 | % | |||||||||||||
Income from equity instruments | 217 | 218 | 266 | (0.5 | %) | (18.0 | %) | |||||||||||||
Income from companies accounted for using the equity method | 9 | 7 | 15 | 28.6 | % | (53.3 | %) | |||||||||||||
Net fees and commissions | 3,748 | 3,787 | 4,074 | (1.0 | %) | (7.0 | %) | |||||||||||||
Gains/losses on financial assets and liabilities (net) | 843 | 687 | 764 | 22.7 | % | (10.1 | %) | |||||||||||||
Other operating income/(expenses) (net) | 171 | 139 | 181 | 23.0 | % | (23.2 | %) | |||||||||||||
TOTAL INCOME | 15,945 | 16,294 | 14,559 | (2.1 | %) | 11.9 | % | |||||||||||||
Administrative expenses | (5,513 | ) | (5,334 | ) | (4,956 | ) | 3.4 | % | 7.6 | % | ||||||||||
Personnel expenses | (3,429 | ) | (3,306 | ) | (3,123 | ) | 3.7 | % | 5.9 | % | ||||||||||
Other general administrative expenses | (2,084 | ) | (2,028 | ) | (1,833 | ) | 2.8 | % | 10.6 | % | ||||||||||
Depreciation and amortization | (639 | ) | (570 | ) | (500 | ) | 12.1 | % | 14.0 | % | ||||||||||
Impairment losses on financial assets (net) | (4,218 | ) | (3,286 | ) | (2,476 | ) | 28.4 | % | 32.7 | % | ||||||||||
Provisions (net) | (60 | ) | (311 | ) | (89 | ) | (80.7 | %) | 249.4 | % | ||||||||||
Impairment losses on other assets (net) | (48 | ) | (41 | ) | (16 | ) | 17.1 | % | 156.3 | % | ||||||||||
Gains/(losses) on other assets (net) | (55 | ) | (81 | ) | (38 | ) | (32.1 | %) | 113.2 | % | ||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 5,412 | 6,671 | 6,484 | (18.9 | %) | 2.9 | % | |||||||||||||
Income tax | (1,417 | ) | (1,768 | ) | (1,686 | ) | -19.9 | % | 4.9 | % | ||||||||||
PROFIT FROM CONTINUING OPERATIONS | 3,995 | 4,903 | 4,798 | (18.5 | %) | 2.2 | % | |||||||||||||
Profit/(loss) from discontinued operations (net) | (14 | ) | (45 | ) | (21 | ) | (68.9 | %) | 114.3 | % | ||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 3,981 | 4,858 | 4,777 | (18.1 | %) | 1.7 | % | |||||||||||||
Profit attributable to non-controlling interest | 96 | 65 | 109 | 47.7 | % | (40.4 | %) | |||||||||||||
Profit attributable to the Parent | 3,885 | 4,793 | 4,668 | (18.9 | %) | 2.7 | % |
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2010 | 2009 | 2008 | 2010/2009 | 2009/2008 | ||||||||||||||||
(in millions of euros, except percentages) | ||||||||||||||||||||
INTEREST INCOME / (CHARGES) | 4,431 | 3,934 | 2,411 | 12.6 | % | 63.2 | % | |||||||||||||
Income from equity instruments | — | — | — | n/a | n/a | |||||||||||||||
Income from companies accounted for using the equity method | — | — | 1 | n/a | n/a | |||||||||||||||
Net fees and commissions | 957 | 993 | 926 | (3.6 | %) | 7.2 | % | |||||||||||||
Gains/losses on financial assets and liabilities (net) | 465 | 506 | 500 | (8.1 | %) | 1.2 | % | |||||||||||||
Other operating income/(expenses) (net) | 28 | 27 | 49 | 3.7 | % | (44.9 | %) | |||||||||||||
TOTAL INCOME | 5,881 | 5,460 | 3,887 | 7.7 | % | 40.5 | % | |||||||||||||
Administrative expenses | (2,028 | ) | (1,997 | ) | (1,603 | ) | 1.6 | % | 24.6 | % | ||||||||||
Personnel expenses | (1,209 | ) | (1,170 | ) | (986 | ) | 3.3 | % | 18.7 | % | ||||||||||
Other general administrative expenses | (819 | ) | (827 | ) | (617 | ) | (1.0 | %) | 34.0 | % | ||||||||||
Depreciation and amortization | (286 | ) | (231 | ) | (158 | ) | 23.8 | % | 46.2 | % | ||||||||||
Impairment losses on financial assets (net) | (760 | ) | (881 | ) | (457 | ) | (13.7 | %) | 92.8 | % | ||||||||||
Provisions (net) | (132 | ) | 16 | (29 | ) | (925.0 | %) | (155.2 | %) | |||||||||||
Impairment losses on other assets (net) | — | — | — | n/a | n/a | |||||||||||||||
Gains/(losses) on other assets (net) | 47 | — | 32 | n/a | n/a | |||||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 2,722 | 2,367 | 1,672 | 15.0 | % | 41.6 | % | |||||||||||||
Income tax | (737 | ) | (641 | ) | (425 | ) | 15.0 | % | 50.8 | % | ||||||||||
PROFIT FROM CONTINUING OPERATIONS | 1,985 | 1,726 | 1,247 | 15.0 | % | 38.4 | % | |||||||||||||
Profit/(loss) from discontinued operations (net) | — | — | — | n/a | n/a | |||||||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 1,985 | 1,726 | 1,247 | 15.0 | % | 38.4 | % | |||||||||||||
Profit attributable to non-controlling interest | — | — | — | n/a | n/a | |||||||||||||||
Profit attributable to the Parent | 1,985 | 1,726 | 1,247 | 15.0 | % | 38.4 | % |
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2010 | 2009 | 2008 | 2010/2009 | 2009/2008 | ||||||||||||||||
(in millions of euros, except percentages) | ||||||||||||||||||||
INTEREST INCOME / (CHARGES) | 14,778 | 11,959 | 8,025 | 23.6 | % | 49.0 | % | |||||||||||||
Income from equity instruments | 80 | 96 | 58 | (16.7 | %) | 65.5 | % | |||||||||||||
Income from companies accounted for using the equity method | 10 | 10 | 680 | 0.0 | % | (98.5 | %) | |||||||||||||
Net fees and commissions | 4,661 | 3,925 | 3,208 | 18.8 | % | 22.4 | % | |||||||||||||
Gains/losses on financial assets and liabilities (net) | 1,410 | 1,663 | 857 | (15.2 | %) | 94.0 | % | |||||||||||||
Other operating income/(expenses) (net) | (163 | ) | 15 | 10 | n/a | 50.0 | % | |||||||||||||
TOTAL INCOME | 20,776 | 17,668 | 12,838 | 17.6 | % | 37.6 | % | |||||||||||||
Administrative expenses | (7,193 | ) | (6,032 | ) | (4,651 | ) | 19.2 | % | 29.7 | % | ||||||||||
Personnel expenses | (3,955 | ) | (3,210 | ) | (2,504 | ) | 23.2 | % | 28.2 | % | ||||||||||
Other general administrative expenses | (3,238 | ) | (2,822 | ) | (2,147 | ) | 14.7 | % | 31.4 | % | ||||||||||
Depreciation and amortization | (778 | ) | (566 | ) | (404 | ) | 37.5 | % | 40.1 | % | ||||||||||
Impairment losses on financial assets (net) | (4,687 | ) | (4,979 | ) | (3,020 | ) | (5.9 | %) | 64.9 | % | ||||||||||
Provisions (net) | (990 | ) | (681 | ) | (533 | ) | 45.4 | % | 27.8 | % | ||||||||||
Impairment losses on other assets (net) | (12 | ) | (22 | ) | (6 | ) | (45.5 | %) | 266.7 | % | ||||||||||
Gains/(losses) on other assets (net) | 255 | 40 | 54 | 537.5 | % | (25.9 | %) | |||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 7,371 | 5,428 | 4,278 | 35.8 | % | 26.9 | % | |||||||||||||
Income tax | (1,717 | ) | (1,257 | ) | (663 | ) | 36.6 | % | 89.6 | % | ||||||||||
PROFIT FROM CONTINUING OPERATIONS | 5,654 | 4,171 | 3,615 | 35.6 | % | 15.4 | % | |||||||||||||
Profit/(loss) from discontinued operations (net) | — | 91 | 340 | (100.0 | %) | (73.2 | %) | |||||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 5,654 | 4,262 | 3,955 | 32.7 | % | 7.8 | % | |||||||||||||
Profit attributable to non-controlling interest | 850 | 428 | 346 | 98.6 | % | 23.7 | % | |||||||||||||
Profit attributable to the Parent | 4,804 | 3,834 | 3,609 | 25.3 | % | 6.2 | % |
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Variations | ||||||||||||
(in millions of euros) | 2010 | 2009(1) | 2010/2009 | |||||||||
INTEREST INCOME / (CHARGES) | 1,736 | 1,160 | 49.7 | % | ||||||||
Income from equity instruments | 1 | 1 | 0.0 | % | ||||||||
Income from companies accounted for using the equity method | — | (3 | ) | (100.0 | %) | |||||||
Net fees and commissions | 408 | 380 | 7.4 | % | ||||||||
Gains/losses on financial assets and liabilities (net) | 29 | 14 | 107.1 | % | ||||||||
Other operating income/(expenses) (net) | (67 | ) | (89 | ) | (24.7 | %) | ||||||
TOTAL INCOME | 2,107 | 1,463 | 44.0 | % | ||||||||
Administrative expenses | (832 | ) | (766 | ) | 8.6 | % | ||||||
Personnel expenses | (468 | ) | (457 | ) | 2.4 | % | ||||||
Other general administrative expenses | (364 | ) | (309 | ) | 17.8 | % | ||||||
Depreciation and amortization | (105 | ) | (115 | ) | (8.7 | %) | ||||||
Impairment losses on financial assets (net) | (510 | ) | (571 | ) | (10.7 | %) | ||||||
Provisions (net) | (66 | ) | (55 | ) | 20.0 | % | ||||||
Impairment losses on other assets (net) | (19 | ) | (1 | ) | 1,800.0 | % | ||||||
Gains/(losses) on other assets (net) | (6 | ) | (2 | ) | 200.0 | % | ||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 569 | (47 | ) | n/a | ||||||||
Income tax | (143 | ) | 22 | n/a | ||||||||
PROFIT FROM CONTINUING OPERATIONS | 426 | (25 | ) | n/a | ||||||||
Profit/(loss) from discontinued operations (net) | — | — | n/a | |||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 426 | (25 | ) | n/a | ||||||||
Profit attributable to non-controlling interest | — | — | n/a | |||||||||
Profit attributable to the Parent | 426 | (25 | ) | n/a |
(1) | As Sovereign was fully acquired on January 30, 2009, only 11 months for 2009 are presented for 2009. |
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Variations | ||||||||||||||||||||
2010 | 2009 | 2008 | 2010/2009 | 2009/2008 | ||||||||||||||||
(in millions of euros, except percentages) | ||||||||||||||||||||
INTEREST INCOME / (CHARGES) | (2,678 | ) | (2,210 | ) | (2,157 | ) | 21.2 | % | 2.5 | % | ||||||||||
Income from equity instruments | 64 | 121 | 229 | (47.1 | %) | (47.2 | %) | |||||||||||||
Income from companies accounted for using the equity method | (2 | ) | (15 | ) | 96 | (86.7 | %) | (115.6 | %) | |||||||||||
Net fees and commissions | (40 | ) | (5 | ) | 59 | 700.0 | % | (108.5 | %) | |||||||||||
Gains/losses on financial assets and liabilities (net) | (141 | ) | 1,376 | 1,353 | n/a | 1.7 | % | |||||||||||||
Other operating income/(expenses) (net) | 137 | 52 | 32 | 163.5 | % | 62.5 | % | |||||||||||||
TOTAL INCOME | (2,660 | ) | (681 | ) | (388 | ) | 290.6 | % | 75.5 | % | ||||||||||
Administrative expenses | (690 | ) | (695 | ) | (455 | ) | (0.7 | %) | 52.7 | % | ||||||||||
Personnel expenses | (269 | ) | (307 | ) | (200 | ) | (12.4 | %) | 53.5 | % | ||||||||||
Other general administrative expenses | (421 | ) | (388 | ) | (255 | ) | 8.5 | % | 52.2 | % | ||||||||||
Depreciation and amortization | (132 | ) | (114 | ) | (177 | ) | 15.8 | % | (35.6 | %) | ||||||||||
Impairment losses on financial assets (net) | (268 | ) | (1,861 | ) | (331 | ) | (85.6 | %) | 462.2 | % | ||||||||||
Provisions (net) | 115 | (762 | ) | (989 | ) | n/a | (23.0 | %) | ||||||||||||
Impairment losses on other assets (net) | (207 | ) | (100 | ) | (1,027 | ) | 107.0 | % | (90.3 | %) | ||||||||||
Gains/(losses) on other assets (net) | (180 | ) | 382 | 1,783 | n/a | (78.6 | %) | |||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | (4,022 | ) | (3,831 | ) | (1,584 | ) | 5.0 | % | 141.9 | % | ||||||||||
Income tax | 1,091 | 2,437 | 938 | (55.2 | %) | 159.8 | % | |||||||||||||
PROFIT FROM CONTINUING OPERATIONS | (2,931 | ) | (1,394 | ) | (646 | ) | 110.3 | % | 115.8 | % | ||||||||||
Profit/(loss) from discontinued operations (net) | (13 | ) | (15 | ) | — | (13.3 | %) | n/a | ||||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | (2,944 | ) | (1,409 | ) | (646 | ) | 108.9 | % | 118.1 | % | ||||||||||
Profit attributable to non-controlling interest | (25 | ) | (24 | ) | 1 | 4.2 | % | n/a | ||||||||||||
Profit attributable to the Parent | (2,919 | ) | (1,385 | ) | (647 | ) | 110.8 | % | 114.1 | % |
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Variations | ||||||||||||||||||||
2010 | 2009 | 2008 | 2010/2009 | 2009/2008 | ||||||||||||||||
(in millions of euros, except percentages) | ||||||||||||||||||||
INTEREST INCOME / (CHARGES) | 28,994 | 25,800 | 17,613 | 12.4 | % | 46.5 | % | |||||||||||||
Income from equity instruments | 101 | 128 | 154 | (21.1 | %) | (16.9 | %) | |||||||||||||
Income from companies accounted for using the equity method | 19 | 14 | 556 | 35.7 | % | (97.5 | %) | |||||||||||||
Net fees and commissions | 8,058 | 7,527 | 6,861 | 7.1 | % | 9.7 | % | |||||||||||||
Gains/losses on financial assets and liabilities (net) | 1,333 | 1,452 | 1,100 | (8.2 | %) | 32.0 | % | |||||||||||||
Other operating income/(expenses) (net) | (384 | ) | (224 | ) | 31 | 71.4 | % | (822.6 | %) | |||||||||||
TOTAL INCOME | 38,121 | 34,697 | 26,315 | 9.9 | % | 31.9 | % | |||||||||||||
Administrative expenses | (13,929 | ) | (12,681 | ) | (9,857 | ) | 9.8 | % | 28.6 | % | ||||||||||
Personnel expenses | (8,002 | ) | (7,236 | ) | (5,806 | ) | 10.6 | % | 24.6 | % | ||||||||||
Other general administrative expenses | (5,927 | ) | (5,445 | ) | (4,051 | ) | 8.9 | % | 34.4 | % | ||||||||||
Depreciation and amortization | (1,623 | ) | (1,362 | ) | (946 | ) | 19.2 | % | 44.0 | % | ||||||||||
Impairment losses on financial assets (net) | (10,168 | ) | (9,744 | ) | (5,672 | ) | 4.4 | % | 71.8 | % | ||||||||||
Provisions (net) | (1,222 | ) | (1,010 | ) | (607 | ) | 21.0 | % | 66.4 | % | ||||||||||
Impairment losses on other assets (net) | (69 | ) | (57 | ) | (24 | ) | 21.1 | % | 137.5 | % | ||||||||||
Gains/(losses) on other assets (net) | 235 | (33 | ) | 43 | n/a | n/a | ||||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 11,345 | 9,810 | 9,252 | 15.6 | % | 6.0 | % | |||||||||||||
Income tax | (2,743 | ) | (2,341 | ) | (1,825 | ) | 17.2 | % | 28.3 | % | ||||||||||
PROFIT FROM CONTINUING OPERATIONS | 8,602 | 7,469 | 7,427 | 15.2 | % | 0.6 | % | |||||||||||||
Profit/(loss) from discontinued operations (net) | (14 | ) | 46 | 319 | n/a | (85.6 | %) | |||||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 8,588 | 7,515 | 7,746 | 14.3 | % | (3.0 | %) | |||||||||||||
Profit attributable to non-controlling interest | 648 | 333 | 434 | 94.6 | % | (23.3 | %) | |||||||||||||
Profit attributable to the Parent | 7,940 | 7,182 | 7,312 | 10.6 | % | (1.8 | %) |
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Variations | ||||||||||||||||||||
2010 | 2009 | 2008 | 2010/2009 | 2009/2008 | ||||||||||||||||
(in millions of euros, except percentages) | ||||||||||||||||||||
INTEREST INCOME / (CHARGES) | 2,676 | 2,508 | 1,892 | 6.7 | % | 32.6 | % | |||||||||||||
Income from equity instruments | 197 | 187 | 164 | 5.3 | % | 14.0 | % | |||||||||||||
Income from companies accounted for using the equity method | — | — | 87 | n/a | (100.0 | %) | ||||||||||||||
Net fees and commissions | 1,292 | 1,128 | 883 | 14.5 | % | 27.7 | % | |||||||||||||
Gains/losses on financial assets and liabilities (net) | 1,364 | 1,384 | 995 | (1.4 | %) | 39.1 | % | |||||||||||||
Other operating income/(expenses) (net) | (22 | ) | (22 | ) | (45 | ) | — | (51.1 | %) | |||||||||||
TOTAL INCOME | 5,507 | 5,185 | 3,976 | 6.2 | % | 30.4 | % | |||||||||||||
Administrative expenses | (1,343 | ) | (1,169 | ) | (1,060 | ) | 14.9 | % | 10.3 | % | ||||||||||
Personnel expenses | (898 | ) | (758 | ) | (672 | ) | 18.5 | % | 12.8 | % | ||||||||||
Other general administrative expenses | (445 | ) | (411 | ) | (388 | ) | 8.3 | % | 5.9 | % | ||||||||||
Depreciation and amortization | (137 | ) | (88 | ) | (98 | ) | 55.7 | % | (10.2 | %) | ||||||||||
Impairment losses on financial assets (net) | (5 | ) | 34 | (281 | ) | (114.7 | %) | n/a | ||||||||||||
Provisions (net) | (11 | ) | 5 | (26 | ) | (320.0 | %) | n/a | ||||||||||||
Impairment losses on other assets (net) | (10 | ) | (3 | ) | — | 233.3 | % | n/a | ||||||||||||
Gains/(losses) on other assets (net) | 5 | — | 4 | n/a | (100.0 | %) | ||||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 4,006 | 3,964 | 2,515 | 1.1 | % | 57.6 | % | |||||||||||||
Income tax | (1,071 | ) | (1,084 | ) | (775 | ) | (1.2 | %) | 39.9 | % | ||||||||||
PROFIT FROM CONTINUING OPERATIONS | 2,935 | 2,880 | 1,740 | 1.9 | % | 65.5 | % | |||||||||||||
Profit/(loss) from discontinued operations (net) | — | — | — | n/a | n/a | |||||||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 2,935 | 2,880 | 1,740 | 1.9 | % | 65.5 | % | |||||||||||||
Profit attributable to non-controlling interest | 238 | 132 | (1 | ) | 80.3 | % | n/a | |||||||||||||
Profit attributable to the Parent | 2,697 | 2,748 | 1,741 | (1.9 | %) | 57.8 | % |
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Variations | ||||||||||||||||||||
2010 | 2009 | 2008 | 2010/2009 | 2009/2008 | ||||||||||||||||
(in millions of euros, except percentages) | ||||||||||||||||||||
INTEREST INCOME / (CHARGES) | 232 | 201 | 190 | 15.4 | % | 5.8 | % | |||||||||||||
Income from equity instruments | — | — | 6 | — | (100.0 | %) | ||||||||||||||
Income from companies accounted for using the equity method | — | — | 53 | — | (100.0 | %) | ||||||||||||||
Net fees and commissions | 424 | 431 | 464 | (1.6 | %) | (7.1 | %) | |||||||||||||
Gains/losses on financial assets and liabilities (net) | 50 | 34 | 26 | 47.1 | % | 30.8 | % | |||||||||||||
Other operating income/(expenses) (net) | 375 | 338 | 254 | 10.9 | % | 33.1 | % | |||||||||||||
TOTAL INCOME | 1,081 | 1,004 | 993 | 7.7 | % | 1.1 | % | |||||||||||||
Administrative expenses | (294 | ) | (279 | ) | (293 | ) | 5.4 | % | (4.8 | %) | ||||||||||
Personnel expenses | (161 | ) | (149 | ) | (135 | ) | 8.1 | % | 10.4 | % | ||||||||||
Other general administrative expenses | (133 | ) | (130 | ) | (158 | ) | 2.3 | % | (17.7 | %) | ||||||||||
Depreciation and amortization | (48 | ) | (32 | ) | (18 | ) | 50.0 | % | 77.8 | % | ||||||||||
Impairment losses on financial assets (net) | (2 | ) | (10 | ) | — | (80.0 | %) | n/a | ||||||||||||
Provisions (net) | (15 | ) | (36 | ) | (18 | ) | (58.3 | %) | 100.0 | % | ||||||||||
Impairment losses on other assets (net) | — | (1 | ) | 2 | (100.0 | %) | n/a | |||||||||||||
Gains/(losses) on other assets (net) | 1 | — | 1 | n/a | (100.0 | %) | ||||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 723 | 646 | 667 | 11.9 | % | (3.1 | %) | |||||||||||||
Income tax | (200 | ) | (219 | ) | (174 | ) | (8.7 | %) | 25.9 | % | ||||||||||
PROFIT FROM CONTINUING OPERATIONS | 523 | 427 | 493 | 22.5 | % | (13.4 | %) | |||||||||||||
Profit/(loss) from discontinued operations (net) | — | — | — | — | — | |||||||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 523 | 427 | 493 | 22.5 | % | (13.4 | %) | |||||||||||||
Profit attributable to non-controlling interest | 60 | 28 | 22 | 114.3 | % | 27.3 | % | |||||||||||||
Profit attributable to the Parent | 463 | 399 | 471 | 16.0 | % | (15.3 | %) |
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2010 | 2009 | 2008 | ||||||||||
(in thousands of euros) | ||||||||||||
Due to credit entities | 134,577,332 | 141,930,426 | 114,360,961 | |||||||||
Customer deposits | 568,914,742 | 463,602,299 | 354,193,915 | |||||||||
Marketable debt securities | 209,005,806 | 221,230,091 | 237,824,647 | |||||||||
Subordinated debt | 34,095,612 | 39,008,547 | 36,257,108 | |||||||||
Total | 946,593,492 | 865,771,363 | 742,636,631 |
(1) Senior debt | 2.7 years | |||
(2) Mortgage debt | 13.0 years | |||
(3) Dated subordinated debt | 6.8 years |
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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) |
• | 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; |
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• | 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 and the US 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 Spanish, Portuguese, Irish and Greek economies, 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; |
• | a drop in the value of the euro relative to the US dollar, the Sterling pound or Latin American currencies; |
• | inflationary pressures, particularly in Latin America, 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 financial crisis 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. |
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2010 | 2009 | 2008 | ||||||||||
(in thousands of euros) | ||||||||||||
Contingent liabilities: | ||||||||||||
Financial guarantees and other sureties | 18,395,112 | 20,974,258 | 15,614,342 | |||||||||
Irrevocable documentary credits | 3,815,796 | 2,636,618 | 3,590,454 | |||||||||
Other guarantees | 36,733,325 | 35,192,187 | 45,613,498 | |||||||||
Other contingent liabilities | 851,020 | 453,013 | 504,900 | |||||||||
59,795,253 | 59,256,076 | 65,323,194 | ||||||||||
Commitments: | ||||||||||||
Balances drawable by third parties | 179,963,765 | 150,562,786 | 123,329,168 | |||||||||
Other commitments | 23,745,628 | 12,967,970 | 8,395,838 | |||||||||
203,709,393 | 163,530,756 | 131,725,006 | ||||||||||
Total: | 263,504,646 | 222,786,832 | 197,048,200 | |||||||||
2010 | 2009 | 2008 | ||||||||||
(in thousands of euros) | ||||||||||||
Off-balance sheet funds: | ||||||||||||
Mutual funds | 113,509,684 | 105,216,486 | 90,305,714 | |||||||||
Pension funds | 10,964,711 | 11,309,649 | 11,127,918 | |||||||||
Other managed funds | 20,314,226 | 18,364,168 | 17,289,448 | |||||||||
144,788,621 | 134,890,303 | 118,723,080 |
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More than | More than | |||||||||||||||||||
1 year but | 3 years but | |||||||||||||||||||
Contractual obligations | Less than | less than 3 | less than 5 | More than | ||||||||||||||||
(in millions of euros) | 1 year | years | years | 5 years | Total | |||||||||||||||
Deposits from credit institutions | 47,163 | 9,218 | 10,500 | 4,012 | 70,893 | |||||||||||||||
Customer deposits | 481,628 | 68,481 | 16,467 | 14,809 | 581,385 | |||||||||||||||
Marketable debt securities | 41,296 | 63,476 | 25,961 | 57,496 | 188,229 | |||||||||||||||
Subordinated debt | 1,587 | 2,318 | 1,776 | 24,794 | 30,475 | |||||||||||||||
Operating lease obligations | 303 | 646 | 443 | 2,327 | 3,719 | |||||||||||||||
Purchase obligations | 4 | 7 | 5 | 4 | 20 | |||||||||||||||
Other long-term liabilities (1) | — | — | — | 9,519 | 9,519 | |||||||||||||||
Total | 571,981 | 144,146 | 55,152 | 112,961 | 884,240 |
(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.comunder the heading “Information for shareholders and investors—Corporate governance—Board of directors—Rules and Regulations of the Board of Directors”. |
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Director | ||||
Name | Position with Santander | 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 | ||
Ángel Jado | Director | 2010 | ||
Francisco Luzón | Director | 1997 | ||
Abel Matutes | Director | 2002 | ||
Juan R. Inciarte (2) | Director | 2008 | ||
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 | Chief executive officer, Santander UK | |
Francisco Luzón | Director, executive vice president, America | |
Juan R. Inciarte | Director, executive vice president, strategy | |
José A. Alvarez | Executive vice president, financial 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 | |
José G. Cantera (*) | Chief executive officer, Banesto | |
Juan Guitard | Executive vice president, internal auditing | |
Adolfo Lagos | Executive vice president, global wholesale banking | |
Jorge Maortua | Executive vice president, global wholesale banking | |
Javier Marín | Executive vice president, global private banking, asset management and insurance | |
Jorge Morán | Executive vice president, USA | |
José M. Nus | Executive vice president, Santander UK | |
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 | |
Juan A. Yanes | Executive vice president, USA | |
Jesús Ma Zabalza | Executive vice president, America |
(*) | José G. Cantera is not an executive vice president of Banco Santander. |
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Thousands of Euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Total salaries | 22,670 | 25,784 | 25,489 | |||||||||
Of which: variable remuneration in cash (or bonus) | 11,917 | (*) | 15,240 | 15,240 |
(*) | At the annual general meeting on June 11, 2010, the shareholders approved the first cycle of the deferred and conditional share plan, whereby payment of a portion of the variable remuneration for 2010 amounting to€6,362,000 will be deferred over the next three years and will accrue, where appropriate, in three equal installments and will be recognized as remuneration in each of the aforementioned years, provided that the conditions for entitlement to the remuneration are met. Note 5.d.iv to our consolidated financial statements includes detailed information on the aforementioned deferred variable remuneration. |
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Thousands of euros | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bylaw-stipulated retainers | Salary of executive | Other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual retainer | Attendance fees | directors (1) | remuneration | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Appointments | Variable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Audit and | and | remuneration | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive | compliance | remuneration | Other | Fixed | in cash | Share plan | ||||||||||||||||||||||||||||||||||||||||||||||||||
Directors | Board | committee | committee | committee | Board | fees | remuneration | (a) | Total | (b) | Other | Total | Total | Total | ||||||||||||||||||||||||||||||||||||||||||
Emilio Botín | 106 | 213 | — | — | 28 | 4 | 1,344 | 1,682 | 3,026 | 486 | 1 | 3,864 | 3,992 | 5,420 | ||||||||||||||||||||||||||||||||||||||||||
Fernando de Asúa | 142 | 213 | 50 | 30 | 28 | 191 | — | — | — | — | — | 654 | 647 | 642 | ||||||||||||||||||||||||||||||||||||||||||
Alfredo Sáenz | 106 | 213 | — | — | 28 | 4 | 3,703 | 3,351 | 7,054 | 1,301 | 473 | 9,179 | 10,237 | 9,295 | ||||||||||||||||||||||||||||||||||||||||||
Matías R. Inciarte | 106 | 213 | — | — | 28 | 163 | 1,710 | 1,994 | 3,704 | 622 | 226 | 5,062 | 5,339 | 6,541 | ||||||||||||||||||||||||||||||||||||||||||
Manuel Soto | 142 | — | 50 | 30 | 25 | 32 | — | — | — | — | — | 279 | 277 | 274 | ||||||||||||||||||||||||||||||||||||||||||
Assicurazioni Generali, SpA. | 123 | — | — | — | 16 | — | — | — | — | — | — | 139 | 134 | 140 | ||||||||||||||||||||||||||||||||||||||||||
Antonio Basagoiti | 106 | 213 | — | — | 28 | 156 | — | — | — | — | 7 | 510 | 510 | 517 | ||||||||||||||||||||||||||||||||||||||||||
Ana P. Botín | 106 | 213 | — | — | 28 | 4 | 1,353 | 1,440 | 2,793 | 321 | 16 | 3,481 | 3,647 | 4,021 | ||||||||||||||||||||||||||||||||||||||||||
Javier Botín (2) | 106 | — | — | — | 25 | — | — | — | — | — | — | 131 | 129 | 129 | ||||||||||||||||||||||||||||||||||||||||||
Lord Terence Burns | 106 | — | — | — | 19 | — | — | — | — | — | — | 125 | 125 | 123 | ||||||||||||||||||||||||||||||||||||||||||
Guillermo de la Dehesa | 106 | 213 | — | 30 | 28 | 13 | — | — | — | — | — | 390 | 386 | 384 | ||||||||||||||||||||||||||||||||||||||||||
Rodrigo Echenique (**) | 106 | 213 | — | 30 | 28 | 11 | — | — | — | — | 35 | 423 | 418 | 443 | ||||||||||||||||||||||||||||||||||||||||||
Antonio Escámez | 106 | 213 | — | — | 23 | 149 | — | — | — | — | 39 | 530 | 537 | 535 | ||||||||||||||||||||||||||||||||||||||||||
Ángel Jado (***) | 59 | — | — | — | 13 | — | — | — | — | — | — | 72 | — | — | ||||||||||||||||||||||||||||||||||||||||||
Francisco Luzón | 106 | 213 | — | — | 23 | 1 | 1,656 | 2,146 | 3,802 | 522 | 1,004 | 5,671 | 5,811 | 6,851 | ||||||||||||||||||||||||||||||||||||||||||
Abel Matutes | 106 | — | 50 | — | 25 | 16 | — | — | — | — | — | 197 | 192 | 194 | ||||||||||||||||||||||||||||||||||||||||||
Juan R. Inciarte (*) | 106 | — | — | — | 28 | 120 | 987 | 1,304 | 2,291 | 505 | 111 | 3,161 | 3,121 | 3,830 | ||||||||||||||||||||||||||||||||||||||||||
Luis Ángel Rojo (3) | 106 | — | 50 | 30 | 8 | 21 | — | — | — | — | — | 215 | 225 | 229 | ||||||||||||||||||||||||||||||||||||||||||
Luis Alberto Salazar-Simpson | 106 | — | 50 | — | 25 | 19 | — | — | — | — | — | 200 | 202 | 198 | ||||||||||||||||||||||||||||||||||||||||||
Isabel Tocino | 106 | — | — | — | 28 | — | — | — | — | — | — | 134 | 132 | 129 | ||||||||||||||||||||||||||||||||||||||||||
Total 2010 | 2,162 | 2,130 | 250 | 150 | 482 | 904 | 10,753 | 11,917 | 22,670 | 3,757 | 1,912 | 34,417 | — | — | ||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||
(*) | 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. He was appointed as a member of the audit and compliance committee on December 14, 2010. | |
(***) | Appointed as member of the Bank’s board of directors by the shareholders at the general meeting held on January 11, 2010, Angel Jado took office on the same date. | |
(a) | Relating to the variable remuneration in cash received in 2010. | |
(b) | Amounts received in 2010 in respect of the variable remuneration in shares granted through the Plan I10 approved by the shareholders at the general meeting held on June 21, 2008. | |
(1) | Recognized under staff costs at the Bank, except for the salary of Ana P. Botín, whose salary for the first eleven months of 2010 was recognized at Banco Español de Crédito, S.A. | |
(2) | Amounts contributed to Marcelino Botín Foundation. | |
(3) | Luis Ángel Rojo died on May 24, 2011. |
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Thousands of Euros | ||||||||||||||
Company | 2010 | 2009 | 2008 | |||||||||||
Emilio Botín | Shinsei Bank, Ltd. | — | 30.1 | 53.0 | ||||||||||
Fernando de Asúa | CEPSA | — | 100.2 | 97.2 | ||||||||||
Antonio Escámez | Attijariwafa Bank Société Anonyme | 10.0 | 5.0 | 14.8 | ||||||||||
10.0 | 135.3 | 165.0 | ||||||||||||
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Number of | Thousands of Euros | |||||||||||||||||||||||
executive | Salary | Other | ||||||||||||||||||||||
Year | vice presidents (1) | Fixed | Variable | Total | Remuneration | Total | ||||||||||||||||||
2008 | 24 | 21,219 | 34,674 | 55,893 | 27,598 | 83,491 | ||||||||||||||||||
2009 | 24 | 21,512 | 36,468 | 57,980 | 16,745 | 74,725 | ||||||||||||||||||
2010 | 23 | 23,756 | 28,484 | (2) | 52,240 | 14,700 | 66,940 |
(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. | |
(2) | At the annual general meeting held on June 11, 2010, the shareholders approved the first cycle of the deferred conditional delivery share plan, whereby payment of a portion of the variable remuneration for 2010 amounting to€11,482 million will be deferred over the next three years and will accrue, where appropriate, in three equal installments and will be recognized as remuneration in each of the aforementioned years, provided that the conditions for entitlement to the remuneration are met. See Notes 5 and 47 to our consolidated financial statements. |
Maximum number of | December 31, | December 31, | December 31, | |||||||||
options/shares | 2010 | 2009 | 2008 | |||||||||
Plan I-06 (*) | — | — | 1,499,010 | |||||||||
Plan I-09 | — | — | 822,508 | |||||||||
Plan I-10 | — | 1,154,158 | 1,280,124 | |||||||||
Plan I-11 | 1,226,754 | 1,312,214 | 1,446,259 | |||||||||
Plan I-12 | 1,498,713 | 1,562,227 | — | |||||||||
Plan I-13 | 1,468,762 | — | — |
(*) | The exercise period was from January 15, 2008 to January 15, 2009. |
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Thousands of Euros | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
Accrued | Accrued | Accrued | ||||||||||||||||||||||
Pension | Other | Pension | Other | Pension | Other | |||||||||||||||||||
Obligations | Insurance | Obligations | Insurance | Obligations | Insurance | |||||||||||||||||||
Emilio Botín | 25,029 | — | 24,642 | — | 25,579 | — | ||||||||||||||||||
Alfredo Sáenz | 86,620 | 11,108 | 85,740 | 11,108 | 80,049 | 10,785 | ||||||||||||||||||
Matías R. Inciarte | 44,560 | 5,131 | 52,536 | 5,131 | 50,894 | 4,982 | ||||||||||||||||||
Ana P. Botín | 31,329 | 1,403 | 23,775 | 1,403 | 21,737 | 1,403 | ||||||||||||||||||
Francisco Luzón | 55,950 | 9,934 | 53,513 | 9,031 | 53,083 | 7,624 | ||||||||||||||||||
Juan R. Inciarte | 11,629 | 2,961 | 10,969 | 2,961 | 9,918 | 2,875 | ||||||||||||||||||
255,117 | 30,537 | 251,175 | 29,634 | 241,260 | 27,669 | |||||||||||||||||||
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Options | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options | Granted | Options Exercised | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
at | Number | Market | Remuneration | Options | Options | Date of | Date of | |||||||||||||||||||||||||||||||||||||||||||||||||
December 31, | Exercise | Number of | of Shares | Exercise | Price | Allocated | at | Number of | at | Exercise | Commencement | Expiry of | ||||||||||||||||||||||||||||||||||||||||||||
2005, | Price | 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 was 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 was equal to the number of options exercised. |
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Rights | Rights | Shares | Rights | Rights | Shares | Rights | ||||||||||||||||||||||||||||||||||||||||||||||
Rights at | granted in | Rights at | granted in | delivered in | cancelled in | Rights at | granted in | delivered in | cancelled in | Rights at | ||||||||||||||||||||||||||||||||||||||||||
December 31, | 2008 | December 31, | 2009 | 2009 | 2009 | December 31, | 2010 | 2010 | 2010 | December 31, | Grant | Share delivery | ||||||||||||||||||||||||||||||||||||||||
2007 | (number) | 2008 | (number) | (number) | (number) | 2009 | (number) | (number) | (number) | 2010 | date | deadline | ||||||||||||||||||||||||||||||||||||||||
Plan I09: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Emilio Botín | 41,785 | — | 41,785 | — | (37,937 | ) | (3,848 | ) | — | — | — | — | — | 06-23-07 | 07-31-09 | |||||||||||||||||||||||||||||||||||||
Alfredo Sáenz | 110,084 | — | 110,084 | — | (99,945 | ) | (10,139 | ) | — | — | — | — | — | 06-23-07 | 07-31-09 | |||||||||||||||||||||||||||||||||||||
Matías R. Inciarte | 53,160 | — | 53,160 | — | (48,264 | ) | (4,896 | ) | — | — | — | — | — | 06-23-07 | 07-31-09 | |||||||||||||||||||||||||||||||||||||
Ana P. Botín (*) | 27,929 | — | 27,929 | — | (25,357 | ) | (2,572 | ) | — | — | — | — | — | 06-23-07 | 07-31-09 | |||||||||||||||||||||||||||||||||||||
Francisco Luzón | 44,749 | — | 44,749 | — | (40,628 | ) | (4,121 | ) | — | — | — | — | — | 06-23-07 | 07-31-09 | |||||||||||||||||||||||||||||||||||||
Juan R. Inciarte (**) | 43,322 | — | 43,322 | — | (39,332 | ) | (3,990 | ) | — | — | — | — | — | 06-23-07 | 07-31-09 | |||||||||||||||||||||||||||||||||||||
321,029 | — | 321,029 | — | (291,463 | ) | (29,566 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Plan I10: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Emilio Botín | 62,589 | — | 62,589 | — | — | — | 62,589 | — | (56,825 | ) | (5,764 | ) | — | 06-23-07 | 07-31-10 | |||||||||||||||||||||||||||||||||||||
Alfredo Sáenz | 164,894 | — | 164,894 | — | — | — | 164,894 | — | (149,707 | ) | (15,187 | ) | — | 06-23-07 | 07-31-10 | |||||||||||||||||||||||||||||||||||||
Matías R. Inciarte | 79,627 | — | 79,627 | — | — | — | 79,627 | — | (72,293 | ) | (7,334 | ) | — | 06-23-07 | 07-31-10 | |||||||||||||||||||||||||||||||||||||
Ana P. Botín (*) | 41,835 | — | 41,835 | — | — | — | 41,835 | — | (37,982 | ) | (3,853 | ) | — | 06-23-07 | 07-31-10 | |||||||||||||||||||||||||||||||||||||
Francisco Luzón | 67,029 | — | 67,029 | — | — | — | 67,029 | — | (60,856 | ) | (6,173 | ) | — | 06-23-07 | 07-31-10 | |||||||||||||||||||||||||||||||||||||
Juan R. Inciarte (**) | 64,983 | — | 64,983 | — | — | — | 64,983 | — | (58,998 | ) | (5,985 | ) | — | 06-23-07 | 07-31-10 | |||||||||||||||||||||||||||||||||||||
480,957 | — | 480,957 | — | — | — | 480,957 | — | (436,661 | ) | (44,296 | ) | — | ||||||||||||||||||||||||||||||||||||||||
Plan I11: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Emilio Botín | — | 68,848 | 68,848 | — | — | — | 68,848 | — | — | — | 68,848 | 06-21-08 | 07-31-11 | |||||||||||||||||||||||||||||||||||||||
Alfredo Sáenz | — | 189,628 | 189,628 | — | — | — | 189,628 | — | — | — | 189,628 | 06-21-08 | 07-31-11 | |||||||||||||||||||||||||||||||||||||||
Matías R. Inciarte | — | 87,590 | 87,590 | — | — | — | 87,590 | — | — | — | 87,590 | 06-21-08 | 07-31-11 | |||||||||||||||||||||||||||||||||||||||
Ana P. Botín (*) | — | 46,855 | 46,855 | — | — | — | 46,855 | — | — | — | 46,855 | 06-21-08 | 07-31-11 | |||||||||||||||||||||||||||||||||||||||
Francisco Luzón | — | 77,083 | 77,083 | — | — | — | 77,083 | — | — | — | 77,083 | 06-21-08 | 07-31-11 | |||||||||||||||||||||||||||||||||||||||
Juan R. Inciarte (**) | — | 50,555 | 50,555 | — | — | — | 50,555 | — | — | — | 50,555 | 06-21-08 | 07-31-11 | |||||||||||||||||||||||||||||||||||||||
— | 520,559 | 520,559 | — | — | — | 520,559 | — | — | — | 520,559 | ||||||||||||||||||||||||||||||||||||||||||
Plan I12: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Emilio Botín | — | — | — | 82,941 | — | — | 82,941 | — | — | — | 82,941 | 06-19-09 | 07-31-12 | |||||||||||||||||||||||||||||||||||||||
Alfredo Sáenz | — | — | — | 228,445 | — | — | 228,445 | — | — | — | 228,445 | 06-19-09 | 07-31-12 | |||||||||||||||||||||||||||||||||||||||
Matías R. Inciarte | — | — | — | 105,520 | — | — | 105,520 | — | — | — | 105,520 | 06-19-09 | 07-31-12 | |||||||||||||||||||||||||||||||||||||||
Ana P. Botín (*) | — | — | — | 56,447 | — | — | 56,447 | — | — | — | 56,447 | 06-19-09 | 07-31-12 | |||||||||||||||||||||||||||||||||||||||
Francisco Luzón | — | — | — | 92,862 | — | — | 92,862 | — | — | — | 92,862 | 06-19-09 | 07-31-12 | |||||||||||||||||||||||||||||||||||||||
Juan R. Inciarte (**) | — | — | — | 60,904 | — | — | 60,904 | — | — | — | 60,904 | 06-19-09 | 07-31-12 | |||||||||||||||||||||||||||||||||||||||
— | — | — | 627,119 | — | — | 627,119 | — | — | — | 627,119 | ||||||||||||||||||||||||||||||||||||||||||
Plan I13: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Emilio Botín | — | — | — | — | — | — | — | 82,941 | — | — | 82,941 | 06-11-10 | 07-31-13 | |||||||||||||||||||||||||||||||||||||||
Alfredo Sáenz | — | — | — | — | — | — | 228,445 | — | — | 228,445 | 06-11-10 | 07-31-13 | ||||||||||||||||||||||||||||||||||||||||
Matías R. Inciarte | — | — | — | — | — | — | — | 105,520 | — | — | 105,520 | 06-11-10 | 07-31-13 | |||||||||||||||||||||||||||||||||||||||
Ana P. Botín (*) | — | — | — | — | — | — | — | 56,447 | — | — | 56,447 | 06-11-10 | 07-31-13 | |||||||||||||||||||||||||||||||||||||||
Francisco Luzón | — | — | — | — | — | — | — | 92,862 | — | — | 92,862 | 06-11-10 | 07-31-13 | |||||||||||||||||||||||||||||||||||||||
Juan R. Inciarte (**) | — | — | — | — | — | — | — | 60,904 | — | — | 60,904 | 06-11-10 | 07-31-13 | |||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 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 general meeting of Banesto held on June 27, 2007, the maximum number of Santander shares shown in the foregoing table relates to the aforementioned executive director, based on the resolution adopted at the aforementioned annual general meeting. | |
(**) | 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 relating to Ana P. Botín by virtue of the Banesto Share-Based Payment Incentive Plan approved by the shareholders at the annual general meeting of Banesto held on February 24, 2010, the maximum number of Santander shares shown in the foregoing table relates to the aforementioned executive director, based on the resolution adopted at the aforementioned annual general meeting. |
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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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Executive directors | 1st Cycle | |||
Emilio Botín | 94,345 | |||
Alfredo Sáenz | 312,450 | |||
Matías R. Inciarte | 135,188 | |||
Ana P. Botín (*) | 91,187 | (*) | ||
Francisco Luzón | 154,981 | |||
Juan R. Inciarte | 61,386 |
(*) | Shares of Banco Español de Crédito, as authorized by the shareholders at Banesto’s annual general meeting of February 23, 2011. In this case, the share price of Banesto used to calculate the number of shares was€6.143, the average market price of the Banesto share weighted by daily volume in the 15 trading days prior to January 19, 2011, the date on which the board of directors of that entity approved the variable remuneration of its executive directors for 2010. |
1. | Performance shares plan; | |
2. | Obligatory investment plan with matched deferred bonus in shares or matched deferred bonus plan; | |
3. | Deferred and conditional share plan; | |
4. | Restricted shares plan; and | |
5. | 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, 2010 | 55,602,193 | |||||||||||||||||||
Of which: | ||||||||||||||||||||
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-13 plan | 19,612,616 | 2010 | 6,782 | June 11, 2010 | July 31, 2013 |
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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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1. | Beneficiaries: The executives of the Santander Group (excluding Banesto) as determined by the board of directors, or the executive committee by delegation therefrom, excluding the executive directors, other members of senior management and those other executives who are beneficiaries of the deferred and conditional variable remuneration plan referred to in page 169 below. The overall number of participants is expected to be approximately 6,500, although the board of directors, or the executive committee by delegation therefrom, may decide to include or exclude additional participants, without changing the maximum overall number of shares to be delivered that is authorised at any time. | |
2. | Objectives: The objectives used to determine the number of shares for distribution (the “Objectives”) are linked to Total Shareholder Return (“TSR”). | |
For the purposes of the I-14 plan, TSR is the difference (expressed as a percentage) between the final value of an investment in common shares in each of the compared institutions at the end of the period and the value of the same investment at the beginning of the period. Dividends or other similar items received by the shareholders for such investment during the corresponding period of time will be considered for the calculation of such final value as if they had been invested in more shares of the same kind on the first date on which the dividend or similar item was due to the shareholders and at the average weighted listing price on such date. The determination of such initial and final values are based on the listing prices indicated in sub-section 3 below. |
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At the end of the respective cycle, the TSR for Santander and each of the entities of the group identified below (the “Reference Group”) will be calculated and will be listed in descending order. The application of the TSR indicator will determine the percentage of shares to be distributed, based on the following scale and on the relative position of Santander within the Reference Group: |
Position of Santander in | Percentage shares earned | |||
the TSR ranking | of the maximum | |||
1st – 5th | 100.0 | % | ||
6th | 86 | % | ||
7th | 72 | % | ||
8th | 58 | % | ||
9th | 44 | % | ||
10th | 30 | % | ||
11th and below | 0 | % |
Bank | Country | |||
Itaú Unibanco Banco Múltiplo | Brazil | |||
Barclays | United Kingdom | |||
Bank of America | The USA | |||
BBVA | Spain | |||
BNP Paribas | France | |||
HSBC Holdings | The UK | |||
ING Group | The Netherlands | |||
Intesa Sanpaolo | Italy | |||
JP Morgan Chase & Co. | The USA | |||
Mitsubishi UFJ Financial Group | Japan | |||
Nordea Bank | Sweden | |||
Royal Bank of Canada | Canada | |||
Société Générale | France | |||
Standard Chartered | The UK | |||
UBS | Switzerland | |||
UniCredit | Italy | |||
Wells Fargo & Co. | The USA |
The board, or the executive committee by delegation therefrom, will, after a report from the appointments and remuneration committee, have the power to adapt, if appropriate, the composition of the Reference Group in the event of unforeseen circumstances that may affect the entities initially comprising such Group. In such cases, no shares will be earned if Santander ranks below the mean (50 percentile) of the Reference Group; the maximum percentage of shares will be earned if Santander is included in the first quartile (including the 25 percentile) of the Reference Group; 30% of the maximum number of shares will be earned at the mean (50 percentile); and, for intermediate positions between (but excluding) the mean and the first quartile (excluding the 25 percentile), earned shares will be calculated by linear interpolation. |
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3. | Duration: This sixth cycle will comprise the years 2011, 2012 and 2013. The calculation of the TSR will take into account the average weighted daily volume of the average weighted listing prices for the fifteen trading sessions immediately preceding (but not including) April 1, 2011 (to calculate the value at the beginning of the period) and that of the fifteen trading sessions immediately preceding (but not including) April 1, 2014 (to calculate the value at the end of the period). | |
To receive the shares, one must remain in active service with the Group through June 30, 2014,2 and there must be a determination by the board of directors, upon a proposal from the appointments and remuneration committee, of the absence of any of the following circumstances during the period prior to delivery: |
(i) | poor financial performance of the Group; | ||
(ii) | breach by the beneficiary of internal regulations, particularly those relating to risks; | ||
(iii) | material restatement of the Group’s financial statements, except when pursuant to a change in the accounting standards; or | ||
(iv) | significant changes in the financial capital or risk profile of the Group. |
The delivery of shares, if any, shall take place no later than July 31, 2014, on a date determined by the board of directors, or by the executive committee by delegation therefrom. | ||
The shares will be delivered by the Bank or by another company of the Group, as the case may be. | ||
4. | Other rules: In the event of a change in the number of shares due to a decrease or increase in the par value of the shares or a transaction with an equivalent effect, the number of shares to be delivered will be modified so as to maintain the percentage of the total share capital represented by them, and the corresponding adjustments shall be made in order for the calculation of TSR to be correct. | |
Information from the stock exchange with the largest trading volume or, in case of doubt, from the stock exchange of the place where the registered office is located, shall be used to determine the listing price of each share. | ||
If necessary or appropriate for legal, regulatory or similar reasons, the delivery mechanisms provided for herein may be adapted in specific cases without altering the maximum number of shares linked to the plan or the basic conditions upon which the delivery thereof is made contingent. Such adaptations may include the substitution of the delivery of shares for the delivery of equivalent amounts in cash. |
2 | When termination of the employment relationship with Banco Santander or another entity of the Santander Group is due to retirement, early retirement or pre-retirement of the beneficiary, for a termination judicially declared to be improper, unilateral separation for good cause by an employee (which includes, in any case, those situations set forth in article 10.3 of Royal decree 1382/1985, of 1 August, governing the special relationship of senior management, for the persons subject to these rules), permanent disability or death, or as a result of an employer other than Banco Santander ceasing to belong to the Santander Group, as well as in those cases of mandatory redundancy, the right to delivery of the shares shall continue subject to the same terms as if none of such circumstances had occurred, except for the following changes: | |
(i) | In the case of death, the right shall pass to the successors of the beneficiary. | |
(ii) | The number of shares to deliver shall be the result of multiplying the maximum number of shares to be delivered to the beneficiary by the quotient resulting from dividing the number of days elapsed between January 1, 2011 and the date of occurrence of the death, retirement, pre-retirement, redundancy, leave or other circumstance causing the application of this rule, inclusive, by the number of days between January 1, 2011 and June 30, 2014, both inclusive. |
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The shares to be delivered may be owned by the Bank or by any of its subsidiaries, be newly-issued shares, or be obtained from third parties that have signed agreements to ensure that the commitments made will be met. | ||
5. | Maximum limit: The aggregate maximum limit of shares to be delivered in relation to the sixth cycle of the Performance Shares Plan will be 19,000,000, equal to 0.2251% of the share capital as of the date of the call to the Meeting (the “Aggregate Limit”). |
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Reference bonus | ||
(thousands of euros) | % deferred | |
< 300 | 0% | |
300 – 600 | 20% | |
600 – 1,200 | 30% | |
1,200 – 2,400 | 40% | |
> 2,400 | 50% | |
Total |
(i) | Purpose and beneficiaries: The second cycle of the deferred and conditional share plan shall be applied in relation to the variable remuneration in cash or bonus for financial year 2011 approved by the board of directors, or the appropriate body in each case, for the executive directors or employees of the Santander Group whose gross variable remuneration or annual bonus for 2011 is generally above€300,000 (gross), in order to defer a portion of said variable remuneration or bonus for payment, if any, within a three-year period in Santander shares, in accordance with the rules set forth below. This second cycle shall not apply to the executive directors, other members of senior management or other executives who are beneficiaries of the deferred and conditional variable remuneration plan referred to in page 169 below. | |
(ii) | Operation: In addition to the beneficiary remaining with the Santander Group3, the accrual of deferred remuneration in the form of shares is conditional upon none of the following circumstances existing during the period prior to each of the deliveries, in the opinion of the board of directors, and following a proposal of the appointments and remuneration committee: |
(i) | poor financial performance of the Group; |
3 | When termination of the employment relationship with Banco Santander or another entity of the Santander Group is due to retirement, early retirement or pre-retirement of the beneficiary, for a termination judicially declared to be improper, unilateral separation for good cause by an employee (which includes, in any case, those situations set forth in article 10.3 of Royal decree 1382/1985, of 1 August, governing the special relationship of senior management, for the persons subject to these rules), permanent disability or death, or as a result of an employer other than Banco Santander ceasing to belong to the Santander Group, as well as in those cases of mandatory redundancy, the right to delivery of the shares (as well as the corresponding dividends) shall remain under the same conditions in force as if none of such circumstances had occurred. |
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(ii) | breach by the beneficiary of the internal regulations, including in particular those related to risks; | ||
(iii) | material restatement of the Group’s financial statements, except when pursuant to a change in the accounting standards; or | ||
(iv) | significant changes in the financial capital or risk profile of the Group. |
Reference bonus | ||
(thousands of euros) | % deferred in the tranche | |
Less than or equal to 300 | 0% | |
More than 300 to 600 (inclusive) | 20% | |
More than 600 | 30% |
Upon each delivery of shares, and thus subject to the same requirements, the beneficiary will be paid an amount in cash equal to the dividends payable for such shares from the date of notice of the bonus and through the time of delivery, whether on the first, second or third anniversary. Under the the Santander Scrip Dividend Program (Santander Dividendo Elección), if applicable, the price offered by the Bank for the free allotment rights corresponding to such shares will be paid. | ||
The beneficiaries of this second cycle of the deferred and conditional share plan may not directly or indirectly hedge the shares prior to their delivery. | ||
(iii) | Maximum number of shares to be delivered: Based on the above scale, the board of directors has estimated that the maximum amount to defer in shares of the total bonus for the financial year 2011 of the beneficiaries of this cycle is€ 40 million (the “Maximum Amount Distributable in Shares”). The maximum number of Santander shares that may be delivered under this cycle of the plan (the “Deferred and Conditional Share Plan Limit”) will be determined by applying the following formula: |
Deferred and Conditional Share Plan Limit = | Maximum Amount Distributable in Shares | ||
Santander Share Price |
where “Santander Share Price” will be the average weighted daily volume of the average weighted listing prices of the relevant Santander shares for the fifteen trading sessions prior to the date on which the board of directors approves the bonus for the executive directors of the Bank for financial year 2011. | ||
(iv) | Other rules: In the event of a change in the number of shares due to a decrease or increase in the par value of the shares or some other transaction with a similar effect, the number of shares to be delivered will be modified so as to maintain the percentage of the total share capital represented by them. | |
Information from the stock exchange with the largest trading volume or, in case of doubt, from the stock exchange of the place where the registered office is located, shall be used to determine the listing price of each share. |
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If necessary or appropriate for legal, regulatory or similar reasons, the delivery mechanisms provided for herein may be adapted in specific cases without altering the maximum number of shares under the plan or the basic conditions upon which the delivery thereof is made contingent. Such adaptations may include the substitution of the delivery of shares for the delivery of equivalent amounts in cash. | ||
The shares to be delivered may be owned by the Bank or by any of its subsidiaries, be newly-issued shares, or be obtained from third parties that have signed agreements to ensure that the commitments made can be met. |
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Immediate payment percentage | Deferred percentage | |||||||
Executive Directors | 40 | % | 60 | % | ||||
Division Directors and other executives of the Group with a similar profile | 50 | % | 50 | % | ||||
Other Executives Subject to Supervision | 60 | % | 40 | % |
(i) | In 2012, each beneficiary, based on the group to which the beneficiary belongs, will receive the Immediate Payment Percentage applicable in each case in halves and net of taxes or withholding, in cash and Santander shares (the “Initial Date” which is understood as the specific date on which the Immediate Payment Percentage is paid). | |
(ii) | The payment of the Deferred Percentage of the bonus applicable in each case based on the group to which the beneficiary belongs will be deferred for a period of 3 years and will be paid in thirds, within fifteen days following the anniversaries of the Initial Date in 2013, 2014 and 2015 (the “Anniversaries”), provided that the conditions listed below are met. | |
(iii) | Of the deferred amount, upon payment (or withholding) of the taxes applicable at any time, the resulting net amount will be paid in thirds, within fifteen days following the first, second and third Anniversaries, 50% in cash and the other 50% in Santander shares. | |
(iv) | Beneficiaries who receive Santander shares pursuant to paragraphs (i) to (iii) above may not transfer them or engage in the direct or indirect hedging thereof for a period of one year from each delivery of shares. Nor may the beneficiaries engage in direct or indirect hedging of the shares prior to the delivery thereof. |
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(i) | poor financial performance of the Group; | |
(ii) | breach by the beneficiary of internal regulations, particularly those relating to risks; | |
(iii) | material restatement of the Group’s financial statements, except when pursuant to a change in the accounting standards; or | |
(iv) | significant changes in the financial capital or risk profile of the Group. |
4 | When termination of the employment relationship with Banco Santander or another entity of the Santander Group is due to retirement, early retirement or pre-retirement of the beneficiary, for a termination judicially declared to be improper, unilateral separation for good cause by an employee (which includes, in any case, those situations set forth in article 10.3 of Royal decree 1382/1985, of August 1, governing the special relationship of senior management, for the persons subject to these rules), permanent disability or death, or as a result of an employer other than Banco Santander ceasing to belong to the Santander Group, as well as in those cases of mandatory redundancy, the right to delivery of the shares and the deferred cash amounts (as well as the corresponding dividends and interest) shall remain under the same conditions in force as if none of such circumstances had occurred. |
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VRSL | = | MADVRS | ||||||
Santander Share Price |
EDSL | = | MADSED | ||||||
Santander Share Price |
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Date of | Date of | |||||||||||||||||||||||||||
Exercise price | commencement | expiry of | ||||||||||||||||||||||||||
Number of | in pounds | Year | Employee | Number of | of exercise | exercise | ||||||||||||||||||||||
shares | sterling (*) | granted | group | persons | period | period | ||||||||||||||||||||||
Plans outstanding at 01/01/08 | 8,048,312 | 5.34 | ||||||||||||||||||||||||||
Options granted (Sharesave) | 5,196,807 | 7.69 | 2008 | Employees | 6,556 | (**) | 11/01/08 | 11/01/11 | ||||||||||||||||||||
Options exercised | (6,829,255 | ) | 4.91 | 11/01/08 | 11/01/13 | |||||||||||||||||||||||
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 | ||||||||||||||||||||||||||
Options granted (Sharesave) | 3,359,425 | 6.46 | 2010 | Employees | 4,752 | (**) | 11/01/10 | 11/01/13 | ||||||||||||||||||||
11/01/10 | 11/01/15 | |||||||||||||||||||||||||||
Options exercised | (72,516 | ) | 7.54 | |||||||||||||||||||||||||
Of which: | ||||||||||||||||||||||||||||
Sharesave | (72,516 | ) | 7.54 | |||||||||||||||||||||||||
Options cancelled (net) or not exercised | (3,072,758 | ) | 6.82 | |||||||||||||||||||||||||
Of which: | ||||||||||||||||||||||||||||
Sharesave | (3,072,758 | ) | 6.82 | |||||||||||||||||||||||||
Plans outstanding at 12/31/10 | 8,938,680 | 7.09 | ||||||||||||||||||||||||||
Of which: | ||||||||||||||||||||||||||||
Executive Options | 12,015 | 4.54 | 2003-2004 | Executives | 2 | 03/26/06 | 03/24/13 | |||||||||||||||||||||
Sharesave | 8,926,665 | 7.09 | 2004-2008-2009-2010 | Employees | 13,195 | (**) | 04/01/06 | 11/01/15 |
(*) | At December 31, 2010, 2009 and 2008, the euro/pound sterling exchange rate was€1.16178/GBP 1;€1.12600/GBP 1 and€1.04987/GBP 1, respectively. | |
(**) | Number of accounts/contracts. A single employee may have more than one account/contract. |
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Date of | ||
Name | expiration (1) | |
Emilio Botín | 1st half 2013 | |
Fernando de Asúa | 1st half 2015 | |
Alfredo Sáenz | 1st half 2015 | |
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 2015 | |
Lord Burns | 1st half 2011 | |
Guillermo de la Dehesa | 1st half 2014 | |
Rodrigo Echenique | 1st half 2011 | |
Antonio Escámez | 1st half 2012 | |
Ángel Jado | 1st half 2015 | |
Francisco Luzón | 1st half 2012 | |
Abel Matutes | 1st half 2014 | |
Juan R. Inciarte | 1st half 2013 | |
Luis Alberto Salazar-Simpson | 1st half 2013 | |
Isabel Tocino | 1st half 2015 |
(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. | |
A proposal to reduce the term of the office for our directors from five to three years has been submitted for the consideration of our shareholders at the 2011 annual general meeting which, if approved, will result in approximately one-third of the directors (as opposed to one-fifth) being up for annual re-election. |
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Thousands of euros | 2010 | Change (%) | 2009 | 2008 | ||||||||||||
Emilio Botín | 1,344 | — | 1,344 | 1,305 | ||||||||||||
Alfredo Sáenz | 3,703 | — | 3,703 | 3,595 | ||||||||||||
Matías R. Inciarte | 1,710 | — | 1,710 | 1,661 | ||||||||||||
Ana P. Botín | 1,353 | (*) | 4.6 | % | 1,294 | 1,269 | ||||||||||
Francisco Luzón | 1,656 | 10.0 | % | 1,505 | 1,461 | |||||||||||
Juan R. Inciarte | 987 | — | 987 | 958 | ||||||||||||
Total | 10,754 | 2.0 | % | 10,543 | 10,249 | |||||||||||
(*) | It is the sum of the fixed remuneration received from Banesto by Ana P. Botín for the first eleven months of 2010, and that accrued from December 1, 2010 as a result of the change in her responsibilities (chief executive officer of Santander UK). | |
b. Variable remuneration of executive directors |
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Thousands of euros | 2010 (*) | Change (%) | 2009 | 2008 | ||||||||||||
Emilio Botín | 1,682 | (15.3 | %) | 1,987 | 1,987 | |||||||||||
Alfredo Sáenz | 3,351 | (29.4 | %) | 4,745 | 4,745 | |||||||||||
Matías R. Inciarte | 1,994 | (20.3 | %) | 2,503 | 2,503 | |||||||||||
Ana P. Botín | 1,440 | (19.4 | %) | 1,786 | 1,786 | |||||||||||
Francisco Luzón | 2,146 | (22.0 | %) | 2,753 | 2,753 | |||||||||||
Juan R. Inciarte | 1,304 | (11.1 | %) | 1,466 | 1,466 | |||||||||||
Total | 11,917 | (21.8 | %) | 15,240 | 15,240 | |||||||||||
(*) | Not included are the amounts whose handing-over in the form of shares are deferred and conditional by resolution of the general meeting of shareholders on June 11, 2010, and which amount to a total of€6,362,000. |
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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 (€25.0 million and€86.6 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 Note 5.c to our consolidated financial statements. | ||
If termination of the contract with Alfredo Sáenz had occurred in 2010, he could have chosen to proceed to retired status or to receive a severance compensation equivalent to 40% of his annual fixed salary multiplied by the number of years of his service at the Bank, up to a maximum of 10 times his annual fixed salary. However, Alfredo Sáenz has waived his right to receive such severance compensation. | |||
– | In the case of Matías R. Inciarte, to take pre-retirement and to receive his accrued pensions in the form of capital (€44,560,000) without any additional amounts accruing in respect of pensions in the future since the consolidation option referred to in Note 5.c has been exercised. | ||
At December 31, 2009 and 2008, Matías R. Inciarte would have been entitled to take pre-retirement and accrue annual pension supplements amounting to€2,507,000 and€2,416,000, respectively, in those years. | |||
– | In the case of Ana P. Botín, pursuant to a change in her contract approved by the directors at the board meeting held on January 24, 2011, following the report of the appointments and remuneration committee, to take pre-retirement and accrue a pension supplement. At December 31, 2010, the annual pension supplement would amount to€2,556 thousand (December 31, 2009:€1,841,000; December 31, 2008:€1,781,000). | ||
At December 31, 2009 and 2008, Ana P. Botín was entitled to receive a termination benefit amounting to five years’ annual fixed salary at the date of termination (2009:€6,472,000, 2008:€6,345,000), although this entitlement to termination benefit had ceased as a result of the change in her contract. | |||
– | In the case of Francisco Luzón, to take pre-retirement and to accrue a pension supplement. At December 31, 2010, the annual pension supplement would amount to€2,850,000 (2009:€2,701,000; 2008:€2,648,000). | ||
– | In the case of Juan R. Inciarte, pursuant to a change in his contract approved by the directors at the board meeting held on January 24, 2011, following the report of the appointments and remuneration committee, to take pre-retirement and accrue a pension supplement. At December 31, 2010, the annual pension supplement would amount to€908,000 (December 31, 2009:€869,000, December 31, 2008:€958,000). | ||
As of December 31, 2009 and 2008, Juan R. Inciarte was entitled to receive an indemnity amounting to 5 yearly payments of the annual fixed salary he received at the time of termination (€4,936,000 and€4,792,000, respectively), this indemnity right having been eliminated as a result of the amendment to his contract. |
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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 |
(*) | It is not contractually established. |
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(i) | Supervise the process of preparing and presenting the regulated financial information relating to the Company and the Group, as well as its integrity, reviewing compliance with regulatory requirements, the proper demarcation of group consolidation and the correct application of accounting standards; | ||
(ii) | Supervise the effectiveness of the systems for the internal monitoring and management of risks, reviewing them periodically, so that the principal risks are identified, managed and properly disclosed; and | ||
(iii) | Discuss with the external auditor any significant weaknesses detected in the internal control system during the course of the audit. |
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Name | Position | |
Manuel Soto | Chairman | |
Fernando de Asúa | Member | |
Rodrigo Echenique | Member | |
Abel Matutes | Member | |
Luis Alberto Salazar-Simpson | Member |
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Name | Position | |
Fernando de Asúa | Chairman | |
Guillermo de la Dehesa | Member | |
Rodrigo Echenique | Member | |
Manuel Soto | Member |
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Number of employees | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
SPAIN | 36,429 | 35,076 | 36,376 | |||||||||
LATIN AMERICA | 88,490 | 84,976 | 95,375 | |||||||||
Argentina | 6,453 | 5,753 | 6,313 | |||||||||
Brazil | 53,829 | 50,904 | 53,198 | |||||||||
Chile | 11,702 | 11,850 | 12,081 | |||||||||
Colombia | 1,321 | 1,304 | 1,415 | |||||||||
Mexico | 12,531 | 12,509 | 13,924 | |||||||||
Peru | 56 | 47 | 52 | |||||||||
Puerto Rico | 1,807 | 1,796 | 1,885 | |||||||||
Uruguay | 735 | 757 | 847 | |||||||||
Venezuela | 56 | 56 | 5,659 | |||||||||
EUROPE | 41,116 | 37,871 | 36,778 | |||||||||
Austria | 389 | 467 | — | |||||||||
Czech Republic | 116 | 166 | 205 | |||||||||
Germany | 3,020 | 2,852 | 2,431 | |||||||||
Belgium | 23 | 13 | 12 | |||||||||
Finland | 143 | 89 | 28 | |||||||||
France | 41 | 32 | 51 | |||||||||
Greece | 26 | 19 | 21 | |||||||||
Hungary | 42 | 47 | 84 | |||||||||
Ireland | 8 | 7 | 7 | |||||||||
Italy | 922 | 931 | 879 | |||||||||
Luxembourg | 3 | 3 | 3 | |||||||||
Norway | 421 | 385 | 361 | |||||||||
Poland | 3,622 | 867 | 852 | |||||||||
Portugal | 6,522 | 6,522 | 6,839 | |||||||||
Russia | — | 85 | — | |||||||||
Switzerland | 175 | 178 | 198 | |||||||||
The Netherlands | 423 | 423 | 289 | |||||||||
United Kingdom | 25,220 | 24,785 | 24,518 | |||||||||
USA | 12,644 | 11,355 | 2,051 | |||||||||
ASIA | 114 | 103 | 82 | |||||||||
Hong Kong | 78 | 72 | 75 | |||||||||
China | 23 | 23 | — | |||||||||
Japan | 6 | 5 | 5 | |||||||||
Others | 7 | 3 | 2 | |||||||||
OTHERS | 76 | 79 | 299 | |||||||||
Bahamas | 55 | 56 | 55 | |||||||||
Others | 21 | 23 | 244 | |||||||||
Total | 178,869 | 169,460 | 170,961 |
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Number of employees | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Retail Banking | 171,964 | 163,184 | 165,244 | |||||||||
Asset Management and Insurance | 1,338 | 1,558 | 1,435 | |||||||||
Global Wholesale Banking | 3,037 | 2,898 | 2,572 | |||||||||
Corporate Activities | 2,530 | 1,820 | 1,710 | |||||||||
Total | 178,869 | 169,460 | 170,961 | |||||||||
Direct | Indirect stake | % of | ||||||||||||||
Directors | Stake | and represented | Total shares | Capital stock | ||||||||||||
Emilio Botín (1) | 8,200,236 | 151,922,027 | 160,122,263 | 2.118 | % | |||||||||||
Fernando de Asúa | 63,600 | 51,420 | 115,020 | 0.001 | % | |||||||||||
Alfredo Sáenz | 987,913 | 1,278,851 | 2,266,764 | 0.027 | % | |||||||||||
Matías R. Inciarte (3) | 993,591 | 164,125 | 1,157,716 | 0.014 | % | |||||||||||
Manuel Soto | 62,446 | 365,377 | 427,823 | 0.005 | % | |||||||||||
Assicurazioni Generali S.p.A | 75,000 | 50,059,290 | 50,134,290 | 0.594 | % | |||||||||||
Antonio Basagoiti | 712,920 | — | 712,920 | 0.008 | % | |||||||||||
Ana P. Botín (1) | 5,106,835 | 4,024,136 | 9,130,971 | 0.000 | % | |||||||||||
Javier Botín (1)(2) | 4,793,481 | 4,676,610 | 9,470,091 | 0.000 | % | |||||||||||
Lord Burns (Terence) | 30,103 | 27,001 | 57,104 | 0.001 | % | |||||||||||
Guillermo de la Dehesa | 103 | — | 103 | 0.000 | % | |||||||||||
Rodrigo Echenique | 658,758 | 9,542 | 668,300 | 0.008 | % | |||||||||||
Antonio Escámez | 757,596 | — | 757,596 | 0.009 | % | |||||||||||
Ángel Jado | 1,877,500 | 4,950,000 | 6,827,500 | 0.081 | % | |||||||||||
Francisco Luzón | 1,257,943 | 59,873 | 1,317,816 | 0.016 | % | |||||||||||
Abel Matutes | 126,890 | 2,355,145 | 2,482,035 | 0.029 | % | |||||||||||
Juan R. Inciarte | 1,375,665 | — | 1,375,665 | 0.016 | % | |||||||||||
Luis Alberto Salazar-Simpson | 253,205 | 5,801 | 259,006 | 0.003 | % | |||||||||||
Isabel Tocino | 39,861 | — | 39,861 | 0.000 | % | |||||||||||
Total | 27,373,646 | 219,949,198 | 247,322,844 | 2.930 | % | |||||||||||
(1) | Emilio Botín has attributed the right of vote in a general shareholders’ meeting of 91,866,035 shares (1.088% 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 9,130,971 shares held by Ana P. Botín and of 9,470,091 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 2.118% 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 79,262 shares owned by two of his children. |
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Thousands of Euros | ||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||
Loans | Loans | Loans | ||||||||||||||||||||||||||||||||||
and | and | and | ||||||||||||||||||||||||||||||||||
Credits | Guarantees | Total | Credits | Guarantees | Total | Credits | Guarantees | Total | ||||||||||||||||||||||||||||
Alfredo Sáenz | 31 | — | 31 | 16 | — | 16 | 25 | — | 25 | |||||||||||||||||||||||||||
Matías R. Inciarte | 14 | — | 14 | 7 | 10 | 17 | 20 | 10 | 30 | |||||||||||||||||||||||||||
Manuel Soto | 2 | — | 2 | — | — | — | 5 | — | 5 | |||||||||||||||||||||||||||
Antonio Basagoiti | 36 | 1 | 37 | 47 | 1 | 48 | 66 | 1 | 67 | |||||||||||||||||||||||||||
Ana P. Botín | 2 | — | 2 | 3 | — | 3 | 5 | — | 5 | |||||||||||||||||||||||||||
Javier Botín | 5 | — | 5 | 2 | — | 2 | — | — | — | |||||||||||||||||||||||||||
Rodrigo Echenique | 16 | — | 16 | 9 | — | 9 | 12 | — | 12 | |||||||||||||||||||||||||||
Antonio Escámez | 1,500 | — | 1,500 | 1,488 | — | 1,488 | 1,474 | — | 1,474 | |||||||||||||||||||||||||||
Ángel Jado | 3,002 | — | 3,002 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Francisco Luzón | 9,230 | — | 9,230 | 5,004 | — | 5,004 | 1,649 | — | 1,649 | |||||||||||||||||||||||||||
Juan R. Inciarte | 370 | — | 370 | 421 | — | 421 | 465 | — | 465 | |||||||||||||||||||||||||||
Luis Alberto Salazar-Simpson | 401 | — | 401 | 434 | — | 434 | 461 | — | 461 | |||||||||||||||||||||||||||
Isabel Tocino | 30 | — | 30 | 40 | — | 40 | 49 | — | 49 | |||||||||||||||||||||||||||
14,639 | 1 | 14,640 | 7,471 | 11 | 7,482 | 4,231 | 11 | 4,242 | ||||||||||||||||||||||||||||
• | 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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(a) | Index to consolidated financial statements of Santander |
Page | ||||
Report of Deloitte, S.L. | F-1 | |||
Consolidated Balance Sheets as of December 31, 2010, 2009 and 2008 | F-2 | |||
Consolidated Income Statements for the Years Ended December 31, 2010, 2009 and 2008 | F-3 | |||
Consolidated Statements of Recognized Income and Expense for the Years Ended December 31, 2010, 2009 and 2008 | F-4 | |||
Consolidated Statements of Changes in Total Equity for the Years Ended December 31, 2010, 2009 and 2008 | F-5 | |||
Consolidated Statement of Cash Flows for the Years Ended December 31, 2010, 2009 and 2008 | F-8 | |||
Notes to the Consolidated Financial Statements | F-9 | |||
- | “Mandados de Segurança” filed by Banco Santander Brasil, S.A. and certain 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. | ||
- | “Mandados de Segurança” filed by certain Group companies in Brazil claiming their right to pay the Brazilian social contribution tax on net income at a rate of 8% and 10% from 1994 to 1998. | ||
- | 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. In September 2007 the Federal Regional Court found in favor of Banco Santander, S.A., but the Brazilian authorities appealed against the judgment at the Federal Supreme Court. In the case of Banco ABN AMRO Real, S.A., in March 2007 the court found in its favor, but the Brazilian authorities appealed against the judgment at the Federal Regional Court, which handed down a decision partly upholding the appeal in September 2009. Banco ABN AMRO Real, S.A. filed an appeal at the Federal Supreme Court. |
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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 addition, Banco Santander Brasil, S.A. and other Group companies in Brazil are involved in several administrative and legal proceedings against the tax authorities in connection with the social security tax on certain items which are not considered to be employee remuneration. | ||
– | 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 11941/2009. 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 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 of the related court proceedings. | ||
– | In December 2008, the Brazilian tax authorities issued an infringement notice against Banco Santander Brasil, S.A. in relation to income tax (IRPJ and CSL) for 2002 to 2004. The tax authorities took the view that Banco Santander Brasil, S.A. did not meet the necessary legal requirements to be able to deduct the goodwill arising out of the acquisition of Banespa. Banco Santander Brasil, S.A. filed an appeal at Conselho Administrativo de Recursos Fiscais (CARF) against the infringement notice. In June 2010 the Brazilian tax authorities issued infringement notices in relation to this same matter for 2005 to 2007. Banco Santander Brasil, S.A. filed an appeal against these procedures at CARF. The Group considers, based on the advice of its external legal counsel, that the stance taken by the Brazilian tax authorities is not correct, that there are sound defense arguments to appeal against the infringement notice and that, therefore, the risk of loss is remote. Consequently, no provisions have been recognized in connection with these proceedings because this matter should not affect the consolidated financial statements. | ||
– | In December 2010, the Brazilian tax authorities issued an infringement notice against Santander Seguros, S.A., as the successor by merger to ABN AMRO Brazil Dois Participacoes, S.A., in relation to income tax (IRPJ and CSL) for 2005. The tax authorities questioned the tax treatment applied to a sale of Real Seguros, S.A. shares made in that year. The aforementioned entity filed an appeal against the infringement notice. Also, the tax authorities issued infringement notices against Banco Santander, S.A. in connection with income tax (IRPJ and CSL), questioning the tax treatment applied to the economic compensation received under the contractual guarantees provided by the sellers of the former Banco Meridional. The entity filed an appeal against the aforementioned infringement notice. | ||
– | 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. A favorable judgment at first instance was handed down in September 2006, although the judgment was appealed against by the tax authorities in January 2007 and the court found in favor of the latter in June 2010. Abbey National Treasury Services plc plans to appeal against this judgment to a higher court. | ||
– | Legal action filed by Sovereign Bancorp Inc. to take a foreign tax credit in connection with taxes paid outside the United States in fiscal years 2003 to 2005 in relation to financing transactions carried out with an international bank. |
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• | Customer remediation: claims associated with the sale by Santander UK (formerly Abbey) of certain financial products to its customers. | ||
The provisions recorded by Santander UK in this respect were calculated on the basis of the estimate of the number of claims that will be received, of those, the number that will be upheld and the estimated average settlement per case. | |||
• | LANETRO, S.A. (currently ZED WORLDWIDE, 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 plaintiff. | ||
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. In a decision handed down on March 30, 2010, the Supreme Court dismissed an extraordinary appeal against procedural infringements and partly upheld a cassation appeal filed in both cases by the Bank against the decision of the Madrid Provincial Appellate Court. | |||
Zed Worldwide, S.A. requested the court-ordered enforcement of the decision. On January 25, 2011, the court of First Instance issued an order to enforce the decision handed down by the Madrid Provincial Appellate Court, whereby the Bank has to subscribe to 75.1 million shares at their par value of€0.4 per share totaling€30.05 million. Zed Worldwide filed an appeal for reconsideration of the order enforcing the decision, which the Bank has opposed. On March 23, 2011, the Court of first instance dismissed the appeal for reconsideration. | |||
• | Proceeding under Civil Procedure Law filed by Galesa de Promociones, S.A. against the Bank at Elche Court of First Instance no. 5, Alicante (case 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 plaintiff company, which concluded in the foreclosure by the Bank of the mortgaged properties and their subsequent sale by the latter 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 of the properties by the Bank to the aforementioned third parties, which 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 plaintiff, which was prevented from continuing its business activity as a property developer; and (iii)€360,000 relating to the loss of rental income. | |||
On March 2, 2010, the court of first instance handed down a decision partly upholding both the claim filed against the Bank and the counterclaim, ordering the Bank to pay the plaintiff€4,458,960.61, and Galesa Promociones, S.A. to pay the Bank€1,428,075.70, which resulted in a net loss of€3,030,874.91 for the Bank. Two appeals against this decision were filed on May 31, 2010: one by Galesa and the other one by the Bank. On November 11, 2010, the Alicante Provincial Appellate Court handed down a decision upholding the appeal filed by the Bank and dismissing the appeal brought by Galesa de Promociones S.A., as a result of which and by way of offsetting the indemnity obligations payable by each party, the Bank became a creditor of Galesa in the amount€400,000. | |||
Galesa de Promociones S.A. filed a cassation appeal against the above decision at the Supreme Court, for which leave to proceed has not yet been granted. Both parties have appealed before the Court and the Bank has filed a pleading for the inadmission of the appeal. |
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• | Declaratory large claims action brought at Madrid Court of First Instance no. 19 (case 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 plaintiff 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. | |||
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 for 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 submitted on January 21, 2010. The Supreme Court has set the issuing of the judgment for September 29, 2011. | |||
• | 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 (case no. 928/2007), seeking damages of approximately€43 million, plus interest and costs. The plaintiffs, who were former shareholders of Yesocentro, S.A. (Yesos y Prefabricados del Centro, S.A.) alleged 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 plaintiffs, in relation to the sale of shares owned by the plaintiffs to another company called Invercámara, S.A. | ||
This claim was 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 a motion for a preliminary ruling on a civil issue filed by the Bank was resolved. | |||
In an order issued by Madrid Court of First Instance no. 13 on September 11, 2008, which was ratified by an order issued by the Madrid Provincial Appellate Court on March 24, 2010, the proceeding was stayed on preliminary civil ruling grounds because another proceeding based on the same events had been initiated by other shareholders of Yesocentro at the Madrid Court of First Instance no. 47 (proceeding no. 1051/2004) and, therefore, the former proceeding was stayed until a final decision had been handed down on the latter. In the proceeding filed at Court no. 47, a first instance judgment was handed down partly upholding the claim as well as an appeal judgment partly upholding the appeals filed by the plaintiffs and the Bank. On January 10, 2011, the Bank filed a cassation appeal and an extraordinary appeal on the grounds of procedural infringements. | |||
• | On February 6, 2008, Banco Santander, S.A. filed a request for arbitration with the Secretary of the Spanish Arbitration Court against the business entity Gaesco Bolsa, Sociedad de Valores, S.A., claiming€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 by the aforementioned company and 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 Bolsa, Sociedad de Valores, S.A. Gaesco filed for the annulment of the arbitral award at Madrid Provincial Appellate Court. | ||
Additionally, Mobilaria Monesa, S.L. (parent of the former Gaesco) filed a claim against Banco Santander, S.A. at Santander Court of First Instance no. 5, reproducing the claims discussed and already resolved in arbitration circumstance which was brought to the Court’s attention in the notice of opposition thereto filed by the Bank. |
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The above proceeding was stayed by Santander Provincial Appellate Court (order dated December 20, 2010) due to the Court issuing the preliminary civil ruling on the grounds claimed by the Bank— until the request for annulment of the arbitral award of May 12, 2009 is resolved. | |||
The Group considers that the risk of loss arising as a result of these matters is remote and, accordingly, it has not recognized any provisions in connection with these proceedings. | |||
• | Former employees of Banco do Estado de São Paulo S.A., Santander Banespa, Cia. de Arrendamiento Mercantil: 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 By-laws in the event that the entity obtained a profit and that the distribution of this profit, in the form of this 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 relevant clause was eliminated from the By-laws in 2001. In September 2005 the Regional Labor Court ordered Banco Santander Banespa, Cia. de Arrendamiento Mercantil (currently Banco Santander (Brasil), S.A.) to pay the half-yearly bonus and the Bank subsequently lodged an appeal at the High Labor Court. Decisions were handed down in June 2008 and in March 2011 ordering the Bank to pay the half-yearly bonus from 1996 onwards for a maximum amount equivalent to the share in the profits. A related appeal against these decisions was filed at the Federal Supreme Court, and is currently pending. | ||
• | Padrão Comércio de Incorporacão de Imóveis Ltda.: A claim for BRL 87 million against Banco Santander (Brasil), S.A. for purported wrongful charges made by Banco do Estado de São Paulo, S.A. (“Banespa”) since the account was opened in 1994 until 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 had been used by the plaintiff. Taking into account the outcome of the aforementioned appeal, the inability to submit the aforementioned additional documentation due to procedural reasons and the scant possibilities, in the opinion of the legal advisers of Banco Santander (Brasil), S.A., owing to all the above factors, of obtaining a favorable decision by filing a special appeal with the Federal Court, it was decided to start a negotiation process with Padrão which led to an agreement, reached in June 2010, whereby Banco Santander (Brasil), S.A. paid BRL 54.5 million. In exchange Padrão withdrew the aforementioned claim against Banco Santander Brasil. The agreement was certified by the court. | ||
• | “Planos economicos”: Like the rest of the banking system, Santander Brasil has been the subject of claims from customers, mostly depositors, and of class actions brought by consumer protection associations and the public prosecutor’s office, among others, in connection with the possible effects of certain legislative changes relating to differences in the monetary adjustments to interest on bank deposits and other inflation-linked contracts (planos económicos). The plaintiffs considered that their vested rights in relation to the inflationary adjustments had been impaired due to the immediate application of these adjustments. In April 2010, the High Court of Justice set the statute of limitations period for these class actions at five years, as requested by the banks, rather than twenty years, as sought by the plaintiffs, which will significantly reduce the number of actions of this kind brought and the amounts claimed in this connection. As regards the substance of the matter, the decisions issued to date have been adverse for the banks, although two proceedings have been brought at the High Court of Justice and the Supreme Federal Court as a result of which the matter is expected to be definitively settled. In August 2010, the High Court of Justice handed down a decision finding for the plaintiffs in terms of substance, but excluding one of theplanosfrom the claim, thereby reducing the claimed amount and confirming the five-year statute of limitations period for these class actions. Shortly thereafter, the Supreme Federal Court issued an injunctive relief order whereby all the proceedings in progress were stayed until this court issues a final decision on the matter. Consequently, enforcement of the aforementioned decision handed down by the High Court of Justice was also stayed. |
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• | Proceeding under Civil Procedure Law (case no. 1043/2009) conducted at Madrid Court of First Instance no. 26, following a claim brought by Banco Occidental de Descuento, Banco Universal, C.A. against the Bank for USD 150,000,000 in principal plus USD 4,656,164 in interest for alleged termination of an escrow contract. On October 7, 2010, the Bank was served notice of a decision dated October 1, 2010 which upheld the claim filed by Banco Occidental de Descuento, Banco Universal, C.A. without a ruling being issued in relation to court costs. The Bank filed an appeal against the aforementioned first-instance decision. Banco Occidental de Descuento, Banco Universal, C.A. filed another appeal against the ruling that declared that the Bank should not bear the court costs. The plaintiff requested provisional enforcement of the decision, against which the Bank has submitted notice of opposition. | ||
• | 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 Santander Group 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” 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 in the consolidated income statement for 2008. | |||
At the date hereof, 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, the risk of loss is considered to be remote and, therefore, it has not been necessary to recognize any liability in this connection. | |||
• | The investigation, on the grounds of alleged fraud, of Bernard L. Madoff Investment Securities LLC (“Madoff Securities”) by the US Securities and Exchange Commission (“SEC”) 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, who were qualifying investors. | ||
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 US for preference shares to be issued by the Group for the aforementioned amount, with an annual coupon of 2% and a call option that could be exercised by the issuer in year ten. At December 31, 2008, the Group determined that these events had to be considered to be adjusting events after the reporting period, as defined in IAS 10.3, because they provided evidence of conditions that existed at the end of the reporting period and, therefore, taking into account IAS 37.14, it recognized the pre-tax cost of this transaction for the Group (€500 million —€350 million after tax—) under “Gains/Losses on financial assets and liabilities” in the consolidated income statement for 2008. | |||
The Group 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 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 transactions, 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). As the SEC has stated, Madoff Securities had been regularly inspected by the aforementioned supervisory body in recent years, and at no time was its reputation and solvency questioned by the market or by the US supervisory authorities. | |||
At the date hereof, certain claims had been filed in relation to this matter. The Group is currently assessing the appropriate legal action to be taken. As discussed above, the Group considers that it has at all times exercised due diligence and that these products have always been sold in a transparent way pursuant to applicable legislation and established procedures. Therefore, except for the three cases in which the decisions handed down at first instance upheld the claim on the grounds that are very particular to each specific case (which have been appealed against by the Bank), no provisions were recognized for the other claims since the risk of loss is considered remote. | |||
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 fraud perpetrated by 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 was close to 97%. | |||
On May 26, 2009, two funds managed by Optimal Investment Services, S.A., an indirect subsidiary of 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 allowed the funds’ claims in the liquidation proceeding and reduced his clawback demands on the funds by the amounts withdrawn by the latter from Madoff Securities, in the 90 days prior to bankruptcy, which US 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’ estate were allowed in their full amounts, calculated on a cash-in, cash-out basis, of USD 1,540,141,277.60 and USD 9,807,768.40, respectively, and the funds were entitled to Securities Investor Protection Corporation advances of USD 500,000 each. The funds paid 85% of the clawback claims asserted by the trustee. The payments totaled USD 129,057,094.60 for Strategic U.S. Equity and USD 106,323,953.40 for Arbitrage. | |||
The funds agreed not to file any other claims against Madoff Securities’ estate (in liquidation). 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 make the percentages applied to the funds equal to those applied to other investors in comparable situations. | |||
The agreement followed the trustee’s investigation of Optimal’s conduct in dealing with Madoff Securities, including a review of Optimal’s documents relating to its due diligence, in which the trustee concluded that its conduct did not provide grounds to assert any claim against the Optimal companies or any other 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, agents and employees who agree to release the trustee and the Madoff Securities estate (in liquidation), to the extent the claims arise out of the funds’ dealings with Madoff Securities. It also releases the funds from potential clawback liability for any other withdrawals made by them from Madoff Securities. | |||
The agreement between the trustee and the aforementioned Optimal funds was approved by the United States Bankruptcy Court in New York on June 16, 2009. |
Madoff Securities is currently in liquidation in accordance with the Securities Investor Protection Act of 1970 at the United States Bankruptcy Court in New York. Bernard L. Madoff, the chief executive of Madoff Securities, pleaded guilty to perpetrating what was probably the largest pyramid fraud in history and was sentenced to 150 years’ imprisonment. |
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Euro per Share Interim | Dollars per ADS Interim | |||||||||||||||||||||||||||||||||||||||
First | Second | Third | Fourth | Total | First | Second | Third | Fourth | Total | |||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||
2010 | 0.135234 | 0.119 | 0.117 | 0.228766 | 0.60 | 0.140799 | 0.132571 | 0.1267 | 0.252342 | 0.652412 |
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Year Ended December 31, | ||||||||||||||||||
IFRS-IASB | ||||||||||||||||||
2006 | 2007 | 2008 | 2009 | 2010 | ||||||||||||||
(in thousands of euros) | ||||||||||||||||||
3,256,190 | 4,070,247 | 4,826,218 | 4,150,813 | 3,331,865 |
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Euros per Share | ||||||||||||
High | Low | Last | ||||||||||
2006 Annual | 14.37 | 10.54 | 14.14 | |||||||||
2007 Annual | 15.00 | 12.56 | 14.79 | |||||||||
2008 Annual | 14.59 | 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 | |||||||||
2010 Annual | 11.98 | 7.30 | 7.93 | |||||||||
First Quarter | 11.98 | 9.24 | 9.84 | |||||||||
Second Quarter | 10.79 | 7.36 | 8.74 | |||||||||
Third Quarter | 10.43 | 8.68 | 9.32 | |||||||||
Fourth Quarter | 9.63 | 7.30 | 7.93 | |||||||||
Last six months | ||||||||||||
2010 | ||||||||||||
November | 9.01 | 7.30 | 7.30 | |||||||||
December | 8.49 | 7.82 | 7.93 | |||||||||
2011 | ||||||||||||
January | 9.07 | 7.40 | 8.95 | |||||||||
February | 9.32 | 8.74 | 8.94 | |||||||||
March | 8.78 | 8.03 | 8.19 | |||||||||
April | 8.66 | 8.05 | 8.62 | |||||||||
May (through May 26, 2011) | 8.39 | 7.77 | 7.90 |
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Dollars Per ADS | ||||||||||||
High | Low | Last | ||||||||||
2006 Annual | 18.73 | 13.16 | 18.66 | |||||||||
2007 Annual | 22.14 | 17.29 | 21.54 | |||||||||
2008 Annual | 22.24 | 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 | |||||||||
2010 | ||||||||||||
Annual | 17.50 | 8.77 | 10.65 | |||||||||
First Quarter | 17.50 | 12.65 | 13.27 | |||||||||
Second Quarter | 14.77 | 8.77 | 10.50 | |||||||||
Third Quarter | 13.73 | 10.92 | 12.66 | |||||||||
Fourth Quarter | 13.46 | 9.62 | 10.65 | |||||||||
Last six months | ||||||||||||
2010 | ||||||||||||
November | 12.56 | 9.62 | 9.62 | |||||||||
December | 11.28 | 10.37 | 10.65 | |||||||||
2011 | ||||||||||||
January | 12.39 | 9.74 | 12.24 | |||||||||
February | 12.69 | 11.79 | 12.30 | |||||||||
March | 12.16 | 11.07 | 11.71 | |||||||||
April | 12.48 | 11.48 | 12.40 | |||||||||
May (through May 26, 2011) | 12.34 | 10.90 | 11.22 |
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• | the trade involves more than€1.5 million and more than 40% of average daily trading volume of the stock during the preceding quarter; |
• | relates to a merger or spin-off of a listed company; |
• | relates to the reorganization of a business group; |
• | the transaction is executed for the purposes of settling litigation; |
• | involves certain types of contracts or complex transactions; or |
• | the Sociedad de Bolsas finds other justifiable cause. |
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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. |
• | 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. |
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• | 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. |
• | 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; |
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• | 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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(i) | The restated text of the Spanish Capital Corporations Law (Ley de Sociedades de Capital) approved by Royal Legislative Decree 1/2010, of July 2, as subsequently amended by Royal Decree-Law 13/2010, of December 3, on tax, labour and deregulating actions for the promotion of investment and job creation; |
(ii) | Law 12/2010, of June 30, amendatory of Law 19/1988, of July 12, on Audit of Financial Statements; Law 24/1988, of July 28, on the Securities Market, and the restated text of the Business Corporations Law (Ley de Sociedades Anónimas) for adjustment thereof to European Community law; | |
(iii) | Law 2/2011, of March 4, on Sustainable Economy. |
(iv) | Also proposed is the inclusion in our By-laws of certain provisions contained in the Spanish Capital Corporations Law and which were already included in the former Business Corporations Law as a consequence of the entry into force of, among other laws, Law 3/2009, of April 3, on structural modifications of commercial companies and Law 16/2007, of 4 July, on the reform and adjustment of commercial legislation in accounting matters for international harmonisation thereof based on European Union law. |
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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, or merger, or spin-off, or global assignment of assets and liabilities, 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, |
• | 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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• | 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; |
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• | 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; or |
• | 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, any state thereof or the District of Columbia; 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, control and risk appetite; |
• | 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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• | Anti-money laundering. | ||
• | Institutional relations with regulatory bodies. | ||
• | Codes of conduct of the securities markets. | ||
• | Marketing of products. | ||
• | Markets in financial instruments directive (MiFID). | ||
• | Others: Bank of Spain/Supervisors customer complaints and data protection. |
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Million euros
Outstanding | ||||||||||||||||||||||||||||||||||||||||
to | ||||||||||||||||||||||||||||||||||||||||
Out- | Commit- | Sovereign | Private fixed | cred. ent. | Commit- | Derivatives | ||||||||||||||||||||||||||||||||||
standing | ments to | fixed income | income | and central | ments to | and Repos | %/ | |||||||||||||||||||||||||||||||||
to customers | customers | (exc. trading) | (exc. trading) | banks | credit entities | (ECR) | Total | % | Dec. 09 | |||||||||||||||||||||||||||||||
Spain | 277,583 | 61,492 | 26,956 | 7,674 | 19,260 | 1,484 | 32,644 | 427,092 | 35.4 | % | -3.0 | % | ||||||||||||||||||||||||||||
Parent Bank | 168,070 | 45,097 | 16,210 | 4,892 | 14,059 | 1,210 | 26,568 | 276,105 | 22.9 | % | -1.6 | % | ||||||||||||||||||||||||||||
Banesto | 79,842 | 10,154 | 7,980 | 1,198 | 3,204 | 273 | 5,905 | 108,556 | 9.0 | % | -5.7 | % | ||||||||||||||||||||||||||||
Others | 29,671 | 6,241 | 2,765 | 1,584 | 1,997 | 1 | 171 | 42,430 | 3.5 | % | -4.9 | % | ||||||||||||||||||||||||||||
Rest of Europe | 320,158 | 42,791 | 6,022 | 9,163 | 34,224 | 1 | 16,167 | 428,525 | 35.5 | % | 9.6 | % | ||||||||||||||||||||||||||||
Germany | 21,879 | 295 | 0 | 111 | 694 | 0 | 6 | 22,984 | 1.9 | % | 0.5 | % | ||||||||||||||||||||||||||||
Portugal | 23,062 | 7,831 | 5,515 | 3,517 | 1,466 | 1 | 1,880 | 43,272 | 3.6 | % | 11.6 | % | ||||||||||||||||||||||||||||
Uk | 242,864 | 32,154 | 145 | 5,431 | 31,380 | 0 | 13,650 | 325,624 | 27.0 | % | 11.7 | % | ||||||||||||||||||||||||||||
Others | 32,353 | 2,511 | 362 | 103 | 684 | 0 | 631 | 36,645 | 3.0 | % | -2.6 | % | ||||||||||||||||||||||||||||
Latin America | 136,084 | 63,200 | 25,602 | 3,745 | 31,544 | 6 | 10,926 | 271,106 | 22.5 | % | 30.0 | % | ||||||||||||||||||||||||||||
Brazil | 81,684 | 42,159 | 18,040 | 2,613 | 24,008 | 0 | 5,758 | 174,263 | 14.4 | % | 32.0 | % | ||||||||||||||||||||||||||||
Chile | 27,397 | 7,929 | 1,764 | 948 | 2,313 | 6 | 2,938 | 43,296 | 3.6 | % | 24.8 | % | ||||||||||||||||||||||||||||
Mexico | 14,621 | 11,508 | 3,977 | 2 | 3,431 | 0 | 1,822 | 35,361 | 2.9 | % | 34.0 | % | ||||||||||||||||||||||||||||
Others | 12,382 | 1,603 | 1,820 | 183 | 1,791 | 0 | 407 | 18,186 | 1.5 | % | 18.5 | % | ||||||||||||||||||||||||||||
United States | 53,288 | 10,888 | 1,682 | 8,953 | 2,984 | 0 | 795 | 78,590 | 6.5 | % | 16.8 | % | ||||||||||||||||||||||||||||
Rest of World | 747 | 102 | 1 | 1 | 158 | 0 | 0 | 1,009 | 0.1 | % | -33.9 | % | ||||||||||||||||||||||||||||
Total Group | 787,860 | 178,473 | 60,262 | 29,536 | 88,169 | 1,491 | 60,532 | 1,206,322 | 100 | % | 8.8 | % | ||||||||||||||||||||||||||||
% of Total | 65,3 | % | 14,8 | % | 5,0 | % | 2,4 | % | 7,3 | % | 0,1 | % | 5,0 | % | 100,0 | % | ||||||||||||||||||||||||
% Change/Dec 09 | 6,9 | % | 19,6 | % | 1,2 | % | -24,0 | % | 43,9 | % | 9,4 | % | -0,7 | % | 8,8 | % |
Outstanding balances with customers including contingent risk and excluding repos (EUR 1,395 million) and other customer credit assets (EUR 12,406 million).
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Credit risk | Spec. prov net | |||||||||||||||||||||||||||||||||||||||
with customers * | NPL ratio | Coverage | recovered write-offs ** | Credit cost | ||||||||||||||||||||||||||||||||||||
(million euros) | % | % | (million euros) | (% of risk)3 | ||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 20102 | 20091 | |||||||||||||||||||||||||||||||
Continental Europe | 370,673 | 366,970 | 4.34 | 3.64 | 71.4 | 76.6 | 6,190 | 5,084 | 1.62 | 1.39 | ||||||||||||||||||||||||||||||
Santander Branch Network | 126,705 | 129,099 | 5.52 | 4.38 | 51.8 | 64.9 | 2,454 | 1,851 | 1.89 | 1.41 | ||||||||||||||||||||||||||||||
Banesto | 86,213 | 86,681 | 4.11 | 2.97 | 54.4 | 64.1 | 1,272 | 737 | 1.52 | 0.89 | ||||||||||||||||||||||||||||||
Santander Consumer finance | 67,820 | 60,214 | 4.95 | 5.39 | 128.4 | 96.8 | 1,884 | 2,005 | 2.85 | 3.38 | ||||||||||||||||||||||||||||||
Portugal | 32,265 | 34,501 | 2.90 | 2.27 | 60.0 | 64.6 | 105 | 95 | 0.30 | 0.27 | ||||||||||||||||||||||||||||||
United Kingdom | 244,707 | 238,215 | 1.76 | 1.71 | 45.8 | 43.8 | 826 | 1,018 | 0.34 | 0.43 | ||||||||||||||||||||||||||||||
Latin America | 149,333 | 117,146 | 4.11 | 4.25 | 103.6 | 105.2 | 4,758 | 5,053 | 3.53 | 4.44 | ||||||||||||||||||||||||||||||
Brazil | 84,440 | 65,611 | 4.91 | 5.27 | 100.5 | 99.2 | 3,703 | 3,537 | 4.93 | 5.88 | ||||||||||||||||||||||||||||||
Mexico | 16,432 | 12,676 | 1.84 | 1.84 | 214.9 | 264.4 | 469 | 824 | 3.12 | 6.13 | ||||||||||||||||||||||||||||||
Chile | 28,858 | 21,384 | 3.74 | 3.20 | 88.7 | 89.0 | 390 | 402 | 1.57 | 1.98 | ||||||||||||||||||||||||||||||
Puerto Rico | 4,360 | 4,132 | 10.59 | 9.60 | 57.5 | 53.3 | 143 | 89 | 3.22 | 1.99 | ||||||||||||||||||||||||||||||
Colombia | 2,275 | 1,719 | 1.56 | 1.83 | 199.6 | 187.5 | 15 | 31 | 0.68 | 1.94 | ||||||||||||||||||||||||||||||
Argentina | 4,097 | 2,936 | 1.69 | 2.60 | 149.1 | 141.0 | 26 | 91 | 0.72 | 2.99 | ||||||||||||||||||||||||||||||
Sovereign Rest | 40,604 | 38,770 | 4.61 | 5.35 | 75.4 | 62.5 | 479 | 578 | 1.16 | |||||||||||||||||||||||||||||||
Total Group | 804,036 | 758,347 | 3.55 | 3.24 | 72.7 | 75.3 | 12,342 | 11,760 | 1.56 | 1.57 | ||||||||||||||||||||||||||||||
Memo item | ||||||||||||||||||||||||||||||||||||||||
Spain | 283,424 | 284,307 | 4.24 | 3.41 | 57.9 | 73.4 | 4,352 | 3,497 | 1.53 | 1.20 |
* | Includes gross customer loans, guarantees, documentary credits and retail segment derivatives (ECR EUR 2,375 million). | |
** | Bad debts recovered. | |
1. | Excludes Sovereign | |
2. | Excludes the incorporation of AIG in Santander Consumer Finance Poland. | |
3. | (Specific allowances — recovery of bad debts)/ Total average credit risk. |
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PD | ||||||||||||
Internal | Wholesale | |||||||||||
rating | Banking | Banks | Sovereigns | |||||||||
8.5 to 9.3 | 0.030 | % | 0.030 | % | 0.030 | % | ||||||
8.0 to 8.5 | 0.049 | % | 0.039 | % | 0.045 | % | ||||||
7.5 to 8.0 | 0.077 | % | 0.066 | % | 0.072 | % | ||||||
7.0 to 7.5 | 0.123 | % | 0.111 | % | 0.115 | % | ||||||
6.5 to 7.0 | 0.195 | % | 0.186 | % | 0.184 | % | ||||||
6.0 to 6.5 | 0.311 | % | 0.311 | % | 0.293 | % | ||||||
5.5 to 6.0 | 0.494 | % | 0.521 | % | 0.468 | % | ||||||
5.0 to 5.5 | 0.786 | % | 0.874 | % | 0.746 | % | ||||||
4.5 to 5.0 | 1.251 | % | 1.465 | % | 1.189 | % | ||||||
4.0 to 4.5 | 1.989 | % | 2.456 | % | 1.896 | % | ||||||
3.5 to 4.0 | 3.163 | % | 4.117 | % | 3.022 | % | ||||||
3.0 to 3.5 | 5.031 | % | 6.901 | % | 4.818 | % | ||||||
2.5 to 3.0 | 8.002 | % | 11.569 | % | 7.681 | % | ||||||
2.0 to 2.5 | 12.727 | % | 19.393 | % | 12.246 | % | ||||||
1.5 to 2.0 | 20.241 | % | 32.509 | % | 19.524 | % | ||||||
< 1.5 | 32.193 | % | 54.496 | % | 31.126 | % |
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Million euros and %
Average | Average | |||||||||||||||||||
EAD1 | % | PD | LGD | EL | ||||||||||||||||
Sovereign debt | 160,764 | 15.38 | % | 0.14 | % | 10.64 | % | 0.01 | % | |||||||||||
Counterparty | 63,264 | 6.05 | % | 0.41 | % | 74.94 | % | 0.31 | % | |||||||||||
Public sector | 12,539 | 1.20 | % | 0.73 | % | 12.01 | % | 0.09 | % | |||||||||||
Corporate | 154,725 | 14.80 | % | 0.90 | % | 37.40 | % | 0.34 | % | |||||||||||
SMEs | 172,547 | 16.51 | % | 5.79 | % | 31.50 | % | 1.83 | % | |||||||||||
Mortgages (individuals) | 312,865 | 29.93 | % | 3.20 | % | 7.44 | % | 0.24 | % | |||||||||||
Consumer loans | 119,921 | 11.47 | % | 8.69 | % | 54.57 | % | 4.74 | % | |||||||||||
Credit cards of individuals | 31,193 | 2.98 | % | 5.46 | % | 63.74 | % | 3.48 | % | |||||||||||
Other asset | 17,361 | 1.66 | % | 1.83 | % | 28.09 | % | 0.51 | % | |||||||||||
Memorandum item customers2 | 803,791 | 76.90 | % | 4.18 | % | 33.31 | % | 1.39 | % | |||||||||||
Total | 1,045,180 | 100.00 | % | 3.29 | % | 33.44 | % | 1.10 | % | |||||||||||
Data at December 2010 | ||
1. | Excluding doubtful loans | |
2. | Excluding sovereign debt, banks and other financial entities and other assets. |
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Million euros
Total | ||||||||||||||||||||
Extinguish | Secure | Reduce | Monitor | FEVE | ||||||||||||||||
Retail banking Spain | 5,148 | 379 | 12,975 | 11,582 | 30,084 | |||||||||||||||
Banesto | 8,499 | 460 | 2,720 | 11,116 | 22,795 | |||||||||||||||
Portugal | 339 | 69 | 920 | 1,926 | 3,236 | |||||||||||||||
United Kingdom | 236 | 14 | 933 | 2,318 | 3,502 | |||||||||||||||
Sovereign | 2,640 | 231 | 742 | 1,992 | 5,605 | |||||||||||||||
Latin America | 1,262 | 425 | 1,657 | 6,223 | 9,567 | |||||||||||||||
Total | 18,124 | 1,577 | 19,930 | 35,157 | 74,789 | |||||||||||||||
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Million euros
Gross amount | Of which: doubtful | |||||||
Loans to acquire property | 61,936 | 1,388 | ||||||
Without mortgage guarantee | 549 | 30 | ||||||
With mortgage guarantee | 61,387 | 1,358 |
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Million euros
LTV < 50% | 50%<LTV<80% | 80%<LTV < 100% | LTV > 100% | |||||||||||||
Gross amount | 20,583 | 31,519 | 8,299 | 986 | ||||||||||||
Of which: doubtful | 247 | 638 | 440 | 33 |
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DEVELOPMENT: DOUBTFUL AND SUBSTANDARD LOANS
Million euros
Risk | Coverage | |||||||||||
Amount | Amount | % | ||||||||||
Doubtful | 4,636 | 1,321 | 29 | |||||||||
Substandard | 4,932 | 569 | 12 | |||||||||
Generic coverage | 768 | |||||||||||
Total | 9,568 | 2,658 | 28 | |||||||||
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Million euros
Gross amount | Allowance | Net amount | ||||||||||
Finished buildings | 3,098 | 25 | % | 2,339 | ||||||||
Buildings under construction | 564 | 25 | % | 425 | ||||||||
Developed land | 2,307 | 35 | % | 1,506 | ||||||||
Land that can be developed | 1,308 | 40 | % | 787 | ||||||||
Other land | 232 | 40 | % | 138 | ||||||||
Total | 7,509 | 31 | % | 5,195 | ||||||||
Billion euros
2010 | 2009 | |||||||||||
Gross entries | 2.1 | 2.5 | -20 | % | ||||||||
Sales | 1.1 | 0.8 | 31 | % | ||||||||
Difference | 1.0 | 1.7 | -44 | % |
• | Viable transactions; |
• | Transactions where the customer intends to pay; |
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• | Transactions which improve the Bank’s position in terms of expected loss; and |
• | Transactions where the restructuring 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 restructuring and its effects are evaluated, ensuring that the results 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. |
• | The restructured transactions are placed under special watch. |
• | when there is a slight and prolonged deterioration in payment capacity: |
o | extending the period: customers installment is reduced by lengthening the period of the transaction | ||
o | final bullet (balloon payment): reduces installment by postponing part of the principal, which is paid together with the last payment. This alternative will be considered when the transaction is collateralized (e.g.: mortgages). |
• | when there is a severe but transitory deterioration in payment capacity: |
o | adjustment to short term: a grace period shall be applied on the principal during a reduced period, until the customer recovers its original payment capacity. |
• | 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 conditions which under prudent criteria are set out in the Group’s Corporate Policy which establish the following calendar of payments that a borrower must make on the refinanced loans before we return the loan to accrual status: |
Cure Period | ||||||||||||
< 2 years | 2-5 years | > 5 years | ||||||||||
With collateral | 3 installments | |||||||||||
Without collateral | 3 installments | 9 installments | 12 installments |
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Spain (*) | Portugal | UK | Brazil | Latin America | Sovereign | Total | ||||||||||||||||||||||
Individuals | 677 | 653 | 511 | 774 | 356 | 295 | 3,266 | |||||||||||||||||||||
SME | 286 | 71 | 17 | 479 | 60 | — | 913 | |||||||||||||||||||||
Entities | 1,401 | — | 229 | — | 91 | 56 | 1,777 | |||||||||||||||||||||
TOTAL | 2,364 | 724 | 757 | 1,253 | 507 | 351 | 5,956 | |||||||||||||||||||||
(*) | Including Santander Retail Banking, Banesto and Santander Consumer Finance |
Argentina | Colombia | Chile | Mexico | Puerto Rico | Total | |||||||||||||||||||||||
Individuals | 66 | 3 | 236 | 3 | 48 | 356 | ||||||||||||||||||||||
SME | 4 | 1 | 33 | 4 | 18 | 60 | ||||||||||||||||||||||
Entities | 2 | 2 | — | 76 | 11 | 91 | ||||||||||||||||||||||
TOTAL | 72 | 6 | 269 | 83 | 77 | 507 | ||||||||||||||||||||||
Santander Retail | ||||||||||||||||||||
Banking | Portugal | UK | Sovereign | Chile | ||||||||||||||||
Individuals | 479 | 653 | 511 | 295 | 236 | |||||||||||||||
Mortgages | 373 | 513 | 496 | 295 | 8 | |||||||||||||||
Consumer | 105 | 26 | 10 | — | 219 | |||||||||||||||
Others | 1 | 6 | 5 | — | 9 | |||||||||||||||
Credit cards | — | 108 | — | — | — |
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Million euros
December 2010 | ||||||||
Portfolio | % of loans | |||||||
Residential mortgages | 192,590 | 78.6 | ||||||
First home buyer | 34,666 | 14.2 | ||||||
Mover | 75,110 | 30.7 | ||||||
Remortgage | 82,814 | 33.8 |
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Million euros
Benchmark | Adverse | |||||||
scenario | scenario | |||||||
Net operating income 2010-2011 | 49,196 | 43,599 | ||||||
Provisions at December 2009 | 20,779 | 20,779 | ||||||
Total | 69,975 | 64,378 | ||||||
Gross deterioration 2010-2011 | (40,856 | ) | (50,288 | ) | ||||
Taxes | (6,701 | ) | (3,114 | ) | ||||
Net surplus stress test | 22,419 | 10,976 | ||||||
Dividends, generic provisions not used and others | (14,555 | ) | (8,730 | ) | ||||
Change in Tier 1 capital | 7,864 | 2,246 | ||||||
Risk assets | 579,621 | 585,346 | ||||||
Tier 1 | 11,0 | % | 10,0 | % |
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Million euros at December 31, 2010
Total ECR | Total net replacement value | |||||||||||||||||||||||
Trading | Hedging | Total | Trading | Hedging | Total | |||||||||||||||||||
CDS protection acquired | 663 | 134 | 798 | 178 | 210 | 388 | ||||||||||||||||||
CDS protection sold | 55 | 2 | 57 | (325 | ) | (33 | ) | (358 | ) | |||||||||||||||
TRS total return swap | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
CDS options | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Total credit derivatives | 718 | 137 | 855 | (147 | ) | 177 | 30 | |||||||||||||||||
Equity forwards | 0 | 142 | 143 | 0 | (286 | ) | (286 | ) | ||||||||||||||||
Equity options | 522 | 1,013 | 1,535 | (203 | ) | (362 | ) | (564 | ) | |||||||||||||||
Equity swaps | 0 | 513 | 513 | 0 | 165 | 165 | ||||||||||||||||||
Equity spot | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Total equity derivatives | 522 | 1,669 | 2,191 | (203 | ) | (483 | ) | (685 | ) | |||||||||||||||
Fixed-income forwards | 56 | 38 | 94 | 30 | 1 | 31 | ||||||||||||||||||
Fixed-income options | 0 | 1 | 1 | 0 | 0 | 0 | ||||||||||||||||||
Fixed-income spot | 0 | 0 | 0 | 0 | 0 | 0 | ||||||||||||||||||
Total fixed income derivatives | 56 | 39 | 95 | 30 | 1 | 31 | ||||||||||||||||||
Asset swaps | 1,686 | 2,600 | 4,286 | (1,688 | ) | 389 | (1,299 | ) | ||||||||||||||||
Exchange-rate options | 304 | 140 | 443 | (74 | ) | (303 | ) | (377 | ) | |||||||||||||||
Exchange-rate swaps | 4,353 | 12,045 | 16,398 | 603 | 1,805 | 2,408 | ||||||||||||||||||
Other exchange-rate derivatives | 5 | 6 | 11 | 1 | 1 | 2 | ||||||||||||||||||
Total exchange rates | 6,348 | 14,791 | 21,139 | (1,159 | ) | 1,893 | 734 | |||||||||||||||||
Asset swaps | 0 | 293 | 293 | 0 | (52 | ) | (52 | ) | ||||||||||||||||
Call money swaps | 371 | 20 | 391 | (86 | ) | (8 | ) | (94 | ) | |||||||||||||||
IRS | 14,935 | 10,439 | 25,375 | 1,008 | 3,170 | 4,178 | ||||||||||||||||||
Forward interest rates | 1 | 4 | 4 | 0 | (11 | ) | (11 | ) | ||||||||||||||||
Other interest-rate derivatives | 916 | 1,423 | 2,339 | 643 | (1,914 | ) | (1,271 | ) | ||||||||||||||||
Interest rate structures | 338 | 493 | 831 | 222 | (256 | ) | (34 | ) | ||||||||||||||||
Total interest-rate derivatives | 16,561 | 12,673 | 29,234 | 1,787 | 929 | 2,717 | ||||||||||||||||||
Commodities | 239 | 13 | 252 | 164 | 11 | 175 | ||||||||||||||||||
Total commodity derivatives | 239 | 13 | 252 | 164 | 11 | 175 | ||||||||||||||||||
Total otc derivatives | 24,444 | 29,322 | 53,766 | 473 | 2,529 | 3,002 | ||||||||||||||||||
Collateral | 0 | (6,873 | ) | (6,873 | ) | |||||||||||||||||||
Total | 24,444 | 22,449 | 46,893 | |||||||||||||||||||||
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1 year | 1-5 years | 5-10 years | over 10 years | Total REC | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
T | H | Total | T | H | Total | T | H | Total | T | H | Total | T | H | Total | ||||||||||||||||||||||||||||||||||||||||||||||
CDS protection acquired | 4 | 5 | 9 | 66 | 15 | 81 | 16 | 56 | 72 | 577 | 58 | 636 | 663 | 134 | 798 | |||||||||||||||||||||||||||||||||||||||||||||
CDS protection sold | 5 | 2 | 7 | 40 | 0 | 40 | 10 | 0 | 10 | 0 | 0 | 0 | 55 | 2 | 57 | |||||||||||||||||||||||||||||||||||||||||||||
TRS total return swap | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||
CDS options | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||
Total credit derivatives | 9 | 7 | 16 | 105 | 15 | 120 | 26 | 56 | 82 | 578 | 59 | 636 | 718 | 137 | 855 | |||||||||||||||||||||||||||||||||||||||||||||
Equity forwards | 0 | 142 | 143 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 142 | 143 | |||||||||||||||||||||||||||||||||||||||||||||
Equity options | 168 | 564 | 732 | 346 | 382 | 728 | 8 | 62 | 70 | 0 | 5 | 5 | 522 | 1,013 | 1,535 | |||||||||||||||||||||||||||||||||||||||||||||
Equity swaps | 0 | 163 | 163 | 0 | 301 | 301 | 0 | 3 | 3 | 0 | 47 | 47 | 0 | 513 | 513 | |||||||||||||||||||||||||||||||||||||||||||||
Equity spot | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||
Total equity derivatives | 168 | 869 | 1,038 | 346 | 683 | 1,029 | 8 | 65 | 72 | 0 | 52 | 52 | 522 | 1,669 | 2,191 | |||||||||||||||||||||||||||||||||||||||||||||
Fixed-income forwards | 56 | 38 | 94 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 56 | 38 | 94 | |||||||||||||||||||||||||||||||||||||||||||||
Fixed-income options | 0 | 0 | 0 | 0 | 1 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 1 | |||||||||||||||||||||||||||||||||||||||||||||
Fixed-income spot | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |||||||||||||||||||||||||||||||||||||||||||||
Total fixed income derivatives | 56 | 38 | 94 | 0 | 1 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 56 | 39 | 95 | |||||||||||||||||||||||||||||||||||||||||||||
Asset swaps | 1,121 | 2,234 | 3,356 | 491 | 284 | 775 | 26 | 79 | 105 | 48 | 2 | 50 | 1,686 | 2,600 | 4,286 | |||||||||||||||||||||||||||||||||||||||||||||
Exchange-rate options | 222 | 130 | 352 | 81 | 10 | 91 | 1 | 0 | 1 | 0 | 0 | 0 | 304 | 140 | 443 | |||||||||||||||||||||||||||||||||||||||||||||
Exchange-rate swaps | 1,539 | 2,142 | 3,681 | 1,649 | 5,649 | 7,297 | 1,163 | 1,925 | 3,088 | 2 | 2,329 | 2,331 | 4,353 | 12,045 | 16,398 | |||||||||||||||||||||||||||||||||||||||||||||
Other exchange-rate derivatives | 5 | 6 | 11 | 0 | 0 | 1 | 0 | 0 | 0 | 0 | 0 | 0 | 5 | 6 | 11 | |||||||||||||||||||||||||||||||||||||||||||||
Total exchange rates | 2,887 | 4,512 | 7,399 | 2,221 | 5,943 | 8,164 | 1,190 | 2,004 | 3,194 | 51 | 2,331 | 2,382 | 6,348 | 14,791 | 21,139 | |||||||||||||||||||||||||||||||||||||||||||||
Asset swaps | 0 | 1 | 1 | 0 | 27 | 27 | 0 | 48 | 48 | 0 | 217 | 217 | 0 | 293 | 293 | |||||||||||||||||||||||||||||||||||||||||||||
Call money swaps | 138 | 18 | 157 | 223 | 2 | 225 | 5 | 0 | 5 | 5 | 0 | 5 | 371 | 20 | 391 | |||||||||||||||||||||||||||||||||||||||||||||
IRS | 374 | 729 | 1,104 | 3,135 | 3,418 | 6,552 | 3,986 | 2,714 | 6,699 | 7,440 | 3,579 | 11,019 | 14,935 | 10,439 | 25,375 | |||||||||||||||||||||||||||||||||||||||||||||
Forward interest rates | 1 | 4 | 4 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1 | 4 | 4 | |||||||||||||||||||||||||||||||||||||||||||||
Other interest-rate derivatives | 2 | 197 | 199 | 41 | 451 | 492 | 107 | 384 | 491 | 766 | 391 | 1,157 | 916 | 1,423 | 2,339 | |||||||||||||||||||||||||||||||||||||||||||||
Interest rate structures | 33 | 93 | 126 | 213 | 173 | 386 | 48 | 51 | 99 | 44 | 176 | 220 | 338 | 493 | 831 | |||||||||||||||||||||||||||||||||||||||||||||
Total interest-rate derivatives | 549 | 1,042 | 1,591 | 3,612 | 4,071 | 7,683 | 4,145 | 3,197 | 7,342 | 8,256 | 4,363 | 12,619 | 16,561 | 12,673 | 29,234 | |||||||||||||||||||||||||||||||||||||||||||||
Commodities | 108 | 0 | 108 | 119 | 13 | 132 | 12 | 0 | 12 | 0 | 0 | 0 | 239 | 13 | 252 | |||||||||||||||||||||||||||||||||||||||||||||
Total commodity derivatives | 108 | 0 | 108 | 119 | 13 | 132 | 12 | 0 | 12 | 0 | 0 | 0 | 239 | 13 | 252 | |||||||||||||||||||||||||||||||||||||||||||||
Total otc derivatives | 3,777 | 6,469 | 10,246 | 6,403 | 10,726 | 17,129 | 5,380 | 5,322 | 10,703 | 8,884 | 6,805 | 15,689 | 24,444 | 29,322 | 53,766 | |||||||||||||||||||||||||||||||||||||||||||||
Collateral | 0 | -6,873 | -6,873 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | 24,444 | 22,449 | 46,893 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
H = Hedging | ||
T = Trading |
BY TYPE OF COUNTERPARTY
Rating | % | |||
AAA | 11.6 | |||
AA | 9.7 | |||
A | 41.5 | |||
BBB | 21.3 | |||
BB | 13.3 | |||
B | 1.6 | |||
Rest | 0.9 |
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Million euros
Main segments | RORAC | Creation of value | ||||||
Continental Europe | 21.2 | % | 1,444 | |||||
UK | 38.5 | % | 1,284 | |||||
Latin America | 36.5 | % | 3,549 | |||||
Sovereign | 14.0 | % | 13 | |||||
Subtotal of operating areas | 28.3 | % | 6,290 | |||||
Financial management and equity stakes | (44.3 | )% | (3,879 | ) | ||||
Group total | 18.5 | % | 2,411 |
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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. |
1 | In addition to this document, there is a Corporate Handbook on Structural Risks Management that explains in detail these type of risks, including items for interest rate risk, liquidity risk and structural exchange rate risk. |
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• | 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. |
2. | “Basel III: international framework for liquidity risk measurement, standards and monitoring” (Basel Committee on Banking Supervision, December 2010). |
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Minimum | Average | Maximum | Last | |||||||||||||
TOTAL TRADING (*) | ||||||||||||||||
Total VaR | 21.2 | 28.7 | 37.5 | 29.6 | ||||||||||||
Diversification effect | (15.7 | ) | (29.1 | ) | (45.4 | ) | (27.8 | ) | ||||||||
Fixed-Income VaR | 9.4 | 16.4 | 25.4 | 19.0 | ||||||||||||
Equity VaR | 4.4 | 8.0 | 14.4 | 8.8 | ||||||||||||
FX VaR | 4.6 | 11.4 | 23.6 | 13.9 | ||||||||||||
Credit Spread VaR | 13.9 | 20.9 | 27.1 | 14.7 | ||||||||||||
Commodities VaR | 0.5 | 1.3 | 2.1 | 1.0 | ||||||||||||
LATIN AMERICA | ||||||||||||||||
VaR Total | 12.5 | 18.2 | 34.8 | 13.9 | ||||||||||||
Diversification effect | (1.3 | ) | (8.3 | ) | (21.5 | ) | (12.6 | ) | ||||||||
Fixed-Income VaR | 12.0 | 14.5 | 20.1 | 14.8 | ||||||||||||
Equity VaR | 1.7 | 5.8 | 15.0 | 5.3 | ||||||||||||
FX VaR | 2.8 | 7.1 | 27.6 | 6.5 | ||||||||||||
USA and Asia | ||||||||||||||||
VaR Total | 0.7 | 1.3 | 5.9 | 0.9 | ||||||||||||
Diversification effect | (0.1 | ) | (0.7 | ) | (1.8 | ) | (0.3 | ) | ||||||||
Fixed-Income VaR | 0.7 | 1.2 | 2.7 | 0.9 | ||||||||||||
Equity VaR | 0.0 | 0.2 | 1.4 | 0.0 | ||||||||||||
FX VaR | 0.3 | 0.6 | 5.5 | 0.3 | ||||||||||||
EUROPE | ||||||||||||||||
VaR Total | 9.2 | 14.8 | 31.3 | 25.1 | ||||||||||||
Diversification effect | (3.6 | ) | (18.9 | ) | (28.4 | ) | (14.6 | ) | ||||||||
Fixed-Income VaR | 4.9 | 8.9 | 17.5 | 12.5 | ||||||||||||
Equity VaR | 4.0 | 6.7 | 14.5 | 6.5 | ||||||||||||
FX VaR | 2.0 | 9.8 | 15.8 | 9.6 | ||||||||||||
Credit Spread VaR | 3.5 | 7.0 | 14.4 | 9.0 | ||||||||||||
Commodities VaR | 0.5 | 1.3 | 2.1 | 2.1 |
(*) | Total VaR of trading includes transactions that are not assigned to any particular country, such as Active Credit Portfolio Management and Non-core Legacy Portfolio. |
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3 | Results in terms of “clean P&L”. Excluding intraday results and those from commissions. | |
4 | EaR is Earnings at Risk and is the counterparty of VaR on the profits side. |
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€ million | Interest rate | Equities | Exchange rate | Credit Spread | Commodities | Total | ||||||||||||||||||
Total Trading | (61.4 | ) | (68.8 | ) | (76.1 | ) | (94.2 | ) | (1.6 | ) | (302.1 | ) | ||||||||||||
Europe | (9.7 | ) | (16.4 | ) | (62.8 | ) | (54.6 | ) | (1.6 | ) | (145.1 | ) | ||||||||||||
Latin America | (51.2 | ) | (52.4 | ) | (10.9 | ) | — | — | (114.5 | ) | ||||||||||||||
USA (New York) | (0.3 | ) | — | (0.3 | ) | — | — | (0.6 | ) | |||||||||||||||
Global Activities | (0.2 | ) | — | (2.1 | ) | (39.6 | ) | — | (41.9 | ) |
5 | Includes all the balance sheet except the trading portfolios. |
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Up to 1 | 1-3 | 3-5 | More than 5 | |||||||||||||||||||||
€ million | Not sensitive | year | years | years | years | TOTAL | ||||||||||||||||||
Money and securities market | 41,762 | 1,797 | 1,754 | 14,671 | 59,984 | |||||||||||||||||||
Loans | 112 | 116,764 | 10,838 | 1,504 | 1,728 | 130,946 | ||||||||||||||||||
Permanent equity stakes | 65,919 | 65,919 | ||||||||||||||||||||||
Other assets | 17,346 | 51,705 | 51 | 53 | 91 | 69,246 | ||||||||||||||||||
Total assets | 83,377 | 210,231 | 12,686 | 3,311 | 16,490 | 326,095 | ||||||||||||||||||
Money market | — | 43,125 | 108 | 1,800 | — | 45,033 | ||||||||||||||||||
Customer deposits | — | 39,513 | 13,314 | 9,704 | 14,649 | 77,180 | ||||||||||||||||||
Debt Issues and securitizations | — | 77,605 | 13,789 | 14,592 | 10,766 | 116,752 | ||||||||||||||||||
Stockholders’ equity and other liabilities | 82,219 | 44,054 | 1,011 | 712 | 1,122 | 129,118 | ||||||||||||||||||
Total liabilities | 82,219 | 204,297 | 28,222 | 26,808 | 26,537 | 368,083 | ||||||||||||||||||
Balance sheet Gap | 1,158 | 5,933 | (15,537 | ) | (23,495 | ) | (10,047 | ) | (41,988 | ) | ||||||||||||||
Off-balance sheet structural Gap | — | 24,104 | 13,067 | 10,630 | (2,078 | ) | 45,723 | |||||||||||||||||
Total structural Gap | 1,158 | 30,037 | (2,470 | ) | (12,865 | ) | (12,125 | ) | 3,735 | |||||||||||||||
Accumulated Gap | — | 30,037 | 27,567 | 14,702 | 2,577 | — | ||||||||||||||||||
(*) | Gap of euro-denominated assets and liabilities, excluding other currencies. |
6 | Sensitivity expressed as an absolute value. It is the aggregation of the sensitivity to many yield curves, grouped applying suppositions of correlation (betas) between them. |
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Gaps in Local | Not | |||||||||||||||||||||||
Currency | Sensitive | 0-6 months | 6-12 months | 1-3 years | > 3 years | TOTAL | ||||||||||||||||||
Assets | 50,273 | 85,009 | 19,659 | 45,031 | 21,114 | 221,086 | ||||||||||||||||||
Liabilities | 54,232 | 73,683 | 5,351 | 26,446 | 4,536 | 164,248 | ||||||||||||||||||
Off-balance Sheet | 2,637 | 9,829 | (6,681 | ) | (5,747 | ) | (1,024 | ) | (986 | ) | ||||||||||||||
Gap | (16,452 | ) | (1,727 | ) | 7,626 | (1,109 | ) | 15,554 | 3,891 |
Gaps in Foreign | Not | |||||||||||||||||||||||
Currency | sensitive | 0-6 months | 6-12 months | 1-3 years | > 3 years | TOTAL | ||||||||||||||||||
Assets | 2,948 | 20,864 | 3,983 | 2,973 | 7,643 | 38,411 | ||||||||||||||||||
Liabilities | 2,419 | 22,432 | 4,425 | 3,730 | 7,906 | 40,912 | ||||||||||||||||||
Off-balance Sheet | (2,546 | ) | 315 | (433 | ) | 2,181 | 1,469 | 986 | ||||||||||||||||
Gap | (2,341 | ) | (1,887 | ) | (875 | ) | 5 | 1,206 | (3,891 | ) |
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• | €26 billion of assets were securitized, of which€19 billion were placed in the market and the rest retained by the Group’s various units. These retained securitizations increased the Group’s liquidity position through its discounting capacity in central banks. |
• | Repurchases were made in the secondary market of securitization bonds of the higher tranches of Group issuers (around€500 million). |
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%
Metrics | 2010 | 2009 | ||||||
Loans/net assets | 75 | % | 79 | % | ||||
Customer deposits, insurance and medium and long-term funding/loans | 115 | % | 106 | % | ||||
Customer deposits, insurance and medium and long-term financing shaeholders’ funds and other liabilities/total loans and fixed assets | 117 | % | 110 | % | ||||
Short-term financing/net liabilities | 3 | % | 5 | % |
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• | CDOs/CLOs: the position remained insignificant at€486 million, 24% lower than in 2009. Most of this was due to the integration of the portfolio of Alliance & Leicester in 2008 (32% of the portfolio has an AAA rating and 77% A or higher). |
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• | Non-Agency CMOs and pass-throughs with underlying mortgage alt-A7: exposure of€639 million at the end of 2010 from the integration of Sovereign Bank in January 2009. The position was 17% lower than in 2009. |
• | Hedge funds: the total exposure is not significant (€540 million at the end of 2010) and most of it is through financing these funds (€295 million), as the rest is direct participation in portfolio. This exposure has low levels of loan-to-value of around 35% (€1,543 million of collateral). The risk with this type of counterparty is analyzed case by case, establishing the percentages of collateral on the basis of the features and assets of each fund. The exposure was 2% lower than in 2009. |
• | Conduits: The positions inherited from buying Alliance & Leicester were integrated, at market prices, into the Group’s balance sheet in the third quarter of 2010. |
• | Monolines: Santander’s exposure to bond insurance companies was€274 million8at the end of 2010,€244 million of it indirect exposure by virtue of the guarantee provided by this type of entity to various financing or traditional securitization transactions. The exposure in this case is double default, as the primary underlying assets are of high credit quality (mainly AA). The small remaining amount is direct exposure (for example, via purchase of protection from the risk of non-payment by any of these insurance companies through a credit default swap). The exposure was 31% lower than in 2009. |
• | 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 | 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). | |
8 | 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 as of December 31, 2010 a€1,328 million portfolio of these bonds. |
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December 31, 2010 | ||||||||||||||||||||
December 31, 2009 | Low | Average | High | Period End | ||||||||||||||||
TOTAL | 983.6 | 580.4 | 804.5 | 952.8 | 580.4 | |||||||||||||||
Trading | 27.5 | 21.2 | 28.7 | 37.5 | 29.6 | |||||||||||||||
Non-Trading | 1,015.0 | 582.1 | 812.2 | 974.5 | 582.1 | |||||||||||||||
Diversification Effect | (58.9 | ) | (22.8 | ) | (36.4 | ) | (59.2 | ) | (31.3 | ) |
9 | “Basel III: A global regulatory framework for more resilient banks and banking systems” and “Basel III: International framework for liquidity risk measurement, standards and monitoring.” |
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December 31, 2010 | ||||||||||||||||||||
December 31, 2009 | Low | Average | High | Period End | ||||||||||||||||
Interest Rate Risk | ||||||||||||||||||||
Trading | 18.3 | 9.4 | 16.4 | 25.4 | 19.0 | |||||||||||||||
Non-Trading | 210.6 | 240.5 | 301.5 | 334.6 | 309.2 | |||||||||||||||
Diversification Effect | (17.5 | ) | (9.2 | ) | (15.9 | ) | (24.5 | ) | (18.4 | |||||||||||
TOTAL | 211.4 | 240.7 | 302.0 | 335.6 | 309.8 |
December 31, 2010 | ||||||||||||||||||||
December 31, 2009 | Low | Average | High | Period End | ||||||||||||||||
Exchange Rate Risk | ||||||||||||||||||||
Trading | 16.1 | 4.6 | 11.4 | 23.6 | 13.9 | |||||||||||||||
Non-Trading | 579.8 | 376.7 | 481.2 | 695.6 | 391.3 | |||||||||||||||
Diversification Effect | (15.9 | ) | (4.6 | ) | (11.2 | ) | (23.2 | ) | (13.6 | ) | ||||||||||
TOTAL | 580.0 | 376.7 | 481.3 | 696.0 | 391.6 |
December 31, 2010 | ||||||||||||||||||||
December 31, 2009 | Low | Average | High | Period End | ||||||||||||||||
Equity Price Risk | ||||||||||||||||||||
Trading | 5.9 | 4.4 | 8.0 | 14.4 | 8.8 | |||||||||||||||
Non-Trading | 369.4 | 218.5 | 354.7 | 417.3 | 218.5 | |||||||||||||||
Diversification Effect | (5.8 | ) | (4.3 | ) | (7.9 | ) | (14.1 | ) | (8.6 | ) | ||||||||||
TOTAL | 369.5 | 218.5 | 354.8 | 417.6 | 218.7 | ) |
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December 31, 2010 | ||||||||||||||||||||
December 31, 2009 | Low | Average | High | Period End | ||||||||||||||||
Trading | ||||||||||||||||||||
Interest Rate | 18.3 | 9.4 | 16.4 | 25.4 | 19.0 | |||||||||||||||
Exchange Rate | 16.1 | 4.6 | 11.4 | 23.6 | 13.9 | |||||||||||||||
Equity | 5.9 | 4.4 | 8.0 | 14.4 | 8.8 | |||||||||||||||
Credit Spread | 15.0 | 13.9 | 20.9 | 27.1 | 14.7 | |||||||||||||||
Commodities | 1.4 | 0.5 | 1.3 | 2.1 | 1.0 | |||||||||||||||
TOTAL | 27.5 | 21.2 | 28.7 | 37.5 | 29.6 | |||||||||||||||
Non-Trading Interest Rate | ||||||||||||||||||||
Interest Rate | 210.6 | 240.5 | 301.5 | 334.6 | 309.2 | |||||||||||||||
Non-Trading Foreign Exchange | ||||||||||||||||||||
Exchange Rate | 579.8 | 376.7 | 481.2 | 695.6 | 391.3 | |||||||||||||||
Non-Trading Equity | ||||||||||||||||||||
Equity | 369.4 | 218.5 | 354.7 | 417.3 | 218.5 | |||||||||||||||
TOTAL | 983.6 | 580.4 | 804.5 | 952.8 | 580.4 | |||||||||||||||
Interest Rate | 211.4 | 240.7 | 302.0 | 335.6 | 309.8 | |||||||||||||||
Exchange Rate | 580.0 | 376.7 | 481.3 | 696.0 | 391.6 | |||||||||||||||
Equity | 369.5 | 218.5 | 354.8 | 417.6 | 218.7 |
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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: | Expenses payable at the sole discretion of the depositary. | ||
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. |
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: |
Variable: $1,818,898.42
Total: $4,705,784.19
Variable: $1,818,898.63
Total: $3,202,983.63
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; |
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• | 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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2010 | 2009 | 2008 | ||||||||||
(in millions of euros) | ||||||||||||
Audit fees | 21.6 | 19.6 | 18.3 | |||||||||
Audit related fees (1) | 10.7 | 11.0 | 10.4 | |||||||||
Non-audit related fees (excluding tax services) (2) | 1.7 | 1.5 | 3.4 | |||||||||
Tax fees (3) | 3.9 | 3.2 | 1.9 | |||||||||
Other fees paid (4) | 8.3 | 3.7 | 3.8 | |||||||||
46.2 | 39.0 | 37.8 |
(1) | Comprising€6.5 million in 2010,€6.8 million in 2009 and€5.9 million in 2008 for the audit of internal control pursuant to the requirements of the Sarbanes-Oxley Act and the review of the calculation of regulatory capital (Basel) and€4.2 million in 2010,€4.2 million in 2009 and€4.5 million in 2008 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). Additionally, the auditors were paid€5.4 million in 2010,€5.7 million in 2009 and€6.2 million in 2008, which related mainly to six monthly audits. The€6.2 million paid in 2008 were recognized as an increase in the cost of the business combination effected in that year. | |
(2) | The amounts invoiced for services other than audit which, during the past fiscal year, were principally those relating to securitization processes and financial studies. | |
(3) | All tax services have been approved by the audit and compliance committee of the board of directors. | |
(4) | 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 | ||||||||||||||
2010 | purchased | share (or unit) | plans or programs | programs | |||||||||||||
January | 103,421,817 | 10.72 | — | — | |||||||||||||
February | 100,233,852 | 9.69 | — | — | |||||||||||||
March | 27,491,992 | 9.61 | — | — | |||||||||||||
April | 108,950,854 | 9.14 | — | — | |||||||||||||
May | 99,873,110 | 8.69 | — | — | |||||||||||||
June | 22,295,623 | 7.64 | — | — | |||||||||||||
July | 124,779,560 | 9.60 | — | — | |||||||||||||
August | 50,604,177 | 8.98 | — | — | |||||||||||||
September | 28,677,511 | 9.44 | — | — | |||||||||||||
October | 44,174,049 | 9.44 | — | — | |||||||||||||
November | 52,209,355 | 7.97 | — | — | |||||||||||||
December | 32,020,740 | 7.92 | — | — | |||||||||||||
Total | 794,732,640 | ||||||||||||||||
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(a) Index to Financial Statements | Page | |||
Report of Deloitte, S.L. | F-1 | |||
Consolidated Balance Sheets at December 31, 2010, 2009 and 2008 | F-2 | |||
Consolidated Income Statements for the Years Ended December 31, 2010, 2009 and 2008 | F-3 | |||
Consolidated Statements of Recognized Income and Expense for the Years Ended December 31, 2010, 2009 and 2008 | F-4 | |||
Consolidated Statements Of Changes In Total Equity for the Years Ended December 31, 2010, 2009 and 2008 | F-5 | |||
Consolidated Cash Flow Statement for the Years Ended December 31, 2010, 2009 and 2008 | F-8 | |||
Notes to the Consolidated Financial Statements | F-9 | |||
Exhibit | ||||
Number | Description | |||
1.1 | By-laws (Estatutos) of Banco Santander, S.A. (incorporated by reference to Exhibit 1.1 to our Annual Report on Form 20-F for the year ended December 31, 2009, filed with the Securities and Exchange Commission on June 10, 2010). | |||
1.2 | By-laws (Estatutos) of Banco Santander, S.A., (English translation of By-laws set forth in Exhibit 1.1 hereto) (incorporated by reference to Exhibit 1.2 to our Annual Report on Form 20-F for the year ended December 31, 2009, filed with the Securities and Exchange Commission on June 10, 2010). | |||
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. (incorporated by reference to Exhibit 4.1 to our Annual Report on Form 20-F for the year ended December 31, 2009, filed with the Securities and Exchange Commission on June 10, 2010). | ||
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 | |||
Title: Chief financial officer |
Date: June 6, 2011 |
Page | ||||
F-1 | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-8 | ||||
F-9 | ||||
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(Thousands of Euros)
Note | 2010 | 2009 | 2008 | |||||||||||||
ASSETS | ||||||||||||||||
CASH AND BALANCES WITH CENTRAL BANKS | 77,785,278 | 34,889,413 | 45,781,345 | |||||||||||||
FINANCIAL ASSETS HELD FOR TRADING: | 156,761,730 | 135,054,321 | 151,817,192 | |||||||||||||
Loans and advances to credit institutions | 6 | 16,216,136 | 5,952,956 | 5,149,584 | ||||||||||||
Loans and advances to customers | 10 | 755,175 | 10,076,412 | 684,348 | ||||||||||||
Debt instruments | 7 | 57,871,332 | 49,920,518 | 43,895,548 | ||||||||||||
Equity instruments | 8 | 8,850,318 | 9,248,022 | 6,272,403 | ||||||||||||
Trading derivatives | 9 | 73,068,769 | 59,856,413 | 95,815,309 | ||||||||||||
OTHER FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS: | 39,480,171 | 37,813,669 | 25,817,138 | |||||||||||||
Loans and advances to credit institutions | 6 | 18,831,109 | 16,242,609 | 8,911,906 | ||||||||||||
Loans and advances to customers | 10 | 7,777,403 | 8,328,516 | 8,972,707 | ||||||||||||
Debt instruments | 7 | 4,604,308 | 7,365,213 | 5,154,732 | ||||||||||||
Equity instruments | 8 | 8,267,351 | 5,877,331 | 2,777,793 | ||||||||||||
AVAILABLE-FOR-SALE FINANCIAL ASSETS: | 86,234,826 | 86,620,503 | 48,920,306 | |||||||||||||
Debt instruments | 7 | 79,688,813 | 79,289,337 | 42,547,677 | ||||||||||||
Equity instruments | 8 | 6,546,013 | 7,331,166 | 6,372,629 | ||||||||||||
LOANS AND RECEIVABLES: | 768,858,435 | 736,746,371 | 699,614,727 | |||||||||||||
Loans and advances to credit institutions | 6 | 44,808,106 | 57,641,042 | 64,730,787 | ||||||||||||
Loans and advances to customers | 10 | 715,621,319 | 664,145,998 | 617,231,380 | ||||||||||||
Debt instruments | 7 | 8,429,010 | 14,959,331 | 17,652,560 | ||||||||||||
HELD-TO-MATURITY INVESTMENTS | — | — | — | |||||||||||||
CHANGES IN THE FAIR VALUE OF HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK | 36 | 1,464,203 | 1,419,841 | 2,402,736 | ||||||||||||
HEDGING DERIVATIVES | 11 | 8,227,013 | 7,833,850 | 9,698,132 | ||||||||||||
NON-CURRENT ASSETS HELD FOR SALE | 12 | 6,285,020 | 5,789,189 | 9,267,486 | ||||||||||||
INVESTMENTS: | 272,915 | 164,473 | 1,323,453 | |||||||||||||
Associates | 13 | 272,915 | 164,473 | 1,323,453 | ||||||||||||
Jointly controlled entities | — | — | — | |||||||||||||
INSURANCE CONTRACTS LINKED TO PENSIONS | 14 | 2,219,948 | 2,356,151 | 2,446,989 | ||||||||||||
REINSURANCE ASSETS | 15 | 546,392 | 416,822 | 458,388 | ||||||||||||
TANGIBLE ASSETS: | 11,141,637 | 8,995,735 | 8,501,552 | |||||||||||||
Property, plant and equipment- | 9,831,811 | 7,904,819 | 7,630,935 | |||||||||||||
For own use | 16 | 7,507,990 | 6,202,162 | 5,664,616 | ||||||||||||
Leased out under an operating lease | 16 | 2,323,821 | 1,702,657 | 1,966,319 | ||||||||||||
Investment property | 16 | 1,309,826 | 1,090,916 | 870,617 | ||||||||||||
INTANGIBLE ASSETS: | 28,064,379 | 25,643,414 | 20,623,267 | |||||||||||||
Goodwill | 17 | 24,622,345 | 22,865,056 | 18,836,199 | ||||||||||||
Other intangible assets | 18 | 3,442,034 | 2,778,358 | 1,787,068 | ||||||||||||
TAX ASSETS: | 22,572,333 | 20,654,815 | 16,953,613 | |||||||||||||
Current | 5,483,665 | 4,827,554 | 2,309,465 | |||||||||||||
Deferred | 27 | 17,088,668 | 15,827,261 | 14,644,148 | ||||||||||||
OTHER ASSETS: | 19 | 7,586,403 | 6,130,891 | 6,005,226 | ||||||||||||
Inventories | 455,107 | 518,833 | 620,774 | |||||||||||||
Other | 7,131,296 | 5,612,058 | 5,384,452 | |||||||||||||
TOTAL ASSETS | 1,217,500,683 | 1,110,529,458 | 1,049,631,550 | |||||||||||||
LIABILITIES AND EQUITY | ||||||||||||||||
FINANCIAL LIABILITIES HELD FOR TRADING: | 136,771,837 | 115,516,474 | 136,620,235 | |||||||||||||
Deposits from central banks | 20 | 12,605,204 | 2,985,488 | 9,109,857 | ||||||||||||
Deposits from credit institutions | 20 | 28,370,399 | 43,131,718 | 26,841,854 | ||||||||||||
Customer deposits | 21 | 7,848,954 | 4,658,372 | 4,896,065 | ||||||||||||
Marketable debt securities | 22 | 365,265 | 586,022 | 3,569,795 | ||||||||||||
Trading derivatives | 9 | 75,279,097 | 58,712,624 | 89,167,433 | ||||||||||||
Short positions | 9 | 12,302,918 | 5,139,730 | 3,035,231 | ||||||||||||
Other financial liabilities | 24 | — | 302,520 | — | ||||||||||||
OTHER FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS: | 51,019,749 | 42,371,301 | 28,639,359 | |||||||||||||
Deposits from central banks | 20 | 336,985 | 10,103,147 | 4,396,901 | ||||||||||||
Deposits from credit institutions | 20 | 19,263,029 | 12,744,848 | 9,733,268 | ||||||||||||
Customer deposits | 21 | 27,142,003 | 14,636,466 | 9,318,117 | ||||||||||||
Marketable debt securities | 22 | 4,277,732 | 4,886,840 | 5,191,073 | ||||||||||||
Subordinated liabilities | — | — | — | |||||||||||||
Other financial liabilities | — | — | — | |||||||||||||
FINANCIAL LIABILITIES AT AMORTISED COST: | 898,968,685 | 823,402,745 | 770,007,599 | |||||||||||||
Deposits from central banks | 20 | 8,644,043 | 22,345,110 | 9,211,957 | ||||||||||||
Deposits from credit institutions | 20 | 70,892,525 | 50,781,276 | 70,583,533 | ||||||||||||
Customer deposits | 21 | 581,384,862 | 487,681,399 | 406,015,268 | ||||||||||||
Marketable debt securities | 22 | 188,229,225 | 206,490,311 | 227,642,422 | ||||||||||||
Subordinated liabilities | 23 | 30,474,637 | 36,804,601 | 38,873,250 | ||||||||||||
Other financial liabilities | 24 | 19,343,393 | 19,300,048 | 17,681,169 | ||||||||||||
CHANGES IN THE FAIR VALUE OF HEDGED ITEMS IN PORTFOLIO HEDGES OF INTEREST RATE RISK | 36 | 810,376 | 806,418 | 440,136 | ||||||||||||
HEDGING DERIVATIVES | 11 | 6,633,628 | 5,191,077 | 5,957,611 | ||||||||||||
LIABILITIES ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE | 54,584 | 293,512 | 49,688 | |||||||||||||
LIABILITIES UNDER INSURANCE CONTRACTS | 15 | 10,449,274 | 16,916,446 | 16,849,511 | ||||||||||||
PROVISIONS: | 15,659,853 | 17,532,739 | 17,736,259 | |||||||||||||
Provisions for pensions and similar obligations | 25 | 9,519,093 | 10,628,684 | 11,198,117 | ||||||||||||
Provisions for taxes and other legal contingencies | 25 | 3,670,184 | 3,283,339 | 2,363,706 | ||||||||||||
Provisions for contingent liabilities and commitments | 25 | 1,030,244 | 641,620 | 678,584 | ||||||||||||
Other provisions | 25 | 1,440,332 | 2,979,096 | 3,495,852 | ||||||||||||
TAX LIABILITIES: | 8,618,390 | 7,003,945 | 5,768,665 | |||||||||||||
Current | 4,306,246 | 3,337,444 | 2,304,599 | |||||||||||||
Deferred | 27 | 4,312,144 | 3,666,501 | 3,464,066 | ||||||||||||
OTHER LIABILITIES | 26 | 7,599,849 | 7,624,159 | 7,560,995 | ||||||||||||
TOTAL LIABILITIES | 1,136,586,225 | 1,036,658,816 | 989,630,058 | |||||||||||||
EQUITY | ||||||||||||||||
SHAREHOLDERS’ EQUITY: | 30 | 77,333,542 | 71,831,688 | 65,886,582 | ||||||||||||
Share capital | 31 | 4,164,561 | 4,114,413 | 3,997,030 | ||||||||||||
Registered | 4,164,561 | 4,114,413 | 3,997,030 | |||||||||||||
Less: Uncalled capital | — | — | — | |||||||||||||
Share premium | 32 | 29,457,152 | 29,305,257 | 28,103,802 | ||||||||||||
Reserves | 33 | 28,307,196 | 24,607,287 | 20,868,406 | ||||||||||||
Accumulated reserves (losses) | 33 | 28,254,649 | 24,539,624 | 21,158,869 | ||||||||||||
Reserves (losses) of entities accounted for using the equity method | 33 | 52,547 | 67,663 | (290,463 | ) | |||||||||||
Other equity instruments | 34 | 8,686,000 | 7,188,465 | 7,155,566 | ||||||||||||
Equity component of compound financial instruments | 34 | 1,668,049 | — | — | ||||||||||||
Other | 34 | 7,017,951 | 7,188,465 | 7,155,566 | ||||||||||||
Less: Treasury shares | 34 | (192,288 | ) | (29,755 | ) | (421,198 | ) | |||||||||
Profit for the year attributable to the Parent | 8,180,909 | 8,942,538 | 8,876,414 | |||||||||||||
Less: Dividends and remuneration | 4 | (1,269,988 | ) | (2,296,517 | ) | (2,693,438 | ) | |||||||||
VALUATION ADJUSTMENTS: | (2,315,203 | ) | (3,165,104 | ) | (8,299,696 | ) | ||||||||||
Available-for-sale financial assets | 29 | (1,248,853 | ) | 645,345 | 79,293 | |||||||||||
Cash flow hedges | 11 | (171,762 | ) | (255,498 | ) | (309,883 | ) | |||||||||
Hedges of net investments in foreign operations | 29 | (1,955,824 | ) | 296,686 | 1,467,289 | |||||||||||
Exchange differences | 29 | 1,061,407 | (3,851,826 | ) | (9,424,871 | ) | ||||||||||
Non-current assets held for sale | — | 189 | 36,878 | |||||||||||||
Entities accounted for using the equity method | 29 | (171 | ) | — | (148,402 | ) | ||||||||||
Other valuation adjustments | — | — | — | |||||||||||||
NON-CONTROLLING INTERESTS: | 28 | 5,896,119 | 5,204,058 | 2,414,606 | ||||||||||||
Valuation adjustments | 838,415 | 45,228 | (371,310 | ) | ||||||||||||
Other | 5,057,704 | 5,158,830 | 2,785,916 | |||||||||||||
TOTAL EQUITY | 80,914,458 | 73,870,642 | 60,001,492 | |||||||||||||
TOTAL LIABILITIES AND EQUITY | 1,217,500,683 | 1,110,529,458 | 1,049,631,550 | |||||||||||||
MEMORANDUM ITEMS: | ||||||||||||||||
CONTINGENT LIABILITIES | 35 | 59,795,253 | 59,256,076 | 65,323,194 | ||||||||||||
CONTINGENT COMMITMENTS | 35 | 203,709,393 | 163,530,756 | 131,725,006 |
F-2
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008
(Thousands of Euros)
(Debit) Credit | ||||||||||||||||
Notes | 2010 | 2009 | 2008 | |||||||||||||
Interest and similar income | 38 | 52,906,754 | 53,173,004 | 55,043,546 | ||||||||||||
Interest expense and similar charges | 39 | (23,682,375 | ) | (26,874,462 | ) | (37,505,084 | ) | |||||||||
INTEREST INCOME / (CHARGES) | 29,224,379 | 26,298,542 | 17,538,462 | |||||||||||||
Income from equity instruments | 40 | 362,068 | 436,474 | 552,757 | ||||||||||||
Income from companies accounted for using the equity method | 41 | 16,921 | (520 | ) | 791,754 | |||||||||||
Fee and commission income | 42 | 11,679,702 | 10,726,368 | 9,741,400 | ||||||||||||
Fee and commission expense | 43 | (1,945,552 | ) | (1,646,234 | ) | (1,475,105 | ) | |||||||||
Gains/losses on financial assets and liabilities (net) | 44 | 2,164,423 | 3,801,645 | 2,892,249 | ||||||||||||
Held for trading | 1,311,812 | 2,098,449 | 566,828 | |||||||||||||
Other financial instruments at fair value through profit or loss | 70,028 | 197,993 | 607,309 | |||||||||||||
Financial instruments not measured at fair value through profit or loss | 791,430 | 1,630,858 | 1,722,651 | |||||||||||||
Other | (8,847 | ) | (125,655 | ) | (4,539 | ) | ||||||||||
Exchange differences (net) | 45 | 441,148 | 444,127 | 582,215 | ||||||||||||
Other operating income | 8,195,567 | 7,928,538 | 9,436,308 | |||||||||||||
Income from insurance and reinsurance contracts issued | 46 | 7,162,076 | 7,112,856 | 8,385,788 | ||||||||||||
Sales and income from the provision of non-financial services | 46 | 340,371 | 377,800 | 586,872 | ||||||||||||
Other | 46 | 693,120 | 437,882 | 463,648 | ||||||||||||
Other operating expenses | (8,089,330 | ) | (7,784,621 | ) | (9,164,487 | ) | ||||||||||
Expenses of insurance and reinsurance contracts | 46 | (6,784,207 | ) | (6,773,996 | ) | (8,134,199 | ) | |||||||||
Changes in inventories | 46 | (204,920 | ) | (237,396 | ) | (469,154 | ) | |||||||||
Other | 46 | (1,100,203 | ) | (773,229 | ) | (561,134 | ) | |||||||||
TOTAL INCOME | 42,049,326 | 40,204,319 | 30,895,553 | |||||||||||||
Administrative expenses | (16,255,988 | ) | (14,824,605 | ) | (11,665,857 | ) | ||||||||||
Personnel expenses | 47 | (9,329,556 | ) | (8,450,283 | ) | (6,813,351 | ) | |||||||||
Other general administrative expenses | 48 | (6,926,432 | ) | (6,374,322 | ) | (4,852,506 | ) | |||||||||
Depreciation and amortization | 16 and 18 | (1,939,984 | ) | (1,596,445 | ) | (1,239,590 | ) | |||||||||
Provisions (net) | 25 | (1,132,621 | ) | (1,792,123 | ) | (1,640,561 | ) | |||||||||
Impairment losses on financial assets (net) | (10,443,149 | ) | (11,578,322 | ) | (6,283,052 | ) | ||||||||||
Loans and receivables | 10 | (10,266,899 | ) | (11,087,996 | ) | (5,896,888 | ) | |||||||||
Other financial instruments not measured at fair value through profit or loss | 8 | (176,250 | ) | (490,326 | ) | (386,164 | ) | |||||||||
Impairment losses on other assets (net) | (285,864 | ) | (164,630 | ) | (1,049,226 | ) | ||||||||||
Goodwill and other intangible assets | 17 and 18 | (69,399 | ) | (31,249 | ) | (983,929 | ) | |||||||||
Other assets | (216,465 | ) | (133,381 | ) | (65,297 | ) | ||||||||||
Gains/(losses) on disposal of assets not classified as non-current assets held for sale | 49 | 350,323 | 1,565,013 | 101,156 | ||||||||||||
Negative goodwill on business combinations | — | — | — | |||||||||||||
Gains/(losses) on disposal of non-current assets held for sale not classified as discontinued operations | 50 | (290,170 | ) | (1,225,407 | ) | 1,730,902 | ||||||||||
OPERATING PROFIT / (LOSS) BEFORE TAX | 12,051,873 | 10,587,800 | 10,849,325 | |||||||||||||
Income tax | 27 | (2,923,190 | ) | (1,206,610 | ) | (1,836,052 | ) | |||||||||
PROFIT FROM CONTINUING OPERATIONS | 9,128,683 | 9,381,190 | 9,013,273 | |||||||||||||
PROFIT (LOSS) FROM DISCONTINUED OPERATIONS (Net) | 37 | (26,922 | ) | 30,870 | 319,141 | |||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 9,101,761 | 9,412,060 | 9,332,414 | |||||||||||||
Profit attributable to the Parent | 8,180,909 | 8,942,538 | 8,876,414 | |||||||||||||
Profit attributable to non-controlling interests | 28 | 920,852 | 469,522 | 456,000 | ||||||||||||
EARNINGS PER SHARE | ||||||||||||||||
From continuing and discontinued operations | ||||||||||||||||
Basic earnings per share (euros) | 4 | 0.9418 | 1.0454 | 1.2207 | ||||||||||||
Diluted earnings per share (euros) | 4 | 0.9356 | 1.0382 | 1.2133 | ||||||||||||
From continuing operations | ||||||||||||||||
Basic earnings per share (euros) | 4 | 0.9449 | 1.0422 | 1.1780 | ||||||||||||
Diluted earnings per share (euros) | 4 | 0.9387 | 1.0350 | 1.1709 |
F-3
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008
(Thousands of Euros)
2010 | 2009 | 2008 | ||||||||||
CONSOLIDATED PROFIT FOR THE YEAR | 9,101,761 | 9,412,060 | 9,332,414 | |||||||||
OTHER RECOGNIZED INCOME AND EXPENSE | 1,643,088 | 5,551,130 | (9,319,420 | ) | ||||||||
Available-for-sale financial assets: | (2,719,375 | ) | 1,253,709 | (2,043,666 | ) | |||||||
Revaluation gains/(losses) | (1,863,743 | ) | 2,132,897 | (3,539,079 | ) | |||||||
Amounts transferred to income statement | (855,632 | ) | (777,149 | ) | 1,571,044 | |||||||
Other reclassifications | — | (102,039 | ) | (75,631 | ) | |||||||
Cash flow hedges: | 117,103 | 73,172 | (374,700 | ) | ||||||||
Revaluation gains/(losses) | (88,704 | ) | 160,387 | (479,905 | ) | |||||||
Amounts transferred to income statement | 205,807 | (40,852 | ) | 15,060 | ||||||||
Amounts transferred to initial carrying amount of hedged items | — | — | — | |||||||||
Other reclassifications | — | (46,363 | ) | 90,145 | ||||||||
Hedges of net investments in foreign operations: | (2,252,510 | ) | (1,170,603 | ) | 828,815 | |||||||
Revaluation gains/(losses) | (2,443,625 | ) | (1,221,590 | ) | 828,815 | |||||||
Amounts transferred to income statement | 191,115 | 50,987 | — | |||||||||
Other reclassifications | — | — | — | |||||||||
Exchange differences: | 5,704,027 | 5,914,974 | (8,423,459 | ) | ||||||||
Revaluation gains/(losses) | 5,986,471 | 5,943,755 | (8,640,444 | ) | ||||||||
Amounts transferred to income statement | (282,444 | ) | (28,781 | ) | 216,985 | |||||||
Other reclassifications | — | — | — | |||||||||
Non-current assets held for sale: | (48 | ) | (36,830 | ) | 36,878 | |||||||
Revaluation gains/(losses) | (48 | ) | (36,830 | ) | — | |||||||
Amounts transferred to income statement | — | — | — | |||||||||
Other reclassifications | — | — | 36,878 | |||||||||
Actuarial gains/(losses) on pension plans | — | — | — | |||||||||
Entities accounted for using the equity method: | (171 | ) | 148,402 | (146,562 | ) | |||||||
Revaluation gains/(losses) | (171 | ) | — | (149,073 | ) | |||||||
Amounts transferred to income statement | — | — | 43,728 | |||||||||
Other reclassifications | — | 148,402 | (41,217 | ) | ||||||||
Other recognized income and expense | — | — | — | |||||||||
Income tax | 794,062 | (631,694 | ) | 803,274 | ||||||||
TOTAL RECOGNIZED INCOME AND EXPENSE | 10,744,849 | 14,963,190 | 12,994 | |||||||||
Attributable to the Parent | 9,030,810 | 14,077,130 | (145,318 | ) | ||||||||
Attributable to non-controlling interests | 1,714,039 | 886,060 | 158,312 |
F-4
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008
(Thousands of Euros)
Equity Attributable to the Parent | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(Losses) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
of Entities | Profit for | Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated | Accounted for | Other | Less: | the Year | Dividends | Total | Non- | |||||||||||||||||||||||||||||||||||||||||||||
Share | Share | Reserves | Using the Equity | Equity | Treasury | Attributable to | and | Shareholders’ | Valuation | Controlling | Total | |||||||||||||||||||||||||||||||||||||||||
Capital | Premium | (Losses) | Method | Instruments | Shares | the Parent | Remuneration | Equity | Adjustments | Total | Interests | Equity | ||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||
Adjustments due to changes in accounting policies | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Adjustments due to errors | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Adjusted beginning balance | 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 | ||||||||||||||||||||||||||||||||||||
Total recognized income and expense | — | — | — | — | — | — | 8,180,909 | — | 8,180,909 | 849,901 | 9,030,810 | 1,714,039 | 10,744,849 | |||||||||||||||||||||||||||||||||||||||
Other changes in equity | 50,148 | 151,895 | 3,715,025 | (15,116 | ) | 1,497,535 | (162,533 | ) | (8,942,538 | ) | 1,026,529 | (2,679,055 | ) | — | (2,679,055 | ) | (1,021,978 | ) | (3,701,033 | ) | ||||||||||||||||||||||||||||||||
Capital increases | 50,148 | 161,925 | (44,357 | ) | — | (167,716 | ) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
Capital reductions | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Conversion of financial liabilities into equity | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Increases in other equity instruments | — | — | — | — | 1,820,869 | — | — | — | 1,820,869 | — | 1,820,869 | — | 1,820,869 | |||||||||||||||||||||||||||||||||||||||
Reclassification of financial liabilities to other equity instruments | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Reclassification of other equity instruments to financial liabilities | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
Distribution of dividends | — | — | (1,825,367 | ) | — | — | — | — | (1,269,988 | ) | (3,095,355 | ) | — | (3,095,355 | ) | (399,876 | ) | (3,495,231 | ) | |||||||||||||||||||||||||||||||||
Transactions involving own equity instruments (net) | — | — | (18,429 | ) | — | — | (162,533 | ) | — | — | (180,962 | ) | — | (180,962 | ) | — | (180,962 | ) | ||||||||||||||||||||||||||||||||||
Transfers between equity items | — | (10,030 | ) | 6,713,241 | (15,116 | ) | (42,074 | ) | — | (8,942,538 | ) | 2,296,517 | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
Increases (decreases) due to business combinations | — | — | — | — | — | — | — | — | — | — | — | 101,189 | 101,189 | |||||||||||||||||||||||||||||||||||||||
Equity-instrument-based payments | — | — | — | — | (113,560 | ) | — | — | — | (113,560 | ) | — | (113,560 | ) | — | (113,560 | ) | |||||||||||||||||||||||||||||||||||
Other increases/(decreases) in equity | — | — | (1,110,063 | ) | — | 16 | — | — | — | (1,110,047 | ) | — | (1,110,047 | ) | (723,291 | ) | (1,833,338 | ) | ||||||||||||||||||||||||||||||||||
Ending balance at 12/31/10 | 4,164,561 | 29,457,152 | 28,254,649 | 52,547 | 8,686,000 | (192,288 | ) | 8,180,909 | (1,269,988 | ) | 77,333,542 | (2,315,203 | ) | 75,018,339 | 5,896,119 | 80,914,458 |
F-5
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008
(Thousands of Euros)
Equity Attributable to the Parent | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(Losses) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
of Entities | Profit for | Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated | Accounted for | Other | Less: | the Year | Dividends | Total | Non- | |||||||||||||||||||||||||||||||||||||||||||||
Share | Share | Reserves | Using the Equity | Equity | Treasury | Attributable to | 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-6
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008(Continued)
(Thousands of Euros)
Equity Attributable to the Parent | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserves | ||||||||||||||||||||||||||||||||||||||||||||||||||||
(Losses) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
of Entities | Profit for | Less: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated | Accounted for | Other | Less: | the Year | Dividends | Total | Non- | |||||||||||||||||||||||||||||||||||||||||||||
Share | Share | Reserves | Using the Equity | Equity | Treasury | Attributable to | and | Shareholders’ | Valuation | Controlling | Total | |||||||||||||||||||||||||||||||||||||||||
Capital | Premium | (Losses) | Method | Instruments | Shares | the Parent | Remuneration | Equity | Adjustments | Total | Interests | Equity | ||||||||||||||||||||||||||||||||||||||||
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-7
Table of Contents
FOR THE YEARS ENDED DECEMBER 31, 2010, 2009 AND 2008
(Thousands of Euros)
2010 | 2009 (*) | 2008 | ||||||||||
A. CASH FLOWS FROM OPERATING ACTIVITIES: | 51,874,233 | (18,035,526 | ) | 15,827,165 | ||||||||
Consolidated profit for the year | 9,101,761 | 9,412,060 | 9,332,414 | |||||||||
Adjustments made to obtain the cash flows from operating activities- | 17,849,063 | 15,558,115 | 10,254,304 | |||||||||
Depreciation and amortization | 1,939,984 | 1,596,445 | 1,269,527 | |||||||||
Other adjustments | 15,909,079 | 13,961,670 | 8,984,777 | |||||||||
Net increase/decrease in operating assets- | 28,486,803 | 23,749,168 | 70,560,851 | |||||||||
Financial assets held for trading | 6,309,594 | (10,145,789 | ) | (8,175,164 | ) | |||||||
Other financial assets at fair value through profit or loss | 412,899 | 11,553,038 | (453,996 | ) | ||||||||
Available-for-sale financial assets | (3,144,943 | ) | 30,417,303 | (3,249,597 | ) | |||||||
Loans and receivables | 18,480,649 | (11,195,718 | ) | 79,907,831 | ||||||||
Other operating assets | 6,428,604 | 3,120,334 | 2,531,777 | |||||||||
Net increase/decrease in operating liabilities- | 55,488,257 | (17,729,540 | ) | 68,246,416 | ||||||||
Financial liabilities held for trading | 7,582,939 | (14,436,807 | ) | 11,080,000 | ||||||||
Other financial liabilities at fair value through profit or loss | 285,192 | 6,729,640 | (11,078,643 | ) | ||||||||
Financial liabilities at amortized cost | 47,274,149 | (10,206,053 | ) | 70,455,437 | ||||||||
Other operating liabilities | 345,977 | 183,680 | (2,210,378 | ) | ||||||||
Income tax recovered/paid | (2,078,045 | ) | (1,526,993 | ) | (1,445,118 | ) | ||||||
B. CASH FLOWS FROM INVESTING ACTIVITIES: | (2,634,789 | ) | 2,884,124 | 950,026 | ||||||||
Payments- | 5,310,382 | 5,340,862 | 4,241,797 | |||||||||
Tangible assets | 3,634,889 | 1,879,565 | 2,737,784 | |||||||||
Intangible assets | 1,504,615 | 3,222,774 | 750,440 | |||||||||
Investments | 10,878 | 13,523 | 753,573 | |||||||||
Subsidiaries and other business units | 160,000 | 225,000 | — | |||||||||
Non-current assets held for sale and associated liabilities | — | — | — | |||||||||
Held-to-maturity investments | — | — | — | |||||||||
Other payments related to investing activities | — | — | — | |||||||||
Proceeds- | 2,675,593 | 8,224,986 | 5,191,823 | |||||||||
Tangible assets | 696,066 | 1,175,834 | 1,509,291 | |||||||||
Intangible assets | 9,706 | 1,320,677 | — | |||||||||
Investments | 104,197 | 13,888 | 44,607 | |||||||||
Subsidiaries and other business units | 32,777 | 756,112 | 828,346 | |||||||||
Non-current assets held for sale and associated liabilities | 1,832,847 | 4,958,475 | 2,809,579 | |||||||||
Held-to-maturity investments | — | — | — | |||||||||
Other proceeds related to investing activities | — | — | — | |||||||||
C. CASH FLOWS FROM FINANCING ACTIVITIES: | (11,301,009 | ) | 433,148 | 432,327 | ||||||||
Payments- | 21,470,012 | 18,281,063 | 14,321,999 | |||||||||
Dividends | 4,107,007 | 4,386,550 | 4,243,021 | |||||||||
Subordinated liabilities | 7,727,191 | 4,245,272 | 1,315,190 | |||||||||
Redemption of own equity instruments | — | — | — | |||||||||
Acquisition of own equity instruments | 7,372,022 | 9,263,615 | 7,842,820 | |||||||||
Other payments related to financing activities | 2,263,792 | 385,626 | 920,968 | |||||||||
Proceeds- | 10,169,003 | 18,714,211 | 14,754,326 | |||||||||
Subordinated liabilities | 286,701 | 3,653,548 | 311,835 | |||||||||
Issuance of own equity instruments | — | — | 7,020,677 | |||||||||
Disposal of own equity instruments | 7,191,060 | 9,975,819 | 7,421,814 | |||||||||
Other proceeds related to financing activities | 2,691,242 | 5,084,844 | — | |||||||||
D. EFFECT OF FOREIGN EXCHANGE RATE CHANGES | 4,957,430 | 3,826,322 | (2,490,948 | ) | ||||||||
E. NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS | 42,895,865 | (10,891,932 | ) | 14,718,570 | ||||||||
F. CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 34,889,413 | 45,781,345 | 31,062,775 | |||||||||
G. CASH AND CASH EQUIVALENTS AT END OF YEAR | 77,785,278 | 34,889,413 | 45,781,345 | |||||||||
COMPONENTS OF CASH AND CASH EQUIVALENTS AT END OF YEAR: | ||||||||||||
Cash | 5,515,130 | 5,171,858 | 4,407,124 | |||||||||
Cash equivalents at central banks | 72,270,148 | 29,717,555 | 41,374,221 | |||||||||
Other financial assets | — | — | — | |||||||||
Less: Bank overdrafts refundable on demand | — | — | — | |||||||||
TOTAL CASH AND CASH EQUIVALENTS AT END OF YEAR | 77,785,278 | 34,889,413 | 45,781,345 | |||||||||
(*) | Cash flows for the year ended December 31, 2009 have been restated in accordance with the amendment to IAS 7. See Note 1.h to the consolidated financial statements. |
F-8
Table of Contents
for the year ended December 31, 2010
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
• | Revision of IFRS 3, Business Combinations and Amendment to IAS 27, Consolidated and Separate Financial Statements: 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; transactions with non-controlling interests are accounted for as equity transactions while control is retained; and there is an option to measure at fair value the non-controlling interests of the acquiree, as opposed to the single current treatment of measuring them as the proportionate share of the fair value of the net assets acquired. | ||
The amendments to IAS 27 also revised certain aspect of IAS 7, Statements of Cash Flows, whereby the cash flows relating to changes in ownership of a subsidiary that do not give rise to a loss of control are classified as cash flows from financing activities. This amendment must be applied retrospectively. | |||
In 2010 the Group applied the aforementioned revised standards to the recognition of business combinations (acquisitions) performed in the year (see Note 3) and to the transactions carried out with non-controlling interests that did not result in a change in control of the corresponding units (see, in Note 3, the transactions performed with the non-controlling interests of Banco Santander México, Santander BanCorp and Santander Brasil). | |||
• | Amendment to IAS 39, Eligible Hedged Items: 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. | ||
• | 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. | ||
• | IFRIC 12, Service Concession Arrangements: 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: this interpretation applies to the accounting treatment of distributions of non-cash assets to an entity’s owners (“dividends in kind”), although its scope does not include distributions of assets within a group or between jointly controlled entities. The interpretation states that an entity must measure such liabilities at the fair value of the asset to be distributed and that any difference between the carrying amount of the dividend payable and the carrying amount of the asset distributed must be recognized in profit or loss. |
F-10
Table of Contents
• | IFRIC 18, Transfers of Assets from Customers: 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). |
• | Bank of Spain Circular 3/2010, of June 29: building on the experience accumulated over recent years and taking into consideration the current economic situation, the Bank of Spain reviewed the references established in Circular 4/2004 for determining allowances and provisions for insolvency risk attributable to the borrower, and the consideration that must be made of guarantees received. | ||
• | Bank of Spain Circular 7/2010 on the implementation of certain aspects of the mortgage market establishes the essential data of the special accounting recognition that the issuer must include in its financial statements, and the minimum content of the note to the financial statements of activities, which includes the express representation of the board of directors or equivalent body of the credit institution with regard to the existence of express policies and procedures on its activity in the mortgage market in Spain. | ||
• | Bank of Spain Circular 8/2010, of 22 December, amends Bank of Spain Circular 4/2004, of December 22, in order to adapt it to the amendments introduced in the International Financial Reporting Standards adopted by the European Union, primarily the amendments to IFRS 3 and IAS 27. |
• | 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 orwarrants). 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. | ||
• | Revision of IAS 24, Related Party Disclosures (obligatory for years beginning on or after January 1, 2011): 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 (obligatory for years beginning on or after January 1, 2011): 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 (obligatory for years beginning on or after July 1, 2010): 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 shares 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. |
F-11
Table of Contents
• | IFRS 9, Financial Instruments: Classification and Measurement (obligatory as from January 1, 2013), 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. | ||
• | Amendment to IFRS 7, Financial Instruments: Disclosures (obligatory for years beginning on or after July 1, 2011) — Transfers of Financial Assets. This amendment enhances disclosures about transfers of assets, both those in which the assets are not derecognized and mainly those that qualify for derecognition but for which the entity retains continuing involvement. | ||
• | Amendments to IAS 12, Income Taxes: these amendments incorporate the requirement to measure deferred tax assets and liabilities relating to investment property depending on whether the entity expects to recover the carrying amount of the asset through use or sale. | ||
• | Amendment to IFRS 1 relating to the presentation of financial statements following a period of hyperinflation. | ||
• | IFRS 10, Consolidated Financial Statements (obligatory as from January 1, 2013), which will replace the consolidation guidance in IAS 27 Consolidated and Separate Financial Statements and SIC-12 Consolidation — Special Purpose Entities by introducing a single consolidation model for all entities based on control, irrespective of the nature of the investee. Under IFRS 10, control is based on whether an investor has 1) power over the investee; 2) exposure, or rights, to variable returns from its involvement with the investee; and 3) the ability to use its power over the investee to affect the amount of the returns. The requirements relating to separate financial statements remain unchanged and are included in the amended IAS 27 Separate Financial Statements. The other portions of IAS 27 will be replaced by IFRS 10. | ||
• | IFRS 11, Joint Arrangements (obligatory as from January 1, 2013): introduces new accounting requirements for joint arrangements, replacing IAS 31 Interests in Joint Ventures and SIC-13 Jointly-controlled Entities Non-monetary Contributions by Ventures. The option to apply the proportional consolidation method when accounting for jointly controlled entities is removed. Additionally, IFRS 11 eliminates jointly controlled assets and jointly controlled operations (as defined under IAS 31) to now only differentiate between joint operations and joint ventures. A joint operation is a joint arrangement whereby the parties that have joint control have rights to the assets and obligations for the liabilities. A joint venture is a joint arrangement whereby the parties that have joint control have rights to the net assets. | ||
• | IFRS 12, Disclosure of Interests in Other Entities (obligatory as from January 1, 2013): requires enhanced disclosures about both consolidated entities and unconsolidated entities in which an entity has involvement. The objective of IFRS 12 is to require information so that financial statement users may evaluate the basis of control, any restrictions on consolidated assets and liabilities, risk exposures arising from involvements with unconsolidated structured entities and non-controlling interest holders’ involvement in the activities of consolidated entities. |
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• | As the amended IAS 27 Separate Financial Statements above mentioned, the Amendment to IAS 28, Investments in Associates and Joint Ventures (obligatory as from January 1, 2013): includes conforming changes based on the issuance of IFRS 10, IFRS 11 and IFRS 12. | ||
• | IFRS 13, Fair Value Measurement (obligatory as from January 1, 2013), which will replace the guidance on fair value measurement in existing IFRS accounting literature with a single standard. |
c) | Use of estimates | ||
The consolidated results and the determination of consolidated equity are sensitive to the accounting policies, measurement bases and estimates used by the directors of the Bank in preparing the consolidated financial statements. The main accounting policies and measurement bases are set forth in Note 2. | |||
In the consolidated financial statements estimates were occasionally made by the senior management of the Bank and of the consolidated entities in order to quantify certain of the assets, liabilities, income, expenses and commitments reported herein. These estimates, which were made on the basis of the best information available, relate basically to the following: |
• | 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 |
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e) | Capital management |
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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. |
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g) | Events after the reporting period |
• | At its meeting of January 13, 2011, the Bank’s executive committee resolved to apply the SantanderDividendo Elecciónprogramme on the dates on which the third interim dividend is traditionally paid, whereby the shareholders were offered the option of receiving an amount equivalent to said dividend, the gross amount of which was EUR 0.117 per share, in shares or cash. Accordingly, an amount equal to the third interim dividend was paid in part in February 2011 in the form of a cash payment of EUR 129,189 thousand and the remainder through the delivery of bonus shares valued at EUR 845,318 thousand. | ||
• | On February 3, 2011, the Bank announced the payment of the fourth dividend for 2010 for a gross amount of EUR 0.228766 per share, which was paid in cash on May 1, 2011. With this dividend, which was the final dividend if the proposed distribution of profit to be submitted to the shareholders at the general meeting is approved, the total remuneration per share for 2010 was EUR 0.60 and the total remuneration distributed to the shareholders was EUR 4,999 million. | ||
• | On February 7, 2011, a takeover bid was announced in Poland for 100% of the Polish entity Bank Zachodni WBK (BZ WBK), which Allied Irish Bank (AIB), owner of 70.36% of BZ WBK, is obliged to accept, by virtue of the agreement entered into with Banco Santander in September 2010. | ||
Banco Santander’s bid entails a maximum consideration of approximately EUR 4,293 million in cash for 100% of BZ WBK. Its acceptance period runs from February 24, 2011 to March 25, 2011 and it is expected to be settled on April 1, 2011. | |||
On February 18, 2011, a notice of non-opposition was received from the Polish financial regulator -KNF- to the Group’s acquisition of a significant stake. | |||
On March 29, 2011, we announced that the acceptance period of the tender offer ended on Friday March 25, 2011, having commenced on February 24, 2011. | |||
According to information provided by the agent bank in the transaction, 69,912,653 BZ WBK shares were tendered, representing 95.67% of BZ WBK’s capital. Since the tender offer was made at a cash price of 226.89 PLN per share (approximately €57.05), the purchase of the shares tendered in the offer resulted in a payment of 15,862.48 million PLN (approximately €3,988.6 million). | |||
Since the 70% acceptance threshold which was a condition of the tender offer was exceeded and all the remaining conditions, including the obtaining of the appropriate regulatory authorizations, were met, the tender offer was settled and the transfer of the shares were made on April 1, 2011. | |||
Additionally, on the same date of April 1, 2011 we acquired AIB’s 50% stake in BZ WBK Asset Management for €150 million in cash. | |||
At the date of preparation of these consolidated financial statements, we are still working in the initial accounting for this business combination. Accordingly, we have not been able to include detailed information about assets and liabilities acquired and goodwill corresponding to this transaction. We will include this information in next financial statements. |
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• | On February 17, 2011, the sale of shares representing 1.9% of the share capital of Banco Santander Chile was performed for USD 291 million in total. The transaction gave rise to a gain of approximately EUR 110 million, which will be fully recognized in reserves. Following this transaction, the Group holds a 75% ownership interest in the share capital of Banco Santander Chile. | ||
• | On February 22, 2011, Banco Santander and the insurance company Zurich Financial Services Group entered into an agreement to create a strategic alliance that will boost Santander Group’s bancassurance business in five key Latin American markets: Brazil, Chile, Mexico, Argentina and Uruguay. | ||
Santander will create aholdingcompany for the insurance “units” in Latin America. Zurich will acquire 51% of the share capital and will be responsible for managing the companies. Santander will own 49% of the share capital of theholdingcompany and will enter into a distribution agreement for the sale of insurance products in each country for 25 years. | |||
The close of this transaction is subject to the final documentation and relevant authorizations from the various regulators. | |||
• | On December 3, 2010, for purely commercial reasons, the Group decided to contribute resources to the Santander Banif Inmobiliario, FII property investment fund (“the Fund”) through the subscription of new units and the granting of a two-year liquidity guarantee in order to meet any outstanding redemption claims by the unit holders and to avoid winding up the Fund. The Group offered the unit holders of the Fund the possibility, before February 16, 2011, to submit new requests for the total or partial redemption of their units or for the total or partial revocation of any redemption requests that they had previously submitted and had not been met. | ||
Redemptions from the Fund, managed by Group entity Santander Real Estate, S.G.I.I.C. S.A., had been suspended for two years in February 2009, in accordance with the request filed with the Spanish National Securities Market Commission (CNMV), due to the lack of sufficient liquidity to meet the redemptions requested at that date. | |||
On March 1, 2011, the Group paid the full amount of the redemptions requested by the Fund’s unit holders, i.e. EUR 2,501 million (93.01% of the Fund’s net assets), through the subscription of the related units by the Group at their redemption value at February 28, 2011. | |||
Following the aforementioned acquisition, the Group owns 96.62% of the Fund. Furthermore, the suspension of redemptions was lifted from said date and the Fund is operating normally. | |||
• | On May 26, 2011, the Group announced that Banco Santander Río, S.A. had initiated proceedings to obtain authorization from the National Securities Commission of the Republic of Argentina and the U.S. Securities and Exchange Commission for a public offering of its Class B shares. No shares may be offered to the public until the aforementioned regulators have granted their respective authorizations. | ||
The Group has notified Banco Santander Río of its intention to sell a yet undetermined number of Banco Santander Río shares as part of the public offering. |
h) | Comparative information |
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• | 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 totalling EUR 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 S.A. (EUR 1,499 million, recognised 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 (EUR 724 million — see Note 44), and other gains on the sale of 10% of Attijariwafa Bank Société Anonyme and other transactions (EUR 364 million) were allocated to provisions to credit loss allowances (EUR 1,041 million), to the write-down of assets acquired (EUR 554 million — see Note 50), to the write-down of the ownership interest held in Metrovacesa (EUR 269 million — see Note 8), to additions to the provision for restructuring costs (EUR 260 million, recognised under Provisions (net)) and to other provisions and write-downs (EUR 463 million, including provisions for pre-retirement benefits recognised under Provisions (net)), all net of taxes and non-controlling interests. | ||
• | In 2008 the Group obtained extraordinary gains totalling EUR 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 (EUR 586 million, recognised gross under Gains/(losses) on disposal of non-current assets held for sale not classified as discontinued operations — see Note 50), ABN’s liabilities (EUR 741 million, recognised under Gains/losses on financial assets and liabilities (net) — see Note 44) and the Italian businesses acquired from ABN (EUR 2,245 million, recognised 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 (EUR 1,430 million, recognised 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 Santander UK (EUR 904 million, recognised under Impairment losses on other assets (net) — see Note 18), to additions to provisions for restructuring costs and for pre-retirement benefits (EUR 386 million and EUR 382 million, respectively, recognised under Provisions (net)), to the amortisation of goodwill at the Santander Consumer Finance Group and portfolio write-downs (EUR 295 million) and to other period provisions (EUR 175 million). |
2. | Accounting policies and measurement bases |
a) | Foreign currency transactions |
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• | Translation of foreign currency to the functional currency (currency of the main economic environment in which the entity 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 year 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. |
• | 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. |
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Millions of euros | ||||||||||||||||||||||||
Effect on consolidated equity | Effect on consolidated profit | |||||||||||||||||||||||
Currency | 2010 | 2009 | 2008 | 2010 | 2009 | 2008 | ||||||||||||||||||
US dollar | (39.1 | ) | — | — | — | 2.8 | 3.9 | |||||||||||||||||
Chilean peso | (11.7 | ) | (12.7 | ) | (12.4 | ) | 7.6 | 7.0 | 3.1 | |||||||||||||||
Pound sterling | (62.0 | ) | (21.5 | ) | (5.2 | ) | 20.3 | 16.2 | 14.4 | |||||||||||||||
Mexican peso | (42.9 | ) | (20.5 | ) | (23.1 | ) | 9.1 | 4.7 | 3.6 | |||||||||||||||
Brazilian real | (89.2 | ) | (111.4 | ) | (60.1 | ) | — | — | 13.6 |
Millions of euros | ||||||||||||||||||||||||
Effect on consolidated equity | Effect on consolidated profit | |||||||||||||||||||||||
Currency | 2010 | 2009 | 2008 | 2010 | 2009 | 2008 | ||||||||||||||||||
US dollar | 39.9 | — | — | — | (2.8 | ) | (4.0 | ) | ||||||||||||||||
Chilean peso | 11.9 | 12.9 | 12.6 | (7.8 | ) | (7.2 | ) | (3.0 | ) | |||||||||||||||
Pound sterling | 63.2 | 21.9 | 5.3 | (20.7 | ) | (16.5 | ) | (14.7 | ) | |||||||||||||||
Mexican peso | 42.0 | 16.5 | 26.8 | (9.3 | ) | (4.8 | ) | (3.6 | ) | |||||||||||||||
Brazilian real | 81.0 | 81.9 | 65.2 | — | — | (13.4 | ) |
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b) | Basis of consolidation |
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• | 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 acquirer. Until December 31, 2009, under applicable legislation, the cost of a business combination was considered to include any cost directly attributable to the business combination, such as fees paid to auditors, legal advisers, investment banks and other consultants. In 2010, 2009 and 2008, the auditors were paid EUR 5.4 million, EUR 5.7 million and EUR 6.2 million, respectively, relating mainly to half-yearly audits, of which EUR 6.2 million were recognized in 2008 as an increase in the cost of the business combinations effected in that year (see Note 3). |
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• | 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 acquiree, are estimated and recognized in the consolidated balance sheet; the Group also estimates the amount of any non-controlling interests and the fair value of the previously held equity interest in the acquiree. | ||
• | Any positive difference between the aforementioned items is recognized as discussed in Note 2.m. Any negative difference is recognized under Negative goodwill on business combinations in the consolidated income statement. | ||
Lastly, as from January 1, 2010, any acquisitions of non-controlling interests carried out after the date on which control of the entity is obtained are accounted for as equity transactions, i.e. the difference between the price paid and the carrying amount of the percentage acquired of the non-controlling interests is recognized directly in consolidated equity. |
c) | Definitions and classification of financial instruments |
• | Investments in 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). |
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• | 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 otherwise 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 receivables from the purchasers of goods, or the users of services, constituting part of the Group’s business. | ||
The consolidated entities generally intend to hold the loans and credits granted by them until their final maturity and, therefore, they are presented in the consolidated balance sheet at their amortized cost (which includes any reductions required to reflect the estimated losses on their recovery). | |||
• | 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. |
• | 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. |
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• | 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 debtor belongs, under: |
• | Loans and advances to credit institutions: credit of any nature, including deposits and money market operations, in the name of credit institutions. |
• | Loans and advances to customers: includes the remaining credit, 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. |
• | 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 effectively hedged against interest rate risk through fair value hedging derivatives. | ||
• | Hedging derivatives: includes the fair value in favor of the Group of derivatives, including embedded derivatives separated from hybrid financial instruments, designated as hedging instruments in hedge accounting. | ||
• | Investments: includes the investments in the share capital of associates. |
• | 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 acquired under reverse repurchase 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 otherwise 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 ordinary borrowing activities carried on by financial institutions. |
• | Deposits: includes all repayable balances received in cash by the Group, other than those instrumented as marketable securities and those having the substance of subordinated liabilities. This item also includes cash bonds and cash consignments received 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 the remaining deposits, including money market operations through central counterparties. |
• | Marketable debt securities: includes the amount of bonds and other debt represented by marketable securities, other than those having the substance of 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 acquired 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 capital 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 effectively 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 |
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Millions of euros | ||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||
Published | Published | Published | ||||||||||||||||||||||||||||||||||
price | price | price | ||||||||||||||||||||||||||||||||||
quotations in | quotations in | quotations in | ||||||||||||||||||||||||||||||||||
active | Internal | active | Internal | active | Internal | |||||||||||||||||||||||||||||||
markets | models | Total | markets | models | Total | markets | models | Total | ||||||||||||||||||||||||||||
Financial assets held for trading | 65,009 | 91,753 | 156,762 | 61,056 | 73,998 | 135,054 | 51,947 | 99,870 | 151,817 | |||||||||||||||||||||||||||
Other financial assets at fair value through profit or loss | 9,446 | 30,034 | 39,480 | 8,938 | 28,876 | 37,814 | 6,137 | 19,680 | 25,817 | |||||||||||||||||||||||||||
Available-for-sale financial assets | 69,337 | 16,898 | 86,235 | 75,469 | 11,152 | 86,621 | 43,747 | 5,173 | 48,920 | |||||||||||||||||||||||||||
Hedging derivatives (assets) | 1,226 | 7,001 | 8,227 | 1,226 | 6,608 | 7,834 | 244 | 9,454 | 9,698 | |||||||||||||||||||||||||||
Financial liabilities held for trading | 18,027 | 118,745 | 136,772 | 12,013 | 103,503 | 115,516 | 12,265 | 124,355 | 136,620 | |||||||||||||||||||||||||||
Other financial liabilities at fair value through profit or loss | — | 51,020 | 51,020 | — | 42,371 | 42,371 | — | 28,639 | 28,639 | |||||||||||||||||||||||||||
Hedging derivatives (liabilities) | 509 | 6,125 | 6,634 | 318 | 4,873 | 5,191 | 261 | 5,697 | 5,958 | |||||||||||||||||||||||||||
Liabilities under insurance contracts | 4,163 | 6,286 | 10,449 | 5,006 | 11,910 | 16,916 | 5,286 | 11,564 | 16,850 |
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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 classified as Other financial assets at fair value through profit or loss, the present value method is used. Estimated future cash flows are discounted using the yield curves of the related currencies. The yield 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; for more complex instruments, the Dupire (local volatility) and Heston (stochastic volatility) models are 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. |
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• | 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, and the Markov Functional Model are used. The main inputs used in these models are basically observable market data, including the related yield 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 | Fair | Fair | ||||||||||||||||||||||
values | values | values | Effect of reasonable | |||||||||||||||||||||
calculated | calculated | calculated | assumptions on fair values | |||||||||||||||||||||
using internal | using internal | using internal | at 12/31/10 | |||||||||||||||||||||
models at | models at | models at | More | Less | ||||||||||||||||||||
12/31/10 | 12/31/09 | 12/31/08 | Valuation techniques | Main assumptions | favorable | favorable | ||||||||||||||||||
ASSETS: | ||||||||||||||||||||||||
Financial assets held for trading | 91,753 | 73,998 | 99,870 | 307.1 | (295.0 | ) | ||||||||||||||||||
Loans and advances to credit institutions | 16,216 | 5,953 | 5,150 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Loans and advances to customers (b) | 755 | 10,076 | 684 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Debt and equity interests | 10,983 | 4,898 | 6,074 | Present Value Method | Observable market data, HPI | 4.3 | (4.3 | ) | ||||||||||||||||
Trading derivatives | 63,799 | 53,070 | 87,962 | 302.8 | (290.7 | ) | ||||||||||||||||||
Swaps | 46,562 | 26,390 | 72,693 | Present Value Method, Gaussian Copula (c) | Observable market data, liquidity | 33.4 | (e) | (33.4 | ) (e) | |||||||||||||||
Exchange rate options | 727 | 818 | 3,524 | Black-Scholes Model | Observable market data, liquidity | 0.2 | (e) | (0.2 | ) (e) | |||||||||||||||
Interest rate options | 6,632 | 17,185 | 4,926 | Black-Scholes Model, Heath-Jarrow-Morton Model | Observable market data, liquidity, correlation | 109.2 | (e) | (111.1 | ) (e) | |||||||||||||||
Interest rate futures | 53 | 2,109 | 339 | Present Value Method | Observable market data | 68.1 | (74.3 | ) | ||||||||||||||||
Index and securities options | 5,248 | 3,849 | 6,127 | Black-Scholes Model | Observable market data, dividends, correlation, liquidity, HPI | 68.1 | (74.3 | ) | ||||||||||||||||
Other | 4,577 | 2,720 | 353 | N/A | N/A | 99.9 | (71.7 | ) | ||||||||||||||||
Hedging derivatives | 7,001 | 6,608 | 9,454 | 1.2 | (1.2 | ) | ||||||||||||||||||
Swaps | 6,886 | 6,465 | 9,029 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Exchange rate options | 67 | 47 | 265 | Black-Scholes Model | Observable market data | 1.2 | (1.2 | ) | ||||||||||||||||
Interest rate options | 31 | 56 | 157 | Black-Scholes Model | Observable market data | — | — | |||||||||||||||||
Other | 17 | 40 | 3 | N/A | N/A | — | — | |||||||||||||||||
Other financial assets at fair value through profit or loss | 30,034 | 28,876 | 19,681 | — | — | |||||||||||||||||||
Loans and advances to credit institutions | 18,831 | 16,243 | 8,912 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Loans and advances to customers (d) | 7,777 | 8,329 | 8,973 | Present Value Method | Observable market data, HPI | — | — | |||||||||||||||||
Debt and equity interests | 3,426 | 4,304 | 1,796 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Available-for-sale financial assets | 16,898 | 11,152 | 5,173 | 142.1 | (133.9 | ) | ||||||||||||||||||
Debt and equity interests | 16,898 | 11,152 | 5,173 | Present Value Method | Observable market data | 142.1 | (133.9 | ) | ||||||||||||||||
LIABILITIES: | ||||||||||||||||||||||||
Financial liabilities held for trading | 118,745 | 103,503 | 124,355 | 47.7 | (46.5 | ) | ||||||||||||||||||
Deposits from central banks | 12,605 | 2,985 | 9,110 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Deposits from credit institutions | 28,370 | 43,132 | 26,842 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Customer deposits | 7,849 | 4,658 | 4,896 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Debt and equity interests | 365 | 586 | 1,075 | Present Value Method | Observable market data, liquidity | (a | ) | (a | ) | |||||||||||||||
Trading derivatives | 69,556 | 52,141 | 82,432 | 47.7 | (45.6 | ) | ||||||||||||||||||
Swaps | 48,533 | 35,916 | 67,288 | Present Value Method, Gaussian Copula (c) | Observable market data, liquidity, HPI | — | (e) | — | (e) | |||||||||||||||
Exchange rate options | 915 | 898 | 3,515 | Black-Scholes Model | Observable market data, liquidity | — | (e) | — | (e) | |||||||||||||||
Interest rate options | 7,356 | 3,974 | 5,402 | Black-Scholes Model, Heath-Jarrow-Morton Model | Observable market data, liquidity, correlation | — | (e) | — | (e) | |||||||||||||||
Index and securities options | 6,189 | 4,518 | 4,694 | Black-Scholes Model | Observable market data, dividends, correlation, liquidity, HPI | 47.7 | (45.6 | ) | ||||||||||||||||
Forward purchase and sale contracts | — | — | — | N/A | N/A | — | — | |||||||||||||||||
Interest rate and equity futures | 181 | 2,596 | 1,189 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Other | 6,382 | 4,239 | 344 | N/A | N/A | — | — | |||||||||||||||||
Hedging derivatives | 6,125 | 4,873 | 5,697 | |||||||||||||||||||||
Swaps | 5,723 | 4,558 | 5,586 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Exchange rate options | 363 | 175 | 20 | Black-Scholes Model | Observable market data | — | — | |||||||||||||||||
Interest rate options | 16 | 67 | 91 | Black-Scholes Model | Observable market data | — | — | |||||||||||||||||
Other | 23 | 72 | — | N/A | N/A | — | — | |||||||||||||||||
Other financial liabilities at fair value through profit or loss | 51,020 | 42,371 | 28,639 | Present Value Method | Observable market data | — | — | |||||||||||||||||
Liabilities under insurance contracts | 6,286 | 11,910 | 11,564 | Note 15 | — | — | ||||||||||||||||||
TOTAL | 327,862 | 283,290 | 304,433 | 498 | (475.7 | ) | ||||||||||||||||||
(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). |
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(c) | Includes credit risk derivatives with a negative net fair value of EUR 65 million recognized in the consolidated balance sheet. 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), and discloses the joint effect associated with the related instruments classified on the asset side of the consolidated balance sheet. |
• | 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 option pricing) 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. |
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Fair values calculated | ||||||||||||
using internal | ||||||||||||
models | ||||||||||||
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
ASSETS: | ||||||||||||
Level 2 | 143,494 | 118,001 | 132,861 | |||||||||
Level 3 | 2,192 | 2,632 | 1,316 | |||||||||
145,686 | 120,633 | 134,177 | ||||||||||
LIABILITIES: | ||||||||||||
Level 2 | 181,879 | 162,179 | 169,630 | |||||||||
Level 3 | 297 | 477 | 626 | |||||||||
182,176 | 162,656 | 170,256 | ||||||||||
327,862 | 283,290 | 304,433 | ||||||||||
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• | 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 asset giving rise to them is impaired or derecognized, at which time they are recognized in 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 under Valuation adjustments — Non-current assets held for sale. |
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). |
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). To this end, the Group checks that the results of the hedge were within a range of 80% to 125% of the results of the hedged item. |
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3. | There must be adequate documentation evidencing the specific designation of the financial derivative to hedge certain balances or transactions and how this hedge was expected to be achieved and measured, provided that this is consistent with the Group’s management of own risks. | ||
The changes in value of financial instruments qualifying for hedge accounting are recognized as follows: |
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. |
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e) | Derecognition 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 net 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 |
• | 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. |
• | 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 foreseeably be made. |
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• | 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. |
1. | Specific credit risk coverage: |
a. | Specific allowance: |
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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. |
• | 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: | ||
In certain portfolios (sovereign risk, credit institutions or large corporations) the number of defaults observed is very small or zero. In these cases, the Group opted to use the data contained in the credit derivative spreads to estimate the expected loss discounted by the market and break it down into PD and LGD. | |||
2. | Top-down units: | ||
In the exceptional cases in which the Group does not have sufficient data to construct a sufficiently robust credit risk measurement model, the expected loss on the loan portfolios is estimated based on a top-down approximation in which the historically observed average cost of the loan portfolios is used as the best estimate of the expected loss. As the credit models are developed and bottom-up measurements are obtained, the top-down measurements used for these portfolios are gradually replaced. |
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2. | Country risk allowance: |
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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 |
j) | Reinsurance assets and Liabilities under insurance contracts |
• | By applying 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. |
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• | 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 carrying amount recognized in the consolidated balance sheet of its insurance contract liabilities (see Note 15), less 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. |
k) | Tangible assets |
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Annual | ||||
rate | ||||
Buildings for own use | 2.0 | % | ||
Furniture | 7.7 | % | ||
Fixtures | 7.0 | % | ||
Office and IT equipment | 25.0 | % | ||
Leasehold improvements | 7.0 | % |
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l) | Accounting for leases |
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m) | Intangible assets |
• | 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 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. |
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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. | ||
Inventories are measured at the lower of cost and net realizable value, which is the estimated selling price of the inventories in the ordinary course of business, less the estimated costs of completion and the estimated costs required to make the sale. | |||
Any write-downs of inventories -such as those due to damage, obsolescence or reduction of selling price- to net realizable value and other impairment losses are recognized as expenses for the year in which the impairment or loss occurs. Subsequent reversals are recognized in the consolidated income statement for the year in which they occur. | |||
The carrying amount of inventories is derecognized and recognized as an expense in the period in which the revenue from their sale is recognized. |
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• | Other: this item includes the balance of all prepayments and accrued income (excluding accrued interest, fees and commissions), 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 consolidated entities, which is considered to be likely to occur and certain as to its nature but uncertain as to its amount and/or timing. | ||
• | 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. | ||
• | 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 pre-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. |
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• | 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. |
r) | Equity-instrument-based employee remuneration |
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s) | Recognition of income and expenses |
• | 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. |
t) | Financial guarantees |
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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 are only available to pay or fund post-employment benefits and they cannot be returned to the consolidated entities unless the assets remaining in the plan are sufficient to meet all the benefit obligations of the plan and of the entity to current and former employees, or they are returned to reimburse employee benefits already paid by the Group. |
• | Current service cost, i.e. the increase in the present value of the obligations resulting from employee service in the current period, under Personnel expenses. | ||
• | Interest cost, i.e. 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 consolidated 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 sheet and the average interest rates at 2010, 2009 and 2008 year-end is provided in Note 51. | |||
aa) | Consolidated statements of cash flows |
• | 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. | ||
The Group classifies as cash and cash equivalents the balances recognized under Cash and balances with central banks in the consolidated balance sheet. | |||
• | 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. | ||
As indicated in Note 1.h, the amendments to IAS 27, which came into effect in 2010, also revised certain aspect of IAS 7, Statement of Cash Flows, whereby cash flows arising from changes in ownership interests in a subsidiary that do not result in a loss of control are classified as cash flows from financing activities. This amendment was applied retrospectively. |
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. | |||
Accordingly, this statement presents: |
a. | Consolidated profit for the year. | ||
b. | The net amount of the income and expenses recognized temporarily in consolidated equity under Valuation adjustments. |
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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 non-controlling 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. | ||
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 |
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b) | Acquisitions and disposals |
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• | 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 Santander UK, thereby strengthening the competitive positioning of the products and services offered by the Group and benefiting its customers. | ||
• | It increased the critical mass of the Group’s business in the UK market, as part of our vertical strategy. | ||
• | In-marketcost 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 Santander UK in the London area). | ||
• | Santander UK’s expansion process in the SMEs and retail business will be speeded up by two to three years. |
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• | Retail deposits totaling GBP 20,000 million | ||
• | The direct distribution channels, including 197 commercial branches, 141 agencies (distribution points in third-party premises) and the related employees. |
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c) | Off-shore entities |
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• | 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. |
• | Alliance & Leicester International Holdings Limited, in the Isle of Man, whose only assets are the shares of Alliance & Leicester International Limited. | ||
• | 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. |
• | 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 annual general meeting -EUR 3,044 million- and acquisition of bonus share rights from the shareholders which, under the Santander Dividendo Elección programme, opted to receive in cash remuneration equivalent to the second and third interim dividends -EUR 286 million-: | 3,330 | |||
Of which: | ||||
Distributed at December 31, 2010 (*) | 1,270 | |||
Third interim dividend | 129 | |||
Fourth interim dividend | 1,931 | |||
To voluntary reserves | 2 | |||
Net profit for the year | 3,332 | |||
(*) | Recognized under Shareholders’ equity — Dividends and remuneration. |
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The provisional accounting statements prepared by the Bank pursuant to legal requirements evidencing the existence of sufficient funds for the distribution of the interim dividends were as follows: |
Millions of euros | ||||||||||||||||
05/31/10 | 09/30/10 | 12/31/10 | 12/31/10 | |||||||||||||
First | Second | Third (*) | Fourth (*) | |||||||||||||
Profit after tax | 1,246 | 1,626 | 3,332 | 3,332 | ||||||||||||
Dividends paid | — | (1,113 | ) | (1,270 | ) | (1,270 | ) | |||||||||
1,246 | 513 | 2,062 | 2,062 | |||||||||||||
Interim dividends in cash | 1,113 | 157 | 129 | 1,931 | ||||||||||||
Accumulated interim dividends | 1,113 | 1,270 | 1,399 | 3,330 | ||||||||||||
Gross dividend per share (euros) | 0.135234 | 0.119000 | 0.117000 | 0.228766 | ||||||||||||
Date of payment | 01/08/10 | 01/11/10 | 01/02/11 | 01/05/11 |
(*) | Dividends not distributed at December 31, 2010. |
The board of directors will propose to the shareholders at the annual general meeting that remuneration of EUR 0.60 per share be paid out of 2010 profit. |
b) | Earnings per share from continuing operations and discontinued operations |
i. Basic earnings per share |
Basic earnings per share are calculated by dividing the net profit attributable to the Parent by the weighted average number of ordinary shares outstanding during the year, excluding the average number of treasury shares held in the year. |
Accordingly: |
12/31/10 | 12/31/09 | 12/31/08 | ||||||||||
Profit attributable to the Parent (thousands of euros) | 8,180,909 | 8,942,538 | 8,876,414 | |||||||||
Profit (Loss) from discontinued operations (net of non-controlling interests) (thousands of euros) | (26,922 | ) | 27,431 | 310,804 | ||||||||
Profit from continuing operations (net of non-controlling interests) (thousands of euros) | 8,207,831 | 8,915,107 | 8,565,610 | |||||||||
Weighted average number of shares outstanding | 8,210,983,846 | 8,075,814,950 | 6,802,545,788 | |||||||||
Assumed conversion of convertible debt | 475,538,339 | 478,409,443 | 468,923,871 | |||||||||
Adjusted number of shares | 8,686,522,185 | 8,554,224,393 | 7,271,469,659 | |||||||||
Basic earnings per share (euros) | 0.9418 | 1.0454 | 1.2207 | |||||||||
Basic earnings per share from discontinued operations (euros) | (0.0031 | ) | 0.0032 | 0.0427 | ||||||||
Basic earnings per share from continuing operations (euros) | 0.9449 | 1.0422 | 1.1780 |
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ii. Diluted earnings per share |
In calculating diluted earnings per share, the amount of profit attributable to ordinary shareholders and the weighted average number of shares outstanding, net of treasury shares, are adjusted to take into account all the dilutive effects inherent to potential ordinary shares (share options,warrantsand convertible debt instruments). |
Accordingly, diluted earnings per share were determined as follows: |
12/31/10 | 12/31/09 | 12/31/08 | ||||||||||
Profit attributable to the Parent (thousands of euros) | 8,180,909 | 8,942,538 | 8,876,414 | |||||||||
Profit (Loss) from discontinued operations (net of non-controlling interests) (thousands of euros) | (26,922 | ) | 27,431 | 310,804 | ||||||||
Profit from continuing operations (net of non-controlling interests) (thousands of euros) | 8,207,831 | 8,915,107 | 8,565,610 | |||||||||
Dilutive effect of changes in profit for the year arising from potential conversion of ordinary shares | — | — | — | |||||||||
Weighted average number of shares outstanding | 8,210,983,846 | 8,075,814,950 | 6,802,545,788 | |||||||||
Assumed conversion of convertible debt | 475,538,339 | 478,409,443 | 468,923,871 | |||||||||
Dilutive effect of options/rights on shares | 57,607,691 | 59,108,134 | 44,244,806 | |||||||||
Adjusted number of shares | 8,744,129,876 | 8,613,332,527 | 7,315,714,465 | |||||||||
Diluted earnings per share (euros) | 0.9356 | 1.0382 | 1.2133 | |||||||||
Diluted earnings per share from discontinued operations (euros) | (0.0031 | ) | 0.0032 | 0.0425 | ||||||||
Diluted earnings per share from continuing operations (euros) | 0.9387 | 1.0350 | 1.1709 |
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 |
Article 58 of the Bank’s current Bylaws approved by the shareholders at the annual general meeting held on June 21, 2008 provides that the share in the Bank’s profit for each year that the directors will be entitled to receive for discharging their duties as members of the board of directors -annual emolument and attendance fees- will be equal to 1% of the Bank’s net profit for the year. However, the board of directors may resolve to reduce this percentage. In the previous Bylaws, this percentage represented the limit only with respect to the annual emolument and did not include attendance fees. |
The amount set by the board of directors for 2010, calculated pursuant to the aforementioned Article 58 of the Bylaws, was 0.183% of the Bank’s profit for 2010 (2009: 0.144% in like-for-like terms; 2008: 0.124% in like-for-like terms). |
At the proposal of the appointments and remuneration committee, the directors at the board meeting held on December 20, 2010 resolved to set the annual emolument for 2010 at the same amounts as those paid out of the profits for 2009 and 2008. |
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Previously, at the board meeting held on December 22, 2008, under the powers conferred on them, the directors had resolved to reduce by 10% the annual emolument corresponding to the directors for 2008, and established the following amounts in this connection (the respective proportional amounts were allocated to any directors who did not sit on the board for the whole year): each board member received a gross emolument of EUR 106.3 thousand in 2010, 2009 and 2008 and, additionally, each member of the following board committees received the following gross emoluments: executive committee, EUR 213.2 thousand; audit and compliance committee, EUR 50 thousand; appointments and remuneration committee, EUR 30 thousand. Also, the first deputy chairman and the fourth deputy chairman received a gross amount of EUR 36 thousand each. |
Furthermore, the directors receive fees for attending board and committee meetings, excluding executive committee meetings, since no attendance fees are received for this committee. |
The amounts of the fees for attending the meetings of the board of directors and of the board committees (excluding the executive committee) were the same in 2010 as in 2009 and 2008 and will remain unchanged as from January 1, 2011, in accordance with the proposal made by the appointments and remuneration committee at its meeting on December 14, 2010 and approved by the directors at the board meeting on December 20, 2010. These attendance fees were approved by the directors at the board meeting held on December 17, 2007 in the following amounts: |
• | Board of directors: EUR 2,540 for resident directors and EUR 2,057 for non-resident directors. | ||
• | Risk committee and audit and compliance committee: EUR 1,650 for resident directors and EUR 1,335 for non-resident directors. | ||
• | Other committees: EUR 1,270 for resident directors and EUR 1,028 for non-resident directors. |
ii. Salaries |
Following is the detail of the salaries received by the Bank’s executive directors: Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos, Mr. Alfredo Sáenz Abad, Mr. Matías Rodríguez Inciarte, Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea, Mr. Francisco Luzón López and Mr. Juan Rodríguez Inciarte, who took office as member of the board of directors on March 24, 2008. |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Total salaries | 22,670 | 25,784 | 25,489 | |||||||||
Of which: variable remuneration in cash | 11,917 | (1) | 15,240 | 15,240 |
(1) | At the annual general meeting on June 11, 2010, the shareholders approved the first cycle of the deferred conditional delivery share plan, whereby payment of a portion of the variable remuneration for 2010 amounting to EUR 6,362 thousand will be deferred over the next three years and will accrue, where appropriate, in three equal portions and will be recognized as remuneration in each of the aforementioned years, provided that the conditions for entitlement to the remuneration are met. Note 5.d.iv) includes detailed information on the aforementioned deferred variable remuneration. |
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The amounts of fixed salary remuneration received by the executive directors in 2010 were approved by the directors at the board meeting held on December 21, 2009, following the proposal made by the appointments and remuneration committee at its meeting of December 17, 2009. |
Also, at the meeting held on December 14, 2010, the appointments and remuneration committee proposed to the board of directors that the executive directors’ variable salary remuneration for 2010 should include a deferred portion payable in shares, as resolved by the shareholders at the annual general meeting held on June 11, 2010 (see Note 5.d.iv). This proposal was approved by the directors at the board meeting held on December 20, 2010. At its meeting held on December 21, 2009, the board of directors resolved that the executive directors’ variable salary remuneration for 2009 be maintained at the same amounts as in 2008. At the board meetings of December 22, 2008 and January 26, 2009, the directors had resolved to reduce these amounts by 15% with respect to 2007 -10% in the case of Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea-. |
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iii. Detail by director |
The detail, by director, of the remuneration earned by the Bank’s directors in 2010 is as follows: |
Thousands of euros | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bylaw-stipulated emoluments | Salary of executive | Other | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual emolument | Attendance fees | directors (1) | remuneration | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Appointments | Variable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Audit and | and | remuneration | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Executive | compliance | remuneration | Other | Fixed | in cash | Share 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 | — | — | 28 | 4 | 1,344 | 1,682 | 3,026 | 486 | 1 | 3,864 | 3,992 | 5,420 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Fernando de Asúa Álvarez | 142 | 213 | 50 | 30 | 28 | 191 | — | — | — | — | — | 654 | 647 | 642 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Alfredo Sáenz Abad | 106 | 213 | — | — | 28 | 4 | 3,703 | 3,351 | 7,054 | 1,301 | 473 | 9,179 | 10,237 | 9,295 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Matías Rodríguez Inciarte | 106 | 213 | — | — | 28 | 163 | 1,710 | 1,994 | 3,704 | 622 | 226 | 5,062 | 5,339 | 6,541 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Manuel Soto Serrano | 142 | — | 50 | 30 | 25 | 32 | — | — | — | — | — | 279 | 277 | 274 | ||||||||||||||||||||||||||||||||||||||||||
Assicurazioni Generali, SpA. | 123 | — | — | — | 16 | — | — | — | — | — | — | 139 | 134 | 140 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Antonio Basagoiti García-Tuñón | 106 | 213 | — | — | 28 | 156 | — | — | — | — | 7 | 510 | 510 | 517 | ||||||||||||||||||||||||||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea | 106 | 213 | — | — | 28 | 4 | 1,353 | 1,440 | 2,793 | 321 | 16 | 3,481 | 3,647 | 4,021 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Francisco Javier Botín-Sanz de Sautuola y O’Shea (2) | 106 | — | — | — | 25 | — | — | — | — | — | — | 131 | 129 | 129 | ||||||||||||||||||||||||||||||||||||||||||
Lord Terence Burns | 106 | — | — | — | 19 | — | — | — | — | — | — | 125 | 125 | 123 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Guillermo de la Dehesa Romero | 106 | 213 | — | 30 | 28 | 13 | — | — | — | — | — | 390 | 386 | 384 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Rodrigo Echenique Gordillo (**) | 106 | 213 | — | 30 | 28 | 11 | — | — | — | — | 35 | 423 | 418 | 443 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Antonio Escámez Torres | 106 | 213 | — | — | 23 | 149 | — | — | — | — | 39 | 530 | 537 | 535 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Ángel Jado Becerro de Bengoa (***) | 59 | — | — | — | 13 | — | — | — | — | — | — | 72 | — | — | ||||||||||||||||||||||||||||||||||||||||||
Mr. Francisco Luzón López | 106 | 213 | — | — | 23 | 1 | 1,656 | 2,146 | 3,802 | 522 | 1,004 | 5,671 | 5,811 | 6,851 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Abel Matutes Juan | 106 | — | 50 | — | 25 | 16 | — | — | — | — | — | 197 | 192 | 194 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Juan Rodríguez Inciarte (*) | 106 | — | — | — | 28 | 120 | 987 | 1,304 | 2,291 | 505 | 111 | 3,161 | 3,121 | 3,830 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Luis Ángel Rojo Duque (3) | 106 | — | 50 | 30 | 8 | 21 | — | — | — | — | — | 215 | 225 | 229 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Luis Alberto Salazar-Simpson Bos | 106 | — | 50 | — | 25 | 19 | — | — | — | — | — | 200 | 202 | 198 | ||||||||||||||||||||||||||||||||||||||||||
Ms. Isabel Tocino Biscarolasaga | 106 | — | — | — | 28 | — | — | — | — | — | — | 134 | 132 | 129 | ||||||||||||||||||||||||||||||||||||||||||
Total 2010 | 2,168 | 2,132 | 248 | 149 | 482 | 904 | 10,754 | 11,917 | 22,670 | 3,757 | 1,912 | 34,423 | — | — | ||||||||||||||||||||||||||||||||||||||||||
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 | ||||||||||||||||||||||||||||||||||||||||||
(*) | 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. He was appointed as a member of the audit and compliance committee on December 14, 2010. | |
(***) | Appointed as member of the Bank’s board of directors by the shareholders at the general meeting held on January 11, 2010, Mr. Angel Jado Becerro de Bengoa took office on the same date. | |
(a) | Relating to the variable remuneration in cash received in 2010. | |
(b) | Amounts received in 2010 in respect of the variable remuneration in shares granted through the Plan I10 approved by the shareholders at the general meeting held on June 21, 2008. | |
(1) | Recognized under Personnel expenses at the Bank, except for the salary of Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea, whose salary for the first eleven months of 2010 was recognized at Banco Español de Crédito, S.A. | |
(2) | Amounts contributed to Marcelino Botín Foundation. | |
(3) | Mr. Luis Ángel Rojo Duque died on May 24, 2011. |
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The amount of Other remuneration — Share plan, EUR 3,757 thousand at December 31, 2010 and EUR 2,403 thousand at December 31, 2009, as shown in the foregoing table, relates to the variable remuneration received in 2010 and 2009 by the Bank’s directors in the form of Banco Santander, S.A. shares under the I10 and I09 incentive plans (Plans I10 and I09) approved by the shareholders at the annual general meeting on June 23, 2007. As established in the aforementioned plans, the number of shares received was determined by the degree of achievement of the targets to which it was tied, and fell short of the maximum number established in both years (see Note 5.d.ii). |
Also, the amount at December 31, 2008, EUR 6,612 thousand, relates to the variable share-based remuneration received in 2008 by the Bank’s directors through the exercise of Banco Santander, S.A. share options granted under the I06 incentive plan (Plan I06) approved by the shareholders at the annual general meeting of Banco Santander, S.A. held on June 18, 2005 and, in the case of Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea, through the delivery of shares of Banco Español de Crédito, S.A. under an incentive plan for executives of this entity approved by the shareholders at its annual general meeting held on February 28, 2006 (see Note 5.d.i). |
The amounts recorded under Other remuneration — Other in the foregoing table include, inter alia, the life and medical insurance costs borne by the Group relating to the Bank’s directors. |
b) | Remuneration of the board members as representatives of the Bank |
By resolution of the executive committee, all the remuneration received by the Bank’s directors who represent the Bank on the boards of directors of listed companies in which the Bank has a stake (at the expense of those companies) and which relates to appointments made after March 18, 2002, will accrue to the Group. The remuneration received in respect of representation duties of this kind, relating to appointments agreed upon before March 18, 2002, was as follows: |
Thousands of euros | ||||||||||||||
Company | 2010 | 2009 | 2008 | |||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | Shinsei Bank, Ltd. | — | 30.1 | 53.0 | ||||||||||
Mr. Fernando de Asúa Álvarez | Cepsa | — | 100.2 | 97.2 | ||||||||||
Mr. Antonio Escámez Torres | Attijariwafa Bank Société Anonyme | 10.0 | 5.0 | 14.8 | ||||||||||
10.0 | 135.3 | 165.0 | ||||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos ceased to discharge his duties as director of Shinsei Bank, Ltd. on June 23, 2009 and received compensation of EUR 73.1 thousand. |
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Also, in 2008, 2007, 2006 and 2005 Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos had received, in each year, options to acquire shares of Shinsei Bank, Ltd. (Shinsei), the detail being as follows: 10,000 shares at a price of JPY 416 each in 2008; 10,000 shares at a price of JPY 555 each in 2007; 25,000 shares at a price of JPY 825 each in 2006; and 25,000 shares at a price of JPY 601 each in 2005. At December 31, 2010, the market price of the Shinsei share was JPY 106 and, therefore, regardless of the stipulated exercise periods, the options granted in those years would not have given rise to any gains had they been exercised. |
Mr. Fernando de Asúa ceased to discharge his duties as director of Cepsa on October 1, 2009 after the Group sold its ownership interest in that company. |
Furthermore, other directors of the Bank earned a total of EUR 741 thousand in 2010 as members of the boards of directors of Group companies (2009: EUR 663 thousand; 2008: EUR 729 thousand), the detail being as follows: Lord Burns received EUR 607 thousand as non-executive chairman of the Group companies Santander UK Plc and Alliance & Leicester Plc.; Mr. Antonio Basagoiti García-Tuñón received EUR 83 thousand as non-executive chairman of the board of directors of Banesto and in bylaw stipulated directors’ fees; Mr. Ángel Jado Becerro de Bengoa received EUR 9 thousand from Banco Banif, S.A. as a member of its board prior to joining the board of directors of the Bank and Mr. Matías Rodríguez Inciarte received EUR 42 thousand as a non-executive director of U.C.I., S.A. |
c) | Post-employment and other long-term benefits |
The total balance of supplementary pension obligations assumed by the Group over the years to its current and retired employees (covered mostly by in-house provisions which amounted to EUR 9,519 million at December 31, 2010) includes the obligations to those who have been directors of the Bank during the year and who discharge (or have discharged) executive functions. The total pension obligations to these directors, together with the total sum insured under life insurance policies and other items, amounted to EUR 325 million at December 31, 2010 (December 31, 2009: EUR 292 million; December 31, 2008: EUR 311 million). |
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The following table provides information on: (i) the pension obligations assumed and covered by the Group; and (ii) other insurance -the premiums of which are paid by the Group, the related cost being included in the Other remuneration — Other column in the table in Note 5.a.iii-, in both cases in respect of the Bank’s executive directors: |
Thousands of euros | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
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 | 25,029 | — | 24,642 | — | 25,579 | — | ||||||||||||||||||
Mr. Alfredo Sáenz Abad | 86,620 | 11,108 | 85,740 | 11,108 | 80,049 | 10,785 | ||||||||||||||||||
Mr. Matías Rodríguez Inciarte | 44,560 | 5,131 | 52,536 | 5,131 | 50,894 | 4,982 | ||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea | 31,329 | 1,403 | 23,775 | 1,403 | 21,737 | 1,403 | ||||||||||||||||||
Mr. Francisco Luzón López | 55,950 | 9,934 | 53,513 | 9,031 | 53,083 | 7,624 | ||||||||||||||||||
Mr. Juan Rodríguez Inciarte | 11,629 | 2,961 | 10,969 | 2,961 | 9,918 | 2,875 | ||||||||||||||||||
255,117 | 30,537 | 251,175 | 29,634 | 241,260 | 27,669 | |||||||||||||||||||
The amounts in the Accrued pension obligations column in the foregoing table relate to the accrued present actuarial value of the future annual payments to be made by the Group. These amounts were obtained using actuarial calculations and cover the obligations to pay the respective pension supplements or lump sums. In the case of Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos, Mr. Alfredo Sáenz Abad, Mr. Matías Rodríguez Inciarte and Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea, these supplements or sums were calculated as 100% of the sum of the fixed annual salary received at the date of effective retirement or, where appropriate, at the date of opting to receive the benefit in a lump sum, plus 30% of the arithmetical mean of the last three variable remuneration payments received until that date. In addition, in the case of Mr. Francisco Luzón López, to the amount thus calculated will be added the amounts received by him in the year before retirement or pre-retirement or, where appropriate, at the date of opting to receive the benefit in a lump sum, in his capacity as a member of the board of directors or the committees of the Bank or of other consolidable Group companies and, in the case of Mr. Juan Rodríguez Inciarte, 100% of the gross fixed annual salary received at the date of effective retirement or, where appropriate, at the date of opting to receive the benefit in a lump sum. |
On December 17, 2007, March 24, 2008, July 21, 2008 and April 28, 2009, the board of directors of the Bank resolved to authorize a change in the contracts of the executive directors and the other members of the Bank’s senior management -the senior executives- granting them the right, once they reach the date of retirement -or pre-retirement, as appropriate- to opt to receive their accrued pensions -or amounts similar thereto- in the form of an annuity or a lump sum-, i.e. in one single payment, in full but not in part. In order to maintain the financial neutrality for the Group, the amount to be received in the form of a lump sum by the commitment beneficiary at the date of retirement must be the aliquot part of the market value of the assets assigned to cover the mathematical provisions of the policy instrumenting these commitments to senior executives at the date of economic effect of exercising the option. The senior management who are still in service on reaching the age of retirement -or who at the date of the contract entered into have passed the age of retirement- must state whether they wish to opt for this form of benefit. This option will mean that no further pension benefit will accrue and the lump sum to be received, which will be updated at the agreed-upon interest rate, will be fixed. Should the senior executive subsequently die whilst still in service and prior to retirement, the lump sum of the pension will correspond to his/her heirs. |
In 2009, Mr. Emilio Botín Sanz de Sautuola y García de los Ríos and Mr. Alfredo Sáenz Abad, who had passed the age of retirement, exercised the option to receive their respective accrued pensions as a lump sum on the date of effective retirement. |
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Furthermore, at the board meeting held on December 21, 2009, the Bank’s directors resolved that the executive directors -and other members of senior management who are beneficiaries of defined benefit plans who have not reached the age of retirement may opt, upon reaching the age of 60 and on each of their following birthdays until they are 64 years of age, to receive their accrued pensions as a lump sum, which will be determined at the date of economic effect of exercising the option and which they (or their heirs in the event of death) will be entitled to receive when they retire or are declared to be disabled. In order to maintain the financial neutrality for the Group, the amount to be received in the form of a lump sum by the commitment beneficiary at the date of retirement must be the aliquot part of the market value of the assets assigned to cover the mathematical provisions of the policy instrumenting these commitments to senior executives at the date of economic effect of exercising the option. This option will mean that no further pension benefit will accrue and the lump sum to be received, which will be updated at the agreed-upon interest rate, will be fixed. Also, any person who exercises this option must undertake not to take pre-retirement, retire early or retire, in all cases at his/her own request, within two years from the exercise date. |
Lastly, the board of directors resolution referred to in the preceding paragraph also regulated the impact of the deferral of the computable variable remuneration on the determination of the pension obligations (or similar amounts), in the form of an annuity or a lump sum, for pre-retirement, early retirement or normal retirement. |
In 2010, Mr. Matías Rodríguez Inciarte, who had reached the age of 60, exercised the option to receive his accrued pension as a lump sum on the date of effective retirement. |
The amounts included in the foregoing table in respect of the pension obligations accrued to the directors Mr. Emilio Botín Sanz de Sautuola y García de los Ríos and Mr. Alfredo Sáenz Abad in 2009 and to the director Mr. Matías Rodríguez Inciarte in 2010 are those relating to the aforementioned lump sums, and no further amounts will accrue in respect of pensions after those dates. The lump sums will be updated at the agreed-upon interest rate. |
Pension provisions recognized and reversed in 2010 amounted to EUR 9,570 thousand and EUR 7,408 thousand, respectively (2009: EUR 5,703 thousand and EUR 4 thousand, respectively; 2008: EUR 26,974 thousand and EUR 11 thousand, respectively). |
Additionally, other directors have life insurance policies the cost of which is borne by the Group, the related insured sum being EUR 3 million at December 31, 2010 (2009 and 2008: EUR 3 million each year). Also, the payments made in 2010 to the members of the board entitled to post-employment benefits amounted to EUR 2.6 million (2009: EUR 2.6 million). |
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d) | Deferred variable share-based remuneration systems |
The detail of these plans granted to directors (see Note 47) is as follows: |
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 which were achieved. The exercise period was from January 15, 2008 to January 15, 2009. The executive directors were beneficiaries of this plan; the number of Bank share options held by them is indicated below: |
Options granted | Options exercised | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of | Market | Remuneration | Options at | Date of | Date of | |||||||||||||||||||||||||||||||||||||||||||||||||||
Options at | Exercise | Number of | shares | Exercise | price | allocated | Options at | Number of | December 31 | Exercise | commencement | expiry of | ||||||||||||||||||||||||||||||||||||||||||||
December 31 | price | options | acquired | price | applied | (thousands | December 31 | options | 2010 and | price | of exercise | exercise | ||||||||||||||||||||||||||||||||||||||||||||
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 | 15-01-08 | 15-01-09 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Matías Rodríguez Inciarte | 665,200 | 9.09 | — | (332,600 | ) | 67,901 | 9.09 | 14.12 | 1,661 | 332,600 | (332,600 | ) | — | 9.09 | 15-01-08 | 15-01-09 | ||||||||||||||||||||||||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea (*) | 293,692 | 9.09 | — | — | — | — | — | 293,692 | (293,692 | ) | — | 9.09 | 15-01-08 | 15-01-09 | ||||||||||||||||||||||||||||||||||||||||||
Mr. Francisco Luzón López | 639,400 | 9.09 | — | (300,000 | ) | 60,656 | 9.09 | 14.04 | 1,473 | 339,400 | (339,400 | ) | — | 9.09 | 15-01-08 | 15-01-09 | ||||||||||||||||||||||||||||||||||||||||
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 annual general 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 I06 incentive plan (see Note 47), each purchase option granted entitles the beneficiary to acquire one Bank share at a price of EUR 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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As detailed in the foregoing table, the remuneration allocated to executive directors due to the exercise of Santander share options under the I06 incentive plan (see Note 47) amounted to EUR 6,004 thousand in 2008. Additionally, the remuneration allocated to Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea due to the delivery of Banesto shares under the incentive plan for executives approved by the shareholders at the annual general meeting of this entity on February 28, 2006 amounted to EUR 608 thousand. The share options under Plan I06 that had not been exercised at December 31, 2008 expired on January 15, 2009. |
This plan, which provides for deferred variable remuneration in shares of the Bank, will involve 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 table below shows the maximum number of options granted to each executive director in each cycle and the number of shares received in 2010 and 2009 under the I10 and I09 incentive plans (Plan I10 and I09), respectively. As established in these plans, the number of shares received was determined by the degree of achievement of the targets to which each plan was tied, and fell short of the maximum number. |
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Options | Options | Shares | Options | Options | Shares | Options | Share | |||||||||||||||||||||||||||||||||||||||||||||
Options at | granted in | Options at | granted in | delivered in 2009 | cancelled in | Options at | granted in | delivered in | cancelled in 2010 | Options at | Grant | delivery | ||||||||||||||||||||||||||||||||||||||||
December 31, 2007 | 2008 (number) | December 31, 2008 | 2009 (number) | (number) | 2009 (number) | December 31, 2009 | 2010 (number) | 2010 (number) | (number) | December 31, 2010 | date | deadline | ||||||||||||||||||||||||||||||||||||||||
Plan I09: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | 41,785 | — | 41,785 | — | (37,937 | ) | (3,848 | ) | — | — | — | — | — | 06-23-07 | 07-31-09 | |||||||||||||||||||||||||||||||||||||
Mr. Alfredo Sáenz Abad | 110,084 | — | 110,084 | — | (99,945 | ) | (10,139 | ) | — | — | — | — | — | 06-23-07 | 07-31-09 | |||||||||||||||||||||||||||||||||||||
Mr. Matías Rodríguez Inciarte | 53,160 | — | 53,160 | — | (48,264 | ) | (4,896 | ) | — | — | — | — | — | 06-23-07 | 07-31-09 | |||||||||||||||||||||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea (*) | 27,929 | — | 27,929 | — | (25,357 | ) | (2,572 | ) | — | — | — | — | — | 06-23-07 | 07-31-09 | |||||||||||||||||||||||||||||||||||||
Mr. Francisco Luzón López | 44,749 | — | 44,749 | — | (40,628 | ) | (4,121 | ) | — | — | — | — | — | 06-23-07 | 07-31-09 | |||||||||||||||||||||||||||||||||||||
Mr. Juan Rodríguez Inciarte (**) | 43,322 | — | 43,322 | — | (39,332 | ) | (3,990 | ) | — | — | — | — | — | 06-23-07 | 07-31-09 | |||||||||||||||||||||||||||||||||||||
321,029 | — | 321,029 | — | (291,463 | ) | (29,566 | ) | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Plan I10: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | 62,589 | — | 62,589 | — | — | — | 62,589 | — | (56,825 | ) | (5,764 | ) | — | 06-23-07 | 07-31-10 | |||||||||||||||||||||||||||||||||||||
Mr. Alfredo Sáenz Abad | 164,894 | — | 164,894 | — | — | — | 164,894 | — | (149,707 | ) | (15,187 | ) | — | 06-23-07 | 07-31-10 | |||||||||||||||||||||||||||||||||||||
Mr. Matías Rodríguez Inciarte | 79,627 | — | 79,627 | — | — | — | 79,627 | — | (72,293 | ) | (7,334 | ) | — | 06-23-07 | 07-31-10 | |||||||||||||||||||||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea (*) | 41,835 | — | 41,835 | — | — | — | 41,835 | — | (37,982 | ) | (3,853 | ) | — | 06-23-07 | 07-31-10 | |||||||||||||||||||||||||||||||||||||
Mr. Francisco Luzón López | 67,029 | — | 67,029 | — | — | — | 67,029 | — | (60,856 | ) | (6,173 | ) | — | 06-23-07 | 07-31-10 | |||||||||||||||||||||||||||||||||||||
Mr. Juan Rodríguez Inciarte (**) | 64,983 | — | 64,983 | — | — | — | 64,983 | — | (58,998 | ) | (5,985 | ) | — | 06-23-07 | 07-31-10 | |||||||||||||||||||||||||||||||||||||
480,957 | — | 480,957 | — | — | — | 480,957 | — | (436,661 | ) | (44,296 | ) | — | ||||||||||||||||||||||||||||||||||||||||
Plan I11: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | — | 68,848 | 68,848 | — | — | — | 68,848 | — | — | — | 68,848 | 06-21-08 | 07-31-11 | |||||||||||||||||||||||||||||||||||||||
Mr. Alfredo Sáenz Abad | — | 189,628 | 189,628 | — | — | — | 189,628 | — | — | — | 189,628 | 06-21-08 | 07-31-11 | |||||||||||||||||||||||||||||||||||||||
Mr. Matías Rodríguez Inciarte | — | 87,590 | 87,590 | — | — | — | 87,590 | — | — | — | 87,590 | 06-21-08 | 07-31-11 | |||||||||||||||||||||||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea (***) | — | 46,855 | 46,855 | — | — | — | 46,855 | — | — | — | 46,855 | 06-21-08 | 07-31-11 | |||||||||||||||||||||||||||||||||||||||
Mr. Francisco Luzón López | — | 77,083 | 77,083 | — | — | — | 77,083 | — | — | — | 77,083 | 06-21-08 | 07-31-11 | |||||||||||||||||||||||||||||||||||||||
Mr. Juan Rodríguez Inciarte | — | 50,555 | 50,555 | — | — | — | 50,555 | — | — | — | 50,555 | 06-21-08 | 07-31-11 | |||||||||||||||||||||||||||||||||||||||
— | 520,559 | 520,559 | — | — | — | 520,559 | — | — | — | 520,559 | ||||||||||||||||||||||||||||||||||||||||||
Plan I12: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | — | — | — | 82,941 | — | — | 82,941 | — | — | — | 82,941 | 06-19-09 | 07-31-12 | |||||||||||||||||||||||||||||||||||||||
Mr. Alfredo Sáenz Abad | — | — | — | 228,445 | — | — | 228,445 | — | — | — | 228,445 | 06-19-09 | 07-31-12 | |||||||||||||||||||||||||||||||||||||||
Mr. Matías Rodríguez Inciarte | — | — | — | 105,520 | — | — | 105,520 | — | — | — | 105,520 | 06-19-09 | 07-31-12 | |||||||||||||||||||||||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea | — | — | — | 56,447 | — | — | 56,447 | — | — | — | 56,447 | 06-19-09 | 07-31-12 | |||||||||||||||||||||||||||||||||||||||
Mr. Francisco Luzón López | — | — | — | 92,862 | — | — | 92,862 | — | — | — | 92,862 | 06-19-09 | 07-31-12 | |||||||||||||||||||||||||||||||||||||||
Mr. Juan Rodríguez Inciarte | — | — | — | 60,904 | — | — | 60,904 | — | — | — | 60,904 | 06-19-09 | 07-31-12 | |||||||||||||||||||||||||||||||||||||||
— | — | — | 627,119 | — | — | 627,119 | — | — | — | 627,119 | ||||||||||||||||||||||||||||||||||||||||||
Plan I13: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | — | — | — | — | — | — | — | 82,941 | — | — | 82,941 | 06-11-10 | 07-31-13 | |||||||||||||||||||||||||||||||||||||||
Mr. Alfredo Sáenz Abad | — | — | — | — | — | — | 228,445 | — | — | 228,445 | 06-11-10 | 07-31-13 | ||||||||||||||||||||||||||||||||||||||||
Mr. Matías Rodríguez Inciarte | — | — | — | — | — | — | — | 105,520 | — | — | 105,520 | 06-11-10 | 07-31-13 | |||||||||||||||||||||||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Sautuola y O’Shea | — | — | — | — | — | — | — | 56,447 | — | — | 56,447 | 06-11-10 | 07-31-13 | |||||||||||||||||||||||||||||||||||||||
Mr. Francisco Luzón López | — | — | — | — | — | — | — | 92,862 | — | — | 92,862 | 06-11-10 | 07-31-13 | |||||||||||||||||||||||||||||||||||||||
Mr. Juan Rodríguez Inciarte | — | — | — | — | — | — | — | 60,904 | — | — | 60,904 | 06-11-10 | 07-31-13 | |||||||||||||||||||||||||||||||||||||||
— | — | — | — | — | — | — | 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 annual general meeting of Banesto held on June 27, 2007, the maximum number of Santander shares shown in the foregoing table relates to the aforementioned executive director, based on the resolution adopted at the aforementioned annual general meeting. | |
(**) | Mr. Juan Rodríguez 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 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 annual general meeting of Banesto held on February 24, 2010, the maximum number of Santander shares shown in the foregoing table relates to the aforementioned executive director, based on the resolution adopted at the aforementioned annual general meeting. |
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Pursuant to the obligatory investment share plan (see Note 47), the current executive directors also acquired as deferred share-based variable remuneration, prior to February 29, 2008, February 28, 2009 and February 28, 2010, the number of Bank shares shown in the table below, which involved an investment of EUR 1.5 million in 2008, EUR 0.8 million in 2009 and EUR 1.5 million in 2010. Executive directors 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 are entitled to receive the same number of Bank shares as that composing their initial obligatory investment. |
The shareholders at the annual general 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 Group’s financial statements, except when it is required pursuant to a change in accounting standards. |
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 annual general meeting of Banco Santander held on June 23, 2007 and by the shareholders at the annual general meeting of Banesto held on June 27, 2007, the maximum number of Santander 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. 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 annual general meeting of Banco Santander held on June 21, 2008 and by the shareholders at the annual general meeting of Banesto held on February 24, 2010. |
At the annual general meeting held on June 11, 2010, the shareholders approved the first cycle of the deferred conditional delivery share plan, applicable to the variable salary remuneration to be received in 2010 by the executive directors and executives and employees of Santander Group whose variable remuneration or annual bonus for 2010 generally exceeds EUR 300,000 (gross), with a view to deferring a portion of the aforementioned variable remuneration or bonus over a period of three years in which it will be paid, where appropriate, in Santander shares. |
The condition for accrual of the share-based deferred remuneration was, in addition to that of the beneficiary remaining in the Group’s employ, with the exceptions included in the plan regulations, that 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; (iii) a material restatement of the Group’s financial statements, except when it is required pursuant to a change in accounting standards; or (iv) significant changes in capital adequacy and the qualitative assessment of risk. |
The share-based bonus will be deferred over three years and will be paid, where appropriate, in three installments starting in the first year. |
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The number of shares allocated to each executive director for deferral purposes, calculated taking into account the average market price of the shares weighted by daily volume in the 15 trading days prior to December 20, 2010 -the date on which the board of directors approved the bonus for 2010-, is as follows: |
Executive directors | 1st cycle | |||
Mr. Emilio Botín-Sanz de Sautuola y García de los Ríos | 94,345 | |||
Mr. Alfredo Sáenz Abad | 312,450 | |||
Mr. Matías Rodríguez Inciarte | 135,188 | |||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea (*) | 91,187 | (*) | ||
Mr. Francisco Luzón López | 154,981 | |||
Mr. Juan Rodríguez Inciarte | 61,386 |
(*) | Shares of Banco Español de Crédito, as authorized by the shareholders of that entity at the annual general meeting of February 23, 2011. In this case, the share price of Banesto used to calculate the number of shares was EUR 6,143, the average market price of the Banesto share weighted by daily volume in the 15 trading days prior to January 19, 2011, the date on which the board of directors of this entity approved the variable remuneration of its executive directors for 2010. |
e) | Loans |
The Group’s direct risk exposure to the Bank’s directors and the guarantees provided for them are detailed below. These transactions were made on an arm’s-length basis or the related compensation in kind was charged: |
Thousands of euros | ||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||
Loans and | Loans and | Loans and | ||||||||||||||||||||||||||||||||||
credits | Guarantees | Total | credits | Guarantees | Total | credits | Guarantees | Total | ||||||||||||||||||||||||||||
Mr. Alfredo Sáenz Abad | 31 | — | 31 | 16 | — | 16 | 25 | — | 25 | |||||||||||||||||||||||||||
Mr. Matías Rodríguez Inciarte | 14 | — | 14 | 7 | 10 | 17 | 20 | 10 | 30 | |||||||||||||||||||||||||||
Mr. Manuel Soto Serrano | 2 | — | 2 | — | — | — | 5 | — | 5 | |||||||||||||||||||||||||||
Mr. Antonio Basagoiti García-Tuñón | 36 | 1 | 37 | 47 | 1 | 48 | 66 | 1 | 67 | |||||||||||||||||||||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea | 2 | — | 2 | 3 | — | 3 | 5 | — | 5 | |||||||||||||||||||||||||||
Mr. Javier Botín-Sanz de Sautuola y O’Shea | 5 | — | 5 | 2 | — | 2 | — | — | — | |||||||||||||||||||||||||||
Mr. Rodrigo Echenique Gordillo | 16 | — | 16 | 9 | — | 9 | 12 | — | 12 | |||||||||||||||||||||||||||
Mr. Antonio Escámez Torres | 1,500 | — | 1,500 | 1,488 | — | 1,488 | 1,473 | — | 1,473 | |||||||||||||||||||||||||||
Mr. Angel Jado Becerro de Bengoa | 3,002 | — | 3,002 | — | — | — | — | — | — | |||||||||||||||||||||||||||
Mr. Francisco Luzón López | 9,230 | — | 9,230 | 5,004 | — | 5,004 | 1,649 | — | 1,649 | |||||||||||||||||||||||||||
Mr. Juan Rodríguez Inciarte | 370 | — | 370 | 421 | — | 421 | 465 | — | 465 | |||||||||||||||||||||||||||
Mr. Luis Alberto Salazar-Simpson Bos | 401 | — | 401 | 434 | — | 434 | 461 | — | 461 | |||||||||||||||||||||||||||
Ms. Isabel Tocino Biscarolasaga | 30 | — | 30 | 40 | — | 40 | 49 | — | 49 | |||||||||||||||||||||||||||
14,639 | 1 | 14,640 | 7,471 | 11 | 7,482 | 4,231 | 11 | 4,242 | ||||||||||||||||||||||||||||
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f) | Senior managers |
Following is a detail of the remuneration paid to the Bank’s executive vice presidents (*) in 2010, 2009 and 2008: |
Thousands of euros | ||||||||||||||||||||||||
Number of | Salary in cash | |||||||||||||||||||||||
executive | Variable in | Other | ||||||||||||||||||||||
Year | vice presidents(1) | Fixed | cash | Total | remuneration | Total | ||||||||||||||||||
2008 | 24 | 21,219 | 34,674 | 55,893 | 27,598 | 83,491 | ||||||||||||||||||
2009 | 24 | 21,512 | 36,468 | 57,980 | 16,745 | 74,725 | ||||||||||||||||||
2010 | 23 | 23,756 | 28,484 | (2) | 52,240 | 14,700 | 66,940 |
(*) | 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. | |
(2) | At the annual general meeting held on June 11, 2010, the shareholders approved the first cycle of the deferred conditional delivery share plan, whereby payment of a portion of the variable remuneration for 2010 amounting to EUR 11,482 million will be deferred over the next three years and will accrue, where appropriate, in three equal portions and will be recognized as remuneration in each of the aforementioned years, provided that the conditions for entitlement to the remuneration are met. Notes 5 and 47 include detailed information on the aforementioned deferred variable remuneration. |
The amounts in the Other remuneration column in the foregoing table include all the non-cash salary remuneration paid to the executive vice presidents, such as the life insurance premiums of EUR 1,099 thousand (2009: EUR 1,148 thousand, 2008: EUR 1,029 thousand), the termination or retirement benefits, and the share-based variable remuneration in the form of Santander shares -EUR 9,190 thousand (2009: EUR 5,982 thousand)- under the I10 and I09 incentive plans approved by the shareholders at the annual general meeting on June 23, 2007. As established in the aforementioned plans, the number of shares received by the executive vice presidents -1,078,730 Santander shares in 2010 (2009: 746,756 Santander shares)- was determined by the degree of achievement of the targets to which it was tied, and fell short of the maximum number established in both years. Also, in 2008 EUR 22,410 thousand were allocated due to the exercise by the executive vice presidents of 5,317,978 Santander share options under the I06 incentive plan (see Note 47) and the delivery of Banesto shares under the incentive plan for executives approved by the shareholders at the annual general meeting of this entity held on February 28, 2006. |
Following is a detail of the maximum number of options or Santander shares that the Bank’s executive vice presidents (excluding executive directors) were entitled to receive at December 31, 2010, 2009 and 2008 under the various plans then in force (see Note 47). |
Maximum number of | ||||||||||||
options/shares | 12/31/10 | 12/31/09 | 12/31/08 | |||||||||
Plan I06 (*) | — | — | 1,499,010 | |||||||||
Plan I09 | — | — | 822,508 | |||||||||
Plan I10 | — | 1,154,158 | 1,280,124 | |||||||||
Plan I11 | 1,226,754 | 1,312,214 | 1,446,259 | |||||||||
Plan I12 | 1,498,713 | 1,562,227 | — | |||||||||
Plan I13 | 1,468,762 | — |
(*) | The exercise period was from January 15, 2008 to January 15, 2009. |
Additionally, with respect to the obligatory investment share plan, the annual investment made in February 2010, 2009 and 2008 by the executive vice presidents (excluding current executive directors) amounted to EUR 3.2 million (equal to 330,104 shares), EUR 2.9 million (equal to 508,764 shares) and EUR 3.4 million (equal to 261,681 shares), respectively. |
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Lastly, the final number of Santander shares allocated to senior management for deferral purposes under the deferred conditional delivery share plan (see Note 47), calculated taking into account the average market price of the shares weighted by daily volume in the 15 trading days prior to December 20, 2010 -the date on which the board of directors approved the bonus for 2010-, is 1,496,628 shares. |
The actuarial liability recognized in respect of post-employment benefits earned by the Bank’s senior managers totalled EUR 227 million at December 31, 2010 (December 31, 2009: EUR 245 million; December 31, 2008: EUR 240 million). Settlements of EUR 47 million took place in 2010. The net charge to the consolidated income statement amounted to EUR 31 million in 2010 (2009: EUR 40 million; 2008: EUR 41 million). Additionally, the total sum insured under life and accident insurance policies relating to this group amounted to EUR 61 million at December 31, 2010 (December 31, 2009: EUR 63 million; December 31, 2008: EUR 59 million). |
g) | Post-employment benefits to former directors and former executive vice presidents |
The post-employment benefits paid and settlements made in 2010 to former directors of the Bank and former executive vice presidents amounted to EUR 7.9 million and EUR 33 million, respectively (2009: EUR 7.9 million and EUR 40 million, respectively; 2008: EUR 7.7 million and EUR 19.1 million, respectively). |
The amounts recognized in the consolidated income statement for 2010 in connection with the Group’s pension and similar obligations to former directors of the Bank and former executive vice presidents were zero and a release of EUR 173 thousand, respectively (2009: release of EUR 1,258 thousand and a period provision of EUR 7,460 thousand, respectively; 2008: period provisions of EUR 1,064 thousand and EUR 570 thousand, respectively). |
Furthermore, Provisions — Provisions for pensions and similar obligations in the consolidated balance sheet at December 31, 2010 included EUR 82.3 million and EUR 116.8 million in respect of the post-employment benefit obligations to former directors of the Bank and former executive vice presidents, respectively (2009: EUR 84.9 million and EUR 146 million, respectively; 2008: EUR 88.8 million and EUR 132.2 million, respectively). |
h) | Contract termination |
The Bank has signed contracts with all its executive directors. |
The Bank’s executive directors have indefinite-term employment contracts. Executive directors whose contracts are terminated voluntarily or due to breach of duties are not entitled to receive any economic compensation. Under current conditions, if the contracts are terminated for reasons attributable to the Bank or due to objective circumstances (such as those affecting the executive directors’ functional and organic statute), the directors are entitled, at the date of termination of their employment relationship with the Bank, to the following: |
• | 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 (EUR 25,029 thousand and EUR 86,620 thousand, respectively), without any additional amounts accruing in respect of pensions in the future in both cases, since the consolidation option referred to in Note 5.c has been exercised by both executive directors. |
Had Mr. Alfredo Sáenz Abad’s contract been terminated in 2009, he would have been able to choose between retiring or receiving severance pay equivalent to 40% of his fixed annual salary multiplied by the number of years’ service in banking, up to a maximum of ten times his fixed annual salary. However, Mr. Alfredo Sáenz Abad waived his right to receive this severance pay. |
• | In the case of Mr. Matías Rodríguez Inciarte, to take pre-retirement and to receive his accrued pensions in the form of capital (EUR 44,560 thousand), without any additional amounts accruing in respect of pensions in the future, since the consolidation option referred to in Note 5.c has been exercised. |
At December 31, 2009 and 2008, Mr. Matías Rodríguez Inciarte would have been entitled to take pre-retirement and to accrue annual pension supplements amounting to EUR 2,507 thousand and EUR 2,416 thousand, respectively, in those years. |
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• | In the case of Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea, pursuant to a change in her contract approved by the directors at the board meeting held on January 24, 2011, following the report of the appointments and remuneration committee, to take pre-retirement and to accrue a pension supplement. At December 31, 2010, the annual pension supplement would amount to EUR 2,556 thousand (December 31, 2009: EUR 1,841 thousand; December 31, 2008: EUR 1,781 thousand). |
At December 31, 2009 and 2008, Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea was entitled to receive a termination benefit amounting to five years’ annual fixed salary at the date of termination -2009: EUR 6,472 thousand, 2008: EUR 6,345 thousand-, although this entitlement to termination benefit ceased as a result of the change in her contract. |
• | In the case of Mr. Francisco Luzón López, to take pre-retirement and to accrue a pension supplement. At December 31, 2010, the annual pension supplement would amount to EUR 2,850 thousand (2009: EUR 2,701 thousand; 2008: EUR 2,648 thousand). |
• | In the case of Mr. Juan Rodríguez Inciarte, pursuant to a change in his contract approved by the directors at the board meeting held on January 24, 2011, following the report of the appointments and remuneration committee, to take pre-retirement and to accrue a pension supplement. At December 31, 2010, the annual pension supplement would amount to EUR 908 thousand (December 31, 2009: EUR 869 thousand, December 31, 2008: EUR 958 thousand). |
At December 31, 2009 and 2008, Mr. Juan Rodríguez Inciarte was entitled to receive a termination benefit amounting to five years’ annual fixed salary at the date of termination -2009: EUR 4,936 thousand, 2008: EUR 4,792 thousand-, although this entitlement to termination benefit ceased as a result of the change in his contract. |
If Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea, Mr. Francisco Luzón López or Mr. Juan Rodríguez Inciarte retire or take pre-retirement, they have the right to opt to receive the pensions accrued -or similar amounts- in the form of income or capital -i.e. in a single payment- in full but not in part, without prejudice to the right to exercise their respective options, after reaching the age of 60 (see Note 5.c). |
Additionally, other non-director members of the Group’s senior management have contracts which entitle them to receive benefits in the event of termination for reasons other than voluntary redundancy, retirement, disability or serious breach of duties. These benefits are recognized as a provision for pensions and similar obligations and as a staff cost only when the employment relationship between the Bank and its managers is terminated before the normal retirement date. |
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 |
In accordance with the requirements of Articles 229 and 230 of the Spanish Limited Liability Companies Law (Ley de Sociedades de Capital), in order to enhance the transparency of listed companies, following is a detail of the investments held by the directors and persons related to them in the share capital of entities engaging in banking, financing or lending; and of the management or governing functions, if any, that the directors discharge thereat: |
Number of | ||||||||||
Director | Corporate name | 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.(2) | 26,016 | — | |||||||
HSBC Holdings plc | 13,509 | — | ||||||||
Lloyds Banking Group plc | 522 | — | ||||||||
Banco Bradesco S.A. (*) | 1,815 | — | ||||||||
Banco Banif, S.A. | — | Chairman (1) | ||||||||
Santander Investment, S.A. | — | Deputy chairman (1) | ||||||||
Santander Private Banking s.p.a. | — | Chairman (1) |
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Number of | ||||||||||
Director | Corporate name | shares | Functions | |||||||
Mr. Matías Rodríguez Inciarte | Banco Español de Crédito, S.A. | 27,575 | Director (1) | |||||||
Banco Santander Totta, S.A. | — | Chairman (1) | ||||||||
Mr. Manuel Soto Serrano | Banco Bilbao Vizcaya Argentaria, S.A. | 150,000 | — | |||||||
Intesa Sanpaolo S.p.A. | 108,483 | — | ||||||||
UniCredito Italiano S.p.A. | 150,000 | — | ||||||||
Istituto per le Opere di Religione (IOR) | — | Member (3) | ||||||||
Assicurazioni Generali S.p.A. (4) | Commerzbank, AG | 57,934,287 | — | |||||||
Intesa Sanpaolo S.p.A. | 587,826,770 | — | ||||||||
Mediobanca Banca di Credito Finanziario S.p.a. | 17,201,061 | — | ||||||||
UniCredito Italiano S.p.A. | 77,439,951 | — | ||||||||
Société Générale | 1,563,574 | — | ||||||||
Erste Group Bank AG | 1,334,234 | — | ||||||||
Banca Monte dei Paschi di Siena S.p.A. | 22,216,015 | — | ||||||||
ING Groep Bank N.V. | 10,037,337 | |||||||||
Deustche Bank A.G. | 1,306,535 | — | ||||||||
BNP Paribas S.A. | 2,301,378 | |||||||||
Banco Bilbao Vizcaya Argentaria, S.A. | 6,178,178 | — | ||||||||
Crédit Agricole, S.A. | 3,625,797 | — | ||||||||
Banco Español de Crédito, S.A. | 753,296 | — | ||||||||
Mr. Antonio Basagoiti García-Tuñón | Banco Popular Español, S.A. | 517 | — | |||||||
Banco Bilbao Vizcaya Argentaria, S.A. (*) | 11 | — | ||||||||
Banco Español de Crédito, S.A. | 1,000 | Chairman (1) | ||||||||
Ms. Ana Patricia Botín-Sanz de Sautuola y O’Shea | Bankinter, S.A. | 4,649,101 | — | |||||||
Banco Español de Crédito, S.A. | 560,214 | — | ||||||||
Santander UK plc | — | Chief executive officer | ||||||||
Santander Investment, S.A. | — | Director (1) | ||||||||
Mr. Javier Botín-Sanz de Sautuola y O’Shea | Bankinter, S.A. | 4,649,101 | — | |||||||
Lord Burns (Terence) | Lloyds Banking Group plc (*) | 3,745 | — | |||||||
Barclays plc (*) | 1,901 | — | ||||||||
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 | Wells Fargo & Co. | 4,500 | — | |||||||
Barclays plc | 20,000 | — | ||||||||
Lloyds Banking Group plc | 70,000 | — | ||||||||
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 | Banco de Valencia, S.A. | 349 | — | |||||||
Attijariwafa Bank Société Anonyme | 10 | Deputy chairman (1) | ||||||||
Santander Consumer Finance, S.A. | — | Chairman (1) | ||||||||
Open Bank, S.A. | — | Chairman (1) | ||||||||
Mr. Ángel Jado Becerro de Bengoa | Bankinter, S.A. (5) | 1,244,000 | — | |||||||
Banco Banif, S.A. | — | Director (1) |
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Number of | ||||||||||
Director | Corporate name | shares | Functions | |||||||
Mr. Francisco Luzón López | Banco Bilbao Vizcaya Argentaria, S.A. | 85,793 | — | |||||||
Bank of America Corporation | 121,106 | — | ||||||||
Citigroup Inc. | 196,141 | — | ||||||||
Wells Fargo & Co. | 32,517 | — | ||||||||
Lloyds Banking Group plc | 497,679 | — | ||||||||
Royal Bank of Scotland Group plc | 586,665 | — | ||||||||
BNP Paribas S.A. | 5,963 | — | ||||||||
Société Générale | 6,398 | — | ||||||||
Barclays plc | 101,375 | — | ||||||||
HSBC Holdings plc | 13,294 | — | ||||||||
UBS, AG | 29,444 | — | ||||||||
Mr. Abel Matutes Juan | Banco Bilbao Vizcaya Argentaria, S.A. | 676,448 | — | |||||||
Banco Español de Crédito, S.A. | 11,980 | |||||||||
Citigroup Inc. | 1,090,629 | — | ||||||||
Mr. Juan Rodríguez Inciarte | Banco Bilbao Vizcaya Argentaria, S.A. | 1,016 | — | |||||||
Wells Fargo & Co. | 107 | — | ||||||||
Santander UK plc | — | Deputy chairman (1) | ||||||||
Alliance & Leicester plc | — | Director (1) | ||||||||
Banco Banif, S.A. | — | Director (1) | ||||||||
Santander Consumer Finance, S.A. | — | Director (1) | ||||||||
Ms. Isabel Tocino Biscarolasaga | Banco Bilbao Vizcaya Argentaria, S.A. | 2,402 | — | |||||||
Citigroup Inc. | 11,300 | — | ||||||||
Mr. Antoine Bernheim (6) | Credit Suisse Group A.G. | 40,900 | — | |||||||
BNP Paribas S.A. | 16,179 | — | ||||||||
UBS A.G. | 82,863 | — | ||||||||
Intesa Sanpaolo S.p.A. | 398,533 | — | ||||||||
UniCredito Italiano S.p.A. | 171,944 | — | ||||||||
Royal Bank of Scotland Group plc | 12,298 | — | ||||||||
Bank of New York Mellon Corporation | 10,000 | — | ||||||||
BSI SA | — | Director (1) | ||||||||
Mediobanca Banca di Credito Finanziario S.p.a. | 63,000 | Director (1) |
(*) | Ownership interests held by related persons. | |
(1) | Non-executive. | |
(2) | 1,016 shares are held by related persons. | |
(3) | Non-executive member of the control committee. | |
(4) | 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). | |
(5) | 244,000 shares are held by related persons. | |
(6) | Representative on the Bank’s board of directors of the non-executive proprietary director Assicurazioni Generali S.p.A. |
None of the members of the board of directors perform, as independent professionals or as employees, any activities of the kind indicated in the foregoing table. |
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6. | Loans and advances to credit institutions |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Classification: | ||||||||||||
Financial assets held for trading | 16,216,136 | 5,952,956 | 5,149,584 | |||||||||
Other financial assets at fair value through profit or loss | 18,831,109 | 16,242,609 | 8,911,906 | |||||||||
Loans and receivables | 44,808,106 | 57,641,042 | 64,730,787 | |||||||||
79,855,351 | 79,836,607 | 78,792,277 | ||||||||||
Type: | ||||||||||||
Reciprocal accounts | 1,264,072 | 712,503 | 663,230 | |||||||||
Time deposits | 13,548,408 | 21,382,542 | 25,455,903 | |||||||||
Reverse repurchase agreements | 36,720,631 | 29,489,895 | 18,568,747 | |||||||||
Other accounts | 28,322,240 | 28,251,667 | 34,104,397 | |||||||||
79,855,351 | 79,836,607 | 78,792,277 | ||||||||||
Currency: | ||||||||||||
Euro | 46,253,949 | 50,346,410 | 44,157,708 | |||||||||
Pound sterling | 8,099,761 | 4,631,696 | 8,094,238 | |||||||||
US dollar | 13,450,609 | 11,209,610 | 13,079,671 | |||||||||
Other currencies | 12,067,591 | 13,674,427 | 13,714,227 | |||||||||
Impairment losses | (16,559 | ) | (25,536 | ) | (253,567 | ) | ||||||
Of which: due to country risk | (8,203 | ) | (8,460 | ) | (250,024 | ) | ||||||
79,855,351 | 79,836,607 | 78,792,277 | ||||||||||
The impairment losses on financial assets classified as loans and receivables are disclosed in Note 10. |
Note 51 contains a detail of the residual maturity periods of loans and receivables and of the related average interest rates. |
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7. | Debt instruments |
The detail, by classification, type and currency, of Debt instruments is as follows: |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Classification: | ||||||||||||
Financial assets held for trading | 57,871,332 | 49,920,518 | 43,895,548 | |||||||||
Other financial assets at fair value through profit or loss | 4,604,308 | 7,365,213 | 5,154,732 | |||||||||
Available-for-sale financial assets | 79,688,813 | 79,289,337 | 42,547,677 | |||||||||
Loans and receivables | 8,429,010 | 14,959,331 | 17,652,560 | |||||||||
150,593,463 | 151,534,399 | 109,250,517 | ||||||||||
Type: | ||||||||||||
Spanish government debt securities | 35,663,155 | 38,312,678 | 20,499,493 | |||||||||
Foreign government debt securities | 63,600,151 | 44,006,698 | 23,132,075 | |||||||||
Issued by financial institutions | 23,760,726 | 39,853,240 | 39,096,714 | |||||||||
Other fixed-income securities | 27,713,486 | 29,528,505 | 26,703,413 | |||||||||
Impairment losses | (144,055 | ) | (166,722 | ) | (181,178 | ) | ||||||
150,593,463 | 151,534,399 | 109,250,517 | ||||||||||
Currency: | ||||||||||||
Euro | 61,843,978 | 72,745,088 | 51,577,517 | |||||||||
Pound sterling | 11,125,156 | 11,882,570 | 16,345,483 | |||||||||
US dollar | 23,442,472 | 25,744,623 | 15,396,510 | |||||||||
Other currencies | 54,325,912 | 41,328,840 | 26,112,185 | |||||||||
Impairment losses | (144,055 | ) | (166,722 | ) | (181,178 | ) | ||||||
150,593,463 | 151,534,399 | 109,250,517 | ||||||||||
At December 31, 2010, the nominal amount of Spanish government debt securities assigned to certain own or third-party commitments amounted to EUR 3,684 million (December 31, 2009: EUR 16,509 million; December 31, 2008: EUR 2,674 million). | |||
Additionally, at December 31, 2010 other debt securities totaling EUR 23,350 million had been assigned to own obligations (December 31, 2009: EUR 23,152 million; December 31, 2008: EUR 22,487 million), mainly as security for credit facilities received by the Group. | |||
The detail, by origin of the issuer, of Debt instruments at December 31, 2010 is as follows: |
Thousands of euros | ||||||||||||||||
Private | Sovereign | |||||||||||||||
debt | debt | Total | % | |||||||||||||
Spain | 7,915,055 | 35,663,155 | 43,578,210 | 28.94 | % | |||||||||||
United Kingdom | 14,721,336 | 4,169,412 | 18,890,748 | 12.54 | % | |||||||||||
Portugal | 6,107,875 | 2,819,005 | 8,926,880 | 5.93 | % | |||||||||||
Ireland | 569,603 | — | 569,603 | 0.38 | % | |||||||||||
Greece | — | 176,947 | 176,947 | 0.12 | % | |||||||||||
Other European countries | 4,666,194 | 6,958,959 | 11,625,153 | 7.72 | % | |||||||||||
United States | 10,793,052 | 2,953,177 | 13,746,229 | 9.13 | % | |||||||||||
Brazil | 2,504,132 | 30,948,350 | 33,452,482 | 22.21 | % | |||||||||||
Mexico | 902,514 | 10,755,734 | 11,658,248 | 7.74 | % | |||||||||||
Chile | 1,083,966 | 2,281,273 | 3,365,239 | 2.23 | % | |||||||||||
Other American countries | 1,615,845 | 1,524,303 | 3,140,148 | 2.09 | % | |||||||||||
Rest of the world | 450,585 | 1,012,991 | 1,463,576 | 0.97 | % | |||||||||||
51,330,157 | 99,263,306 | 150,593,463 | 100.00 | % | ||||||||||||
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The detail, by issuer rating, of Debt instruments at December 31, 2010 is as follows: |
Thousands of euros | ||||||||||||||||
Private debt | Sovereign debt | Total | % | |||||||||||||
AAA | 25,617,724 | 14,036,432 | 39,654,156 | 26.33 | % | |||||||||||
AA | 5,427,856 | 35,842,396 | 41,270,252 | 27.41 | % | |||||||||||
A | 6,152,279 | 6,067,139 | 12,219,418 | 8.11 | % | |||||||||||
BBB (*) | 6,217,191 | 41,731,814 | 47,949,005 | 31.84 | % | |||||||||||
Below BBB | 1,039,586 | 1,585,525 | 2,625,111 | 1.74 | % | |||||||||||
Unrated | 6,875,521 | — | 6,875,521 | 4.57 | % | |||||||||||
51,330,157 | 99,263,306 | 150,593,463 | 100.00 | % | ||||||||||||
(*) | Including mainly Brazil and Mexico. |
The detail, by type of financial instrument, of Private debt at December 31, 2010 is as follows: |
Thousands | ||||
of euros | ||||
Securitized mortgage bonds | 6,830,223 | |||
Other asset-backed bonds | 2,815,226 | |||
Floating rate debt | 19,475,694 | |||
Fixed rate debt | 22,209,014 | |||
TOTAL | 51,330,157 | |||
The impairment losses on available-for-sale financial assets (EUR 118,637 thousand at December 31, 2010) are disclosed in Note 8. Also, the impairment losses on financial assets classified as loans and receivables (EUR 25,418 thousand at December 31, 2010) are disclosed in Note 10. | |||
Note 29 contains a detail of the valuation adjustments recognized in equity on available-for-sale financial assets. | |||
Note 51 contains a detail of the residual maturity periods of available-for-sale financial assets and of loans and receivables and of the related average interest rates. |
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8. | Equity instruments |
a) | Breakdown |
The detail, by classification and type, of Equity instruments is as follows: |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Classification: | ||||||||||||
Financial assets held for trading | 8,850,318 | 9,248,022 | 6,272,403 | |||||||||
Other financial assets at fair value through profit or loss | 8,267,351 | 5,877,331 | 2,777,793 | |||||||||
Available-for-sale financial assets | 6,546,013 | 7,331,166 | 6,372,629 | |||||||||
Of which: | ||||||||||||
Disregarding allowances for impairment losses | 6,546,013 | 7,331,166 | 6,381,788 | |||||||||
Allowances for impairment losses | — | — | (9,159 | ) | ||||||||
23,663,682 | 22,456,519 | 15,422,825 | ||||||||||
Type: | ||||||||||||
Shares of Spanish companies | 4,778,438 | 4,981,812 | 3,219,901 | |||||||||
Shares of foreign companies | 6,468,185 | 7,526,087 | 5,897,681 | |||||||||
Investment fund units and shares | 4,560,560 | 4,254,774 | 3,614,329 | |||||||||
Other securities | 7,856,499 | 5,693,846 | 2,700,073 | |||||||||
Of which: unit linked | 7,856,499 | 5,693,846 | 2,700,073 | |||||||||
Impairment losses | — | — | (9,159 | ) | ||||||||
23,663,682 | 22,456,519 | 15,422,825 | ||||||||||
Note 29 contains a detail of the valuation adjustments recognized in equity on available-for-sale financial assets. |
b) | Changes |
The changes in Available-for-sale financial assets, disregarding the allowances for impairment losses, were as follows: |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Balance at beginning of year | 7,331 | 6,382 | 10,173 | |||||||||
Changes in the scope of consolidation | — | 467 | 366 | |||||||||
Transfers (Note 13) | — | 53 | 204 | |||||||||
Net additions /(disposals) | (1,077 | ) | (192 | ) | (454 | ) | ||||||
Of which: | ||||||||||||
Shinsei | — | — | 322 | |||||||||
Cielo | (651 | ) | — | — | ||||||||
Metrovacesa | — | 938 | — | |||||||||
France Telecom | — | (378 | ) | — | ||||||||
Attijariwafa Bank | — | (367 | ) | — | ||||||||
Iberdrola, S.A. | — | — | (846 | ) | ||||||||
Valuation adjustments (*) | 292 | 621 | (3,907 | ) | ||||||||
Balance at end of year | 6,546 | 7,331 | 6,382 | |||||||||
(*) | The valuation adjustments in 2008 included the write-downs of the ownership interests held in that year in The Royal Bank of Scotland (EUR 1,293 million) and Fortis Bank (EUR 749 million). |
The main acquisitions and disposals made in 2010, 2009 and 2008 were as follows: |
i. Metrovacesa, S.A. (Metrovacesa) |
On February 20, 2009, certain credit institutions, including Banco Santander, S.A. and Banco Español de Crédito, S.A., entered into an agreement for the restructuring of the debt of the Sanahuja Group, whereby these credit institutions received shares representing 54.75% of the share capital of Metrovacesa in payment of the Sanahuja Group’s debt. |
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The aforementioned agreement also envisaged the acquisition by the creditor entities of an additional 10.77% of the share capital of Metrovacesa (shares on which the Sanahuja family was granted a call option for four years), which gave rise to an additional disbursement of EUR 214 million for the Group, and other conditions concerning the administration of this company. |
Following the execution of the agreement, Santander Group had an ownership interest of 23.63% in Metrovacesa, S.A., and 5.38% of the share capital was subject to the aforementioned option. |
In December 2009, the Group measured this investment at EUR 25 per share, which gave rise to additional write-downs and impairment losses of EUR 269 million net of tax (see Note 1.h). |
At December 31, 2010, the value of this holding amounted to EUR 402 million, after deducting the write-downs, equivalent to EUR 24.4 per share. Also, the Group has granted the company participating loans amounting to EUR 109 million, which were provisioned in full. |
ii. France Telecom España, S.A. (France Telecom) |
On April 29, 2009, the Group announced it had entered into an agreement with Atlas Services Nederland BV (a wholly-owned subsidiary of France Telecom) to sell the Group’s 5.01% ownership interest in France Telecom España, S.A. for EUR 378 million. This transaction generated a loss for the Group of EUR 14 million. |
iii. Attijariwafa Bank Société Anonyme |
On December 28, 2009, the Group sold to the Moroccan company Société Nationale d’Investissement (SNI) 10% of the share capital of Attijariwafa Bank for MAD 4,149.4 million (approximately EUR 367 million at the closing exchange rate). This transaction gave rise to a gain of EUR 218 million for Santander Group (see Note 1.h), which was recognized under Gains/(losses) on disposal of non-current assets held for sale not classified as discontinued operations in the consolidated income statement (see Note 50). After the sale, Santander Group has a 4.55% ownership interest in Attijariwafa Bank. |
iv. Cielo, S.A. |
In July 2010 the Group entered into an agreement with Banco do Brasil S.A. and Banco Bradesco S.A. for the sale to these two entities of all the shares held by Santander Group in Cielo S.A. — formerly Visanet — (7.20% of the share capital). The agreed-upon sale price was BRL 1,487 million (approximately EUR 650.7 million), which gave rise to a gain of EUR 212 million, net of taxes and non-controlling interests. |
c) | Notifications of acquisitions of investments |
The notifications made by the Bank in 2010, in compliance with Article 155 of the Spanish Limited Liability Companies Law (Ley de Sociedades de Capital) and Article 53 of Securities Market Law 24/1998 (Ley del Mercado de Valores), of the acquisitions and disposals of holdings in investees are listed in Appendix IV. |
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d) | Allowances for impairment losses |
Following is a summary of the changes in the impairment losses on these items and on debt instruments classified as Available-for-sale financial assets (see Note 7): |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Balance at beginning of year | 166,722 | 190,337 | 102,991 | |||||||||
Net impairment losses for the year | 176,250 | 490,326 | 386,164 | |||||||||
Of which: | ||||||||||||
Impairment losses charged to income | 198,693 | 536,567 | 400,858 | |||||||||
Impairment losses reversed with a credit to income | (22,443 | ) | (46,241 | ) | (14,694 | ) | ||||||
Net changes in the scope of consolidation | — | — | 19,654 | |||||||||
Write-off of assets due to impairment | (205,241 | ) | (505,017 | ) | (370,498 | ) | ||||||
Exchange differences and other items | (19,094 | ) | (8,924 | ) | 52,026 | |||||||
Balance at end of year | 118,637 | 166,722 | 190,337 | |||||||||
Of which: | ||||||||||||
By geographical location of risk: | ||||||||||||
Spain | 48,475 | 97,746 | 144,796 | |||||||||
Rest of Europe | — | — | 1,271 | |||||||||
Latin America | 70,162 | 68,976 | 44,270 | |||||||||
By type of asset covered: | ||||||||||||
Debt instruments — Available-for-sale financial assets (Note 7) | 118,637 | 166,722 | 181,178 | |||||||||
Equity instruments — Available-for-sale financial assets | — | — | 9,159 |
9. | Trading derivatives (assets and liabilities) and Short positions |
a) | Trading derivatives |
The detail, by type of inherent risk, of the fair value of the trading derivatives arranged by the Group is as follows (see Note 36): |
Thousands of euros | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
Debit | Credit | Debit | Credit | Debit | Credit | |||||||||||||||||||
balance | balance | balance | balance | balance | balance | |||||||||||||||||||
Interest rate risk | 51,675,279 | 52,116,623 | 43,413,018 | 43,135,683 | 68,145,560 | 67,005,552 | ||||||||||||||||||
Currency risk | 14,444,766 | 16,015,980 | 11,364,400 | 9,892,032 | 19,001,043 | 14,381,752 | ||||||||||||||||||
Price risk | 5,642,774 | 6,413,108 | 3,995,032 | 5,075,830 | 8,129,606 | 7,237,843 | ||||||||||||||||||
Other risks | 1,305,950 | 733,386 | 1,083,963 | 609,079 | 539,100 | 542,286 | ||||||||||||||||||
73,068,769 | 75,279,097 | 59,856,413 | 58,712,624 | 95,815,309 | 89,167,433 | |||||||||||||||||||
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b) | Short positions |
Following is a breakdown of the short positions: |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Borrowed securities: | ||||||||||||
Debt instruments | 2,580,279 | 1,536,689 | 1,054,527 | |||||||||
Of which, Santander UK | 1,172,795 | 896,439 | 775,094 | |||||||||
Equity instruments | 278,868 | 106,199 | 57,263 | |||||||||
Of which, Santander UK | 62,135 | 6,784 | 13,670 | |||||||||
Short sales: | ||||||||||||
Debt instruments | 9,443,391 | 3,496,842 | 1,912,854 | |||||||||
Of which: the Bank | 9,200,390 | 2,529,586 | 1,903,554 | |||||||||
Equity instruments | 380 | — | 10,587 | |||||||||
12,302,918 | 5,139,730 | 3,035,231 | ||||||||||
10. | Loans and advances to customers |
a) | Breakdown |
The detail, by classification, of Loans and advances to customers in the consolidated balance sheets is as follows: |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Financial assets held for trading | 755,175 | 10,076,412 | 684,348 | |||||||||
Other financial assets at fair value through profit or loss | 7,777,403 | 8,328,516 | 8,972,707 | |||||||||
Loans and receivables | 715,621,319 | 664,145,998 | 617,231,380 | |||||||||
Of which: | ||||||||||||
Disregarding impairment losses | 735,318,317 | 682,019,094 | 629,697,436 | |||||||||
Impairment losses | (19,696,998 | ) | (17,873,096 | ) | (12,466,056 | ) | ||||||
Of which, due to country risk | (40,871 | ) | (37,234 | ) | (304,207 | ) | ||||||
724,153,897 | 682,550,926 | 626,888,435 | ||||||||||
Loans and advances to customers disregarding impairment losses | 743,850,895 | 700,424,022 | 639,354,490 | |||||||||
Note 51 contains a detail of the residual maturity periods of loans and receivables and of the related average interest rates. |
There are no loans and advances to customers for material amounts without fixed maturity dates. |
In August 2010 the Group acquired a US vehicle financing portfolio from HSBC with a nominal value of USD 4.3 million for approximately USD 4 million (approximately EUR 3.15 thousand million), subject to adjustments. The debt recovery of this acquired portfolio was already being performed by Santander Consumer USA. |
In September 2010, the Group acquired a US vehicle financing portfolio of CitiFinancial from Citigroup Inc. (Citi) with a nominal value of USD 3.2 thousand million (EUR 2.3 thousand million) for a price of 99% of its gross amount. Additionally, both entities entered into an agreement whereby Santander will perform the debt recovery of the vehicle financing portfolio retained by Citi amounting to approximately USD 7.2 thousand million. |
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b) | Breakdown |
Following is a detail, by loan type and status, borrower sector, geographical area of residence and interest rate formula, of the loans and advances to customers, which reflect the Group’s exposure to credit risk in its core business, disregarding impairment losses: |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
By loan type and status: | ||||||||||||
Commercial credit | 15,737 | 17,454 | 22,250 | |||||||||
Secured loans | 430,073 | 411,778 | 351,609 | |||||||||
Reverse repurchase agreements | 6,166 | 13,958 | 5,228 | |||||||||
Other term loans | 234,858 | 204,224 | 216,690 | |||||||||
Finance leases | 20,260 | 20,873 | 21,011 | |||||||||
Receivable on demand | 8,849 | 8,088 | 8,572 | |||||||||
Impaired assets | 27,908 | 24,049 | 13,994 | |||||||||
743,851 | 700,424 | 639,354 | ||||||||||
By borrower sector: | ||||||||||||
Public sector — Spain (*) | 12,138 | 9,802 | 7,668 | |||||||||
Public sector — Other countries (**) | 3,527 | 2,861 | 3,029 | |||||||||
Individuals | 395,622 | 379,297 | 347,201 | |||||||||
Energy | 12,504 | 11,521 | 10,476 | |||||||||
Construction | 26,708 | 22,696 | 24,341 | |||||||||
Manufacturing | 47,568 | 40,534 | 43,993 | |||||||||
Services | 147,299 | 134,638 | 123,895 | |||||||||
Other sectors | 98,485 | 99,074 | 78,751 | |||||||||
743,851 | 700,424 | 639,354 | ||||||||||
By geographical area: | ||||||||||||
Spain | 227,613 | 230,345 | 240,247 | |||||||||
European Union (excluding Spain) | 320,286 | 311,776 | 279,664 | |||||||||
United States and Puerto Rico | 57,881 | 49,501 | 15,096 | |||||||||
Other OECD countries | 6,432 | 5,256 | 8,104 | |||||||||
Latin America | 122,940 | 96,470 | 88,720 | |||||||||
Rest of the world | 8,699 | 7,075 | 7,523 | |||||||||
743,851 | 700,424 | 639,354 | ||||||||||
By interest rate formula: | ||||||||||||
Fixed rate | 297,259 | 286,445 | 256,506 | |||||||||
Floating rate | 446,592 | 413,979 | 382,848 | |||||||||
743,851 | 700,424 | 639,354 | ||||||||||
(*) | At December 31, 2010 the issuer rating was AA. | |
(**) | At December 31, 2010, the detail by issuer rating was approximately as follows: 7.5% AAA, 42.9% A, 46.0% BBB and 3.6% below BBB. |
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c) | Impairment losses |
The changes in the impairment losses on the assets making up the balances of Loans and receivables — Loans and advances to customers, Loans and receivables — Loans and advances to credit institutions (see Note 6) and Loans and receivables — Debt instruments (see Note 7) were as follows: |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Balance at beginning of year | 17,898,632 | 12,719,623 | 8,796,371 | |||||||||
Impairment losses charged to income for the year | 11,468,216 | 12,002,717 | 6,596,635 | |||||||||
Of which: | ||||||||||||
Individually assessed | 14,769,923 | 13,948,358 | 7,683,692 | |||||||||
Collectively assessed | 1,404,944 | 2,205,598 | 640,424 | |||||||||
Impairment losses reversed with a credit to income | (4,706,651 | ) | (4,151,239 | ) | (1,727,481 | ) | ||||||
Inclusion of entities in the Group in the year (Note 3) | — | 1,426,104 | 2,310,095 | |||||||||
Write-off of impaired balances against recorded impairment allowance | (10,913,172 | ) | (9,794,628 | ) | (4,552,393 | ) | ||||||
Exchange differences and other changes | 1,285,299 | 1,544,815 | (431,085 | ) | ||||||||
Balance at end of year | 19,738,975 | 17,898,632 | 12,719,623 | |||||||||
Of which: | ||||||||||||
By method of assessment: | ||||||||||||
Individually | 14,584,051 | 11,627,929 | 7,183,237 | |||||||||
Of which: due to country risk (Note 2.g) | 49,074 | 45,694 | 554,230 | |||||||||
Collectively | 5,154,924 | 6,270,703 | 5,536,386 | |||||||||
By geographical location of risk: | ||||||||||||
Spain | 6,810,296 | 6,992,818 | 5,948,950 | |||||||||
Rest of Europe | 4,694,585 | 4,435,269 | 3,307,313 | |||||||||
America | 8,234,094 | 6,470,545 | 3,463,360 | |||||||||
By classification of assets: | ||||||||||||
Loans and advances to credit institutions | 16,559 | 25,536 | 253,567 | |||||||||
Debt instruments | 25,418 | — | — | |||||||||
Loans and advances to customers | 19,696,998 | 17,873,096 | 12,466,056 |
Previously written-off assets recovered in 2010, 2009 and 2008 amounted to EUR 1,201,317 thousand, EUR 914,721 thousand and EUR 699,747 thousand, respectively. Taking into account these amounts and those recognized in Impairment losses charged to income for the year in the foregoing table, impairment losses on Loans and receivables amounted to EUR 10,266,899 thousand in 2010, EUR 11,087,996 thousand in 2009 and EUR 5,896,888 thousand in 2008. |
The increase in the impairment losses charged to income in 2009 with respect to 2008 was due to various factors: the scope effect resulting from the new inclusions in the Group, the full consolidation of Banco Real for the whole year, the substantial deterioration of the macroeconomic situation and, to a lesser extent, the shift in preceding years in themixof the Group’s portfolio towards more profitable products albeit with higher risk premiums. |
d) | Impaired assets |
The detail of the changes in the balance of the financial assets classified as Loans and receivables — Loans and advances to customers and considered to be impaired due to credit risk is as follows: |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Balance at beginning of year | 24,049 | 13,994 | 6,070 | |||||||||
Net additions | 13,575 | 18,046 | 11,200 | |||||||||
Written-off assets | (10,913 | ) | (9,795 | ) | (4,552 | ) | ||||||
Increase in scope of consolidation | 239 | 1,006 | 1,945 | |||||||||
Exchange differences and other | 958 | 798 | (669 | ) | ||||||||
Balance at end of year | 27,908 | 24,049 | 13,994 | |||||||||
This amount, after deducting the related allowances, represents the Group’s best estimate of the fair value of the impaired assets. |
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Following is a detail of the financial assets classified as loans and receivables and considered to be impaired due to credit risk at December 31, 2010, classified by geographical location of risk and by age of the oldest past-due amount: |
Millions of euros | ||||||||||||||||||||||||
With no | ||||||||||||||||||||||||
past-due | ||||||||||||||||||||||||
balances or | ||||||||||||||||||||||||
less than 3 | With balances past due by | |||||||||||||||||||||||
months | 3 to 6 | 6 to 9 | 9 to 12 | More than | ||||||||||||||||||||
past due | months | months | months | 12 months | Total | |||||||||||||||||||
Spain | 2,726 | 1,835 | 1,511 | 1,001 | 5,240 | 12,313 | ||||||||||||||||||
European Union (excluding Spain) | 308 | 2,782 | 1,192 | 759 | 2,190 | 7,231 | ||||||||||||||||||
United States and Puerto Rico | 898 | 567 | 231 | 139 | 817 | 2,652 | ||||||||||||||||||
Other OECD countries | 18 | 35 | 37 | 34 | — | 124 | ||||||||||||||||||
Latin America | 768 | 2,310 | 894 | 791 | 822 | 5,585 | ||||||||||||||||||
Rest of the world | — | 3 | — | — | — | 3 | ||||||||||||||||||
4,718 | 7,532 | 3,865 | 2,724 | 9,069 | 27,908 | |||||||||||||||||||
The detail at December 31, 2009 is as follows: |
Millions of euros | ||||||||||||||||||||||||
With no | ||||||||||||||||||||||||
past-due | ||||||||||||||||||||||||
balances or | ||||||||||||||||||||||||
less than 3 | With balances past due by | |||||||||||||||||||||||
months | 3 to 6 | 6 to 9 | 9 to 12 | More than | ||||||||||||||||||||
past due | months | months | months | 12 months | Total | |||||||||||||||||||
Spain | 2,171 | 1,431 | 1,356 | 956 | 4,287 | 10,201 | ||||||||||||||||||
European Union (excluding Spain) | 276 | 3,343 | 977 | 689 | 1,418 | 6,703 | ||||||||||||||||||
United States and Puerto Rico | 361 | 1,024 | 352 | 248 | 572 | 2,557 | ||||||||||||||||||
Other OECD countries | 5 | 35 | 23 | 16 | 23 | 102 | ||||||||||||||||||
Latin America | 398 | 1,893 | 977 | 688 | 516 | 4,472 | ||||||||||||||||||
Rest of the world | — | 4 | 3 | 2 | 4 | 13 | ||||||||||||||||||
3,212 | 7,730 | 3,688 | 2,599 | 6,820 | 24,049 | |||||||||||||||||||
The detail at December 31, 2008 is as follows: |
Millions of euros | ||||||||||||||||||||||||
With no | ||||||||||||||||||||||||
past-due | ||||||||||||||||||||||||
balances or | ||||||||||||||||||||||||
less than 3 | With balances past due by | |||||||||||||||||||||||
months | 3 to 6 | 6 to 9 | 9 to 12 | More than | ||||||||||||||||||||
past due | months | months | months | 12 months | Total | |||||||||||||||||||
Spain | 637 | 2,461 | 984 | 694 | 1,486 | 6,262 | ||||||||||||||||||
European Union (excluding Spain) | 38 | 2,447 | 550 | 388 | 816 | 4,239 | ||||||||||||||||||
United States and Puerto Rico | 102 | 261 | 62 | 44 | 85 | 554 | ||||||||||||||||||
Other OECD countries | 28 | 284 | 3 | 2 | 4 | 321 | ||||||||||||||||||
Latin America | 274 | 1,359 | 458 | 322 | 200 | 2,613 | ||||||||||||||||||
Rest of the world | 2 | 1 | 1 | — | 1 | 5 | ||||||||||||||||||
1,081 | 6,813 | 2,058 | 1,450 | 2,592 | 13,994 | |||||||||||||||||||
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e) | Securitization |
Loans and advances to customers includes, inter alia, the securitized loans transferred to third parties on which the Group has retained risks, albeit partially, and which therefore, in accordance with the applicable accounting standards, cannot be derecognized. The breakdown of the securitized loans, by type of financial instrument, and of the securitized loans derecognized because the stipulated requirements were met (see Note 2.e) is shown below. Note 22 details the liabilities associated with these securitization transactions. |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Derecognized | 9,647 | 10,836 | 2,882 | |||||||||
Of which: | ||||||||||||
Mortgage assets (*) | 9,635 | 10,232 | 2,088 | |||||||||
Other securitized assets | 12 | 604 | 794 | |||||||||
Retained on the balance sheet | 133,046 | 123,706 | 126,497 | |||||||||
Of which: | ||||||||||||
Securitized mortgage assets | 99,842 | 90,182 | 90,264 | |||||||||
Of which: the UK | 73,865 | 64,592 | 66,615 | |||||||||
Other securitized assets | 33,204 | 33,524 | 36,233 | |||||||||
Total | 142,693 | 134,542 | 129,380 | |||||||||
(*) | Since 2009 this balance has included assets of Santander Holdings USA (formerly Sovereign) amounting to approximately EUR 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. |
The growth in securitization since 2008 has been the result of its use as a tool for the management of regulatory capital and as a means of diversifying the Group’s liquidity sources. In 2008, 2009 and 2010 the Group did not derecognize any of the securitizations performed, and the balance derecognized in those years relates to securitizations performed in prior years. |
11. | Hedging derivatives |
The detail, by type of risk hedged, of the fair value of the derivatives qualifying for hedge accounting is as follows (see Note 36): |
Thousands of euros | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |||||||||||||||||||
Fair value hedges | 8,006,630 | 5,832,452 | 7,585,383 | 4,296,012 | 8,553,353 | 5,213,389 | ||||||||||||||||||
Of which: Portfolio hedges | 1,539,868 | 2,683,447 | 1,552,732 | 2,820,008 | 971,284 | 2,956,415 | ||||||||||||||||||
Cash flow hedges | 153,421 | 438,240 | 201,626 | 719,726 | 879,230 | 694,328 | ||||||||||||||||||
Hedges of net investments in foreign operations | 66,962 | 362,936 | 46,841 | 175,339 | 265,549 | 49,894 | ||||||||||||||||||
8,227,013 | 6,633,628 | 7,833,850 | 5,191,077 | 9,698,132 | 5,957,611 | |||||||||||||||||||
Note 36 contains a description of the Group’s main hedges. |
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12. | Non-current assets held for sale |
The detail of Non-current assets held for sale is as follows: |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Equity instruments | — | 4,014 | 3,890,215 | |||||||||
Of which: | ||||||||||||
Cepsa | — | — | 2,846,300 | |||||||||
Interbanca (Note 3-b) | — | — | 1,000,000 | |||||||||
Tangible assets | 5,971,824 | 5,110,723 | 5,265,868 | |||||||||
Of which: | ||||||||||||
Foreclosed assets and acquired assets | 5,873,862 | 4,938,536 | 4,881,006 | |||||||||
Other tangible assets held for sale | 97,962 | 172,187 | 384,862 | |||||||||
Other assets | 313,196 | 674,452 | 111,403 | |||||||||
6,285,020 | 5,789,189 | 9,267,486 | ||||||||||
Impairment losses of EUR 2,500,441 thousand, EUR 2,090,126 thousand and EUR 178,495 thousand were deducted from the balance of this item at December 31, 2010, 2009 and 2008, respectively. The net charges recorded in those years amounted to EUR 298,337 thousand, EUR 1,350,592 thousand and EUR 70,027 thousand, respectively (see Note 50). | |||
The most significant transactions relating to non-current assets held for sale were as follows: | |||
Sale of Santander business campus | |||
In the first half of 2008 Banco Santander entered into an agreement with the consortium led by Propinvest in relation to the sale of the Ciudad Financiera Santander business campus and the subsequent leaseback thereof for a term of 40 years, with the Bank reserving the right to a purchase option at market price at the end of the aforementioned term. This transaction, which was completed on September 12, 2008, was performed within the framework of the restricted private competition organized by Banco Santander for the sale and subsequent leaseback of a portfolio of properties owned by it in Spain, of which the business campus was the last part. The price agreed upon for the Santander Business Campus was EUR 1,900 million. The gains obtained by Banco Santander on this sale were recognized under Gains/(losses) on disposal of non-current assets held for sale not classified as discontinued operations in the consolidated income statement and amounted to EUR 586 million, net (EUR 836 million, gross — see Note 50). Other relevant information on this transaction is provided in Note 16. | |||
Cepsa | |||
At December 31, 2008, the Bank’s directors classified the ownership interest held in Compañía Española de Petróleos, S.A. (Cepsa) as a non-current asset held for sale, since it intended to recover the value of the investment through the sale thereof in the short term. The Cepsa shares were previously recognized under Investments in the consolidated balance sheet, since the entity was deemed to be an associate, and the investment was accounted for using the equity method. The balance at which this asset was recognized related basically to the carrying amount of the ownership interest when the decision to sell it was taken; this amount was lower than the fair value of the ownership interest less costs to sell at 2008 year-end. | |||
On March 31, 2009, Santander Group announced the agreement with the International Petroleum Investment Company of the Emirate of Abu Dhabi for the sale to it of the 32.5% ownership interest held by the Group in Cepsa for EUR 33 per share, which would be reduced by the amount of any dividends paid out of 2009 profit prior to completion of the transaction. This transaction was completed in 2009 and did not give rise to any gain or loss for the Group. |
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Foreclosed assets and assets acquired from borrowers in payment of their debts |
13. | Investments — Associates |
a) | Breakdown |
The detail, by company, of Investments — Associates (see Note 2.c) is as follows: |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Sovereign (Note 3) | — | — | 1,103,623 | |||||||||
Banco Caixa Geral Totta Angola, S.A. | 95,183 | — | — | |||||||||
Other companies | 177,732 | 164,473 | 219,830 | |||||||||
272,915 | 164,473 | 1,323,453 | ||||||||||
Of which: | ||||||||||||
Euros | 111,896 | 72,755 | 130,079 | |||||||||
Of which: | ||||||||||||
Listed | — | — | 1,103,623 |
At December 31, 2010, the cost of the investments detailed in the foregoing table included EUR 71 million relating to goodwill (December 31, 2009: EUR 9 million; December 31, 2008: EUR 9 million). |
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b) | Changes |
The changes in Investments — Associates were as follows: |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Balance at beginning of year | 164 | 1,323 | 15,689 | |||||||||
Acquisitions and capital increases (Note 3) | 11 | 13 | 754 | |||||||||
Of which: | ||||||||||||
Sovereign | — | — | 228 | |||||||||
RFS Holdings B.V. | — | — | 408 | |||||||||
Disposals and capital reductions (Note 3) | (41 | ) | (14 | ) | (41 | ) | ||||||
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 | 17 | — | 792 | |||||||||
Impairment losses | — | — | (8 | ) | ||||||||
Dividends paid | (16 | ) | (5 | ) | (550 | ) | ||||||
Change in consolidation method (Note 3) | 101 | (1,346 | ) | (10,658 | ) | |||||||
Exchange differences and other changes (*) | 37 | 246 | (700 | ) | ||||||||
Balance at end of year | 273 | 164 | 1,323 | |||||||||
(*) | In 2008 Exchange differences and other changes included EUR 723 million relating to the exchange losses incurred on RFS Holdings B.V. |
c) | Impairment losses |
No significant impairment was disclosed with respect to investments in associates in 2010, 2009 or 2008. |
d) | Other disclosures |
Following is a summary of the financial information on the associates (obtained from the information available at the reporting date): |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Total assets | 4,630 | 2,604 | 59,915 | |||||||||
Total liabilities | (3,828 | ) | (2,160 | ) | (54,643 | ) | ||||||
Non-controlling interests | — | — | (196 | ) | ||||||||
Net assets | 802 | 444 | 5,076 | |||||||||
Group’s share of the net assets of associates | 202 | 155 | 1,314 | |||||||||
Goodwill | 71 | 9 | 9 | |||||||||
Total Group share | 273 | 164 | 1,323 | |||||||||
Total income | 1,047 | 311 | 21,849 | |||||||||
Total profit | 70 | 77 | 1,050 | |||||||||
Group’s share of the profit of associates | 17 | — | 792 | |||||||||
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14. | Insurance contracts linked to pensions |
The detail of Insurance contracts linked to pensions (see Note 25.c) is as follows: |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Assets relating to insurance contracts covering post-employment benefit plan obligations: | ||||||||||||
Bank | 1,986,454 | 2,094,039 | 2,159,707 | |||||||||
Banesto | 202,458 | 227,609 | 248,025 | |||||||||
Other Spanish companies | 29,541 | 31,159 | 32,035 | |||||||||
Assets relating to insurance contracts covering other similar obligations: | ||||||||||||
Bank | 551 | 1,791 | 4,794 | |||||||||
Other Spanish companies | 944 | 1,553 | 2,428 | |||||||||
2,219,948 | 2,356,151 | 2,446,989 | ||||||||||
15. | Liabilities under insurance contracts and Reinsurance assets |
Thousands of euros | ||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||
Direct | Direct | Direct | ||||||||||||||||||||||||||||||||||
insurance and | Total | insurance and | Total | insurance and | Total | |||||||||||||||||||||||||||||||
reinsurance | Reinsurance | (balance | reinsurance | Reinsurance | (balance | reinsurance | Reinsurance | (balance | ||||||||||||||||||||||||||||
assumed | ceded | payable) | assumed | ceded | payable) | assumed | ceded | payable) | ||||||||||||||||||||||||||||
Technical provisions for: | ||||||||||||||||||||||||||||||||||||
Unearned premiums and unexpired risks | 370,787 | (169,755 | ) | 201,032 | 455,181 | (195,688 | ) | 259,493 | 409,187 | (194,646 | ) | 214,541 | ||||||||||||||||||||||||
Life insurance: | 3,060,593 | (51,275 | ) | 3,009,318 | 4,744,629 | (55,891 | ) | 4,688,738 | 4,130,577 | (51,645 | ) | 4,078,932 | ||||||||||||||||||||||||
Unearned premiums and risks | 328,963 | (51,275 | ) | 277,688 | 555,597 | (55,891 | ) | 499,706 | 332,507 | (25,401 | ) | 307,106 | ||||||||||||||||||||||||
Mathematical provisions | 2,731,630 | — | 2.731,630 | 4,189,032 | — | 4,189,032 | 3,798,070 | (26,244 | ) | 3,771,826 | ||||||||||||||||||||||||||
Claims outstanding | 514,608 | (65,376 | ) | 449,232 | 483,234 | (52,529 | ) | 430,705 | 407,121 | (46,856 | ) | 360,265 | ||||||||||||||||||||||||
Bonuses and rebates | 22,418 | — | 22,418 | 18,605 | — | 18,605 | 17,440 | (5,937 | ) | 11,503 | ||||||||||||||||||||||||||
Life insurance policies where the investment risk is borne by the policyholders | 5,763,143 | (40 | ) | 5,763,103 | 10,939,477 | (50 | ) | 10,939,427 | 11,713,993 | (135,854 | ) | 11,578,139 | ||||||||||||||||||||||||
Other technical provisions | 717,725 | (259,946 | ) | 457,779 | 275,320 | (112,664 | ) | 162,656 | 171,193 | (23,450 | ) | 147,743 | ||||||||||||||||||||||||
10,449,274 | (546,392 | ) | 9,902,882 | 16,916,446 | (416,822 | ) | 16,499,624 | 16,849,511 | (458,388 | ) | 16,391,123 | |||||||||||||||||||||||||
The Group performs insurance and reinsurance transactions in Spain, Portugal, Brazil, Mexico, Chile, Argentina and Uruguay through companies owned by it. The main products offered, which are aimed at individual customers who are, in turn, customers of the Bank in each country, are life and non-life insurance policies and unit-linked-type savings products where the investment risk is borne by the policyholder. The lines of insurance offered are: life savings insurance (13% of premiums), unemployment (1% of premiums), home insurance (3% of premiums), various non-life lines (3% of premiums) and savings insurance (80% of premiums). Most of the insurance contract liabilities recognized in the Group’s consolidated financial statements relate to savings insurance, the vast majority of which are measured at fair value, which is the value of the investments assigned to the related contracts (risk borne by the policyholder). |
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16. | Tangible assets |
a) | Changes |
The changes in Tangible assets in the consolidated balance sheet were as follows: |
Thousands of euros | ||||||||||||||||
Property, | Leased | |||||||||||||||
plant and | out under an | |||||||||||||||
equipment | operating | Investment | ||||||||||||||
for own use | lease | property | Total | |||||||||||||
Cost: | ||||||||||||||||
Balances at January 1, 2008 | 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 | ||||||||||||
Additions / Disposals (net) due to change in the scope of consolidation | 37,318 | 11,026 | — | 48,344 | ||||||||||||
Additions / Disposals (net) | 1,545,402 | 820,777 | 267,774 | 2,633,953 | ||||||||||||
Transfers and other changes | (32,385 | ) | (24,381 | ) | 47,112 | (9,654 | ) | |||||||||
Exchange differences (net) | 600,027 | 19,222 | 23,163 | 642,412 | ||||||||||||
Balances at December 31, 2010 | 13,389,676 | 3,225,990 | 1,561,248 | 18,176,914 | ||||||||||||
Accumulated depreciation: | ||||||||||||||||
Balances at January 1, 2008 | (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 | ) | ||||||||
Disposals | 330,598 | 168,502 | 2,828 | 501,928 | ||||||||||||
Transfers and other changes | (63,051 | ) | (360,419 | ) | (10,590 | ) | (434,060 | ) | ||||||||
Charge for the year | (846,120 | ) | (223 | ) | (9,504 | ) | (855,847 | ) | ||||||||
Exchange differences and other items | (260,066 | ) | (7,818 | ) | (397 | ) | (268,281 | ) | ||||||||
Balances at December 31, 2010 | (5,847,418 | ) | (886,904 | ) | (53,840 | ) | (6,788,162 | ) | ||||||||
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Thousands of euros | ||||||||||||||||
Property, | Leased | |||||||||||||||
plant and | out under an | |||||||||||||||
equipment | operating | Investment | ||||||||||||||
for own use | lease | property | Total | |||||||||||||
Impairment losses: | ||||||||||||||||
Balances at January 1, 2008 | (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 | ) | ||||||||
Impairment charge for the year | (21,581 | ) | (2,889 | ) | (82,182 | ) | (106,652 | ) | ||||||||
Exchange differences | 15,686 | (2,633 | ) | (19,294 | ) | (6,241 | ) | |||||||||
Balances at December 31, 2010 | (34,268 | ) | (15,265 | ) | (197,582 | ) | (247,115 | ) | ||||||||
Tangible assets, net: | ||||||||||||||||
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 | ||||||||||||
Balances at December 31, 2010 | 7,507,990 | 2,323,821 | 1,309,826 | 11,141,637 |
(*) | 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 sheet is as follows: |
Millions of euros | ||||||||||||||||
Accumulated | Impairment | Carrying | ||||||||||||||
Cost | depreciation | losses | amount | |||||||||||||
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 | ||||||||||
Land and buildings | 5,393 | (1,354 | ) | (34 | ) | 4,005 | ||||||||||
IT equipment and fixtures | 2,904 | (2,076 | ) | — | 828 | |||||||||||
Furniture and vehicles | 4,834 | (2,347 | ) | — | 2,487 | |||||||||||
Construction in progress and other items | 259 | (71 | ) | — | 188 | |||||||||||
Balances at December 31, 2010 | 13,390 | (5,848 | ) | (34 | ) | 7,508 | ||||||||||
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The carrying amount at December 31, 2010 in the foregoing table includes the following approximate amounts: |
• | EUR 5,104 million relating to property, plant and equipment owned by Group entities and branches located abroad (December 31, 2009: EUR 4,717 million; December 31, 2008: EUR 4,063 million). |
• | EUR 660 million (December 31, 2009: EUR 196 million; December 31, 2008: EUR 118 million) relating to property, plant and equipment being acquired under finance leases by the consolidated entities (Note 2.l discloses additional information on these items). |
c) | Investment property | ||
The comparison of the fair value of the investment property at December 31, 2010 with the carrying amount at that date results in unrealized gains of EUR 9 million (December 31, 2009: EUR 9 million; December 31, 2008: EUR 18 million). | |||
The rental income earned from investment property and the direct costs related both to investment properties that generated rental income in 2010, 2009 and 2008 and to investment properties that did not generate rental income in those years are not material in the context of the consolidated financial statements. |
d) | Sale of properties | ||
On November 14, 2007, the Group sold ten singular properties to two companies in the Pontegadea Group for EUR 458 million and recognized a net gain of EUR 216 million. At the same time, an operating lease agreement for the aforementioned properties (with maintenance, insurance and taxes payable by the Group) was entered into with these companies, with compulsory terms of between 12 and 15 years, during which the rent (initially set at EUR 1,722 thousand per month) will be reviewed annually on the date of completion of each year of the lease term, based on the percentage variation in the Spanish Consumer Price Index (CPI) in the preceding twelve months, except in the fifth year (effective from the sixth year), in which the rent for nine of the ten properties will be reviewed on the basis of the CPI plus three percentage points. In nine of the ten lease agreements, the agreement is renewable for five additional five-year periods and a last three-year renewal period, up to a total of 40 years. In one of the ten lease agreements, the agreement is renewable for five additional five-year periods up to a total of 40 years. Nine of the ten lease agreements provide for adjustment of the rent to market in each renewal period. One of the ten lease agreements provides for adjustment of the rent to market in 2017, with subsequent adjustments to market taking place every five years from 2017 onwards. Also, the lease agreements include a purchase option exercisable by the Group on final expiry of the agreements (2047), with the exception of one of the leases, which envisages the possibility of exercising the purchase option in March 2023, March 2028, March 2033, March 2038, March 2043 and March 2047. In all the lease agreements, the value of the properties in the event that the purchase option is exercised shall be the market value of the properties on the related dates; this market value will be determined, if appropriate, by independent experts. | |||
Also, on November 23, 2007 the Group sold 1,152 of its branch offices to the Pearl Group for EUR 2,040 million and recognized a net gain of EUR 860 million. Simultaneously, an operating lease agreement for the aforementioned branch offices (with maintenance, insurance and taxes payable by the Group) was entered into with the Pearl Group, with compulsory terms of 24, 25 or 26 years (depending on the property), during which the rent (initially set at EUR 8,417 thousand per month, payable quarterly) will be reviewed annually on the date of completion of each year of the lease term: (i) during the first ten years of the agreement, based on the percentage variation in the Spanish CPI in the preceding twelve months, plus 215 basis points; and (ii) from the eleventh year onwards, based on variations in the CPI. The agreement is renewable for a maximum of three additional seven-year periods, up to a total of 45, 46 or 47 years (depending on the property), the rent being adjusted to market at the end of the compulsory term and of each renewal period, and includes an option, exercisable by the Group on final expiry of the lease (45, 46 or 47 years, depending on the property) to purchase the properties at their market value on the expiry date; this market value will be determined, if appropriate, by independent experts. |
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Lastly, on September 12, 2008 the Group completed the sale of its head offices (the Santander Business Campus) to Marme Inversiones 2007, S.L. for EUR 1,904 million and recognized a net gain of EUR 586 million (not including any net gains relating to certain projects in progress that the Group undertook to complete, which were completed in 2009, as a result of which the Group recognized gains of EUR 73 million). Simultaneously, an operating lease agreement for the aforementioned offices (with maintenance, insurance and taxes payable by the Group) was entered into with Marme Inversiones 2007, S.L., with a compulsory term of 40 years, during which the rent (initially set at EUR 6,891 thousand per month, payable quarterly) will be reviewed annually based on the variation in the preceding twelve months in the Harmonized Consumer Price Index of the euro zone multiplied by 1.74, with a minimum of 2.20% during the first ten years and a maximum of 6% throughout the lease term. The agreement includes an option exercisable by the Group on final expiry of the lease to purchase the Business Campus at its market value on the expiry date -the market value will be determined, if appropriate, by independent experts-, and a right of first refusal if the lessor should wish to sell the Business Campus. In addition to the two aforementioned agreements, the Group entered into a third additional promotion agreement, whereby during the first 20 years of the lease term it can request Marme Inversiones 2007, S.L. to construct buildings additional to those already existing at the Business Campus or to acquire additional land (from the third year onwards) to be included in the Business Campus, all under certain terms and conditions and with a maximum total cost of approximately EUR 296 million, which would subsequently be included in the lease agreement. |
The most noteworthy feature of the other agreed terms and conditions, all of which are customary market conditions for operating lease agreements, is that none of the aforementioned lease agreements provides for the transfer of ownership of the properties to the Group on expiry thereof, and the Group is entitled not to renew the rentals beyond the minimum compulsory term. Furthermore, the Group has not granted any guarantee to the buyers for any losses that might arise from the early termination of the agreements or for possible fluctuations in the residual value of the aforementioned properties. |
In the above-mentioned transactions the Group considered information provided by independent advisors, who estimated the economic lives of the transferred properties at the transaction date, which in all cases were more than 60 years (more than 80 years in the case of the Business Campus). These advisors also analyzed both the selling prices of the properties and the agreed subsequent rental payments. The Group, based in part upon this analysis, concluded that their properties had been set at fair market values at that date. |
The rental expense recognized by the Group in 2010 in connection with these agreements amounted to EUR 214 million (December 31, 2009: EUR 208 million; December 31, 2008: EUR 144 million). At December 31, 2010, the present value of the minimum future payments that the Group will incur during the compulsory term (since it is considered that the agreements will not be renewed and the existing purchase options will not be exercised) amounted to EUR 212 million payable within one year (December 31, 2009: EUR 189 million; December 31, 2008: EUR 208 million), EUR 784 million payable at between one and five years (December 31, 2009: EUR 697 million; December 31, 2008: EUR 835 million) -EUR 205 million in the second year (December 31, 2009: EUR 183 million; December 31, 2008: EUR 208 million), EUR 199 million in the third year (December 31, 2009: EUR 177 million; December 31, 2008: EUR 209 million), EUR 193 million in the fourth year (December 31, 2009: EUR 172 million; December 31, 2008: EUR 180 million) and EUR 187 million in the fifth year (December 31, 2009: EUR 166 million; December 31, 2008: EUR 210 million)-, and EUR 2,010 million payable at more than five years (December 31, 2009: EUR 1,764 million; December 31, 2008: EUR 1,906 million). |
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17. | Intangible assets — Goodwill |
The detail of Goodwill, based on the companies giving rise thereto (see Note 3.c), is as follows: |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Santander Brasil S.A. | 8,755 | 7,706 | 6,850 | |||||||||
Santander UK Plc (formerly Abbey Group) (1) | 8,250 | 7,996 | 6,921 | |||||||||
Banco Santander Totta, S.A. | 1,641 | 1,641 | 1,641 | |||||||||
Santander Holdings USA, Inc. | 1,537 | 1,425 | — | |||||||||
Santander Consumer Holding GmbH (formerly CC-Holding) | 1,018 | 878 | 875 | |||||||||
Banco Santander — Chile | 798 | 683 | 563 | |||||||||
Santander Consumer USA Inc. | 523 | 493 | 484 | |||||||||
Grupo Financiero Santander Serfin (Mexico) | 484 | 423 | 416 | |||||||||
Santander Cards UK Limited | 383 | 365 | — | |||||||||
Banco Español de Crédito, S.A. | 369 | 369 | 369 | |||||||||
Santander Consumer Bank AS | 137 | 129 | 112 | |||||||||
Santander Consumer Bank S.p.A. | 106 | 106 | 106 | |||||||||
Banco Santander Consumer Portugal, S.A. | 59 | 122 | 122 | |||||||||
Other companies | 562 | 529 | 377 | |||||||||
TOTAL GOODWILL | 24,622 | 22,865 | 18,836 | |||||||||
(1) | Including Alliance & Leicester and Bradford and Bingley. |
At least once per year (or whenever there is any indication of impairment), the Group reviews goodwill for impairment (i.e. a potential reduction in its recoverable value to below its carrying amount). For this purpose, it analyses the following: (i) certain macroeconomic variables that might affect its investments (population data, political situation, economic situation -including bankarisation-, among others); (ii) various microeconomic variables comparing the investments of the Group with the financial services industry of the country in which the Group carries on most of its business activities (balance sheet composition, total funds under management, results, efficiency ratio, capital adequacy ratio, return on equity, among others); and (iii) theprice earnings(P/E)ratioof the investments as compared with the P/E ratio of the stock market in the country in which the investments are located and that of comparable local financial institutions. | ||
To supplement this, the Group performs estimates of the recoverable amounts of certain cash-generating units using discounted cash flow projections. In order to perform this calculation, the Group uses projections based on the five-year financial budgets approved by the directors and discounts them using rates in line with the market and the business in which the units operate. The cash flows beyond the time horizon are extrapolated using a constant growth rate. This growth rate does not exceed the average long-term growth rate for the market in which the cash-generating unit in question operates. The directors consider that any reasonably possible change in the key assumptions on which the recoverable amounts of the cash-generating units are based would not cause the carrying amounts thereof to exceed their recoverable amounts. | ||
Based on the foregoing, and in accordance with the estimates, projections and measurements available to the Bank’s directors in 2010, the Group recognized impairment losses on goodwill totaling EUR 63 million (2009: EUR 3 million; 2008: EUR 73 million) under Impairment losses on other assets — Goodwill and other intangible assets. |
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The changes in Goodwill were as follows: |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Balance at beginning of year | 22,865 | 18,836 | 13,831 | |||||||||
Transfer of goodwill from Investments (Note 3) | — | — | 8,000 | |||||||||
Additions (Note 3) | 16 | 2,300 | 941 | |||||||||
Of which: | ||||||||||||
Santander Holdings USA, Inc (formerly Sovereign Bancorp) | — | 1,601 | — | |||||||||
Santander UK (Bradford & Bingley) | — | — | 202 | |||||||||
Santander UK (Alliance & Leicester) | — | — | 554 | |||||||||
Santander Consumer USA (formerly Drive) | — | 26 | 42 | |||||||||
Santander Cards UK Limited | — | 359 | — | |||||||||
Real Tokio Marine | — | 152 | — | |||||||||
GE Money Bank GmbH (Austria) | — | 98 | — | |||||||||
GE Money Oy (Finland) | — | 42 | — | |||||||||
Adjustments to initial acquisition price allocation | 167 | 628 | (413 | ) | ||||||||
Of which, transfer to other intangible assets | — | — | (447 | ) | ||||||||
Impairment losses | (63 | ) | (3 | ) | (73 | ) | ||||||
Disposals | — | (1,288 | ) | (3 | ) | |||||||
Of which: | ||||||||||||
Banco Santander Brasil, S.A. (Note 3) | — | (1,286 | ) | — | ||||||||
Exchange differences and other items | 1,637 | 2,392 | (3,447 | ) | ||||||||
Balance at end of year | 24,622 | 22,865 | 18,836 | |||||||||
The changes in goodwill in 2008 related mostly to the goodwill that arose on the full consolidation of Banco Real (see Note 3.b), to the acquisition of Alliance & Leicester and to the exchange differences arising on the translation to euros, at the closing rates, of the amount of the goodwill expressed in foreign currency, mainly that resulting from the purchases of Santander UK and Banco Real. In accordance with current regulations, these exchange differences were recognized with a charge to the heading Valuation adjustments — Exchange differences in equity and a credit to Goodwill in assets. The change in the balance of this heading is disclosed in the consolidated statement of recognized income and expense. |
Also, the changes in 2009 related mainly to the acquisitions made in the year (Sovereign and GE units in Europe — see Note 3), the partial derecognition of the goodwill of Banco Santander Brasil associated with the placement among non-controlling shareholders of 14.47% of its share capital (see Note 3) and the exchange differences arising on the translation to euros, at the closing rates, of the amount of the goodwill expressed in foreign currency, mainly that resulting from the purchases of Santander UK and Banco Real, the trend in the balance reflecting the recovery of these currencies in 2009. |
Substantially all the changes in goodwill from December 31, 2009 to December 31, 2010 relate to exchange differences, which, in accordance with current regulations, were recognized with a credit to Valuation adjustments — Exchange differences in equity. The changes in the balance of this item are shown in the consolidated statement of recognized income and expense. |
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18. | Intangible assets — Other intangible assets |
The detail of Intangible assets — Other intangible assets and of the changes therein in 2010, 2009 and 2008 is as follows: |
Thousands of euros | ||||||||||||||||||||||||||||||||
Net | Change in | Application of | Exchange | |||||||||||||||||||||||||||||
Estimated | December 31, | additions and | scope of | Amortization | amortization | differences | December 31, | |||||||||||||||||||||||||
Thousands of euros | useful life | 2009 | disposals | consolidation | and impairment | and impairment | and other | 2010 | ||||||||||||||||||||||||
With indefinite useful life: | ||||||||||||||||||||||||||||||||
Other brand names | 40,874 | 98 | — | — | — | 3,184 | 44,156 | |||||||||||||||||||||||||
With finite useful life: | ||||||||||||||||||||||||||||||||
Credit cards (Abbey) | 5 years | 27,024 | — | — | — | (27,024 | ) | — | — | |||||||||||||||||||||||
IT developments | 3-7 years | 2,941,871 | 1,338,493 | — | — | (356,679 | ) | 313,519 | 4,237,204 | |||||||||||||||||||||||
Other | 1,696,817 | 133,415 | 1,560 | — | (61,594 | ) | 128,749 | 1,898,947 | ||||||||||||||||||||||||
Accumulated amortization | (1,920,500 | ) | — | — | (1,084,137 | ) | 436,522 | (163,950 | ) | (2,732,065 | ) | |||||||||||||||||||||
Impairment losses | (7,728 | ) | — | — | (6,399 | ) | 8,775 | (856 | ) | (6,208 | ) | |||||||||||||||||||||
2,778,358 | 1,472,006 | 1,560 | (1,090,536 | ) | — | 280,646 | 3,442,034 | |||||||||||||||||||||||||
Thousands of euros | ||||||||||||||||||||||||||||||||
Net | Change in | Application of | Exchange | |||||||||||||||||||||||||||||
Estimated | December 31, | additions and | scope of | Amortization | amortization | differences | December 31, | |||||||||||||||||||||||||
Thousands of euros | useful life | 2008 | disposals | consolidation | and impairment | and 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 | 5,566 | (7,728 | ) | ||||||||||||||||||||||
1,787,068 | 1,344,711 | 144,452 | (854,757 | ) | — | 356,884 | 2,778,358 | |||||||||||||||||||||||||
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Thousands of euros | ||||||||||||||||||||||||||||||||
Net | Change in | Application of | Exchange | |||||||||||||||||||||||||||||
Estimated | December 31, | additions and | scope of | Amortization | amortization | differences | December 31, | |||||||||||||||||||||||||
Thousands of euros | useful life | 2007 | disposals | consolidation | and impairment | and 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 | |||||||||||||||||||||||||
At December 31, 2010, 2009 and 2008, the Group reviewed the useful lives of its intangible assets and adjusted the carrying amounts of these assets on the basis of the estimated economic benefits currently expected to be obtained therefrom. As a result of this review, in 2008 the Group recognized under Impairment losses on other assets — Goodwill and other intangible assets impairment losses amounting to EUR 911 million relating substantially in full to intangible assets arising from the acquisition of Abbey in 2004 (see Note 1.h). |
19. | Other assets |
The detail of Other assets is as follows: |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Transactions in transit | 304,591 | 439,739 | 204,780 | |||||||||
Net pension plan assets (Note 25) | 984,231 | 502,041 | 510,028 | |||||||||
Prepayments and accrued income | 2,558,738 | 2,259,262 | 1,952,843 | |||||||||
Other | 3,283,736 | 2,411,016 | 2,716,801 | |||||||||
Inventories | 455,107 | 518,833 | 620,774 | |||||||||
7,586,403 | 6,130,891 | 6,005,226 | ||||||||||
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20. | Deposits from central banks and Deposits from credit institutions |
The detail, by classification, counterparty, type and currency, of Deposits from central banks and Deposits from credit institutions is as follows: |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Classification: | ||||||||||||
Financial liabilities held for trading | 40,975,603 | 46,117,206 | 35,951,711 | |||||||||
Of which: | ||||||||||||
Deposits from central banks | 12,605,204 | 2,985,488 | 9,109,857 | |||||||||
Deposits from credit institutions | 28,370,399 | 43,131,718 | 26,841,854 | |||||||||
Other financial liabilities at fair value through profit or loss | 19,600,014 | 22,847,995 | 14,130,169 | |||||||||
Of which: | ||||||||||||
Deposits from central banks | 336,985 | 10,103,147 | 4,396,901 | |||||||||
Deposits from credit institutions | 19,263,029 | 12,744,848 | 9,733,268 | |||||||||
Financial liabilities at amortized cost | 79,536,568 | 73,126,386 | 79,795,490 | |||||||||
Of which: | ||||||||||||
Deposits from central banks | 8,644,043 | 22,345,110 | 9,211,957 | |||||||||
Deposits from credit institutions | 70,892,525 | 50,781,276 | 70,583,533 | |||||||||
140,112,185 | 142,091,587 | 129,877,370 | ||||||||||
Type: | ||||||||||||
Reciprocal accounts | 423,304 | 948,049 | 509,282 | |||||||||
Time deposits | 57,233,213 | 78,325,126 | 82,559,946 | |||||||||
Other demand accounts | 2,677,990 | 3,340,932 | 2,527,834 | |||||||||
Repurchase agreements | 78,196,555 | 56,818,092 | 41,651,446 | |||||||||
Central bank credit account drawdowns | 1,579,723 | 2,658,925 | 2,626,262 | |||||||||
Hybrid financial liabilities | 1,400 | 463 | 2,600 | |||||||||
140,112,185 | 142,091,587 | 129,877,370 | ||||||||||
Currency: | ||||||||||||
Euro | 52,872,178 | 58,457,951 | 59,833,384 | |||||||||
Pound sterling | 25,309,040 | 34,719,824 | 27,275,168 | |||||||||
US dollar | 43,996,327 | 37,066,057 | 33,490,478 | |||||||||
Other currencies | 17,934,640 | 11,847,756 | 9,278,340 | |||||||||
140,112,185 | 142,091,587 | 129,877,370 | ||||||||||
Note 51 contains a detail of the residual maturity periods of financial liabilities at amortized cost and of the related average interest rates. |
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21. | Customer deposits |
The detail, by classification, geographical area and type, of Customer deposits is as follows: |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Classification: | ||||||||||||
Financial liabilities held for trading | 7,848,954 | 4,658,372 | 4,896,065 | |||||||||
Other financial liabilities at fair value through profit or loss | 27,142,003 | 14,636,466 | 9,318,117 | |||||||||
Financial liabilities at amortized cost | 581,384,862 | 487,681,399 | 406,015,268 | |||||||||
616,375,819 | 506,976,237 | 420,229,450 | ||||||||||
Geographical area: | ||||||||||||
Spain | 218,788,099 | 170,760,231 | 142,376,596 | |||||||||
European Union (excluding Spain) | 230,929,334 | 199,169,106 | 170,778,310 | |||||||||
United States and Puerto Rico | 40,854,747 | 37,851,345 | 8,440,893 | |||||||||
Other OECD countries | 997,944 | 1,101,108 | 470,721 | |||||||||
Latin America | 124,333,911 | 96,804,592 | 96,103,045 | |||||||||
Rest of the world | 471,784 | 1,289,855 | 2,059,885 | |||||||||
616,375,819 | 506,976,237 | 420,229,450 | ||||||||||
Type: | ||||||||||||
Demand deposits- | ||||||||||||
Current accounts | 148,066,306 | 135,895,002 | 94,773,159 | |||||||||
Savings accounts | 136,693,907 | 127,940,647 | 115,673,794 | |||||||||
Other demand deposits | 3,430,804 | 3,570,326 | 3,035,757 | |||||||||
Time deposits- | ||||||||||||
Fixed-term deposits | 275,628,965 | 192,244,789 | 143,130,514 | |||||||||
Home-purchase savings accounts | 230,791 | 315,867 | 295,458 | |||||||||
Discount deposits | 448,432 | 448,432 | 11,625,840 | |||||||||
Hybrid financial liabilities | 4,754,258 | 5,447,496 | 8,159,893 | |||||||||
Other term deposits | 153,812 | 212,113 | 290,055 | |||||||||
Notice deposits | 1,316,203 | 2,208,116 | 1,764,954 | |||||||||
Repurchase agreements | 45,652,341 | 38,693,449 | 41,480,026 | |||||||||
616,375,819 | 506,976,237 | 420,229,450 | ||||||||||
Note 51 contains a detail of the residual maturity periods of financial liabilities at amortized cost and of the related average interest rates. |
22. | Marketable debt securities |
a) | Breakdown | ||
The detail, by classification and type, of Marketable debt securities is as follows: |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Classification: | ||||||||||||
Financial liabilities held for trading | 365,265 | 586,022 | 3,569,795 | |||||||||
Other financial liabilities at fair value through profit or loss | 4,277,732 | 4,886,840 | 5,191,073 | |||||||||
Financial liabilities at amortized cost | 188,229,225 | 206,490,311 | 227,642,422 | |||||||||
192,872,222 | 211,963,173 | 236,403,290 | ||||||||||
Type: | ||||||||||||
Bonds and debentures outstanding | 185,868,663 | 183,250,197 | 194,291,014 | |||||||||
Notes and other securities | 7,003,559 | 28,712,976 | 42,112,276 | |||||||||
192,872,222 | 211,963,173 | 236,403,290 | ||||||||||
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At December 31, 2010, 2009 and 2008, none of these issues was convertible into Bank shares or granted privileges or rights which, in certain circumstances, make them convertible into shares (except for the “Valores Santander”issue, which is described in Note 34.a). |
Note 51 contains a detail of the residual maturity periods of financial liabilities at amortized cost at 2010, 2009 and 2008 year-end and of the related average interest rates in those years. |
b) | Bonds and debentures outstanding |
The detail, by currency of issue, of Bonds and debentures outstanding is as follows: |
December 31, 2010 | ||||||||||||||||||||
Outstanding | ||||||||||||||||||||
issue amount in | ||||||||||||||||||||
foreign | Annual | |||||||||||||||||||
Millions of euros | currency | interest | ||||||||||||||||||
Currency of issue | 2010 | 2009 | 2008 | (millions) | rate (%) | |||||||||||||||
Euro | 120,705 | 122,454 | 135,330 | 120,705 | 2.61 | % | ||||||||||||||
US dollar | 33,680 | 36,535 | 27,459 | 45,004 | 1.52 | % | ||||||||||||||
Pound sterling | 17,735 | 13,829 | 21,493 | 15,265 | 1.64 | % | ||||||||||||||
Brazilian real | 7,391 | 3,768 | 2,531 | 16,391 | 10.77 | % | ||||||||||||||
Chilean peso | 3,777 | 3,180 | 2,380 | 2,361,620 | 4.04 | % | ||||||||||||||
Other currencies | 2,581 | 3,484 | 5,097 | |||||||||||||||||
Balance at end of year | 185,869 | 183,250 | 194,291 | |||||||||||||||||
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Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Balance at beginning of year | 183,250 | 194,291 | 200,557 | |||||||||
Net inclusion of entities in the Group | 831 | 10,760 | 20,333 | |||||||||
Of which: | ||||||||||||
Acquisition of portfolios of HSBC and Citi by Santander Consumer USA | 831 | — | — | |||||||||
Santander Holdings USA, Inc. (Sovereign Bancorp, Inc.) | — | 10,759 | — | |||||||||
Alliance & Leicester Group | — | — | 18,676 | |||||||||
Issues | 116,239 | 60,999 | 76,786 | |||||||||
Of which: | ||||||||||||
Santander UK Group (formerly Abbey) (*) | ||||||||||||
Bonds in pounds sterling | 51,052 | 4,945 | 21,667 | |||||||||
Bonds in other currencies | 24,221 | 33,257 | 29,599 | |||||||||
Santander International Debt, S.A. Sole-Shareholder Company | ||||||||||||
Bonds — floating/fixed rate | 10,012 | 2,928 | 16,007 | |||||||||
Banco Santander Brasil S.A. | ||||||||||||
Real estate letters of credit | 3,218 | 2,311 | 663 | |||||||||
Bonds | 3,984 | 80 | 556 | |||||||||
Agricultural letters of credit | 410 | 458 | — | |||||||||
Banesto | ||||||||||||
Bonds | 5,979 | 4,556 | 3,818 | |||||||||
Mortgage-backed bonds — fixed rate | 565 | 2,807 | 100 | |||||||||
Santander Consumer USA Inc. | ||||||||||||
Asset-backed securities | 4,642 | — | — | |||||||||
Banco Santander, S.A. | ||||||||||||
Bonds | 2,110 | — | — | |||||||||
Mortgage-backed bonds — fixed rate | 2,030 | 1,500 | — | |||||||||
Santander US Debt, S.A. Sole-Shareholder Company | ||||||||||||
Debentures — floating rate | 3,068 | 1,032 | — | |||||||||
Banco Santander — Chile | ||||||||||||
Bonds | 2,135 | 859 | — | |||||||||
Banco Santander Totta, S.A. | ||||||||||||
Mortgage debentures | 950 | 1,000 | 1,000 | |||||||||
Bonds | 342 | 1,520 | 1,496 | |||||||||
Totta (Ireland), PLC | ||||||||||||
Bonds — floating rate | 112 | 3,380 | 849 | |||||||||
Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander | ||||||||||||
Bonds | 10 | 164 | — | |||||||||
Redemptions | (112,730 | ) | (75,614 | ) | (93,872 | ) | ||||||
Of which: | ||||||||||||
Santander UK Group (*) | (70,071 | ) | (48,277 | ) | (65,039 | ) | ||||||
Santander International Debt, S.A. Sole-Shareholder Company | (11,576 | ) | (2,672 | ) | (6,239 | ) | ||||||
Santander Holdings USA, Inc. | (9,652 | ) | — | |||||||||
Banesto | (7,134 | ) | (4,971 | ) | (7,407 | ) | ||||||
Totta (Ireland), PLC | (3,380 | ) | (849 | ) | (1,189 | ) | ||||||
Banco Santander S.A. (Brazil) | (3,116 | ) | (2,278 | ) | (555 | ) | ||||||
Banco Santander, S.A. | (1,965 | ) | (1,545 | ) | (1,783 | ) | ||||||
Hipototta No. 6 Limited | (1,818 | ) | — | — | ||||||||
Santander US Debt, S.A. Sole-Shareholder Company | (1,562 | ) | (13,156 | ) | (4,178 | ) | ||||||
Banco Santander Totta, S.A. | (1,383 | ) | (1,430 | ) | (2,637 | ) | ||||||
Santander Consumer USA | (519 | ) | (155 | ) | (960 | ) | ||||||
Banco Santander — Chile | (228 | ) | — | |||||||||
Santander Consumer Bank S.p.A. | (26 | ) | — | (217 | ) | |||||||
Santander Consumer Bank Aktiengesellschaft | — | (149 | ) | (203 | ) | |||||||
Santander Central Hispano International Limited | — | (46 | ) | (979 | ) | |||||||
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 | 2,098 | 1,459 | (5,806 | ) | ||||||||
Repurchases and other changes | (3,819 | ) | (8,645 | ) | (3,707 | ) | ||||||
Balance at end of year | 185,869 | 183,250 | 194,291 | |||||||||
(*) | Including Alliance & Leicester. |
c) | Notes and other securities |
These notes were issued basically by Abbey National North America LLC, Santander UK, Sovereign Bancorp, Inc., Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander, Banco Santander, S.A., Banco Santander Puerto Rico, Banesto, S.A., Laparanza, S.A., Santander Consumer Finance, S.A., Santander Commercial Paper, S.A., Sole-Shareholder Company and Fondo de Titulización de Activos Santander 2. |
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d) | Guarantees |
The detail of liabilities and contingent liabilities secured by financial assets is as follows: |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Asset-backed securities | 39,279 | 37,945 | 50,153 | |||||||||
Of which, mortgage-backed securities | 28,059 | 27,481 | 34,409 | |||||||||
Other mortgage securities | 65,187 | 53,994 | 47,758 | |||||||||
Of which: mortgage-backed bonds | 41,960 | 42,204 | 37,726 | |||||||||
104,466 | 91,939 | 97,911 | ||||||||||
The mortgage-backed securities and other mortgage securities are secured by mortgage loans with average maturities of more than ten years. The main terms and conditions of these loans are listed below: |
1. | Transactions securing mortgage-backed securities: |
• | First mortgage for acquisition and/or refurbishment of principal or second residence, which at the date of securitization did 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 does not exceed 80% of the lower of the appraised value and the purchase price, unless additional guarantees are provided (borrower’s payment capacity, other collateral, guarantors of solvency or mortgage credit insurance), in which case this limit may be extended up to a maximum of 120%. |
• | 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. |
The other securitizations, including asset-backed securities and notes issued by special-purpose vehicles (SPVs), are secured by: |
• | Mortgage loans to individuals to finance the acquisition and refurbishment of homes with an average maturity of more than 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 more than ten years. |
• | Asset-backed securities issued by various European special-purpose vehicles backed by German and Italian loans for the purchase of 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. |
The fair value of the guarantees received by the Group (financial and non-financial assets) which the Group is authorized to sell or pledge even if the owner of the guarantee has not defaulted is scantly material taking into account the Group’s financial statements as a whole. |
e) | Spanish mortgage-market issues |
The members of the board of directors hereby state that the Group’s Spanish entities to which the regulations mentioned below apply have specific policies and procedures in place to cover all activities relating to the mortgage-market issues launched by it, which guarantee strict compliance with the mortgage market regulations applicable to these activities as provided for in Royal Decree 716/2009, of April 24, implementing certain provisions of Mortgage Market Law 2/1981, of March 25, and, by application thereof, in Bank of Spain Circular 7/2010, of November 30, and other financial and mortgage system regulations. Also, financial management defines the Group entities’ funding strategy. |
The risk policies applicable to mortgage market transactions envisage maximum loan-to-value (LTV) ratios, and specific policies are also in place adapted to each mortgage product, which occasionally require the application of stricter limits. |
The Group’s general policies in this respect establish that an analysis must be performed of the repayment capacity of each potential customer. This analysis must determine whether each customer’s income is sufficient to meet the repayments of the loan requested. In addition, the analysis of each customer must include a conclusion on the stability over time of the customer’s income considered with respect to the life of the loan. The indicator used to measure the repayment capacity (effort ratio) of each potential customer takes into account mainly the relationship between the potential debt and the income generated, considering on the one hand the monthly repayments of the loan requested and other transactions and, on the other, the monthly salary income and other duly supported income. |
The Group entities have specialized document comparison procedures and tools for verifying customer information and solvency (see Note 54). |
The Group entities’ procedures envisage that each mortgage originated in the mortgage market must be individually valued by an appraisal company not related to the Group. |
Mortgage Market Law 41/2007, Article 5, establishes that any appraisal company approved by the Bank of Spain may issue valid appraisal reports. However, as permitted by this same article, the Group entities perform a series of checks and select, from among these companies, a small group with which it enters into cooperation agreements with special conditions and automated control mechanisms. The Group’s internal regulations specify, in detail, each of the internally approved companies, as well as the approval requirements and procedures and the controls established to uphold them. In this connection, the regulations establish the functions of an appraisal company committee on which the various areas of the Group related to these companies are represented. The aim of the committee is to regulate and adapt the internal regulations and the activities of the appraisal companies to the current market and business situation. |
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Basically, the companies wishing to cooperate with the Group must have a significant level of activity in the mortgage market in the area in which they operate, they must pass a preliminary screening process based on criteria of independence, technical capacity and solvency -in order to ascertain the continuity of their business- and, lastly, they must pass a series of tests prior to obtaining definitive approval. |
In order to comply with the legislation, any appraisal provided by the customer is reviewed, irrespective of which appraisal company issues it, to verify whether the requirements, procedures and methods used to prepare it are formally adapted to the valued asset pursuant to current legislation and that the values reported are customary in the market. |
Following is a detail of the information required by Bank of Spain Circular 7/2010, of November 30, pursuant to the aforementioned Royal Decree 716/2009, of April 24: |
Thousands of euros | ||||
12/31/10 | ||||
Carrying amount of the mortgage loans and credits receivable | 108,173,754 | |||
Of which: | ||||
Loans eligible to cover issues of mortgage-backed securities | 58,811,432 | |||
Transfers of assets retained on balance sheet: mortgage-backed certificates and other securitized mortgage assets | 10,968,834 |
Mortgage-backed bonds (“cédulas hipotecarias”) |
The mortgage-backed bonds issued by Group entities are securities the principal and interest of which are specifically secured by mortgages, there being no need for registration in the Property Register and without prejudice to the issuer’s unlimited liability. |
The mortgage-backed bonds include the holder’s financial claim on the issuer, secured as indicated in the preceding paragraph, and may be enforced to claim payment from the issuer after maturity. The holders of these securities have the status of special preferential creditors vis-à-vis all other creditors (established in Article 1923.3 of the Spanish Civil Code) in relation to all the mortgage loans and credits registered in the issuer’s favor and, where appropriate, in relation to the cash flows generated by the derivative financial instruments associated with the issues. |
In the event of insolvency, the holders of these bonds will enjoy the special privilege established in Article 90.1.1 of Insolvency Law 22/2003, of July 9. Without prejudice to the foregoing, in accordance with Article 84.2.7 of the Insolvency Law, during the insolvency proceedings, the payments relating to the repayment of the principal and interest of the bonds issued and outstanding at the date of the insolvency filing will be settled up to the amount of the income received by the insolvent party from the mortgage loans and credits and, where appropriate, from the replacement assets backing the bonds and from the cash flows generated by the financial instruments associated with the issues (Final Provision 19 of the Insolvency Law). |
If, due to a timing mismatch, the income received by the insolvent party is insufficient to meet the payments described in the preceding paragraph, the insolvency managers must settle them by realizing the replacement assets set aside to cover the issue and, if this is not sufficient, they must obtain financing to meet the mandated payments to the holders of the mortgage-backed bonds, and the finance provider must be subrogated to the position of the bond-holders. |
In the event that the measure indicated in Article 155.3 of the Insolvency Law were to be adopted, the payments to all holders of the mortgage-backed bonds issued would be made on a pro-rata basis, irrespective of the issue dates of the bonds. |
The outstanding mortgage-backed bonds issued by the Group totalled EUR 41,960 million at December 31, 2010 (all of which were denominated in euros), of which EUR 23,509 million were issued by Banco Santander, S.A.; EUR 17,274 million were issued by Banco Español de Crédito, S.A. and EUR 1,177 million were issued by Santander Consumer Finance, S.A. The issues outstanding at December 31, 2010 and 2009 are detailed in the separate financial statements of each of these companies. |
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Mortgage bond issuers have an early redemption option solely for the purpose of complying with the limits on the volume of outstanding mortgage-backed bonds stipulated by mortgage market regulations. |
None of the mortgage-backed bonds issued by the Group entities had replacement assets assigned to them. |
23. | Subordinated liabilities |
a) | Breakdown |
The detail, by currency of issue, of Subordinated liabilities is as follows: |
December 31, 2010 | ||||||||||||||||||||
Outstanding | ||||||||||||||||||||
issue amount | ||||||||||||||||||||
in foreign | Annual | |||||||||||||||||||
Thousands of euros | currency | interest rate | ||||||||||||||||||
Currency of issue | 2010 | 2009 | 2008 | (millions) | (%) | |||||||||||||||
Euro | 13,700,799 | 16,598,441 | 19,660,053 | 13,701 | 5.48 | % | ||||||||||||||
US dollar | 6,259,098 | 9,297,611 | 7,877,340 | 8,363 | 6.71 | % | ||||||||||||||
Pound sterling | 4,876,061 | 6,440,827 | 7,952,179 | 4,197 | 7.64 | % | ||||||||||||||
Brazilian real | 4,371,694 | 3,490,034 | 2,442,517 | 9,695 | 10.78 | % | ||||||||||||||
Other currencies | 1,266,985 | 977,688 | 941,161 | |||||||||||||||||
Balance at end of year | 30,474,637 | 36,804,601 | 38,873,250 | |||||||||||||||||
Of which, preference shares | 435,365 | 430,152 | 1,051,272 |
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b) | Changes |
The changes in Subordinated liabilities were as follows: |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Balance at beginning of year | 36,805 | 38,873 | 36,193 | |||||||||
Net inclusion of entities in the Group | — | 1,598 | 2,776 | |||||||||
Alliance & Leicester Group | — | — | 1,648 | |||||||||
Banco AMRO Real S.A. | — | — | 1,128 | |||||||||
Santander Holdings USA, Inc. | — | 1,598 | — | |||||||||
Issues | 287 | 6,874 | 312 | |||||||||
Of which: | ||||||||||||
Banco Santander- Chile | 206 | 48 | — | |||||||||
Banco Santander, S.A. | 73 | 9 | — | |||||||||
Santander Finance Capital, S.A., Sole-Shareholder Company | — | 2,463 | — | |||||||||
Santander Finance Preferred, S.A., Sole-Shareholder Company | — | 1,576 | — | |||||||||
Santander Issuances, S.A., Sole-Shareholder Company | — | 1,544 | — | |||||||||
Santander International Preferred, S.A., Sole-Shareholder Company | — | 690 | — | |||||||||
Banesto, S.A. | — | 497 | — | |||||||||
Redemptions | (7,728 | ) | (9,316 | ) | (1,315 | ) | ||||||
Of which: | ||||||||||||
Santander Issuances, S.A., Sole-Shareholder Company | (1,852 | ) | (500 | ) | — | |||||||
Santander Central Hispano Issuances Limited | (1,484 | ) | (1,027 | ) | (153 | ) | ||||||
Santander UK Plc (*) | (1,453 | ) | (3,468 | ) | (409 | ) | ||||||
Santander Finance Capital, S.A., Sole-Shareholder Company | (1,000 | ) | (2,280 | ) | — | |||||||
Santander Perpetual, S.A., Sole-Shareholder Company | (848 | ) | (588 | ) | — | |||||||
Banco Santander (Brasil) S.A. | (347 | ) | (20 | ) | — | |||||||
Banco Santander Totta, S.A. | (254 | ) | (25 | ) | — | |||||||
Santander Holdings USA, Inc. | (148 | ) | — | — | ||||||||
Banesto, S.A. | (17 | ) | (131 | ) | (500 | ) | ||||||
Santander Finance Preferred, S.A., Sole-Shareholder Company | — | (1,174 | ) | — | ||||||||
Exchange differences | 1,161 | 708 | (2,066 | ) | ||||||||
Other changes | (51 | ) | (1,932 | ) | 2,973 | |||||||
Balance at end of year | 30,474 | 36,805 | 38,873 | |||||||||
(*) | Including Alliance & Leicester. |
c) | Other disclosures |
This item includes the preference shares (participaciones preferentes) and other financial instruments issued by the consolidated companies which, although equity for legal purposes, do not meet the requirements for classification as equity (preference shares). |
The preference shares do not carry any voting rights and are non-cumulative. They were subscribed to by non-Group third parties and, except for the shares of Santander UK referred to below, are redeemable at the discretion of the issuer, based on the terms and conditions of each issue. |
For the purposes of payment priority, preference shares (participaciones preferentes) are junior to all general creditors and to subordinated deposits. The remuneration of these securities, which have no voting rights, is conditional upon the obtainment of sufficient distributable profit and upon the limits imposed by Spanish banking regulations on equity. |
The other issues are subordinated and, therefore, rank junior to all general creditors of the issuers. The issues launched by Santander Central Hispano Issuances Limited, Santander Central Hispano Financial Services Limited, Santander Issuances, S.A. (Sole-Shareholder Company), Santander Perpetual, S.A. (Sole-Shareholder Company), Santander Finance Capital, S.A. (Sole-Shareholder Company), Santander International Preferred, S.A. (Sole-Shareholder Company) and Santander Finance Preferred S.A. (Sole-Shareholder Company) are guaranteed by the Bank or by restricted deposits arranged by the Bank for this purpose. |
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Except for those described in Note 34.a, at December 31, 2010 none of these issues was convertible into Bank shares or granted privileges or rights which, in certain circumstances, might make them convertible into shares. |
At December 31, 2010, Santander UK plc had a GBP 200 million subordinated debt issue which is convertible, at Santander UK plc’s option, into preference shares of Santander UK plc, at a price of GBP 1 per share. Also, in 2010 the Group launched an issue of bonds mandatorily exchangeable for shares of Banco Santander Brasil (see Note 34). |
The accrued interest on the subordinated liabilities amounted to EUR 2,230 million in 2010 (December 31, 2009: EUR 2,354 million; December 31, 2008: EUR 2,415 million) (see Note 39). |
24. | Other financial liabilities |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Trade payables | 2,079,988 | 1,902,249 | 2,282,759 | |||||||||
Clearing houses | 1,485,159 | 734,873 | 761,534 | |||||||||
Tax collection accounts: | ||||||||||||
Tax payables | 2,106,448 | 1,915,373 | 2,066,685 | |||||||||
Factoring accounts payable | 415,545 | 448,985 | 283,478 | |||||||||
Unsettled financial transactions | 3,182,829 | 2,753,781 | 3,628,473 | |||||||||
Other financial liabilities | 10,073,424 | 11,847,307 | 8,658,240 | |||||||||
Of which: recognized in financial liabilities held for trading | — | 302,520 | — | |||||||||
19,343,393 | 19,602,568 | 17,681,169 | ||||||||||
25. | Provisions |
a) | Breakdown |
The detail of Provisions is as follows: |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Provisions for pensions and similar obligations | 9,519,093 | 10,628,684 | 11,198,117 | |||||||||
Provisions for taxes and other legal contingencies | 3,670,184 | 3,283,339 | 2,363,706 | |||||||||
Provisions for contingent liabilities and commitments (Note 2): | 1,030,244 | 641,620 | 678,584 | |||||||||
Of which: due to country risk | 18,796 | 18,418 | 56,254 | |||||||||
Other provisions | 1,440,332 | 2,979,096 | 3,495,852 | |||||||||
Provisions | 15,659,853 | 17,532,739 | 17,736,259 | |||||||||
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b) | Changes |
The changes in Provisions were as follows: |
Millions of euros | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||||||||||||||
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 | 10,629 | 642 | 6,262 | 17,533 | 11,198 | 679 | 5,860 | 17,737 | 11,820 | 636 | 4,115 | 16,571 | ||||||||||||||||||||||||||||||||||||
Net inclusion of entities in the Group | — | 4 | 8 | 12 | 44 | 125 | (26 | ) | 143 | 175 | 73 | 2,816 | 3,064 | |||||||||||||||||||||||||||||||||||
Additions charged to income: | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense and similar charges (Note 39) | 481 | — | — | 481 | 482 | — | — | 482 | 454 | — | — | 454 | ||||||||||||||||||||||||||||||||||||
Personnel expenses (Note 47) | 146 | — | — | 146 | 176 | — | — | 176 | 184 | — | — | 184 | ||||||||||||||||||||||||||||||||||||
Period provisions | 188 | 69 | 876 | 1,133 | 339 | 46 | 1,407 | 1,792 | 598 | (3 | ) | 1,045 | 1,640 | |||||||||||||||||||||||||||||||||||
Other additions arising from insurance contracts linked to pensions | (29 | ) | — | — | (29 | ) | (30 | ) | — | — | (30 | ) | (17 | ) | — | — | (17 | ) | ||||||||||||||||||||||||||||||
Payments to pensioners and pre-retirees with a charge to internal provisions | (1,258 | ) | — | — | (1,258 | ) | (1,191 | ) | — | — | (1,191 | ) | (1,086 | ) | — | — | (1,086 | ) | ||||||||||||||||||||||||||||||
Insurance premiums paid | (3 | ) | — | — | (3 | ) | (1 | ) | — | — | (1 | ) | (8 | ) | — | — | (8 | ) | ||||||||||||||||||||||||||||||
Payments to external funds | (1,205 | ) | — | — | (1,205 | ) | (594 | ) | — | — | (594 | ) | (563 | ) | — | — | (563 | ) | ||||||||||||||||||||||||||||||
Amount used | — | — | (3,364 | ) | (3,364 | ) | — | — | (1,412 | ) | (1,412 | ) | — | — | (1,523 | ) | (1,523 | ) | ||||||||||||||||||||||||||||||
Transfers, exchange differences and other changes | 570 | 315 | 1,329 | 2,214 | 206 | (208 | ) | 433 | 431 | (359 | ) | (27 | ) | (594 | ) | (980 | ) | |||||||||||||||||||||||||||||||
Balances at end of year | 9,519 | 1,030 | 5,111 | 15,660 | 10,629 | 642 | 6,262 | 17,533 | 11,198 | 679 | 5,860 | 17,736 | ||||||||||||||||||||||||||||||||||||
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c) | Provisions for pensions and similar obligations |
The detail of Provisions for pensions and similar obligations is as follows: |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Provisions for post-employment plans — Spanish entities | 5,247 | 5,443 | 5,596 | |||||||||
Of which: defined benefit | 5,244 | 5,439 | 5,593 | |||||||||
Provisions for other similar obligations — Spanish entities | 3,273 | 3,851 | 4,166 | |||||||||
Of which: pre-retirements | 3,262 | 3,842 | 4,158 | |||||||||
Provisions for post-employment plans — Santander UK | 28 | 496 | 744 | |||||||||
Provisions for post-employment plans and other similar obligations — Other foreign subsidiaries | 971 | 839 | 692 | |||||||||
Of which: defined benefit | 966 | 829 | 688 | |||||||||
Provisions for pensions and similar obligations | 9,519 | 10,629 | 11,198 | |||||||||
i. Spanish entities — Post-employment plans and other similar obligations |
At each year-end, the consolidated Spanish entities had post-employment benefit obligations under defined benefit plans. On July 25, 2006, the Bank entered into an agreement with the employee representatives to promote a defined contribution plan aimed at all current personnel. Subsequently, at its meeting on December 17, 2007, the Bank’s board of directors approved the implementation of a defined contribution retirement plan for executives of the Bank. In 2008, in accordance with the aforementioned plan, an extraordinary contribution totaling EUR 111 million was made for past service. Lastly, in various years some of the consolidated entities offered certain of their employees the possibility of taking pre-retirement and, therefore, provisions are recognized each year for the obligations to employees taking pre-retirement -in terms of salaries and other employee benefit costs- from the date of their pre-retirement to the date of effective retirement. |
At December 31, 2010, 2009 and 2008, the Spanish entities had post-employment benefit obligations under defined contribution and defined benefit plans. The expenses incurred in respect of contributions to defined contribution plans amounted to EUR 47 million in 2010 (2009: EUR 44 million; 2008: EUR 40 million). |
The amount of the defined benefit obligations was determined on the basis of the work performed by independent actuaries using the following actuarial techniques: |
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 | |||||||||||
2010 | 2009 | 2008 | 2010 | 2009 | 2008 | |||||||
Annual discount rate | 4.0% | 4.0% | 4.0% | 4.0% | 4.0% | 4.0% | ||||||
Mortality tables | GRM/F-95 | GRM/F-95 | GRM/F-95 | GRM/F-95 | GRM/F-95 | GRM/F-95 | ||||||
(PERM/F-2000 | (PERM/F-2000 | (PERM/F-2000 | (PERM/F-2000 | (PERM/F-2000 | (PERM/F-2000 | |||||||
in the case of | in the case of | in the case of | in the case of | in the case of | in the case of | |||||||
Banesto) | Banesto) | Banesto) | Banesto) | Banesto) | 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 | 2.50% (2.9% in the | 2.50% (2.9% in the | |||||||||
case of Banesto) | case of Banesto) | 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 | |||||||||||||||||||||||
2010 | 2009 | 2008 | 2010 | 2009 | 2008 | |||||||||||||||||||
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 | |||||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | 2010 | 2009 | 2008 | 2007 | 2006 | |||||||||||||||||||||||||||||||
Present value of the obligations: | ||||||||||||||||||||||||||||||||||||||||
To current employees | 1,240 | 1,200 | 1,273 | 1,259 | 1,215 | — | — | — | — | — | ||||||||||||||||||||||||||||||
Vested obligations to retired employees | 4,471 | 4,708 | 4,828 | 4,876 | 4,958 | — | — | — | — | — | ||||||||||||||||||||||||||||||
To pre-retirees | — | — | — | — | — | 3,262 | 3,842 | 4,158 | 3,950 | 4,481 | ||||||||||||||||||||||||||||||
Long-service bonuses and other obligations | — | — | — | — | — | 8 | 9 | 8 | 50 | 46 | ||||||||||||||||||||||||||||||
Other | 181 | 183 | 181 | 174 | 164 | 3 | — | — | 1 | — | ||||||||||||||||||||||||||||||
5,892 | 6,091 | 6,282 | 6,309 | 6,337 | 3,273 | 3,851 | 4,166 | 4,001 | 4,527 | |||||||||||||||||||||||||||||||
Less- | ||||||||||||||||||||||||||||||||||||||||
Fair value of plan assets | 183 | 184 | 193 | 192 | 203 | — | — | — | — | — | ||||||||||||||||||||||||||||||
Unrecognized actuarial (gains)/losses | 457 | 462 | 489 | 487 | 482 | — | — | — | — | — | ||||||||||||||||||||||||||||||
Unrecognized past service cost | 8 | 6 | 7 | 4 | 5 | — | — | — | — | — | ||||||||||||||||||||||||||||||
Provisions — Provisions for pensions | 5,244 | 5,439 | 5,593 | 5,626 | 5,647 | 3,273 | 3,851 | 4,166 | 4,001 | 4,527 | ||||||||||||||||||||||||||||||
Of which: | ||||||||||||||||||||||||||||||||||||||||
Internal provisions for pensions | 3,025 | 3,086 | 3,153 | 3,114 | 3,065 | 3,272 | 3,848 | 4,159 | 3,987 | 4,504 | ||||||||||||||||||||||||||||||
Insurance contracts linked to pensions (Note 14) | 2,219 | 2,353 | 2,440 | 2,512 | 2,582 | 1 | 3 | 7 | 14 | 23 |
Millions of euros | ||||||||||||||||||||||||
Post-employment plans | Other similar obligations | |||||||||||||||||||||||
2010 | 2009 | 2008 | 2010 | 2009 | 2008 | |||||||||||||||||||
Current service cost | 52 | 55 | 56 | 1 | 1 | 5 | ||||||||||||||||||
Interest cost | 215 | 226 | 240 | 139 | 153 | 145 | ||||||||||||||||||
Expected return on plan assets | (7 | ) | (7 | ) | (8 | ) | — | — | — | |||||||||||||||
Expected return on insurance contracts linked to pensions | (90 | ) | (95 | ) | (95 | ) | — | — | — | |||||||||||||||
Extraordinary charges (credits)- | ||||||||||||||||||||||||
Actuarial (gains)/losses recognized in the year | 3 | 10 | 6 | (14 | ) | 38 | 4 | |||||||||||||||||
Past service cost | 40 | 29 | 63 | 28 | — | — | ||||||||||||||||||
Pre-retirement cost | 1 | (19 | ) | (23 | ) | 10 | 257 | 587 | ||||||||||||||||
Other | (21 | ) | (51 | ) | (20 | ) | (10 | ) | — | (53 | ) | |||||||||||||
Total | 193 | 148 | 219 | 154 | 449 | 688 | ||||||||||||||||||
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The changes in the present value of the accrued defined benefit obligations were as follows: |
Millions of euros | ||||||||||||||||||||||||
Post-employment plans | Other similar obligations | |||||||||||||||||||||||
2010 | 2009 | 2008 | 2010 | 2009 | 2008 | |||||||||||||||||||
Present value of the obligations at beginning of year | 6,091 | 6,282 | 6,309 | 3,851 | 4,166 | 4,001 | ||||||||||||||||||
Current service cost | 52 | 55 | 56 | 1 | 1 | 5 | ||||||||||||||||||
Interest cost | 215 | 226 | 240 | 139 | 153 | 145 | ||||||||||||||||||
Pre-retirement cost | 1 | (19 | ) | (23 | ) | 10 | 257 | 587 | ||||||||||||||||
Effect of curtailment/settlement | (21 | ) | (51 | ) | (21 | ) | (10 | ) | — | (54 | ) | |||||||||||||
Benefits paid | (465 | ) | (383 | ) | (334 | ) | (732 | ) | (765 | ) | (726 | ) | ||||||||||||
Past service cost | 42 | 29 | 66 | 28 | — | — | ||||||||||||||||||
Actuarial (gains)/losses | (32 | ) | (52 | ) | (11 | ) | (14 | ) | 38 | 4 | ||||||||||||||
Other | 9 | 4 | — | — | 1 | 204 | ||||||||||||||||||
Present value of the obligations at end of year | 5,892 | 6,091 | 6,282 | 3,273 | 3,851 | 4,166 | ||||||||||||||||||
The changes in the fair value of plan assets and of insurance contracts linked to pensions were as follows: |
Millions of euros | ||||||||||||
Post-employment plans | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Fair value of plan assets at beginning of year | 184 | 193 | 192 | |||||||||
Expected return on plan assets | 7 | 7 | 8 | |||||||||
Actuarial gains/(losses) | (1 | ) | (4 | ) | (2 | ) | ||||||
Contributions | 3 | (1 | ) | 8 | ||||||||
Benefits paid | (10 | ) | (11 | ) | (13 | ) | ||||||
Fair value of plan assets at end of year | 183 | 184 | 193 | |||||||||
Millions of euros | ||||||||||||||||||||||||
Post-employment plans | Other similar obligations | |||||||||||||||||||||||
2010 | 2009 | 2008 | 2010 | 2009 | 2008 | |||||||||||||||||||
Fair value of insurance contracts linked to pensions at beginning of year | 2,353 | 2,440 | 2,512 | 3 | 7 | 14 | ||||||||||||||||||
Expected return on insurance contracts (Note 38) | 90 | 95 | 95 | — | — | — | ||||||||||||||||||
Actuarial gains/(losses) | (29 | ) | (31 | ) | (17 | ) | — | — | — | |||||||||||||||
Premiums paid | (39 | ) | 7 | 11 | — | — | — | |||||||||||||||||
Benefits paid | (156 | ) | (158 | ) | (161 | ) | (2 | ) | (4 | ) | (7 | ) | ||||||||||||
Fair value of insurance contracts linked to pensions at end of year | 2,219 | 2,353 | 2,440 | 1 | 3 | 7 | ||||||||||||||||||
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Millions | ||||
of euros | ||||
2011 | 1,063 | |||
2012 | 1,006 | |||
2013 | 907 | |||
2014 | 837 | |||
2015 | 749 | |||
2016 to 2020 | 2,545 | |||
7,107 | ||||
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: |
2010 | 2009 | 2008 | ||||||||||
Annual discount rate | 5.45% | 5.75% | 6.40% | |||||||||
Mortality tables | 103 S1 Light TMC | PX92MC C2009 | PX92MC C2008 | |||||||||
Cumulative annual CPI growth | 3.5% | 3.4% | 3.0% | |||||||||
Annual salary increase rate | 3.5% | 3.4% | 3.5% | |||||||||
Annual pension increase rate | 3.4% | 3.3% | 3.0% |
Millions of euros | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Present value of the obligations | 7,824 | 7,116 | 5,445 | 6,248 | 6,350 | |||||||||||||||
Less- | ||||||||||||||||||||
Fair value of plan assets | 7,617 | 5,910 | 4,591 | 4,913 | 4,810 | |||||||||||||||
Unrecognized actuarial (gains)/losses | 767 | 787 | 202 | 60 | (102 | ) | ||||||||||||||
Provisions — Provisions for pensions | (560 | ) | 419 | 652 | 1,275 | 1,642 | ||||||||||||||
Of which: | ||||||||||||||||||||
Internal provisions for pensions | 28 | 496 | 744 | 1,275 | 1,642 | |||||||||||||||
Net assets for pensions | (588 | ) | (77 | ) | (92 | ) | — | — |
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Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Current service cost | 43 | 72 | 69 | |||||||||
Interest cost | 416 | 367 | 331 | |||||||||
Expected return on plan assets | (370 | ) | (320 | ) | (298 | ) | ||||||
Extraordinary charges (credits): | ||||||||||||
Actuarial (gains)/losses recognized in the year | 22 | — | (1 | ) | ||||||||
Past service cost | — | (1 | ) | — | ||||||||
Total | 111 | 118 | 101 | |||||||||
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Present value of the obligations at beginning of year | 7,116 | 5,445 | 6,248 | |||||||||
Net inclusion of entities in the Group | — | — | 1,252 | |||||||||
Current service cost | 43 | 72 | 69 | |||||||||
Interest cost | 416 | 367 | 331 | |||||||||
Past service cost | — | (1 | ) | — | ||||||||
Benefits paid | (241 | ) | (261 | ) | (199 | ) | ||||||
Actuarial (gains)/losses | 244 | 1,050 | (802 | ) | ||||||||
Exchange differences and other items | 246 | 444 | (1,454 | ) | ||||||||
Present value of the obligations at end of year | 7,824 | 7,116 | 5,445 | |||||||||
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Fair value of plan assets at beginning of year | 5,910 | 4,591 | 4,913 | |||||||||
Net inclusion of entities in the Group | — | — | 1,335 | |||||||||
Expected return on plan assets | 370 | 320 | 298 | |||||||||
Actuarial gains/(losses) | 273 | 364 | (954 | ) | ||||||||
Contributions | 1,121 | 564 | 413 | |||||||||
Benefits paid | (241 | ) | (261 | ) | (199 | ) | ||||||
Exchange differences | 184 | 332 | (1,215 | ) | ||||||||
Fair value of plan assets at end of year | 7,617 | 5,910 | 4,591 | |||||||||
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The main categories of plan assets as a percentage of total plan assets are as follows: |
2010 | 2009 | 2008 | ||||||||||
Equity instruments | 34 | % | 39 | % | 41 | % | ||||||
Debt instruments | 58 | % | 54 | % | 56 | % | ||||||
Properties | 1 | % | 1 | % | 2 | % | ||||||
Other | 7 | % | 6 | % | 1 | % |
Millions | ||||
of euros | ||||
2011 | 254 | |||
2012 | 271 | |||
2013 | 289 | |||
2014 | 309 | |||
2015 | 330 | |||
2016 to 2020 | 2,027 | |||
3,480 | ||||
iii. Other foreign subsidiaries |
Millions of euros | ||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||
Present value of the obligations | 11,062 | 9,078 | 6,735 | 7,264 | 6,198 | |||||||||||||||
Less- | ||||||||||||||||||||
Fair value of plan assets | 10,176 | 8,497 | 6,307 | 6,725 | 3,917 | |||||||||||||||
Unrecognized actuarial (gains)/losses | 667 | 632 | 386 | 134 | 517 | |||||||||||||||
Unrecognized past service cost | — | 3 | — | — | — | |||||||||||||||
Provisions — Provisions for pensions | 219 | (54 | ) | 42 | 405 | 1,764 | ||||||||||||||
Of which: | ||||||||||||||||||||
Internal provisions for pensions | 966 | 829 | 688 | 821 | 2,198 | |||||||||||||||
Net assets for pensions | (396 | ) | (425 | ) | (418 | ) | (239 | ) | (224 | ) | ||||||||||
Unrecognized net assets for pensions | (351 | ) | (458 | ) | (228 | ) | (177 | ) | (210 | ) |
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Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Current service cost | 50 | 49 | 54 | |||||||||
Interest cost | 939 | 736 | 670 | |||||||||
Expected return on plan assets | (851 | ) | (672 | ) | (627 | ) | ||||||
Extraordinary charges (credits): | ||||||||||||
Actuarial (gains)/losses recognized in the year | 83 | 73 | 31 | |||||||||
Pre-retirement cost | 31 | 9 | 5 | |||||||||
Other | 11 | (10 | ) | (2 | ) | |||||||
Total | 263 | 185 | 131 | |||||||||
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Present value of the obligations at beginning of year | 9,078 | 6,735 | 7,264 | |||||||||
Net inclusion of entities in the Group | — | 68 | 673 | |||||||||
Current service cost | 50 | 49 | 54 | |||||||||
Interest cost | 939 | 736 | 670 | |||||||||
Pre-retirement cost | 31 | 9 | 5 | |||||||||
Effect of curtailment/settlement | (8 | ) | (209 | ) | (2 | ) | ||||||
Benefits paid | (717 | ) | (587 | ) | (535 | ) | ||||||
Past service cost | 17 | 3 | — | |||||||||
Actuarial (gains)/losses | 585 | 830 | (10 | ) | ||||||||
Exchange differences and other items | 1,087 | 1,444 | (1,384 | ) | ||||||||
Present value of the obligations at end of year | 11,062 | 9,078 | 6,735 | |||||||||
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Fair value of plan assets at beginning of year | 8,497 | 6,307 | 6,725 | |||||||||
Net inclusion of entities in the Group | — | 49 | 618 | |||||||||
Expected return on plan assets | 851 | 672 | 627 | |||||||||
Actuarial gains/(losses) | 351 | 449 | (351 | ) | ||||||||
Contributions | 130 | 158 | 285 | |||||||||
Benefits paid | (646 | ) | (533 | ) | (495 | ) | ||||||
Exchange differences and other items | 993 | 1,395 | (1,102 | ) | ||||||||
Fair value of plan assets at end of year | 10,176 | 8,497 | 6,307 | |||||||||
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2010 | 2009 | 2008 | ||||||||||
Equity instruments | 9 | % | 12 | % | 12 | % | ||||||
Debt instruments | 86 | % | 83 | % | 83 | % | ||||||
Properties | 1 | % | 1 | % | 2 | % | ||||||
Other | 4 | % | 4 | % | 3 | % |
Millions | ||||
of euros | ||||
2011 | 736 | |||
2012 | 768 | |||
2013 | 800 | |||
2014 | 834 | |||
2015 | 869 | |||
2016 to 2020 | 5,150 | |||
9,157 | ||||
d) | Provisions for taxes and other legal contingencies and Other provisions |
The balances of Provisions — Provisions for taxes and other legal contingencies and Provisions — Other provisions, which include, inter alia, provisions for restructuring costs and tax-related and non-tax-related proceedings, were estimated using prudent calculation procedures in keeping with the uncertainty inherent to 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 the legal proceedings in progress. |
The detail of Provisions for taxes and other legal contingencies and Other provisions is as follows: |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Recognized by Spanish companies | 840 | 828 | 1,061 | |||||||||
Recognized by other EU companies | 536 | 537 | 721 | |||||||||
Recognized by other companies | 3,735 | 4,897 | 4,078 | |||||||||
Of which: | ||||||||||||
Brazil | 3,664 | 3,428 | 2,920 | |||||||||
5,111 | 6,262 | 5,860 | ||||||||||
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e) | Litigation |
• | “Mandados de Segurança” filed by Banco Santander Brasil, S.A. and certain 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. |
• | “Mandados de Segurança” filed by certain Group companies in Brazil claiming their right to pay the Brazilian social contribution tax on net income at a rate of 8% and 10% from 1994 to 1998. |
• | 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. In September 2007 the Federal Regional Court found in favor of Banco Santander, S.A., but the Brazilian authorities appealed against the judgment at the Federal Supreme Court. In the case of Banco ABN AMRO Real, S.A., in March 2007 the court found in its favor, but the Brazilian authorities appealed against the judgment at the Federal Regional Court, which handed down a decision partly upholding the appeal in September 2009. Banco ABN AMRO Real, S.A. filed an appeal at the Federal Supreme Court. |
• | 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 addition, Banco Santander Brasil, S.A. and other Group companies in Brazil are involved in several administrative and legal proceedings against the tax authorities in connection with the social security tax on certain items which are not considered to be employee remuneration. |
• | 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 11941/2009. 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 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 of the related court proceedings. |
• | In December 2008, the Brazilian tax authorities issued an infringement notice against Banco Santander Brasil, S.A. in relation to income tax (IRPJ and CSL) for 2002 to 2004. The tax authorities took the view that Banco Santander Brasil, S.A. did not meet the necessary legal requirements to be able to deduct the goodwill arising out of the acquisition of Banespa. Banco Santander Brasil, S.A. filed an appeal at Conselho Administrativo de Recursos Fiscais (CARF) against the infringement notice. In June 2010 the Brazilian tax authorities issued infringement notices in relation to this same matter for 2005 to 2007. Banco Santander Brasil, S.A. filed an appeal against these procedures at CARF. The Group considers, based on the advice of its external legal counsel, that the stance taken by the Brazilian tax authorities is not correct, that there are sound defense arguments to appeal against the infringement notice and that, therefore, the risk of loss is remote. Consequently, no provisions have been recognized in connection with these proceedings because this matter should not affect the consolidated financial statements. |
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• | In December 2010, the Brazilian tax authorities issued an infringement notice against Santander Seguros, S.A., as the successor by merger to ABN AMRO Brazil Dois Participacoes, S.A., in relation to income tax (IRPJ and CSL) for 2005. The tax authorities questioned the tax treatment applied to a sale of Real Seguros, S.A. shares made in that year. The aforementioned entity filed an appeal against the infringement notice. Also, the tax authorities issued infringement notices against Banco Santander, S.A. in connection with income tax (IRPJ and CSL), questioning the tax treatment applied to the economic compensation received under the contractual guarantees provided by the sellers of the former Banco Meridional. The entity filed an appeal against the aforementioned infringement notice. |
• | 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. A favorable judgment at first instance was handed down in September 2006, although the judgment was appealed against by the tax authorities in January 2007 and the court found in favor of the latter in June 2010. Abbey National Treasury Services plc plans to appeal against this judgment to a higher court. |
• | Legal action filed by Sovereign Bancorp Inc. to take a foreign tax credit in connection with taxes paid outside the United States in fiscal years 2003 to 2005 in relation to financing transactions carried out with an international bank. |
• | Customer remediation: claims associated with the sale by Santander UK (formerly Abbey) of certain financial products to its customers. |
The provisions recorded by Santander UK in this respect were calculated on the basis of the estimate of the number of claims that will be received, of those, the number that will be upheld and the estimated average settlement per case. |
• | LANETRO, S.A. (currently ZED WORLDWIDE, 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 plaintiff. |
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. |
In a decision handed down on March 30, 2010, the Supreme Court dismissed an extraordinary appeal against procedural infringements and partly upheld a cassation appeal filed in both cases by the Bank against the decision of the Madrid Provincial Appellate Court. |
Zed Worldwide, S.A. requested the court-ordered enforcement of the decision. On January 25, 2011, the court of First Instance issued an order to enforce the decision handed down by the Madrid Provincial Appellate Court, whereby the Bank has to subscribe to 75.1 million shares at their par value of €0.4 per share totaling €30.05 million. Zed Worldwide filed an appeal for reconsideration of the order enforcing the decision, which the Bank has opposed. On March 23, 2011, the Court of first instance dismissed the appeal for reconsideration. |
• | Proceeding under Civil Procedure Law filed by Galesa de Promociones, S.A. against the Bank at Elche Court of First Instance no. 5, Alicante (case 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 plaintiff company, which concluded in the foreclosure by the Bank of the mortgaged properties and their subsequent sale by the latter 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 of the properties by the Bank to the aforementioned third parties, which 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 plaintiff, which was prevented from continuing its business activity as a property developer; and (iii) €360,000 relating to the loss of rental income. |
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On March 2, 2010, the court of first instance handed down a decision partly upholding both the claim filed against the Bank and the counterclaim, ordering the Bank to pay the plaintiff €4,458,960.61, and Galesa Promociones, S.A. to pay the Bank €1,428,075.70, which resulted in a net loss of €3,030,874.91 for the Bank. Two appeals against this decision were filed on May 31, 2010: one by Galesa and the other one by the Bank. On November 11, 2010, the Alicante Provincial Appellate Court handed down a decision upholding the appeal filed by the Bank and dismissing the appeal brought by Galesa de Promociones S.A., as a result of which and by way of offsetting the indemnity obligations payable by each party, the Bank became a creditor of Galesa in the amount €400,000. |
Galesa de Promociones S.A. filed a cassation appeal against the above decision at the Supreme Court, for which leave to proceed has not yet been granted. Both parties have appealed before the Court and the Bank has filed a pleading for the inadmission of the appeal. |
• | Declaratory large claims action brought at Madrid Court of First Instance no. 19 (case 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 plaintiff 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. |
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 for 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 submitted on January 21, 2010. The Supreme Court has set the issuing the judgment for September 29, 2011. |
• | 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 (case no. 928/2007), seeking damages of approximately €43 million, plus interest and costs. The plaintiffs, who were former shareholders of Yesocentro, S.A. (Yesos y Prefabricados del Centro, S.A.) alleged 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 plaintiffs, in relation to the sale of shares owned by the plaintiffs to another company called Invercámara, S.A. |
This claim was 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 a motion for a preliminary ruling on a civil issue filed by the Bank was resolved. |
In an order issued by Madrid Court of First Instance no. 13 on September 11, 2008, which was ratified by an order issued by the Madrid Provincial Appellate Court on March 24, 2010, the proceeding was stayed on preliminary civil ruling grounds because another proceeding based on the same events had been initiated by other shareholders of Yesocentro at the Madrid Court of First Instance no. 47 (proceeding no. 1051/2004) and, therefore, the former proceeding was stayed until a final decision had been handed down on the latter. In the proceeding filed at Court no. 47, a first instance judgment was handed down partly upholding the claim as well as an appeal judgment partly upholding the appeals filed by the plaintiffs and the Bank. On January 10, 2011, the Bank filed a cassation appeal and an extraordinary appeal on the grounds of procedural infringements. |
• | On February 6, 2008, Banco Santander, S.A. filed a request for arbitration with the Secretary of the Spanish Arbitration Court against the business entity Gaesco Bolsa, Sociedad de Valores, S.A., claiming €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 by the aforementioned company and 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 Bolsa, Sociedad de Valores, S.A. Gaesco filed for the annulment of the arbitral award at Madrid Provincial Appellate Court. |
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Additionally, Mobilaria Monesa, S.L. (parent of the former Gaesco) filed a claim against Banco Santander, S.A. at Santander Court of First Instance no. 5, reproducing the claims discussed and already resolved in arbitration circumstance which was brought to the Court’s attention in the notice of opposition thereto filed by the Bank. |
The above proceeding was stayed by Santander Provincial Appellate Court (order dated December 20, 2010) due to the Court issuing the preliminary civil ruling on the grounds claimed by the Bank— until the request for annulment of the arbitral award of May 12, 2009 is resolved. |
The Group considers that the risk of loss arising as a result of these matters is remote and, accordingly, it has not recognized any provisions in connection with these proceedings. |
• | Former employees of Banco do Estado de São Paulo S.A., Santander Banespa, Cia. de Arrendamiento Mercantil: 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 this 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 relevant clause was eliminated from the Bylaws in 2001. In September 2005 the Regional Labor Court ordered Banco Santander Banespa, Cia. de Arrendamiento Mercantil (currently Banco Santander (Brasil), S.A.) to pay the half-yearly bonus and the Bank subsequently lodged an appeal at the High Labor Court. Decisions were handed down in June 2008 and in March 2011 ordering the Bank to pay the half-yearly bonus from 1996 onwards for a maximum amount equivalent to the share in the profits. A related appeal against these decisions was filed at the Federal Supreme Court, and is currently pending. |
• | Padrão Comércio de Incorporacão de Imóveis Ltda.: A claim for BRL 87 million against Banco Santander (Brasil), S.A. for purported wrongful charges made by Banco do Estado de São Paulo, S.A. (“Banespa”) since the account was opened in 1994 until 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 had been used by the plaintiff. Taking into account the outcome of the aforementioned appeal, the inability to submit the aforementioned additional documentation due to procedural reasons and the scant possibilities, in the opinion of the legal advisers of Banco Santander (Brasil), S.A., owing to all the above factors, of obtaining a favorable decision by filing a special appeal with the Federal Court, it was decided to start a negotiation process with Padrão which led to an agreement, reached in June 2010, whereby Banco Santander (Brasil), S.A. paid BRL 54.5 million. In exchange Padrão withdrew the aforementioned claim against Banco Santander Brasil. The agreement was certified by the court. |
• | “Planos economicos”: Like the rest of the banking system, Santander Brasil has been the subject of claims from customers, mostly depositors, and of class actions brought by consumer protection associations and the public prosecutor’s office, among others, in connection with the possible effects of certain legislative changes relating to differences in the monetary adjustments to interest on bank deposits and other inflation-linked contracts (planos económicos). The plaintiffs considered that their vested rights in relation to the inflationary adjustments had been impaired due to the immediate application of these adjustments. In April 2010, the High Court of Justice set the statute of limitations period for these class actions at five years, as requested by the banks, rather than twenty years, as sought by the plaintiffs, which will significantly reduce the number of actions of this kind brought and the amounts claimed in this connection. As regards the substance of the matter, the decisions issued to date have been adverse for the banks, although two proceedings have been brought at the High Court of Justice and the Supreme Federal Court as a result of which the matter is expected to be definitively settled. In August 2010, the High Court of Justice handed down a decision finding for the plaintiffs in terms of substance, but excluding one of theplanosfrom the claim, thereby reducing the claimed amount and confirming the five-year statute of limitations period for these class actions. Shortly thereafter, the Supreme Federal Court issued an injunctive relief order whereby all the proceedings in progress were stayed until this court issues a final decision on the matter. Consequently, enforcement of the aforementioned decision handed down by the High Court of Justice was also stayed. |
• | Proceeding under Civil Procedure Law (case no. 1043/2009) conducted at Madrid Court of First Instance no. 26, following a claim brought by Banco Occidental de Descuento, Banco Universal, C.A. against the Bank for USD 150,000,000 in principal plus USD 4,656,164 in interest for alleged termination of an escrow contract. On October 7, 2010, the Bank was served notice of a decision dated October 1, 2010 which upheld the claim filed by Banco Occidental de Descuento, Banco Universal, C.A. without a ruling being issued in relation to court costs. The Bank filed an appeal against the aforementioned first-instance decision. Banco Occidental de Descuento, Banco Universal, C.A. filed another appeal against the ruling that declared that the Bank should not bear the court costs .The plaintiff requested provisional enforcement of the decision, against which the Bank has submitted notice of opposition. |
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• | 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 Santander Group 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” 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 in the consolidated income statement for 2008. |
At the date hereof, 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, the risk of loss is considered to be remote and, therefore, it has not been necessary to recognize any liability in this connection. |
• | The investigation, on the grounds of alleged fraud, of Bernard L. Madoff Investment Securities LLC (“Madoff Securities”) by the US Securities and Exchange Commission (“SEC”) 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, who were qualifying investors. |
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 US for preference shares to be issued by the Group for the aforementioned amount, with an annual coupon of 2% and a call option that could be exercised by the issuer in year ten. At December 31, 2008, the Group determined that these events had to be considered to be adjusting events after the reporting period, as defined in IAS 10.3, because they provided evidence of conditions that existed at the end of the reporting period and, therefore, taking into account IAS 37.14, it recognized the pre-tax cost of this transaction for the Group (€500 million —€350 million after tax—) under “Gains/Losses on financial assets and liabilities” in the consolidated income statement for 2008. |
The Group 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 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. |
At the time of the transactions, 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). As the SEC has stated, Madoff Securities had been regularly inspected by the aforementioned supervisory body in recent years, and at no time was its reputation and solvency questioned by the market or by the US supervisory authorities. |
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At the date hereof, certain claims had been filed in relation to this matter. The Group is currently assessing the appropriate legal action to be taken. As discussed above, the Group considers that it has at all times exercised due diligence and that these products have always been sold in a transparent way pursuant to applicable legislation and established procedures. Therefore, except for the three cases in which the decisions handed down at first instance upheld the claim on grounds that are very particular to each specific case (which have been appealed against by the Bank), no provisions were recognized for the other claims since the risk of loss is considered remote. |
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 fraud perpetrated by 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 was close to 97%. |
On May 26, 2009, two funds managed by Optimal Investment Services, S.A., an indirect subsidiary of 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 allowed the funds’ claims in the liquidation proceeding and reduced his clawback demands on the funds by the amounts withdrawn by the latter from Madoff Securities, in the 90 days prior to bankruptcy, which US 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’ estate were allowed in their full amounts, calculated on a cash-in, cash-out basis, of USD 1,540,141,277.60 and USD 9,807,768.40, respectively, and the funds were entitled to Securities Investor Protection Corporation advances of USD 500,000 each. The funds paid 85% of the clawback claims asserted by the trustee. The payments totaled USD 129,057,094.60 for Strategic U.S. Equity and USD 106,323,953.40 for Arbitrage. |
The funds agreed not to file any other claims against Madoff Securities’ estate (in liquidation). 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 make the percentages applied to the funds equal to those applied to other investors in comparable situations. |
The agreement followed the trustee’s investigation of Optimal’s conduct in dealing with Madoff Securities, including a review of Optimal’s documents relating to its due diligence, in which the trustee concluded that its conduct did not provide grounds to assert any claim against the Optimal companies or any other 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, agents and employees who agree to release the trustee and the Madoff Securities estate (in liquidation), to the extent the claims arise out of the funds’ dealings with Madoff Securities. It also releases the funds from potential clawback liability for any other withdrawals made by them from Madoff Securities. |
The agreement between the trustee and the aforementioned Optimal funds was approved by the United States Bankruptcy Court in New York on June 16, 2009. |
Madoff Securities is currently in liquidation in accordance with the Securities Investor Protection Act of 1970 at the United States Bankruptcy Court in New York. Bernard L. Madoff, the chief executive of Madoff Securities, pleaded guilty to perpetrating what was probably the largest pyramid fraud in history and was sentenced to 150 years’ imprisonment. |
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26. | Other liabilities |
The detail of Other liabilities is as follows: |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Transactions in transit | 320,545 | 325,987 | 401,977 | |||||||||
Accrued expenses and deferred income | 4,891,489 | 5,438,831 | 4,593,557 | |||||||||
Other | 2,387,815 | 1,859,341 | 2,565,461 | |||||||||
7,599,849 | 7,624,159 | 7,560,995 | ||||||||||
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. |
b) | Years open for review by the tax authorities |
At December 31, 2010, the Consolidated Tax Group had the years from 2005 to 2010 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 and that of 2003 and 2004 was completed in April 2010. Most of the tax assessments issued were signed on a contested basis. |
In 2010 there were no significant developments in connection with the tax disputes at the different instances which were pending resolution at December 31, 2009 or which commenced in 2010. |
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. |
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c) | Reconciliation |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Consolidated profit before tax: | ||||||||||||
From continuing operations | 12,052 | 10,588 | 10,849 | |||||||||
From discontinued operations | (25 | ) | 46 | 372 | ||||||||
12,027 | 10,634 | 11,221 | ||||||||||
Income tax at 30% | 3,608 | 3,190 | 3,366 | |||||||||
Decreases due to permanent differences | (544 | ) | (1,460 | ) | (1,419 | ) | ||||||
Of which: | ||||||||||||
Due to effect of different tax rates | (328 | ) | (1,180 | ) | (1,039 | ) | ||||||
Income tax of Group companies, per local books | 3,064 | 1,730 | 1,947 | |||||||||
Net increases (decreases) due to other permanent differences | (178 | ) | (556 | ) | (346 | ) | ||||||
Other, net | 39 | 48 | 287 | |||||||||
Current income tax | 2,925 | 1,222 | 1,888 | |||||||||
Effective tax rate | 24.32 | % | 11.49 | % | 16.83 | % | ||||||
Of which: | ||||||||||||
Continuing operations | 2,923 | 1,207 | 1,836 | |||||||||
Discontinued operations | 2 | 15 | 52 | |||||||||
Of which: | ||||||||||||
Current tax | 2,610 | 2,082 | 2,689 | |||||||||
Deferred taxes | 315 | (860 | ) | (801 | ) | |||||||
Taxes paid in the year | 2,078 | 1,527 | 1,445 |
d) | Tax recognized in equity |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Net tax credited (charged) to equity: | ||||||||||||
Measurement of non-current assets held for sale | — | — | (16 | ) | ||||||||
Measurement of available-for-sale fixed-income securities | 387 | (373 | ) | 30 | ||||||||
Measurement of available-for-sale equity securities | 134 | 35 | 247 | |||||||||
Measurement of cash flow hedges | 70 | 106 | 163 | |||||||||
Total | 591 | (232 | ) | 424 | ||||||||
e) | Deferred taxes |
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Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Tax assets: | 17,089 | 15,827 | 14,644 | |||||||||
Of which: | ||||||||||||
Banco Santander (Brasil) S.A. | 3,572 | 3,410 | 1,775 | |||||||||
Banco ABN AMRO Real S.A. (*) | — | — | 2,191 | |||||||||
Santander Holdings USA | 1,933 | 1,925 | — | |||||||||
Santander UK Group | 656 | 909 | 1,303 | |||||||||
Pre-retirements | 887 | 989 | 1,242 | |||||||||
Other pensions | 806 | 910 | 1,084 | |||||||||
Prepaid taxes- Investments | — | — | 965 | |||||||||
Valuation adjustments | 1,265 | 602 | 787 | |||||||||
Tax liabilities: | 4,312 | 3,667 | 3,464 | |||||||||
Of which: | ||||||||||||
Banco Santander (Brasil) S.A. | 626 | 553 | 472 | |||||||||
Banco ABN AMRO Real S.A. (*) | — | — | 376 | |||||||||
Santander Holdings USA | 128 | 107 | — | |||||||||
Santander UK Group | 409 | 405 | 418 | |||||||||
Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander | 275 | 65 | 113 | |||||||||
Santander Consumer Bank AG | 85 | 92 | 89 | |||||||||
Valuation adjustments | 678 | 744 | 341 |
(*) | Merged into Banco Santander (Brasil), S.A. in 2009. |
Millions | ||||
of euros | ||||
Deferred tax assets | 17,089 | |||
That do not depend on the Group’s ability to generate future profit | 11,542 | |||
That depend on the Group’s ability to generate future profit | 5,547 | |||
Deferred tax liabilities | (4,312 | ) | ||
Net | 1,235 | |||
Millions of euros | ||||||||||||||||||||||||||||
Foreign | ||||||||||||||||||||||||||||
currency | (Charge)/ | |||||||||||||||||||||||||||
balance | Credit to asset | |||||||||||||||||||||||||||
Balances at | (Charge)/ | translation | and liability | Acquisitions | Balances at | |||||||||||||||||||||||
December 31, | Credit to | differences and | revaluation | Prepaid | for the year | December 31, | ||||||||||||||||||||||
2009 | income | other items | reserve | taxes | (net) | 2010 | ||||||||||||||||||||||
Deferred tax assets | 15,827 | 72 | 882 | 233 | — | 75 | 17,089 | |||||||||||||||||||||
Deferred tax liabilities | (3,667 | ) | (387 | ) | (381 | ) | 122 | — | 1 | (4,312 | ) | |||||||||||||||||
Total | 12,160 | (315 | ) | 501 | 355 | — | 76 | 12,777 | ||||||||||||||||||||
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Millions of euros | ||||||||||||||||||||||||||||
Foreign | ||||||||||||||||||||||||||||
currency | ||||||||||||||||||||||||||||
balance | (Charge)/ | |||||||||||||||||||||||||||
translation | Credit to asset | |||||||||||||||||||||||||||
Balances at | (Charge)/ | differences | and liability | Acquisitions | Balances at | |||||||||||||||||||||||
December 31, | Credit to | and other | revaluation | Prepaid | for the year | December 31, | ||||||||||||||||||||||
2008 | income | items | reserve | taxes | (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 asset | |||||||||||||||||||||||||||
Balances at | (Charge)/ | translation | and liability | Acquisitions | Balances at | |||||||||||||||||||||||
December 31, | Credit to | differences and | revaluation | Prepaid | for the year | December 31, | ||||||||||||||||||||||
2007 | income | other items | reserve | taxes | (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 | |||||||||||||||||||||
f) | Other disclosures |
28. | Non-controlling interests |
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a) | Breakdown |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Banesto Group | 503,901 | 555,368 | 495,021 | |||||||||
Grupo Financiero Santander, S.A.B. de C.V. | 6,355 | 787,351 | 707,603 | |||||||||
Banco Santander Chile | 511,854 | 383,191 | 245,229 | |||||||||
Brazil Group | 3,556,777 | 2,571,235 | 122,067 | |||||||||
Santander BanCorp | — | 35,340 | 34,751 | |||||||||
Other companies | 396,380 | 402,051 | 353,935 | |||||||||
4,975,267 | 4,734,536 | 1,958,606 | ||||||||||
Profit for the year attributable to non-controlling interests | 920,852 | 469,522 | 456,000 | |||||||||
Of which: | ||||||||||||
Banesto Group | 56,929 | 26,773 | 75,294 | |||||||||
Grupo Financiero Santander, S.A.B. de C.V. | 129,718 | 160,478 | 182,927 | |||||||||
Banco Santander Chile | 175,250 | 134,913 | 129,758 | |||||||||
Santander Brasil | 539,064 | 114,151 | 22,042 | |||||||||
Santander BanCorp | 2,224 | 3,178 | 2,434 | |||||||||
Other companies | 17,667 | 30,029 | 43,545 | |||||||||
5,896,119 | 5,204,058 | 2,414,606 | ||||||||||
b) | Changes |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Balance at beginning of year | 5,204 | 2,415 | 2,358 | |||||||||
Change in consolidation method | — | — | 105 | |||||||||
Business combinations | 101 | (12 | ) | 13 | ||||||||
Change in proportion of ownership interest | (537 | ) | (2 | ) | (41 | ) | ||||||
Valuation adjustments | 29 | 75 | (26 | ) | ||||||||
Dividends paid to non-controlling interests | (400 | ) | (233 | ) | (241 | ) | ||||||
Changes in share capital (*) | 3 | 2,187 | 74 | |||||||||
Exchange differences and other items | 575 | 305 | (283 | ) | ||||||||
Profit for the year attributable to non-controlling interests | 921 | 469 | 456 | |||||||||
Balance at end of year | 5,896 | 5,204 | 2,415 | |||||||||
(*) | In 2009 including mainly the non-controlling interests arising from the initial public offering of Santander Brasil launched by the Group amounting to EUR 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 |
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• | 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. |
a) | Available-for-sale financial assets |
Millions of euros | ||||||||||||||||||||||||||||||||
December 31, 2010 | December 31, 2009 | |||||||||||||||||||||||||||||||
Net | Net | |||||||||||||||||||||||||||||||
revaluation | revaluation | |||||||||||||||||||||||||||||||
Revaluation | Revaluation | gains/ | Fair | Revaluation | Revaluation | gains/ | Fair | |||||||||||||||||||||||||
gains | losses | (losses) | value | gains | losses | (losses) | value | |||||||||||||||||||||||||
Debt instruments | ||||||||||||||||||||||||||||||||
Government debt securities and debt instruments issued by central banks | ||||||||||||||||||||||||||||||||
Spain | 272 | (1,797 | ) | (1,525 | ) | 27,050 | 250 | (10 | ) | 240 | 28,208 | |||||||||||||||||||||
Rest of Europe | 19 | (229 | ) | (210 | ) | 3,871 | 17 | (4 | ) | 13 | 3,996 | |||||||||||||||||||||
Latin America and rest of the world | 503 | (211 | ) | 292 | 27,785 | 172 | (135 | ) | 37 | 26,409 | ||||||||||||||||||||||
Private-sector debt securities | 461 | (347 | ) | 114 | 20,983 | 390 | (165 | ) | 225 | 20,677 | ||||||||||||||||||||||
1,255 | (2,584 | ) | (1,329 | ) | 79,689 | 829 | (314 | ) | 515 | 79,289 | ||||||||||||||||||||||
Equity instruments | ||||||||||||||||||||||||||||||||
Domestic | ||||||||||||||||||||||||||||||||
Spain | 82 | (326 | ) | (244 | ) | 1,878 | 86 | (282 | ) | (197 | ) | 2,478 | ||||||||||||||||||||
International | ||||||||||||||||||||||||||||||||
Rest of Europe | 47 | (266 | ) | (219 | ) | 1,325 | — | (192 | ) | (192 | ) | 1,734 | ||||||||||||||||||||
United States | 71 | (32 | ) | 39 | 1,550 | 83 | (5 | ) | 79 | 1,168 | ||||||||||||||||||||||
Latin America and rest of the world | 543 | (39 | ) | 504 | 1,793 | 655 | (215 | ) | 440 | 1,952 | ||||||||||||||||||||||
743 | (663 | ) | 80 | 6,546 | 824 | (694 | ) | 130 | 7,331 | |||||||||||||||||||||||
Of which: | ||||||||||||||||||||||||||||||||
Listed | 569 | (552 | ) | 17 | 4,089 | 667 | (668 | ) | (1 | ) | 5,877 | |||||||||||||||||||||
Unlisted | 174 | (111 | ) | 63 | 2,457 | 157 | (26 | ) | 131 | 1,455 | ||||||||||||||||||||||
1,998 | (3,247 | ) | (1,249 | ) | 86,235 | 1,653 | (1,008 | ) | 645 | 86,620 | ||||||||||||||||||||||
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b) | Cash flow hedges |
c) | Hedges of net investments in foreign operations and Exchange differences |
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Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Net balance at end of year | (894,417 | ) | (3,555,140 | ) | (7,957,582 | ) | ||||||
Of which: | ||||||||||||
Arising on consolidation: | ||||||||||||
Subsidiaries: | (891,113 | ) | (3,558,042 | ) | (7,949,868 | ) | ||||||
Brazil Group | 2,750,118 | 1,124,699 | (2,819,871 | ) | ||||||||
Chile Group | 300,912 | (89,222 | ) | (475,525 | ) | |||||||
Mexico Group | (452,209 | ) | (1,010,852 | ) | (977,254 | ) | ||||||
Grupo Santander UK | (3,195,996 | ) | (2,964,878 | ) | (3,280,445 | ) | ||||||
Other | (293,938 | ) | (617,789 | ) | (396,773 | ) | ||||||
Associates | (3,304 | ) | 2,902 | (7,714 | ) |
d) | Entities accounted for using the equity method |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Balance at beginning of year | — | (148,402 | ) | (1,840 | ) | |||||||
Revaluation gains (losses) | (171 | ) | — | (149,073 | ) | |||||||
Amounts transferred to income | — | — | 43,728 | |||||||||
Transfers | — | 148,402 | (41,217 | ) | ||||||||
Balance at end of year | (171 | ) | — | (148,402 | ) | |||||||
Of which: | ||||||||||||
Santander Holdings USA (formerly Sovereign) | — | — | (148,402 | ) |
30. | Shareholders’ equity |
31. | Issued capital |
a) | Changes |
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b) | Other considerations |
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32. | Share premium |
33. | Reserves |
a) | Definitions |
b) | Breakdown |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Accumulated reserves: | ||||||||||||
Restricted reserves- | ||||||||||||
Legal reserve | 832,912 | 822,883 | 799,406 | |||||||||
Reserve for treasury shares | 736,792 | 531,695 | 871,994 | |||||||||
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 (*) | 1,745,544 | 2,282,098 | 2,479,352 | |||||||||
Consolidation reserves attributed to the Bank | 6,652,259 | 6,752,138 | 5,591,045 | |||||||||
Reserves at subsidiaries | 18,233,866 | 14,097,534 | 11,363,796 | |||||||||
28,254,649 | 24,539,624 | 21,158,869 | ||||||||||
Reserves of entities accounted for using the equity method: | ||||||||||||
Associates | 52,547 | 67,663 | (290,463 | ) | ||||||||
Of which: | ||||||||||||
Sovereign | — | — | (352,986 | ) | ||||||||
28,307,196 | 24,607,287 | 20,868,406 | ||||||||||
(*) | Include the reserves stipulated by Article 150 of the Spanish Limited Liability Companies Law (Ley de Sociedades de Capital) for an amount equal to the loans granted by Group companies to third parties for the acquisition of treasury shares. |
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Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Banco Español de Crédito, S.A. | 4,195 | 4,031 | 3,703 | |||||||||
Grupo Santander UK | 3,418 | 2,689 | 2,040 | |||||||||
Banco Santander (Brasil), S.A. (Consolidated Group) | 2,904 | 1,940 | 1,596 | |||||||||
Banco Santander Totta, S.A. (Consolidated Group) | 1,949 | 1,589 | 1,273 | |||||||||
Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander, S.A.B. de C.V. | 1,931 | 1,623 | 1,630 | |||||||||
Banco Santander — Chile | 1,834 | 1,598 | 1,031 | |||||||||
Banco de Venezuela, S.A., Banco Universal | — | — | 663 | |||||||||
Grupo Santander Consumer Finance, S.A. | 797 | 723 | 559 | |||||||||
Cartera Mobiliaria, S.A., SICAV | 336 | 315 | 324 | |||||||||
Santander Seguros y Reaseguros, Compañía Aseguradora, S.A. | 331 | 237 | 149 | |||||||||
Banco Banif, S.A. | 274 | 210 | 188 | |||||||||
Santander Investment, S.A. | 217 | 230 | 207 | |||||||||
Banco Santander International (United States) | 206 | 241 | 203 | |||||||||
Banco Santander (Suisse) SA | 44 | 151 | 175 | |||||||||
BSN — Banco Santander de Negocios Portugal, S.A. | — | 94 | 116 | |||||||||
Banco Santander Río, S.A. | (227 | ) | (412 | ) | (449 | ) | ||||||
Exchange differences, consolidation adjustments and other companies (*) | 25 | (1,161 | ) | (2,044 | ) | |||||||
Total | 18,234 | 14,098 | 11,364 | |||||||||
Of which: restricted | 1,563 | 1,271 | 1,466 |
(*) | Includes the charge relating to cumulative exchange differences in the transition to International Financial Reporting Standards. |
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34. | Other equity instruments and Treasury shares |
a) | Other equity instruments |
b) | Treasury shares |
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35. | Memorandum items |
a) | Contingent liabilities |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Financial guarantees | 18,395,112 | 20,974,258 | 15,614,342 | |||||||||
Financial bank guarantees | 17,517,828 | 19,725,382 | 14,514,126 | |||||||||
Doubtful guarantees | 603,779 | 489,367 | 196,862 | |||||||||
Credit derivatives sold | 273,225 | 759,224 | 903,067 | |||||||||
Other financial guarantees | 280 | 285 | 287 | |||||||||
Irrevocable documentary credits | 3,815,796 | 2,636,618 | 3,590,454 | |||||||||
Other bank guarantees and indemnities provided | 36,733,325 | 35,192,187 | 45,613,498 | |||||||||
Other guarantees | 29,331,463 | 28,025,392 | 38,905,912 | |||||||||
Undertakings to provide bank guarantees | 7,401,862 | 7,166,795 | 6,707,586 | |||||||||
Other contingent liabilities | 851,020 | 453,013 | 504,900 | |||||||||
Assets earmarked for third-party obligations | 107,734 | 3 | 4 | |||||||||
Other doubtful contingent liabilities | — | 6 | — | |||||||||
Other contingent liabilities | 743,286 | 453,004 | 504,896 | |||||||||
59,795,253 | 59,256,076 | 65,323,194 | ||||||||||
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b) | Contingent commitments |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Drawable by third parties | 179,963,765 | 150,562,786 | 123,329,168 | |||||||||
Financial asset forward purchase commitments | 1,589,176 | 3,302,484 | 856,212 | |||||||||
Regular way financial asset purchase contracts | 2,702,529 | 3,446,834 | 1,626,097 | |||||||||
Securities subscribed but not paid | 25,689 | 29,141 | 42,467 | |||||||||
Securities placement and underwriting commitments | 21,478 | 11 | 50,006 | |||||||||
Documents delivered to clearing houses | 17,409,843 | 4,764,584 | 5,348,689 | |||||||||
Other contingent commitments | 1,996,913 | 1,424,916 | 472,367 | |||||||||
203,709,393 | 163,530,756 | 131,725,006 | ||||||||||
c) | Off-balance-sheet funds under management |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Investment funds | 113,510 | 105,216 | 90,305 | |||||||||
Pension funds | 10,965 | 11,310 | 11,128 | |||||||||
Assets under management | 20,314 | 18,364 | 17,289 | |||||||||
144,789 | 134,890 | 118,722 | ||||||||||
d) | Third-party securities held in custody |
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36. | Derivatives — Notional amounts and market values of trading and hedging derivatives |
Millions of euros | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
Notional | Market | Notional | Market | Notional | Market | |||||||||||||||||||
amount | value | amount | value | amount | value | |||||||||||||||||||
Trading derivatives: | ||||||||||||||||||||||||
Interest rate risk- | ||||||||||||||||||||||||
Forward rate agreements | 63,575 | (19 | ) | 150,906 | (1,177 | ) | 328,743 | (31 | ) | |||||||||||||||
Interest rate swaps | 2,097,581 | 481 | 1,693,804 | 918 | 1,742,448 | 2,424 | ||||||||||||||||||
Options and futures | 1,057,816 | (904 | ) | 1,001,660 | 537 | 848,479 | (1,252 | ) | ||||||||||||||||
Foreign currency risk- | ||||||||||||||||||||||||
Foreign currency purchases and sales | 165,747 | (2,226 | ) | 108,031 | (525 | ) | 110,049 | (1,261 | ) | |||||||||||||||
Foreign currency options | 41,419 | (182 | ) | 45,983 | (81 | ) | 71,114 | 9 | ||||||||||||||||
Currency swaps | 183,109 | 838 | 112,361 | 2,079 | 82,080 | 5,871 | ||||||||||||||||||
Securities and commodities derivatives | 241,185 | (198 | ) | 160,867 | (606 | ) | 156,094 | 889 | ||||||||||||||||
3,850,432 | (2,210 | ) | 3,273,612 | 1,144 | 3,339,007 | 6,648 | ||||||||||||||||||
Hedging derivatives: | ||||||||||||||||||||||||
Interest rate risk- | ||||||||||||||||||||||||
Forward rate agreements | — | — | — | — | 653 | 1 | ||||||||||||||||||
Interest rate swaps | 211,964 | 1,225 | 218,539 | 1,751 | 164,800 | 2,205 | ||||||||||||||||||
Options and futures | 7,314 | 18 | 21,144 | (26 | ) | 27,140 | 33 | |||||||||||||||||
Foreign currency risk- | ||||||||||||||||||||||||
Foreign currency purchases and sales | 3,875 | (4 | ) | 1,714 | (14 | ) | 8,329 | (69 | ) | |||||||||||||||
Foreign currency options | 30,989 | (294 | ) | 21,784 | (128 | ) | 4,209 | 246 | ||||||||||||||||
Currency swaps | 26,913 | 748 | 14,715 | 1,091 | 12,889 | 1,595 | ||||||||||||||||||
Securities and commodities derivatives | 985 | (100 | ) | 1,007 | (32 | ) | 3,593 | (270 | ) | |||||||||||||||
282,040 | 1,593 | 278,903 | 2,643 | 221,613 | 3,741 | |||||||||||||||||||
Total | 4,132,472 | (617 | ) | 3,552,515 | 3,787 | 3,560,620 | 10,389 | |||||||||||||||||
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Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Credit derivatives | 855 | 1,942 | 3,186 | |||||||||
Securities derivatives | 2,191 | 2,763 | 4,322 | |||||||||
Fixed-income derivatives | 95 | 343 | 345 | |||||||||
Currency derivatives | 21,139 | 21,568 | 15,277 | |||||||||
Interest rate derivatives | 29,234 | 23,438 | 25,117 | |||||||||
Commodities derivatives | 252 | 138 | 138 | |||||||||
Collateral received | (6,873 | ) | (7,430 | ) | (9,366 | ) | ||||||
Total | 46,893 | 42,761 | 39,019 | |||||||||
Millions of euros | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
Notional | Fair | Notional | Fair | Notional | Fair | |||||||||||||||||||
amount | value | amount | value | amount | value | |||||||||||||||||||
Fair value hedges | 212,705 | 2,174 | 203,975 | 3,289 | 169,623 | 3,340 | ||||||||||||||||||
Cash flow hedges | 43,090 | (285 | ) | 66,194 | (518 | ) | 45,162 | 185 | ||||||||||||||||
Hedges of net investments in foreign operations | 26,245 | (296 | ) | 8,735 | (128 | ) | 6,828 | 216 | ||||||||||||||||
282,040 | 1,593 | 278,904 | 2,643 | 221,613 | 3,741 | |||||||||||||||||||
• | 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. |
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Thousands of euros | ||||||||||||||||
Less than | 1 to 5 | More than | ||||||||||||||
2010 | 1 year | years | 5 years | Total | ||||||||||||
Debit balances (losses) | (192,861 | ) | (61,793 | ) | (30,165 | ) | (284,819 | ) |
37. | Discontinued operations |
a) | Description of divestments (see Note 3) |
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b) | Profit or loss and net cash flows from discontinued operations |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Interest income/(charges) | 33 | 248 | 645 | |||||||||
Income from companies accounted for using the equity method | — | 1 | 6 | |||||||||
Net fee and commission income | 2 | 48 | 184 | |||||||||
Gains/losses on financial assets and liabilities | — | 10 | 63 | |||||||||
Exchange differences | — | (1 | ) | (1 | ) | |||||||
Other operating income (net) | — | (8 | ) | (52 | ) | |||||||
Total income | 35 | 298 | 845 | |||||||||
Personnel expenses | (6 | ) | (59 | ) | (162 | ) | ||||||
Other general administrative expenses | (9 | ) | (61 | ) | (170 | ) | ||||||
Depreciation and amortization | (1 | ) | (11 | ) | (33 | ) | ||||||
Provisions | — | (19 | ) | (62 | ) | |||||||
Impairment losses on financial assets | (37 | ) | (104 | ) | (63 | ) | ||||||
Gains (losses) on disposal of assets not classified as non-current assets held for sale | (7 | ) | 2 | 17 | ||||||||
Operating profit/(loss) before tax | (25 | ) | 46 | 372 | ||||||||
Income tax | (2 | ) | (15 | ) | (53 | ) | ||||||
Profit/(loss) from discontinued operations | (27 | ) | 31 | 319 | ||||||||
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Cash and cash equivalents at beginning of year | — | 2,623 | 1,807 | |||||||||
Cash flows from operating activities | (2 | ) | (2,043 | ) | 751 | |||||||
Cash flows from investing activities | 2 | 143 | (30 | ) | ||||||||
Cash flows from financing activities | — | (723 | ) | 94 | ||||||||
Cash and cash equivalents at end of year | — | — | 2,623 | |||||||||
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c) | Consideration received |
Millions of euros | 2009 | |||
ASSETS: | 8,839 | |||
Cash and balances with central banks | 2,832 | |||
Financial assets held for trading | 7 | |||
Available-for-sale financial assets | 544 | |||
Loans and receivables | 5,125 | |||
Investments | 7 | |||
Tangible assets and intangible assets | 132 | |||
Tax assets | 128 | |||
Other assets | 63 | |||
LIABILITIES: | (8,089 | ) | ||
Financial liabilities at amortized cost | (7,619 | ) | ||
Provisions | (309 | ) | ||
Tax liabilities | (12 | ) | ||
Other liabilities | (149 | ) | ||
Underlying carrying amount | 750 | |||
Goodwill | 2 | |||
Non-controlling interests | (12 | ) | ||
Net amount | 740 | |||
Gains/Losses on divestments | — | |||
Consideration received | 740 | |||
Of which: In cash | 740 | |||
d) | Earnings per share relating to discontinued operations |
2010 | 2009 | 2008 | ||||||||||
Basic earnings per share (euros) | (0.0031 | ) | 0.0032 | 0.0427 | ||||||||
Diluted earnings per share (euros) | (0.0031 | ) | 0.0032 | 0.0425 |
38. | Interest and similar income |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Balances with the Bank of Spain and other central banks | 1,933,085 | 357,017 | 759,952 | |||||||||
Loans and advances to credit institutions | 1,044,967 | 2,520,858 | 3,819,453 | |||||||||
Debt instruments | 6,231,925 | 5,586,577 | 4,506,874 | |||||||||
Loans and advances to customers | 41,854,050 | 42,081,922 | 41,366,071 | |||||||||
Insurance contracts linked to pensions (Note 25) | 89,688 | 94,626 | 95,319 | |||||||||
Other interest | 1,753,039 | 2,532,004 | 4,495,877 | |||||||||
Total | 52,906,754 | 53,173,004 | 55,043,546 | |||||||||
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39. | Interest expense and similar charges |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Deposits from the Bank of Spain and other central banks | 303,610 | 296,449 | 422,265 | |||||||||
Deposits from credit institutions | 1,368,998 | 2,988,915 | 3,266,323 | |||||||||
Customer deposits | 13,445,551 | 11,810,713 | 15,000,393 | |||||||||
Marketable debt securities and subordinated liabilities | 7,189,382 | 8,590,796 | 13,232,690 | |||||||||
Marketable debt securities | 4,959,103 | 6,236,747 | 10,817,648 | |||||||||
Subordinated liabilities (Note 23) | 2,230,279 | 2,354,049 | 2,415,042 | |||||||||
Provisions for pensions (Note 25) | 481,273 | 481,771 | 453,852 | |||||||||
Other interest | 893,561 | 2,705,818 | 5,129,561 | |||||||||
Total | 23,682,375 | 26,874,462 | 37,505,084 | |||||||||
40. | Income from equity instruments |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Equity instruments classified as: | ||||||||||||
Financial assets held for trading | 241,950 | 238,209 | 222,795 | |||||||||
Available-for-sale financial assets | 120,118 | 198,265 | 329,962 | |||||||||
Of which: | ||||||||||||
Royal Bank of Scotland | — | — | 74,575 | |||||||||
362,068 | 436,474 | 552,757 | ||||||||||
41. | Income from companies accounted for using the equity method — Associates |
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Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Cepsa (Note 12) | — | — | 130,932 | |||||||||
Attijariwafa (Note 8) | — | — | 27,560 | |||||||||
Sovereign Bancorp (*) | — | (15,691 | ) | (110,251 | ) | |||||||
RFS Holdings B.V. (**) | — | — | 711,146 | |||||||||
Other companies | 16,921 | 15,171 | 32,367 | |||||||||
16,921 | (520 | ) | 791,754 | |||||||||
(*) | Fully consolidated from February 2009. | |
(**) | Of the 2008 result of entities accounted for using the equity method relating to RFS Holdings B.V., EUR 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). |
42. | Fee and commission income |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Collection and payment services: | ||||||||||||
Bills | 315,410 | 326,974 | 313,312 | |||||||||
Demand accounts | 995,078 | 858,696 | 570,404 | |||||||||
Cards | 1,980,236 | 1,761,868 | 1,566,972 | |||||||||
Cheques and other | 285,996 | 279,882 | 347,879 | |||||||||
Orders | 351,033 | 309,582 | 247,502 | |||||||||
3,927,753 | 3,537,002 | 3,046,069 | ||||||||||
Marketing of non-banking financial products: | ||||||||||||
Investment funds | 1,198,307 | 1,070,672 | 1,458,148 | |||||||||
Pension funds | 151,465 | 148,986 | 160,331 | |||||||||
Insurance | 2,160,783 | 1,963,847 | 1,864,109 | |||||||||
3,510,555 | 3,183,505 | 3,482,588 | ||||||||||
Securities services: | ||||||||||||
Securities underwriting and placement | 301,727 | 254,298 | 102,199 | |||||||||
Securities trading | 309,879 | 324,672 | 353,603 | |||||||||
Administration and custody | 221,815 | 242,665 | 247,612 | |||||||||
Asset management | 84,341 | 67,490 | 79,100 | |||||||||
917,762 | 889,125 | 782,514 | ||||||||||
Other: | ||||||||||||
Foreign exchange | 177,613 | 154,847 | 96,187 | |||||||||
Financial guarantees | 529,739 | 485,149 | 391,280 | |||||||||
Commitment fees | 213,607 | 199,563 | 265,807 | |||||||||
Other fees and commissions | 2,402,673 | 2,277,177 | 1,676,955 | |||||||||
3,323,632 | 3,116,736 | 2,430,229 | ||||||||||
11,679,702 | 10,726,368 | 9,741,400 | ||||||||||
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43. | Fee and commission expense |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Fees and commissions assigned to third parties | 1,222,954 | 1,050,665 | 936,713 | |||||||||
Of which: Cards | 842,156 | 728,485 | 710,330 | |||||||||
Brokerage fees on lending and deposit transactions | 41,542 | 29,591 | 26,925 | |||||||||
Other fees and commissions | 681,056 | 565,978 | 511,467 | |||||||||
1,945,552 | 1,646,234 | 1,475,105 | ||||||||||
44. | Gains/losses on financial assets and liabilities |
a) | Breakdown |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Other financial instruments at fair value through profit or loss (*) | 70,028 | 197,993 | 607,309 | |||||||||
Financial instruments not measured at fair value through profit or loss | 791,430 | 1,630,858 | 1,722,651 | |||||||||
Of which: Available-for-sale financial assets | 1,020,035 | 861,901 | 767,131 | |||||||||
Of which: | ||||||||||||
Debt instruments | 437,794 | 439,633 | 397,213 | |||||||||
Equity instruments | 582,241 | 422,268 | 369,918 | |||||||||
Of which: Other | (228,605 | ) | 768,957 | 955,520 | ||||||||
Of which: | ||||||||||||
Due to exchange of shares (Note 1.h) | — | 723,917 | — | |||||||||
Due to repurchase of securitizations | — | 97,459 | — | |||||||||
Disposal of ABN liabilities (Note 1.h) | — | — | 741,100 | |||||||||
Hedging derivatives and other | (8,847 | ) | (125,655 | ) | (4,539 | ) | ||||||
Losses on assets to be delivered to Madoff/Lehman victims (Note 25) | — | — | (643,000 | ) | ||||||||
Other financial assets and liabilities held for trading (*) | 1,311,812 | 2,098,449 | 1,209,828 | |||||||||
2,164,423 | 3,801,645 | 2,892,249 | ||||||||||
(*) | 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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b) | Financial assets and liabilities at fair value through profit or loss |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Loans and advances to credit institutions | 35,047 | 22,196 | 14,061 | |||||||||
Loans and advances to customers | 8,533 | 18,405 | 9,657 | |||||||||
Debt instruments | 62,476 | 57,286 | 49,050 | |||||||||
Equity instruments | 17,117 | 15,125 | 9,051 | |||||||||
Derivatives | 73,069 | 59,856 | 95,815 | |||||||||
196,242 | 172,868 | 177,634 | ||||||||||
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Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Derivatives | (75,279 | ) | (58,713 | ) | (89,167 | ) | ||||||
Other liabilities | (112,513 | ) | (99,175 | ) | (76,093 | ) | ||||||
(187,792 | ) | (157,888 | ) | (165,260 | ) | |||||||
45. | Exchange differences |
46. | Other operating income and Other operating expenses |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Insurance activity income | 377,869 | 338,860 | 251,589 | |||||||||
Income from insurance and reinsurance contracts issued | 7,162,076 | 7,112,856 | 8,385,788 | |||||||||
Of which: | ||||||||||||
Insurance and reinsurance premium income | 6,845,205 | 6,950,140 | 8,150,685 | |||||||||
Reinsurance income | 316,871 | 162,716 | 235,103 | |||||||||
Expenses of insurance and reinsurance contracts | (6,784,207 | ) | (6,773,996 | ) | (8,134,199 | ) | ||||||
Of which: | ||||||||||||
Claims paid and other insurance-related expenses | (5,815,848 | ) | (3,015,508 | ) | (3,480,255 | ) | ||||||
Net provisions for insurance contract liabilities | (689,019 | ) | (3,540,038 | ) | (4,381,487 | ) | ||||||
Reinsurance premiums paid | (279,340 | ) | (218,450 | ) | (272,457 | ) | ||||||
Non-financial services | 135,451 | 140,404 | 117,718 | |||||||||
Sales and income from the provision of non-financial services | 340,371 | 377,800 | 586,872 | |||||||||
Cost of sales | (204,920 | ) | (237,396 | ) | (469,154 | ) | ||||||
Other operating income and expenses | (407,083 | ) | (335,347 | ) | (97,486 | ) | ||||||
Other operating income | 693,120 | 437,882 | 463,648 | |||||||||
Of which, fees and commissions offsetting direct costs | 70,430 | 116,851 | 155,785 | |||||||||
Other operating expenses | (1,100,203 | ) | (773,229 | ) | (561,134 | ) | ||||||
Of which, Deposit Guarantee Fund | (306,814 | ) | (317,708 | ) | (179,023 | ) | ||||||
106,237 | 143,917 | 271,821 | ||||||||||
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47. | Personnel expenses |
a) | Breakdown |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Wages and salaries | 6,635,673 | 6,060,541 | 4,941,871 | |||||||||
Social security costs | 1,188,132 | 1,054,906 | 815,864 | |||||||||
Additions to provisions for defined benefit pension plans (Note 25) | 145,859 | 175,810 | 184,072 | |||||||||
Contributions to defined contribution pension funds (Note 25) | 150,643 | 114,080 | 77,703 | |||||||||
Share-based payment costs | 152,820 | 147,805 | 107,644 | |||||||||
Of which: | ||||||||||||
Payments granted to the Bank’s directors | 5,055 | 5,724 | 3,560 | |||||||||
Other personnel expenses | 1,056,429 | 897,141 | 686,197 | |||||||||
9,329,556 | 8,450,283 | 6,813,351 | ||||||||||
b) | Headcount |
Average number of employees (**) | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
The Bank: | ||||||||||||
Senior management (*) | 100 | 87 | 90 | |||||||||
Other line personnel | 16,289 | 16,292 | 16,364 | |||||||||
Clerical staff | 3,284 | 3,625 | 3,816 | |||||||||
General services personnel | 31 | 33 | 36 | |||||||||
19,704 | 20,037 | 20,306 | ||||||||||
Banesto | 9,272 | 9,678 | 10,330 | |||||||||
Rest of Spain | 6,749 | 5,970 | 5,940 | |||||||||
Santander UK (**) | 18,845 | 20,809 | 15,593 | |||||||||
Other companies (***) | 118,339 | 113,582 | 82,168 | |||||||||
172,909 | 170,076 | 134,337 | ||||||||||
(*) | Categories of deputy assistant executive vice presidents and above, including senior management. | |
(**) | The Santander UK Group includes Alliance & Leicester and Bradford & Bingley. | |
(***) | Excluding personnel assigned to discontinued operations. |
Functional breakdown by gender | ||||||||||||||||||||||||
Executives | Other line personnel | Clerical staff | ||||||||||||||||||||||
Men | Women | Men | Women | Men | Women | |||||||||||||||||||
Continental Europe | 1,239 | 248 | 6,342 | 2,844 | 21,855 | 19,815 | ||||||||||||||||||
United Kingdom | 109 | 21 | 414 | 197 | 9,235 | 15,244 | ||||||||||||||||||
Latin America | 707 | 108 | 3,681 | 2,750 | 39,905 | 54,155 | ||||||||||||||||||
Total | 2,055 | 377 | 10,437 | 5,791 | 70,995 | 89,214 | ||||||||||||||||||
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Functional breakdown by gender | ||||||||||||||||||||||||
Executives | Other line personnel | Clerical staff | ||||||||||||||||||||||
Men | Women | Men | Women | Men | Women | |||||||||||||||||||
Continental Europe | 83 | % | 17 | % | 69 | % | 31 | % | 52 | % | 48 | % | ||||||||||||
United Kingdom | 84 | % | 16 | % | 68 | % | 32 | % | 38 | % | 62 | % | ||||||||||||
Latin America | 87 | % | 13 | % | 57 | % | 43 | % | 42 | % | 58 | % | ||||||||||||
Total | 84 | % | 16 | % | 64 | % | 36 | % | 44 | % | 56 | % | ||||||||||||
c) | Share-based payments |
Date of | Date of | |||||||||||||||||||||||||
Euros | commencement | expiry of | ||||||||||||||||||||||||
Number of | Exercise | Year | Employee | Number of | of exercise | exercise | ||||||||||||||||||||
shares | price | granted | group | persons | period | period | ||||||||||||||||||||
Plans outstanding at 01/01/08 | 121,194,782 | |||||||||||||||||||||||||
Options exercised (Plan I06) | (65,983,402 | ) | 9.09 | — | Executives | (1,555 | ) | 15/01/08 | 15/01/09 | |||||||||||||||||
Options granted (Plan I10) | 46,560 | — | 2008 | Executives | 1 | 23/06/07 | 31/07/10 | |||||||||||||||||||
Options granted (Plan I11) | 17,122,650 | — | 2008 | Executives | 5,771 | 21/06/08 | 31/07/11 | |||||||||||||||||||
Plans outstanding at 12/31/08 | 72,380,590 | |||||||||||||||||||||||||
Shares delivered (Plan I09) | (8,978,865 | ) | — | 2007 | Executives | (5,066 | ) | 23/06/07 | 31/07/09 | |||||||||||||||||
Options cancelled, net (Plan I06) | (29,072,617 | ) | 9.09 | — | Executives | (957 | ) | 15/01/08 | 15/01/09 | |||||||||||||||||
Options cancelled, net (Plan I09) | (1,469,615 | ) | — | 2007 | Executives | (410 | ) | 23/06/07 | 31/07/09 | |||||||||||||||||
Options granted (Plan I12) | 18,866,927 | — | 2009 | Executives | 6,510 | 19/06/09 | 31/07/12 | |||||||||||||||||||
Plans outstanding at 12/31/09 | 51,726,420 | |||||||||||||||||||||||||
Shares delivered (Plan I10) | (12,947,042 | ) | — | 2007 | Executives | (4,930 | ) | 23/06/07 | 31/07/10 | |||||||||||||||||
Options cancelled, net (Plan I10) | (2,789,801 | ) | — | 2007 | Executives | (577 | ) | 23/06/07 | 31/07/10 | |||||||||||||||||
Options granted (Plan I13) | 19,612,616 | — | 2010 | Executives | 6,782 | 11/06/10 | 31/07/13 | |||||||||||||||||||
Plans outstanding at 12/31/10 | 55,602,193 | |||||||||||||||||||||||||
Of which: | ||||||||||||||||||||||||||
Plan I11 | 17,122,650 | — | 2008 | Executives | 5,771 | 21/06/08 | 31/07/11 | |||||||||||||||||||
Plan I12 | 18,866,927 | — | 2009 | Executives | 6,510 | 19/06/09 | 31/07/12 | |||||||||||||||||||
Plan 113 | 19,612,616 | — | 2010 | Executives | 6,782 | 11/06/10 | 31/07/13 |
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(i) | Performance share plan |
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Santander’s | Percentage of | Santander’s | Percentage of | |||||||
place in the TSR | maximum shares | place in the EPS | maximum shares | |||||||
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 | % |
Santander’s | Percentage of | |||
place in the TSR | maximum shares | |||
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 | % |
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Benchmark bonus | Percentage | |||
(thousands of euros) | (deferred) | |||
300 or less | 0 | % | ||
301 to 600 (inclusive) | 20 | % | ||
601 to 1,200 (inclusive) | 30 | % | ||
1,201 to 2,400 (inclusive) | 40 | % | ||
More than 2,400 | 50 | % |
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Date of | Date of | |||||||||||||||||||||||||||
Exercise price | commencement | expiry of | ||||||||||||||||||||||||||
Number of | in pounds | Year | Employee | Number of | of exercise | exercise | ||||||||||||||||||||||
shares | sterling (*) | granted | group | persons | period | period | ||||||||||||||||||||||
Plans outstanding at 01/01/08 | 8,048,312 | 5.34 | ||||||||||||||||||||||||||
Options granted (Sharesave) | 5,196,807 | 7.69 | 2008 | Employees | 6,556 (** | ) | 01/11/08 | 01/11/11 | ||||||||||||||||||||
Options exercised | (6,829,255 | ) | 4.91 | 01/11/08 | 01/11/13 | |||||||||||||||||||||||
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 | 7.24 | ||||||||||||||||||||||||||
Options granted (Sharesave) | 3,359,425 | 6.46 | 2010 | Employees | 4,752 (** | ) | 01/11/10 01/11/10 | 01/11/13 01/11/15 | ||||||||||||||||||||
Options exercised | (72,516 | ) | 7.54 | |||||||||||||||||||||||||
Of which: | ||||||||||||||||||||||||||||
Sharesave | (72,516 | ) | 7.54 | |||||||||||||||||||||||||
Options cancelled (net) or not exercised | (3,072,758 | ) | 6.82 | |||||||||||||||||||||||||
Of which: | ||||||||||||||||||||||||||||
Sharesave | (3,072,758 | ) | 6.82 | |||||||||||||||||||||||||
Plans outstanding at 12/31/10 | 8,938,680 | 7.09 | ||||||||||||||||||||||||||
Of which: | ||||||||||||||||||||||||||||
Executive Options | 12,015 | 4.54 | 2003-2004 | Executives | 2 | 26/03/06 | 24/03/13 | |||||||||||||||||||||
Sharesave | 8,926,665 | 7.09 | 2004-2008- 2009-2010 | Employees | 13,195 | (**) | 01/04/06 | 01/11/15 |
(*) | At December 31, 2010, 2009 and 2008, the euro/pound sterling exchange rate was EUR 1.16178/GBP 1; EUR 1.12600/GBP 1 and EUR 1.04987/GBP 1, respectively. | |
(**) | Number of accounts/contracts. A single employee may have more than one account/contract. |
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• | It was assumed that the beneficiaries will not leave the Group’s employ during the term of each plan. | ||
• | The Group calculated the fair value of the 50% linked to the Bank’s relative TSR position (100% in the case of PI12), on the grant date, considering 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. |
PI09 | PI10 | PI11 | PI12 | PI13 | ||||||||||||||||
Expected volatility (*) | 16.25 | % | 15.67 | % | 19.31 | % | 42.36 | % | 49.65 | % | ||||||||||
Annual dividend yield based on last few years | 3.23 | % | 3.24 | % | 3.47 | % | 4.88 | % | 6.34 | % | ||||||||||
Risk-free interest rate (Treasury Bond yield (zero coupon) over the period of the plan) | 4.473 | % | 4.497 | % | 4.835 | % | 2.04 | % | 3.33 | % |
(*) | Calculated on the basis of historical volatility over the corresponding period (two or three years). |
• | 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. |
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2010 | 2009 | 2008 | ||||
Risk-free interest rate | 1.7%-5.2% | 2.5%-3.5% | 2.9%-6.5% | |||
Dividend increase, based solely on the average increase since 1989 | 8% | 10% | 10% | |||
Volatility of underlying shares based on historical volatility over 5 years | 20.3%-39.4% | 29.0%-34.4% | 20.2%-29.6% | |||
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 Options Plan | 10 years | 10 years | 10 years |
48. | Other general administrative expenses |
a) | Breakdown |
Thousands of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Property, fixtures and supplies | 1,731,165 | 1,613,675 | 1,206,895 | |||||||||
Other administrative expenses | 1,554,733 | 1,435,743 | 1,048,392 | |||||||||
Technology and systems | 797,701 | 785,504 | 504,196 | |||||||||
Advertising | 633,511 | 594,432 | 534,876 | |||||||||
Communications | 670,307 | 631,806 | 452,900 | |||||||||
Technical reports | 428,470 | 359,753 | 298,037 | |||||||||
Per diems and travel expenses | 276,397 | 262,097 | 257,079 | |||||||||
Taxes other than income tax | 376,115 | 312,994 | 279,250 | |||||||||
Surveillance and cash courier services | 401,367 | 331,220 | 235,207 | |||||||||
Insurance premiums | 56,666 | 47,098 | 35,674 | |||||||||
6,926,432 | 6,374,322 | 4,852,506 | ||||||||||
b) | Other information |
• | The fees for the audit of the financial statements of Group companies amounted to EUR 21.6 million, the detail being as follows: |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Audit of the annual financial statements of the companies audited by Deloitte | 21.6 | 19.6 | 18.3 | |||||||||
Of which: | ||||||||||||
Santander UK | 4.1 | 3.7 | 3.3 | |||||||||
Santander Holdings USA (formerly Sovereign) | 2.5 | 2.3 | — | |||||||||
Santander Brasil | 1.7 | 1.5 | 2.4 | |||||||||
Audit of the Bank’s separate and consolidated financial statements | 1.1 | 1.0 | 1.0 |
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• | The fees for services similar to the audit of financial statements amounted to EUR 10.7 million, the detail being as follows: |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Internal control audit (SOX) and regulatory capital audit (Basel) | 6.5 | 6.8 | 5.9 | |||||||||
Other reports required by the different national supervisory bodies of the countries in which the Group operates | 4.2 | 4.2 | 4.5 | |||||||||
10.7 | 11.0 | 10.4 | ||||||||||
• | The detail of the other attest services relating to the audit of the various Group companies is as follows: audit services required for the issuance of debt securities, for EUR 2.5 million (2009: EUR 0.7 million; 2008: EUR 0.9 million), services relating to the adaptation to Solvency II, for EUR 0.6 million, as well as due diligence review work and audits of other corporate transactions, for EUR 5.8 million (2009: EUR 3 million; 2008: EUR 2.9 million). | ||
• | The fees for the fiscal advisory services provided to various Group companies amounted to EUR 3.9 million (2009: EUR 3.2 million; 2008: EUR 1.9 million) and the fees for other non-attest services amounted to EUR 1.7 million (2009: EUR 1.5 million; 2008: EUR 3.4 million). |
The services commissioned from the Group’s auditors meet the independence requirements stipulated by Audit Law 19/1988, of July 12, amended by Law 12/2010, of June 30, 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. |
• | Also, the Group commissioned services from audit firms other than Deloitte amounting to EUR 18.9 million (2009: EUR 14.0 million; 2008: EUR 13.9 million). |
49. | Gains/(losses) on disposal of assets not classified as non-current assets held for sale |
Millions of euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Gains: | ||||||||||||
On disposal of tangible assets | 206 | 51 | 115 | |||||||||
On disposal of investments | 193 | 1,531 | 53 | |||||||||
Of which: | ||||||||||||
Banco Santander Brasil (Note 3) | — | 1,499 | — | |||||||||
Disposal of Porterbrook (Note 3) | — | — | 50 | |||||||||
399 | 1,582 | 168 | ||||||||||
Losses: | ||||||||||||
On disposal of tangible assets | (9 | ) | (14 | ) | (64 | ) | ||||||
On disposal of investments | (40 | ) | (4 | ) | (3 | ) | ||||||
(49 | ) | (18 | ) | (67 | ) | |||||||
350 | 1,565 | 101 | ||||||||||
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50. | Gains/(losses) on disposal of non-current assets held for sale not classified as discontinued operations |
Millions of euros | ||||||||||||
Net balance | 2010 | 2009 | 2008 | |||||||||
Tangible assets | (332 | ) | (1,362 | ) | 799 | |||||||
Impairment of non-current assets held for sale (Note 12) (*) | (298 | ) | (1,350 | ) | (70 | ) | ||||||
Gain on disposals | (34 | ) | (12 | ) | 868 | |||||||
Of which, on disposal of the Ciudad Financiera business campus (Note 1.h) | — | — | 836 | |||||||||
Other gains | 113 | 243 | 3,046 | |||||||||
Of which: | ||||||||||||
Antonveneta (Note 1.h) | — | — | 3,046 | |||||||||
Attijariwafa Bank (Note 1.h) | — | 218 | — | |||||||||
Other losses | (71 | ) | (106 | ) | (2,113 | ) | ||||||
Of which, write-down of ownership interests in Royal Bank of Scotland and Fortis (Note 1.h) | — | — | (2,043 | ) | ||||||||
Total | (290 | ) | (1,225 | ) | 1,731 | |||||||
(*) | Including in 2009 the write-downs performed at year-end of EUR 814 million (EUR 554 million net of tax) (see Note 1.h). |
51. | Other disclosures |
a) | Residual maturity periods and average interest rates |
December 31, 2010 | ||||||||||||||||||||||||||||||||||||
Millions of euros | Average | |||||||||||||||||||||||||||||||||||
On | Less than 1 | 1 to 3 | 3 to 12 | 1 to 3 | 3 to 5 | More than 5 | interest | |||||||||||||||||||||||||||||
demand | month | months | months | years | years | years | Total | rate | ||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||
Cash and balances with central banks | 64,653 | 8,354 | 2,664 | 2,031 | 66 | — | 17 | 77,785 | 4.71 | % | ||||||||||||||||||||||||||
Available-for-sale financial assets- | 291 | 1,939 | 1,395 | 5,836 | 26,329 | 11,086 | 32,813 | 79,689 | 5.23 | % | ||||||||||||||||||||||||||
Debt instruments | ||||||||||||||||||||||||||||||||||||
Loans and receivables- | ||||||||||||||||||||||||||||||||||||
Loans and advances to credit institutions | 10,205 | 17,131 | 2,017 | 3,551 | 2,511 | 1,199 | 8,194 | 44,808 | 3.67 | % | ||||||||||||||||||||||||||
Loans and advances to customers | 19,338 | 35,294 | 33,879 | 77,766 | 105,792 | 74,138 | 369,414 | 715,621 | 5.33 | % | ||||||||||||||||||||||||||
Debt instruments | 30 | 1,556 | 867 | 1,046 | 932 | 409 | 3,589 | 8,429 | 2.04 | % | ||||||||||||||||||||||||||
94,517 | 64,274 | 40,822 | 90,230 | 135,630 | 86,832 | 414,027 | 926,332 | 5.16 | % | |||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||
Financial liabilities at amortized cost: | ||||||||||||||||||||||||||||||||||||
Deposits from central banks | 704 | 7,486 | 305 | 2 | 65 | 82 | — | 8,644 | 1.12 | % | ||||||||||||||||||||||||||
Deposits from credit institutions | 3,603 | 22,172 | 9,116 | 12,272 | 9,218 | 10,500 | 4,012 | 70,893 | 4.23 | % | ||||||||||||||||||||||||||
Customer deposits | 282,895 | 71,286 | 47,990 | 79,457 | 68,481 | 16,467 | 14,809 | 581,385 | 2.88 | % | ||||||||||||||||||||||||||
Marketable debt securities (*) | 1,669 | 8,869 | 10,356 | 20,403 | 63,476 | 25,960 | 57,496 | 188,229 | 2.48 | % | ||||||||||||||||||||||||||
Subordinated liabilities | 69 | 20 | 1,361 | 137 | 2,318 | 1,776 | 24,794 | 30,475 | 5.98 | % | ||||||||||||||||||||||||||
Other financial liabilities | 8,151 | 2,516 | 4,539 | 351 | 2,643 | 403 | 740 | 19,343 | N/A | |||||||||||||||||||||||||||
297,091 | 112,349 | 73,667 | 112,622 | 146,201 | 55,188 | 101,851 | 898,969 | 2.99 | % | |||||||||||||||||||||||||||
Difference (assets less liabilities) | (202,574 | ) | (48,075 | ) | (32,845 | ) | (22,392 | ) | (10,571 | ) | 31,644 | 312,176 | 27,363 | |||||||||||||||||||||||
(*) | Includes promissory notes, certificates of deposit and other short-term debt issues. |
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December 31, 2009 | ||||||||||||||||||||||||||||||||||||
Millions of euros | Average | |||||||||||||||||||||||||||||||||||
On | Less than 1 | 1 to 3 | 3 to 12 | 1 to 3 | 3 to 5 | More than 5 | interest | |||||||||||||||||||||||||||||
demand | month | months | months | years | years | 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 | 1 to 3 | 3 to 12 | 1 to 3 | More than 5 | interest | ||||||||||||||||||||||||||||||
demand | month | months | months | years | 3 to 5 years | 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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b) | Equivalent euro value of assets and liabilities |
Equivalent value in millions of euros | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
Assets | Liabilities | Assets | Liabilities | Assets | Liabilities | |||||||||||||||||||
Cash and balances with central banks | 69,690 | — | 28,198 | — | 26,685 | — | ||||||||||||||||||
Financial assets/liabilities held for trading | 112,990 | 96,089 | 94,069 | 87,066 | 104,429 | 96,666 | ||||||||||||||||||
Other financial instruments at fair value | 18,271 | 20,154 | 18,407 | 27,195 | 14,478 | 22,025 | ||||||||||||||||||
Available-for-sale financial assets | 45,491 | — | 43,048 | — | 25,338 | — | ||||||||||||||||||
Loans and receivables | 453,787 | — | 408,161 | — | 351,302 | — | ||||||||||||||||||
Investments | 161 | — | 92 | — | 1,169 | — | ||||||||||||||||||
Tangible assets | 5,270 | — | 3,918 | — | 3,286 | — | ||||||||||||||||||
Intangible assets | 24,024 | — | 21,659 | — | 16,940 | — | ||||||||||||||||||
Financial liabilities at amortized cost | — | 537,904 | — | 456,697 | — | 406,270 | ||||||||||||||||||
Liabilities under insurance contracts | — | 9,516 | — | 6,675 | — | 2,985 | ||||||||||||||||||
Other | 20,877 | 43,440 | 20,864 | 32,207 | 18,945 | 25,230 | ||||||||||||||||||
750,561 | 707,103 | 638,416 | 609,840 | 562,572 | 553,176 | |||||||||||||||||||
c) | Fair value of financial assets and liabilities not measured at fair value |
Millions of euros | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | Carrying | Fair | |||||||||||||||||||
Assets | amount | value | amount | value | amount | value | ||||||||||||||||||
Loans and receivables: | ||||||||||||||||||||||||
Loans and advances to credit institutions | 44,808 | 45,103 | 57,641 | 58,121 | 64,731 | 65,059 | ||||||||||||||||||
Loans and advances to customers | 715,621 | 721,887 | 664,146 | 676,218 | 617,231 | 627,006 | ||||||||||||||||||
Debt instruments | 8,429 | 8,097 | 14,959 | 13,718 | 17,653 | 17,645 | ||||||||||||||||||
768,858 | 775,087 | 736,746 | 748,057 | 699,615 | 709,710 | |||||||||||||||||||
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Millions of euros | ||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||
Carrying | Fair | Carrying | Fair | Carrying | Fair | |||||||||||||||||||
Liabilities | amount | value | amount | value | amount | value | ||||||||||||||||||
Financial liabilities at amortized cost: | ||||||||||||||||||||||||
Deposits from central banks | 8,644 | 8,644 | 22,345 | 22,349 | 9,212 | 9,212 | ||||||||||||||||||
Deposits from credit institutions | 70,893 | 71,036 | 50,781 | 50,905 | 70,583 | 70,740 | ||||||||||||||||||
Customer deposits | 581,385 | 582,624 | 487,681 | 488,675 | 406,015 | 407,537 | ||||||||||||||||||
Marketable debt securities | 188,229 | 189,671 | 206,490 | 206,765 | 227,642 | 227,413 | ||||||||||||||||||
Subordinated liabilities | 30,475 | 32,006 | 36,805 | 37,685 | 38,873 | 36,705 | ||||||||||||||||||
Other financial liabilities | 19,343 | 19,282 | 19,300 | 19,636 | 17,681 | 17,677 | ||||||||||||||||||
898,969 | 903,263 | 823,403 | 826,015 | 770,007 | 769,285 | |||||||||||||||||||
52. | Geographical and business segment reporting |
a) | Geographical segments |
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Millions of euros | ||||||||||||||||||||||||||||
2010 | ||||||||||||||||||||||||||||
Continental | Corporate | Intra-Group | ||||||||||||||||||||||||||
(Condensed) balance sheet | Europe | United Kingdom | Latin America | Sovereign | activities | eliminations | Total | |||||||||||||||||||||
Loans and advances to customers | 323,660 | 233,856 | 127,268 | 36,724 | 2,646 | — | 724,154 | |||||||||||||||||||||
Financial assets held for trading (excluding loans and advances) | 57,690 | 45,187 | 31,580 | 211 | 5,122 | — | 139,790 | |||||||||||||||||||||
Available-for-sale financial assets | 23,843 | 204 | 30,697 | 10,203 | 21,288 | — | 86,235 | |||||||||||||||||||||
Loans and advances to credit institutions | 66,925 | 29,137 | 21,632 | 722 | 36,868 | (75,429 | ) | 79,855 | ||||||||||||||||||||
Non-current assets | 4,965 | 2,323 | 4,880 | 507 | 1,909 | — | 14,584 | |||||||||||||||||||||
Other asset accounts | 22,160 | 42,063 | 57,186 | 3,430 | 138,996 | (90,952 | ) | 172,883 | ||||||||||||||||||||
Total assets / liabilities | 499,243 | 352,770 | 273,243 | 51,797 | 206,829 | (166,381 | ) | 1,217,501 | ||||||||||||||||||||
Customer deposits | 247,715 | 184,548 | 137,848 | 32,007 | 14,258 | — | 616,376 | |||||||||||||||||||||
Marketable debt securities | 48,413 | 64,326 | 15,376 | 1,945 | 62,812 | — | 192,872 | |||||||||||||||||||||
Subordinated liabilities | 1,740 | 8,143 | 5,683 | 2,781 | 12,128 | — | 30,475 | |||||||||||||||||||||
Liabilities under insurance contracts | 933 | 1 | 9,515 | — | — | — | 10,449 | |||||||||||||||||||||
Deposits from central banks and credit institutions | 77,029 | 54,159 | 38,026 | 9,567 | 36,760 | (75,429 | ) | 140,112 | ||||||||||||||||||||
Other liability accounts | 95,993 | 29,831 | 45,990 | 2,297 | 10,448 | (27,765 | ) | 156,794 | ||||||||||||||||||||
Equity (share capital + reserves) | 27,420 | 11,762 | 20,805 | 3,200 | 70,423 | (63,187 | ) | 70,423 | ||||||||||||||||||||
Other customer funds under management | 53,968 | 14,369 | 77,180 | 30 | — | — | 145,547 | |||||||||||||||||||||
Investment funds | 37,519 | 14,369 | 61,622 | — | — | — | 113,510 | |||||||||||||||||||||
Pension funds | 10,965 | — | — | — | — | — | 10,965 | |||||||||||||||||||||
Assets under management | 5,484 | — | 14,800 | 30 | — | — | 20,314 | |||||||||||||||||||||
Savings insurance | — | — | 758 | — | — | — | 758 | |||||||||||||||||||||
Customer funds under management | 351,836 | 271,386 | 236,087 | 36,763 | 89,198 | — | 985,270 | |||||||||||||||||||||
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Millions of euros | ||||||||||||||||||||||||||||
2009 | ||||||||||||||||||||||||||||
Continental | Corporate | Intra-Group | ||||||||||||||||||||||||||
(Condensed) balance sheet | Europe | United Kingdom | Latin America | Sovereign | activities | eliminations | Total | |||||||||||||||||||||
Loans and advances to customers | 322,026 | 227,713 | 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 | 90,530 | 28,745 | 22,146 | 496 | 43,550 | (105,630 | ) | 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 | 510,461 | 324,546 | 213,753 | 48,791 | 220,733 | (207,755 | ) | 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 | 117,509 | 57,879 | 32,765 | 736 | 38,832 | (105,630 | ) | 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 | ||||||||||||||||||||||||||||
Continental | Corporate | Intra-Group | ||||||||||||||||||||||||||
(Condensed) balance sheet | Europe | United Kingdom | Latin America | Sovereign | activities | 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 | ||||||||||||||||||||||||
2010 | ||||||||||||||||||||||||
�� | Continental | Corporate | ||||||||||||||||||||||
(Condensed) income statement | Europe | United Kingdom | Latin America | Sovereign | activities | Total | ||||||||||||||||||
INTEREST INCOME/(CHARGES) | 10,957 | 4,431 | 14,778 | 1,736 | (2,678 | ) | 29,224 | |||||||||||||||||
Income from equity instruments | 217 | — | 80 | 1 | 64 | 362 | ||||||||||||||||||
Income from companies accounted for using the equity method | 9 | — | 10 | — | (2 | ) | 17 | |||||||||||||||||
Net fee and commission income | 3,748 | 957 | 4,661 | 408 | (40 | ) | 9,734 | |||||||||||||||||
Gains/losses on financial assets and liabilities | 843 | 465 | 1,410 | 29 | (141 | ) | 2,606 | |||||||||||||||||
Other operating income/(expenses) | 171 | 28 | (163 | ) | (67 | ) | 137 | 106 | ||||||||||||||||
TOTAL INCOME | 15,945 | 5,881 | 20,776 | 2,107 | (2,660 | ) | 42,049 | |||||||||||||||||
Personnel expenses | (3,429 | ) | (1,209 | ) | (3,955 | ) | (468 | ) | (269 | ) | (9,330 | ) | ||||||||||||
Other administrative expenses | (2,084 | ) | (819 | ) | (3,238 | ) | (364 | ) | (421 | ) | (6,926 | ) | ||||||||||||
Depreciation and amortization of tangible and intangible assets | (639 | ) | (286 | ) | (778 | ) | (105 | ) | (132 | ) | (1,940 | ) | ||||||||||||
Net impairment losses on financial assets | (4,218 | ) | (760 | ) | (4,687 | ) | (510 | ) | (268 | ) | (10,443 | ) | ||||||||||||
Provisions (net) | (60 | ) | (132 | ) | (990 | ) | (66 | ) | 115 | (1,133 | ) | |||||||||||||
Net impairment losses on non-financial assets | (48 | ) | — | (12 | ) | (19 | ) | (207 | ) | (286 | ) | |||||||||||||
Other non-financial gains/(losses) | (55 | ) | 47 | 255 | (6 | ) | (180 | ) | 61 | |||||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 5,412 | 2,722 | 7,371 | 569 | (4,022 | ) | 12,052 | |||||||||||||||||
Income tax | (1,417 | ) | (737 | ) | (1,717 | ) | (143 | ) | 1,091 | (2,923 | ) | |||||||||||||
PROFIT/(LOSS) FROM CONTINUING OPERATIONS | 3,995 | 1,985 | 5,654 | 426 | (2,931 | ) | 9,129 | |||||||||||||||||
Profit/(loss) from discontinued operations | (14 | ) | — | — | — | (13 | ) | (27 | ) | |||||||||||||||
CONSOLIDATED PROFIT/(LOSS) FOR THE YEAR | 3,981 | 1,985 | 5,654 | 426 | (2,944 | ) | 9,102 | |||||||||||||||||
Attributable to non-controlling interests | 96 | — | 850 | — | (25 | ) | 921 | |||||||||||||||||
PROFIT/(LOSS) ATTRIBUTABLE TO THE PARENT | 3,885 | 1,985 | 4,804 | 426 | (2,919 | ) | 8,181 |
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Millions of euros | ||||||||||||||||||||||||||||||||||||||||||||||||
2009 | 2008 | |||||||||||||||||||||||||||||||||||||||||||||||
(Condensed) | Continental | Corporate | Continental | Corporate | ||||||||||||||||||||||||||||||||||||||||||||
income statement | Europe | United Kingdom | Latin America | Sovereign | activities | Total | Europe | United Kingdom | Latin America | Sovereign | activities | Total | ||||||||||||||||||||||||||||||||||||
INTEREST INCOME/(CHARGES) | 11,456 | 3,934 | 11,959 | 1,160 | (2,210 | ) | 26,299 | 9,259 | 2,411 | 8,025 | — | (2,157 | ) | 17,538 | ||||||||||||||||||||||||||||||||||
Income from equity instruments | 218 | — | 96 | 1 | 121 | 436 | 266 | — | 58 | — | 229 | 553 | ||||||||||||||||||||||||||||||||||||
Income from companies accounted for using the equity method | 7 | — | 10 | (3 | ) | (15 | ) | (1 | ) | 15 | 1 | 680 | — | 96 | 792 | |||||||||||||||||||||||||||||||||
Net fee and commission income | 3,787 | 993 | 3,925 | 380 | (5 | ) | 9,080 | 4,074 | 926 | 3,208 | — | 59 | 8,267 | |||||||||||||||||||||||||||||||||||
Gains/losses on financial assets and liabilities | 687 | 506 | 1,663 | 14 | 1,376 | 4,246 | 764 | 500 | 857 | — | 1,353 | 3,474 | ||||||||||||||||||||||||||||||||||||
Other operating income/(expenses) | 139 | 27 | 15 | (89 | ) | 52 | 144 | 181 | 49 | 10 | — | 32 | 272 | |||||||||||||||||||||||||||||||||||
TOTAL INCOME | 16,294 | 5,460 | 17,668 | 1,463 | (681 | ) | 40,204 | 14,559 | 3,887 | 12,838 | — | (388 | ) | 30,896 | ||||||||||||||||||||||||||||||||||
Personnel expenses | (3,306 | ) | (1,170 | ) | (3,210 | ) | (457 | ) | (307 | ) | (8,450 | ) | (3,123 | ) | (986 | ) | (2,504 | ) | — | (200 | ) | (6,813 | ) | |||||||||||||||||||||||||
Other administrative expenses | (2,028 | ) | (827 | ) | (2,822 | ) | (309 | ) | (388 | ) | (6,374 | ) | (1,833 | ) | (617 | ) | (2,147 | ) | — | (255 | ) | (4,852 | ) | |||||||||||||||||||||||||
Depreciation and amortization of tangible and intangible assets | (570 | ) | (231 | ) | (566 | ) | (115 | ) | (114 | ) | (1,596 | ) | (500 | ) | (158 | ) | (404 | ) | — | (177 | ) | (1,239 | ) | |||||||||||||||||||||||||
Net impairment losses on financial assets | (3,286 | ) | (881 | ) | (4,979 | ) | (571 | ) | (1,861 | ) | (11,578 | ) | (2,476 | ) | (457 | ) | (3,020 | ) | — | (331 | ) | (6,284 | ) | |||||||||||||||||||||||||
Provisions (net) | (311 | ) | 16 | (681 | ) | (55 | ) | (762 | ) | (1,793 | ) | (89 | ) | (29 | ) | (533 | ) | — | (989 | ) | (1,640 | ) | ||||||||||||||||||||||||||
Net impairment losses on non-financial assets | (41 | ) | — | (22 | ) | (1 | ) | (100 | ) | (164 | ) | (16 | ) | — | (6 | ) | — | (1,027 | ) | (1,049 | ) | |||||||||||||||||||||||||||
Other non-financial gains/(losses) | (81 | ) | — | 40 | (2 | ) | 382 | 339 | (38 | ) | 32 | 54 | — | 1,783 | 1,831 | |||||||||||||||||||||||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 6,671 | 2,367 | 5,428 | (47 | ) | (3,831 | ) | 10,588 | 6,484 | 1,672 | 4,278 | — | (1,584 | ) | 10,850 | |||||||||||||||||||||||||||||||||
Income tax | (1,768 | ) | (641 | ) | (1,257 | ) | 22 | 2,437 | (1,207 | ) | (1,686 | ) | (425 | ) | (663 | ) | — | 938 | (1,836 | ) | ||||||||||||||||||||||||||||
PROFIT/(LOSS) FROM CONTINUING OPERATIONS | 4,903 | 1,726 | 4,171 | (25 | ) | (1,394 | ) | 9,381 | 4,798 | 1,247 | 3,615 | — | (646 | ) | 9,014 | |||||||||||||||||||||||||||||||||
Profit/(loss) from discontinued operations | (45 | ) | — | 91 | — | (15 | ) | 31 | (21 | ) | — | 340 | — | — | 319 | |||||||||||||||||||||||||||||||||
CONSOLIDATED PROFIT/(LOSS) FOR THE YEAR | 4,858 | 1,726 | 4,262 | (25 | ) | (1,409 | ) | 9,412 | 4,777 | 1,247 | 3,955 | — | (646 | ) | 9,333 | |||||||||||||||||||||||||||||||||
Attributable to non-controlling interests | 65 | — | 428 | — | (24 | ) | 469 | 109 | — | 346 | — | 1 | 456 | |||||||||||||||||||||||||||||||||||
PROFIT/(LOSS) ATTRIBUTABLE TO THE PARENT | 4,793 | 1,726 | 3,834 | (25 | ) | (1,385 | ) | 8,943 | 4,668 | 1,247 | 3,609 | — | (647 | ) | 8,877 |
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Revenue (millions of euros) | ||||||||||||||||||||||||||||||||||||
Revenue from external | Inter-segment | |||||||||||||||||||||||||||||||||||
customers | revenue | Total revenue | ||||||||||||||||||||||||||||||||||
Segment | 2010 | 2009 | 2008 | 2010 | 2009 | 2008 | 2010 | 2009 | 2008 | |||||||||||||||||||||||||||
Continental Europe | 27,538 | 31,968 | 40,396 | 130 | 1,297 | 1,108 | 27,668 | 33,265 | 41,504 | |||||||||||||||||||||||||||
United Kingdom | 10,201 | 10,595 | 13,621 | 92 | 1,287 | 2,099 | 10,293 | 11,882 | 15,721 | |||||||||||||||||||||||||||
Latin America | 35,197 | 30,101 | 23,184 | (414 | ) | 480 | 1,169 | 34,783 | 30,581 | 24,353 | ||||||||||||||||||||||||||
Sovereign | 2,850 | 2,496 | — | (42 | ) | (19 | ) | — | 2,808 | 2,477 | — | |||||||||||||||||||||||||
Corporate activities | (477 | ) | 906 | 464 | 2,980 | 5,206 | 9,378 | 2,503 | 6,112 | 9,843 | ||||||||||||||||||||||||||
Inter-segment revenue adjustments and eliminations | — | — | — | (2,746 | ) | (8,251 | ) | (13,755 | ) | (2,746 | ) | (8,251 | ) | (13,755 | ) | |||||||||||||||||||||
TOTAL | 75,309 | 76,066 | 77,666 | — | — | — | 75,309 | 76,066 | 77,666 | |||||||||||||||||||||||||||
b) | Business segments |
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Millions of euros | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset | Asset | Asset | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Global | management | Global | management | Global | management | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Condensed) income | Retail | wholesale | and | Corporate | Retail | wholesale | and | Corporate | Retail | wholesale | and | Corporate | ||||||||||||||||||||||||||||||||||||||||||||||||
statement | banking | banking | insurance | activities | Total | banking | banking | insurance | activities | Total | banking | banking | insurance | activities | Total | |||||||||||||||||||||||||||||||||||||||||||||
INTEREST INCOME/(CHARGES) | 28,994 | 2,676 | 232 | (2,678 | ) | 29,224 | 25,800 | 2,508 | 201 | (2,210 | ) | 26,299 | 17,613 | 1,892 | 190 | (2,157 | ) | 17,538 | ||||||||||||||||||||||||||||||||||||||||||
Income from equity instruments | 101 | 197 | — | 64 | 362 | 128 | 187 | — | 121 | 436 | 154 | 164 | 6 | 229 | 553 | |||||||||||||||||||||||||||||||||||||||||||||
Income from companies accounted for using the equity method | 19 | — | — | (2 | ) | 17 | 14 | — | — | (15 | ) | (1 | ) | 556 | 87 | 53 | 96 | 792 | ||||||||||||||||||||||||||||||||||||||||||
Net fee and commission income | 8,058 | 1,292 | 424 | (40 | ) | 9,734 | 7,527 | 1,128 | 431 | (6 | ) | 9,080 | 6,861 | 883 | 464 | 59 | 8,267 | |||||||||||||||||||||||||||||||||||||||||||
Gains/losses on financial assets and liabilities | 1,333 | 1,364 | 50 | (141 | ) | 2,606 | 1,452 | 1,384 | 34 | 1,376 | 4,246 | 1,100 | 995 | 26 | 1,353 | 3,474 | ||||||||||||||||||||||||||||||||||||||||||||
Other operating income/(expenses) | (384 | ) | (22 | ) | 375 | 137 | 106 | (224 | ) | (22 | ) | 338 | 52 | 144 | 31 | (45 | ) | 254 | 32 | 272 | ||||||||||||||||||||||||||||||||||||||||
TOTAL INCOME | 38,121 | 5,507 | 1,081 | (2,660 | ) | 42,049 | 34,697 | 5,185 | 1,004 | (682 | ) | 40,204 | 26,315 | 3,976 | 993 | (388 | ) | 30,896 | ||||||||||||||||||||||||||||||||||||||||||
Personnel expenses | (8,002 | ) | (898 | ) | (161 | ) | (269 | ) | (9,330 | ) | (7,236 | ) | (758 | ) | (149 | ) | (307 | ) | (8,450 | ) | (5,806 | ) | (672 | ) | (135 | ) | (200 | ) | (6,813 | ) | ||||||||||||||||||||||||||||||
Other administrative expenses | (5,927 | ) | (445 | ) | (133 | ) | (421 | ) | (6,926 | ) | (5,445 | ) | (411 | ) | (130 | ) | (388 | ) | (6,374 | ) | (4,051 | ) | (388 | ) | (158 | ) | (255 | ) | (4,852 | ) | ||||||||||||||||||||||||||||||
Depreciation and amortization of tangible and intangible assets | (1,623 | ) | (137 | ) | (48 | ) | (132 | ) | (1,940 | ) | (1,362 | ) | (88 | ) | (32 | ) | (114 | ) | (1,596 | ) | (946 | ) | (98 | ) | (18 | ) | (177 | ) | (1,239 | ) | ||||||||||||||||||||||||||||||
Net impairment losses on financial assets | (10,168 | ) | (5 | ) | (2 | ) | (268 | ) | (10,443 | ) | (9,744 | ) | 34 | (10 | ) | (1,858 | ) | (11,578 | ) | (5,672 | ) | (281 | ) | — | (331 | ) | (6,284 | ) | ||||||||||||||||||||||||||||||||
Provisions (net) | (1,222 | ) | (11 | ) | (15 | ) | 115 | (1,133 | ) | (1,010 | ) | 5 | (36 | ) | (752 | ) | (1,793 | ) | (607 | ) | (26 | ) | (18 | ) | (989 | ) | (1,640 | ) | ||||||||||||||||||||||||||||||||
Net impairment losses on non-financial assets | (69 | ) | (10 | ) | — | (207 | ) | (286 | ) | (57 | ) | (3 | ) | (1 | ) | (103 | ) | (164 | ) | (24 | ) | — | 2 | (1,027 | ) | (1,049 | ) | |||||||||||||||||||||||||||||||||
Other non-financial gains/(losses) | 235 | 5 | 1 | (180 | ) | 61 | (33 | ) | — | — | 372 | 339 | 43 | 4 | 1 | 1,783 | 1,831 | |||||||||||||||||||||||||||||||||||||||||||
OPERATING PROFIT/(LOSS) BEFORE TAX | 11,345 | 4,006 | 723 | (4,022 | ) | 12,052 | 9,810 | 3,964 | 646 | (3,832 | ) | 10,588 | 9,252 | 2,515 | 667 | (1,584 | ) | 10,850 | ||||||||||||||||||||||||||||||||||||||||||
Income tax | (2,743 | ) | (1,071 | ) | (200 | ) | 1,091 | (2,923 | ) | (2,341 | ) | (1,084 | ) | (219 | ) | 2,437 | (1,207 | ) | (1,825 | ) | (775 | ) | (174 | ) | 938 | (1,836 | ) | |||||||||||||||||||||||||||||||||
PROFIT/(LOSS) FROM CONTINUING OPERATIONS | 8,602 | 2,935 | 523 | (2,931 | ) | 9,129 | 7,469 | 2,880 | 427 | (1,395 | ) | 9,381 | 7,427 | 1,740 | 493 | (646 | ) | 9,014 | ||||||||||||||||||||||||||||||||||||||||||
Profit/(loss) from discontinued operations | (14 | ) | — | — | (13 | ) | (27 | ) | 46 | — | — | (15 | ) | 31 | 319 | — | — | — | 319 | |||||||||||||||||||||||||||||||||||||||||
CONSOLIDATED PROFIT/(LOSS) FOR THE YEAR | 8,588 | 2,935 | 523 | (2,944 | ) | 9,102 | 7,515 | 2,880 | 427 | (1,410 | ) | 9,412 | 7,746 | 1,740 | 493 | (646 | ) | 9,333 | ||||||||||||||||||||||||||||||||||||||||||
Attributable to non-controlling interests | 648 | 238 | 60 | (25 | ) | 921 | 333 | 132 | 28 | (24 | ) | 469 | 434 | (1 | ) | 22 | 1 | 456 | ||||||||||||||||||||||||||||||||||||||||||
PROFIT/(LOSS) ATTRIBUTABLE TO THE PARENT | 7,940 | 2,697 | 463 | (2,919 | ) | 8,181 | 7,182 | 2,748 | 399 | (1,386 | ) | 8,943 | 7,312 | 1,741 | 471 | (647 | ) | 8,877 |
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53. | Related parties |
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Millions of euros | ||||||||||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | ||||||||||||||||||||||||||||||||||||||||||||||
Associates and | Associates and | Associates and | ||||||||||||||||||||||||||||||||||||||||||||||
jointly | Members of | jointly | Members of | jointly | Members of | Executive | ||||||||||||||||||||||||||||||||||||||||||
controlled | the board of | Executive vice | Other related | controlled | the board of | Executive vice | Other related | controlled | the board of | vice | Other related | |||||||||||||||||||||||||||||||||||||
entities | directors | presidents | parties | entities | directors | presidents | parties | entities | directors | presidents | parties | |||||||||||||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||||||||||||||||||
Loans and advances to credit institutions | 3,921 | — | — | — | 3,990 | — | — | — | 4,019 | — | — | — | ||||||||||||||||||||||||||||||||||||
Loans and advances to customers | 144 | 15 | 30 | 1,330 | 149 | 7 | 24 | 1,664 | 221 | 4 | 21 | 1,728 | ||||||||||||||||||||||||||||||||||||
Debt instruments | 594 | — | — | 534 | 609 | — | — | 117 | 510 | — | — | 464 | ||||||||||||||||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||
Deposits from credit institutions | (231 | ) | — | — | — | (204 | ) | — | — | — | (136 | ) | — | — | — | |||||||||||||||||||||||||||||||||
Customer deposits | (183 | ) | (16 | ) | (59 | ) | (498 | ) | (217 | ) | (8 | ) | (41 | ) | (551 | ) | (143 | ) | (11 | ) | (22 | ) | (405 | ) | ||||||||||||||||||||||||
Marketable debt securities | — | — | — | (2,828 | ) | — | — | — | (1,007 | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||
Income statement: | ||||||||||||||||||||||||||||||||||||||||||||||||
Interest and similar income | 78 | — | — | 173 | 96 | — | 1 | 111 | 203 | — | 1 | 83 | ||||||||||||||||||||||||||||||||||||
Interest expense and similar charges | (3 | ) | — | (1 | ) | (19 | ) | (9 | ) | — | (1 | ) | (31 | ) | (25 | ) | — | (1 | ) | (10 | ) | |||||||||||||||||||||||||||
Gains/losses on financial assets and liabilities | 37 | — | — | 9 | 57 | — | — | 8 | 3 | — | 1 | 32 | ||||||||||||||||||||||||||||||||||||
Fee and commission income | 41 | — | — | 19 | 22 | — | — | 10 | 28 | — | — | 25 | ||||||||||||||||||||||||||||||||||||
Fee and commission expense | (13 | ) | — | — | (11 | ) | — | — | — | (23 | ) | — | — | — | ||||||||||||||||||||||||||||||||||
Other: | ||||||||||||||||||||||||||||||||||||||||||||||||
Contingent liabilities | 2 | — | — | 442 | — | — | — | 491 | 293 | — | — | 479 | ||||||||||||||||||||||||||||||||||||
Contingent commitments | 90 | 1 | 5 | 3 | 137 | 1 | 3 | 3 | 164 | 1 | 7 | 13 | ||||||||||||||||||||||||||||||||||||
Derivative financial instruments | 6,878 | — | — | 1,378 | 6,868 | — | — | 3,153 | 7,074 | — | — | 1,314 |
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54. | Risk management |
• | Santander Group focuses its banking activities on theretailbanking business,and has an internationally diversified presence characterized by major market shares (>10%) in the main markets in which it operates. The wholesale banking business is conducted above all in the Group’s core markets. | ||
• | This model enables the Group to generate highly recurring earnings on the basis of a solid capital and liquidity base. | ||
• | Santander’s presence in the markets in which it operates is formalized through subsidiaries that are independent in terms of both capital and liquidity, in a manner that is compatible with corporate control. The corporate structure is necessarily a simple one, reducing to a minimum the use of non-operating or purely instrumental companies. | ||
• | Santander implements its operational and technological integration model through a series of corporate platforms and tools. This facilitates a swift and efficient compilation of data. | ||
• | All the Group’s activities are carried out within the bounds of its social and reputational commitment, in accordance with its strategic objectives. |
• | 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 as chairman of the risk committee, reports directly to the executive committee and the board. The segregation of functions between the business areas and the risk areas entrusted with risk acceptance, measurement, analysis, control and reporting provides sufficient independence and autonomy for proper risk control. | ||
• | Direct involvement of senior management in the decision-making process. | ||
• | 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 approval unit and, if appropriate, 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. | ||
• | Centralized control. Risk is controlled and managed in an integrated fashion through a corporate structure with Group-wide responsibilities (all risk, all businesses, all geographical areas). |
• | Establishment of risk policies and procedures. The risk policies and procedures constitute the basic regulatory framework governing risk activities and processes. The local risk units transpose the corporate risk regulations into their internal policies. | ||
• | Definition and assessment of risk methodologies. Risk methodologies facilitate the development of the internal risk models applicable by the Group, and they require risk measures and product valuation and yield curve building methods. | ||
• | Risk measurement. Risk measurement takes into account all risk exposures assumed across the business spectrum. It uses previously validated and approved methodologies and models based on the components and dimensions of risk throughout its life-cycle. | ||
• | Definition and limitation of risk appetite. The aim pursued is to delimit, in an efficient manner, the maximum levels of risk that can be assumed, by setting overall and specific limits for the various types of risks, products, customers, sectors and geographical areas. | ||
• | Implementation of a risk monitoring and control system which checks, on a daily basis and with the corresponding reports, the degree to which Santander’s risk profile matches the risk policies approved and the risk limits set. |
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• | Internal ratings- and scorings-based models which, after 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); and 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 credit and market risk analyses in order to assess the impact of alternative scenarios, even on provisions and capital. |
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• | Credit risk:In general, credit risk appetite is shaped through control limits, which can vary in the course of the year in accordance with the needs of the banking business and the Group’s risk appetite, on the basis of the established segmentation of risk (standardized, individualized and wholesale). There are two types of limits (basic -budget-linked- and portfolio -standardized and individualized-). In addition, the results of stress tests performed in various scenarios are taken into consideration. |
• | Market risk:the trading business is customer-centric. Checks are made to ensure that the limits proposed are consistent with the business budget. The metrics employed include VaR, management P&L and capital. VaR is established on the basis of the historical trend of losses, and is expressed as the amount used of management P&L up to a maximum percentage. Stress testing is also used. |
• | Operational and technology risk:the established risk appetite is monitored on the basis of daily management and mitigation, through the gross losses/gross income ratio, self-assessment questionnaires/risk maps, and management indicators. | ||
• | Compliance and reputational risk:the appetite for this risk is deemed to be “zero”. Active reputational risk management policies are established through the corporate office set up for this purpose. |
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1. | CORPORATE GOVERNANCE OF THE RISK FUNCTION |
• | 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. |
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• | 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, centered on the performance and management integration of the risk function in the Group’s commercial, global and local businesses. |
2. | INTEGRATED RISK CONTROL |
• | Global and corporate scope: 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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3. | CREDIT RISK |
3.1 | Introduction to the treatment of credit risk |
• | 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. |
3.2 | Main aggregates and variations |
A. | Global credit risk map — 2010 |
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SANTANDER GROUP — GROSS CREDIT RISK EXPOSURE | ||||||||||||||||||||||||||||||||||||||||
Sovereign | Private | Credit inst. | Drawable | |||||||||||||||||||||||||||||||||||||
Customer | Drawable by | fixed-income | fixed-income | & cent. bank | by credit | Derivatives & | Change/ | |||||||||||||||||||||||||||||||||
Data in millions of euros | drawdowns | customers | (excl. trad.) | (excl. trad.) | drawdowns | institutions | Repos (CRE) | Total | % | Dec-09 | ||||||||||||||||||||||||||||||
SPAIN | 277,583 | 61,492 | 26,956 | 7,674 | 19,260 | 1,484 | 32,644 | 427,092 | 35.4 | % | -3.0 | % | ||||||||||||||||||||||||||||
Parent bank | 168,070 | 45,097 | 16,210 | 4,892 | 14,059 | 1,210 | 26,568 | 276,105 | 22.9 | % | -1.6 | % | ||||||||||||||||||||||||||||
Banesto | 79,842 | 10,154 | 7,980 | 1,198 | 3,204 | 273 | 5,905 | 108,556 | 9.0 | % | -5.7 | % | ||||||||||||||||||||||||||||
Other | 29,671 | 6,241 | 2,765 | 1,584 | 1,997 | 1 | 171 | 42,430 | 3.5 | % | -4.9 | % | ||||||||||||||||||||||||||||
REST OF EUROPE | 320,158 | 42,791 | 6,022 | 9,163 | 34,224 | 1 | 16,167 | 428,525 | 35.5 | % | 9.6 | % | ||||||||||||||||||||||||||||
Germany | 21,879 | 295 | 0 | 111 | 694 | 0 | 6 | 22,984 | 1.9 | % | 0.5 | % | ||||||||||||||||||||||||||||
Portugal | 23,062 | 7,831 | 5,515 | 3,517 | 1,466 | 1 | 1,880 | 43,272 | 3.6 | % | 11.6 | % | ||||||||||||||||||||||||||||
United Kingdom | 242,864 | 32,154 | 145 | 5,431 | 31,380 | 0 | 13,650 | 325,624 | 27.0 | % | 11.7 | % | ||||||||||||||||||||||||||||
Other | 32,353 | 2,511 | 362 | 103 | 684 | 0 | 631 | 36,645 | 3.0 | % | -2.6 | % | ||||||||||||||||||||||||||||
LATIN AMERICA | 136,084 | 63,200 | 25,602 | 3,745 | 31,544 | 6 | 10,926 | 271,106 | 22.5 | % | 30.0 | % | ||||||||||||||||||||||||||||
Brazil | 81,684 | 42,159 | 18,040 | 2,613 | 24,008 | 0 | 5,758 | 174,263 | 14.4 | % | 32.0 | % | ||||||||||||||||||||||||||||
Chile | 27,397 | 7,929 | 1,764 | 948 | 2,313 | 6 | 2,938 | 43,296 | 3.6 | % | 24.8 | % | ||||||||||||||||||||||||||||
Mexico | 14,621 | 11,508 | 3,977 | 2 | 3,431 | 0 | 1,822 | 35,361 | 2.9 | % | 34.0 | % | ||||||||||||||||||||||||||||
Other | 12,382 | 1,603 | 1,820 | 183 | 1,791 | 0 | 407 | 18,186 | 1.5 | % | 18.5 | % | ||||||||||||||||||||||||||||
UNITED STATES | 53,288 | 10,888 | 1,682 | 8,953 | 2,984 | 0 | 795 | 78,590 | 6.5 | % | 16.8 | % | ||||||||||||||||||||||||||||
REST OF THE WORLD | 747 | 102 | 1 | 1 | 158 | 0 | 0 | 1,009 | 0.1 | % | -33.9 | % | ||||||||||||||||||||||||||||
TOTAL GROUP | 787,860 | 178,473 | 60,262 | 29,536 | 88,169 | 1,491 | 60,532 | 1,206,322 | 100 | % | 8.8 | % | ||||||||||||||||||||||||||||
%/total | 65.3 | % | 14.8 | % | 5.0 | % | 2.4 | % | 7.3 | % | 0.1 | % | 5.0 | % | 100.0 | % | ||||||||||||||||||||||||
Change/Dec-09 | 6.9 | % | 19.6 | % | 1.2 | % | -24.0 | % | 43.9 | % | 9.4 | % | -0.7 | % | 8.8 | % | ||||||||||||||||||||||||
B. | Variations in aggregates in 2010 |
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Specific Credit | ||||||||||||||||||||||||||||||||||||||||
Loans | ||||||||||||||||||||||||||||||||||||||||
Credit Risk | Non- | Provisions, Net | ||||||||||||||||||||||||||||||||||||||
Exposure to | Performing | Coverage | of RAWO ** | |||||||||||||||||||||||||||||||||||||
Customers * | Loans Ratio | Ratio | (Millions of | Cost of Credit | ||||||||||||||||||||||||||||||||||||
(Millions of euros) | (%) | (%) | euros) | (% of risk)(3) | ||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 | 2009 | 2010 (2) | 2009 (1) | |||||||||||||||||||||||||||||||
Continental Europe | 370,673 | 366,970 | 4.34 | 3.64 | 71.4 | 76.6 | 6,190 | 5,084 | 1.64 | 1.39 | ||||||||||||||||||||||||||||||
Santander Network | 126,705 | 129,099 | 5.52 | 4.38 | 51.8 | 64.9 | 2,454 | 1,851 | 1.89 | 1.41 | ||||||||||||||||||||||||||||||
Banesto | 86,213 | 86,681 | 4.11 | 2.97 | 54.4 | 64.1 | 1,272 | 737 | 1.52 | 0.89 | ||||||||||||||||||||||||||||||
Santander Consumer Finance | 67,820 | 60,214 | 4.95 | 5.39 | 128.4 | 96.8 | 1,884 | 2,005 | 2.85 | 3.38 | ||||||||||||||||||||||||||||||
Portugal | 32,265 | 34,501 | 2.90 | 2.27 | 60.0 | 64.6 | 105 | 95 | 0.30 | 0.27 | ||||||||||||||||||||||||||||||
United Kingdom | 244,707 | 238,215 | 1.76 | 1.71 | 45.8 | 43.8 | 826 | 1,018 | 0.34 | 0.43 | ||||||||||||||||||||||||||||||
Latin America | 149,333 | 117,146 | 4.11 | 4.25 | 103.6 | 105.2 | 4,758 | 5,053 | 3.53 | 4.44 | ||||||||||||||||||||||||||||||
Brazil | 84,440 | 65,611 | 4.91 | 5.27 | 100.5 | 99.2 | 3,703 | 3,537 | 4.93 | 5.88 | ||||||||||||||||||||||||||||||
Mexico | 16,432 | 12,676 | 1.84 | 1.84 | 214.9 | 264.4 | 469 | 824 | 3.12 | 6.13 | ||||||||||||||||||||||||||||||
Chile | 28,858 | 21,384 | 3.74 | 3.20 | 88.7 | 89.0 | 390 | 402 | 1.57 | 1.98 | ||||||||||||||||||||||||||||||
Puerto Rico | 4,360 | 4,132 | 10.59 | 9.60 | 57.5 | 53.3 | 143 | 89 | 3.22 | 1.99 | ||||||||||||||||||||||||||||||
Colombia | 2,275 | 1,719 | 1.56 | 1.83 | 199.6 | 187.5 | 15 | 31 | 0.68 | 1.94 | ||||||||||||||||||||||||||||||
Argentina | 4,097 | 2,936 | 1.69 | 2.60 | 149.1 | 141.0 | 26 | 91 | 0.72 | 2.99 | ||||||||||||||||||||||||||||||
Sovereign | 40,604 | 38,770 | 4.61 | 5.35 | 75.4 | 62.5 | 479 | 578 | 1.16 | — | ||||||||||||||||||||||||||||||
Total Group | 804,036 | 758,347 | 3.55 | 3.24 | 72.7 | 75.3 | 12,342 | 11,760 | 1.56 | 1.57 | ||||||||||||||||||||||||||||||
Memorandum item: | ||||||||||||||||||||||||||||||||||||||||
Spain | 283,424 | 284,307 | 4.24 | 3.41 | 57.9 | 73.4 | 4,352 | 3,497 | 1.53 | 1.20 |
* | Including gross loans and advances to customers, guarantees, documentary credits and retail segment derivatives (CRE: EUR 2,375 million) | |
** | RAWO= Recoveries of assets written off. | |
(1) | Excluding Sovereign | |
(2) | Excluding the inclusion of AIG in Santander Consumer Finance Poland | |
(3) | (Specific provisions — recoveries of written-off assets)/Total average credit risk. |
C. | Distribution of credit risk |
3.3 | Metrics and measurement tools |
A. | Credit rating tools |
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B. | Credit risk parameters |
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C. | Globalratingscales |
Wholesale banking | Banks | Sovereign risks | ||||||||||||||
Internal rating | PD | Internal rating | PD | Internal rating | PD | |||||||||||
8.5 to 9.3 | 0.030 | % | 8.5 to 9.3 | 0.030 | % | 8.5 to 9.3 | 0.030 | % | ||||||||
8.0 to 8.5 | 0.049 | % | 8.0 to 8.5 | 0.039 | % | 8.0 to 8.5 | 0.045 | % | ||||||||
7.5 to 8.0 | 0.077 | % | 7.5 to 8.0 | 0.066 | % | 7.5 to 8.0 | 0.072 | % | ||||||||
7.0 to 7.5 | 0.123 | % | 7.0 to 7.5 | 0.111 | % | 7.0 to 7.5 | 0.115 | % | ||||||||
6.5 to 7.0 | 0.195 | % | 6.5 to 7.0 | 0.186 | % | 6.5 to 7.0 | 0.184 | % | ||||||||
6.0 to 6.5 | 0.311 | % | 6.0 to 6.5 | 0.311 | % | 6.0 to 6.5 | 0.293 | % | ||||||||
5.5 to 6.0 | 0.494 | % | 5.5 to 6.0 | 0.521 | % | 5.5 to 6.0 | 0.468 | % | ||||||||
5.0 to 5.5 | 0.786 | % | 5.0 to 5.5 | 0.874 | % | 5.0 to 5.5 | 0.746 | % | ||||||||
4.5 to 5.0 | 1.251 | % | 4.5 to 5.0 | 1.465 | % | 4.5 to 5.0 | 1.189 | % | ||||||||
4.0 to 4.5 | 1.989 | % | 4.0 to 4.5 | 2.456 | % | 4.0 to 4.5 | 1.896 | % | ||||||||
3.5 to 4.0 | 3.163 | % | 3.5 to 4.0 | 4.117 | % | 3.5 to 4.0 | 3.022 | % | ||||||||
3.0 to 3.5 | 5.031 | % | 3.0 to 3.5 | 6.901 | % | 3.0 to 3.5 | 4.818 | % | ||||||||
2.5 to 3.0 | 8.002 | % | 2.5 to 3.0 | 11.569 | % | 2.5 to 3.0 | 7.681 | % | ||||||||
2.0 to 2.5 | 12.727 | % | 2.0 to 2.5 | 19.393 | % | 2.0 to 2.5 | 12.246 | % | ||||||||
1.5 to 2.0 | 20.241 | % | 1.5 to 2.0 | 32.509 | % | 1.5 to 2.0 | 19.524 | % | ||||||||
Less than 1.5 | 32.193 | % | Less than 1.5 | 54.496 | % | Less than 1.5 | 31.126 | % |
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D. | Distribution of EAD and associated expected loss (EL) |
Segmentation of credit risk exposure | ||||||||||||||||||||
Average | ||||||||||||||||||||
EAD (1) | % | Average PD | LGD | EL | ||||||||||||||||
Sovereign debt | 160,764 | 15.38 | % | 0.14 | % | 10.64 | % | 0.01 | % | |||||||||||
Banks and other financial institutions | 63,264 | 6.05 | % | 0.41 | % | 74.94 | % | 0.31 | % | |||||||||||
Public sector | 12,539 | 1.20 | % | 0.73 | % | 12.01 | % | 0.09 | % | |||||||||||
Corporate | 154,725 | 14.80 | % | 0.90 | % | 37.40 | % | 0.34 | % | |||||||||||
SMEs | 172,547 | 16.51 | % | 5.79 | % | 31.50 | % | 1.83 | % | |||||||||||
Mortgage loans to individuals | 312,865 | 29.93 | % | 3.20 | % | 7.44 | % | 0.24 | % | |||||||||||
Consumer loans to individuals | 119,921 | 11.47 | % | 8.69 | % | 54.57 | % | 4.74 | % | |||||||||||
Credit cards — individuals | 31,193 | 2.98 | % | 5.46 | % | 63.74 | % | 3.48 | % | |||||||||||
Other assets | 17,361 | 1.66 | % | 1.83 | % | 28.09 | % | 0.51 | % | |||||||||||
Memorandum item — customers (2) | 803,791 | 76.90 | % | 4.18 | % | 33.31 | % | 1.39 | % | |||||||||||
Total | 1,045,180 | 100.00 | % | 3.29 | % | 33.44 | % | 1.10 | % | |||||||||||
(1) | Excluding doubtful assets | |
(2) | Excluding sovereign debt, banks and other financial institutions and other assets |
3.4. | Observed loss: measures of cost of credit |
3.5 | Credit risk cycle |
• | 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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A. | Risk limit planning and setting |
B. | Risk analysis and credit rating process |
C. | Transaction decision-making |
D. | Risk monitoring and control |
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a. | Portfolio overview |
b. | Analysis of the home purchase loan portfolio |
Gross | Of which: | |||||||
Millions of euros | amount | Doubtful | ||||||
Home purchase loans | 61,936 | 1,388 | ||||||
Without mortgage guarantee | 549 | 30 | ||||||
With mortgage guarantee | 61,387 | 1,358 |
• | All mortgage transactions include principal repayments from the very first day. | ||
• | Habitual practice of early repayment, as a result of which the average life of transactions is much shorter than the contractual term. | ||
• | Debtors provide all their assets as security, not just the home. | ||
• | Most of the mortgages are floating rate loans with fixedspreadstied to Euribor. | ||
• | High quality of collateral: 94% of the portfolio relates to financing provided for principal residence purchases. | ||
• | 85% of the portfolio has an LTV of less than 80%. | ||
• | Stable average effort ratio at around 29%. |
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Total LTV Ranges | ||||||||||||||||
In millions of euros | LTV < 50% | 50% < LTV < 80% | 80% < LTV < 100% | LTV > 100% | ||||||||||||
Gross amount | 20,583 | 31,519 | 8,299 | 986 | ||||||||||||
Of which: Doubtful | 247 | 638 | 440 | 33 |
c. | Financing granted for construction and property development for real estate purposes |
Excess over | Specific | |||||||||||
Gross amount | collateral value | allowance | ||||||||||
In millions of euros | Total | Total | Total | |||||||||
1) Loans recognized (gross exposure) (1) | 27,334 | 13,296 | 1,890 | |||||||||
1.1) Of which: Doubtful | 4,636 | 2,391 | 1,321 | |||||||||
1.2) Of which: Substandard | 4,932 | 2,715 | 569 | |||||||||
- Total collective coverage (total businesses in Spain) | 768 | |||||||||||
- Written-off assets | 589 |
(1) | By loan purpose |
Millions of euros – December 2010 | Credits: Gross | |||
1. Without mortgage guarantee | 6,124 | |||
2. With mortgage guarantee | 21,210 | |||
2.1 Completed buildings | 12,709 | |||
2.1.1 Residential | 5,247 | |||
2.1.2 Other | 7,462 | |||
2.2 Buildings under construction | 2,548 | |||
2.2.1 Residential | 1,991 | |||
2.2.2 Other | 558 | |||
2.3 Land | 5,953 | |||
2.3.1 Developed land | 3,678 | |||
2.3.2 Developable land | 2,023 | |||
2.3.3 Other land | 252 | |||
TOTAL | 27,334 | |||
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• | Developments with completed work / certificate of final completion obtained: 72.5% of outstanding risk. | ||
• | Developments with a percentage of completion of more than 80%: 12.8% of outstanding risk. | ||
• | Developments with a percentage of completion of between 50 and 80%: 3.1% of outstanding risk. | ||
• | Percentage of completion of less than 50%: 11.5%. |
• | Developers with an ample solvency profile and proven experience in the market. | ||
• | Strict criteria regarding the specific parameters of the transactions: exclusive financing for the construction cost, high percentages of accredited sales, principal residence financing, etc. | ||
• | Support of financing of government-subsidized housing, with accredited sales percentages. | ||
• | Restricted financing of land purchases, subject to the restoration of a sufficient level of coverage in existing financing arrangements or to the obtainment of increased collateral. |
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Management of on-balance-sheet property assets is conducted through companies specializing in the sale of real estate (Altamira Santander Real Estate, S.A. and Promodomus Desarrollo de Activos, S.L.) and is supplemented by the commercial network structure. The assets are sold with price reductions in keeping with the market situation.
d. | Acquired and foreclosed assets |
• | Immediate availability of the assets, as opposed to the longer duration of legal proceedings. | ||
• | 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. |
Gross carrying | Of which: | Net carrying | ||||||||||||||
amount | Allowance | amount | % covered | |||||||||||||
Property assets from loans to construction and property development companies | 5,396 | 1,790 | 3,606 | 33 | % | |||||||||||
Of which: | ||||||||||||||||
Completed buildings | 1,093 | 268 | 825 | 25 | % | |||||||||||
Residential | 714 | 175 | 539 | 25 | % | |||||||||||
Other | 379 | 93 | 286 | 25 | % | |||||||||||
Buildings under construction | 564 | 139 | 425 | 25 | % | |||||||||||
Residential | 562 | 138 | 424 | 25 | % | |||||||||||
Other | 2 | 1 | 1 | 25 | % | |||||||||||
Land | 3,740 | 1,383 | 2,357 | 37 | % | |||||||||||
Developed land | 2,235 | 775 | 1,460 | 35 | % | |||||||||||
Developable land | 1,308 | 521 | 787 | 40 | % | |||||||||||
Other land | 197 | 87 | 110 | 44 | % | |||||||||||
Property assets from home purchase mortgage loans to households | 1,506 | 369 | 1,137 | 25 | % | |||||||||||
Other foreclosed property assets | 607 | 154 | 453 | 25 | % | |||||||||||
Equity instruments of, ownership interests in and financing provided to non-consolidated companies holding these assets | 840 | 438 | 402 |
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2009 | 2010 | |||||||||||
Gross additions | 2.5 | 2.1 | -20 | % | ||||||||
Disposals | 0.8 | 1.1 | 31 | % | ||||||||
Difference | 1.7 | 1.0 | -44 | % |
• | that are viable and whose initial impairment is not very severe, | ||
• | 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 exposure to the customer is assessed, regardless of the situation of each individual contract, and the highest possible level of guarantees is assigned to all the customer’s risks. | ||
• | The exposure to the customer 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 foreseeably 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. | ||
• | Restructured transactions are subject to special monitoring, which continues until the debt has been repaid in full. | ||
• | For individualized customers, a detailed, case-by-case analysis is performed, in which the use of expert judgment makes it possible to establish the most suitable conditions. |
• | The criteria established in Bank of Spain Circular-based regulations are met (i.e. collection of ordinary interest outstanding and, in any case, provision of new effective guarantees or reasonable assurance of payment capacity); |
• | The precautionary provisions included, using the principle of prudence, in the Group’s corporate policy are met (sustained payment for a period of between three and twelve months, depending on the transaction features and the type of guarantee). |
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E. | Risk control function |
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• | Calculates the sensitivity of the credit risk parameters (PD and LGD) to certain macroeconomic variables. |
• | Designs benchmark scenarios (at global level and for each of the Group units). |
• | 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. |
• | Estimates the expected loss associated with each of the set scenarios and the changes in the risk profile of each portfolio in response to changes in certain macroeconomic variables. |
• | Unemployment rate | ||
• | Housing prices | ||
• | GDP | ||
• | Interest rate | ||
• | Inflation |
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F. | Loan recovery |
3.6 | Credit risk from other standpoints |
A. | Concentration risk |
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B. | Credit risk from financial market operations |
RATING | % | |||
AAA | 11.6 | % | ||
AA | 9.7 | % | ||
A | 41.5 | % | ||
BBB | 21.3 | % | ||
BB | 13.3 | % | ||
B | 1.6 | % | ||
Other | 0.9 | % |
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C. | Country risk |
D. | Sovereign risk |
E. | Environmental risk |
• | 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, using a sequential methodology, the social and environmental risks of the projects financed: |
• | For transactions amounting to USD 10 million or more, an initial general questionnaire is completed, designed to establish the social and environmental risks of the project (which is classified, from higher to lower risk, into category A, B or C, respectively) and the degree of compliance of the transaction with the Equator Principles. |
• | For projects classified into the highest-risk categories (categories A and B), a more exhaustive questionnaire is completed, which is adapted according to the business sector involved. |
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• | Depending on the category and location of the projects, a social and environmental audit is conducted (by independent external advisers). To this end, specific questionnaires have been developed for the sectors in which the Bank is most active. Furthermore, the Bank organizes social and environmental training courses for both its risk management teams and the heads of its business units. |
• | 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 2010, 41,306 companies in Spain were assessed using this tool. |
4. | MARKET RISK |
4.1 | Activities subject to market risk |
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. |
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4.2 | Methodologies | ||
Trading |
a) | Interest rate gap of assets and liabilities |
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b) | Net interest margin (NIM) sensitivity |
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 |
1 | “Basel III: International framework for liquidity risk measurement, standards and monitoring” (Basel Committee on Banking Supervision, December 2010) |
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4.3 | Control system |
A. | Limit setting |
B. | Objectives of the limits structure |
• | 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 2010 |
A. | Trading |
2 | Results in terms of “cleanresults”. The results for these years do not include intraday results or those arising from fees and commissions. | |
3 | Value at Earnings(VaE) is the balancing entry for VaR on the profit side. |
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B. | Balance sheet management4 |
4 | Includes the total balance sheet, except for financial assets and liabilities held for trading. | |
5 | Sensitivity expressed as an absolute figure. It is the sum of the sensitivity to numerous yield curves grouped together applying correlation assumptions (betas) between these curves. |
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• | Assets amounting to over EUR 26,000 million were securitized, of which EUR 19,000 million were placed in the market and the remainder were retained by the Group’s various units. These retained securitization transactions increased the Group’s liquidity position since they can be discounted at central banks. |
• | Higher tranches of asset-backed bonds issued by Group companies were repurchased in the secondary market (around EUR 500 million). |
1. | Liquidity management framework |
A. | Organizational and governance model |
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• | Broad base of highly stable customer deposits: more than 85% are retail customer deposits captured by the various commercial units in the Group’s main markets. |
• | Financing of stable on-balance-sheet liquidity needs (commercial gap or difference between lending and deposits) through medium- and long-term issues, establishing a surplus of structural financing in order to cope with possible adverse situations. |
• | Diversification of funding sources to reduce concentration risk with respect to: |
• | Instruments/investors | ||
• | Markets/currencies | ||
• | Terms |
• | Strict control of short-term funding needs, in keeping with the Group’s policy of minimizing the raising of short-term financing. |
• | Autonomy and responsibility of subsidiaries in the management of liquidity funding, with no structural support from the Parent. |
• | Preparation of a liquidity plan each year on the basis of the funding needs arising from the budgets of each business and the methodology described above. Based on these liquidity requirements and taking into account certain prudential limits on the raising of short-term market financing, financial management establishes an issue and securitization plan for the year. |
• | Year-round monitoring of the actual changes in the balance sheet and in the financing requirements, which results in the relevant updates of the plan. |
• | Maintaining an active presence in a broad and diversified set of funding markets. In particular, the Group has nine major independent issuer units which avoid any dependence on a specific market and endow it with significant issuance capabilities in various markets. |
• | Supported by the foregoing, the Group has an adequate structure of medium- and long-term issues, well diversified by product (senior, subordinate, preference, mortgage-backed bonds, securitizations), with a conservative average term (4.1 years at 2010 year-end). |
• | All this translates into a moderate need for short-term wholesale financing at Group level. |
C. | Balance sheet analysis and liquidity risk measurement |
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2. | Current liquidity position |
A) | Robust balance sheet |
B) | Funding dynamics |
A. | Robust balance sheet |
B. | Funding dynamics |
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C. | Structural foreign currency risk/hedges of results |
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D. | Structured financing |
E. | Exposures related to complex structured assets |
• | CDOs and CLOs: a position of EUR 486 million, down 24% with respect to 2009 year-end. This position is largely a result of the integration of the Alliance & Leicester portfolio in 2008. 32% of this portfolio was rated AAA and 77% had a rating of A or higher. | ||
• | Non-agency CMOs and pass-throughs with alt-A mortgage underlying1: exposure of EUR 639 million at the end of December, arising from the integration of Sovereign Bank in January 2009. This position fell by 17% with respect to December 2009. | ||
• | Hedge funds: the total exposure was not material (EUR 540 million at the end of December) and consisted largely of the financing provided to these funds (EUR 295 million), the remainder being direct portfolio investment. This exposure involved low levels of loan-to-value risk -around 35% (collateral of EUR 1,543 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 by 2% with respect to 2009 year-end. | ||
• | Conduits: there is no exposure. The conduit positions resulting from the acquisition of Alliance & Leicester were recognized at their market value in the Group’s balance sheet in the third quarter of 2010. | ||
• | Monolines: Santander’s exposure to monoline insurers amounted to EUR 274 million2 in December 2010, and was concentrated mainly on an indirect exposure amounting to EUR 244 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). Exposure decreased significantly -by 31%-with respect to 2009. |
• | 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. |
1 | 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.). | |
2 | The guarantees provided by monoline insurers in US Municipal Bonds are not treated as exposure. As a result of the acquisition of Sovereign Bank, the Group integrated a portfolio of this type of bonds amounting to EUR 1,328 million at December 2010. |
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• | 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 |
• | 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). |
6 | “Basel III: International framework for liquidity risk measurement, standards and monitoring” (Basel Committee on Banking Supervision, December 2010) |
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• | 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, etc.), and setting of risk tolerance 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. |
• | Definition and implementation of the Corporate Technology and Operational Risk Management Framework. | ||
• | 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. | ||
• | Ensure the effective management of operational and technological risk. | ||
• | Provide adequate information on this type of risk. |
• | Security of information systems. | ||
• | Promotion of contingency and business continuity plans. | ||
• | Management of the 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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• | Classified databases of operational incidents are received on a monthly basis. The captured events relating to operational risk are not restricted by thresholds, i.e. none are excluded due to their amount, and they include events affecting the accounts (including positive effects) and those not affecting the accounts. |
• | Self-assessment questionnaires completed by the main Group units are received and analyzed and their results materialize in the preparation of risk maps. |
• | A corporate system of operational risk indicators is in place, which is updated continuously in coordination with the internal control area. |
• | The most significant and frequent events are identified and analyzed, and mitigation measures are adopted and disseminated to the other Group units as best practice guidelines. |
• | Databases are reconciled with the accounting records. |
• | 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. |
• | Two levels of information: one corporate, with consolidated information, and the other individualized for each country/unit. |
• | Dissemination of the best practices among the countries/units of Santander Group, obtained from the combined study of the results of qualitative and quantitative analyses of operational risk. |
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• | Santander Group’s operational risk management model. | ||
• | Human resources and scope of action. | ||
• | Analysis of the database of errors and incidents. | ||
• | Operational risk cost and accounting reconciliation. | ||
• | Self-assessment questionnaires. | ||
• | Indicators. | ||
• | Mitigating measures/active management. | ||
• | Contingency plans. | ||
• | Regulatory framework: BIS II. | ||
• | Insurance. |
• | 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 requirements and RORACs 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 | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Assets | ||||||||||||
Cash and due from banks | 70,858,410 | 28,231,681 | 41,131,292 | |||||||||
Interest earning deposits in other banks | 25,063,368 | 29,288,269 | 43,553,958 | |||||||||
Securities purchased under agreements to resell | 9,988,524 | 21,288,275 | 19,391,367 | |||||||||
Trading account assets | 196,241,901 | 172,867,988 | 177,451,940 | |||||||||
Banks | 35,054,229 | 22,714,580 | 13,998,287 | |||||||||
Loans | 8,525,594 | 17,885,911 | 9,537,868 | |||||||||
Derivatives | 73,068,769 | 59,856,413 | 95,815,309 | |||||||||
Debt securities | 62,475,640 | 57,285,731 | 49,050,280 | |||||||||
Equity securities | 17,117,669 | 15,125,353 | 9,050,196 | |||||||||
Investment securities | 94,663,835 | 101,579,834 | 66,572,866 | |||||||||
Available-for-sale | 94,663,835 | 101,579,834 | 66,572,866 | |||||||||
Net Loans and leases | 702,459,309 | 653,348,725 | 607,424,343 | |||||||||
Loans and leases, net of unearned income | 722,121,041 | 671,184,116 | 619,890,400 | |||||||||
Less-Allowance for loan losses | (19,661,732 | ) | (17,835,391 | ) | (12,466,057 | ) | ||||||
Premises and equipment, net | 12,780,464 | 11,499,449 | 11,953,856 | |||||||||
Investment in affiliated companies | 272,915 | 164,473 | 1,323,452 | |||||||||
Other assets | 102,952,009 | 89,904,613 | 78,381,486 | |||||||||
Intangible Assets | 3,442,034 | 2,778,358 | 1,787,068 | |||||||||
Goodwill in consolidation | 24,622,345 | 22,865,056 | 18,836,199 | |||||||||
Accrual Accounts | 2,558,738 | 2,259,262 | 1,952,843 | |||||||||
Hedge derivatives | 8,227,013 | 7,833,850 | 9,698,132 | |||||||||
Others | 64,101,879 | 54,168,087 | 46,107,244 | |||||||||
Total assets | 1,215,280,735 | 1,108,173,307 | 1,047,184,560 | |||||||||
Liabilities | ||||||||||||
Deposits | 633,938,785 | 554,133,789 | 468,641,990 | |||||||||
Non interest deposits | 4,825,310 | 5,393,916 | 4,608,242 | |||||||||
Interest bearing | 629,113,475 | 548,739,873 | 464,033,748 | |||||||||
Demand deposits | 153,185,961 | 142,483,882 | 99,670,268 | |||||||||
Savings deposits | 136,693,907 | 127,940,647 | 115,673,794 | |||||||||
Time deposits | 339,233,607 | 278,315,344 | 248,689,686 | |||||||||
Certificates of deposit | — | — | — | |||||||||
Short-term debt | 130,729,864 | 124,189,724 | 125,291,176 | |||||||||
Long-term debt | 216,475,672 | 220,089,591 | 233,516,879 | |||||||||
Other liabilities | 153,221,957 | 135,889,561 | 159,733,023 | |||||||||
Taxes Payable | 8,618,446 | 7,003,945 | 5,768,665 | |||||||||
Accounts Payable | 8,285,660 | 7,859,466 | 8,738,047 | |||||||||
Accrual Accounts | 4,953,205 | 5,502,958 | 4,669,160 | |||||||||
Pension Allowance | 7,299,145 | 8,272,533 | 8,751,128 | |||||||||
Stock borrowing liabilities | — | — | — | |||||||||
Derivatives | 81,912,726 | 63,903,701 | 95,125,044 | |||||||||
Liabilities under insurance contracts | 10,449,274 | 16,916,446 | 16,849,511 | |||||||||
Other Provisions | 6,140,760 | 6,904,055 | 6,538,142 | |||||||||
Short securities positions | 12,302,918 | 5,139,730 | 3,035,231 | |||||||||
Others | 13,259,823 | 14,386,727 | 10,258,095 | |||||||||
Total liabilities | 1,134,366,278 | 1,034,302,665 | 987,183,068 | |||||||||
Equity | ||||||||||||
Stockholders’ equity | ||||||||||||
Capital stock | 4,164,561 | 4,114,413 | 3,997,030 | |||||||||
Additional paid-in-capital | 29,457,152 | 29,305,257 | 28,103,802 | |||||||||
Other additional capital | (1,462,276 | ) | (2,326,272 | ) | (3,114,636 | ) | ||||||
Current year earnings | 8,180,909 | 8,942,538 | 8,876,414 | |||||||||
Other reserves | 34,677,992 | 28,630,648 | 19,724,276 | |||||||||
Total stockholders’ equity | 75,018,338 | 68,666,584 | 57,586,886 | |||||||||
Non-controlling interests | 5,896,119 | 5,204,058 | 2,414,606 | |||||||||
Total Equity | 80,914,457 | 73,870,642 | 60,001,492 | |||||||||
Total liabilities and Equity | 1,215,280,735 | 1,108,173,307 | 1,047,184,560 |
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Thousands of Euros | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Interest income: | ||||||||||||
Interest and fees on loans and leases | 42,513,764 | 42,707,534 | 42,574,139 | |||||||||
Interest on deposits in other banks | 2,880,783 | 3,362,476 | 5,561,810 | |||||||||
Interest on securities purchased under agreements to resell | 978,676 | 1,155,892 | 1,788,147 | |||||||||
Interest on investment securities | 6,801,027 | 6,285,097 | 5,567,274 | |||||||||
Dividends | 16 | 5,350 | 92,017 | |||||||||
Total interest income | 53,174,266 | 53,516,349 | 55,583,387 | |||||||||
Interest expenses: | ||||||||||||
Interest on deposits | (13,732,501 | ) | (15,852,047 | ) | (18,814,100 | ) | ||||||
Interest on short-term borrowings | (3,258,486 | ) | (2,929,118 | ) | (5,437,822 | ) | ||||||
Interest on long-term debt | (5,116,603 | ) | (6,561,801 | ) | (12,174,778 | ) | ||||||
Total interest expense | (22,107,590 | ) | (25,342,966 | ) | (36,426,700 | ) | ||||||
Interest income / (Charges) | 31,066,676 | 28,173,383 | 19,156,687 | |||||||||
Provision for credit losses | (10,257,986 | ) | (11,010,021 | ) | (5,909,252 | ) | ||||||
Interest income / (Charges) after provision for credit losses | 20,808,690 | 17,163,362 | 13,247,435 | |||||||||
Non interest income: | ||||||||||||
Commissions and fees from fiduciary activities | 1,349,772 | 1,219,658 | 1,618,479 | |||||||||
Commissions and fees from securities activities, net | 784,129 | 774,296 | 704,525 | |||||||||
Fees and commissions from insurance activities | 9,043,520 | 8,858,253 | 9,977,441 | |||||||||
Other Fees and commissions, net | 5,439,465 | 5,122,333 | 4,079,182 | |||||||||
Gains (losses) from: | ||||||||||||
Affiliated companies’ securities | 170,170 | 1,521,863 | 3,791,479 | |||||||||
Investment securities | 2,107,665 | 4,551,719 | (6,767,774 | ) | ||||||||
Foreign exchange, derivatives and other, net | 319,857 | (811,761 | ) | 7,757,144 | ||||||||
Sale of premises | 197,057 | 37,279 | 887,931 | |||||||||
Income from non financial entities | 345,255 | 381,653 | 591,177 | |||||||||
Gains on sale of non-current assets / liabilities held for sale not classified as discontinued operations | 209,643 | 414,802 | 36,419 | |||||||||
Other income | 810,610 | 485,908 | 558,812 | |||||||||
Total non interest income | 20,777,143 | 22,556,003 | 23,234,815 | |||||||||
Non interest expense: | ||||||||||||
Salaries and employee benefits | (9,917,026 | ) | (9,176,648 | ) | (7,774,565 | ) | ||||||
Occupancy expense of premises, depreciation and maintenance, net | (2,502,490 | ) | (2,254,891 | ) | (1,665,057 | ) | ||||||
General and administrative expenses | (5,279,789 | ) | (4,889,737 | ) | (3,771,527 | ) | ||||||
Impairment of goodwill | (63,000 | ) | (2,631 | ) | (72,726 | ) | ||||||
Impairment / amortization of intangible assets | (1,090,536 | ) | (854,757 | ) | (1,566,414 | ) | ||||||
Impairment of tangible assets | (529,593 | ) | (1,503,048 | ) | (111,114 | ) | ||||||
Provisions for specific allowances | (923,595 | ) | (1,444,074 | ) | (1,034,102 | ) | ||||||
Payments to Deposit Guarantee Fund | (306,814 | ) | (317,708 | ) | (179,023 | ) | ||||||
Insurance claims | (7,590,945 | ) | (7,604,807 | ) | (8,472,523 | ) | ||||||
Expenses of non financial entities | (205,246 | ) | (244,083 | ) | (489,283 | ) | ||||||
Losses on sale of non-current assets / liabilities held for sale not classified as discontinued operations | (201,477 | ) | (289,617 | ) | (75,184 | ) | ||||||
Other expenses | (923,449 | ) | (549,564 | ) | (421,407 | ) | ||||||
Total non interest expense | (29,533,960 | ) | (29,131,565 | ) | (25,632,925 | ) | ||||||
Income before income taxes | 12,051,873 | 10,587,800 | 10,849,325 | |||||||||
Income tax expense | (2,923,190 | ) | (1,206,610 | ) | (1,836,052 | ) | ||||||
Net consolidated income for the year | 9,128,683 | 9,381,190 | 9,013,273 | |||||||||
Net income attributed to non-controlling interests | 920,852 | 466,083 | 447,662 | |||||||||
Income from discontinued operation, net of taxes | (26,922 | ) | 27,431 | 310,803 | ||||||||
NET INCOME ATTRIBUTED TO THE GROUP | 8,180,909 | 8,942,538 | 8,876,414 |
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2010 | 2009 | 2008 | ||||||||||
(Thousands of Euros) | ||||||||||||
Assets | ||||||||||||
Cash and due from banks | 70,716,206 | 70,922,607 | 78,827,627 | |||||||||
Trading account assets | 67,807,360 | 57,262,358 | 79,641,722 | |||||||||
Investment securities | 29,849,856 | 34,033,734 | 16,061,930 | |||||||||
Net Loans and leases | 186,505,411 | 174,645,173 | 183,754,083 | |||||||||
Investment in affiliated companies | 60,496,584 | 67,430,284 | 62,232,929 | |||||||||
Premises and equipment, net | 1,271,519 | 1,338,600 | 728,588 | |||||||||
Other assets | 12,647,754 | 10,436,136 | 13,943,826 | |||||||||
Total assets | 429,294,690 | 416,068,892 | 435,190,705 | |||||||||
Liabilities | ||||||||||||
Deposits | 221,026,754 | 236,833,251 | 213,464,786 | |||||||||
Short-term debt | 26,923,776 | 13,597,783 | 34,337,021 | |||||||||
Long-term debt | 59,800,705 | 59,884,683 | 57,769,675 | |||||||||
Other liabilities | 76,825,438 | 59,571,695 | 84,257,494 | |||||||||
Total liabilities | 384,576,673 | 369,887,412 | 389,828,976 | |||||||||
Stockholders’ equity | ||||||||||||
Capital stock | 4,164,561 | 4,114,413 | 3,997,030 | |||||||||
Retained earnings and other reserves | 40,553,456 | 42,067,067 | 41,364,699 | |||||||||
Total stockholders’ equity | 44,718,017 | 46,181,480 | 45,361,729 | |||||||||
Total liabilities and Stockholders’ Equity | 429,294,690 | 416,068,892 | 435,190,705 |
2010 | 2009 | 2008 | ||||||||||
(Thousands of Euros) | ||||||||||||
Interest income | ||||||||||||
Interest from earning assets | 9,061,280 | 11,410,345 | 15,233,869 | |||||||||
Dividends from affiliated companies | 5,514,503 | 2,456,785 | 4,541,565 | |||||||||
14,575,783 | 13,867,130 | 19,775,434 | ||||||||||
Interest expense | (5,816,718 | ) | (7,117,004 | ) | (13,318,953 | ) | ||||||
Interest income / (Charges) | 8,759,065 | 6,750,126 | 6,456,481 | |||||||||
Provision for credit losses | (2,131,820 | ) | (331,241 | ) | (1,387,505 | ) | ||||||
Interest income / (Charges) after provision for credit losses | 6,627,245 | 6,418,885 | 5,068,976 | |||||||||
Non interest income: | 715,785 | 1,483,843 | 4,369,576 | |||||||||
Non interest expense: | (3,950,314 | ) | (3,688,492 | ) | (4,555,202 | ) | ||||||
Income before income taxes | 3,392,716 | 4,214,236 | 4,883,350 | |||||||||
Income tax expense | (60,851 | ) | (63,423 | ) | (57,132 | ) | ||||||
Net income | 3,331,865 | 4,150,813 | 4,826,218 |
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2010 | 2009 | 2008 | ||||||||||
(Thousands of Euros) | ||||||||||||
1. Cash flows from operating activities | ||||||||||||
Consolidated profit | 3,331,865 | 4,150,813 | 4,826,218 | |||||||||
Adjustments to profit | 3,053,649 | 1,305,971 | 2,895,285 | |||||||||
Net increase/decrease in operating assets | 14,922,859 | (12,900,811 | ) | 63,231,280 | ||||||||
Net increase/decrease in operating liabilities | 13,166,127 | (26,129,154 | ) | 61,252,781 | ||||||||
Reimbusements/payments of income tax | 215,014 | 254,105 | 57,132 | |||||||||
Total net cash flows from operating activities (1) | 4,843,796 | (7,517,454 | ) | 5,800,136 | ||||||||
2. Cash flows from investing activities | ||||||||||||
Investments (-) | (1,329,085 | ) | (3,641,824 | ) | (3,686,280 | ) | ||||||
Divestments (+) | 4,577,220 | 2,026,980 | 524,116 | |||||||||
Total net cash flows from investment activities (2) | 3,248,135 | (1,614,844 | ) | (3,162,164 | ) | |||||||
3. Cash flows from financing activities | ||||||||||||
Disposal of own equity instruments | 2,342,793 | 32,345 | — | |||||||||
Acquisition of own equity instruments | (2,313,767 | ) | (61,059 | ) | (61,471 | ) | ||||||
Issuance of debt securities | 6,970,186 | 1,945,877 | 200,039 | |||||||||
Redemption of debt securities | (9,437,904 | ) | — | — | ||||||||
Dividends paid | (4,107,009 | ) | (4,386,550 | ) | (4,243,021 | ) | ||||||
Issuance/Redemption of equity instruments | — | — | 7,020,677 | |||||||||
Other collections/payments related to financing activities | (376,768 | ) | (438,283 | ) | 1,162,017 | |||||||
Total net cash flows from financing activities (3) | (6,922,469 | ) | (2,907,670 | ) | 4,078,241 | |||||||
4. Effect of exchange rate changes on cash and cash equivalents (4) | 250,691 | 112,740 | (468,668 | ) | ||||||||
5. Net increase/decrease in cash and cash equivalents (1+2+3+4) | 1,420,153 | (11,927,228 | ) | 6,247,545 | ||||||||
Cash and cash equivalents at beginning of period | 6,626,871 | 18,554,099 | 12,306,554 | |||||||||
Cash and cash equivalents at end of period | 8,047,024 | 6,626,871 | 18,554,099 |
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55.2 | Preference Shares and Preferred Securities |
2010 | 2009 | 2008 | ||||||||||
(Thousands of Euros) | ||||||||||||
Preference shares | 435,364 | 430,152 | 1,051,272 | |||||||||
Preferred securities | 6,916,930 | 7,315,291 | 7,621,575 | |||||||||
Total at year-end | 7,352,294 | 7,745,443 | 8,672,847 |
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Outstanding at December 31, 2010 | ||||||||||||
Amount in | ||||||||||||
Preference Shares | currency | |||||||||||
Issuer/Date of issue | Currency | (million) | Interest rate | Redemption Option (1) | ||||||||
Banesto Holding, Ltd, December 1992 | US Dollar | 45.1 | 10.500 | % | June 30, 2012 | |||||||
Santander UK plc, October 1995 | Pounds Sterling | 80.3 | 10.375 | % | No option | |||||||
Santander UK plc, February 1996 | Pounds Sterling | 80.3 | 10.375 | % | No option | |||||||
Santander UK plc, March 2004 | Pounds Sterling | 13.6 | 5.827 | % | March 22, 2016 | |||||||
Santander UK plc, May 2006 | Pounds Sterling | 34.9 | 6.222 | %(2) | May 24, 2019 | |||||||
Santander Holdings USA, Inc, August 2000 | US Dollar | 147.5 | 12.000 | % | May 16, 2020 | |||||||
Santander Holdings USA, Inc, May 2006 | US Dollar | 75.5 | 7.300 | % | May 15, 2011 |
Outstanding at December 31, 2010 | ||||||||||
Amount in | ||||||||||
Preferred Securities | currency | |||||||||
Issuer/Date of issue | Currency | (million) | Interest rate | Maturity date | ||||||
Banesto Group | ||||||||||
Banco Español de Crédito, October 2004 | Euro | 96.9 | €CMS 10 + 0.125% | Perpetuity | ||||||
Banco Español de Crédito (1), November 2004 | Euro | 158.0 | 5.5% | Perpetuity | ||||||
Banco Español de Crédito, June 2009 | Euro | 497.5 | 6.0% | Perpetuity | ||||||
Santander Finance Capital, S.A. (Unipersonal) | ||||||||||
March 2009 | US Dollar | 18.2 | 2.0% | Perpetuity | ||||||
March 2009 | US Dollar | 25.0 | 2.0% | Perpetuity | ||||||
March 2009 | Euro | 313.7 | 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 | 174.2 | €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 | 125.6 | 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 | ||||||
Santander UK 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 | 101.8 | 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 |
(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. |
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• | 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. |
Santander Finance Capital, S.A. (Unipersonal) was established in Spain on July 8, 2003. |
The common stock of the company is wholly owned by Banco Santander, S.A. |
Presented below are the condensed balance sheet, condensed statements of income and statements of changes in the stockholders’ equity for Santander Finance Capital, S.A. (Unipersonal), prepared in conformity with IFRS. |
Thousands of Euros | ||||||||
SANTANDER FINANCE CAPITAL, S.A. (UNIPERSONAL) | 2010 | 2009 | ||||||
Assets: | ||||||||
Cash | 5,070 | 22,965 | ||||||
Deposits with Parent Bank | 2,465,064 | 3,442,226 | ||||||
Accrual accounts | 8,458 | 11,201 | ||||||
Other assets | — | — | ||||||
Total Assets | 2,478,592 | 3,476,392 | ||||||
Liabilities and stockholders’ equity: | ||||||||
LIABILITIES: | ||||||||
Public entities | 3,946 | 4,409 | ||||||
Accrual accounts | 8,465 | 10,043 | ||||||
Non-commercial debts | — | — | ||||||
Commercial debts | 38 | 74 | ||||||
Debts with Group companies | 227 | 69 | ||||||
Provisions for taxes | — | — | ||||||
Preferred securities | 2,465,144 | 3,461,648 | ||||||
Total Liabilities | 2,477,820 | 3,476,243 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Capital stock | 151 | 151 | ||||||
Retained earnings | (2 | ) | 243 | |||||
Net income | 623 | (245 | ) | |||||
Total Stockholders’ Equity | 772 | 149 | ||||||
Total Liabilities and Stockholders’ Equity | 2,478,592 | 3,476,392 |
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Thousands of Euros | ||||||||
SANTANDER FINANCE CAPITAL, S.A. (UNIPERSONAL) | 2010 | 2009 | ||||||
Interest income | 119,964 | 118,253 | ||||||
Interest expenses | (119,024 | ) | (118,236 | ) | ||||
Non interest expenses | (159 | ) | (262 | ) | ||||
Corporate income tax | (158 | ) | — | |||||
Net income / (loss) | 623 | (245 | ) | |||||
Retained | Total | |||||||||||||||||||
Capital stock | Earnings | Net income | Stockholders’Equity | |||||||||||||||||
Changes in Stockholders’ Equity | Common Shares | Thousands of Euros | ||||||||||||||||||
Balance at January 31, 2009 | 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 | ||||||||||||||
2009 Income allocation | — | — | (245 | ) | 245 | — | ||||||||||||||
Net income 2010 | — | — | — | 623 | 623 | |||||||||||||||
Balance at December 31, 2010 | 1,505 | 151 | (2 | ) | 623 | 772 |
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Thousands of | ||||||
Issue Date | Euros at 12/31/10 | |||||
Issuances | ||||||
Series VI | 03/18/2009 | 13,608 | ||||
Series VII | 03/18/2009 | 18,691 | ||||
Series VIII | 03/18/2009 | 313,745 | ||||
Series IX | 03/18/2009 | 153,700 | ||||
Series X | 06/30/2009 | 1,965,616 | ||||
Total | 2,465,360 | |||||
Issuances expenses | ||||||
Series VI | — | |||||
Series VII | — | |||||
Series VIII | (100 | ) | ||||
Series IX | (49 | ) | ||||
Series X | (67 | ) | ||||
Total | (216 | ) | ||||
Total | 2,465,144 | |||||
- | 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. On July 12, 2010 the company redeemed the whole series. | |
- | 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. |
Santander Finance Preferred, S.A. (Unipersonal) was established in Spain on February 27, 2004. |
The common stock of the company is wholly owned by Banco Santander, S.A. |
Presented below are the condensed balance sheet, condensed statements of income and statements of changes in the stockholders’ equity for Santander Finance Preferred, S.A. (Unipersonal), prepared in conformity with IFRS. |
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Table of Contents
Thousands of Euros | ||||||||
SANTANDER FINANCE PREFERRED, S.A. (UNIPERSONAL) | 2010 | 2009 | ||||||
Assets: | ||||||||
Cash | 28,567 | 24,917 | ||||||
Deposits with Parent Bank | 3,641,218 | 3,626,360 | ||||||
Accrual accounts | 71,895 | 69,304 | ||||||
Total Assets | 3,741,680 | 3,720,581 | ||||||
Liabilities and stockholders’ equity: | ||||||||
LIABILITIES: | ||||||||
Public entities | 18 | 254 | ||||||
Accrual accounts | 53,890 | 69,017 | ||||||
Commercial debts | 36 | 25 | ||||||
Non-commercial debts | — | — | ||||||
Deferred income | — | — | ||||||
Debts with group companies | 1,259,534 | 928,206 | ||||||
Provisions for taxes | — | — | ||||||
Preferred securities | 2,426,482 | 2,720,256 | ||||||
Total Liabilities | 3,739,960 | 3,717,758 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Capital stock | 151 | 151 | ||||||
Retained earnings | 2,672 | 1,340 | ||||||
Net income | (1,103 | ) | 1,332 | |||||
Total Stockholders’ Equity | 1,720 | 2,823 | ||||||
Total Liabilities and Stockholders’ Equity | 3,741,680 | 3,720,581 |
Thousands of Euros | ||||||||
SANTANDER FINANCE PREFERRED, S.A. (UNIPERSONAL) | 2010 | 2009 | ||||||
Interest income | 302,097 | 182,125 | ||||||
Interest expenses | (301,946 | ) | (179,748 | ) | ||||
Non interest income | — | — | ||||||
Non interest expenses | (1,254 | ) | (1,042 | ) | ||||
Corporate income tax | — | (3 | ) | |||||
Net income / (loss) | (1,103 | ) | 1,332 | |||||
Retained | Total | |||||||||||||||||||
Capital stock | Earnings | Net income | Stockholders’ Equity | |||||||||||||||||
Changes in Stockholders’ Equity | Common Shares | Thousands of Euros | ||||||||||||||||||
Balance at January 31, 2009 | 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 | |||||||||||||||
2009 Income allocation | — | — | 1,332 | (1,332 | ) | — | ||||||||||||||
Net income 2010 | — | — | — | (1,103 | ) | (1,103 | ) | |||||||||||||
Balance at December 31, 2010 | 1,505 | 151 | 2,672 | (1,103 | ) | 1,720 |
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Thousands of | ||||||
Issue Date | Euros at 12/31/10 | |||||
Issuances | ||||||
Series 1- $190,000 | 03/11/2004 | 142,194 | ||||
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 | 374,195 | ||||
Series 5- $600,000 | 31/01/2007 | 449,035 | ||||
Series 6- $350,000 | 05/03/2007 | 261,937 | ||||
Series 7- £250,000 | 07/10/2007 | 290,444 | ||||
Series 8- £679,400 | 07/27/2009 | 789,312 | ||||
Series 9- €125,700 | 07/27/2009 | 125,700 | ||||
Series 10- $825,110 | 09/29/2009 | 617,505 | ||||
Series 11- $161,587 | 09/29/2009 | 120,930 | ||||
3,671,252 | ||||||
Issuances expenses | ||||||
Series 1 | — | — | ||||
Series 2 | — | — | ||||
Series 3 | — | — | ||||
Series 4 | — | (1.358 | ) | |||
Series 5 | — | (1.896 | ) | |||
Series 6 | — | (59 | ) | |||
Series 7 | — | (27 | ) | |||
Series 8 | — | (89 | ) | |||
Series 9 | — | (89 | ) | |||
Series 10 | — | (93 | ) | |||
Series 11 | — | (93 | ) | |||
(3,704 | ) | |||||
Total | 3,667,548 | |||||
- | 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. |
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Santander International Preferred, S.A. (Sociedad Unipersonal) was established in Spain on February 17, 2009. |
The common stock of the company is wholly owned by Banco Santander, S.A. |
Presented below are the condensed balance sheet, condensed statements of income and statements of changes in the stockholders’ equity for Santander International Preferred, S.A. (Sociedad Unipersonal), prepared in conformity with IFRS. |
SANTANDER INTERNATIONAL PREFERRED, S.A. | Thousands of Euros | Thousands of Euros | ||||||
(SOCIEDAD UNIPERSONAL) | 2010 | 2009 | ||||||
Assets: | ||||||||
Cash | 142 | 225 | ||||||
Deposits with Parent Bank | 742,455 | 689,271 | ||||||
Accrual accounts | 11,904 | 10,904 | ||||||
Other current assets | — | 4 | ||||||
Total Assets | 754,501 | 700,404 | ||||||
Liabilities and stockholders’ equity: | ||||||||
LIABILITIES: | ||||||||
Public entities | — | 7 | ||||||
Commercial debts | 26 | 71 | ||||||
Debts with group companies | 9 | — | ||||||
Accrual accounts | 11,762 | 10,882 | ||||||
Preferred securities | 742,622 | 689,401 | ||||||
Total Liabilities | 754,419 | 700,361 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Capital stock | 60 | 60 | ||||||
Retained earnings | (17 | ) | — | |||||
Net income | 39 | (17 | ) | |||||
Total Stockholders’ Equity | 82 | 43 | ||||||
Total Liabilities and Stockholders’ Equity | 754,501 | 700,404 |
SANTANDER INTERNATIONAL PREFERRED, S.A. | Thousands of Euros | Thousands of Euros | ||||||
(SOCIEDAD UNIPERSONAL) | 2010 | 2009 | ||||||
Interest income | 15,171 | 11,078 | ||||||
Interest expenses | (15,034 | ) | (11,066 | ) | ||||
Non interest income | — | 2 | ||||||
Non interest expenses | (89 | ) | (31 | ) | ||||
Corporate income tax | (9 | ) | — | |||||
Net income / (loss) | 39 | (17 | ) | |||||
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Retained | Total | |||||||||||||||||||
Capital stock | Earnings | Net income | Stockholders’ Equity | |||||||||||||||||
Changes in Stockholders’ Equity | Common 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 | ||||||||||||||
2009 Income allocation | — | — | (17 | ) | 17 | — | ||||||||||||||
Net income 2010 | — | — | — | 39 | 39 | |||||||||||||||
Balance at December 31, 2010 | 602 | 60 | (17 | ) | 39 | 82 |
Thousands of | ||||||
Issue Date | Euros at 12/31/10 | |||||
Issuances | ||||||
Series 1 ($) | 03/19/2009 | 734,166 | ||||
Series 2 (€) | 03/19/2009 | 8,582 | ||||
742,748 | ||||||
Issuances expenses | (126 | ) | ||||
Total | 742,622 | |||||
- | 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 | US Registered senior debt |
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Thousands of Euros | Thousands of Euros | |||||||
SANTANDER US DEBT, S.A. (SOCIEDAD UNIPERSONAL) | 2010 | 2009 | ||||||
Assets: | ||||||||
Cash | 739 | 433 | ||||||
Deposits with Parent Bank | 4,212,792 | 2,605,191 | ||||||
Other current assets | — | 4 | ||||||
Total Assets | 4,213,531 | 2,605,628 | ||||||
Liabilities and stockholders’ equity: | ||||||||
LIABILITIES: | ||||||||
Public entities | 23 | — | ||||||
Commercial debts | 35 | 36 | ||||||
Debts with group companies | 5,081 | 9,040 | ||||||
Senior debt | 4,208,069 | 2,595,989 | ||||||
Total Liabilities | 4,213,208 | 2,605,065 | ||||||
STOCKHOLDERS’ EQUITY: | ||||||||
Capital stock | 120 | 120 | ||||||
Retained earnings | 443 | 431 | ||||||
Net income | (240 | ) | 12 | |||||
Total Stockholders’ Equity | 323 | 563 | ||||||
Total Liabilities and Stockholders’ Equity | 4,213,531 | 2,605,628 |
Thousands of Euros | Thousands of Euros | |||||||
SANTANDER US DEBT, S.A. (SOCIEDAD UNIPERSONAL) | 2010 | 2009 | ||||||
Interest income | 65,042 | 43,321 | ||||||
Interest expenses | (64,875 | ) | (43,016 | ) | ||||
Non interest income | 111 | 4 | ||||||
Non interest expenses | (518 | ) | (292 | ) | ||||
Corporate income tax | — | (5 | ) | |||||
Net income / (loss) | (240 | ) | 12 | |||||
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Retained | Total | |||||||||||||||||||
Capital stock | Earnings | Net income | Stockholders’ Equity | |||||||||||||||||
Changes in Stockholders’ | Common | |||||||||||||||||||
Equity | Shares | Thousands of Euros | ||||||||||||||||||
Balance at January 1, 2009 | 1,200 | 120 | 332 | 100 | 552 | |||||||||||||||
2008 Income allocation | — | — | 99 | (100 | ) | (1 | ) | |||||||||||||
Net income 2009 | — | — | — | 12 | 12 | |||||||||||||||
Balance at December 31, 2009 | 1,200 | 120 | 431 | 12 | 563 | |||||||||||||||
2009 Income allocation | — | — | 12 | (12 | ) | — | ||||||||||||||
Net income 2010 | — | — | — | (240 | ) | (240 | ) | |||||||||||||
Balance at December 31, 2010 | 1,200 | 120 | 443 | (240 | ) | 323 |
55.4 | Acquisition of Sovereign Bancorp, Inc (“Sovereign”). |
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2008 | ||||
(Thousands of euros) | ||||
Assets | ||||
Cash and amounts due from depository institutions | 2,697,796 | |||
Investment securities available for sale | 6,683,437 | |||
Investment securities held to maturity | — | |||
Other investments | 516,470 | |||
Net loans held for investment | 39,117,012 | |||
Loans held for sale | 235,203 | |||
Premises and equipment | 395,308 | |||
Accrued interest receivable | 180,795 | |||
Goodwill | 2,465,676 | |||
Core deposits and other intangibles | 192,909 | |||
Bank owned life insurance | 1,327,648 | |||
Other assets | 1,583,067 | |||
Total assets | 55,395,321 | |||
Liabilities | ||||
Deposits and other customer accounts | 34,805,327 | |||
Borrowings and other debt obligations | 15,063,724 | |||
Advance payments by borrowers for taxes and insurance | 66,986 | |||
Other liabilities | 1,437,789 | |||
Total liabilities | 51,373,826 | |||
Non-controlling interests-preferred securities of subsidiaries | — | |||
Stockholders’ Equity | ||||
Preferred stock | 140,436 | |||
Common stock | 5,546,289 | |||
Warrants and employee stock options issued | 251,902 | |||
Unallocated common stock held by Employee Stock Ownership Plan | — | |||
Treasury stock | (6,739 | ) | ||
Accumulated other comprehensive loss | (564,642 | ) | ||
Retained earnings | (1,345,751 | ) | ||
Total Stockholders’ Equity | 4,021,495 | |||
Total Liabilities and Stockholders’ Equity | 55,395,321 |
2008 | ||||
(Thousands of euros) | ||||
Interest income | 2,679,882 | |||
Interest expense | (1,394,001 | ) | ||
Provision for credit losses | (622,297 | ) | ||
Interest income / (Charges) after provision for credit losses | 663,584 | |||
Fees and other income | 434,746 | |||
Net (loss)/gain on investment securities | (994,022 | ) | ||
Non-interest income | (559,277 | ) | ||
General and administrative expenses | (1,013,917 | ) | ||
Other expenses | (206,312 | ) | ||
Income before income taxes | (1,115,922 | ) | ||
Income tax benefit/(provision) | (494,269 | ) | ||
Net income | (1,610,191 | ) |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
2 & 3 Triton Limited (m) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 12 | 4 | 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 | 93 | (1 | ) | 88 | ||||||||||||||||
A & L CF (Jersey) No.2 Limited (n) | Jersey | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 107 | 0 | 91 | |||||||||||||||||
A & L CF December (1) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 13 | 1 | 0 | |||||||||||||||||
A & L CF December (10) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 36 | (1 | ) | 33 | ||||||||||||||||
A & L CF December (11) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 12 | 0 | 11 | |||||||||||||||||
A & L CF June (1) Limited (e) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 4 | 1 | 1 | |||||||||||||||||
A & L CF June (2) Limited (e) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 2 | 0 | 0 | |||||||||||||||||
A & L CF June (3) Limited (e) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | (1 | ) | 1 | 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) (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
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 | (1 | ) | 0 | ||||||||||||||||
A & L CF March (8) Limited (d) (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
A & L CF March (9) Limited (d) (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 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 | 1 | 0 | |||||||||||||||||
A & L CF September (4) Limited (f) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | (3 | ) | 1 | 0 | ||||||||||||||||
A & L CF September (5) Limited (f) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 2 | 0 | 0 | |||||||||||||||||
A N (123) plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 985 | 4 | 990 | |||||||||||||||||
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 | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Abbey Covered Bonds (LM) Limited | United Kingdom | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Abbey Covered Bonds LLP | United Kingdom | — | (b | ) | — | SECURITISATION | 599 | 190 | 0 | |||||||||||||||||||
Abbey National (America) Holdings Inc. | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 34 | 0 | 34 | |||||||||||||||||
Abbey National (America) Holdings Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 34 | 0 | 27 | |||||||||||||||||
Abbey National (CF Trustee) Limited (d) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ASSET MANAGEMENT COMPANY | 0 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Abbey National (Gibraltar) Limited (j) | Gibraltar | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 0 | 0 | 0 | |||||||||||||||||
Abbey National (Holdings) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 22 | 0 | 19 | |||||||||||||||||
Abbey National 1986 Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 7 | 0 | 6 | |||||||||||||||||
Abbey National Alpha Investments (d) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 1 | 0 | 1 | |||||||||||||||||
Abbey National American Investments Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 302 | 1 | 294 | |||||||||||||||||
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 | 115 | 16 | 99 | |||||||||||||||||
Abbey National Business Cashflow Finance Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FACTORING | 5 | 0 | 4 | |||||||||||||||||
Abbey National Business Equipment Leasing Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 1 | 0 | 0 | |||||||||||||||||
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 Financial Investments 3 B.V. | Netherlands | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 4 | 1 | 1 | |||||||||||||||||
Abbey National Financial Investments 4 B.V. | Netherlands | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 294 | 0 | 291 | |||||||||||||||||
Abbey National General Insurance Services Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ADVISORY SERVICES | (44 | ) | 44 | 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 Homes Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | (44 | ) | 0 | 0 | ||||||||||||||||
Abbey National International Limited | Jersey | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 212 | 19 | 174 | |||||||||||||||||
Abbey National Investments | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 128 | 1 | 124 | |||||||||||||||||
Abbey National Legacy Holdings Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Abbey National Legacy Leasing Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Abbey National Legacy Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 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 | 0 | 0 | 0 | |||||||||||||||||
Abbey National Pension (Escrow Services) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PENSION FUND MANAGEMENT COMPANY | 16 | 6 | 0 | |||||||||||||||||
Abbey National Personal Pensions Trustee Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ASSET MANAGEMENT COMPANY | 0 | 0 | 0 | |||||||||||||||||
Abbey National PLP (UK) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Abbey National Properties (2) Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | (3 | ) | 3 | 0 | ||||||||||||||||
Abbey National Property Investments | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 394 | 5 | 161 | |||||||||||||||||
Abbey National Property Services Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | (15 | ) | 0 | 0 | ||||||||||||||||
Abbey National Securities Inc. | United States | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 43 | 1 | 34 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Abbey National September Leasing (3) Limited (f) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | (9 | ) | 0 | 0 | ||||||||||||||||
Abbey National Sterling Capital plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 3 | 0 | 0 | |||||||||||||||||
Abbey National Treasury Investments | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 219 | 18 | 214 | |||||||||||||||||
Abbey National Treasury Services (Transport Holdings) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 4 | 4 | |||||||||||||||||
Abbey National Treasury Services Investments Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 880 | 2 | 871 | |||||||||||||||||
Abbey National Treasury Services Overseas Holdings | United Kingdom | 0.00 | % | 99.99 | % | 99.99 | % | HOLDING COMPANY | 1,229 | 316 | 1,184 | |||||||||||||||||
Abbey National Treasury Services plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 4,070 | 534 | 3,310 | |||||||||||||||||
Abbey National UK Investments | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 830 | 4 | 704 | |||||||||||||||||
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 | (1 | ) | 8 | ||||||||||||||||
ABN AMRO Administradora de Cartões de Crédito Ltda. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | CARDS | — | — | — | |||||||||||||||||
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 | — | — | — | |||||||||||||||||
Adelfa Servicios a Instalaciones Fotovoltaicas, S.L. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | ELECTRICITY | 0 | 0 | 0 | |||||||||||||||||
Administración de Bancos Latinoamericanos Santander, S.L. | Spain | 24.11 | % | 75.89 | % | 100.00 | % | HOLDING COMPANY | 558 | 243 | 524 | |||||||||||||||||
AEH Purchasing, Ltd. | Ireland | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Afisa S.A. | Chile | 0.00 | % | 100.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 10 | 0 | 3 | |||||||||||||||||
Agencia de Seguros Santander, Ltda. | Colombia | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE | 4 | (3 | ) | 1 | ||||||||||||||||
Agrícola Tabaibal, S.A. | Spain | 0.00 | % | 66.80 | % | 100.00 | % | AGRICULTURE AND LIVESTOCK | 0 | 0 | 0 | |||||||||||||||||
Agropecuaria Tapirapé S.A. | Brazil | 0.00 | % | 80.62 | % | 99.07 | % | AGRICULTURE AND LIVESTOCK | 3 | 0 | 1 | |||||||||||||||||
AIG Bank Polska Spólka Akcyjna | Poland | 0.00 | % | 70.00 | % | 100.00 | % | BANKING | 255 | 20 | 80 | |||||||||||||||||
AKB Marketing Services Sp. Z.o.o. | Poland | 0.00 | % | 70.00 | % | 100.00 | % | MARKETING | 6 | 0 | 0 | |||||||||||||||||
Aktúa Soluciones Financieras, S.A. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | FINANCIAL SERVICES | 3 | 6 | 0 | |||||||||||||||||
Alcaidesa Golf, S.L. | Spain | 0.00 | % | 45.03 | % | 50.01 | % | SPORTS OPERATIONS | 5 | (1 | ) | 3 | ||||||||||||||||
Alcaidesa Holding, S.A. (consolidated) | Spain | 0.00 | % | 45.03 | % | 50.01 | % | PROPERTY | 65 | (3 | ) | 27 | ||||||||||||||||
Alcaidesa Inmobiliaria, S.A. | Spain | 0.00 | % | 45.03 | % | 50.01 | % | PROPERTY | 60 | (1 | ) | 15 | ||||||||||||||||
Alcaidesa Servicios, S.A. | Spain | 0.00 | % | 45.03 | % | 50.01 | % | SERVICES | 9 | 0 | 4 | |||||||||||||||||
ALCF Investments Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Aljarafe Golf, S.A. | Spain | 0.00 | % | 80.51 | % | 89.41 | % | PROPERTY | 14 | 0 | 0 | |||||||||||||||||
Aljardi SGPS, Lda. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 1,163 | 800 | 1,148 | |||||||||||||||||
Alliance & Leicester (Holdings) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Alliance & Leicester (Isle of Man) Limited (j) | 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 | 3 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Cash Solutions Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | (24 | ) | 0 | 0 | ||||||||||||||||
Alliance & Leicester Commercial Bank plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 26 | 0 | 26 | |||||||||||||||||
Alliance & Leicester Commercial Finance (Holdings) plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 46 | 0 | 79 | |||||||||||||||||
Alliance & Leicester Covered Bonds (LM) Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Covered Bonds LLP (j) | United Kingdom | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Alliance & Leicester Equity Investments (Guarantee) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Estate Agents (Holdings) Limited (j) | 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 | 0 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Financing plc (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 8 | 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 | 30 | 0 | 30 | |||||||||||||||||
Alliance & Leicester International Limited | Isle of Man | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 141 | 0 | 30 | |||||||||||||||||
Alliance & Leicester Investment (No 3) LLP | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 22 | �� | 0 | 22 | ||||||||||||||||
Alliance & Leicester Investment (No. 4) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 12 | 0 | 12 | |||||||||||||||||
Alliance & Leicester Investments (Derivatives No. 3) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 17 | 0 | 17 | |||||||||||||||||
Alliance & Leicester Investments (Derivatives) Limited | United Kingdom | 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 | 3 | 1 | 1 | |||||||||||||||||
Alliance & Leicester Investments Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 3 | 2 | 1 | |||||||||||||||||
Alliance & Leicester LM Holdings Limited (j) | United Kingdom | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Alliance & Leicester Personal Finance Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | (256 | ) | 20 | 0 | ||||||||||||||||
Alliance & Leicester plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 108 | 85 | 1,149 | |||||||||||||||||
Alliance & Leicester Print Services Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 3 | 0 | 0 | |||||||||||||||||
Alliance & Leicester Share Ownership Trust Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 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 Limited | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 29 | (3 | ) | 30 | ||||||||||||||||
Alliance Corporate Services Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 10 | 0 | 0 | |||||||||||||||||
Almacenadora Serfin, S.A. de C.V. | Mexico | 0.00 | % | 98.58 | % | 98.71 | % | WAREHOUSING | 0 | 0 | 2 | |||||||||||||||||
Almacenadora Somex, S.A. de C.V. | Mexico | 0.00 | % | 97.10 | % | 97.24 | % | WAREHOUSING | 8 | 0 | 1 | |||||||||||||||||
Altamira Santander Real Estate, S.A. | Spain | 93.62 | % | 6.38 | % | 100.00 | % | PROPERTY | (627 | ) | (179 | ) | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Andaluza de Inversiones, S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 45 | (1 | ) | 27 | ||||||||||||||||
ANDSH Limited (j) | 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 | % | 99.44 | % | 100.00 | % | e-COMMERCE | 0 | 1 | 0 | |||||||||||||||||
Aquanima Chile S.A. | Chile | 0.00 | % | 99.44 | % | 100.00 | % | e-COMMERCE | 1 | 0 | 0 | |||||||||||||||||
Aquanima México S. de R.L. de C.V. | Mexico | 0.00 | % | 99.44 | % | 100.00 | % | e-COMMERCE | 1 | 0 | 1 | |||||||||||||||||
Aquanima S.A. | Argentina | 0.00 | % | 99.44 | % | 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 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Aurum S.A. | Chile | 0.72 | % | 99.28 | % | 100.00 | % | HOLDING COMPANY | 6 | 3 | 80 | |||||||||||||||||
Ausant Holding Gesellschaft m.b.H. in liquidation (j) | Austria | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Aviación Antares, A.I.E. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | LEASING | 30 | 1 | 30 | |||||||||||||||||
Aviación Intercontinental, A.I.E. | Spain | 65.00 | % | 0.00 | % | 65.00 | % | LEASING | 54 | 3 | 35 | |||||||||||||||||
Aviación RC II, A.I.E. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | LEASING | 9 | 0 | 9 | |||||||||||||||||
Aviación Real, A.I.E. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | LEASING | 4 | 0 | 10 | |||||||||||||||||
Aviación Regional Cántabra, A.I.E. | Spain | 73.58 | % | 0.00 | % | 73.58 | % | LEASING | 28 | 1 | 22 | |||||||||||||||||
Aviación Scorpius, A.I.E. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | LEASING | 26 | 0 | 26 | |||||||||||||||||
Aviación Tritón, A.I.E. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | LEASING | 21 | 0 | 21 | |||||||||||||||||
Aymoré Crédito, Financiamento e Investimento S.A. | Brazil | 0.00 | % | 81.38 | % | 100.00 | % | FINANCE | 296 | 135 | 278 | |||||||||||||||||
Bajondillo, S.A. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | PROPERTY | 0 | 0 | 0 | |||||||||||||||||
Baker Street Risk and Insurance (Guernsey) Limited (e) | Guernsey | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE | 14 | 1 | 2 | |||||||||||||||||
Banbou S.A.R.L. | France | 0.00 | % | 90.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Banco ABN AMRO Real S.A. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | BANKING | — | — | — | |||||||||||||||||
Banco Alicantino de Comercio, S.A. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | BANKING | 9 | 0 | 8 | |||||||||||||||||
Banco Bandepe S.A. | Brazil | 0.00 | % | 81.38 | % | 100.00 | % | BANKING | 1,810 | 108 | 1,259 | |||||||||||||||||
Banco Banif, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | BANKING | 391 | 33 | 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 | 29 | |||||||||||||||||
Banco Español de Crédito, S.A. | Spain | 88.96 | % | 1.08 | % | 90.04 | % | BANKING | 4,807 | 436 | 1,300 | |||||||||||||||||
Banco Madesant — Sociedade Unipessoal, S.A. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 1,186 | (167 | ) | 1,159 | ||||||||||||||||
Banco Santander- Chile | Chile | 0.00 | % | 76.74 | % | 76.91 | % | BANKING | 2,395 | 763 | 1,367 | |||||||||||||||||
Banco Santander (Brasil) S.A. | Brazil | 0.00 | % | 81.38 | % | 81.38 | % | BANKING | 28,309 | 945 | 9,374 | |||||||||||||||||
Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander | Mexico | 0.00 | % | 99.86 | % | 99.99 | % | BANKING | 4,010 | 779 | 2,416 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Banco Santander (Panamá), S.A. | Panama | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 8 | 0 | 8 | |||||||||||||||||
Banco Santander (Suisse) SA | Switzerland | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 203 | 44 | 325 | |||||||||||||||||
Banco Santander Bahamas International Limited | Bahamas | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 835 | 88 | 785 | |||||||||||||||||
Banco Santander Colombia, S.A. | Colombia | 0.00 | % | 97.85 | % | 97.85 | % | BANKING | 235 | 38 | 471 | |||||||||||||||||
Banco Santander Consumer Portugal, S.A. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 111 | 7 | 177 | |||||||||||||||||
Banco Santander International | United States | 95.88 | % | 4.12 | % | 100.00 | % | BANKING | 389 | 36 | 387 | |||||||||||||||||
Banco Santander Perú S.A. | Peru | 99.00 | % | 1.00 | % | 100.00 | % | BANKING | 35 | 2 | 33 | |||||||||||||||||
Banco Santander Puerto Rico | Puerto Rico | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 478 | 11 | 418 | |||||||||||||||||
Banco Santander Río S.A. | Argentina | 8.23 | % | 91.07 | % | 99.30 | % | BANKING | 426 | 302 | 282 | |||||||||||||||||
Banco Santander Totta, S.A. | Portugal | 0.00 | % | 99.73 | % | 99.87 | % | BANKING | 1,565 | 217 | 2,747 | |||||||||||||||||
Banco Santander, S.A. | Uruguay | 98.04 | % | 1.96 | % | 100.00 | % | BANKING | 297 | 41 | 204 | |||||||||||||||||
Banesto Banca Privada Gestión, S.A. S.G.I.I.C. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 3 | 0 | 2 | |||||||||||||||||
Banesto Banco de Emisiones, S.A. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | BANKING | 102 | 1 | 87 | |||||||||||||||||
Banesto Bolsa, S.A., Sdad. Valores y Bolsa | Spain | 0.00 | % | 90.04 | % | 100.00 | % | BROKER-DEALER | 112 | 1 | 31 | |||||||||||||||||
Banesto Financial Products, Plc. | Ireland | 0.00 | % | 90.04 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Banesto Renting, S.A. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | FINANCE | 10 | 0 | 2 | |||||||||||||||||
Banesto Securities, Inc. | United States | 0.00 | % | 90.04 | % | 100.00 | % | FINANCE | 4 | 2 | 2 | |||||||||||||||||
Banif Gestión, S.A., S.G.I.I.C. | Spain | 0.00 | % | 98.01 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 25 | 0 | 15 | |||||||||||||||||
Bansa Santander, S.A. | Chile | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 4 | (1 | ) | 36 | ||||||||||||||||
Bansamex, S.A. | Spain | 50.00 | % | 0.00 | % | 50.00 | % | CARDS | 6 | 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 | 2 | 0 | 2 | |||||||||||||||||
Beta Cero, S.A. | Spain | 0.00 | % | 79.24 | % | 88.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Bracken Securities Holdings Limited | United Kingdom | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Bracken Securities Option Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||
Bracken Securities plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||
Bradford & Bingley International Limited | Isle of Man | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 205 | 12 | 118 | |||||||||||||||||
Brazil Foreign Diversified Payment Rights Finance Company | Cayman Islands | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
BRS Investments, S.A. | Argentina | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 28 | 0 | 73 | |||||||||||||||||
BST International Bank, Inc. | Puerto Rico | 0.00 | % | 99.73 | % | 100.00 | % | BANKING | 4 | 18 | 4 | |||||||||||||||||
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 | % | 56.61 | % | 62.87 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Cántabra de Inversiones, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | (18 | ) | (16 | ) | 154 | |||||||||||||||
Cantabric Financing LLC. | United States | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Cantabric Financing, Plc. | Ireland | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Cántabro Catalana de Inversiones, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 188 | 2 | 140 | |||||||||||||||||
Capital Riesgo Global, SCR de Régimen Simplificado, S.A. | Spain | 92.91 | % | 7.09 | % | 100.00 | % | VENTURE CAPITAL COMPANY | 599 | (5 | ) | 553 | ||||||||||||||||
Capital Street Delaware LP | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Capital Street GP (j) | Cayman Islands | — | (b | ) | — | HOLDING COMPANY | 0 | 0 | 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 | 26 | 0 | 23 | |||||||||||||||||
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 | % | 80.69 | % | 92.75 | % | SECURITIES INVESTMENT | 643 | (3 | ) | 227 | ||||||||||||||||
Casa de Bolsa Santander, S.A. de C.V., Grupo Financiero Santander | Mexico | 0.00 | % | 99.83 | % | 99.97 | % | BROKER-DEALER | 46 | 22 | 37 | |||||||||||||||||
Cater Allen Holdings Limited | United Kingdom | 0.00 | % | 99.99 | % | 100.00 | % | HOLDING COMPANY | 110 | 290 | 100 | |||||||||||||||||
Cater Allen International Limited | United Kingdom | 0.00 | % | 99.99 | % | 100.00 | % | BROKER-DEALER | 141 | 55 | 137 | |||||||||||||||||
Cater Allen Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 280 | 38 | 258 | |||||||||||||||||
Cater Allen Lloyd’s Holdings Limited | United Kingdom | 0.00 | % | 99.99 | % | 100.00 | % | HOLDING COMPANY | (11 | ) | 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 (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 32 | 0 | 0 | |||||||||||||||||
Catmoll, S.L. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | PROPERTY | 9 | 0 | 6 | |||||||||||||||||
Certidesa, S.L. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | LEASE OF AIRCRAFT | (19 | ) | (5 | ) | 3 | |||||||||||||||
Chatsworth Securities LLP (j) (g) | United Kingdom | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
CitiFinancial Auto Issuance Trust 2009-1 | United States | — | (b | ) | — | SECURITISATION | 0 | 11 | 0 | |||||||||||||||||||
Clínica Sear, S.A. | Spain | 0.00 | % | 45.54 | % | 50.58 | % | HEALTHCARE | 4 | 0 | 1 | |||||||||||||||||
Club Zaudin Golf, S.A. | Spain | 0.00 | % | 85.64 | % | 95.11 | % | SERVICES | 15 | 0 | 12 | |||||||||||||||||
Comercializadora Al-fin, S.A. de C.V. | Mexico | 0.00 | % | 100.00 | % | 100.00 | % | RETAIL TRADE | 0 | 0 | 0 | |||||||||||||||||
Companhia Santander de Valores — Distribuidora de Títulos e Valores Mobiliários | Brazil | 0.00 | % | 81.38 | % | 100.00 | % | ASSET MANAGEMENT | 37 | 2 | 28 | |||||||||||||||||
Costa Canaria de Veneguera, S.A. | Spain | 0.00 | % | 66.80 | % | 74.19 | % | PROPERTY | 13 | 0 | 9 | |||||||||||||||||
Crawfall, S.A. | Uruguay | 100.00 | % | 0.00 | % | 100.00 | % | SERVICES | 1 | 0 | 1 | |||||||||||||||||
Credicenter Empreendimentos e Promoções Ltda. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | FINANCIAL SERVICES | — | — | — |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Credisol, S.A. (j) | Uruguay | 0.00 | % | 100.00 | % | 100.00 | % | CARDS | 0 | 0 | 7 | |||||||||||||||||
Crefisa, Inc. | Puerto Rico | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 310 | (16 | ) | 279 | ||||||||||||||||
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 | 1 | 4 | |||||||||||||||||
Depósitos Portuarios, S.A. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | SERVICES | 1 | 0 | 1 | |||||||||||||||||
Digital Procurement Holdings N.V. | Netherlands | 0.00 | % | 99.44 | % | 100.00 | % | HOLDING COMPANY | 2 | 2 | 1 | |||||||||||||||||
Diners Club Spain, S.A. | Spain | 75.00 | % | 0.00 | % | 75.00 | % | CARDS | 9 | 2 | 9 | |||||||||||||||||
Dirección Estratega, S.C. | Mexico | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 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 | (8 | ) | (4 | ) | 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 | 0 | 17 | 0 | |||||||||||||||||
Dudebasa, S.A. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | FINANCE | 32 | (4 | ) | 22 | ||||||||||||||||
Elerco, S.A. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | PROPERTY | 194 | (91 | ) | 170 | ||||||||||||||||
Empresas Banesto 1, Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Empresas Banesto 2, Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Empresas Banesto 3, Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Empresas Banesto 4, Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Empresas Banesto 5, Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Erestone S.A.S. | France | 0.00 | % | 90.00 | % | 90.00 | % | PROPERTY | 63 | 0 | 57 | |||||||||||||||||
Evansgrove Limited (f) (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
FFB — Participações e Serviços, Sociedade Unipessoal, S.A. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 3,667 | 20 | 1,020 | |||||||||||||||||
Fideicomiso 100740 SLPT | Mexico | 0.00 | % | 99.86 | % | 100.00 | % | FINANCE | 53 | 6 | 34 | |||||||||||||||||
Fideicomiso Financiero Río Personales I | Argentina | — | (b | ) | — | SECURITIES | 1 | 0 | 0 | |||||||||||||||||||
Fideicomiso GFSSLPT Banca Serfín, S.A. | Mexico | 0.00 | % | 99.86 | % | 100.00 | % | FINANCE | 47 | 2 | 28 | |||||||||||||||||
Fideicomiso Super Letras Hipotecarias Clase I | Argentina | — | (b | ) | — | SECURITIES | 2 | 0 | 0 | |||||||||||||||||||
Fideicomiso Super Letras Hipotecarias Clase II | Argentina | — | (b | ) | — | SECURITIES | 4 | 0 | 0 | |||||||||||||||||||
Financiación Banesto 1, Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Financiera Alcanza, S.A. de C.V., Sociedad Financiera de Objeto Múltiple, Entidad Regulada | Mexico | 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 | 0 | 0 | 0 | |||||||||||||||||
First National Tricity Finance Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 213 | 5 | 119 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Fomento e Inversiones, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 35 | 27 | 17 | |||||||||||||||||
Fondo de Titulización de Activos Santander 1 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander 2 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Consumer Spain 07-2 | Spain | (b | ) | SECURITISATION | (39 | ) | (4 | ) | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Consumer Spain 08-1 | Spain | (b | ) | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||||
Fondo de Titulización de Activos Santander Consumer Spain 09-1 | Spain | (b | ) | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||||
Fondo de Titulización de Activos Santander Consumer Spain Auto 06 | Spain | (b | ) | SECURITISATION | (8 | ) | 0 | 0 | ||||||||||||||||||||
Fondo de Titulización de Activos Santander Consumer Spain Auto 07-1 | Spain | (b | ) | SECURITISATION | (33 | ) | 0 | 0 | ||||||||||||||||||||
Fondo de Titulización de Activos Santander Consumer Spain Auto 2010-1 | Spain | (b | ) | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||||
Fondo de Titulización de Activos Santander Empresas 1 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Empresas 2 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Empresas 3 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Empresas 4 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Empresas 5 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Empresas 6 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Empresas 7 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Hipotecario 6 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos Santander Público 1 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Hipotecaria Banesto 2 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Hipotecaria Banesto 3 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Hipotecaria Banesto 4 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Santander Financiación 1 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Santander Financiación 2 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Santander Financiación 3 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Santander Financiación 4 | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fondos Santander, S.A. Administradora de Fondos de Inversión (in liquidation) (j) | Uruguay | 0.00 | % | 100.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 0 | 0 | 0 | |||||||||||||||||
Formación Integral, S.A. | Spain | 0.00 | % | 90.04 | % | 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 | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fosse Funding (No.1) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SECURITISATION | 52 | 92 | 0 | |||||||||||||||||
Fosse Master Issuer PLC | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SECURITISATION | 5 | 28 | 0 | |||||||||||||||||
Fosse PECOH Limited | United Kingdom | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fosse Trustee (UK) Limited | United Kingdom | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Fosse Trustee Limited | Jersey | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
FTPYME Banesto 2 Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
FTPYME Santander 2 Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Garilar, S.A. | Uruguay | 0.00 | % | 100.00 | % | 100.00 | % | INTERNET | 0 | 0 | 0 | |||||||||||||||||
GEOBAN Deutschland 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 | 1 | 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 Contables 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 | % | 90.04 | % | 100.00 | % | FINANCE | 6 | 1 | 1 | |||||||||||||||||
Gestión de Instalaciones Fotovoltaicas, S.L. Sole-Shareholder Company | Spain | 0.00 | % | 100.00 | % | 100.00 | % | ELECTRICITY | 0 | 0 | 0 | |||||||||||||||||
Gestión Santander, S.A. de C.V., Sociedad Operadora de Sociedades de Inversión, Grupo Financiero Santander | Mexico | 0.00 | % | 99.87 | % | 100.00 | % | FINANCE | 3 | 5 | 1 | |||||||||||||||||
Gestora de Procesos S.A., in liquidation (j) | Peru | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 1 | 0 | 1 | |||||||||||||||||
Giro Investments Limited (j) (n) | Cayman Islands | 0.00 | % | 100.00 | % | 100.0 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Girobank Carlton Investments Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 7 | 0 | 1 | |||||||||||||||||
Girobank Investments Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 1 | 0 | 0 | |||||||||||||||||
Golden Bar (Securitisation) S.r.l. | Italy | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Golden Bar Securitization Programme I | Italy | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Golden Bar Securitization Programme II | Italy | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Golden Bar Securitization Programme III | Italy | — | (b | ) | — | SECURITISATION | (11 | ) | 0 | 0 | ||||||||||||||||||
Golden Bar Securitization Programme IV | Italy | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Grupo Alcanza, S.A. de C.V. | Mexico | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 1 | 0 | 13 | |||||||||||||||||
Grupo Empresarial Santander, S.L. | Spain | 99.11 | % | 0.89 | % | 100.00 | % | HOLDING COMPANY | 3,180 | 499 | 3,759 | |||||||||||||||||
Grupo Financiero Santander, S.A. B de C.V. | Mexico | 74.75 | % | 25.12 | % | 99.87 | % | HOLDING COMPANY | 4,143 | 837 | 4,066 | |||||||||||||||||
Guaranty Car, S.A., Sole-Shareholder Company | Spain | 0.00 | % | 100.00 | % | 100.00 | % | AUTOMOTIVE | 3 | 0 | 1 | |||||||||||||||||
Hansar Finance Limited (j) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 1 | 0 | 1 | |||||||||||||||||
Hipototta No. 1 FTC | Portugal | — | (b | ) | — | SECURITISATION | 3 | (2 | ) | 0 | ||||||||||||||||||
Hipototta No. 1 plc | Ireland | — | (b | ) | — | SECURITISATION | (3 | ) | (1 | ) | 0 | |||||||||||||||||
Hipototta No. 10 FTC | Portugal | — | (b | ) | — | SECURITISATION | 2 | (1 | ) | 0 | ||||||||||||||||||
Hipototta No. 10 Limited | Ireland | — | (b | ) | — | SECURITISATION | (3 | ) | 0 | 0 | ||||||||||||||||||
Hipototta No. 11 | Portugal | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Hipototta No. 2 FTC | Portugal | — | (b | ) | — | SECURITISATION | 12 | (5 | ) | 0 | ||||||||||||||||||
Hipototta No. 2 plc | Ireland | — | (b | ) | — | SECURITISATION | (11 | ) | 0 | 0 | ||||||||||||||||||
Hipototta No. 3 FTC | Portugal | — | (b | ) | — | SECURITISATION | 18 | (7 | ) | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Hipototta No. 3 plc | Ireland | — | (b | ) | — | SECURITISATION | (17 | ) | (4 | ) | 0 | |||||||||||||||||
Hipototta No. 4 FTC | Portugal | — | (b | ) | — | SECURITISATION | 18 | (7 | ) | 0 | ||||||||||||||||||
Hipototta No. 4 plc | Ireland | — | (b | ) | — | SECURITISATION | (18 | ) | (3 | ) | 0 | |||||||||||||||||
Hipototta No. 5 FTC | Portugal | — | (b | ) | — | SECURITISATION | 9 | (5 | ) | 0 | ||||||||||||||||||
Hipototta No. 5 plc | Ireland | — | (b | ) | — | SECURITISATION | (8 | ) | (1 | ) | 0 | |||||||||||||||||
Hipototta No. 7 FTC | Portugal | — | (b | ) | — | SECURITISATION | 10 | (7 | ) | 0 | ||||||||||||||||||
Hipototta No. 7 Limited | Ireland | — | (b | ) | — | SECURITISATION | (10 | ) | (2 | ) | 0 | |||||||||||||||||
Hipototta No. 8 FTC | Portugal | — | (b | ) | — | SECURITISATION | 5 | (3 | ) | 0 | ||||||||||||||||||
Hipototta No. 8 Limited | Ireland | — | (b | ) | — | SECURITISATION | (5 | ) | 0 | 0 | ||||||||||||||||||
Hispamer Renting, S.A. Sole-Shareholder Company | Spain | 0.00 | % | 100.00 | % | 100.00 | % | FULL-SERVICE LEASE | 12 | 0 | 1 | |||||||||||||||||
Holbah II Limited | Bahamas | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 986 | 702 | 1,475 | |||||||||||||||||
Holbah Limited | Bahamas | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 947 | 0 | |||||||||||||||||
Holmes Financing (Nº1) plc | United Kingdom | — | (b | ) | — | SECURITISATION | 8 | (8 | ) | 0 | ||||||||||||||||||
Holmes Financing (Nº10) plc | United Kingdom | — | (b | ) | — | SECURITISATION | (1 | ) | 1 | 0 | ||||||||||||||||||
Holmes Financing (Nº9) plc | United Kingdom | — | (b | ) | — | SECURITISATION | 1 | (1 | ) | 0 | ||||||||||||||||||
Holmes Funding 2 Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SECURITISATION | (276 | ) | 276 | 0 | ||||||||||||||||
Holmes Funding Limited | United Kingdom | — | (b | ) | — | SECURITISATION | (100 | ) | 28 | 0 | ||||||||||||||||||
Holmes Holdings Limited | United Kingdom | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Holmes Master Issuer 2 PLC | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SECURITISATION | 146 | (146 | ) | 0 | ||||||||||||||||
Holmes Master Issuer plc | United Kingdom | — | (b | ) | — | SECURITISATION | 0 | 7 | 0 | |||||||||||||||||||
Holmes Trustees Limited | United Kingdom | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Holneth B.V. | Netherlands | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 9 | 67 | 12 | |||||||||||||||||
HRE Investment Holdings II-A S.à.r.l. (c) | Luxembourg | 0.00 | % | 69.91 | % | 0.00 | % | HOLDING COMPANY | 0 | (39 | ) | 0 | ||||||||||||||||
HSBC Automotive Trust (USA) 2006-3 | United States | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
HSBC Automotive Trust (USA) 2007-1 | United States | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
HSH Delaware L.P. (c) | United States | 0.00 | % | 69.60 | % | 0.00 | % | HOLDING COMPANY | 12 | (4 | ) | 5 | ||||||||||||||||
Hualle, S.A. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | SECURITIES INVESTMENT | 74 | 1 | 5 | |||||||||||||||||
Ibérica de Compras Corporativas, S.L. | Spain | 91.63 | % | 7.82 | % | 100.00 | % | e-COMMERCE | 14 | 4 | 5 | |||||||||||||||||
Independence Community Bank Corp. | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 4,367 | 89 | 4,693 | |||||||||||||||||
Independence Community Commercial Reinvestment Corp. | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 100 | 4 | 103 | |||||||||||||||||
Infraestructuras Americanas, S.L. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 45 | (43 | ) | 129 | ||||||||||||||||
Ingeniería de Software Bancario, S.L. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | IT SERVICES | 76 | 14 | 86 | |||||||||||||||||
Inmo Francia 2, S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 57 | 0 | 58 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Instituto Santander Serfin, A.C. | Mexico | 0.00 | % | 99.86 | % | 100.00 | % | NOT-FOR-PROFIT INSTITUTE | 1 | 0 | 0 | |||||||||||||||||
Insurance Funding Solutions Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | (7 | ) | 2 | 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 | 4 | 1 | 0 | |||||||||||||||||
Interfinance Holanda B.V. | Netherlands | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Inversiones Marítimas del Mediterráneo, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | INACTIVE | 4 | 0 | 3 | |||||||||||||||||
Isban Argentina S.A. | Argentina | 87.42 | % | 12.58 | % | 100.00 | % | FINANCIAL SERVICES | 3 | 0 | 2 | |||||||||||||||||
Isban Brasil S.A. | Brazil | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 16 | 7 | 22 | |||||||||||||||||
Isban Chile S.A. | Chile | 0.00 | % | 100.00 | % | 100.00 | % | IT SERVICES | 13 | 2 | 23 | |||||||||||||||||
Isban DE GmbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | IT SERVICES | 1 | 0 | 0 | |||||||||||||||||
Isban México, S.A. de C.V. | Mexico | 100.00 | % | 0.00 | % | 100.00 | % | IT SERVICES | 78 | 1 | 60 | |||||||||||||||||
ISBAN PT — Engenheria e Software Bancário, S.A. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | IT SERVICES | 1 | 0 | 0 | |||||||||||||||||
Isban U.K., Ltd. | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | IT SERVICES | 7 | 3 | 0 | |||||||||||||||||
Island Insurance Corporation | Puerto Rico | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE | 3 | 0 | 4 | |||||||||||||||||
Itasant — Sociedade Gestora de Participações Sociais Sociedade Unipessoal, Lda. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 92 | 596 | 92 | |||||||||||||||||
J.C. Flowers II-A L.P. | Canada | 0.00 | % | 70.32 | % | 4.43 | % | HOLDING COMPANY | 64 | (5 | ) | 52 | ||||||||||||||||
JCF BIN II-A (o) | Mauritania | 0.00 | % | 69.47 | % | 4.43 | % | HOLDING COMPANY | 4 | 0 | 3 | |||||||||||||||||
JCF II-A AIV K L.P. | Canada | 0.00 | % | 69.53 | % | 0.00 | % | HOLDING COMPANY | 3 | 0 | 3 | |||||||||||||||||
JCF II-A Special AIV K L.P. | Canada | 0.00 | % | 72.29 | % | 4.99 | % | HOLDING COMPANY | 3 | 0 | 3 | |||||||||||||||||
Jupiter III C.V. (c) | Netherlands | 0.00 | % | 72.33 | % | 4.99 | % | HOLDING COMPANY | 147 | (39 | ) | 79 | ||||||||||||||||
Jupiter JCF AIV II A C.V. | Netherlands | 0.00 | % | 69.33 | % | 4.99 | % | HOLDING COMPANY | 18 | 3 | 15 | |||||||||||||||||
La Unión Resinera Española, S.A. (consolidated) | Spain | 74.87 | % | 21.30 | % | 96.26 | % | CHEMICALS | 47 | 1 | 28 | |||||||||||||||||
Laboratorios Indas, S.A. (e) | Spain | 0.00 | % | 73.22 | % | 73.22 | % | HEALTH PRODUCTS | 50 | 26 | 255 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Langton Funding (No.1) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||
Langton Mortgages Trustee (UK) Limited | United Kingdom | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Langton Mortgages Trustee Limited | Jersey | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Langton PECOH Limited | United Kingdom | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Langton Securities (2008-1) plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||
Langton Securities (2008-2) plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||
Langton Securities (2008-3) plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||
Langton Securities (2010-1) PLC | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||
Langton Securities (2010-2) PLC | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||
Langton Securities Holdings Limited | United Kingdom | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Laparanza, S.A. | Spain | 61.59 | % | 0.00 | % | 61.59 | % | AGRICULTURE AND LIVESTOCK | 31 | 0 | 16 | |||||||||||||||||
Larix Chile Inversiones Limitada | Chile | 0.00 | % | 90.04 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Lease Totta No. 1 FTC | Portugal | — | (b | ) | — | SECURITISATION | 5 | 0 | 0 | |||||||||||||||||||
Leasetotta No. 1 Limited | Ireland | — | (b | ) | — | SECURITISATION | (3 | ) | 1 | 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 | ) | 2 | 1 | ||||||||||||||||
Luresa Inmobiliaria, S.A. | Spain | 0.00 | % | 96.17 | % | 100.00 | % | PROPERTY | 22 | 1 | 9 | |||||||||||||||||
Luri 1, S.A. | Spain | 0.00 | % | 5.58 | % | 100.00 | % | PROPERTY | 101 | (7 | ) | 5 | ||||||||||||||||
Luri 2, S.A. | Spain | 0.00 | % | 4.81 | % | 100.00 | % | PROPERTY | 82 | (17 | ) | 3 | ||||||||||||||||
Luri 4, S.A. Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | 100.00 | % | PROPERTY | 30 | (3 | ) | 32 | ||||||||||||||||
Luri Land, S.A. | Belgium | 0.00 | % | 5.15 | % | 100.00 | % | PROPERTY | 5 | 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 | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Mata Alta, S.L. | Spain | 0.00 | % | 61.59 | % | 100.00 | % | PROPERTY | 0 | 0 | 0 | |||||||||||||||||
Merciver, S.L. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | SHIPPING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Mesena Servicios de Gestión Inmobiliaria, S.A. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | PROPERTY | 750 | (127 | ) | 102 | ||||||||||||||||
Mitre Capital Partners Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | MORTGAGE LOAN COMPANY | (63 | ) | (18 | ) | 0 | |||||||||||||||
Money Card (Holdings) Limited | United Kingdom | 0.00 | % | 80.00 | % | 100.00 | % | HOLDING COMPANY | (6 | ) | 21 | 2 | ||||||||||||||||
Money Card Limited | United Kingdom | 0.00 | % | 80.00 | % | 100.00 | % | FINANCIAL SERVICES | 0 | 0 | 0 | |||||||||||||||||
Mugo Termosolar, S.L. | Spain | 0.00 | % | 65.00 | % | 65.00 | % | ELECTRICITY | 0 | 0 | 0 | |||||||||||||||||
Multinegocios S.A. | Chile | 0.00 | % | 99.54 | % | 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 | 13 | 1 | 14 | |||||||||||||||||
Multiservicios de Negocios Limitada | Chile | 0.00 | % | 100.00 | % | 100.00 | % | FINANCIAL SERVICES | 1 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
N&P (B.E.S.) Loans Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 4 | 0 | 4 | |||||||||||||||||
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 | (3 | ) | 61 | ||||||||||||||||
Naviera Trans Ore, A.I.E. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | LEASING | 18 | 0 | 18 | |||||||||||||||||
Nebraska Wind I LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | ELECTRICITY | 5 | 0 | 5 | |||||||||||||||||
New Menta Public Corp. | United States | 0.00 | % | 100.00 | % | 100.00 | % | INACTIVE | 0 | 0 | 0 | |||||||||||||||||
NIB Special Investors IV-A LP | Canada | 0.00 | % | 99.70 | % | 4.99 | % | HOLDING COMPANY | 40 | 4 | 66 | |||||||||||||||||
NIB Special Investors IV-B LP (c) | Canada | 0.00 | % | 95.86 | % | 4.99 | % | HOLDING COMPANY | 13 | 2 | 29 | |||||||||||||||||
Norbest AS | Norway | 7.94 | % | 92.06 | % | 100.00 | % | SECURITIES INVESTMENT | 257 | (21 | ) | 1,356 | ||||||||||||||||
NW Services CO. | United States | 0.00 | % | 99.44 | % | 100.00 | % | e-COMMERCE | 2 | 0 | 2 | |||||||||||||||||
Oil-Dor, S.A. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | FINANCE | 158 | 2 | 110 | |||||||||||||||||
Open Bank, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | BANKING | 161 | (4 | ) | 137 | ||||||||||||||||
Optimal Alternative Investments, S.G.I.I.C., S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 1 | 0 | 1 | |||||||||||||||||
Optimal Investment Services SA | Switzerland | 0.00 | % | 100.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 44 | (8 | ) | 5 | ||||||||||||||||
Optimal Multiadvisors Ireland Plc / Optimal Strategic US Equity Ireland EUR Fund (c) | Ireland | 73.56 | % | 8.66 | % | 80.73 | % | FUND MANAGEMENT COMPANY | 27 | 0 | 0 | |||||||||||||||||
Optimal Multiadvisors Ireland Plc / Optimal Strategic US Equity Ireland USD Fund (c) | Ireland | 2.98 | % | 92.98 | % | 95.80 | % | FUND MANAGEMENT COMPANY | 3 | 0 | 0 | |||||||||||||||||
Optimal Multiadvisors Ltd — Strategic US Equity Series (consolidated) (c) | Bahamas | 0.00 | % | 69.25 | % | 68.29 | % | FUND MANAGEMENT COMPANY | 28 | 1 | 0 | |||||||||||||||||
Parasant SA | Switzerland | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 1,528 | 697 | 1,440 | |||||||||||||||||
Patagon Euro, S.L. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 693 | 3 | 590 | |||||||||||||||||
PBE Companies, LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 67 | (5 | ) | 82 | ||||||||||||||||
PECOH Limited | United Kingdom | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Pereda Gestión, S.A. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | HOLDING COMPANY | 27 | 16 | 4 | |||||||||||||||||
Perevent Empresa de Servicios Eventuales S.A. | Argentina | 0.00 | % | 99.97 | % | 100.00 | % | SERVICES | 0 | 0 | 1 | |||||||||||||||||
Pingham International, S.A. | Uruguay | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Polskie Towarzystwo Finansowe S.A. | Poland | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 3 | 0 | 24 | |||||||||||||||||
Portada S.A., in liquidation (j) | Chile | 0.00 | % | 96.17 | % | 96.17 | % | FINANCE | 0 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Portal Universia Argentina S.A. | Argentina | 0.00 | % | 84.18 | % | 84.18 | % | INTERNET | 1 | (1 | ) | 0 | ||||||||||||||||
Portal Universia Portugal, Prestação de Serviços de Informática, S.A. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | INTERNET | 1 | (1 | ) | 0 | ||||||||||||||||
Portal Universia, S.A. | Spain | 0.00 | % | 56.56 | % | 56.56 | % | 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 | % | 99.44 | % | 100.00 | % | e-COMMERCE | (1 | ) | 0 | 0 | ||||||||||||||||
Produban Servicios Informáticos Generales, S.L. | Spain | 98.44 | % | 1.56 | % | 100.00 | % | SERVICES | 1 | 9 | 1 | |||||||||||||||||
Produban Serviços de Informática S.A. | Brazil | 0.00 | % | 100.00 | % | 100.00 | % | IT SERVICES | 6 | 5 | 5 | |||||||||||||||||
Promociones y Servicios Monterrey, S.A. de C.V. | Mexico | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 7 | 0 | 7 | |||||||||||||||||
Promociones y Servicios Polanco, S.A. de C.V. | Mexico | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 66 | 1 | 64 | |||||||||||||||||
Promociones y Servicios Santiago, S.A. de C.V. | Mexico | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 74 | 0 | 65 | |||||||||||||||||
Promodomus Desarrollo de Activos, S.L. | Spain | 0.00 | % | 45.92 | % | 51.00 | % | PROPERTY | (5 | ) | (6 | ) | 0 | |||||||||||||||
PSB Inmobilien GmbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 0 | 0 | 0 | |||||||||||||||||
Real Corretora de Seguros, S.A. (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | INSURANCE BROKERAGE | — | — | — | |||||||||||||||||
REB Empreendimentos e Administradora de Bens, S.A. | Brazil | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 2 | 0 | 0 | |||||||||||||||||
Redes y Procesos, S.A. | Spain | 52.17 | % | 13.24 | % | 66.87 | % | CARDS | 1 | 0 | 1 | |||||||||||||||||
Reintegra Comercial España, S.L. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 3 | 1 | 3 | |||||||||||||||||
Reintegra Contact Center, S.L. Sole-Shareholder Company | Spain | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 1 | 1 | 1 | |||||||||||||||||
Reintegra, S.A. | Spain | 55.00 | % | 45.00 | % | 100.00 | % | COLLECTION AND PAYMENT SERVICES | 6 | 1 | 9 | |||||||||||||||||
Retail Financial Services Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | (45 | ) | 0 | 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. in liquidation (j) | Colombia | 0.00 | % | 97.96 | % | 100.00 | % | COLLECTION AND PAYMENT SERVICES | 0 | 0 | 0 | |||||||||||||||||
Sánchez Ramade Santander Financiera, S.L. | Spain | 0.00 | % | 50.00 | % | 50.00 | % | FINANCIAL SERVICES | 0 | 0 | 0 | |||||||||||||||||
Saninv — Gestão e Investimentos, S.A. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 23 | (20 | ) | 5 | ||||||||||||||||
Sansol S.r.l. | Italy | 0.00 | % | 100.00 | % | 100.00 | % | ELECTRICITY PRODUCTION | 0 | 0 | 0 | |||||||||||||||||
Santander (CF Trustee Property Nominee) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Santander Administradora de Consórcios Ltda. | Brazil | 0.00 | % | 81.38 | % | 100.00 | % | FINANCE | 2 | 0 | 1 | |||||||||||||||||
Santander Advisory Services S.A. | Brazil | 0.00 | % | 81.38 | % | 100.00 | % | ADVISORY SERVICES | 59 | 13 | 44 | |||||||||||||||||
Santander Agente de Valores Limitada | Chile | 0.00 | % | 76.97 | % | 100.00 | % | BROKER-DEALER | 74 | 7 | 24 | |||||||||||||||||
Santander Ahorro Inmobiliario 2 S.I.I., S.A. | Spain | 69.11 | % | 0.01 | % | 69.12 | % | PROPERTY | 59 | (6 | ) | 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 | 76 | (8 | ) | 29 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Santander Asset Finance (December) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | (1 | ) | 1 | 0 | ||||||||||||||||
Santander Asset Finance plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 107 | 43 | 169 | |||||||||||||||||
Santander Asset Management — Sociedade Gestora de Fundos de Investimento Mobiliário, S.A. | Portugal | 0.00 | % | 99.73 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 20 | 6 | 7 | |||||||||||||||||
Santander Asset Management Chile S.A. | Chile | 0.01 | % | 99.83 | % | 100.00 | % | SECURITIES INVESTMENT | 1 | 0 | 10 | |||||||||||||||||
Santander Asset Management Corporation | Puerto Rico | 0.00 | % | 100.00 | % | 100.00 | % | ASSET MANAGEMENT | (5 | ) | 9 | 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 | % | 98.01 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 10 | 3 | 0 | |||||||||||||||||
Santander Asset Management S.A. Administradora General de Fondos | Chile | 0.00 | % | 76.75 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 55 | 41 | 9 | |||||||||||||||||
Santander Asset Management UK Holdings Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 109 | 0 | 109 | |||||||||||||||||
Santander Asset Management UK Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FUND AND PORTFOLIO MANAGER | 11 | (1 | ) | 7 | ||||||||||||||||
Santander Asset Management, S.A., S.G.I.I.C. | Spain | 28.30 | % | 69.71 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 94 | 22 | 33 | |||||||||||||||||
Santander Back-Offices Globales Especializados, S.A. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Santander Back-Offices Globales Mayoristas, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | SERVICES | 1 | 1 | 1 | |||||||||||||||||
Santander BanCorp | Puerto Rico | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 444 | 57 | 137 | |||||||||||||||||
Santander Bank & Trust Ltd. | Bahamas | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 1,165 | 427 | 1,188 | |||||||||||||||||
Santander Benelux, S.A./N.V. | Belgium | 83.20 | % | 16.80 | % | 100.00 | % | BANKING | 1,150 | 54 | 1,125 | |||||||||||||||||
Santander Brasil Administradora de Consórcio Ltda. | Brazil | 0.00 | % | 81.38 | % | 100.00 | % | SERVICES | 42 | 11 | 9 | |||||||||||||||||
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 | % | 81.38 | % | 100.00 | % | ASSET MANAGEMENT | 62 | 34 | 67 | |||||||||||||||||
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 | % | 81.38 | % | 100.00 | % | INSURANCE | 65 | 11 | 43 | |||||||||||||||||
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 | % | 81.38 | % | 100.00 | % | INSURANCE | 160 | 63 | 100 | |||||||||||||||||
Santander Carbón Finance, S.A. | Spain | 99.98 | % | 0.02 | % | 100.00 | % | SECURITIES INVESTMENT | (20 | ) | 2 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Santander Cards Ireland Limited | Ireland | 0.00 | % | 100.00 | % | 100.00 | % | CARDS | (4 | ) | (2 | ) | 0 | |||||||||||||||
Santander Cards Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCIAL SERVICES | 90 | (51 | ) | 257 | ||||||||||||||||
Santander Cards UK Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 549 | 70 | 994 | |||||||||||||||||
Santander Carteras, S.G.C., S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 21 | 0 | 8 | |||||||||||||||||
Santander Central Hispano Finance (Delaware) Inc. | United States | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 3 | (2 | ) | 0 | ||||||||||||||||
Santander Central Hispano Financial Services Limited | Cayman Islands | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 3 | (2 | ) | 0 | ||||||||||||||||
Santander Central Hispano International Limited | Cayman Islands | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 2 | (1 | ) | 0 | ||||||||||||||||
Santander Central Hispano Issuances Limited | Cayman Islands | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 2 | 0 | 0 | |||||||||||||||||
Santander Chile Holding S.A. | Chile | 22.11 | % | 77.43 | % | 99.54 | % | HOLDING COMPANY | 1,141 | 274 | 309 | |||||||||||||||||
Santander CHP S.A. | Brazil | 0.00 | % | 75.50 | % | 92.78 | % | ASSET MANAGEMENT | 0 | 2 | 2 | |||||||||||||||||
Santander Commercial Paper, S.A., Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 1 | 1 | 0 | |||||||||||||||||
Santander Consumer (UK) plc | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ADVISORY SERVICES | 170 | 69 | 181 | |||||||||||||||||
Santander Consumer Acquired Receivables Trust 2010-WO | United States | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Consumer Bank AG | Germany | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 1,489 | 433 | 1,569 | |||||||||||||||||
Santander Consumer Bank AS | Norway | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 492 | 71 | 612 | |||||||||||||||||
Santander Consumer Bank GmbH | Austria | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 826 | 29 | 856 | |||||||||||||||||
Santander Consumer Bank S.p.A. | Italy | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 312 | (50 | ) | 437 | ||||||||||||||||
Santander Consumer Bank Spólka Akcyjna | Poland | 0.00 | % | 70.00 | % | 70.00 | % | BANKING | 332 | 7 | 217 | |||||||||||||||||
Santander Consumer Beteiligungsverwaltungsgesellschaft mbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 1 | 0 | 1 | |||||||||||||||||
Santander Consumer Chile S.A. | Chile | 51.00 | % | 0.00 | % | 51.00 | % | FINANCE | 15 | 2 | 8 | |||||||||||||||||
Santander Consumer Credit Services Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | (36 | ) | (2 | ) | 0 | |||||||||||||||
Santander Consumer Debit GmbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 2 | 0 | |||||||||||||||||
Santander Consumer Finance a.s. | Czech Republic | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 36 | 3 | 26 | |||||||||||||||||
Santander Consumer Finance Benelux B.V. | Netherlands | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 15 | 4 | 33 | |||||||||||||||||
Santander Consumer Finance Media S.r.l. | Italy | 0.00 | % | 65.00 | % | 65.00 | % | FINANCE | 8 | 1 | 5 | |||||||||||||||||
Santander Consumer Finance Oy | Finland | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 129 | 8 | 157 | |||||||||||||||||
Santander Consumer Finance Zrt. | Hungary | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 2 | (5 | ) | 0 | ||||||||||||||||
Santander Consumer Finance, S.A. | Spain | 63.19 | % | 36.81 | % | 100.00 | % | BANKING | 7,275 | 420 | 5,195 | |||||||||||||||||
Santander Consumer Finanzia S.r.l. | Italy | 0.00 | % | 100.00 | % | 100.00 | % | FACTORING | 34 | (15 | ) | 31 | ||||||||||||||||
Santander Consumer France (j) | France | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 3 | 0 | 3 | |||||||||||||||||
Santander Consumer Holding Austria GmbH | Austria | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 863 | 0 | 863 | |||||||||||||||||
Santander Consumer Holding GmbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 820 | (255 | ) | 2,051 | ||||||||||||||||
Santander Consumer Iber-Rent, S.L. | Spain | 0.00 | % | 60.00 | % | 60.00 | % | FULL-SERVICE LEASE | 60 | (2 | ) | 18 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Santander Consumer Leasing GmbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 6 | 22 | 6 | |||||||||||||||||
Santander Consumer Leasing s.r.o. | Czech Republic | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 1 | 0 | 1 | |||||||||||||||||
Santander Consumer Multirent Spółka z ograniczoną odpowiedzialnością | Poland | 0.00 | % | 42.00 | % | 60.00 | % | LEASING | 5 | 0 | 3 | |||||||||||||||||
Santander Consumer Receivables 2 LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 82 | 150 | 82 | |||||||||||||||||
Santander Consumer Receivables 3 LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 0 | (29 | ) | 0 | ||||||||||||||||
Santander Consumer Receivables 4 LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 0 | (3 | ) | 0 | ||||||||||||||||
Santander Consumer Receivables 5 LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 0 | (14 | ) | 0 | ||||||||||||||||
Santander Consumer Receivables 7 LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 0 | (45 | ) | 0 | ||||||||||||||||
Santander Consumer Receivables 8 LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 0 | 0 | 0 | |||||||||||||||||
Santander Consumer Receivables 9 LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 0 | 0 | 0 | |||||||||||||||||
Santander Consumer Receivables Funding LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||
Santander Consumer Receivables LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 106 | (63 | ) | 106 | ||||||||||||||||
Santander Consumer Services GmbH | Austria | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Santander Consumer USA Inc. | United States | 0.00 | % | 91.50 | % | 91.50 | % | FINANCE | 546 | 328 | 500 | |||||||||||||||||
Santander Consumer, EFC, S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 307 | (40 | ) | 505 | ||||||||||||||||
Santander Consumo, S.A. de C.V., SOFOM, E.R. | Mexico | 0.00 | % | 99.86 | % | 100.00 | % | CARDS | 162 | 205 | 597 | |||||||||||||||||
Santander Corredora de Seguros Limitada | Chile | 0.00 | % | 76.80 | % | 100.00 | % | INSURANCE BROKERAGE | 83 | 3 | 57 | |||||||||||||||||
Santander Corretora de Câmbio e Valores Mobiliários S.A. | Brazil | 0.00 | % | 81.38 | % | 100.00 | % | BROKER-DEALER | 134 | 20 | 47 | |||||||||||||||||
Santander de Titulización S.G.F.T., S.A. | Spain | 81.00 | % | 19.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 4 | 2 | 1 | |||||||||||||||||
Santander Drive Auto Receivables LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||
Santander Drive Auto Receivables Trust 2007-2 | United States | — | (b | ) | — | SECURITISATION | 18 | (9 | ) | 0 | ||||||||||||||||||
Santander Drive Auto Receivables Trust 2007-3 | United States | — | (b | ) | — | SECURITISATION | 15 | (5 | ) | 0 | ||||||||||||||||||
Santander Drive Auto Receivables Trust 2010-1 | United States | — | (b | ) | — | SECURITISATION | 0 | 123 | 0 | |||||||||||||||||||
Santander Drive Auto Receivables Trust 2010-2 | United States | — | (b | ) | — | SECURITISATION | 0 | 39 | 0 | |||||||||||||||||||
Santander Drive Auto Receivables Trust 2010-3 | United States | — | (b | ) | — | SECURITISATION | 0 | 20 | 0 | |||||||||||||||||||
Santander Drive Auto Receivables Trust 2010-A | United States | — | (b | ) | — | SECURITISATION | 0 | 108 | 0 | |||||||||||||||||||
Santander Drive Auto Receivables Trust 2010-B | United States | — | (b | ) | — | SECURITISATION | 0 | 11 | 0 | |||||||||||||||||||
Santander Drive Auto Receivables Trust 2010-H | United States | — | (b | ) | — | SECURITISATION | 0 | 28 | 0 | |||||||||||||||||||
Santander Energías Renovables I, SCR de Régimen Simplificado, S.A. | Spain | 56.76 | % | 0.00 | % | 56.76 | % | VENTURE CAPITAL COMPANY | 13 | (1 | ) | 8 | ||||||||||||||||
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 | % | 99.54 | % | 100.00 | % | FACTORING | 35 | 3 | 7 | |||||||||||||||||
Santander Factoring y Confirming, S.A., E.F.C. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | FACTORING | 207 | 20 | 126 | |||||||||||||||||
Santander Financial Exchanges Limited | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 313 | 27 | 309 | |||||||||||||||||
Santander Financial Products plc | Ireland | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 191 | 0 | 162 | |||||||||||||||||
Santander Financial Services, Inc. | Puerto Rico | 0.00 | % | 100.00 | % | 100.00 | % | LENDING COMPANY | 77 | 32 | 103 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Santander Gestão de Activos, SGPS, S.A. | Portugal | 0.00 | % | 99.73 | % | 100.00 | % | HOLDING COMPANY | 14 | 0 | 7 | |||||||||||||||||
Santander Gestión de Recaudación y Cobranzas Ltda. | Chile | 0.00 | % | 99.54 | % | 100.00 | % | FINANCIAL SERVICES | 5 | (3 | ) | 2 | ||||||||||||||||
Santander Gestión Inmobiliaria, S.A. | Spain | 0.01 | % | 99.99 | % | 100.00 | % | PROPERTY | 2 | 0 | 0 | |||||||||||||||||
Santander Getnet Serviços para Meios de Pagamento S.A. | Brazil | 0.00 | % | 40.69 | % | 50.00 | % | SERVICES | 6 | 0 | 2 | |||||||||||||||||
Santander Global Consumer Finance Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 59 | 6 | 51 | |||||||||||||||||
Santander Global Facilities, S.A. de C.V. | Mexico | 100.00 | % | 0.00 | % | 100.00 | % | PROPERTY MANAGEMENT | 119 | (4 | ) | 130 | ||||||||||||||||
Santander Global Facilities, S.A. Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | 100.00 | % | SERVICES | 3 | 0 | 1 | |||||||||||||||||
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 U.S.A., 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 | 231 | 6 | 227 | |||||||||||||||||
Santander Global Services, S.A. (j) | Uruguay | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Santander Global Sport, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | SPORTS OPERATIONS | 36 | (1 | ) | 32 | ||||||||||||||||
Santander Guarantee Company | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 4 | 0 | 3 | |||||||||||||||||
Santander Harp 1 Limited | Ireland | 0.00 | % | 100.00 | % | 100.00 | % | INACTIVE | 0 | 0 | 0 | |||||||||||||||||
Santander Harp 2 Limited | Ireland | 0.00 | % | 100.00 | % | 100.00 | % | INACTIVE | 0 | 0 | 0 | |||||||||||||||||
Santander Harp 3 Limited | Ireland | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Santander Hipotecario 1 Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Hipotecario 2 Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Hipotecario 3 Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Hipotecario 4 Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
Santander Hipotecario 5 Fondo de Titulización de Activos | Spain | — | (b | ) | — | SECURITISATION | 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 | 47 | 836 | 0 | |||||||||||||||||
Santander Holdings USA, Inc. | United States | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | 7,503 | 465 | 9,304 | |||||||||||||||||
Santander Infrastructure Capital Limited (j) | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
Santander Infrastructure Capital Management Limited (j) | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | LEASING | 1 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Santander Insurance Agency, Inc. | Puerto Rico | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE BROKERAGE | 3 | 2 | 4 | |||||||||||||||||
Santander Insurance Agency, U.S., LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE | 0 | 0 | 0 | |||||||||||||||||
Santander Insurance Holding, S.L. | Spain | 99.99 | % | 0.01 | % | 100.00 | % | HOLDING COMPANY | 369 | 21 | 357 | |||||||||||||||||
Santander Insurance Services UK Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | ASSET MANAGEMENT COMPANY | 27 | 2 | 35 | |||||||||||||||||
Santander International Bank of Puerto Rico, Inc. | Puerto Rico | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 121 | 2 | 76 | |||||||||||||||||
Santander International Debt, S.A., Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 2 | 1 | 0 | |||||||||||||||||
Santander Inversiones Limitada | Chile | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 2,021 | 101 | 953 | |||||||||||||||||
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 | 98 | 0 | 98 | |||||||||||||||||
Santander Investment Bolsa, S.V., S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 147 | 15 | 104 | |||||||||||||||||
Santander Investment Chile Limitada | Chile | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 292 | 16 | 129 | |||||||||||||||||
Santander Investment Colombia S.A. | Colombia | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 7 | 0 | 39 | |||||||||||||||||
Santander Investment I, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | HOLDING COMPANY | (1,487 | ) | 393 | 0 | ||||||||||||||||
Santander Investment Limited | Bahamas | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | (51 | ) | 8 | 0 | ||||||||||||||||
Santander Investment Securities Inc. | United States | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 89 | 16 | 131 | |||||||||||||||||
Santander Investment Trust Colombia S.A., Sociedad Fiduciaria | Colombia | 0.00 | % | 100.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 12 | 2 | 13 | |||||||||||||||||
Santander Investment Valores Colombia S.A., Comisionista de Bolsa Comercial | Colombia | 0.00 | % | 97.96 | % | 100.00 | % | BROKER-DEALER | 5 | 4 | 1 | |||||||||||||||||
Santander Investment, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | BANKING | 239 | 130 | 14 | |||||||||||||||||
Santander ISA Managers Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FUND AND PORTFOLIO MANAGER | 18 | 3 | 13 | |||||||||||||||||
Santander Issuances, S.A., Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 0 | 1 | 0 | |||||||||||||||||
Santander Lease, S.A., E.F.C. | Spain | 70.00 | % | 30.00 | % | 100.00 | % | LEASING | 77 | 3 | 35 | |||||||||||||||||
Santander Leasing S.A. Arrendamento Mercantil | Brazil | 0.00 | % | 81.37 | % | 99.99 | % | LEASING | 5,259 | 448 | 3,697 | |||||||||||||||||
Santander Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 1 | 0 | 0 | |||||||||||||||||
Santander Mediación Operador de Banca-Seguros Vinculado, S.A. | Spain | 21.00 | % | 76.00 | % | 100.00 | % | INSURANCE BROKERAGE | 2 | 0 | 1 | |||||||||||||||||
Santander Merchant S.A. | Argentina | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 2 | 0 | 3 | |||||||||||||||||
Santander Microcrédito Assessoria Financiera S.A. | Brazil | 0.00 | % | 81.38 | % | 100.00 | % | FINANCIAL SERVICES | 3 | 3 | 1 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Santander Operaciones Retail, S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 10 | 1 | 10 | |||||||||||||||||
Santander Overseas Bank, Inc. (h) | Puerto Rico | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 450 | 14 | 207 | |||||||||||||||||
Santander PB UK (Holdings) Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 159 | 0 | 211 | |||||||||||||||||
Santander Pensiones, S.A., E.G.F.P. | Spain | 21.20 | % | 76.81 | % | 100.00 | % | PENSION FUND MANAGEMENT COMPANY | 57 | 10 | 50 | |||||||||||||||||
Santander Pensões — Sociedade Gestora de Fundos de Pensões, S.A. | Portugal | 0.00 | % | 99.73 | % | 100.00 | % | PENSION FUND MANAGEMENT COMPANY | 5 | 1 | 1 | |||||||||||||||||
Santander Perpetual, S.A., Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 0 | 1 | 0 | |||||||||||||||||
Santander Portfolio Management UK Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 18 | (2 | ) | 13 | ||||||||||||||||
Santander Private Advisors, Ltd. | United States | 100.00 | % | 0.00 | % | 100.00 | % | ADVISORY SERVICES | 2 | 1 | 0 | |||||||||||||||||
Santander Private Banking s.p.a. | Italy | 100.00 | % | 0.00 | % | 100.00 | % | BANKING | 52 | (15 | ) | 103 | ||||||||||||||||
Santander Private Banking UK Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 310 | (10 | ) | 317 | ||||||||||||||||
Santander Private Equity, S.A., S.G.E.C.R. | Spain | 90.00 | % | 9.97 | % | 100.00 | % | VENTURE CAPITAL MANAGEMENT COMPANY | 4 | 1 | 4 | |||||||||||||||||
Santander Private Real Estate Advisory, S.A. Sole-Shareholder Company | Spain | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 4 | 2 | 0 | |||||||||||||||||
Santander Real Estate, S.G.I.I.C., S.A. | Spain | 0.00 | % | 99.20 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 107 | 2 | 0 | |||||||||||||||||
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 | 8 | 8 | 8 | |||||||||||||||||
Santander Río Servicios S.A. | Argentina | 0.00 | % | 99.97 | % | 100.00 | % | ADVISORY SERVICES | 0 | 0 | 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 | % | 99.96 | % | 100.00 | % | FINANCIAL SERVICES | 0 | 0 | 0 | |||||||||||||||||
Santander S.A. — Corretora de Câmbio e Títulos (l) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | BROKER-DEALER | — | — | — | |||||||||||||||||
Santander S.A. — Serviços Técnicos, Administrativos e de Corretagem de Seguros | Brazil | 0.00 | % | 81.38 | % | 100.00 | % | INSURANCE BROKERAGE | 64 | 5 | 52 | |||||||||||||||||
Santander S.A. Corredores de Bolsa | Chile | 0.00 | % | 88.14 | % | 100.00 | % | BROKER-DEALER | 76 | 10 | 33 | |||||||||||||||||
Santander S.A. Sociedad Securitizadora | Chile | 0.00 | % | 76.83 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 2 | 0 | 1 | |||||||||||||||||
Santander Securities (Brasil) Corretora de Valores Mobiliários S.A. | Brazil | 0.00 | % | 81.38 | % | 100.00 | % | BROKER-DEALER | 31 | 2 | 23 | |||||||||||||||||
Santander Securities Corporation | Puerto Rico | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 44 | 10 | 18 | |||||||||||||||||
Santander Seguros de Vida S.A. | Chile | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE | 164 | 56 | 11 | |||||||||||||||||
Santander Seguros Generales S.A. | Chile | 99.51 | % | 0.49 | % | 100.00 | % | INSURANCE | 22 | 0 | 23 | |||||||||||||||||
Santander Seguros S.A. | Brazil | 0.00 | % | 81.38 | % | 100.00 | % | INSURANCE | 972 | 109 | 876 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Santander Seguros y Reaseguros, Compañía Aseguradora, S.A. | Spain | 0.00 | % | 96.12 | % | 100.00 | % | INSURANCE | 555 | 105 | 251 | |||||||||||||||||
Santander Seguros, S.A. | Uruguay | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE | 4 | 1 | 5 | |||||||||||||||||
Santander Service GmbH | Germany | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 0 | 0 | 2 | |||||||||||||||||
Santander Servicios de Recaudación y Pagos Limitada | Chile | 0.00 | % | 76.74 | % | 100.00 | % | SERVICES | 7 | 1 | 5 | |||||||||||||||||
Santander Tecnología y Operaciones A.E.I.E. | Spain | — | (b | ) | — | SERVICES | 0 | 0 | 0 | |||||||||||||||||||
Santander Totta Seguros, Companhia de Seguros de Vida, S.A. | Portugal | 0.00 | % | 99.86 | % | 100.00 | % | INSURANCE | 98 | 21 | 47 | |||||||||||||||||
Santander Totta, SGPS, S.A. | Portugal | 0.00 | % | 99.86 | % | 99.86 | % | HOLDING COMPANY | 2,812 | 280 | 3,321 | |||||||||||||||||
Santander Trade Services Limited | Hong Kong | 0.00 | % | 100.00 | % | 100.00 | % | SERVICES | 17 | 1 | 17 | |||||||||||||||||
Santander UK Foundation Limited | United Kingdom | — | (b | ) | — | SECURITISATION | 12 | 1 | 0 | |||||||||||||||||||
Santander UK Investments | United Kingdom | 100.00 | % | 0.00 | % | 100.00 | % | LEASING | 50 | 0 | 46 | |||||||||||||||||
Santander UK Loans Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 9 | 1 | 1 | |||||||||||||||||
Santander UK Nominee Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 0 | 0 | 0 | |||||||||||||||||
Santander UK plc | United Kingdom | 77.67 | % | 22.33 | % | 100.00 | % | BANKING | 12,816 | 1,616 | 20,477 | |||||||||||||||||
Santander Unit Trust Managers UK Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FUND AND PORTFOLIO MANAGER | 18 | (1 | ) | 17 | ||||||||||||||||
Santander US Debt, S.A., Sole-Shareholder Company | Spain | 100.00 | % | 0.00 | % | 100.00 | % | FINANCE | 1 | 0 | 0 | |||||||||||||||||
Santander Venezuela Sociedad Administradora de Entidades de Inversión Colectiva, C.A. | Venezuela | 0.00 | % | 90.00 | % | 100.00 | % | FUND MANAGEMENT COMPANY | 0 | 0 | 0 | |||||||||||||||||
Santotta-Internacional, SGPS, Sociedade Unipessoal, Lda. | Portugal | 0.00 | % | 99.73 | % | 100.00 | % | HOLDING COMPANY | 64 | 0 | 14 | |||||||||||||||||
Santusa Holding, S.L. | Spain | 69.76 | % | 30.24 | % | 100.00 | % | HOLDING COMPANY | 9,833 | 448 | 9,215 | |||||||||||||||||
Saturn Japan II Sub C.V. | Netherlands | 0.00 | % | 69.23 | % | 0.00 | % | HOLDING COMPANY | 18 | 3 | 15 | |||||||||||||||||
Saturn Japan III Sub C.V. | Netherlands | 0.00 | % | 72.29 | % | 0.00 | % | HOLDING COMPANY | 106 | 5 | 79 | |||||||||||||||||
SC Germany Auto 08-2 Limited | Ireland | — | (b | ) | — | SECURITISATION | (4 | ) | 1 | 0 | ||||||||||||||||||
SC Germany Auto 2009-1 Limited | Ireland | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
SC Germany Auto 2010-1 UG (haftungsbeschränkt) | Germany | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
SC Germany Consumer 08-1 Limited | Ireland | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
SC Germany Consumer 09-1 Limited | Ireland | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
SC Germany Consumer 10-1 Limited | Ireland | — | (b | ) | — | SECURITISATION | 0 | (1 | ) | 0 | ||||||||||||||||||
SC Private Cars 2010-1 Limited | Ireland | — | (b | ) | — | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||||
SCI BANBY PRO | France | 0.00 | % | 90.00 | % | 100.00 | % | PROPERTY | 56 | (1 | ) | 57 | ||||||||||||||||
Scottish Mutual Pensions Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 6 | 0 | 99 | |||||||||||||||||
Seguros Santander, S.A., Grupo Financiero Santander | Mexico | 0.00 | % | 99.87 | % | 100.00 | % | INSURANCE | 65 | 27 | 32 | |||||||||||||||||
Serfin International Bank and Trust, Limited | Cayman Islands | 0.00 | % | 99.73 | % | 100.00 | % | BANKING | 32 | 0 | 24 | |||||||||||||||||
Services and Promotions Delaware Corporation | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 57 | 0 | 57 | |||||||||||||||||
Services and Promotions Miami LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 57 | 0 | 57 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
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 | 1 | 1 | 0 | |||||||||||||||||
Servicios Corporativos Seguros Serfin, S.A. de C.V. (j) | Mexico | 0.00 | % | 99.87 | % | 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 | 10 | 2 | 1 | |||||||||||||||||
Servicios de Cobranzas Fiscalex Ltda. | Chile | 0.00 | % | 99.54 | % | 100.00 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Servicios Universia Venezuela S.U.V., S.A. | Venezuela | 0.00 | % | 82.99 | % | 82.99 | % | INTERNET | 0 | 0 | 0 | |||||||||||||||||
Sheppards Moneybrokers Limited | United Kingdom | 0.00 | % | 99.99 | % | 100.00 | % | ADVISORY SERVICES | 18 | 0 | 17 | |||||||||||||||||
Sherlock Intermediación Correduría de Seguros, S.A. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | INSURANCE BROKERAGE | 11 | 1 | 9 | |||||||||||||||||
Silk Finance No. 3 Limited | Ireland | — | (b | ) | — | SECURITISATION | (10 | ) | 4 | 0 | ||||||||||||||||||
Sinvest Inversiones y Asesorías Limitada | Chile | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 89 | 7 | 2 | |||||||||||||||||
Sistema 4B, S.A. | Spain | 52.17 | % | 13.24 | % | 66.87 | % | CARDS | 51 | 2 | 9 | |||||||||||||||||
Sociedad Integral de Valoraciones Automatizadas, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | APPRAISALS | 1 | 1 | 1 | |||||||||||||||||
Sodepro, S.A. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | FINANCE | 16 | 0 | 12 | |||||||||||||||||
Solarlaser Limited | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | PROPERTY | 56 | 0 | 46 | |||||||||||||||||
Southern Cone Water Management Ltd. (j) | 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 | 28,853 | 436 | 24,045 | |||||||||||||||||
SOV Charter LTD (UK) | United Kingdom | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 0 | 0 | 0 | |||||||||||||||||
Sovereign Bank | United States | 0.00 | % | 100.00 | % | 100.00 | % | BANKING | 8,578 | 507 | 10,303 | |||||||||||||||||
Sovereign Capital Trust IV | United States | 0.00 | % | 100.00 | % | 100.00 | % | FINANCE | 19 | 0 | 19 | |||||||||||||||||
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 | 35 | (3 | ) | 33 | ||||||||||||||||
Sovereign Delaware Investment Corporation | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 101 | 5 | 55 | |||||||||||||||||
Sovereign Leasing LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 1 | 1 | 0 | |||||||||||||||||
Sovereign Precious Metals, LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | TRADING OF PRECIOUS METALS | 84 | 41 | 11 | |||||||||||||||||
Sovereign REIT Holdings, Inc. | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 5,538 | 58 | 4,040 | |||||||||||||||||
Sovereign Securities Corporation, LLC | United States | 0.00 | % | 100.00 | % | 100.00 | % | BROKER-DEALER | 42 | 0 | 40 | |||||||||||||||||
Sovereign Spirit Limited (n) | Bermuda | 0.00 | % | 100.00 | % | 100.00 | % | LEASING | 0 | 0 | 0 | |||||||||||||||||
Sovereign Trade Services (HK) Limited (j) | 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 | 5,188 | 670 | 11,110 | |||||||||||||||||
Suleyado 2003, S.L. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | SECURITIES INVESTMENT | 0 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Suzuki Servicios Financieros, S.L. | Spain | 0.00 | % | 51.00 | % | 51.00 | % | INTERMEDIATION | 0 | 0 | 0 | |||||||||||||||||
Swesant SA | Switzerland | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 1 | 1,114 | 0 | |||||||||||||||||
Task Moraza, S.L. (e) | Spain | 0.00 | % | 73.22 | % | 73.22 | % | HOLDING COMPANY | 24 | 1 | 27 | |||||||||||||||||
Taxagest Sociedade Gestora de Participações Sociais, S.A. | Portugal | 0.00 | % | 99.73 | % | 100.00 | % | HOLDING COMPANY | 63 | (2 | ) | 0 | ||||||||||||||||
Teatinos Siglo XXI Inversiones Limitada | Chile | 50.00 | % | 50.00 | % | 100.00 | % | HOLDING COMPANY | 1,235 | 365 | 516 | |||||||||||||||||
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 | 14 | |||||||||||||||||
The HSH AIV 4 Trust | United States | 0.00 | % | 69.60 | % | 4.99 | % | HOLDING COMPANY | 6 | (2 | ) | 5 | ||||||||||||||||
The JCF HRE AIV II-A Trust | United States | 0.00 | % | 69.91 | % | 4.99 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
The National & Provincial Building Society Pension Fund Trustees Limited (d) (j) | United Kingdom | — | (b | ) | — | ASSET MANAGEMENT COMPANY | 0 | 0 | 0 | |||||||||||||||||||
The Prepaid Card Company Limited | United Kingdom | 0.00 | % | 80.00 | % | 80.00 | % | FINANCE | (27 | ) | 14 | 0 | ||||||||||||||||
The WF Company Limited (j) | 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 | 2 | 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 Inc. Newark | United States | 0.00 | % | 99.73 | % | 100.00 | % | BANKING | 1 | 0 | 1 | |||||||||||||||||
Totta (Ireland), PLC (h) | Ireland | 0.00 | % | 99.73 | % | 100.00 | % | FINANCE | 276 | 68 | 341 | |||||||||||||||||
Totta Crédito Especializado, Instituição Financiera de Crédito, S.A. (IFIC) | Portugal | 0.00 | % | 99.84 | % | 100.00 | % | LEASING | 134 | 25 | 42 | |||||||||||||||||
Totta Urbe — Empresa de Administração e Construções, S.A. | Portugal | 0.00 | % | 99.73 | % | 100.00 | % | PROPERTY | 116 | (1 | ) | 148 | ||||||||||||||||
Triad Automobile Receivables Trust 2006-B | United States | — | (b | ) | — | SECURITISATION | 2 | 5 | 0 | |||||||||||||||||||
Triad Automobile Receivables Trust 2006-C | United States | — | (b | ) | — | SECURITISATION | 3 | 9 | 0 | |||||||||||||||||||
Triad Automobile Receivables Trust 2007-A | United States | — | (b | ) | — | SECURITISATION | 6 | 17 | 0 | |||||||||||||||||||
Triad Automobile Receivables Trust 2007-B | United States | — | (b | ) | — | SECURITISATION | 3 | 12 | 0 | |||||||||||||||||||
Triad Financial Residual Special Purpose LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | AUXILIARY | 0 | 0 | 0 | |||||||||||||||||
Triad Financial Special Purpose LLC | United States | 0.00 | % | 91.50 | % | 100.00 | % | SECURITISATION | 0 | 0 | 0 | |||||||||||||||||
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 | 40 | 7 | 82 | |||||||||||||||||
Universia Brasil S.A. | Brazil | 0.00 | % | 100.00 | % | 100.00 | % | INTERNET | 3 | (2 | ) | 1 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Capital | Net profit | Amount of | ||||||||||||||||||||||||||
% Ownership held by the Bank | % of voting power | and | (loss) for | ownership | ||||||||||||||||||||||||
Entity | Location | Direct | Indirect | (k) | Line of business | Reserves | the year | interest | ||||||||||||||||||||
Universia Chile S.A. | Chile | 0.00 | % | 82.42 | % | 82.42 | % | INTERNET | 1 | (1 | ) | 0 | ||||||||||||||||
Universia Colombia, S.A. | Colombia | 0.00 | % | 99.95 | % | 99.95 | % | INTERNET | 1 | 0 | 0 | |||||||||||||||||
Universia Holding, S.L. | Spain | 99.98 | % | 0.02 | % | 100.00 | % | HOLDING COMPANY | 28 | (20 | ) | 11 | ||||||||||||||||
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 | % | 77.50 | % | 77.50 | % | INTERNET | 1 | (1 | ) | 0 | ||||||||||||||||
Universia Puerto Rico, Inc. | Puerto Rico | 0.00 | % | 100.00 | % | 100.00 | % | INTERNET | 1 | 0 | 0 | |||||||||||||||||
UPFC Auto Receivables Trust 2007-A | United States | — | (b | ) | — | SECURITISATION | 0 | 3 | 0 | |||||||||||||||||||
UPFC Auto Receivables Trust 2007-B | United States | — | (b | ) | — | SECURITISATION | 0 | 4 | 0 | |||||||||||||||||||
Valores Santander Casa de Bolsa, C.A. | Venezuela | 0.00 | % | 90.00 | % | 90.00 | % | BROKER-DEALER | 6 | 1 | 8 | |||||||||||||||||
Viking Collection 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 | 4 | (3 | ) | 0 | ||||||||||||||||
Vista Desarrollo, S.A. SCR de Régimen Simplificado | Spain | 100.00 | % | 0.00 | % | 100.00 | % | VENTURE CAPITAL COMPANY | 251 | (13 | ) | 158 | ||||||||||||||||
W.N.P.H. Gestão e Investimentos Sociedade Unipessoal, S.A. | Portugal | 0.00 | % | 100.00 | % | 100.00 | % | SECURITIES INVESTMENT | 0 | 0 | 0 | |||||||||||||||||
Wallcesa, S.A. | Spain | 100.00 | % | 0.00 | % | 100.00 | % | SECURITIES INVESTMENT | (678 | ) | (127 | ) | 0 | |||||||||||||||
Waypoint Insurance Group, Inc. | United States | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 3 | 0 | 13 | |||||||||||||||||
Webmotors S.A. | Brazil | 0.00 | % | 81.38 | % | 100.00 | % | SERVICES | 18 | 5 | 8 | |||||||||||||||||
Wex Point España, S.L. | Spain | 0.00 | % | 90.04 | % | 100.00 | % | SERVICES | 1 | 0 | 1 | |||||||||||||||||
Whitewick Limited | Jersey | 0.00 | % | 100.00 | % | 100.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
WIM Servicios Corporativos, S.A. de C.V. | Mexico | 0.00 | % | 100.00 | % | 100.00 | % | ADVISORY SERVICES | 0 | 0 | 0 | |||||||||||||||||
ZS Insurance América, S.L. | Spain | 0.00 | % | 100.00 | % | 100.00 | % | COMPANY MANAGEMENT | 0 | 0 | 0 |
(a) | Amount per books of each company at December 31, 2010, disregarding 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, 2009. | |
(d) | Data from the latest approved financial statements at March 31, 2010. | |
(e) | Data from the latest approved financial statements at June 30, 2010. | |
(f) | Data from the latest approved financial statements at September 30, 2010. | |
(g) | Data from the latest approved financial statements at April 30, 2010. |
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(h) | Data from the latest approved financial statements at November 30, 2010. | |
(i) | Data from the latest approved financial statements at August 31, 2010. | |
(j) | Company in liquidation at December 31, 2010. | |
(k) | Pursuant to Article 3 of Royal Decree 1159/2010, of September 17, 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, 2010. | |
(n) | Company resident in the UK for tax purposes. | |
(o) | Data from the latest available approved financial statements at September 30, 2009. | |
(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 Ownership held by the Bank | Capital and | Net profit (loss) | ||||||||||||||||||||||||||
Entity | Location | Direct | Indirect | % of voting power (f) | Line of business | Assets | Reserves | for the year | ||||||||||||||||||||
26 Rue Villiot S.A.S. | France | 0.00 | % | 35.00 | % | 50.00 | % | PROPERTY | 132 | 51 | 2 | |||||||||||||||||
ABSLine Multimedia, S.L. | Spain | 0.00 | % | 47.50 | % | 47.50 | % | MARKETING | 0 | 0 | (1 | ) | ||||||||||||||||
Administrador Financiero de Transantiago S.A. | Chile | 0.00 | % | 15.35 | % | 20.00 | % | COLLECTION AND PAYMENT SERVICES | 81 | 4 | 2 | |||||||||||||||||
Affirmative Insurance Holdings Inc. (b) | United States | 0.00 | % | 5.00 | % | 0.00 | % | INSURANCE | 562 | 166 | (29 | ) | ||||||||||||||||
Affirmative Investment LLC | United States | 0.00 | % | 9.86 | % | 4.99 | % | HOLDING COMPANY | 16 | 24 | (8 | ) | ||||||||||||||||
Agres, Agrupación Restauradores, S.L. | Spain | 0.00 | % | 38.73 | % | 43.01 | % | RESTAURANTS | 3 | 2 | 0 | |||||||||||||||||
Aguas de Fuensanta, S.A. | Spain | 0.00 | % | 38.01 | % | 42.21 | % | FOOD | 37 | 10 | 0 | |||||||||||||||||
Alcover AG | Switzerland | 27.91 | % | 0.00 | % | 27.91 | % | INSURANCE | 419 | 153 | (16 | ) | ||||||||||||||||
Algebris Global Financials Fund (b) | Cayman Islands | 9.14 | % | 0.00 | % | 9.14 | % | HOLDING COMPANY | 797 | 699 | 54 | |||||||||||||||||
Allfunds Alternative, S.V., S.A. (Sole-Shareholder Company) | Spain | 0.00 | % | 50.00 | % | 50.00 | % | BROKER-DEALER | 4 | 4 | 0 | |||||||||||||||||
Allfunds Bank, S.A. | Spain | 50.00 | % | 0.00 | % | 50.00 | % | BANKING | 246 | 99 | 12 | |||||||||||||||||
Allfunds International S.A. | Luxembourg | 0.00 | % | 50.00 | % | 50.00 | % | FINANCIAL SERVICES | 3 | 2 | 0 | |||||||||||||||||
Allfunds Nominee Limited | United Kingdom | 0.00 | % | 50.00 | % | 50.00 | % | HOLDING COMPANY | 0 | 0 | 0 | |||||||||||||||||
Andalucarthage Holding Société Holding Offshore S.A. | Morocco | 0.00 | % | 20.11 | % | 20.11 | % | HOLDING COMPANY | 165 | 126 | 0 | |||||||||||||||||
Anekis, S.A. | Spain | 24.75 | % | 24.75 | % | 49.50 | % | ADVERTISING | 4 | 2 | 0 | |||||||||||||||||
Arena Communications Network, S.L. | Spain | 20.00 | % | 0.00 | % | 20.00 | % | ADVERTISING | 54 | 4 | 1 | |||||||||||||||||
Attijari Bank Société Anonyme (consolidated) (b) | Tunisia | 0.00 | % | 10.97 | % | 10.97 | % | BANKING | 1,818 | 134 | 24 | |||||||||||||||||
Attijari Factoring Maroc, S.A. | Morocco | 0.00 | % | 28.41 | % | 28.41 | % | FACTORING | 11 | 4 | 2 | |||||||||||||||||
Attijari International Bank Société Anonymé | Morocco | 50.00 | % | 0.00 | % | 50.00 | % | BANKING | 14 | 2 | 1 | |||||||||||||||||
Autopistas del Sol S.A. (b) | Argentina | 0.00 | % | 14.17 | % | 14.17 | % | MOTORWAY CONCESSIONS | 257 | 33 | (31 | ) | ||||||||||||||||
Banco Caixa Geral Totta de Angola, S.A. | Angola | 0.00 | % | 24.92 | % | 24.99 | % | BANKING | 800 | 159 | 31 | |||||||||||||||||
Banco Internacional da Guiné-Bissau, S.A. (d) (l) | Guinea Bissau | 0.00 | % | 48.87 | % | 49.00 | % | BANKING | 12 | (30 | ) | (1 | ) | |||||||||||||||
Base Central Rede Serviços Imobiliarios, S.A. | Portugal | 0.00 | % | 49.80 | % | 49.80 | % | PROPERTY SERVICES | 1 | 0 | 0 | |||||||||||||||||
Bee Cave (TX) HC Apartments Syndicated Holdings, LLC | United States | 0.00 | % | 33.33 | % | 33.33 | % | PROPERTY | 2 | 1 | 1 | |||||||||||||||||
Benim-Sociedade Imobiliária, S.A. (consolidated) (b) | Portugal | 0.00 | % | 25.74 | % | 25.81 | % | PROPERTY | 12 | 7 | (1 | ) | ||||||||||||||||
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 | % | 19.28 | % | 21.41 | % | FOOD | 27 | 5 | (3 | ) |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of Ownership held by the Bank | Capital and | Net profit (loss) | ||||||||||||||||||||||||||
Entity | Location | Direct | Indirect | % of voting power (f) | Line of business | Assets | Reserves | for the year | ||||||||||||||||||||
Cartera del Norte, S.A. | Spain | 0.00 | % | 32.51 | % | 36.10 | % | FINANCE | 1 | 1 | 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 | % | 44.12 | % | 49.00 | % | TECHNOLOGY | 1 | 1 | 0 | |||||||||||||||||
Charta Leasing No. 1 Limited (j) | United Kingdom | 0.00 | % | 50.00 | % | 50.00 | % | LEASING | 107 | (9 | ) | (4 | ) | |||||||||||||||
Charta Leasing No. 2 Limited | United Kingdom | 0.00 | % | 50.00 | % | 50.00 | % | LEASING | 53 | (10 | ) | (4 | ) | |||||||||||||||
Companhia de Arrendamento Mercantil RCI Brasil | Brazil | 0.00 | % | 32.45 | % | 39.88 | % | LEASING | 310 | 209 | 20 | |||||||||||||||||
Companhia de Crédito, Financiamento e Investimento RCI Brasil | Brazil | 0.00 | % | 32.21 | % | 39.58 | % | FINANCE | 1,186 | 98 | 31 | |||||||||||||||||
Compañía Concesionaria del Túnel de Sóller, S.A. | Spain | 0.00 | % | 29.44 | % | 32.70 | % | CONSTRUCTION | 45 | 18 | 1 | |||||||||||||||||
Compañía Española de Seguros de Crédito a la Exportación, S.A., Compañía de Seguros y Reaseguros (b) | Spain | 13.95 | % | 6.47 | % | 21.08 | % | CREDIT INSURANCE | 842 | 140 | 22 | |||||||||||||||||
Comprarcasa Servicios Inmobiliarios, S.A. | Spain | 0.00 | % | 47.50 | % | 47.50 | % | PROPERTY SERVICES | 2 | 1 | 0 | |||||||||||||||||
Dirgenfin, S.L. | Spain | 0.00 | % | 36.02 | % | 40.00 | % | REAL ESTATE DEVELOPMENT | 56 | 5 | 0 | |||||||||||||||||
Ensafeca Holding Empresarial, S.L. | Spain | 0.00 | % | 31.82 | % | 31.82 | % | TELECOMMUNICATIONS | 9 | 10 | (2 | ) | ||||||||||||||||
Espais Promocat, S.L. | Spain | 0.00 | % | 45.02 | % | 50.00 | % | PROPERTY | 24 | (1 | ) | (2 | ) | |||||||||||||||
Faviren Ahorro SICAV, S.A. | Spain | 0.00 | % | 18.56 | % | 20.61 | % | OPEN-END INVESTMENT COMPANY | 3 | 8 | 0 | |||||||||||||||||
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 | % | 14.76 | % | 14.76 | % | BANKING | 48,863 | 2,779 | (28 | ) | ||||||||||||||||
Fondo de Titulización de Activos UCI 11 | Spain | — | (h | ) | — | SECURITISATION | 300 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos UCI 14 | Spain | — | (h | ) | — | SECURITISATION | 770 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos UCI 15 | Spain | — | (h | ) | — | SECURITISATION | 878 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos UCI 16 | Spain | — | (h | ) | — | SECURITISATION | 1,271 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos UCI 17 | Spain | — | (h | ) | — | SECURITISATION | 1,086 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos UCI 18 | Spain | — | (h | ) | — | SECURITISATION | 1,427 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización de Activos UCI 19 | Spain | — | (h | ) | — | SECURITISATION | 966 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Hipotecaria UCI 10 | Spain | — | (h | ) | — | SECURITISATION | 207 | 0 | 0 | |||||||||||||||||||
Fondo de Titulización Hipotecaria UCI 12 | Spain | — | (h | ) | — | SECURITISATION | 404 | 0 | 0 | |||||||||||||||||||
Friedrichstrasse, S.L. | Spain | 0.00 | % | 35.00 | % | 35.00 | % | PROPERTY | 42 | 43 | 0 | |||||||||||||||||
Gire S.A. | Argentina | 0.00 | % | 57.92 | % | 58.33 | % | COLLECTION AND PAYMENT SERVICES | 59 | 6 | 6 | |||||||||||||||||
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 | % | 36.43 | % | 40.46 | % | FOOD | 6 | 0 | 0 | |||||||||||||||||
Grupo Konecta Centros Especiales de Empleo, S.L. | Spain | 0.00 | % | 48.25 | % | 48.25 | % | TELEMARKETING | 0 | 0 | 0 | |||||||||||||||||
Grupo Konecta Maroc S.A.R.L. à associé unique | Morocco | 0.00 | % | 48.25 | % | 48.25 | % | TELEMARKETING | 0 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of Ownership held by the Bank | Capital and | Net profit (loss) | ||||||||||||||||||||||||||
Entity | Location | Direct | Indirect | % of voting power (f) | Line of business | Assets | Reserves | for the year | ||||||||||||||||||||
Grupo Konecta UK Limited | United Kingdom | 0.00 | % | 48.20 | % | 48.20 | % | FINANCE | 0 | (1 | ) | 0 | ||||||||||||||||
Grupo Konectanet México, S.A. de C.V. | Mexico | 0.00 | % | 48.25 | % | 48.25 | % | TELEMARKETING | 0 | 0 | 0 | |||||||||||||||||
Grupo Konectanet, S.L. | Spain | 0.00 | % | 48.25 | % | 48.25 | % | HOLDING COMPANY | 19 | 6 | 0 | |||||||||||||||||
Helican Desarrollo Eólico, S.L. | Spain | 0.00 | % | 46.00 | % | 46.00 | % | ELECTRICITY | 0 | 0 | 0 | |||||||||||||||||
HLC — Centrais de Cogeração, S.A. (c) | Portugal | 0.00 | % | 24.45 | % | 24.49 | % | ELECTRICITY | 2 | (2 | ) | (2 | ) | |||||||||||||||
Home Services On Line Solutions, S.L. | Spain | 0.00 | % | 48.25 | % | 48.25 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Hyundai Capital Germany GmbH | Germany | 0.00 | % | 49.99 | % | 49.99 | % | SERVICES | 2 | 2 | 0 | |||||||||||||||||
Imperial Holding S.C.A. (i) | Luxembourg | 0.00 | % | 37.06 | % | 37.06 | % | SECURITIES INVESTMENT | 190 | 39 | 0 | |||||||||||||||||
Inmo Alemania Gestión de Activos Inmobiliarios, S.A. | Spain | 0.00 | % | 19.22 | % | 20.00 | % | HOLDING COMPANY | 99 | 99 | 0 | |||||||||||||||||
J.C. Flowers I L.P. (b) | United States | 16.80 | % | 0.00 | % | 4.99 | % | HOLDING COMPANY | 100 | 73 | 25 | |||||||||||||||||
JC Flowers AIV II L.P. (b) | United States | 0.00 | % | 9.80 | % | 4.99 | % | HOLDING COMPANY | 10 | 8 | 2 | |||||||||||||||||
JC Flowers AIV P L.P. (b) | Canada | 0.00 | % | 6.90 | % | 4.99 | % | HOLDING COMPANY | 119 | 119 | (2 | ) | ||||||||||||||||
Kassadesign 2005, S.L. | Spain | 0.00 | % | 45.02 | % | 50.00 | % | PROPERTY | 55 | 4 | (1 | ) | ||||||||||||||||
Konecta Activos Inmobiliarios, S.L. | Spain | 0.00 | % | 49.08 | % | 49.08 | % | PROPERTY | 8 | 0 | 0 | |||||||||||||||||
Konecta Brazil Outsourcing Ltda. | Brazil | 0.00 | % | 48.24 | % | 48.24 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Konecta Broker, S.L. | Spain | 0.00 | % | 48.25 | % | 48.25 | % | SERVICES | 0 | 1 | 0 | |||||||||||||||||
Konecta Bto, S.L. | Spain | 0.00 | % | 48.25 | % | 48.25 | % | TELECOMMUNICATIONS | 40 | 37 | 3 | |||||||||||||||||
Konecta Chile S.A. | Chile | 0.00 | % | 35.70 | % | 35.70 | % | SERVICES | 5 | 5 | 0 | |||||||||||||||||
Konecta Colombia Grupo Konecta Colombia Ltda | Colombia | 0.00 | % | 48.25 | % | 48.25 | % | TELEMARKETING | 0 | 0 | 0 | |||||||||||||||||
Konecta Field Marketing, S.A. | Spain | 0.00 | % | 48.25 | % | 48.25 | % | MARKETING | 0 | 0 | 0 | |||||||||||||||||
Konecta Marketing & Publicidad, S.L. | Spain | 0.00 | % | 30.88 | % | 30.88 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Konecta Portugal, Lda. | Portugal | 0.00 | % | 48.25 | % | 48.25 | % | MARKETING | 1 | 1 | 0 | |||||||||||||||||
Konecta Servicios Administrativos y Tecnológicos, S.L. | Spain | 0.00 | % | 48.25 | % | 48.25 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Konecta Servicios de Empleo ETT, S.A. | Spain | 0.00 | % | 48.25 | % | 48.25 | % | TEMPORARY EMPLOYMENT AGENCY | 0 | (1 | ) | 0 | ||||||||||||||||
Konectanet Andalucía, S.L. | Spain | 0.00 | % | 48.25 | % | 48.25 | % | SERVICES | 1 | 0 | 1 | |||||||||||||||||
Konectanet Comercialización, S.L. | Spain | 0.00 | % | 48.25 | % | 48.25 | % | MARKETING | 1 | 1 | 0 | |||||||||||||||||
Kontacta Comunicaciones, S.A. | Spain | 0.00 | % | 36.19 | % | 36.19 | % | SERVICES | 2 | 1 | 1 | |||||||||||||||||
Kontacta Top Ten, S.L. | Spain | 0.00 | % | 36.19 | % | 36.19 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Luri 3, S.A. | Spain | 0.00 | % | 9.62 | % | 10.00 | % | PROPERTY | 36 | 30 | 1 | |||||||||||||||||
Maxamcorp Holding, S.L. (consolidated) (e) | Spain | 0.00 | % | 22.62 | % | 22.62 | % | HOLDING COMPANY | 582 | 150 | 6 | |||||||||||||||||
Medimobiliario Edições Period. e Multimedia, S.A. (k) | Portugal | 0.00 | % | 0.00 | % | 0.00 | % | PROPERTY SERVICES | — | — | — | |||||||||||||||||
Metrovacesa, S.A. (consolidated) (b) | Spain | 14.51 | % | 8.22 | % | 23.63 | % | PROPERTY | 8,626 | 1,768 | (889 | ) | ||||||||||||||||
Neoen, SGPS, S.A. | Portugal | 0.00 | % | 50.00 | % | 50.00 | % | ELECTRICITY | 42 | 0 | 0 |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of Ownership held by the Bank | Capital and | Net profit (loss) | ||||||||||||||||||||||||||
Entity | Location | Direct | Indirect | % of voting power (f) | Line of business | Assets | Reserves | for the year | ||||||||||||||||||||
New PEL S.a.r.l. (b) | Luxembourg | 0.00 | % | 6.90 | % | 0.00 | % | HOLDING COMPANY | 46 | 33 | 11 | |||||||||||||||||
Norchem Holdings e Negócios S.A. | Brazil | 0.00 | % | 17.70 | % | 21.75 | % | HOLDING COMPANY | 100 | 43 | 4 | |||||||||||||||||
Norchem Participações e Consultoria S.A. | Brazil | 0.00 | % | 40.69 | % | 50.00 | % | BROKER-DEALER | 59 | 24 | 2 | |||||||||||||||||
Olivant Investments Switzerland S.A. (b) | Luxembourg | 0.00 | % | 34.97 | % | 34.97 | % | HOLDING COMPANY | 76 | (1,827 | ) | 289 | ||||||||||||||||
Olivant Limited (consolidated) (m) | Guernsey | 0.00 | % | 9.00 | % | 9.00 | % | HOLDING COMPANY | 244 | 239 | (237 | ) | ||||||||||||||||
Omega Financial Services GmbH | Germany | 0.00 | % | 50.00 | % | 50.00 | % | SERVICES | 2 | 0 | 2 | |||||||||||||||||
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 | |||||||||||||||||
Parque Solar la Robla, S.L. | Spain | 0.00 | % | 85.54 | % | 25.00 | % | ELECTRICITY | 14 | 0 | 0 | |||||||||||||||||
Parque Solar Saelices, S.L. | Spain | 0.00 | % | 85.54 | % | 25.00 | % | ELECTRICITY | 72 | 4 | 2 | |||||||||||||||||
Partang, SGPS, S.A. | Portugal | 0.00 | % | 48.87 | % | 49.00 | % | HOLDING COMPANY | 95 | 87 | 5 | |||||||||||||||||
Private Estate Life S.A. (m) | Luxembourg | 0.00 | % | 5.87 | % | 0.00 | % | INSURANCE | 2,662 | 53 | 14 | |||||||||||||||||
Prodesur Mediterráneo, S.L. | Spain | 0.00 | % | 45.02 | % | 50.00 | % | PROPERTY | 51 | 17 | (2 | ) | ||||||||||||||||
Programa Multi Sponsor PMS, S.A. | Spain | 24.75 | % | 24.75 | % | 49.50 | % | ADVERTISING | 5 | 5 | 0 | |||||||||||||||||
Proinsur Mediterráneo, S.L. | Spain | 0.00 | % | 45.02 | % | 50.00 | % | PROPERTY | 67 | 22 | (2 | ) | ||||||||||||||||
Promoreras Desarrollo de Activos, S.L. | Spain | 0.00 | % | 31.51 | % | 35.00 | % | PROPERTY | 140 | 14 | (5 | ) | ||||||||||||||||
PSA Finance PLC | United Kingdom | 0.00 | % | 50.00 | % | 50.00 | % | LEASING | 5 | 5 | 0 | |||||||||||||||||
Puntoform, S.L. | Spain | 0.00 | % | 48.25 | % | 48.25 | % | TRAINING | 1 | 0 | 0 | |||||||||||||||||
Q 205 Real Estate GmbH | Germany | 0.00 | % | 17.50 | % | 17.50 | % | PROPERTY | 252 | 62 | 3 | |||||||||||||||||
Quiero Televisión, S.A., Sole-Shareholder Company | Spain | 0.00 | % | 31.82 | % | 31.82 | % | TELECOMMUNICATIONS | 78 | 7 | 0 | |||||||||||||||||
Real Seguros Vida e Previdência S.A. (k) | Brazil | 0.00 | % | 0.00 | % | 0.00 | % | INSURANCE | — | — | — | |||||||||||||||||
Redbanc S.A. | Chile | 0.00 | % | 25.66 | % | 33.43 | % | SERVICES | 20 | 7 | 1 | |||||||||||||||||
Redbanc, S.A. | Uruguay | 0.00 | % | 25.00 | % | 25.00 | % | SERVICES | 2 | 0 | 0 | |||||||||||||||||
Renova Energía S.A. (b) | Brazil | 0.00 | % | 6.77 | % | 8.32 | % | ELECTRICITY | 132 | 63 | (1 | ) | ||||||||||||||||
Retama Real Estate, S.L. | Spain | 0.00 | % | 50.00 | % | 50.00 | % | SERVICES | 49 | 0 | (3 | ) | ||||||||||||||||
RFS Holdings B.V. (n) | Netherlands | 1.03 | % | 0.00 | % | 1.03 | % | HOLDING COMPANY | 4,059 | (743 | ) | 1,407 | ||||||||||||||||
Saniso S.r.l. | Italy | 0.00 | % | 50.00 | % | 50.00 | % | ELECTRICITY PRODUCTION | 15 | 0 | 0 | |||||||||||||||||
Saudi Hollandi Bank (consolidated) (b) | Saudi Arabia | 0.00 | % | 11.16 | % | 11.16 | % | BANKING | 12,042 | 1,130 | 18 | |||||||||||||||||
SC Littleton HH LLC | United States | 0.00 | % | 24.10 | % | 24.10 | % | PROPERTY | 1 | 1 | 0 | |||||||||||||||||
Shinsei Bank, Ltd. (consolidated) (e) | Japan | 0.00 | % | 6.72 | % | 1.85 | % | BANKING | 104,710 | 7,134 | (1,290 | ) | ||||||||||||||||
Sistarbanc S.R.L. (b) | Uruguay | 0.00 | % | 20.00 | % | 20.00 | % | CARDS | 2 | 2 | 0 | |||||||||||||||||
Sociedad Interbancaria de Depósitos de Valores S.A. | Chile | 0.00 | % | 22.48 | % | 29.29 | % | SECURITIES DEPOSITORY INSTITUTION | 3 | 2 | 1 | |||||||||||||||||
Sociedad Promotora Bilbao Plaza Financiera, S.A. (b) | Spain | 7.74 | % | 25.04 | % | 33.90 | % | ADVISORY SERVICES | 2 | 2 | 0 | |||||||||||||||||
Solar Energy Capital Europe S.à.r.l. | Luxembourg | 0.00 | % | 33.33 | % | 33.33 | % | HOLDING COMPANY | 7 | 2 | 0 | |||||||||||||||||
Tecnologia Bancária S.A. | Brazil | 0.00 | % | 20.82 | % | 20.82 | % | ATMs | 1,145 | 72 | 5 | |||||||||||||||||
Teka Industrial, S.A. (consolidated) (b) | Spain | 0.00 | % | 10.00 | % | 10.00 | % | DOMESTIC APPLIANCES | 674 | 285 | (4 | ) | ||||||||||||||||
Trabajando.com Chile S.A. | Chile | 0.00 | % | 33.33 | % | 33.33 | % | SERVICES | 6 | 7 | (2 | ) | ||||||||||||||||
Transbank S.A. | Chile | 0.00 | % | 25.11 | % | 32.71 | % | CARDS | 332 | 8 | 2 | |||||||||||||||||
Transolver Finance EFC, S.A. | Spain | 0.00 | % | 50.00 | % | 50.00 | % | LEASING | 146 | 26 | (15 | ) |
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Millions of euros (a) | ||||||||||||||||||||||||||||
% of Ownership held by the Bank | Capital and | Net profit (loss) | ||||||||||||||||||||||||||
Entity | Location | Direct | Indirect | % of voting power (f) | Line of business | Assets | Reserves | for the year | ||||||||||||||||||||
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 | 211 | 108 | (3 | ) | ||||||||||||||||
UCI Mediação de Seguros Unipessoal, Lda. | Portugal | 0.00 | % | 50.00 | % | 50.00 | % | INSURANCE BROKERAGE | 0 | 0 | 0 | |||||||||||||||||
UFI Servizi S.r.l. (b) | Italy | 0.00 | % | 23.17 | % | 23.17 | % | SERVICES | 0 | 0 | 0 | |||||||||||||||||
Unicre-Instituição Financeira de Crédito, S.A. | Portugal | 0.00 | % | 21.44 | % | 21.50 | % | FINANCE | 303 | 62 | 11 | |||||||||||||||||
Unión de Créditos Inmobiliarios, S.A., EFC | Spain | 0.00 | % | 50.00 | % | 50.00 | % | MORTGAGE LOAN COMPANY | 8,318 | 212 | 25 | |||||||||||||||||
Vector Software Factory, S.L. | Spain | 0.00 | % | 21.60 | % | 21.60 | % | IT | 13 | 1 | 2 | |||||||||||||||||
Viking Consortium Holdings Limited (consolidated) | United Kingdom | 0.00 | % | 25.04 | % | 25.04 | % | HOLDING COMPANY | 1 | 0 | 0 | |||||||||||||||||
Wtorre Empreendimentos Imobiliários S.A. (consolidated) (b) | Brazil | 0.00 | % | 6.95 | % | 8.55 | % | PROPERTY | 1,703 | 264 | (67 | ) |
(a) | Amounts per the books of each company generally at December 31, 2010, 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, 2009. | |
(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, 2010, this entity’s year-end. | |
(f) | Pursuant to Article 3 of Royal Decree 1159/2010, of September 17, 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 260 of the Spanish Limited Liability Companies Law (Ley de Sociedades de Capital)) is not material. | |
(h) | Companies over which effective control is exercised. | |
(i) | Data from the latest approved financial statements at July 31, 2010. | |
(j) | Data from the latest approved financial statements at September 30, 2010. | |
(k) | Company in merger process with another Group company. Awaiting registration at Mercantile Registry. | |
(l) | Company in liquidation at December 31, 2010. | |
(m) | Data from the latest approved financial statements at December 31, 2008. | |
(n) | Considered an associate. |
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Millions of euros (a) | ||||||||||||||||||||||||||||
Net profit | ||||||||||||||||||||||||||||
% of ownership held by the Bank | Share | Preference | (loss) for | |||||||||||||||||||||||||
Entity | Location | Direct | Indirect | Line of business | capital | Reserves | share cost | the year | ||||||||||||||||||||
Abbey National Capital Trust I | United States | — | (b | ) | FINANCE | 0 | 0 | 0 | 0 | |||||||||||||||||||
Banesto Holdings, Ltd. | Guernsey | 0.00 | % | 90.04 | % | SECURITIES INVESTMENT | 0 | 28 | 5 | 0 | ||||||||||||||||||
Santander Emisora 150, S.A., Unipersonal | Spain | 100.00 | % | 0.00 | % | FINANCE | 0 | 0 | 243 | 0 | ||||||||||||||||||
Santander Finance Capital, S.A., Unipersonal | Spain | 100.00 | % | 0.00 | % | FINANCE | 0 | 0 | 149 | 1 | ||||||||||||||||||
Santander Finance Preferred, S.A., Unipersonal | Spain | 100.00 | % | 0.00 | % | FINANCE | 0 | 3 | 133 | (1 | ) | |||||||||||||||||
Santander International Preferred, S.A., Unipersonal | Spain | 100.00 | % | 0.00 | % | FINANCE | 0 | 0 | 15 | 0 | ||||||||||||||||||
Santander PR Capital Trust I | Puerto Rico | 0.00 | % | 100.00 | % | FINANCE | 3 | (7 | ) | 3 | 7 | |||||||||||||||||
Sovereign Real Estate Investment Trust | United States | 0.00 | % | 100.00 | % | FINANCE | 1 | 595 | 52 | 26 | ||||||||||||||||||
Totta & Açores Financing, Limited | Cayman Islands | 0.00 | % | 99.73 | % | FINANCE | 0 | (1 | ) | 12 | 12 |
(a) | Amounts per the books of each company at December 31, 2010, 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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Year end December 31, | ||||||||||||||||||||||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||||
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 and preferred stock dividends | 23,208,389 | 9,475,888 | 26,392,227 | 10,540,180 | 37,041,015 | 17,756,819 | 30,569,963 | 15,980,396 | 24,143,967 | 11,033,379 | ||||||||||||||||||||||||||||||
Preferred dividends | 60,689 | 60,689 | 92,294 | 92,294 | 37,374 | 37,374 | 47,290 | 47,290 | 85,229 | 85,229 | ||||||||||||||||||||||||||||||
Fixed charges | 23,147,699 | 9,415,198 | 26,299,933 | 10,447,886 | 37,003,641 | 17,719,445 | 30,522,673 | 15,933,106 | 24,058,738 | 10,948,150 | ||||||||||||||||||||||||||||||
EARNINGS: | ||||||||||||||||||||||||||||||||||||||||
Income from continuing operations before taxes and extraordinary items | 12,051,873 | 12,051,873 | 10,587,800 | 10,587,800 | 10,849,325 | 10,849,325 | 10,970,494 | 10,970,494 | 8,853,774 | 8,853,774 | ||||||||||||||||||||||||||||||
Less: Earnings from associated companies | 16,910 | 16,910 | (5,870 | ) | (5,870 | ) | 695,880 | 695,880 | 291,401 | 291,401 | 259,269 | 259,269 | ||||||||||||||||||||||||||||
Fixed charges | 23,147,699 | 9,415,198 | 26,299,933 | 10,447,886 | 37,003,641 | 17,719,445 | 30,522,673 | 15,933,106 | 24,058,738 | 10,948,150 | ||||||||||||||||||||||||||||||
Total earnings | 35,182,662 | 21,450,161 | 36,893,603 | 21,041,556 | 47,157,086 | 27,872,890 | 41,201,766 | 26,612,199 | 32,653,243 | 19,542,655 | ||||||||||||||||||||||||||||||
Ratio of earnings to fixed charges | 1.52 | 2.28 | 1.40 | 2.01 | 1.27 | 1.57 | 1.35 | 1.67 | 1.36 | 1.79 | ||||||||||||||||||||||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends | 1.52 | 2.26 | 1.40 | 2.01 | 1.27 | 1.57 | 1.35 | 1.67 | 1.36 | 1.78 |
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