12 February 2018 | 11:35PM GMT

Spain Banks

The local picture 4Q17: Good fee income trends, strong credit quality evolution

Spanish banks reported an aggregate ROTE of +4.7% in Key views, estimate changes and stock calls Jose Abad
+44(20)7051-4236 | jose.abad@gs.com
4Q17 (incl. international operations), weaker than our We incorporate 4Q17 results and recent trends into our Goldman Sachs International
For the exclusive use of KATE.SCOTT@GS.COM

expectations for +5.1%. Within this: (1) core revenue trends
strengthened on stronger-than-expected fee income, the
quarter’s bright spot; (2) costs came in higher than
expected, with half of the banks missing our expectations;
(3) cost-of-risk continued to improve at 35bp (Spain-only) vs.
GSe for 40bp; and (4) capital progression was negative, with
the aggregate group-level CET1 ratio at 11.3%, -18bp vs.
GSe.
estimates, resulting into our GS-adjusted 2018-20E EPS Markus Pops
+44(20)7774-1771 |
estimates to increase by +2%/+3% on average, on the markus.pops@gs.com
Goldman Sachs International
back of (1) better core income (fee income in particular)
trends; and (2) stronger credit quality dynamics (lower
cost-of-risk) in Spain. In terms of profitability, we expect
ROTE to improve to +11.2% (+8.5% Spain-only) in 2018E,
from +8.8% (+5.5%) in 2017, above the European sector’s
average (+10.3%).

We also cut our COE estimates across the board (by up to

Key aggregates and points of differentiation
Within the aggregate, BKT and UNI’s results outperformed,
in our view, as: (1) core revenues beat our estimates by 6%
and 3%, respectively; and (2) guidance for IFRS9 impacts in
1Q18 is now expected to be ‘positive’ vs. earlier
expectations for a ‘negative’ impact at both banks. Indeed,
the key focus of this quarter was on regulatory impacts from
the implementation of IFRS9 in January 2018 (5/7 banks
either upgraded or reiterated their guidance) as well as from
Basel 4/EBA guidelines/TRIM (where banks do not see any
meaningful impacts).
-100bp) to reflect lower near-term risk related to Catalonia.
However, our COE estimates remain above pre-4Q17
levels, as we still view political issues around Catalonia as a
major risk for Spain’s recovery. All in, we increase our price
targets by ~6% on average, implying an average upside to
last close of ~6%.
We remain Buy-rated on SAN (+17% upside) and
Neutral-rated on all other names in our coverage, with the
highest upside at UNI (+13%) and the lowest at BKT
(-14%).

Goldman Sachs does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may
have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their
investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to www.gs.com/research/hedge.html.
Analysts employed by non-US affiliates are not registered/qualified as research analysts with FINRA in the U.S.
 Goldman Sachs Spain Banks

Spain: The local picture: 4Q17 earnings snapshot - Group level

Exhibit 1: Spain Banks: Group level - A large one-off impairment at BBVA offset strong fee income evolution at SAN
Aggregate P&L and balance sheet; €bn unless otherwise indicated; sample comprises SAN (incl. POP), BBVA, BKT, BKIA (incl. BMN), CABK, SABE and UNI. Notes: (1) revenues include equity method
income, which is included in ‘other’; (2) NIM and LLPs calculated as % of net loans; (3) net profit or loss attributable to ordinary shareholders
Quarterly Review Annual Review

Reported GSe Overview Forecasts Growth (yoy) New vs. Old

¼EQ
4Q16 1Q17 2Q17 3Q17 4Q17 4Q17E q/q y/y vs. GS 2017E 2018E 2019E 2017E 2018E 2019E 2017E 2018E 2019E

NII 15.4 15.7 16.2 16.1 16.2 16.1 1% 5% 0% 64.2 65.8 69.1 7% 2% 5% 0% 1% 1%
Fees (net) 5.0 5.3 5.5 5.4 5.5 5.4 2% 10% 2% 21.7 22.7 23.8 11% 4% 5% 0% 2% 2%
Core revenues 20.4 21.1 21.7 21.5 21.7 21.5 1% 6% 1% 86.0 88.4 92.8 8% 3% 5% 0% 2% 2%
Trading & other 1.5 2.5 2.0 2.2 0.9 1.0 -58% -41% -8% 7.6 6.7 6.6 -9% -11% -2% -1% 1% 1%
For the exclusive use of KATE.SCOTT@GS.COM

Total Income 22.0 23.5 23.7 23.7 22.6 22.5 -4% 3% 0% 93.5 95.1 99.5 7% 2% 5% 0% 2% 1%
Operating Costs (11.3) (11.3) (11.6) (11.5) (11.8) (11.6) 2% 5% 1% (46.3) (47.3) (47.6) 5% 2% 1% 0% 3% 3%
Pre-Provision Profit 10.7 12.2 12.1 12.2 10.8 10.9 -11% 1% -1% 47.3 47.8 51.8 8% 1% 8% 0% 0% 0%
Provisions (3.6) (4.7) (4.4) (4.8) (4.9) (4.2) 2% 34% 17% (18.8) (15.9) (16.5) 12% -15% 4% 4% -2% -2%
Operating Result 7.1 7.4 7.7 7.4 5.9 6.7 -19% -16% -12% 28.4 31.9 35.3 6% 12% 11% -3% 1% 1%
Other (2.6) (0.7) (1.1) (0.9) (0.6) (1.1) -38% -78% -48% (3.4) (2.5) (2.4) -28% -28% -3% -13% -2% -2%
Result Before Tax 4.4 6.8 6.6 6.4 5.4 5.6 -17% 21% -5% 25.0 29.4 32.9 13% 18% 12% -1% 1% 1%
Net Attributable Result(2) 2.5 4.2 3.9 3.9 1.8 2.0 -52% -27% -9% 13.8 18.2 20.4 7% 32% 12% -1% 1% 1%

(1)
NIM 3.56% 3.58% 3.55% 3.56% 3.59% 3.58% 3bp 4bp 1bp 3.56% 3.55% 3.61% 11bp -0bp 6bp -0bp 5bp 5bp
Cost / Income 51% 48% 49% 49% 52% 52% 4pp 1pp 1pp 49% 50% 48% -1pp 0pp -2pp 0pp 1pp 1pp
Cost of risk(1) 84 bp 108 bp 97 bp 106 bp 108 bp 92 bp 2bp 24bp 16bp 104 bp 86 bp 87 bp 8bp -18bp 0bp 4bp -2bp -2bp
ROTE 6.8% 11.0% 10.3% 9.8% 4.7% 5.1% -5pp -2pp -0pp 8.8% 11.2% 11.8% 0pp 2pp 1pp -0pp 0pp 0pp
ROTA 35 bp 57 bp 52 bp 51 bp 24 bp 27 bp -27bp -11bp -3bp 45 bp 59 bp 65 bp 1bp 14bp 6bp -1bp -0bp -0bp

Net loans 1.74t 1.76t 1.82t 1.81t 1.80t 1.80t -0.1% 3.9% 0.1% 1.80t 1.85t 1.91t 3.9% 2.5% 3.3% 0.1% 0.1% 0.1%
Deposits 1.61t 1.63t 1.69t 1.70t 1.71t 1.69t 0.8% 6.4% 1.2% 1.71t 1.76t 1.82t 6.4% 2.9% 3.4% 1.2% 1.0% 1.1%
Loans/deposits 108% 108% 108% 106% 105% 106% -1pp -3pp -1pp 105% 105% 105% -3pp -0pp -0pp -1pp -1pp -1pp
Total assets 2.95t 2.97t 3.05t 3.05t 3.08t 3.03t 0.9% 4.6% 1.6% 3.08t 3.12t 3.18t 4.6% 1.2% 1.9% 1.6% 1.4% 1.4%

CET1% 11.1% 11.1% 11.2% 11.4% 11.3% 11.5% -9bp 13bp -18bp 11.3% 11.6% 12.0% 13bp 34bp 39bp -18bp -7bp -5bp
CET1 0.15t 0.15t 0.15t 0.15t 0.15t 0.15t -1.8% 1.5% -1.7% 0.15t 0.16t 0.17t 1.5% 4.1% 6.7% -1.7% -1.7% -1.5%
RWAs 1.33t 1.36t 1.37t 1.35t 1.33t 1.34t -1.0% 0.3% -0.1% 1.33t 1.35t 1.39t 0.3% 1.0% 3.2% -0.1% -1.1% -1.1%
Tangible Equity / Assets 5.1% 5.2% 5.0% 5.3% 5.2% 5.3% -0.1bp 0.0bp -0.1bp 5.2% 5.3% 5.5% 0.0bp 0.1bp 0.2bp -0.1bp -0.1bp -0.1bp

Source: Company data, Goldman Sachs Global Investment Research

12 February 2018 
 Goldman Sachs Spain Banks

Spain: The local picture: 4Q17 earnings snapshot - Domestic operations (Spain-only)
Exhibit 2: Spain Banks: Domestic operations - Strong fee income evolution and credit quality in 4Q17; going forward, loan growth expected to ‘inflect’ throughout 2018 in a context of ‘flattish’
NIMs
Aggregate P&L and balance sheet; €bn unless otherwise indicated; sample comprises SAN SP, BBVA SP, BKT, BKIA (incl. BMN), CABK SP, SABE SP, POP (est) and UNI. Notes: (1) revenues include equity
method income, which is included in ‘other’; (2) NIM and LLPs calculated as % of net loans; (3) net profit or loss attributable to ordinary shareholders
Quarterly Review Annual Review

Reported GSe Overview Forecasts Growth (yoy) New vs. Old

¼EQ
4Q16 1Q17 2Q17 3Q17 4Q17 4Q17E q/q y/y vs. GS 2017E 2018E 2019E 2017E 2018E 2019E 2017E 2018E 2019E

NII 4.96 4.88 4.84 4.78 4.77 4.78 0% -4% 0% 19.26 19.51 19.96 -3% 1% 2% 0% 1% 2%
Fees (net) 2.11 2.16 2.32 2.21 2.32 2.23 5% 10% 4% 9.01 9.51 9.68 8% 6% 2% 1% 4% 4%
Core revenues 7.07 7.04 7.16 6.99 7.08 7.00 1% 0% 1% 28.27 29.02 29.63 1% 3% 2% 0% 2% 2%
For the exclusive use of KATE.SCOTT@GS.COM

Trading & other 0.41 1.51 1.01 1.29 0.05 0.16 -- -87% -68% 3.86 3.46 3.38 -20% -11% -2% -3% 0% 0%
Total Income 7.48 8.55 8.17 8.28 7.14 7.17 -14% -5% 0% 32.13 32.48 33.01 -2% 1% 2% 0% 2% 2%
Operating Costs (4.87) (4.43) (4.42) (4.43) (4.52) (4.43) 2% -7% 2% (17.81) (18.13) (17.76) -4% 2% -2% 1% 4% 3%
Pre-Provision Profit 2.61 4.12 3.74 3.84 2.61 2.74 -32% 0% -5% 14.32 14.35 15.24 0% 0% 6% -1% 0% 0%
Provisions (3.54) (1.66) (1.11) (1.77) (0.80) (0.90) -55% -77% -11% (5.35) (2.98) (2.53) -34% -44% -15% -2% -3% -5%
Operating Result (0.93) 2.46 2.63 2.07 1.81 1.84 -13% -- -2% 8.98 11.37 12.71 45% 27% 12% 0% 1% 1%
Other (3.96) (0.56) (0.78) 0.11 (1.01) (0.19) -- -74% -- (2.25) (0.77) (0.68) -60% -66% -11% 57% -13% -13%
Result Before Tax (4.89) 1.90 1.85 2.18 0.80 1.65 -63% -- -51% 6.73 10.60 12.02 -- 58% 13% -11% 2% 2%
Net Attributable Result(2) (3.64) 1.46 1.37 1.55 0.59 1.25 -62% -- -53% 4.98 7.48 8.49 -- 50% 14% -12% 2% 2%

(1)
NIM 2.12% 2.12% 2.11% 2.12% 2.06% 2.12% -6bp -6bp -6bp 2.09% 2.10% 2.11% -3bp 1bp 1bp -6bp -3bp -2bp
Cost / Income 65% 52% 54% 54% 63% 62% 10pp -2pp 2pp 55% 56% 54% -1pp 0pp -2pp 0pp 1pp 1pp
Cost of risk(1) 151 bp 72 bp 49 bp 79 bp 35 bp 40 bp -44bp -117bp -5bp 58 bp 32 bp 27 bp -29bp -26bp -5bp -3bp -2bp -2bp
ROE -15.5% 6.5% 6.7% 7.0% 2.6% 5.7% -4pp 18pp -3pp 5.5% 8.5% 9.5% 5pp 3pp 1pp -1pp 0pp 0pp
ROA -89 bp 36 bp 34 bp 38 bp 14 bp 31 bp -24bp 103bp -17bp 30 bp 45 bp 50 bp 28bp 15bp 6bp -5bp -1bp -1bp

Net loans 934 bn 919 bn 915 bn 899 bn 923 bn 899 bn 2.7% -1.2% 2.7% 923 bn 931 bn 948 bn -1.2% 0.8% 1.8% 2.7% 2.7% 2.7%
Deposits 914 bn 895 bn 904 bn 909 bn 939 bn 912 bn 3.4% 2.8% 3.0% 939 bn 957 bn 978 bn 2.8% 1.8% 2.3% 3.0% 3.0% 3.2%
Loans/deposits 102% 103% 101% 99% 98% 99% -1pp -4pp -0pp 98% 97% 97% -4pp -1pp -0pp -0pp -0pp -1pp
Total assets 1.64 tn 1.61 tn 1.62 tn 1.62 tn 1.67 tn 1.61 tn 2.9% 1.9% 3.7% 1.68 tn 1.68 tn 1.68 tn 2.3% -0.2% 0.5% 4.2% 4.1% 4.1%
Equity 94 bn 90 bn 81 bn 89 bn 91 bn 89 bn 1.7% -3.6% 2.4% 91 bn 88 bn 89 bn -3.5% -3.4% 1.4% 2.5% 0.8% 0.6%

Source: Company data, Goldman Sachs Global Investment Research

12 February 2018 
 Goldman Sachs Spain Banks

4Q17 results: Strong core revenues offset by lower trading, higher costs and select one-off
impairments
Exhibit 3: In 4Q17, Spanish banks had total domestic profit of €0.59bn
P&L and balance sheet for Spain only for SAN, BBVA, CABK, SABE; €bn unless otherwise indicated. Note: revenues include equity method income. Figures have been estimated in multiple cases due to
disclosure availability. NIM and LLPs calculated as % of net loans. Net profit or loss attributable to ordinary shareholders. SAN is shown ex POP. Figures for Popular are estimates; may be subject to
definitional differences related to accounting classifications; deposits unadjusted for repos. BKIA is shown ex BMN.
4Q17 SAN BBVA CABK BKIA SABE POP BKT UNI Total 4Q17 vs GSe SAN BBVA CABK BKIA SABE POP BKT UNI Total
Domestic metrics Domestic metrics
NII 679 970 1,088 476 667 438 272 151 4,766 NII -7% 2% -1% 0% -1% 0% 5% 4% 0%
Fees (net) 562 388 550 214 295 129 110 56 2,318 Fees (net) 10% -1% -1% 0% 6% 6% 8% 2% 4%
Core revenues 1,241 1,358 1,638 690 962 567 383 207 7,085 Core revenues 0% 1% -1% 0% 1% 1% 6% 3% 1%
Trading & other 134 91 (29) (62) (98) (31) 75 (26) 53 Trading & other -- -- -- 38% 46% -- 1% -- -68%
For the exclusive use of KATE.SCOTT@GS.COM

Total Income 1,375 1,449 1,609 628 865 536 458 181 7,137 Total Income 7% 6% -8% -3% -3% -11% 5% -4% 0%
Operating Costs (899) (862) (1,011) (399) (537) (390) (241) (155) (4,525) Operating Costs 6% -1% 0% 3% 4% -3% 3% -1% 2%
PPP 476 587 598 230 327 146 216 26 2,613 PPP 8% 17% -18% -12% -12% -28% 7% -21% -5%
Provisions (136) (151) (148) (50) (205) (68) (49) 9 (800) Provisions 18% -2% -21% -31% -19% 43% 8% -- -11%
Operating profit 340 436 450 180 122 78 167 36 1,813 Operating profit 5% 26% -17% -4% 3% -50% 6% -- -2%
Other (63) (350) (227) (65) 48 (8) (8) (25) (1,011) Other -35% -- -- -- -2% -46% 59% -- --
PBT 277 86 223 115 170 71 160 10 801 PBT 21% -71% -55% -33% 2% -50% 5% 64% -51%
Net income(2) 182 100 200 77 132 85 119 7 590 Net income(2) 13% -55% -48% -38% -4% -19% 9% -13% -53%

NIM(1) 1.76% 2.08% 2.26% 1.86% 2.47% 2.32% 2.04% 2.04% 2.06% NIM(1) -13bp -2bp -1bp 0bp -3bp 1bp 7bp 10bp -6bp
Cost / Income 65% 59% 63% 63% 62% 73% 53% 85% 63% Cost / Income -1pp -4pp 5pp 4pp 4pp 6pp -1pp 3pp 2pp
Cost of risk(1) 35 bp 32 bp 31 bp 19 bp 76 bp 36 bp 37 bp -12 bp 35 bp Cost of risk(1) 5bp -2bp -8bp -9bp -17bp 11bp 2bp -42bp -5bp
ROE 4.6% 3.3% 3.7% 2.3% 4.7% 4.3% 10.9% 0.7% 2.6% ROE 0pp -4pp -3pp -2pp -0pp -2pp 1pp -0pp -3pp
ROA 20 bp 12 bp 23 bp 17 bp 33 bp 27 bp 67 bp 5 bp 14 bp ROA 2bp -16bp -22bp -11bp -1bp -5bp 4bp -1bp -17bp

Net loans 155 bn 187 bn 193 bn 103 bn 108 bn 76 bn 53 bn 30 bn 923 bn Net loans -0.3% 2.7% -0.2% -0.2% -0.1% -0.1% 1.1% -1.2% 2.7%
Loans share 16.7% 20.2% 20.8% 13.3% 11.7% 8.2% 5.8% 3.2% 100.0% Loans share -0.5pp -0.0pp -0.6pp 1.9pp -0.3pp -0.2pp -0.1pp -0.1pp -
Deposits 194 bn 178 bn 183 bn 102 bn 99 bn 65 bn 45 bn 46 bn 939 bn Deposits 3.7% -3.0% -0.1% 0.8% 1.1% -7.3% 0.8% 0.8% 3.0%
Deposits share 20.6% 18.9% 19.5% 13.9% 10.6% 6.9% 4.7% 4.9% 100.0% Deposits share 0.1pp -1.2pp -0.6pp 2.8pp -0.2pp -0.8pp -0.1pp -0.1pp -
Loans/deposits 80% 105% 105% 101% 109% 116% 120% 64% 98% Loans/deposits -3pp 6pp -0pp -1pp -1pp 8pp 0pp -1pp -0pp
Total assets 362 bn 329 bn 354 bn 179 bn 158 bn 127 bn 71 bn 71 bn 1,671 bn Total assets 2.6% 1.6% 3.6% 0.0% -0.1% -2.2% 2.2% -0.1% 3.7%

Source: Company data, Goldman Sachs Global Investment Research.

12 February 2018 
 Goldman Sachs Spain Banks

4Q17 results continued: Strong fee income evolution (+10% yoy), helping compensate slow recovery
at NII level
Exhibit 4: Sequentially, NII was flat and fees were up 5%
P&L and balance sheet for Spain only for SAN, BBVA, CABK, SABE; €bn unless otherwise indicated. Note: Revenues include equity method income. Figures have been estimated in multiple cases due to
disclosure availability. NIM and LLPs calculated as % of net loans. Net profit or loss attributable to ordinary shareholders. SAN is shown ex POP. Figures for Popular are estimated; may be subject to
definitional differences to accounting classifications; deposits unadjusted for repos. BKIA is shown ex BMN.
4Q17 vs 3Q17 SAN BBVA CABK BKIA SABE POP BKT UNI Total 4Q17 vs 4Q16 SAN BBVA CABK BKIA SABE POP BKT UNI Total
Domestic metrics Domestic metrics
NII -5% 3% -1% 1% -3% -4% 5% 7% 0% NII -8% -2% 1% -8% -4% -15% 2% -6% -4%
Fees (net) 10% -1% 2% 2% 7% 0% 7% 2% 5% Fees (net) 24% 10% 1% 1% 13% -4% 5% 8% 10%
Core revenues 1% 2% 0% 1% 0% -3% 5% 5% 1% Core revenues 4% 1% 1% -5% 0% -13% 3% -2% 0%
Trading & other -35% -51% -- -- -- -- -31% -- -- Trading & other -11% -40% -- -- -- -82% -2% -- -87%
For the exclusive use of KATE.SCOTT@GS.COM

Total Income -4% -5% -18% -16% -31% -16% -3% -29% -14% Total Income 3% -3% -15% -11% -6% 12% 2% -12% -5%
Operating Costs 4% 0% 0% 3% 2% 1% 4% -2% 2% Operating Costs 6% -6% 1% 6% -2% -50% -3% -3% -7%
PPP -16% -10% -37% -37% -55% -41% -9% -73% -32% PPP -3% 2% -33% -31% -13% -- 8% -43% 0%
Provisions 14% -7% -26% -34% -81% 77% 5% -- -55% Provisions -1% -- -- -24% 32% -- 10% -- -77%
Operating profit -25% -11% -39% -38% -- -62% -13% -45% -13% Operating profit -4% -16% -65% -32% -44% -- 8% -- --
Other -38% -- -- -- -87% -- 26% -- -- Other -63% -60% -78% -- -- -- -71% 48% -74%
PBT -21% -79% -68% -56% -- -67% -14% -82% -63% PBT 52% -- 0% -- 79% -- 24% -- --
Net income(2) -22% -67% -63% -66% -32% -- -12% -87% -62% Net income(2) 43% -- -- 6% -- -- 33% -- --

NIM(1) -10bp 1bp -2bp 3bp -7bp -9bp 5bp 15bp -6bp NIM(1) -15bp -3bp 11bp -12bp -5bp 13bp -3bp -5bp -6bp
Cost / Income 5pp 3pp 11pp 12pp 20pp 12pp 3pp 24pp 10pp Cost / Income 2pp -2pp 10pp 10pp 3pp -89pp -3pp 8pp -2pp
Cost of risk(1) 4bp -3bp -11bp -10bp -329bp 16bp 1bp -58bp -44bp Cost of risk(1) -0bp 21bp 107bp -6bp 20bp nm 2bp -114bp -117bp
ROE -1pp -7pp -6pp -5pp -2pp -- -2pp -5pp -4pp ROE 1pp 13pp 2pp 0pp 3pp 141pp 2pp 8pp 18pp
ROA -6bp -25bp -41bp -33bp -14bp 67bp -10bp -31bp -24bp ROA 4bp 48bp 14bp 2bp 18bp nm 13bp 42bp 103bp

Net loans -0.1% 2.5% -0.1% -0.8% 0.0% -0.3% 2.0% -1.0% 2.7% Net loans -0.1% -0.3% -3.9% -2.0% -2.5% -20.0% 3.8% -3.4% -1.2%
Loans share -0.5pp -0.0pp -0.6pp 1.8pp -0.3pp -0.2pp -0.0pp -0.1pp - Loans share 0.2pp 0.2pp -0.6pp 2.1pp -0.2pp -1.9pp 0.3pp -0.1pp -
Deposits 3.9% -3.0% 0.7% 1.2% 1.6% -7.0% 1.6% 1.1% 3.4% Deposits 9.5% 0.3% -2.3% -3.2% 0.8% -17.0% 4.6% -5.1% 2.8%
Deposits share 0.1pp -1.2pp -0.5pp 2.8pp -0.2pp -0.8pp -0.1pp -0.1pp - Deposits share 1.3pp -0.5pp -1.0pp 2.4pp -0.2pp -1.6pp 0.1pp -0.4pp -
Loans/deposits -3pp 6pp -1pp -2pp -2pp 8pp 1pp -1pp -1pp Loans/deposits -8pp -1pp -2pp 1pp -4pp -4pp -1pp 1pp -4pp
Total assets 2.5% 1.4% 2.2% -0.1% -4.3% -2.3% 2.1% -0.1% 2.9% Total assets 11.8% -5.0% 1.6% -5.8% -0.8% -14.2% 6.2% -1.6% 1.9%

Source: Company data, Goldman Sachs Global Investment Research

12 February 2018 
 Goldman Sachs Spain Banks

Spain: The domestic local picture: 4Q17 earnings snapshot

Exhibit 5: NII was sequentially flat at the sector level Exhibit 6: Net loans continue to trend down on avg. Exhibit 7: Strong deposit inflows at SAN, strong outflows at
NII growth, qoq and yoy %, 4Q17. BKIA is shown ex BMN. Net loan growth, qoq and yoy %, 4Q17. BKIA is shown ex BMN. POP
Deposit growth, qoq and yoy %, 4Q17. BKIA is shown ex BMN.

3.8%

9.5%
7%

2.7%
5%

2.5%

2.0%

4.6%
3%

3.9%
2%

3.4%
2.8%
1%

1%

1.6%
1.6%
1.2%

1.1%
0.8%
0.7%
0.3%
0%
-1%

0.0%
-0.1%
-0.1%
-0.1%

-0.3%
-2%

-0.8%
-3%

-1.0%

-1.2%

-2.3%
-4%
-4%

-3.0%
-4%

-3.2%
-2.0%
-5%

-6%

-2.5%

-5.1%
-7.0%
-3.4%
-8%
-8%

-3.9%
For the exclusive use of KATE.SCOTT@GS.COM

-15%

-17%
SAN BBVA CABK BKIA SABE POP BKT UNI Total SAN BBVA CABK BKIA SABE POP BKT UNI Total SAN BBVA CABK BKIA SABE POP BKT UNI Total
qoq yoy qoq yoy qoq yoy

Source: Company data, Goldman Sachs Global Investment Research Source: Company data, Goldman Sachs Global Investment Research Source: Company data, Goldman Sachs Global Investment Research

Exhibit 8: The avg. C/I ratio stood at 63% in 4Q17 Exhibit 9: Sector COR fell to 35bp, UNI reported credit Exhibit 10: ROA stood at ~14bp in 4Q17 - highest at BKT,
Cost/income ratio, %. BKIA is shown ex BMN. For POP, 4Q17 is write-backs lowest at UNI
compared vs. 3Q16. Credit costs as % net loans, annualised. BKIA is shown ex ROA, annualised. BKIA is shown ex BMN.
BMN.

151 bp

67 bp
53 bp
85%

33 bp

27 bp
102 bp

23 bp
20 bp
78%

17 bp
16 bp

15 bp

15 bp

14 bp
12 bp
73%

76 bp

9 bp

5 bp
56 bp
65%

65%
63%

63%

63%
63%

37 bp
36 bp
35 bp
35 bp

35 bp
62%

35 bp
62%

32 bp

31 bp

25 bp
59%

59%

19 bp
12 bp
55%

55%
53%
53%

53%

-36 bp

-37 bp
-12 bp

-89 bp
-76 bp

SAN BBVA CABK BKIA SABE POP BKT UNI Total SAN BBVA CABK BKIA SABE POP BKT UNI Total SAN BBVA CABK BKIA SABE POP BKT UNI Total

4Q16 4Q17 4Q16 4Q17 4Q16 4Q17

Source: Company data, Goldman Sachs Global Investment Research Source: Company data, Goldman Sachs Global Investment Research Source: Company data, Goldman Sachs Global Investment Research

12 February 2018 
 Goldman Sachs Spain Banks

Changes to our estimates and 12-month price targets

We incorporate 4Q17 results and recent trends into our forecasts and ROTE/COE-derived price targets:

n SAN: We change our GS-adjusted 2018-20 EPS estimates by -0.3%/ +1.6%. We also bring our COE down to 9.5% (from
9.9%) on lower domestic ‘growth’ risk related to Catalonia. All in, we increase our 12m PT by +5.5%, implying upside
potential of 17% (vs. +11% before).
n BBVA: We change our GS-adjusted 2018-20 EPS estimates by +1.4%/ +3.3%. We also bring our COE down to 10.5%
(from 10.7%) on lower risk related to Catalonia. All in, we increase our 12m PT by +4.3%, implying upside potential of
8% (vs. +4% before).
n
For the exclusive use of KATE.SCOTT@GS.COM

CABK: We change our GS-adjusted 2018-20 EPS estimates by -5.6%/-7.6%. In particular, we (1) cut our revenues from
Angola to account for a combination of a deteriorating growth environment in the country and the ongoing devaluation of
the ‘kwanza’ vs. EUR; and (2) incorporate the revised guidance for higher cost growth (+3%) in 2018E at CABK
stand-alone. We also bring our COE down to 10% (from 11%) on lower risk related to Catalonia. All in, we increase our
12m PT 2.1%, implying upside potential of 9% (vs. +6% before).
n BKIA: We incorporate BMN into our numbers since December 2017. The change in perimeter explains the large change to
our GS-adjusted EPS estimates (+8.5% and +10% in 2019-20E). 2018 EPS falls due the incorporation of BMN. In
addition, we also bring our COE down to 8.5% (from 8.7%) on lower risk related to Catalonia. All in, we increase our 12m
PT by 1.8%, implying upside potential of 5% (vs. +3% before).
n SABE: We change our GS-adjusted 2018-20 EPS estimates by +1.8%/ +4.9%. We also bring our COE down to 11% (from
11.9%) on lower risk related to Catalonia. All in, we increase our 12m PT 9.1%, implying upside potential of 7% (vs. -2%
before).
n BKT: We change our GS-adjusted 2018-20 EPS estimates by +3.1%/ +7.3%. In particular, we upgrade our core revenue
forecasts given strong trends observed in 4Q17. We also bring our COE down to 8.5% (from 8.9%) on lower risk related
to Catalonia. All in, we increase our 12m PT 12.5%, implying downside potential of -14% (vs. -23% before).
n UNI: We change our GS-adjusted 2018-20 EPS estimates by +7.4%/ +11.2%. In particular, we upgrade our estimates on
the back of (1) strong NII dynamics (+3% yoy in line with guidance vs. our previous estimates of -2% yoy) given the
‘base effect’ of lower funding costs since 4Q17; (2) a lower cost-of-credit, which we now view reaching ~15bp in 2019E
(vs. ~17bp earlier). Finally, we keep our COE at 8.5% as it already reflects the lower risk profile. All in, we increase our
12m PT 10.6%, implying upside potential of 13% (vs. +2% before).

12 February 2018 
 Goldman Sachs Spain Banks

Changes to our estimates and 12-month price targets (continued)

Exhibit 11: Summary of changes to our estimates and 12m ROE/COTE-derived price targets
Euro mn, unless otherwise indicated. EPS and price targets in euros. Last close as of February 9, 2018
Previous net income estimates - before GS adjustments Previous EPS estimates - after GS adjustments
Ticker Stock 2017E 2018E 2019E 2020E Ticker Stock 2017E 2018E 2019E 2020E
BKIA.MC Bankia 864 793 902 952 BKIA.MC Bankia 0.29 0.26 0.30 0.31
BKT.MC Bankinter 485 529 589 601 BKT.MC Bankinter 0.53 0.56 0.63 0.64
BBVA.MC BBVA 3,264 4,911 5,351 5,646 BBVA.MC BBVA 0.59 0.69 0.76 0.80
CABK.MC CaixaBank 1,885 2,386 2,656 2,783 CABK.MC CaixaBank 0.36 0.38 0.43 0.45
SABE.MC Sabadell 808 928 1,097 1,276 SABE.MC Sabadell 0.14 0.16 0.19 0.22
SAN.MC Santander 6,493 8,269 9,435 11,516 SAN.MC Santander 0.46 0.51 0.58 0.69
UNI.MC Unicaja 144 131 210 210 UNI.MC Unicaja 0.10 0.10 0.12 0.12
For the exclusive use of KATE.SCOTT@GS.COM

New net income estimates - before GS adjustments New EPS estimates - after GS adjustments
Ticker Stock 2017E 2018E 2019E 2020E Ticker Stock 2017E 2018E 2019E 2020E
BKIA.MC Bankia 505 835 1,049 1,122 BKIA.MC Bankia 0.28 0.25 0.32 0.35
BKT.MC Bankinter 495 566 606 626 BKT.MC Bankinter 0.54 0.60 0.65 0.67
BBVA.MC BBVA 3,519 5,064 5,483 5,721 BBVA.MC BBVA 0.63 0.71 0.78 0.81
CABK.MC CaixaBank 1,684 2,225 2,486 2,579 CABK.MC CaixaBank 0.34 0.36 0.40 0.42
SABE.MC Sabadell 801 939 1,130 1,330 SABE.MC Sabadell 0.14 0.16 0.19 0.23
SAN.MC Santander 6,619 8,387 9,389 11,579 SAN.MC Santander 0.47 0.52 0.58 0.69
UNI.MC Unicaja 143 143 230 223 UNI.MC Unicaja 0.10 0.11 0.13 0.13

% Net income change - before GS adjustments % EPS change - after GS adjustments

Ticker Stock 2017E 2018E 2019E 2020E Ticker Stock 2017E 2018E 2019E 2020E
BKIA.MC Bankia -41.6% 5.2% 16.3% 17.8% BKIA.MC Bankia -6.4% -2.5% 8.5% 10.0%
BKT.MC Bankinter 2.1% 6.9% 2.9% 4.2% BKT.MC Bankinter 2.2% 7.3% 3.1% 4.4%
BBVA.MC BBVA 7.8% 3.1% 2.5% 1.3% BBVA.MC BBVA 6.5% 3.3% 2.6% 1.4%
CABK.MC CaixaBank -10.7% -6.7% -6.4% -7.3% CABK.MC CaixaBank -7.4% -5.6% -6.6% -7.6%
SABE.MC Sabadell -0.8% 1.2% 3.0% 4.2% SABE.MC Sabadell -0.8% 1.8% 3.7% 4.9%
SAN.MC Santander 1.9% 1.4% -0.5% 0.6% SAN.MC Santander 1.5% 1.6% -0.3% 0.7%
UNI.MC Unicaja -0.7% 9.2% 9.8% 6.3% UNI.MC Unicaja -0.7% 8.0% 11.2% 7.4%

12-month price target Upside/ downside

Ticker Stock Old New % Chg. Ticker Stock Last close Old New
BKIA.MC Bankia 3.95 4.02 1.8% BKIA.MC Bankia 3.85 3% 5%
BKT.MC Bankinter 6.80 7.65 12.5% BKT.MC Bankinter 8.87 -23% -14%
BBVA.MC BBVA 7.26 7.57 4.3% BBVA.MC BBVA 7.01 4% 8%
CABK.MC CaixaBank 4.27 4.36 2.1% CABK.MC CaixaBank 4.01 6% 9%
SABE.MC Sabadell 1.75 1.91 9.1% SABE.MC Sabadell 1.78 -2% 7%
SAN.MC Santander 6.07 6.40 5.5% SAN.MC Santander 5.48 11% 17%
UNI.MC Unicaja 1.44 1.60 10.6% UNI.MC Unicaja 1.42 2% 13%

Source: Datastream, Goldman Sachs Global Investment Research

12 February 2018 
 Goldman Sachs Spain Banks

Key risks

Key risks to our price target, estimates and rating include:

n SAN: (1) worse-than-expected macroeconomic and/or operating conditions across key geographies (Brazil, UK, Spain,
Mexico, USA); (2) value-destructive M&A; (3) political risks in Spain and abroad; (4) detrimental FX movements; and (5)
slower-than-expected credit cost undershooting and real estate recovery in Spain.
n BBVA: (1) better/worse-than-expected macroeconomic and/or operating conditions across key geographies (Mexico,
Spain, Turkey, USA); (2) value-destructive/accretive M&A; (3) political risks in Spain and abroad; (4) FX movements; and (5)
slower/faster-than-expected credit-cost undershooting and real estate recovery in Spain.
n
For the exclusive use of KATE.SCOTT@GS.COM

CABK: (1) better/worse-than-expected NIM, loan growth, credit quality and/or cost control, as well as macroeconomic
conditions across key geographies; (2) value-destructive/accretive M&A; (3) political risks in Spain and abroad; and (4) FX
movements.
n BKIA: (1) better/worse-than-expected NIM, loan growth, credit quality and/or cost control, as well as macroeconomic
conditions across key geographies; (2) value-destructive/accretive M&A; (4) political risks in Spain and abroad.
n SABE: (1) better/worse-than-expected macroeconomic and/or operating conditions across key geographies (Spain, UK);
(2) value-destructive/accretive M&A; (3) political risks in Spain and abroad; (4) FX movements in GBP:EUR; and (5)
slower/faster-than-expected credit-cost undershooting and real estate recovery in Spain.
n BKT: (1) better/worse-than-expected NIM, loan growth, credit quality and/or cost control, as well as macroeconomic
conditions across key geographies; (2) value-destructive/accretive M&A; (3) political risks in Spain.
n UNI: (1) better or worse than expected macroeconomic and/or competitive operating conditions in Spain; (2)
value-destructive/creative M&A; (3) slower than expected credit cost undershooting and real estate recovery in Spain.

12 February 2018 
 Goldman Sachs Spain Banks

Banco Santander (Buy)

Exhibit 12: Banco Santander: 4Q17 earnings snapshot
€mn unless otherwise indicated. (1) Total income includes income by equity method, which is included in ‘other’. (2) NIM and LLPs calculated as % of net loans.
Quarterly Review Annual Review

Reported GSe Overview Forecasts Growth (yoy) New vs. Old

¼PQ
4Q16 1Q17 2Q17 3Q17 4Q17 4Q17E q/q y/y vs. GS 2017E 2018E 2019E 2017E 2018E 2019E 2017E 2018E 2019E

NII 8,096 8,402 8,606 8,681 8,607 8,678 -1% 6% -1% 34,296 35,027 36,651 10% 2% 5% 0% 0% 0%
Fees (net) 2,637 2,844 2,916 2,888 2,949 2,886 2% 12% 2% 11,597 12,122 12,853 14% 5% 6% 1% 2% 1%
Core revenues 10,734 11,246 11,522 11,569 11,556 11,564 0% 8% 0% 45,892 47,149 49,505 11% 3% 5% 0% 1% 0%
Trading & other 555 784 527 683 506 459 -26% -9% 10% 2,499 2,741 2,698 -3% 10% -2% 2% 11% 10%
Total Income 11,288 12,029 12,049 12,252 12,062 12,023 -2% 7% 0% 48,392 49,890 52,202 10% 3% 5% 0% 1% 1%
For the exclusive use of KATE.SCOTT@GS.COM

Operating Costs (5,453) (5,543) (5,648) (5,766) (5,961) (5,830) 3% 9% 2% (22,918) (23,595) (23,688) 9% 3% 0% 1% 3% 3%
Pre-Provision Profit 5,835 6,486 6,401 6,486 6,101 6,193 -6% 5% -1% 25,473 26,295 28,514 12% 3% 8% 0% -1% -1%
Provisions (2,565) (2,468) (2,343) (2,304) (2,411) (2,509) 5% -6% -4% (9,525) (9,864) (10,421) -2% 4% 6% -1% -1% 0%
Operating Result 3,270 4,018 4,058 4,182 3,690 3,684 -12% 13% 0% 15,948 16,431 18,093 23% 3% 10% 0% 0% -2%
Other (601) (707) (785) (1,106) (697) (880) -37% 16% -21% (2,398) (1,802) (1,827) 40% -25% 1% -6% -4% -3%
Result Before Tax 2,670 3,311 3,273 3,076 2,993 2,804 -3% 12% 7% 13,550 14,629 16,266 20% 8% 11% 1% 0% -1%
Net Attributable Result(2) 1,598 1,867 1,749 1,461 1,542 1,415 5% -4% 9% 6,619 8,387 9,389 7% 27% 12% 2% 1% 0%

(1)
NIM 4.1% 4.2% 4.0% 4.1% 4.1% 4.1% -1bp -4bp -2bp 4.0% 4.0% 4.1% 11bp -2bp 6bp 1bp 2bp 2bp
Cost / Income 48% 46% 47% 47% 49% 48% 2pp 1pp 1pp 47% 47% 45% -1pp -0pp -2pp 0pp 1pp 1pp
Cost of risk(1) 130 bp 124 bp 109 bp 108 bp 114 bp 118 bp 6bp -16bp -4bp 112 bp 113 bp 116 bp -11bp 1bp 3bp -1bp -1bp -0bp
ROTE 10.4% 11.9% 11.6% 8.7% 9.4% 8.4% 1pp -1pp 1pp 10.1% 12.2% 12.7% -0pp 2pp 1pp 0pp 0pp 0pp
ROTA 49 bp 56 bp 49 bp 41 bp 44 bp 40 bp 3bp -5bp 4bp 47 bp 58 bp 64 bp -1bp 12bp 6bp 1bp 1bp 0bp

Net loans 790bn 795bn 861bn 855bn 849bn 853bn -0.7% 7.4% -0.4% 849bn 872bn 900bn 7.4% 2.7% 3.2% -0.4% -0.4% -0.4%
Deposits 691bn 706bn 764bn 779bn 778bn 776bn -0.1% 12.5% 0.2% 778bn 801bn 826bn 12.5% 3.0% 3.2% 0.2% 0.2% 0.2%
Loans/deposits 114% 113% 113% 110% 109% 110% -1pp -5pp -1pp 109% 109% 109% -5pp -0pp 0pp -1pp -1pp -1pp
Total assets 1.3tn 1.4tn 1.4tn 1.5tn 1.4tn 1.5tn -1.6% 7.9% -0.8% 1.4tn 1.5tn 1.5tn 7.9% 1.5% 2.1% -0.8% -1.0% -1.0%

CET1% 10.6% 10.7% 10.7% 10.8% 10.8% 10.9% 4bp 28bp -5bp 10.8% 11.2% 11.6% 28bp 34bp 39bp -5bp -1bp 1bp
CET1 62bn 64bn 68bn 67bn 66bn 67bn -2.5% 5.6% -2.6% 66bn 69bn 74bn 5.6% 4.8% 7.3% -2.6% -2.3% -2.2%
RWAs 588 bn 597 bn 630 bn 623 bn 605 bn 618 bn -2.8% 2.9% -2.2% 605bn 614bn 637bn 2.9% 1.6% 3.6% -2.2% -2.2% -2.3%
Tangible Equity 62 bn 63 bn 60 bn 67 bn 66 bn 67 bn -2.3% 7.0% -2.5% 66 bn 69 bn 74 bn 7.0% 4.7% 7.2% -2.5% -2.2% -2.1%
Equity 91 bn 93 bn 89 bn 96 bn 94 bn 95 bn -1.5% 3.9% -1.0% 94 bn 98 bn 103 bn 3.9% 3.3% 5.1% -1.0% -0.8% -0.8%
Intangibles 29 bn 30 bn 29 bn 29 bn 29 bn 28 bn 0.5% -2.5% 2.7% 29 bn 29 bn 29 bn -2.5% 0.0% 0.0% 2.7% 2.7% 2.7%
Tangible Equity / Assets 4.7% 4.8% 4.2% 4.7% 4.6% 4.7% -0.0bp -0.0bp -0.1bp 4.6% 4.8% 5.0% -0.0bp 0.1bp 0.2bp -0.1bp -0.1bp -0.0bp

Source: Company data, Goldman Sachs Global Investment Research

12 February 2018 
 Goldman Sachs Spain Banks

BBVA (Neutral)
Exhibit 13: BBVA: 4Q17 earnings snapshot
€mn unless otherwise indicated. (1) Total income includes income by equity method, which is included in ‘other’. (2) NIM and LLPs calculated as % of net loans.
Quarterly Review Annual Review

Reported GSe Overview Forecasts Growth (yoy) New vs. Old

¼PQ
4Q16 1Q17 2Q17 3Q17 4Q17 4Q17E q/q y/y vs. GS 2017E 2018E 2019E 2017E 2018E 2019E 2017E 2018E 2019E

NII 4,385 4,322 4,481 4,399 4,557 4,454 4% 4% 2% 17,758 18,157 19,420 4% 2% 7% 1% 3% 3%
Fees (net) 1,161 1,223 1,233 1,249 1,215 1,215 -3% 5% 0% 4,921 4,903 5,168 4% 0% 5% 0% -1% -1%
Core revenues 5,546 5,546 5,714 5,647 5,772 5,670 2% 4% 2% 22,679 23,060 24,589 4% 2% 7% 0% 2% 2%
Trading & other 677 837 622 542 590 421 9% -13% 40% 2,590 2,390 2,273 -10% -8% -5% 7% 2% 2%
Total Income 6,222 6,383 6,336 6,189 6,362 6,090 3% 2% 4% 25,270 25,451 26,862 2% 1% 6% 1% 2% 2%
For the exclusive use of KATE.SCOTT@GS.COM

Operating Costs (3,243) (3,137) (3,175) (3,075) (3,114) (3,058) 1% -4% 2% (12,500) (12,603) (13,017) -2% 1% 3% 0% 2% 2%
Pre-Provision Profit 2,980 3,246 3,161 3,115 3,248 3,032 4% 9% 7% 12,770 12,848 13,845 8% 1% 8% 2% 2% 2%
Provisions (687) (945) (997) (976) (1,885) (991) -- -- -- (4,803) (3,925) (4,242) 26% -18% 8% 23% -4% -3%
Operating Result 2,292 2,301 2,164 2,139 1,363 2,041 -36% -41% -33% 7,967 8,922 9,603 -1% 12% 8% -8% 5% 4%
Other (1,007) (236) (196) (157) 597 (250) -- -- -- (1,036) (532) (518) -38% -49% -3% -45% 2% 2%
Result Before Tax 1,285 2,065 1,969 1,981 1,960 1,791 -1% 53% 9% 6,931 8,391 9,085 8% 21% 8% 3% 5% 4%
Net Attributable Result(2) 678 1,199 1,107 1,143 70 (186) -- -90% -- 3,519 5,064 5,483 1% 44% 8% 8% 3% 2%

NIM(1) 4.2% 4.2% 4.4% 4.4% 4.7% 4.5% 32bp 47bp 25bp 4.6% 4.5% 4.6% 47bp -6bp 11bp 17bp 25bp 25bp
Cost / Income 52% 49% 50% 50% 49% 50% -1pp -3pp -1pp 49% 50% 48% -2pp 0pp -1pp -0pp 0pp 0pp
Cost of risk(1) 66 bp 91 bp 97 bp 97 bp 195 bp 99 bp 97bp 128bp 95bp 124 bp 98 bp 101 bp 32bp -26bp 3bp 26bp -1bp -1bp
ROTE 7.2% 12.5% 11.4% 11.8% 0.7% -1.9% -11pp -6pp 3pp 9.3% 12.8% 12.9% 0pp 4pp 0pp 1pp 1pp 1pp
ROTA 38 bp 68 bp 64 bp 67 bp 4 bp -11 bp -63bp -33bp 15bp 52 bp 73 bp 77 bp 4bp 21bp 4bp 3bp 2bp 1bp

Net loans 415bn 416bn 409bn 402bn 388bn 400bn -3.5% -6.5% -3.1% 388bn 402bn 419bn -6.5% 3.6% 4.3% -3.1% -3.0% -2.9%
Deposits 401bn 398bn 395bn 393bn 376bn 386bn -4.2% -6.2% -2.4% 376bn 389bn 407bn -6.2% 3.3% 4.8% -2.4% -3.2% -3.0%
Loans/deposits 103% 104% 104% 102% 103% 104% 1pp -0pp -1pp 103% 103% 103% -0pp 0pp -0pp -1pp 0pp 0pp
Total assets 0.7tn 0.7tn 0.7tn 0.7tn 0.7tn 0.7tn -0.1% -5.7% 1.3% 0.7tn 0.7tn 0.7tn -5.7% 1.8% 2.8% 1.3% 0.9% 0.8%

CET1% 10.9% 11.0% 11.1% 11.2% 11.1% 11.2% -11bp 18bp -9bp 11.1% 11.3% 11.6% 18bp 24bp 28bp -9bp 2bp 6bp
CET1 42bn 43bn 41bn 41bn 40bn 41bn -2.1% -5.5% -1.3% 40bn 42bn 45bn -5.5% 4.0% 7.1% -1.3% -2.4% -2.0%
RWAs 389 bn 390 bn 373 bn 366 bn 362 bn 364 bn -1.0% -7.0% -0.5% 362bn 368bn 385bn -7.0% 1.8% 4.5% -0.5% -2.5% -2.5%
Tangible Equity / Assets 5.2% 5.4% 5.6% 5.7% 5.6% 5.7% -0.1bp 0.4bp -0.1bp 5.6% 5.7% 6.0% 0.4bp 0.1bp 0.3bp -0.1bp -0.2bp -0.2bp

Source: Company data, Goldman Sachs Global Investment Research

12 February 2018 
 Goldman Sachs Spain Banks

CaixaBank (Neutral)
Exhibit 14: CaixaBank: 4Q17 earnings snapshot
€mn unless otherwise indicated. (1) Total income includes income by equity method, which is included in ‘other’. (2) NIM and LLPs calculated as % of net loans.
Quarterly Review Annual Review

Reported GSe Overview Forecasts Growth (yoy) New vs. Old

¼PQ
4Q16 1Q17 2Q17 3Q17 4Q17 4Q17E q/q y/y vs. GS 2017E 2018E 2019E 2017E 2018E 2019E 2017E 2018E 2019E

NII 1,077 1,153 1,196 1,201 1,196 1,196 0% 11% 0% 4,746 4,841 4,952 14% 2% 2% 0% 0% 0%
Fees (net) 544 588 664 615 632 627 3% 16% 1% 2,499 2,612 2,666 20% 5% 2% 0% 2% 2%
Core revenues 1,621 1,741 1,860 1,816 1,828 1,823 1% 13% 0% 7,245 7,454 7,618 16% 3% 2% 0% 1% 1%
Trading & other 267 152 527 395 (97) 137 -- -- -- 977 898 947 -38% -8% 5% -19% -17% -17%
Total Income 1,888 1,893 2,387 2,211 1,731 1,960 -22% -8% -12% 8,222 8,352 8,565 5% 2% 3% -3% -2% -1%
For the exclusive use of KATE.SCOTT@GS.COM

Operating Costs (998) (1,101) (1,221) (1,130) (1,125) (1,219) 0% 13% -8% (4,577) (4,632) (4,613) 11% 1% 0% -2% 4% 5%
Pre-Provision Profit 890 792 1,166 1,081 606 741 -44% -32% -18% 3,645 3,720 3,952 -2% 2% 6% -4% -8% -8%
Provisions 108 (619) (616) (223) (253) (241) 13% -- 5% (1,711) (718) (582) 60% -58% -19% 1% -18% -22%
Operating Result 998 173 550 858 353 500 -59% -65% -29% 1,934 3,002 3,370 -27% 55% 12% -7% -5% -4%
Other (774) 278 4 (1) (117) (1) -- -85% -- 164 (20) (19) -- -- -4% -41% -- --
Result Before Tax 224 451 554 857 236 499 -72% 5% -53% 2,098 2,982 3,351 36% 42% 12% -11% -5% -5%
Net Attributable Result(2) 77 403 436 649 196 397 -70% -- -51% 1,684 2,225 2,486 61% 32% 12% -11% -7% -6%

NIM(1) 2.1% 2.1% 2.1% 2.2% 2.2% 2.2% 0bp 4bp 2bp 2.2% 2.2% 2.2% 10bp 1bp -1bp 2bp 3bp 3bp
Cost / Income 53% 58% 51% 51% 65% 62% 14pp 12pp 3pp 56% 55% 54% 3pp -0pp -2pp 0pp 3pp 3pp
Cost of risk(1) -22 bp 111 bp 110 bp 41 bp 46 bp 44 bp 6bp 68bp 2bp 78 bp 32 bp 26 bp 25bp -46bp -7bp 1bp -7bp -7bp
ROTE 1.6% 7.8% 8.7% 12.5% 3.8% 7.6% -9pp 2pp -4pp 8.2% 10.5% 11.1% 3pp 2pp 1pp -1pp -0pp -0pp
ROTA 9 bp 44 bp 47 bp 69 bp 21 bp 43 bp -49bp 12bp -22bp 44 bp 59 bp 65 bp 14bp 14bp 6bp -6bp -5bp -5bp

Net loans 201bn 223bn 223bn 220bn 219bn 220bn -0.6% 9.0% -0.7% 219bn 222bn 228bn 9.0% 1.4% 2.6% -0.7% -0.9% -1.0%
Deposits 187bn 197bn 203bn 204bn 204bn 206bn -0.2% 8.8% -0.9% 204bn 210bn 216bn 8.8% 3.0% 3.2% -0.9% -0.9% -1.0%
Loans/deposits 107% 113% 110% 108% 108% 107% -0pp 0pp 0pp 108% 106% 105% 0pp -2pp -1pp 0pp 0pp -0pp
Total assets 0.3tn 0.4tn 0.4tn 0.4tn 0.4tn 0.4tn 1.1% 10.1% 1.7% 0.4tn 0.4tn 0.4tn 10.1% -0.1% 0.8% 1.7% 1.3% 1.3%

CET1% 12.4% 11.5% 11.5% 11.7% 11.7% 12.0% 0bp -74bp -34bp 11.7% 12.5% 13.3% -74bp 87bp 75bp -34bp -19bp -25bp
CET1 17bn 18bn 17bn 17bn 17bn 18bn -0.5% 4.0% -1.4% 17bn 18bn 19bn 4.0% 4.4% 6.2% -1.4% -1.9% -2.2%
RWAs 134 bn 153 bn 151 bn 149 bn 149 bn 146 bn -0.6% 10.6% 1.5% 149bn 144bn 145bn 10.6% -2.9% 0.2% 1.5% -0.4% -0.4%
Tangible Equity / Assets 5.8% 5.6% 5.4% 5.5% 5.4% 5.6% -0.1bp -0.4bp -0.2bp 5.4% 5.6% 5.8% -0.4bp 0.2bp 0.2bp -0.2bp -0.2bp -0.2bp

Source: Company data, Goldman Sachs Global Investment Research

12 February 2018 
 Goldman Sachs Spain Banks

Bankia (Neutral)
Exhibit 15: Bankia: 4Q17 earnings snapshot
€mn unless otherwise indicated. (1) Total income includes income by equity method, which is included in ‘other’. (2) NIM and LLPs calculated as % of net loans. Numbers include BMN, which explains the
large impacts vs. GSe, as our numbers until 4Q17 were only for BKIA ‘stand-alone’ (ex BMN).
Quarterly Review Annual Review

Reported GSe Overview Forecasts Growth (yoy) New vs. Old

¼PQ
4Q16 1Q17 2Q17 3Q17 4Q17 4Q17E q/q y/y vs. GS 2017E 2018E 2019E 2017E 2018E 2019E 2017E 2018E 2019E

NII 517 504 491 472 501 477 6% -3% 5% 1,968 2,203 2,273 -8% 12% 3% 1% 17% 19%
Fees (net) 213 207 218 210 229 215 9% 7% 6% 864 1,054 1,069 5% 22% 1% 2% 20% 20%
Core revenues 730 711 709 682 730 692 7% 0% 6% 2,832 3,257 3,342 -5% 15% 3% 1% 18% 19%
Trading & other (23) 175 53 69 (64) (45) -- -- 41% 233 128 127 20% -45% -1% -7% -15% -15%
For the exclusive use of KATE.SCOTT@GS.COM

Total Income 707 886 762 751 666 647 -11% -6% 3% 3,065 3,385 3,470 -3% 10% 3% 1% 16% 17%
Operating Costs (376) (386) (378) (387) (430) (387) 11% 15% 11% (1,582) (1,911) (1,813) 2% 21% -5% 3% 24% 18%
Pre-Provision Profit 331 500 384 364 236 259 -35% -29% -9% 1,483 1,474 1,656 -8% -1% 12% -2% 8% 17%
Provisions (65) (108) (73) (75) (52) (72) -30% -20% -28% (308) (297) (201) -5% -4% -32% -6% 19% 18%
Operating Result 266 392 311 289 184 187 -36% -31% -2% 1,175 1,177 1,456 -9% 0% 24% 0% 5% 17%
Other (215) 12 (22) (29) (379) (16) -- 76% -- (417) (29) (12) 38% -- -59% -- 0% --
Result Before Tax 51 404 289 260 (195) 171 -- -- -- 758 1,148 1,444 -23% 51% 26% -33% 5% 17%
Net Attributable Result(2) 72 304 210 225 (235) 125 -- -- -- 505 835 1,049 -37% 65% 26% -42% 5% 16%

(1)
NIM 2.0% 1.9% 1.9% 1.8% 1.6% 1.9% -19bp -35bp -22bp 1.6% 1.8% 1.8% -45bp 19bp 3bp -29bp -4bp -1bp
Cost / Income 53% 44% 50% 52% 65% 60% 13pp 11pp 5pp 52% 56% 52% 3pp 5pp -4pp 1pp 3pp 0pp
Cost of risk(1) 25 bp 41 bp 28 bp 29 bp 17 bp 28 bp -12bp -8bp -11bp 25 bp 24 bp 16 bp -6bp -1bp -8bp -7bp -0bp -0bp
ROTE 2.3% 9.8% 6.6% 7.0% -7.0% 4.0% -14pp -9pp -11pp 3.8% 6.2% 7.5% -3pp 2pp 1pp -3pp -0pp 0pp
ROTA 15 bp 66 bp 47 bp 50 bp -44 bp 28 bp -94bp -59bp -72bp 24 bp 39 bp 49 bp -19bp 15bp 10bp -25bp -5bp -1bp

Net loans 105 bn 104 bn 104 bn 103 bn 123 bn 103 bn 18.9% 17.5% 19.6% 123 bn 123 bn 125 bn 17.5% -0.2% 1.6% 19.6% 19.4% 19.2%
Deposits 105 bn 104 bn 103 bn 101 bn 130 bn 101 bn 29.6% 24.0% 29.1% 130 bn 132 bn 134 bn 24.0% 1.2% 1.2% 29.1% 29.1% 29.1%
Loans/deposits 100% 100% 101% 103% 94% 102% -8pp -5pp -7pp 94% 93% 93% -5pp -1pp 0pp -7pp -8pp -8pp
Total assets 190 bn 184 bn 181 bn 179 bn 214 bn 179 bn 19% 12% 19% 214 bn 215 bn 216 bn 12.5% 0.4% 0.5% 19.4% 19.7% 19.8%

CET1% 13.5% 13.6% 14.2% 14.6% 12.7% 14.6% -189bp -86bp -193bp 12.7% 13.0% 13.3% -86bp 38bp 31bp -193bp -116bp -125bp
CET1 10.4 bn 10.3 bn 10.6 bn 10.7 bn 10.9 bn 10.4 bn 2.1% 4.5% 5.2% 10.9 bn 11.1 bn 11.4 bn 4.5% 1.5% 3.3% 5.2% 7.0% 7.2%
RWAs 77 bn 76 bn 75 bn 73 bn 86 bn 71 bn 17.3% 11.6% 21.3% 86 bn 85 bn 86 bn 11.6% -1.5% 0.9% 21.3% 16.5% 17.3%
Tangible Equity / Assets 6.6% 6.7% 7.0% 7.2% 6.3% 7.0% -0.9bp -0.4bp -0.7bp 6.3% 6.3% 6.5% -0.4bp 0.1bp 0.1bp -0.7bp -0.6bp -0.7bp

Source: Company data, Goldman Sachs Global Investment Research

12 February 2018 
 Goldman Sachs Spain Banks

Banco Sabadell (Neutral)

Exhibit 16: Banco Sabadell: 4Q17 earnings snapshot
€mn unless otherwise indicated. (1) Total income includes income by equity method, which is included in ‘other’. (2) NIM and LLPs calculated as % of net loans.
Quarterly Review Annual Review

Reported GSe Overview Forecasts Growth (yoy) New vs. Old

¼PQ
4Q16 1Q17 2Q17 3Q17 4Q17 4Q17E q/q y/y vs. GS 2017E 2018E 2019E 2017E 2018E 2019E 2017E 2018E 2019E

NII 947 962 974 941 925 933 -2% -2% -1% 3,802 3,852 4,022 -1% 1% 4% 0% 1% 1%
Fees (net) 288 297 306 301 319 304 6% 11% 5% 1,223 1,287 1,320 7% 5% 3% 1% 5% 5%
Core revenues 1,235 1,259 1,281 1,242 1,244 1,237 0% 1% 1% 5,026 5,139 5,342 1% 2% 4% 0% 2% 2%
Trading & other (38) 341 163 297 (89) (58) -- -- 54% 711 65 62 47% -- -5% -4% -27% -29%
Total Income 1,198 1,600 1,443 1,540 1,154 1,179 -25% -4% -2% 5,737 5,205 5,404 5% -9% 4% 0% 1% 2%
For the exclusive use of KATE.SCOTT@GS.COM

Operating Costs (782) (789) (787) (770) (780) (758) 1% 0% 3% (3,125) (2,965) (2,924) 2% -5% -1% 1% 1% 1%
Pre-Provision Profit 416 811 656 770 374 420 -51% -10% -11% 2,612 2,240 2,480 8% -14% 11% -2% 1% 3%
Provisions (314) (511) (340) (1,117) (229) (280) -80% -27% -18% (2,196) (920) (899) 54% -58% -2% -2% -1% 0%
Operating Result 102 301 316 (347) 146 141 -- 43% 4% 416 1,320 1,582 -58% -- 20% 1% 2% 4%
Other 3 2 16 366 49 49 -87% -- 0% 433 (6) (2) -- -- -69% 0% -37% -66%
Result Before Tax 105 303 332 19 194 190 -- 85% 3% 848 1,314 1,580 -17% 55% 20% 1% 3% 4%
Net Attributable Result(2) 64 216 235 203 148 154 -27% -- -4% 801 939 1,130 13% 17% 20% -1% 1% 3%

NIM(1) 2.6% 2.7% 2.7% 2.6% 2.6% 2.6% -4bp -3bp -1bp 2.6% 2.6% 2.7% 0bp -2bp 3bp 1bp 2bp 3bp
Cost / Income 65% 49% 55% 50% 68% 64% 18pp 2pp 3pp 54% 57% 54% -1pp 2pp -3pp 1pp 0pp -0pp
Cost of risk(1) 86 bp 144 bp 96 bp 310 bp 64 bp 77 bp -246bp -23bp -14bp 153 bp 63 bp 60 bp 55bp nm -3bp -3bp -0bp -0bp
ROTE 2.3% 8.0% 8.6% 7.4% 5.4% 5.6% -2pp 3pp -0pp 7.3% 8.6% 9.8% 1pp 1pp 1pp -0pp 0pp 0pp
ROTA 12 bp 40 bp 44 bp 39 bp 27 bp 29 bp -12bp 15bp -2bp 37 bp 42 bp 50 bp nm 6bp 8bp -2bp -2bp -1bp

Net loans 145 bn 142 bn 142 bn 144 bn 144 bn 145 bn -0.3% -1.1% -0.6% 144 bn 146 bn 151 bn -1.1% 2.0% 3.1% -0.6% -0.1% 0.4%
Deposits 134 bn 132 bn 132 bn 134 bn 135 bn 135 bn 1.0% 0.7% 0.4% 135 bn 139 bn 142 bn 0.7% 2.5% 2.5% 0.4% 0.4% 0.4%
Loans/deposits 108% 108% 108% 108% 106% 107% -1pp -2pp -1pp 106% 106% 106% -2pp -0pp 1pp -1pp -1pp -0pp
Total assets 213 bn 219 bn 217 bn 211 bn 221 bn 212 bn 5% 4% 5% 221 bn 224 bn 229 bn 4.2% 1.3% 2.0% 4.6% 4.9% 5.2%

CET1% 12.0% 11.9% 12.1% 12.7% 12.8% 12.9% 8bp 78bp -15bp 12.8% 12.6% 13.1% 78bp -14bp 45bp -15bp -25bp -23bp
CET1 10.3 bn 10.3 bn 10.1 bn 10.3 bn 9.9 bn 10.4 bn -3.9% -3.9% -4.3% 9.9 bn 9.9 bn 10.6 bn nm 0.2% 6.1% -4.3% -4.7% -4.2%
RWAs 86 bn 87 bn 84 bn 81 bn 78 bn 80 bn -4.6% -9.8% -3.2% 78 bn 79 bn 81 bn -9.8% 1.3% 2.5% -3.2% -2.8% -2.5%
Tangible Equity / Assets 5.2% 5.0% 5.1% 5.3% 5.0% 5.3% -0.2bp -0.1bp -0.2bp 5.0% 4.9% 5.1% -0.1bp -0.1bp 0.2bp -0.2bp -0.3bp -0.3bp

Source: Company data, Goldman Sachs Global Investment Research

12 February 2018 
 Goldman Sachs Spain Banks

Bankinter (Neutral)
Exhibit 17: Bankinter: 4Q17 earnings snapshot
€mn unless otherwise indicated. (1) Total income includes income by equity method, which is included in ‘other’. (2) NIM and LLPs calculated as % of net loans.
Quarterly Review Annual Review

Reported GSe Overview Forecasts Growth (yoy) New vs. Old

¼PQ
4Q16 1Q17 2Q17 3Q17 4Q17 4Q17E q/q y/y vs. GS 2017E 2018E 2019E 2017E 2018E 2019E 2017E 2018E 2019E

NII 266 258 272 260 272 260 5% 2% 5% 1,062 1,083 1,119 8% 2% 3% 1% 2% 2%
Fees (net) 105 100 109 104 110 103 7% 5% 8% 423 441 463 12% 4% 5% 2% 3% 3%
Core revenues 371 358 381 363 383 363 5% 3% 6% 1,485 1,524 1,583 9% 3% 4% 1% 2% 2%
Trading & other 76 110 74 108 75 74 -31% -2% 1% 366 415 422 2% 13% 2% 0% 9% 9%
Total Income 447 467 455 471 458 437 -3% 2% 5% 1,851 1,939 2,004 8% 5% 3% 1% 4% 3%
For the exclusive use of KATE.SCOTT@GS.COM

Operating Costs (247) (233) (238) (233) (241) (234) 4% -3% 3% (944) (981) (997) 5% 4% 2% 1% 3% 3%
Pre-Provision Profit 200 235 217 239 216 203 -9% 8% 7% 907 958 1,007 11% 6% 5% 2% 4% 4%
Provisions (45) (53) (53) (47) (49) (46) 5% 10% 8% (202) (143) (135) -3% -29% -5% 2% -10% 9%
Operating Result 155 182 164 192 167 157 -13% 8% 6% 704 815 872 16% 16% 7% 1% 7% 3%
Other (26) (10) (3) (6) (8) (5) 26% -71% 59% (27) (19) (19) -- -30% 0% 11% 0% 0%
Result Before Tax 129 172 160 186 160 153 -14% 24% 5% 677 796 853 0% 18% 7% 1% 7% 3%
Net Attributable Result(2) 90 124 117 135 119 109 -12% 33% 9% 495 566 606 1% 14% 7% 2% 7% 3%

NIM(1) 2.1% 2.0% 2.1% 2.0% 2.0% 2.0% 5bp -3bp 7bp 2.0% 2.0% 2.0% 9bp -3bp -1bp 0bp 2bp 2bp
Cost / Income 55% 50% 52% 49% 53% 54% 3pp -3pp -1pp 51% 51% 50% -2pp -0pp -1pp -0pp -0pp -0pp
Cost of risk(1) 35 bp 41 bp 41 bp 36 bp 37 bp 35 bp 1bp 2bp 2bp 38 bp 26 bp 24 bp -2bp -12bp -2bp 0bp -3bp 2bp
ROTE 9.3% 12.8% 11.7% 13.3% 11.6% 10.7% -2pp 2pp 1pp 12.1% 12.6% 12.7% -1pp 1pp 0pp 0pp 0pp -0pp
ROTA 54 bp 72 bp 66 bp 78 bp 67 bp 63 bp -11bp 13bp 4bp 70 bp 79 bp 84 bp -3bp 9bp 6bp -0bp 4bp 1bp

Net loans 51 bn 51 bn 52 bn 52 bn 53 bn 53 bn 2.0% 3.8% 1.1% 53 bn 55 bn 57 bn 3.8% 3.6% 3.8% 1.1% 0.8% 0.6%
Deposits 43 bn 44 bn 45 bn 44 bn 45 bn 44 bn 1.6% 4.6% 0.8% 45 bn 46 bn 47 bn 4.6% 3.2% 3.2% 0.8% 0.8% 0.7%
Loans/deposits 121% 117% 116% 119% 120% 119% 1pp -1pp 0pp 120% 120% 121% -1pp 0pp 1pp 0pp 0pp -0pp
Total assets 67 bn 70 bn 71 bn 70 bn 71 bn 70 bn 2% 6% 2% 71 bn 72 bn 72 bn 6.2% 1.3% 0.1% 2.2% 1.4% 1.1%

CET1% 11.2% 11.3% 11.3% 11.5% 11.5% 11.5% -4bp 31bp 1bp 11.5% 12.1% 12.5% 31bp 60bp 43bp 1bp 39bp 42bp
CET1 3.4 bn 3.5 bn 3.5 bn 3.6 bn 3.6 bn 3.6 bn -0.5% 4.7% -1.0% 3.6 bn 4.0 bn 4.3 bn 4.7% 10.6% 7.3% -1.0% 3.7% 3.7%
RWAs 31 bn 31 bn 31 bn 31 bn 31 bn 32 bn -0.2% 1.9% -1.0% 31 bn 33 bn 34 bn 1.9% 5.1% 3.6% -1.0% 0.4% 0.2%
Tangible Equity / Assets 5.8% 5.6% 5.6% 5.8% 5.8% 5.8% -0.1bp 0.0bp -0.1bp 5.8% 6.2% 6.6% 0.0bp 0.5bp 0.4bp -0.1bp 0.2bp 0.2bp

Source: Company data, Goldman Sachs Global Investment Research

12 February 2018 
 Goldman Sachs Spain Banks

Unicaja Banco (Neutral)

Exhibit 18: Unicaja Banco: 4Q17 earnings snapshot
€mn unless otherwise indicated. (1) Total income includes income by equity method, which is included in ‘other’. (2) NIM and LLPs calculated as % of net loans.
Quarterly Review Annual Review

Reported GSe Overview Forecasts Growth (yoy) New vs. Old

¼PQ
4Q16 1Q17 2Q17 3Q17 4Q17 4Q17E q/q y/y vs. GS 2017E 2018E 2019E 2017E 2018E 2019E 2017E 2018E 2019E

NII 160 145 146 141 151 145 7% -6% 4% 583 600 620 -6% 3% 3% 1% 5% 8%
Fees (net) 52 53 56 55 56 55 2% 8% 2% 220 233 248 6% 6% 6% 0% 2% 3%
Core revenues 212 198 202 196 207 200 5% -2% 3% 803 834 867 -3% 4% 4% 1% 5% 6%
Trading & other (5) 83 77 60 (26) (10) -- -- -- 194 91 87 -26% -53% -4% -7% -21% -25%
Total Income 207 281 279 256 181 190 -29% -12% -4% 997 925 955 -8% -7% 3% -1% 1% 3%
For the exclusive use of KATE.SCOTT@GS.COM

Operating Costs (160) (160) (160) (158) (155) (156) -2% -3% -1% (633) (610) (583) -4% -4% -4% 0% -1% -1%
Pre-Provision Profit 46 121 118 99 26 33 -73% -43% -21% 364 316 372 -16% -13% 18% -2% 6% 9%
Provisions (78) (46) (20) (34) 9 (22) -- -- -- (92) (66) (51) -48% -28% -23% -26% -1% -2%
Operating Result (32) 75 98 64 36 11 -45% -- -- 273 249 321 6% -9% 29% 10% 8% 10%
Other (17) (1) (98) (8) (25) (5) -- 48% -- (132) (65) (12) -- -51% -82% 18% 0% 0%
Result Before Tax (49) 74 0 56 10 6 -82% -- 64% 140 184 309 -27% 32% 67% 3% 11% 11%
Net Attributable Result(2) (53) 52 34 50 7 8 -87% -- -13% 143 143 230 0% 0% 61% -1% 9% 10%

NIM(1) 2.1% 1.9% 1.9% 1.9% 2.0% 1.9% 15bp -5bp 10bp 2.0% 2.0% 2.0% -5bp 4bp 1bp 4bp 14bp 19bp
Cost / Income 78% 57% 58% 62% 85% 82% 24pp 8pp 3pp 63% 66% 61% 3pp 2pp -5pp 0pp -1pp -2pp
Cost of risk(1) 102 bp 61 bp 26 bp 46 bp -12 bp 30 bp -58bp -114bp -42bp 31 bp 22 bp 17 bp -26bp -9bp -5bp -10bp 0bp 0bp
ROTE -7.2% 7.0% 3.7% 5.4% 0.7% 0.8% -5pp 8pp -0pp 3.7% 3.6% 5.7% -1pp -0pp 2pp -0pp 0pp 0pp
ROTA -37 bp 37 bp 24 bp 36 bp 5 bp 5 bp -31bp 42bp -1bp 25 bp 25 bp 40 bp 1bp 0bp 15bp -0bp 2bp 4bp

Net loans 31 bn 30 bn 31 bn 30 bn 30 bn 30 bn -1.0% -3.4% -1.2% 30 bn 30 bn 31 bn -3.4% 0.9% 2.5% -1.2% -2.0% -2.5%
Deposits 49 bn 45 bn 45 bn 46 bn 46 bn 46 bn 1.1% -5.1% 0.8% 46 bn 47 bn 50 bn -5.1% 2.9% 5.9% 0.8% 2.2% 6.7%
Loans/deposits 63% 67% 69% 66% 64% 66% -1pp 1pp -1pp 64% 63% 61% 1pp -1pp -2pp -1pp -3pp -6pp
Total assets 57 bn 56 bn 56 bn 56 bn 56 bn 56 bn 0% -2% 0% 56 bn 56 bn 57 bn -1.6% 0.1% 1.0% -0.1% -0.6% -0.9%

CET1% 11.8% 12.0% 11.8% 12.5% 12.8% 12.7% 25bp 94bp 3bp 12.8% 12.9% 13.3% 94bp 17bp 36bp 3bp 17bp 31bp
CET1 3.0 bn 3.0 bn 2.9 bn 3.1 bn 3.1 bn 3.2 bn -1.0% 4.0% -2.8% 3.1 bn 3.1 bn 3.3 bn 4.0% 2.2% 5.2% -2.8% -2.4% -1.8%
RWAs 25 bn 25 bn 25 bn 25 bn 24 bn 25 bn -2.9% -3.6% -3.0% 24 bn 24 bn 25 bn -3.6% 0.8% 2.4% -3.0% -3.7% -4.1%
Tangible Equity 3.0 bn 2.9 bn 3.6 bn 3.8 bn 3.9 bn 3.8 bn 3.0% 31.1% 1.6% 3.9 bn 3.9 bn 4.1 bn 31.1% 1.5% 3.6% 1.6% 1.9% 2.2%
Equity 3.0 bn 2.9 bn 3.6 bn 3.8 bn 3.9 bn 3.8 bn 3.0% 31.1% 1.6% 3.9 bn 3.9 bn 4.1 bn 31.1% 1.5% 3.6% 1.6% 1.9% 2.2%
Intangibles 0.0 bn 0.0 bn 0.0 bn 0.0 bn 0.0 bn 0.0 bn -5.9% -- -5.9% 0.0 bn 0.0 bn 0.0 bn -- 0.0% 0.0% -5.9% -5.9% -5.9%
Tangible Equity / Assets 5.2% 5.3% 6.4% 6.7% 6.9% 6.8% 0.2bp 1.7bp 0.1bp 6.9% 7.0% 7.2% 1.7bp 0.1bp 0.2bp 0.1bp 0.2bp 0.2bp

Source: Company data, Goldman Sachs Global Investment Research

12 February 2018 
 Goldman Sachs

Disclosure Appendix
Reg AC
We, Jose Abad and Markus Pops, hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. We
also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Unless otherwise stated, the individuals listed on the cover page of this report are analysts in Goldman Sachs’ Global Investment Research division.

GS Factor Profile
The Goldman Sachs Factor Profile provides investment context for a stock by comparing key attributes to the market (i.e. our coverage universe) and its sector peers. The four key attributes depicted are:
Growth, Financial Returns, Multiple (e.g. valuation) and Integrated (a composite of Growth, Financial Returns and Multiple). Growth, Financial Returns and Multiple are calculated by using normalized ranks
for specific metrics for each stock. The normalized ranks for the metrics are then averaged and converted into percentiles for the relevant attribute. The precise calculation of each metric may vary
depending on the fiscal year, industry and region, but the standard approach is as follows:
Growth is based on a stock’s forward-looking sales growth, EBITDA growth and EPS growth (for financial stocks, only EPS and sales growth), with a higher percentile indicating a higher growth company.
Financial Returns is based on a stock’s forward-looking ROE, ROCE and CROCI (for financial stocks, only ROE), with a higher percentile indicating a company with higher financial returns. Multiple is
For the exclusive use of KATE.SCOTT@GS.COM

based on a stock’s forward-looking P/E, P/B, price/dividend (P/D), EV/EBITDA, EV/FCF and EV/Debt Adjusted Cash Flow (DACF) (for financial stocks, only P/E, P/B and P/D), with a higher percentile indicating
a stock trading at a higher multiple. The Integrated percentile is calculated as the average of the Growth percentile, Financial Returns percentile and (100% - Multiple percentile).
Financial Returns and Multiple use the Goldman Sachs analyst forecasts at the fiscal year-end at least three quarters in the future. Growth uses inputs for the fiscal year at least seven quarters in the future
compared with the year at least three quarters in the future (on a per-share basis for all metrics).
For a more detailed description of how we calculate the GS Factor Profile, please contact your GS representative.

M&A Rank
Across our global coverage, we examine stocks using an M&A framework, considering both qualitative factors and quantitative factors (which may vary across sectors and regions) to incorporate the
potential that certain companies could be acquired. We then assign a M&A rank as a means of scoring companies under our rated coverage from 1 to 3, with 1 representing high (30%-50%) probability of
the company becoming an acquisition target, 2 representing medium (15%-30%) probability and 3 representing low (0%-15%) probability. For companies ranked 1 or 2, in line with our standard
departmental guidelines we incorporate an M&A component into our target price. M&A rank of 3 is considered immaterial and therefore does not factor into our price target, and may or may not be
discussed in research.

Quantum
Quantum is Goldman Sachs’ proprietary database providing access to detailed financial statement histories, forecasts and ratios. It can be used for in-depth analysis of a single company, or to make
comparisons between companies in different sectors and markets.

GS SUSTAIN
GS SUSTAIN is a global investment strategy focused on the generation of long-term alpha through identifying high quality industry leaders. The GS SUSTAIN 50 list includes leaders we believe to be well
positioned to deliver long-term outperformance through superior returns on capital, sustainable competitive advantage and effective management of ESG risks vs. global industry peers. Candidates are
selected largely on a combination of quantifiable analysis of these three aspects of corporate performance.

Disclosures
Coverage group(s) of stocks by primary analyst(s)
Jose Abad: Europe-Pan-Euro Banks.
Europe-Pan-Euro Banks: ABN Amro Group, Allied Irish Banks, Alpha Bank, Arrow Global Group, Banca Monte dei Paschi di Siena, Banca Popolare Emilia Romagna, Banco BPI, Banco BPM SpA, Banco
Comercial Portugues, Banco Sabadell, Banco Santander, Bank of Ireland Group, Bank of Piraeus, Bank Pekao, Bank Zachodni WBK, Bankia, Bankinter, Barclays Plc, BAWAG Group, BBVA, BNP Paribas,
CaixaBank SA, Commerzbank AG, Credit Agricole SA, Credit Suisse, CYBG Plc, Danske Bank, Deutsche Bank, DNB, EFG International, Erste Bank, Eurobank Ergasias SA, HSBC, ING Groep NV, Intesa
Sanpaolo, Investor AB, Julius Baer Group, KBC Group, Komercni Banka, Lloyds Banking Group, Metro Bank Plc, Moneta Money Bank AS, National Bank of Greece, Natixis, Nordea, OTP Bank Plc, PKO BP,
Provident Financial, Raiffeisen Bank International, Resurs Holding, Royal Bank of Scotland, SEB, Societe Generale, Standard Chartered, Svenska Handelsbanken, Swedbank, UBI Banca, UBS Group, Unicaja
Banco SA, UniCredit, Van Lanschot NV, Virgin Money Holdings, Vontobel.

Company-specific regulatory disclosures

Compendium report: please see disclosures at http://www.gs.com/research/hedge.html. Disclosures applicable to the companies included in this compendium can be found in the latest relevant published
research

12 February 2018 
 Goldman Sachs

Distribution of ratings/investment banking relationships

Goldman Sachs Investment Research global Equity coverage universe

Rating Distribution Investment Banking Relationships

Buy Hold Sell Buy Hold Sell
Global 33% 54% 13% 63% 57% 52%

As of January 1, 2018, Goldman Sachs Global Investment Research had investment ratings on 2,867 equity securities. Goldman Sachs assigns stocks as Buys and Sells on various regional Investment
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Price target and rating history chart(s)

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 Goldman Sachs

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Ratings, coverage groups and views and related definitions

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associated with the price target. Price targets are required for all covered stocks. The total return potential, price target and associated time horizon are stated in each report adding or reiterating an
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