Good morning, everyone to this is Santander First Quarter 2015 Results Presentation. This is [indiscernible] Investor Relations of the group, we will proceed with the results presentation which will be called by our CEO, Mr. Alvarez and our CFO Mr. Garcia followed by the Q&A session. As you know, we will take your question and no webcast this time. So we can limit of two questions per analyst and whole investor. So with no further delays I hand over the floor to our CEO.

Thank you, Savio [ph]. Good morning to everyone. The presentation as usually, we spilt the presentation in two parts. The first one I'm going to elaborate about the group performance in the first quarter 2015, afterwards, our CEO Mr. Jose Garcia Cantera will elaborate on the main business areas. We plan not to go through all the business areas, we have to leave more time for questions, that's you have presentation all the details about the units we've do not plan to elaborate in detail. And finally, I will make some conclusions of this presentation. Just starting with the macro environment, we are seeing which we're growth in our businesses. Let's say we are seeing good developments both in the US and the UK. The Euro sun probably is be hiding which is hiding is a little bit which is unexpected mainly in Germany and Spain and the margin economies we have probably now greater activity in Mexico, Chile and Poland. Brazil is lagging well behind and is in a middle of an adjustment process that probably leads the economy this year into recession. We are forecasting this, a decrease of 1% of GDP and finally and banking business continued to be affected by the into rate policy in the maturity of the mature markets. Last but not least back for competitions in some markets we see later on in our presentation. Starting with numbers, the trends in the 1Q were pretty similar of those we saw in the last quarter 2015. We saw it continued to normalize, we have been speaking for quite bit of time about normalization of the profits, we are following the same trend. Profit was ahead of EUR1.7 billion 18% higher quarter-on-quarter and 32% higher year-on-year. Drivers of this growth, the higher commercial revenues, higher…

Good morning everyone. Let me go through the main business areas. the breakdown of profits continue to show our high level of diversification and very well balanced source of profits around 20% come from Brazil and the UK. Spain contributes around 15%, US Santander consumer around 10%. This is similar breakdown from the one we had in the previous quarter. If we look at the profits by geography, all of them had positive earnings in quarter. Positive growth in earnings with quarter with exception of Chile basically because of the lower inflation that we had, this year relative to last year. I will make a quick comment on the smaller countries and then I will go into a bit more detail on the major units. In Mexico, we have a positive commercial strategy. The business is expanding. We also expanded our branch network as you know we grew our branches by around 200 and that is basically contributing to positive net interest income that increased 11% in the quarter and the lower cost of credit that we had in Mexico, basically explained the 13% growth in net attributable profit that we show for in the quarter. In Chile, well we have a close to $6 billion portfolio is affected by the ratio of inflation. We have significantly lower inflation in the quarter that explains the lower revenues. This high to some extent a very positive dynamics that we are seeing in the quarter growing in companies, growing in high income individuals. We are gaining our commercial punch in the country, so we feel comfortable very happy with the performance in Chile and we think that, as excluding these inflations effect, the underlying trends are positive. In Poland, we were negatively affected by the lower interest rate that we had in…

To sum up, to give you time to my request you want. So let me to sum up the conclusion. well we are thinking we are facing a relatively benign growth environment in our main markets probably but Brazil, with some uncertainties in very low interest rates and increasing regulatory requirements that as a constant in the industry in the last couple of year. We starting the year with a solid performance, with dynamics results nine out of 10 volumes are growing profits. Volumes we are growing almost every geography. From our qualitative standpoint, we have some liquidity and capital ratios appropriate for the business model balance sheet structure on the overall profile. We are seeing with expect to continue to see more dynamics and risk and uncovering ratios and the cost of credit improving at the growth level in our almost all the units, are recognizing that in some units that better there is little room to growth. The revolution results, volumes and capital, is low to improve our main profitability ratios in line with our and the targets we established for the three year plan. We continue to make progress in our strategy and let me to finish this presentation making some comments in relation with the other, how we are evolving in our starting relation with customer and previously associated the target we establish. In relation with customers, we are standing different tools that new CRM seen in Chile, Brazil, US and Spain. 1|2|3 wall has been implemented in several geographies in Portugal, Poland and Germany. We have new initiative in relation with companies to have a better operating model, digital operating model with company and individuals, the multi-channel strategy is following is progression well across all units. In relation with ample years, we are launching a new [indiscernible] plant to ensure that we develop properly the talent we have inside the company. Well in relation with our combination with associated you know we have a extensive program of universities, in which we expand to invest million in this 40 years. In this quarter we present a new web for the Santander University company portal, and we also reach an agreement with a universe here in Madrid to pioneer in such institute in big financial data. Lastly, during the first quarter several steps were taken to enhance the transparency we have and make each year to exercise the rights. Impacting the last investors call meeting. The participation via electronic devices has multiplied by a factor of seven. in short, we are progressing well in terms of result as well with cultural transformation we are following internal interbank in order to reach our targets to be a bank simple personal as we decide that we want to be. Finally, let me to remember that well we have a investor day that is held in London at [indiscernible]. Now we remain at your disposal for the questions you may have.

[Operator instructions] [Indiscernible] from Goldman Sachs.

Thank you very much for doing the call in the English and for taking the questions live as well. I would like to ask two questions, the first one is on the deferred tax assets. can you just update us please, what the outstanding amount as of the first quarter is and what your views are on the debate at the relating to the European Commission revision of the deferred tax assets and their potential deductibility from the capital base, how would you react to that and what do you think the impact on Santander would be that went through? and the second question I have it relates to the credit quality evolution, so your non-performing loans are falling and the coverage ratio so ramped up by 2 percentage points this quarter, but the P&L charge for credit risk is broadly flat this quarter, how should we think about this, is there a level of coverage that you think, you want to reach and at that point we should expect the sharper decline in the P&L charge or do you think there is a going to be a gradual decline, how should we think about the provisioning leverage in the context of Santander? Thanks a lot.

Thanks Yian [ph] let me collaborate on the case issue, as you know what we have is a, a process that is about to start, but the bank commission is opening an investigation, but is not yet open official investigation on this topic to speculate on the outcome of process that is not yet started probably to front line article elaborate on this, what I can give you is a data that related with the amount of details we have in the balance sheet and potentially can be affected from whatever outcome of this process or another process that may follow the same path and done by European Commission or the NCB or whatever other regulators. We have around EUR5.7 billion something like that in our balance sheet, so you translate this into core capital is below 1 full percentage point of core capital. This is amount, this is on our annual report and we publish, I think at the year in annual report and into the half year report. So we update the market with these figures every six months. Particularly to elaborate more on this, so I think we don't have more information than that. The second question is about credit quality. Well as I anticipate in my presentation we were talking for the year about normalization of profits and one big piece on these valuations was the reduction on cost upgrade. Well, we being going through in normalization in the amortization markets for sure. We are already normalized probably in consumer finance and up the main deal is remained to be done in the Spain probably and in Portugal and the cost of credits particularly in the Spain where we are right now is maybe below 100 basis points. we should act into this, we average are currently 60 to 70, but probably you can expect that some kind of goal, should happens normally after a crisis like the one we suffered in Spain because the collection recover, but the room from where we're now 100 basis points cost of credit till the average across the cycle that 60 to 70, it gives you a number above where we are. In Brazil, that maybe our point the cost of credit is falling because the change in mix. Yes, so we don't break, changing mix in the country. So now we have less consumers, and secured consumer lending and much more secure consumer lending. Let's say mortgages and we have also much more large corporation and disposal that normally has significantly lower cost of risk.

That's very helpful. Thank you very much.

Next question comes from [indiscernible] from Nomura please go ahead.

I've two questions. First one Spain, net interest income and margins. It looked like there was fairly decent pressure on margins this quarter were to decline in net interest income. I want to wonder if you could just elaborate a little bit more on the type of pressure you're seeing lending yields and you think the competition is going to evolve, how much more downward pressure, do you expect to see on lending yields in Spain and the second question is on Brazil. as you highlighted the changes in mix, the cost control that you're focusing is having quite a positive impact on the P&L, but I just wonder given the ongoing deterioration in the macro environment, how long do you think expect to see positive trends in the P&L in Brazil given the deteriorating economic conditions. Thanks.

Okay let me elaborate on Brazil and I will the Spanish question to Jose. In Brazil, so it's true that we're facing a challenging environment, but let me to re-stress what we've done in the last two or three years that it has to be relatively optimistic about the outlook of our franchise in Brazil. We are not working within initiative Brazil, that the significantly different than the consensus. we are thinking the GDP is going to fall 1% this year, so we don't expect a significant lending route, meaning significant in Brazil Real growth, we expect to grow the loan book probably around 9%, in line with inflation. So no growth in Real terms that for emerging economy as you know is not particularly demanding or particularly aggressive and we expect to grow in line with this. What we have done in the last few years, we improved significantly our franchise in several France. the cost base is the third year in a row that we're growing our cost base significantly less than inflation, while our competitor probably growing in line or above inflation remember that they each agreement in countries was around 9% and we're lowering the cost much lower than this. So this is, we work a lot in the cost base. We work a lot in our capacity to in our collections skills and at the same time, we change dramatically the business phase. so having all of this, taking all of this into account and understanding then the environment is quite demanding, we are fairly positive that we can continue to deliver some revenue growth in the country with very good cost control and probably about the same cost of risk. Yes, so maybe is more up and down due to specific cases, but overall we see an fairly stable P&L in the coming quarters in the trends in a market that is not performing very well. So now I hand it to Jose to elaborate on income and margins in Spain.

As we showed in the presentation, we see a strong competition on the asset side very strong competition as interest rates are very, very low and we have low liquidity we are seeing, lot of competition on the asset side. It has to give an idea of what we are and in terms of companies including all types of companies, we are producing right now loans at around 200 basis points. A year ago, it was around 260 basis point and that trend that is continuing, the only exception to that is mortgages. New mortgages are being produced that is created of our own 150 basis points relative to the back book at around 90 basis points. But the trend clearly going forward is lower spread on loans because of competition. On the liability side, so far we've been able to compensate because of the drop in the cost of deposits, but that has limit. Obviously you know we think we can have few more causes just few more causes of positive news that, but it will be a point where that factor will stabilize. So we think that going forward, the pressures in terms of margins are going to mount. On the other hand, as we described, we're seeing very positive trends in new production. We are seeing new production in mortgages going up 24% and companies lending going up high double digits. So the combination of those two factor is, what is going to be driven net interest income going forward.

Thank you, very clear.

Next question comes from [indiscernible]. Please go ahead.

Yes I wanted to elaborate a bit more on the net interest income in Spain and also in Brazil. And regarding the contribution loan portfolio because net interest income has fallen quarter-on-quarter despite the better customer spread. So if you can update on the loan portfolio and a year contribution in the quarter and also in Brazil, the net interest margin is up quarter-on-quarter despite the lower long spreads. So if you can update there on any contribution of the loan portfolio affecting in the quarter as well?

Okay, let me to elaborate on this. I pass the question ALCO portfolio to Jose. In Brazil, probably to elaborate on the longer stats, is the only geography in which we are seeing clearly from book increased, we are able to increase the spreads in the loan book. Yes so in the last quarter we saw this trend and we think this is going to remain in the market for a while. so positive in the certain years in this front assuming that our mix and speaking like for like for the mix effects continue wither, but on a like for like to increase the spreads. You want to elaborate on the ALCO contribution in the Spain.

Yes, well both in Spain and Brazil. In Brazil, there was no contribution from whatsoever from ALCO portfolio to net interest income and in Spain because of lower interest rates, the contribution was significantly lower and the one we have last year. Roughly it was like around EUR100 million less is slightly more than EUR100 million less contribution to margins, this quarter and it was a year ago.

Next question comes from Carlos Peixoto from BPI, please go ahead.

[Indiscernible].

Sorry, Carlos we couldn't hear. So unless you repeat on much more clear basis, we'll IR rep will call you for follow-up.

Sorry, can you hear me better now? Hello? Can you hear me?

Next question comes from Carlos Peixoto from BPI, please go ahead, sir.

Are you hearing me now?

I think we jumped Carols, we'll follow up with him. Next participant, please?

Next question comes from Andrea Filtri from Mediobanca. Please go ahead.

Two quick questions, one on strategy and one again on ALCO. Could you please provide more details on the Pioneer Santander's management deal with regards to Santander's management P&L in 2014 prospects for a subsequent IPO further acquisitions and a comment on the completeness of the product offered and on the governance of the combined entity? And on the ALCO, if you could please provide as usual the breakdown of the portfolio, the contribution Q1, 2015 P&L and the maturity profile. Thank you.

Okay, with relation with Pioneer deal, we have announced I think two days ago, that we signed a Memorandum of Understanding, we signed on some conditions. Now we're entering the process of drafting the contract that it's going to last maybe two months. we will sign the final agreement around in two months or don't take this for granted is not written not two months or one month or maybe three months, but we will sign the contract in two months and afterwards we enter into all the all the regulatory process that it's going to be quite long. Probably as long as one year. so because we will be asking for regulatory approval in all the judicial in which we have asset management companies that basically means in all the jurisdictions in which we have a core subsidiary, so Mexico, Brazil, Chile, Spain all the jurisdictions. So we will have an at the end an operating company probably one year from now is the timetable I have in mind. But this May is more changes around the route. This is the timetable also that now written in the stamp. And Jose do you want to elaborate on ALCO.

Yes, the total ALCO portfolio that we have at group level amounted to EUR84 billion the contribution to net interest margin the quarter was EUR350 million for the group.

Next question comes from Britta Schmidt from Autonomous Research. Please go head.

I've two question please. the first one is, to what extent was the level in Brazil was impacted by the US Dollar versus the Real, is that hedged on a local basis and do you expect that this would be reversed to some point if the interest rate continues to improve and then secondly and within Santander Bank in the US, the cost income ratio is at 71% impacted by the higher regulatory charges there. Is there any management action that you can anticipate and could talk about improve the situation there? Thank you.

In Brazil, I think your question refers to what point the level of interest rate as I understood you well is impacting in the capacity to the revenues, up to what point in movement rates changed our capacity to new revenues, is not an important topic this one is Brazil. as you know the amount of the dispatch, we get on deposits is relatively low is around 1%, as you know the maturity of the current accounts and cheap deposits should be used in the Central Bank and the Central Bank pays you or nothing a fixed rate. So high rates in Brazil, do not translate necessarily into higher significant, higher revenues because on the liability side, we have the reserved requirements coming from the Central Bank and this, prevent has to make to increase the revenues due to this. The second question related with the US and cost income in US and naturally we have a unit that is bank that the cost are relatively high, the cost of income is very high. We are mixing in the bank, as you know we are incorporating a holding company in the US, from the scratch probably all these costs are falling into the bank cost. Probably we should look more at the cost of the consolidated holding and not march into the bank isolated because probably some of the cost that will fall into the holding in the future now are situated in the bank. Having said that, our banking operation not a consumer operation banking operation in the US. we have plenty of work to do to improve the franchise and the revenge side should be improving in a significant way, is not that much, is not that we have probably high cost base, is more that our capacity to raise revenues particularly the fee income is particularly is weak compared with our competitors in the capacity, the NII we are more in line with competitors, in the income we are lagging well behind those competitors and there is plenty of work to do in improving the franchise in order to improve the revenue generation and having the better cost income ratio.

Next question comes from Ignacio Largi [ph] from BBVA. Please go ahead.

One question on Mexico and the increase in the cost of risk, what shall we expect going forward on the cost of risk in Mexico for 2015? Thanks.

Well we don't expect a significant changes in the cost of line by line, what happened in this year in Mexico, is we're growing. the market in terms, we're growing less, the loan book is growing around mid double digit, 15%, 14%, 16% and what we have a is a growth that is significantly lower in credit cards. I mean that's the issue, but being the credit cards , the higher cost of risk in Mexico, it depends if we keep the same trend probably the cost of this is going to be relatively stable, but in [indiscernible] if the credit cards portfolio start to grow or not because in that case, the credit card portfolio not happy, that is maybe around or above double digit ,while the average consulting fees is significantly lower. Taking that aside, this change in mix particularly in credit cards, I will see a relatively stable cost of reaching company.

Thanks very much.

Next question comes from Mario Roberio [ph] from Fidantis [ph]. Please go ahead.

Couple of questions. the first one is, could you give an on the front and the back book cost of the time deposit book in Spain and the second question is, you mentioned the ALCO portfolio at the group level. Can you also give an update on the ALCO portfolio in Spain average duration and average yield? Thank you.

One, deposit cost I don't know, if this quarter for loan book. We are running till the new production is coming appoint, 30 something.

33.

33 or 35. So this is a new production, while I think the average cost of time deposits still above for around 1%. So that this gives you the dynamics of this the time deposit portfolio. In the ALCO portfolio, Jose you want to collaborate specifically on this.

Yes in Spain, we have a total of around EUR27 billion with an average duration of slightly less than four years and an average interest of slightly above 2%.

Next question comes from Alvaro Serrano from Morgan Stanley. Please go ahead.

Just a follow-up on the Spain and NII. With your UI lower and the mortgage is still hoping to reprice and all the dynamic you explained. Can you think, you'll be able to grow NII this year in to Spain? and the second question was more on M&A. the Postbank is now up for sale, you've looked to the bank in the past and my impression is that Germany is an interesting for Santander and I've think you've also shown interest in the past with acquisitions of SEB and the consumer business you're building there, how should we think or how you thinking about opportunities such as this one and also if you can update on where we're on ALCO. Thank you.

Okay in relation with NII in the Spain, Jose already elaborate on this, but let me to add, a bit of color. Within that we continue to be able to reprice downwards the deposit book. I told you the new production from book, how is behaving so this is still LATAM but has limit, we are running up on 60 something because of deposits, probe we can reach something like that, that is 0.4, but there's a limit. On the other side and I mentioned before, we were not expecting the decrease we're seeing asset splits or we were expecting this to come later. What we're seeing by the way is more offers come into the market at lower prices probably this is due to liquidity into the market and to the effect of the quantitative division. so we are seeing a relatively this quarter we were able to offset decrease in asset spreads, with decrease the positive spread probably this is not going to be possible more and many quarters more, probably one more, but probably afterwards, we are going to suffer in NII in Spain -- not elaborating on the ALCO portfolio that is more practical. In relation in M&A, you know we are participating in Oracle. we are not that during the year has started too reasonable to start. We've analyzed bank and we are going to put an offer that is attractive for us, once we see the numbers. in relation with our market, we clearly have stated our policy there. our priorities organic growth. naturally we're going to look into marketing which that are core for us, the potential opportunities probably not day, weeks, once and this is our stance in relation with M&A. so the only process we have by now is Nova Banco in which you know where we're at.

Thank you.

Next question comes from Raoul Leonard from Deutsche Bank. please go ahead.

So I've had two questions. the first one is about balance sheet, you obviously grew your next customer loans and total assets 8% in the quarter. what I'm interested in understanding is ,what's your expectation for balance sheet growth going forward per se, you know the end of 2015 or 2016 and do you expect the same pace of growth to continue? because we're leading on, you end with up risk weight inflation growth. could you update us on what are you expectations off of that? and then, will you think your capital base will end up being your capital base target between 10% and 11%, do you think that will end up being some kind of constraints on your balance sheet growth? and would you actually pull back from loan growth if you're not making your bottom end of the target at 10%? so that was about three questions, my other question is on tax rate guidance. the tax rate is been trending up and this quarter is around 31% and how should we think that about going forward?

I'm not sure, if I get right to your questions. I understood that given the growth and the prospect of growth we've had, in relation with the capital raised we had. It's true that, we are seeing and happy, acceleration of growth, we are happy in our geographies and at the same time, we are generating that the profits are going up and as I mentioned in the presentation with the current growth and the current profits natural, we are able to generate around 10 basis points free capital for quarter after dividend and after the growth in weighted assets. this quarter we're different higher rate before, due to PSA that brought into the books EUR12 billion and new loans. so overall I think that we should be on track to get into our target that is 10% to 11% core capital ratio in coming quarters we are going to approach the lower part of the range and we feel comfortable in this regard. The second question was about the tax rate, is to that tax rate this quarter came 30% and this one off, we are yes agreeing, 30% last year we were accruing at this point at time, 27.5% is to that we're expecting a higher tax rate due to the combination of the geographies and the different corporate tax we have across geographies.

Next question comes from Ignacio Cerezo From Credit Suisse.

I had a couple of questions. first one is valuation adjustments line in the balance sheet has been closed to EUR3 billion in the quarter if you can split that between AFX and FX and the second question is on the contribution to positive guaranteed this EUR50 million to EUR60 million quarterly number was given for the Spanish business, but if you can give us like a group number and split that within the ratios? thank you.

Valuation adjustment EUR3 billion, AFX and FX, having mind FX being EUR2.3 billion or EUR2.4 billion and the rest comes from AFX. remember our policy, let me to remember our policy in fetching the FX rate, you have policies to the capital ratio means that we fetch the ratio, not the actual amount and this is reason why we have this difference in valuation adjustments. in relation with deposit one. I mentioned the Spanish, do you have the figures of dollar? Dollars one, do you have here?

Follow-up.

We follow-up Ignacio and we provide you the figures for the other units, yes.

Okay, thank you very much.

Next question comes from Stefan Nedialkov from Citi Group. please go head.

Good this is Stefan Nedialkov from Citi. two questions from our side. Number one on the balance sheet, we're seeing that Spain and Mexico are seeing increases in basically the trading portfolio due to create institutions as well as from credit institutions. just wanted to understand is this an FX affect through the derivatives line of some sort or is it something else, maybe liquidity related and number two, on Brazil. It was very good showing this past quarter ROE in the mid-teens. your group ROTE is at 11.5%, so that's very close to the target of 12% to 14%, what did you understand, how much upside is there in Brazil to help you get to closer to 12% to 14% ROTE as you're targeting? is Brazil the driver to get you to 12% to 14% or is it another geography? thank you.

Thanks. Mexico and Spain.

The more, the FX. there is an increase in both assets and liabilities on financial intuitions. it's basically related to FX in those countries and also to increased activity in the repo market associated with GBM activity. so there are no special issues with regards to liquidity. it's basically repo in Spain associated to GBM and for the rest of the group it's FX.

Okay in relation the second question that our targeting the recount annual, we've been 12% to 14% and we're being and 11.5%, that we are close, well one to go, up what point in Brazil is going to help on this, as Brazil being the main contributor to the profits of the group and naturally is key part of the group and as I said, our franchise in Brazil has improved quite significantly in the last two years and I remain confident that Brazil is going to help us in a significant way to achieve our targets not only in repo and tangible equity also the other targets, we establish at the group level. But we remain optimistic about it outlook for Brazil in medium term. We're going to produce not in the medium term, we expect brazil to positioning growth issued compared with the average of the group.

Our next question comes from Steffie [ph] Peterson from JP Morgan. Please go ahead.

One quick question on the collected provisions, they were off quite significantly from EUR6.3 billion end of last year to EUR8.5 billion in the first quarter. could you just talk about why you increased the collective provisions, are you concerned about something particular like Petrobras or something that hasn't hit the balance sheet, but then should hit the balance sheet later, this year and second of all, can you give outlook on how you view the UK growth in the UK has been very impressive so far, should we expect similar growth in the UK going forward? Thank you.

It is related the collective provision is related with exchange rate, yes. So is basically due to this. The outlook for the UK as Jose elaborate in the presentation, we're seeing fairly stable spreads, well the liability re-pricing is coming to an end and we're seeing relatively good quality. So we don't expect business from this side and the capacity to grow in the volumes in the countries is going to be key to produce relative results and the ones we got in this quarter.

Thanks for your question Sophie [ph]. I'm afraid we're running out of time. So we have maybe time for just one or two more incoming question please. Go ahead, follow with the next one.

Next question comes from Robert Noble from RBC. Please go ahead.

Two questions from me. In Chile, should we expect more pressure on the interest margins in the coming quarters or do you think the positive customer dynamics you've got out waving I guess is inflation impact and in Brazil, could you comment on the progress of all the lawsuits going on and specifically the press reports on the potential tax fraud scheme and also what litigation relations you've set aside for any lawsuits in Brazil as well? Thank you.

Well in relation with Chile, we elaborate on inflation. Last year inflation was 6% with this year we are expecting to cover around 3%. Well going forward pressure probably in the first quarter, you split 3% we expect for the year for the first quarter, we got a little bit more. Yes, so done in other quarters. But overall, aside from the inflation has an effect, we tend to have a long position due to mortgage book between high end $7 billion. This is impact in the big annual, so inflation different from 3% and the impacting of $5 billion to $7 billion portfolio. The lawsuits in Brazil, I don't know which ones you're referring to, but probably I don't know you referred to the relation with [indiscernible] or which one are you referring to?

I'm sorry, there are reports on the tax fraud scheme.

We don't have any indication from authorities and we think, well this was our behaviour has been correct and we don't expect any kind of deal there.

Okay, thank you.

The last one.

Yes, last question, please.

Last question comes from Carlo Digrandi from HSBC. Please go ahead, sir.

Two more questions. You've been guiding for organic capital generation 40 bps this year, if I understood correctly, 10 bps for the quarter. So the question is, if you expect capital generation to accelerate as of 2016 onwards maybe 60 bps, 70 bps or you think the regulation will take a stall and you expect the flat 40 bps per year over the next two years? And the second question on the Spanish Real update went off, you've been guiding for good improvement in non-performing loans especially from Spain good trend. So I was wondering if the weight of this division will come to zero by 2017 in terms of negative contribution to the profit. Thank you.

Carlos, organic capital in relation I mentioned in the presentation around 10 basis points per quarter, is what we seek with current outlook we have. So this is what we expect. The runoff we are stating Spain, as you saw the results spinning the think the results are falling. so we expect this to keep the space and to produce less and less negative result and you mentioned 2017 coming to an end probably we have the base of 25%, if 2017 coming to an end, are not, if this not come to an end will be very, very low. Yes the negative contribution.

Thank you very much.

Thanks very much everyone for joining. Obviously we missed of course for further questions. See you next quarters. Thanks.

Thank you.