Good morning, everyone and thanks for joining to this Full Year 2016 Earnings Presentation Conference Call. So we have today, the opening will be given by out Executive Chairman, Ms. Ana Botin, who will address a delivery on our 2016 commitments as well as the progress we are making with regards to the strategic priorities. Then our Group CEO, Mr. Alvarez, will address the group business areas review for the full year and our Executive Chairman will go through with our this year 2017 strategic priorities as well as concluding remarks. Obviously we have plenty of time to take your questions live. So with no further delays, Ms. Ana Botin. Thank you.

So, good morning, welcome to our results presentation for 2016. I will first update you on our progress towards our 2016 commitments and strategic priorities. Jose Antonio will then cover in more detail our evolution during the year. And to conclude, I will briefly review what our strategic priorities and goals are for 2017 before we pass on to questions. So first of all, we have delivered strong results in the challenging environment. In 2016, we have been able to offset a lot of the unexpected adverse conditions from Brexit to lower than anticipated rates, higher taxes and some others. We have delivered an increase in net profit of 4% with a very strong underlying profit before tax in constant euros of 12%. We have also and we are proposing to increase dividend per share and cash dividend per share, growing earnings per share and growing tangible per share again by €0.15 to €422. We have delivered ahead of plan on our fully loaded CET1 at 10.55. Our customer revenues are up by 4%. Our loans are up by 2% and funds up by 5% all in constant euros. Looking at the P&L, you can see here the performance along all the lines again showing good evolution of retail and commercial banking business activities. If you look at total customer revenues growth, I am particularly proud of the increase in our fee income at 8% close again to the double-digit growth as a result of our loyalty strategy. Prudent risk policies have also been reflected in the reduction of the provisioning charge. And as you can see, all these trends are increasingly positive as is evident in the performance in the fourth quarter. You can see here, our focus for the last couple of years is impression growth in all…

Thank you, Ana. Good morning to everyone. Following the Ana comments, I will look to the performance of the Group of Santander and the main units. You have all the information in the packaging, so I am going to elaborate on the main units, make some summary of that as more of once. Starting with the area, Ana elaborated, we delivered a strong performance in the year that was in particularly helpful in terms of the market developments. But having said that, we - the performance of the Group was very positive and we have making progress in our commercial transformation and at the same time achieving our financial results. When you look at the activity, we keep different levels of activity in emerging markets, we’ve been ensuring, we have acquired spread growth all across along as growing 2% in constant euros and France growing 5%. Particularly important is we are, the growth we are showing in the France is concentrate in the most valuable items, demand deposit are growing to 10%, mutual funds are growing to 7%, while time deposits are following 9%. So this is reflection of our policy toward royalty, more royalty - developing more royalty among our customer base. Going to numbers, first starting with the fourth quarter 2016, the attributable profit in the quarter was 1.6 billion. As you know, this was impacted by the contribution of deposit guarantee scheme mainly in the Spain if you guys are in the Spain is €160 million. Excluding this impact, the quarter has been the best quarter in 2016. Underlying profit before taxes of 11.3 billion for the whole year is up 3% in current euros, 12% in constant euros with profitability growing in nine out of ten our core markets. We had a significant impact in the…

So thank you, Jose Antonio. I would now like to close by briefly sharing with you our 2016 priorities. And I'd like to start by reminding because this is very important for us what our purpose is. Our purpose is to help people and businesses prosper. What we aim for we want to be the best in retail and commercial bank that earns a lasting loyalty of its people, its customers, shareholders and communities. And we want to do things in a way that is every day more simple and personal and fair. And this guides everything we do. It determines how priorities and it determines how we manage our business. So what is our goal, you've seen this before, it's a simple, but ambitious goal. We want to be the best retail and commercial bank in every market where we do business. And this is a virtuous circle as you can see all our stakeholders benefit, because it begins with our people who take pride in their work. Who are key to our success and our transformation, their alignment with our culture and their pride of being part of Santander delivers the best outcomes for our customers who benefit from and grow their relationship and loyalty with us. And this in turn combined with reinforce management and a strengthened focus on operational excellence and prudent risk management produces better results for you and our shareholders growing earnings per share in a sustainable way. So we can then reinvest in our communities. I like to spend a few minutes on our people. I can tell you that the most, one of the most rewarding projects of both with Jose Antonio and I co-lead in the bank is the cultural transformation program. And as I've said before this is not marketing…

[Operator Instructions]

Thank you very much for the presentation and congratulations again for your quarterly results. I have two questions one on Brexit and other on Latin America. On Brexit, as well we are just amount on how far away from actually the U.K government activity in Article 4 of the activity on European Union and the Prime Minister has already outlined her plant for hard Brexit. In light of these, how are you thinking strategically about your operations in the U.K. going forward, particularly across three layers; first layer about the - across the mix between secure and secure lending going forward; second layer would be about the mix between organic and inorganic growth in the U.K. and the third layer would be acrosspotentialplants for relocating is task based in the U.K. which may report functionally to Madrid to London? My second question would be on Latin America. In light of the potential changes in the trade and integration policies by the new U.S. government how are you thinking about on the impact this is going have on your operations in Latin America, would be particularly interested in a comparison between your activity or your expectation for Mexico and Brazil, and also I was wondering whether it actually in light of these meaningful change as you’ve revised your guidance for these two economies. If I remember well, I mean you’ve been talking about double-digit loan growth in Mexico until late last year I’m not sure with whether these are changed? Thank you very much.

Yes, so let me start with Brexit. There was no plans to relocate our bank in the U.K. will be affected as much as the U.K. economy is if there’s less growth. Obviously we won’t do as well. However, until now the economy has performed quite well. We’re not revising our estimates, we did some revision in September because we were not expecting this to happen and of course there is some impact on exchange rates. We’re still anticipating growth in both the secured and commercial lending market in the U.K. next year. And we will continue to grow probably in line with the market. So we are at this moment keeping our estimate on our guidance for the U.K. in terms of secure and secured we’ve been gaining market share in companies, we expect to continue that maybe at a bit slower rate but still growth. In terms of inorganic we’ve said many times, we will consider add-on acquisitions in our core markets, we will be very disciplined as we’ve shown in 2016, return on investment being above the cost of equity after year three and EPS accretive and that will continue to be the case. In the case of Latin America, there is no question that there will be an impact and there’s already been impact on foreign exchange, exchange rate on the peso. Brazil and Argentina, but Mexican economies actually doing quite well, they’ve been structural reforms in energy and infrastructure, we’ve announced we’re investing in our own bank 15 billion pesos over the next two years to make it better, we’ll continue to invest. And I like to say that in the same case as Brazil, Mexico has a lot of room to grow our business for example on the liability side, on the loyalty strategy where we’ve grown at very good rates 20% loyal customers, close to 60% in digital customers. So we expect to continue to do well in Mexico in spite of a more challenging environment. The rest of Latin America frankly, Brazil and Argentina actually buy more from the U.S. than they sell on the numbers are actually not that significant. So we do not expect in as much as it affects world economy yes, but not directly they should be among the least affected economies from whatever policies we still don’t know come out of the U.S. in that regard. One of the more important opportunities for us is actually to do more across countries. I gave some numbers in Argentina, Brazil this year and that’s just the beginning. So yeah, there will be a more challenging environment in some economies as I said, the main impact to us is from the actual growth in those economies and in some cases from exchange rates as we’ve said.

Thanks. Next question please.

The next question comes from Sofie Peterzens from J.P. Morgan. Please go ahead.

Yeah, hi. Here is Sofie Peterzens from J.P. Morgan. I had a question on Spain. Could you just give some guidance on now what do you expect from net interest income going forward than growth and also how you see cost of risk developing in Spain and also remind us of your ALCO sizedaverage yield or how much it contributed to NII? And my second question is going back to Mexico. Quarter-on-quarter, I saw your loan book was down and it was largely driven by corporate. Could you just discuss what happened in Mexico and what is more one-off or how should we think about it going forward? Thank you.

In terms of Spain, net interest income we expect broadly stable for next year, but probably maybe still some slight decrease in Q1, as the re-pricing of the asset side hence and actually if rates stay where they are they should start to be some improvement in the second half of the year. Cost of risk, there is some room for improvement, but probably not much with very low levels historically already, so I think that is something we could improve a bit more, but not much more, and we expect to continue to improve on loyal customers. We are at two million loyal customers which would drive good growth in fee income. We’re gaining market share in many segments in Spain in a profitable way, so that should be more the driver next year. But I’d say broadly stable net interest income for the whole of the year would still some maybe some slight decrease in Q1. Maybe on the ALCO you want to say something about the ALCO, I think there’s not much left there.

As I said in the presentation, the reduction in NII eventually due to the lower ALCO revenues, yeah, so in the size of ALCO you know always having change would stands in relation with the - we thought we review in relation with the interest rate risk.

So Mexico, in terms of the - is a quarter-on-quarter I don’t think anything significant there.

No, is basically come from global corporate bank, and is not that nothing that affects the retail and commercial business is mainly due to several operations in global corporate bank.

Thanks Sofie for your question. Next one please.

The next question comes from Ignacio Ulargui from Deutsche Bank. Please go ahead.

Hi good morning everyone. Just have one question on the U.S. and then would you say that the recent exemption of the qualitative CCAR could give you some additional potential in terms of cost cutting or reducing the cost expansion now you have seen in the U.S. business and also link to that on the provision inline, how do you see the cost of risk going forward for the U.S. operations?

Yeah. Qualitative exemption which we believe will happen for all smaller banks and that’s us in the U.S will help us. I still believe we can do better even if that doesn’t happen you’ve seen that our cost income ratio, it’s not where we want to be, but has come down 10 points in the bank. So we are expecting to do better on cost in the U.S. As you’ve seen in my slide from here we should start growing profits in a significant way especially at Santander Bank and they as the team has really been working for one year they’ve done a great job. But yes, that should give us some additional upside we’re not really counting on that for the moment. On provisions we’ve had a few one-offs and energy that should go better in the bank, but may Antonio you want to comment on that?

The bank items see any particularly belong on loan provisions probably when it comes to SCUSA, as I said in the presentation, I would underwriting has been marked that was higher FICO it was in 2016, so is reasonable all equal to expect that the costs are slightly is going to stay or go a lower than the one we’ve had in the previous quarters. I’m sure these are the yield naturally the higher FICO this affect to the yield.

Thanks Ignacio. Next question please.

The next question comes from Rohith Chandra from Barclays. Please go ahead.

Hi, good morning. I’ve got three questions please if I could. I mean it’s obviously a solid set of numbers and solid returns already being generated. But as you’ve acknowledged in the early parts of the presentation that could be better if you’re able to improve the profitability of the U.S. business and you’ve got some quite ambitious targets that’s to grow earnings 30% in the bank and 15% in consumer finance. Just wondering if you can break down a little bit more how are you expect to deliver that profitability improvement recombination if I guess rate rises improved a customer activity and also a cost ratio touched on slightly so that was the first one. The second one was on fees, up 8% year-on-year is a strong performance, but looking at the chart that you’ve showed that growth like slowed significantly since over the past three quarters, just wondering what about the momentum that you see most changing going into 2017? And then my final question was coming back to the U.K. business and really the outlook for credit quality, so you sort of net right back in this quarter. I guess what we’ve seen actually is some improvement in consensus expectations for the economy of the U.K. over the next two years. And so we keen to understand what your expectations are for macro drivers like GDP, unemployment and property prices, and how you see the cost of risk evolving over the next couple of years? Thank you.

Yes, let me start with the U.S. First, it’s important to keep things in context, because U.S. is 5% of our net profit and Santander Bank which is where we really need to improve the profitability is about 6% of our investment. SCUSA has 18% return on tangible equity 15 ROE, because we have de-risk the business and so and that there we’re expecting still double-digit growth and to be above our cost of equity. In the bank, we are aiming to simplify the bank, make it profitable; it’s the same loyalty strategy. We have a simply right checking account which is doing really well. So it would be on the on the revenue side on the cost side and of course higher rates in the U.S. will help us as it will help other banks. So we’re pretty confident, but let’s remember the U.S. is only 5% as a whole of our total P&L and the most significant contribution is from SCUSA were we still expect 15% ROE. U.S. should help us as we think of creating long term customer value for our shareholders this will come down the road for five years down the road. On the fees, my understanding is it’s mostly GCB, we still expect strong underlying growth in our fees reaching that 10% communicative growth rate over the period by 2018, very much focused on retail and commercial banking, transactional banking, trade finance and so on. And I understand that I know the last quarter is a GCB sort of a few bigger deals so you should not read too much into that. U.K., U.K. we were quite pessimistic at the beginning, we are less pessimistic now, as I said I believe in my presentation, the fact that we’ve had a good second half means that the first half should be good. Now obviously, a devaluation has a positive short term impact, but overtime that should lead to high inflation which could impact consumers, so we have been quite cautious still on GDP growth for next year especially the second half and we are following I believe in our numbers we’re around 1.6 something like this 1.7, 1.2 well something tells me 1.2 GDP growth is what is in our estimates for GDP growth and in the U.K. I think that’s it.

Thanks, Rohith. Next one please.

The next question comes from Stefan Nedialkov from Citi Group. Please go ahead.

Hi, guys, good morning. Stefan from Citi. Two questions, the first one on Mexico, I consider corporate lending growth the decline in loan growth in 4Q. Will you just give us color in terms of how the larger Mexican domestic corporate are approaching lending and specifically it was the large nominated lending versus peso lending. And the second question on the U.S. which would be open to M&A of over timeframe and I guess how much time which you give yourselves to fix to U.S business before considering M&A? Thank you.

On corporate lending in Mexico understand the question is what will drive it going forward? What’s our expectation? Well, I mean there’s a lot of - still a lot of positives in Mexico. There are some negatives uncertainty of course is my to delay some business investment, but Mexico has made some very fundamental reforms in energy as you know infrastructure. We’re seeing a lot of interest from many companies just been a very interesting auction on the communications side which was very highly subscribe by many investors. So we still expect investment in certain key areas to continue. Mexico is a market of 120 million people where they have a highly skilled labor force and very strong positive, so the higher end of the market should continue to grow there could be some delays in investment until we have clarity, but I wouldn’t say anything special at this time. And again for us, specifically we have a lot of room to improve against ourselves on the other side of the balance sheet on transactional customer’s digital customers and that’s why we’ve announced this 15 billion peso investment in our own business. For the U.S. again we’re not considering M&A, in all our markets we’ve said small add-on acquisitions. We’re making progress. We’re meeting all our strategic milestones and in fact continues we can give you a very good sense that from here. It should be going up the U.S. the biggest part of our business is doing well. We have de-risk. We have taking less risk as Jose Antonio just said also 15% ROE, growth in profits of 15% for the next few years and significant growth in profit in the bank in a very attractive banking market where we believe we can add value. There is a lot of strategies once we are in the regulatory side is totally where we wanted to be to grow for example with digital strategy. So there is no M&A and we expect to continue to give you good news from here on the operating side.

Thanks, Stefan. Next question please.

The next question comes from Carlo Digrandi from HSBC. Please go ahead

Yes, hello, this is Carlo Digrandi. Just two questions if I may, on provisions they proved to be as Jose Antonio said that the trend is very favorable coverage is improving. So overall I was wondering if you can give us an indication if this trend will continue we have seen right back in the U.K. probably these are not sustainable or eventually they are. So can you give us an indication if you expect for 2017 more or less overall provisions to a long side the same trend with the similar impact on college, et cetera? And apologies again I have one more question on the U.S. since has not been asked. Do you have additional visibility on CCAR when eventually you would expect deposit? Thank you.

I’ll let Jose Antonio answer the question on provisions, but I'd say we're on target towards our cost of risk average, I think it was over the three years of 1.2 and below we're at 1.18 cost of risk across the group. But definitely we are expecting U.K. for example which is a two basis points cost of risk to have some higher charges next year. I mean again within our estimates keeping our commitments, but we're at historically low and that is one of our biggest markets in terms of lending. So in terms of the U.S. so as you know we've passed our quantitative CCAR, we actually have a lot of excess capital in the U.S. I think one of the signals that we hope to give you soon is that we'll be allowed to pay dividends again. I want to stress that if we normalize our capital in the U.S. we have an ROE in the whole country including the bank of 4%, so it's not great, but regional banks around 6%, so we're really in a place again we need to fix and do better in the bank and we're making progress. So CCAR what we know it's not in writing, but we've been told and we expect this to happen is that we will not be subject to the qualitative CCAR, because remember that us and other small regional banks were being asked to be at the standards of J.P. Morgan and the very big money center banks. Now Santander we have our own standards and that's going to be applied anyway and we’ve made huge progress towards managing in the Santander Group way all our businesses including the consumer finance. So I'd say that’s very likely that the qualitative CCAR we expect to pass this year. If we have to but, as I said we probably won't have to. I don't know on provisions you want to give a bit more visibility?

Well in general we see a - sorry in general we see a relatively nine credited scenario in which as Ana mentioned in absolute numbers we’re going to have higher provisions for sure in the U.K. because the present level of the thing is not sustainable anymore. But probably we have on the opposite side is reasonable to expect that the cost of rate in Brazil will start to turn down probably is the one that is more important for us. I already mentioned as SCUSA where is not due to the greater scenario is more due to our underwriting policy that we expect credit cost to go down also. In the other unit side I don't have any special to mention probably in Spain that we are very relatively low levels should we still expect some kind of mortgage shooting in 2017.

Thanks Carlos. Next one please.

The next question comes from Ignacio Cerezo from UBS. Please go ahead.

Good morning. Couple of questions from my side. On Brazil if I remember correctly, I think in Q3 you have one-off impact actually have explained a sequential increase, so the number actually local currency is core that has been similar to the one in Q3 so there is no been a recovery actually from that number, if you can explain if there is anything specific this quarter? And in the U.K. in terms of the top line if you can quantify the €40 million increase, sequential increase of top line in bounce in the quarter if you can give us some color basically in terms of the impact of they want to the accounts cost decline? Thank you.

So I'll answer the U.K. but I think on Brazil, frankly I think Jose Antonio on your maybe Sergio you're going to want to answer?

No.

No.

Nothing that comes to my mind that. Jose Garcia do you remember anyone else.

We had high drilling entries from financial operations. But there was nothing I mean that’s why maybe both the line you see that it doesn't grow that much in local currencies. So we have €152 million in Q3, now we have a slightly negative that’s the difference nothing more on that.

So on the U.K. yeah, the net interest margin has done better in the year then we had guided or we had expected. And yes in Q4 you do have already an impact of the re-pricing on the one, to three account which is you know where we have a lot of upside, this is exactly the strategy for four years we've been growing very the very high pace, we've grown €11 billion in current account balances just in this year that should slow down and that's as expected that’s a huge amount of room to grow with the four million loyal customers and 1 to 3 customers in the U.K. And this again should be driving fee income growth as we have now a new online investment platform. We have many new services and better services and that should continue to drive revenues including our net interest margin for the next year. Of course on the asset side the low rates would continue to impact on the SVR. So I think we're guiding towards stability maybe slightly down stability flattish margin for next year in the U.K. but a very good fourth quarter again on plan.

Thanks Ignacio. Next question please.

The next question comes from Alvaro Serrano from Morgan Stanley. Please go ahead.

Hi good morning. Just one question on cost and then follow-up on Brazil. On cost both in Spain and the U.K, I think the performance has been pretty good cost down quarter-on-quarter in Spain. For 2017 should we take this fourth quarter cost basis as the recurring cost based should we expect more cost cutting what could we can give us some color on where you stand on costs there in both regions? And then on Brazil you've given some color, but just - can you talk - give us a bit more explanation on spreads in the quarter that you mentioned the improved would you - is that expect to be ongoing and if you look at the levers of the P&L of 2017 would you say that each is still more margins than the volumes for 2017 and also and in the provisions for Brazil. Do you expect them to come down in absolute terms you mentioned the cost of risk would be down, but I'm not sure there's room to provisions to come down in absolute terms? Thank you.

On costs, I’ll give you the general picture, I mean our target as this year is to keep a flattish cost income around 48%. We're not planning on any - let's say large cost cutting exercises we will continue to manage cost. So we can then invest in the future, so balancing short and medium term growth is crucially important, in countries like Mexico I said we're going to invest a lot 15 billion pesos is a big investment. In other countries in Europe we're going to continue to try to manage more efficiently so we can dedicate more investment for the future and very importantly we're going to do more and more of investing jointly. So an e-wallet for all of Santander countries together you know working on certain projects across countries this is a huge opportunity for us, which allows us to keep this stable cost income, but also invest for the future. I'd say the country Brazil we’re also investing Argentina we're investing, so in some of the higher growth countries we're doing quite a lot of that. In terms of visibility for Brazil, I think we're anticipating the cost of risk to peak around 5% so there might be some slight deterioration on that for next year, but nothing major coming down. Maybe we won’t comment on that and volumes, I think volumes are starting a more going to be more volumes and margins next year.

In Spain either reflecting you know probably in nominal terms we’ll go down in U.K. more kind of flattish cost, like while in Brazil we expect to grow probably in-line with inflation a little bit higher due to the fact that we have two business that are booming, that are growing lot that are quite in business and the payroll base lending that the companies have called that we’re going to have cost are going to winning the enough growing double digit just because those business are growing a lot. So this is going you should expect. In relation with spreads in Brazil what you show in the quarter you probably focused too much on the asset side. So we've done a very good year on the liability side in Brazil in the spreads. So we probably in the fourth quarter is a combination of high respects on the liability side that will show a mix if you look at the quarter overall significantly more in consumer lending and doing more in the corporate and large corporate on this has an effect on them is, but to look out to the liability side, yeah.

Okay, thanks Alvaro. Next question please.

The next question comes from Andrea Unzueta from Credit Suisse. Please go ahead.

Hi, good morning. My question is on Spain and on margin specifically. Are you know accounting for the negative cost TLTRO in Spain, and if so what is the impact, can if you could comment a bit on your expectations for Spain both in terms of volumes and spreads. And I'm going to go back to the questions on Brazilian cost of risk, I think in Q3 you did mentioned that you had one-off case impacting provisions in Q3 in Brazil and the levels in Q4 are similar. So going back just to Alvaro’s question do you see room for the absolute level of provisions going down in the next year? Thank you.

Yes, in terms of volumes in Spain, we believe that for the first time net lending should be slightly positive next year, so that is good news. We’re actually gaining market share based on the loyalty 1 to 3 strategy and to our 1 to 3 customers we're gaining share in consumer lending for example 200 basis points and that's doing pretty well. And we expect for the first time next year that volume growth so the front book will grow more than the amortization in the back book in mortgages, so that also should provide some positive volumes in Spain. The cost TLTRO - it's accounted in Spain as part of the country, so that is included. In Brazil, yes, there was - I think a one-off sort explains to that Q3 uptick.

We said before that was not a start not in the sense that was one-off provision for a large customer in that sense I said is not certainly, okay.

But it’s exceptional.

But it’s a specific provisional exceptional in the third quarter, yeah.

And the levels of NPL coverage gone up Q-on-Q by 4% or points up to 93% as you know.

Thanks Andrea. Next question please.

The next question comes from the Adrian Cighi from RBC. Please go ahead.

Hello this is Adrian Cighi from RBC. Thank you for taking my questions. I have two clarification questions, one on Brazil and one on Mexico. On Brazil just going to follow-up on the launch for this quarter you said that obviously you just turn an improvement. What’s the outlook inline of the reduction and the benchmark rates in Brazil at the beginning of January? And on Mexico you just mentioned again the 15 billion peso investment over the next three years, how much of this is incremental over sort of the current run rate of 26 billion peso on 2016? Thank you.

I actually couldn’t hear the first question, I didn't - could you just repeat the first question maybe I think we haven't really…

Would you repeat the first question Adrian?

On the Brazil sort of increase in loans for this quarter, how do you see the outlook of this developing inline of the reduction in benchmark rates in Brazil at the beginning of January?

In Brazil, as I said the impact of the decrease in spreads the balance sheet is long, so that means the lower rates normally to our NII tend to increase, so in that regard the position is good. We don't see in the short run maybe in the long term, we have more impact in the corporate and global corporate bank in business. But in the short run probably these leads to an increasing the spreads on the kind of consumer lending and a decrease on the liability side. As I mentioned before this year was a very good year on the liability side.

Mexico, Mexico is a quite a significant investment for us. Mexico has a very strong cost income this year close that below 40%. We anticipating growth, as I said good profit growth over the few years, so we are able to invest and continue the trends, the positive trends that we've had even in the context although it be harder, but we believe also in the context of a more challenging economy possibly with some as I said this morning modernization of the NAFTA agreement, which will have some impact. But overall the positives outweigh the negatives and again we believe the country has huge potential and that's why we're investing in a very significant way, in Brazil also by the way and Argentina.

Thanks Adrian. Next question please.

The next question comes from our Oda Schmidt from Autonomous Research. Please go ahead.

Yea, hi it’s Britta Schmidt from Autonomous Research. I could ask a clarification question on Spain, could you give us any sort of guidance that still how much share to two benefit was included in NII, and can you also comment perhaps only lending your increase from the bottom in Q3 is that a mix of change or do you see anything improving in terms of competition. And then I've got another question on Poland there were some comments on the [indiscernible] or talking about maintaining profits flat in 2017, can you give us an outlook statement there from your point of view, and do you have any indication what impact the discussions surrounding this Swiss bank loans have on be that?

I think the question on Spain was if the TLTRO is accounted it’s in the numbers of Santander Spain as a country, I think we answered that previously. On Mexico - Mexico and Poland - so the team here is telling me that TLTRO will be in Santander Spain as of January 1, 2017 and it would be on an accrual basis as of Q1 of next year. Sorry for that clarification. And Poland, there is apparently a flattish guidance.

I know which you are referring to because in Poland excluding the potential impact of the Swiss franc, but this not still clear. So it's still under discussion. Excluding that as I said, we expect that the profit growing in Poland probably the conversation or the answer to the question probably we’re referring including some impact from the Swiss franc. Excluding that we expect to grow profits in Poland.

Thanks Britta. Next question.

The next question comes from Daragh Quinn from KBW. Please go ahead.

Hi, it’s Daragh from KBW. Just a couple of questions, one on loan growth, I just want to follow-up on Spain and the outlook for positive loan growth in 2017, it looks like in Q4 the pace of decline has actually accelerated, I’m certainly looking at the sector does the decline in new business volumes also looks to be picking up. So if you could just provide a little bit more color about your items for growth in 2017 and do you see which segment do you see that growth coming from? And then sticking with loan growth, just to comment on Brazil, and I think you touched on the growth in Q4, but do you think you'll be able to generate positive loan growth in Brazil in 2017. And then finally just on your 2018 EPS targets, sorry the growth rates in EPS does that include the coupons from 81 both in issue and that you plan to issue over the next two years? Thanks.

Yes, EPS target does include the coupons from 81 and we’re reiterating our guidance to double digit growth by 2018. On Spain loan growth so we had a lot of - let's say payback on the public administration side which we expect to do not have an effect going forward as it - that came down in the quarter by 9.5%. But we’ve already have positive trends in consumer lending by 2% and corporate side by about 1% the medium sized company, so the net is minus 1% compared to almost minus 4% for the year. So we do expect that to change sign in 2017, possibly of course mortgages could is now at minus 1% mortgage compared to minus 4% for the year that's a significant part of our balance sheet €46 billion in Spain. So we do expect this trend to continue the economy is doing well, exports are now 33% of the economy that's much higher than a few years ago. So we are expecting that trend to change. In Brazil, I understand we are expecting positive loan growth for the year, for next year and a quarter-on-quarter trends are good awesome.

Before this quarter-on-quarter we grew 5% that is - is this is not sustainable probably in 2017 we're going in a range between mid-to-high single digit growth loan growth in Brazil, yeah, this is our current expectation based on our view above the macro economy, will flat in Spain, yeah in Spain this year, yeah we may grow 1% to 2% this year, we have institutional lending going down as Ana said, and at the same day we launch fairly significantly that is good, but those were the two main components of the decline in the loan book also in the mortgages we are still declining, but the they are, while in corporation as we mean consumer lending we’re allowing. So going forward we are little bit more constructive on the trends on the loan bookings spend.

Thanks Daragh. Next question please.

The next question comes from Marta Sánchez Romero from Bank of America. Please go ahead. Marta Sánchez Romero: Hello, I got a follow-up on the TLTRO EBIT, give us the volume and you’ve taken in Spain. And then on top of that I have three questions, one is provisions in Spain, second about the NII in U.K. and the third one about capital. On provisions in Spain you took risk less than 40 basis points seems quite low relative to your peers particularly when half of your [Technical Difficulty] seems little bit lower maybe could give us some through the cycle in Spain particularly of IFRS-9. The second question on NII in the U.K I don’t know you’ve been opportunistically this quarter increased your portfolio given the move in great expectations and skills. And if you’re still guiding for flat NII in 2017 is that one capital evaluation adjustments have gone down in corporate is slight positive moves in the currency and what is driving that and if you could give us an update on how much of unrealized gains in your Spanish, Brazilian and U.K. portfolio? Thank you.

Yeah, net interest income in the U.K. again our guidance I understand is flattish net interest income for next year even though better than expected and lot obviously depends what happens to the interest rate as another European countries, we have a positive impact if interest rates go up, if you look at the whole of Santander in Europe and the U.S. reception of Brazil obviously as Jose Antonio mentioned that is about €1 billion of additional income for all our countries in Europe and in the U.S. for 100 hundred basis points parallel move in the yield curve. So that depending when rates move that's not in our numbers that could be a positive. On provisions in Spain, yes I mean we are doing better than others that is a fact, real estate exposure is reducing quite fast, let’s say that restructured side and we expect we have another two years on that before it becomes immaterial basically the cost that you see there and let's say in there restructured on bad bank is now basically the cost of running that business of that run down in the portfolio and the net amount there is about €5 billion. So again as Spanish economy has done really well for the last couple of years, one and a half million new jobs more exports and so that is being reflected in the cost of risk and we're doing better than our peers. I didn't really - the capital question…

Well is a AFS impact.

AFS impact was…

We have a capital, a mark-to-market that this positive naturally these changes on a daily basis, but between €501 billion. Yes as we moving for the last two or three months, yeah is more in this industry. But the impact is the marginal impact naturally the impact in capital is the marginal movement from where you would before. And this is where we show the volatility in the fourth quarter and you should expect depending on the level of the rates some volatility come from this part the business in terms of capital.

We have time for two more questions. Next one please.

The next question comes from Mario Lodos from Banc Sabadell. Please go ahead.

.:

I said that was marginally material in our raw material spend to trend as made by the Bank of Spain and is still too early to come with a number for IFRS-9, yeah.

The next question please.

Then next question comes from Benjie Creelan-Sandford [ph] from Jeffries. Please go ahead.

Yeah, hi it’s Benjie Creelan from Jeffries. I'm just two very quick follow-up from my side. First of all just on the Spanish real estate division, I mean total assets that were down 30% quarter-on-quarter, so very big drop just want if there was any particular driver behind that. And then also just on the Spanish outlook portfolio if you could possibly provide the absolute size of the outlook portfolio, the average duration on the current average deals would be really helpful? Thanks.

That reduction is due to - just via your business as usual reduction, which of course the objective is that to be run down to nothing, but there was also a few transactions which were done with Metrovacesa where we are now managing that through that company and this was evaluation done, not just as a few other banks decided that this is the best way to manage this and maximize value for our shareholders. So there's a few bigger transactions, but there's also this regular settle down off of our real estate restructured portfolio.