The first thing to be said is the economic context is still very difficult and also very diverse, depending on the geographies. In Europe, at the beginning of the quarter, it seemed that there was some degree of stabilization. But now, in the latter part of the quarter, once again, we see signs of instability in the market. The U.S., on the other hand, closed 2011 with higher growth rates and remain solid at the start of the year, while Latin America still showed dynamic growth rates of around 3% or more in the main countries. (Inaudible) the Grupo Santander has applied different strategies depending on the countries and the momentum in each economy and the priority in all of them was to strengthen our balance sheet, aided by our strong capacity to generate results. Quick overview of the quarter, three keys were, first, strong gross operating income, with over €11.35 billion, that’s 8% up on the first quarter of 2011, enabling us to post a pre-provision profit of €6.26 billion which is a new quarterly record and an attributable profit of €1.6 billion. Second, the group’s diversification. At this time, 56% of our profit comes from emerging countries. I remind you that in line with our strategy, we have strong local franchises and we continue to improve our geographic diversification as demonstrated by the latest acquisition in Poland. And then thirdly, we have continued to bolster our balance sheet significantly in the quarter. We have once again improved our capital ratios whilst under BIS and EBA criteria, we’ve improved our funding structure and our liquidity, improving our loan-to-deposit ratio to 115%. And in credit quality, we compare well with the industry in the main areas where we operate. Let’s look at each of these points in more detail. We…

In the UK, the focus is on companies without forgetting the linkage potential we still have with individual customers, as well as in retail deposit. In the United States, we will continue to improve the commercial franchise, which will enable us to expand the range of products offered and the profiles of the customers that we target. The conversion of Sovereign Bank into a National Bank Association and the new IT platform will drive this transformation. In consumer lending, we aim to consolidate the levels of penetration and the results achieved, and maintain profitability differentials with our peers. Moreover, the strategy followed in agreement with producers gives us growth possibilities. Of note are Germany’s solid results. In emerging markets, we continue to take advantage of the good macroeconomic environment to maintain high growth rates. We see a good evolution of profits in Latin America, driven by revenue growth. And in Poland, we will progress in the integration, while meeting the envisaged growth path of profits. In short, diversification, balance sheet strength, and the generation of recurring profits enables Santander to face 2012 confident of continuing to produce good results in a still complex environment. Thank you. José Antonio Álvarez: The first group of questions is on strategy and regulation. And Sergio Gamez from Merrill Lynch, Antonio Ramirez from Keefe, Britta Schmidt from Autonomous, Paco Riquel from Nmas1, Patrick Lee from Royal Bank of Canada, and Alexander Pelteshki from ING ask two things. First of all, the statements made by the IMF with regards to the need for public capital, proposals of ring fencing and the creation of a bad bank in Spain. And related to that, the role of the deposit guarantee fund in Spain, whether you think more support will be required, more leveraging, what would be the schedule for that, if public capital will be needed, and generally speaking how do you think the funding will be solved for the deposit guarantee fund in Spain?

And what the fund says is what we are also saying. This -- what our – it’s what our Chairman said in the General Shareholders’ Meeting. We have to continue with the provisioning of the sector. And we have to agree with the fund in that regard. With regards to what has been called the bad bank, although it’s not really a bad bank, but that’s how we’re calling it. The basic problem here is that banks must manage the real estate assets they have. And this process of managing these assets, some people believe they can do it themselves, which is our case. We have the capacity to manage our own real estate assets. And in fact, in the first quarter of this year, and I think this appeared in one of the slides, we – the last quarter of last year and the first quarter of this year, we are selling as much as is coming in, and we hope that at the end of 2011 to have achieved a fall of these assets. So we are managing these assets ourselves. We’re doing this well. We are going to speed up the sales of those properties. The Royal Decree of February will make it easier to accelerate the selling of these assets and this is very important that we manage this process well. How we do it is not that important. So, I repeat, we are managing this ourselves and we’re doing it well. We’re very pleased with how we’re doing it. And you’ll see that in 2012, you will see a fall in the net stock of these assets in our group. And with regards to the deposit guarantee fund, nothing has been decided yet. But we know what is happening and we know what the rumors…

In the first quarter, we haven’t charged any provisions for the Royal Decree, because we’re having to apply the international accounting standards, the IFRS and the transactions that are made in the market are still at prices that would not justify applying the levels of provisioning required by the Royal Decree. We will do this gradually in 2012, as the market reflects these new prices, which it will, because of the higher demands of the Royal Decree. And therefore, quarter to quarter, we will see how our provisions and therefore, our coverages coincide with market valuations of the different assets. How much do we need in 2012 to comply 100% with the decree? Well, after discounting the Colombia capital gain, which we haven’t applied yet but that we will to this effect, we would have about €1 billion to apply in the form of additional provisions from here until the end of the year. José Antonio Álvarez:

José Antonio Álvarez:

José Antonio Álvarez: José Antonio Álvarez: Sovereign debt is basically in Spain, where we have about €35 billion. We’ve increased it by about €6 billion, €7 billion in the quarter. We had (audio gap) for the rest of the group, another €16 billion. These are basically portfolios in Poland, Chile. And as for the rest, the €86 billion, €63 billion is sovereign debt, €23 billion is not. But basically, those assets are mostly –you can see this in the U.S. The rest is various assets in the different banks. Mean maturities were as – or mean term in general, it’s between a year and a bit in emerging countries and three and a bit or three and a half in the mature economies. The contribution to our trading gain, maybe, 3%, 3.5% in the whole of the group. And I forget if there was some other question. Do try and speak closer to the microphone.

José Antonio Álvarez: The AFS increase, we’ve already discussed. And the funding plans, 2012-2013, well, it will depend on the subsidiaries we have planned to issue, depending on the subsidiaries. The biggest issues will be in the UK, where we have the plan to issue €13 billion in the year. We have already issued €8 billion. In Spain and Portugal, the deleveraging covers need for issues, so the €35 billion we’ve deposited with the ECB is a sort of cushion in worst-case scenario. We will continue to issue if the market is open or in good condition, to retain a presence in the market in the two products we generally issue. In the UK, the €12 billion or €13 billion we’ve said, basically with securitizations, covered bonds and some senior debt issues. And much more modest amount in Chile, we might issue €1 billion or €2 billion, and in Brazil, €3 billion or €4 billion. Additionally, there is securitization activity should finance the U.S. business. It’s very active and it’s funded with securitization. And the business in the Nordic countries and in the UK is also being funded with securitizations. And these are basically the issuance plans we have in the Group for 2012 and beyond, 2013. So in summary, in mature markets Spain and Portugal, deleveraging is basically equivalent to maturities and we will issue to help retain a presence in the market and other markets. That’s the specific plans we have.

And there’s a question by Rohith Chandra from Barclays, also on trading gains and whether we can give them the breakdown and whether it’s sustainable, this kind of figure. And he refers to Banesto again and the €154 million that Banesto reported. And again, remember that they’ve reported everything – it’s in different parts of the consolidated accounts and specifically, the €354 million we have at the top is because of the divestment of Banesto portfolios. There’s also a question about ECB funding, which I think you’ve already answered. José Antonio Álvarez:

Andrea Filtri from Mediobanca is asking about EBA capital ratios, if we had reflected the provisions of the new Royal Decree. I think we’ve already explained what the impact of that law is going to be and how we’re going to do it. And someone from Natixis is asking about the impacts of the deferred tax assets and the Basel III, and in general, the phase-in. I think we’ve announced already several times that the impact of all those new frameworks will use up between 15 to 20 basis points annual starting in 2015. And finally, to finish this part, we have some more questions on strategy and regulation about dividends. Jaime Becerril from JP is asking about the payout plan. Why don’t we cut dividends instead of selling or reducing our stake in businesses or subsidiaries? José Antonio Álvarez: There is basic strategic issues connected with management, with the group’s valuation, et cetera, et cetera. So it’s nothing to do with dividend decisions and the dividend will remain at €0.60. This year, we approved three scrip dividends, as you know, in the AGM. We will have four interim dividends of €0.15, of which three will be script dividends and that’s the policy we’ve announced and confirmed.

Moving onto risks, Spain, there are several questions. One by Matteo Ramenghi from UBS, Alexander Pelteshki from ING, Ryan Cost from Citigroup, about NPL trends in Spain by segments, mortgages, SMEs, and trends in those segments. Coverages and ratios – I think you’ve already said something about that in the presentation. And specifically, with developers, they want a breakdown of the loans per segment and how do we – and the NPLs per segment and how do we expect our exposure to developers to evolve in the future? So it’s all about NPLs in Spain. José Antonio Álvarez: Where will NPLs be in Spain at the end of the year, or throughout this year? It’s hard to predict. It may rise from the figure we’ve just posted, to maybe another 0.5% by year end, less certainly next year, but it could maybe go up another 0.25% or 0.3% in the whole year, and this should be probably middle of next year. By segment, there is a table that we showed in the presentation in which we tried to answer that question, looking at total NPLs in Spain, and the breakdown between real estate, household mortgages and other loans, showing a breakdown by different segments, how much in our balance belongs to each segment. And so in this graph, which I’m going to try and find again, here you go, what you see there is basically that loans with real estate purpose, which are basically real estate developers, €32 billion, sorry, €22 billion; the €22 billion, which are loans for real estate purpose have had a very high NPL, as you see, of 32.8%. On the contrary, the rest of the portfolio has performed quite well until now. Individual mortgages, NPLs have remained flat. Certain fears and certain rather historical predictions…

Same question from David Vaamonde from Fidentiis. He’s asking about the sale of portfolios, if we’ve sold off any portfolios? Can we elaborate a little bit about the sale of loan portfolios and whether the fall in our exposure is because we’ve sold portfolios and what do we plan to do in the future in this area? José Antonio Álvarez: We don’t have any specific plans, but of course, we wouldn’t discount that possibility, as the normal activity is not going to significantly change neither NPLs nor outstanding balance. So it’s part of the usual process of portfolio sales that happen in the different subsidiaries, depending on – around default management policies. José Antonio Álvarez: Moving on to other areas, questions about the UK from Britta Schmidt from Autonomous, Nikos from Citi, Matteo Ramenghi from UBS and Patrick Lee from the Royal Bank of Canada, asking us to explain about the rise in provisions in the UK and whether it’s going to continue, whether this run rate of 33 basis points up to 40 basis points cost of risk would be a good proxy, and whether we expect more charges from corporate portfolio or any other. So by segments, if there’s a one-off, it’s all about the UK and provisions.

That’s one reason, and obviously, that will continue, since Santander UK wants to increase its penetration in the SME segment. That’s part of our strategy of the unit. That effect will continue, and that will affect NPLs and provisions because of this change in the business mix. And then, we have also had in the non-core corporate part, the part that’s run off and non-core, and doing social housing, we have had a slightly higher increase in provisions. And that, together with what I’ve just explained, which was the biggest contribution, has meant a slightly greater need for provisions. But I do want to underscore that our provisions levels in the UK are very conservative, very well-provisioned indeed. José Antonio Álvarez:

But in any case, our ratios today, our NPL ratios, now compare very favorably to those of our main competitors in Brazil for NPL trends in Brazil. If we compare it with Q1 last year and also with Q4 last year, also very similar to what’s been experienced by our peers. There has been a strong rise in provisions in comparison with Q1 2011, but that’s also been the case for all our peers and also a rise, a significant rise versus Q4 2011. But again, this is connected to two factors, first, growth in lending. We are growing double-digit growth, high double-digit growth of our lending, in fact, more than our peers. Having said all that, in our particular case, there’s also an effect that I should mention, and that is that this rise in NPL is very much in the individual retail segment. Our business mix in Brazil is quite concentrated on the individual consumer side, and the usual loan products for individuals in Brazil have a higher NPL, so that’s basically what we can say. I don’t think NPLs are going to fall in Q2, they have – I do expect them to plateau. I don’t think we can expect that there will be a fall in the second semester, because it is an industry-wide trend, again, for private banks, not for state banks. They have other kinds of lending with other trends, and that’s what we can say.

As a result, in the system, more NPL has emerged, and although this rise will probably stay, it is not really a concern. It is still very small and the economic forecasts for the country are very good, because the economy shows good fundamentals. And what we see in our bank has been experienced also by all the major competitors in Chile. Provisions up very significantly, but it’s all due to the same underlying issue that I’ve just mentioned. José Antonio Álvarez:

José Antonio Álvarez:

If we subtract the trends in that segment, lending, at least for the Santander, would be growing. We’re growing lending to businesses. If we now look at property and real estate in all other areas, lending is growing, up 3% for businesses and other individual loans. So the overall effect is a little misleading in terms of our strategy. Banks, and certainly ourselves, are not at all restricting lending deliberately, or deleveraging on that side of things. José Antonio Álvarez:

And this, together with the hedge, which we have, in fact, post debt, has meant that there’s been a strong impact on our income and you see that very clearly on the income. But on the other hand, at the macroeconomic level in the UK, spreads have held, are actually slightly improving for lending, for deposits. There is very strong competition in the UK that’s based on competition for deposits, and so there, we haven’t seen an improvement in the cost of funding. But together, lending and deposits, we have seen a slight improvement in spreads. So the impact on our net operating income or our net interest income is mostly due to falling volumes and to the cost of funding, as well as the hedge not being there anymore. So the current rate, will continue during next quarters. And the profit we’ve posted for Q1 is, I think, also going to be quite typical of the profit levels we expect for the UK in the coming quarters. That is, if you multiply that by four, you will have a good proxy for the year-end profit for the UK. José Antonio Álvarez: And from Citigroup, about the investment that we announced for three years of €490 million in the UK, can we elaborate on that, if it’s going to be an investment or a cost and how is that going, the program and the investment itself? No news there. Well, there’s – therefore nothing to say about that. There’s no more news than what we announced in Investors Day about the technology plan linked to the RBS deal, which as you know is – has been implemented. And then on Brazil, on lending, Benjie Creelan from Macquarie, whether we still have the same opinion on the lending increase in Brazil of about 15%? And how do we see the volumes in Brazil?

But economic growth is still a priority for the government. So it is accepted in the market that that might be the growth level. So with all those levels of growth, lending, we think, might increase and therefore, we’re going to see our business grow 15% to 20%, our lending, reaching about 17%. If we don’t expect too many changes. The government, as we know, is making a great effort to reduce the spreads and the rates and the industry is trying to follow those indications. We don’t think that is going to have a significant impact on the accounts, though, and we think that Brazil, where I can confirm that this – the guidance that we gave at the end of the year or beginning of this year, that the earnings will grow by 15%. We can confirm that now. José Antonio Álvarez: There’s a question from Alexander Pelteshki from ING about Mexico. How much do you expect to grow in volumes of loans in Mexico? Do you expect to grow more or less than our peers? And how do you see the system growing in Mexico?

Good growth with good results, and with a very good outlook for the next few quarters, because Mexico is performing very well. It is the one that is performing the best out of all the large Latin American countries, and we hope this trend will continue in coming quarters. José Antonio Álvarez:

Okay, so I think we’ve answered all the questions that we received. If there are any pending questions, please get in touch with our Investors department. We’re at your disposal to answer any further questions. Thank you so much, and see you next quarter.