MONTHLY NEWSLETTER February 2012

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1 Santander Shareholder Relations UK MONTHLY NEWSLETTER February 2012 Santander calls its Annual General Meeting Expected to be held on 30 March P.5 THE SANTANDER SHARE The Santander share price ended the month trading at 5.18 P.2 ECONOMIC OVERVIEW Eurogroup reaches agreement on second rescue package for Greece P.3 GROUP NEWS Santander extends its partnership with Scuderia Ferrari until 2017 P.4 PRODUCTS Santander Shareholders Charity Golf Tournament 2012 P.6

2 Market Summary In February, most stock markets reported gains, with the exception of the IBEX 35, the primary index of the Spanish market, which was affected by the lifting of the ban on the short-selling of financial stocks. The stock markets progress was marked by the second bailout plan for Greece which was given the green light by the Eurozone s finance ministers, as well as the revision of the European Commission s predictions for economic growth and the lowering of the credit ratings of various European banks by the major risk rating agencies. The Santander share price ended the month at 5.18, having risen 4.2%. Meanwhile, the FTSE 100, the British market s main index, rose 3.3%, and the STOXX Banks Index, which includes the main companies in the European banking sector, was up 6.3%. Annual trend-stock price comparison Santander FTSE 350 BANKS 50 Base 100 = February feb-11 mar-11 apr-11 may-11 jun-11 jul-11 aug-11 sep-11 oct-11 nov-11 dec-11 jan-12 feb-12 CHANGE (%) MARKET CAP. SANTANDER AND OTHER LEADING BANKS * MONTH YEAR ( MILL.) IND & COMM BANK OF CHINA ,749 CHINA CONSTRUCTION BANK ,488 WELLS FARGO & COMPANY ,532 HSBC HOLDINGS PLC ,980 JPMORGAN CHASE & CO ,991 AGRICULTURAL BANK OF CHINA ,206 BANK OF CHINA LTD ,706 CITIGROUP INC ,230 ITAÚ UNIBANCO ,292 ALLIED IRISH BANK ,656 BANK OF AMERICA CORP ,672 COMMONWEALTH BANK OF AUSTRALIA ,846 ROYAL BANK OF CANADA ,987 BANCO SANTANDER ,371 TORONTO-DOMINION BANK ,414 *Share price in main market converted to Sterling BANCO SANTANDER (UK) Share price on the London Stock Exchange MARKETS CHANGE (%) UK INDEX MONTH YEAR FTSE 100 5, FTSE Eurotop 100 2, FTSE All-Share 3, FTSE TechMARK 100 2, FTSE FT 30 2, FTSE , FTSE 350 Banks 3, CHANGE (%) INDEX MONTH YEAR EUROSTOXX 50 2, STOXX 50 2, STOXX BANKS IBEX 35 8, CAC-40 3, DAX 6, DOW JONES IND. AVG. 12, S&P 500 1, NIKKEI 225 9, HANG SENG 21, MERVAL 2, MEXBOL 37,

Eurogroup reaches agreement on second rescue package for Greece Despite several delays and a noticeable increase in political tension which put Greece back in the headlines, the Eurogroup of Eurozone

The country has implemented the initial austerity measures that were set and agreed to strengthen its institutional capacity and supervision of the plan.

3 Eurogroup reaches agreement on second rescue package for Greece Despite several delays and a noticeable increase in political tension which put Greece back in the headlines, the Eurogroup of Eurozone finance ministers backed a second bailout plan for Greece. The country has implemented the initial austerity measures that were set and agreed to strengthen its institutional capacity and supervision of the plan. In addition, the Private Sector Involvement (PSI) deal was successfully concluded. The PSI participation in the Greek bond swaps exceeded 95% with the activation of collective action clauses. The new Greek bonds are already in circulation and the necessary conditions are in place for the country to receive its new bailout, thus avoiding a chaotic default in March. This, together with the liquidity provided by the European Central Bank via its two auctions of three-year loans and the adjustment measures implemented at a national level, has relaxed tensions in the financial markets, especially in the Eurozone s peripheral debt markets. LOCAL New Quantitative Expansion In January, the services Purchasing Managers Index (PMI) rose from 54 to 56 and the manufacturing PMI from 49.7 to Together these suggest that the British economy may be about to leave the general decrease in activity behind. In addition, the most recent data shows new evidence of a slowing in the decline in the employment market. The quarterly increase in unemployment in December was estimated to be 48,000, which is less than the 100,000 recorded in the previous month, and the total number of people in employment increased by 60,000. The number of registered unemployed rose by only 6,900 in January and the unemployment rate stayed at 5%. With unemployment figures remaining high, the Bank of England hopes that there will be no salary pressures and that inflation will therefore continue to fall (the downward trend continued into January when inflation fell from 4.2% in December to 3.6%), contributing to an increase in real incomes. In addition, the Nationwide consumer confidence index rose from 38 points to 47, the highest it had been for five months (although still lower than a year ago), and retail sales rose for the second month running in January, in part due to the traditional New Year sales. Credit for families remains weak and mortgages approved in December totalled 52,900. Aware of the uncertainty regarding domestic and foreign demand, the situation in the financial sector and latent risks, the Bank of England decided to increase its bond purchase (quantitative easing) target by 50 billion, in addition to the 275 billion already acquired. 3

Santander extends its partnership with Scuderia Ferrari until 2017 Santander announced on 3 February that it would be extending its partnership with Scuderia Ferrari for a further three years, until

4 Santander extends its partnership with Scuderia Ferrari until 2017 Santander announced on 3 February that it would be extending its partnership with Scuderia Ferrari for a further three years, until the end of The initial five-year sponsorship deal was due to run until the end of 2014, and with this new Santander and KBC agree to merge Bank Zachodni WBK and Kredyt Bank Santander and Belgian group KBC Bank have reached an investment agreement to combine their Polish banking subsidiaries, Bank Zachodni WBK and Kredyt Bank. Once the merger has taken place, Santander will hold approximately 76.5% of the combined bank and KBC, around 16.4%. The remaining 7.1% will be owned by minority shareholders. Santander has agreed to help KBC reduce agreement, Santander strengthens both its relationship with the prestigious Formula One team and its own sponsorship strategy. The new deal means that Santander will increase its signage on the Ferrari cars. As well as the cars, the bank is already advertised on the equipment of the drivers and the team members. Santander will be present in every European GP and Brazil. This, in turn, will strengthen its leadership in its main markets and boost its brand recognition throughout the world. The chairman of Santander, Emilio Botín, said the bank was delighted to be its stake in the combined bank to below 10% immediately after the proposed merger. KBC s ultimate plan is to sell all of its remaining shares. Santander chairman Emilio Botín said the following of the merger: With this operation, Santander will significantly strengthen its presence in Poland, one of Europe s most dynamic economies, extending its partnership with the Italian team. Our sponsorship with Scuderia Ferrari is the best marketing operation in the 150 year-plus history of the bank, he said. We couldn t let the opportunity to extend the contract pass, given the excellent results it has given us in terms of brand recognition and sales in all of the markets in which we operate. In Spain, Santander has been recognised by IMG as the best-known brand for its support of sport for two years running (2010 and 2011). The bank has also launched special products and campaigns in its main markets, such as the Ferrari credit card, of which over 370,000 have already been taken out in Spain, Brazil, Mexico, Germany and Portugal. obtaining the critical mass we seek in core markets. This transaction also demonstrates the flexibility and other advantages of Santander s model of standalone subsidiaries. We will immediately begin to generate value for Santander s shareholders and those of the new merged entity and will create, at the same time, a more powerful bank for clients and employees in Poland. LOCAL Lady Margaret Hall, University of Oxford signs agreement with Santander The three-year agreement will provide funding for the College and will benefit both students and staff of the institution. Oxford, 15 February Lady Margaret Hall, University of Oxford and Santander, through its Santander Universities global division, have signed an agreement that will set up, among other activities, scholarships for students to study at the College. The agreement was signed by the Principal of the College, Dr Frances Lannon, and Luis Juste, Director, Santander Universities UK, at a ceremony held in the Old Library of the College. Through this new partnership, Santander will fund scholarships for postgraduate students to study at the College, financial support for a visiting fellow to the College from the University of Alcalá in Spain, and a research grant fund with a minimum of three awards. Dr Lannon said: The mission of LMH is to benefit society through excellence in teaching and research. We are very grateful to Santander for their visionary support of this mission. Mr Juste said: The University of Oxford is renowned worldwide for the quality of its education and research. That s why, at Santander, we are delighted to be able to work with one of its colleges through Santander Universities. Our long-term partnership aims to promote international collaboration and the exchange of knowledge, and to enhance the University s excellent work and thus contribute to the development and prosperity of our society. During the event a memorandum of understanding was signed between the University of Alcalá and Lady Margaret Hall. The event finished with a scholarship reception where beneficiaries of the funding provided by Santander received their diplomas from the Vice-Chancellor. Lady Margaret Hall, the first women s college in Oxford, was founded in The College is now a flourishing coeducational institution of 400 undergraduates, 180 graduate students, and over 40 tutors and lecturers. The Shareholder Relations team are due to host a roadshow event in the Bodleian Library at Oxford University on 7 March. 4

5 Santander calls its Annual General Meeting Santander has announced that Santander s Board of Directors has agreed to hold the 2012 Annual General Meeting (AGM) at the Palacio de Exposiciones y Congresos (Exhibition and Convention Centre) in the city of Santander, Spain. The meeting will most probably be held, on second call, at 9.30am on 30 March (The first call of the meeting will be at the same time and place on 29 March 2012, although past experience and the wide dispersion of the Company s share capital among a large number of shareholders, indicates that it is likely to be held on the second call.) vote on these. You can do so in one of two easy ways: Voting online is quick and easy. All you need are the voting details included on your voting instruction form. The voting deadline is 12 noon on Friday 23 March By Post. Return your voting instruction form using the pre-paid envelope supplied, ensuring that it is received by the voting deadline of 12 noon on Friday 23 March Shareholders who vote online or return their voting instruction form by post before the deadline will receive this exclusive pen*. Further information about the resolutions and other information relating to the meeting can be found at If you would like to ask any questions about the resolutions or the meeting, you can them to shareholders@santander.com or write to Santander Shareholder Relations, 2 Triton Square, Regent s Place, London NW1 3AN. Should you want to follow the AGM in the UK, you can do so from 8.30am BST (British Summer Time) as there will be a live webcast via with a simultaneous translation into English. As usual, a number or resolutions from the Board will be put before the AGM, and we would like to encourage all shareholders to *Only available to shareholders in the Santander Nominee Service residing in the UK. Stocks are limited % of Santander s capital chooses to receive shares over cash in respect of the latest dividend On Thursday 2 February, Santander paid the third dividend for the 2011 financial year to its shareholders % of the Bank s capital chose to receive shares rather than cash. This, in turn, has allowed Santander to increase its free capital by 167,810,197 shares, corresponding to 1.88% of the share capital. LOCAL Shareholder roadshow programme 2012 The roadshow is an informal evening where shareholders can speak directly to the team that is focused on looking after their shareholder interests, directly addressing their queries and providing detailed information on Banco Santander and its standing in the current economic climate. The 2012 Santander Shareholder roadshow programme began with an evening event in Leicester, on January 25th. The Santander Shareholder Relations team hosted local shareholders at the beautiful Grade I listed building, The City Rooms in Leicester where shareholders were given a short presentation on the Group s activities from the director of Shareholder Relations, Pilar Vega de Seoane. During the course of the evening all guests had the opportunity to address their shareholder queries and concerns to the director and members of the Shareholder Relations team directly. Shareholders found the evening useful and informative, and the team were appreciative of the positive feedback that shareholders had about the evening and Banco Santander in general. One aspect that shareholders highlighted in particular was the level of remuneration that they receive as shareholders from the Bank ( 0.60 annually) compared to the low or zero dividend paid out to shareholders by other UK banks. The Shareholder Relations team is based in London and holds shareholder receptions across the UK regularly between September and May. SHAREHOLDER CALENDAR March 30 ANNUAL GENERAL MEETING OF SHAREHOLDERS If you would like to attend a roadshow, please shareholders@santander.com or write to us at Shareholder Relations, 2 Triton Square, Regent s Place, London NW1 3AN giving your name, address, a contact number and details of the event you would like to attend. 5

PROMOTIONS Santander Shareholders Charity Golf Tournament 2012 Free Share Purchase Service The Shareholder Relations team would like to thank all of you that applied to enter the 2012 Charity Golf

On receipt of confirmation of your successful application we would be grateful if you could pay the 50 charity donation.

PGA Centenary Course (9 May) Northern Ireland Lough Erne, Faldo Course (16 May) For further information, please visit www.charitygolf.santander.

6 PROMOTIONS Santander Shareholders Charity Golf Tournament 2012 Free Share Purchase Service The Shareholder Relations team would like to thank all of you that applied to enter the 2012 Charity Golf Tournament in aid of Marie Curie Cancer Care. Please note that the deadline has now passed and we will be getting in touch will all those that were successful in their applications shortly. On receipt of confirmation of your successful application we would be grateful if you could pay the 50 charity donation. The regional events will be taking place in April and May at the following courses: England Woburn, Marquess Course (18 April) Wales Celtic Manor, Twenty Ten Course (25 April) Scotland Gleneagles, PGA Centenary Course (9 May) Northern Ireland Lough Erne, Faldo Course (16 May) For further information, please visit We would like to thank our shareholders for their continuing support and loyalty to Santander by offering them monthly opportunities to increase their shareholding without paying any dealing fees: 20 APRIL AND 18 MAY ARE THE NEXT OPPORTUNITIES FOR YOU TO BUY SANTANDER SHARES WITHOUT PAYING ANY FEES Simply visit complete and sign the form, and send it together with your cheque, made payable to Santander Share Purchase Service, to Equiniti, PO Box 4608, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6NZ on or before the relevant closing date. The current closing dates are 16 April and 14 May Forms received after a closing date will be carried forward and included in the following month s arrangement. Details of your purchase will be confirmed shortly after the shares have been bought. For full details please see the Terms and Conditions which are available at REGISTER FOR SHAREHOLDER BENEFITS AT 6

UNITED KINGDOM SANTANDER SHAREHOLDER RELATIONS UK 2 Triton Square, Regent s Place London NW1 3AN Shareholders Helpline: 0871 384 2000* From outside the UK: +44 (0)121 415 7188 Web: www.santander.

7 UNITED KINGDOM SANTANDER SHAREHOLDER RELATIONS UK 2 Triton Square, Regent s Place London NW1 3AN Shareholders Helpline: * From outside the UK: +44 (0) Web: shareholders@santander.com *Calls to this number are charged at 8p per minute from a BT landline (other network providers costs may vary). MEXICO RELACIÓN CON ACCIONISTAS SANTANDER MÉXICO Av. Paseo de la Reforma 330, Piso 2 Colonia Lomas de Chapultepec 11000, México DF Línea Atención Accionistas: Desde fuera de México: Web: accionistas@santander.com.mx SPAIN RELACIÓN CON ACCIONISTAS SANTANDER ESPAÑA Ciudad Grupo Santander Avda de Cantabria s/n Edificio Marisma, planta baja Boadilla del Monte (Madrid) Línea Atención Accionistas: Desde fuera de España: Web: accionistas@santander.com PORTUGAL RELAÇÃO COM ACCIONISTAS SANTANDER PORTUGAL Rua da Mesquita, nº 6 B8C Lisboa Linha Atendimento Accionistas: De fora de Portugal: Web: accionistas@santander.pt US SANTANDER SHAREHOLDER RELATIONS US Mail Code: MA1-SST , State Street Boston, MA Shareholders Helpline Boston: From outside the US: dial the code +1 Web: shareholders@santander.us 7

202, million 2.1. Our scale, our diversification and the predictability of our business give us strong foundations on which to innovate

202, million 2.1. Our scale, our diversification and the predictability of our business give us strong foundations on which to innovate In 2017 we obtained excellent results the right way: through profitable growth Ana Botín, Group executive chairman of Banco Santander Our success in 2017 shows that our way of doing business, and our focus