IT MAR 14 ENG

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    Quarterly Report Mar-

    Highlights (Amounts in euros thousand)

    31.03.14 31.03.13 Variation %

    Highlights

    Total assets managed 170,028,655 173,762,351 (2.1)On-balance sheet total assets 153,671,939 159,030,194 (3.4)Own funds 12,635,840 10,792,775 17.1Customer deposits 86,684,743 81,134,397 6.8Lending to customers (gross) 109,972,361 115,075,850 (4.4)

    Solvency

    Core capital EBA (%) 10.67 8.04Tier 1(%) 11.18 9.73BIS ratio (%) 11.57 10.52Fully loaded Basel III Leverage ratio 6.18 1

    Risk Management

    Total risks 147,509,859 155,141,866 (4.9)Non-performing loans 21,057,958 15,381,923 36.9

    Allowance for credit losses 8,784,269 9,099,315 (3.5)% Nonperforming ratio 14.28 9.91% Coverage for non-performing and writen-offs balances 52.13 68.62% Coverage for non-performing balances excl writen-offs balances 41.71 59.09

    % Coverage with guarantees 100.69 1 112.12

    Earnings

    Net interest income 549,208 584,497 (6.0)Gross operating income 916,855 817,180 12.2Profit before provisions 471,883 401,543 17.5Profit before tax 89,901 150,563 (40.3)Consolidated profit for the year 63,017 104,665 (39.8)Net profit attributed to the Group 63,055 104,222 (39.5)

    Net Return and Efficiency

    Average total assets 150,090,636 155,712,059 (3.6) Avertage risk-weighted assets (RWA) 84,348,769 91,935,825 (8.3) Average total equity 12,587,936 10,719,219 17.4ROA (%) 0.17 0.27RORWA (%) 0.30 0.46ROE (%) 2.00 3.89Operating Efficiency (%) 44.37 46.44

    Per share data 3

    Final number of shares fully diluted (thousands) 2,130,288 4 2,034,322 4.7 Average number of shares (thousands) 2,083,406 4 2,006,448 3.8

    Adjusted share closing market price (euros) 5.48 2.89 89.6Market capitalization 11,673,979 5 5,879,190 98.6Book value per share diluted (euros) 5.98 5.86 2.2

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    Quarterly Report Mar-14

    Commercial Gap(Amounts in euros thousand)

    31.03.14

    Lending to customers 101,781,595Repos (6,814,169)Total lending to customers net (ex repos) (a) 94,967,426Current accounts 26,421,611Term deposits 49,867,012Valuation adjustments 193,912

    Subtotal customer deposits (ex repos) 76,482,535Retail Commercial paper 530,709Mediation loans (1) 8,277,447Securitizations sold to third parties 507,541Marketable securities distributed through the branch network 468,673Tax collection accounts 417,838Total customer deposits (b) 86,684,743

    GAP (a-b) 8,282,683LTD (a/b) 109.6%

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    Quarterly Report

    Funds managed (Amounts in euros thousand)

    31.03.14 31.12.13 31.03.

    Customer deposit:

    General government 17,544,165 10,732,015 8,978,499

    Other private sectors 73,612,971 72,111,152 67,650,463

    Residents 65,403,727 63,595,104 59,326,125 Non residents 8,209,244 8,516,048 8,324,338

    Valuation adjustments (+/-) 193,912 181,979 112,697

    Subtotal customer deposits and General Government 91,351,048 83,025,146 76,741,659

    Deposits at central counterparty entities 4,040,291 6,137,333 13,331,388

    Total customer deposits 95,391,339 89,162,479 90,073,047

    Unadjusted debt certificates including bonds: 14,757,181 15,917,942 19,663,739

    Bonds and other securities outstanding 13,813,961 14,922,018 16,021,560Commercial paper 943,220 995,924 3,642,179

    Valuation adjustments (+/-) 363,257 364,433 567,509

    Total debt certificates including bonds 15,120,438 16,282,375 20,231,248

    Subordinated liabilities 1,613,545 2,324,019 2,202,987

    Total on-balance sheet funds (a) 112,125,322 107,768,873 112,507,282

    Mutual funds 8,590,203 8,341,528 7,387,171 Asset portfolio management 806,213 764,781 742,744 Pensions funds 5,107,646 5,038,528 4,816,192 Insurance premiums 1,852,654 1,808,398 1,786,050

    Total other intermediated funds (b) 16,356,716 15,953,235 14,732,157

    Total funds managed (a+b) 128,482,038 123,722,108 127,239,439

    Retail funds (Amounts in euros thousand) 31.03.14 31.12.13 31.03.

    Demand deposits 26,421,611 24,178,369 22,342,089Time deposits 49,867,012 50,277,210 46,754,806

    Asset repos 14,868,513 8,387,588 7,532,067Other accounts and valuation adjustments 193,912 181,979 112,697Subtotal customer deposits 91,351,048 83,025,146 76,741,659

    Retail commercial paper 530,709 652,641 3,163,602ICO Mediation loans 8,277,447 7,798,768 6,409,667

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    Quarterly Report

    Lending to customers (Amounts in euros thousand)

    31.03.14 31.12.13 31.03.13 3 months 1

    Lending to general government 5,457,949 1,565,801 3,674,881 >

    Lending to other private sectors 104,256,327 107,213,243 111,159,932 (2.8)

    Residents 94,367,538 97,337,158 101,024,362 (3.1)

    Non residents 9,888,789 9,876,085 10,135,570 0.1

    Total lending to customers 109,714,276 108,779,044 114,834,813 0.9

    Other loans 258,085 246,826 241,037 4.6

    Total lending to customers and others 109,972,361 109,025,870 115,075,850 0.9 (4.4

    Valuation adjustments (+/-) (8,189,641) (7,893,434) (8,451,382) 3.8

    Total 101,782,720 101,132,436 106,624,468 0.6

    Lending to customers by type

    (Amounts in euros thousand) 31.03.14 31.12.13 31.03.13 3 months 1

    Trade loans and discounts 3,306,685 3,370,774 3,602,586 (1.9)Secured loans 41,650,060 43,005,888 50,181,209 (3.2) Mortgage 40,575,575 42,040,253 48,736,007 (3.5) Other 1,074,485 965,635 1,445,202 11.3Repos 6,814,169 7,102,146 6,501,730 (4.1)Term loans and other lending 35,151,981 32,487,641 37,087,841 8.2Leasing 2,274,764 2,322,267 2,594,147 (2.0)Doubtful assets 20,774,702 20,737,154 15,108,337 0.2

    Total lending to customers 109,972,361 109,025,870 115,075,850 0.9

    Variation

    Variation

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    Quarterly Report Mar

    Risk Management Performance(Amounts in euros thousand)

    31.03.14 31.03.13 Amount %

    Non performing loans

    Balance at 1 January 21,216,003 13,935,871 7,280,132 52.2 Additions 1,147,658 2,601,102 (1,453,444) (55.9) Recoveries 1,279,391 841,272 438,119 52.1 Net variation (131,733) 1,759,830 (1,891,563) % increase (0.6) 12.6Write-offs (26,312) (313,778) 287,466 (91.6)Balance at 31 March 21,057,958 15,381,923 5,676,035 36.9

    31.03.14 31.03.13 Amount %

    Allowance for credit losses

    Balance at 1 January 8,525,999 9,128,749 (602,750) (6.6) Annual provision

    Gross 1,460,829 1,472,359 (11,530) (0.8) Recoveries (1,090,405) (1,177,248) 86,843 (7.4) Net 370,424 295,111 75,313 25.5 Other variations (85,898) (11,404) (74,494) > Writte-offs (26,256) (313,141) 286,885 (91.6)Balance at 31 March 8,784,269 9,099,315 (315,046) (3.5)Of which sub-standard risk provisions 881,446 1,065,749 (184,303) (17.3)

    Specific General Country risk Total

    Balance at 1 January 8,524,616 - 1,383 8,525,999

    Net provisions 370,389 - 35 370,424 Amount used 26,256 - - 26,256 Other variations and transfers (85,898) - - (85,898)

    Balance at 31 March 8,782,851 - 1,418 8,784,269

    *Including doubtful off-balance sheet risks and country risk and related risk allowance

    31.03.14 31.03.13 Amount %

    Risk quality measures (%):

    Total risks 147,509,859 155,141,866 (7,632,007) (4.9)

    Nonperformance (Nonperforming loans/ Total risks) 14.28 9.91 4.37Credit risk premium 1.45 0.93 0.51Typical spread on lending to customers 1.90 1.54 0.36

    31.03.14

    Coverage by type of non-performing balance

    Non-performing balances without mortgage guarantee 5,401,075

    Non-performing balances with mortgage guarantee 15,656,883

    Value of guarantees (incuding haircuts) 12,450,173

    Total non-performing balances* 21,057,958

    Variation

    Variation

    Variation

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    Quarterly Report Mar-14

    Solvency (Amounts in euros thousand) 31.03.14 31.03.13

    Capital 8,074,804 6,310,976Reserves 3,929,057 3,839,446Minority interest 1,120 22,048Ordinary capital haircuts -2,982,451 -2,775,342Ordinary Tier 1 Capital 9,022,530 7,397,127CET 1 ratio (%) 10.67 8.04

    MCNs 756,568 1,757,404Preferred shares 527,163 59,474

    Additional capital haircuts -847,237 -265,647Tier 1 capital 9,459,024 8,948,358Tier 1 ratio (%) 11.18 9.73

    Equity 9,788,708 9,676,677Ratio BIS (%) 11.57 10.52

    Fully loaded Basel III Leverage Ratio (%) 6.18

    Total risk weighted assets 84,588,101 91,965,588from which credit risk 77,530,119 84,195,298from which operational risk 6,520,771 6,782,694from which market risk 537,212 987,596

    1. Fully loaded Basel III Leverage Ratio CRR

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    Quarterly Report Mar-14

    Equity (Amounts in euros thousand)

    Capital &reserves

    Valuationadjustments Minority interests

    Net AssetValue

    Balance at 31/12/2013 11,925,494 (350,500) 51,377 11,626,371 Capital increase 704,183 - - 704,183 Variation in treasury stock 39 - - 39 Gain on treasury stock transactions 97 - - 97 Actuarial differences - (678) - (678) Remuneration of mandatory convertible debentures (28,982) - - (28,982) Consolidation operations and other (net) (30,897) - 41 (30,856) Corporate actions 2,851 - (30,581) (27,730) Value adjustments - 224,018 - 224,018 Net profit at 31 March 2014 63,055 - (38) 63,017

    Dividends paid in 2014 - - - -Balance at 31/03/2014 12,635,840 (127,160) 20,799 12,529,479

    Mandatory convertible notes(Amounts in euros thousand)

    AmountBalance sheetconsideration Conversion price

    Convertiondate

    MCNs II/2012 645,173 Equity Fixed price: 17,88 November 2015

    MCNs III/2012 78,001 Subordinated debt Floating at marketprice. Floor:2,50 April 2014

    MCNs IV/2012 33,333 Subordinated debtFloating at marketprice. Floor:2,50

    1/3 June 20141/3 Dec. 2014

    TOTAL 756,507

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    Quarterly Report

    Consolidated income and profitability

    31.03.14 31.03.13 Variation % 31.03.14 31.03.13 Var

    Interest and similar income 1,061,134 1,283,645 (17.3) 2.83 3.30 (0.47)- Interest expense and similar charges 511,926 699,148 (26.8) 1.37 1.80 (0.43)=Net interest income 549,208 584,497 (6.0) 1.46 1.50 (0.04)+ Return on equity instruments 1,111 5,539 (79.9) - 0.01 (0.01)+Share of results of entities accounted for using -the equity method 5,830 5,500 6.0 0.02 0.01 0.01+Net fees and commissions 176,094 187,889 (6.3) 0.47 0.48 (0.01)Gains or losses on financial assets and liabilities (net) 202,978 41,777 > 0.54 0.11 0.43Exchange differences (net) 10,634 12,344 (13.9) 0.03 0.03 (0.00)+Other operating profits (29,000) (20,366) 42.4 (0.08) (0.05) (0.03)

    =Gross operating income 916,855 817,180 12.2 2.44 2.11 0.33 -Administrative expenses: 406,850 379,534 7.2 1.09 0.98 0.11 Personnel expenses 227,423 226,440 0.4 0.61 0.58 0.03 Other general administrative expenses 179,427 153,094 17.2 0.48 0.40 0.09 - Depreciation & amortisation 38,122 36,103 5.6 0.10 0.09 0.01 = Net Operating Income (Pre-provision Profit) 471,883 401,543 17.5 1.25 1.04 0.21 -Financial asset impairment losses (net) 323,317 246,670 31.1 0.85 0.64 0.21 -Impairment of other assets (net) 62,138 198,896 (68.8) 0.17 0.51 (0.34) Gains/ (Losses) on assets held for sale (net) 3,473 194,586 (98.2) 0.01 0.50 (0.49) =Profit before tax 89,901 150,563 (40.3) 0.24 0.39 (0.15) - Income tax 26,884 45,898 (41.4) 0.07 0.12 (0.05)+Profit/ Loss from discontinued operations (net) - - - - - -=Consolidated profit for the year 63,017 104,665 (39.8) 0.17 0.27 (0.10)- Profit/ Loss attributed to minority interests (38) 443 - - -

    =Profit/ Loss attributed to the controlling company 63,055 104,222 (39.5) 0.17 0.27 (0.10)

    Net return on Risk Weighted Assets (RORWA) (%) 0.30 0.46 (0.16)Net return on Equity (ROE) (%) 2.00 3.89 (1.89Operating efficency ratio (%) 44.37 46.44 (2.07

    In Euro Million: Average Total Assets 150,091 155,712 (5,621) Average Risk Weighted Assets (RWA) 84,349 91,936 (7,587)Average Equity 12,588 10,719 1,

    (Amounts in euros thousand) (Annualized % of ATA)

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    Quarterly P&L(Amounts in euros thousand)

    2014I IV III II I

    Interest and similar income 1,061,134 1,116,158 1,200,098 1,263,096 1,283,645- Interest expense and similar charges 511,926 534,609 605,436 612,339 699,148=Net interest income 549,208 581,549 594,662 650,757 584,497+ Return on equity instruments 1,111 3,586 3,612 5,053 5,539+Share of results of entities accounted for usingthe equity method 5,830 11,727 6,474 8,563 5,500+Net fees and commissions 176,094 184,640 191,642 195,088 187,889Gains or losses on financial assets and liabilities (net) 202,978 127,977 157,194 134,153 41,777

    Exchange differences (net) 10,634 12,422 14,192 13,462 12,344+Other operating profits (29,000) (47,162) 6,929 (17,082) (20,366) =Gross operating income 916,855 874,739 974,705 989,994 817,180 -Administrative expenses: 406,850 421,396 385,031 386,598 379,534 Personnel expenses 227,423 240,524 230,398 231,748 226,440 Other general administrative expenses 179,427 180,872 154,633 154,850 153,094 - Depreciation & amortisation 38,122 37,099 38,270 39,150 36,103 = Net Operating Income (Pre-provision Profit) 471,883 416,244 551,404 564,246 401,543 -Financial asset impairment losses (net) 323,317 454,360 304,495 248,707 246,670 -Impairment of other assets (net) 62,138 524,497 180,152 278,376 198,896 Gains/ (Losses) on assets held for sale (net) 3,473 712,645 9,483 45,306 194,586 =Profit before tax 89,901 150,032 76,240 82,469 150,563 - Income tax 26,884 50,867 18,864 15,526 45,898

    +Profit/ Loss from discontinued operations (net) - - - - -=Consolidated profit for the year 63,017 99,165 57,376 66,943 104,665- Profit/ Loss attributed to minority interests (38) 1,095 507 805 443=Profit/ Loss attributed to the controlling company 63,055 98,070 56,869 66,138 104,222

    2013

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    Quarterly profitability(Amounts in % ATA, rates annualized)

    2014I IV III II I

    Interest and similar income 2.83 3.01 3.13 3.21 3.30- Interest expense and similar charges 1.37 1.43 1.59 1.55 1.80=Net interest income 1.46 1.58 1.54 1.66 1.50+ Return on equity instruments - 0.01 0.01 0.01 0.01+Share of results of entities accounted for usingthe equity method 0.02 0.03 0.02 0.02 0.01+Net fees and commissions 0.47 0.50 0.50 0.50 0.48Gains or losses on financial assets and liabilities (net) 0.54 0.34 0.41 0.34 0.11Exchange differences (net) 0.03 0.03 0.04 0.03 0.03+Other operating profits (0.08) (0.13) 0.02 (0.04) (0.05) =Gross operating income 2.44 2.35 2.55 2.53 2.11 -Administrative expenses: 1.09 1.13 1.01 0.99 0.98 Personnel expenses 0.61 0.65 0.60 0.59 0.58 Other general administrative expenses 0.48 0.48 0.40 0.40 0.40 - Depreciation & amortisation 0.10 0.10 0.10 0.10 0.09 = Net Operating Income (Pre-provision Profit) 1.25 1.12 1.44 1.44 1.04 -Financial asset impairment losses (net) 0.85 1.22 0.80 0.64 0.64 -Impairment of other assets (net) 0.17 1.41 0.47 0.71 0.51 Gains/ (Losses) on assets held for sale (net) 0.01 1.92 0.02 0.12 0.50

    =Profit before tax 0.24 0.40 0.20 0.21 0.39 - Income tax 0.07 0.13 0.05 0.04 0.12+Profit/ Loss from discontinued operations (net) - - - - -=Consolidated profit for the year 0.17 0.27 0.15 0.17 0.27- Profit/ Loss attributed to minority interests - 0.01 - - -=Profit/ Loss attributed to the controlling company 0.17 0.26 0.15 0.17 0.27

    Net return on Risk Weighted Assets (RORWA) (%) 0.30 0.37 0.19 0.37 0.46Net return on Equity (ROE) (%) 2.00 3.51 2.09 2.45 3.89Operating efficency ratio (%) 44.37 48.17 39.50 39.05 46.44

    In Euro Million: Average Total Assets 150,091 148,632 153,726 157,161 155,712 Average Risk Weighted Assets (RWA) 84,349 89,265 90,555 91,561 91,936Average Equity 12,588 11,179 10,883 10,799 10,719

    2013

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    Quarterly Report

    Yields and Costs(Amounts in %, rates annualized)

    31.03.14 31.03.13

    Average balance

    Distribution(%)

    Income orexpense

    Averagebalance

    Distribution(%)

    Financial system 6,110,075 4.07 13,062 0.86 5,674,187 3.64Loans and discounts (a) 99,187,678 66.09 920,862 3.71 104,313,269 66.99 1,093,05Securities portfolio 23,755,179 15.83 125,626 2.12 26,002,373 16.70 182Other assets 21,037,704 14.02 1,584 0.03 19,722,230 12.67

    Total earning assets (b) 150,090,636 100.00 1,061,134 2.83 155,712,059 100.00 1,283,645

    Financial system 22,368,516 14.90 84,992 1.52 29,728,228 19.09 101Customer funds (c) 91,726,811 61.11 283,711 1.24 87,585,716 56.25 435,

    Demand accounts 18,622,455 12.41 20,116 0.43 15,022,394 9.65 16Savings and time deposits 67,814,884 45.18 257,609 1.52 62,837,084 40.35 368,8Deposits at central counterparty entities 4,877,978 3.25 3,328 0.27 5,120,346 3.29 3,65Retail commercial paper 411,494 0.27 2,658 2.58 4,605,892 2.96 46

    Marketable debt securities & other 17,380,634 11.58 140,415 3.23 20,029,137 12.86 158,30Other interest-bearing liabilities 350,797 0.23 2,808 3.20 391,111 0.25Other funds 5,675,942 3.78 - - 7,258,648 4.66 Equity 12,587,936 8.39 - - 10,719,219 6.88

    Total funds (d) 150,090,636 100.00 511,926 1.37 155,712,059 100.00 699,1

    Customer spread (a-c) 2.48

    Spread (b-d)1.46

    Average rate(%)

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    Quarterly Yields and Costs(Amounts in %, rates annualized)

    Distribution Yield Distribution Yield Distribution Yield Distribution Yield

    Financial system 4.07 0.86 4.14 0.75 4.18 0.42 4.03 0.43Loans and discounts (a) 66.09 3.71 66.92 3.87 66.82 3.99 66.05 4.11 66.9Securities portfolio 15.83 2.12 14.58 2.61 15.79 2.75 17.16 2.80 16Other assets 14.02 0.03 14.37 0.04 13.21 0.04 12.77 0.04 12

    Total earning assets (b) 100.00 2.83 100.00 3.01 100.00 3.13 100.00 3.21 100.00

    Financial system 14.90 1.52 15.84 1.43 17.68 1.26 18.73 1.27 19Customer funds (c) 61.11 1.24 60.13 1.46 59.20 1.69 57.92 1.74 56

    Demand accounts 12.41 0.43 11.13 0.47 10.27 0.45 9.92 0.45 9Savings and time deposits 45.18 1.52 45.16 1.77 45.02 2.04 43.09 2.10 40.3Deposits at central counterparty entities 3.25 0.27 3.43 0.32 3.29 0.40 3.74 0.39 3.29Retail commercial paper 0.27 2.58 0.41 3.35 0.63 3.76 1.17 3.97 2

    Marketable debt securities & other 11.58 3.23 12.00 2.73 12.44 2.77 12.38 2.46 12.86Other interest-bearing liabilities 0.23 3.20 0.23 3.34 0.23 3.33 0.24 3.31 0.Other funds 3.78 - 4.28 - 3.36 - 3.86 -Equity 8.39 - 7.52 - 7.08 - 6.87 -

    Total funds (d) 100.00 1.37 100.00 1.43 100.00 1.59 100.00 1.55 100.0

    Customer spread (a-c) 2.48 2.41 2.30 2.36

    Spread (b-d) 1.46 1.58 1.54 1.66

    I IV III II2014 2013

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    Quarterly Report Mar-1

    Net fees and commision income(Amounts in euros thousand)

    31.03.14 31.03.13 Variation % 31.03.14 31.03.13

    Banking services 169,997 177,788 (4.4) 96.5 94.6

    Portfolio administration 24,011 22,212 8.1 13.6 11.8Securities portfolios 7,252 6,875 5.5 4.1 3.7

    Asset portfolio management 913 790 15.6 0.5 0.4Mutual funds 13,504 10,326 30.8 7.7 5.5Pension plans 2,342 4,221 (44.5) 1.3 2.2

    Other banking services 129,365 131,182 (1.4) 73.5 69.8Securities and foreign currency purchase and sal 4,471 2,559 74.7 2.5 1.4Demand account administration 25,937 26,088 (0.6) 14.7 13.9Provision of collateral and other guarantees 35,220 36,776 (4.2) 20.0 19.6

    Asset transaction services 9,985 9,807 1.8 5.7 5.2Collection and payment handling 18,201 19,857 (8.3) 10.4 10.5Other 35,551 36,095 (1.5) 20.2 19.2

    Means of payment 16,621 24,394 (31.9) 9.4 13.0

    Defaults 6,097 10,101 (39.6) 3.5 5.4

    Total 176,094 187,889 (6.3) 100.0 100.0

    Distributions %

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    Personnel and general expenses(Amounts in euros thousand)

    31.03.14 31.03.13 Variation % 31.03.14 31.03.1

    Personnel expenses: 227,423 226,440 0.4 55.9 59.7

    Wages and salaries 166,648 169,083 (1.4) 40.9 44.6Social security charges 44,652 44,761 (0.2) 11.0 11.8Other personnel expenses 8,837 6,503 35.9 2.2 1.7Pensions 7,286 6,093 19.6 1.8 1.6

    General expenses 179,427 153,094 17.2 44.1 40.3

    Rents and commons services 34,626 36,701 (5.7) 8.5 9.7 Communications 8,038 8,520 (5.7) 2.0 2.2

    Maintenance of premises equipment 16,959 10,951 54.9 4.2 2.9 IT and other technical expenses 48,107 36,740 30.9 11.8 9.7 Stationery and office supplies 1,605 2,070 (22.5) 0.4 0.5 Technical reports and legal expenses 12,768 8,998 41.9 3.1 2.4

    Advertising and publicity 8,661 8,846 (2.1) 2.1 2.3 Insurance 2,071 1,507 37.4 0.5 0.4 Security and fund transport services 4,881 6,448 (24.3) 1.2 1.7 Travel 2,338 1,832 27.6 0.6 0.5 VAT and others 31,259 25,448 22.8 7.7 6.7 Other general expenses 8,114 5,033 61.2 2.0 1.3

    Total 406,850 379,534 7.2 100.0 100.0

    Distributions %