Fernando de Asúa Álvarez – First Vice Chairman Jose Antonio Alvarez – CFO Fernando de Asúa Álvarez: Okay. Good morning. We’re going to begin the results presentation for Q2. And as we always do I will review the main highlights for the quarter and the group’s results and then Jose Antonio Alvarez will give you more detailed overview of the results of the different business areas and finally I will conclude with our outlook for the coming quarters. The first chapter of the presentation will deal with the most relevant results of the quarter which I’ll review in the coming slides. First I’ll speak about the Santander group’s ability to continue to generate recurring results in a market environment which is still difficult. We’ve posted a recurring profit of 2.013 billion in the quarter bolstered by the recovery in our commercial revenues that we pointed to in our last presentation. And with that the first half’s recurring profits was 4.12 billion. In the quarter we have made a one-off provision of 538 million pounds sterling net of tax or EUR620 million in relation to payment protection insurance remediation in the U.K. or PPI. After this charge, attributable profit for the first half was EUR3.5 billion. The second feature is the group’s NPL which has continued with the same trend as in Q1 with a small rise mostly due to the increase in Spain. On the other hand units such as Santander Consumer Finance in Sovereign have continued to show significant improvement. Third, we’ve improved our liquidity position in the first half capturing EUR19 billion more than the needs generated by business volumes and maturities and thirdly, we closed the – fourthly, we’ve ended the quarter with core capital at 9.2%, 40 basis points higher than in December. We continue to…

Good morning. I will now review in more detail the different units, remind you that we always post a more detailed presentation on our Web site about the different business units and also that in this quarter for the first time, we’ve also included data about our new bank in Poland. Beginning with Europe, with Continental Europe, I’d say that our income statement reflects the difficult business environment. In spite of that income, the diverse performance in the different units within this geography, overall and discounting perimeter effects, income has remained pretty flat. With the perimeter effect, basic income rose by 6.3% but the main driver for that was the recovery that we are seeing, income in Spain, which we will look at in a moment. As for costs in our regional networks in Spain and Portugal, they remain basically flat. The increased costs were mostly due to the perimeter effect due to investments made in global businesses and also in Consumer Finance. Provisions increased, as our CEO has explained, because of generics. Profit was EUR1.87 billion in the semester, which is 17% down from first half of 2010. In the slides on the right, you can show that, we can see that the upper half of our income statement has very positive trends. If we look now at business in Spain and when I refer to the business in Spain, in includes all the bank’s businesses in Spain – Santander network, Banesto, Consumer Finance in Spain, Banif, wholesale business and asset management and insurance in Spain. We see that business volumes show that deleveraging for Spanish economy overall, our long portfolio has shrunk slightly and the deleveraging is clearly seen in the loans-to-deposit ratio, which is already at around 120% when it was about over 180% at the end…

With regards to the results guidance and consensus, the question is whether we complete guidance of repeating the net recurring profit that we obtained last year after the PPI impact is that will mean that we will have net profit of $10.5 billion in 2011 after the PPI impact and therefore eight in recurring profits after the impact and if the profit remains in line with profits from 2010.

Well in 2010 we obtained 8.2 billion in net profit, attributable net profit. And although in this quarter we took into account that PPI went up and sometimes in the U.K. As we’re seeing in the presentation, our capacities to generate ordinary profit is similar to the one we had last year. Therefore we still believe that the recurrent profit this year will be in line with that of last year. Ordinary recurrent profit will be more or less the same. We also would like to reiterate our shareholders by EUR0.68 per share as we have announced repeatedly and I can confirm now.

On the PPA charge, several questions on that. Richard Santrec, Carlos Berastain and Sancho Gomez and Carlos Densoto ask about the expense also Leveet Monmonday is asking about this subject. And (inaudible) is saying that compared to the U.K. peers the PPI charge seems to be lower for the Santander U.K. bank. What is the reason for that? Diamonte is asking the opposite question. Why is it higher than our initial estimates? Central Governments, can we give more details and shed some more light on this PPI charge? And then if we expect future of PPI charges in the future. These are all the questions I think on the PPI.

The calculation of what we have to pay for the PPI is in line with the other large banks have had to pay for this charge in the U.K., HSBC, Lloyd’s, Barclays, et cetera. The industry as a whole in the U.K. set up an extraordinary fund of about 6 billion pound sterling. We have a market share of about 10%, from 9% to 10% and therefore our charge is clearly in line with what we would have to pay according to our market share. We don’t expect to have to make any future payments for this. We think that we are more or less well covered with regards to future possible claims. And this figure is higher than we had envisaged originally. We didn’t announce it, we just made a general comment because we really didn’t know back than and we hadn’t done the calculation. Now the figure is more precise, but as I said earlier, this figure fits well with our market share in the U.K. and with what the other large British banks have provisioned for this concept.

Then, questions possible IPO plans. There are quite a lot of questions on what plans do we have with England, with the U.K., with Argentina regarding any possible IPOs in these countries and what are we thinking about IPOs in general.

Okay. About an IPO in the U.K., actually we currently have some uncertainty which will certainly affect the timing of our IPO in the U.K. So we still plan to have an IPO, but clearly we will delay it beyond the initial dates we had announced. The U.K. is still in a very open-ended regulatory environment. There is significant uncertainty about what the regulatory will be ultimately, especially after the Independent Commission for Banking publishes conclusions and that’s significant, this open-ended regulatory context. We also have some delay in the execution of the Royal Bank of Scotland transaction plus, obviously the situation of the market doesn’t help either. But having said that, the plan is to have an IPO but we won’t have it in 2011. We will delay it. That’s for the U.K. and for Argentina. I could say practically the same thing. There’s a lot of uncertainty in the markets and we’ll have to decide what the right time is for that IPO.

As for capital, there’s a question from Rajeet Chandra from Barclays, asking if capital issues going down 50 basis points, but your risk-weighted assets have also gone down. But actually that’s not true. The risk-weighted assets have remained at 47%, which is stable, in the quarter, but we’ve used up some capital because of the BZ W integration. The question is whether we expect risk-weighted assets to drop further in the future.

Well, we are very comfortable with our capital structure, as you’ve seen. Both at the end of 2010 and in the first quarters of 2011, we maintained our target of ending the year above 9% core capital, which is the guidance we’d given and so we don’t foresee any surprises there let’s say.

And continuing with capital ratios, there’s more questions, one from Hiro Yukifuji from Naowa Asset Management, also by our capital ratio targets, which you’ve already announced. What would be the impact of Basel III on capital?

We have already said that it would be 75 or 80 basis points less approximately.

A question from Neil Smith about whether convertibles have been taken into account for the EBA stress tests.

We already reported that they weren’t in December 2010, but yes, for December 2012 and the stress test. There’s also a question about the deduction of intangibles, which we’ll also, yes, deducted.

Rita Smith and Sergio Vanez asking us about whether we can clarify the surface charge or what do we expect there, what would be proficient between 100 and 200 basis points and what impact might it have on Santander. Both questions are pretty similar.

Okay. About that point, I want to be very prudent, because it’s not something that we can be sure about. We don’t know what kind of charge will be allocated to us specifically we’ve had no official announcement, but unofficially we believe that we’ll be on the lower side or on the lowest side of the different scales for that. So we expect because of our business model and our risk profile and the diversification of our business and our legal structure of independent subsidiaries that the surcharge that will be applied to us for our being a systemic bank will be in the lower end of that surcharge but of course that’s only an unofficial estimate because we’ve not had any official confirmation on this point.

Okay. There’s several questions about potential impacts of the SB, which I think you’ve already discussed when you talked about the core capital incent in the U.K.

We’ll have to wait and see what happens with that regulatory framework.

From M&I in Spain they’re asking – also Yuki Fugi and Bretard Smith Montano and Anontio Ramirez are asking what our plans are for any potential acquisitions in Spain. Are we planning to invest in any cajas or savings banks? And given the high integration costs and the potential reputational risks that might be entailed or involved in some of these transactions like acquiring the La Camb who would we be interested? And if the fraud way to you offer an asset protection plan, would we be interested in La Camb and so on and so forth.

This is a question too highly speculative so the answer can’t really be any more definite either. We don’t know. It depends on so many things and a lot of those things were contained in the question, clearly price and guarantees and different aspects. So we don’t know. We’ll have to cross that bridge when we come to it, as they say.

There’s also a question about Poland, same direction from Brita Smith. What do we think of that market? Are we considering potential future acquisitions? Would we be interested in the Polish bank?

Well our position in Poland is solid. It’s good. We have our significant market share plus the market. The bank’s performing very well as we’ve explained. It’s growing and growing its business and its profits significant, so we really don’t need any additional acquisitions in Poland. Having said that, of course, if there were some good opportunities in the market we would assess them, but it’s way too early now to say what our decision would be in the end because we don’t know.

And as far as your pay-out policy, this question is from (inaudible) from RBS and Tiao Lopez from SAAM , Carlos Berastain from Deutsche Bank and (inaudible) from Credit Suisse, all about our pay-out policy. Asking how much will be cash dividend? How much is script dividend? If profits go down this year will we retain the $0.60 dividend? Since payout would rise to above 60%, how are we going to split those $0.60 between cash and script and whether it’s still going to be a 50% pay-out target? They are all pretty similar as you see.

I think I said before when I was answering a previous question or in the presentation. It’s a question about guidance on our profits and as I said the bank will maintain its total shareholder remuneration of $0.60 per share. On the same policy respires to split in cash and script dividend we had last year, exactly the same.

Okay. Question about risk weighted assets (inaudible) from Credit Suisse. Have re re-calibrated our risk weighted assets or is it just balance sheet effect?

It is. It’s a balance sheet effect with new entries in this quarter. Such as, for instance, the Polish Bank which we’ve explained already.

And to finish with this part, there’s two questions. One about convertibles whether FINs or if they were out of the money in October, 2012 do we have any contingency plan to act on that conversion? Would we do it at market price or not? Would there be a loss? And the second is about the bank IPO. Have we bought any shares or not? Howell Leonard from IBS is asking this. And have we participated in that IPO?

Okay. About this last question, I also want to be very clear. Our basic principle is to treat our kind shareholders and our potential future shareholders because of conversion of these convertibles in the same way and so the issue will be fully realized to our converted to equity. It will become equity, no matter what. And in fact, our BPA figures include that full dilution. It’s been included in the EBA stress tests, as we’ve explained already, 100% as equity. And that’s basically what’s going to happen. The holders of these convertibles have received an attractive remuneration over these years and basically yield with the final conversion price will have had the same yield as any other Santander shareholder. So we think that’s the right approach and that’s how it’s going to be. Thank you. Oh, it will be market price, yes.

Moving on to risks, credit quality, there’s a general question about NPL entries in the semester, can we elaborate a little, can we – given the rise without the perimeter effect what do we think of the NPL and the group in general. And then I can ask more specific questions, but I can tell you already that in Spain there’s quite a lot of questions. Also from here Yuki Fugie Leonardo, (inaudible) and Benji Crillion from Maguire about the NPL peak. When do we expect that to peak and what trend do we see for NPLs. So these are all questions about group NPL and Spain NPL. Fernando de Asúa Álvarez: All right. The number for the group is greatly impacted by the number for Spain, as we explained. In the presentation, in Spain we had been provisioning and reporting in previous quarter presentations. In January and back in April, we said that we expected NPLs to peak this year at some point on Q3 or 4. We basically maintain that belief, but I should make some observations about it. First that the NPL ratio is a ratio and when we were doing our estimates and forecasts we had always considered that lending would remain constant. But lending is actually now drop at a rate of approximately 6% which means that probably this drop in the bottom figure of this ratio, if the top remains the same, will have an impact on the resulting ratio. We don’t think that the top is going to change. We think the absolute number of volume of NPLs we had the end, we will have at the end of 2011 will be the peak and will not grow further in 2012. But the ratio because lending’s dropping may go down, may rise. But anyway, that’s our guidance right now.

Some questions also about Spain. Ravi Chandra from Barclays is asking about generic provisions? How much is left? Have we used them up completely? Fernando de Asúa Álvarez: In Spain we still have 330 million in generic provisions which is approximately the legal requirement.

Another question about whether we are at that regulatory limit yet. Fernando de Asúa Álvarez: And yes, we are, approximately, as you’ve seen because we’ve not used any generic provisions this quarter.

Dari Amund is asking about whether the quarterly rise in provisions is due to a release in generic provisions or rising NPLs or a combination both, which I think has already been explained. A question about coverage from Raul Leonard from RBS and Benji Keeland from Maguire. And since coverage is at 49%, whether we expect it to drop further? Do we expect it to drop below 40? How much more do we think it can go down or how much more will we allow it to go down in the next quarter? Fernando de Asúa Álvarez: No. We don’t think that’s a number that’s going to change. It’s gone down slightly, but rather immaterially and we don’t think that it’ll go down further. We don’t expect any change there.

Antonio Ramirez is asking about problematic assets, doubtful assets basically real estate. There’s also a second question about this point. What trends do we expect for real estate assets in Spain? Prices if their share of the total is going to continue to rise, if we expect additional impairments in the rest of 2011 and 2012? So assets in our balance sheet right now plus any additional ones and the situation in Spain in general. Fernando de Asúa Álvarez: Okay. Well we have 11% of our loan portfolio in Spain and 3.5% of the groups loan portfolio is real estate, EUR25 billion. And as we’ve said and as you know and even in the presentation, we’ve provisioned 25% of that to cover doubtful real estate exposure. We’ve also increased provisions for foreclosed and allocated assets up to 32%. That reflects our views of that market. The question about how much will property prices drop or how much have they dropped where our provisioning level affects our views on that. We’ve also provisioned for land. Land now is provisioned at about 40% because that’s also our view on land prices and the revolution. And that’s basically it. That’s basically the answer I can provide for that.

Okay. There’s a question about the information that we included in the Bank of Spain presentation on exposure to real estate developers? And whether it’s group or Spain? And the long term is it Spain? Is the information required by Bank of Spain which took us to our developer exposure and our foreclosed and allocated assets? And then about Brazil, we have several questions from several analysts. One has been that quarterly rising provisions in Brazil and what our outlook is for provisioning in Brazil in the second half? Do we expect quality to continue to worsen? What is worsening most? Do we think there might have been a credit bubble or not? So basically these are the questions. Fernando de Asúa Álvarez: Okay. Brazil. There has been a rise in NPLs for the whole sector for all of our peers in Q2.

Why? Fernando de Asúa Álvarez: Well it’s something that, there’s several causes. There has been some indication that this was going to happen in the past because there had been a rise in defaults between 15 and 90 days in the first quarter for Santander and the sector. Santander had 34% defaults up to March 2011 and that of course is early warning that you will get NPLs. So that’s the first point. Second point is that it seems both for the week and the sector believe that Q2 – these defaults will – or in Q3 these will drop, because we’re seeing defaults drop already. So it’s been a peak that the whole sector has seen in Q2. But it will go down from now on. Reasons or probably because individuals were hit by some lending restrictions in Brazil, shortening of terms increased in the initial payment of a credit card and then how has that had an impact on these defaults, which increased in Q1. There’s also been some effect in SMEs, probably because of some earlier refinancing in the system. So basically the whole sector has experienced this rise in NPLs in Q2. But the forecast, which was the second part of the question, is that in Q3 this peak will normalize, will go down.

And what about Santander specifically? Fernando de Asúa Álvarez: Same thing as in the whole of the sector, but slightly amplified, because our business mix is more focused on individual consumer finance than our peers. We for example have a percentage of lending to individuals over our total loan book is 41%, when the sectors average is 32. So we’re more focused to retail individual’s loans. And we’re growing faster than the sector, than our peers in that segment, which means that our NPL rose slightly more than that of our peers this quarter. Although, it’s also true that the higher NPLs, because of this particular business mix was a means of higher spreads, because this is a more profitable business.

And there’s a couple of questions going back to Spain at Fische dealing with the risks area. There’s a question from Jaime Cerille about loss in our trading revenues in Spain, 10 million. Fernando de Asúa Álvarez: That’s basically wholesale banking. You have the details with the breakdown by units and you’ll see that it’s basically wholesale banking.

Alvaro Serrano from Morgan Stanley has two questions. One is whether we have any guidance on specific provisions. We’ve spoken about risk in Spain already but do you think or do we think it’s sustainable and do we have any visibility on specific provisions? And the second is at what rate can you reduce your real-estate exposure in Spain and do we have any targets to deleverage or reduce our exposure to our segment? Fernando de Asúa Álvarez: Right. Specific provisions in Spain are dropping slightly. They’ve dropped strongly in the first, well, last year and in Q1 and between Q1 and Q2, they’ve dropped a little, very little, specific provisions. And basically, I think that in the next quarters, specific provisions will remain at similar levels, perhaps slightly lower than those we have now although the fact that we have no generic provisions left means that the impact on our income statement will still be significant without that cushion that we’ve enjoyed in previous quarters. The second part of the question was what? Oh, yes, target. To reduce our real estate exposure, we’ll target it to reduce it as much as possible as quickly as possible. That’s the target, but in fact, we’ve already reduced it by EUR2 billion, as you see in the tables in the annex or in the appendix. And of course, we’ll continue to reduce that exposure; unfortunately, not as fast as we would like but our goal and our focus is certainly to reduce that exposure as much as possible.

Moving on to the financial side, we have several questions about the corporate center, basically about the financial margin. Can we explain that trend and how much is then due to funding costs or Alco? Second question or line of questions is about our ROFs, our trading gains. Fernando de Asúa Álvarez: We have EUR160 million up compared to other banks, which are weaker in that area.

And the third line of questions is about provisions and for that area can we elaborate a little about provisions? Fernando de Asúa Álvarez: Okay. I think I already discussed the financial margin. I think it was down as I mentioned with respect of the previous year. I mentioned that there was a general effect with rising interest rates. So funding for the corporate census is slightly more expensive because of rising rates. The second impact in the spread is higher as you all know, self-funding. And there’s another question which is charged to the corporate center and it’s about $14 billion. Margin there is a bit lower. But that is still pretty minimal. In the whole of the year will be a bit more over all these, rising 25 basis points in the semester has not had much of an effect. So the main two impacts, rising rates and rising spreads. As I have explained the hedges for our exchange rate risk this year, the euro has depreciated versus other currencies. And therefore that has generated couplet gains. That’s the main effect.

There’s a question about our exposure to sovereign debt. Saying that we had $42 billion exposure to countries like Brazil, Mexico, with low ratings and whether this exposure has changed since last year and what is our take on that. Another from (inaudible) from JP Morgan about the impact about wholesale funding on our net financial margin, which you’ve already answered I think. Fernando de Asúa Álvarez: As for our exposure to sovereign debt, BBB, I suppose he basically means Brazil and Mexico, because Chile is not the BB. We do have our core portfolios in Brazil of $25 billion and in Mexico, lots more. $4 billion in dollars, that is. There’s been no significant changes. The last significant change there was when we did the coupling case in Brazil, where as you know the liquidity excess was tied to public debt. So it’s just public debt in local currency. There’s no public debt in dollars or euros. This is all in local currency and the amounts are as I’ve mentioned.

The second part was, and now again, about whether you wanted to explain the cost of funding change, but you’ve explained that already. Fernando de Asúa Álvarez: Yes. I’ve answered that already.

And to close these two areas of questions come in from (inaudible) about whether it would make sense to buy back some minority interest in Santander Consumer. Fernando de Asúa Álvarez: There are no minority interests in Santander Consumer Finance.

(Inaudible) is asking about capital gains in the sale of your insurance factories in Latin America and whether that’s going to go to core capital or provisions. Fernando de Asúa Álvarez: We explained that it was going to be used to reinforce the balance sheet and when charged we will reuse it for that purposes. I think they said especially in the presentation about payout and the surcharge for systematically significant bank, we’ve already answered.

Another question is about rising tax pressure in the year. Fernando de Asúa Álvarez: And that’s due to profit generation in countries with higher tax rates or maybe that’s particularly the reason. It’s a trend that we’ve been seeing as more profits generate in countries with higher tax rates.

About Spain, there’s several questions about deposits. Antonio Ramirez and Benji Cleveland from Maguire, asking about the loss of deposits we’ve had, 11.6 billion, versus any deposits ex-rapos? This of course connected to the 2010 campaigns. Do we expect any more withdrawals in 3T, what would have been the results of last year’s campaigns, net, how do we see it, also the competitive environments, deposits in Spain and some more questions along the same lines. Fernando de Asúa Álvarez: Okay. Let’s take each of those turn. So that results for the second quarter. We’ve had the maturities of that special campaign we organized last year to attract customer deposits, up 4% campaign. And so in Q2 we’ve had the yearly maturity of that. How much have we retained? Just over 60%, so we’ve lost 40%, just under 40% of that. And that’s why there’s that annual drop in deposits in the results which reported. We’ve had a drop in deposits in Q2, versus Q2 last year, because of loss of just under 40% of the deposits attracted by that campaign which were just 30 some billion.

That’s on the side of the explanation of the fall of deposits and the result of that campaign. Now, we’ve been able to keep more than 60% of those deposits. So I have to say that it was a very successful campaign indeed, because when we extended that 60% of the money that came in at 4%, the price now is 120 to 150 basis points below what we gave last year. Last year we gave 4% on those deposits, and those that we kept we’re paying 2.6%. So let’s not forget that in this period the euro driver went up by 100 basis points. So I have to say that the campaign has been very successful. I’m being told that on the insurance capital gains there are some questions about that. They will be, they will not have an impact on the capital and how we will allocate that money we will decide when the time comes.

Also on deposits, a question from Marcellos Senaldo on Spain on the performance of the net interest income and revenue in general. How do we think that’s going to perform? What do we expect from the competition, the evolution of deposit lending and therefore the evolution of the commercial gap until the end of the year? Fernando de Asúa Álvarez: Well, the policies that we are applying in Spain are making revenues grow and the net interest income is increasing because of two things. First of all, because of the impact of the reduction of the strong fall of the costs of deposits, as I mentioned a few minutes ago that 4% that we were paying for deposits, now we’re paying 2.6% so it’s 140 basis points less than what we gave last year. Plus with the interest rate that is one point, one percentage point higher, that is having an impact on the income statement. And apart from that we’re also being very selective in our lending policy. So these two things together are giving these results despite the fact that the volumes are lower because there’s less economic activity and lending has fallen by almost 6%. But despite that, despite all those variables, we are still very, very positive revenues and we think that these policies we will continue to implement in the next few quarters and that will make our income grow in the future. So the trend we’ve seen ever since Q1 this year, with the turning point on the revenue curve, we will continue to see in the future.

On Spain, there’s a question from Santiago Lopez, why Banesto figures are different to those published by Banesto. Fernando de Asúa Álvarez: This has been happening for a year now and that is because of the deposit campaign and the cost of it that we just explained.

Several questions of exposure to Sovereign debt, basically Spanish and Portuguese from Samuel Lopez and Andrea Filtree. Can we specify the exposures to Sovereign debt of Spain and Portugal? Have these changed? Can we give details on the exposure in Portugal given the fact that in the EVA, you talked about EUR3.6 billion as compared to EUR1.6 billion? Fernando de Asúa Álvarez: EUR3.6 billion includes not only Sovereign debt, also loans and other items as well.

And then a question on the current situation in Europe, our Sovereign debt. What do you think can happen? Can you absorb the funding costs that you have at present and if our treasury activity has changed given the situation in Europe. Fernando de Asúa Álvarez: Well, our exposure to Sovereign debt hasn’t changed. We have about 20 billion or 21 billion of Spanish risk; 14 billion in the current company, Banesto, 5 billion; and other units, all of them put together, another billion. So that hasn’t changed. In Portugal, we have 1.6 billion of Portuguese public debt. It is true that we have loans for another 700 billion so it’s 2.3 billion exposure in total because we have these loans to publish to Portuguese public company. So that hasn’t changed. These Alco portfolios go beyond maturity. With regards to the situation in Europe, well, an agreement was reached last week, which we think is very positive, because I think it goes in the right direction with this agreement on Greece and also the possibility of giving more flexibility to the SCF. With regards to low rate funded costs, the CEO elaborated on our policy that we have of extending the assets spread. And that is the natural way to go. Of course that has an impact on economic growth and that is the main concern at a macro level. The tax management activity, well, it’s basically activity with customers.

How has it changed? Fernando de Asúa Álvarez: Well, basically the prices try to reflect the market conditions as could be otherwise in this activity. But apart from trying to reflect that in the prices, I would say that another aspect that hasn’t changed. There are banks that are much more specialized in the world of issues and fixed income and there is very little activity right now. And we don’t do that as much as some of our competitors, but, because the flex market conditions have proved otherwise.

Now in Mexico, there’s a question from UBS on the increase of NPL rates from 1.6% to 2.5%. And Imargo Rio asks about the increase in lending and the NPL ratio? Fernando de Asúa Álvarez: I remind you that in Mexico we bought a portfolio for $2 billion and that effects the NPL rate as well as lending figures.

In the U.K., from Lena Uki from EY Asset Management is asking about the volumes. How do we think mortgage volumes will change? And also loans to SMEs? What conditions do we have for those loans? And do we see growth opportunities for the loan book given the economic situation which is quite weak in the country? Fernando de Asúa Álvarez: I think the question is answered by the question itself. It’s a weak situation of the economy and therefore there is a weakening for loans. On the part that we’re very strong, which is mortgages, growth is flat. Growth is very, very little, practically no growth at all. Although there are re-mortgage activities and that is an ongoing activity because this is a very, this is a characteristic of the British market. But otherwise, very little activity and that will continue while the economy doesn’t grow. Now, the situation for us is a little bit different in terms of SME. We have a very small among SME. This is a segment which is a priority for Santander U.K. given its weak penetration in this market. So in relative terms, we’re growing quite a lot relatively speaking of course. We’re growing a lot in SMEs given the fact that our market share there is quite small. But I remind you that it’s because we start off with a very small market share, so flat or very little growth. If it’s not flat growth it’s very, very little growth because of the weak market conditions and we don’t think that the lending market is growing at all.

In terms of the net interest income, there are several questions from Raul Bernard and Marcello Bernardo and Roje Luciano from Barclays. Basically, how do we see the performance of the net interest income? Can we give any outlook given the fact that it’s growing very little? Are there more impacts apart from the regulatory or liquidity impacts? And could you say something also about the deposits? It looks like costs are going up on deposits. How do you see that? Fernando de Asúa Álvarez: Well, there is a tougher competitive environment because British banks that in previous years were in a negative situation are now competitive again in the market and we do see that there is a greater pressure on margins but not exaggerated. That might erode our spreads a little bit, although spreads are remaining more or less the same in loans and deposits. This new news that there’s not much activity and if we keep the same level of spreads, well the net interest income doesn’t grow very much and that is what is happening in the U.K. And we think that it will continue to be that way in the next few quarters because we don’t think that the economic situation will change drastically in the U.K. in the short term.

And to finish with questions about the U.K. (inaudible) is asking about the impact of regulations. Do you think there’s going to be more impact? Fernando de Asúa Álvarez: No. We don’t think so. In fact, in like-for-like terms is basically already included.

Another question on the performance of these and commissions, which are very strong in the U.K. Antonio Ramirez, asked if there’s any change there. Fernando de Asúa Álvarez: Basically it’s from wholesale banking, from corporate financing activities.

And to close question from the U.K. we have a question on quality. (Inaudible) from Barclay’s would like to ask what is our forecast regarding quality and he also asks about costs. Fernando de Asúa Álvarez: Santander U.K. has – stated very clearly that quality is a priority for the bank. We are still in the competitive quality ranking. We are not doing well as compared to our British competitors in those rankings. We have improved our position somewhat. Last year we were the last on in the ranking. And we’re not there any longer, but we’re still on the low side of the ranking. And quality for us is one of our priorities. Now that doesn’t have a clear impact on the cost. This – I’ve never believed that it’s either cost or quality that they are so interrelated. Of course, yes, we have had to hire a few more people in the call centers, because we’ve brought the call centers from India to the U.K. and we’ve had to hire new people, but it’s not that important for it to have an impact on our crawl space in the U.K. Now quality is very clear for us. It’s a slow process. We think that we’ll see the results little by little. It’s a very slow process, but I hope that in 2012 we can be on the top part of the rankings that will be there at the end of the list.

Yes. A couple of questions more, Brazil, (inaudible). How do we see the macro scenario for Brazil? And (inaudible) would like to ask about the performance of volume. Do we think that 15% that we mentioned is still valid or do we feel any pressure in terms of growth and also that question on revenue in their country on the midterm and also the quality of risk? Fernando de Asúa Álvarez: Well, the macro scenario in Brazil, it’s not too different, it won’t be too different in the future. Last year grew a lot that we think that for this year, it’s going to grow 3.5% to 4%, volumes, 50%. Yes. We think that is still valid. We’re growing at 17%; 15%, 16%, 17% is what we see in the system and we think we will be there in line with the industry. Of the midterm in the country, well, the growth rates are having an impact on the revenue. The revenue is growing at two digits. I think in this first half, the growth has been 13% and on the midterm, we think that will continue to be positive and the spreads remain the same or they have increased somewhat in this first half of the year. And on the midterm, I would say that we are quite optimistic with regards to the performance of Brazil and the possibility of generating profit there. Twenty percent, more of less is the figure that we would like to reach in terms of the results generation in Brazil. Regarding the quality of risk, we only mentioned that we think that provisions in absolute terms will grow, depending on the mix, will grow a little bit more or less. If it’s more consumer, then that will mean that it will grow more; but if it’s in wholesale, it will grow slightly less. But we’re growing right now at almost 30% in the consumer area.

We have a question from Brazil, which is more or less the same. Will it grow as much as last year?

Yes. It will remain stable.

And there’s a question on the net interest income in the United States, this response to asset and liability movement that we see there.

There is nothing new there with regards to possible outlooks.

And the last question is Nacio Fedacial from Credit Suisse in Portugal. Can we give an opinion of the performance of the P&L given the macro scenario in the country and the aid that has been negotiated plus the structural measures that the government has been announcing?

Well, the P&L in Portugal is going to suffer on different sides. On the one hand, because the country and the bank are deleveraging, which means it’s – the growth of lending is going to be, well, it’s not going to be growth it’s going to be a fall in lending and this will have an impact on the revenue. And the higher funding costs at a retail level, which in Portugal has always been high, because of the war on deposits as well as wholesale, that will also have an impact on the earnings and thirdly, a higher NPL rate. We think that in the economic context of Portugal in the next few years we will see a higher NPL so therefore less activity from the business point of view. Less activity, the deleveraging of the banks will strike a balance between loans and deposits. It’s a bit high now. It has to be no more than 120% as established by the Bank of Portugal, higher cost of funding, retail as well as wholesale, and a higher NPL rate. Now, nevertheless, Portugal will continue to have profit. We mentioned this earlier when we talked about Portugal in the presentation. We don’t expect to have losses in Portugal. We don’t expect to destroy capital. Even taking into account all of these impacts, the bank will generate positive results but less than what we’ve been generating in previous years and less than the ones we will generate this year. Fernando de Asúa Álvarez: Okay. I think that we have already answered all of the questions. If that is not the case, please get in contact with our department and we will send you the questions, the answers later. Thank you very much for coming.