2018 Annual Report CONTACT INFORMATION

Haitong Bank, S.A. (GLItFLR4XDUW]R +HDG2IILFH 5XD$OH[DQGUH+HUFXODQR /LVERD±3RUWXJDO

Haitong Banco de Investimento do Brasil, S.A. $Y%ULJDGHLUR)DULD/LPDWK)ORRU ,WDLP%LEL&(3 6DR3DXOR±%UD]LO

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WHERE WE ARE

Haitong Bank, S.A. | 1 CHAIRMAN AND CEO’S REVIEW

Wu Min | CEO Lin Yong | Chairman

We are now moving up a gear towards a new era as Haitong Bank becomes a Strategic Reserve for the whole Group!

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2 | 2018 Annual Report Delivering Our Strategy Over the past year Haitong Bank has progressed in the implementation of its strategy: to leverage on the opportunities emerging from China’s internationalization, combining expertise in Europe and LatAm with Group cross-border origination. Haitong Bank has significantly improved Operating Income, Costs and Capital Position.

Banking Income Operationg Costs Capital 43% 38% 22.9% ,QFUHDVHG 5HGXFWLRQ &(7UDWLR WUDQVLWLRQDO

Haitong Bank, S.A. | 3 HAITONG BANK’S MANAGEMENT VECTORS

4 | 2018 Annual Report DRIVING PERFORMANCE WITH INTEGRITY AND MERITOCRACY Haitong Bank, S.A. | 5

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HaitongH Bank’s product range is tailored to meet the Corporate and Institutional Clients’ needs in DCM, M&A Advisory, FICC and Structured Finance solutions.s.

Haitong Bank, S.A. | 7 PRODUCT

Product Offering Haitong Bank’s product offering has been simplified, focusing on core competences serving Corporate and Institutional clients in cross-border China-related transactions and in the domestic markets in Europe and LatAm.

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8 | 2018 Annual Report STRUCTURED FINANCE

Offering FY 2018 figures Project Finance / Project Bonds Acquisition Finance 22% €22m Corporate Lending / Bridge Financing Weight in total Banking Income Guarantees Banking Income amount

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Haitong Bank, S.A. | 9 MERGERS AND ACQUISITIONS

Offering FY 2018 figures

Sell-side and buy-side advisory Advisory on assets disposals 18% €18m Weight in total Banking Income Companies valuations Banking Income amount

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12 | 2018 Annual Report CAPITAL MARKETS

Offering FY 2018 figures Cross-border Eurobond structuring and underwriting 32% €32m Local bonds issuance Weight in total Banking Income Short-term debt issuance Banking Income amount

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Haitong Bank, S.A. | 17 ASSET MANAGEMENT Offering FY 2018 figures Discretionary portfolio management 2% €2m Fixed Income Asia Bonds Fund Weight in total Banking Income Other: e.g. Green Bonds Banking Income amount

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18 | 2018 Annual Report FICC - FIXED INCOME, CURRENCIES AND COMMODITIES

Offering FY 2018 figures

Flow Bond Trading and Sales 13% €13m Corporate Hedging Solutions Weight in total Banking Income Banking Income amount

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20 | 2018 Annual Report PRIVATE EQUITY Offering FY 2018 figures

Infrastructure Private Equity Fund Other new projects: Asia-related 6% €6m Weight in total Banking Income Funds Banking Income amount

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Haitong Bank, S.A. | 21 EQUITIES / RESEARCH

Offering FY 2018 figures

Equities brokerage Research on large and mid-cap 4% €4m Weight in total Banking Income companies Banking Income amount

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22 | 2018 Annual Report Leading Stock Market Performance

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Haitong Bank, S.A. | 25 EXPERTISE

Haitong Bank combines unique competences Haitong Securities is the only Tier I Chinese Securities firm with banking activities in Europe and LatAm. Haitong Bank’s deep-rooted presence in its local markets, together with its Chinese heritage makes it a unique player to support Chinese companies to access foreign markets for funding and investment. In addition, the Bank maintains a solid commitment to its domestic clients supported by a well- established team of local professionals in Europe and Brazil. Haitong Bank’s high capitalization makes its balance sheet available to further support client’s business.

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26 | 2018 Annual Report STRUCTURED FINANCE A Structured Finance and Infrastructure Specialist with a China Angle OVERVIEW 2019 OUTLOOK :LWK D JOREDO JHRJUDSKLF VFRSH DQG D ORQJ WUDFN +DLWRQJ%DQN¶V6WUXFWXUHG)LQDQFHEXVLQHVVDFWLYLW\ UHFRUGDQGH[SHUWLVHLQ3URMHFW)LQDQFH$FTXLVLWLRQ SURVSHFWVUHPDLQSRVLWLYHEDVHGRQWKH%DQN¶VQHZ )LQDQFHDQG2WKHU&UHGLWVWKH6WUXFWXUHG)LQDQFH VWUDWHJLFSRVLWLRQLQJDQGRQWKHJUHDWSRWHQWLDOIURP 'LYLVLRQGHYHORSVILQDQFLQJVROXWLRQVDQGSURYLGHV &KLQDUHODWHG FURVVERUGHU GHDOV +DLWRQJ %DQN¶V VHUYLFHV WR LWV FOLHQWV WKURXJK WKH IROORZLQJ PDLQ JOREDOSUHVHQFHZLWKORFDOH[HFXWLRQFDSDELOLWLHVLQ DFWLYLWLHV (XURSH/DWDPDQG$VLDRIIHUVXQLTXHFRPSHWLWLYH DGYDQWDJHV DQG DUH NH\ HOHPHQWV RI WKLV QHZ x )LQDQFLDO DGYLVRU\ VHUYLFHV ± QDPHO\ LQ VWUDWHJLFSRVLWLRQLQJ FRQQHFWLRQZLWK333SURMHFWV¶VWUXFWXULQJDQG ELGGLQJSURFHVVHV 7KHH[LVWLQJSLSHOLQHRIGHDOVLQYROYLQJERWKOHQGLQJ x 6WUXFWXULQJDUUDQJLQJDQGXQGHUZULWLQJGHEW DQG DGYLVRU\ SRWHQWLDO PDQGDWHV LQ VHYHUDO IDFLOLWLHV ± PDLQO\ IRFXVLQJ RQ &KLQDUHODWHG JHRJUDSKLHV DQG WKH FDSDFLW\ WR JHQHUDWH IXUWKHU WUDQVDFWLRQV DFTXLVLWLRQ ILQDQFH DQG SURMHFW RSSRUWXQLWLHVGXHWRGHHSHUFRRUGLQDWLRQZLWKRWKHU ILQDQFHUHODWHGGHDOVLQWKHLQIUDVWUXFWXUHDQG +DLWRQJ *URXS HQWLWLHV VKRXOG DOORZ IRU WKH HQHUJ\VHFWRUV VXFFHVVIXOFRPSOHWLRQLQRIVHYHUDOPDQGDWHV x 6WUXFWXULQJ RI ILQDQFLQJ RSHUDWLRQV WKURXJK LQ(XURSH$IULFDDQG/DWDP ERQG LVVXHV XQGHU D SURMHFW ILQDQFH UHJLPH ,Q %UD]LO LW LV ZRUWK PHQWLRQLQJ WKH QHZ %UD]LOLDQ ³3URMHFW%RQGV´ JRYHUQPHQW¶V LQLWLDWLYH RI PDLQWDLQLQJ WKH x 3RVWFORVLQJVHUYLFHV±SRUWIROLRPDQDJHPHQW FRQFHVVLRQ SURJUDPV WKDW ZHUH XQGHUZD\ DQG DQGDJHQF\UROHV VFKHGXOLQJ WKH DXFWLRQV IRU DLUSRUWV SRUWV DQG UDLOZD\VDVVHWVIRUWKHILUVWTXDUWHU RIWKH \HDU,Q STRATEGY WKLV FRQWH[W WKH 6WUXFWXUHG )LQDQFH EXVLQHVV +DLWRQJ%DQN¶V6WUXFWXUHG)LQDQFHEXVLQHVV VKRXOG EHQHILW IURP JRRG EXVLQHVV RSSRUWXQLWLHV SURSRVLWLRQDQGVWUDWHJ\LVGULYHQE\WKHSRWHQWLDO ERWKUHODWHGWRDGYLVRU\PDQGDWHVDQGWKHFORVLQJ RI&KLQDUHODWHGQHZEXVLQHVVRULJLQDWLRQDVZHOO RI QHZ ORDQV DQG WKH FRQVHTXHQW LQFUHDVH LQ WKH DVE\WKH%DQN¶VORFDOSRVLWLRQLQJDQGH[HFXWLRQ ORDQSRUWIROLR FDSDELOLWLHVLQ(XURSHDQG/DWDP 7DNLQJ DGYDQWDJH RI +DLWRQJ %DQN¶V H[SHUWLVH LQ 3URMHFW )LQDQFH DQG LQ WKH LQIUDVWUXFWXUH VHFWRU D SDUWLFXODU IRFXV LV SODFHG RQ WKH ³2QH %HOW 2QH 5RDG´LQLWLDWLYHE\IROORZLQJFORVHO\DQGSDUWLFLSDWLQJ LQ UHOHYDQW EXVLQHVV RSSRUWXQLWLHV LQ FRRUGLQDWLRQ ZLWK+DLWRQJ*URXSDQGRWKHULQYHVWRUV

Haitong Bank, S.A. | 27 MERGERS AND ACQUISITIONS Local Player with China Angle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µQRGHDO¶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¶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

28 | 2018 Annual Report CAPITAL MARKETS Well positioned to play the “China House” role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³&KLQD FRPSDQLHV WR VHHN DOWHUQDWLYH ILQDQFLQJ +RXVH´ UROH LQ (0($ DQG /DW$P FURVVERUGHU LQVWUXPHQWV LQ VRPH ZD\V ZLWK OHVV JXDUDQWHHV WUDQVDFWLRQV OHYHUDJLQJ RQ WKH *URXSV XQLTXH DQG FROODWHUDOV LQ FRPSDULVRQ WR WKH ,QVWLWXWLRQV DFFHVVWR$VLDQSRROVRIGHPDQG WUDGLWLRQDOILQDQFLQJOLQHV*LYHQWKHRXWORRNRIDORZ 7KLV LQFOXGHV WKH JURZLQJ RSSRUWXQLWLHV LQ 3DQGD LQWHUHVWUDWHVVFHQDULRLQVWLWXWLRQDOLQYHVWRUVEHJDQ %RQGPDUNHWVDV&KLQDRSHQVXSWRIRUHLJQLVVXHUV WRORRNIRUDZLGHUUDQJHRIVHFWRUVDQGFRPSDQLHV LQORFDO&1

Haitong Bank, S.A. | 29 ASSET MANAGEMENT Leveraging on a long and successful track record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

FICC – FIXED INCOME, CURRENCIES AND COMMODITIES Product development and international distribution platform based on strong local expertise OVERVIEW GLIIHUHQW RIILFHV ZH ZLOO EH DEOH WR FUHDWH LPSRUWDQW 7KH)L[HG,QFRPH&XUUHQF\DQG&RPPRGLWLHV ),&& V\QHUJLHVDQGEHFRPHDQH[HFXWLRQKXEFURVVLQJIORZ 'LYLVLRQUHPDLQVDQLPSRUWDQWSOD\HULQ+DLWRQJ%DQN¶V DQGEXVLQHVVRSSRUWXQLWLHVIURPGLIIHUHQWJHRJUDSKLHV UHOHYDQWPDUNHWV ,EHULD3RODQG%UD]LODQGWKH8. 7KLV 'LYLVLRQ ZRUNV DV D µSURGXFW IDFWRU\¶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x )ORZ7UDGLQJDQG)L[HG,QFRPH6DOHV 2019 OUTLOOK x 6\QGLFDWLRQ x &RUSRUDWH6ROXWLRQV )RUWKH),&&WHDPZLOOUHPDLQFRPPLWWHGWR x 6WUXFWXUHG3URGXFWV GLVFRQWLQXHGLQGHFHPEHU WKH FRYHUDJH RI LQWHUQDWLRQDO ,QVWLWXWLRQDO DQG FRUSRUDWHFOLHQWVDVDZD\WRVWUHQJWKHQWKH%DQN¶V STRATEGY GLVWULEXWLRQSODWIRUPIRUGLIIHUHQWSURGXFWVDVZHOODV ),&&ZLOOFRQWLQXHWRIROORZ+DLWRQJ%DQN¶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

30 | 2018 Annual Report PRIVATE EQUITY Playing a Pan European angle in the Infrastructure market

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EQUITIES / RESEARCH Focus on Iberian and Polish markets OVERVIEW STRATEGY 7KH(TXLWLHV'LYLVLRQRIIHUVDQRUGHUH[HFXWLRQDQG ,Q FORVH FRRUGLQDWLRQ ZLWK +DLWRQJ ,QWHUQDWLRQDO VDOHVVHUYLFHIRFXVHGRQ,EHULDQDQG3ROLVKHTXLW\ WKHSULRULW\LVWRH[SORUHDYHQXHVWRVSHHGXSWKH PDUNHWVIRU(XURSHDQLQYHVWRUV RYHUDOO JURXS HTXLWLHV IRRWSULQW LQ (XURSH 7KH 7KLV EXVLQHVV LV FRPSOHPHQWHG E\ UHVHDUFK ,EHULDQ DQG 3ROLVK SURGXFW DQG LQVWLWXWLRQDO VHUYLFHV SURYLGHG E\ WKH 5HVHDUFK 'LYLVLRQ LQ FOLHQWV¶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

Haitong Bank, S.A. | 31

People

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HumanHu capital is central to ththe business. The Bank aims to continuously develop talent within a client- focused meritocratic culture, with effective mechanisms of accountability andnd reward.d.

Haitong Bank, S.A. | 33 HUMAN RESOURCES

Mission To serve those clients involved in opportunities from China’s internationalisation alongside local clients in Europe and Latin America that seek a dedicated corporate and Institutional Banking service. HR is at the core of the Bank’s support functions. Developing a highly motivated and engaged staff will lead to higher performance.

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Haitong Bank, S.A. | 35 BOARD OF DIRECTORS AND SENIOR MANAGERS Board of Directors Lin Yong Chairman

Wu Min Chief Executive Officer (CEO)

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36 | 2018 Annual Report António Domingues Non-Executive Board Member

Poon Mo Yiu Non-Executive Board Member

Pan Guangtao Non-Executive Board Member

Vincent Camerlynck Non-Executive Board Member

Zhang Xinjun Non-Executive Board Member

Senior Managers with a seat on the Executive Committee António Gomes Pacheco Head of Finance

Pedro Costa Head of CEO Office Secretary to the Exco and Board of Directors

Haitong Bank, S.A. | 37

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Haitong Bank, S.A. | 39 STRUCTURE

Organisational Structure

Haitong Bank, S.A. is part of Haitong Securities Co. Ltd., a leading investment bank and securities firm in China with a broad international footprint. Haitong Bank was established as an investment bank in 1993. After its acquisition by Haitong Securities, in 2015, Haitong Bank aligned its product offering leveraging on its Sino-European and Sino-LatAm business flows combining Group expertise in Asia and Haitong Bank’s strong competitive position in domestic markets in Europe and LatAm. Through its operations located in Iberia, the UK, Ireland, Poland and Brazil, Haitong Bank has an unrivalled cross-border approach, connecting clients and opportunities across its broad network through a team of nearly four hundred professionals.

40 | 2018 Annual Report BRANCHES SUBSIDIARIES

HAITONG BANK, S.A. – SPAIN BRANCH HAITONG BANCO DE INVESTIMENTO DO -RVp0LJXHO5HJR BRASIL, S.A. (BRAZIL) /XtV0LJXHO*LO $ODQ)HUQDQGHV

HAITONG BANK, S.A. – LONDON BRANCH HAITONG CAPITAL – SOCIEDADE DE CAPITAL 3DXOR$UD~MR DE RISCO, S.A. (PORTUGAL) 3HGUR&RVWD 3DXOR0DUWLQV /XtV9DOHQoD3LQWR HAITONG BANK, S.A. – WARSAW BRANCH .U]\V]WRI5RVD HAITONG INVESTMENT IRELAND P.L.C. (IRELAND)* HAITONG BANCO DE INVESTIMENTO 3HGUR&RVWD DO BRASIL, S.A. – CAYMAN ISLANDS &DUORV1RJXHLUD BRANCH 3HWHU0XUSK\

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Haitong Bank, S.A. | 41 MACROECONOMIC ENVIRONMENT

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42 | 2018 Annual Report 2019 Outlook

Economic Activity

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Haitong Bank, S.A. | 43 CORPORATE EVENTS

44 | 2018 Annual Report FINANCIAL OVERVIEW

The target has been reached and Haitong Bank has become profitable again in 2018. For Haitong Bank, the year of 2018 has been very rewarding. Following the measures to achieve a leaner operating cost structure, Haitong Bank has succeed on increasing revenues and returning to a consistent operating and bottom-line profitability.

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46 | 2018 Annual Report RATING

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Haitong Bank, S.A. | 47 TREASURY

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48 | 2018 Annual Report ACTIVITY HIGHLIGHTS 7KH%DQNVWUHQJWKHQHGLWVFDSLWDOEDVHZLWKDQ$7 7KH7UHDVXU\GHSDUWPHQW¶VPDLQJRDOIRULVWR ,VVXH IRU 86' PLOOLRQ (85 PLOOLRQ FRQWLQXH WR HQVXUH OLTXLGLW\ DQG D VWDEOH DQG LPSURYLQJLWVFDSLWDOUDWLRVDQGOLTXLGLW\SRVLWLRQ GLYHUVLILHGIXQGLQJVWUXFWXUHDGMXVWHGWRWKHEDODQFH VKHHWDQGEXVLQHVVPRGHO )XQGLQJFRVWVUHPDLQHGVWDEOHWKURXJKRXWWKH\HDU DQGWKH%DQNPDLQWDLQHGDYHU\FRPIRUWDEOHOLTXLGLW\ ,Q%UD]LOWKHSXUVXLWRIDEHWWHUIXQGLQJIUDPHZRUN SRVLWLRQ ERWK LQ WHUPV RI FDVK DQG (&% HOLJLEOH ZLOOFRQWLQXHLQ7KH7UHDVXU\GHSDUWPHQWZLOO *RYHUQPHQWERQGV IRFXV RQ VXSSRUWLQJ +DLWRQJ %DQN¶V DFWLYLWLHV DQG WKHEXVLQHVV¶JURZWKWKURXJKDQDGHTXDWHIXQGLQJ 7KH SDUWQHUVKLS ZLWK WKH RQOLQH SODWIRUP DOORZLQJ VWUXFWXUH ,Q DGGLWLRQ QHZ RSSRUWXQLWLHV DQG DFFHVV WR UHWDLO GHSRVLWV LQ *HUPDQ\ DQG $XVWULD VWUXFWXUHGVROXWLRQVZLOOEHSXUVXHGWRLPSURYHWKH ZDVUROOHGRXWWRWKH6SDQLVKPDUNHWDQGGHVSLWHWKH %DQN¶V EDODQFH VKHHW DQG JHQHUDWH UHFXUULQJ VPDOO YDULDWLRQ LQ WKH YROXPHV VRXUFHG YLD WKLV UHYHQXHV FKDQQHO JRLQJ IRUZDUG ZH FRQVLGHU WKLV DQ LPSRUWDQWDQGTXDOLW\IXQGLQJVRXUFHDQGH[SHFWLW WRKDYHLQFUHDVHGLPSRUWDQFHLQWKH%DQN¶VIXQGLQJ EMTN programme / Total outstanding amount SURILOH PLOOLRQHXURV 2XWVWDQGLQJ GHEW LVVXHG XQGHU WKH 0HGLXP7HUP 1RWH3URJUDP 071V WRWDOOHG(85PLOOLRQDV 358 RI'HFHPEHUYV(85PLOOLRQE\WKHHQG RI KLJKOLJKWLQJ WKH DERYHPHQWLRQHG 211 GLIILFXOWLHV 3RUWXJXHVH EDQNV KDG DFFHVVLQJ 143 LQWHUQDWLRQDOGHEWPDUNHWV ,Q%UD]LOWKH%DQNKDGDUHPDUNDEOHDFKLHYHPHQW WKURXJKLWVSXEOLFLVVXDQFHRILetrasFinanceiras 7KLV WUDQVDFWLRQ DOORZHG WKH %DQN WR HQODUJH LWV LQVWLWXWLRQDOLQYHVWRUEDVHDQGOHQJWKHQWKHOLDELOLWLHV SURILOH ,VVXHYDOXHRXWVWDQGLQJGHGXFWHGIURPEX\EDFNV6RXUFH+DLWRQJ%DQN 7KH %UD]LOLDQ WHDP LV EHLQJ DEOH WR LPSURYH WKH IXQGLQJIUDPHZRUNDWWKHVDPHWLPHDVUHGXFLQJWKH FRVWRIIXQGLQJ7KH%DQNKDVDOVRFRQWLQXRXVO\ FKDVHGVWUXFWXUHGRSSRUWXQLWLHVLQRUGHUWRJHQHUDWH UHFXUULQJUHYHQXHVDQGRSWLPL]HWKH%DQN¶VEDODQFH VKHHW

Haitong Bank, S.A. | 49

IT & Internal Controls

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TheTh Bank encourages a vibrant and innovative attitude underpinned by improvement in the IT infrastructure in anticipation to a changing market. Haitong Bank will continue developing solid standalone internal controls to strengthen its compliance culture and full regulatory awareness.ss.

Haitong Bank, S.A. | 51 INFORMATION TECHNOLOGY

Haitong Group shares a common vision in terms of the role of technology to drive change and improve the market position.

IT development is at the core of an innovative spirit as the Bank embraces change and adapts to a changing market. Haitong Bank is in a unique position to enter new business segments where it is unencumbered by legacy. The financial services industry is facing strong challenges and disruption from fast moving, leaner platforms. The survival of the fittest depends on the agility to adapt and anticipate change without the burden of heavy structures and the right attitude to dare and innovate in order to be ahead of the curve.

52 | 2018 Annual Report ENHANCING INNOVATION

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56 | 2018 Annual Report Risk Indicators Fixed Income Portfolio by Sector 7KURXJKRXW +DLWRQJ %DQN FRQWLQXHG WR WKRXVDQGHXURV SXUVXH D UHGXFWLRQ VWUDWHJ\ IRU QRQSHUIRUPLQJ December 2018 December 2017 ORDQV 13/ DVZHOODVDFRQVHUYDWLYHDSSURDFKLQ Total 1 070 104 900 332 ZKDW FRQFHUQV WKH LPSDLUPHQW FRYHUDJH RI LWV *RYHUQPHQWV &RQVWUXFWLRQ (QJLQHHULQJ FUHGLWSRUWIROLR 0HWDOV 0LQLQJ 7HFKQRORJ\+DUGZDUH (TXLSPHQW Credit Risk Indicators 3RZHU 2LO *DV

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62 | 2018 Annual Report $VRI'HFHPEHU+DLWRQJ%DQN¶VOHYHUDJH Leverage Ratios UDWLRV FDOFXODWHG XQGHU WKH %DVHO ,,, 6WDQGDUG $SSURDFK RQ ERWK WUDQVLWLRQDO DQG IXOO\ORDGHG December 2018 December 2017

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Haitong Bank, S.A. | 63

Financial Report

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Haitong Bank, S.A. | 65 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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66 | 2018 Annual Report 1. CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Income Statement for the financial years ended on the 31st December 2018 and 2017

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Financial margin 37 522 44 192

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(PSOR\HHFRVWV $GPLQLVWUDWLYHFRVWV 'HSUHFLDWLRQVDQGDPRUWLVDWLRQV DQG 3URYLVLRQV 1HWLPSDLUPHQWORVVRQILQDQFLDODVVHWV Operating expenses 103 952 204 458

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Profit / (Loss) before Income Tax ( 5 420) ( 135 720) ,QFRPHWD[ &XUUHQWWD[ 'HIHUUHGWD[ 7 354 ( 19 310)

Net profit of continued operations ( 12 774) ( 116 410)

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Net Profit / (Loss) for the year 1 447 ( 136 181)

Attributable to shareholders of the parent company 1 159 ( 130 187) Attributable to non-controlling interests 288 ( 5 994)

1 447 ( 136 181)

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Haitong Bank, S.A. | 67 Consolidated Statement of Comprehensive Income for the financial years ended on the 31st December 2018 and 2017 WKRXVDQGHXURV 31.12.2017 31.12.2018 Restatement

Net income for the period $WWULEXWDEOHWRVKDUHKROGHUVRIWKHSDUHQWFRPSDQ\ $WWULEXWDEOHWRQRQFRQWUROOLQJLQWHUHVWV 1 447 ( 136 181)

Other comprehensive income for the period

Items that will not be reclassified to profit and loss $FWXDULDOJDLQV ORVVHV QHWRIWD[HV ( 2 104) ( 177)

Items that may be reclassified to profit and loss ([FKDQJHGLIIHUHQFHVQHWRIWD[HV 2ZQFUHGLWULVNHIIHFWRQOLDELOLWLHVYDOXDWLRQ 2WKHUFRPSUHKHQVLYHLQFRPHIURPDVVRFLDWHV )DLUYDOXHFKDQJHVRIILQDQFLDODVVHWVDYDLODEOHIRUVDOH

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Total comprehensive income/(loss) for the period ( 20 503) ( 154 940)

Attributable to shareholders of the parent company ( 16 862) ( 144 347) Attributable to non-controlling interests ( 3 641) ( 10 593)

( 20 503) ( 154 940)

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68 | 2018 Annual Report Consolidated Statement of Financial Position as at the 31st December 2018 and 2017 WKRXVDQGHXURV

Notes 31.12.2018 31.12.2017

Assets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

Total Assets 2 894 763 3 275 905

Liabilities )LQDQFLDOOLDELOLWLHVKHOGIRUWUDGLQJ 6HFXULWLHV 'HULYDWLYHILQDQFLDOOLDELOLWLHV )LQDQFLDOOLDELOLWLHVPHDVXUHGDWDPRUWLVHGFRVW 5HVRXUFHVIURPFUHGLWLQVWLWXWLRQV 5HVRXUFHVIURPFXVWRPHUV 'HEWVHFXULWLHVLVVXHG )LQDQFLDOOLDELOLWLHVGHVLJQDWHGDWIDLUYDOXHWKURXJKSURILWRUORVV 'HEWVHFXULWLHVLVVXHG /LDELOLWLHVIURPGLVFRQWLQXLQJXQLWV 3URYLVLRQV 7D[OLDELOLWLHV &XUUHQWLQFRPHWD[OLDELOLWLHV 'HIHUUHGLQFRPHWD[OLDELOLWLHV 2WKHUOLDELOLWLHV

Total Liabilities 2 279 257 2 742 139

Equity 6KDUHFDSLWDO 6KDUHSUHPLXP 2WKHUHTXLW\LQVWUXPHQWV )DLUYDOXHUHVHUYHV 2WKHUUHVHUYHVDQGUHWDLQHGHDUQLQJV 1HWSURILW ORVV IRUWKH\HDUDWWULEXWDEOHVKDUHKROGHUVRIWKHSDUHQWFRPSDQ\

Total equity attributable to the shareholders of the parent company 589 477 502 684

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Total Equity 615 506 533 766

Total Equity and Liabilities 2 894 763 3 275 905

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Haitong Bank, S.A. | 69 Consolidated Statement of Changes in Equity for the financial years ended on the 31st December 2018 and 2017

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Other Reserves, Net profit/(loss) Equity Retained for the period attributable Non- Share Share Other equity Fair-value Earnings and attributable to Total controlling Capital Premium instruments reserves Other shareholders of shareholders Equity interests Comprehensive the parent of the parent Income company company

Balance as at 31 December 2016 (Restatement) 426 269 8 796 83 731 ( 2 312) ( 111 455) ( 96 181) 308 848 41 675 350 523

2WKHUPRYHPHQWVUHFRUGHGGLUHFWO\LQHTXLW\ VHH1RWH &KDQJHVLQIDLUYDOXHQHWRIWD[HV $FWXDULDOJDLQV ORVVHV QHWRIWD[HV 2WKHUFRPSUHKHQVLYHLQFRPHRIDVVRFLDWHV ([FKDQJHGLIIHUHQFHV 2ZQFUHGLWULVNFKDQJHV 1HWSURILW ORVV IRUWKH\HDU Total comprehensive income for the year - - - 7 099 ( 21 259) ( 130 187) ( 144 347) ( 10 593) ( 154 940)

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Balance as at 31 December 2017 844 769 8 796 3 731 4 787 ( 229 212) ( 130 187) 502 684 31 082 533 766

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Balance as at 1 January 2018 844 769 8 796 3 731 4 553 ( 230 364) ( 130 187) 501 298 31 063 532 361

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Balance as at 31 December 2018 844 769 8 796 108 773 ( 173) ( 373 847) 1 159 589 477 26 029 615 506

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70 | 2018 Annual Report Consolidated Cash Flow Statement for the financial years ended on the 31st December 2018 and 2017

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Notes 31.12.2018 31.12.2017

Cash flows from operating activities ,QWHUHVWVUHFHLYHG ,QWHUHVWVSDLG )HHVDQGFRPPLVVLRQVUHFHLYHG )HHVDQGFRPPLVVLRQVSDLG /RDQVUHFRYHU\ &DVKSD\PHQWVWRHPSOR\HHVDQGVXSSOLHUV ( 109 716) ( 12 754) Changes in operating assets and liabilities: 5HVRXUFHVDWFHQWUDOEDQNV 7UDGLQJILQDQFLDODVVHWVDQGOLDELOLWLHV /RDQVDQGDGYDQFHVWREDQNV 5HVRXUFHVIURPRWKHUFUHGLWLQVWLWXWLRQV /RDQVDQGDGYDQFHVWRFXVWRPHUV 5HVRXUFHVIURPFRVWXPHUV 5LVNPDQDJHPHQWGHULYDWLYHV 2WKHURSHUDWLQJDVVHWVDQGOLDELOLWLHV Net cash flow from operating activities before income tax ( 254 450) ( 24 389) ,QFRPHWD[HVSDLG ( 277 829) ( 44 839)

Net cash flows from investment activities 6DOHRILQYHVWPHQWVLQVXEVLGLDULHVDQGDVVRFLDWHV 3XUFKDVHRIVHFXULWLHV 6DOHRIVHFXULWLHV 3XUFKDVHRIIL[HGDVVHWV 6DOHRIRIIL[HGDVVHWV ( 22 523) 290 281 Cash flows from financing activities 6KDUHFDSLWDOLQFUHDVH 'HEWVHFXULWLHVLVVXHG 5HLPEXUVHPHQWRIGHEWVHFXULWLHVLVVXHG ,VVXDQFHRIRWKHUHTXLW\LQVWUXPHQWV ,QWHUHVWUHFHLYHG SDLG IURPWRRWKHUHTXLW\LQVWUXPHQWV

Net cash flow from financing activities 166 841 84 135 Net changes in cash and equivalents ( 133 511) 329 577

Cash and equivalents at the beginning for the year Cash and equivalents at the end for the year ( 133 511) 329 577

Cash and equivalents includes: &DVK 'HSRVLWVDWRWKHUFUHGLWLQVWLWXWLRQV 0LQLPXP5HVHUYHV

Total 335 945 469 456 7KHIROORZLQJQRWHVIRUPDQLQWHJUDOSDUWRIWKHVHFRQVROLGDWHGILQDQFLDOVWDWHPHQWV

Haitong Bank, S.A. | 71 2. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Haitong Bank, S.A.

NOTE 1 – ACTIVITY AND GROUP STRUCTURE

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72 | 2018 Annual Report ,Q+DLWRQJ%DQNVWDUWHGDVLPSOLILFDWLRQSODQIRULWVJURXS6HYHUDOPHDVXUHVZHUHWDNHQZLWKLQWKHVFRSHRI VXFKSURFHVVLQFOXGLQJWKHGLVSRVDODQGPHUJHURIVHYHUDOKROGLQJVZLWKQRVLJQLILFDQWLPSDFWRQWKHDFFRXQWV 7KHVLPSOLILFDWLRQSURFHVVFRQWLQXHGWKURXJKRXWDQGWKHPDLQFKDQJHVPDGHWRWKHJURXS¶VVWUXFWXUHDUHVHW IRUWKEHORZ

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WKRXVDQGHXURV 31.12.2018 Acquisitions Disposals Other Other Gains/ (losses) Sale Investments Total Reimbursements Total in amount (a) (a) (b) sales/disposals

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74 | 2018 Annual Report NOTE 2 – MAIN ACCOUNTING POLICIES

2.1. Bases of preparation

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Haitong Bank, S.A. | 75 2.2. Basis of consolidation

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Subsidiaries

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Associates

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Goodwill

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Transactions with non-controlling interests

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Translation of financial statements in foreign currency

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Balances and transactions eliminated on consolidation

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2.4. Financial instruments (IFRS 9)

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2.4.1. Financial assets classification

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Business model evaluation for financial assets management

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Evaluation if the contractual cash flows correspond to solely payments of principal and interest (SPPI)

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Initial recognition

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Reclassifications between categories of financial instruments

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Derecognition criteria

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Impairment of financial assets

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Expected Credit Losses

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84 | 2018 Annual Report Significant increase in credit risk

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2.4.2. Financial liabilities

Classification, initial recognition and subsequent measurement

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Haitong Bank, S.A. | 85 Financial liabilities at fair value through profit or loss

Classification

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86 | 2018 Annual Report Financial liabilities at amortised cost

Classification

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Reclassification between categories of financial liabilities

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Derecognition of financial liabilities

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2.4.3. Interest recognition

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2.4.4. Financial guarantees

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2.5. Financial instruments (IAS 39)

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2.5.1. Financial derivatives

Classification

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Recognition and measurement

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2.5.2. Loans and advances to customers

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88 | 2018 Annual Report LPSDLUPHQWORVVHV

Impairment

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2.5.3. Other financial assets

Classification

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Initial recognition and measurement, and derecognition

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Subsequent measurement

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90 | 2018 Annual Report Impairment

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2.5.4. Financial liabilities

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2.5.5. Financial guarantees

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2.6. Assets sold with repurchase agreement and securities lending

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2.7. Equity instruments

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2.8. Offsetting financial instruments

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92 | 2018 Annual Report 2.9. Non-current assets held-for-sale and assets from discontinuing operations

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2.10. Other tangible assets

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2.11. Intangible assets

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2.12. Leases

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Operating leases

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Financial leases

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2.13. Employee benefits

Pensions

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Variable remuneration paid to employees

In accordance with IAS 19 - Employee benefits, variable remuneration (profit sharing, bonuses and others) granted to employees and, possibly, to executive members of administration bodies, is accounted for in profit or loss of its respective financial year.

96 | 2018 Annual Report Income taxes

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2.14. Provisions

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2.15. Recognition of interest income and expense (IAS 39)

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Recognition of fee and commission income

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2.16. Segment reporting

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2.17. Earnings per share

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2.18. Cash and cash equivalents

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NOTE 3 – MAIN ESTIMATES AND JUDGEMENTS USED IN THE PREPARATION OF FINANCIAL STATEMENTS

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3.1. Impairment losses on financial assets at amortised cost and debt instruments at fair value through other comprehensive income

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Individual analysis

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Collective analysis

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3.2. Income taxes

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3.3. Goodwill Impairment

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Haitong Bank, S.A. | 101 3.4. Pensions and other employee benefits

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3.5. Fair value of financial derivatives and assets and liabilities at fair value through profit or loss

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3.6. Classification and Measurement

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102 | 2018 Annual Report NOTE 4 – SEGMENT REPORTING

4.1. Description of Business Areas

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Mergers and Acquisitions Division

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Capital Markets Division

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Fixed Income Currency and Commodities Division

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Equities Division

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Structured Finance Division

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Haitong Bank, S.A. | 103 Treasury Division

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Global Markets

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Private Equity

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Corporate Centre

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Other

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4.2. Criteria for the attribution of the business and of the results to the segments

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Measurement of profits or losses from the segments

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Haitong Bank’s Structures dedicated to the Segment

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Interest income and expenses

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Domestic and International Areas

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Haitong Bank, S.A. | 105 WKRXVDQGHXURV 31.12.2018 Structured Mergers and Capital Global Private Corporate FICC Equities Treasury Other Total Fina nc e Acquisitions Markets Markets Equity Centre 1HWLQWHUHVWLQFRPH 1HWIHHVDQGFRPLVVLRQV COMERCIAL OPERATING INCOME 21 181 17 810 31 795 6 755 3 882 24 512 2 354 ( 7 605) 10 355 111 039 5HVXOWVRQILQDQFLDORSHUDWLRQ ,QWHUVHJPHQW2SHUDWLQJ,QFRPH TOTAL OPERATING INCOME 22 061 17 589 31 704 12 870 3 884 11 738 5 690 1 670 - ( 8 674) 98 532 Operation expenses 6WDIIFRVWV *HQHUDODGPLQLVWUDWLRQH[SHQVHV 'HSUHFLDWLRQVDQG$PRUWLVDWLRQV Gross income 20 200 11 448 29 524 7 191 1 362 8 001 3 768 ( 1 519) ( 46 268) ( 12 732) 20 975 Impairment and Provisions &UHGLWLPSDLUPHQW 6HFXULWLHVLPSDLUPHQW 1HWSURYLVLRQVDQGRWKHULPSDLUPHQ Income before taxes ( 6 603) 11 326 28 770 7 118 1 362 7 665 3 705 ( 1 331) ( 47 442) ( 9 990) ( 5 420)

WKRXVDQGHXURV 31.12.2017

Structured Mergers and Capital Global Private Corporate FICC Equities Treasury Other Total Fina nc e Acquisitions Markets Markets Equity Centre

1HWLQWHUHVWLQFRPH 1HWIHHVDQGFRPLVVLRQV COMERCIAL OPERATING INCOME 20 639 20 117 17 031 ( 210) 6 836 26 863 3 426 1 342 - 6 987 103 031 5HVXOWVRQILQDQFLDORSHUDWLRQ ,QWHUVHJPHQW2SHUDWLQJ,QFRPH TOTAL OPERATING INCOME 19 985 21 413 16 646 8 413 5 808 3 514 6 919 ( 3 148) - ( 10 812) 68 738 Operation expenses 6WDIIFRVWV *HQHUDODGPLQLVWUDWLRQH[SHQVHV 'HSUHFLDWLRQVDQG$PRUWLVDWLRQV Gross income 17 340 15 613 14 469 1 826 2 867 ( 498) 4 535 ( 4 690) ( 93 462) ( 14 891) ( 56 891) Impairment and Provisions &UHGLWLPSDLUPHQW 6HFXULWLHVLPSDLUPHQW 1HWSURYLVLRQVDQGRWKHULPSDLUPHQW Income before taxes ( 52 203) 14 889 14 331 ( 162) 2 411 ( 663) 3 523 ( 5 602) ( 102 150) ( 10 094) ( 135 720)

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WKRXVDQGHXURV 31.12.2017 Portugal Rest of the Europe America Total

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106 | 2018 Annual Report NOTE 5 – FINANCIAL MARGIN

7KLVKHDGLQJ¶VDPRXQWLVFRPSRVHGRI WKRXVDQGHXURV 31.12.2018 31.12.2017

From From assets/liabilities at From assets/liabilities From amortised cost assets/liabilitie at amortised assets/liabilities and at fair-value s at fair-value Total cost and at fair-value Total through other through profit available-for- through profit comprehensive and loss sale financial and loss income assets

Interest and similar income ,QWHUHVWIURPORDQVDQGDGYDQFHVWRFXVWRPHUV ,QWHUHVWIURPGHSRVLWVDQGLQYHVWPHQWVLQFUHGLWLQVWLWXWLRQV ,QWHUHVWIURPDYDLODEOHIRUVDOHILQDQFLDODVVHWV ,QWHUHVWIURPILQDQFLDODVVHWVDWIDLUYDOXHWKURXJKRWKHUFRPSUHKHQVLYHLQFRPH ,QWHUHVWIURPILQDQFLDODVVHWVDWIDLUYDOXHWKURXJKSURILWDQGORVV ,QWHUHVWIURPGHEWVHFXULWLHVDWDPRUWLVHGFRVW 2WKHULQWHUHVWDQGVLPLODULQFRPH 42 064 56 110 98 174 78 792 88 035 166 827 Interest and similar expenses ,QWHUHVWIURPGHSRVLWVIURPFHQWUDOEDQNVDQGRWKHUFUHGLWLQVWLWXWLRQV ,QWHUHVWIURPGHEWVHFXULWLHVLVVXHG ,QWHUHVWIURPFXVWRPHUVDFFRXQWV 2WKHULQWHUHVWDQGVLPLODUH[SHQVHV

60 652 - 60 652 122 635 - 122 635

( 18 588) 56 110 37 522 ( 43 843) 88 035 44 192

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NOTE 6 – NET FEES AND COMMISSIONS INCOME

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WKRXVDQGHXURV 31.12.2018 31.12.2017 Fees and commissions income )URPEDQNLQJVHUYLFHV )URPJXDUDQWHHVSURYLGHG )URPWUDQVDFWLRQVZ LWKVHFXULWLHV

79 142 71 625

Fees and commissions expenses )URPEDQNLQJVHUYLFHVUHQGHUHGE\WKLUGSDUWLHV )URPWUDQVDFWLRQVZ LWKVHFXULWLHV )URPJXDUDQWHHVUHFHLYHG 2WKHUIHHDQGFRPLVVLRQH[SHQVHV

6 776 13 723

72 366 57 902

Haitong Bank, S.A. | 107 NOTE 7 – NET TRADING INCOME

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WKRXVDQGHXURV

31.12.2018 31.12.2017

Trading assets and liabilities Securities %RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV ,VVXHGE\SXEOLFHQWLWLHV 2IRWKHUHQWLWLHV

6KDUHV

( 37 408) ( 63 720)

Financial derivatives )RUHLJQH[FKDQJHFRQWUDFWV ,QWHUHVWUDWHVFRQWUDFWV (TXLW\LQGH[HVFRQWUDFWV &UHGLWGHIDXOWFRQWUDFWV 2WKHU 16 965 42 508 ( 20 443) ( 21 212)

NOTE 8 – NET INCOME FROM OTHER INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

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Financial liabilities at fair value through profit or loss

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2 927

108 | 2018 Annual Report NOTE 9 – NET GAIN/(LOSS) FROM DERECOGNITION OF FINANCIAL ASSETS MEASURED AT FAIR VALUE TRHOUGH OTHER COMPREHENSIVE INCOME

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%RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV ,VVXHGE\SXEOLFHQWLWLHV 2IRWKHUHQWLWLHV

3 934

NOTE 10 – NET GAINS/(LOSSES) FROM FINANCIAL ASSETS HELD FOR SALE

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%RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV ,VVXHGE\SXEOLFHQWLWLHV 2IRWKHUHQWLWLHV

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2 391

NOTE 11 – NET GAINS / (LOSSES) FROM FOREIGN EXCHANGE DIFFERENCES

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WKRXVDQGHXURV 31.12.2018 31.12.2017

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Haitong Bank, S.A. | 109 NOTE 12 – NET GAIN/(LOSS) FROM DERECOGNITION OF FINANCIAL ASSETS MEASURED AT AMORTISED COST

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117 ( 835)

NOTE 13 – OTHER OPERATING INCOME AND EXPENSES

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( 3 806) ( 9 580)

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110 | 2018 Annual Report NOTE 14 – EMPLOYEE COSTS

7KLVKHDGLQJ¶VDPRXQWLVFRPSRVHGRI WKRXVDQGHXURV 31.12.2018 31.12.2017

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44 324 77 938

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2018 5HPXQHUDWLRQVDQGRWKHUVKRUWWHUPEHQHILWV 9DULDEOHUHPXQHUDWLRQV Total 1 961 11 995 13 956

2017 5HPXQHUDWLRQVDQGRWKHUVKRUWWHUPEHQHILWV 9DULDEOHUHPXQHUDWLRQV Total 1 697 14 014 15 711

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2018 2017

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398 535

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NOTE 15 – EMPLOYEES BENEFITS

Retirement pensions and healthcare benefits

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112 | 2018 Annual Report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Assumptions 31.12.2018 31.12.2017

Financial Assumptions

([SHFWHGUHWXUQUDWHV 'LVFRXQWUDWH 3HQVLRQJURZWKUDWHV 6DODU\JURZWKUDWHV

Demographic Assumptions and Assessment Methods

0RUWDOLW\WDEOH 0HQ 79 79 :RPHQ 79\HDUV 79\HDUV $FWXDULDOYDOXDWLRQPHWKRG 3URMHFW8QLW&UHGLW0HWKRG

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Haitong Bank, S.A. | 113 5HFLSLHQWVRIWKHSHQVLRQVSODQDUHGLVDJJUHJDWHGDVIROORZV

31.12.2018 31.12.2017

$FWLYHZRUNHUV )RUPHUHPSOR\HHVZLWKYHVWHGULJKWV 5HWLUHG 6XUYLYRUV

TOTAL 219 214

)RUPHUHPSOR\HHVZLWKYHVWHGULJKWVUHIHUWRHPSOR\HHVZKRFHDVHGWKHLUDFWLYLW\LQWKH*URXSLQDQG XQGHUWKHWHUPVRIWKH6RFLDO3ODQDQGPDLQWDLQHGWKHSHQVLRQSODQULJKWV

7KH,$6DSSOLFDWLRQLPSOLHVWKHIROORZLQJOLDELOLWLHVDQGFRYHUDJHOHYHOVZKLFKVKDOOEHUHSRUWHGRQWKHVWRI 'HFHPEHUDQG WKRXVDQGHXURV 31.12.2018 31.12.2017

Net Assets / (Liabilities) recognised in the statement of financial position /LDELOLWLHVDVDWVWRI'HFHPEHU 3HQVLRQHUVDQGIRUPHUHPSOR\HHVZLWKYHVWHGULJKWV $FWLYHZRUNHUV 72 659 72 070

Balance of funds as at 31st of December 69 641 72 552 ([FHVVRIFRYHUDJH&RQWULEXWLRQVWRWKHIXQG Assets / (Liabilities) in the statement of financial position (see Notes 28 and 34) ( 3 018) 482

$FXPPXODWHGDFWXDULDOJDLQVORVVHVUHFRJQLVHGLQRWKHUFRPSUHKHQVLYHLQFRPH

5HWLUHGLQFOXGHVWKHIRUPHUHPSOR\HHVZLWKYHVWHGULJKWVDFTXLUHGXQGHUWKH6RFLDO3ODQ

7KHHYROXWLRQRIOLDELOLWLHVUHJDUGLQJUHWLUHPHQWSHQVLRQVDQGKHDOWKFDUHEHQHILWVLVDQDO\VHGDVIROORZV

WKRXVDQGHXURV

31.12.2018 31.12.2017

Liabilities at the beginning of the period 72 070 70 735

&XUUHQWVHUYLFHFRVW VHH1RWH ,QWHUHVWH[SHQVHV 3DUWLFLSDQWVFRQWULEXWLRQV $FWXDULDO JDLQV ORVVHV &KDQJHVLQDVVXPSWLRQV ([SHULHQFH *DLQV ORVVHV 3HQVLRQVSDLGE\WKHIXQG &KDQJHVIURPWHUPLQDWLRQDJUHHPHQWV VHH1RWH &KDQJHVIURP0D[LPXP6DODU\&DSLPSOHPHQWDWLRQ VHH1RWH

Liabilities at the end of the period 72 659 72 070

114 | 2018 Annual Report &RQVLGHULQJ WKH VLWXDWLRQ RQ WKH VW RI 'HFHPEHU WKH DQDO\VLV WR WKH VHQVLELOLW\ DQG DOWHUDWLRQV RI WKH DFWXDULDODVVXPSWLRQVUHYHDOHGWKHIROORZLQJLPSDFWV

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WKRXVDQGHXURV 31.12.2018 31.12.2017

Pension Funds at the beginning of the period 72 552 67 349 5HDOLQFRPHRIWKHIXQG *URXSFRQWULEXWLRQV 3DUWLFLSDQWVFRQWULEXWLRQV %HQHILWVSDLG Pension Funds at the end of the period 69 641 72 552

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7KHDVVHWVRIWKHSHQVLRQIXQGVPD\EHDQDO\VHGLQWKHIROORZLQJPDQQHU % Portfolio 2018 2017 %RQGV 6KDUHV $OWHUQDWLYHLQYHVWPHQW /LTXLGLW\ Total

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Haitong Bank, S.A. | 115 7KHHYROXWLRQRIDFFXPXODWHGDFWXDULDOGHYLDWLRQVUHIOHFWHGLQRWKHUFRPSUHKHQVLYHLQFRPHPD\EHDQDO\VHGDVIROORZV

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31.12.2018 31.12.2017

Deferred actuarial gains / (losses) as at 1st January 31 792 31 641

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Deferred actuarial deviations as at 31st of December 34 616 31 792

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31.12.2018 31.12.2017

&XUUHQWVHUYLFHFRVW VHH1RWH ,QWHUHVW([SHQVHV ,QFRPH Expenses of the period 746 1 262

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31.12.2018 31.12.2017

Opening balance 482 ( 3 386)

Final Balance ( 3 018) 482

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(Under) / over funded liabilities ( 3 018) 482 ( 3 386) - ( 865)

([SHULHQFH JDLQV ORVVHVIURPOLDELOLWLHV ([SHULHQFH JDLQV ORVVHVIURPSODQDVVHWV

116 | 2018 Annual Report Career bonuses

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Liabilities at the begining of the period 498 583

Liabilities at the end of the period (see Note 34) 485 498

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NOTE 16 – ADMINISTRATIVE COSTS

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31.12.2018 31.12.2017

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Haitong Bank, S.A. | 117 7KHHDUQLQJVIURPRXWVWDQGLQJUHQWVUHJDUGLQJQRQFDQFHOODEOHRSHUDWLQJOHDVHFRQWUDFWVVKDOOEHDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017

8SWRRQH\HDU 2QHWRILYH\HDUV 2 036 2 718

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Total value of agreed services 839

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NOTE 17 – EARNINGS PER SHARE

Basic earnings per share

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1HWLQFRPHDWWULEXWDEOHWRVKDUHKROGHUVRIWKHSDUHQWFRPSDQ\

Weighted average number of ordinary shares outstanding (thousand) 168 954 129 351

Basic earnings per share attributable to shareholders of the parent company (euros) 0,01 -1,01

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118 | 2018 Annual Report Diluted earnings per share

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NOTE 18 – CASH AND CASH EQUIVALENTS

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31.12.2018 31.12.2017

&DVK

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309 182 441 626

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32 069 31 636

341 256 473 273

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341 255 473 273

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Haitong Bank, S.A. | 119 NOTE 19 – FINANCIAL ASSETS AND LIABILITIES HELD FOR TRADING - SECURITIES

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31.12.2018 31.12.2017

Financial assets held-for-trading %RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV )URPSXEOLFLVVXHUV )URPRWKHULVVXHUV

6KDUHV 466 957 456 208

Financial liabilities held-for-trading 6KRUWVHOOLQJ 119 907 395 877

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WKRXVDQGHXURV 31.12.2018 31.12.2017

8SWRWKUHHPRQWKV )URPWKUHHPRQWKVWRRQH\HDU )URPRQHWRILYH\HDUV 0RUHWKDQILYH\HDUV 8QGHWHUPLQHGSHULRG 466 957 456 208

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120 | 2018 Annual Report 8QTXRWHGVHFXULWLHVLVVXHGE\SXEOLFHQWLWLHVUHIHUVPDLQO\WR%UD]LOLDQSXEOLFGHEWLQVWUXPHQWVZKLFKGHVSLWH EHLQJTXRWHGDUHYDOXHGDFFRUGLQJWRLQWHUQDOPRGHODQGDUHWKHUHIRUHSUHVHQWHGDVXQTXRWHGVHFXULWLHV

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NOTE 20 – DERIVATIVES

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31.12.2018 31.12.2017

Derivatives financial assets

Trading derivatives (assets) )RUHLJQH[FKDQJHFRQWUDFWV ,QWHUHVWUDWHFRQWUDFWV 2WKHUFRQWUDFWV 130 147 203 801 Derivatives for risk management purposes (assets) ,QWHUHVWUDWHFRQWUDFWV (TXLW\,QGH[FRQWUDFWV 2WKHUFRQWUDFWV - 11 266 130 147 215 067 Derivatives financial liabilities

Trading derivatives (liabilities) )RUHLJQH[FKDQJHFRQWUDFWV ,QWHUHVWUDWHFRQWUDFWV 2WKHUFRQWUDFWV 184 966 210 220 Derivatives for risk management purposes (liabilities) ,QWHUHVWUDWHFRQWUDFWV (TXLW\,QGH[FRQWUDFWV 2WKHUFRQWUDFWV - 14 857 184 966 225 077

( 54 819) ( 10 010)

Haitong Bank, S.A. | 121 $VDWVWRI'HFHPEHUDQGWUDGLQJILQDQFLDOGHULYDWLYHVLVDQDO\VHGDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017 Fair value Fair value Notional Notional Positive Negative Positive Negative

Foreign-exchange contracts )RUZDUG EX\ VHOO &XUUHQF\6ZDSV EX\ VHOO &XUUHQF\)XWXUHV EX\ VHOO &XUUHQF\,QWHUHVW5DWH6ZDSV EX\ VHOO &XUUHQF\2SWLRQV EX\ VHOO 2 625 089 3 423 9 917 2 111 120 16 668 15 134 Interest-rate contracts ,QWHUHVW5DWH6ZDSV EX\ VHOO ,QWHUHVW5DWH&DSV )ORRUV EX\ VHOO ,QWHUHVW5DWH)XWXUHV EX\ VHOO

9 251 548 105 278 150 699 11 357 928 178 818 186 888

Contracts on shares/indexes (TXLW\,QGH[6ZDSV EX\ VHOO (TXLW\,QGH[2SWLRQV EX\ VHOO (TXLW\,QGH[)XWXUHV EX\ VHOO 329 564 20 080 22 926 86 244 8 303 8 186

Credit agreements &UHGLW'HIDXOW6ZDSV EX\ VHOO 105 423 1 366 1 424 10 000 12 12

Total 12 311 624 130 147 184 966 13 565 292 203 801 210 220

122 | 2018 Annual Report $VDWVWRI'HFHPEHUDQGWKHDQDO\VLVRIWUDGLQJILQDQFLDOGHULYDWLYHVE\UHVLGXDOPDWXULW\SHULRGLV DVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017 NotionalFair Value Notional Fair Value Sale Purchase(net) Sale Purchase (net)

8SWRWKUHHPRQWKV )URPWKUHHPRQWKVWRRQH\HDU )URPRQHWRILYH\HDUV 0RUHWKDQILYH\HDUV 6 102 563 6 209 061 ( 54 819) 6 748 724 6 816 568 ( 6 419) a) Other risk management derivatives

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Derivative Associated liability Financial liabilities Derivative Notional Fair Fair economically Reimburseme Instrument Fair value Fair value Book hedged nt amount at value changes in value changes in value Sell Buy the maturity the period the period

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352 604 207 002 ( 3 591) 11 175 1 200 ( 11 431) 214 493 230 782

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Haitong Bank, S.A. | 123 NOTE 21 – SECURITIES

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6KDUHV 2WKHUYDULDEOHLQFRPHVHFXULWLHV 38 471 - Financial assets at fair value through other comprehensive income %RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV )URPSXEOLFLVVXHUV )URPRWKHULVVXHUV 515 813 - Financial assets measured at amortised cost Securities %RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV )URPRWKHULVVXHUV 87 085 - Financial assets avaiable-for-sale %RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV )URPSXEOLFLVVXHUV )URPRWKHULVVXHUV 6KDUHV 2WKHUYDULDEOHLQFRPHVHFXULWLHV - 491 947

641 369 491 947

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Balance as at 31st December 2018 517 630 2 818 ( 2 793) ( 1 842) 515 813 $PRUWLVHGFRVW

124 | 2018 Annual Report $VDWVWRI'HFHPEHUWKHKHDGLQJRIILQDQFLDODVVHWVLVWKRXVDQGHXURVLQVHFXULWLHVSOHGJHGDV FROODWHUDOE\WKH*URXS VHH1RWH

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Impairment Cost (1) Book value (Note 32)

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Balance as at 31st December 2018 87 533 ( 448) 87 085 $PRUWLVHGFRVW

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Fair value reserve Impairment Cost (1) Book value (Note 32) Positive Negative

%RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV ,VVXHGE\SXEOLFHQWLWLHV ,VVXHGE\RWKHUHQWLWLHV

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2WKHUYDULDEOHLQFRPHVHFXULWLHV Balance as at 31st December 2017 525 276 10 281 ( 2 156) ( 41 454) 491 947 $PRUWLVHGFRVW

$VDWVWRI'HFHPEHUWKHKHDGLQJRIILQDQFLDODVVHWVKHOGIRUVDOHLQFOXGHVWKRXVDQGHXURVLQ VHFXULWLHVSOHGJHGDVFROODWHUDOE\WKHJURXS 1RWH

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8SWRWKUHHPRQWKV )URPWKUHHPRQWKVWRRQH\HDU )URPRQHWRILYH\HDUV 0RUHWKDQILYH\HDUV 8QGHWHUPLQHGSHULRG 641 369 491 947

Haitong Bank, S.A. | 125 $VDWVWRI'HFHPEHUDQGWKHKHDGLQJRIVHFXULWLHVFRQFHUQLQJTXRWHGDQGXQTXRWHGVHFXULWLHVLV GLYLGHGDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017 Quoted Unquoted Total Quoted Unquoted Total 6HFXULWLHV %RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV ,VVXHGE\SXEOLFHQWLWLHV ,VVXHGE\RWKHUHQWLWLHV 6KDUHV 2WKHUYDULDEOHLQFRPHVHFXULWLHV

Total statement of financial position value 310 513 330 856 641 369 293 519 198 428 491 947

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NOTE 22 - LOANS AND ADVANCES TO BANKS

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31.12.2018 31.12.2017

Loans and advances to banks in Portugal 'HSRVLWV 56 55

Loans and advances to banks abroad 5HYHUVHUHSRV 9HU\VKRUWWHUPGHSRVLWV 2WKHUORDQVDQGDGYDQFHV

142 356 503 333 142 412 503 388 ,PSDLUPHQWORVVHV 1RWH 126 828 488 000

126 | 2018 Annual Report $VDWVWRI'HFHPEHUDQGWKHDQDO\VLVRIORDQVDQGDGYDQFHVWREDQNVE\UHVLGXDOPDWXULW\SHULRG LVSUHVHQWHGDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017

8SWRWKUHHPRQWKV )URPWKUHHPRQWKVWRRQH\HDU 2YHUGXH 142 412 503 388

NOTE 23 – LOANS AND ADVANCES TO CUSTOMERS

$VDWVWRI'HFHPEHUDQGWKLVKHDGLQJLVDQDO\VHGDVIROORZV WKRXVDQGHXURV

31.12.2018 31.12.2017

At fair value throught profit and loss Domestic loans &RUSRUDWH /RDQV 5 499 - Overdue loans and interest 8SWRGD\V 285 - 5 784 - /RDQVIDLUYDOXHVUHYDOXDWLRQ

5 783 - At amortized cost Domestic loans &RUSRUDWH &RPPHUFLDOFUHGLWOLQHV /RDQV 2WKHUORDQV 5HWDLO 0RUWJDJHORDQV 207 062 300 205 Foreign loans &RUSRUDWH /RDQV 5HYHUVHUHSRVSS 2WKHUORDQV 5HWDLO 0RUWJDJHORDQV 2WKHUORDQV

309 097 372 577 Overdue loans and interest 8SWRGD\V )RUPRUHWKDQGD\V 13 884 77 342 530 043 750 124 ,PSDLUPHQWORVVHV 508 458 629 907 514 241 629 907

Haitong Bank, S.A. | 127 $VDWVWRI'HFHPEHUDQGWKHDQDO\VLVRIORDQVDQGDGYDQFHVWRFRVWXPHUVE\UHVLGXDOPDWXULW\ SHULRGLVSUHVHQWHGDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017

8SWRWKUHHPRQWKV )URPWKUHHPRQWKVWRRQH\HDU )URPRQHWRILYH\HDUV 0RUHWKDQILYH\HDUV 8QGHWHUPLQHGSHULRG 535 827 750 124

NOTE 24 - NON-CURRENT ASSETS HELD-FOR-SALE

$VDWVWRI'HFHPEHUDQGWKLVKHDGLQJLVDQDO\VHGDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017

6XEVLGLDULHVDFTXLUHGH[FOXVLYHO\IRUUHVDOHSXUSRVHV 2 533 2 533

1RQFXUUHQW DVVHWV KHOGIRUVDOH RQO\ LQFOXGHV WKH LQYHVWPHQW LQ 3ROLVK +RWHO &RPSDQ\ 7KH *URXS KDV LPSOHPHQWHGDSODQIRUWKHLPPHGLDWHVDOHRIWKLVVXEVLGLDU\+RZHYHUGXHWRPDUNHWFRQGLWLRQVLWZDVQRWSRVVLEOH WRFDUU\RXWWKHGLYHVWLWXUHZLWKLQWKHSHULRGRULJLQDOO\IRUHVHHQ

,Q0D\+DLWRQJ%DQNDVVLJQHGDVDOHVPDQGDWHWR-//8QGHUWKLVDJUHHPHQWRQ1RYHPEHUWKWKH %DQNVLJQHGDOHWWHURILQWHQWWRVHOOWKH3ROLVK+RWHO&RPSDQ\ZLWKDSRWHQWLDOLQYHVWRU7KHERRNYDOXHDW'HFHPEHU VWRIWKLVLQYHVWPHQWFRUUHVSRQGVWRLWVUHFRYHUDEOHDPRXQWEDVHGRQWKHOHWWHURILQWHQWUHFHLYHG

7KH*URXSFRQWLQXHVWRGHYHORSHIIRUWVWRFRQFOXGHWKHVDOHRIWKHFRPSDQ\KDYLQJHQWHUHGLQWRD1'$ZLWKDQRWKHU SRWHQWLDOLQYHVWRULQ1RYHPEHU

7KHVDOHLVHVWLPDWHGWREHFRPSOHWHGXQWLOWKHHQGRIWKHILUVWKDOIRI

128 | 2018 Annual Report NOTE 25 – OTHER TANGIBLE ASSETS

$VDWVWRI'HFHPEHUDQGWKLVKHDGLQJLVDQDO\VHGDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017 Real Estate )RURZQXVH ,PSURYHPHQWVLQOHDVHKROGSURSHUW\

10 023 10 314 Equipment ,7HTXLSPHQW ,QGRRULQVWDOODWLRQV )XUQLWXUH 0DFKLQHU\DQGWRROV 0RWRUYHKLFOHV 6HFXULW\HTXLSPHQW 2WKHUV 18 290 21 302 28 313 31 616 Work in progress (TXLSPHQW 23 - 28 336 31 616 Accumulated depreciations

5 364 7 639

Haitong Bank, S.A. | 129 7KHPRYHPHQWLQWKLVKHDGLQJZDVDVIROORZV

WKRXVDQGHXURV Real Work in Equipment Total estate progress Acquisition cost

Balance as at 31st December 2016 14 668 26 023 288 40 979 $FTXLVLWLRQV :ULWHRIIVVDOHV 7UDQVIHUVWRGLVFRQWLQXHGRSHUDWLRQV ([FKDQJHYDULDWLRQDQGRWKHUPRYHPHQWV

Balance as at 31st December 2017 10 314 21 302 - 31 616 $FTXLVLWLRQV :ULWHRIIVVDOHV 7UDQVIHUVWRGLVFRQWLQXHGRSHUDWLRQV 7UDQVIHUV ([FKDQJHYDULDWLRQDQGRWKHUPRYHPHQWV

Balance as at 31st December 2018 10 023 18 290 23 28 336

Depreciations

Balance as at 31st December 2016 7 998 21 128 - 29 126 'HSUHFLDWLRQVRISHULRG - 'HSUHFLDWLRQIRUGLVFRQWLQXHGRSHUDWLRQV - :ULWHRIIVVDOHV - 7UDQVIHUVWRGLVFRQWLQXHGRSHUDWLRQV - ([FKDQJHYDULDWLRQDQGRWKHUPRYHPHQWV -

Balance as at 31st December 2017 5 798 18 179 - 23 977 'HSUHFLDWLRQVRISHULRG - :ULWHRIIVVDOHV - 7UDQVIHUVWRGLVFRQWLQXHGRSHUDWLRQV - ([FKDQJHYDULDWLRQDQGRWKHUPRYHPHQWV -

Balance as at 31st December 2018 6 748 16 224 - 22 972

Net book value as at 31st December 2018 3 275 2 066 23 5 364

Net book value as at 31st December 2017 4 516 3 123 - 7 639

130 | 2018 Annual Report NOTE 26 – INTANGIBLE ASSETS

$VDWVWRI'HFHPEHUDQGWKLVKHDGLQJLVDQDO\VHGDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017

Goodwill

Purchased from third parties 6RIWZDUH 2WKHUV

33 848 33 870

Work in progress

44 279 44 195

Accumulated amortisations

(26 036) (22 868)

18 243 21 327

*RRGZLOOLVUHJLVWHUHGLQDFFRUGDQFHZLWKWKHDFFRXQWLQJSROLF\GHVFULEHGLQ1RWHDQGDQDO\VHGDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017

Subsidiaries

+DLWRQJ&DSLWDO6RFLHGDGHGH&DSLWDOGH5LVFR6$

9 859 9 859

$QQXDOO\WKH*URXSDQDO\VHVWKHJRRGZLOOLPSDLUPHQWLQDFFRUGDQFHZLWK,$6,PSDLUPHQWRI$VVHWV

7KHUHFRYHUDEOHDPRXQWRI+DLWRQJ&DSLWDO±6RFLHGDGHGH&DSLWDOGH5LVFR6$ZDVGHWHUPLQHGEDVHGRQWKH GLVFRXQWHGFDVKIORZVPHWKRGEDVHGRQ L WKHEXVLQHVVSODQRIWKHFRPSDQ\IRUWKHQH[W\HDUVDQG LL DGLVFRXQW UDWHRI%DVHGRQWKHVHDVVXPSWLRQVWKH%RDUGRI'LUHFWRUVFRQVLGHUVWKDWWKHUHLVQRLPSDLUPHQWRIWKH JRRGZLOORIWKLVFRPSDQ\RQVWRI'HFHPEHU

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

Haitong Bank, S.A. | 131 7KHPRYHPHQWLQWKLVKHDGLQJZDVDVIROORZV WKRXVDQGHXURV Other fixed Work in Goodwill Software Total assets progress

Acquisition cost

Balance as at 31st December 2016 9 859 35 950 916 1 343 48 068 $FTXLVLWLRQV 3XUFKDVHGIURPWKLUGSDUWLHV :ULWHRIIVVDOHV 7UDQVIHUVWRGLVFRQWLQXHGRSHUDWLRQV ([FKDQJHUDWHYDULDWLRQDQGRWKHUPRYHPHQWV

Balance as at 31st December 2017 9 859 32 954 916 466 44 195 $FTXLVLWLRQV 3XUFKDVHGIURPWKLUGSDUWLHV :ULWHRIIVVDOHV 7UDQVIHUV ([FKDQJHUDWHYDULDWLRQDQGRWKHUPRYHPHQWV

Balance as at 31st December 2018 9 859 32 932 916 572 44 279

Amortizations

Balance as at 31st December 2016 - 21 139 916 - 22 055

$PRUWL]DWLRQVRIWKHSHULRG :ULWHRIIVVDOHV 7UDQVIHUVWRGLVFRQWLQXHGRSHUDWLRQV ([FKDQJHUDWHYDULDWLRQDQGRWKHUPRYHPHQWV

Balance as at 31st December 2017 - 21 952 916 - 22 868 $PRUWL]DWLRQVRIWKHSHULRG :ULWHRIIVVDOHV ([FKDQJHUDWHYDULDWLRQDQGRWKHUPRYHPHQWV

Balance as at 31st December 2018 - 25 120 916 - 26 036

Net balance as at 31st December 2018 9 859 7 812 - 572 18 243

Net balance as at 31st December 2017 9 859 11 002 - 466 21 327

132 | 2018 Annual Report NOTE 27 – INVESTMENTS IN ASSOCIATED COMPANIES

)LQDQFLDOLQIRUPDWLRQUHJDUGLQJDVVRFLDWHGFRPSDQLHVLVSUHVHQWHGLQWKHIROORZLQJWDEOH (thousand euros)

Assets Liabilities Equity Income Net Income

31.12.2018 31.12.2017 31.12.2018 31.12.2017 31.12.2018 31.12.2017 31.12.2018 31.12.2017 31.12.2018 31.12.2017

)XQGR(VStULWR6DQWR,%(5,$,

WKRXVDQGHXURV Net income from the associated companies Aquisition cost% he ld Book Value attributable to the Gr oup 31.12.2018 31.12.2017 31.12.2018 31.12.2017 31.12.2018 31.12.2017 31.12.2018 31.12.2017

)XQGR(VStULWR6DQWR,%(5,$, 2WKHU 2 766 5 317 827 3 189 12 307

Impairment ( 340) ( 340)

487 2 849

7KHPRYHPHQWRIWKLVKHDGLQJLVDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017 Opening balance 'LVSRVDOVDQGRWKHUUHLPEXUVHPHQWV 1HW,QFRPHIURPDVVRFLDWHGFRPSDQLHV 2WKHUFRPSUHKHQVLYHLQFRPHIURPDVVRFLDWHV ,PSDLUPHQWRIWKHILQDQFLDO\HDU Closing balance 487 2 849

,QWKH+DLWRQJ&DSLWDO*URXS6&UHFHLYHGPLOOLRQHXURVIURPWKH(VStULWR6DQWR,%(5,$,IXQG

Haitong Bank, S.A. | 133 NOTE 28 – OTHER ASSETS

$VDWVWRI'HFHPEHUDQG,WKH2WKHU$VVHWVKHDGLQJLVDQDO\VHGDVIROORZV

WKRXVDQGHXURV

31.12.2018 31.12.2017

Debtors and other assets &ROODWHUDOGHSRVLWHGXQGHUFROODWHUDODJUHHPHQWV 1RWH 6XSSOLHVVXSSOHPHQWDU\FDSLWDOLQVWDOPHQWVDQGVXERUGLQDWHGDVVHWV 3XEOLFVHFWRU 'HSRVLWVSODFHGXQGHUPDUJLQDFFRXQWV IXWXUHVFRQWUDFWV 2WKHUVXQGU\GHEWRUV ,PSDLUPHQWORVVHVIRUGHEWRUVDQGRWKHULQYHVWPHQWV 1RWH 201 701 201 452 Othe r a sse ts *ROGRWKHUSUHFLRXVPHWDOVQXPLVPDWLFPHGDOV DQGRWKHUOLTXLGDVVHWV 2WKHUDVVHWV 10 111 7 820 Prepayments and deferred costs 807 2 103

Othe r sundry a sse ts ([FKDQJHWUDQVDFWLRQVSHQGLQJVHWWOHPHQW 0DUNHWVHFXULWLHVWUDQVDFWLRQVSHQGLQJVHWWOHPHQW 5HWLUHPHQWSHQVLRQV 1RWH 2WKHUWUDQVDFWLRQVSHQGLQJVHWWOHPHQW 48 441 82 324

261 060 293 699

6WRFNH[FKDQJHWUDQVDFWLRQVSHQGLQJVHWWOHPHQWUHIHUWRWUDQVDFWLRQVZLWKVHFXULWLHVUHFRUGHGDWWKHWUDGHGDWH SHQGLQJVHWWOHPHQW

134 | 2018 Annual Report NOTE 29 – RESOURCES OF CREDIT INSTITUTIONS

7KHUHVRXUFHVRIFUHGLWLQVWLWXWLRQVKHDGLQJLVSUHVHQWHGDVIROORZV WKRXVDQGHXURV

31.12.2018 31.12.2017

Resources of central banks %DQFRGH3RUWXJDO 60 000 60 000 Resources of other credit institutions Domestic ,QWHUEDQNPRQH\PDUNHW 'HSRVLWV 5HSXUFKDVHDJUHHPHQWV 292 20 701 Foreign 'HSRVLWV /RDQV 5HSXUFKDVHDJUHHPHQWV 2WKHUUHVRXUFHV

298 665 1 098 810 358 957 1 179 511

$VDWVWRI'HFHPEHUDQG,WKHDQDO\VLVRIUHVRXUFHVRIFUHGLWLQVWLWXWLRQVE\UHVLGXDOPDWXULW\SHULRGLV DVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017 8SWRWKUHHPRQWKV )URPWKUHHPRQWKVWRRQH\HDU )URPRQHWRILYH\HDUV 0RUHWKDQILYH\HDUV 358 957 1 179 511

NOTE 30 – RESOURCES OF CUSTOMERS

7KHEDODQFHRIWKHUHVRXUFHVRIFXVWRPHUVKHDGLQJLVFRPSRVHGZLWKUHJDUGWRLWVQDWXUHDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017 Repayable on demand 'HPDQGGHSRVLWV Time deposits )L[HGWHUPGHSRVLWV Other resources 5HSXUFKDVHDJUHHPHQWV 2WKHU'HSRVLWV 2WKHU 125 700 8 716 400 206 515 964

Haitong Bank, S.A. | 135 $VDWVWRI'HFHPEHUDQGWKHDQDO\VLVRIGXHWRFXVWRPHUVE\UHVLGXDOPDWXULW\SHULRGLVDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017 Demand deposits Fixed-term deposits 8SWRPRQWKV WRPRQWKV WR\HDUV 400 206 515 964

NOTE 31 – DEBT SECURITIES ISSUED

7KHGHEWVHFXULWLHVLVVXHGKHDGLQJFDQEHGLYLGHGDVIROORZV WKRXVDQGHXURV

31.12.2018 31.12.2017

Debt securities issued (XUR0HGLXP7HUP1RWHV 2WKHU%RQGV

162 612 242 786

7KHIDLUYDOXHRIWKHSRUWIROLRUHJDUGLQJGHEWVHFXULWLHVLVVXHGLVSUHVHQWHGLQ1RWH

'XULQJ+DLWRQJ%DQN*URXSLVVXHGVHFXULWLHVDPRXQWLQJWRWKRXVDQGHXURV VWRI'HFHPEHU WKRXVDQGHXURV ZKHUHWKRXVDQGHXURVZHUHUHLPEXUVHG VWRI'HFHPEHU WKRXVDQGHXURV

$VDWVWRI'HFHPEHUDQGWKHUHVLGXDOGXUDWLRQRIWKHGHEWVHFXULWLHVLVVXHGLVDVIROORZV

WKRXVDQGHXURV

31.12.2018 31.12.2017

8SWRWKUHHPRQWKV )URPWKUHHPRQWKVWRRQH\HDU )URPRQHWRILYH\HDUV

162 612 242 786

$VDWVWRI'HFHPEHUDQGWKHUHFRQFLOLDWLRQRIWKHIORZVIURPWKLVILQDQFLQJDFWLYLW\LVDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017 Opening balance 242 786 341 567 &DVK)ORZV )DLU9DOXHDGMXVWPHQWV 7UDQVIHUWRDFWLYLWLHVWREHGLVFRQWLQXHG 2WKHUV Final balance 162 612 242 786

136 | 2018 Annual Report 7KHPDLQFKDUDFWHULVWLFVRIWKHGHEWVHFXULWLHVLVVXHGLVDVIROORZV

WKRXVDQGHXURV 31.12.2018

Issuer Designation Currency Issue Date Book Value Maturity Interest Rate

+7B%5 /)/(75$ ),1$ 1&(,5$ +$ ,721*%5,17//)3 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$%(6,19(67,0(172%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$ ),1$ 1&(,5$ +$ ,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$ ),1$ 1&(,5$ +$ ,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),$ %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),% %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),& %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),' %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),( %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),) %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),* %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),+ %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),, %5/ &', +7B%5 /)/(75$ ),1$ 1&(,5$ +$ ,721*%5,17//),- %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),. %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),/ %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),0 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),1 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),2 %5/ ,3&$ +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),4 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),5 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),6 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),7 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),8 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),9 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),: %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),; %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),< %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),= %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),$ %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),% %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),& %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),' %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),( %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),) %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),* %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),+ %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),, %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),- %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),. %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),/ %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),0 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),2 %5/ &', +7B%5 /)/(75$ ),1$ 1&(,5$ +$ ,721*%5,17//),3 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),4 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),5 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),6 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),7 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),9 %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),: %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),; %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),< %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//),= %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &', +7B%5 /)/(75$),1$1&(,5$+$,721*%5,17//), %5/ &',

Haitong Bank, S.A. | 137 WKRXVDQGHXURV 31.12.2018

Issuer Designation Currency Issue Date Book Value Maturity Interest Rate

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138 | 2018 Annual Report NOTE 32 – PROVISIONS AND IMPAIRMENT

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WKRXVDQGHXURV Provisions for Provisions for other risks and guarantees and other TOTAL charges undertakings Balance as at 31st December 2016 7 168 1 647 8 815

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Balance as at 31st December 2017 11 805 1 854 13 659

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Balance as at 31st December 2018 13 377 1 825 15 202

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WKRXVDQGHXURV Net charge of the Exchange Net charge of the 31.12.2016 period from Write back differences and 31.12.2017 period dicontinued operations others

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337 967 68 588 7 618 ( 212 094) ( 12 005) 190 074

Haitong Bank, S.A. | 139 NOTE 33 – INCOME TAXES

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WKRXVDQGHXURV Asset Liabiity 31.12.2018 31.12.2017 31.12.2018 31.12.2017

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Current tax asset / (liability) 44 360 34 070 ( 2 817) ( 3 231)

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Deferred tax asset/(liability) 127 999 141 703 ( 877) ( 5 750) 127 122 135 953

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Net deferred tax asset / (liability) 127 999 139 027 ( 877) ( 3 074) 127 122 135 953

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31.12.2018 31.12.2017

Opening balance ,)56WUDQVLWLRQLPSDFW 1RWH 5HFRJQLVHGLQSURILWRUORVV 5HFRJQLVHGLQQHWSURILWRIGLVFRQWLQXHGRSHUDWLRQV 5HFRJQLVHGLQIDLUYDOXHUHVHUYHV 5HFRJQLVHGLQRWKHUUHVHUYHV )RUHLJQH[FKDQJHYDULDWLRQDQGRWKHUV Closing balance (Asset / (Liability)) 127 122 135 953

142 | 2018 Annual Report Tax recognised in the income statement and reserves during the 2018 and 2017 financial years had the following sources:

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31.12.2018 31.12.2017 Recognised in Recognised in Recognised in Recognised in profit or loss reserves profit or loss reserves

Deferred Taxes 'HULYDWLYHILQDQFLDOLQVWUXPHQWV 6HFXULWLHV /RDQVDQGDGYDQFHVWRFXVWRPHUV 3URYLVLRQV 3HQVLRQ)XQG 2WKHU 7D[ORVVHVFDUULHGIRUZDUG

Current Taxes

Total recognised tax 7 354 ( 2 858) ( 19 310) 2 930

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Profit or loss before tax and Non-controlling interests ( 5 420) ( 135 970)

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(135,7) 7 354 14,2 ( 19 310)

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Haitong Bank, S.A. | 143 NOTE 34 – OTHER LIABILITIES

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Creditors and other resources 3XEOLFVHFWRU 'HSRVLWHGFROODWHUDOXQGHUFROODWHUDODJUHHPHQWV 1RWH 6XQGU\FUHGLWRUV &UHGLWRUVIURPWUDQVDFWLRQVZLWKVHFXULWLHV 6XSSOLHUV 2WKHUVXQGU\FUHGLWRUV 37 211 49 456

Accrued expenses &DUHHUERQXVHV VHH1RWH 2WKHUDFFUXHGH[SHQVHV 10 332 13 371

Deferred income 340 3 958

Other sundry liabilities 6WRFNH[FKDQJHWUDQVDFWLRQVSHQGLQJVHWWOHPHQW )RUHLJQH[FKDQJHWUDQVDFWLRQVSHQGLQJVHWWOHPHQW 2WKHUWUDQVDFWLRQVSHQGLQJVHWWOHPHQW 79 643 90 255

Retirement pensions (see Note 15) 3 018 -

130 544 157 040

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NOTE 35 – DISCONTINUED OPERATIONS

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144 | 2018 Annual Report 7KHFRPSOHWLRQRIWKHWUDQVDFWLRQRFFXUUHGDVDW)HEUXDU\UGDIWHUWKHQHFHVVDU\DSSURYDOVKDYHEHHQ JUDQWHGQDPHO\IURPWKHVXSHUYLVRU\DXWKRULWLHVRQWKHVHLQWHUQDWLRQDO+DLWRQJ%DQNXQLWV

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WKRXVDQGHXURV 31.12.2018 31.12.2017

6HOOSULFH +DLWRQJ8.(TXLW\DVRI)HEUXDU\ Consolidated Loss

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Haitong (UK) Limited Net Profit of discontinued operations 2 901 ( 9 638)

6HOOSULFH +DLWRQJ6HFXULWLHV86$//&(TXLW\DVRI)HEUXDU\ Consolidated Loss

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Haitong Securities USA LLC Net Profit of discontinued operations 10 330 ( 9 914)

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Haitong Investment Ireland PLC Net Profit of discontinuing operations 990 ( 219)

Net Profit of discontinuing operations 14 221 ( 19 771)

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+DLWRQJ 8. /LPLWHG7RWDO$VVHWVDVRI'HFHPEHU ,QWUDJURXSWUDQVDFWLRQV - 10 470

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Assets of discontinuing operations 213 920 20 359

+DLWRQJ 8. /LPLWHG7RWDO/LDELOLWLHVDVRI'HFHPEHU -5 227

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Liabilities of discontinuing operations 903 169 5 920

146 | 2018 Annual Report HAITONG UK LIMITED GROUP

Consolidated Balance sheet as at the 23rd February 2018 and 31st December 2017 (Unaudited) WKRXVDQGHXURV 23.02.2018 31.12.2017

Assets &DVKDQGFDVKHTXLYDOHQWV ,QYHVWPHQWVHFXULWLHV 2WKHUWDQJLEOHDVVHWV 2WKHUDVVHWV

Total Assets 8 899 13 016

Liabilities 2WKHUOLDELOLWLHV

Total Liabilities 1 096 5 227

Equity 6KDUHFDSLWDO 6KDUHSUHPLXP )DLUYDOXHUHVHUYHV 2WKHUUHVHUYHVDQGUHWDLQHGLQFRPH 1HWSURILW ORVV IRUWKHSHULRGDWWULEXWDEOHVKDUHKROGHUVRIWKHSDUHQWFRPSDQ\

Total equity attributable to the shareholders of the parent company 7 803 7 789

Total Equity and Liabilities 8 899 13 016

Haitong Bank, S.A. | 147 HAITONG UK LIMITED GROUP

Consolidated Income Statement for the periods ended on the 23rd February 2018 and 31st December 2017 (Unaudited)

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23.02.2018 31.12.2017

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Financial margin - ( 25) )HHVDQGFRPPLVVLRQVLQFRPH )HHVDQGFRPPLVVLRQVH[SHQVHV 1HWWUDGLQJLQFRPH 1HWJDLQV ORVVHV IURPIRUHLJQH[FKDQJHUHYDOXDWLRQ 1HWJDLQV ORVVHV DULVLQJIURPWKHGLVSRVDORIRWKHUDVVHWV 2WKHURSHUDWLQJUHVXOWV

Operating Income 1 438 5 665

(PSOR\HHFRVWV $GPLQLVWUDWLYHFRVWV 'HSUHFLDWLRQDQGDPRUWLVDWLRQ Operating expenses 1 494 15 303

Profit / (Loss) before Income Tax ( 56) ( 9 638)

Net Profit / (Loss) for the period ( 56) ( 9 638)

148 | 2018 Annual Report HAITONG SECURITIES USA LLC

Individual Balance sheet as at the 23rd February 2018 and 31st December 2017 (Unaudited) WKRXVDQGHXURV 23.02.2018 31.12.2017

Assets &DVKDQGFDVKHTXLYDOHQWV 2WKHUWDQJLEOHDVVHWV ,QWDQJLEOHDVVHWV 2WKHUDVVHWV

Total Assets 9 290 9 888

Liabilities 5HVRXUFHVRIRWKHUFUHGLWLQVWLWXWLRQV 2WKHUOLDELOLWLHV

Total Liabilities 8022 6822

Equity 6KDUHFDSLWDO 2WKHUUHVHUYHVDQGUHWDLQHGLQFRPH 1HWSURILW ORVV IRUWKHSHULRGDWWULEXWDEOHVKDUHKROGHUVRIWKHSDUHQWFRPSDQ\

Total equity attributable to the shareholders of the parent company 1 268 3 066

Total Equity and Liabilities 9 290 9 888

Haitong Bank, S.A. | 149 HAITONG SECURITIES USA LLC

Individual Income Statement for the periods ended on the 23rd February 2018 and 31st December 2017 (Unaudited)

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23.02.2018 31.12.2017

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Financial margin ( 19) ( 241) )HHVDQGFRPPLVVLRQVLQFRPH )HHVDQGFRPPLVVLRQVH[SHQVHV 2WKHURSHUDWLQJUHVXOWV

Operating Income 3 055 7 745

(PSOR\HHFRVWV $GPLQLVWUDWLYHFRVWV 'HSUHFLDWLRQDQGDPRUWLVDWLRQ Operating expenses 4 791 17 658

Profit / (Loss) before Income Tax ( 1 736) ( 9 913)

Income tax &XUUHQWWD[

( 1)

Net Profit / (Loss) for the period ( 1 736) ( 9 914)

150 | 2018 Annual Report HAITONG INVESTMENT IRELAND PLC

Individual Balance sheet 31st December 2018 (Unaudited) WKRXVDQGHXURV 31.12.2018

Assets &DVKDQGFDVKHTXLYDOHQWV )LQDQFLDODVVHWVDWIDLUYDOXHWKURXJKSURILWRUORVV )LQDQFLDODVVHWVKHOGIRUWUDGLQJ 6HFXULWLHV 'HULYDWLYHILQDQFLDODVVHWV 1RQWUDGLQJILQDQFLDODVVHWVPDQGDWRULO\DWIDLUYDOXHWKURXJKSURILWRUORVV 6HFXULWLHV )LQDQFLDODVVHWVDWIDLUYDOXHWKURXJKRWKHUFRPSUHKHQVLYHLQFRPH )LQDQFLDODVVHWVPHDVXUHGDWDPRUWLVHGFRVW /RDQVDQGDGYDQFHVWREDQNV /RDQVDQGDGYDQFHVWRFXVWRPHUV 2WKHUWDQJLEOHDVVHWV &XUUHQWLQFRPHWD[DVVHWV 'HIHUUHGLQFRPHWD[DVVHWV 2WKHUDVVHWV

Total Assets 1 297 954

Liabilities )LQDQFLDOOLDELOLWLHVKHOGIRUWUDGLQJ 'HULYDWLYHILQDQFLDOOLDELOLWLHV )LQDQFLDOOLDELOLWLHVPHDVXUHGDWDPRUWLVHGFRVW 5HVRXUFHVRIFUHGLWLQVWLWXWLRQV )LQDQFLDOOLDELOLWLHVGHVLJQDWHGDWIDLUYDOXHWKURXJKSURILWRUORVV 'HEWVHFXULWLHVLVVXHG &XUUHQWLQFRPHWD[OLDELOLWLHV 2WKHUOLDELOLWLHV

Total Liabilities 1 141 687

Equity 6KDUHFDSLWDO 2WKHUHTXLW\LQVWUXPHQWV )DLUYDOXHUHVHUYHV 2WKHUUHVHUYHVDQGUHWDLQHGHDUQLQJV 1HWSURILW ORVV IRUWKH\HDUDWWULEXWDEOHVKDUHKROGHUVRIWKHSDUHQWFRPSDQ\

Total equity attributable to the shareholders of the parent company 156 267

Total Equity and Liabilities 1 297 954

Haitong Bank, S.A. | 151 HAITONG INVESTMENT IRELAND PLC

Individual Statement of Financial Position 31st December 2018 (Unaudited) WKRXVDQGHXURV

31.12.2018

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Financial margin 547

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Operating Income 2 046

(PSOR\HHFRVWV $GPLQLVWUDWLYHFRVWV 'HSUHFLDWLRQVDQGDPRUWLVDWLRQV 1HWLPSDLUPHQWORVVRQILQDQFLDODVVHWV

Operating expenses 757

Profit / (Loss) before Income Tax 1 289

Income tax &XUUHQWWD[

Net Profit / (Loss) for the year 1 123

152 | 2018 Annual Report 7KHUHVXOWVRIGLVFRQWLQXHGRSHUDWLRQVUHODWLQJWR+DLWRQJ,QYHVWPHQW,UHODQG3/&RI'HFHPEHUDUH EURNHQGRZQDVIROORZV

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Individual Adjustments Net

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Financial margin 547 ( 154) 393 )HHDQG&RPPLVVLRQLQFRPH )HHDQG&RPPLVVLRQH[SHQVH 1HWWUDGLQJLQFRPH 1HWJDLQ ORVV IURPGHUHFRJQLWLRQRIILQDQFLDODVVHWVPHDVXUHGDW)972&, 1HWJDLQV ORVVHV IURPIRUHLJQH[FKDQJHGLIIHUHQFHV 1HWJDLQ ORVV IURPGHUHFRJQLWLRQRIILQDQFLDODVVHWVPHDVXUHGDWDPRUWLVHGFRVW 2WKHURSHUDWLQJLQFRPHDQGH[SHQVH 1HWLQFRPHIURPRWKHUILQDQFLDOLQVWUXPHQWVDW)973/

Operating Income 2 046 3 696 5 742

6WDIIFRVWV *HQHUDODQGDGPLQLVWUDWLYHH[SHQVHV 'HSUHFLDWLRQDQGDPRUWLVDWLRQ 1HWLPSDLUPHQWORVVRQILQDQFLDODVVHWV Operating expenses 757 3 829 4 586

Profit / (Loss) before Income Tax 1 289 ( 133) 1 156

Income tax &XUUHQWWD[

Net Profit / (Loss) for the year 1 123 ( 133) 990

Haitong Bank, S.A. | 153 7KHDVVHWVDQGOLDELOLWLHVRIGLVFRQWLQXHGDFWLYLWLHVRI+DLWRQJ,QYHVWPHQW,UHODQG3/&VKRZWKH IROORZLQJDPRXQWV

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Assets &DVKDQGFDVKHTXLYDOHQWV )LQDQFLDODVVHWVDWIDLUYDOXHWKURXJKSURILWRUORVV )LQDQFLDODVVHWVKHOGIRUWUDGLQJ 6HFXULWLHV 'HULYDWLYHILQDQFLDODVVHWV 1RQWUDGLQJILQDQFLDODVVHWVPDQGDWRULO\DWIDLUYDOXHWKURXJKSURILWRUORVV 6HFXULWLHV )LQDQFLDODVVHWVDWIDLUYDOXHWKURXJKRWKHUFRPSUHKHQVLYHLQFRPH )LQDQFLDODVVHWVPHDVXUHGDWDPRUWLVHGFRVW /RDQVDQGDGYDQFHVWREDQNV /RDQVDQGDGYDQFHVWRFXVWRPHUV 2WKHUWDQJLEOHDVVHWV &XUUHQWLQFRPHWD[DVVHWV 'HIHUUHGLQFRPHWD[DVVHWV 2WKHUDVVHWV

Total Assets 1 297 954 (1 084 034) 213 920

Liabilities )LQDQFLDOOLDELOLWLHVKHOGIRUWUDGLQJ 'HULYDWLYHILQDQFLDODVVHWV )LQDQFLDOOLDELOLWLHVPHDVXUHGDWDPRUWLVHGFRVW 'HSRVLWVIURPEDQNV )LQDQFLDOOLDELOLWLHVGHVLJQDWHGDWIDLUYDOXHWKURXJKSURILWRUORVV 'HEWVHFXULWLHVLVVXHG &XUUHQWLQFRPHWD[OLDELOLWLHV 2WKHUOLDELOLWLHV

Total Liabilities 1 141 687 ( 238 518) 903 169

154 | 2018 Annual Report ,Q WKH WDEOH EHORZ LW LV SUHVHQWHG WKH JURVV H[SRVXUH E\ ILQDQFLDO LQVWUXPHQW LQWHUQDO UDWLQJ EXFNHW LPSDLUPHQW VWDJH DQG GD\V RI RYHUGXH LQ ZKDW FRQFHUQV WKH QRQFXUUHQW DVVHWV KHOG IRU VDOH FRUUHVSRQGLQJWRWKH,UHODQGSRUWIROLR

WKRXVDQGHXURV Ireland 'Non-current assets held Commercial & Construction & Transportation Banks Health Care Power Total for sale' under IFRS5 Professional Services Engineering Infrastructure Gr os s Gr os s Gr os s Gr os s Gross Gross Gross Impairment Impairment Impairment Impairment Impairment Impairment Impairment Asset Type / Stage / Rating class Exposure Exposure Exposure Exposure Exposure Exposure Exposure Cash and cash equivalents 292 ------292 - Stage 1 292 ------292 - >DDDD@ 256 - >EEEEEE@ 36 - Loans and advances to customers - - 8 635 6 276 51 343 33 929 17 952 121 62 638 723 79 599 14 945 220 167 55 994 Stage 1 ------9 353 4 36 954 291 3 714 4 50 021 299 >EEEEEE@ >EEEE@ >EE@ Stage 2 ------8 599 117 25 684 432 15 211 182 49 494 731 >EEEEEE@ >EEEE@ >EE@ Stage 3 - - 8 635 6 276 51 343 33 929 - - - - 60 674 14 759 120 652 54 964 >G@ Banking Book Debt Securities - - - - 4 555 79 ------4 555 79 Stage 1 - - - - 4 555 79 ------4 555 79 >EE@ Total 292 - 8 635 6 276 55 898 34 008 17 952 121 62 638 723 79 599 14 945 225 014 56 073

WKRXVDQGHXURV Commercial & Construction & Transportation Ireland 'Non-current assets held Banks Health Care Power Total for sale' under IFRS5 Professional Services Engineering Infrastructure Asset Type / Stage / Past Due Gross Gr os s Gr os s Gr os s Gross Gross Gr os s Impairment Impairment Impairment Impairment Impairment Impairment Impairment Status Exposure Exposure Exposure Exposure Exposure Exposure Exposure Cash and cash equivalents 292 ------292 - Stage 1 292 ------292 - 1RRYHUGXH Loans and advances to customers - - 8 635 6 276 51 343 33 929 17 952 121 62 638 723 79 599 14 945 220 167 55 994 Stage 1 ------9 353 4 36 954 291 3 714 4 50 021 299 1RRYHUGXH Stage 2 ------8 599 117 25 684 432 15 211 182 49 494 731 1RRYHUGXH Stage 3 - - 8 635 6 276 51 343 33 929 - - - - 60 674 14 759 120 652 54 964 1RRYHUGXH 0RUHWKDQGD\V Banking Book Debt Securities - - - - 4 555 79 ------4 555 79 Stage 1 - - - - 4 555 79 ------4 555 79 1RRYHUGXH Total 292 - 8 635 6 276 55 898 34 008 17 952 121 62 638 723 79 599 14 945 225 014 56 073

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WKRXVDQGHXURV 31.12.2018 Book Issuer Designation Currency Issue Date Maturity Interest Rate Value

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156 | 2018 Annual Report NOTE 36 – CAPITAL, SHARE PREMIUM AND OTHER CAPITAL INSTRUMENTS

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NOTE 37 – FAIR-VALUE RESERVES, OTHER RESERVES, RETAINED EARNINGS AND NON-CONTROLLING INTERESTS

Legal reserve, fair-value reserves and other reserves

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158 | 2018 Annual Report )DLUYDOXHUHVHUYHVUHSUHVHQWWKHSRVVLEOHFDSLWDOJDLQVDQGORVVHVLQUHODWLRQWRWKHILQDQFLDODVVHWVWURXJK RWKHUFRPSUHKHQVLYHLQFRPHSRUWIROLRQHWRILPSDLUPHQWUHFRJQLVHGLQWKHLQFRPHVWDWHPHQWRIWKH\HDUDQGRU SUHYLRXV\HDUV7KHYDOXHRIWKLVUHVHUYHLVSUHVHQWHGQHWRIGHIHUUHGWD[7KHPRYHPHQWVRIWKHVHKHDGLQJV ZHUHWKHIROORZLQJ

WKRXVDQGHXURV Fair Value reserves Other reserves and retained earnings

Other Total Other Income Total fair Actuarial Revaluation Legal Exchange reserves and reserves and tax value gains/losses reserves Reserve differences retained retained reserves reserve (net of taxes) earnings earnings

Balance as at 31 December 2016 ( 2 781) 469 ( 2 312) 39 878 ( 25 999) ( 133 539) 8 205 ( 111 455)

$FWXDULDOJDLQVORVVHV QHWRIWD[HV 2ZQFUHGLWULVNFKDQJHV ,QWHUHVWRIRWKHUHTXLW\LQVWUXPHQWV &KDQJHVLQIDLUYDOXH QHWRIWD[HV )RUHLJQH[FKDQJHGLIIHUHQFHV 7UDQVIHUWRUHVHUYHV 2WKHUFRPSUHKHQVLYHLQFRPHIURPDVVRFLDWHV Balance as at 31 December 2017 7 314 ( 2 527) 4 787 39 878 ( 26 176) ( 150 719) ( 92 195) ( 229 212)

,)56WUDQVLWLRQLPSDFW 1RWH Balance as at 1 January 2018 7 064 ( 2 511) 4 553 39 878 ( 26 176) ( 150 719) ( 93 347) ( 230 364)

$FWXDULDOJDLQVORVVHV QHWRIWD[HV 2ZQFUHGLWULVNFKDQJH &KDQJHVLQIDLUYDOXH QHWRIWD[HV )RUHLJQH[FKDQJHGLIIHUHQFHV RSHUDWLRQV )RUHLJQH[FKDQJHUHVHUYHUHF\FOHIURPGLVFRQWLQXHGRSHUDWLRQV 7UDQVIHUWRUHVHUYHV 2WKHUFRPSUHKHQVLYHLQFRPHRIDVVRFLDWHV Balance as at 31 December 2018 ( 132) ( 41) ( 173) 39 878 ( 28 280) ( 164 723) ( 220 722) ( 373 847)

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31.12.2018 31.12.2017

Opening balance 4 787 ( 2 312) ,)56WUDQVLWLRQLPSDFW 1RWH Balance at 01.01.2018 4 553 ( 2 312) )DLUYDOXHFKDQJHV 'LVSRVDOVRIWKH\HDU ,PSDLUPHQWUHFRJQLVHGLQWKH\HDU 7UDQVIHURIFRPSUHKHQVLYHLQFRPHIURPGLVFRQWLQXLQJRSHUDWLRQV 'HIHUUHGWD[HVUHFRJQLVHGLQUHVHUYHVGXULQJWKH\HDU

Closing balance ( 173) 4 787

Haitong Bank, S.A. | 159 Non-controlling interests

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31.12.2018 31.12.2017

Opening balance 31 082 41 675 ,)56WUDQVLWLRQLPSDFW 1RWH 'LYLGHQGVSDLG &KDQJHVLQIDLUYDOXHUHVHUYH ([FKDQJHGLIIHUHQFHDQGRWKHU 1HWLQFRPHIRUWKHSHULRG

Closing balance 26 029 31 082

NOTE 38 – CONTINGENT LIABILITIES, GUARANTEES AND COMMITMENTS

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Contingent liabilities, guarantees and stand by letters of credit *XDUDQWHHVDQGVWDQGE\OHWWHUVRIFUHGLW $VVHWVSOHGJHGDVFROODWHUDO 843 825 452 412

Commitments ,UUHYRFDEOHFRPPLWPHQWV 16 462 13 939

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WKRXVDQGHXURV 31.12.2018 Assets

Guarantees Liabilities Income Expenses Others Total

Shareholders +$,721*,17(51$7,21$/+2/',1*6/,0,7('

Subsidiaries and associates +$,721*,17(51$7,21$/675$7(*,&,19(670(17 +$,721*6(&85,7,(6 +$,721*,17(51$7,21$/6(&85,7,(6&2/7' +$,721*,17(51$7,21$/&5(',7&203$1

TOTAL 2 77 2 77 15 972 191 60 4 610

WKRXVDQGHXURV 31.12.2017 Assets

Income Expenses Others Total

Shareholders +$,721*,17(51$7,21$/+2/',1*6/,0,7('

Subsidiaries and associates +$,721*,17(51$7,21$/675$7(*,&,19(670(17 +$,721*6(&85,7,(6 +$,721*81,75867),1$1&,$/ /($6,1* +$,721*,17(51$7,21$/6(&85,7,(6&2/7' +$,721*81,75867,17(51$7,21$//($6,1*& +$,721*81,75867&$3,7$/*5283&2/,0,7(' +$,721*,17(51$7,21$/&5(',7&203$1

TOTAL 348 348 38 069 3

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166 | 2018 Annual Report NOTE 40 – FAIR-VALUE OF FINANCIAL ASSETS AND LIABILITIES

Fair-value of financial assets and liabilities

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Balance as at 31st December 2018 &DVKDQGFDVKHTXLYDOHQWV )LQDQFLDODVVHWVDWIDLUYDOXHWKURXJKSURILWRUORVV )LQDQFLDODVVHWVKHOGIRUWUDGLQJ 6HFXULWLHV 'HULYDWLYHILQDQFLDODVVHWV 1RQWUDGLQJILQDQFLDODVVHWVPDQGDWRULO\DWIDLUYDOXHWKURXJKSURILWRU ORVV 6HFXULWLHV /RDQVDQGDGYDQFHVWRFXVWRPHUV )LQDQFLDODVVHWVDWIDLUYDOXHWKURXJKRWKHUFRPSUHKHQVLYHLQFRPH )LQDQFLDODVVHWVPHDVXUHGDWDPRUWLVHGFRVW 6HFXULWLHV /RDQVDQGDGYDQFHVWREDQNV /RDQVDQGDGYDQFHVWRFXVWRPHUV

Financial Assets 1 063 626 335 076 648 646 173 449 2 220 797 2 204 108

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Financial Liabilities 921 775 15 924 255 121 33 828 1 226 648 1 226 648 Balance as at 31st December 2017

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Financial Assets 1 593 588 341 988 617 236 201 590 2 754 402 2 746 305 )LQDQFLDOOLDELOLWLHVKHOGIRUWUDGLQJ 6HFXULWLHV 'HULYDWLYHILQDQFLDOOLDELOLWLHV )LQDQFLDOOLDELOLWLHVPHDVXUHGDWDPRUWLVHGFRVW 5HVRXUFHVRIFUHGLWLQVWLWXWLRQV 5HVRXUFHVRIFXVWRPHUV 'HEWVHFXULWLHVLVVXHG )LQDQFLDOOLDELOLWLHVGHVLJQDWHGDWIDLUYDOXHWKURXJKSURILWRUORVV 'HEWVHFXULWLHVLVVXHG

Financial Liabilities 1 723 768 - 795 465 39 982 2 559 215 2 559 215

Haitong Bank, S.A. | 167 Fair-value Hierarchy

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Financial assets held for Financial assets mandatory Financial assets Financial trading at fair value through profit at fair value assets or loss through other Total held-for- Derivative Loans and comprehensive sale Securities financial Securities advances to income assets costumers

Opening Balance 43 231 ( 2 570) - - 120 947 - 161 608

IFRS 9 reclass transition impact 5 883

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Closing Balance 17 528 ( 7 497) 28 913 5 783 - 94 894 139 621

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168 | 2018 Annual Report 7KHPDLQSDUDPHWHUVXVHGGXULQJLQZKDWFRQFHUQVYDOXDWLRQPRGHOVZHUHWKHIROORZLQJ

Yield curves 7KHVKRUWWHUPUDWHVVHWRXWEHORZUHIOHFWLQGLFDWLYHYDOXHVRIGHSRVLWLQWHUHVWUDWHVDQGRUIXWXUHV6ZDSUDWHVDUH XVHGIRUWKHORQJWHUP

31.12.2018 31.12.2017 EUR USD GBP EUR USD GBP

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Credit spreads &UHGLWVSUHDGVFXUYHVDQGUHFRYHU\UDWHVXVHGE\WKH*URXSDUHVRXUFHGRQDGDLO\EDVLVIURP0DUNLW7KHWDEOH EHORZUHIOHFWVWKHHYROXWLRQRIWKHPDLQ&'6LQGLFHV EDVLVSRLQWV Index Series 1 year 3 years 5 years 7 years 10 years

Year 2017 &';86'0DLQ 29 L7UD[[(XU0DLQ 28 L7UD[[(XU6HQLRU)LQDQFLDO 28

Year 2018 &';86'0DLQ 31 L7UD[[(XU0DLQ 30 L7UD[[(XU6HQLRU)LQDQFLDO 30

Haitong Bank, S.A. | 169 Interest rate volatilities 7KHIROORZLQJILJXUHVUHIOHFWDWWKHPRQH\LPSOLHGYRODWLOLWLHV

31.12.2018 31.12.2017 EUR USD GBP EUR USD GBP

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Foreign exchange rate and volatilities 7KHWDEOHEHORZUHIOHFWV(&%¶V (XURSHDQ&HQWUDO%DQN IRUHLJQH[FKDQJHUDWHVIL[LQJVDQGDWWKHPRQH\LPSOLHG YRODWLOLWLHV

Exchange Rate Volatiliy (%) 31.12.2018 31.12.2017 1 month 3 months 6 months 9 months 1 year

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Quotation Historical volatility (%) Implied 31.12.2018 31.12.2017 Range % 1 month 3 months volatility (%)

'-(XUR6WR[[ 36, ,%(; '$; 6 3 %29(63$

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Cash and cash equivalents and Loans and advances to banks

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170 | 2018 Annual Report Loans and advances to customers

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Resources of other credit institutions

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Resources of customers

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Debt securities issued and Subordinated Liabilities

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NOTE 41 – IFRS 9 ADOPTION

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WKRXVDQGHXURV Loans and advances Securities to customers

Financial Financial Assets At fair Othe r Financial Assets at fair Cash and required to be Loans and value At De fe r r e d reserves Non- assets value through Othe r Fair -value cash measured at advances through amortised tax assets / Provisions and controlling held for other Assets reserves equivalents fair value to banks profit or cost liabilities retained interests sale comprehensive through profit loss income income or loss Balance at 31 December 2017 – IAS 39 473 273 491 947 - - 488 000 - 629 907 135 953 293 699 13 659 4 787 ( 229 212) 31 082

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Reclassification: - ( 491 947) 32 802 459 145 - 5 883 ( 5 883) - - - ( 1 230) 1 230 - )URPILQDQFLDO$VVHWVKHOGIRUVDOH 6KDUHV *URVV$PRXQW 5HDYDOXDWLRQ ,PSDLUPHQW %RQGV *URVV$PRXQW 5HDYDOXDWLRQ ,PSDLUPHQW )URPORDQVWRFXVWRPHUV *URVV$PRXQW 5HDYDOXDWLRQ ,PSDLUPHQW Remeasurement ( 8) - - - ( 448) - ( 842) 194 ( 274) 27 996 ( 2 382) ( 19)

,PSDLUPHQW 5HDYDOXDWLRQIURPIDLUYDOXHWKURXJK RWKHUFRPSUHKHQVLYHLQFRPH Balance at 1 January 2018 - IFRS 9 473 265 - 32 802 459 145 487 552 5 883 623 182 136 147 293 425 13 686 4 553 ( 230 364) 31 063

Haitong Bank, S.A. | 171 2Q-DQXDU\VWWKH*URXSUHFODVVLILHGLWVILQDQFLDODVVHWVWRWKHSRUWIROLRVHVWDEOLVKHGLQ,)56 1RWH

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NOTE 42 – RISK MANAGEMENT

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Credit Risk

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Calculation of ECL

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Inputs in the measurement of ECL

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Forward-Looking Information

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Haitong Bank, S.A. | 173 7KH*URXSXVHVIRUZDUGORRNLQJLQIRUPDWLRQEDVHGRQDVLPSOLILHGDSSURDFKJURXQGHGRQWKHSURSRUWLRQDOLW\DQG FKDUDFWHULVWLFV RI WKH %DQN 7KH *URXS LPSOHPHQWHG D VLQJOH FHQWUDO VFHQDULR DSSURDFK EDVHG RQ H[WHUQDO LQIRUPDWLRQDQGPDNLQJXVHRI%DQNRI3RUWXJDO¶VVWDWLVWLFDOLQIRUPDWLRQ7KLVDSSURDFKHQVXUHVFRQVLVWHQF\DQG DOLJQPHQWZLWKWKH5HJXODWRU

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WKRXVDQGHXURV Stage 1 Stage 2 Stage 3 Total Stage Total Total Asset Type Low to Fair risk Monitoring Substandard Monitoring Substandard Doubtful Impaired Not rated 1 Stage 2 Stage 3 [aaa+;a-] [bbb+;b-] [ccc+;ccc] [bbb+;b-] [ccc+;ccc] [lccc] [d] /RDQVDQGDGYDQFHVWRFXVWRPHUV *XDUDQWHHV 6HFXULWLHV /RDQVDQGDGYDQFHVWREDQNV &DVKDQGFDVKHTXLYDOHQWV 'HEWRUVDQGRWKHUUHFHLYDEOHV Total 347 295 1 124 619 285 116 934 1 589 133 128 861 3 358 2 973 135 192 74 045 74 045

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WKRXVDQGHXURV Stage 1 Stage 2 Stage 3 Financial instruments at No overdue 1 - 29 days No overdue No overdue More than 181 days amortised cost (including Gross Gross Gross Gross Loss Loss Loss Loss Loss Financial Guarantees) by past due Gross carrying amount carrying carrying carrying carrying allow ance allow ance allow ance allow ance allow ance status amount amount amount amount $JULEXVLQHVV &RPPRGLW\)RRGV %DQNV %URNHU'HDOHUV %XLOGLQJ0DWHULDOV &DSLWDO*RRGV &KHPLFDOV &RPPHUFLDO 3URIHVVLRQDO6HUYLFHV

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174 | 2018 Annual Report Loans and advances to costumers

7KHWDEOHEHORZSUHVHQWVDVXPPDU\RIWKHSRUWIROLRRIORDQVDQGDGYDQFHVWRFRVWXPHUVRI+DLWRQJ%DQN6$ *URXSDVRI'HFHPEHUDQG'HFHPEHU

WKRXVDQGHXURV 31/12/2018 31/12/2017 Loans and advances to customers Stage 1 Stage 2 Stage 3 POCI Total Total Amortized cost /RZ WRIDLUULVN >DDDD@ 29 142 - 0RQLWRULQJ >EEEE@ 370 586 399 674 6XEVWDQGDUG >FFFFFF@ - 57 953 'RXEWIXO >OFFF@ - 4 065 ,PSDLUHG >G@ 38 222 280 064 1RWUDWHG 92 093 8 368 Gross carrying amount 395 545 96 276 38 222 - 530 043 750 124 /RVVDOORZ DQFH 1RWH 21 584 120 217 Carrying amount 393 051 92 622 22 786 - 508 459 629 907 Fair Value Trough Profit and Loss ,PSDLUHG >G@ 5 784 - Gross carrying amount - - 5 784 - 5 784 - 5HDYDOXDWLRQ ( 1) - Carrying amount - - 5 783 - 5 783 - Total gross carrying amount 395 545 96 276 44 006 - 535 827 750 124 /RVVDOORZ DQFH - 5HDYDOXDWLRQ Total Carrying amount 393 051 92 622 28 568 - 514 241 629 907

Guarantees

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WKRXVDQGHXURV 31-12-2018 31-12-2017 Guarantees Stage 1 Stage 2 Stage 3 POCI Total Total 0RQLWRULQJ >EEEE@ 142 831 90 657 6XEVWDQGDUG >FFFFFF@ - 55 766 'RXEWIXO >OFFF@ 2 973 - ,PSDLUHG >G@ 2 837 25 484 1RWUDWHG 825 2 509 Total gross carrying amount 143 656 2 973 2 837 - 149 466 174 416 /RVVDOORZ DQFH 1RWH 1 764 1 801 Total Carrying amount 142 915 2 676 2 111 - 147 702 172 615

Haitong Bank, S.A. | 175 Banking book debt securities

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WKRXVDQGHXURV 31-12-2018 31-12-2017 Banking Book Debt Securities Stage 1 Stage 2 Stage 3 POCI Total Total Amortized cost 0RQLWRULQJ >EEEE@ 87 533 - Gross carrying amount 87 533 - - - 87 533 - /RVVDOORZ DQFH 1RWH 448 - Carrying amount (Note 21) 87 085 - - - 87 085 - Fair Value through Other Comprehensive Income 0RQLWRULQJ >EEEE@ 497 522 88 758 6XEVWDQGDUG >FFFFFF@ - 2 141 ,PSDLUHG >G@ 10 820 43 336 1RWUDWHG 9 288 345 230 Gross carrying amount 506 810 - 929 9 891 517 630 479 465 /RVVDOORZ DQFH 1RWH 1 842 25 869 5HDYDOXDWLRQ 25 6 459 Carrying amount 506 092 - 784 8 937 515 813 460 055 Total gross carrying amount 594 343 - 929 9 891 605 163 479 465 /RVVDOORZ DQFH 5HDYDOXDWLRQ Total Carrying amount 593 177 - 784 8 937 602 898 460 055

Cash and Cash Equivalents

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WKRXVDQGHXURV 31-12-2018 31-12-2017 Cash and cash equivalents Stage 1 Stage 2 Stage 3 POCI Total Total $PRUWL]HGFRVW /RZ WRIDLUULVN >DDDD@ 317 075 448 034 0RQLWRULQJ >EEEE@ 23 982 3 235 6XEVWDQGDUG >FFFFFF@ - 18 857 1RWUDWHG 194 3 136 Total gross carrying amount 340 330 921 - - 341 251 473 262 /RVVDOORZ DQFH 1RWH 1 - Total Carrying amount 340 329 921 - - 341 250 473 262

Loans and advances to banks

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WKRXVDQGHXURV 31-12-2018 31-12-2017 Loans and advances to Banks Stage 1 Stage 2 Stage 3 POCI Total Total $PRUWL]HGFRVW /RZ WRIDLUULVN >DDDD@ 1 048 17 560 0RQLWRULQJ >EEEE@ 122 929 455 121 6XEVWDQGDUG >FFFFFF@ 3 358 - 'RXEWIXO >OFFF@ - - ,PSDLUHG >G@ 15 077 15 077 1RWUDWHG - 15 630 Total gross carrying amount 92 313 35 022 15 077 - 142 412 503 388 /RVVDOORZ DQFH 1RWH 15 584 15 388 Total Carrying amount 92 304 34 524 - - 126 828 488 000

176 | 2018 Annual Report Debtors and other receivables

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WKRXVDQGHXURV 31/12/2018 31/12/2017 Debtors and other receivables Stage 1 Stage 2 Stage 3 POCI Total Total $PRUWL]HGFRVW /RZWRIDLUULVN >DDDD@ 30 4 0RQLWRULQJ >EEEE@ 8 097 990 6XEVWDQGDUG >FFFFFF@ 285 6 000 'RXEWIXO >OFFF@ - - ,PSDLUHG >G@ 1 305 1 345 1RWUDWHG 14 534 15 265 Total gross carrying amount 22 946 - 1 305 - 24 251 23 604 /RVVDOORZDQFH 1RWH 8 781 12 675 Total Carrying amount 15 470 - - - 15 470 10 929

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WKRXVDQGHXURV Financial assets modified during the year 31.12.2018 Amortised cost before changes 30 646 ,PSDLUPHQWORVVHVEHIRUHVFKDQJHV Net amortised cost before changes 30 493 1HWJDLQ ORVV 2WKHUV Amortized cost after changes 32 725 ,PSDLUPHQWORVVHVDIWHUFKDQJHV Net amortized cost after changes 30 488

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WKRXVDQGHXURV Stage 1 Stage 2 Stage 3 POCI Rating bucket Gross Exposure Gross Exposure Gross Exposure Gross Exposure Exposure at Default Exposure at Default Exposure at Default Exposure at Default

/RZWRIDLUULVN >DDDD@ 0RQLWRULQJ >EEEE@ 6XEVWDQGDUG >FFFFFF@ 'RXEWIXO >OFFF@ ,PSDLUHG >G@ 1RWUDWHG 1RW5DWHG Total 1 587 768 1 300 213 135 191 106 509 65 520 55 184 9 891 9 891

Concentration risk

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178 | 2018 Annual Report 7KHEUHDNGRZQRIORDQVDQGDGYDQFHVWRFRVWXPHUVILQDQFLDODVVHWVKHOGIRUWUDGLQJDQGVHFXULWLHVE\VHFWRURI DFWLYLW\IRUWKH\HDUVHQGHGVW'HFHPEHUDQGVW'HFHPEHULVDVIROORZV WKRXVDQGHXURV 31.12.2018 Financial assets held-for- Loans and advances to customers Securities trading

Gross amount Impairment Derivative Gross Securities financial Impairment Outstanding Overdue Outstanding Overdue amount loans loans loans loans assets

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WKRXVDQGHXURV 31.12.2017 Financial assets held-for- Loans and advances to customers Securities trading Gross amount Impairment Derivative Outstand Overdue Outstand Overdue Securities financial Gross amount Impairment ing loans loans ing loans loans assets $JULEXVLQHVV &RPPRGLW\)RRGV $XWRPRELOHV &RPSRQHQWV %DQNV %URNHU'HDOHUV %XLOGLQJ0DWHULDOV &DSLWDO*RRGV &KHPLFDOV &RPPHUFLDO 3URIHVVLRQDO6HUYLFHV &RQVWUXFWLRQ (QJLQHHULQJ &RQVXPHU'XUDEOHV $SSDUHO &RQWDLQHUV 3DFNDJLQJ )RRG%HYHUDJH 7REDFFR )XQGV $VVHW0DQDJHUV *RYHUQPHQWV +HDOWK&DUH +RWHOV *DPLQJ 0HGLD (QWHUWDLQPHQW 0HWDOV 0LQLQJ 2LO *DV 3DSHU )RUHVW3URGXFWV 3KDUPDFHXWLFDOV 3RZHU 5HDO(VWDWH 5HWDLOLQJ 6RIWZDUH 7HOHFRPV 7UDQVSRUWDWLRQ 7UDQVSRUWDWLRQ,QIUDVWUXFWXUH :DWHU8WLOLWLHV 2WKHUV 727$/

Haitong Bank, S.A. | 179 Market risk

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PLOOLRQHXURV 31.12.2018 31.12.2017 December Average Maximum Minimum December Average Maximum Minimum )RUHLJQ([FKDQJH5LVN ,QWHUHVW5DWH5LVN 6KDUHV &UHGLWVSUHDG &RYDULDQFH Total 4,06 4,60 7,06 2,91 4,97 5,82 10,38 2,62

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WKRXVDQGHXURV

31.12.2018 31.12.2017

Average Average Average Average Interest of the Interest of the balance of the interest balance of the interest period period period rate period rate

0RQHWDU\DVVHWV /RDQVDQGDGYDQFHVWRFXVWRPHUV ,QYHVWPHQWLQVHFXULWLHV &ROODWHUDODFFRXQWV

Financial assets 2 689 819 98 174 3,65% 3 278 793 176 618 5,39%

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Financial liabilities 2 072 495 60 652 2,93% 3 251 257 127 030 3,91%

Financial Result 37 522 49 588

180 | 2018 Annual Report $VRIVW'HFHPEHUDQGVW'HFHPEHUWKHH[SRVXUHRIDVVHWVDQGOLDELOLWLHVE\FXUUHQF\LQUHJDUGVWR WKHIRUHLJQH[FKDQJHULVNZDVDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017 Net Net Spot Forward Spot Forward Exposure Exposure 86' 86'2//$5 *%3 67(5/,1*3281' %5/ %5$=,/,$15($/ '.. '$1,6+.521( -3< <(1 &+) 6:,66)5$1& 3/1 3/,6+=/27< 12. 125:(*,$1.521( &$' &$1$',$1'2//$5 =$5 5$1' $8' $8675$/,$1'2//$5 &=. &=(&+.2581$ &1< <8$15(10,1%, +.' +21*.21*'2//$5 27+(5 307 706 ( 270 109) 37 597 259 767 ( 321 073) ( 61 306) 1RWHDVVHW OLDELOLW\

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PLOOLRQHXURV 31 December 2018 Up to 3 3 to 6 6 to 12 1 to 5 More than months months months years 5 years $VVHWV /LDELOLWLHV Gap 267 ( 236) 71 ( 170) 22

PLOOLRQHXURV 31 December 2017 Up to 3 3 to 6 6 to 12 1 to 5 More than months months months years 5 years $VVHWV /LDELOLWLHV Gap 524 52 38 ( 545) 13

Haitong Bank, S.A. | 181 7KHLPSDFWRQWKHEDQNLQJERRNSRUWIROLRHFRQRPLFYDOXHXQGHUDVFHQDULRRIESVPRYHPHQWLQLQWHUHVW UDWHVLQ'HFHPEHUDQG'HFHPEHUZDVDVIROORZV

PLOOLRQHXURV Scenario December 2018 December 2017

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WKRXVDQGHXURV 31.12.2018

Financial assets held for Securities Total trading - Securities

3RUWXJDO 6SDLQ 3RODQG ,WDO\ 18 325 280 978 299 303

WKRXVDQGHXURV 31.12.2017

Financial assets held for trading - Securities Total Securities

3RUWXJDO 6SDLQ 502 251 988 252 490

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182 | 2018 Annual Report 7KHGHWDLOVRIWKHH[SRVXUHUHJDUGLQJLQYHVWPHQWVHFXULWLHVDQGWUDGLQJDVVHWVLVDVIROORZV

WKRXVDQGHXURV 31.12.2018 Market Accrued Fair value Nominal Book Value Impairment value Interest reserves

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186 | 2018 Annual Report NOTE 43 – ACCOUNTING STANDARDS AND RECENT INTERPRETATIONS

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190 | 2018 Annual Report Haitong Bank, S.A. | 191 192 | 2018 Annual Report Haitong Bank, S.A. | 193 194 | 2018 Annual Report Haitong Bank, S.A. | 195 196 | 2018 Annual Report Haitong Bank, S.A. | 197 198 | 2018 Annual Report Haitong Bank, S.A. | 199 200 | 2018 Annual Report Haitong Bank, S.A. | 201 202 | 2018 Annual Report Haitong Bank, S.A. | 203 204 | 2018 Annual Report Haitong Bank, S.A. | 205 206 | 2018 Annual Report Haitong Bank, S.A. | 207 208 | 2018 Annual Report INDIVIDUAL FINANCIAL STATEMENTS AND NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS

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Haitong Bank, S.A. | 209 1. INDIVIDUAL FINANCIAL STATEMENTS

Individual Income Statement for the financial years ended on the 31st December 2018 and 2017 WKRXVDQGHXURV

Notes 31.12.2018 31.12.2017

,QWHUHVWDQGVLPLODULQFRPH ,QWHUHVWDQGVLPLODUH[SHQVH Financial margin 3 094 1 657

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Operating Income 75 457 48 093

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Operating expenses 75 763 181 817

Profit / (Loss) before Income Tax ( 306) ( 133 724)

Income tax &XUUHQWWD[ 'HIHUUHGWD[

4 260 6 817

Net Profit / (Loss) for the year ( 4 566) ( 140 541)

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210 | 2018 Annual Report Individual Statement of Comprehensive Income for the financial years ended on the 31st December 2018 and 2017

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31.12.2018 31.12.2017

Net income of the year ( 4 566) ( 140 541) - - Other comprehensive income for the year

Items that will not be reclassified to profit and loss $FWXDULDOJDLQV ORVVHV QHWRIWD[HV ( 2 104) ( 177)

Items that may be reclassified to profit and loss ([FKDQJHGLIIHUHQFHVQHWRIWD[HV )DLUYDOXHFKDQJHVRIILQDQFLDODVVHWVKHOGIRUVDOH )DLUYDOXHFKDQJHVRIGHEWLQVWUXPHQWVPHDVXUHGDWIDLUYDOXHWKURXJKRWKHUFRPSUHKHQVLYH LQFRPH ( 2 949) 5 128

Total comprehensive income/(loss) of the year ( 9 619) ( 135 590)

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Haitong Bank, S.A. | 211 Individual Statement of Financial Position as at 31st December 2018 and 2017 WKRXVDQGHXURV

Notes 31.12.2018 31.12.2017

Assets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

Total Assets 2 316 979 2 226 710

Liabilities )LQDQFLDOOLDELOLWLHVKHOGIRUWUDGLQJ 6HFXULWLHV 'HULYDWLYHILQDQFLDODVVHWV )LQDQFLDOOLDELOLWLHVPHDVXUHGDWDPRUWLVHGFRVW 5HVRXUFHVIURPFUHGLWLQVWLWXWLRQV 5HVRXUFHVIURPFXVWRPHUV 'HEWVHFXULWLHVLVVXHG 3URYLVLRQV 7D[OLDELOLWLHV &XUUHQWLQFRPHWD[OLDELOLWLHV 'HIHUUHGLQFRPHWD[OLDELOLWLHV 2WKHUOLDELOLWLHV

Total Liabilities 1 720 554 1 724 246

Equity 6KDUHFDSLWDO 6KDUHSUHPLXP 2WKHUHTXLW\LQVWUXPHQWV )DLUYDOXHUHVHUYHV 2WKHUUHVHUYHVDQGUHWDLQHGLQFRPH 1HWSURILW ORVV RIWKH\HDUDWWULEXWDEOHVKDUHKROGHUVRIWKHSDUHQWFRPSDQ\

Total equity attributable to the shareholders of the parent company 596 425 502 464

Total Equity and Liabilities 2 316 979 2 226 710

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212 | 2018 Annual Report Individual Statement of Changes in Equity for the financial years ended on the 31st December 2018 and 2017

WKRXVDQGHXURV Other Reserves, Retained Income Net profit / Share Share Other equity Fair value Total and Other Total (loss) for the Capital premium instruments reserve equity Comprehensive ye ar Income

Balance as at 31st of December 2016 426 269 8 796 83 731 ( 3 161) ( 64 445) ( 67 606) ( 151 281) 299 909

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Balance as at 31st of December 2017 844 769 8 796 3 731 1 967 ( 216 258) ( 214 291) ( 140 541) 502 464

,)56DGRSWLRQLPSDFW VHH1RWH Balance as at 01st of January 2018 844 769 8 796 3 731 2 419 ( 217 626) ( 215 207) ( 140 541) 501 548 2WKHUPRYHPHQWVGLUHFWO\UHFRUGHGLQHTXLW\ VHH1RWH &KDQJHVLQIDLUYDOXHQHWRIWD[HV ([FKDQJHGLIIHUHQFHV $FWXDULDOJDLQV ORVVHV QHWRIWD[HV 1HWSURILW ORVV IRUWKHSHULRG Total of comprehensive income of the year - - - ( 2 964) ( 2 090) ( 5 054) ( 4 566) ( 9 620)

,VVXDQFHRIRWKHUHTXLW\LQVWUXPHQWV VHH1RWH 5HVHUYHHVWDEOLVKPHQW Balance as at 31st of December 2018 844 769 8 796 108 773 ( 545) ( 360 802) ( 361 347) ( 4 566) 596 425

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Haitong Bank, S.A. | 213 Individual Cash Flow Statement for the financial years ended on the 31st December 2018 and 2017

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Notes31.12.2018 31.12.2017

Cash flows from operating activities ,QWHUHVWVUHFHLYHG ,QWHUHVWVSDLG )HHVDQGFRPPLVVLRQUHFHLYHG )HHVDQGFRPPLVVLRQSDLG &DVKSD\PHQWVWRHPSOR\HHVDQGVXSSOLHUV 1 016 ( 17 324) Changes in operating assets and liabilities: 5HVRXUFHVDWFHQWUDOEDQNV 5HVRXUFHVIURPFHQWUDOEDQNV 7UDGLQJILQDQFLDODVVHWVDQGOLDELOLWLHV /RDQVDQGDGYDQFHVWREDQNV 5HVRXUFHVIURPRWKHUFUHGLWLQVWLWXWLRQV /RDQVDQGDGYDQFHVWRFXVWRPHUV 5HVRXUFHVIURPFXVWRPHUV 2WKHURSHUDWLQJDVVHWVDQGOLDELOLWLHV Net cash flow from operating activities before income tax ( 191 611) ( 34 779) ,QFRPHWD[HVSDLG ( 204 381) ( 36 441)

Net cash flows from investment activities

6DOHRILQYHVWPHQWVLQVXEVLGLDULHVDQGDVVRFLDWHV 6XEVLGLDULHVDQGDVVRFLDWHVVKDUHFDSLWDOLQFUHDVH 3XUFKDVHRIVHFXULWLHV 6DOHRIVHFXULWLHV 3XUFKDVHRIIL[HGDVVHWV 6DOHRIIL[HGDVVHWV ( 160 860) 138 261 Cash flows from financing activities

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Cash and equivalents at the beginning of the year Cash and equivalents at the end of the year ( 153 744) 341 503

Cash and equivalents includes: &DVK 'HSRVLWVDWRWKHUFUHGLWLQVWLWXWLRQV 0LQLPXP5HVHUYHV

Total 312 122 465 866

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214 | 2018 Annual Report 2. NOTES TO THE INDIVIDUAL FINANCIAL STATEMENTS

Haitong Bank, S.A.

NOTE 1 - ACTIVITY

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Haitong Bank, S.A. | 215 NOTE 2 – MAIN ACCOUNTING POLICIES

2.1. Bases of preparation

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2.2. Bases Foreign currency transactions

2.3. Financial instruments (IFRS 9)

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Evaluation if the contractual cash flows correspond to solely payments of principal and interest (SPPI)

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Initial recognition

Subsequent measurement

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Reclassifications between categories of financial instruments

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Derecognition criteria

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Loans written-off

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Purchase or originated credit impaired assets

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Impairment of financial assets

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Impairment Model

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Expected Credit Losses

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Significant increase in credit risk

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Default definition

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2.3.2 . Financial liabilities

Classification, initial recognition and subsequent measurement

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Haitong Bank, S.A. | 223 Financial liabilities at fair value through profit or loss

Classification

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Initial recognition and subsequent measurement

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Financial liabilities at amortised cost

Classification

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Initial recognition and subsequent measurement

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2.3.3 Interest recognition

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2.3.4. Financial guarantees

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Haitong Bank, S.A. | 225 2.4. Financial instruments (IAS 39)

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2.4.1. Financial derivatives

Classification

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Recognition and measurement

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2.4.2. Loans and advances to customers

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Impairment

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2.4.3. Other financial assets

Classification

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Initial recognition and measurement, and derecognition

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Subsequent measurement

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Impairment

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2.4.4 Financial liabilities

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2.4.5. Financial guarantees

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2.5. Assets sold with repurchase agreement and securities lending

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2.6. Equity instruments

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2.7. Offsetting financial instruments

2.8. Non-current assets held-for-sale and assets from discontinuing operations

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2.9. Other tangible assets

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2.10. Intangible assets

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Haitong Bank, S.A. | 231 2.11. Leases

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Operating leases

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Financial leases

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2.12. Employee benefits

Pensions

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Health-care benefits

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Haitong Bank, S.A. | 233 Long-term service bonus and Career bonus

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Variable remuneration paid to employees

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2.13. Income taxes

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2.14. Provisions

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2.15. Recognition of interest income and expense (IAS 39)

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2.16. Recognition of fee and commission income

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2.17. Segment reporting

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2.18. Earnings per share

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2.19. Cash and cash equivalents

2.20. Investments in subsidiaries and associated companies

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NOTE 3 – MAIN ESTIMATES AND JUDGEMENTS USED IN THE PREPARATION OF FINANCIAL STATEMENTS

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3.1. Impairment losses on financial assets at amortised cost and debt instruments at fair value through other comprehensive income

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Individual analysis

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Collective analysis

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3.2. Income Taxes

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3.3. Impairment losses in subsidiaries and associated companies

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3.5. Fair value of financial derivatives and assets and liabilities at fair value through profit or loss

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3.6. Classification and Measurement

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NOTE 4 – FINANCIAL MARGIN

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( 1 018) 4 112 3 094 ( 2 612) 4 269 1 657

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Mergers and Acquisitions Division

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Treasury Division

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242 | 2018 Annual Report NOTE 7 – NET TRADING INCOME

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Trading assets and liabilities

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( 3 447) 2 238

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NOTE 8 – NET INCOME FROM OTHER INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

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( 1 380) - Financial derivatives for risk managment purposes (TXLW\LQGH[HVFRQWUDFWV &UHGLWFRQWUDFWV -56 ( 1 380) 56

Haitong Bank, S.A. | 243 NOTE 9 – NET GAIN/(LOSS) FROM DERECOGNITION OF FINANCIAL ASSETS MEASURED AT FAIR VALUE TRHOUGH OTHER COMPREHENSIVE INCOME

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NOTE 10 – NET GAINS/(LOSSES) FROM FINANCIAL ASSETS HELD FOR SALE

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NOTE 11 – NET GAINS / (LOSSES) FROM FOREIGN EXCHANGE DIFFERENCES

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NOTE 13 – OTHER OPERATING RESULTS

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Haitong Bank, S.A. | 245 NOTE 14 – EMPLOYEE COSTS

7KLVKHDGLQJ¶VDPRXQWLVFRPSRVHGRI WKRXVDQGHXURV 31.12.2018 31.12.2017 :DJHVDQGVDODULHV 5HPXQHUDWLRQ &DUHHUEHQHILWV VHH1RWH &KDQJHVIURPWHUPLQDWLRQDJUHHPHQWV VHH1RWH &KDQJHVIURP0D[LPXP6DODU\&DSLPSOHPHQWDWLRQ VHH1RWH ([SHQVHVZLWKUHWLUHPHQWSHQVLRQV VHH1RWH 2WKHUPDQGDWRU\VRFLDOFKDUJHV 2WKHUH[SHQVHV 32 900 56 744

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WKRXVDQGHXURV Other Key Board of Management Total Directors sta ff

2018 5HPXQHUDWLRQDQGRWKHUVKRUWWHUPEHQHILWV 9DULDEOHUHPXQHUDWLRQ Total 1 560 10 986 12 546

2017 5HPXQHUDWLRQVDQGRWKHUVKRUWWHUPEHQHILWV 9DULDEOHUHPXQHUDWLRQV Total 1 357 8 838 10 195

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2018 2017

'LUHFWRUV 0DQDJHPHQW 6SHFLILFUROHV $GPLQLVWUDWLYHUROHV 6XSSRUWUROHV

301 365

246 | 2018 Annual Report NOTE 15 – EMPLOYEES BENEFITS

Retirement pensions and healthcare benefits

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$ULVLQJIURPWKHVLJQDWXUHRIWKHQHZ&ROOHFWLYH/DERU$JUHHPHQW ³$FRUGR&ROHWLYRGH7UDEDOKR´$&7 RQ-XO\ SXEOLVKHGLQ/DERU%XOOHWLQ %ROHWLPGR7UDEDOKR QRRI$XJXVWWKH%DQN¶VFRQWULEXWLRQVWR6$06DVIURP )HEUXDU\FRUUHVSRQGWRDIL[HGDPRXQW DVSHU$QQH[9,RIWKHQHZ$&7 IRUHDFKHPSOR\HHWLPHVD\HDU

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(PSOR\HHVKLUHGDIWHU'HFHPEHUDUHFRYHUHGE\WKH3RUWXJXHVH*HQHUDO6RFLDO6HFXULW\5HJLPH

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Haitong Bank, S.A. | 247 7KHDJUHHPHQWIXUWKHUHVWDEOLVKHGWKDWWKHILQDQFLDOLQVWLWXWLRQV¶SHQVLRQIXQGDVVHWVUHODWLQJWRWKHSDUWDOORFDWHGWR WKHVDWLVIDFWLRQUHVSRQVLELOLWLHVIRUWKRVHSHQVLRQVEHWUDQVIHUUHGWRWKH6WDWH

7KHPDLQDVVXPSWLRQVXVHGLQWKHFDOFXODWLRQRIOLDELOLWLHVDUHDVIROORZV

Assumptions 31.12.2018 31.12.2017

Financial Assumptions

([SHFWHGUHWXUQUDWHV 'LVFRXQWUDWH 3HQVLRQJURZWKUDWHV 6DODU\JURZWKUDWHV

Demographic Assumptions and Assessment Methods

0RUWDOLW\WDEOH 0HQ 79 79 :RPHQ 79\HDUV 79\HDUV $FWXDULDOYDOXDWLRQPHWKRG 3URMHFW8QLW&UHGLW0HWKRG

5HFLSLHQWVRIWKHSHQVLRQVSODQDUHGLVDJJUHJDWHGDVIROORZV

31.12.2018 31.12.2017

$FWLYHZRUNHUV )RUPHUHPSOR\HHVZLWKYHVWHGULJKWV 5HWLUHG 6XUYLYRUV

TOTAL 219 214

)RUPHUHPSOR\HHVZLWKYHVWHGULJKWVUHIHUWRHPSOR\HHVZKRFHDVHGWKHLUDFWLYLW\LQWKH%DQNLQDQG XQGHUWKHWHUPVRIWKH6RFLDO3ODQDQGPDLQWDLQHGWKHSHQVLRQSODQULJKWV

248 | 2018 Annual Report 7KH,$6DSSOLFDWLRQLPSOLHVWKHIROORZLQJOLDELOLWLHVDQGFRYHUDJHOHYHOVZKLFKVKDOOEHUHSRUWHGRQWKHVWRI 'HFHPEHUDQG

WKRXVDQGHXURV 31.12.2018 31.12.2017

Net Assets / (Liabilities) recognised in the statement of financial position /LDELOLWLHVDVDWVWRI'HFHPEHU 3HQVLRQHUVDQGIRUPHUHPSOR\HHVZLWKYHVWHGULJKWV $FWLYHZRUNHUV 72 659 72 070

Balance of the Funds at 31 December 69 641 72 552 ([FHVVRIFRYHUDJH &RQWULEXWLRQVWRWKHIXQG

Assets / (Liabilities) in the statement of financial position (see Notes 28 and 34) ( 3 018) 482

$FXPPXODWHGDFWXDULDOJDLQVORVVHVUHFRJQLVHGLQRWKHUFRPSUHKHQVLYHLQFRPH

5HWLUHGLQFOXGHVWKHIRUPHUHPSOR\HHVZLWKYHVWHGULJKWVDFTXLUHGXQGHUWKH6RFLDO3ODQ

7KHHYROXWLRQRIOLDELOLWLHVUHJDUGLQJUHWLUHPHQWSHQVLRQVDQGKHDOWKFDUHEHQHILWVLVDQDO\VHGDVIROORZV

WKRXVDQGHXURV

31.12.2018 31.12.2017

Liabilities at the beginning of the year 72 070 70 735

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$QLQFUHDVHLQWKHGLVFRXQWUDWHRIEDVHSRLQWVZRXOGKDYHUHSUHVHQWHGDUHGXFWLRQLQOLDELOLWLHVRIDSSUR[LPDWHO\ WKRXVDQGHXURV$GLVFRXQWUDWHGHFUHDVHRIWKHVDPHSURSRUWLRQZRXOGKDYHUHSUHVHQWHGDQLQFUHDVHLQ OLDELOLWLHVRIDSSUR[LPDWHO\WKRXVDQGHXURV

$Q LQFUHDVH RI EDVH SRLQWV LQ WKH JURZWK RI VDODULHV DQG SHQVLRQV ZRXOG KDYH UHSUHVHQWHG DQ LQFUHDVH LQ OLDELOLWLHVRIDSSUR[LPDWHO\WKRXVDQGHXURV$GHFUHDVHLQWKHJURZWKRIVDODULHVRIWKHVDPHSURSRUWLRQZRXOG KDYHUHSUHVHQWHGDGHFUHDVHLQOLDELOLWLHVRIDSSUR[LPDWHO\WKRXVDQGHXURV

Haitong Bank, S.A. | 249 7KHHYROXWLRQRIYDOXHUHJDUGLQJWKHSHQVLRQIXQGVRQWKHILQDQFLDO\HDUVHQGLQJRQWKHVWRI'HFHPEHU DQGPD\EHDQDO\VHGDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017

Pension Funds at the beginning of the year 72 552 67 349 5HDOLQFRPHRIWKHIXQG %DQNFRQWULEXWLRQV 3DUWLFLSDQWVFRQWULEXWLRQV %HQHILWVSDLG Pension Funds at the end of the year 69 641 72 552

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7KHDVVHWVRIWKHSHQVLRQIXQGVPD\EHDQDO\VHGLQWKHIROORZLQJPDQQHU

% Portfolio 2018 2017

%RQGV 6KDUHV $OWHUQDWLYHLQYHVWPHQW /LTXLGLW\ Total

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7KHHYROXWLRQRIDFFXPXODWHGDFWXDULDOGHYLDWLRQVUHIOHFWHGLQRWKHUFRPSUHKHQVLYHLQFRPHPD\EHDQDO\VHGDVIROORZV

WKRXVDQGHXURV

31.12.2018 31.12.2017

Accumulated actuarial gains / (losses) as at 1st January 31 792 31 641

$FWXDULDODVVXPSWLRQVFKDQJHV *DLQV ORVVHVLQH[SHULHQFH

Accumulated actuarial deviations as at 31st of December 34 616 31 792

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WKRXVDQGHXURV

31.12.2018 31.12.2017

&XUUHQWVHUYLFHFRVW 6HH1RWH ,QWHUHVW([SHQVHV ,QFRPH Expenses of the period 746 1 262

7KHHDUQLQJVFRVWVRIWKHLQWHUHVWVDUHUHFRJQL]HGDFFRUGLQJDWQHWYDOXHLQLQWHUHVWDQGVLPLODULQFRPHH[SHQVHV

250 | 2018 Annual Report 7KHHYROXWLRQRIWKHQHWDVVHWV OLDELOLWLHV RQWKHEDODQFHUHJDUGLQJWKHILQDQFLDO\HDUVHQGLQJRQWKHVWRI 'HFHPEHUDQGPD\EHDQDO\VHGDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017

Opening balance 482 ( 3 386)

Closing balance ( 3 018) 482

7KHHYROXWLRQRIOLDELOLWLHVDQGIXQGEDODQFHVDVZHOODVWKHHDUQLQJVDQGORVVHVRIH[SHULHQFHLQWKHODVW\HDUV VKDOOEHDQDO\VHGDVIROORZV

WKRXVDQGHXURV

31.12.2018 31.12.2017 31.12.2016 31.12.2015 31.12.2014

/LDELOLWLHV

)XQGVEDODQFHV

(Under) / over funded liabilities ( 3 018) 482 ( 3 386) - ( 865)

([SHULHQFH JDLQV ORVVHVIURPOLDELOLWLHV

([SHULHQFH JDLQV ORVVHVIURPSODQDVVHWV

Career bonuses

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WKRXVDQGHXURV 31.12.2018 31.12.2017

Liabilities at the begining of the period 498 583

Liabilities at the end of the period (see Note 34) 485 498

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7KHOLDELOLW\UHJDUGLQJFDUHHUERQXVHVLVUHJLVWHUHGLQRWKHUOLDELOLWLHV VHH1RWH

Haitong Bank, S.A. | 251 NOTE 16 – ADMINISTRATIVE COSTS

7KLVKHDGLQJ¶VDPRXQWLVFRPSRVHGRI

WKRXVDQGHXURV 31.12.2018 31.12.2017 /HDVHDQGUHQWDO 0DUNHWLQJDQGDGYHUWLVHPHQW 3UHVVUHOHDVHVDQGH[SHGLWLRQ 7UDYHOOLQJDQGUHSUHVHQWDWLRQ 0DLQWHQDQFHDQGUHODWHGVHUYLFHV ,QVXUDQFHV /HJDODQGOLWLJDWLRQ 6SHFLDOLVHGVHUYLFHV ,7VHUYLFHV 7HPSRUDU\ODERXU ,QGHSHQGHQWZRUN 2WKHUVSHFLDOLVHGVHUYLFHV 2WKHUH[SHQVHV 21 846 32 541

7KH2WKHU6SHFLDOLVHG6HUYLFHVKHDGLQJLQFOXGHVDPRQJRWKHUVWKHFRVWVZLWKDXGLWRUV 7KHLWHP2WKHU&RVWV LQFOXGHVDPRQJRWKHUVWKHFRVWVZLWKVHFXULW\DQGVXUYHLOODQFHLQIRUPDWLRQWUDLQLQJFRVWVDQGFRVWVZLWKH[WHUQDO VXSSOLHUV

7KHHDUQLQJVIURPRXWVWDQGLQJUHQWVUHJDUGLQJQRQFDQFHOODEOHRSHUDWLQJOHDVHFRQWUDFWVVKDOOEHDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017

8SWRRQH\HDU 2QHWRILYH\HDUV 2 002 2 664

6HUYLFHVDJUHHGZLWKWKH&RPSDQ\RI6WDWXWRU\$XGLWRUVDQGE\WKHDXGLWRUVDFFRUGLQJWRWKHSURYLVLRQVRIDUWLFOH )RIWKH&RPPHUFLDO&RPSDQLHV&RGHDUHDVIROORZV

WKRXVDQGHXURV 31.12.2018

6WDWXWRU\DXGLWRIDQQXDODFFRXQWV +DLWRQJ%DQN 2WKHUUHOLDELOLW\DVVXUDQFHVHUYLFHV 2WKHUQRQVWDWXWRU\DXGLWVHUYLFHV

Total amount of agreed services 605

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252 | 2018 Annual Report NOTE 17 – EARNINGS PER SHARE

Basic earnings per share

WKRXVDQGHXURV 31.12.2018 31.12.2017

1HW3URILW /RVV DWWULEXWDEOHWRHTXLW\KROGHUVRIWKH%DQN

Weighted average number of ordinary shares outstanding (thousands) 168 954 129 351

Basic earnings per share attributable to equity holders of the Bank (in euro) -0,03 -1,09

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Diluted earnings per share

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2QWKHVWRI'HFHPEHUDQGWKH%DQNKROGVLQVWUXPHQWVLVVXHGZLWKRXWGLOXWLQJHIIHFWWKHUHIRUHGLOXWHG HDUQLQJVSHUVKDUHHTXDOVEDVLFHDUQLQJVSHUVKDUH

NOTE 18 – CASH AND CASH EQUIVALENTS

$VDWWKHVWRI'HFHPEHUDQGWKLVKHDGLQJLVDQDO\VHGDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017 &DVK 'HPDQGGHSRVLWDWFHQWUDOEDQNV %DQNRI3RUWXJDO 2WKHUFHQWUDOEDQNV 308 987 441 324 'HSRVLWVDWRWKHUFUHGLWLQVWLWXWLRQVLQ3RUWXJDO 'HPDQGGHSRVLWV

4 474 13 932 'HSRVLWVDWRWKHUFUHGLWLQVWLWXWLRQVDEURDG 'HPDQGGHSRVLWV 3 969 14 418

317 433 469 683

Haitong Bank, S.A. | 253 7KHµ'HPDQGGHSRVLWVLQFHQWUDOEDQNV±%DQNRI3RUWXJDO¶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NOTE 19 – FINANCIAL ASSETS AND LIABILITIES HELD FOR TRADING - SECURITIES

$VDWVWRI'HFHPEHUDQGWKLVKHDGLQJLVDVIROORZV

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31.12.2018 31.12.2017

Financial assets held-for-trading Securities %RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV )URPSXEOLFLVVXHUV )URPRWKHULVVXHUV

6KDUHV 69 996 98 456 Financial liabilities held-for-trading Securities 6KRUWVHOOLQJ

16 119 -

$VDWVWRI'HFHPEHUDQGWKHDQDO\VLVRIILQDQFLDODVVHWVKHOGIRUWUDGLQJE\UHVLGXDOPDWXULW\SHULRG LVDVIROORZV WKRXVDQGHXURV

31.12.2018 31.12.2017

8SWRWKUHHPRQWKV )URPWKUHHPRQWKVWRRQH\HDU )URPRQHWRILYH\HDUV 0RUHWKDQILYH\HDUV 8QGHWHUPLQHGSHULRG 69 996 98 456

254 | 2018 Annual Report ,QDFFRUGDQFHZLWKWKHDFFRXQWLQJSROLF\GHVFULEHGLQ1RWHWUDGLQJILQDQFLDODVVHWVDQGOLDELOLWLHVDUHERXJKW IRUWKHSXUSRVHRIVKRUWWHUPWUDGLQJUHJDUGOHVVRIWKHLUPDWXULW\

7KHVKRUWVHOOLQJUHSUHVHQWVVHFXULWLHVVROGE\WKH%DQNZKLFKKDGEHHQSXUFKDVHGXQGHUDUHYHUVHUHSXUFKDVH DJUHHPHQW ,Q DFFRUGDQFH ZLWK WKH DFFRXQWLQJ SROLF\ GHVFULEHG LQ 1RWH VHFXULWLHV SXUFKDVHG XQGHU D UHSXUFKDVHDJUHHPHQWDUHQRWUHFRJQLVHGLQWKHVWDWHPHQWRIILQDQFLDOSRVLWLRQ,IWKRVHVHFXULWLHVDUHVROGWKH %DQNUHFRJQLVHVDILQDQFLDOOLDELOLW\HTXLYDOHQWWRWKHIDLUYDOXHRIWKHDVVHWVZKLFKVKDOOEHUHWXUQHGLQSXUVXDQFH RIWKHUHSXUFKDVHDJUHHPHQW

$VDWVWRI'HFHPEHUDQGWKHKHDGLQJRIILQDQFLDODVVHWVKHOGIRUWUDGLQJFRQFHUQLQJTXRWHGDQG XQTXRWHGVHFXULWLHVLVGLYLGHGDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017 Quoted Unquoted Total Quoted Unquoted Total Securities %RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV ,VVXHGE\SXEOLFHQWLWLHV ,VVXHGE\RWKHUHQWLWLHV 6KDUHV

Total book value 24 563 45 433 69 996 43 882 54 574 98 456

$VDW'HFHPEHUDQGWKHH[SRVXUHWRSXEOLFGHEWIURPSHULSKHUDO(XUR]RQHFRXQWULHVLVDQDO\VHGLQ 1RWH

NOTE 20 – DERIVATIVES

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WKRXVDQGHXURV 31.12.2018 31.12.2017

Trading derivatives (assets) )RUHLJQH[FKDQJHFRQWUDFWV ,QWHUHVWUDWHFRQWUDFWV 2WKHUFRQWUDFWV 158 959 208 528

Trading derivatives (liabilities) ,QWHUHVWUDWHFRQWUDFWV (TXLW\LQGH[FRQWUDFWV 2WKHUFRQWUDFWV 162 500 200 883 ( 3 541) 7 645

Haitong Bank, S.A. | 255 $VDWVWRI'HFHPEHUDQGWUDGLQJILQDQFLDOGHULYDWLYHVLVDQDO\VHGDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017 Notional Fair value Notional Fair value Positive Negative Positive Negative

Foreign-exchange contracts )RUZDUG EX\ VHOO &XUUHQF\6ZDSV EX\ VHOO &XUUHQF\,QWHUHVW5DWH6ZDSV EX\ VHOO &XUUHQF\2SWLRQV EX\ VHOO 1 176 236 6 268 9 744 1 093 414 21 835 19 574

Interest rate contracts ,QWHUHVW5DWH6ZDSV EX\ VHOO ,QWHUHVW5DWH&DSV )ORRUV EX\ VHOO ,QWHUHVW5DWH)XWXUHV EX\ VHOO 5 864 805 127 395 126 846 7 846 956 163 066 157 790

Equity / index contracts (TXLW\,QGH[6ZDSV EX\ VHOO (TXLW\,QGH[2SWLRQV EX\ VHOO (TXLW\,QGH[)XWXUHV VHOO 400 992 22 508 23 120 299 196 19 030 18 922

Credit default contracts &UHGLW'HIDXOW6ZDSV EX\ VHOO 210 846 2 788 2 790 301 956 4 597 4 597

Total 7 652 879 158 959 162 500 9 541 522 208 528 200 883

256 | 2018 Annual Report $VDWVWRI'HFHPEHUDQGWKHDQDO\VLVRIWUDGLQJILQDQFLDOGHULYDWLYHVE\UHVLGXDOPDWXULW\SHULRGLV DVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017 Notional Fair Value Notional Fair Value Sale Purchase(net) Sale Purchase (net)

8SWRWKUHHPRQWKV )URPWKUHHPRQWKVWRRQH\HDU )URPRQHWRILYH\HDUV 0RUHWKDQILYH\HDUV

3 849 563 3 803 316 ( 3 541) 4 776 178 4 765 344 7 645

NOTE 21 – SECURITIES

$VDWVWRI'HFHPEHUDQGWKLVKHDGLQJLVDQDO\VHGDVIROORZV

WKRXVDQGHXURV

31.12.2018 31.12.2017

Non-trading financial assets mandatorily at fair value through profit or loss Securities 6KDUHV 2WKHUYDULDEOHLQFRPHVHFXULWLHV 11 346 - Financial assets at fair value through other comprehensive income Securities %RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV )URPSXEOLFLVVXHUV )URPRWKHULVVXHUV 371 780 - Financial assets available- for-sale Securities %RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV )URPSXEOLFLVVXHUV )URPRWKHULVVXHUV

6KDUHV

2WKHUYDULDEOHLQFRPHVHFXULWLHV - 280 920 Financial assets measured at amortised cost Securities %RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV )URPRWKHULVVXHUV 87 085 -

470 211 280 920

Haitong Bank, S.A. | 257 ,Q DFFRUGDQFH ZLWK WKH DFFRXQWLQJ SROLF\ GHVFULEHG LQ 1RWH WKH %DQNUHJXODUO\ DVVHVVHV ZKHWKHUWKHUH LV REMHFWLYHHYLGHQFHRILPSDLUPHQWLQWKHLQYHVWPHQWVHFXULWLHVSRUWIROLRVIROORZLQJWKHMXGJHPHQWFULWHULDGHVFULEHG LQ1RWH

$VDWVWRI'HFHPEHUWKHSRUWIROLRRIILQDQFLDODVVHWVDWIDLUYDOXHWKURXJKRWKHUFRPSUHKHQVLYHLQFRPHLV DQDO\VHGDVIROORZV

WKRXVDQGHXURV Fair value reserve Impairment Book Cost (1) (Note 36) (Note 32) value Positive Negative

%RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV ,VVXHGE\SXEOLFHQWLWLHV ,VVXHGE\RWKHUHQWLWLHV

Balance as at 31st December 2018 373 200 1 557 ( 2 308) ( 669) 371 780 $PRUWLVHGFRVW

$VDWVWRI'HFHPEHUWKHKHDGLQJRIILQDQFLDODVVHWVLVWKRXVDQGHXURVLQVHFXULWLHVSOHGJHGDV FROODWHUDOE\WKH%DQN

7KHSRUWIROLRILQDQFLDODVVHWVDWDPRUWL]HGFRVWLVDQDO\VHGDVIROORZV

WKRXVDQGHXURV

Impairment Cost (1) Book value (Note 32)

%RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV ,VVXHGE\RWKHUHQWLWLHV

Balance as at 31st December 2018 87 532 ( 447) 87 085 $PRUWLVHGFRVW

7KHSRUWIROLRRI)LQDQFLDODVVHWVKHOGIRUVDOHLVDQDO\VHGDVIROORZV

WKRXVDQGHXURV Fair value reserve Impairment Book Cost (1) (Note 36) (Note 32) value Positive Negative %RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV ,VVXHGE\SXEOLFHQWLWLHV ,VVXHGE\RWKHUHQWLWLHV

6KDUHV 2WKHUYDULDEOHLQFRPHVHFXULWLHV Balance as at 31st December 2017 284 238 2 868 ( 156) ( 6 030) 280 920 $FTXLVLWRQFRVWUHODWLQJWRVKDUHVDQGDPRUWLVHGFRVWUHODWLQJWRGHEWVHFXULWLHV

$VDWVWRI'HFHPEHUWKHKHDGLQJRIILQDQFLDODVVHWVKHOGIRUVDOHLQFOXGHVWKRXVDQGHXURVLQ VHFXULWLHVSOHGJHGDVFROODWHUDOE\WKH%DQN 1RWH

258 | 2018 Annual Report $VDWVWRI'HFHPEHUDQGWKHDQDO\VLVRIVHFXULWLHVSRUWIROLRVE\PDWXULW\SHULRGLVSUHVHQWHGDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017

8SWRWKUHHPRQWKV )URPWKUHHPRQWKVWRRQH\HDU )URPRQHWRILYH\HDUV 0RUHWKDQILYH\HDUV 8QGHWHUPLQHGSHULRG 470 211 280 920

$VDWVWRI'HFHPEHUDQGWKHKHDGLQJRIVHFXULWLHVFRQFHUQLQJTXRWHGDQGXQTXRWHGVHFXULWLHVLV GLYLGHGDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017 Quoted Unquoted Total Quoted Unquoted Total Securities %RQGVDQGRWKHUIL[HGLQFRPHVHFXULWLHV ,VVXHGE\SXEOLFHQWLWLHV ,VVXHGE\RWKHUHQWLWLHV 6KDUHV 2WKHUYDULDEOHLQFRPHVHFXULWLHV

Total book value 294 929 175 282 470 211 256 980 23 940 280 920

$VDWVWRI'HFHPEHUDQGWKHH[SRVXUHWRWKHSXEOLFGHEWRI³SHULSKHUDO´FRXQWULHVZLWKLQWKH(XUR$UHD LVSUHVHQWHGLQ1RWH

NOTE 22 - LOANS AND ADVANCES TO BANKS

$VDWVWRI'HFHPEHUDQGWKLVKHDGLQJLVDQDO\VHGDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017

Loans and advances to banks in Portugal 'HSRVLWV 2WKHUORDQVDQGDGYDQFHV 56 6 201 oans and ad L vances to banks abroad /RDQV 9HU\VKRUWWHUPGHSRVLWV 2WKHUORDQVDQGDGYDQFHV

19 483 173 714 19 539 179 915 ,PSDLUPHQWORVVHV 1RWH

3 965 164 527

Haitong Bank, S.A. | 259 $VDWVWRI'HFHPEHUDQGWKHDQDO\VLVRIORDQVDQGDGYDQFHVWREDQNVE\UHVLGXDOPDWXULW\SHULRG LVSUHVHQWHGDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017

8SWRWKUHHPRQWKV )URPWKUHHPRQWKVWRRQH\HDU )URPRQHWRILYH\HDUV 0RUHWKDQILYH\HDUV 2YHUGXH

19 539 179 915

NOTE 23 – LOANS AND ADVANCES TO CUSTOMERS

$VDWVWRI'HFHPEHUDQGWKLVKHDGLQJLVDQDO\VHGDVIROORZV

WKRXVDQGHXURV

31.12.2018 31.12.2017

At fair value throught profit and loss Overdue loans and interest 8SWRGD\V

285 - /RDQVIDLUYDOXHUHYDOXDWLRQ 284 - At amortized cost Domestic loans &RUSRUDWH &RPPHUFLDOOLQHVRIFUHGLW /RDQV 2WKHUFUHGLWV 5HWDLO 0RUWJDJHORDQV

207 036 291 418

For e ign loa ns &RUSRUDWH /RDQV 2SHUDWLRQVZLWKUHYHUVHUHSR 2WKHUFUHGLWV 5HWDLO 0RUWJDJHORDQV

434 658 37 398

Overdue loans and interest 8SWRGD\V )RUPRUHWKDQGD\V 78 386 110 724 720 080 439 540 ,PSDLUPHQWORVVHV 1RWH 631 220 300 583

631 504 300 583

260 | 2018 Annual Report $VDWVWRI'HFHPEHUDQGWKHDQDO\VLVRIORDQVDQGDGYDQFHVWRFXVWRPHUVE\UHVLGXDOPDWXULW\ SHULRGLVSUHVHQWHGDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017

8SWRWKUHHPRQWKV )URPWKUHHPRQWKVWRRQH\HDU )URPRQHWRILYH\HDUV 0RUHWKDQILYH\HDUV 8QGHWHUPLQHGSHULRG 720 364 439 540

NOTE 24 - NON-CURRENT ASSETS HELD-FOR-SALE

$VDWVWRI'HFHPEHUDQGWKLVKHDGLQJLVDQDO\VHGDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017

+$,721* 8. /,0,7(' +$,721*6(&85,7,(686$ 32/,6++27(/&203$1< +$,721*,19(670(17,5(/$1'38%/,&/,0,7('&203$1< 153 358 25 185

1RQFXUUHQWDVVHWVKHOGIRUVDOHRQO\LQFOXGHVWKHLQYHVWPHQWLQ3ROLVK+RWHO&RPSDQ\7KH%DQNKDVLPSOHPHQWHG DSODQIRUWKHLPPHGLDWHVDOHRIWKLVVXEVLGLDU\+RZHYHUGXHWRPDUNHWFRQGLWLRQVLWZDVQRWSRVVLEOHWRFDUU\RXW WKHGLYHVWLWXUHZLWKLQWKHSHULRGRULJLQDOO\IRUHVHHQ

7KH%DQNFRQWLQXHVWRGHYHORSHIIRUWVWRFRQFOXGHWKHVDOHRIWKHFRPSDQ\KDYLQJHQWHUHGLQWRD1'$ZLWKDQRWKHU SRWHQWLDOLQYHVWRULQ1RYHPEHU

7KHVDOHLVHVWLPDWHGWREHFRPSOHWHGXQWLOWKHHQGRI

Haitong Bank, S.A. | 261 7KHPRYHPHQWLQWKLVKHDGLQJZDVDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017

2SHQLQJEDODQFH 25 185 3 600 ,QGLFDWLYH6HOOSULFHRI+$,721* 8. /,0,7(' ,QYHVWPHQWWUDQVIHULQ+$,721*6(&85,7,(686$ 9DOXHUHGXFWLRQRI32/,6++27(/&203$1< )RUHLJQH[FKDQJHUHYDOXDWLRQRI+$,721* 8. /,0,7(' 6HOO3ULFHRI 8. /,0,7(' 6HOOSULFHRI+$,721*6(&85,7,(686$ 1HWJDLQV ORVV IURPVHOOLQJ+$,721* 8. /,0,7(' 1RWH 1HWJDLQV ORVV IURPVHOOLQJ+$,721*6(&85,7,(686$ 1RWH ,QYHVWPHQWWUDQVIHULQ+$,721*,19(670(17,5(/$1'3/&

Closing balance 153 358 25 185

,Q )HEUXDU\ WKH +DLWRQJ 6HFXULWLHV 86$ //& +DLWRQJ 8. /LPLWHG DQG +DLWRQJ 6HFXULWLHV 8. /LPLWHG VXEVLGLDULHVZHUHVROGWR+DLWRQJ,QWHUQDWLRQDO%9,7KHVDOHSULFHRI+DLWRQJ6HFXULWLHV86$//&ZDV WKRXVDQGGROODUV WKRXVDQGHXURV 7KHVDOHVYDOXHRI+DLWRQJ8./LPLWHGDQG+DLWRQJ6HFXULWLHV 8. /LPLWHGDPRXQWHGWRWKRXVDQGGROODUV WKRXVDQGHXURV

)ROORZLQJ WKH GHFLVLRQ IURP WKH 0DQDJHPHQW WKH %DQN LV SUHSDULQJ WKH VDOH RI LWV ,ULVK VXEVLGLDU\ +DLWRQJ ,QYHVWPHQW,UHODQGSOF

7KLVVDOHZRXOGWDNHSODFHLQVLGH+DLWRQJ*URXSDQGLWDOORZV+DLWRQJ%DQNWRDFKLHYHLPSRUWDQWPLOHVWRQHV

x )XUWKHUVLPSOLI\+DLWRQJ%DQN¶VFRUSRUDWHDQGEXVLQHVVVWUXFWXUH x ,PSURYHWKHTXDOLW\RI+DLWRQJ%DQN¶VDVVHWVDVSDUWRIWKHOHJDF\SRUWIROLRLVERRNHGE\WKH,ULVKVXEVLGLDU\ x ,QFUHDVH5:$¶VDQGFDSLWDOSRVLWLRQ

7KLVVDOHLVGHSHQGHQWRQWKHH[HFXWLRQRIWKHFXVWRPDU\FRQWUDFWXDODJUHHPHQWVDQGWKHVWDQGDUGGXHGLOLJHQFH SURFHGXUHV7KHVDOHLVHVWLPDWHGWREHFRPSOHWHGXQWLOWKHHQGRI

$VDFRQVHTXHQFHRIWKLVGHFLVLRQWKHLQYHVWPHQWLQWKH,ULVKVXEVLGLDU\ZDVUHFODVVLILHGWRWKHQRQFXUUHQWDVVHWV KHOGIRUVDOHFDSWLRQ

262 | 2018 Annual Report NOTE 25 - OTHER TANGIBLE ASSETS

$VDWVWRI'HFHPEHUDQGWKLVKHDGLQJLVDQDO\VHGDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017 Real Estate ,PSURYHPHQWVLQOHDVHKROGSURSHUW\ 6 446 6 317 Equipment ,7HTXLSPHQW ,QGRRULQVWDOODWLRQV )XUQLWXUH 0DFKLQHU\DQGWRROV 0RWRUYHKLFOHV 6HFXULW\HTXLSPHQW 2WKHUV 16 973 19 641 23 419 25 958 Work in progress (TXLSPHQW 23 -

23 442 25 958 Accumulated depreciation 2 391 3 953

7KHPRYHPHQWLQWKLVKHDGLQJZDVDVIROORZV WKRXVDQGHXURV Work in Property Equipment Total progress Balance as at 31st December 2016 6 141 20 016 242 26 399 $FTXLVLWLRQV :ULWHRIIVVDOHV ([FKDQJHGLIIHUHQFHVDQGRWKHUPRYHPHQWV Balance as at 31st December 2017 6 317 19 641 - 25 958 $FTXLVLWLRQV :ULWHRIIVVDOHV ([FKDQJHYDULDWLRQDQGRWKHUPRYHPHQWV Balance as at 31st December 2018 6 446 16 973 23 23 442 Accumulated depreciation Balance as at 31st December 2016 4 420 16 671 - 21 091 'HSUHFLDWLRQVRIWKHILQDQFLDO\HDU :ULWHRIIVVDOHV Balance as at 31st December 2017 4 712 17 293 - 22 005 'HSUHFLDWLRQVRIWKHILQDQFLDO\HDU :ULWHRIIVVDOHV ([FKDQJHGLIIHUHQFHVDQGRWKHUPRYHPHQWV - Balance as at 31st December 2018 5 461 15 590 - 21 051 Net book value as at 31st December 2018 985 1 383 23 2 391 Net book value as at 31st December 2017 1 605 2 348 - 3 953

Haitong Bank, S.A. | 263 NOTE 26 – INTANGIBLE ASSETS

$VDWVWRI'HFHPEHUDQGWKLVKHDGLQJLVDQDO\VHGDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017 Purchased from third parties 6RIWZDUH 2WKHUV

31 473 31 158

Work in progress 32 044 31 624

Accumulated depreciation (25 341) (22 400)

6 703 9 224

7KHPRYHPHQWLQWKLVKHDGLQJZDVDVIROORZV

WKRXVDQGHXURV Work in Software Other Total progress Acquisition cost Balance as at 31st December 2016 29 087 916 1 302 31 305 $FTXLVLWLRQV 3XUFKDVHGIURPWKLUGSDUWLHV :ULWHRIIVVDOHV 7UDQVIHUV ([FKDQJHUDWHYDULDWLRQDQGRWKHUPRYHPHQWV Balance as at 31st December 2017 30 242 916 466 31 624 $FTXLVLWLRQV 3XUFKDVHGIURPWKLUGSDUWLHV :ULWHRIIVVDOHV ([FKDQJHUDWHYDULDWLRQDQGRWKHUPRYHPHQWV

Balance as at 31st December 2018 30 557 916 571 32 044 Accumulated depreciation Balance as at 31st December 2016 18 185 916 - 19 101 $PRUWLVDWLRQVRIWKHILQDQFLDO\HDU :ULWHRIIVVDOHV

Balance as at 31st December 2017 21 484 916 - 22 400 $PRUWLVDWLRQVRIWKHILQDQFLDO\HDU :ULWHRIIVVDOHV Balance as at 31st December 2018 24 425 916 - 25 341 Net book value as at 31st December 2018 6 132 - 571 6 703

Net book value as at 31st December 2017 8 758 - 466 9 224

264 | 2018 Annual Report NOTE 27 – INVESTMENTS IN ASSOCIATED COMPANIES

)LQDQFLDOLQIRUPDWLRQUHJDUGLQJDVVRFLDWHGFRPSDQLHVLVSUHVHQWHGLQWKHIROORZLQJWDEOH

WKRXVDQGHXURV 31.12.2018 31.12.2017 Par Par Number of Owned by the Acquisition Number of Owned by Acquisition Value Value shares bank Cost shares the bank Cost (Euro) (Euro)

Associates 0&262&,('$'(*(6725$'()81'26'(,1902%,/,$5,26$

Subsidiaries +$,721*%$1&2'(,19(67,0(172'2%5$6,/6$ +$,721*&$3,7$/6&56$ +$,721*,19(670(17,5(/$1'38%/,&/,0,7('&203$1<

217 156 218 719 Impairment losses (Note 32)

173 643 166 785

'XULQJWKHSHULRGWKHEDODQFH,QYHVWPHQWVLQVXEVLGLDULHVDQGDVVRFLDWHVSUHVHQWHGWKHIROORZLQJFKDQJHV x ,Q0D\0&2±6RFLHGDGH*HVWRUDGH)XQGRVGH,QYHVWLPHQWR0RELOLiULR6$KDVEHHQFORVHGE\WKH DPRXQWRIWKRXVDQGHXURV x ,Q'HFHPEHU+DLWRQJ%DQFRGH,QYHVWLPHQWRGR%UDVLO6$DSSURYHGWKHSD\PHQWRILQWHUHVWRQRZQ FDSLWDOLQWKHDPRXQWRIWKRXVDQGUHDLV)URPWKLVDPRXQWZLOOEHUHFHLYHGE\+DLWRQJ%DQN6$ VHH1RWH x ,Q'HFHPEHU+DLWRQJ%DQN6$GHFLGHGWRVHOOLWVVXEVLGLDU\+DLWRQJ,QYHVWPHQW,UHODQG3/& VHHQRWH LQDSHULRGXQGHURQH\HDU

'XULQJWKHSHULRGWKHEDODQFH,QYHVWPHQWVLQVXEVLGLDULHVDQGDVVRFLDWHVSUHVHQWHGWKHIROORZLQJFKDQJHV x ,Q0DUFK+DLWRQJ%DQN6$IXOO\VXEVFULEHGWKHFDSLWDOLQFUHDVHRI+DLWRQJ 8. OLPLWHGDQLQYHVWPHQW RI*%3WKRXVDQG*%3 x ,Q-XQH+DLWRQJ%DQN6$IXOO\VXEVFULEHGWKHFDSLWDOLQFUHDVHRI+DLWRQJ 8. /LPLWHGDQLQYHVWPHQW RI*%3WKRXVDQG*%3 x ,Q1RYHPEHU/XVLWDQLD&DSLWDO6$3,GH&962)20(15ZDVGLVVROYHG x ,Q'HFHPEHUVXEMHFWWRWKHWHUPVDQGFRQGLWLRQVRIWKH6KDUH3XUFKDVH$JUHHPHQWV+DLWRQJ%DQNKDV FRQGLWLRQDOO\ DJUHHG WR VHOO WR +DLWRQJ ,QWHUQDWLRQDO %9, WKH VKDUHV UHSUHVHQWLQJ RI WKH FDSLWDO RI LWV VXEVLGLDULHVLQ/RQGRQDQG1HZ

,QWKH%DQNUHFRJQL]HGDQLPSDLUPHQWUHYHUVLRQRIWKRXVDQGHXURV ,QWKH%DQNUHFRJQL]HGDQ LPSDLUPHQWLQFUHDVHRIWKRXVDQGHXURV IRUWKHLQYHVWPHQWLQ+DLWRQJ%DQFRGH,QYHVWLPHQWRGR%UDVLO6$

Haitong Bank, S.A. | 265 NOTE 28 – OTHER ASSETS

$VDWVWRI'HFHPEHUDQGWKH2WKHU$VVHWVKHDGLQJLVDQDO\VHGDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017

Debtors and other assets

&ROODWHUDOGHSRVLWHGXQGHUFROODWHUDODJUHHPHQWV 1RWH 6XSSOLHVVXSSOHPHQWDU\FDSLWDOLQVWDOPHQWVDQGVXERUGLQDWHGDVVHWV 3XEOLFVHFWRU 'HSRVLWVSODFHGXQGHUPDUJLQDFFRXQWV IXWXUHVFRQWUDFWV 2WKHUVXQGU\GHEWRUV ,PSDLUPHQWORVVHVIRUGHEWRUVDQGRWKHULQYHVWPHQWV 1RWH 146 737 288 341

Other assets *ROGRWKHUSUHFLRXVPHWDOVQXPLVPDWLFPHGDOV DQGRWKHUOLTXLGDVVHWV 2WKHUDVVHWV 9 999 8 510

Income receivable 418 422

Prepayments and deferred costs 338 1 895

Other sundry assets ([FKDQJHWUDQVDFWLRQVSHQGLQJVHWWOHPHQW 0DUNHWVHFXULWLHVWUDQVDFWLRQVSHQGLQJVHWWOHPHQW 2WKHUWUDQVDFWLRQVSHQGLQJVHWWOHPHQW 44 196 69 602

Retirement Benefits (Note 15)

201 688 369 252

6WRFNH[FKDQJHWUDQVDFWLRQVSHQGLQJVHWWOHPHQWUHIHUWRWUDQVDFWLRQVZLWKVHFXULWLHVUHFRUGHGDWWKHWUDGHGDWH SHQGLQJVHWWOHPHQWLQDFFRUGDQFHZLWKWKHDFFRXQWLQJSROLF\GHVFULEHGLQ1RWH

266 | 2018 Annual Report NOTE 29 – RESOURCES OF CREDIT INSTITUTIONS

7KHUHVRXUFHVRIFUHGLWLQVWLWXWLRQVKHDGLQJLVSUHVHQWHGDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017

Resources of central banks %DQNRI3RUWXJDO 60 000 60 000

Resources of other credit institutions Domestic ,QWHUEDQNPRQH\PDUNHW 'HSRVLWV 5HSXUFKDVHDJUHHPHQWV

292 20 707 For e ign 'HSRVLWV /RDQV

- 803 981

60 292 884 688

$VDWVWRI'HFHPEHUDQGWKHDQDO\VLVRIUHVRXUFHVRIFUHGLWLQVWLWXWLRQVE\UHVLGXDOPDWXULW\SHULRGLV DVIROORZV

WKRXVDQGHXURV

31.12.2018 31.12.2017

8SWRWKUHHPRQWKV )URPWKUHHPRQWKVWRRQH\HDU )URPRQHWRILYH\HDUV 60 292 884 688

NOTE 30 – RESOURCES OF CUSTOMERS

7KHEDODQFHRIWKHUHVRXUFHVRIFXVWRPHUVKHDGLQJLVFRPSRVHGZLWKUHJDUGWRLWVQDWXUHDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017 Repayable on demand 'HPDQGGHSRVLWV Time deposits )L[HGWHUPGHSRVLWV Other resources 5HSXUFKDVHDJUHHPHQWV 2WKHU'HSRVLWV 2WKHU

121 065 1 056 1 035 108 290 616

Haitong Bank, S.A. | 267 $VDWVWRI'HFHPEHUDQGWKHDQDO\VLVRIGXHWRFXVWRPHUVE\UHVLGXDOPDWXULW\SHULRGLVDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017

Demand deposits Fixed-term deposits 8SWRPRQWKV WRPRQWKV WR\HDUV 1 035 108 290 616

NOTE 31 – DEBT SECURITIES ISSUED

7KHGHEWVHFXULWLHVLVVXHGKHDGLQJFDQEHGLYLGHGDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017

Debt securities issued (XUR0HGLXP7HUP1RWHV 251 145 143 127

7KHIDLUYDOXHRIWKHSRUWIROLRUHJDUGLQJGHEWVHFXULWLHVLVVXHGLVSUHVHQWHGLQ1RWH

'XULQJ+DLWRQJ%DQNLVVXHGVHFXULWLHVDPRXQWLQJWRWKRXVDQGHXURV VWRI'HFHPEHU WKRXVDQGHXURV DQGZHUHUHLPEXUVHGDQDPRXQWRIWKRXVDQGHXURV WKHUHZHUHQRUHLPEXUVHPHQWVLQ

$VDWVWRI'HFHPEHUDQGWKHUHVLGXDOGXUDWLRQRIWKHGHEWVHFXULWLHVLVVXHGLVDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017

)URPWKUHHPRQWKVWRRQH\HDU )URPRQHWRILYH\HDUV

251 145 143 127

$VDWVWRI'HFHPEHUDQGWKHUHFRQFLOLDWLRQRIWKHIORZVIURPWKLVILQDQFLQJDFWLYLW\LVDVIROORZV

WKRXVDQGHXURV 31.12.2018 31.12.2017 Opening balance 143 127 103 092

&DVK)ORZV 2WKHU Final balance 251 145 143 127

268 | 2018 Annual Report 7KHPDLQFKDUDFWHULVWLFVRIWKHGHEWVHFXULWLHVLVVXHGLVDVIROORZV

WKRXVDQGHXURV 31.12.2018

Issue Book Issuer Designation Currency Maturity Interest Rate Date Value

+7%DQN +7%),;('5$7($*2 +7%6 (85

WKRXVDQGHXURV 31.12.2017 Issue Book Issuer Designation Currency Maturity Interest Rate Date Value

+7%DQN +7%)/2$7,1*5$7('(& +7%6 (85 (XULERUP

NOTE 32 – PROVISIONS AND IMPAIRMENT

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WKRXVDQGHXURV Provisions for Provisions for guarantees and other risks and TOTAL other charges undertakings Balance as at 31st December 2016 7 093 81 132 88 225

1HWFKDUJHRIWKHSHULRG :ULWHEDFN )RUHLJQH[FKDQJHGLIIHUHQFHVDQGRWKHUV

Balance as at 31st December 2017 10 375 52 400 62 775

,)56WUDQVLWLRQLPSDFW 1RWH 1HWFKDUJHRIWKHSHULRG :ULWHEDFN )RUHLJQH[FKDQJHGLIIHUHQFHVDQGRWKHUV

Balance as at 31st December 2018 11 408 68 401 79 809

7KHVH SURYLVLRQV DUH PHDQW WR FRYHU SRVVLEOH FRQWLQJHQFLHV UHODWHG WR WKH DFWLYLW\ RI WKH %DQN LQFOXGLQJ FRQWLQJHQFLHVDVVRFLDWHGZLWKRQJRLQJWD[SURFHHGLQJV

,QWKH%DQNUHFRJQL]HGSURYLVLRQVIRURWKHUULVNVDQGFKDUJHVLQWKHDPRXQWRIWKRXVDQGHXURVUHODWHG WRWKH6RFLDO3ODQLQSURJUHVVRQWKDWGDWH 1RWH ,QWKRXVDQGHXURVZHUHXVHGIRUSD\PHQWVPDGH LQWKLVFRQWH[W

Haitong Bank, S.A. | 269 7KHPRYHPHQWVLQLPSDLUPHQWORVVHVFDQEHDQDO\]HGDVIROORZV

WKRXVDQGHXURV IFRS 9 Net charge Exchange transition Write 31.12.2017 of the Stage 3 differences 31.12.2018 impact back period and others (Note 40)

&DVKDQGFDVKHTXLYDOHQWV 1RWH )LQDQFLDODVVHWVPHDVXUHGDWIDLUYDOXHWKURXJKSURILWRUORVV 1RWH )LQDQFLDODVVHWVDYDLODEOHIRUVDOH 1RWH )LQDQFLDODVVHWVPHDVXUHGDWDPRUWL]HGFRVW 6HFXULWLHV 1RWH /RDQDQGDGYDQFHVWREDQNV 1RWH /RDQDQGDGYDQFHVWRFXVWRPHUV 1RWH ,QYHVWPHQWVLQDVVRFLDWHGFRPSDQLHV 1RWH 2WKHUDVVHWV 1RWH

218 898 ( 4 779) ( 3 765) ( 56 321) 52 1 540 155 625

WKRXVDQGHXURV Exchange Net charge of 31.12.2016 Write back differences and 31.12.2017 the period others

)LQDQFLDODVVHWVDYDLODEOHIRUVDOH 1RWH )LQDQFLDODVVHWVPHDVXUHGDWDPRUWL]HGFRVW /RDQDQGDGYDQFHVWREDQNV 1RWH /RDQDQGDGYDQFHVWRFXVWRPHUV 1RWH ,QYHVWPHQWVLQDVVRFLDWHGFRPSDQLHV 1RWH 2WKHUDVVHWV 1RWH

358 848 78 014 ( 215 267) ( 2 697) 218 898

NOTE 33 – INCOME TAXES

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WKRXVDQGHXURV Asset Liability 31.12.2018 31.12.2017 31.12.2018 31.12.2017 &RUSRUDWHLQFRPHWD[ 7D[&UHGLW 6SHFLDO6FKHPHIRU'HIHUUHG7D[HV

Current tax asset / (liability) 39 893 29 434 ( 2 068) ( 3 020)

272 | 2018 Annual Report 'HIHUUHGWD[DVVHWVDQGOLDELOLWLHVUHFRJQL]HGLQWKHVWDWHPHQWRIILQDQFLDOSRVLWLRQDVDWVWRI'HFHPEHUDQG FDQEHDQDO\]HGDVIROORZV

WKRXVDQGHXURV Asset Liabilities Net 31.12.2018 31.12.2017 31.12.2018 31.12.2017 31.12.2018 31.12.2017

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Net deferred tax asset / (liability) 87 235 100 180 - ( 746) 87 235 99 434

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7KHPRYHPHQWVLQGHIHUUHGWD[HVLQWKHEDODQFHVKHHWKDGWKHIROORZLQJLPSDFWV WKRXVDQGHXURV 31.12.2018 31.12.2017

Opening balance 5HFRJQLVHGLQSURILWRUORVV 5HFRJQLVHGLQIDLUYDOXHUHVHUYHV 5HFRJQLVHGLQRWKHUUHVHUYHV )RUHLJQH[FKDQJHYDULDWLRQDQGRWKHUV Closing balance (Asset / (Liability)) 87 235 99 434

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Haitong Bank, S.A. | 273 7D[UHFRJQLVHGLQWKHLQFRPHVWDWHPHQWDQGUHVHUYHVGXULQJWKHDQGILQDQFLDO\HDUVKDGWKHIROORZLQJVRXUFHV WKRXVDQGHXURV 31.12.2018 31.12.2017

Recognised in Recognised Recognised in Recognised in profit or loss in reserves profit or loss reserves

Deferred Taxes 6HFXULWLHV /RDQVDQGDGYDQFHVWRFXVWRPHUV 3URYLVLRQV 3HQVLRQ)XQG 2WKHUV 7D[ORVVFDUULHGIRUZDUG 3 505 ( 1 325) 5 022 1 893

Current Taxes

Total recognised taxes 4 260 ( 1 325) 6 817 1 893

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WKRXVDQGHXURV 31.12.2018 31.12.2017 % Value % Value

Profit or loss before taxes ( 1 723) ( 133 724) ,QFRPHWD[UDWHRI+DLWRQJ%DQN - 7D[GHWHUPLQHGEDVHGRQWKHLQFRPHWD[UDWHRI+DLWRQJ%DQN &KDQJHLQWKHWD[UDWHRIVXEVLGLDULHV 1RWD[DEOHJDLQV - - )ODWWD[DWLRQ 'HIHUUHGWD[DVVHWQRWUHFRJQLVHGRQ WD[ORVVHVJHQHUDWHGLQWKH\HDU 1RQGHGXFWLEOHFRVWV 2WKHU - (247,2) 4 260 (5,0) 6 817

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274 | 2018 Annual Report NOTE 34 – OTHER LIABILITIES

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31.12.2018 31.12.2017

Creditors and other resources 3XEOLFVHFWRU 'HSRVLWHGFROODWHUDOXQGHUFROODWHUDODJUHHPHQWV 1RWH 6XQGU\FUHGLWRUV &UHGLWRUVIURPWUDQVDFWLRQVZLWKVHFXULWLHV 6XSSOLHUV 2WKHUVXQGU\FUHGLWRUV 24 687 42 321

Accrued expenses &DUHHUERQXVHV VHH1RWH 2WKHUDFFUXHGH[SHQVHV 7 956 12 065

Deferred income 108 3 758

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Retirement pensions (Note 15) 3 018 - 113 513 138 391

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NOTE 35 – CAPITAL, SHARE PREMIUM AND OTHER CAPITAL INSTRUMENTS

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Share premiums

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276 | 2018 Annual Report ZKHQUHSRUWHGE\WKH%RDUGRI'LUHFWRUV'XHWRWKHLUIHDWXUHVVXFKERQGVDUHGHHPHGWREHFDSLWDOLQVWUXPHQWVLQ DFFRUGDQFHZLWKWKHDFFRXQWLQJSROLF\ODLGGRZQLQ1RWH

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NOTE 36 – FAIR-VALUE RESERVES, OTHER RESERVES, RETAINED EARNINGS AND NON- CONTROLLING INTERESTS

Legal reserve, fair-value reserves and other reserves

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WKRXVDQGHXURV Fair value reserves Other reserves and retained earnings Available Actuarial Other Total Other Income Total fair for-sale Legal deviations Exchange reserves and reserves and tax value financial reserve (net of diferences retained retained reserves reserve assets taxes) earnings earnings

Balance as at 31st December 2016 (Restatement) ( 4 375) 1 214 ( 3 161) 39 878 ( 25 998) - ( 78 325) ( 64 445)

$FWXDULDOGHYLDWLRQVQHWRIWD[HV ,QWHUHVWRIRWKHUHTXLW\LQVWUXPHQWV )DLUYDOXHFKDQJHV 7UDQVIHUWRUHVHUYHV 2WKHUPRYHPHQWV Balance as at 31st December 2017 2 712 ( 745) 1 967 39 878 ( 26 175) - ( 229 961) ( 216 258) ,)56WUDQVLWLRQLPSDFW

Balance as at 1st January 2018 3 164 ( 745) 2 419 39 878 ( 26 175) - ( 231 329) ( 217 626) $FWXDULDOGHYLDWLRQVQHWRIWD[HV ,QWHUHVWRIRWKHUHTXLW\LQVWUXPHQWV )DLUYDOXHFKDQJHV ([FKDQJHGLIHUHQFHV 7UDQVIHUWRUHVHUYHV ,VVXDQFHRIRWKHUHTXLW\LQVWUXPHQWV

Balance as at 31st December 2017 ( 752) 207 ( 545) 39 878 ( 28 279) 14 ( 372 415) ( 360 802)

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Haitong Bank, S.A. | 277 7KHPRYHPHQWRIWKHIDLUYDOXHUHVHUYHQHWRIGHIHUUHGWD[HVFDQEHDQDO\VHGDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017 Opening Balance 1 967 ( 3 161)

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Balance at 01.01.2018 2 419 ( 3 161) )DLU9DOXHFKDQJHV 'LVSRVDOVRIWKHSHULRG ,PSDLUPHQWUHFRJQLVHGLQWKHSHULRG 1RWH 'HIHUUHGWD[HVUHFRJQLVHGLQUHVHUYHVGXULQJWKHSHULRG

Closing balance ( 545) 1 967

NOTE 37 – CONTINGENT LIABILITIES, GUARANTEES AND COMMITMENTS

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Contingent liabilities, guarantees and stand by letters of credit *XDUDQWHHVDQGVWDQGE\OHWWHUVRIFUHGLW $VVHWVSOHJHGDVFROODWHUDO 754 366 729 205

Commitments ,UUHYRFDEOHFRPPLWPHQWV 11 105 5 572

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278 | 2018 Annual Report $GGLWLRQDOO\WKHRIIEDODQFHHOHPHQWVUHODWHGWREDQNLQJVHUYLFHVSURYLGHGDUHDVIROORZV WKRXVDQGHXURV 31.12.2018 31.12.2017

Liabilities related to services provided

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Resolution Fund

Resolution measures applied to Banco Espírito Santo, S.A. and BANIF – Banco Internacional do Funchal, S.A.

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280 | 2018 Annual Report FDSLWDO7KHWHUPVDJUHHGDOVRLQFOXGHDFRQWLQJHQWFDSLWDOPHFKDQLVPXQGHUZKLFKWKH5HVROXWLRQ)XQGDVD VKDUHKROGHUXQGHUWDNHVWRPDNHFDSLWDOLQMHFWLRQVLQFDVHFHUWDLQFXPXODWLYHFRQGLWLRQVDUHWREHPHWUHODWHGWR L WKHSHUIRUPDQFHRIDVSHFLILFSRUWIROLRRIDVVHWVDQG LL WKHFDSLWDOOHYHOVRIWKHEDQNJRLQJIRUZDUG$Q\FDSLWDO LQMHFWLRQVWREHFDUULHGRXWSXUVXDQWWRWKLVFRQWLQJHQWPHFKDQLVPEHQHILWIURPDFDSLWDOEXIIHUUHVXOWLQJIURPWKH LQMHFWLRQWREHPDGHXQGHUWKHWHUPVRIWKHDJUHHPHQWDQGDUHVXEMHFWWRDQDEVROXWHFDS´

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282 | 2018 Annual Report NOTE 38 – RELATED PARTIES TRANSACTIONS

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WKRXVDQGHXURV 31.12.2018 Assets Loans and Guarantees Liabilities Income Expenses advances Loans Securities Others (A) Total to banks

Subsidiaries +$,721*%$1&2'(,19(67,0(172'2%5$6,/6$ +$,721*&$3,7$/6&56$ +$,721*,19(670(17,5(/$1'3/& 6(6,%(5,$35,9$7((48,7<6$

TOTAL - 189 658 - 190 764 380 422 284 959 775 944 9 777 30 858 $ ,QFOXGHVDFTXLVLWLRQFRVWRIVXEVLGLDULHV

WKRXVDQGHXURV 31.12.2017 Assets Loans and Guarantees Liabilities Income Expenses advances Loans Securities Others (A) Total to banks

Subsidiaries +$,721*%$1&2'(,19(67,0(172'2%5$6,/6$ +$,721*&$3,7$/6&56$ +$,721* 8. /,0,7(' +$,721*,19(670(17,5(/$1'38%/,&/7'&203 +$,721*6(&85,7,(6 8. /,0,7(' /86,7$1,$&$3,7$/6$3,&962)20(15 +$,721*6(&85,7,(686$//&

TOTAL 6 145 - 7 756 400 389 414 290 338 532 860 837 ( 42 487) ( 17 927) $ ,QFOXGHVDFTXLVLWLRQFRVWRIVXEVLGLDULHV

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WKRXVDQGHXURV 31.12.2018 Assets

Liabilities Income Expenses Others Total

+$,721*,17(51$&,21$/+2/',1*6/,0,7('

Subsidiaries and associates +$,721*,17(51$7,21$/675$7(*,&,19(670(17 +$,721*6(&85,7,(6 +$,721*,17(51$7,21$/6(&85,7,(6&2/7' +$,721*,17(51$7,21$/&5(',7&203$1

TOTAL 2 776 2 776 191 59 401 610

Haitong Bank, S.A. | 283 WKRXVDQGHXURV 31.12.2017 Assets

Garantees Liabilities Income Expenses Others Total

Shareholders +$,721*,17(51$&,21$/+2/',1*6/,0,7('

TOTAL 348 348 - - 38 069 3

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NOTE 39 – FAIR-VALUE OF FINANCIAL ASSETS AND LIABILITIES

Fair-value of financial assets and liabilities

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284 | 2018 Annual Report 7KHIDLUYDOXHRIILQDQFLDODVVHWVDQGOLDELOLWLHVIRUWKH%DQN¶VLVDQDO\VHGDVIROORZV

WKRXVDQGHXURV Valuated at fair value

Amortised Level 1 Level 2 Level 3 Total book Fair value cost value Balance as at 31st December 2018 &DVKDQGFDVKHTXLYDOHQWV )LQDQFLDODVVHWVDWIDLUYDOXHWKURXJKSURILWRUORVV )LQDQFLDODVVHWVKHOGIRUWUDGLQJ 6HFXULWLHV 'HULYDWLYHILQDQFLDODVVHWV 1RQWUDGLQJILQDQFLDODVVHWVPDQGDWRULO\DWIDLUYDOXHWKURXJKSURILWRUORVV 6HFXULWLHV /RDQVDQGDGYDQFHVWRFXVWRPHUV )LQDQFLDODVVHWVDWIDLUYDOXHWKURXJKRWKHUFRPSUHKHQVLYHLQFRPH )LQDQFLDODVVHWVPHDVXUHGDWDPRUWLVHGFRVW 6HFXULWLHV /RDQVDQGDGYDQFHVWREDQNV /RDQVDQGDGYDQFHVWRFXVWRPHUV

Financial Assets 1 039 703 319 492 163 836 129 037 1 652 068 1 647 768 )LQDQFLDOOLDELOLWLHVKHOGIRUWUDGLQJ 6HFXULWLHV 'HULYDWLYHILQDQFLDODVVHWV )LQDQFLDOOLDELOLWLHVPHDVXUHGDWDPRUWLVHGFRVW 5HVRXUFHVRIFUHGLWLQVWLWXWLRQV 5HVRXUFHVRIFXVWRPHUV 'HEWVHFXULWLHVLVVXHG

Financial liabilities 1 346 545 15 924 124 386 38 309 1 525 164 1 526 097 Balance as at 31st December 2017 &DVKDQGFDVKHTXLYDOHQWV )LQDQFLDODVVHWVDWIDLUYDOXHWKURXJKSURILWRUORVV )LQDQFLDODVVHWVKHOGIRUWUDGLQJ 6HFXULWLHV 'HULYDWLYHILQDQFLDODVVHWV $YDLODEOHIRUVDOHILQDQFLDODVVHWV )LQDQFLDODVVHWVPHDVXUHGDWDPRUWLVHGFRVW /RDQVDQGDGYDQFHVWREDQNV /RDQVDQGDGYDQFHVWRFXVWRPHUV

Financial assets 934 843 300 862 178 431 108 561 1 522 697 1 521 490 )LQDQFLDOOLDELOLWLHVKHOGIRUWUDGLQJ 6HFXULWLHV 'HULYDWLYHILQDQFLDODVVHWV )LQDQFLDOOLDELOLWLHVPHDVXUHGDWDPRUWLVHGFRVW 5HVRXUFHVRIFUHGLWLQVWLWXWLRQV 5HVRXUFHVRIFXVWRPHUV 'HEWVHFXULWLHVLVVXHG

Financial liabilities 1 318 431 - 159 534 41 349 1 519 314 1 525 081

Haitong Bank, S.A. | 285 Fair-value Hierarchy

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Financial assets held for Financial assets Financial assets Financial trading mandatory at at fair value assets fair value through other Total available-for- Derivative through profit or comprehensive sale Securities financial loss income assets

Opening Balance 42 975 378 - 23 859 - 67 212

IFRS 9 reclass transition impact - - 2 645 ( 23 859) 21 214 -

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Closing Balance 17 723 ( 1 767) 2 496 - 72 187 90 639

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Yield curves

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Credit spreads

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Interest rate volatilities

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Haitong Bank, S.A. | 287 Foreign exchange rate and volatilities

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Equity Indexes

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Prices Historical volatility (%) Implied 31.12.2018 31.12.2017 % Variation 1 month 3 months volatility (%) '-(XUR6WR[[ 36, ,%(; '$; 6 3 %29(63$

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288 | 2018 Annual Report NOTE 40 – IFRS9 ADOPTION

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Securities Loans and Financial Financial advances to Financial Assets Loans and Othe r Financial Assets at fair customers Cash and assets required to be advances to reserves assets value through at Othe r Fair-value cash held-for- measured at banks Provisions and available for other amortised Assets reserves equivalents trading - fair value retained sale comprehensi cost Securities through profit income ve income or loss

Balance at 31 December 2017 – IAS 39 469 683 98 456 280 920 - - 164 527 300 583 369 252 62 775 1 967 ( 216 258)

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Reclassification: - - ( 280 920) 2 726 278 194 ------

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Remeasurement ( 2) - - - - ( 142) ( 395) ( 259) 118 452 ( 1 368)

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Balance at 1 January 2018 - IFRS 9 469 681 98 456 - 2 726 278 194 164 385 300 188 368 993 62 893 2 419 ( 217 626)

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Haitong Bank, S.A. | 289 NOTE 41 – RISK MANAGEMENT

Comparability of information

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Credit Risk

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Calculation of ECL

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290 | 2018 Annual Report Inputs in the measurement of ECL

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Forward-Looking Information

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Total 340 172 1 192 276 285 105 505 1 638 238 45 931 3 358 49 289 234 195 234 195

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WKRXVDQGHXURV Stage 1 Stage 2 Stage 3

Financial instruments at amortised No overdue 1 - 29 days No overdue No overdue 1 - 29 days More than 181 days Gross Gross Gros s Gross Gros s Gros s cost Loss Loss Loss Loss Loss Loss carrying carrying carrying carrying carrying carrying allow ance allow ance allow ance allow ance allow ance allow ance amount amount amount amount amount amount %DQNV %URNHU'HDOHUV %XLOGLQJ0DWHULDOV &DSLWDO*RRGV &KHPLFDOV &RPPHUFLDO 3URIHVVLRQDO6HUYLFHV &RQVWUXFWLRQ (QJLQHHULQJ &RQWDLQHUV 3DFNDJLQJ )RRG%HYHUDJH 7REDFFR *RYHUQPHQWV +HDOWK&DUH +RWHOV *DPLQJ ,QVXUDQFH 0HGLD (QWHUWDLQPHQW 0HWDOV 0LQLQJ 1RQ%DQN)LQDQFLDO,QVWLWXWLRQV 2LO *DV 2WKHUV 3DSHU )RUHVW3URGXFWV 3RZ HU 5HDO(VWDWH 5HWDLOLQJ 6RIWZ DUH 7HFKQRORJ\+DUGZ DUH (TXLSPHQW 7HOHFRPV 7UDQVSRUWDWLRQ 7UDQVSRUWDWLRQ,QIUDVWUXFWXUH Total 1 216 093 2 827 48 945 5 722 49 289 1 363 137 518 77 394 1 161 1 161 95 231 91 313

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Loans and advances to costumers

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WKRXVDQGHXURV 31/12/2018 31/12/2017 Loans and advances to customers Stage 1 Stage 2 Stage 3 Total Total Amortized cost /RZWRIDLUULVN >DDDD@ 29 142 - 0RQLWRULQJ >EEEE@ 507 226 250 008 6XEVWDQGDUG >FFFFFF@ - 16 868 'RXEWIXO >OFFF@ - 296 ,PSDLUHG >G@ 92 632 168 395 1RWUDWHG 91 080 3 973 Gross carrying amount 581 517 45 931 92 632 720 080 439 540 /RVVDOORZDQFH 1RWH 88 860 138 957 Carrying amount 579 185 45 065 6 971 631 220 300 583 Fair Value Trough Profit and Loss 000- - ,PSDLUHG >G@ - - 285 - Gross carrying amount - - 285 285 - 5HYDOXDWLRQ - - ( 1) - Carrying amount - - 284 284 - Total gross carrying amount 581 517 45 931 92 917 720 365 439 540 7RWDOLPSDLUPHQW 88 860 138 957 7RWDOUHYDOXDWLRQ ( 1) - Total Carrying amount 579 184 45 065 7 255 631 504 300 583

292 | 2018 Annual Report Guarantees

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WKRXVDQGHXURV 31-12-2018 31-12-2017 Guarantees Stage 1 Stage 2 Stage 3 Total Total 0RQLWRULQJ >EEEE@ 248 506 389 977 6XEVWDQGDUG >FFFFFF@ - 55 766 'RXEWIXO >OFFF@ - - ,PSDLUHG >G@ 125 000 2 826 1RWUDWHG 1 106 2 639 Total gross carrying amount (Note 37) 249 612 - 125 000 374 612 451 208 /RVVDOORZDQFH - 68 337 52 345 Total Carrying amount 249 227 - 57 048 306 275 398 863

Banking book debt securities

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WKRXVDQGHXURV 31-12-2018 31-12-2017 Banking Book Debt Securities Stage 1 Stage 2 Stage 3 Total Total Amortized cost 0RQLWRULQJ >EEEE@ 87 532 - 1RWUDWHG - - Gross carrying amount 87 532 - - 87 532 - /RVVDOORZDQFH 1RWH 447 - Carrying amount 87 085 - - 87 085 - Fair Value through Other Comprehensive Income 00- - 0RQLWRULQJ >EEEE@ 373 200 26 356 1RWUDWHG - 249 126 Gross carrying amount 373 200 - - 373 200 275 482 /RVVDOORZDQFH 1RWH 669 - 5HYDOXDWLRQ ( 751) 2 712 Carrying amount (Note 21) 371 780 - - 371 780 278 194 Total gross carrying amount 460 732 - - 460 732 275 482 7RWDO,PSDLPHQW 1 116 - 7RWDO5HYDOXDWLRQ ( 751) 2 712 Total Carrying amount (Note 21) 458 865 - - 458 865 278 194

Cash and Cash Equivalents

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(thousand euros) 31-12-2018 31-12-2017 Cash and cash equivalents Stage 1 Stage 2 Stage 3 Total Total Amortized cost /RZWRIDLUULVN >DDDD@ 309 952 446 803 0RQLWRULQJ >EEEE@ 7 478 1 669 6XEVWDQGDUG >FFFFFF@ - 18 541 'RXEWIXO >OFFF@ - - ,PSDLUHG >G@ - - 1RWUDWHG - 2 661 Total gross carrying amount 317 430 - - 317 430 469 674 Total CarrCarryingying amount ((NoteNote 188)) 317 430 - - 317 430 469 674

Haitong Bank, S.A. | 293 Loans and advances to banks

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(thousand euros) 31-12-2018 31-12-2017 Loans and advances to Banks Stage 1 Stage 2 Stage 3 Total Total Amortized cost /RZWRIDLUULVN >DDDD@ 1 048 3 336 0RQLWRULQJ >EEEE@ 56 139 727 6XEVWDQGDUG >FFFFFF@ 3 358 - 'RXEWIXO >OFFF@ - - ,PSDLUHG >G@ 15 077 15 077 1RWUDWHG - 21 775 Total gross carrying amount (Note 22) 1 104 3 358 15 077 19 539 179 915 /RVVDOORZDQFH 1RWH - 15 574 15 388 Total Carrying amount 1 104 2 861 - 3 965 164 527

Debtors and other receivables

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(thousand euros) 31-12-2018 31-12-2017 Debtors and other receivables Stage 1 Stage 2 Stage 3 Total Total Amortized cost /RZWRIDLUULVN >DDDD@ 30 4 0RQLWRULQJ >EEEE@ 14 209 2 615 6XEVWDQGDUG >FFFFFF@ 285 6 000 'RXEWIXO >OFFF@ - - ,PSDLUHG >G@ 1 201 1 235 1RWUDWHG 13 319 19 287 Total gross carrying amount (Note 22) 27 843 - 1 201 29 044 29 141 /RVVDOORZDQFH 1RWH 6 562 6 589 Total Carrying amount 22 459 - 23 22 482 22 552

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294 | 2018 Annual Report 5HJDUGLQJSOHGJHVRYHUQRQOLVWHGHTXLW\VHFXULWLHVSOHGJHVRYHUHTXLSPHQWDQGPRUWJDJHVYDOXDWLRQLWLVGRQH DWOHDVWRQDQDQQXDOEDVLVDQGLWLVEDVHGRQILQDQFLDOLQIRUPDWLRQRIWKHERUURZHURURQYDOXDWLRQUHSRUWVRIH[WHUQDO HQWLWLHV HJUHDOHVWDWH

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(thousand euros) Stage 1 Stage 2 Stage 3 Rating bucket Gross Gross Gross Exposure at Default Exposure at Default Exposure at Default Exposure Exposure Exposure /RZWRIDLUULVN >DDDD@ 0RQLWRULQJ >EEEE@ 6XEVWDQGDUG >FFFFFF@ ,PSDLUHG >G@ 1RWUDWHG Total 1 639 439 1 323 353 49 289 49 289 232 994 217 467

Concentration risk

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WKRXVDQGHXURV 31.12.2018

Financial assets held for trading Securities Loans and advances to customers Industry Gross amount Impairment Derivative Gross Securities Impairment Outstanding Overdue Outstanding Overdue financial assets amount loans loans loans loans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WKRXVDQGHXURV 31.12.2017 Financial assets held for Loans and advances to customers Securities trading Industry Gross amount Impairment Derivative Gross Securities Impairment Outstanding Overdue Outstanding Overdue financial assets amount loans loans loans loans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

296 | 2018 Annual Report Market risk

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31.12.2018 31.12.2017 December Average Maximum Minimum December Average Maximum Minimum )RUHLJQ([FKDQJH5LVN ,QWHUHVW5DWH5LVN 6KDUHV &UHGLWVSUHDG &RYDULDQFH Total 10,47 6,27 11,90 3,96 4,61 4,31 8,51 1,43

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31.12.2018 31.12.2017

Average Average Average Average Interest of the Interest of the balance of the interest balance of the interest period period period rate period rate

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Financial assets 1 830 546 19 285 1,05% 1 468 424 19 611 1,34%

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Financial liabilities 1 326 321 16 191 1,22% 1 625 405 17 954 1,10%

Financial result 3 094 1 657

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298 | 2018 Annual Report 7KHLPSDFWRQWKHEDQNLQJERRNSRUWIROLRHFRQRPLFYDOXHXQGHUDVFHQDULRRIESVPRYHPHQWLQLQWHUHVW UDWHVLQ'HFHPEHUDQG'HFHPEHUZDVDVIROORZV

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WKRXVDQGHXURV 31.12.2018

Financial assets at fair value through Securities Total profit or loss

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17 576 280 978 298 554

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Financial assets at fair value Securities Total through profit or loss

3RUWXJDO - 251 988 251 988 1HWYDOXHVUHFHLYDEOH SD\DEOH

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WKRXVDQGHXURV 31.12.2018 Market Accrued Fair value Nominal Book value Impairment value interest reserve

Securities Portugal 165 300 179 890 2 816 182 495 ( 211) 1 229 0DWXULW\PRUHWKDQ\HDU

Italy 100 000 98 500 58 98 483 ( 75) ( 1 858) 0DWXULW\PRUHWKDQ\HDU

265 300 278 390 2 874 280 978 ( 286) ( 629)

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15 905 17 391 185 17 576 - -

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300 | 2018 Annual Report December December Liquidity Coverage Ratio 2018 2017

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NOTE 42 – ACCOUNTING STANDARDS AND RECENT INTERPRETATIONS

Standards, interpretations, amendments and revisions that came into force in this year

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ThisTh report constitutes an integral part of Haitong Bank’s 2018 Annual Report and aims to disclose the structure and corporate governance practices adopted by Haitong Bank, S.A.. This report was prepared in accordance with Articles 7 and 245-A of the Portuguese Securities Code.e.

Haitong Bank, S.A. | 327 GOVERNANCE REPORT

PART I – SHAREHOLDER STRUCTURE

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328 | 2018 Annual Report 7. Shares and Bonds held by members of the Board of Directors and Supervisory bodies $QQH[UHIHUUHGWRLQSDUDJUDSKRI$UWLFOHRIWKH3RUWXJXHVH&RPPHUFLDO&RPSDQLHV&RGH

Securities Transactions in 2018 Securities held Board of Directors Securities held as of as of 31/12/2018 31/12/2017 Date Acquisitions Disposals

Wu Min

Lin Yong Haitong International Securities Group Limited 2UGLQDU\6KDUHV

Haitong International Securities Group Limited 6KDUH2SWLRQV

Haitong International Securities Group Limited $ZDUGHG6KDUHV XQYHVWHG

Alan do Amaral Fernandes

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Haitong International Securities Group Limited 6KDUH2SWLRQV

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Nuno Miguel Sousa Figueiredo Carvalho

Pan Guangtao

Haitong Bank, S.A. | 329 Securities Transactions in 2018 Securities held Board of Directors Securities held as of as of 31/12/2018 31/12/2017 Date Acquisitions Disposals

Paulo José Lameiras Martins

Vasco Câmara Pires dos Santos Martins

Vincent Marie L. Camerlynck

Zhang Xinjun

Securities Transactions in 2018 Supervisory Board / Securities held Securities held as of Statutory Auditor as of 31/12/2018 31/12/2017 Date Acquisitions Disposals

Mário Paulo Bettencourt de Oliveira

Cristina Maria da Costa Pinto

Maria do Rosário Mayoral Robles Machado Simões Ventura

Paulo Ribeiro da Silva

Deloitte & Associados, SROC, S.A.

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330 | 2018 Annual Report PART II – CORPORATE BODIES AND COMMITTEES

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342 | 2018 Annual Report PART III – INTERNAL ORGANISATION

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344 | 2018 Annual Report PART IV – REMUNERATION

1) $QQXDODPRXQWRIWKHIL[HGUHPXQHUDWLRQVSDLG 7KHPHPEHUVRIWKH6XSHUYLVRU\%RDUGRI+DLWRQJ E\+DLWRQJ%DQN6$RUFRPSDQLHVXQGHULWV 6$GLGQRWUHFHLYHDQ\YDULDEOHUHPXQHUDWLRQLQ FRQWUROLQWRHDFKRIWKHPHPEHUVRIWKH KDYLQJ EHHQ SDLG WKH IROORZLQJ IL[HG %RDUGRI'LUHFWRUVDQGWKH6XSHUYLVRU\%RDUG UHPXQHUDWLRQV

BOARD OF DIRECTORS SUPERVISORY BOARD

HXURV HXURV Executive Subsidiaries Haitong Bank and Members of the Haitong Bank Supervisory Board Members and Total Branches Total Board of and Branches Affiliates Remuneration Directors

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346 | 2018 Annual Report PART V – TRANSACTIONS WITH RELATED PARTIES

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354 | 2018 Annual Report Positions in companies outside the Haitong Group

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Haitong Bank, S.A. | 355

Annexes

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Haitong Bank, S.A. | 357 NON-FINANCIAL INFORMATION AND DIVERSITY Article 508º G – Portuguese Corporate Code)

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358 | 2018 Annual Report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¶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’ ISSUES DJDLQVW EULEHU\ LQYROYLQJ RIILFLDOV RI WKH (XURSHDQ 3OHDVH VHH ³+XPDQ 5HVRXUFHV´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

Haitong Bank, S.A. | 359 EARNINGS DISTRIBUTION PROPOSAL

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360 | 2018 Annual Report DECLARATION OF CONFORMITY

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Haitong Bank, S.A. | 361 HAITONG BANK, S.A. Edifício Quartzo - Rua Alexandre Herculano, 38 | 1269-180 Lisbon | PORTUGAL Registered Share Capital: 844 769 000 euros Corporate Registration na Tax Payer Number: 501 385 932