— 2011 — 130th year Report Banco Sabadell —Annual —Banco — Sabadell — —Annual — Report — 2011 — — 130th — year — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Annual Report 2011 130th year WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd —Index — — — — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — — Annual Report 2011 — —

5 — The Banco Sabadell group in 2011 – financial highlights

9 — Chairman’s letter

12 — Financial and share performance information

35 — Group businesses

65 — Excellence

74 — Risk management

87 — Board of Directors and Senior Management Team

90 — Report of the Audit and Control Committee

102 — Report on Directors’ remuneration

109 — Corporate Social Responsibility

117 — Statutory information

— Directors’ statement of responsibility — Auditor’s report — Annual accounts — Report of the directors

258 — Banco Sabadell group contact details WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — — — — — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd —The Banco Sabadell group in 2011– financial highlights — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd

€'000 Financial highlights 2011 2010 % 11/10 Own funds 6,276,160 5,978,412 5.0 Total assets 100,437,380 97,099,209 3.4 Gross loans and advances to customers in 2011 – financial highlights The Banco Sabadell group ex reverse repos 73,635,342 73,057,928 0.8 Gross loans and advances to customers 74,922,073 76,190,720 (1.7) On-balance sheet deposits and issued securities 78,119,863 77,164,193 1.2 Customer deposits ex repos 52,827,042 49,374,406 7.0 Assets held in mutual funds 8,024,185 8,852,797 (9.4) Assets held in pension funds and insurance policies sold 8,784,677 8,742,691 0.5 Deposits and assets under management 96,061,962 95,998,199 0.1

€'000 Income and earnings performance

Banco Sabadell Net interest income 1,537,263 1,459,116 5.4 Gross income 2,506,722 2,331,339 7.5

Annual Report 2011 Annual Report Profi t before impairment and other provisions 1,230,710 1,136,304 8.3 Net attributable profi t 231,902 380,040 (39.0)

Resources Number of branches 1,382 1,467 Number of employees 10,675 10,777

6 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd

% Ratios 2011 2010 Profi tability and effi ciency ratios: ROA (Net profi t / average total assets) 0.24 0.44 ROE (Net attributable profi t / average shareholders' equity) 3.82 7.32 in 2011 – financial highlights The Banco Sabadell group Cost:income (general administrative expenses / gross income) 47.32 46.20 BIS capital ratios: Core capital* 10.30 8.20 Tier I 9.80 9.36 Total 10.81 11.08 Risk management: Loan loss ratio 5.95 5.01 Loan loss coverage ratio 48.5 56.6 Loan loss coverage ratio including mortgage security 115.8 112.5

*The 2011 fi gure includes a €718 million buyback of preferred securities in exchange for ordinary shares. Banco Sabadell

Share data

Number of shares 1,391,048,717 1,263,630,834 2011 Annual Report Number of shareholders 127,310 126,263 Quoted share price (€) 2.934 2.950 Attributable earnings per share (€) 0.17 0.32 Attributable earnings per share allowing for effect of mandatorily convertible bonds (€) 0.15 0.28

7 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd —Chairman’s letter — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Dear Shareholder,

Banco Sabadell ended 2011, its 130th year of operation, with across-the-board increases in business margins, a comfortable liquidity position and, with the help of an active capital management strategy, an improved core capital ratio. All this was achieved in a highly challenging environment marked by a prolonged bout of economic weakness and continuing fi nancial market turbulence. Operating conditions were overshadowed by the euro zone sovereign debt crisis which worsened signifi cantly in the second half of 2011. Notwithstanding the measures taken by the European authorities to mitigate fi nancial instability and improvements in economic and fi scal governance, Greece’s fi nancial position became ever more precarious, political problems erupted in Italy and doubts remained over the effi cacy of the bail-out mechanisms that had been put in place. As a result, the sovereign debt of European countries lost its risk-free status, particularly in systemic countries like Spain and Italy, exacerbating the negative feedback loop Chairman’s letter between funding problems in the government sector and in the banking sector. From the summer onwards, risk premiums in the inter-bank markets increased signifi cantly, almost to the heights seen in late 2008. Many of the funding markets tapped by banks and other lending institutions remained closed. The risk premium on the sovereign debt of Spain and a number of other countries rose to levels not seen since the inception of European monetary union, with spreads rising on occasion to more than 450 basis points and impacting on borrowing costs and the pricing of new loans. The European Central Bank became the principal source of funding for the banking system and the counterparty of a large number of fi nancial institutions. Europe’s supreme monetary authority, which had increased offi cial interest rates on two occasions earlier in the year, not only reversed its interest rate policy but began to grant loans with very long maturities (36 months) in an effort to ease stressed bank funding conditions. The Spanish economy remained virtually fl at throughout 2011, with activity actually falling in the last part of the year. Domestic demand was affected by factors such as fi scal tightening, a deteriorating labour market and global fi nancial market instability. However, the imbalances

Banco Sabadell that had built up during the cyclical boom period continued to be addressed. Structural reforms continued and changes to the law were made to reinforce the country’s commitment to maintain healthy public accounts in the medium and long term. A sound approach to managing the

Annual Report 2011 Annual Report Spanish economy will be critical to an early resolution of the current diffi culties. The restructuring of Spain’s fi nancial sector continued throughout 2011 and minimum capital requirements for banks were increased by a new Law on Strengthening the Financial System (Royal Decree-Law 2011), which raised the capital adequacy threshold for fi nancial institutions. The process of recapitalizing the banks to meet the requirements of the new law was completed in September, with a number of institutions receiving capital injections from the Fund for Orderly Bank Restructuring (FROB). All this made it necessary for banks to actively manage their capital and to allocate large amounts of funds to cleaning up their balance-sheets, putting further pressure on their profi t margins. Against this backdrop, Banco Sabadell saw good revenue growth and increased margins 10 across all earnings metrics. Resolute asset and liability management and determined sales efforts at branch level made it possible to end the year with a 5.4% increase in net interest income, with gross operating income rising by 7.5% compared with the previous year. The profi t before provisions totalled €1,230.7 million, up 8.3% on the year (or 2.7% on a comparable basis, with the effect of the Banco Guipuzcoano merger included). This was achieved despite diffi cult operating conditions, rising borrowing costs and poor credit accessibility. After balance-sheet strengthening allocations of €1,048.9 million in loan impairment and other provisions – 8.4% more than in the previous year – Banco Sabadell posted a net profi t of €231.9 million at the close of 2011. A highly proactive strategy made 2011 a year of record-breaking achievement for the Bank, both in terms of increased deposits and winning new customers. Strong organic growth led to gains in market share and pushed up the Bank’s customer base to over 2.7 million with 342,096 new customers being added during the year, ensuring that targets were met. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd The Bank continued to enjoy a comfortable liquidity position, thanks in large measure to its success in attracting deposits and the effectiveness of its branch network, which enabled it to continue to generate a signifi cant surplus of deposits over loans of almost €4,000 million. Core capital was substantially strengthened during the year. The Bank carried out two capital-bolstering exercises: the fi rst of these, in February, was an issue and offering of new shares for the purpose of redeeming various issues of subordinated and preferred debt; the second, in December 2011, was an offer to buy back preferred securities by exchanging them for new shares. These transactions resulted in the Bank’s core capital ratio reaching 10.3% by the close of the year. The second quarter of the year saw the completion of the integration of Banco Guipuzcoano into the Banco Sabadell group. The integration was carried out in a period of barely fi ve months and underscores the Bank’s record of solid achievement, expertise and technical capability in executing integration processes. As a result Banco Sabadell is now the Chairman’s letter fourth largest fi nancial institution in the Basque Country and Navarre regions, trading under the new SabadellGuipuzcoano local brand. In August Sabadell United Bank, Banco Sabadell’s subsidiary in Miami, was granted permission to take over Lydian Private Bank, a local institution which had until then been under administration by the US authorities. As a result of this transaction the total revenue of Banco Sabadell’s Florida subsidiary increased by 51%, strengthening its position in the state of Florida and making it the state’s seventh largest local bank by deposits. In a further development, on 7 December 2011 Banco Sabadell acquired Banco CAM S.A. in a competitive bidding process organized by the Fund for Orderly Bank Restructuring (FROB) following the reorganization of the Caja de Ahorros del Mediterráneo (CAM). The take-over agreement, which is subject to approval by the Spanish regulator and the EU competition authorities, incorporates certain fi nancial conditions and risk limitations. The deal will substantially extend the Bank’s existing franchise in Alicante, Murcia, Valencia and the Balearic Islands. The take-over offer was drawn up according to parameters set out in the bidding conditions and included an application for additional capital, over and above the FROB’s €2,800 million Banco Sabadell commitment, amounting to €5,249 million. The arrangements also include an asset protection scheme (APS) under which the Deposit Guarantee Fund (DGF) will cover up to 80% of losses incurred over a period of ten years. A defi ned portfolio of assets valued at €24,660 2011 Annual Report million will enjoy protection in relation to capital consumption and impairment loss if and when the assets are sold off. Finally, the take-over agreement includes FROB guarantees of liquidity support amounting to an additional €12,500 million. The Banco CAM acquisition represents a transformative leap for Banco Sabadell. It will enable it to contemplate a future that assures it of a place among Spain’s top banking groups, and this at a crucial time when Spain’s fi nancial system has been subjected to stress and under intense pressure to consolidate. This annual report contains accurate and detailed information on the key developments that have marked the year 2011 and on the group’s performance in a highly challenging economic and fi nancial environment. The data it provides testifi es to the resilience of the Bank’s core business and its determined efforts to continue to strengthen its balance-sheet. It also bears witness to the sturdy professionalism of a highly experienced management 11 team, supported by a diligent workforce that is committed to the future vision of today’s Banco Sabadell.

José Oliu Creus Chairman WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd —Financial and share performance information — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — — Macroeconomic environment — —

The euro zone sovereign debt crisis continued to be the focus of attention in 2011. Advances in the area of economic and fi scal governance and improved mechanisms of fi nancial support were not suffi cient to resolve the situation. Rather, fi nancial instability in the region worsened signifi cantly in the second half of the year as contagion spread to the systemic countries.

performance information performance and share Financial In the fi rst half of the year, the main factors giving rise to instability were fi scal and political issues in Greece and discussions among European policymakers on the possibility of voluntary private sector participation in an exchange of Greek government debt. In April, Portugal asked for international assistance after an internal political crisis erupted in the country. The agreements reached at the European Council meeting of 21 July failed to prevent a resumption of fi nancial turbulence in the summer months and contagion soon spread to the sovereign debt markets of countries like Spain and Italy. At the July European Summit agreement was reached on: (i) providing a further package of assistance to Greece linked, fi nally, to an orderly restructuring of public debt in the hands of the private sector; (ii) less stringent conditions for providing aid to countries in need of rescue, and (iii) increased fl exibility for support mechanisms, allowing institutions to act on the basis of a precautionary programme Banco Sabadell and buy government debt on the secondary market. Growing fi nancial instability was caused by doubts over the implementation of bailout mechanisms, given the increasingly critical situation in Annual Report 2011 Annual Report Greece and rumours of a downgrading of France’s credit rating. Fears of global economic recession and the removal of the US’s triple-A status by Standard & Poor’s only made the problem worse. In response, Spain and Italy took additional corrective measures and the European Central Bank reactivated its asset purchase programme and began buying Spanish and Italian government debt.

14 — ECB Government bond purchases (€Bn.)

250

200

150

100

50

0

June March June 2010 September2010 December2010 2011 2011 September2010 December2011 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd In the fourth quarter, the European Council meeting of 26 October once again highlighted the diffi culty of reaching agreements within the euro zone and the announced measures failed to convince the fi nancial markets. In particular, the summit agreed to require Europe’s major banks to strengthen their capital bases in line with their exposure to European sovereign debt, causing banks to reduce that exposure. This, combined with the lack of any fi rm agreement at the November G-20 meeting and political crises brewing in Italy and Greece, made the fi nancial turmoil even worse and the debt crisis began to affect countries like France. European countries saw their sovereign debt lose its risk-free status, risk premiums in the inter-bank markets returned to their end-2008 levels, and credit institutions again found many of their funding

markets being closed off. The European Council of 9 December information performance and share Financial approved a new budget pact and strengthened coordination of economic policies; this was judged by observers to be a step in the right direction but still insuffi cient to bring the euro area’s sovereign debt crisis to an end.

— Risk premiums on 12-month euro inter-bank rates (basis points)

250

200

150

100 Banco Sabadell

50 Annual Report 2011 Annual Report

0

June June June June December2007 2008 December2008 2009 December2009 2010 December2010 2011 December2011

In addition to the crisis brought on by sovereign debt problems in the euro zone, a series of additional shocks occurred during the year and contributed to weaken prospects for global economic growth. First, geopolitical tensions in North Africa and the Middle East caused a substantial rise in oil prices in the fi rst quarter. A natural disaster struck Japan in March, causing severe disruption to global supply chains. A rising level of political polarization in the United States obstructed measures to stimulate the economy. 15 Finally, restrictive economic policies being adopted in the emerging countries to combat the risk of overheating contributed to an economic slowdown in these economies in the second half of the year. In the case of Spain, throughout the year economic activity remained virtually fl at and actually showed a decline towards the end of the year. Domestic demand was weighed down by such factors as tight fi scal policies, a worsening labour market and fi nancial instability in the international markets. However, Spain continued to implement structural reforms, including changes to the pension and collective bargaining systems and plans to strengthen the fi nancial sector. On the fi scal front, limits to the WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — IFO business confidence survey - expectations

115

110

105

100

95

90

85

80

75

June June June June December2007 2008 December2008 2009 December2009 2010 December2010 2011 December2011 performance information performance and share Financial structural defi cit were inserted into the Spanish Constitution and rules were made to restrict the growth of public expenditure for both central government and the larger municipal councils. In the political arena, the 20 November general election saw the Popular Party win with an absolute majority. Against this backdrop, monetary policy pursued by central banks in major developed countries continued to be highly accommodative and included concerted action to boost liquidity. In particular the European Central Bank, having pushed up its benchmark rate in April and July in pursuit of its primary aim of controlling infl ation, reduced rates again to 1.00% in the last quarter in response to economic weakness. The ECB also took unconventional measures to resolve liquidity problems in the fi nancial system and to relieve the shortage of collateral, such as introducing 36-month refi nancing loans, broadening the range of Banco Sabadell eligible collateral, reducing reserve requirements, and reactivating the covered bond purchasing programme. In the US, the Federal Reserve held discount rates unchanged at 0.00%-0.25% and Annual Report 2011 Annual Report indicated that economic conditions would probably ensure that they remained at exceptionally low levels until mid-2013. The Fed also adopted additional unorthodox monetary measures to reduce long-term interest rates and provide support for mortgage market activity. Elsewhere, the Bank of Japan kept its benchmark rate unchanged in a range of 0.00% - 0.10% and increased its unconventional monetary programmes. Finally, the Bank of England allowed base rates to remain at 0.50% and, in the last quarter, decided to increase assets acquired under its asset purchase programme by GBP 75 billion to GBP 275 billion. In the long-term bond markets, yields in Germany and the US fell back sharply, falling to all-time lows. German and US bonds 16 became a refuge as European fi nancial instability persisted, garnering further support as global economic activity declined. For the peripheral economies in the euro zone, risk premiums generally saw sharp upward movements, reaching highs not seen since the euro area came into being. In the fourth quarter, indeed, as the sovereign debt crisis spread throughout the region, interest rate spreads on the debt of countries such as France or Austria over the German benchmark reached their highest levels since the launch of the single European currency. In these conditions, the main rating agencies continued to take actions which impacted negatively on the sovereign debt of the peripheral countries. The ratings of Portuguese and Irish debt were downgraded to junk status. Moreover, the agencies’ doubts over progress in resolving WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd the sovereign debt crisis led them to review the ratings of every country in the euro zone as the year came to an end. In the currency markets, the euro ended the year lower against the dollar. In the early months of the year, the single currency was helped by improvements to the European financial support mechanisms and by European Central Bank pronouncements in preparation for rate increases. It then stabilized but sank lower from September onwards because of uncertainty over the resolution of sovereign debt problems in the euro zone, the changing discourse emanating from the ECB and political convulsions in Greece and Italy. One of the few factors supporting the European currency at this time was the repatriation of capital by European banks.

— Risk premiums on 10-year sovereign bonds over German Bund information performance and share Financial (basis points) —Spain — Italy — France

600

500

400

300

200

100

0 Banco Sabadell

June June June June December2007 2008 December2008 2009 December2009 2010 December2010 2011 December2011 Annual Report 2011 Annual Report

Meanwhile, the yen appreciated against the dollar over the year despite interventions in the currency markets by the Japanese authorities. The currency derived support from global fi nancial instability. Equity markets, after remaining relatively stable throughout the fi rst half of the year, fell back sharply in the summer months as fi nancial turbulence returned and the global economy weakened. In the year as a whole, the EURO STOXX 50 index declined by 17.1%, while the Spanish IBEX did so by 13.1%. In the US, the S&P index recovered after the summer and was able to end the year practically unchanged, having been less severely affected by the European debt crisis. In euro terms, the S&P index ended the year 17 with a rise of 3.1% as a result of the weakening European currency. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — — Share performance — —

In the fi rst 11 months of the year Banco Sabadell's share price moved in line with the IBEX 35 index and the European equity markets, which remained relatively stable in the fi rst half. In the second half of the year the Bank's share price, along with those of its peers, suffered a considerable decline. This was caused mainly by fi nancial turmoil in European markets from the summer onwards. In December, however, Banco Sabadell shares rallied strongly, rising by more than 40% in just three weeks. A strong

performance information performance and share Financial performance by Spanish banking industry shares in December, combined with the 7 December announcement by Spain's Fund for Orderly Bank Restructuring (FROB) that Banco CAM had been taken over by Banco Sabadell, were factors driving the rally. — —A sharp rally in the last month of the year shows the markets’ positive view of the announced Banco CAM take-over — —

There were three key elements to the CAM take-over: (1) an Banco Sabadell asset protection scheme; (2) a cash injection; and (3) liquidity support. The deal has cemented Banco Sabadell’s position among the leading Spanish banking groups, increased its market Annual Report 2011 Annual Report share and given it a more balanced national presence. The announcement was very well received by the investor community, which showed a healthy interest in the details of the transaction.

—Comparative share performance —Banco Sabadell —Comparable Spanish banks (*) — IBEX 35 —DJ STOXX 600

130 18 120

110

100

90

80

70

60

31.12.10 31.03.11 30.06.11 30.09.11 31.12.11

(*) Includes Caixabank, Banco Popular, Banesto and Bankinter for the whole of 2011, plus Bankia from 20 July 2011 onwards. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — Monthly share price movements - 2011

Month Closing Average daily price Maximum Minimum trading volume (€) (€) (€) ('000 shares)

January 3.494 3.709 2.779 8,600 February 3.146 3.370 3.025 20,862 March 3.087 3.215 3.000 9,072 April 2.993 3.187 2.920 6,555 May 2.983 3.055 2.799 5,179 June 2.850 3.006 2.750 5,962 July 2.609 2.968 2.450 8,606 August 2.754 2.754 2.236 5,989 September 2.685 2.783 2.438 3,726 October 2.610 2.730 2.526 2,890 November 2.490 2.573 2.217 2,869 December 2.934 3.237 2.467 4,989 information performance and share Financial

With the share price at €2.934 at the close of the year, Banco Sabadell's year-end market capitalization was €4,078 million, making it Spain's sixth largest banking group by market value as well as on most other fi nancial measures. Two dividend payments were made during the year: a fi nal dividend for the year 2010 of €0.06 per share and an interim dividend for 2011 of €0.05 per share. This is equivalent to a dividend yield of 3.75% on Banco Sabadell shares in the year 2011. Combined with the 2011 fi nal dividend of €0.05 per share, payable in bonus shares from the Bank's stock of treasury shares, which will be recommended for approval by the General Meeting, the overall dividend for the year will be €0.10 per share. On 31 January 2011 Banco Sabadell’s Board of Directors took Banco Sabadell the decision to increase the capital of the Bank by the issue and sale of 126,363,082 shares amounting to 10% of the total shares outstanding. This capital-raising exercise was carried out by private 2011 Annual Report placement aimed exclusively at qualifi ed investors in Spain and

— Earnings per share and book value per share 2007-2011

Mn ¤Mn. ¤ ¤Mn. ¤ Number Net attributable Net attributable Shareholders' Book value of shares profi t earnings per share equity per share

2007 1.224 782 0,64 4.501 3,68 2008 1.200 674 0,56 4.627 3,86 2009 1.200 522 0,44 5.226 4,36 2009* 1.300 522 0,41 5.226 4,02 2010 1.264 380 0,32 5.978 4,73 19 2010** 1.457 380 0,28 5.978 4,10 2011 1.391 232 0,17 6.276 4,51 2011*** 1.584 232 0,15 6.276 3,96

*Includes the dilution effect of 100,340,000 additional shares resulting from an issue of convertible bonds. **Includes the dilution effect of 100,010,000 and 93,600,000 additional shares resulting from issues of convertible bonds. ***Includes the dilution effect of 99,690,000 and 92,870,000 additional shares resulting from issues of convertible bonds.

—Ratios

Share price at 31.12.11 €2.934 P/E ratio 2011* 19.34 x P/B ratio 2011 0.74 x Dividend yield 2011 3.75%

*Allowing for conversion of mandatorily convertible subordinated bonds. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd abroad, using an accelerated bookbuild procedure. At the same time the Bank launched a cash offer to buy back a number of debt issues (preferred securities and subordinated notes). The overall effect of the simultaneous capital increase and buyback offer was to enhance the composition of Banco Sabadell's capital and to raise its core capital ratio to a satisfactory level. As a result of the transaction the ratio increased by 68 basis points. Early in December 2011 the decision was taken to make a buyback offer to the holders of preferred securities issued by different Banco Sabadell group undertakings and sold to private investors. The preferred securities were to be exchanged for ordinary shares of Banco Sabadell. The buyback process was completed on 3 January 2012 and met with a weighted

performance information performance and share Financial acceptance rate of 93.8%. The offer price at which 90% of the nominal value of the repurchased preferred shares would be paid was fi xed at the sum of €2.6461 per share. Under the terms of the offer, the remaining 10% of the nominal value of the repurchased preferred shares, plus 2% of the overall nominal value of the preferred shares, will be paid once the Bank has satisfi ed itself that investors have fulfi lled the requirement to continue to hold without interruption, until 14 December 2012 inclusive, all ordinary shares of the Bank acquired by them under the terms of the offer. The offer was carried out for the dual purpose of giving holders of preferred shares the opportunity to liquidate their positions in these securities and replace them with Banco Sabadell ordinary shares, while at the same time building up the Bank’s consolidated capital structure. Banco Sabadell Annual Report 2011 Annual Report

— Analysis of shareholdings at 31 December 2011

Size of holding Number of Number of % of total shareholders shares share capital

12.000 or less 117,172 196,181 ,482 14.10% From 12.001 to 120.000 9,255 287,787 ,225 20.70% From 120.001 to 240.000 491 81,696 ,265 5.87% From 240.001 to 1.200.000 318 149,718 ,911 10.76% From 1.200.001 to 18.000.000 66 238,411 ,006 17.14% More than 18.000.000 8 437,253 ,828 31.43%

TOTAL 127,310 1,391 ,048 ,717 100.00%

20

—Analysis of shareholdings at 31 December 2010

Size of holding Number of Number of % of total shareholders shares share capital

12.000 or less 116,080 193,854,327 15.34% From 12.001 to 120.000 9,259 288,800,666 22.85% From 120.001 to 240.000 520 86,360,656 6.83% From 240.001 to 1.200.000 334 154,314,086 12.21% From 1.200.001 to 15.000.000 63 226,950,198 17.96% More than 15.000.000 7 313,350,901 24.81%

TOTAL 126,263 1,263,630,834 100.00% WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd The total number of shares of the Bank to be issued or sold as a result of the application by preferred shareholders of a cash sum equivalent to 90% of the nominal value of the repurchased preferred shares, less any fractional amounts, was 271,179,763 (of which 48,000,000 were treasury shares and 223,179,763 were new shares representing 13.83% of the ordinary share capital of the Bank as increased by the offer). A notarial instrument formally executing the new share issue was fi led with the Barcelona Mercantile Registry on 4 January 2012. On 12 January 2012 the Board of Directors of Banco Sabadell decided to call an Extraordinary General Meeting of the Company to be held on 23 February 2012. On the agenda for the meeting was an increase in capital in a

nominal amount of €86,476,525,625 by the issue and allotment information performance and share Financial of 691,812,205 ordinary shares payable in cash with a nominal value of €0.125 each, subject to a right of preferential subscription and to the possibility of the issue not being fully subscribed, with powers being granted to the Board of Directors, including the power of substitution, to carry out the increase in capital and to decide on the terms thereof except as specifi cally determined by the Meeting. The Board of Directors was also authorized to increase the share capital on one or more occasions and, if thought fi t, to withdraw preferential subscription rights.

Banco Sabadell has a Shareholder Relations Desk and an Investor Relations Department whose functions are to provide detailed information on the performance of the group and respond to enquiries, suggestions and views of existing or potential shareholders, whether private or institutional, on any aspect Banco Sabadell related to the Bank and its performance. Annual Report 2011 Annual Report

21 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — —Financial review — — — —Laying the foundations for future growth — Robust asset and liability management — Strong growth in customer numbers — — performance information performance and share Financial

€'000 Assets 2011 2010 % 11/10

Cash and deposits with central banks 1,290,678 1,253,600 3.0 Assets held for trading. derivatives and other fi nancial assets 2,273,131 1,962,652 15.8 Available-for-sale fi nancial assets 13,268,170 10,830,629 22.5 Loans and receivables 76,282,944 76,725,432 (0.6) Loans and advances to credit institutions 3,628,914 2,744,614 32.2 Loans and advances to customers 72,654,030 73,980,818 (1.8) Equity investments 696,934 813,492 (14.3) Tangible assets 1,106,881 1,081,549 2.3 Intangible assets 1,022,161 831,301 23.0 Other assets 4,496,481 3,600,554 24.9

Total assets 100,437,380 97,099,209 3.4 Banco Sabadell

Liabilities 2011 2010 % 11/10

Annual Report 2011 Annual Report Liabilities held for trading and derivatives 2,011,411 1,716,500 17.2 Financial liabilities at amortized cost 91,586,490 88,710,738 3.2 Deposits from central banks 4,040,717 32,997 -- Deposits from credit institutions 8,128,791 10,300,991 (21.1) Deposits from other creditors 58,444,050 55,092,555 6.1 Debt certifi cates including bonds 17,643,095 19,507,497 (9.6) Subordinated liabilities 1,859,370 2,386,629 (22.1) Other fi nancial liabilities 1,470,467 1,390,069 5.8 Liabilities under insurance contracts 173,348 177,512 (2.3) Provisions 350,203 367,662 (4.7) Other liabilities 381,784 438,254 (12.9)

Total liabilities 94,503,236 91,410,666 3.4

Equity 2011 2010 % 11/10 22 Own funds 6,276,160 5,978,412 5.0 Valuation adjustments (389,228) (323,735) 20.2 Non-controlling interests 47,212 33,866 39.4

Total equity 5,934,144 5,688,543 4.3

Total liabilities and equity 100,437,380 97,099,209 3.4

Off-balance sheet items 2011 2010 % 11/10

Contingent exposures 8,347,022 8,310,022 0.4 Contingent commitments 11,657,865 16,133,441 (27.7)

Total off-balance sheet items 20,004,887 24,443,463 (18.2) WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Capital management

— —Boosting our core capital ratio — Actively managing our capital —

—BIS capital ratios

€'000

2011 2010 % 11/10 information performance and share Financial

Capital 173,881 157,954 10.1 Reserves 5,171,378 4,777,188 8.3 Convertible bonds 814,620 818,714 (0.5) Non-controlling interests 53,239 39,294 35.5 Deductions (1,151,809) (829,717) 38.8

Core capital 5,061,309 4,963,433 2.0

Core capital ratio (%) 9.01 8.20

Preference shares and deductions 520,711 699,490 (25.6)

Primary capital 5,582,020 5,662,923 (1.4)

Tier I capital ratio (%) 9.94 9.36

Secondary capital 567,164 1,041,663 (45.6)

Tier II capital ratio (%) 1.01 1.72 Banco Sabadell

Capital base 6,149,184 6,704,586 (8.3) Annual Report 2011 Annual Report BIS ratio (%) 10.95 11.08

Minimum capital requirement 4,493,377 4,842,011 (7.2)

Capital surplus 1,655,807 1,862,575 (11.1)

Memorandum item:

Risk-weighted assets (RWA) 56,167,208 60,525,138 (7.2)

*Core capital reached 10.30% in 2011. This includes a €718 million buyback of preferred securities in exchange for ordinary shares of the Bank.

Balance sheet management 23 Total assets of the Banco Sabadell group stood at €100,437.4 million at the end of 2011, a rise of €3,338.2 million compared with the year-end fi gure for group assets for 2010. The percentage increase during the year was 3.4%. — —A good inflow of deposits thanks to a strong branch presence and an active ALM strategy — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Gross loans and advances to customers excluding reverse — Gross loans and advances to customers repos totalled €73,635.3 million at 31 December 2011, up from (ex reverse repos) (€ Mn.) €73,057.9 million at the close of 2010, a 0.8 % increase. Of the

various components of gross loans and advances to customers, 73,058 73,635 the "other loans and receivables" category performed particularly well, increasing by €1,783.3 million. Other loans also saw good growth with a rise of €1,020.9 million.

— Loans and advances to customers —Loans and advances to customers 31.12.2010 31.12.2011 performance information performance and share Financial 2010 2011 1 Overdrafts and sundry accounts 2% 1 Overdrafts and sundry accounts 3% 2 Mortgage loans and credit 52% 2 Mortgage loans and credit 49% 3 Other secured loans 3 Other secured loans and receivables 6% and receivables 5% 4 Commercial loans 8% 4 Commercial loans 8% 5 Other loans 20% 5 Other loans 23% 6 Other receivables 8% 6 Other receivables 8% 7 Finance leases 4% 7 Finance leases 4%

1 1

7 7 6 6

5 5 2 2 Banco Sabadell

4 4 3 3 Annual Report 2011 Annual Report

€'000 2011 2010 % 11/10

Secured loans 37,910,786 40,015,744 (5.3) Commercial loans 5,454,772 5,576,618 (2.2) Other loans and receivables 20,889,437 19,106,137 9.3 Other loans 9,380,347 8,359,429 12.2

Gross loans and advances to customers ex reverse repos 73,635,342 73,057,928 0.8

24 Reverse repos 1,286,731 3,132,792 (58.9)

Loans and advances to customers - gross 74,922,073 76,190,720 (1.7)

Provisions for bad and doubtful debts and country risk (2,268,043) (2,209,902) 2.6

Loans and advances to customers - net 72,654,030 73,980,818 (1.8)

Memorandum item: Total securitized assets 10,150,163 9,976,654 1.7 Of which: Securitized mortgage assets 6,834,319 6,410,041 6.6 Other securitized assets 3,315,844 3,566,613 (7.0)

Of which: Securitization issues after 01.01.04 10,019,153 9,771,286 2.5 Of which: Securitized mortgage assets 6,705,180 6,219,586 7.8 Other securitized assets 3,313,973 3,551,700 (6.7) WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd The loan loss ratio (bad and doubtful loans as a proportion of total qualifying loans and advances), at 5.95%, was once again below the average for the Spanish fi nancial sector. The loan loss coverage ratio was 48.5%. The loan loss coverage ratio with mortgage security included was 115.8%.

€'000 2011 2010 % 11/10

Total bad and doubtful debts 4,876,554 4,073,951 19.7

Gross loans and advances to customers ex reverse repos 73,635,342 73,057,928 0.8 Contingent liabilities 8,347,022 8,310,022 0.4

Total credit risk 81,982,364 81,367,950 0.8

performance information performance and share Financial Specifi c provisions 1,532,895 1,880,605 (18.5) information performance and share Financial Generic provisions 831,799 424,788 95.8

Provisions for bad and doubtful debts 2,364,694 2,305,393 2.6

Loan loss ratio (%) 5.95 5.01

Loan loss coverage ratio (%) 48.5 56.6

In 2011 the Banco Sabadell group saw the value of its investment portfolio increase by 20.1% compared with the previous year to reach a year-end total of €14,382.9 million. Banco Sabadell's portfolio of fi xed-income investments is held, fi rst, as part of its arrangements for macro-hedging the group's on- balance sheet interest rate risk; second, as a source of interest Banco Sabadell returns to boost net interest income, subject always to complying strictly with the established limits for interest rate risk; and third, as part of a treasury management strategy of investing cash 2011 Annual Report surpluses in the securities markets. The Bank ensures that the credit quality of overall asset positions held in its fi xed-income portfolio is of the highest order and that it invests in assets with the highest ratings awarded by rating agencies.

€'000 2011 2010 % 11/10

25 Government securities Treasury bills 1,175,162 1,405,113 (16.4) Other government securities 6,764,342 5,015,834 34.9 Fixed-income securities 4,348,994 3,452,212 26.0 Doubtful assets 8,281 7,933 4.4

Total fi xed-income securities 12, 296, 779 9, 881, 092 24.4

Shares and equity investments Credit institutions 117,301 158,769 (26.1) Other private sector issuers 1,271,865 1,119,631 13.6 Equity investments in unconsolidated companies 696,934 813,492 (14.3)

Total shares and equity investments 2,086,100 2,091,892 (0.3)

Total investment portfolio 14,382,879 11,972,984 20.1 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Customer funds on the liability side of the balance sheet at the end of the year stood at €78,119.9 million, up from €77,164.2 million at the end of 2010 (+1.2%). Customer deposits grew by 6.1%. Time deposits did particularly well, reaching a year-end total of €32,819.8 million (+9.1%). Demand deposits (current accounts plus savings accounts) showed an overall increase of 2.5%. Debt securities and other negotiable instruments together with subordinated liabilities totalled €19,502.5 million, down from the previous year’s fi gure of €21,894.1 million, a 10.9% fall. performance information performance and share Financial

€'000 2011 2010 % 11/10

Current accounts 15,365,426 15,439,685 (0.5) Savings accounts 3,374,545 2,844,818 18.6 Time deposits 32,819,805 30,091,528 9.1 Repurchase agreements 6,297,269 6,249,332 0.8 Accrued expenses and deferred income 505,230 356,101 41.9 Adjustments due to hedging derivatives 81,775 111,091 (26.4)

Customer deposits 58,444,050 55,092,555 6.1

Debt securities and other negotiable instruments 17,643,095 19,507,497 (9.6)

Subordinated liabilities 1,859,370 2,386,629 (22.1)

Banco Sabadell Liabilities under insurance contracts 173,348 177,512 (2.3)

Total on-balance sheet deposits and issued securities 78,119,863 77,164,193 1.2 Annual Report 2011 Annual Report

—Customer deposits (*) — Customer deposits (*) 31.12.2010 31.12.2011

1 Current accounts 28% 1 Current accounts 27% 2 Savings accounts 5% 2 Savings accounts 6% 3 Time deposits 55% 3 Time deposits 56% 4 Repurchase agreements 11% 4 Repurchase agreements 11%

4 4

1 1 26

2 2

3 3

(*) Before time period and hedging adjustments.

The value of assets in collective investment schemes (CIS’s) at the end of the year was €8,024.2 million. This was 9.4% below the fi gure for 2010 and was in line with market trends in the period. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd €'000 2011 2010 % 11/10

Managed collective investment schemes (CIS's) 6,737,188 7,421,903 (9.2) Equity funds 339,122 448,969 (24.5) Balanced funds 434,449 504,681 (13.9) Fixed-income funds 1,658,223 2,127,417 (22.1) Guaranteed funds 2,035,260 1,855,775 9.7 Real estate funds 1,000,706 1,079,171 (7.3) Open-end investment companies (OEICs) 1,269,428 1,405,890 (9.7)

Mutual funds and OEICs distributed by the group 1,286,997 1,430,894 (10.1)

Collective investment schemes 8,024,185 8,852,797 (9.4)

Individual 1,767,125 1,827,383 (3.3) Company 1,067,101 1,159,427 (8.0)

Group 24,073 29,008 (17.0) information performance and share Financial

Pension funds 2,858,299 3,015,818 (5.2)

Total CIS's and pension funds 10,882,484 11,868,615 (8.3)

Assets held in pension funds sold by the group totalled €2,858.3 million, down 5.2% compared with the year before, while insurance policies sold and liabilities under insurance contracts, at €6,099.7 million were up by 3.3% on the year. Overall, customer deposits and assets under management amounted to €96,062.0 million at the close of the year, similar to last year's fi gure of €95,998.2 million.

€'000

2011 2010 % 11/10 Banco Sabadell

Creditors - general government 2,983,741 1,282,570 132.6 Creditors - resident sector 49,161,785 48,229,930 1.9

Creditors - non-resident sector 5,711,519 5,112,863 11.7 2011 Annual Report Accrued expenses and deferred income 505,230 356,101 41.9 Adjustments due to hedging derivatives 81,775 111,091 (26.4) Debt securities and other negotiable instruments 17,643,095 19,507,497 (9.6) Subordinated liabilities 1,859,370 2,386,629 (22.1) Collective investment schemes 8,024,185 8,852,797 (9.4) Pension funds 2,858,299 3,015,818 (5.2) Insurance policies sold and liabilities under insurance contracts 6,099,726 5,904,385 3.3 Wealth management 1,133,237 1,238,518 (8.5)

Total customer deposits and assets under management 96,061,962 95,998,199 0. 1

€'000 2011 2010 % 11/10 27

Capital 173,881 157,954 10.1 Reserves 5,299,712 4,761,117 11.3 Other equity instruments 814,620 818,714 (0.5) Less: Treasury shares (174,439) (25,686) -- Net attributable profi t 231,902 380,040 (39.0) Less: Dividends and similar payments (69,516) (113,727) (38.9)

Own funds 6,276,160 5,978,412 5.0

Valuation adjustments (389,228) (323,735) 20.2

Non-controlling interests 47,212 33,866 39.4

Total equity 5,934,144 5,688,543 4.3 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Liquidity management and funding

In a climate of worsening fi nancial market turmoil across the globe fuelled by the sovereign debt crisis and the seizing up of capital markets, especially in the euro area, the Bank's funding policy continued to focus on attracting deposits and other funds through the branch network. As far as its wholesale market funding activities are concerned the Bank, like the rest of the banking sector, saw its ratings downgraded by the three major rating agencies, very largely in response to lower sovereign credit ratings on the Kingdom of Spain.

performance information performance and share Financial — Ratings awarded to Banco Sabadell debt securities

Rating agency Mortgage Public sector Long-term Short-term covered covered Other debt debt bonds bonds ratings

Fitch BBB+ F2 Support 3 Moody's A3 Prime 2 Aaa Aa2 Strength C- Standard & Poor's BBB A2 -

The group has a number of short- and long-term funding programmes in place, giving it a range of funding sources and an appropriate diversity of products, maturities and investors. Its short-term funding arrangements include a Spanish commercial Banco Sabadell paper (pagarés) issuance programme with an upper limit of €5,000 million and a Euro Commercial Paper (ECP) programme with a nominal value of up to €3,500 million; in addition, Banco Annual Report 2011 Annual Report Guipuzcoano has its own pagaré issuance programme with a limit of €1,000 million. All these programmes are aimed at qualifi ed and unqualifi ed investors. The value of commercial papers, which are offered mainly on the domestic market, outstanding at 31 December showed a slight increase over the year and stood at €2,240 million. The group's ECP programme, aimed at global qualifi ed investors, saw a progressive contraction and by 31 December 2011 no issues under the ECP programme were outstanding. As part of its longer-term funding, in 2011 Banco Sabadell issued bonds totalling €2,217 million under its Nonparticipating Securities Issuance Programme. This included a public offering 28 of 2-year mortgage covered bonds (cédulas hipotecarias) totalling €1,200 million, fi ve issues of mortgage covered bonds underwritten by the European Investment Bank with an aggregate value of €600 million and maturities of between eight and ten years, a private placement of ordinary bonds with a value of €77 million maturing in one year and a bond issue offered to the general public with a total value of €300 million and a term of 18 months. In addition to these sources of funds, the Bank holds a reserve of liquid assets —cash and assets realizable in the short-term— which would enable it to face any liquidity contingency. In the course of 2011, Banco Sabadell continued to strengthen its liquid asset base, mainly by creating a positive gap between deposits WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd and loans via its branch network and through such initiatives as setting up a new securitization fund with a total value of €1,500 million, issuing public sector covered bonds (cédulas territoriales) and state-backed ordinary bonds amounting to €500 million and €1,500 million respectively, and adding new loans totalling more than €678 million to its eligible collateral for its credit facility with the Bank of Spain. At the close of the year Banco Sabadell's eligible liquid asset base amounted to more than €10,400 million. At 31 December Banco Sabadell had borrowings with the European Central Bank totalling €4,154 million following an ECB auction of 3-year liquidity on 22 December 2011. Banco Sabadell's participation in the auction amounted to €4,000 million, which covers the full amount of the group's capital market debt maturing

in the year 2012. information performance and share Financial Banco Sabadell's liquidity management policy seeks to ensure that its lending can be fi nanced at a reasonable cost and within a reasonable time so that liquidity risk is kept to a minimum. Its standard liquidity management procedures are as follows:

— Each year a funding plan is drawn up based on the funding needs identifi ed for each business unit and the amount to be raised on the capital markets, spread over a range of long- and short-term funding programmes. —Regular checks are made to see that the funding plan is being adhered to and any deviations from the plan are identifi ed for each business unit and the funding plan updated accordingly. —The Bank's short-term commitments, treasury position and future projections are reviewed periodically to ensure that the Bank has suffi cient liquidity to meet its fi nancing needs Banco Sabadell in the long and short term. —Banco Sabadell regularly updates its liquidity contingency plan to ensure that it has suffi cient liquid assets available to 2011 Annual Report respond effectively to any liquidity stress scenario that could arise.

Profi t performance in 2011

Despite challenging economic and fi nancial conditions, the Banco Sabadell group ended the year 2011 with a net attributable profi t of €231.9 million after net provisions for loan defaults, securities revaluations and real estate writedowns amounting to €1,048.9 million, 8.4% higher than the fi gure for 2010. At the close of 2011, net interest income totalled €1,537.3 29 million, rising by 5.4% year-on-year. With data for Banco Guipuzcoano included for the whole of the year 2010 (although for accounting purposes results for Banco Guipuzcoano were only integrated from December 2010 onwards), the change on the year would have been a 4.4% fall due to adverse movements in interest rates, although this was partly offset by careful management of interest spreads and returns on the Bank's ALCO-managed portfolio of fi xed-interest securities. Profi ts of group undertakings consolidated by the equity method totalled €37.7 million and included substantial contributions from the group’s insurance and pension associates WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd (€14.3 million), and good results from affi liate banks in Latin America (Banco del Bajío and Centro Financiero BHD), which together contributed a total of €21.1 million. Net fee and commission income was €573.6 million and increased by €57.1 million (up 11.1%) on the year (up 3.1% with Banco Guipuzcoano included for the whole of 2010). Income categories showing particularly good growth were fees for securities-related services, card fees and loan syndication fees. — —Good revenue growth —Significant like-for-like cost reductions performance information performance and share Financial — Using sustained generation of exceptional profits to strengthen our provision buffer — —

Net income from trading totalled €271.2 million, including a profi t of €87.1 million on a debt-for-equity swap offer in the fi rst quarter of the year (the issue and sale of 126 million Banco Sabadell shares in a buyback offer for preferred shares and discounted subordinated securities). In 2010 this income category also included a one-off gain of €89.0 million on a transaction involving a preferred share and subordinated bond exchange offer in the second quarter of the year. Also included in net income Banco Sabadell from trading for 2011 were profi ts of €139.0 million in the trading book and €45.3 million on sales of available-for-sale fi xed-income assets. Operating expenses for 2011 were €1,145.1 million, of Annual Report 2011 Annual Report which €38.1 million consisted of non-recurring costs (employee severance payments and restructuring costs related to the acquisition of Banco Guipuzcoano). Non-recurring expenses in 2010 totalled €22.6 million. On a like-for-like basis (that is, with Banco Guipuzcoano included for the whole of 2010 and excluding the impact of the integration of Lydian Private Bank in the second half of 2011 and the sale and leaseback deal in April 2010), operating expenses for the year 2011 were down by 3.7% on the year before. The cost: income ratio with non-recurring costs excluded was 45.75%. The resulting operating profi t (before impairment and other provisions) for the year 2011 was €1,230.7 million, up 8.3% on 30 the previous year. Net provisions for loan losses totalled €512.4 million, up from €383.9 million the previous year. Additional provisions of €536.6 million were also set aside to cover impairment losses on real estate and fi nancial assets. Of the total net provisions for 2011, €186 million resulted from the appropriation of extraordinary profi ts generated by the debt-for-equity swap carried out in February 2011 and by the gross impact of the Tax Agency ruling on the tax deductibility of certain goodwill. This tax impact is explained in the note on income tax and resulted in a net tax rebate of €69.4 million. Profi ts on asset sales during the year were not signifi cant, amounting to just €5.7 million for the year 2011 compared with WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd €296.1 million a year earlier. The fi gure for 2010 was boosted by an exceptional gain of €250.0 million on the sale and leaseback deal executed in April that year, and also by a €29.0 million profi t on the sale of a property in the Paseo de Gracia, Barcelona. The net attributable group profi t was €231.9 million, down from €380.0 million in 2010. The Tier l capital ratio was 9.94%, up from 9.36% at the end of the previous year. The core capital ratio was 9.01% compared with 8.20% in 2010. performance information performance and share Financial

€'000 Banco Sabadell ATA: Average total assets 2011 %/ATA 2010 %/ATA % 11/10

Interest and similar income 3,394,082 3.52 2,644,787 3.04 28.3

Interest expense and similar charges (1,856,819) (1.93) (1,185,671) (1.36) 56.6 2011 Annual Report

Net interest income 1,537,263 1.60 1,459,116 1.67 5.4

Returns on equity instruments 8,752 0.01 16,282 0.02 (46.2) Net income from equity-accounted undertakings 37,650 0.04 70,867 0.08 (46.9) Net fees and commissions 573,593 0.60 516,462 0.59 11.1 Income from trading (net) 271,246 0.28 204,065 0.23 32.9 Exchange differences (net) 69,999 0.07 58,655 0.07 19.3 Other operating income and expense 8,219 0.01 5,892 0.01 39.5

Gross income 2,506,722 2.60 2,331,339 2.68 7.5

Personnel expenses (742,600) (0.77) (679,721) (0.78) 9.3 Other general administrative expenses (402,491) (0.42) (356,334) (0.41) 13.0 Depreciation and amortization (130,921) (0.14) (158,980) (0.18) (17.6) 31 Profi t before impairment and other provisions 1,230,710 1.28 1,136,304 1.30 8.3

Loan loss and other provisions (1,048,916) (1.09) (968,074) (1.11) 8.4 Profi t on disposal of assets 5,672 0.01 296,111 0.34 (98.1) Profi t from discontinued operations (net of tax) 0 0.00 0 0.00 -- Income tax 48,406 0.05 (81,419) (0.09) --

Consolidated profi t for the year 235,872 0.24 382,922 0.44 (38.4)

Attributable to non-controlling interests 3,970 2,882 37.8

Net attributable profi t 231,902 380,040 (39.0) WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Net interest income

Net interest income increased by 5.4% on the fi gure for 2010. The increase resulted mainly from the acquisition of Banco Guipuzcoano and Lydian Private Bank. Average loans and advances to customers for the year were up by 10.0% while average customer deposits increased by 21.4%; this was mainly due to the acquisitions mentioned above and campaigns by the group to attract deposits. The group's reduced need for capital market funding was refl ected in lower average volumes, which declined by €772.2 million. Interest receivable on loans and advances to customers was up from 3.54% in 2010 to 4.05% in 2011, an increase of 51 basis

performance information performance and share Financial points. On the other hand, capital market funding costs rose by 78 basis points and the cost of customer deposits by 47 basis points. This improvement in loan-deposit spreads was driven by interest rate rises during 2011, with the 3-month EURIBOR rate for the year averaging 1.39% compared with 0.81% in 2010. Interest spreads were also helped by differential rates on loans and advances to customers. However, total net interest income diminished as a proportion of average total assets as the cost of capital market funds increased, falling from 1.67% in 2010 to 1.60% in 2011. The drive to increase customer deposits did, however, achieve a better balance of on-balance sheet funding by increasing the proportion of funding obtained from deposits, which rose from 46.4% of total borrowed funds in 2010 to 51.0% in 2011. Banco Sabadell Annual Report 2011 Annual Report

€'000 Average Rate Income/ Average Rate Income/ volume 2011 expense volume 2010 expense

Cash. central banks and other credit institutions 2,441,323 1.60 38,955 1,987,021 1.14 22,628 Loans and advances to customers 70,162,479 4.05 2,841,394 63,761,381 3.54 2,257,141 Fixed-income investments 13,143,326 3.31 435,211 11,575,412 2.72 314,738 32 Equity investments 2,090,937 -- 0 2,057,497 -- 0 Tangible and intangible assets 2,025,523 -- 0 1,642,656 -- 0 Other assets 6,433,921 1.22 78,522 6,104,824 0.82 50,280

Total capital employed 96,297,509 3.52 3,394,082 87,128,791 3.04 2,644,787

Credit institutions 7,386,781 (2.41) (177,704) 6,582,361 (1.41) (92,735) Customer deposits 49,068,198 (2.04) (999,142) 40,421,970 (1.57) (635,022) Capital market 22,785,085 (2.34) (533,081) 23,557,319 (1.56) (366,496) Repurchase agreements 5,313,818 (1.48) (78,796) 5,198,364 (0.70) (36,572) Other liabilities 5,772,118 (1.18) (68,096) 5,713,119 (0.96) (54,846) Shareholders' equity 5,971,509 -- 0 5,655,658 -- 0

Total funds 96,297,509 (1.93) (1,856,819) 87,128,791 (1.36) (1,185,671)

Net interest income 1.60 1,537,263 1.67 1,459,116 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Fees and commissions

Net fee and commission income reached a year-end total of €573.6 million, up 11.1% on the fi gure for 2010. This was due in large measure to the growth of service-related fees which increased by 21.6% overall, driven mainly by a very substantial 59.8% rise in fees for services related to securities and sizeable increases in fees for other services. Fees and commissions on loans and guarantees increased by 7.4% year-on-year, with good growth in fees related to avals and other guarantees which rose by 10.3%. There was also growth, albeit more modest, in commissions on sales of pension funds and insurance (3.6%), while fees and commissions on mutual funds fell by 6.2%,

refl ecting current market conditions. information performance and share Financial Banco Sabadell Annual Report 2011 Annual Report

€'000 2011 2010 % 11/10

Lending-related fees 103,105 97,829 5.4 Avals and other guarantees 87,160 79,034 10.3 Paid to other banks (3,693) (3,144) 17.5

Fees and commissions on loans and guarantees 186,572 173,719 7.4 33 Payment cards 69,165 63,285 9.3 Money transfers 38,525 35,448 8.7 Securities 70,895 44,358 59.8 Current account charges 34,730 33,243 4.5 Other services 54,205 43,597 24.3

Fees and commissions for services 267,520 219,931 21.6

Mutual funds 73,812 78,731 (6.2) Commissions on sales of pension funds and insurance 45,689 44,081 3.6

Fees and commissions related to mutual funds. pension funds and Insurance 119,501 122,812 (2.7)

Total net fees and commissions 573,593 516,462 11.1 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd General administrative expenses

General administrative expenses for 2011 totalled €1,145.1 million. This included non-recurring wage and salary costs of €29.0 million and a further €9.1 million in non-recurring conversion costs arising from the acquisition of Banco Guipuzcoano. As to recurring costs, personnel expenses rose by 8.6%. On a like-for-like basis, however (that is, with Banco Guipuzcoano included for the whole of 2010 and excluding the impact of the integration of Lydian Private Bank in the second half of 2011), recurring personnel expenses were down 3.0% on the year thanks to actions being implemented under the group’s operating effi ciency programme. Other recurring administrative expenses increased by 10.4%; however, cost

performance information performance and share Financial control initiatives ensured that, on a like-for-like basis and ignoring the effect of the April 2010 sale and leaseback transaction, these other recurring expenses were reduced by 4.9% compared with the previous year.

€'000 2011 2010 % 11/10

Wages and salaries (538,109) (500,147) 7.6 Social welfare costs (113,017) (100,290) 12.7 Other staff-related costs (91,474) (79,284) 15.4

Personnel expenses (742,600) (679,721) 9.3

IT and systems (58,007) (56,976) 1.8

Banco Sabadell Communications (20,277) (21,828) (7.1) Advertising (35,585) (30,919) 15.1 Premises. fi ttings and equipment (111,763) (95,396) 17.2 Printed material and offi ce supplies (7,013) (7,681) (8.7) Annual Report 2011 Annual Report Taxes (61,962) (54,271) 14.2 Other expenses (107,884) (89,263) 20.9

Other administrative expenses (402,491) (356,334) 13.0

Total general administrative expenses (1,145,091) (1,036,055) 10.5

Net provisions and impairment charges

€'000 2011 2010 % 11/10 34 Specifi c provisions (530,670) (750,866) (29.3) Exceptional appropriations (208,945) (202,000) 3.4 Additions due to new Bank of Spain rules (Circular 3/2010) 0 120,000 (100.0) Sub-standard risks 142,325 177,605 (19.9) Real estate (239,841) (492,958) (51.3) Banco Comercial Português (114,254) (88,363) 29.3 Impairment losses in guaranteed return funds (43,050) 0 -- Other impairment losses (37,166) (46,748) (20.5)

Sub-total (1,031,601) (1,283,330) (19.6)

Generic provisions (17,315) 315,256 --

Total net provisions and impairment charges (1,048,916) (968,074) 8.4 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd —Group businesses — — — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Banco Sabadell is at the head of Spain's sixth largest banking group. The group offers a full range of banking and fi nancial services through its different banks, brands, subsidiaries and associates. The group's development objectives are strongly focused on profi table growth and the generation of shareholder value through a strategy of business diversifi cation based on high returns, effi ciency and quality of service together with a conservative risk profi le, while maintaining high standards of ethics and professional conduct combined with sensitivity to stakeholders' interests. The Bank has a business model that fosters long-term customer relationships through constant efforts to promote customer loyalty and by adopting an initiative-based, proactive

Group businesses approach. The Bank offers a comprehensive range of products and services, competent, highly qualifi ed personnel, an IT platform with ample capacity to support future growth and a relentless focus on quality. The group has four main areas of business: Commercial Banking; Corporate Banking and Global Operations; Markets and Private Banking, and BS America. It has seven regional divisions with full responsibility for their areas, and several business- focused support teams.

Commercial Banking

Commercial Banking is the largest of the group's business lines. It focuses on providing fi nancial products and services to large and medium-sized businesses, SMEs, retailers and sole proprietors, Banco Sabadell individuals and professional groupings. Its high degree of market specialization ensures that customers receive a personalized service of the highest quality tailored to their needs, whether from Annual Report 2011 Annual Report expert staff throughout its extensive branch network or via other channels provided to support the customer relationship and give access to remote banking services. SabadellAtlántico is the group's fl agship brand with a footprint covering most of the country except for Asturias and León, an area served by the group's Banco Herrero brand. In the Basque Country, Navarre and La Rioja, the group is represented chiefl y through its SabadellGuipuzcoano network. Its SabadellSolbank brand is primarily aimed at meeting the needs of Spanish-resident foreigners from other European countries. It does this through a chain of specialist branches located throughout the Canary Islands, the Balearic Islands and the country's southern and 36 south-eastern coastal areas. Finally, ActivoBank is there to serve customers who prefer to do their banking exclusively by telephone or online.

Corporate Banking and Global Businesses

Corporate Banking and Global Businesses offers a range of products and services to large corporates and fi nancial institutions in Spain and abroad. Its activities embrace corporate banking, structured fi nance, corporate fi nance, development capital, international trade and consumer fi nance. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd The Bank’s major clients are served by a team of expert managers working from offi ces in Madrid, Barcelona, London, Paris and Miami. Its business model is based on a comprehensive offering of specialized fi nancing services and solutions, ranging from transaction banking to more sophisticated, tailor-made solutions in such areas as fi nancing, treasury services and corporate fi nance. In the area of structured fi nance Banco Sabadell has a team operating from offi ces in Madrid, Barcelona, the Basque country and Miami with more than 20 years' experience in developing and structuring long-term fi nancing packages, mainly by participating in loan syndications along with other banks. Sabadell Corporate Finance is a group subsidiary that

specializes in advising on mergers and acquisitions. It advises Group businesses corporate transactions such as company sales and acquisitions, mergers and MBOs, assists companies in fi nding new or replacement partners and provides independent value appraisals. Its capital markets business includes advising company fl otations, including new listings on MAB, Spain's alternative investment market. Banco Sabadell's development capital business focuses on two main areas: taking temporary equity positions in non-fi nancial companies; and investing in energy projects, with the accent on renewable forms of energy. In its international business the Bank aims to be present in the markets that are of most interest to companies actively engaging in foreign trade. It does this by having a network of foreign branches, subsidiaries and associates to support its customers' operations in other countries, and by maintaining working arrangements with more than 2,800 correspondent banks, thus Banco Sabadell ensuring a genuinely global coverage. Sabadell Fincom is a group subsidiary specializing in consumer fi nance. Its principal business is providing point-of-sale fi nance to 2011 Annual Report purchasers of cars, computer equipment, domestic appliances, health accessories and other products.

Markets and Private Banking

Banco Sabadell offers a comprehensive array of products and services to customers who entrust their savings and investments to its care. These range from researching investment alternatives to executing trades in securities and the active management and custody of asset portfolios. The unit combines a number of integrated areas of activity: Banco Urquijo; BS Banca Privada; 37 Investment, Products and Research; Treasury and Capital Markets; Securities and custodian services; and Bancassurance. Markets and Private Banking is thus well equipped to offer high value products and services designed to secure the best possible returns for customers through optimized investment processes, rigorous analysis and high quality, professional management. The Bank has a process for generating and approving products and services to ensure that the full range of offerings available to customers more than meets their requirements in terms of quality, profi tability and ability to meet market needs. Procedures and practices to identify customer risk profi les are kept under constant review, thus ensuring that any offer that is made and the WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd way assets are managed are appropriate to each risk profi le and comply with all rules for the protection of customers under the EU Directive on Markets in Financial Instruments (MiFID) and its transposition into Spanish law. The Bank’s determination to bring its product and service offering into line with customers’ needs enabled it to strengthen and improve its position in the securities brokerage business and as a manager of collective investment schemes, as well as in pension and retirement products, an effort that gained it the Euromoney magazine "best Spanish private bank" award for Banco Urquijo.

Group businesses BS America

The BS America operation comprises a number of business units, associated undertakings and representative offi ces which together handle the provision of fi nancial services in the corporate banking, private banking and commercial banking areas. The business is managed from Miami, where Banco Sabadell has a full-service international branch which has been in operation since 1993. During the year 2011 Banco Sabadell continued to pursue its aim of consolidating its domestic banking operation in the state of Florida. In August it took over the assets and liabilities of Lydian Private Bank after it went into receivership. The take-over will help to consolidate the local banking business model in Florida. It is the Bank's fourth corporate action in that state in a fi ve-year period which has seen the acquisition of TransAtlantic Bank in 2007, the take-over of BBVA's private banking business in 2008, and the Banco Sabadell purchase of Mellon United National Bank in 2010. Banco Sabadell holds equity interests in two banks, BanBajío and Banco BHD, which enjoy high reputations in the strategic Annual Report 2011 Annual Report markets of Mexico and the Dominican Republic respectively. Its representative offi ces in Mexico, Venezuela, Brazil and the Dominican Republic are also available to offer assistance and services to customers in the Americas region.

— — Commercial Banking in 2011 — —

38 In 2011, despite a highly complex operating environment, a major promotional effort aimed at attracting new customers and deposits resulted in increased market shares for the Bank. — — A record number of new customers signed up —Driving up market shares in the individual and business customer segments — Generating a positive balance of deposits and loans — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd €'000 2011 20101 Change y.o.y. (%)

Net interest income 1,275,890 1,343,669 (5.0)

Fees and commissions (net) 379,777 378,981 0.2 Other income 24,859 25,924 (4.1)

Gross income 1,680,526 1,748,574 (3.9)

Operating expenses (886,451) (946,009) (6.3)

Operating profi t 794,075 802,565 (1.1)

Impairment losses (404,316) (327,390) 23.5

Profi t before tax 389,759 475,175 (18.0) Group businesses

Ratios (%): ROE 9.3% 11.2% Cost:income ratio 52.7% 54.1% Loan loss ratio 6.6% 5.6% Loan loss coverage ratio 48.0% 55.7%

Business volumes (€Mn.) Loans and advances 55,788 57,115 (2.3) Customer accounts 54,188 51,018 6.2 Securities 8,611 8,776 (1.9)

Other information Employees 7,259 7,324 (0.9) Branches in Spain 1,322 1,412 (6.4)

1 For the sake of comparability, data for Banco Guipuzcoano have been included for the whole of 2010 (although for accounting purposes results for Banco Guipuzcoano only began to be incorporated from December 2010 onwards). Banco Sabadell

Net interest income attributable to Commercial Banking totalled €1,275.9 million in 2011, with pre-tax profi ts reaching €389.8 million. The ROE was 9.3% and the cost: income ratio was 52.7%. 2011 Annual Report Loans and advances totalled €55,788 million and customer funds stood at €54,188 million.

Market segments

Companies, businesses, government and local authorities

A key aspect of the work of the Bank's branches in 2011, as set out in the CREA master plan, was the campaign to win new customers. During the year 55,536 businesses were added as new 39 customers of Banco Sabadell, a number that was 40.2% up on the fi gure for 2010. The "Expansión Negocios" package proved to be a key aid to customer recruitment: since its launch in 2010 it has as been instrumental in capturing more than 97,000 new business customers (retail establishments, sole proprietors and micro-enterprises), increasing the relative importance of this sub- segment by 23.4%. Expansión Negocios offers in a single product a complete package of fi nancial solutions on favourable terms for business or professional people. It also offers an exclusive range of services including a legal help line and an exclusive web site offering goods and services for business or personal use. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd €'000 2011 2010 Change y.o.y. (%)

Net interest income 832,927 892,844 -6.7

Fees and commissions (net) 178,429 181,477 -1.7 Other profi ts/losses 4,784 6,132 -22.0 Gross income 1,016,140 1,080,453 -6.0

Business volumes Loans and advances (€Mn.) 41,911 43,341 -3.3 Customer funds (€Mn.) 25,987 24,367 6.6 Securities (€Mn.) 4,640 4,679 -0.8

Loan loss ratio 7.87% 6.44% Group businesses

Banco Sabadell once again maintained its leading position in serving large corporate clients, which accounted for 65.1% of customers in the business and government segment – a clear sign of the added value afforded by a network of dedicated business branches. A key priority in the group's sales efforts was attracting deposits and other customer funds, which saw an increase of €1,610.6 million, a rise of 8.7%. Time deposits showed excellent growth, especially the "Depósito Flexible Empresas" and "Pagaré BS" products for businesses. Once again, business protection insurance was of key importance in our drive to promote customer loyalty and deepen customer relationships. During the year policies sold to businesses and to retailers increased by 51.3% and 7.8% Banco Sabadell respectively, compared with the previous year. In the area of high value added working capital products for businesses such as specialized fi nance, efforts were concentrated Annual Report 2011 Annual Report on the small and medium-sized business segment, thanks to which lending volumes grew more than 11.5% year-on-year. With the aim of facilitating customers' access to sources of fi nance, numerous agreements were concluded with offi cial bodies at both national and regional level, involving the granting of loan fi nance amounting to €2,292.5 million overall. This included participating in Offi cial Credit Institute (ICO) schemes in which the Bank secured a 10.2% share, making it the fi fth largest provider of funds under ICO schemes. The programmes with the highest take-up were the ICO-sponsored Sustainable Investment, Internationalization, Investment and Liquidity schemes, in which the Bank participated with shares of 13.5%, 16.7%, 10.6% and 40 8.4% respectively. During the year agreements of a similar kind were concluded with the European Investment Bank (EIB), the Technological and Industrial Development Centre (CDTI) and a number of Spanish regionally-based organizations. The Bank also continued to work actively to promote international trade and offer guidance to businesses. As part of this effort it organized training days that were attended by over 3,000 fi rms. Activities of this kind reinforced the Bank's position as a leader in foreign trade, with both existing and potential customers. A good indication of this was the growth in its share of the export and import documentary credit businesses compared with 2010, with year-end market shares of 23.4% and 13.1% respectively. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd In 2011 Banco Sabadell was a leading provider of medium- and long-term fi nance, especially in the areas of leasing, sale and leaseback, marine fi nance and fi nance for plant and equipment expansion and renovation. It was particularly supportive of any long-term fi nance linked to energy effi ciency, such as by encouraging the use of hybrid vehicles or energy-saving lighting in its leasing and equipment hire businesses. The year saw further development of a Banco Sabadell project aimed at government agencies. A team of dedicated specialists was set up to service central, regional and local government all over the country, based on a targeted, high value-added service offering. The results achieved were in line with targets for the year, both in terms of the number of new customers recruited and the

amount of business generated. Group businesses

Individual customers

2011 was the fi rst year of the Bank's 3-year master plan, “CREA”, a strategic programme setting ambitious growth and customer service targets with the aim of enhancing Banco Sabadell's attraction as the bank of choice for individual customers.

€'000 2011 2010 Change y.o.y. (%)

Net interest income 442,970 450,825 -1.7

Fees and commissions (net) 201,348 197,504 1.9 Other profi ts/losses 20,075 19,792 1.4 Gross income 664,393 668,121 -0.6 Banco Sabadell

Business volumes Loans and advances (€Mn.) 13,877 13,774 0.7 Annual Report 2011 Annual Report Customer funds (€Mn.) 28,201 26,651 5.8 Securities (€Mn.) 3,971 4,097 -3.1

Loan loss ratio 3.90% 3.80%

In line with these aims, recruiting and developing multi-product relationships with customers were key themes in the group's promotional activities. A vital part of this, as in other years, was the work done to enhance the Bank’s public profi le. A good example of this effort was an advertising campaign to promote the "Cuenta Expansión" account, featuring football star Pep Guardiola. In the fourth quarter of the year the emphasis shifted to a campaign based on the theme "Talking about the future", featuring 41 personalities from different areas of activity and highlighting the importance of saving for the long term. To support the campaign the Bank launched a “virtual planner” tool designed to help customers plan their long-term savings. The offer of a savings aid of this kind was a fi rst in the Spanish market. The combination of these awareness-raising efforts and branch level sales initiatives resulted in 2011 being the Bank’s most successful year ever in terms of growing customer numbers: new individual customers saw an increase of more than 286,500, 42.9% up on the fi gure for 2010. In sales initiatives directed at the personal customer market segment the emphasis was on capturing on-balance sheet WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd deposits, which increased by 2.8% over the year. As in previous years, major efforts were invested in the quality of service provided by the personal banking team as evidenced by the European Financial Advisor (EFA) certifi cate, an assurance of high professional standards in consultancy and personal fi nancial advice. For customers with middle-range incomes, the main focus was on attracting new customers and increasing cross-sale ratios based on the “Cuenta Expansión”, a feature-rich current account to which account holders have their pay credited directly, and offering transaction banking on highly competitive terms. The attractions of this product resulted in 150,000 new accounts being opened during the year and contributed to a 10.7% increase

Group businesses in direct debit mandates as well as increased cross-sale ratios and per-customer returns. New deposits became a central theme of the Bank’s marketing programme. Overall deposits for this market segment reached a year-end fi gure of €11,810 million, 25.4% up on the fi gure for 2010. The Bank was also a very active provider of mortgage fi nance, both for property owners and for real estate investors and developers (the latter accounting for 54.0% of the total). The Bank’s share of this market increased by 17.4% year-on-year (data for the year to September 2011). Finally, as part of an initiative launched the previous year, the Bank continued to promote the transfer (“subrogation”) of mortgages from property developers to property buyers under the “Adapta” and “Solvia” programmes, both of which offer fi nance to property buyers on highly advantageous terms. Short-term fi nance for individual customers received a boost Banco Sabadell from the launch of “Línea Expansión”, a simple way of giving customers access to cash advances. In the area of consumer loans, a number of agreements were entered into with business Annual Report 2011 Annual Report schools, including IESE, ESADE and the Instituto de Empresa, to offer loans to persons wishing to study for Master’s degrees. The credit and debit card business showed very signifi cant growth, with a 22.2% year-on-year increase in revenue and a 20.5% increase in the number of cards in use, primarily on the back of growing customer numbers. The Bank’s share of the EPOS market was up by 39.2% on the previous year, reaching 7.64%. A valuable new service offering for the Bank’s customers was Finanzas Personales, a tool that lets users manage their own banking information in a fast, simple and user-friendly way. This is consistent with the Bank’s policy of making customers’ handling of their day-to-day banking as easy and simple as possible. 42 Another service launched during the year, to be offered mainly through the SabadellSolbank branches, was targeted at Spain’s resident expatriate community. The “Regular Transfer Plan” is exclusively for UK citizens, who make up 43% of the group’s foreign customers, and is designed to make it easier for British residents to have regular automatic transfers sent from the UK to their accounts in Spain without having to make special arrangements with their UK bank. At the end of the year SabadellSolbank had a 160,000-strong customer base (7% up on the year before) having added 22,320 new customers during the year, and had grown the assets under its management by over €3,940 million. Finally, ActivoBank continued to focus on wealth management, handling assets of more than €1,411.0 million. Deposits WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd and mortgage fi nance grew by 3.7% and 12.1% respectively. ActivoBank clients at the close of the year numbered 49,240.

Banco Herrero

In 2011 Banco Herrero celebrated one hundred years of trading as a commercial brand. It made its appearance in Oviedo, Asturias, in 1911, having started life as a banking house in the municipality of Villafranca del Bierzo in the province of León. In 2011, the Herrero brand was continuing to increase in strength and vitality a decade after being merged with Banco Sabadell. Activities to develop business resulted in 30,640 new

individual customers and 2,954 business customers, a rate Group businesses of new business development never previously achieved. New customer sign-ups averaged 2,800 a month over the year thanks to a powerful product and service offering, the superior quality of service offered to customers, and the reputation and trust enjoyed by the Banco Herrero brand among families and businesses in Asturias and León. Lending was up by 3.1%, reaching a year-end fi gure of €3,765 million. This was achieved despite a general pattern of reduced lending in the market as a whole as fi nancial institutions showed less inclination to lend and demand remained lacklustre in a challenging economic environment. Despite this, Banco Herrero continued to support its customers in their business ventures and to offer credit, but without any relaxation of its rigorous risk analysis and selection procedures. A sign of this positive stance was the sizable shares of ICO-subsidized loans arranged by Banco Herrero in Asturias and León − 48% and 20% respectively. Its Banco Sabadell loan-loss ratio at the end of the year was 2.9%, one of the lowest in the Spanish banking industry. Customer deposits were up by 7.5%, reaching a year-end total 2011 Annual Report of €6,668.5 million. Once again, in a context of fi nancial market turbulence time deposits were the most popular option, increasing by 15.5% year on year. The various events organized to coincide with the Banco Herrero centenary clearly showed, once again, the high degree of brand awareness and prestige enjoyed by the Herrero brand among its customers and the wider community in Asturias and León. For example, the Astorga Chamber of Commerce chose Banco Herrero to receive its Gold Medal; the Marino Gutiérrez Foundation awarded it its special annual prize, and the jury appointed by Vivir Oviedo magazine chose it for the title of “Oviedo Personality of the Year”. 43 A joint initiative by Banco Herrero and the APQ (Asturias Patria Querida) Association during the year resulted in the setting up of the “Álvarez-Margaride” prize for people, fi rms or organizations whose business activities showed a close link with the Asturias region over time. The fi rst person to be awarded the prize was Juan Albargonzález González, the head of a major Asturian group of companies. Other activities in the cultural and social spheres included four new exhibitions at the Banco Herrero Hall in Oviedo, organized as part of an agreement between the bank and the Asturian Government’s Department of Culture. Each year the Banco Herrero Foundation awards a prize to an economist below the age of 40 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd judged to have done outstanding work in the areas of economics or business and social studies. The prize was won this year by Marta Reynal, the holder of a PhD from the London School of Economics and a lecturer at Barcelona’s Pompeu Fabra University.

Banco Guipuzcoano

During the year Banco Guipuzcoano was integrated into the Banco Sabadell group. The operation made considerable demands on the expert staff of both banks, who carried out a high-quality exercise in organizational and technological terms and completed the integration in record time. The integration involved a

Group businesses reorganization of the Bank’s Central Services Division and the roll-out of Banco Sabadell systems, processes and business development tools to all Banco Guipuzcoano branches, resulting in signifi cant increases in promotional activities and customer numbers. Banco Guipuzcoano now operates under the SabadellGuipuzcoano brand name. The brand was launched on 9 June in San Sebastián and has continued to serve its customer franchise in the region comprising the Basque Country, Navarre and La Rioja. One of the most visible expressions of the bank’s historical links with the region and the local community was its programme of public relations and sponsorship in the cultural and social arena. Thus, SabadellGuipuzcoano continued to host or co-sponsor events such as lectures on cultural topics in partnership with the Bilbao daily El Correo, a programme of Banco Sabadell concerts with the Kursaal Foundation and the San Sebastián “Quincena Musical” event. It also continued to work with the Guipúzcoa Chamber of Commerce in sponsoring the “Faro Annual Report 2011 Annual Report Internacional” trade promotion fair and the Guipúzcoa trade prizes. New sponsorship initiatives included support for the San Sebastián Gastronomy Fair, the Basque Enterprise Evening in Bilbao and sporting events such as Guipúzcoa Basket.

Remote Channels

Banco Sabadell is a recognized leader in putting technology to work in banking. New technology applications, however, will not be successful unless realized entirely from a customer’s perspective. The Bank is convinced that a paradigm shift has 44 taken place: interaction with customers used to be bilateral, but now customers are talking about the Bank in blogs and on social networking sites in a totally unrestricted way and producing multiple interactions with a single click of the mouse. Customers can connect to networks anytime, anywhere. And they can move freely from one channel to another at any stage when considering whether to approach a fi nancial institution or sign up for a product. Many of these interactions take place outside bank branches, but a relationship based on trust, so important in the fi nancial services industry, is highly dependent on personal contact. What customers want, therefore, is channels that mesh perfectly together and are not over-impersonal. This has led Banco Sabadell to re-think its customer relationship model while WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd safeguarding what is most essential to its value proposition: quality of service. Banco Sabadell is working to let customers experience a new way of doing banking that embodies everything that the new technologies have to offer and that customers are already using on a daily basis, without allowing any distance or remoteness to come between the customer and the Bank. Our slogan “it’s not remote banking – it’s taking your bank with you” sums up how we have transformed our way of staying in touch with customers. Our 2011 online campaign to explain the various options we are offering our customers was recently described by Financial Brand magazine as “one of the best representations of what banking should be in the modern age, from the consumer’s point of view”. This is what we

have set out to achieve. Group businesses Banco Sabadell is continuing to work on improving the customer experience with the use of new channels and integrating them with traditional ones. We are working to convert our branches into a multi-channel network so that employees and customers can interact in a number of different ways; at the same time, we are developing an easier, simpler kind of banking, where service is what really makes the difference.

Branch Network

Banco Sabadell ended the year with a total of 1,382 branches. Of these, 948 were operating under the SabadellAtlántico name; 110 were SabadellGuipuzcoano branches in the Basque Country, Navarre and La Rioja; 179 comprised the Banco Herrero network in Asturias and León; 15 were Banco Urquijo; 83 were Banco Sabadell SabadellSolbank; 2 were Corporate Banking branches and 2 were ActivoBank customer service centres. The international network comprised a total of 43 branches and offi ces. 2011 Annual Report

45 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Region Province Sabadell Sabadell Banco Banco Sabadell Sabadell Banco ActivoBank Sabadell Total Atlántico Atlántico Herrero Herrero Solbank Guipuzcoano Urquijo Atlántico Business Business Corporate

Andalucía Almería 5 2 7 Cádiz 12 1 2 15 Córdoba 4 4 Granada 5 1 2 8 Huelva 2 1 3 Jaén 3 3 Málaga 29 1 27 1 58 Seville 21 1 1 23

Total, Andalucía 81 4 34 2 121

Aragón Huesca 6 6 Teruel 1 1

Group businesses Zaragoza 17 1 1 19

Total, Aragón 24 1 1 26

Asturias Asturias 143 4 147

Total, Asturias 143 4 147

Balearic Islands Baleares 22 1 14 1 38

Total, Balearic Islands 22 1 14 1 38

Basque Country Álava 3 1 7 11 Guipúzcoa 5 1 46 1 53 Vizcaya 11 1 42 1 55

Total, Basque Country 19 3 95 2 119

Canary Islands Las Palmas 8 1 6 15 Tenerife 5 7 12

Total, Canary Islands 13 1 13 27

Cantabria Cantabria 4 1 5

Banco Sabadell Total, Cantabria 4 1 5

Castile- Albacete 5 5 La Mancha Ciudad Real 3 3

Annual Report 2011 Annual Report Cuenca 2 2 Guadalajara 3 3 Toledo 6 6

Total, Castile-La Mancha 19 19

Castile-León Ávila 1 1 Burgos 4 1 5 León 31 1 32 Palencia 2 2 Salamanca 3 3 Segovia 1 1 Soria 1 1 Valladolid 9 1 1 11 Zamora 4 4

46 Total, Castile-León 25 2 31 1 1 60 Catalonia Barcelona 288 12 1 1 1 303 Girona 49 1 50 Lleida 21 1 22 Tarragona 25 1 26

Total, Catalonia 383 15 1 1 1 401 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Region Provence Sabadell Sabadell Banco Banco Sabadell Sabadell Banco ActivoBank Sabadell Total Atlántico Atlántico Herrero Herrero Solbank Guipuzcoano Urquijo Atlántico Business Business Corporate

Community Alicante 24 2 19 45 of Valencia Castellón 16 1 1 18 Valencia 49 2 1 1 53

Total, Community of Valencia 89 5 20 2 116

Extremadura Badajoz 2 2 Cáceres 1 1

Total, Extremadura 3 3

Galicia A Coruña 7 2 1 10 Lugo 6 6 Ourense 3 3 Pontevedra 9 1 10 Group businesses Total, Galicia 25 3 1 29

La Rioja La Rioja 4 1 4 9

Total, La Rioja 4 1 4 9

Madrid Madrid 161 9 2 1 1 174

Total, Madrid 161 9 2 1 1 174

Murcia Murcia 18 1 2 1 22

Total, Murcia 18 1 2 1 22

Navarre Navarra 10 1 11 1 23

Total, Navarre 10 1 11 1 23

Total, branches in Spain 900 48 174 5 83 110 15 2 2 1.339 Banco Sabadell

Professional and occupational groups. Agent partners

Banking services targeted on professional and occupational 2011 Annual Report groupings and the use of agent partners and associates continued to play a key role in winning customers in 2011, whether individuals, retail establishments or professional practices. At the close of the year a total of 1,349 partnership agreements were in existence with professional associations and colleges, with a combined membership of over 1,086,888, of whom 206,712 were already customers of the Bank. The business associated with this market amounted to €10,855 million. Of particular signifi cance was the signing up of 60,000 employees and senior managers of companies that were business customers of the Bank, as well as more than 40,000 new customers from the professions. 47 Banco Sabadell’s network of agent partners, particularly in the role of “collaborating agent”, was once again a key channel for winning new business. New customer introductions amounted to over 18,000 at the end of the year. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd International network

At 31 December 2011 Banco Sabadell's presence in foreign markets was as follows.

Country Branch Representative Associate Subsidiary Offi ce

Europe Andorra 1 France 2 Portugal 1 United Kingdom 1 Turkey 1

Americas Group businesses Brazil 1 Chile 1 Dominican Republic 1 1 Mexico 1 1 USA 1 1 Venezuela 1

Asia China 2 Hong Kong 1 India 1 Singapore 1 United Arab Emirates 1

Africa Algeria 1 Morocco 1

Banco Sabadell Total 5 12 4 2

ATM network Annual Report 2011 Annual Report

In the course of the year more than 21.6 million transactions were carried out on Banco Sabadell's network of 1,612 self-service cash machines, including the Banco Guipuzcoano network. 81.6% of cash withdrawals of less than €600 were made on ATMs, up from 79% in 2010. The Bank continued the ATM modernization programme it began in 2009. This involved 422 separate interventions in which 187 machines were replaced and another 170 were upgraded. The result was a continuous improvement in the service available from the ATM network, whose latest-generation machines are signifi cantly more ergonomic and user friendly, featuring large- 48 format touch screens, headphone jacks and higher operating speeds. The year saw further operational and service improvements being made to the ATM network, including speedy cash withdrawals and the ability to apply for loan and insurance products directly via the ATM. Another development was the addition of a smart deposit function to the Bank’s “Instant Bank” self-service tills. This means that banknotes can be deposited directly into the machine without having to be sorted or placed in envelopes. Finally, a pilot scheme was carried out in which a number of special ATMs for updating savings books were installed in the banking halls at eight branches. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Remote Access Channels

BS Online At the end of 2011 more than 1,200,000 individual customers and 275,000 businesses had signed up for the group’s online banking service. The overall fi gure was more than 25% up on the year before. A total of 350 million transactions were performed online, an annual increase of 16%. The proportion of customers using online services, at 81%, showed a considerable improve- ment compared with the 76.3% for the previous year, and BS Online continued to contribute to improving the effi ciency of the Bank’s service to its customers. In service availability, BS Online was again among the four

best online banking services according to measures produced by Group businesses Eurobits, the specialist online banking monitoring organization. In the course of the year a number of new capabilities were introduced. These included the Personal Finance service, a tool allowing customers to keep close track of their household economy with the help of graphical representations and comparative charts, and Correspondence Online, a feature that lets customers examine all documents recording their transaction history with the Bank, offering speedy and secure access to banking information. By the end of the year 46.5% of customers were receiving most of their correspondence from the Bank by this means. A number of actions were also taken to make certain functions more user-friendly and to further develop our system for confi rming payment instructions by entering a second pin number on a mobile phone, thus improving system security and fraud prevention. Halfway through the year the home pages of the Bank’s Banco Sabadell websites were redesigned and given a new look by making use of the possibilities offered by new video digital formats. Annual Report 2011 Annual Report

Mobile banking – BS Móvil Users of the group’s BS Móvil website increased by 170% and totalled 128,000 by the end of the year. At the close of the year more than 18% of active online banking users were also using their mobiles to access the service. The number of users of the SMS alerts service increased by 50%. SMS messages were received by more than 750,000 users on their mobile phones and more than 18.5 million messages were sent, an increase of 153.6% compared with the number sent the previous year. In 2011 the Bank continued with a plan to develop capabilities 49 in native applications for phone terminals and tablets running on key platforms such as iPhone, iPad, Android, BlackBerry and Windows Phone. A new “instant check” service was also launched, allowing customers to pay in cheques by scanning them on their mobile phones, and a Property Search feature was introduced to help homebuyers locate suitable properties. As part of its strategy of making mobile services more widely available, the Bank launched a SoLVIA mobile application which lets users view the properties being offered by SoLVIA that are closest to where they are, and enable potential purchasers to get information and arrange visits. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Branch Direct The year 2011 saw further development of the plan to transform the Contact Centre by extending its traditional role as a cus- tomer help and support centre and signifi cantly expanding its sales orientation. Thus, in the course of the year Branch Direct increased the resources available for attracting new customers and for signing them up for remote banking products; it also opened up new channels on social networking sites, such as a helpdesk on Facebook and a help page on Google+ with 24/7 availability as in the case of other Branch Direct customer support services. During the year Branch Direct received and handled more than 1,250,000 enquiries, up 12% on the previous year. The telephone

Group businesses helpline achieved a service level (calls answered as a proportion of calls received) of 95.3% and a response rate (calls answered in less than 20 seconds) of 83.7%

Social Networks Banco Sabadell continued with the strategy launched in 2010 of maintaining an active presence on social networking sites with the aim of exploiting these channels as points of contact with customers. It also made use of them to support sales campaigns and hold networking sessions. In the course of the year new networks and services were added, including a presence on Google+ (Banco Sabadell was the fi rst Spanish bank to open a service on this network) and the “Can we help you?” service on Facebook (available 24 hours a day) in addition to the channels introduced the previous year (Twitter, Banco Sabadell Facebook, Customer Suggestions). Banco Sabadell was also one of the fi rst Spanish business organizations to publish a guide on using social networks for its Annual Report 2011 Annual Report employees. The guide can be viewed on the main group website, which also provides links and information on the Bank’s social networking activities (such as the BS Press blog, the video channel in YouTube, an image gallery in Flickr, and The Banco Sabadell Corporate Blog). At the end of 2011 the Bank had 13,500 followers on social networking sites. Banco Sabadell’s presence on the main social networking sites can be viewed on socialmedia.bancsabadell.com.

— 50 — Corporate Banking and Global Businesses in 2011 — —

Corporate Banking

Banco Sabadell continued to be one of the main banks actively operating in this market and thus strengthening the group's position among large corporate clients. The year 2011 saw acti- vity being maintained at levels similar to those of previous years, with a strong focus on deepening customer relationships while controlling capital consumption, and on attracting new customers while maintaining stringent criteria in approving/ WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd renewing loan and credit facilities. From the point of view of geo- graphic diversity, it is signifi cant that for the second consecutive year almost 20% of the income generated by the unit originated from our branch teams outside Spain (Paris, London and Miami). Continuing high levels of activity, combined with repricing of existing credit risk in line with market conditions, ensured that we were able to boost net interest income by as much as 8% as well as achieve an excellent result in fee and commission generation. This, along with lower costs, helped us to raise our operating profi t by 13%. — —Good revenue growth

— Increased market shares in international trade Group businesses — —

Loan delinquency rates remained at the historically low levels reached at the end of last year and loan loss provisions had practically no impact on results. This made it possible to end the year with a 68% increase in our pre-tax profi t.

Structured fi nance

Banco Sabadell continued to take a leading role as a top Spanish provider of structured fi nancing solutions and was a participant in most of the key fi nancing deals completed in 2011. Many of these Banco Sabadell €'000 2011 2010 Change y.o.y. (%)

2011 Annual Report Net interest income 165,901 153,677 8.0

Fees and commissions (net) 26,658 17,426 53.0 Other income 9,203 12,055 (23.7)

Gross income 201,762 183,158 10.2

Operating expenses (21,066) (23,352) (9.8)

Operating profi t 180,696 159,806 13.1

Impairment losses 2,570 (50,991) (105.0) Other gains/losses 0 0 0.0

Profi t before tax 183,266 108,815 68.4 51 Ratios (%): ROE 16.3% 9.7% Cost:income ratio 10.4% 12.7% Loan loss ratio 0.7% 1.1% Loan loss coverage ratio 86.7% 84.5%

Business volumes (€Mn.) Loans and advances 11,344 10,923 3.9 Customer accounts 4,207 4,261 (1.3) Securities 444 1,106 (59.9)

Other information Employees 94 89 5.6 Branches in Spain 2 2 0.0 Branches abroad 2 2 0.0 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd were corporate operations or project fi nance deals, mainly in the fi eld of renewable energy, In a further move to grow the group’s international footprint, the year 2011 saw it expanding its presence in the US market, especially in renewable energy and long-term infrastructure developments for Spanish and foreign promoters. Growth plans in Europe, France and the UK also continued apace with the Bank taking part in project fi nance and corporate transactions. Overall, structured fi nance deals in which the Bank took part numbered 105, generating revenues that were up by 12% on the year before. In the last quarter of the year the Bank adopted the Equator Principles (a series of voluntary guidelines to identify, evaluate

Group businesses and manage social and environmental risks in project fi nance transactions) and will be applying these principles in its fi nancing deals for new projects all over the world where the project capital costs are more than USD 10 million.

Corporate Finance

Key developments for Banco Sabadell as a provider of advisory services on mergers and acquisitions included the successful negotiation of mandates in acquisition, sale and capital raising transactions. As Spanish companies moved into foreign markets, the Bank saw a growing number of cross-border transactions of which more than 50% involved companies in other countries. In its capital market advisory role, Banco Sabadell was a successful participant in one of four IPOs on Spain’s Alternative Banco Sabadell Stock Market (MAB).

Annual Report 2011 Annual Report Development capital

Aurica XXI, S.C.R., S.A.

Aurica XXI (a company subject to the “simplifi ed regime” for share issues by venture capital companies) is the vehicle through which Banco Sabadell supports the growth of well-managed non-fi nancial companies with strong, industry-leading positions and a good presence in foreign markets, by providing temporary capital and active assistance. The year 2011 saw active management of the existing portfolio, 52 with several of the company's investees expanding through foreign acquisitions. New additions to the portfolio included Aurica's fi rst investment outside Spain: a 5% stake in Laboratoires Dermatologiques d’Uriage, a French pharmaceuticals fi rm.

Sinia Renovables, S.C.R, S.A.

Through its subsidiary Sinia Renovables (a company subject to the “simplifi ed regime” for share issues by venture capital companies), Banco Sabadell takes temporary shareholdings in companies in the renewable energy sector. Banco Sabadell is fi rmly committed to renewable energy and particularly wind farm developments, where WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd it is considering greater geographical diversifi cation of its activity. It is also looking to invest in other renewable sources of electricity generation such as thermosolar, photovoltaic, cogeneration or mini hydro-electric plants. Key new investments in 2011 included taking a 50% shareholding in Eólica Mirasierra S.L., in Palencia; a complete buyout of Parque Eólico Loma del Capón S.L., in Granada; and a 62.1% stake in Eólica Sierra Sesnández, S.L. in Zamora. The latter purchase was made through Emte Renovables, a private equity company owned jointly with the infrastructure group Comsa Emte. Other developments in 2011 included the formation of a new company, Atalanta Catalonia 2011, S.L., to fi nance the development of mini-wind farms in Catalonia, with Banco Sabadell

taking a 25% stake; and the acquisition of an additional 19% Group businesses holding in Hidrodata as a result of a merger in which Hidrodata absorbed its sister companies in the EISSL group, bringing Sinia's shareholding to 45.75%.

International trade

In 2011, as in previous years, the group's international trade business continued at a high level, with operations involving direct links with more than 250 correspondent banks across fi ve continents. Cross-border payments handled during the year amounted to some €1,472 million. Based on data for transactions handled via SWIFT, good market shares were achieved of 16.4% in import documentation from remitting correspondent banks and 23.5% in export documentary credits, representing increases of 71 and 13 basis points, respectively, Banco Sabadell compared with the fi gures at the end of 2010. The Bank's international branches continued to focus on and tailor their operations in markets of special interest to Spanish 2011 Annual Report companies actively engaging in foreign trade, whether in the import/export fi eld or as part of their foreign investment activities. The Bank's Casablanca branch, the fi rst to be opened by a Spanish bank in Morocco, made good progress during the year. It is ideally positioned to assist Moroccan businesses with share-owning interests or trading links in Spain by providing them with transaction banking and fi nancial solutions of the fi rst order. Banco Sabadell has long been a pioneer in building a presence in key foreign markets such as China (where it has two offi ces, in Beijing and Shanghai), India, Singapore, Turkey, the United Arab Emirates and Algeria. 53 Its representative offi ces have become key reference points for Spanish businessmen in all these markets.

Consumer Finance: Sabadell Fincom

Business activity at BanSabadell Fincom continued to expand in 2011, with increases over previous years in both net revenue and operating income, the latter rising by as much as 33%. It also made further progress in making its debt recovery more effi cient, thus reducing loan delinquencies and ensuring that doubtful loans were fully provided for. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd During the year a total of 56,000 new loans were arranged at 4,000 points of sale all over the country. This new business resulted in top-line revenues for 2011 of €250 million. The company continued to deliver effi ciency improvements thanks to highly skilled personnel, upgraded technology tools and success in managing down operating costs. All this helped the company to bring its cost:income ratio down to below 37%.

— — Markets and Private Banking in 2011 —

Group businesses —

Banco Urquijo

Banco Urquijo is one of the most highly regarded and well- established names in the Spanish banking market. With its private banking-centred business model, it is characterized by its focus on the customer and by its specialist advisory and integrated wealth management services. In 2011 it further strengthened its leading position as Spain's best specialist private bank, as confi rmed by its successful candidature for the Best Private Banking Awards conferred each year by Euromoney magazine to institutions specializing in the management of large fortunes. The magazine once again acknowledged the success of the Urquijo business model and paid tribute to the quality of its services within its specialist market. Banco Sabadell For the second time Banco Urquijo won the highest accolades as Best Spanish Private Bank and for the Best Global Private Banking Service. Annual Report 2011 Annual Report — —Banco Urquijo – another year of leadership as Spain's best specialist private bank —

During the year it successfully responded to the needs of the market and earned a pre-tax profi t of €19.3 million, a 40.5% increase on the previous year's fi gure. Top-line revenues were €8,710 million, with customer deposits and funds under 54 management totalling €7,911 million and loans and advances of €799 million. The loan loss ratio fell to 0.91%.

BS Banca Privada

Banco Sabadell caters for the needs of its Private Banking clients by delivering a high quality, highly specialized and personalized service and by proposing investment solutions to suit their risk profi le. Assets under management totalled €17,727 million, with the Madrid and Catalan regions accounting for 59% of this amount. Client numbers increased to reach 15,000 at the close of the year. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd €'000 2011 2010 Change y.o.y. (%)

Net interest income 27,753 26,888 3.2

Fees and commissions (net) 15,978 19,173 (16.7) Other income 6,598 3,503 88.4

Gross income 50,329 49,564 1.5

Operating expenses (32,632) (35,029) (6.8)

Operating profi t 17,697 14,535 21.8

Provisioning expense (net) 1,583 (125) -- Impairment losses 86 (191) -- Other gains/losses (41) (466) (91.2) Group businesses Profi t before tax 19,325 13,753 40.5

Ratios (%): ROE 6.2% 4.6% Cost:income ratio 53.7% 59.7% Loan loss ratio 0.9% 2.3% Loan loss coverage ratio 219.7% 79.6%

Business volumes (€Mn.) Loans and advances 799 1,029 (22.4) Customer accounts 2,956 3,252 (9.1) Securities 4,955 5,146 (3.7)

Other information Employees 207 219 (5.5) Branches in Spain 15 14 7.1 Banco Sabadell

The Bank focused on growing its business in different market segments by boosting its service capabilities in each segment. Signifi cant progress was made, for example, in the Institutional 2011 Annual Report and Corporate Client segment, to which it aims to bring a unifi ed, organized, comprehensive approach and a well-coordinated range of available services, so as to position Banco Sabadell as a market leader serving more than 1,200 clients. Other important segments addressed were Sports & Entertainment, serving elite members of the sporting and entertainment worlds, Religious Institutions, and Company Pension/Retirement Plans. Wealth management advice acquired a special importance as wealth taxes were reintroduced in some of Spain's autonomous regions for the years 2011 and 2012. An initiative that was welcomed by the private banking team was the launch of BP Learning, a virtual community whose aim is to foster and reward 55 the sharing of knowledge and experience within the team.

Investment, Products and Research

Banco Sabadell has a team of experts specializing in fi nancial market research and analysis and in drawing up asset allocation strategies to guide investment decisions, planning and developing investment products and researching the various types of asset in which customers may wish to invest. During the year product development at Banco Sabadell continued to focus on offering customers high-yielding investment WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd products based on views informed by asset allocation strategy. Activity was intensifi ed in the design of new products and the review of existing ones. A new system for tracking business activity in different products was put into operation. In the latter part of the year a study group was set up to seek out new product ideas and ways of positioning the Banco Sabadell product catalogue in the medium and long term. In the area of research, the team’s stock market research capabilities were expanded and its work was extended to include the credit markets. There was further enhancement of the reports service, which provides customers with Banco Sabadell's view of stock market trends and business sectors to enable them to take informed investment decisions.

Group businesses The group’s asset management business, which is carried on by the units responsible for managing collective investment schemes (CIS's), combines asset management with the selling and operation of CIS's; it also manages investments for other Banco Sabadell businesses that hold portfolios of assets. The gross income attributable to asset management totalled €29.1 million in 2011 and a pre-tax profi t was posted of €9.7 million. The ROE was 14.7% and the cost: income ratio was 66.6%. Banco Sabadell Annual Report 2011 Annual Report

€'000 2011 2010 Change y.o.y. (%)

Gross income 29,122 32,942 (11.6)

Operating expenses (19,410) (18,651) 4.1

Operating profi t 9,712 14,291 (32.0)

Other gains/losses 0 (13) -- 56 Profi t before tax 9,712 14,278 (32.0)

Ratios (%): ROE 14.7% 24.5% Cost:income ratio 66.7% 56.6%

Business volumes (€Mn.) Assets under management in CIS's 6,737 7,422 (9.8) Total assets in CIS's including schemes sold but not managed 8,024 8,853 (9.5)

Other information Employees 153 158 (3.2) Branches in Spain ------WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd At the close of 2011 total assets under management by the Spanish-domiciled mutual fund industry as a whole, including real estate investment funds, totalled €132,266.5 million. The volume of Spanish-domiciled mutual fund assets under management by the Banco Sabadell group stood at €5,193.5 million at the close of the year. The group’s offering of guaranteed return funds was maintained during the year and return guarantees were issued in respect of nine guaranteed funds totalling €1,176.9 million at 31 December 2011. Guaranteed funds as a whole accounted for €2,030.5 million worth of assets at the close of the year. Assets in guaranteed funds increased in importance relative to the total value of fi nancial assets under management in funds subject to

Spanish jurisdiction, rising to 48.3% from 40.1% the year before. Group businesses Sabadell BS Inmobiliario FII, a real estate fund launched in early 2004, ended the year with assets of €990.2 million and 16,389 fundholders. It remains a Spanish market-leading vehicle for investment in real estate assets. In 2011 Banco Sabadell mutual funds earned a number of accolades and distinctions. InverSabadell 70, F.I. was awarded an A quality rating by rating agency and mutual fund analysts Standard and Poor’s for management quality, while Sabadell BS Rendimiento Institutional, F.I. and Sabadell BS España Bolsa, F.I. earned praise for consistently good results over the last fi ve years and were again given an A rating. Standard and Poor’s also reviewed and confi rmed its “high” rating for quality of management for mutual funds which had already been quality rated. A total of eight funds managed by BanSabadell Inversion were rated high quality. Four of these also earned a rating for 5-year Long-Term Fund Management. BanSabadell Inversión reinforced its position as an acknowledged Banco Sabadell leader among Spanish fund managers, having received 67% (2010: 58%) of the quality ratings awarded by Standard & Poor’s to Spanish-domiciled mutual funds overall. 2011 Annual Report During the year a total of 17 mutual funds and 17 investment companies (OEICs) were added to the range of investment vehicles as a result of the merger of Banco Guipuzcoano. Seven mergers took place in which seven funds were absorbed by others with the same investment objectives, having regard always to investors' best interests. Two OEICs were also merged. Three mutual funds, two fi xed-return guaranteed funds and one balanced fund were set up and registered with the Spanish securities market regulator (CNMV). At the close of the year the group's Spanish-domiciled collective investment schemes numbered 264, with management split between BanSabadell Inversión, S.A., S.G.I.I.C. Sociedad Unipersonal (125 schemes), Urquijo Gestión, S.A., S.G.I.I.C. (138 57 schemes), and Guipuzcoano, S.G.I.I.C., S.A. (1 scheme).

Treasury and Capital Markets

In product distribution, revenues and profi t levels remained sta- ble in 2010, despite diffi cult operating conditions. There were further changes in the product mix compared with earlier years as the group continued to diversify its income sources. While activity and profi t performance in such areas as foreign exchange, derivatives and structured products remained broadly unchanged from 2010, the fi xed-income business WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd increased twofold with increases in all product lines. This was especially true of retail products, boosted by high levels of issuance by autonomous regional governments in which the Bank was a very active participant. Trading saw high levels of activity during the year, both in the management of spread movements and in proactive cash management, increasingly involving the use of central clearing houses such as LCH. Trading also moved into new areas of activity such as a sovereign debt portfolio and long-term interest rate management. The year 2011 saw a further boost being given to Banco Sabadell´s capital market involvement. In its institutional client- focused business, it serviced 102 clients in a range of fi xed-

Group businesses income investments (government, corporate and structured bonds). In the primary fi xed-income market Banco Sabadell not only increased its involvement in wholesale market issues but acted as an underwriter in a number of issues targeted at retail investors.

Bancassurance

Profi t before sales commissions and tax was €169.3 million, an 8% increase on 2010. The net profi t from the Bancassurance business totalled €62.4 million, a rise of 28%. This performance was achieved thanks to active and diligent management of margins throughout the year, resulting in a gross income of €201.5 million, a 10% rise on 2010. At 31December 2011 the overall volume of savings under Banco Sabadell management by Bancassurance stood at €8,888.8 million, with total premium income of €1,429.6 million.

Annual Report 2011 Annual Report — —Bancassurance – a dependable source of income that keeps growing — — These results once again confi rm the positive impact that the alliance with the Zurich insurance group has had on sales of insurance and pension plans.

58 BanSabadell Vida

Total premium income in life insurance for the year 2011 was €1,346.8 million, giving BanSabadell Vida a number fi ve ranking in the league table of Spanish life offi ces according to recent data published by ICEA, a research organization for the insurance and pension industries. Premiums in protection-only life insurance were €90.5 million, up 12% on the year-end fi gure for 2010. Against a background of lower mortgage lending to support linked life-with-protection insurance, freestanding life policies performed well, particularly the Life Care policy which generated €31.8 million in premium income, a rise of 28%. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd BanSabadell Vida savings/life insurance products ended the year with total savings under management of €6,030.5 million, making BanSabadell Vida the Spanish insurance industry’s sixth largest provider according to recent ICEA published data. BanSabadell Vida posted a profi t before sales commissions and tax of €135.8 million, 11% more than in 2010. The net profi t was €54.5 million, a 34% increase.

BanSabadell Pensiones

Funds under management by BanSabadell Pensiones reached a year-end total of €2,567.5 million. €1,500.4 million of

these funds related to individual and group pension plans and Group businesses €1,067.1 million to occupational schemes. These totals rank BanSabadell Pensiones in eleventh place in the industry as a whole according to recent data from INVERCO, an investment and pension fund association. A major development in 2011 was the introduction of guaranteed pension plans, which sold well for most of the year and particularly during the end-of-year sales campaign. Another was the integration of Banco Guipuzcoano which resulted in a signifi cant addition – €104 million – to pension funds. BanSabadell Pensiones posted a profi t before commissions and tax of €17 million. The net profi t for the year was €4.0 million.

BanSabadell Seguros Generales

The group's general insurance provider writes and distributes Banco Sabadell home and payment protection insurance and also distributes insurance for other underwriters, mainly the Zurich Group. The company's premium income for 2011, at €82.9 million, 2011 Annual Report was up by 8%. The year saw increased business in store and small business protection insurance, with premium income rising by 29% for store insurance and 30% for SMEs. The company reported a profi t before sales commissions and tax of €16.5 million, up 39% on the fi gure for 2010, with a net profi t of €3.9 million, bettering the previous year’s performance.

59 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd BanSabadell Previsión, EPSV

BanSabadell Previsión, a voluntary social insurance society, distributes pension/retirement plans within the Basque Country and is held in high regard by branch personnel and by customers. The society reported a total of €290.8 million in savings under its management at the close of the year. A large part of this was additional savings resulting from the merger of Banco Guipuzcoano (€243 million) and from sales of guaranteed pension and retirement plans during the pensions campaign.

Group businesses Securities and custodian services

In the course of 2011 Banco Sabadell gained an increasingly prominent role as a licensed broker on the Spanish stock market. With a 4.64% market share it ranked seventh out of a total of 61 stock exchange members. As a provider of custodian and depository services the Bank was able, despite adverse market conditions and falling asset values, to increase revenues, win new customers and broaden its product and service offering.

— — BS America in 2011 — Banco Sabadell —

The volume of business being handled by Banco Sabadell is Annual Report 2011 Annual Report now more than USD 7,000 million. Assets of USD 3,700 million make it Florida's seventh largest local bank by total assets. It is one of the few fi nancial institutions in the area with the capabi- lity and experience to provide a full range of banking services, ranging from highly complex and sophisticated products for large corporate clients, including structured project fi nance, to products for individual customers as well as a full range of products and services for professional people or companies of any size. —

60 — Acquisition of Lydian Private Bank —Sabadell wins the Miami Chamber of Commerce Prize for International Business Leadership — —

In November Banco Sabadell and Sabadell United Bank were winners of the Miami Chamber of Commerce International Business Leadership Award. The Bank was awarded the prize for business retention and expansion. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Banco Sabadell Miami Branch

At the close of the year Banco Sabadell's operating branch in Miami had more than USD 2,509 million in deposits and funds under management. Client wealth management was up 3%. Loans and advances were up 20% and reached USD 1,251 million, as the bank responded to the needs of international businesses for working capital and medium- and long-term fi nance. In 2011 Banco Sabadell Miami branch continued to expand its structured fi nance business by diversifying its range of loan products. The Bank was once again an active promoter of wind generation (funding fi ve new projects) and a leading player in the

North American wind generation market. It also entered other Group businesses energy markets, such as gas and solar energy, for the fi rst time. All projects fi nanced in 2011 were in the USA and Mexico.

Sabadell United Bank

The year saw Sabadell United Bank acquire virtually all the assets and some of the liabilities of Florida-based Lydian Private Bank in a take-over supervised by the Federal Deposit Insurance Corporation (FDIC). The acquisition came with the guarantee of an active protection scheme, with the FDIC agreeing to absorb 80% of the losses due to any possible impairment of certain loans acquired in the take-over. Sabadell United Bank took over assets amounting to some USD 1,600 million at a discount of USD 176 million and assumed liabilities of some USD 1,600 million, including customer deposits Banco Sabadell totalling USD 1,200 million. Lydian Private Bank’s six branches were added to Sabadell United Bank’s 19-branch chain, making a total of 25 branches. 2011 Annual Report Sabadell United thus saw its position in the state of Florida being considerably strengthened, especially on the West Coast (Tampa, Sarasota and Naples), and is now the seventh largest local bank in terms of deposits. The new addition resulted in a Wealth Management division being set up within Sabadell United Bank, to be known as Sabadell Bank & Trust. The division will focus on private banking and wealth management services. As 2011 drew to a close, Sabadell United Bank was managing assets of some USD 3,500 million. It held deposits of more than USD 2,600 million and loans and advances approaching USD 2,000 million. It was servicing over 45,000 customers. 61

Sabadell Securities

Sabadell Securities USA, Inc. is a fi rm of stockbrokers and investment advisors registered with the Securities and Exchange Commission (SEC). The business has a key role in supporting and driving forward the BS America strategy. Sabadell Securities provides investment and wealth management services to commercial banking customers as well as personal banking, corporate banking and private banking clients. Its business strategy is based on meeting the WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd fi nancial needs of customers by advising them on capital market investments. Sabadell Securities is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC). It uses the services of Pershing LLC, a Bank of New York Mellon subsidiary, for clearing, custody and administrative services.

BanBajío

Headquartered in León, Mexico, BanBajío is a bank whose mission is to be an engine of economic development in the

Group businesses parts of the country where it operates. It has a strong focus on the small and midsize business sector, the food and agriculture industry and other markets showing potential such as consumer and mortgage loans. BanBajío is Mexico's eighth largest bank in terms of assets, which stood at 94,000 million Mexican pesos at the close of the year, with deposits and assets under management of 51,000 million pesos and more than 310,000 customers served by 270 branches. In 2011 it made a net profi t of 862 million pesos. BanBajío's equity capital is owned as to 70% by local businessmen, with the rest in the hands of private sector investors such as Banco Sabadell, which holds 20% of the equity and plays a key role in BanBajío's growth. The remaining 10% of the capital is owned by the International Finance Corporation (IFC), the World Bank's private sector investment arm. Banco Sabadell In 2011 BanBajío strengthened its position as a major lender to the agrarian sector (a key industry in Mexico), a role it had played for the previous seven years. It set up a dedicated Annual Report 2011 Annual Report structured fi nance department with the aim of participating in the infrastructure development business, and it joined the Global Trade Finance Program set up by the International Finance Corporation to give local small and midsize enterprises more access to credit for external trade (exports and imports). BanBajío also confi rmed its leading position as a provider of fi nance to SMEs. Additional services are provided through a number of subsidiaries: Financiera Bajío, which provides factoring, leasing and valuation services; Sinca Bajío, a regulated private equity company; and Afore Afi rme Bajío, which manages pension funds in partnership with Grupo Financiero Afi rme. BanBajío has a strategic alliance with Afi rme which means that the branches and ATMs of 62 each partner are able to operate in an integrated way. BanBajío was recently named as Mexico's fastest growing enterprise in the period 2000-2009 and is well known as being highly attractive to those wishing to pursue a career in banking; all this testifi es to its strong commitment to investing in productive activities.

Centro Financiero BHD

Banco Sabadell owns a 20% equity interest in Centro Financiero BHD, the second largest privately-owned fi nancial services group in the Dominical Republic. It comprises Banco BHD and nine other WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd subsidiaries providing stockbroking, insurance, pension fund and other services. Banco BHD is itself the Republic's second largest bank and as of September 2011 was holding 15.21% of all the assets in the country's banking system. Its AA-(dom) positive outlook rating was again affi rmed by Fitch Ratings, making it the Dominican Republic’s most highly rated bank. Banco BHD was also described by Fitch as having the most advanced system of corporate governance of any Dominican fi nancial company. At the close of 2011 Banco BHD's assets totalled 107,051 million Dominican pesos. Its loans and advances stood at 56,694 million pesos and customer accounts were 87,204 million. Its net worth amounted to 11,217 million pesos and it posted a net

profi t of 3,016 million. Banco BHD once again outperformed the Group businesses rest of the Dominican banking industry in growth, loan quality and profi tability. It has 92 branches giving it nationwide coverage, and advanced online and telephone banking channels. It is a provider of fi nancial services to more than 445,000 customers. Centro Financiero BHD reported a net profi t for 2011 of USD 99.5 million.

— — Other businesses in 2011 — —

SoLVIA Banco Sabadell

In 2011 Banco Sabadell made determined efforts to turn its repossessed real estate assets into cash. To do this it has followed a policy of actively marketing, leveraging and managing 2011 Annual Report its properties with the aim of disposing of them as a matter of priority. The work of managing these assets, which are not being used for or by the banking business and are available for sale, is being undertaken by the SoLVIA group. This has resulted in sales leading to a €414.7 million reduction in the value of the real estate portfolio. As an investor, the SoLVIA group ended the year with €2,903.5 million in assets under management net of provisions. This included real estate assets acquired from Banco Guipuzcoano (€234.1 million) when that entity was integrated into the Banco Sabadell group in 2011. Of the total assets under SoLVIA's management, 21.6% 63 was development land. Plots prepared for development and developments under construction made up 35.8% of the portfolio and the remaining 42.5% was split between rental property and real estate developments for sale. 76.5% of the assets were — — Property sales on a rising trend —Sale prices are on a par with book values — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd residential properties. 34.4% of the assets were located in Catalonia, mainly in the city and metropolitan area of Barcelona; another 18.8% were situated in the Madrid region. The remaining properties were spread over a number of locations in other parts of Spain. By the end of 2011 SoLVIA had sold 46.0% of its inventory of completed new build residential units. The sold units numbered 600 out of a total of 1,304 offered on the market, at an average discount of 22.1%. Apart from signifi cant price reductions and the availability of fi nance to new buyers on highly advantageous terms, factors that boosted property sales in 2011 were introductions of potential purchasers by Banco Sabadell branches and an enlarged external sales force. The Solvia.es real estate web site, along with

Group businesses SoLVIA and Banco Sabadell communication channels (both online and offl ine) also proved to be effective in generating enquiries from customers. As part of the group’s overall strategy of divesting real estate assets, programmes were under way in 2011 to realize €296.2 million worth of equity in building plots ready for development and suitable for immediate sale. Some of these programmes were targeted at real estate developers and others at investors. Schemes designed for real estate developers resulted in a total of 54 agreements being concluded for the development of 2,308 new housing units all over the country. Developing residential units for letting was another aspect of SoLVIA's real estate activity. SoLVIA currently has nine developments under construction with 251 social housing units available for rent and due for delivery in 2012 and 2013. SoLVIA's programme for investors involved structuring investments in special-purpose vehicles for subsequent transfer Banco Sabadell to institutional investment funds. One example of this was an agreement with a UK fund to develop 20,000 square metres of offi ce space in the 22@ district in Barcelona. Annual Report 2011 Annual Report

BancSabadell d’Andorra

BancSabadell d’Andorra was set up in the Principality of Andorra in the year 2000. Banco Sabadell holds a 50.97% interest, with the remaining shares divided among more than 800 Andorran private investors. It is currently the only bank in Andorra with a non-Andorran shareholder and this, combined with the sizeable number of private Andorran shareholders, gives this bank a clear edge over its competitors. The bank’s target customers are medium- and high-income individuals and larger companies 64 operating in the principality. The bank has six branches. Deposits and customer funds under management were in excess of €1,200 million at the end of the year, with loans and advances to customers totalling €400 million. The bank posted a year-end profi t of €6.5 million. The ROE at the end of the year was in excess of 12% and the liquidity ratio, according to criteria set by the Principality's supervisory body, the Andorran National Finance Institute, was over 85% (the legal minimum is 40%). The loan loss ratio was 0.62%. Regulatory capital as of 31 December 2011 exceeded €59 million. The bank's capital adequacy ratio was 20%, considerably above the regulatory minimum of 10%. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd —Excellence — — — — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — — Operations — —

In 2011, the Bank concentrated its efforts on launching the CREA plan to drive forward the transformation of the operational model that had been initiated under the 2008-2010 “Optima” plan, and to carry out a reorganization of sales and marketing to bring about a signifi cant increase in productivity and prepare for anticipated growth. In addition, the Bank’s renowned quality of service was further enhanced.

Excellence — — Plan CREA – new capacity created under Plan Óptima being put to good use — A focus on new market segments —

The implementation of this transformative plan coincided with the April 2011 integration of Banco Guipuzcoano, an operation that was carried out with great effi ciency and in record time.

Operational and organizational transformation

Banco Sabadell As part of the reorganization of its internal capabilities, the Bank continued the process of setting up “operational factories” by opening a new Regional Administrative Centre in San Sebastián. Annual Report 2011 Annual Report This new centre, together with the existing facilities in Madrid, Barcelona and Oviedo, is now handling 92% of the processing for service products and 80% of the processing for lending products.

— Number of Commercial Banking customers per branch employee 2010=100

66 109

Merger of BG 100

2010 Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sept 11 Oct 11 Nov 11 Dec 11 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd In 2011 new tasks were transferred to the operational factories and a start was made on transferring the production of loan and credit documentation. This is expected to be completed in the course of 2012. As a result, more time is being freed up for sales and marketing, as the record volumes of new business demonstrate. The role of the Bank’s administrative centre in Argentina was expanded with the aim of improving unit costs and releasing resources to accommodate the growth envisaged by the CREA Plan. The centre is now handling more than half the transactions carried out by operational factories. Transactions allowing the highest levels of automated processing and in which there are fewest exceptions have been transferred to the centre.

The Regional Administrative Centres, along with the Superdex Excellence centres that handle international operations, the Global Services — Unit costs at Regional Administrative Centres Centre and the IFOS facility, are processing more than 350,000 Cost per transaction in euros. 2010: base 100 transactions each month. Unit costs in lending have been reduced

by 17% and in servicing by 29%. The operations centres have —Lending —Service enhanced the Bank’s capacity for growth by providing a platform that will enable it to absorb the expected increase in transactions. The ongoing programme to reorganize sales and marketing 100 -17% 100 -32% has led to a sharper focus on sales and promotion throughout the 83 68 branch network and greater effi ciency in developing new business. Actions under the programme have been launched in three areas: process, people and channels, all of them focused on sales. In the fi rst of these areas, major improvements have been achieved in the processes associated with selling and sales 2010 2011 2010 2011 support. The introduction of digital signature pads at branches, for

Data are correct as of November 2011 example, means that branches no longer have to print out and fi le more than 10 million transaction slips each year. This innovation, Banco Sabadell together with the digitization factory soon to be rolled out, will eliminate physical fi les from branches altogether. A centralized telephone answering service is being set up for branches; this 2011 Annual Report ensures that branch personnel can have face-to-face meetings with customers without being interrupted by phone calls. An initiative has also been launched to reorganize the group’s Central Services so as to increase the number of staff working on sales-related tasks. In the people-focused part of the programme, a new incentive system is enabling branch personnel to be rewarded for sales achievement based on simple, transparent metrics. The system makes success in selling more visible and provides an incentive to sell. This year more than 80% of branch employees achieved sales that were at least equivalent to fi ve new individual customers. Finally, channels have also been incorporated into the sales 67 and marketing process. This has increased sales opportunities threefold and improved success rates. These developments in the organization of sales and marketing have been accompanied by improved back offi ce processes, which have led to a 17% increase in productivity, quality enhancements and reduced operational risk. A redesign project was carried out on the Bank’s real estate operations. The project involved a reorganization of work processes associated both with the fi nancing and the selling of real estate, and this is increasing the effi ciency of sales and marketing in the real estate area. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Technology

In technology the focus continued to be on providing a more effi cient and business-oriented infrastructure. Improvements in systems and user equipment in previous years made it possible to develop a new virtualized banking platform, currently in the roll-out phase, which will lead to greater job mobility. Job virtualization will make it possible for employees to access their desktops from any terminal, even when they are away from the offi ce, thus substantially reducing energy usage and helping to eliminate contaminating emissions. To make the sales and marketing orientation still more effective a new corporate desktop, Proteo 3.0, was developed. This

Excellence integrates the full range of systems and tools used by branches on a single front end. The new front end will be rolled out in the early months of 2012 and delivers increased systems usability with reduced maintenance costs. All of these initiatives are being pursued in such a way as to assure the highest levels of security.

— IT and communications costs 2006=100

— No. of customers — IT & comms costs 143

Banco Sabadell 119 105 103 100 107 Annual Report 2011 Annual Report 95

88 84 83 83

2006 2007 2008 2009 2010 2011

Cost management

In 2010 the Bank introduced a new integrated expense approval and management system. The system was extended and 68 developed in 2011 and resulted in a saving of €20 million on the initial allocation for cost items covered by the system.

integration processes

The year 2011 saw the successful integration of Banco Guipuzcoano into the group. The Banco Sabadell systems architecture treats integration as an ordinary activity without any loss of business focus. It allows newly acquired organizations to be mapped into the different functional categories that guide the integration process. This architecture, coupled with the experience gained from previous mergers, means that integration WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd can be completed in even less time. The Bank has become an acknowledged industry leader in the execution of mergers.

— — Human Resources — —

Composition of group employees

At the end of the year Banco Sabadell and its group were

employing a total of 10,675 employees, 102 less than at the end Excellence of the previous year despite the addition of the 123 employees at Lydian Bank, acquired in 2011. The average age of employees was 43.3 years and the average length of service was 17.8 years. The gender split was 53.1% men and 46.9% women.

— — 95% of employees participated in one or more training events — More employees are benefiting from our strategic leadership scheme — Banco Sabadell

Employee training

More than 95.0% of the group’s employees made use of one or 2011 Annual Report more of the training opportunities offered by the group. Training courses comprised a total of 222,560 study hours with employee participation averaging 7.1 courses per employee. In 2011 the Bank continued its policy of incorporating learning communities into its training programme within a collaborative working environment affording opportunities for knowledge sharing among peers and reducing travel and administrative costs to a minimum. The year also saw the completion of the second "Laude" programme, an arrangement between the Bank and the University of Barcelona under which the university awards qualifi cations for in-service training completed by group employees. The scheme 69 — Employees – gender split produced 72 new graduates, 105.7% more than the number 1 Women 46.9% graduating in the fi rst round of the scheme. Seven of them 2 Men 53.1% qualifi ed with the "cum laude" distinction.

Human resources development 1 In 2011 the Bank continued to develop its Strategic Leadership scheme, an intensive employee training programme involving all 2 senior management personnel and embodying innovative coaching and skill appraisal techniques. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Remuneration policy

To comply with new rules on remuneration from the Spanish and European authorities, in 2011 the Bank introduced regulations on the use of risk indicators and deferred payment of variable compensation in senior managers’ remuneration systems so as to increase transparency and ensure that the performance on which remuneration is based does show a positive result.

Banco Guipuzcoano

Banco Sabadell completed the full integration of the Banco

Excellence Guipuzcoano workforce, including the unifying of working arrangements and employment conditions with those of employees across the group. Meanwhile, it ensured that a high-quality customer service was maintained and branch services operated normally at all times. To help achieve this aim a training plan involving a total of 53,560 hours’ instruction was set up, with each Banco Guipuzcoano employee attending an average of 16 courses. In the course of the integration the administration of the Banco Guipuzcoano staff payroll, which had been outsourced to an external supplier, was brought back within the organization. The integration process once again showed the capability and scalability of the Bank's computerized human resources management system, launched in 2010. Banco Sabadell

— — Quality Management Annual Report 2011 Annual Report — —

For Banco Sabadell, quality is not just a strategic option; rather, it is a whole approach to doing business, whether in delivering value to stakeholders or in the execution of each and every process forming part of that business. This natural affi nity with excellence helps to strengthen the Bank's capabilities in all areas, transforming threats into strengths and challenges into opportunities for the future. —

70 —Leaders in quality of service —For 95% of new customers, BS met or exceeded expectations — — A key benchmark against which to measure and improve management practices is the European Foundation for Quality Management (EFQM) model for excellence, on which the Bank is independently assessed every two years. The most recent assessment, carried out in 2010, resulted not only in the Bank’s EFQM Seal of Excellence (+ 500 points) being renewed, but in its WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd rating by these tough standards rising to above 600 points for the fi rst time. Banco Sabadell continues to be the only Spanish lending institution with 100% of its fi nancial operations certifi ed to the ISO 9001 standard, providing further proof of its customer-focused and rigorous approach to process management. In 2011 the Bank's certifi cation was renewed for a further three years. Signifi cantly, the newly merged Banco Guipuzcoano was also covered by the certifi cation. The year also saw a successful outcome in the annual assessment required for the Bank to keep the “Madrid Excelente” quality mark. Banco Sabadell was a candidate in the Madrid Foundation for

Excellence annual awards for the best organizations operating Excellence in the Community of Madrid, winning an award in the "large corporate" category.

Quality in customer service

High-quality customer service has traditionally been one of the key drivers of our strategic planning and a distinctive feature of our positioning in the marketplace. To make this possible, the Bank uses a set of indicators that enables it to identify areas for improvement as they emerge, both throughout the organization and for each individual branch, thus providing it with an “instrument panel” to keep track of its progress in meeting annual targets.

Key quality indicators include the following: Banco Sabadell

—-Objective quality audits. These use the mystery shopper system to evaluate the quality achieved by branches in such 2011 Annual Report areas as courtesy, product knowledge, understanding the customer’s needs, ability to give clear explanations, and the information provided. —-Industry benchmarking of quality metrics. The quality of service offered by the Bank’s branches is benchmarked against that of other lending institutions. Here again the mystery shopper system is used; the quality surveys are performed by an independent firm of assessors. —-Perceived quality surveys. These take place continuously throughout the year and are based on customer samples. Data is collected for every one of the Bank's branches. The surveys are of three types: 71

— General surveys: These are carried out on random samples of customers, and use questionnaires for each customer segment. — Surveys conducted among new customers to measure how far their perceptions matched their initial expectations, once they have had the opportunity to become familiar with the workings of the Bank and of their branch. — Surveys of customers using online banking and other remote channels. These focus on the aspects of quality most relevant to those channels. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd —- Customer claims and complaints. This is one of the indicators that are of most value in making our processes more efficient as it gives us precise information on aspects that have given rise to customer dissatisfaction and therefore require prompt attention. The information relates to claims and complaints made through either of the channels provided by the Bank to customers and users of its services: the Customer Service Department and the Customer and Stakeholder Ombudsman. In every year since 2002, Banco Sabadell has been the Bank with the lowest ratio of complaints received by the Bank of Spain. The latest report produced by the Bank of Spain's Complaints Department, which has ceased to provide data on numbers

Excellence of complaints as a proportion of gross revenue, shows a total of 101 complaints for Banco Sabadell. This is far below the numbers reported for other large and medium-sized banks, and ranks Banco Sabadell in 11th position based on complaint numbers alone. This is a more favourable position than would be the case if complaints/revenue ratios were used. Based on internal information, the low number of complaints received by the Bank of Spain would suggest that once again Banco Sabadell was the bank with the lowest ratio of complaints to revenue.

Indicator 2009 2010 2011 Scale

Banco Sabadell Objective quality audits 6.08 5.99* 5.85* 1 – 7 Industry benchmarking of quality metrics ** Banco Sabadell 7.45 7.41 7.24 0 – 10 Banking sector 6.61 6.11 6.06 Annual Report 2011 Annual Report Industry comparison 0.84 1.30 1.18 Perceived quality surveys – satisfaction with branch 5.87 6.04 6.04 1 – 7

Customer claims and complaints (total number handled) 3,006 3,184 3,212

* The scoring method has been changed and the values shown are therefore not comparable with those of earlier years. If the new scoring system had been applied to the data for 2009 the score would have been 5.89, which would mean a 0.1% improvement in 2010. ** The survey provider has changed its scoring method and this has been applied retroactively for comparability with prior year data. For this reason, the scores for 2008 and 2009 are at variance with those shown in the annual reports for those years.

In addition to the above indicators, Banco Sabadell makes use of other sources of information to obtain additional insights into our quality performance. 72 According to a market survey on the fi nancial behaviour of individuals in 2011 produced by FRS Inmark, a fi nancial consultancy fi rm, Banco Sabadell is the bank that is showing the highest levels of satisfaction within the individual customer segment. The research was carried out in the months of May and July on a nationwide sample of 12,000 people aged 18 or over in towns with more than 2,000 inhabitants. Similar feedback is being received from business customers according to a recent survey of SMEs carried out by the same consultancy fi rm based on interviews with 2,525 businesses. According to FRS Inmark, Banco Sabadell can not only boast the highest levels of satisfaction among large corporate clients, but is actually deepening relationships with them still further in WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd a situation where nearly all banks are losing business, and is also the only bank with a net promoter score (promoters minus detractors) that is positive.

Qualis Prizes for Excellence

Established by the Bank in 2002, the Qualis Prizes for Excellence are awarded to employees and working teams who have been particularly noted for the excellence of their work during the year. The prizes presented in 2011 were awarded for performance in 2010. Of particular interest are the prizes for the best

bank branches as examples of successful teamwork, and the Excellence Qualis Prizes – Gold category, which are given in recognition of achievement over an entire career. Branches selected for the best branch award were Tudela; Campollano industry park, Albacete; Manacor; Pedrosa industrial estate, L’Hospitalet de Llobregat; and the Corporate Banking branch at Cornellà de Llobregat. Qualis Gold prizes were awarded to Montserrat Alicart, a staff member in the Chairman's Offi ce, and Jaume Puig, head of Commercial Banking.

Employee participation for improvement and innovation

To encourage employee participation, Banco Sabadell group em- ployees have a special web site, BS Idea, which is part of Canal BS, the corporate intranet. The site provides a simple and user-friendly way for any Banco Sabadell employee to use their creativity in putting forward suggestions for improvements in working methods or in the range of products and services. 2011 Annual Report A major advantage of this system is its transparency: employees’ ideas are immediately visible to all other employees and can be voted on or enriched with further opinions and ideas. This helps to establish priorities for implementation, since the number of votes in favour of an idea gives an excellent indication of the benefi ts that it could bring to the organization. In 2011 a total of 3,688 people posted messages on the site and 2,317 ideas were put forward.

Security award 73 The Bank's Security Department was chosen as a 2011 winner of the International Prize for Technology Innovation awarded by Pacom, the Australian multinational, each year. The prize was awarded in recognition of Banco Sabadell's contribution to operating procedures and enhancements in relation to digital security and alarm systems, affording higher levels of security to bank branches and the banking industry generally. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd —Risk management — — — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd The chief categories of risk inherent in the business of Banco Sabadell and its group are credit risk, market risk and operational risk. The accurate and effi cient management and control of risk is critical to realizing the aim of maximizing shareholder value while ensuring an appropriate degree of fi nancial strength. The management and control of risk comprises a broad framework of principles, policies, procedures and advanced evaluation methodologies, integrated within an effi cient decision-making structure. All this is fully and clearly set out in the Annual Accounts, the Report of the Directors, the Report on Corporate Governance and the Basel II Pillar 3 Disclosure document, all of which can be found on the group's web site. — Risk management — Continuous improvement in risk approval, monitoring and recovery processes —Banco Guipuzcoano integration means unified risk management procedures across the group — —

Banco Sabadell complies with guidelines drawn up under the Basel Capital Accord, a fundamental principle of which is that a bank’s regulatory capital requirements should be more closely related to risks incurred, based on internal risk measurement models which have been independently validated. Banco Sabadell Banco Sabadell has received supervisory authorization to use its own internal models for companies, real estate developers, specialized fi nancing, retailers and sole proprietors, mortgages, 2011 Annual Report personal loans, credit facilities and personal credit cards, and in estimating its regulatory capital requirements. Based on the risk metrics provided by these new methodologies, Banco Sabadell has a consolidated risk measurement model based on an internal unit of measurement in terms of allocated capital. The assessment of risk in terms of an allocated capital requirement means that risk can be related to return, from individual customer up to business unit level. The group has an analytical “risk-adjusted return on capital” (RaRoC) system in place which provides this assessment and includes it as part of the transaction pricing process. 75 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd —Economic capital mapping – —Overall risk profile by borrower category – allocation of economic capital distribution of credit risk exposures by type of risk 1 Large corporates 18.01% —1 Credit risk 78.4% 2 Midsize businesses 17.69% —2 Structural risk 7.0% 3 Small businesses 20.58% —3 Operational risk 8.2% 4 Retailers & sole proprietors 2.15% —4 Market risk 0.7% 5 Mortgage loans 17.26% —5 Other risks 5.7% 6 Consumer loans 1.15% 7 Banks 4.25% 100.0% 8 Sovereign debt 11.85% 9 Other 7.06%

100.0%

4 9

Risk management 5 3 1 8 2 7 6 2

5 1 3

4

— —Credit risk — — Banco Sabadell

Credit risk is the possibility that losses may be incurred as a result of borrowers failing to meet their obligations or through losses in Annual Report 2011 Annual Report value due simply to deterioration in borrower quality.

Approval, monitoring and recovery

To maximize the business opportunities provided by each customer and to guarantee an appropriate degree of security, responsibility for monitoring risks is shared between the relationship manager and the risk analyst, who by maintaining effective communication are able to obtain a comprehensive view of each customer’s individual circumstances. The Board of Directors delegates powers or discretions to the 76 Risk Control Committee, which then sub-delegates authority at — Loan loss ratio by customer segment each level. The addition of controls on these authority thresholds to the loan approval management systems ensures that the powers delegated at each level are appropriate to the expected loss estimates for all loan applications by business customers. By analysing indicators and early warning alerts, and by conducting regular credit rating reviews, the quality of a risk can be constantly monitored in an integrated way. The establishment of effective processes for managing existing risk exposures also benefi ts the process of managing past due accounts, since the early identifi cation of probable default cases 22.58 2.78 2.85 5.69 3.43 3.65 ensures that measures can be taken proactively. With an "early warning" system based on quantitative modelling of indicators Large corporates Loans for real estate by fi rst mortgage Loans for construction not SMEs & sole proprietors Other loans to individulas related to development Loans to individuals secured

development and/or construction WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd and advanced alerts, the quality of a risk can be monitored in an integrated way and risks transferred to recovery specialists who are best equipped to determine the most suitable type of recovery procedure in each case. Risks above a certain limit are grouped into categories according to their expected loss ratios, so that they can be treated in the most suitable way. Alerts are managed by the account manager and the risk manager and are supplemented by the experience of the account that comes from direct contact with the customer.

— Loan loss and loan loss coverage ratios — Loan loss ratio (%) — Loan loss coverage ratio (%) Risk management

466.6%

394.3% 383.1%

325.0% 299.5%

0,66 106.9% 69.0% 56.6% 48.49%

0.66 0.61 0.49 0.39 0.47 2.35 3.73 5.01 5.95

2003 2004 2005 2006 2007 2008 2009 2010 2011 Banco Sabadell

Credit rating 2011 Annual Report

Credit risk exposures to corporate customers, special fi nancing projects, retailers and sole proprietors, fi nancial institutions and countries are assessed according to a system of credit ratings based on internal estimates of the probability of default. The system is based on factors that predict the probability of default within one year and is designed for different customer segments. The rating model is reviewed each year on the basis of an analysis of actual default data. Each rating score is assigned an anticipated default rate which allows consistent comparisons to be made across segments and with the ratings of independent rating agencies, according to a 77 master scale.

Credit scoring

Credit risk exposures to individual customers are classifi ed by means of scoring systems which make use of quantitative modelling based on historical data to identify key predictive factors. Two types of scoring are used:

— Behavioural scoring: a system in which all customers are automatically classifi ed according to their transaction WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd histories and data for each product in use. It is used primarily for such purposes as granting loans, setting limits on authorized overdrafts, targeting sales campaigns, and for tracking and segmenting in claim and/or recovery procedures. — Application scoring: this is used to evaluate applications for personal loans, mortgage loans and credit cards. When full details of the application have been entered, the system generates a result based on the estimated borrowing capacity and fi nancial position of the applicant and the quality of any security or collateral.

— Business loan portfolio - credit rating profile — Individual customer loan portfolio - credit rating profile Risk management — Credit quality from highest (9) to lowest (0) — Credit quality from highest (9) to lowest (0) — Exposure (%) — Exposure (%)

45%

40% 30% 35% 25% 30%

20% 25%

15% 20%

15% 10% 10%

Banco Sabadell 5% 5%

0% 0% 9 8 7 6 5 4 3 2 1 0 9 8 7 6 5 4 3 2 1 0 Annual Report 2011 Annual Report

Country risk

This is the risk associated with the debts of a country analysed as a class on the basis of factors other than credit risk. It manifests itself when a borrower is unable to meet his foreign currency liabilities to external creditors because the country will not allow access to, or transfers to be made in, that currency, or where a recovery action against the borrower would 78 fail for reasons of sovereignty. An overall exposure limit is set for each country, which applies across the whole group. Country limits are approved by the Risk Control Committee and are constantly monitored to ensure that any deterioration in the political, economic or social situation in a country can be detected and acted upon in good time. The rating for each country provides an additional guide, both when setting limits and in monitoring them once they have been set.

WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd —Credit risk – distribution —Counterparty risk – distribution — Counterparty risk – distribution by geography by credit rating by geography

1 Spain 89.74% 1 AAA/Aaa 4.30% 1 Euro area 90.45% 2 Other European Union 4.85% 2 AA+/Aa1 0.78% 2 Other European 4.96% 3 North America 3.84% 3 AA/Aa2 8.78% 3 Other USA and Canada 1.49% 4 Rest of world 0.69% 4 AA-/Aa3 25.65% 4 US investment banks 2.73% 5 Latin America 0.67% 5 A+/A1 29.53% 5 Rest of world 0.37% 6 Other OECD 0.21% 6 A/A2 10.86% 6 Japan 0.00% 7 A-/A3 3.35% 8 BBB/Baa1 10.23% 9 BBB/Baa2 0.16% 10 BBB-/Baa3 0.05% 11 BB+/Ba1 0.08% 12 Other ratings 6.23%

6 11 5 6 10 Risk management

5 12 1 2 4 3 2 2 3 3 4 8 9 7

6 4

1 1 5

Credit risk in market trading

Credit risk due to market trading, or counterparty risk, is exposure to other fi nancial institutions arising from trading Banco Sabadell operations. These may be cash transactions, where the amount at risk is comparable to the nominal value of the transaction, or transactions in derivative instruments not traded on organized 2011 Annual Report markets, where in the great majority of cases the transaction amount is below the notional value. Banco Sabadell has a system in place for the assessment and management of counterparty risk, by which observance of approved limits can be monitored and controlled in real time. In addition, to mitigate exposure to counterparty risk Banco Sabadell maintains a solid base of collateral agreements – credit support annexes (CSAs) or global master repurchase agreements (GMRAs) – negotiated with key counterparties. The collateral provisions of these agreements mean that exposure to such counterparties is signifi cantly reduced. 79 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — —Market risk — —

Discretionary market risk

Discretionary market risk arises from the possibility of loss in the value of fi nancial asset positions due to variations in any of the factors affecting market risk (stock prices, interest rate or exchange rate movements, implied volatilities, correlations, etc.). It arises primarily from treasury and capital market positions which, as they expire or mature at specifi ed times, have risks

Risk management which are known and can be managed or limited by using fi nancial hedging products. Discretionary market risk is measured by the VaR (Value at Risk) method, which allows the risks on different types of fi nancial market transaction to be analysed as a single class. VaR provides an estimate of the anticipated potential maximum loss on a position that would result from an adverse, but normal, movement in any of the market risk factors that have been identifi ed. This estimate is expressed in money terms and is calculated at a specifi ed date, to a specifi ed confi dence level and for a specifi ed time horizon. The estimate takes account of different levels of market risk factors. VaR limits are approved by the Risk Control Committee and are assigned on the basis of an aggregate limit which is divided into sub-limits for different business units and risk factors. These sub- limits are further subdivided successively down to trading desk Banco Sabadell or portfolio level. In some business units, other limits in addition to VaR limits are used. These include sensitivity limits, nominal value limits and stop-loss limits, which complement the view of risk Annual Report 2011 Annual Report provided by VaR techniques. Market risk is monitored on a daily basis and reports on current risk levels and on compliance with the limits assigned to each unit are sent to the risk control functions. This makes it possible to track changes in exposure levels resulting from changes in the market prices and volatilities of fi nancial instrum

80 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd The reliability of the VaR methodology is validated by backtesting techniques which are used to verify that the VaR estimates are within a specifi ed confi dence level. The following graph shows the movement of the 1-day VaR for the group's treasury market operations in the year 2011 at a 99% confi dence level.

—Market risk (€Mn.) — VaR — Interest rate VaR — Exchange rate VaR — Equity VaR — Credit spread VaR Risk management

10.00 9.00 8.00

7.00 6.00 5.00

4.00 3.00 2.00 1.00 0.00

May 11 July 11 March 11 April 11 June 11 January February11 11 August 11 October 11 September 11 NovemberDecember 11 11 Banco Sabadell

Techniques of this kind are supplemented by special simulation 2011 Annual Report exercises and extreme market scenarios (stress testing), the purpose of which is to analyse different macroeconomic scenarios and their possible impact on the trading portfolio. The following table shows a stress analysis of this kind for the most signifi cant portfolio (equity securities).

Equity securities stress test result 2010 (¤Mn.) 81 Date Portfolio Stable Falling Rising value interest rates interest rates interest rates

January 74.12 2.84 (25.14) (7.66) February 60.11 1.10 (21.16) (7.25) March 67.00 3.59 (22.08) (6.04) April 57.81 1.09 (20.33) (6.94) May 58.26 4.11 (18.57) (4.40) June 69.63 5.32 (21.93) (4.90 July 65.03 9.68 (17.48) (0.51) August 78.41 16.43 (12.00) 11.71 September 58.88 16.04 (4.80) 40.59 October 73.42 20.22 (16.86) 22.51 November 74.42 22.94 (15.55) 25.33 December 79.18 24.94 (16.18) 27.49 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Structural interest rate and liquidity risk

Structural risk arises from ongoing customer-based commercial and corporate banking operations and is divided into interest rate risk and liquidity risk. Management of structural risk seeks to ensure stability at the margin by maintaining appropriate levels of liquidity and capital strength.

Interest rate risk

Interest rate risk is caused by changes, as refl ected in the posi- tion or the slope of the yield curve, in the interest rates to which

Risk management asset, liability and off-balance sheet positions are linked. Gaps or mismatches arise between these items because of differences in repricing and maturity dates so that rate changes affect them at different times; this in turn affects the robustness and stability of results. The management of interest rate risk focuses on overall — Structural interest rate risk fi nancial exposure for the group as a whole and involves proposing (Interest rate sensitivity) — Sensitivity of net interest income (¤Mn.) alternative business or hedging strategies that will meet business — Sensitivity of shareholders' equity (%) objectives and are appropriate to market conditions and within the exposure limits that apply across the group. 5.86 A number of methodologies are used to measure interest rate risk. These include measuring the sensitivity of net interest income

to changes in interest rates over a one-year horizon. This is done 4.49 by means of static (gap analysis) or dynamic (simulation) tests based, in the latter case, on different assumptions of balance sheet growth and changes in the slope of the yield curve. Banco Sabadell Another technique used is to measure the sensitivity of shareholders' equity to changes in interest rates by duration gap analysis. This measures the effect of interest rate changes over a 18.42 37.59 Annual Report 2011 Annual Report longer time horizon. The bar chart on the right shows the sensitivity of net interest 2010 2011 income and shareholders' equity to a 100 basis point change in interest rates for the years 2010 and 2011.

Liquidity risk

This can be defi ned as the possibility of the Bank’s being unable to meet payment commitments, even if only temporarily, due to a lack of liquid assets or of its being unable to access the markets to refi nance debts at a reasonable cost. 82 Liquidity risk may be caused by external factors such as a fi nancial market downturn, a systemic crisis or reputational issues, or internally, by an excessive concentration of maturing liabilities. Banco Sabadell keeps a close watch on day-to-day changes in its liquid asset position and holds a diversifi ed portfolio of such assets. It also carries out projections to anticipate future needs. In addition, liquidity gap analysis is used to manage foreseeable mismatches between cash infl ows and outfl ows over a medium-term horizon. Systematic checks are made to verify that the group’s ability to raise funds on the capital markets is suffi cient to satisfy its requirements in the medium and long term. The group has a number of programmes in place to raise fi nance on the medium- and long-term capital markets. Short- WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd term commercial paper issuance programmes further diversify its sources of funds. It is also an issuer of covered bonds and is active in developing new sources of fi nance such as asset-backed securities, which provide a further instrument for the management of liquidity risk. The Bank carries out regular liquidity stress testing to enable it to assess infl ows and outfl ows of funds and the impact of these fl ows on its cash position under different scenarios. Based on this analytical framework, the Bank has a contingency plan in place to deal with unexpected scenarios that could cause an immediate funding requirement. Another type of liquidity stress testing being carried out is to analyse the impacts that changes in market prices may have on

collateral deposited in cash, whether in the futures and options Risk management markets or under collateral agreements (CSAs or GMRAs). To gain an idea of these impacts a number of different market risk scenarios are studied and the effects of these on liquidity, individually and in combination, are analysed. The contingency plan is constantly being updated and identifi es the Bank's assets that are most readily convertible to cash in the short term; it also sets out action plans should it become necessary to raise additional cash.

— — Operational risk — — Banco Sabadell

Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from unforeseen external events. Banco Sabadell pays particular 2011 Annual Report attention to operational risk and has implemented a management, measurement and oversight framework that fulfi ls the conditions necessary to opt for the use of an advanced model for calculating regulatory capital charges for operational risk. Management of operational risk is decentralized and devolved to process managers throughout the organization. The full range of group processes is identifi ed on a corporate process map, thus facilitating the compiling of information in a way that refl ects the structure of the organization. The group has a specialized central unit to manage operational risk, whose main functions are to coordinate, supervise and drive forward the identifi cation, 83 assessment and management of risks by process managers in line with Banco Sabadell's process-based approach. Senior managers and the Board of Directors play a direct, hands-on role in managing operational risk by approving the management framework and its implementation as proposed by an Operational Risk Committee made up of senior managers from different functional areas of the company; they also ensure that regular audits are carried out on the management strategy being applied, the reliability of the information being reported, and the internal validation tests required by the operational risk model. Management of operational risk is divided into two action areas: WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — The fi rst action area is based on an analysis in which all processes and any associated risks that involve potential losses are identifi ed, leading to a qualitative evaluation of the risks and their associated control mechanisms. This is done by process managers in conjunction with the central operational risk unit. The result is an assessment that allows future exposures to be recognized, tendencies to be anticipated and mitigating action to be taken in an informed way. This is supplemented by a system for identifying, monitoring and actively managing risk through the use of key risk indicators. These can be used to trigger alerts in response to increases in exposure, identify the causes of

Risk management that exposure and measure the effectiveness of the controls in place and any improvements that are made. Care is taken to ensure that all processes identifi ed as critical are protected by specifi c business continuity plans in the event of a service failure. The operational risks identifi ed are also assessed from the point of view of their reputational implications, should an incident occur. — The second action area is based on experience. It consists of maintaining a database of all losses that occur in the organization. This provides a store of information of actual operational risk events for each business line and the causes of those events, so that risks can be acted upon and minimized. Loss information is also of use in measuring the extent to which estimates of potential loss are consistent with reality, both in terms of severity and frequency, so that Banco Sabadell loss exposure estimates are constantly being updated and improved in this way. Annual Report 2011 Annual Report

— Distribution of loss events due —Distribution of loss events due to operational risk (by amount) to operational risk (by number)

1 Customers, products 1 Customers, products and business practices 24.90% and business practices 6.30% 2 Property damage 4.33% 2 Property damage 10.27% 3 Process execution, delivery 3 Process execution, delivery and managment 32.99% and managment 36.10% 4 External fraud 22.99% 4 External fraud 40.33% 5 Internal fraud 10.11% 5 Internal fraud 1.28% 6 Business disruption/ 6 Business disruption/ 84 system failure 1.67% system failure 1.56% 7 Staff relations and workplace 7 Staff relations and workplace safety issues 3.01% safety issues 4.16%

6 6 5

7 7 1 1 2 5

2

4 4 3 3 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd The database contains historical records of actual losses resulting from operational risk. It is continually updated as information is received on losses and also on recoveries, whether resulting from the Bank's own efforts or from insurance provision. Since early 2002 a total of 7,958 events involving a total net loss of €65 million have been logged on the database.

— —Compliance risk —

— Risk management

The direct impacts of regulatory nonconformance and the possible imposition of penalties, or the indirect impacts arising from loss of prestige in the eyes of regulators, markets, employees, customers and the media have given rise in recent years to a vital need for effective management of compliance risk. Compliance risk may mean exposure to legal or administrative penalties, signifi cant fi nancial loss or loss of reputation as a result of infringements of laws, regulations, internal policies and codes of conduct applicable to banking. To cover against this risk the group has adopted a system of regulatory compliance that is centrally managed within the parent company, with some functions being devolved to domestic and foreign subsidiaries and branches abroad. This is a fl exible, risk-focused approach which can be adapted to changes in group strategy as they occur; it also makes use of synergies, especially Banco Sabadell in cases involving complex, wide-ranging impacts requiring technology solutions. The main challenge with this approach is to achieve a uniform level of regulatory compliance across the 2011 Annual Report group by establishing minimum standards that must be observed regardless of the type of business or the country where the business is located. The group uses a special methodology to ensure continuous progress in compliance management. This comprises six main areas: —A technology solution to integrate compliance within the group's operating processes so as to ensure high levels of effi ciency and conformity with legal requirements at all times. —Continuous training/instruction for relevant staff through an annual training programme to raise awareness, highlight 85 and explain compliance issues of particular sensitivity or involving the greatest risk. —Clear procedures to ensure that all persons concerned know how to act in any situation. —Swift and effective channels of communication. —Monitoring and control to ensure compliance with legal and regulatory requirements. —Involvement of Compliance in all approvals of new rules and procedures, in the production or distribution of new investment products, and in the work of identifying newly introduced regulations and verifying that the changes required by those regulations are properly implemented. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd The Banco Sabadell group has an effective control infrastructure in all areas where a compliance risk may be present, such as prevention of money laundering and terrorist fi nancing, market abuse, internal codes of conduct and investor protection legislation (MiFID). During the year the Bank's tracking systems were upgraded and progress was made in putting remediation plans in place to comply with the obligations imposed by Spain's new anti-money laundering legislation. Systems to monitor United Nations International Sanctions were introduced and action was taken to place restrictions on certain types of transaction and certain countries. The year also saw further progress in the implementation of tools to detect possible market abuse and tighter controls on compliance with

Risk management the Bank’s internal code of conduct for trading on the stock markets. Furthermore, in line with its commitment to transparency and legal and regulatory compliance, the Banco Sabadell group adjusted its procedures to comply with new obligations imposed by Spanish consumer credit legislation (Ley de Contratos de Crédito al Consumo) so as to provide greater transparency for customers in relation to consumer loans. It also introduced a system for the prevention and control of criminal liability to help manage the group's criminal liability risk. Banco Sabadell Annual Report 2011 Annual Report

86 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd —Board of Directors and Senior Management Team — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd and Senior Management Team Board of Directors Banco Sabadell Annual Report 2011 Annual Report

88

—José Permanyer Cunillera — —José Oliu Creus — —Jaime Guardiola Romojaro — —José Luis Negro Rodríguez — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — — Management Committee — Barcelona — Board of Directors — Chairman Luis Buil Vall — José Oliu Creus Assistant General Manager — — Managing Director — Catalonia Jaime Guardiola Romojaro José Canalias Puig — Chairman — Comptroller General Assistant General Manager José Oliu Creus José Luis Negro Rodríguez — Valencia, Murcia & Balearic Islands — Secretary General Jaime Matas Vallverdú — Vice-Chairmen María José García Beato Assistant General Manager Isak Andic Ermay — Chief Financial Offi cer —Madrid, Castile and Galicia José Manuel Lara Bosch Tomás Varela Muiña Blanca Montero Corominas José Javier Echenique Landiribar General Manager Assistant General Manager — Operations and — Northern Region

— Managing Director Corporate Development Pedro E. Sánchez Sologaistua and Senior Management Team Board of Directors Jaime Guardiola Romojaro Miguel Montes Güell Assistant General Manager General Manager — Southern Region & Canary Islands — Directors Federico Rodríguez Castillo Juan Krauel Alonso Miguel Bósser Rovira Assistant General Manager Assistant General Manager Francesc Casas Selvas — Commercial Banking — Banco Herrero Héctor María Colonques Moreno Carlos Ventura Santamans Pablo Junceda Moreno Sol Daurella Comadrán Deputy General Manager Assistant General Manager Joaquín Folch-Rusiñol Corachán — Markets and Private Banking Maria Teresa Garcia-Milà Lloveras Ramón de la Riva Reina — Other Central Service Divisions Joan Llonch Andreu Deputy General Manager — Internal Audit José Ramón Martínez Sufrategui Cirus Andreu Cabot Nuria Lázaro Rubio José Permanyer Cunillera Assistant General Manager — Compliance, CSR & Carlos Jorge Ramalho — BS América Corporate Governance dos Santos Ferreira Fernando Pérez-Hickman Gonzalo Barettino Coloma Deputy General Manager

— Secretary to the Board — Corporate Banking and — Banking and other subsidiaries Banco Sabadell Miquel Roca i Junyent Global Operations — Banco Guipuzcoano Enric Rovira Masachs Pedro E. Sánchez Sologaistua — Deputy Secretary to the Board Assistant General Manager — Banco Urquijo 2011 Annual Report José Luis Negro Rodríguez — Human Resources Ismael Picón García de Leaniz Javier Vela Hernández — BancSabadell d’Andorra — Honorary Director Assistant General Manager Miquel Alabern Comas Juan Corominas Vila (1) — Risk — BanSabadell Fincom Rafael José García Nauffal Miguel Costa Sampere ¹ Honorary Group Chairman until Assistant General Manager his death on 18 March 2012 — BanSabadell Inversión — Communication and Cirus Andreu Cabot Institutional Relations — BS Capital — Ramon Rovira Pol Raúl Rodríguez Sabater — Executive Committee Assistant General Manager — — Real Estate Management Salvador Grané Terradas 89 — Chairman Assistant General Manager José Oliu Creus — Corporate Operations Joan M. Grumé Sierra — Managing Director Assistant General Manager Jaime Guardiola Romojaro — — Non-executive Director Jaume Puig Balsells José Permanyer Cunillera Deputy General Manager — — Secretary to the Committee Ignacio Camí Casellas José Luis Negro Rodríguez Deputy General Manager WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd —Report of the Audit and Control Committee — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — — Introduction — —

This report on the work of the Audit and Control Committee for 2011 is addressed to shareholders of Banco de Sabadell S.A. and was signed off by the Committee at its meeting of 24 January 2012. It will be submitted to the Board of Directors of Banco de Sabadell S.A. for approval at its meeting on 26 January 2012. The Committee is regulated by article 59 bis of the Articles of Association and article 13 of the Regulations of the Board of Directors of Banco de Sabadell S.A.; it also has its own rules of

organization and procedure which are published on the Group and Control Committee of the Audit Report website, www.grupobancosabadell.com. This regulatory structure ensures that the Audit and Control Committee complies with the reporting requirements laid down by Law 44/2002 of 22 November on Measures to Reform the Financial System, and incorporates the main recommendations on the working of Audit Committees contained in the Unifi ed Code on Corporate Governance approved by the CNMV in 2006. As required by the Bank's articles and other regulations, the Committee consists of four Directors appointed by the Board, one of whom is appointed by the Board to chair the Committee. The Chairperson may continue to perform that role for a maximum of four years and cannot be re-appointed for at least one year after the end of their four-year term. Additional Directors may be co- opted to attend meetings without the right to vote in order to fi ll a vacancy on the Committee or replace a member who is indisposed. The Board also appoints a Secretary to the Committee, who Banco Sabadell cannot be a Director. The Secretary takes minutes of every meeting and these are approved at the end of the meeting itself or at the next following meeting. A report of each meeting of the 2011 Annual Report Committee is read out at the immediately following meeting of the Board of Directors. As of 31 December 2011 the members of the Audit and Control Committee were:

Chairman Joan Llonch Andreu

Committee members Maria Teresa Garcia-Milà Lloveras 91 Francesc Casas Selvas Sol Daurella Comadrán

Secretary Miquel Roca i Junyent WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd As required by its rules of procedure, all directors on the Audit and Control Committee are non-executive, non-shareholder directors and have the knowledge and experience required to perform the duties assigned to the Committee by the Board of Directors. The changes in the membership of the Audit and Control Committee in 2011 were as follows:

— Joan Llonch i Andreu was appointed Chairman of the Committee by a resolution of the Board of Directors at its meeting of 30 June 2011 on a recommendation from the Nomination and Remuneration Committee. The appointment was made necessary by the expiry of the statutory 4-year term of María Teresa Garcia-Milà Lloveras, who was

and Control Committee of the Audit Report appointed to chair the Audit and Control Committee by a resolution of the Board of Directors on 28 June 2007. — María Teresa Garcia-Milà Lloveras continues to serve as a member of the Audit and Control Committee and the other members of the Committee were likewise reappointed to serve on the Committee for another four years.

The Audit and Control Committee meets as often as necessary and in any event not less than every three months. The Committee may request the attendance at its meetings of such executives, including executive Directors, as it sees fi t. It may also seek assistance from independent advisors in carrying out its duties. This report summarizes the range of activities carried out by the Audit and Control Committee in the course of the six meetings that it held during the year 2011, from which it can be seen that the Committee discharged the duties assigned to it in its rules of Banco Sabadell procedure by the Board of Directors of Banco de Sabadell, S.A. within its main areas of responsibility. Together with the publication of an Annual Report on Corporate Annual Report 2011 Annual Report Governance and the information available on the group’s website, the distribution of this report at the Annual General Meeting once again underlines Banco Sabadell's commitment to providing shareholders and investors with the tools and resources they need to keep themselves fully informed of the Company's performance and to ensure that it is transparent in everything that it does.

— — Terms of reference 92 — —

The Audit and Control Committee is responsible for:

— 1. Reporting to the General Meeting on all issues raised by shareholders that are within its remit. — 2. Making recommendations to the Board of Directors, for submission to the General Meeting, regarding the appointment of external auditors and their terms of engagement, the scope of their professional mandate and, if applicable, the termination or non-renewal of their engagement; reviewing the performance of the auditing WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd agreement and ensuring that the opinion on the annual accounts and the main fi ndings of the Auditor's report are expressed in a clear and precise way. — 3. Reporting on the annual accounts and the quarterly and half-yearly fi nancial statements and any prospectuses required to be fi led with the regulatory or supervisory authorities; monitoring regulatory compliance and ensuring that accounting principles and standards have been correctly applied. — 4. Supervising the work of the Internal Audit function and reviewing appointments and replacements of key Internal Audit personnel. — 5. Keeping up to date with the company’s fi nancial reporting

process and internal control systems. and Control Committee of the Audit Report — 6. Liaising with the external auditors to receive reports on any issues that could compromise their independence or other matters related to the process of auditing accounts, and any other reports required by the legislation, rules or professional standards applicable to external audit. — 7. Reporting on any issues referred to the Committee by the Board of Directors that are within its terms of reference. — 8. Any other matters for which the Committee is responsible by law or under the Articles of Association or any regulations made in accordance therewith, or under any generally applicable rules on corporate governance.

— — Regulatory structure Banco Sabadell — — Annual Report 2011 Annual Report

As required by the Law on Measures to Reform the Financial System, on 9 July 2003 the regulations of the Board of Directors were amended by deed and new rules on the composition and working of the Audit Committee came into being. These changes took the form of amendments to certain articles of the Bank’s Articles of Association that had been adopted by a resolution of the Ordinary General Meeting on 24 April 2003. By another deed executed on 9 July 2003 the Audit and Control Committee was set up to replace the existing Audit and Budget Control Committees, whose respective remits had been merged following amendments to the Bank's Articles of Association and to the Regulations of the Board of Directors. 93 On 20 October 2003 the Committee agreed new rules setting out the principles that would govern the work of the Audit and Control Committee of Banco de Sabadell S.A. and basic rules on organization and procedure, within the framework of the Articles of Association and the rules of procedure of the Board of Directors. The rules were approved and confi rmed by the Board of Directors at a meeting on 30 October 2003 and were fi led with the public registry following the execution of a deed on 18 November 2003 before a notary in Sabadell, Javier Micó Giner. On 28 April 2009 the Committee reviewed and reported favourably on a proposed amendment to article 13.1 of the rules of procedure of the Board of Directors to provide for the appointment WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd of alternate committee members. It also resolved to amend article 7.1 of the rules of procedure of the Audit and Control Committee accordingly. The amendments to article 13.1 of the rules of procedure of the Board of Directors and article 7.1 of the rules of procedure of the Audit and Control Committee were approved and confi rmed by the Board of Directors at a meeting on 27 May 2009 and fi led with the public registry following the execution of a deed on 11 June 2009 before the notary in Sabadell, Javier Micó Giner. In 2010 article 59 bis of the Articles of Association and article 13.1 of the Rules of Procedure of the Board of Directors of Banco de Sabadell, S. A. were amended to fi x the number of members of the Audit and Control Committee at a maximum of fi ve in order to keep the number of members of the Committee in the same

and Control Committee of the Audit Report proportion with respect to the number of members of the Board. The Committee also resolved to amend article 7.1 of its Rules of Procedure so as to incorporate the said amendment concerning the number of members.

— — Activities — —

Six meetings were held by the Audit and Control Committee in 2011 in accordance with the regulatory structure described above. Four of these meetings were ordinary or routine in character, while two were ad hoc meetings to discuss matters Banco Sabadell of special interest. Meetings were regularly attended by the Comptroller General and the head of Internal Audit. Meetings were also attended by the Chief Financial Offi cer for pre-publi- Annual Report 2011 Annual Report cation reviews of quarterly and half-yearly trading and fi nancial reports, and by other group senior executives when the nature of the business on the Committee’s agenda made their attendance desirable. The Committee also maintained regular contacts with the External Auditors to keep itself informed of progress in the auditing of accounts. These contacts and attendances ensured that the Committee was able to obtain all the information it required to perform the tasks delegated to it by the Board of Directors within its main areas of responsibility, as follows:

94 Functions related to fi nancial reporting, risk management and internal control

The Committee carried out a review to verify that banking or accounting best practice was being applied at all levels of the organization. On the basis of External Audit or Internal Audit reports and reports from the Comptroller General, the Committee satisfi ed itself that suitable steps were being taken at General Manager level and by other senior executive functions to ensure that the group's main risks were being appropriately identifi ed, measured and controlled. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Supervision of internal controls on the group’s offshore operations

The Committee paid particular attention to overseeing the system of internal controls on the group's offshore operations. This was in response to the Bank of Spain's Banking Supervision Memorandum for 2003 setting out recommendations on the policies of banks and other lenders on the use of offshore locations to expand their overseas operations. In carrying out this responsibility the Committee reviewed the fi ndings of audits carried out by offi cial regulators, audit reports prepared by Group Internal Audit, the results of audits carried out by units with local internal audit functions and

auditors' reports prepared during the year 2011 on the accounts and Control Committee of the Audit Report of subsidiaries with offshore operations. As a result of its review the Committee was able to conclude that group operations conducted through offshore establishments were being reduced and that adequate systems were in place to ensure that offshore establishments were subject to internal control by the parent company as required by the group's policy on winding up any operations likely to give rise to legal or reputational issues. A report on this area of the Committee's supervisory duties was submitted to the Board of Directors on 22 March 2011.

Risk management and control systems

During the year the Committee reviewed the group's risk management systems as described in reports prepared by the Risk, Finance and Internal Audit departments. Banco Sabadell In fulfi lment of the group's market disclosure obligations and as required by the Bank of Spain's Circular 3/2008 (the "Solvency Circular"), at a meeting on 22 March 2011 the Committee 2011 Annual Report reviewed the contents of the document entitled "Basel II - Pillar 3 Disclosures" dated 31 December 2010, based on an internal audit report provided for the purpose. At that meeting it also examined information on the group's qualifying capital resources and capital ratios and considered the degree to which they conformed to the requirements of the Solvency Circular and the objectives set out in the group's risk management policies. The Committee also carried out a detailed review of all fi nancial data necessary to provide a clear view of the group's conservative risk profi le in the different categories of risk for which disclosure was required: credit and dilution risk, market risk in the trading book, operational risk, specifi c data on equity investments and equity instruments not 95 included in the trading book, and interest rate risk on non-trading positions. At its 24 January 2012 meeting the Committee reviewed a report submitted by the Risk Department on risk governance, management and control systems for the year 2011, and reached the conclusion that these systems were appropriate to the group's risk profi le. With regard to the organization-wide implementation of internal ratings-based (IRB) credit risk assessment models, the Committee reviewed the fi ndings of internal audits carried out on these models at the request of the Bank of Spain's Supervision Department. These audits enabled the Committee to keep itself WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd informed of the action being taken to comply with requirements specifi ed by the Bank of Spain in its approval notices for the use of Basel II risk assessment models. From reports provided to it by Internal Audit during the year, the Committee was also able to observe the signifi cant progress being made by the group in developing and rolling out advanced systems for the management and measurement of operational risk and for the control of market and counterparty risk.

Internal control systems in the preparation and presentation of regulated fi nancial information

and Control Committee of the Audit Report At its 25 January 2011 meeting, the Audit and Control Committee approved Internal Audit's Strategic Plan for 2011- 2013 setting out a detailed programme for the supervision of the group's system of internal controls over fi nancial reporting (ICFRs). The Plan provides for the carrying out of tests on areas considered to be of key importance within the Banco Sabadell group and the completion of tests in all areas within the three years covered by the Plan, with the exception of certain areas or processes considered to be of special signifi cance; these include critical controls of period-end closing procedures, reviews of judgements and estimates and general controls on disclosure systems subject to evaluation on an annual basis. The reports provided by Internal Audit on the ICFR evaluation tests were reviewed by members of the Audit and Control Committee; any weaknesses identifi ed in the reports were evaluated and an action plan for correcting them was approved. Banco Sabadell

Functions related to auditing Annual Report 2011 Annual Report

The Committee's functions in relation to the auditing of accounts include making recommendations to the Board regarding the appointment of auditors and reviewing their terms of engagement. At its meeting of 25 January 2011 the Committee reviewed group policy on the engagement of auditors and, on the basis of this review, recommended to the Board that the fi rm of PricewaterhouseCoopers Auditores, S.L. be re-appointed as auditors of the Bank's individual and consolidated accounts for the year. The Board of Directors resolved to submit the Committee's recommendation to the Annual General Meeting of 14 April 2011 and the appointment 96 was duly approved by the General Meeting. With regard to auditor remuneration, the Committee reviewed and approved the Auditor's fees for 2011. Details of fees paid to auditors can be found in the annual accounts for the year. To comply with auditor independence requirements, the Audit and Control Committee reviewed the main non-auditing services provided by PricewaterhouseCoopers in 2011. These related primarily to the production of reports required by the regulatory authorities, which this year included reports on the protection of customer assets as required by the CNMV's Circular 5/2009 of 25 November, the annual report of the external advisor on anti-money laundering practices, and the capital adequacy reports required by the Bank of Spain's Circular 3/2008 and by Royal WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Decree-Law 2/2011 on measures to strengthen the fi nancial system. These non-auditing services also included advising the group on its internal control practices in light of the requirements set out by the CNMV in its document on internal control processes relating to fi nancial reporting (ICFRs) by listed companies, and consultancy services on the group's crime prevention procedures to comply with the new Corporate Criminal Liability Act [Ley de Responsabilidad Penal para Personas Jurídicas]. In addition, tax advice and other services of a non-recurring nature were provided in relation to Sabadell United Bank's take-over of Lydian Private Bank. All these tasks were carried out in compliance with the independence requirements of Law 44/2002 on Measures to Reform the Financial System and did not include any activities that

would be incompatible with the work of auditing accounts. and Control Committee of the Audit Report To verify the group's compliance with statutory limits on concentrations of auditing business, the Committee reviewed the proportional share of the fees paid to PricewaterhouseCoopers by the group in the fi rm's total annual revenue. The share was less than 0.01% of the total for the PricewaterhouseCoopers worldwide organization, and less than 0.55% of the total for its Spanish organization. From information provided by the auditors, the Committee also reviewed the procedures and tools used by the fi rm to ensure compliance with the auditor independence requirements. Written confi rmation of the fi rm's independence with respect to the Banco Sabadell group was received by the Committee on 24 January 2012. Based on the results of its enquiries and verifi cations, the Committee submitted a report to the Board of Directors, before the Auditor's Report on the accounts had been issued, giving a favourable opinion on compliance with the auditor independence requirements and concluding that Banco Sabadell the work for which the auditors had been engaged satisfi ed the independence requirements of Law 12/2011 amending Law 19/1988 on the Auditing of Accounts. 2011 Annual Report The Committee kept in constant touch with the Auditor throughout the year to ensure that it was kept informed of any signifi cant accounting or fi nancial reporting issues arising in the course of his work. In the area of external supervision and regulation, the external auditors reported to the Committee, at its 13 December 2011 meeting, on the European Commission's audit policy green paper and on the new disclosures to be made in the Report on Corporate Governance under the CNMV's draft Circular on Risk Control, Management and Internal Control Systems in relation to Financial Reporting. The Committee also received a report on the proposed draft of the group's annual report on Directors’ remuneration and 97 other information required by the Bank of Spain's Circular 4/2011 on company directors, senior managers, employees responsible for risk-taking and employees exercising control functions. As part of the Committee's oversight of the auditors' performance of their terms of engagement, at its meeting of 19 July 2011 the auditors reported to the Committee on the results of their review of the summary consolidated accounts for the fi rst half-year 2011 giving the accounts a clean bill of health. The auditor also presented to the Committee, at its meeting on 24 January 2012, a report on the individual and consolidated annual accounts for the year 2011. The opinion expressed by the Auditor on the accounts was that as in previous years they WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd presented a true and fair view, in all material respects, of the consolidated fi nancial position of the Bank and the group and of the results of their operations and their cash fl ows for the year as required by applicable fi nancial reporting standards and regulations and, in particular, the accounting principles and practices embodied therein. At the same meeting of the Committee on 24 January 2012, following a decision by the Board of Directors of Banco Guipuzcoano, S.A. on 25 November 2010 that the functions of the audit committee of Banco Guipuzcoano be taken over by the Audit and Control Committee of the Banco Sabadell group, the Auditor presented to the Committee the results of his review of the individual and consolidated annual accounts of the Banco

and Control Committee of the Audit Report Guipuzcoano group for the year 2011 and expressed the opinion that, as in previous years, the accounts gave a true and fair view, in all material respects, of the consolidated fi nancial position of the bank and the group.

Functions related to trading and fi nancial reports

In the course of the year the Committee paid particular attention to reviewing the Company's accounts and its quarterly and half- yearly trading and fi nancial reports as well as other information disclosed to the market, including the share prospectus, before they were released for publication. At its meetings of 22 March 2011 and 26 April 2011, the Committee reviewed and reported favourably on share prospectuses of Banco de Sabadell S.A. and Banco Guipuzcoano, Banco Sabadell S.A. to be fi led with the National Stock Market Commission (CNMV) in accordance with EU Commission Regulation (EC) 809/2004 of 29 April 2004 which came into effect on 18 Annual Report 2011 Annual Report July 2005, implementing Directive 2003/71/EC as regards information contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses and dissemination of advertisements. At the Committee's meetings of 26 April, 19 July and 25 October 2011 and 24 January 2012, the Committee reported favourably on the quarterly fi nancial statements for the periods ending on 31 March, 30 June, 30 September and 31 December 2011, respectively, prior to the their being approved by the Board of Directors and released to the markets. At its 19 July meeting the Audit and Control Committee reported favourably on the summary consolidated half-year 98 fi nancial statements of the Banco Sabadell group and the Banco Guipuzcoano group for the fi rst half year for fi ling with the National Stock Market Commission (CNMV), fi nding them to have been prepared and presented in accordance with IAS 34 on Interim Financial Reporting as incorporated into IFRS-EU, with the detailed disclosure requirements specifi ed by the CNMV in its Circular 1/2008 of 30 January, and with article 12 of Royal Decree 1362/2007. In undertaking this work the Committee received documents and held meetings with the Comptroller General, the Finance Director and the Auditor to satisfy itself that that the applicable accounting principles had been properly applied. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Functions related to Internal Audit

One of the Committee's tasks is to approve the plans and methodologies of the Internal Audit department and assess the extent to which the department's plans are being followed and its recommendations are being implemented. This responsibility was met largely through the approval and oversight of the Internal Audit Year Plan. The Internal Audit department submitted its Strategic Internal Audit Plan for 2011-2013 to the Committee at its meeting of 25 January 2011. The plan was carried out on the basis of a review of the processes, undertakings and activities comprising the Banco Sabadell group and paid due regard to the strategic aims set out in

the CREA Master Plan for 2011-2013, the business risks caused and Control Committee of the Audit Report by the current economic climate and systems for measuring and controlling these risks, as well as supervisory and regulatory requirements. The Audit and Control Committee approved the strategic plan as a basis for the oversight of group risks and internal control for the coming three years; it also approved Internal Audit's Year Plan for 2011 identifying individual tasks to be completed in the course of the year. In 2011 the work of Internal Audit concentrated on reviewing the group's internal control systems to mitigate any fi nancial risk, credit risk, operational risk or accounting or regulatory risk to which its operations are exposed. The implementation of the Internal Audit Year Plan resulted in the production of over 400 audit reports and the main fi ndings of these reports, along with replies from senior management to the recommendations contained in the reports, were evaluated by the Committee. Banco Sabadell

All meetings held by the Committee were attended by the Comptroller General and the head of Internal Audit. The following reports were presented: 2011 Annual Report

— A report on the main internal auditing results for the fourth quarter of 2010, at the meeting of 25 January 2011. —A summary of Internal Audit's annual report on its activities in 2010 and its proposed plan of activities for 2011, at the meeting of 25 January 2011. — A report on the main internal audit results for the fi rst quarter of 2011, at the meeting of 26 April 2011. — A report on the main internal audit results for the second quarter of 2011, at the meeting of 19 July 2011. — A report on the main internal audit results for the third quarter of 2011, at the meeting of 25 October 2011. 99

The Committee kept itself fully informed of progress in implementing the recommendations of previous audit reports and each meeting included the presentation of a report on the Audit Department's monitoring of the group instrument panel of key quality indicators. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Functions related to compliance with legal and regulatory requirements on Corporate Governance

One aspect of the Committee's work in the area of corporate governance was to review reports prepared by the Comptroller General and the Internal Audit department on compliance with applicable laws, internal rules and procedures and regulatory requirements. To comply with the requirements of Royal Decree 217/2008 for regular reviews of compliance with the EU Directive on Markets in Financial Instruments (MiFID) by investment services companies, the Audit and Control Committee received information specifi cally related to the implementation of the MIFID rules by the Banco

and Control Committee of the Audit Report Sabadell group, based on an internal audit report prepared for the purpose. In addition, as required by the CNMV in its Circular 5/2009 of 25 November, the Committee reviewed the auditor's annual report on the protection of customer assets held or managed by Banco de Sabadell, S.A., Banco Guipuzcoano, S.A. and Banco Urquijo Sabadell Banca Privada, S.A., from the point of view of the effectiveness of the arrangements made by these undertakings to comply with customer asset protection requirements. The fi ndings of these reports were satisfactory and no gaps or signifi cant weaknesses were identifi ed in relation to the existence and appropriateness of internal asset protection systems in any of the undertakings.

Corporate Governance Banco Sabadell

At its meeting of 25 January 2011 the Committee decided to make a favourable recommendation to the Board of Directors Annual Report 2011 Annual Report regarding a report on Banco de Sabadell S.A. Corporate Governance structure and practices that had been submitted by the Executive Committee in 2010. The Committee also examined half-yearly reports from the group's Corporate Ethics Committee on action to ensure compliance with the Banco Sabadell group’s Code of Conduct on stock market trading, the group's general Code of Conduct, and actions undertaken in the area of Corporate Social Responsibility and other key areas.

Self-evaluation 100 In fulfi lment of Corporate Governance guidelines, the Audit and Control Committee carried out a self-evaluation and submitted a report with an assessment of the Committee's performance to the Board of Directors for consideration at its meeting of 13 December. The report found that the Committee had fully and properly discharged the duties entrusted to it in its rules of procedure by the Board of Directors of the Bank. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd Reports from supervisory authorities

During the year the Committee was briefed on the main points of reports put out by supervisory authorities in Spain and other countries in which the group operates. From the information provided the Committee was able to satisfy itself that the recommendations of the supervisory authorities were being fully implemented.

— — Conclusion

— and Control Committee of the Audit Report —

The activities described in this report ensured that the Audit and Control Committee was able fully to discharge the duties assigned to it in its rules of procedure by the Board of Directors of Banco de Sabadell, within its area of responsibility. As a result of these activities the Committee was able to give an assurance that the Annual Accounts to be signed off by the Board of Directors provide a true and fair view of the consolidated fi nancial position of Banco Sabadell and the results of its operations, and contain all information necessary for their comprehension. The Committee has, in addition, verifi ed that all business, fi nancial and legal risks to which Banco de Sabadell S.A. and its subsidiary undertakings may be exposed are clearly and straightforwardly explained in the Annual Accounts and the Report Banco Sabadell of the Directors. Finally, it has reviewed the contents of the auditor's report to ensure that the opinion on the Annual Accounts and the main fi ndings of the auditor's report are expressed in a 2011 Annual Report clear and precise way.

This report on the activities of the Audit and Control Committee in the year 2011 was signed by the members of the Committee on 24 January 2012 for submission to the General Meeting.

101 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — Report on Directors’ remuneration — — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — —Report of the Board of Directors of Banco de Sabadell, S.A. on Directors' remuneration, following a recommendation of the Nomination and Remuneration Committee — —

1— Introduction

This report on group policy on the remuneration of members of the Board of Directors has been drawn up in accordance with the Board's Rules of Procedure, Article 14.3.c) of which charges the

Nomination and Remuneration Committee with reporting to the remuneration on Directors’ Report Board on policy on the remuneration of Board members. Banco Sabadell's remuneration policy was drawn up in accordance with Spanish legal requirements, including Law 6/2011 of 11 April and Royal Decree 771/2011. Attention was also paid to European Commission recommendations and to the interpretation guidelines issued by the Basel Committee on Banking Supervision. This report has been prepared to comply with Article 61 ter of Law 24/1988 of 28 July on the Stock Market as amended by Law 2/2011 of 4 March on the Sustainable Economy. The group’s policy on directors' remuneration was developed in accordance with the Bank’s Articles of Association and the Rules of Procedure of the Board of Directors. The policy follows the recommendations of the Unifi ed Code on Corporate Governance for Listed Companies approved by the Council of the National Stock Market Commission on 22 May 2006, specifi cally recommendations 8 and 35 to 39 of the Code. Banco Sabadell Articles 217, 218 and 219 of the Spanish Companies Act [Ley de Sociedades de Capital] (previously article 130 of the SA Companies Act [Ley de Sociedades Anónimas]) provide basic 2011 Annual Report rules on the remuneration of directors and state specifi cally that remuneration should be fi xed by the Articles of Association. Article 81 of Banco Sabadell’s Articles of Association requires that directors' remuneration should consist of a share of not more than 3% in the Bank’s net profi ts, and that within that limit the Directors have discretion to fi x their annual remuneration and to distribute it among the members of the Board as they see fi t. Under the same article directors carrying out executive functions may additionally, with the authority of a resolution of the General Meeting, participate in approved incentive schemes for senior executives of the Bank, consisting of compensation in the form of shares, options over shares or compensation linked to the value 103 of shares. In line with the foregoing rules and provisions, Article 22 of the Rules of Procedure of the Board of Directors provides that directors are entitled to such remuneration as the Board of Directors may determine in accordance with the Articles of Association and with the recommendations of the Nomination and Remuneration Committee. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd 2—Banco de Sabadell S.A. policy on directors’ remuneration

— The remuneration of directors has been fi xed in every case having regard to their time commitment, experience and responsibilities and to provide a suitable incentive, but so that the amount of such remuneration does not in any way compromise their independence. — Remuneration criteria have been validated by the Nomination and Remuneration Committee with guidance, where necessary, from internal sources within the group and taking account of circumstances in the compensation market that could be regarded as comparable. Details of the members of the Nomination and Remuneration Committee

Report on Directors’ remuneration on Directors’ Report and the Committee's duties and responsibilities can be found in the Annual Report on Corporate Governance. — The remuneration of each director has been fi xed by the Board of Directors on the basis of recommendations from the Nomination and Remuneration Committee in accordance with the rules and within the limits set out in Article 81 of the Articles of Association. — In general, and especially where executive functions are being performed, Banco Sabadell sees compensation as a value-creating factor which can help to attract and retain the best qualifi ed people and should include a compensation package that is competitively structured and may in certain cases have a variable element linked to the attainment of specifi ed targets that are aligned with shareholders' interests. — Directors are not paid fees for attendance at meetings. Banco Sabadell

3—Remuneration paid to directors in 2011 in accordance with Annual Report 2011 Annual Report the Articles of Association

The remuneration system approved for Banco Sabadell is governed by the following rules:

A—Board of Directors: — The Chairman of the Board of Directors receives a basic fee of €252,000. — Deputy Chairmen of the Board of Directors receive a basic fee of €126,000. — Other members of the Board of Directors receive a basic fee of €108,000. 104 B—Board committees: — Executive directors do not receive payment for chairing or sitting on Board committees or serving on the boards of directors of other group companies. — Except in the case of the Executive Committee (for which no fee is payable), members of Board Committees (the Risk Control Committee, the Nomination and Remuneration Committee, the Audit and Control Committee and the Strategy Committee) are paid an additional fee of €18,000. — Directors chairing board committees receive an additional payment of €18,000. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — The member of the Risk Control Committee who chairs the Credit Committee is entitled to an additional payment of €18,000.

C— For serving on the boards of other group companies: — Members of the Board of Directors of Banco Guipuzcoano receive the following remuneration: the Chairman of the Board is paid a fee of €120,000; the Deputy Chairman receives a fee of €45,000, and other directors who are members of both boards receive a fee of €30,000. — The Chairman of the Board of Directors of BanSabadell Inversió Desenvolupament, S.A.U. receives a fee of €60,000.

D— Contributions in respect of pension commitments under remuneration on Directors’ Report pre-existing agreements with certain members of the Board are provided in the form of pension insurance policies and are shown in the table below. — Under the rules set out above, the remuneration payable to members of the Board of Directors is as follows: Banco Sabadell

— Directors' remuneration 2011 Annual Report 2011 Annual Report €'000 Director Board Risk Nomination and Audit and Boards of of Control Remuneration Control Strategy Executive other group Total Pension Directors Committee Committee Committee Committee Committee companies 2011 Contribution

José Oliu Creus C 252 C C 0 C 252 37.8 Isak Andic Ermay DC 126 M 18 M 18 162 José Manuel Lara Bosch DC 126 M 18 M 18 162 Javier Echenique Landiribar DC 126 M 18 C3 120 264 Jaime Guardiola Romojaro M 108 M M 0 M M3 108 Miguel Bósser Rovira M 108 108 18.9 Francesc Casas Selvas M 108 M 18 126 18.9 Héctor María Colonques Moreno M 108 C 36 144 18.9 Sol Daurella Comadrán M 108 M 18 M3 30 156 105 Joaquín Folch-Rusiñol Corachán M 108 M 18 M 18 144 18.9 M. Teresa Garcia-Milà Lloveras M 108 M 18 M2 27 153 Joan Llonch Andreu M 108 M 18 C2 27 DC3 45 198 18.9 José Ramón Martínez Sufrategui M 108 108 José Permanyer Cunillera M 108 DC1 36 M C4 60 204 18.9 Carlos Jorge Ramalho Dos Santos Ferreira M 108 108

C: Chairman / DC: Deputy Chairman / M: Member (1) Chair, Credit Committee (2) Replaced in mid -2011 (3) Banco Guipuzcoano (4) BanSabadell Inversió Desenvolupament, S.A.U. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd 4— Anticipated remuneration payable to Directors under the Articles of Association for the year 2012:

Fees expected to be paid to Directors under the Articles of Association for the year 2012 will be the same as for the year 2011.

5— Remuneration payable to executive directors for carrying out executive functions

A—The principles governing the payment of compensation to executive directors for performing executive duties are as

Report on Directors’ remuneration on Directors’ Report follows: — Executive directors are entitled to additional fi xed and variable compensation for the specifi c posts they occupy. A suitable balance has been struck between the fi xed and variable components of their remuneration. — The performance and achievement metrics used to determine fi xed and variable compensation are the same as for senior group executives and are designed to produce an overall package that is competitive with packages for similar positions in comparable companies, of which the variable component is a signifi cant part. Additional performance incentives may apply in exceptional cases. — Variable compensation has been set on the basis of a number of factors and particularly the performance of the executive concerned, rather than being determined simply on the basis of the overall performance of the markets or business sectors in Banco Sabadell which the Company operates or similar variables. — Compensation policy has been aligned with the group's business strategy, long-term objectives, values and interests, Annual Report 2011 Annual Report and is consistent with the principle of safeguarding the interests of customers and investors. — Executive directors’ contracts have been drawn up having regard to all standards and principles normally applicable to relationships of this kind. Contract terms and conditions are in line with generally accepted market practice. — Compensation packages are supplemented by the Banco Sabadell executive incentive scheme, detailed terms and conditions of which were approved by the Annual General Meeting on 25 March 2010.

B—Fixed compensation in 2011 106 The fi xed element in executive directors’ compensation is set to refl ect the high levels of responsibility exercised by them and to reward them for their contributions in the posts they hold and for their leadership and managerial abilities. Comparable market situations have been taken account of in fi xing their remuneration. Fixed compensation includes the pay elements established under the various workforce agreements that apply to all group employees. Fixed remuneration paid in 2011 was €1,362,672 for José Oliu Creus and €851,197 for Jaime Guardiola Romojaro. The Managing Director is paid, in addition, a fi xed annual amount of €400,000. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd C— Variable compensation paid in 2011 The principles on which variable compensation is paid are the following: — Assessments take account of the individual's performance and the overall performance of the group. — Performance measurement takes account of the present and future risks associated with performance as well as the cost of capital employed and the liquidity requirement involved.

The variable compensation paid in 2011, calculated on the basis of performance in the year 2010, was paid in February 2011 prior to the publication of Law 6/2011 and Royal Decree 771/2011.

Variable compensation for the Chairman of the Board is fi xed remuneration on Directors’ Report by the Nomination and Remuneration Committee on the basis of an objective measure such as the pre-tax profi t attributable to the consolidated group and other relevant aspects of group performance during the year. This resulted in a total payment of €525,200. Similarly in the case of the Managing Director, variable compensation was fi xed on the basis of the group's profi t performance; given the nature of his responsibilities, however, a differently weighted set of targets was used. These included the attributable group profi t before tax, the net increase in customers and the group’s market shares in lending and deposit-taking. These metrics produced a variable compensation amount of €486,210. The variable compensation calculated on performance in the year 2011 will be paid in February 2012 and is expected to include a deferral and a share-based element as described in section 6. Banco Sabadell

D— Pension commitments - contributions in 2011 Contributions in respect of pension commitments were provided in 2011 Annual Report the form of insurance policies for amounts totalling €989,259.27 for José Oliu Creus and €2,079,040.34 for Jaime Guardiola Romojaro. Contributions to pension plans were also made amounting to €3,156.95 and €1,580.44 respectively.

E— Deferred variable compensation The compensation system includes an incentive scheme for all Banco Sabadell senior executives, detailed terms and conditions of which were approved by the Annual General Meeting on 25 March 2010. Under the scheme, known as "Stock Appreciation Rights 2010-2013", the Chairman and the Managing Director have been 107 awarded 2,600,000 and 2,000,000 rights, respectively; according to the scheme terms as currently drafted, however, no rights had vested under the scheme as of the date of this report.

F— Other benefi ts During the year amounts of €30,340 and €9,843 were assigned to the Chairman and the Managing Director respectively by way of in specie remuneration and other pay components. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd 6— Anticipated remuneration payable to executive directors for performing executive duties in 2012

Remuneration policy for executive directors for the year 2012 will be based on the same principles as for the year 2011 and will comprise the same compensation elements as were payable in that year and in the same amounts. The schedule of payment, deferral and share awards under the variable compensation scheme is compliant with the requirements of Royal Decree 771/2011 of 3 June; half the variable compensation will therefore be deferred over a period of three years, with one-third of the deferred amount being payable in each year of the period. In addition, 50% of the variable compensation

Report on Directors’ remuneration on Directors’ Report will be paid in shares of the Bank. Banco Sabadell Annual Report 2011 Annual Report

108 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — Corporate social responsibility — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — — Summary Report on Corporate Social Responsibility 2011 — —

Banco Sabadell is observing the recent Communication from the European Commission for 2011-2014 on the corporate social responsibility of enterprises. In the Commission’s updated approach, CSR is now defi ned as “the responsibility of enterprises for their impacts on society”. Respect for applicable legislation and for collective agreements between social partners is a prerequisite for meeting that responsibility. To fully meet their corporate social responsibility, enterprises

responsibility social Corporate should progressively integrate social, environmental, ethical, human rights and consumer concerns into their operations and business strategy, in close collaboration with their stakeholders. This with the aim of maximizing the creation of shared value for their stakeholders and for identifying, preventing and mitigating their possible adverse impacts on society. In the course of the last decade, the group’s business mission and values have undergone major processes of transformation, innovation and shared value creation to align Banco Sabadell with this new defi nition. The group is working with employees, customers, consumers, suppliers, institutions and organizations, both nationally and internationally, to create this shared value. The Bank’s Compliance, CSR and Corporate Governance Department is responsible for coordinating social responsibility policies approved by the Board of Directors and has drawn up special CSR programmes as part of the group’s CREA strategic Banco Sabadell plan for 2011-2013.

Annual Report 2011 Annual Report Initiatives, alliances and commitments in relation to stakeholders and the wider community

— Signatory of the United Nations Global Pact The Global Compact International Network has described the Banco Sabadell progress report for 2010 as being of an “advanced level”.

— Signatory of the Equator Principles

— United Nations Principles for Responsible Investment – UNPRI

110 — Signature of the Carbon Disclosure Project

— Global Reporting Initiative

— Banco Sabadell has been using the ISO 26000 standard as a guide to integrate social responsibility into its values and practices.

— Since 2008 Banco Sabadell has been included in the FTSE- 4Good and FTSE4Good IBEX sustainable stock market indices and a member of the Ethibel Investment Register. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — European Foundation for Quality Management (EFQM) Seal of Excellence and “Madrid Excelente” quality mark

— ISO 9001 Certifi cation for 100% of processes and operations of the financial services group in Spain.

— ISO 14001 Certifi cation for fi ve Central Service offi ce buildings.

— LEED NC (New Construction) Sustainable Building Certifi cation for the new offi ce building at the Banco Sabadell Centre.

— Partner in the European Greenbuilding Programme for

the sustainable construction of the Polinyà logistics centre. responsibility social Corporate

— Member of the 2026 CAT Sustainable Development Strategy Advisory Board.

— Committee member, Chair of Applied Ethics, Ethos Ramon Llull Foundation.

— Friend of the ICO-sponsored RSE-PYME Initiative and the Global Compact Spanish Network to raise awareness of corporate social responsibility among Spanish SMEs.

— Executive President of the Catalonia Club for Management Excellence.

— Member of the Madrid Excelente Foundation’s council of experts. Banco Sabadell

— Member of the advisory board of the Luis Vives Foundation Corporate Social Responsibility Magazine. 2011 Annual Report

— Member of the Environment Committee of the Spanish Association for Quality (AEC).

— Member of the SECE Corporate Social Responsibility External Committee.

Banco Sabadell publishes copious information on its economic, social and environmental performance in its annual Report on Corporate Social Responsibility, following the Global Reporting Initiative (GRI) G3.1 international guidelines and its supplement on the fi nancial services industry. Once again, the report has been 111 verifi ed by external auditors and received the maximum rating of A+ from the GRI. Some of the year’s most signifi cant CSR highlights are briefl y described below. These are set out in more detail in the 2011 Report on Corporate Social Responsibility. The report is available to stakeholders on the corporate website, together with the Report on Corporate Governance for 2011.

Creating shared value —In 2011 Banco Sabadell set a tough but stimulating challenge for its employees, summarized in the phrase: “CREAting the bank that we all want”. Fostering a spirit of innovation WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd and commitment on the part of employees is key to the transformation that we are bringing about. — Towards a new way of engaging with the customer and the consumer - in 2011 the customer service account @BancoSabadell was verifi ed by Twitter.com and a help section was set up on the Bank’s Facebook account. Any customer or user can post their comments, suggestions and enquiries on these social networking sites or on the specially created web site, feedback.bancsabadell.com.

Supporting sole proprietors and SMEs — Banco Sabadell granted loans to SMEs and sole proprietors totalling €1,934 million.

responsibility social Corporate — The Confederation of Business Owners, Retailers, Sole Traders and Services in the Community of Madrid (CECOMA) awarded Banco Sabadell its prize for best fi nancial institution in 2011 in recognition of its work in promoting SME fi nance and modernization.

The bank for the best in business. The bank for you. — Banco Sabadell set up a Personal Finance service with the aim of helping individual customers to organize and manage their household economy. — A campaign on the theme of “talking about the future” was launched with the aim of encouraging customers and users to think about how they can save and what will happen after they retire. The group expanded its offering of pension plans and created a savings planning simulator for the use of customers and consumers. Banco Sabadell

A new way of engaging with customers — Launch of Instant Check, a utility allowing customers to pay in Annual Report 2011 Annual Report cheques in real time and capture an image of the cheque on their mobile phone. — A bigger role for the “Branch Direct” service as a sales support tool. “It’s not remote banking, it’s taking your bank with you”: Banco Sabadell customers can now do most of their banking from their mobile phones, even when they are away from their home or workplace – 24 hours a day, seven days a week.

Service quality — A market survey on the fi nancial behaviour of individual bank customers in 2011 by FRS Inmark, a specialist consultancy fi rm, named Banco Sabadell as the bank generating the highest levels 112 of satisfaction within the individual customer segment. Banco Sabadell also maintained its long-standing position as a leader in quality of service to business customers.

Leadership and training — Professional development for managers was extended to the Bank’s 300 top executives. — Launch of a group-wide management programme for employees taking on leadership roles for the fi rst time, prospective heads of department and newly appointed Central Services managers with responsibility for people or equipment. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — Launch of the third round of the LAUDE programme. Under this programme, bank employees can have their in-service training with the Bank recognized in the form of academic qualifi cations awarded by the University of Barcelona’s Continuous Training Institute, which are compatible with the new European Higher Education Area frameworks. — Launch of a digital skills training kit, a series of six videos with advice from an expert in social networking on how to make effective use of the Internet.

Equality and integration — Launch of an Equality Plan according to a timescale agreed with employee representatives.

— To raise awareness of women’s managerial skills in the responsibility social Corporate business world, Banco Sabadell worked with the ESADE Alumni Association to organize the Women and Leadership Forum.

Sustainability and environmental management — In 2011 Banco Sabadell earmarked more than €659 million to fi nance renewable energy projects and became the fi fth Spanish bank to sign up to the Equator Principles. — In April 2012 Banco Sabadell will be opening a new building which earned the LEED-NC (New Construction) GOLD certifi cate at the design stage. — The Paperless Offi ce: a new working culture at bank branches, capturing customers’ electronic signatures on tablets and eliminating paper fi les. The fi rst transactions to be adapted for the new equipment were cash deposits and withdrawals, these being the most frequent transactions done at branches (some 12 million per year). Banco Sabadell — Introduction of a virtual guide for employees entitled “Connect with your environment”. Annual Report 2011 Annual Report

Supporting innovation and research Banco Sabadell undertakes community support and cultural sponsorship activities through the Banco Sabadell Foundation, the Banco Herrero Foundation and the Banco Sabadell Sponsorship Committee. In 2011 these included the annual prizes and awards listed below. Full information on the Foundations and their activities can be found in the “Society” sections of the main group website. — Tenth Herrero Foundation Prize: awarded to the economist Marta Reynal Querol for her research on the relations between economics, ethnic diversity and civil confl ict. — Sixth Banco Sabadell Prize for biomedical research: awarded to 113 Dr. Óscar Fernández-Capetillo, head of the Genomic Instability Group at the National Centre for Oncological Research (Spanish initials: CNIO), in recognition of his work. — Fourth UPF Emprèn Prize awarded by Pompeu Fabra University’s Social Council and the Banco Sabadell Foundation. The prize, which rewards initiative and business ability in undergraduates, was won by the Finixer Sports Innovation project. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — — — — — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — — — — — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — — — — — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — Statutory information — — — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Directors’ statement of responsibility

Statutory informationBanco Sabadell Annual Report 2011 118 Statutory informationBanco Sabadell Annual Report 2011

119 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Auditor’s report Auditor’s WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo

Statutory informationBanco Sabadell Annual Report 2011 120 Statutory informationBanco Sabadell Annual Report 2011

121 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo ts and basic earnings per share fi nancial assets and liabilities nancial assets fi cates including bonds cates fi nancial liabilities ow statement ow fi fl Notes to the Accounts Financial statements Balance sheet Income statement expense income and Recognized equity of changes in Statement Cash capital and anticipated development construction and real estate on loans for Information funding requirements market Report of the Directors 123 and accounting policies and practices Principal business group Banco Sabadell distribution of pro Proposed 45678 institutions credit to and advances Loans 9 instruments equity Other instruments Equity and liabilities) (assets derivatives Trading debtors other to and advances Loans Issuers in the mortgage and the special mortgage market register 17 Other assets 41 Service Customer Department 37 Financial risk management 31 Contingent exposures 27 currency transactions Foreign 24 under insurance contracts Liabilities 21 Debt certi 16 Intangible assets 14 Investments 10 transfers Financial asset 11 risk rate in portfolio hedges of interest of hedged items value Changes in the fair 15 assets Tangible 19 credit institutions Deposits from 13 sale held for with non-current assets associated sale and liabilities held for Non-current assets 18 2526 Provisions of value Fair 12 and liabilities) (assets derivatives Hedging 202223 creditors other from Deposits liabilities Subordinated Other 28293032 Own funds 33 adjustments Valuation 34 Minority interests 3536 Contingent commitments Off-balance38 funds customer sheet Income statement 39 (income tax) Taxation 40 Segmental information 42 The environment 43 party transactions Related Agents and senior management group directors paid to Remuneration duty of loyalty Directors’ 44 events sheet Post-balance Note Title Annex IAnnex undertakings Banco Sabadell group Consolidated Annual Accounts of the Banco Sabadell group for 2011 - Contents 2011 - group for Banco Sabadell of the Accounts Annual Consolidated WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 0 0 0 0 0 0 0 0 0 0 0 2011 2010 (*) 2010 2011 1,977 1,995 877,935 900,519 792,694 804,980 228,946 181,030 823,815 748,622 198,346 82,679 411,076 291,643 997,308 923,141 155,697 254,047 162,735 183,051 417,685 487,564 530,881 351,914 696,934 813,492 694,957 811,497 205,931 118,203 205,931 1,106,881 1,081,549 1,022,161 831,301 1,408,384 1,214,784 2,394,481 1,850,805 2,238,784 1,596,758 1,682,120 1,297,596 1,297,596 1,682,120 76,282,944 76,725,432 12,090,847 9,762,889 100,437,380 97,099,209 (note 11) t or loss 173,326 177,492 (note 25) (note 13) (note 12) nancial assets 13,268,170 10,830,629 (note 16) nancial assets because of macro-coverages nancial assets because of macro-coverages (note 15) (note 17) (note 14) nancial assets at fair value through profi nancial assets at For own use For Leased out under operating leases 85,241 95,539 Tangible fi xed assets fi Tangible nance lease under a fi Acquired Memorandum item: Goodwill Other intangible assets 0 0 Investment propertyInvestment Current Deferred (note 35) Inventories Other Associates Jointly controlled entities Loans and advances to credit institutions (note 4)Loans and advances to credit institutions (note Loans and advances to other debtors (note 8)Debt securities as collateralMemorandum item: Loaned or advanced as collateralMemorandum item: Loaned or advanced 3,628,914 72,654,030 1,541,697 2,744,614 73,980,818 3,953,483 0 0 Loans and advances to credit institutions advances to credit institutions Loans and other debtorsLoans and advances to Debt securities (note 5) Other equity instruments 6) (note derivatives (note 7)Trading as collateral or advanced Memorandum item: Loaned credit institutionsLoans and advances to other debtorsLoans and advances to Debt securities Other equity instruments 6) (note as collateral or advanced Memorandum item: Loaned Debt securities (note 5) Other equity instruments (note 6) as collateralMemorandum item: Loaned or advanced 0 0 0 38,517 1,437,672 0 0 0 0 33,168 0 1,146,225 0 5,869,459 173,326 6,327,006 0 1,177,323 0 177,492 0 1,067,740 Intangible asset Tax assets Tax Other assets Total assets Total (*) Presented for comparative purposes only. Hedging derivatives to pensions Insurance contracts linked Reinsurance assets asset Tangible Non current assets held for sale Investments Held-to-maturity investments Reductions to fi Cash and deposits with central banksCash and deposits Held for trading 1,290,678 1,253,600 Consolidated balance sheet of the Banco Sabadell group Sabadell the Banco sheet of balance Consolidated 2010 31 December 2011 and 31 December As at €’000 Assets Other fi fi Available-for-sale Loans and receivables

Statutory informationBanco Sabadell Annual Report 2011 122 Statutory informationBanco Sabadell Annual Report 2011

123 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2011 2010 (*) 2010 2011 46,003 71,841 71,466 87,297 449,245 451,064 111,145 104,315 173,348 177,512 350,203 367,662 202,133 184,833 130,667 97,536 179,651 253,421 94,503,236 91,410,666 (note 11) (note 13) t or loss 0 0 (note 24) (note 12) nancial liabilities because of macro-coverages nancial liabilities because of macro-coverages (note 25) nancial liabilities at fair value through profi nancial liabilities Deposits from central banksDeposits of credit institutions (note 19)Deposits of the clientele (note 20) (note 21) negotiable securities Debits represented by Subordinated liabilities (note 22) liabilities (note 23)nancial Other fi 17,643,095 8,128,791 19,507,497 58,444,050 4,040,717 10,300,991 1,859,370 1,470,467 55,092,555 32,997 2,386,629 1,390,069 Deposits from credit institutions Deposits from Deposits from other creditors bonds cates including Debt certifi derivatives (note 7)Trading Short positions nancial liabilities Other fi banks Deposits from central Deposits from credit institutions Deposits from other creditors bonds cates including Debt certifi Subordinated liabilities liabilities nancial Other fi 1,451,021 for pensions and similar obligationsProvisions 1,161,121 for taxes and other regulatoryProvisions contingencies for contingent exposures and commitmentsProvisions Other provisions Current Deferred (note 35) 51,079 163,510 89,611 27,891 176,258 91,672 Deposits from central banks Deposits from (*) Presented for comparative purposes only. Hedging derivatives Liabilities associated with non current assets held for sale €’000 Liabilities Other fi Financial measured at amortized liabilities costReductions to fi Liabilities under insurance contracts Provisions 91,586,490 liabilities Tax 88,710,738 Other liabilities liabilities Total Consolidated balance sheet of the Banco Sabadell group Sabadell the Banco sheet of balance Consolidated 2010 31 December 2011 and 31 December As at Financial trading liabilities held for 1,451,021 1,161,121 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 0 0 0 0 0 0 0 0 991 991 2011 2010 (*) 2010 2011 2,790 1,655 (6,150) (5,689) 47,212 33,866 53,362 39,555 (30,374) (3,934) 173,881 157,954 157,954 173,881 157,954 173,881 814,620 818,714 814,620 (174,439) (25,686) (389,228) (323,735) 6,276,160 5,978,412 5,978,412 6,276,160 1,861,702 1,465,980 1,861,702 3,295,137 3,438,010 5,934,144 5,688,543 8,347,022 8,310,022 11,657,865 16,133,441 (note 32) (note 29) (note 31) (note 30) (note 28) Authorized Less: Uncalled capital Accumulated reserves (losses)Reserves equity method the of entities accounted for by (losses) nancial instruments fi Equity component of compound Other equity instruments 224,483 193,040 814,620 3,213,527 818,714 3,102,097 Capital Share premium account Reserves Other equity instruments Available-for-sale fi nancial assets fi Available-for-sale hedges ow Cash fl in foreign operationsHedges of net investments exchange differences Foreign Non-current assets held for sale the equity methodEntities accounted for by Other valuation adjustments adjustments Valuation Other movements (277,573) 0 (85,062) (327,492) 0 5,045 Less: Treasury Less: Treasury shares to parent companyt or loss for the year attributable Profi paymentsLess: Dividends and similar 231,902 380,040 (69,516) (113,727) (*) Presented for comparative purposes only. Equity Consolidated balance sheet of the Banco Sabadell group group Sabadell the Banco sheet of balance Consolidated 2010 31 December 2011 and 31 December As at €’000 Equity Minority interests equity Total liabilities and equityTotal Memorandum item Contingent exposures Contingent commitments 100,437,380 97,099,209 Valuation adjustments Valuation

Statutory informationBanco Sabadell Annual Report 2011 124 Statutory informationBanco Sabadell Annual Report 2011

125 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo (41) (21,346) 2011 2010 (*) 2010 2011 8,752 16,282 8,752 6,165 18,758 99,429 100,151 60,954 48,396 (56,961) (45,105) (13,997) 5,318 (64,031) (54,233) (91,210) (94,259) 582,189 635,861 637,624 570,695 637,624 204,065 271,246 62,324 139,025 (742,600) (679,721) (512,633) (395,905) (634,524) (505,761) 3,394,082 2,644,787 2,644,787 3,394,082 1,459,116 1,537,263 2,506,722 2,331,339 (1,856,819) (1,185,671) (1,145,091) (1,036,055) (note 34.c) (note 34.a) (note 34.b) (note 34.b) (note 34.a) (note 34.e) (note 34.f) (note 34.g) (note 34.d) nancial assets and liabilities (net) nancial assets and t or loss t or loss of equity-accounted entitiest or loss of equity-accounted 37,650 70,867 Personnel expenses Personnel Other administrative expensesLoans and receivables t or loss (note 6) nancial instruments not measured at fair value through profi Other fi (121,891) (109,856) (402,491) (356,334) Held for trading t or loss nancial instruments value through profi to reasonable Other fi t or loss Financial instruments value through profi not measured at fair Other Income from insurance and reinsurance contractsnancial services Sales and income from non-fi Other operating income 126,056 Expenses from insurance and reinsurance contractsChange in inventories 0 Other operating expenses 123,166 (183) 34,912 3,563 (34,208) 27,848 23,907 (27,808) Impairment losses (net) Depreciation and amortization expense (net) Provisioning Operating profi (130,921) (158,980) Interest expenses and similar charges Interest expenses Net Interest income Returns instruments on equity Share of profi income and commission Fee exchange differences (net)Foreign Other operating income Other operating expenses Gross income Administrative expenses 69,999 58,655 Interest and similar income Interest and expense and commission Fee Gains or losses on fi (*) Presented for comparative purposes only. €’000 Consolidated income statement of the Banco Sabadell group Sabadell Banco of the statement income Consolidated the years 2010 2011 and 31 December ended on For WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 0.17 0.32 0.15 0.28 0.15 0.28 2011 2010 (*) 2010 2011 3,970 2,882 5,672 296,111 5,672 296,111 48,406 (81,419) 48,406 (23,007) (21,286) ed ed as non-current (note 30) t or loss for the period 235,872 382,922 (note 34.h) (note 35) t or loss attributable to minority interests t or loss attributable to the parent company 231,902 380,040 t or loss before discontinued operationst or loss before year before discontinued operationst or loss for the t or loss from discontinued operations (net) 235,872 187,466 382,922 464,341 0 0 Earnings per share (€) Earnings per share of after adjusting for conversion Basic earnings per share mandatory convertible bonds (€) (€) Diluted earnings per share Proffi Profi Goodwill and another intangible asset (note 16) and another intangible Goodwill 15 and 17) (notes 13, Other assets (316) (377,072) (175) (446,170) Income tax Profi Consolidated profi Negative goodwill arising in business combinationsNegative goodwill currentGains (losses) of non assets held for sale not classifi Profi Profi 0 0 held for sale for discontinued operations Gains (losses) in derecognition of assets not classifi Gains (losses) in derecognition Losses due to impairmentLosses due of other assets (net) (377,388) (446,345) (*) Presented for comparative purposes only. Consolidated income statement of the Banco Sabadell group Sabadell Banco of the statement income Consolidated the years 2010 2011 and 31 December ended on For €’000

Statutory informationBanco Sabadell Annual Report 2011 126 Statutory informationBanco Sabadell Annual Report 2011

127 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2011 2010 (*) 2010 2011 1,629 5,470 (37,771) 11,600 (10,352) 160,374 cations cations cations cations cations cations t or loss for the periodt or loss 235,872 382,922 Revaluation gains/(losses)Revaluation income statementAmounts transfered to Other reclassifi 92,116 (21,472) 50,021 (601,651) Revaluation gains/(losses)Revaluation income statementAmounts transfered to initial carryingAmounts transfered to of hedged items amount Other reclassifi 0 5,159 (42,930) 0 (18,330) 29,930 Revaluation gains/(losses) Revaluation Amounts transfered to income statementOther reclassifi 0 0 Revaluation gains/(losses) Revaluation Amounts transfered to income statementOther reclassifi 3 (18) Revaluation gains/(losses) Revaluation Amounts transfered to income statementOther reclassifi 0 0 Revaluation gains/(losses)Revaluation Amounts transfered to income statementOther reclassifi 0 (90,107) 4,905 0 Available-for-sale fi nancial assets: nancial fi Available-for-sale 70,644 (551,630) Cash fl ow hedges: Cash fl Hedges of net investments in foreign operations: Hedges of net investments 0 0 Foreign exchange differences: Foreign 1,632 5,452 Non-current assets held for sale: Actuarial gains/(losses) on pension schemes Actuarial gains/(losses) on pension schemes the equity method: Entities accounted for by (90,107) 0 4,905 0 Other recognized income and expense Income tax 0 0 Consolidated profi Consolidated income and expenseOther recognised (65,954) (369,299) (*) Presented for comparative purposes only. The statement of income and charges in equity is made up of the consolidated statement of recognised Sabadell group. income and expense together with the consolidated statement of changes in total equity for the Banco €’000 Statement of changes in equity changes of Statement group Sabadell the Banco expense for income and of recognised statement Consolidated the years 2010 2011 and 31 December ended on For Total recognized income and expense recognized income Total Attributable to parent company Attributable to minority interests 169,918 166,409 3,509 13,623 12,649 974 Total Total Total Total equity equity Minority Minority interests interests ,543 97,370 688,543 5,934,144

6 5,688,543 1 5,297,370 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Total Total own own Total Total Total Total funds funds Valuation Valuation Valuation Valuation adjustments adjustments Less: Less: payments Dividends payments Dividends and similar and similar t or t or loss for loss for Profi Profi the year the year company company to parent to parent attributable attributable Own funds Own funds Equity attributable to parent company Equity attributable Equity attributable to parent company consolidated statement of changes in total equity for the Banco Sabadell group. Less: Less: shares shares Treasury Treasury Treasury Treasury Other Other equity equity instruments instruments method method (losses) (losses) Reserves Reserves of entities of entities by the equityby by the equityby accounted for accounted for (losses) (losses) reserves reserves Accumulated Accumulated 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (197,127) 0 44,211 (152,916) 0 (152,916) 0 (152,916) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (93,392) 0 0 0 (168,000) 0 (207,119) 54,273 (207,119) 0 (207,119) 0 Share Share account account premium premium Capital Capital €’000 Statement of changes in equity changes of Statement group Sabadell for the Banco total equity in of changes statement Consolidated the years 2010 2011 and 31 December ended on For €’000 Statement of changes in equity for the Banco Sabadell group Consolidated statement of changes in total equity the years 2010 and 2009 ended on 31 December For nancial liabilities to equity 0 0 0 0 0 0 0 0 0 0 0 0 0 nancial liabilities to equity to 0 0 0 0 0 0 0 0 0 0 0 0 0 liabilities nancial

Statutory informationBanco Sabadell Annual Report 2011 128 cation of fi nancial liabilities cation of fi cation of fi nancial liabilities nancial liabilities cation of fi Reductions in capitalClosing balance at 31.12.2009equityAdjustments due to changes in accounting policyin Adjustments to correct errors in Adjusted opening balance changes recognized income and expenseTotal Other 0instruments Increases in capital Reductions 150,000 of fi Conversion Increases in other equity instruments 1,373,270 0Reclassifi 2,840,566equity to other equity instruments 7,954 0 0 (522,489) 0 Distribution of dividend and other 92,710 261,531 0 0 0 0 0 0 0 0 0 150,000 146,2110 0 112,517 0 0 0 0 0 0 to shareholders payments 46,829 318,714 0 0 0 0 0 0 0 0 1,373,270 in own equity instruments (net)Trading 500,000 54,273 372,039 2,840,566 0 equity items equity between Transfers in (138,203)Increases/reductions due to business 146,211 combinations 0 0 372,039 522,489 0 5,511 377,550 Discretionary projects and transfer to welfare 0 500,000 funds (168,000) (138,203) 7,954 Payments 0 5,226,333Other increases (reductions) in equity 522,489 0 228,874 0 Closing balance at 31.12.2010 (168,000) 0 43,656 0 0 Presented for comparative purposes only 5,226,333 5,269,989The statement of changes in equity is made up of the consolidated statement of recognized income and expense together with the (30,083) 0 43,656 27,381 0 0 5,269,989 0 5,2 0 0 27,38 0 0 0 8,179 307,660 157,954 0 0 325,471 1,465,980 (42,772) 46,829 3,102,097 0 (24,225) 0 0 193,040 0 0 0 380,040 0 818,714 (1,625) 0 112,517 0 (25,686) 0 0 0 380,040 (5,132) 0 0 (113,727) (354,489) 0 5,978,412 0 380,040 (323,735) 0 0 (367,391) 0 5,654,677 0 295,388 12,649 33,86 0 0 0 0 0 119,071 0 974 236,828 0 0 0 13,623 295,388 0 0 0 0 119,071 0 (72,129) 0 236,828 0 0 295,388 0 0 0 0 0 119,071 0 (72,129) 236,828 0 5,511 0 (66,618) 0 0 Reductions in capitalClosing balance at 31.12.2010 policyAdjustments due to changes in accounting Adjustments to correct errors in Adjusted opening balance recognized income and expenseTotal Other changes in equity 0instruments Increases in capital Reductions 157,954 of fi Conversion Increases in other equity instruments 1,465,980 0Reclassifi 3,102,097equity to other equity instruments 0 0 0 Distribution of dividend and other 0 0 0 0 0 0 0 0 0 157,954 193,040 0 0 0 0 0 0 0 0 to shareholders payments 0 0 0 0 0 0 0 0 in own equity instruments (net)Trading 1,465,980 818,714 equity items equity 0 between Transfers 3,102,097in Increases/reductions due to business 15,927 (25,686)combinations 0 193,040 0 Discretionary projects and 380,040 transfer to welfare 0 395,722funds 15,927 818,714 Payments (113,727) 0 111,430Other increases (reductions) in equity 5,978,412 (25,686) 400,022 0 0 Closing balance at 31.12.2011 (323,735) 0 380,040 0 31,443 0 5,654,677 (113,727) 0 5,978,412 33,866 (4,094) 0 0 (323,735) (148,753) 5, 0 0 5,654,677 (380,040) 0 0 0 0 7,183 151,470 33,866 173,881 44,211 0 0 5,688 1,861,702 0 (4,300) 31,443 3,213,527 65,846 0 0 (47,223) 0 224,483 0 0 0 231,902 814,620 (4,151) 0 0 0 (174,439) (148,753) 0 0 231,902 65,846 0 0 0 0 (69,516) 0 9,837 (182,913) 0 6,276,160 57 231,902 0 (389,228) 0 75,683 5,886,932 0 (65,493) 166,409 0 47,212 0 0 0 0 0 (145,721) 3,509 0 415,949 169,918 0 0 0 0 0 0 (145,721) 0 0 0 415,949 0 0 0 0 (51,466) (145,721) 0 0 0 0 415,949 0 0 0 (51,466) 0 9,837 0 0 (41,629) 0 0 Statutory informationBanco Sabadell Annual Report 2011

129 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 0 0 0 751 0 0 2011 2010 (*) 2010 2011 6,887 9,695 93,933 48,766 21,407 26,352 16,037 (19,414) 18,53211,645 441,843 452,289 (91,723) (324,400) 361,944246,604 130,915 323,375 325,732 (126,199) 325,732 (845,205) 3,010,579 ows from operating activitiesows from 39,198 (165,420) ow statement for the Banco Sabadell group Banco Sabadell for the ow statement t for the yeart for the 235,872 382,922 ows from investing activitiesows from investing (343,412) 128,914 ows from operating activitiesows from 740,332 (484,177) (-) Tangible assets assets (-) Tangible (-) Intangible assets (-) Investments (-) Subsidiaries and other business units (-) Non-current liabilities held for sale assets and associated (-) Held-to-maturity investments 0 0 0 117,342 Other operations assets activities related to investment (-) Other payments assets (+) Tangible (+) Intangible assets (+) Investments (+) Subsidiaries and other business units (+) Non-current liabilities held for sale assets and associated (+) Held-to-maturity investments activities related to investment (+) Other payments 0 0 0 0 0 0 0 0 Depreciation and amortizationOther adjustments Financial assets held for tradingt or loss through profi nancial assets at fair value Other fi assetsnancial fi Available-for-sale Loans and receivables Financial assets held for tradingt or loss liabilities at fair value through profi nancial Other fi Financial measured at amortized liabilities costOther operations liabilities (4,166) 130,921 (4,674) 384,525 2,288,321 0 158,980 2,385,750 1,384,651 86,338 289,900 3,723,241 0 (31,171) Paid/received in respect of income taxPaid/received Cash fl made Payments (77,218) (23,640) Payments received Payments Cash fl profi Consolidated cash fl Adjustments to obtain in operating assetsNet increase/decrease in operating liabilitiesNet increase/decrease 2,149,207 4,350,695 2,691,687 3,672,656 (*) Presented for comparative purposes only. €’000 Consolidated cash fl Consolidated the years 2010 2011 and 31 December ended on For WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 0 0 2011 2010 (*) 2010 2011 40,400 11,409 40,400 812,892 414,705 812,892 239,346 233,819 152,916 113,936 113,936 152,916 0 480,559 1,173,869 629,808 629,808 1,173,869 ow statement for the Banco Sabadell group Banco Sabadell for the ow statement nancing activities (360,977) (215,103) ows from fi ows from (+) Cash and banks to the group consolidated entities but not available of which: held by 0 0 (+) Subordinated liabilities (+) Subordinated liabilities instruments(+) Issuance of own equity instruments(+) Disposal of own equity nancing activities related to fi (+) Other payments (+) Cash equivalents at central banks nancial assets (+) Other fi on demand rayable (-) Less: Banking overdrafts 410,052 362,440 0 403,296 0 0 1,051,332 0 1,019,781 0 (-) Dividends (-) Dividends (-) Subordinated liabilities equity instruments(-) Redemption of own instruments(-) Acquisition of own equity nancing activities related to fi (-) Other payments 33,832 2,553 504,009 23,513 492,359 0 Effects of changes in exchange ratesEffects of changes in Net increase/decrease in cash and cash equivalentsCash and cash equivalents at beginning of periodCash and cash equivalents at end of periodMemorandum item end of period Components of cash and cash equivalents at at end of period cash and cash equivalents Total 37,078 1,253,600 1,135 (566,557) 1,290,678 1,820,157 1,253,600 3,809 Payments made Payments Cash fl Payments received Payments (*) Presented for comparative purposes only. Consolidated cash fl Consolidated the years 2010 2011 and 31 December ended on For €’000

Statutory informationBanco Sabadell Annual Report 2011 130 Statutory informationBanco Sabadell Annual Report 2011

131 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo rst-time adopters The limit on a defi ned benefi t asset, minimum funding requirements and their t asset, ned benefi The limit on a defi interaction The Bank is the parent company of a group of financial services undertakings (see Annex I) whose activities it services undertakings (see Annex I) whose company of a group of financial The Bank is the parent the Bank of Spain’s Circular 4/2004 with the English title of “Credit This was followed by the publication of the group for the year 2011 have been prepared in accordance with IFRS- The consolidated annual accounts of annual accounts is the responsibility of the directors of the The information provided in these consolidated annual accounts are expressed in thousands of euros and all Unless otherwise indicated, these consolidated Standards and amendments to standardsIAS 24 (amended)IAS 32 (amended)IFRS 1 (amended) mandatory For adoption in 2011 Disclosures on related parties cation of rights issues Financial instruments: presentation – classifi Limited exemption from comparative IFRS 7 disclosures for fi IFRIC 14 (amended) IFRIC 19 to IFRSImprovements 2010) project (May Third annual IFRIC improvements nancial liabilities with equity Extinguishing fi Note 1. Principal business, accounting policies and practices policies accounting business, Note 1. Principal Principal business 20, Sabadell, registered office is at Plaza de Sant Roc, of Banco de Sabadell, S.A. whose The corporate object of banking is to carry on business as a provider to as “Banco Sabadell” or the “Bank”) Spain (also referred in Spain. applicable to all banks operating it is subject to the laws and regulations services. As such, group (the “group”). Bank, make up the Banco Sabadell indirectly and which, together with the controls directly or Basis of presentation the Council of 19 of the European Parliament and of under Regulation (EC) No 1606/2002 On 1 January 2005, to prepare their consolidated annual accounts in accordance with the July, it became mandatory for companies adopted by the European Union (“IFRS-EU”) if, at their balance sheet International Financial Reporting Standards trading on a regulated market of any Member State. date, their securities were admitted to Reporting Rules and Formats”, and subsequent amendments thereto, Institutions - Public and Confidential Financial to banks to bring them into line with IFRS-EU. changing the accounting rules applicable consolidated equity and financial position of the group, the consolidated EU to give a true and fair view of the and expense, changes in consolidated equity and consolidated cash results of its operations, recognized income do not contain significant differences with respect to the accounts that flows. The consolidated annual accounts with Bank of Spain Circular 4/2004. There is no obligatory accounting would be obtained if prepared in accordance having a material effect that has not been applied in preparing the accounts. principle, standard or valuation policy accounting principles, standards and valuation procedures that have A summary statement of the most significant accounts is provided in this note. been applied in these consolidated annual annual accounts for the year 2011 were signed off by the directors parent company of the group. The consolidated Board on 26 January 2012 and will be submitted to the Annual General of Banco Sabadell at a meeting of the the Meeting will approve the accounts without significant changes. Meeting for approval. It is expected that figures are rounded to the nearest thousand euros (€’000). coming into “IASB”) Accounting Standards BoardStandards (the and interpretations issued by the International effect in 2011 (“IFRSs”) and interpretations The following amendments to the International Financial Reporting Standards standards and interpretations (“IFRICs”) came into effect in the course of 2011. The adoption of these amended statements. across the group has had no material impact on these consolidated financial Notes to the consolidated annual accounts of the Banco Sabadell group Sabadell the Banco of accounts annual consolidated to the Notes 2010. December and 31 2011 31 December on years ended For the

2013 2013 2013 2013 2015 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Adoption mandatory as from nancial statements 2013 cation of rights issuescation of 2014 Subsidiaries are entities over which the Bank is able to exercise control and which therefore constitute, together Bank is able to exercise control and which therefore constitute, together Subsidiaries are entities over which the decision-making unit together with The group therefore includes all subsidiary undertakings that constitute a are consolidated solely on the basis Profits or losses generated by entities acquired by the group during the year and one or more other entity Jointly controlled entities are those which are controlled jointly by the group influence which is generally, but not Associates are entities over which the group is able to exercise a significant The group carried out an assessment of the impacts this would have and decided not to exercise its option to to exercise its option and decided not this would have of the impacts carried out an assessment The group Accounting principles and policies applied standards and valuation policies that have been applied in preparing The most significant principles, accounting are as follows: these consolidated annual accounts (a) Consolidation principles of entity are distinguished: subsidiaries, jointly controlled entities and In the consolidation process three types associates. The ability to exercise control is generally, but not exclusively, manifested with the Bank, a decision-making unit. of an interest giving the holder more than 50% of the voting rights in the through the direct or indirect holding to determine the financial and operating policies of the subsidiary so as to subsidiary. Control means the power even when a majority interest is not held. profit from its activities, and may be exercised method. Interests held by third the Bank. These undertakings have been consolidated by the full consolidation minority interests and the share of the parties in group shareholders’ equity are shown in the balance sheet under income statement under profit or loss profit or loss for the year attributable to these shareholders is shown in the attributable to minority interests. and the end of the year. Similarly, of the profits or losses generated in the period between the date of acquisition year are consolidated solely on the basis profits or losses generated by entities disposed of by the group during the year and the date of disposal. of the profits or losses generated in the period between the beginning of the and maintain assets in such or entities not related to the group. Entities of this kind undertake operations the entity requires the a way that any strategic decision of a financial or operational nature concerning been consolidated by the proportional unanimous consent of all interest holders. Jointly controlled entities have consolidation method. 20% or more of the voting rights. exclusively, manifested through a direct or indirect interest that gives the group that is, according to the fraction In the consolidated accounts associates are accounted for by the equity method, of any dividends received from the of the equity represented by the group’s shareholding, after taking account associate and other eliminations. (1) Standards and interpretations not adopted by the EU on 31 December 2011. (1) Standards and interpretations not adopted by endorsement. (2) Awaiting Standards and amendments Standards and amendments to standards IAS 12 (amended) (1)IAS 1 (amended) (1)IAS 19 (1) Deferred taxes: recovery of underlying assets IFRS 13 (1)IAS 28 (1) expense Presentation of statement of recognised income and IAS 27 (1)IFRS 7 (amended)IFRS 10 (1)IFRS 11 (1)ts benefi Employee value measurement Fair IFRS 12 (1) of Financial Assets Disclosures of Transfers IFRS 13 (1) in associates and joint ventures Investments IAS 32 (amended) (1) fi Separate IFRS 9 (2) statementsnancial Consolidated fi Classifi Joint arrangements Disclosure of Interests in Other Entities value measurement Fair 2013 Financial instruments 2012 2013 2013 2013 2013 IASB-issued standardsIASB-issued and interpretations in effect not yet at the IASB by been published had to the group apply which could and interpretations standards The following of the after the date effective dates came either because their not yet in effect, 2011 but were 31 December European Union. approved by the they had not yet been or because financial statements consolidated of the impacts. the non-materiality in view of where this was feasible, adopt early

Statutory informationBanco Sabadell Annual Report 2011 132 Statutory informationBanco Sabadell Annual Report 2011

133 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo benefits, and in estimates of liabilities under insurance contracts (notes 1(q), 1(s), 24 and 25). benefits, and in estimates of liabilities In the consolidation process all significant balances and transactions between group undertakings have been have been group undertakings between and transactions balances all significant process consolidation In the in provided year are during the group by the made and disposals acquisitions most significant of the Details - certain financial assets (notes 1(e), 4, 5, 6, 8 and 13). Impairment losses on - estimates of liabilities and commitments in respect of post-employment Assumptions used in actuarial - and intangible assets (notes 1(j), 1(m), 15 and 16). The useful lives of tangible - on consolidation (notes 1(m) and 16). The valuation of goodwill - assets for which market prices are not available (notes 1(d), 5 and 6). The fair values of financial - 17). estate assets held on the balance sheet (notes 1(h), 1(j), 1(n), 13, 15 and The fair values of real best information available to senior managers on present and foreseeable Although estimates are based on the the following categories according to the valuation method that is applied Financial instruments are divided into of a financial asset on a given date is Financial instruments of this type are measured at fair value. The fair value can be estimated from the values Where there is no market price for a particular financial asset, the fair value instruments, the gain or loss Changes in fair value are taken directly to profit or loss. For non-derivative eliminated in such proportion as may be appropriate, depending on the consolidation method being applied. being method consolidation on the depending may be appropriate, as proportion in such eliminated note 2. (b) Accrual principle have been flow statements) consolidated cash items of the the exception of certain accounts (with These annual made or which payment was of the date on services, regardless of goods and based on real movements prepared received. preparing the financial statements and estimates in (c) Use of judgements It also requires that certain estimates be made. the consolidated annual accounts requires The preparation of estimates may the group’s accounting policies. Such by senior managers in applying the exercise of judgement liabilities at the classification of contingent assets and value of assets and liabilities and the affect the carrying by the accounts. Key items in the period covered accounts, as well as income and expenditure date of the annual the following: estimates relate to at variance with these estimates. circumstances, final outcomes may be recording and of financial instruments Valuation (d) purchases of financial assets are recognized in the balance sheet using As a general rule, regular way sales and settlement date accounting. to them: instruments held for trading Financial • as held for trading if they have been acquired or issued to be sold Financial assets/liabilities are classified that are managed together or repurchased in the near term, or form part of a portfolio of financial instruments are instruments that do not fit the and in which there has been recent action for short-term profit taking, or as hedging instruments for accounting definition of a financial guarantee contract and have not been designated purposes. willing parties in an arm’s defined as the amount for which the asset could be exchanged between knowledgeable, being quoted for the asset on an actively length transaction. The best evidence of fair value of an asset is the price depth. traded market where the market is organized, transparent and of reasonable suitably tested valuation models. Any established for similar assets in recent transactions or, failing that, by using account, particularly the different types peculiarities specific to the financial asset being valued are also taken into the valuation models that have been of risk that may be associated with it. However, the limitations inherent in models may result in the estimated developed and possible inaccuracies in the assumptions required by these asset could be bought or sold as of the fair value of a financial asset not precisely matching the price at which the valuation date. from the other gains or losses, with the attributable to the returns accruing on the instrument are treated differently as gains or losses on financial assets former being recorded as interest or dividends as appropriate, and the latter and liabilities. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Available-for-sale financial assets are measured at their fair value. Changes in value are temporarily recorded, fair value. Changes in value are temporarily assets are measured at their Available-for-sale financial at their amortized cost, where “amortized cost” means the acquisition Loans and receivables are recorded of a financial instrument to the The effective interest rate is the discount rate that exactly equates the value the income statement under interest Interest is determined by the effective interest rate method and recorded in This reflects the value of Also included in this category is capital having the nature of a financial liability. • Other financial assets and liabilities at fair value through profit or loss or profit through value fair at liabilities and assets financial Other • financial as hybrid designated are recognition on original which instruments financial includes category This managed are assets which financial includes It also basis. a fair value on entirely are measured and instruments derivatives fair value or with financial measured at insurance contracts liabilities under together with are fair value, or which to changes in reducing exposure effect of significantly the purpose and which have significantly reducing for the purpose of and derivatives financial liabilities in combination with managed assets/ way as for financial in the same valued and recorded rate risk. These are to interest overall exposure be reliably fair value cannot instruments whose not include equity category does held for trading. The liabilities estimated. assets Available-for-sale financial • that are not designated as held-to-maturity debt securities and equity instruments This category includes financial or loss, loans and receivables, or assets at fair value through profit investments or financial jointly controlled by, not subsidiaries or associates of, or for trading or of entities that are assets/liabilities held the group. exchange differences equity, unless they are due to foreign adjustments in consolidated net of tax, under valuation Amounts recorded as valuation adjustments continue to be included in arising on monetary financial assets. which they have originated is derecognized on the balance sheet, when consolidated equity until the asset from or loss. they are charged or credited to profit and receivables Loans • assets not traded on an active market or required to be designated as Loans and receivables are financial are of a fixed or determinable amount and whose cost to the group will at fair value, the cash flows on which related to borrower solvency. This category comprises investments be recovered in full, except for reasons and includes amounts loaned to customers and not yet repaid; deposits associated with normal bank lending regardless of the legal arrangements under which the funds were placed with other financial institutions, and any debts incurred by purchasers of goods or services forming part of provided; unquoted debt securities; the group’s business. of principal and the cumulative amortization (as shown in the cost of a financial asset less any repayments interest rate method) of the difference between the initial cost and the income statement using the effective any reduction in value due to impairment, whether recognized directly repayment amount at maturity, and less fair a provisioning account. Where loans and receivables are covered by as a write-down of the asset or through value is recorded where the change is associated with the risk or risks value hedges, any change in their fair covered by the hedge. contract terms of the instrument estimated cash flows over the remaining life of the instrument, based on the credit risk. For a fixed-rate instrument including any early repayment option but disregarding future losses due to at the time the instrument was acquired the effective interest rate is the same as the contract interest rate agreed case of a variable-rate instrument the plus any fees or commissions that qualify for treatment as interest. In the and fees on the instrument, until the effective interest rate is the same as the rate of return in respect of interest first date on which the base rate comes up for review. and similar income. Financial liabilities at amortized cost • under any other balance sheet heading This category comprises those financial liabilities that cannot be classified regardless of the term and other and are associated with the normal deposit-taking activity of a financial institution, arrangements under which the deposit is set up. for legal purposes, do not qualify for financial instruments issued by the group which, although treated as capital that do not carry voting rights and on classification as equity. These instruments consist mainly of issued shares which a dividend is paid based on a fixed or variable rate of interest.

Statutory informationBanco Sabadell Annual Report 2011 134 Statutory informationBanco Sabadell Annual Report 2011

135 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo For financial instruments the fair value measurements disclosed in the financial statements are classified are classified statements financial in the disclosed value measurements the fair instruments For financial are all significant inputs for which other valuation techniques expected flows or recent transactions, prices of data. observable market directly or indirectly based on data. observable market determined individually for all debt instruments that are individually Objective evidence of impairment is the following categories, on the basis of the insolvency risk attributable Such instruments are classified into that is attributable to Similar estimates are also made to determine the credit risk on these instruments is extended or renegotiated. The period of arrears on an instrument does not cease to run when the instrument losses on debt instruments In addition to these specific provisions, the group makes provision for latent this purpose, when making Since the group’s own historical and statistical data are not sufficient for according to the following fair value hierarchy: hierarchy: fair value following to the according - for the same instrument. on active markets prices quoted from the (unadjusted) values are obtained Level I: Fair - the instruments, markets for similar quoted on active from the prices being are obtained Level II: Fair values - inputs are not based on techniques for which some significant III: Fair values are obtained by valuation Level assets (e) Impairment of financial statement where assets are recognized in the income to the carrying value of financial In general, adjustments that is, occurred. In the case of debt instruments, that an impairment loss has there is objective evidence recognition of to have occurred when, after initial an impairment loss is considered loans and debt securities, future cash flows. In causes a negative impact on its event or a combination of events the instrument, a single initial recognition, deemed to have occurred when, after instruments, an impairment loss is the case of equity will not be that the carrying value of the instrument combination of events makes it likely a single event or a recovered. assets carried at amortized cost Financial • exposures and contingent commitments, regardless of the obligor, Portfolios of debt instruments, contingent security/collateral, are analysed to determine the credit risk to which the contractual arrangements or the the impairment provision required. In preparing the consolidated financial the group is exposed and to estimate risk transactions on the basis of credit risk, with customer insolvency statements the group classifies its lending risk to which transactions may be exposed. being analysed separately from any country for groups of debt instruments that are not individually significant. significant, and individually or collectively in any group of assets with similar credit risk features, it is analysed When an instrument cannot be included whether it is impaired and, if so, to estimate the impairment loss. solely on an individual basis to determine standard, sub-standard, doubtful due to customer arrears, doubtful to the customer or to the transaction: and write-off. For debt instruments not classified as standard risks, for reasons other than customer arrears, are estimated having regard to the age of past-due accounts, the type the required provisions for impairment provided and the financial situation of the customer and any and value of any collateral or other security on the basis of a default schedule drawn up by the Bank of Spain from guarantors. These estimates are made Spanish banking industry in accordance with the Bank of Spain’s Circular its knowledge and experience of the 3/2010. in a specific country that arises from country risk. Country risk means the risk associated with customers resident circumstances other than normal commercial risk. or renegotiation, it will not be Where an instrument has been classified as a doubtful risk before extension that the customer can make payment reclassified as standard or sub-standard unless there is reasonable certainty the overdue ordinary interest, at on schedule, or additional good security is provided and, in either case, unless least, is paid (apart from any interest for late payment). basis. The collective provision is classified as standard risks by providing for impairment loss on a portfolio-wide at the time of the risk assessment, made from historical impairment experience and other circumstances known statistical procedures, but not and covers latent losses incurred at the balance sheet date, calculated using identified with specific transactions. of determining provisions these provisions it relies on parameters set by the Bank of Spain. This method percentages which vary according for latent loss due to impairment of debt instruments involves the use of into which standard risk to how debt instruments classified as standard risk are assessed. The sub-categories medium risk, medium-high risk and instruments are classified are: negligible risk, low risk, medium-low risk, high risk. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Transactions classified as sub-standard are analysed to determine the provision coverage required. This This required. coverage provision the to determine analysed are as sub-standard classified Transactions for all debt instruments the income statement be recognized in rates ceases to at contractual Interest recorded the fair value of an asset is due to impairment, evidence that a diminution in the Where there is objective there is objective evidence of impairment in debt instruments, whether In reaching a conclusion on whether exposure to sovereign debt is assessed by tracking market movements Any likely impairment due to the group’s group will consider whether a prolonged or significant fall in the In the case of quoted instruments, the will be analysed separately include Where exceptional market circumstances are present, market factors that will of necessity be greater than the generic provision that would apply if the risk was classified as standard. as standard. classified risk was if the would apply that provision the generic than be greater necessity will of will sub-standard as is classified transaction which a period in in the made charges impairment net Furthermore, as a to be classified had continued made if the transaction that would have been than the charges be greater risk. standard calculated been collectively losses have or for which impairment as impaired been individually classified that have three months in arrears. more than of there being accounts as a result assets Available-for-sale financial • financial assets are classified as available-for-sale on debt securities and equity instruments Impairment losses and their fair value cost net of any repayment of principal, difference between their acquisition equal to the positive income statement. loss previously recognized in the consolidated less any impairment in the income adjustments are recorded immediately directly in equity as valuation unrealized losses recognized recognized, in the recovered, the amount is part of the impairment losses are subsequently statement. If all or in the case of equity period in which the recovery occurs; in the income statement for the case of debt securities, in equity as a valuation adjustment. instruments, the recovery is recognized any potential loss events that have occurred. In particular, it analyses quoted or unquoted, the group considers faced by the issuer or obligor; any breaches of contract terms, such any significant financial difficulty being or principal payments; whether the holder of the debt instrument, for as a default or delinquency in interest that the borrower’s financial difficulty, grants to the borrower a concession economic or legal reasons relating to any increased probability that the borrower will enter bankruptcy or the holder would not otherwise consider; a disappearance of an active market for the financial asset in question as other financial reorganization; or the of its credit rating that would be indicative of impairment when result of financial difficulties and a downgrading available information. considered in conjunction with other together with a continuous review of the solvency of each State. caused mainly by fluctuating risk premiums, cost is objective evidence of impairment. In estimating valuation fair value of the investment below its is is generally taken as the quoted price. When determining whether there adjustments in equity, the valuation price is due to impairment, where there are manifestly exceptional objective evidence that a fall in the quoted prices are set, the effects of wider market movements on the quoted circumstances in the markets on which movements that reflect factors specific to the issuer of the instrument price are analysed separately from those no exceptional market circumstances but there have been falls in the under consideration. Where there are for which the quoted price has quoted price of the instrument, an assessment is made of whether the period should be considered as remained below the carrying value of the instrument by a significant percentage applicable, the practice is to objective evidence of impairment. If there is no principle that is more specifically analysis is also made, even where take a standard reference period (18 months) and percentage (40%). An reasons to consider that the no exceptional market circumstances are present, of whether there are objective not a valid quantity from which quoted price of the instrument does not reflect its fair value and is therefore to a free float that is very limited, to assess any potential impairment. Such objective reasons may be related any of which may distort the price of prolonged speculative activity on the share value and other circumstances, the instrument. methods used by analysts whether there have been widespread changes in risk aversion or in the valuation implicit in asset prices; or whether and investors; whether there have been major changes in the multipliers quoted market prices. If such cross-impacts are occurring between bond and equity markets and affecting the instrument is responding circumstances are present an attempt is made to gauge the extent to which a discounted cash flow analysis differently with respect to its sector or to the market as a whole. To do this is made of how the issuer’s is used based on known data of the issuer of the instrument and an assessment is carried out as soon as the future profitability will be affected by the new development. This analysis period. If, in addition, there exceptional circumstances are detected, rather than waiting for any set standard or latent, a full adjustment for this is is structural

Statutory informationBanco Sabadell Annual Report 2011 136 Statutory informationBanco Sabadell Annual Report 2011

137 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo exchange rate movements (fair value hedge); exposure to changes in the estimated cash flows from financial exchange rate movements (fair value hedge); exposure to changes in the estimated highly probable (cash flow hedge); assets and liabilities and from commitments and transactions forecast as of the net investment in a or the exposure associated with net investments in foreign operations (hedge foreign operation). at the date on which it is entered hedge. This means that the derivative must be effective both prospectively, evidence that the hedge will into under normal circumstances, and retrospectively, based on reasonable remain effective throughout the life of the item or position to be hedged. show how effective coverage is to specifically to provide a hedge for certain balances or transactions and to with the group’s management of be achieved and assessed (such assessment necessarily being consistent its own exposures). Another method used to value this type of instrument, where there are exceptional market conditions of the kind of the conditions market exceptional there are where instrument, type of value this used to method Another is to adjust for impairment on the need to reach a conclusion analysis undertaken instruments the For unquoted effect at the close of the years 2011 and 2010, including those that did Details of asset transfers that were in service to customers when they so require, or to manage risks associated Derivatives may be used as part of the - It must cover exposure to changes in the values of assets and liabilities caused by interest rate and/or - It must effectively eliminate a risk that is inherent in the hedged item or position over the expected term of the - Suitable documentation must be available to show that the financial derivative has been entered into referred to above, is based on the use of directly observable market variables and/or data such as a published net a published such as and/or data market variables directly observable use of on the is based to above, referred value. asset in the market. issuers operating multiples for similar data and sector the use of comparable based on instruments Other equity • between for as the difference are accounted at acquisition cost instruments carried losses on equity Impairment market rate of return future cash flows discounted at the and the present value of the expected the carrying amount period in which in the income statement for the These impairment losses are recognized for similar securities. reversed other than this cannot be subsequently write-down in the value of the instrument; they occur, as a direct the asset. through the sale of impairment loss and associates, the group estimates in jointly controlled entities In the case of investments losses are value of the investments. Impairment recoverable with the carrying by comparing the amount of previously they occur; subsequent reversals statement for the period in which recognized in the income recovery takes statement for the period in which losses are recognized in the income recognized impairment place. of financial instruments derecognition and Transfer (f) on the balance sheet when the cash flows generated by the assets Financial assets are only derecognized of their risks and rewards have been transferred. Similarly, financial have ceased or when substantially all for the obligations generated by the liabilities have expired or are acquired liabilities are derecognized only when settlement or resale. from the balance sheet, are given in note 10. not result in assets being derecognized g) Derivatives addition to providing a gain or a loss, may under certain conditions offset Derivatives are instruments which, in risk associated with balances or transactions. The underlyings used in all or part of the credit and/or market indices, the prices of specified securities, cross-currency exchange derivatives may be interest rates, specified with group uses derivatives traded on organized markets or traded bilaterally rates or other similar benchmarks. The (OTC) market. counterparties on the over-the-counter derivatives), or to realize gains as a result of price movements. Financial with the group’s own exposures (hedging as hedging instruments are classified as trading derivatives. To be derivatives that do not qualify for designation following conditions: designated as a hedging instrument, a financial derivative must satisfy the WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo money swap types, the discounted cash flow method is used. The expected future cash flows are discounted flow method is used. The expected future cash flows are discounted money swap types, the discounted cash are observable market data. using the interest rate curves for the relevant currencies. Interest rate curves also be applied in certain cases. Black-Scholes model is normally used, although the binomial tree model may as exchange rates and interest rate The group makes use of observable market inputs to access such factors data. curves, and also non-observable inputs such as volatility and inter-asset correlation model is preferred. The (plain vanilla options) is used; for more highly structured instruments the Hull-White the associated interest rate main inputs used by these models are generally observable market data, including curves, volatilities and exchange rates. Valuation models do not embody significant degrees of subjectivity, given that the above methodologies can Valuation models do not embody significant degrees of subjectivity, given The effectiveness of the coverage provided by derivatives designated as hedging instruments is documented documented is instruments as hedging designated by derivatives provided coverage of the The effectiveness anticipated its life, it is of the hedge and during if, at inception to be highly effective is considered A micro-hedge overall net is assessed by comparing the hedge or macro-hedge, effectiveness In the case of a portfolio of financial assets (micro-hedges) or with portfolios with individual items or balances Hedges may be associated instruments or other primary contracts are recorded separately as Derivatives embedded in other financial prices cannot be determined, prices are estimated using internal In the case of instruments for which quoted by the group at 31 December 2011 to determine the fair values of financial The main valuation techniques in use cross-currency interest rate swap and call To measure the values of financial instruments of the swap, • instruments of the structured equity, index or exchange rate option types the To measure financial • of interest rate derivative instruments such as caps and floors, the Black-Scholes model For the valuation • be adjusted and calibrated, where applicable, by internal fair value calculations and subsequent comparison with be adjusted and calibrated, where applicable, by internal fair value calculations actively traded prices. by effectiveness testing. This is used to verify that divergences due to changes in the fair value of the hedged of the hedged fair value in the to changes due divergences verify that used to This is testing. by effectiveness the and that of the transaction the life limits over within reasonable remain instrument and the hedging item is not met, time this condition fulfilled. If at any has been contract at inception effect of the derivative intended accordingly in and recognized as held-for-trading are reclassified in the hedging group transactions all associated sheet. the balance to the hedged are attributable hedged item that or cash flows of the in the fair value that any changes prospectively The micro-hedge or cash flows of the hedging instrument. offset by changes in the fair value risk are almost entirely instrument are within a if the gains or losses on the hedging to have been highly effective is deemed retrospectively item. of the gains or losses on the hedged range of 80% to 125% each one of them. the hedged amount designated for and liabilities in each time period with amount of assets assets and liabilities examination, that the net amount of be ineffective where it is found, on The hedge will only in the portion must be recognized immediately amount, in which case the ineffective is less than the hedged income statement. latter case, all financial assets and liabilities being collectively hedged will and liabilities (macro-hedges). In the of is considered to be satisfied when the interest rate sensitivities involve the same types of risk; this requirement the individual hedged items are similar. of the derivative are not closely related to those of the primary derivatives where the risk and other characteristics fair classified as held for trading or as other financial assets or liabilities at contract and the primary contract is not value through profit or loss. • Valuation quoted on an active market is determined from the daily market price. The fair value of a financial derivative of which take data based on observable market parameters as models developed by the Bank, the majority make use of other inputs which rely on internal assumptions based on significant inputs. Otherwise, the models financial services community. generally accepted practice within the instruments are listed below:

Statutory informationBanco Sabadell Annual Report 2011 138 Statutory informationBanco Sabadell Annual Report 2011

139 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo recognized directly in a valuation adjustment account in equity via the statement of changes in equity. Any equity via the statement of changes in a valuation adjustment account in recognized directly immediately to the income statement. gain or loss on the instrument is taken other portion of the are sold or otherwise removed from the balance sheet, at which remain in the account until the instruments time they are taken to profit or loss. immediately in the income statement. directly in the income statement with changes in the fair value attributable to the hedged risk are recognized hedges of interest rate risk as balancing items if the hedged amount of hedged assets or liabilities in portfolio liabilities. relates to financial assets or financial that they relate to the type of risk being hedged, are recognized directly in the income statement. in the income are recognized directly risk being hedged, relate to the type of that they statement. the income in profit or loss losses in value are not recognized under valuation adjustments. Gains or recorded in equity the hedged item taken to the income statement or until of the hedged item have been until the gains or losses reaches maturity. is that qualifies as an effective hedge to that part of the hedging instrument Any gain or loss attributable 1. valuation adjustment account in equity instruments recognized directly in the Gains or losses on hedging 2. • For fair value hedges any gains or losses, whether in the hedging instrument or the hedged item, to the extent the hedged item, instrument or whether in the hedging gains or losses, value hedges any For fair • directly in are recognized hedging instruments portion of cash flow on the ineffective or losses in value Gains • hedging instruments are temporarily in the effective portion of In cash flow hedging, valuation differences • follows: operations are accounted for as Hedges of net investments in foreign • a) recognized gains or losses that arise from measuring derivatives at fair value are Hedging instruments: b) that are or losses arising from changes in the fair value of the hedged amount Hedged amount: gains a change in the value of the hedging instrument is recognised In the case of portfolio cash flow hedges, macro-hedges, the group discontinues hedge accounting procedures when In the case of both micro-hedges and the hedged item are taken to profit When a fair value hedge is discontinued any previous adjustments made to the hedging instrument recognized Where a cash flow hedge is discontinued, the cumulative gain or loss on which may be of a financial or non- It can therefore be assumed that the carrying value of an asset of this kind, settlement of borrowers’ payment Real estate or other non-current assets received by the group in full or part • Accounting for micro-hedges for Accounting • are in value or losses gains hedging instruments, or as items as hedged designated instruments For financial criteria: to the following according for accounted for macro-hedges Accounting • risk that are highly effective are accounted for as follows: Fair value macro-hedges of interest rate account in equity until the period in which the expected transactions occur, temporarily in a valuation adjustment when it is recognized in the income statement. a the hedging instrument ceases to meet the conditions for being treated as the hedge expires or is sold, or when instrument as a hedge is withdrawn. hedge, or when the designation of the on which the item ceased to be and loss using the effective interest rate method, recalculated as of the date hedged. The value adjustment must be fully amortized at maturity. to be recognized under in equity under “valuation adjustments” (while the hedge was in effect) continues loss will be taken to profit and loss that heading until the hedged cash flow occurs, at which time the gain or it is recognized in profit or loss unless the hedged transaction is considered unlikely to occur, in which case immediately. sale sale and liabilities associated with non-current(h) Non-current for assets held held for assets the carrying values of assets — The “non-current assets held for sale” heading of the balance sheet comprises unit that the group intends to sell stated individually or combined in a disposal group, or as part of a business current state within one year of the (discontinued operations) — which will very probably be disposed of in their entities or associates that meet these date of the consolidated annual accounts. Investments in jointly controlled criteria also qualify as non-current assets held for sale. rather than from its continued use. financial nature, will be recovered through the disposal of the item concerned the group has decided to make use obligations to the group are treated as non-current assets held for sale, unless of the assets on a continuous basis. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo geographical area of operations. The “liabilities associated with non-current assets held for sale” caption includes amounts payable that are that are payable amounts includes caption for sale” assets held with non-current associated The “liabilities value their carrying lesser of at the valued are generally for sale assets held as non-current classified Assets adjusts to sell, the group estimated costs value net of its exceeds the fair value of an asset If the carrying as required by received in settlement of debts, subject to repossession or otherwise For real estate assets experts listed in the Bank of Spain’s Special Register of These assets have been valued by independent assets (software) are based on a technical assessment of the remaining Estimates of the fair value of intangible a component of the group that has been sold or otherwise disposed A discontinued operation or activity is a separate major line of business or geographical area of operations. It represents 1. a single coordinated plan to sell or otherwise dispose of a separate major line of business or It is part of 2. acquired exclusively with a view to resale. It is a subsidiary 3. a subsidiary, business segment A component of an entity is defined as operations and cash flows, such as associated with disposal groups or discontinued operations. or discontinued groups disposal with associated intangible sell. Tangible and estimated costs to value net of their and their fair they are so classified at the time while or amortized are not depreciated and amortization be subject to depreciation would otherwise assets that held for sale. of non-current assets in the category they remain made to adjustment being a corresponding of such excess, with by the amount value of the asset the carrying the event of one consolidated income statement. In assets held for sale in the gains (losses) on non-current will be reversed any previously recorded losses increases in the fair value of the asset or more subsequent to the loss, and a not exceeding the carrying value prior will be increased, subject to its and the carrying value consolidated income assets held for sale in the made to gains (losses) on non-current corresponding adjustment statement. is the lesser of asset is carried in the balance sheet 3/2010, the amount at which the Bank of Spain Circular the amount of the is, its amortized cost reduced by of the associated financial asset, that the carrying value of the property in its and the assessed market value and in any event not less than 10%, estimated impairment to sell which will in no circumstances be less than 10% of the assessed current state, less the estimated costs The percentage impairment charge increases to 20% for assets value of the property in its current state. than 12 months following their acquisition — and to 30% if the period remaining on the balance sheet for more rule, however, impairment charges on assets remaining on the balance is more than 24 months. As a general to a by updated valuations by independent valuers, but still subject sheet for more than 24 months are replaced minimum impairment charge of 20%. Order ECO/805/2003, on the valuation of properties and certain Appraisal Firms in accordance with Ministerial appraisal firms and agencies employed to determine the market value of rights for defined financial ends. The Gestion de valoraciones y tasaciones, S.A (Gesvalt), and Colectivo these assets were Ibertasa,S.A, Krata,S.A., Arquitectos tasadores, S.A (Catsa). useful lives of said assets. (i) Discontinued operations group operations classified as discontinued operations are recognized Gains or losses arising in the year on operations (net) in the consolidated income statement, net of tax under profit or loss on discontinued or remains on the balance sheet at the end of the year. whether the operation has been derecognized any of the following conditions: of or is classified as a non-current asset held for sale and, in addition, meets and for financial reporting or geographical area of operations, that can be clearly distinguished, operationally purposes, from the rest of the entity. assets (j) Tangible to be in continuous use by the group, Tangible assets comprise property, plant and equipment considered likely or for the realization of capital gains on the net values of land, buildings and other structures held to be leased out a general rule these assets are valued disposal, and assets to be leased to customers under operating leases. As from a comparison of the net value at cost less accumulated depreciation and less any impairment loss identified of each item with its recoverable amount.

Statutory informationBanco Sabadell Annual Report 2011 140 Statutory informationBanco Sabadell Annual Report 2011 141

2.3 to 4

20 to 50 3.3 to 10 4.2 to 12.5 3.1 to 6.25 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Useful life in yearsUseful life in At the close of each accounting period the group carries out a review to determine whether there are internal out a review to determine whether there accounting period the group carries At the close of each each reporting year, the group carries out a review of the estimated useful No less frequently than at the end of tangible assets are recorded in the income statement for the year in Maintenance and repair costs for own-use property are composed of the net values of land, buildings and other Tangible assets classified as investment of debts, being rental properties and therefore carried For real estate assets received in settlement of payments receivable from the lessee Where the group is the lessor of an asset, the sum of the present values recorded in the balance sheet Where the Group is the lessee of the asset, the cost of the leased asset is Tangible assets are depreciated systematically by the straight-line method over their estimated useful lives, lives, useful their estimated over method straight-line by the systematically are depreciated assets Tangible Vehicles Land and buildings Facilities ce furniture and equipment Offi computers and computer equipment Cash dispensers, or external indications that the net value of any asset item exceeds its recoverable amount. If the net value of exceeds its recoverable amount. that the net value of any asset item or external indications to its recoverable the group writes down the asset be in excess of its recoverable amount, an asset is found to and its value in use, of independent third parties) greater of its fair value (based on valuations amount, that is, the in proportion to its restated carrying value and, if required, its adjusted and adjusts future depreciation charges indications that the value of an asset has been recovered, the group estimated useful life. Where there are loss recognized in previous periods and adjusts future depreciation charges records the reversal of the impairment loss on an asset will in no circumstances result in an increase in its accordingly. The reversal of an impairment been asset would have had if impairment losses in previous periods had not carrying value above the value that the recognized. use to determine whether there have been any material changes in their lives of all tangible assets for its own are identified, an adjustment is made by correcting the depreciation estimated useful lives. If material changes on the basis of the adjusted estimated useful life. charge for the asset in the income statement which they are incurred. out or for the realization of capital gains on disposal as a result of future structures held by the group to be leased increases in market prices. as investment properties, the criteria followed are similar to those set out under property, plant and equipment for held for sale and liabilities associated with non-current assets held above in section (h): “non-current assets sale”. out under operating leases, for The criteria used by the group in stating the acquisition costs of assets leased are the same as for tangible purposes of depreciation, useful life estimation and impairment loss recognition assets for the group’s own use. (k) Leases of the lease regardless of its legal form Leasing contracts are presented on the basis of the economic substance and are classified from inception as finance or operating leases. • Finance leases of ownership of the asset are A lease is treated as a finance lease if substantially all of the risks and rewards transferred. exercisable by the lessee at the plus the guaranteed residual value — normally the price of the purchase option therefore included in the balance sheet end of the lease — is recorded as financing provided to a third party and is under loans and receivables according to the type of lessee. same amount. This liability is the according to the nature of the asset and simultaneously as a liability for the of payments to the lessor plus the lesser of the fair value of the leased asset and the sum of the present values using procedures similar to those exercise price of the purchase option, if applicable. The asset is depreciated applicable to property for the group’s own use. taking the depreciable amount as the acquisition cost of each item less its residual value. Land on which buildings which Land on value. its residual item less of each cost the acquisition as amount the depreciable taking Annual depreciated. is not life and an unlimited having treated as is been erected have structures and other basis of the calculated on the statement and are to the income assets are taken charges on tangible depreciation useful lives: average estimated following WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo purchaser. the market price of the asset. the marketplace. rentals. asset values, for example) and not only to interest rates. market conditions (rental payments and values are above or below, the value of any assets or reducing the value of any liabilities whose market balance sheet, provided that respectively, the net fair values at which they were recorded on the acquiree’s given to those same assets or their accounting treatment has been similar to the treatment that would be liabilities by the group. date can be reliably determined. consolidated balance sheet provided that their fair value at the acquisition or more specific cash-generating units. Finance income and expense arising from leasing agreements are credited or charged to the income statement statement the income to or charged are credited leasing agreements from arising and expense income Finance assets. recorded in tangible the leased item is acquisition cost of of the asset, the group is the lessor When the by the lessor, the lease, including any incentives offered the lessee of the asset the costs of Where the group is profit or loss is under an operating lease, any subject to a sale at fair value and leaseback Where an asset is following of assets under an operating lease the be treated as a sale and leaseback For a transaction to - asset transferred to the and rewards associated with the asset must have been sold and all risks The - cannot unilaterally transfer the leased asset to the vendor (lessee). The purchaser (lessor) - risk of a fall in to repurchase at below market value and the lessor is exposed to the The lessee has no option - available in to extend the lease on terms significantly more favourable than those The lessee has no option - of the lease sold and leased back is substantially greater than the current value The fair value of the assets - to property a mere lender: the lessor’s income and exposure to gain or loss is linked The lessor is more than - the greater part of the economic life of the asset. The lease does not cover - be used by third parties without significant alteration. The leased asset can incorporates into its financial statements the assets, liabilities and On the date of acquisition the acquirer cost of holdings in subsidiary, jointly controlled or associated Positive differences arising between the can be assigned to specific assets of the acquiree, they are accounted for by increasing If the differences 1. assignable to specific intangible assets they are accounted for by explicit recognition in the If they are 2. differences that cannot be specifically recognized are recorded as goodwill and assigned to one Any remaining 3. income statement. Negative differences, once they have been quantified, are recognized in the are recognized as increases in the Any purchases of minority interests after control of an entity has been taken identifiable assets, liabilities or Where the cost of a business combination or the fair values assignable to so that the return remains constant throughout the term of the lease. term of the the throughout constant remains the return so that • Operating leases as operating leases. are classified than finance leases Leases other payments similar type and the property of a as for own-use by the same procedure are depreciated Leased assets basis. on a straight-line in the income statement are recognized on the leases basis. income statement on a straight-line are recorded in the of the sale. recorded at the time met: conditions must be (l) Business combinations together of two or more separate entities or economic units into one single A business combination is the bringing acquirer obtains control of the other entity or entities. entity or group of entities, where the including any intangible assets not recognised by the acquiree. contingent liabilities of the acquiree, the acquired assets adjusted on the date on which they were consolidated undertakings and the net fair values of for the first time, are accounted for as follows: cost of the business combination. initial accounting for the business contingent liabilities of the acquiree cannot be determined with certainty, the required to be completed within one year combination is treated as provisional. However, the accounting process is of the acquisition date, and must take effect as from that date.

Statutory informationBanco Sabadell Annual Report 2011 142 Statutory informationBanco Sabadell Annual Report 2011

143 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo = Non-systemic = Non-systemic

α ”, where: Ke = Required return or cost of capital; Rf = Risk-free rate; of capital; Rf = Risk-free rate; ”, where: Ke = Required return or cost α (Rm) + β = Company’s systemic risk coefficient, Rm = Expected return of the market and = Company’s systemic risk coefficient,

β risk premium. numbers and key business recent projections. Based on long-term estimates for the main macroeconomic an estimate of a nil rate of variables, and bearing in mind the current financial market outlook at all times, growth in perpetuity can be arrived at. valuation. For businesses engaging in financial operations, projections are made for the following variables: valuation. For businesses engaging in customer deposits and rates of interest under a forecast economic changes in lending volumes, default rates, scenario, and capital requirements. take account of the economic outlook at the time of the earnings and profitability. These projections valuation. cost of the entity (Ke) from the standpoint of a market from a discount rate taken as the capital value the CAPM method is used as expressed by the formula: participant. To determine this present “Ke = Rf + - by the most to extrapolate cash flow projections beyond the end of the period covered The rate of growth used No impairment loss recognized for goodwill can subsequently be reversed. after all relevant factors have been Other intangible assets may have useful lives that are indefinite — where, in any event, be recognized by the Any loss in the stated value of an intangible asset due to impairment will, Intangible assets are initially recognized at acquisition or production cost, and are subsequently valued at cost valued cost, and are subsequently or production recognized at acquisition assets are initially Intangible impairment value appraisals are undertaken, generally on a present To detect possible indications of goodwill - part of the These assumptions are used as a basis for cash flow projections as Key business assumptions. - variables and other financial parameters. Estimates of macroeconomic - normally five years. This yields a recurring pattern in terms of both The period covered by the projections, - of future dividends, from which a value in use is derived, is calculated The discount rate. The present value • Other intangible assets • and includes such assets as This item is made up largely of intangible assets identified in business combinations applications. contractual relations with customers, deposits or trade marks and computer to the time during which they can be taken into account, it has been concluded that there is no foreseeable limit that have indefinite useful lives expected to generate net cash flows for the group — or finite. Intangible assets reviews their remaining useful lives to are not amortized; however, at the end of each accounting period, the group Intangible assets whose useful verify that they are still indefinite and takes appropriate action if it finds otherwise. criteria similar to those used for tangible lives are finite are amortized on the basis of their useful lives according to assets. The rules for recognizing group and a corresponding adjustment made to the consolidated income statement. of impairment losses in earlier periods losses in value due to impairment of intangible assets and any recoveries are similar to those that apply to tangible assets. (m) Intangible assets (m) Intangible to are deemed assets Intangible substance. physical without assets non-monetary are identifiable assets Intangible disposed or otherwise sold, leased can be they assets because other from are separable when they be identifiable recognized asset will be An intangible or other legal transaction. arise from a contract or when they of individually, asset and its will flow from the economic benefits it likely that and the group considers this criterion when it meets reliably measured. cost can be losses. and/or impairment amortization less any accumulated • Goodwill of the net fair value and the acquired portion between the cost of a business combination A positive difference balance sheet as acquired entity is recognized on the and contingent liabilities of the of the assets, liabilities benefits from in anticipation of the future economic represents a payment made by the group goodwill. Goodwill and recognized. individually or separately identified entity that are not capable of being assets of an acquired combination. valuable consideration through a business only if it has been purchased for Goodwill is recognized for any possible period it is subjected to analysis but at the end of each accounting Goodwill is not amortized, to be impaired, is below its stated net cost and, if found reduce its recoverable value to impairment that would income statement. written down against the consolidated basis, having regard to the following parameters: value of future distributable earnings WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo party, or to exchange financial assets or liabilities with a third party on terms potentially unfavourable to the party, or to exchange financial assets issuer; a variable number of its own equity instruments, or a derivative the issuer is or may be obliged to deliver for a fixed amount of cash or another financial asset, for a fixed number instrument that will or may be settled of the issuer’s own equity instruments. - for which the issuer’s own equity instruments and is: a non-derivative instrument will or may be settled in instruments, whether on issue or cancellation or otherwise, are All transactions in the group’s own equity classified as own equity instruments are not recognized in the financial Changes in the value of instruments to financial institutions outside the Where the liability is discharged by means of a transfer of commitments than those provided by employees, Transactions where, in exchange for the receipt of goods or services other Inventories are valued at the lesser of their cost value, including all purchase and conversion costs and other costs and all purchase and conversion value, including lesser of their cost are valued at the Inventories to and marketing costs production price net of the estimated the estimated sale value means Net realization in sale prices, to to damage, obsolescence or a fall whether caused by impairment due Any value adjustments, basis of appraisals and buildings is calculated on the the value of inventories comprising land Any impairment in of debts the criteria followed are similar to those set out in section (h) For inventories received in settlement - to a third contractual obligation to the issuer: to deliver cash or another financial asset does not contain any recognized directly in equity. the received for such instruments is added or deducted directly in equity and statements. Any consideration paid or in equity. associated transaction costs are deducted based on equity instruments (p) Payments for their services, where the The delivery to employees of the group’s own equity instruments in payment recognized as an expense for services instruments are delivered on completion of a specified period of service, is increase in equity or a liability over the period during which the services are being provided. A corresponding instrument-based compensation, is recognized, according to whether the compensation is classified as equity or transactions with employees liabilities to employees based on the value of the group’s own equity instruments, paid in cash or equity instruments. and economic conditions on which group, that is, through derivatives contracts that precisely mirror the terms associated with the derivatives the equity instruments were issued, the group charges the anticipated costs the services are provided, but does contracts to the income statement according to the specific period in which not recognize any increase in equity or in the associated liability. instruments, are accounted for settlement is in own equity instruments or by a payment based on own equity according to the same rules as apply to employee compensation. (n) Inventories of course the normal group in use by the or for held for sale being that are assets non-financial are Inventories in be consumed or are to such sale, for development or construction production, process of in the or are business, the rendering of services. process or in the production their net and location, and present condition inventories to their in bringing the indirect costs incurred direct and value. realization carry out the sale. year in which the are recognized as expense in the value, or arising from other losses, reflect their net realizable consolidated income in value are recognized in the loss occurred. Any subsequent recoveries impairment or other in which they occur. statement in the year Register of Appraisal of Spain and listed in its Special valuers authorized by the Bank by independent professional rights for particular the valuation of real estate and certain in accordance with the rules for Firms. These are applied set out in the Ministerial Order ECO/805/2003. financial purposes for sale and liabilities associated with non-current assets held for sale”. above under “non-current assets held (o) Own equity instruments as an equity instrument that: An own equity instruments is defined

Statutory informationBanco Sabadell Annual Report 2011 144 Statutory informationBanco Sabadell Annual Report 2011

145 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo entered the Bank’s service after 8 March 1980. above). employee pension scheme. employee pension scheme. To provide for commitments in respect of investments related to life insurance policies, provisions are provisions are life insurance policies, related to in respect of investments for commitments To provide identifying the group has a detailed, formal plan will be recognized only when Provisions for restructuring will be confirmed from past events and whose existence are possible obligations that arise Contingent liabilities plans in 2011 totalled €15,207,000 (€11,734,000 in 2010). Contributions to defined contribution ways: through the pension scheme and through insurance contracts. These commitments are financed in two scheme covers benefits payable under collective agreements with The Banco Sabadell employee pension commitments on early retirement as provided for by article 36 of the Collective Agreement. Additional 1. in certain circumstances. Disability 2. widowers’ and orphans’ benefits payable on the death of retired employees recognized as having Widows’, 3. as a scheme asset. The Banco Sabadell employee pension scheme is treated for all purposes articles 36 and 37 of the 21st Banking Insurance policies provide general cover for specified commitments under that are expressly excluded from the Banco Sabadell employee pension scheme (1, 2 and 3 Commitments 1. covered by a collective agreement with the former Banco Atlántico. Serving employees 2. in respect of some serving employees, not provided for under the collective agreement. Pension commitments 3. to employees on leave of absence who are not entitled to benefits under the Banco Sabadell Commitments 4. to early retirees. These may be partly financed out of pension rights under the Banco Sabadell Commitments 5. (q) Liabilities under insurance contracts insurance under (q) Liabilities a group S.A., Segur Vida, by Assegurances sold to life policies primarily, refer, contracts insurance under Liabilities policyholders. borne by risk is investment which the in subsidiary, entitlements will be policyholders’ on the basis of which of the assets regard to the value made having determined. liabilities and contingent (r) Provisions nature at the arisen from past events and whose obligations of the group which have Provisions are current such obligations uncertain timing and amount; when is clearly specified, but which are of balance sheet date of resources to settle them through an outflow due for settlement, the group expects mature or become benefits. embodying economic has publicly has started to implement the plan or to be made and where the group fundamental changes evidence of its implementation. features, or where there is objective announced its main the group’s uncertain future events that lie outside or non-occurrence of one or more only by the occurrence present obligations of the group the settlement of which is not likely to result control. Contingent liabilities include be economic benefits or whose amount, in extremely rare instances, cannot in an outflow of resources embodying measured with sufficient reliability. pensions (s) Provisions for its employees are as follows: The group’s pension commitments to contribution plans Defined • paid into a separate entity in accordance with agreements reached with These are predetermined contributions to are made subject to there being no legal or constructive obligation particular groups of employees. Contributions investment or other risks. make additional contributions to cover benefit plans Defined • 21st pension commitments agreed under articles 35, 36 and 37 of the Defined benefit plans provide for all current industry. Collective Agreement for the banking as described above, with the following exceptions: members of regulated employee organizations Industry Agreement, including: WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo the event of the Bank becoming insolvent. Bank relating to employee benefits, or unless assets are to be returned obligations of the scheme and of the benefits previously paid. to the Bank to reimburse it for employee These insurance policies have been taken out with insurers outside the group, principally for commitments to for commitments principally group, outside the insurers out with taken have been policies insurance These social a voluntary E.P.S.V., of Gertakizun the takeover in resulted Guipuzcoano of Banco The acquisition for by an internal up to retirement age are provided retirees from the Banco Guipuzcoano Commitments to early present value similar obligations” includes the actuarial heading “provisions for pensions and The balance sheet These assets, at their fair value have been deducted. so calculated, the scheme assets From the obligations separate, non-related third party. They are not owned by the Bank but by a legally 1. benefits and are not available to creditors of the Bank, even in They are available only to pay or fund employee 2. assets remaining in the scheme are sufficient to meet all They cannot be returned to the Bank unless the 3. issued by the Bank. They are not non-transferable financial instruments 4. shown in the individual balance sheet of BanSabadell Vida, S.A. de The assets to fund pension commitments in recognizing in profit and loss for the year only one fifth of any The group has decided to apply a corridor to commitments to early retirees until they acquire legally retired However, actuarial gains or losses related former Banco Atlántico employees, and also with BanSabadell Vida, S.A. de Seguros y Reaseguros. de Seguros Vida, S.A. with BanSabadell and also employees, Atlántico Banco former serving and former respect of the bank’s commitments in defined benefit society which covers insurance by entity governed as a legally separate Guipuzcoano in 1991 set up by Banco The society was employees. and Decree 92/2007 of 20 February Decree 87/84 the Basque Parliament, de 27 October of Law 25/83 insurers independent taken out with are covered by policies commitments The defined benefit of 29 May. group. from the retirement fund. of financial and projected unit credit method on the basis calculated individually by the of pension commitments, which are set out below. actuarial assumptions they meet the obligations are to be settled since polices, are those from which pension including insurance following requirements: of subsidiary, are not scheme assets as the company is a related party Seguros y Reaseguros, a group insurance the Bank. 10% of the greater of the present value of defined benefit obligations and actuarial gains and losses that exceed end of the immediately preceding year. the fair value of scheme assets at the status are recognized immediately.

Statutory informationBanco Sabadell Annual Report 2011 146 Statutory informationBanco Sabadell Annual Report 2011

147 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 2010 2011 exchange rate ruling at the reporting date. acquisition. fair value was determined. The discount rate on insurance policies has been determined by reference to the yield on AA-rated 15-year by reference to the yield on AA-rated insurance policies has been determined The discount rate on which pension to be the earliest retirement date after for all employees is assumed The age of early retirement scheme assets is 4% per annum (a target return that is compatible The expected long-term return on pension employees have been valued taking a discount rate of 4% and using Commitments for Banco Guipuzcoano balances denominated in foreign currency are translated to the functional On initial recognition, debit and credit - Monetary assets and liabilities are translated at the closing exchange rate, defined as the average spot - Non-monetary items measured at historical cost are translated at the exchange rate ruling on the date of - Non-monetary items stated at fair value are translated at the exchange rate ruling on the date on which the - Income and expenses are translated at the exchange rates ruling at the transaction date. and credit balances denominated in In general, foreign exchange differences arising on the translation of debit corporate debt (Bloomberg €AA composite). corporate debt (Bloomberg employer. entitlements cannot be revoked by the with the investment policy of the Banco Sabadell employee pension scheme). with a level of risk set in accordance is insurance policies, the return assumed in respect of each commitment For fixed-rate, without profits, unmatched premium paid, weighted according to the mathematical reserve corresponding the average insured interest on each without profits, matched insurance policies the rate of return used is the to each premium paid. For fixed-rate, discount rate. a 95 mortality tables, an annual rate of increase in salaries of 2.75%, the SS-1990 disability tables, the GRM/F prices of 1.75%, an expected yield on assets of 4%, the projected unit credit cumulative annual rate of increase in earliest age at which employees are entitled to retire. contribution calculation method and the currency(t) Foreign transactions the euro. All balances and transactions denominated in currencies other The functional currency of the group is denominated in a foreign currency. Euro equivalent values (in thousands than the euro are therefore treated as of asset and liability accounts in foreign currency held by the group at 31 of euros) for the aggregate balances in note 27. December 2011 and 2010 are given defined as the exchange rate for immediate delivery — on the recognition currency at the spot exchange rate — to translate foreign currency balances to date. Subsequent to initial recognition, the following procedures are used the functional currency: exchange differences arising on non- foreign currency are recorded in the income statement. However, for foreign made and recognized under valuation monetary items measured at fair value where the fair value adjustment is from the revaluation of the non- adjustments in equity, the exchange rate component is recorded separately monetary item. The actuarial assumptions used in the valuation of pension commitments are as follows: are as commitments pension of in the valuation used assumptions The actuarial Tables - pension schemeDiscount rate - own fundDiscount rate out with related parties - polices taken Discount rate parties out with non-related - policies taken Discount rate ation Infl Rate of increase in salaries 4.60% per annumRetirement due to disability 4.60% per annumStaff turnoverEarly retirementNormal age retirement per annum 4.00% per annum 4.60% annum 4.60% per 4.00% per annum 4.00% per annum 3.00% per annum (new) PERM / F 2000 SS90-Absoluta - - - (new) PERM / F 2000 2.00% per annum 65 3.00% per annum None assumed for Allowed SS90-Absoluta 2.00% per annum None assumed for Allowed 65 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo are recognized when received. are recognized when place. which the transaction or service takes over the period during that gives rise to the fee or commission. the time of the act - a period of time are allocated or services that take place over and commissions relating to transactions Fees - in a single act are recognized at or services that are completed and commissions relating to transactions Fees transaction of the effective cost or yield of a financial commissions forming an integral part Financial fees and accounted for on an accrual basis. Amounts paid or received that are Non-financial income and expense is tax heading is the tax charge assessed on the taxable income The tax expense shown under the income to the tax that is expected to be payable or recoverable on Deferred tax assets and liabilities refer tax deduction or allowance, tax loss or A deferred tax asset such as a tax prepayment, or a credit in respect of a period to verify that they still All recognized deferred tax assets and liabilities are reviewed in each accounting accounts for corporation tax The undertakings in the Banco Sabadell group that are included in the consolidated heading “other financial Guarantees are recognized by the group at their fair value under the liability Generally, fee and commission income and expense and similar items are recorded in the income statement in the income statement items are recorded and similar income and expense fee and commission Generally, - profit or loss measured at fair value through relating to financial assets and liabilities Fees and commissions have been deferred net of associated direct costs and recognized in the income statement over the expected in the income statement over net of associated direct costs and recognized have been deferred transaction. average life of the value obtained by discounting the expected cash flows at market rates of deferred over time are recorded at the interest. (v) Income tax tax expense applicable to foreign subsidiaries are treated as expenses Spanish corporation tax and similar under income tax unless the tax has arisen on a transaction and are recorded in the income statement case the tax is also recognized directly in equity, or unless it relates accounted for directly in equity, in which case the deferred tax is recognized as an asset or liability of the business to a business combination, in which combination. tax deductions and allowances and any tax losses. The taxable for the year, after taking account of applicable with the profit for the year as shown in the income statement, as it income for the year may be at variance are that are taxable or deductible in other years as well as items which excludes items of income or expenditure non-taxable or non-deductible. of assets and liabilities in the financial statements, on the one hand, differences between the carrying values liabilities, on the other. These tax assets and liabilities are determined and the tax bases of those assets and or tax credits the tax rate at which they are expected to be recovered by applying to such temporary differences or paid. sufficient future taxable profits against other benefit is always recognized provided that the group is likely to obtain always be recognized. which the tax asset can be realized. A deferred tax liability will, in general, apply and are adjusted as necessary. out on this basis and are payable purposes are shown in Annex I. Their tax charges for the year have been worked which is responsible for paying the to Banco de Sabadell, S.A. as the parent company of the consolidated group, tax to the Revenue authorities. (w) Financial guarantees specified payments for a third party Financial guarantees are contracts by which the group undertakes to make forms such as guarantees, avals, in the event of the third party failing to do so. They may take a variety of legal insurance contracts or credit derivatives. the fair value will be the present liabilities”. On first recognition and in the absence of evidence to the contrary, receivable is simultaneously value of the expected cash flows. The present value of the future cash flows recorded as an asset. (u) Recognition of income and expense income of (u) Recognition in the recorded generally are similar items and and expense income Interest expense income and of Recognition are other companies from received Dividends method. interest the effective using they accrue, in which period the entitlement vests. as income when recognized to the following criteria: according

Statutory informationBanco Sabadell Annual Report 2011 148 Statutory informationBanco Sabadell Annual Report 2011

149 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo income statement as interest income. as interest income statement of the contract. the anticipated life basis over statement on a straight-line income to the consolidated risk of a change in value is minimal. highly liquid investments for which the investing or funding activities. included in cash and cash equivalents. included in operating activities. Subsequent to initial recognition, guarantee contracts are treated as follows: as are treated contracts guarantee initial recognition, to Subsequent - the differences in the by recording is discounted or premiums receivable all fees, commissions The value of - the amount credited a liability item less recognized as is the amount initially a guarantee contract The value of or the transaction to the customer the credit risk attributable according to guarantees are classified Financial - outflows of cash and cash equivalents, where “cash equivalents” are short-term, Cash flows: inflows and - described as ordinary activities of the group, as well as other activities that cannot be Operating activities: the - not acquisition, sale or other disposal of long-term assets and other investments Investing activities: the - not that result in changes in the size and composition of equity and of liabilities Funding activities: activities and in appropriate cases an assessment will be made of the need to provide for the risk by following procedures the need to provide for the risk by following cases an assessment will be made of and in appropriate carried at amortized cost. in note 1(e) for debt instruments similar to those described Assets under management (x) Management fees are in the consolidated balance sheet. managed by the group are not included Third party assets income. statement under fees and commission shown in the income statement flow (y) Consolidated cash which are defined as follows: flow statement includes certain items The consolidated cash (z) Netting off from transactions are permitted, whether by contract or by law, to be set Where credit and debit balances arising to settle them on a net basis or to realize the asset and settle the liability against each other and the group intends balance sheet at their net values. simultaneously, they are reported in the WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Proportion. consolid. Proportion. consolid. Proportion. consolid. ón. Direct/ indirect Method esnández, S.L. esnández, its consolidation method to the % total % rights acquired Voting as prop. of acquired Voting rights Voting Cost of combination date effective consideration Amount paid/ Transaction rst time: equity method. As a result of this operation, the Banco Sabadell group, via its subsidiary Sinia Renovables, S.C.R. de R.S., S.A., Sabadell group, via its subsidiary Sinia Renovables, S.C.R. de R.S., S.A., As a result of this operation, the Banco FDIC, SUB obtained certain assets Following the adjudication, under a process established beforehand by the of the potential loan losses are This transaction was carried out under a loss-share agreement whereby most of €13,213,000. This transaction, which involved no capital outlay by SUB, generated goodwill (b) Sierra S Energias Renovables the acquisition of a shareholding in the company Shareholding acquired on 29 July 2011 through Acquisition and subsequent merger of Hidrodata, S.A. through the contribution of shares held by Sinia Renovables Sinia Renovables S.A. through the contribution of shares held by Hidrodata, Acquisition and subsequent merger of S.L. S.A. in Santex Pluser, R.S., S.C.R., was recorded in the Barcelona Mercantile Registry whereby Hidrodata, S.A. On 5 April 2011 a merger by takeover Pluser, S.L., a wholly owned subsidiary of Sinia Renovables S.C.R., R.S., took over companies including Santex Industriales y de Servicios, S.L. S.A., and its investee Establecimientos S.A. This stake was further increased to 45.75% on 18 May 2011 through acquired a 33.42% stake in Hidrodata, S.A. the acquisition of new shares in Hidrodata, Trust Private Bank & Lydian company N.A. of assets and liabilities of the Sabadell United Bank, Acquisition by in the state of Florida (USA), Sabadell United Bank N.A. (SUB), a subsidiary of Banco Sabadell based Deposit Insurance was designated as the successful bidder in the sale organised by the Federal in Florida that was in receivership Corporation (FDIC) of Lydian Private Bank, a financial institution established at that time. of approximately USD 176 million totalling approximately USD 1,607 million (€1,118 million) with a discount USD 1,607 million (€1,118 million), (€122 million) and assumed certain liabilities amounting to approximately approximately USD 351 million including approximately USD 1,224 million (€852 million) of customer deposits, USD 32 million (€22 million) in (€244 million) in advances from Federal Home Loan Bank, and approximately other minor items. shared 80%/20% between FDIC and SUB respectively. Parque Eólico Loma del Capón, S.L. Eólico Loma del Capón, Parque S.L. (b) (c)Sistema Eléctrico de Conexión Valcaire, changed (a) having the holder of 25% of the shares, S.L., of Inerban Proyectos, Added to the scope of consolidation as a result Associate 07/10/2011 Subsidiary 07/10/2011 - 46.88% 2,904 100.00% 46.88% 100.00% Indirect Indirect Full consolidation Equity method Eólica Sierra Sesnández, S.L. (b)Eólica Sierra Sesnández, S.L.Eólica Mirasierra, (c) Eólico Loma del Cap Parque on 7 October 2011 through the acquisition of a shareholding in the company Shareholding acquired Multigroup 29/07/2011 Multigroup 29/09/2011 - 62.10% 3,776 62.10% 50.00% Indirect 50.00% Indirect Undertakings fi included in the consolidated accounts for the €’000 Name of undertaking (or operation) acquired or merged Category Note 2. Banco Sabadell Group Sabadell 2. Banco Note along with Annex I listed in 2010, are and 2011 at 31 December group as the comprising The undertakings and the key financial data, holding in each, Bank’s proportional activities, the offices, principal their registered in each case. or equity method) proportional consolidation (full consolidation, method used consolidation group of the consolidated in the composition a) Changes below. group are described of the consolidated in the composition The changes 2011: Changes in the year

Statutory informationBanco Sabadell Annual Report 2011 150 Desarrollos Inmobiliarios La Serreta, S.L. (a)Desarrollos Inmobiliarios La Serreta, S.A.Hidrodata, L.L.C.Solvia Atlantic, S.L. dels Enginyers, Societat d’Inversió S.L. 2011, Atalanta Catalunya S.L. (a) SierraEnergias Renovables Sesnández, Associate 01/01/2011 Multigroup 29/07/2011 Associate 17/06/2011 - Associate 25.00% Subsidiary 24/08/2011 23/05/2011 1 Associate 12 25.00% 05/04/2011 62.10% 28.79% Indirect 10,200 62.10% 10 28.79% 100.00% 5,083 Equity method Indirect 25.00% 100.00% Indirect 33.42% 25.00% Indirect 33.42% Equity method Indirect Full consolidation Indirect Equity method Equity method Statutory informationBanco Sabadell Annual Report 2011 151 method

Consolidation WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Direct/ indirect t/loss to group Profi he scope of consolidation for further information). held after disposal (%) voting rights Proportion of date disposal (%) voting rights Proportion of surrendered on effective Transaction Subsidiary 01/12/2011Subsidiary 07/12/2011 100.00% 100.00% 0.00% 0.00% 0 0 Indirect Indirect Full consol. Full consol. The shares were subscribed equally by the company’s two shareholders, Sinia Renovables, S.C.R. de R.S. and S.C.R. de Sinia Renovables, two shareholders, equally by the company’s were subscribed The shares Undertakings no longer included in the consolidated accounts: €’000 Name of undertaking (or operation) or eliminated spun off, sold, Category Acquisition of 50% of Eólica Mirasierra, S.L. Mirasierra, 50% of Eólica of Acquisition a de R.S.,S.A., S.C.R. Renovables Sinia its subsidiary through acquired, the group 2011, September On 29 the Meeting, General at an Extraordinary date, the same On for €13,000. S.L. Mirasierra, stake in Eólica 50% value shares with a nominal comprising two new a capital increase S.L. agreed of Eólica Mirasierra, Shareholders of a share premium issued, plus as the shares already rights and nature and with the same of 10 euros per share. €3,763,000 contribution. for by a monetary S.L.U, and paid Enerpal Eólica S.L. Eólico Loma del Capón, of Parque Acquisition of 100% a 100% stake Sinia Renovables S.C.R. de R.S.,S.A., the group acquired, through its subsidiary On 7 October 2011, Capón, S.L. for €2,904,000. in Eólico Loma del L.LC Incorporation of Solvia Atlantic, S.L., a subsidiary of owned by Solvia Development, the company Solvia Atlantic, L.L.C., wholly On 23 May 2011, capital of €10,200,000. group, was incorporated with share the Banco Sabadell Establecimientos Industriales y de Servicios, S.L.(a) S.L. (a)Santex Pluser, S.A.Zurriola Inversiones, Guipuzcoano Mediador de Seguros, S.L. (b) Sociedad de Agencia de Seguros, Associate 05/04/2011 26.75% from the scope of consolidation as a result of their winding up and/or liquidation. (b) Companies removed 0.00% Subsidiary Subsidiary 0 05/04/2011 29/07/2011 Indirect 100.00% 100.00% Equity method 0.00% 0.00% 0 9 Indirect Indirect Full consol. Full consol. Guipuzcoano, Entidad Gestora Guipuzcoano, S.A. (b) de Pensiones, de Fondos S.L. (b)PR 12 PV 15, to t S.A. (see section on additions from the scope of consolidation as a result of the merger with Hidrodata, (a) Items removed Associate 20/12/2011 41.00% 0.00% 0 Indirect Equity method

method WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Consolidation Proportional consol. Direct/ indirect % as prop. acquired rights Voting Voting of total % acquired Voting rights Voting Cost of combination paid Amount date effective Transaction rst time: Subsidiary 24/11/2010Subsidiary 24/11/2010Subsidiary 24/11/2010 - 100.00 - 100.00 - 60.00 Indirect 100.00 Full consolidation 60.00 100.00 Indirect Indirect Full consolidation Full consolidation .E., S.L. (a).E., Subsidiary 24/11/2010 - 100.00 100.00 Indirect Full consolidation . Costablanca, S.L. (a) . Costablanca, Associate 24/11/2010 - 45.00 45.00 Indirect Equity method Mariñamendi, S.L. (a)Mariñamendi, S.L. (a) Mirador del Segura 21, S.L. (a) Golf, Mursiya S.L. (a) Naguisa Promociones, Associate 24/11/2010 Subsidiary Associate 24/11/2010 24/11/2010 Associate 24/11/2010 - - - 32.20 100.00 - 45.00 32.20 49.70 100.00 45.00 Indirect Indirect 49.70 Indirect Equity method Full consolidation Indirect Equity method Equity method Espazios Murcia, S.L. (a) Espazios Murcia, S.L.(c) Energía Renovable, ESUS, S.L. (d)Eurofragance, S.L. SPE (a)Gate Solar, S.L. (a)Gazteluberri Gestión, S.L. (a)Gazteluberri, S.L. (a)Grao Castalia, S.A. Unipersonal (a)Guipuzcoano Capital, Sociedad de Agencia Guipuzcoano Mediador de Seguros, S.L. (a) de Seguros, S.L. (a)Guipuzcoano Promoción Empresarial, S.A. (a)Guipuzcoano Valores, Correduría de Seguros del Guipuzcoano, Associate S.A. (a) Grupo Banco Guipuzcoano, 15/07/2010 Associate Entidad Gestora de Guipuzcoano, S.A. (a) de Pensiones, Fondos 24/11/2010 Subsidiary S.A. (a) S.G.I.I.C., Guipuzcoano, 24/11/2010 Subsidiary S.L. (a) Guisain, Subsidiary Multigroup Associate 24/11/2010 S.A. (a)Harinera Ilundain, 24/11/2010 24/11/2010 08/07/2010(a) S.L. Harugui Promocion y Gestion Inmobiliaria, 23 S.L. La Almazara, Haygon Subsidiary S.L. (a) Hidrophytic, Subsidiary 24/11/2010 - 45.00 S.P Hondarriberri, 24/11/2010 - S.A. (e)IFOS, 9,050 SubsidiaryImprobal Norte, S.L. (a) 45.00 Associate - 24/11/2010 - 45.00 100.00 S.L. (a) -Inerban Proyectos, 24/11/2010 25.00 S.L. (a) Vil I, Key 100.00 100.00 S.A. (a) Bareño, Kosta Subsidiary 45.00 Indirect 50.00 100.00 S.L. (a) Lagar de Tasara, - 24/11/2010 - 25.00 A.i.e. (a)Lizarre Promociones, 100.00 100.00 Indirect Equity method S.L. (a) Castilla la Mancha, Loalsa Inversiones Indirect 100.00 100.00 50.00 -M.P Indirect Indirect Full consolidation Associate - Indirect Equity method 24/11/2010 Full consolidation 100.00 100.00 Indirect Full consolidation 100.00 Subsidiary Equity method Associate 50.00 24/11/2010 24/11/2010 - Indirect Equity method 100.00 Indirect Multigroup Associate Full consolidation 100.00 Full consolidation 24/11/2010 24/11/2010 50.00 Indirect Associate Associate 24/11/2010 - 24/11/2010 Full consolidation 100.00 Indirect Associate - Associate - 45.00 Associate Associate 07/10/2010 Indirect 24/11/2010 Equity method Associate 24/11/2010 24/11/2010 Full consolidation 75.00 24/11/2010 40.00 - - 45.00 - - 50.00 20.00 75.00 40.00 Indirect 50.00 35.00 - - Indirect Indirect - - 50.00 20.00 Equity method - Full consolidation 20.00 40.00 50.00 35.00 33.78 Indirect 20.00 Equity method Indirect 40.00 Indirect Indirect 20.00 Equity method 40.00 Equity method 33.78 20.00 40.00 Equity method Equity method Indirect Indirect Indirect Indirect Indirect Equity method Equity method Equity method Equity method Equity method Changes in the year 2010: in the Changes Undertakings for the fi accounts consolidated in the included €’000 Name of undertaking (or operation) acquired or merged Category

Statutory informationBanco Sabadell Annual Report 2011 152 6350 Industries, S.L. (a) 6350 Industries, S.A.Air Miles España, S.L. (a) Aldoluz, S.L. (a) 16 Inversiones, Alfonso XII, S.L. (a) Anara Guipuzcoa, S.A. (a)Banco Guipuzcoano, S.L. (b)Bansabadell Consulting, Bitarte S.A. (a) S.L. (a) PropertyBlueSky Development, S.L. (a) Casas del Mar levante, (a) S.A. C-Cuspide 6, Portuguesa) lda. (Sdad. (a)Cepric, S.L. (a) Desarrollos Inmobiliarios Pronegui, S.A. (a) S.G.F.C.R. Diana Capital Inversion Subsidiary Associate(a) S.A. Easo Bolsa, 24/11/2010 24/11/2010 S.A. (a)Ederra, Associate S.L. (a) Egumar Gestion, Subsidiary 03/05/2010 S.L. (c)Erbisinia Renovables, Subsidiary Subsidiary Associate 24/11/2010 22/10/2010 24/11/2010 24/11/2010 Associate Associate 24/11/2010 Associate 24/11/2010 - Associate - 2,140 Associate 24/11/2010 24/11/2010 613,479 24/11/2010 100.00 37.50 25.00 Subsidiary 100.00 - 3 - 24/11/2010 Associate 100.00 24/11/2010 100.00 - 100.00 100.00 37.50 25.00 - 40.00 Indirect - - 30.05 100.00 Multigroup 100.00 - Full consolidation Subsidiary Indirect 40.00 Associate Direct Direct 30/12/2009 24/11/2010 33.33 40.00 24/11/2010 41.23 consolidation Full Indirect 45.00 - Equity method Subsidiary 30.05 Direct Equity method 40.00 - Full consolidation 24/11/2010 Indirect Full consolidation 100.00 33.33 41.23 Indirect 45.00 Indirect 33.00 Equity method Indirect 1 100.00 Indirect - Equity method Indirect - Equity method 33.00 Equity method Indirect 49.00 100.00 Equity method - Equity method 30.00 Full consolidation Indirect 100.00 49.00 97.85 30.00 Equity method Indirect Indirect 97.85 Indirect Full consolidation Indirect Equity method Full consolidation Statutory informationBanco Sabadell Annual Report 2011 153 method

Consolidation Consolidation WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Direct/ indirect % as prop. as prop. acquired rights Voting Voting Bank, N.A. Bank, of total % acquired Voting rights Voting ember 2009 and registered in November 2010. ember 2009 and registered in November Cost of combination paid Amount date effective Transaction Associate 24/11/2010 - 20.00 20.00 Indirect Equity method holding of treasury shares, or newly issued shares), to have the same voting and dividend rights as other holding of treasury shares, or newly issued shares), to have the same voting Banco Sabadell shares then in issue and outstanding; and of interest of 7.75% per annum. represented by book entries in Iberclear, with a term of 3 years and a rate whether to pay interest on the On each interest payment date Banco Sabadell would decide, at its discretion, bonds or to declare a voluntary conversion period. Banco Guipuzcoano, S.A. is a Spanish-domiciled company headquartered in San Sebastián in the north of Spain. Banco Guipuzcoano, S.A. is a Spanish-domiciled company headquartered by an Extraordinary General The offer price proposed by the Bank in payment for the acquisition was approved the offer, received in exchange: The holders of every eight ordinary shares in Banco Guipuzcoano taking up (i) Bank’s existing five Banco Sabadell shares with a nominal value of €0.125 each (either shares from the (ii) bonds with a nominal value of €5.00 each five Banco Sabadell mandatorily convertible subordinated Acquisition of Banco Guipuzcoano, S.A. Acquisition of Banco Guipuzcoano, share capital of Banco Guipuzcoano, S.A. (“Banco Guipuzcoano”), was The process of acquiring 100% of the process was set in motion following a public share purchase offer by Banco completed on 24 November 2010. This and preference shares of Banco Guipuzcoano. This acquisition should be Sabadell to the holders of all ordinary in strategy to strengthen, consolidate and rebalance the group’s business seen in the context of Banco Sabadell’s Spain. normally carried on by a bank and any Its corporate object is to carry on and engage in any business or operations other services directly or indirectly related to such business or operations. and other securities on the following Meeting on 18 September 2010 and took the form of an exchange of equity terms: €’000 Name of undertaking operation) (or acquired or merged Category Acquired by the group through its subsidiary Sinia Renovables, S.C.R., S.A., Erbisinia Renovables, S.A., was acquired on 30 Dec acquired was S.A., Erbisinia Renovables, S.A., S.C.R., its subsidiary the group through Acquired by Sinia Renovables, NF Desarrollos, S.L. (a) S.L. (a) NF Desarrollos, S.L. (a) n 21, Norfi S.L. (a) Finestrat, Boulevard Parque S.L. (a) del Segura, Parque S.L. (a) PR 12 PV 15, S.L. (a) Probur BG XXI, S.L. (a) Promociones Abaco Costa Almeria, S.L. (a) Promociones Aguiver, S.L. (a) Promociones Florida Casas, Promociones y Desarrollos Creaziona Castilla S.L. (a) la Mancha, S.L. (a)Promociones y Desarrollos Creaziona Levante, S.L. (a) Promociones y Desarrollos Urbanos Oncineda, Associate S.L. (b)Proteo Banking Software, 24/11/2010 Associate S.L. (a) Residencial Haygon, Associate Subsidiary 24/11/2010Residencial Kataoria ,S.L. (a) 24/11/2010 Associate 24/11/2010 N.A. (f)Sabadell United Bank, Associate 24/11/2010 Associate S.L. (a) Saprosin Promociones, 24/11/2010 S.L. (a)Son Blanc Caleta, 24/11/2010 Associate S.L. (a) del Segura, Alta AssociateTierras Vega 24/11/2010 Associate Associate - S.L. (a) Sureste, Torre 24/11/2010 24/11/2010 24/11/2010 S.L. (a) Txonta Egizastu, - - S.A. (a)Urdin Oria, 33.00 - A.i.e. (a)Urtago Promozioak, - 40.00 - Subsidiary S.L. (a)Urumea Gestión, 100.00 40.00 - 16/12/2010 S.L. (a) Muniain, Vera 33.00 50.00 - S.L. (a) Vistas 21, del Parque 34.14 Associate - - 40.00 100.00 S.A. (a) 49.50Zurriola Inversiones, Subsidiary - 40.00 24/11/2010 Indirect Subsidiary 40.00 24/11/2010 S.A. acquisition of Banco Guipuzcoano, (a) Included in the consolidated accounts as a result of the Subsidiary Associate 50.00 41.00 15/01/2010 Indirect formation company (b) New Indirect 40.00 34.14 24/11/2010 24/11/2010 25.00 Indirect(c) 49.50 Equity method Full consolidation S.A. S.A., S.C.R., Aurica XXI, the group through (d) Acquired by 3 Indirect 40.00 Subsidiary Indirect Equity method Servicios the group through S.A. (e) Acquired by Reunidos, 41.00 24/11/2010 40.00 Equity method Indirect 117,336 changed to Sabadell United 25.00 was name the group under its former name of Mellon United National Bank. The company (f) Acquired by 100.00 Indirect Equity method - Equity method Associate Indirect 100.00 - Associate Indirect Equity method Indirect Associate 24/11/2010 100.00 24/11/2010 - - method Equity 25.00 24/11/2010 100.00 Equity method 100.00 Equity method Subsidiary Subsidiary Equity method Associate 100.00 45.02 Direct 24/11/2010 24/11/2010 - 24/11/2010 Subsidiary 100.00 Associate 25.00 Full consolidation Direct 24/11/2010 24/11/2010 100.00 100.00 consolidation Full 45.02 Indirect Indirect - - - Indirect Full consolidation 100.00 Indirect 40.00 Full consolidation Equity method 35.00 - - - 30.00 Indirect Equity method - 100.00 - 100.00 Full consolidation 40.00 32.20 35.00 30.00 100.00 45.00 100.00 100.00 Indirect Indirect Indirect 32.20 100.00 Indirect Indirect Equity method 45.00 Equity method Indirect Equity method Full consolidation Full consolidation Indirect Indirect Full consolidation Equity method Equity method

method Consolidation 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Direct/ indirect t/ group loss to Profi 10,800,000. held after disposal (%) voting rights Proportion of surrendered voting rights date Proportion of on disposal (%) effective Translaction Category Subsidiary 23/12/2010 72.92 0.00 0 Indirect Full consolidation holding of treasury shares, or newly issued shares), to have the same voting and dividend rights as other rights as other voting and dividend to have the same newly issued shares), treasury shares, or holding of and in issue and outstanding; shares then Banco Sabadell for as indicated above term and interest same terms as to in Iberclear, on the by book entries represented shares. holders of ordinary The holders of every eight Banco Guipuzcoano non-voting preference shares taking up the offer, received in in offer, received up the taking shares preference non-voting Guipuzcoano Banco every eight of The holders (i) existing from the Bank’s each (either shares value of €0.125 with a nominal Banco Sabadell shares six (ii) value of €5.00 each with a nominal subordinated bonds convertible Sabadell mandatorily five Banco date on which in Banco Guipuzcoano as of the securities given in exchange for shares The valuation of the This has resulted in a goodwill of €285,345,000. for the business combination The valuation and accounting has been valued at €29,598,000 (see note 16). The goodwill generated by the transaction subsidiary traded under the name of Sabadell United Bank, N.A. From then onwards the new Banco Sabadell exchange: paid in this being the purchase consideration passed to Banco Sabadell was €613,479,000, control of the bank the transaction. intangible assets (see note 16). been recorded under United National Bank (MUNB) Acquisition of Mellon S.A. concluded an agreement with the Bank of New York Mellon On 23 July 2009 Banco de Sabadell, its Miami, Florida subsidiary Mellon United National Bank. On 15 January to buy 100% of the ordinary shares of official and regulatory permissions, Banco Sabadell completed 2010, having obtained the necessary of the agreement, for an initial sum of €117,336,000 (USD 164,000,000). the purchase according to the terms transaction price of €111,712,000 (USD 156,151,000) Subsequently, on 17 June 2010, a final was agreed. S.L. Acquisition of 25% of Eurofragance, its subsidiary Aurica XXI, S.C.R., S.A., a 25% holding in Eurofragance, On 8 July 2010 the group acquired, through S.L. for the sum of €9,050,000. S.A. Acquisition of 25% of Air Miles Spain, 25% share in Air Miles Spain, S.A. for the sum of €2,140,000. On 3 May 2010 the group acquired a €’000 Name of undertaking (or operation) or eliminated spun off, sold, Undertakings no longer included in the consolidated accounts:

Statutory informationBanco Sabadell Annual Report 2011 154 Compañía de Electricidad y Cogeneración de S.A. (a) Uvero, Ibersecurities Holding, S.A.Ibersecurities Holding, S.U. S.A., Sociedad de Valores, Ibersecurities, S.A. (a)Inmobiliaria Asturiana, S.L. (b) Eólico La Peñuca, Parque B.V (a)Sabadell International Finance, S.L. 161, Tolosa, Bank Inc.Transatlantic Holding Corp. (a)Transatlantic Subsidiary(a) Liquidated. 15/06/2010 of € for the sum S.L., Eólico La Peñuca, in Parque S.L. sold its stake (b) On 22 June 2010 Explotaciones Energéticas Sinia XXI, 100.00 Subsidiary Subsidiary 15/06/2010 Subsidiary 29/12/2010 Associate 15/06/2010 22/06/2010 0.00 100.00 100.00 99.63 40.00 Subsidiary 0 31/12/2010 Subsidiary 0.00 09/08/2010 0.00 Associate Indirect 10/06/2010 0.00 0.00 100.00 Full consolidation 100.00 6,839 0 0 23.00 0 0.00 Indirect Direct Direct 0.00 Direct Full consolidation Full consolidation Equity method 0.00 Full consolidation 0 0 Direct 0 Indirect Full consolidation Full consolidation Indirect Equity method Statutory informationBanco Sabadell Annual Report 2011

155 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo total amount of €5,249 million, and Banco CAM will then be sold to Banco Sabadell for a price of one euro. total amount of €5,249 million, and Banco that had been previously committed by the FROB and were paid by That figure includes the €2,800 million the FGD on 15 December 2011. losses on that portfolio over a whose gross value is €24,660 million, and the FGD will assume 80% of the period of ten years, once the provisions for those assets have been absorbed. certain sources of funding currently available to it. From 1 January 2010 onwards all operations of the merged companies were treated for accounting purposes as for accounting purposes were treated the merged companies all operations of 2010 onwards From 1 January Holding Bank, N.A. was split between Transatlantic the ownership of Sabadell United As a result of the merger was signed by the FROB, the Credit Institutions’ Deposit Guarantee In accordance with that process, a contract Sabadell, the FROB and the FGD signed a protocol of financial support On that same date, Banco CAM, Banco (i) the subscription of one or more capital increases, for a The FGD will acquire 100% of Banco CAM through (ii) of assets Banco CAM an asset protection scheme (APS) for a pre-determined portfolio The FGD will grant (iii) certain contingent commitments to Banco CAM aimed at guaranteeing its access to The FROB will assume million, customer loans As of 30 September 2011, Banco CAM had total assets amounting to €70,518 competition authorities. Completion of the transaction is subject to approval by the European Union

Merger by absorption by Banco Sabadell, S.A. of Ibersecurities Holding, S.A. and Ibersecurities, Sociedad de de Sociedad Ibersecurities, and S.A. of IbersecuritiesS.A. Holding, Sabadell, Banco absorption by by Merger Unipersonal. Sociedad S.A., Valores, S.A., Sociedad Valores, de Sociedad Ibersecurities, S.A. and Holding, Ibersecurities June 2010 On 15 and but not liquidated, were dissolved S.A. Both companies Banco de Sabadell, were merged into Unipersonal The latter succession. S.A. by universal to Banco de Sabadell, transferred en bloc share capital was their entire or and without any reservation generally the absorbed companies and obligations of in all rights was subrogated whatsoever. limitation de Sabadell, S.A. operations of Banco N.A. Sabadell United Bank, Bank Inc. by absorption of Transatlantic Merger by N.A. The company by absorption into Sabadell United Bank, Transatlantic Bank Inc. was merged On 9 August 2010 en bloc to Sabadell and equity were transferred not liquidated and its entire assets, liabilities was dissolved but United Bank, N.A. S.A. with the remaining 71.39%. of 28.61%, and Banco de Sabadell, Corp., with a shareholding Corp. Holding Dissolution and liquidation of Transatlantic Holding Corp. approved a plan for its own liquidation in which it would On 23 December 2010, Transatlantic and transfer to Banco de Sabadell, S.A. (as sole shareholder) its portfolio cease all operations of the business in Interstate Property Holdings, LLC and 28.61% of Sabadell United of shares consisting of a 100% interest Bank, N.A. b) Acquisition agreement (“Banco CAM”) was adjudicated to Banco Sabadell following a competitive On 7 December 2011, Banco CAM, S.A. for Orderly Bank Restructuring (FROB). auction process undertaken by the Fund Banco Sabadell undertook to acquire 100% of the shares of Banco CAM. Fund (FGD) and Banco Sabadell, by which CAM, under which: measures for the restructuring of Banco amounting to €50,825 million, 939 branch offices, and 6,319 employees. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 26 990 26 0.17 0.32 0.150.15 0.28 0.28 2011 2010 2011 2010 2011 69,516 189,545 69,516 55,607 (131,223) 128,147 189,837 128,147 (69,516) (113,727) 149,175 451,977 31.08.2011 30.11.2010 06.09.2011 20.12.2010 ts - earnings share per t of Banco de Sabadell, S.A. for the yeart of Banco de Sabadell, 197,983 380,620 Proposals for allocations of profits of subsidiaries and associates are subject to approval by their respective are subject to approval by of profits of subsidiaries and associates Proposals for allocations is €0.05 (€0.15 in by the Board of Directors of the Bank per share for the year recommended The gross dividend distribution of an interim dividend for 2011 amounting to a total of The Board of Directors decided on the the Annual General Meeting the distribution of a final dividend of €0.05 The Board of Directors will propose to profits were generated by the Bank in each annual period to enable an The following table shows that sufficient Earnings per share calculations are shown in the following table: mandatory convertible bonds (€) Net profi t attributable to group (€’000) Net profi t from discontinued operations (net) (€’000) Profi Ordinary average) shares outstanding (weighted of convertibleAssumed conversions bondsOrdinary - adjusted average) shares outstanding (weighted Earnings per share (€) Basic earnings of per share after adjusting for conversion 1,528,796,255 1,336,236,199 1,372,936,870 231,902 0 1,179,321,979 192,560,056 193,614,891 380,040 0 Profi t of Bank t of Profi Estimated income tax Dividends paid for distributiont available Net profi Amount proposed and distributed date Payment 135,266 69,516 Diluted earnings per share (€) 207,027 113,727 To dividends To statutory reserve To reserves in Canary for investment IslandsTo voluntary reserves To Profi 294 248 Annual General Meetings. 2010). to The dividend was paid on 6 September 2011, and will be recommended €69,516,000 (€113,727,000 in 2010). the Annual General Meeting for final approval. reissued from the company’s treasury shares and charged to the share per share to be paid in the form of shares premium reserve. interim dividend to be paid. Earnings per share to the group by the weighted Basic earnings per share are obtained by dividing the net profit or loss attributable treasury shares purchased by the group. average number of ordinary shares outstanding in the year, excluding any or loss, and the weighted average Diluted earnings per share are calculated by adjusting the attributable profit to ordinary shares being exercised. number of shares outstanding, for the estimated effect of all conversions €’000 €’000 Note 3. Proposed allocation of profi of allocation 3. Proposed Note Meeting Annual General to the will propose Board which the year 2011 for the profit of the Bank’s The allocation on 14 April General Meeting by the Annual for 2010 was approved The allocation in the following table. is shown table. is also shown in the 2011 and

Statutory informationBanco Sabadell Annual Report 2011 156 Statutory informationBanco Sabadell Annual Report 2011

157 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 859 507 859 2011 2010 2011 9,060 7,278 9,060 2011 2010 8,281 7,933 (1,907) (1,812) 951,849 444,223 951,849 1,072,334 733,110 725,087 800,597 725,087 233,548 224,781 (11,004) (10,507) 205,931 118,203 632,893 599,249 3,628,914 2,744,614 3,628,914 2,744,614 3,628,914 421,487 1,210,856 3,628,914 2,744,614 3,395,366 2,519,833 3,628,914 2,744,614 7,939,556 6,421,118 1,175,162 1,405,113 1,677,415 558,784 12,090,847 9,762,889 12,296,778 9,881,092 12,296,778 9,881,092 11,663,885 9,281,843 12,296,778 9,881,092 nancial institutions and other issuers 4,359,945 3,462,548 Treasury bills Treasury Other book-entry securitiesGeneral government 5,086,979 4,457,221 Average annual interest rates on loans and advances to credit institutions for the years 2011 and 2010 were Average annual interest rates on loans item at 31 December 2011 principally relate to increases in The main components of the “other accounts” Analysis by heading: Analysis by Held for trading Debt securities Total type: Analysis by Government securities Securities of fi Doubtful assets Impairment provisions Total currency: Analysis by Euro denominated currency denominated Foreign Total 1.60% and 1.14% respectively. buyer credit to non-resident banks and forfaiting deals with other credit the balances on securitization funds, buyer credit to non-resident banks and forfaiting deals with other credit institutions. In 2010, they comprised institutions. €’000 Note 5. Debt securities 2011 and 2010 are analysed as follows: Debt securities shown in the consolidated balance sheet at 31 December €’000 Note 4. Loans and advances to credit institutions to credit and advances 4. Loans Note and 2011 31 December sheet at balance in the consolidated recorded credit institutions to and advances Loans table: analysed in the following 2010 are Analysis by heading: Analysis by Loans and receivables Total type: Analysis by Time deposits Reverse repos Other accounts Doubtful assets Other fi nancial assets Other fi Impairment provisions Other valuation adjustments Total currency: Analysis by Euro denominated currency denominated Foreign Total WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo models models Internal Internal 0 ow 2011 cash fl Discounted and policies - valuation and and policies - valuation and and policies - valuation and price price Quoted Quoted Level I (*)Level II (*) Level III (*) Level 7,956,315 0 38,624 38,624 40,055 7,956,315 0 7,767,057 0 models Internal 2011 2010 2011 cash fl ow cash fl Discounted price (1,290) (85) 0 (726) (727) 0 Quoted 13,281 13,583 746 13,583 628 9,756 241 13,281 (372,148) (8,512) (483) (435,161) (26,503) (586) Level I (*)Level II (*) Level III (*) Level I (*) Level II (*) Level III (*) Level nancial instruments. nancial instruments. recording of fi recording of fi Average annual rates of interest on debt securities in the years 2011 and 2010 were 3.31% and 2.72%, and were 3.31% and 2010 2011 in the years on debt securities interest rates of annual Average as follows: are category assets” financial the “available-for-sale within comprised instruments of debt Details Debt securities held in the available-for-sale financial assets portfolio in the form of public debt at 31 financial assets portfolio in the form of public debt at 31 Debt securities held in the available-for-sale is detailed below according to fair value level: The group’s exposure to public debt securities Valuation method Valuation Accumulated gains recognized in equity at end Accumulated gains recognized of period impairmentLosses recognized as in the income statement for the period Acquisition costAcquisition valueFair in equity at end Accumulated losses recognized of period 11,506,834 765,304 11,267,034 42,766 778,089 9,255,236 45,724 919,633 8,820,316 39,645 902,886 39,687 respectively. (*) principles in the section on accounting used in this table are explained in note 1 (d) of these annual accounts, The levels €’000 (*) in the section on accounting principles of these annual accounts, used in this table are explained in note 1 (d) The levels €’000 December 2011 correspond to €7,697,111,000 in Spanish government bonds and €110,001,000 in foreign in Spanish government bonds and €110,001,000 in foreign December 2011 correspond to €7,697,111,000 debt security holdings comprise positions in Portuguese, Irish, Moroccan government bonds. The group’s foreign amounts of €56,411,000, €40,840,000, €1,180,000 and €11,570,000 and Andorran government bonds in the respectively. Acquisition cost value Fair of periodAccumulated losses recognized in equity at end of periodAccumulated gains recognized in equity at end Losses recognized as impairment in the income statement for the period method Valuation 0 (265,852) 7,607 0 0 0 (71) 0 732

Statutory informationBanco Sabadell Annual Report 2011 158 Statutory informationBanco Sabadell Annual Report 2011

159 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo s and policies - valuation and 2011 2010 2011 62,654 44,574 62,654 31,388 22,384 38,726 27,992 38,517 33,168 38,517 790,881 667,750 790,881 623,176 728,227 509,660 573,417 487,276 542,029 (746,598) (630,031) 1,389,166 1,278,400 1,350,440 1,250,408 1,389,166 1,278,400 1,389,166 1,278,400 1,389,166 2011 2010 2011 4,067 19,856 2,764 4,130 24,597 3,351 (32,670) (7,331) 0 (36,692) (12,265) (959) (115,484)(60,103)0 0 (52,098) 0 Level I (*)Level II (*) Level III (*) Level I (*) Level II (*) Level III (*) Level nancial instruments. recording of fi Financial assets at fair value through profit or loss in both years consisted entirely of investments associated Financial assets at fair value through within the “available-for-sale financial assets” category are as follows: Details of equity instruments comprised Credit institutions Other Credit institutions Other During the year an impairment was recognized in the group’s shareholding in Banco Comercial Português, S.A. During the year an impairment was recognized in the group’s shareholding valued, and is periodically The group has a holding in Metrovacesa, S.A. (MVC). The holding was initially Accumulated gains recognized in equity at end of period Acquisition costvalueAcquisition Fair Accumulated losses recognized in equity at end of period Losses recognized as impairment in the income statement for the period 224,222 931,302 35,113 277,899 725,197 82,482 737,529 84,874 943,827 37,877 245,337 195,619 Share in net assets of mutual funds and OEICsImpairment provisions Total currency: Analysis by Euro denominated currency denominated Foreign Total 771,466 731,021 Analysis by heading: Analysis by Held for trading t or loss through profi nancial assets at fair value Other fi assetsnancial fi Available-for-sale Total type: Analysis by Resident sector Non-resident sector 173,326 177,492 1,177,323 1,067,740 with unit-linked life policies sold through Assegurances Segur Vida, S.A., a group subsidiary. with unit-linked life policies sold through €’000 €’000 Note 6. Equity instruments 6. Equity Note be can and 2010 2011 31 December sheet at balance of the consolidated heading instruments” The “equity as follows: analysed (*) on accounting principle in the section accounts, used in this table are explained in note 1 (d) of these annual The levels (BCP) amounting to €114,301,000 (€54,751,000 in 2010). As a result, the value of the group’s holding in BCP at (BCP) amounting to €114,301,000 (€54,751,000 in 2010). As a result, the impairment has been recorded under 31 December 2011 was written down to the quoted price of the shares. The impairment losses on financial assets in the consolidated income statement. although these valuations are revalued, on the basis of the most reliable NAV (net asset value) data available, 2011, said company carried out liable to be supplemented by yet more rigorous valuation criteria. On 1 August S.A. subscribed to 114,807,397 a capital increase of 918,507,207 shares (€1,377,761,000). Banco Sabadell, to said company, thereby increasing its (€172,211,000) of these shares through the capitalization of loans made at €2.9 per share. total shareholding to 12.35%. As at 31 December 2011 the holding was valued WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Black-Scholes Black-Scholes Valuation method Valuation Simulation on Hull-White model Simulation on Hull-White model Black-Scholes and binomial tree Black-Scholes and binomial tree Black-Scholes, Garman & Kohlhagen model Garman & Kohlhagen Black-Scholes, Black-Scholes, Garman & Kohlhagen model Garman & Kohlhagen Black-Scholes, Montecarlo simulations on Black-Scholes model Montecarlo simulations on Black-Scholes model Montecarlo simulations on Black-Scholes model Montecarlo simulations on Black-Scholes model Black & Black-Scholes with convexity adjustment Black & Black-Scholes with convexity Black & Black-Scholes with convexity adjustment Black & Black-Scholes with convexity 2011 2010 2011 Assets Liabilities Assets Liabilities Fair value Fair 2011 2010 Currency forwards 132,884 46,832 ow Discounted cash fl Interest rate optionsIndex and securities options 120,702 223,662 126,163 148,015 Swaps, CCIRS, Call Money Swap Call Money CCIRS, Swaps, Exchange rate options 962,817 821,619 10,956 ow Discounted cash fl 18,492 Currency forwards 177,710 57,331 ow Discounted cash fl Fair values of trading derivatives are calculated from inputs based on observable market data, except in the case Fair values of trading derivatives are calculated from inputs based on observable The fair values and valuation techniques being used for each type of trading derivative at 31 December 2011 The fair values and valuation techniques Interest rate optionsIndex and securities options 121,422 183,810 105,277 144,782 Swaps, CCIRS, Call Money Swap Call Money CCIRS, Swaps, Exchange rate options 943,932 820,374 10,798 ow Discounted cash fl 18,461 Total liabilities held in trading portfolioTotal 1,451,021 1,161,121 Total assets held in trading portfolio assets held in trading Total Liabilities derivatives:Trading 1,437,672 1,146,225 1,451,021 1,161,121 Securities derivativesderivativesSecurities Interest rate derivativesCurrency Other derivativesTotal currency: Analysis by Euro denominated currency denominatedForeign Total 188,218 231,391 145,346 150,176 1,021,999 177,832 222,072 1,036,240 139,699 139,414 840,718 5,383 850,312 96,060 1,341,612 100,208 5,558 1,437,672 1,451,021 1,350,813 1,146,225 1,161,121 1,077,865 68,360 20,462 1,091,538 69,583 21,219 1,437,672 1,451,021 1,146,225 1,161,121 Assets derivatives:Trading 1,437,672 1,146,225 of stock and index options, where the inputs are supplemented by estimated volatilities and correlations, using of stock and index options, where the inputs are supplemented by estimated methods generally accepted within the financial services community. and 2010 are shown in the table below. €’000 Note 7. Trading derivatives (assets and liabilities) and (assets derivatives 7. Trading Note sides of the liability asset and on the captions derivatives trading for the types by transaction The breakdown follows: and 2010 is as at 31 December 2011 balance sheet consolidated €’000

Statutory informationBanco Sabadell Annual Report 2011 160 Statutory informationBanco Sabadell Annual Report 2011 161 0 0

5,224 6,166 1,494

(1,153) (9,897) (1,565) (5,644) WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 Level ILevel II Level III Levell I Level II Level III Levell Changes in the carrying value of derivative instruments measured at fair value according to Level III of the measured at fair value according to Level value of derivative instruments Changes in the carrying At 31 December 2011, trading derivatives measured at fair value according to the hierarchy of levels described described of levels the hierarchy to value according at fair measured trading derivatives 2011, December At 31 Trading derivatives (assets)Trading derivatives (liabilities)Trading 56,729 6,227 1,207,795 1,243,454 186,497 187,991 0 0 1,007,310 998,058 153,811 148,167 hierarchy, and gains or losses due to changes in value during the years 2011 and 2010 are shown in the following the years 2011 and 2010 are or losses due to changes in value during hierarchy, and gains table: in note 1 to these annual accounts (accounting principles and polices applied) for the years 2011 and 2010, were and 2010, 2011 for the years applied) polices and principles (accounting accounts annual 1 to these in note as follows: classified Additions Write-downs and recoveries Transfers due to changes in value to income statement Gain/loss taken Balance at 31 December 2010 Write-downs and recoveries 182 Additions Transfers Balance at 31 December 2009 Balance at 31 December €’000 €’000 due to changes in value to income statement Gain/loss taken Balance at 31 December 2011 2,537 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 2011 94,844 43,222 94,844 43,222 2,479,422 2,839,019 2,479,422 2,994,755 2,673,778 2,737,599 2,975,350 4,759,280 3,944,427 2,212,140 1,032,724 6,260,063 5,204,277 4,759,280 3,944,427 (2,268,043) (2,209,902) (2,268,043) (2,209,902) 72,654,030 73,980,818 72,654,030 73,980,818 72,654,030 40,015,744 37,910,786 19,106,137 20,889,437 72,654,030 73,980,818 61,595,746 65,966,070 72,654,030 73,980,818 68,783,112 71,141,455 72,654,030 73,980,818 (€3,130,693,000 in 2010); at 31 December 2011 period (assuming that no extensions of purchase options will be exercised) one and five years, and totals €560,867,000 due within one year, €1,375,206,000 falling due between €823,378,000 falling due after five years. Average annual rates of interest on loans and advances to other debtors in the years 2011 and 2010 were Average annual rates of interest on loans With regard to financial leases in the year: - At 31 December 2011 the total gross value of finance leasing contracts amounted to €2,839,591,000 - The present value of the minimum future payments receivable by the bank during the obligatory lease - The contingent instalments recognized as revenue in the year totalled €126,484,000; - Unaccrued finance income totalling €434,375,000 (€327,959,000 in 2010); - The non-guaranteed residual value for the leases totalled €176,867,000 (€178,367,000 in 2010); - Value adjustments due to impairment of finance leases amounted to €86,853,000 (€72,700,000 in 2010). Analysis by heading: Analysis by Loans and receivables Total type: Analysis by Reverse futures market (MEFF) clearing house repos settled through the Commercial loans Secured receivables Other term receivables on demand and other accountsPayable Finance leases rming confi and Factoring Doubtful assets Impairment provisions Other valuation adjustments 1,286,731 Total sector:Analysis by 3,132,792 General government Resident sector Non-resident sector Doubtful assets Impairment provisions Other valuation adjustments Total currency: Analysis by Euro denominated 1,852,445 currency denominatedForeign Total 1,377,025 3,870,918 2,839,363 4.05% and 3.54%, respectively. Note 8. Loans and advances to other debtors to and advances 8. Loans Note are 2010 2011 and December at 31 sheet balance consolidated on the other debtors to and advances Loans as follows: analysed €’000

Statutory informationBanco Sabadell Annual Report 2011 162 Statutory informationBanco Sabadell Annual Report 2011 163

433,539

(508,279) (818,032) 3,952,867 4,507,583 4,768,420 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2,657,310 3,800,091 (2,429,794) (2,873,998) 2011 2010 2011 2010 8,281 7,933 2011 2010 2011 47,073 61,541 47,073 865,223 1,092,283 393,752 356,824 393,752 427,957 391,125 3,283,460 2,545,002 4,768,420 3,952,867 4,768,420 3,952,867 2,860,318 3,112,042 2,860,318 1,709,653 2,882,911 (2,268,043) (2,209,902) 68,346,894 70,522,703 68,346,894 73,980,818 72,654,030 The distribution of doubtful assets at 31 December 2011 and 2010 according to the type of security provided The distribution of doubtful assets at 31 December 2011 and 2010 according Changes in doubtful assets were as follows: Loans and advances to other debtors due for repayment but not classified as doubtful assets at 31 December but not classified as doubtful assets to other debtors due for repayment Loans and advances Loans and advances to government bodies comprise a balance of €2,037,794,000 with the Spanish government government the Spanish with of €2,037,794,000 a balance comprise bodies government to and advances Loans and 2010 December 2011 region at 31 debtors by geographical advances to other of loans and The distribution Spain Other European Union Latin America USA and Canada Other OECD Rest of the world Impairment provisions Total was as follows: 2011 amounted to €585,527,000 (€416,309,000 at 31 December 2010). At 31 December 2011 more than 65% at 31 December 2010). At 31 December 2011 more than 65% 2011 amounted to €585,527,000 (€416,309,000 overdue (31 December 2011: 60% of the total). of this total was not more than one month Doubtful assets different balance sheet headings at 31 December 2011 and 2010 were as Assets recognized as doubtful under follows: (€1,004,039,000 at 31 December 2010) and €174,346,000 with foreign governments. This latter amount includes includes amount This latter governments. with foreign and €174,346,000 2010) December at 31 (€1,004,039,000 the US government. with of €147,168,000 a balance was as follows: Due to acquisition of Banco Guipuzcoano group Balance at 31 December 2010 Additions Write-downs and recoveries Balance at 31 December 2011 Written off Written off Additions Write-downs and recoveries €’000 mortgage(1) Loans secured by where the amount loaned is less than 100% of the assessed value. (2) Includes all other loans secured on property. €’000 Balance at 31 December 2009 €’000 €’000 Mortgage (1) a charge on propertyOther security represented by (2)Other Total 619,737 315,582 Loans and advances to credit institutionsDebt securities Loans and advances to other debtorsTotal 859 4,759,280 3,944,427 507 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo fair value of assets and 2011 2010 2011 2011 2010 2011 2,699 1,937 2,699 2,991 4,452 11,004 10,507 83,744 66,761 83,744 8,621 13,222 108,624 112,718 112,718 108,624 2,280,954 2,222,221 4,555,679 3,759,839 3,759,839 4,555,679 3,952,867 4,768,420 nancial assets derecognized in this note is recognized c Generic Country risk Total Specifi nancial assets: loans and debt securities (note 34(g)). liabilities associated with business combinations (note 16). under the heading impairment losses on fi Details of changes in, and opening and closing balances of, impairment provisions to cover against credit risk Details of changes in, and opening and The distribution of doubtful assets by geographical region at 31 December 2011 and 2010 was as follows: was as and 2010 2011 31 December region at by geographical assets of doubtful The distribution Specific provisions at 31 December 2011 included €308,631,000 in provisions for sub-standard risks Specific provisions at 31 December 2011 included €308,631,000 in provisions Balance at 31 December 2009 charged to income statementProvisions Releases to income statement exchange differencesForeign TransfersAdded on acquisition of Banco GuipuzcoanoOther movementsBalance at 31 December 2010 1,912,393 charged to income statement (*)Provisions 1,410,623 Releases to income statement (*) exchange differencesForeign Transfers 262,589 76,916 (1,253,457) 381,295 (**)Other movements Balance at 31 December 2011 (366,523) 51,008 932 907,235 3,237 4,698 1,805,120 1,992,546 (2,710) 1,796,616 58,588 (484,486) 1,779 411,770 (23,953) 0 (504,007) (1,622,690) (24,442) 2,602 696 (503,999) 267,287 313,597 1,460,302 106 5,331 8 0 44,381 968,425 (3,249) 2,222,221 815,959 370 2,817 (812,644) 0 (512,177) 369,673 4,693 (812,644) 243,334 9 2,280,954 0 0 0 1,075 414,054 (**) The movement in the general allowance is due mainly to provisions for expected losses in the year from the recognition at is due mainly to provisions in the general allowance The movement (**) exposure are shown in the following table: €’000 Impairment provisions Impairment provisions headings at 31 assets under different balance sheet resulting in value adjustments to Impairment provisions 2010 were as follows: December 2011 and €’000 €’000 Loans and advances to credit institutionsDebt securities Loans and advances to other debtorsTotal 1,907 2,268,043 1,812 2,209,902 Spain Union Other European Latin America USA and Canada Other OECD Rest of the world Total (€491,618,000 at 31 December 2010). (*) The total of these amounts and the amortisation/recovery to income in relation to impaired fi taken

Statutory informationBanco Sabadell Annual Report 2011 164 Statutory informationBanco Sabadell Annual Report 2011 165 (70) 167 111 (802) (7,801) (6,955) (8,343) 59,853 17,145

(15,309) (85,155) (35,961) (79,493) (15,379) (99,911) (44,304)

628,591 551,593 924,796 818,032 106,764 (230,050) (310,345) 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 1,134,306 1,647,774 2,218,032 2011 2010 2011 6,492 6,046 6,492 922 2,197 8,834 9,174 32,326 38,965 32,326 321,193 57,903 321,193 1,909,572 2,109,551 2,109,551 1,909,572 2,222,221 2,280,954 nancial assets removed from the asset side amounts to €60,312,000 and is nancial assets removed nancing nancing refl ected in the note 34(g). refl The distribution of impairment provisions by geographical region at 31 December 2011 and 2010 was as and 2010 2011 December at 31 region by geographical provisions of impairment The distribution Financial assets whose terms were renegotiated during the year totalled €3,886,074,000 at 31 December the year totalled €3,886,074,000 at terms were renegotiated during Financial assets whose from the balance sheet on the ground that the probability of recovery was Impaired financial assets derecognized follows: (*) Impairment/recovery charged or credited to income derived from impaired fi €’000 Balance at 31 December 2009 €’000 Additional information income statement at not recognized in the consolidated on impaired financial assets but Finance income accruing and €84,626,000 respectively. and 2010, amounted to €104,929,000 31 December 2011 2011. remote showed the following evolution: Additions: Assets with poor prospects of recovery Added on acquisition of Banco Guipuzcoano Derecognized for other reasons Recoveries: Due to receipt of cash without additional fi Due to repossession of tangible assets Due to debt forgiveness Due to statute of limitations Due to receipt of cash without additional fi Due to repossession of tangible assets Due to other circumstances Net change due to foreign exchange differences Permanently written off: written Permanently Due to other circumstances Net change due to foreign exchange differences Balance at 31 December 2010 Additions: Assets with poor prospects of recovery Derecognized for other reasons Recoveries: written off: Permanently Due to debt forgiveness Due to statute of limitations Balance at 31 December 2011 (*) Spain Union Other European Latin America USA and Canada Other OECD Rest of the world Total WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 40,552 351,647 1,909,018 1,685,443 8,496,3121,839,951 7,735,148 3,002,689 10,336,263 10,737,837 20,066,39920,025,847 20,218,757 19,867,110 Loans used to cover mortgageLoans used to cover bond issues mortgageLoans suitable to cover bond issues 20,025,847 0 19,867,110 0 Of which: Loans carried in the statement of fi nancial position Of which: Loans carried in the statement of fi 4,749,478 5,581,716 Of which: Loans carried in the statement of fi nancial position Of which: Loans carried statement of fi in the Decree 716/2009, limits stated in Royal Comply with eligibility requirements up to the article 5.1 Other Non-attributable amounts Attributable amounts 1,826,564 1,589,348 €’000 and mortgages;Breakdown of total loans capital (nominal values) eligible and attributable Total loans and mortgages portfolioTotal Mortgage issued securities Mortgages used as security for loans received bond issues and mortgageLoans used to cover notes Non-eligible loans Eligible loans 37,107,842 30,402,662 38,333,854 30,956,594 0 0 Note 9. IssuersNote mortgage in the mortgage the special and market register and Sabadell by Banco kept Register Mortgage in the Special on data information section provides This makes 5/2011. The Circular of Spain’s Circular by the Bank entities, as required as issuing Banco Guipuzcoano credit reporting by confidential financial on public and earlier Circular 4/2004 to the certain amendments institutions. A) Lending which can be used at 31 December 2011 and 2010 value of the loan and credit portfolio The aggregate nominal limit of mortgage eligible for the calculation of the issue of mortgage bonds and considered as cover for the issue notes is detailed below: cates issued Mortgage transfer certifi 4,796,162 5,691,817

Statutory informationBanco Sabadell Annual Report 2011 166 Statutory informationBanco Sabadell Annual Report 2011

167 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 Total Eligible Total Eligible Total Of which: Public housingOf which: Public housing 39,042 29,083 2,448 20,403 2,448 16,771 0 0 Of which: for real estate development estate Of which: for real ResidentialCommercialOtherResidential 8,568,412Commercial 4,919,724Other land with servicesDevelopment 9,460,441Other land 5,880,745 18,492,090 14,232,224 5,530,853 19,724,645 3,971,486 3,065,436 14,131,101 662,482 912,671 1,576,502 5,987,660 45,158 135,660 728,879 2,658,023 3,737,475 1,015,512 1,070,903 42,525 1,883 134,062 786,039 825,867 124,538 41,491 283,292 1,881 1,044,998 18,271 211,765 442,651 6,389 A breakdown of these nominal values according to a range of categories is shown in the following table: following in the is shown categories a range of to according values these nominal of A breakdown Originated by BankOriginated by from other lendersTransferred Other30,159,901Euro Other currencies 19,992,986None outstanding 30,703,061Other loans/credit 20,153,031 10 years or less10 to 20 years20 to 30 yearsMore than 30 years 302,861 29,266,656Fixed rate 233,065 rate Variable 19,540,251 ratexed/variable Split fi 29,662,634 527,685 individual/corporate customers use by For 19,592,377 368,971 Other Individual and ISFLSH 242,761 833,145 26,738,469 3,664,193Assets/Completed buildings 18,470,554 293,083 73,413 1,595,845 28,177,282 10,958,025 766,275 19,036,076 253,533 18,231,926 2,779,312 7,836,351 5,380,178Assets/Buildings under construction 4,022,141 7,586,145 10,103,573 1,182,681 5,506,670 257,409 11,353,665 3,215,930 65,726 5,963,621 18,695,636 5,651,035 8,028,055 10,484,913 4,559,829 29,634,332 7,015,045Land 520 12,170,736 5,471,801 767,810 19,647,112 3,617,931 5,477,990 9,962,826 24,685,425 29,126,322 419,046 17,433,320 241 12,260,958 19,111,486 1,817,444 25,846,367 959,712 9,733,844 17,910,067 12,828 1,098,622 773,285 8,649 1,407,206 850,527 4,757,525 1,859,794 3,703,021 1,458,163 Analysis of mortgageAnalysis of only) eligible loans/credit and portfolio loan/credit (overall, mortgage portfolio loan/credit Total Origin of loan/credit Currency30,402,662 20,066,399 positionPayment 30,956,594 30,402,662 20,218,757 20,066,399 term residual Average 30,956,594 20,218,757 30,402,662Interest rate 20,066,399 30,956,594Holders 30,402,662 20,218,757 20,066,399 30,956,594 30,402,662Security/collateral 20,218,757 20,066,399 30,402,662 20,066,399 30,956,594 20,218,757 30,956,594 20,218,757 30,402,662 20,066,399 30,956,594 20,218,757 30,402,662 20,066,399 30,956,594 20,218,757 €’000 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 0 86,443 00 2011 2010 2011 2010 72,140 0 957,285644,028 909,602 662,774 5,507,277 4,900,159 5,417,2422,065,700 5,272,350 2,149,798 2,199,876 3,006,074 4,854,242 4,753,855 54,658 236,522 4,215,498 5,292,393 Eligible Non-eligible 690,695 356,320 1,552,9312,222,296 1,187,645 1,051,537 2,287,417 1,291,792 (2,439,775) (1,693,366) 20,218,757 10,737,837 20,066,399 10,336,263 The changes in the nominal values of the mortgage loans used to cover bond issues and mortgage notes The changes in the nominal values of The breakdown by loan-to-value (LTV) ratio of the nominal values of the mortgage loan and credit portfolio eligible values of the mortgage loan and credit loan-to-value (LTV) ratio of the nominal The breakdown by The nominal value of drawable funds (i.e. undrawn loan commitments) within the total mortgage loan and credit and credit loan total mortgage within the loan commitments) undrawn (i.e. funds of drawable value The nominal Cancellations on maturity dateEarly cancellations from other lenders Transferred Other Bank Originated by from other lendersTransferred Other 196,149 149,401 10,463 3,733 LTV less than 40% LTV LTV 40% to 60% LTV 60% to 80% LTV than 80% more LTV less than 40% LTV 40% to 60% LTV than 60% more LTV (eligible and non-eligible) in 2011 and 2010 are as follows: (eligible and non-eligible) in 2011 and as cover for the issue of mortgage bonds and mortgage notes is as follows: of mortgage bonds and mortgage as cover for the issue portfolio are as follows: are as portfolio Initial balance Cancellations Final balance €’000 Changes in mortgage loans nominal values 2011 €’000 mortgage ratio. Eligible loans for the issuance of bonds and loan-to-value (LTV) by Type bonds covered Potentially eligible Potentially Non-eligible propertySecured on residential Other security 15,850,901Registrations 14,926,364 €’000 and mortgages loans bond used to cover value). Total balances (nominal Available mortgageissues and notes

Statutory informationBanco Sabadell Annual Report 2011 168 Statutory informationBanco Sabadell Annual Report 2011 169

(in years) Average Average WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo unexpired term value (€’000) Nominal 2011 2010 1,230,000 1,270,000 13,638,500 13,678,700 (in years) Average Average unexpired term 2011 2010 value (€’000) Nominal cates 1,909,018 15 1,685,443 18 Residual maturity less than one year one and two yearsResidual maturity between two and three yearsResidual maturity between ve years three and fi Residual maturity between ve and ten years fi Residual maturity between Residual maturity greater than ten years 380,000 130,000 200,000 100,000 0 200,000 380,000 420,000 40,000 100,000 130,000 420,000 Residual maturity less than one yearResidual maturity less one and two yearsResidual maturity between two and three yearsResidual maturity between ve years three and fi Residual maturity between ve and ten years fi Residual maturity between than ten yearsResidual maturity greater than one yearResidual maturity less one and two yearsResidual maturity between two and three yearsResidual maturity between ve years three and fi Residual maturity between ve and ten years fi Residual maturity between Residual maturity greater than ten years 2,700,000 1,000,000 3,250,000 1,000,000 1,500,000 1,000,000 1,500,000 2,500,000 1,200,000 3,250,000 500,000 0 420,000 538,500 1,500,000 0 538,500 1,220,000 600,200 500,000 0 0 0 100,000 At 31 December 2011 Banco de Sabadell, S.A. and Banco Guipuzcoano, S.A. (the group’s issuing entities) were At 31 December 2011 Banco de Sabadell, S.A. and Banco Guipuzcoano, S.A. of Law 2/1081 of 25 March on As required by Royal Decree 716/2009, which developed certain aspects market activities, the Board In line with these policies and procedures for managing the group’s mortgage Issued by public offer Issued by public offer Issued otherwise than by 4,796,162 14 0 5,691,817 0 16 0 0 Issued by public offerIssued by public offerIssued otherwise than by 1,909,018 15 0 1,685,443 0 27 0 0 Of which: Not taken to liabilitiesOf which: Not taken to via public offeringDebt securities Issued Debt securities Other issuesDeposits 9,450,000 1,340,750 9,450,000 1,002,550 2,958,500 2,958,700 Mortgage participationsMortgage certifi 4,796,162 14 5,691,817 16 €'000 Nominal value B) Funding mortgage Guipuzcoano Banco and Banco Sabadell by backed securities collateralized issues of on Information or public offering was by the issue of whether term and residual basis of on the analysed portfolios, and credit loan table: is shown in the following otherwise, Mortgage bonds issued overcollaterized by 224% and 201% respectively, this being understood as the ratio between the nominal value of overcollaterized by 224% and 201% respectively, this being understood as mortgage notes issued. the entire mortgage loan and credit portfolio and the nominal value of the lending, the Board of Directors is the regulation of the mortgage market and other matters relating to mortgage of policies and procedures in place to responsible for ensuring that as of 31 December 2011 the Bank had a set ensure its compliance with the mortgage market regulations. and to implementing the group’s of Directors is responsible for compliance with all mortgage market regulations In the area of credit risk, risk management and control procedures (see note 37 Financial Risk Management). its Risk Control Committee, which in particular, the Board of Directors delegates powers and discretions to procedures set up to handle the then sub-delegates authority at each level of decision-taking. The internal and particularly those secured by origination and monitoring of the assets that make up the group’s lending described in detail below for each type mortgage, which serve as cover for the group’s covered bond issues, are of loan applicant. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo The scoring of an application is the key element in determining the viability of a loan. Where The scoring of an application is the key The group has a wide-ranging monitoring system in place to identify customers that may be The group has a wide-ranging monitoring A decision will be based on the result of the credit scoring procedure supplemented, where supplemented, scoring procedure the result of the credit will be based on A decision of other data and A decision will be based on the credit rating assessment together with a range Applications are analysed with the help of scoring tools that measure the risk involved in a in the risk involved measure that scoring tools help of with the analysed are Applications on both the business and This is carried out by “key management teams” made up of staff members Analysis. Analysis. nature of the property return and the aspects as the likely customer profile by evaluating such transaction a risk intervention of that require the some circumstances There will be the loan is to be secured. on which can before any decision will be required and whose opinion case in more detail will examine the analyst, who favourable or otherwise. on the application, be made Decision. and be a whole range of other details of an analyst. There will, in addition, necessary, by the opinion well it matches the customer’s application and how such as the consistency of parameters to be considered, of the his current and future position; the value customer’s ability to pay based on his possibilities; the of Spain- by an appraisal carried out by a Bank security for the loan (as determined property provided as have approval processes will, additionally, firm which Banco Sabadell’s own internal authorized valuation examinations of availability of any additional security; any association with the group); the shown to be free of databases of defaulters, etc. internal and external group LTV). As a general rule, under internal the security (the loan-to-value ratio, or assessed value of to purchases by individuals of properties for use as their normal procedures the maximum LTV is applicable an upper limit below with a range of other maximum LTV ratios residence and is fixed at 80%. This provides purpose of the loan. below 80% are set, having regard to the the loan is to be secured and also any insurance taken out to cover associated with the property on which has been approved, the mortgage must be registered with the Property the security. Once a loan application finalizing the loan. Registry as part of the formalities for Autonomy levels. level, or where factors are present that are not readily captured by a the loan being sought is above a certain be involved. The limit for each autonomy level is based on credit scores, scoring procedure, a risk analyst will at each level to determine when special intervention is required. with additional conditions being specified been defined for borrowers or sectors which are provided for in the A set of exceptional circumstances has group’s internal rules and procedures. Monitoring. that prompt action can be taken to initiate a timely response showing early signs of default, ensuring this process consists of well-established procedures to review and procedure in every case. A key part of validate the security provided. Analysis. This is supported by a credit the risk management sides, thus ensuring a suitable separation of functions. rating tool that takes account of the following parameters: - Management skill and effectiveness - Market competitiveness - Economic/financial aspects - Track record - Security/guarantees Decision. nature of the security provided parameters such as the consistency of the application, ability to pay and the firm which Banco (as determined by an appraisal carried out by a Bank of Spain-authorized valuation of any association with the group) Sabadell’s own approval processes will, additionally, have shown to be free company’s working capital and its and taking account of any supplementary guarantees, the “fit” between the based on the business’s capital total sales; the appropriateness of the total amount borrowed from the group so on. strength; examinations of internal and external databases of defaulters, and individuals, with a scale of With companies the decision process followed is similar to that used with the intended purpose of the loan. maximum LTV ratios being defined internally by the group having regard to to mortgage loans to property For business borrowers, as a general rule, the maximum LTV ratio is applied principal residences. This is fixed developers, which are then transferred to buyers of homes for use as their at 80%. • • loan, based on the establish the maximum amount of the of the decision-making process is to One part decided upon is to review all charges A further step that must be taken before the application can be • • • • Corporates Individuals

Statutory informationBanco Sabadell Annual Report 2011 170 Statutory informationBanco Sabadell Annual Report 2011

171 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 0 0 2011 2010 1,870 16,506 129,139 193,401 6,576,041 6,654,318 3,312,103 3,853,702 10,019,153 10,717,927 An autonomy level is assigned on the basis of the expected loss associated with a with loss associated of the expected the basis on is assigned level An autonomy A comprehensive monitoring system ensures that any customer showing signs of deteriorating showing signs of deteriorating system ensures that any customer A comprehensive monitoring Business loans are likewise subject to processes to evaluate any charges associated with the security the security with associated any charges evaluate to to processes subject are likewise loans Business Registry. the Property with registered mortgage have any and to provided levels. Autonomy “key levels involves the Each of these may be taken. levels at which decisions There are several transaction. side. the risk management side and one on be on the business of which will team”, one member management a set of exceptional customers, decision. As with individual result of a joint must be the All loan approvals internal for in the group’s these are provided or sectors, and for borrowers has been specified circumstances procedures. Monitoring. expiry of a credit by certain events such as the be identified. Loan monitoring is triggered creditworthiness will system of other aspects identified by the group’s the nature of the business or risk and rating, a change in guarantees are ensure that the borrower’s security or Again, this includes procedures to early warning alerts. and validated. constantly being reviewed funding capital markets and has a number of group is an active participant in the The Banco Sabadell S.A. and its funding strategy, Banco de Sabadell, (see note 37). As one element of programmes in place backed by bonds. Its mortgage bond issues are S.A. are a regular issuers of covered Banco Guipuzcoano, under Royal meet the eligibility criteria applicable secured by real estate mortgages that a portfolio of loans on the mortgage market and mortgage finance in Spain. The group Decree 716/2009 which provides rules its entire portfolio of loans and credit lines secured by mortgages. has review procedures in place to monitor records of all the mortgage assets — and any assets that These include maintaining special accounting bonds and mortgage bonds, and of any financial derivatives replace them — used to back its covered loans and assets meet the eligibility criteria for use as collateral for associated with them; verifying that all that bond issues are at all times kept to within their maximum limits, issues of covered bonds; and ensuring market legislation. as required by the applicable mortgage • • Assets and liabilities held in securitization funds set up after 1 January 2004 and whose associated risks Assets and liabilities held in securitization funds set up after 1 January 2004 and rewards were not transferred to third parties have been retained in the consolidated financial statements. and rewards were not transferred to third parties have been retained in the subordinate financing or other credit That is, for the assets listed there was no transfer of risk but some form of enhancement for the securitization vehicles was arranged. Note 10. Financial asset transfers or has undertaken a number of securitization programmes, either alone In recent years the Banco Sabadell group domestic and foreign banks. Financial assets securitized by the group under in partnership with other highly rated years 2011 and 2010 are summarized below. Assets on which the associated these programmes at the end of the shown separately in the table. risks and rewards were transferred are €’000 Retained in full on balance sheet:Securitized mortgage loans Other securitized assets Total 9,888,144 10,508,020 Derecognized in full from balance sheet:Securitized mortgage loans Other securitized assets nancial asset Other transferred fi 131,009 209,907

Yield Market WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 1,084,714 1,427,309 564 56,323 6,511 7,969 AIAF 614 61,362 13,119 16,895 AIAF 426 42,600 20,221 28,096 AIAF 420 42,000 26,519 35,389 AIAF 1,279 127,798 28,998 38,366 AIAF 9,500 950,000 0 24,518 AIAF 5,000 500,000 56,907 81,889 AIAF 1,079 107,900 0 26,273 AIAF 2,484 248,327 51,049 63,105 AIAF 6,000 600,000 84,281 114,537 AIAF 7,500 750,000 150,655 192,589 AIAF 5,000 500,000 143,032 210,367 AIAF 2,887 289,500 95,680 122,195 AIAF 12,000 1,200,000 407,744 465,121 AIAF Number of securities Amount 2011 2010 Credit rating Issue Liability outstanding Fitch Moody’s S&P DBRS Fund name and series Serie A3Serie B ------Aaa A2 ------530 34 53,000 3,323 4,411 2,100 4,646 3,323 EURIBOR 3M + 0.28% EURIBOR 3M + 0.50% Serie A3Serie ANCSerie B1Serie BNC ------Aaa Aaa A2 A2 ------362 217 21 14 36,200 21,700 2,076 1,386 7,174 2,845 1,800 1,300 9,760 3,673 EURIBOR 3M + 0.27% 2,076 EURIBOR 3M + 0.30% 1,386 EURIBOR 3M + 0.65% EURIBOR 3M + 0.65% Serie A1Serie A2Serie B1Serie B2 ------Aaa Aa3 A2 A2 ------972 251 41 97,200 15 25,100 4,033 1,465 19,273 4,925 26,068 3,600 1,200 6,800 EURIBOR 3M + 0.23% 4,033 EURIBOR 3M + 0.25% 1,465 EURIBOR 3M + 0.65% EURIBOR 3M + 0.65% Serie AG (b)Serie AG Serie ASSerie BG (b)Serie BSSerie C AAA AAA AAA Aaa AAA Aaa Aaa A Aaa ------A1 ------7,068 --- 1,767 706,800 176 176,700 176 17,600 313 17,600 0 31,300 0 0 5,617 0 1,404 4,631 EURIBOR 3M+0.11% 0 4,631 EURIBOR 3M+0.48% EURIBOR 3M+0.28% 8,235 EURIBOR 3M+0.70% EURIBOR 3M+1.45% Serie 1CA (a)Serie 1SASerie 2SASerie 3SA AAA AAA BBB --- BB ------A+ --- A+ A BB ------1,968 2,667 196,800 215 266,700 150 18,009 21,500 15,000 24,405 26,654 8,537 36,121 5,956 11,259 EURIBOR 3M+0.26% EURIBOR 3M 7,855 EURIBOR 3M+0.50% EURIBOR 3M+1.20% Serie 2CASerie 2SASerie B AA+ AA BB ------824 206 82,400 49 20,600 4,900 0 0 17,098 0 4,275 EURIBOR 3M + 0.2% 4,900 EURIBOR 3M + 0.4% EURIBOR 3M + 1.8% Serie A1Serie A2Serie B1Serie B2 ------Aaa Aa1 Baa3 A3 ------1,954 438 195,400 22 70 43,800 35,668 2,200 6,927 6,481 45,629 2,200 6,700 EURIBOR 3M + 0.24% 8,349 2,200 6,927 EURIBOR 3M + 0.26% EURIBOR 3M + 0.65% EURIBOR 3M + 0.65% Serie A1Serie A2Serie BSerie C ------Aaa Aaa Baa2 A2 AAA A+ BBB A ------1,500 10,206 150,000 1,020,600 102 192 388,050 10,200 19,200 0 441,578 6,832 12,861 EURIBOR 3M+0.17% 0 8,168 15,375 EURIBOR 3M+0.06% EURIBOR 3M+0.78% EURIBOR 3M+0.42% Serie 1SASerie 1CA (a)Serie 2Serie 3SA ------Aaa Aaa B3 AAA A2 A+ BB-- A------1,241 4,408 124,100 440,800 117 234 62,787 11,700 23,400 0 93,044 7,164 14,329 EURIBOR 3M-0.01% 0 14,329 7,164 EURIBOR 3M+0.35% EURIBOR 3M+0.11% EURIBOR 3M+0.80% Serie AS(a) Serie AG Serie BSerie C AAA AAA BBB CCC Aaa Aaa Ba1 Caa3 ------1,623 5,494 162,300 549,400 240 143 112,355 24,000 14,300 154,289 0 24,000 14,300 EURIBOR 3M+0.00% 24,000 14,300 0 EURIBOR 3M+0.42% EURIBOR 3M+0.70% EURIBOR 3M+0.10% Serie AS(b) Serie AG Serie BSerie C AAA A CCC CC ------3,456 1,289 345,600 198 128,900 57 117,532 19,800 5,700 184,867 0 19,800 EURIBOR 3M-0.04% 5,700 19,800 0 EURIBOR 3M+0.42% 5,700 EURIBOR 3M+0.15% EURIBOR 3M+0.78% Serie 2CASerie 2SASerie 3SA AA+ AA BBB ------288 74 64 28,800 7,400 6,400 10,995 2,825 17,261 6,400 4,435 6,400 EURIBOR 3M EURIBOR 3M + 0.25% EURIBOR 3M + 1.50% Serie ASerie BSerie C ------Aa1 A2 Ba1 ------2,810 55 281,000 22 6,100 2,400 87,180 114,543 6,100 2,400 EURIBOR 3M + 0.09% 5,470 2,181 EURIBOR 3M + 0.75% EURIBOR 3M + 0.3% Serie 2CASerie 2SASerie 3SA AA+ A B ------300 75 30,000 45 7,500 4,500 17,615 24,711 4,404 4,500 6,178 4,500 EURIBOR 3M EURIBOR 3M + 0.45% EURIBOR 3M + 0.65% Details of current securitization programmes participated in by Banco de Sabadell, S.A. and/or Banco and/or Banco S.A. de Sabadell, by Banco in participated programmes securitization of current Details Guipuzcoano, S.A. are given in the table below: table below: in the S.A. are given Guipuzcoano, Year €’000 2000 (*) FTA 12, TDA 2001 (*) FTA 14-MIXTO, TDA 2002 (*) FTA 15-MIXTO, TDA 2003 F.T.A. II, GC FTGENCAT 2003 F.T.A. 2, SABADELL FTPYME TDA 2003 (*) FTA 4, FTPYME TDA 2003 (*) FTA 17-MIXTO, TDA 2004 F.T.H. GC SABADELL 1, 2004 F.T.A. IM FTPYME SABADELL 3, 2005 F.T.A. GC FTPYME SABADELL 4, 2005 F.T.A. SABADELL 1, GC FTGENCAT 2005 (*) FTA 5, FTPYME TDA 2005 (*) FTA 23, TDA 2005 (*) FTA 6, FTPYME TDA Sub-total to 2005

Statutory informationBanco Sabadell Annual Report 2011 172 Yield Market

Statutory informationBanco Sabadell Annual Report 2011

173 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2.957.368 3,871,826 1,084,714 1,427,309 2.904 290.400 117.015 144,599 AIAF 4.513 452.173 260.268 312,259 AIAF 3.500 350.000 113.296 155,301 AIAF 4.354 435.500 229.402 282,154 AIAF 5,000 500,000 5,000 500,000 235,125 304,616 AIAF 10.000 1.000.000 275.371 425,517 AIAF 10.000 1.000.000 335.783 423,093 AIAF 12.500 1.250.000 12.500 1.250.000 308.392 396,978 AIAF Number of securities Amount 2011 2010 Credit rating Issue Liability outstanding Fitch Moody’s S&P DBRS Serie A1Serie A2 (G)Serie BSerie CSerie D A A --- Aa3 --- Aa3 --- Baa3 Caa1 ------C ------2.303 --- 183 202 230.300 112 18.300 20.200 104 11.200 56.915 18.300 10.400 20.200 84,499 11.200 18,300 20,200 10.400 EURIBOR 3M + 0.3% 11,200 EURIBOR 3M + 0.1% 10,400 EURIBOR 3M + 0.6% EURIBOR 3M + 1.25% EURIBOR 3M + 4% Serie A1Serie A2Serie BSerie CSerie D AAA AA BBB CCC Aa1 CC Aa1 Baa3 A1 --- C ------1.928 --- 2.408 192.800 52 97 240.773 28 17.168 10.300 5.500 224.500 53,996 2.800 240,773 10.300 5.500 EURIBOR 3M + 0.14% EURIBOR 3M + 0.2% 9,631 2.800 5,148 EURIBOR 3M + 0.5% 2,712 EURIBOR 3M + 0.85% EURIBOR 3M + 3.5% Serie BCSerie AS (b)Serie AG Serie Serie ------AAA A-- A+ B-- AAH ------1.573 3M+2.50% 3M+1.25% 1.690 139 13.900 157.300 98 9.800 13.900 13,900 EURIBOR 169.000 EURIBOR 9.800 9,800 89.596 131,601 0 EURIBOR 3M+0.21% 0 EURIBOR 3M+0.25% Serie BCSerie A1Serie A2Serie Serie ------Ba3 Caa3 Aaa A1 CCC AAA A A+ ------3M+2.50% 3M+1.25% 2.000 360 36.000 250 25.000 36,000 36.000 7.390 EURIBOR 25.000 25,000 200.000 EURIBOR 739.000 214.371 0 364,517 0 EURIBOR 3M+0.35% EURIBOR 3M+0.25% Serie BSerie A1CSerie A2Serie A3(G) (a)Serie Serie ------Aa2 Aaa B2 Caa3 Aa1 AAA A+ BBB A+ B ------3M+0.43% 1.750 1.341 3M+0.75% 6.354 355 35.500 175.000 200 20.000 134.100 35.500 35,500 EURIBOR 20.000 20,000 635.400 EURIBOR 134.100 146.183 134,100 0 233,493 EURIBOR 3M+0.005% EURIBOR 3M+0.19% 0 EURIBOR 3M+0.11% Serie 1-A2Serie 1-BSerie 1-CSerie 1-DSerie 2-ASerie 2-BSerie 2-C AAA BBB A CCC Aaa AAA Ba3 A- CCC A1 C ------4.021 ------402.100 35 115 40 130 201.236 11.500 3.500 10 3 4.000 13.000 253,518 10.987 1.000 3.500 EURIBOR 3M + 0.14% 400 4.000 8.421 11,499 3,412 1.000 EURIBOR 3M + 0.35% 3,917 8,646 258 EURIBOR 3M + 0.5% EURIBOR 3M + 0.16% EURIBOR 3M + 3.5% 912 250 EURIBOR 3M + 0.37% EURIBOR 3M + 2.5% Serie BSerie A1CSerie A2Serie A3 (G) (a)Serie Serie AA+ AAA BB CCC AA Aaa Aaa Baa2 Caa3 Aaa ------3M+0.30% 2.200 3M+0.58% 828 400 40.000 269 26.900 8.803 40.000 40,000 220.000 EURIBOR 26,900 26.900 EURIBOR 82.800 880.300 82.800 158.692 0 82,800 247,278 EURIBOR 3M+0.01% EURIBOR 3M+0.13% 0 EURIBOR 3M+0.07% Fund name Fund name and series Serie BCSerie AS (b)Serie AG Serie Serie CCC AA-- CC A --- Aa2 ------3M+0.40% 3M+0.70% 2.717 198 19.800 2.028 19.800 19,800 57 5.700 EURIBOR 271.700 202.800 EURIBOR 5.700 5,700 207.625 271,700 0 EURIBOR 3M-0.045% 7,416 EURIBOR 3M+0.15% Sub-total to 2007 2007 (*) FTA 7, FTPYME TDA 2007 (*) FTA 29, TDA 2007 F.T.A. SABADELL 3, IM FTGENCAT 2007 F.T.A. IM SABADELL EMPRESAS 1, 2007 F.T.A. GC FTPYME SABADELL 6, 2006 (*) FTA 26-MIXTO, TDA €’000 Year 2006 F.T.A. 5, GC FTPYME SABADELL Sub-total to 2005 2006 F.T.A. SABADELL 2, IM FTGENCAT

Yield Market WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2,957,368 3,871,826 10,374,440 11,462,935 5,000 500,000 230,610 309,077 AIAF 3,000 300,000 197,439 228,053 AIAF 6,200 620,000 327,003 426,413 AIAF 9,000 900,000 381,484 900,000 AIAF 2,750 275,000 125,887 190,624 AIAF 2,000 200,000 140,904 200,000 AIAF 10,000 1,000,000 10,000 1,000,000 341,965 470,972 AIAF 14,000 1,400,000 14,000 1,400,000 952,850 1,058,788 AIAF 10,000 1,000,000 436,999 554,552 AIAF 14,400 1,440,000 1,033,951 1,154,794 AIAF 17,400 1,740,000 843,431 1,097,836 AIAF 10,000 1,000,000 904,550 1,000,000 AIAF 15,000 1,500,000 1,500,000 0 AIAF Number of securities Amount 2011 2010 Credit rating Issue Liability outstanding Fitch Moody’s S&P DBRS Fund name Fund name and series A1A2BC ------AAA A CCC BBB-- --- AA ------2,000 200,000 7,475 747,500 389,465 400 40,000 125 12,500 0 40,000 12,5003M+1.25% 3M+1.75% 418,4723M+0.55% 40,000 EURIBOR 3M+0.35% 12,500 EURIBOR EURIBOR 0 EURIBOR ABC ------A+ BBB A AAH ------13,650 1,365,000 917,850 168 16,800 182 18,200 1,023,788 16,800 18,2003M+1.75% 3M+1.25% 3M+0.45% EURIBOR 16,800 18,200 EURIBOR EURIBOR A1A2 (G)BC ------AAA --- AAA A+ AAH BB- AAA ------4,025 4,975 497,500 402,500 0 650 65,000 350 35,000 336,999 65,0003M+1.25% 35,0003M+1.75% 52,0523M+0.45% 402,500 65,000 EURIBOR 35,000 EURIBOR EURIBOR EURIBOR 3M+0.50% A1A2 (G)BC ------A-- A-- A-- AAA AAA B ------1,941 2,350 235,000 194,100 393 39,300 0 39,300 316 31,600 159,7103M+1.25% 31,6003M+1.75% 44,0773M+0.30% 39,300 194,100 EURIBOR 31,600 EURIBOR EURIBOR EURIBOR 3M+0.50% ABC ------Aa3 A3 Ba2 ------AAH ------14,112 1,411,200 1,005,1513M+0.40% 1,125,994 144 14,400 144 14,400 EURIBOR 14,400 14,4003M+0.85% 3M+1.25% 14,400 EURIBOR 14,400 EURIBOR ABC ------Aa3 A3 Ba2 ------AAA ------14,094 1,409,400 512,831 2,088 208,800 1,218 121,800 208,800 121,800 767,2363M+1.50% 3M+1.0% 3M+0.35% 208,800 121,800 EURIBOR EURIBOR EURIBOR Serie ASerie BSerie C ------Aaa Baa3 A2 AA+ BBB A ------2,805 135 280,500 60 13,500 177,939 6,000 208,553 13,500 6,000 13,500 EURIBOR 3M + 0.3% 6,000 EURIBOR 3M + 1.2% EURIBOR 3M + 0.6% ABC ------Aaa A3 Ba2 ------AAA ------5,258 525,800 232,803 251 25,100 691 69,100 332,213 25,100 69,1003M+1.25% 3M+0.55% 3M+1.75% 25,100 EURIBOR EURIBOR 69,100 EURIBOR A1A2B ------AAA AAA B+ --- AAA --- 1,500 150,000 5,340 534,000 165,4843M+0.50% 2,160 216,000 216,000 0 534,000 EURIBOR 3M+1.50% 3M+0.40% 216,000 150,000 EURIBOR EURIBOR Serie ASerie B ------Aa3 B3 A+ ------2,145 605 214,500 60,500 65,387 130,124 60,500 60,500 EURIBOR 3M + 0.3% EURIBOR 3M + 1.5% A1 (G) (a)A2 (G) (a)A3B ------A-- --- A-- --- AAA A-- AAA BB AAA 2,500 BBH 3,900 250,000 390,000 1,600 160,000 3M+1.50% 2,000 200,000 160,000 160,000 154,550 200,000 200,000 3M+1.40% 390,000 EURIBOR 250,000 EURIBOR 390,000 EURIBOR 3M+1.30% EURIBOR 3M+1.35% Serie ASerie B ------Aa3 Baa1 A+ ------1,563 437 156,300 43,700 97,204 43,700 156,300 43,700 EURIBOR 3M + 0.3% EURIBOR 3M + 1.5% A1A2 (G)B ------AAA AAA AAA --- AAA B 6,500 2,950 650,000 295,000 5,550 555,000 650,000 295,000 555,000 0 0 03M+1.00% EURIBOR 3M+0.30% EURIBOR 3M+0.40% EURIBOR Of the total outstanding liability, bonds associated with assets that were not removed from the balance sheet Of the total outstanding liability, bonds associated with assets that were not amounted to a total of €1,575,889,000 in 2011 and €2,061,428,000 in 2010. These bonds are reported in the amounted to a total of €1,575,889,000 in 2011 and €2,061,428,000 in balance sheet under debt certificates including bonds (see note 21). Year €’000 Sub-total to 2007 Sub-total 2008 F.T.A. GC SABADELL EMPRESAS 2, 2008 F.T.A. IM SABADELL RMBS 2, 2008 F.T.A. IM FTPYME SABADELL 7, 2008 F.T.A. SABADELL 4, IMFTGENCAT 2008 F.T.A. IM SABADELL RMBS 3, 2008 F.T.A. IM SABADELL EMPRESAS 3, 2008 (*) FTA 31, TDA 2009 F.T.A. GC SABADELL EMPRESAS 4, 2009 F.T.A. IM SABADELL EMPRESAS 5, 2009 (*) FTA EMPRESAS 1, TDA 2010 F.T.A. GC FTPYME SABADELL 8, 2010 (*) FTA EMPRESAS 2, TDA Total Total (*) Banco Guipuzcoano issues outstanding. (a) With guarantee of the Spanish government. (b) of Catalonia. With guarantee of the Government 2011 F.T.A. IM FTPYME SABADELL 9,

Statutory informationBanco Sabadell Annual Report 2011 174 Statutory informationBanco Sabadell Annual Report 2011

175 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 Assets Liabilities Assets Liabilities December 2011 and 2010 the fair values of swaps covering these items showed a net loss of €386,118,000 December 2011 and 2010 the fair values of swaps covering these items showed and €424,160,000 respectively. and €24,388,000 the fair values of swaps covering these deposits showed a net loss of €18,723,000 respectively. respectively. covering these items showed a net gain of €18,333,000 and €13,779,000 The main types of interest rate risk hedging contract entered into by the group are fixed/variable interest rate The main types of interest rate risk hedging contracts as part of its policy for managing interest rate risk (see The group enters into interest rate hedging funding operations by the group, resulting in debt issues at fixed rates of interest. At 31 Capital market • through the group’s branch network at fixed rates of interest. At 31 December 2011 and 2010 Deposits sold • by the group at fixed rates of interest. At 31 December 2011 and 2010 the fair value of swaps Individual loans • Sabadell, S.A., Banco Urquijo The majority of the group’s hedging operations are carried out by Banco de Of which: Recognized in equity (note 29)Of which: Recognized in equity (note 29)Of which: Recognized 0 0 0 0 0 348 89 1,155 swaps. The most usual valuation technique used with these swaps is the discounted cash flow method. swaps. The most usual valuation technique used are described below: note 37 on financial risk management). The main types of hedging instrument value hedges: a) Fair The items covered are as follows: Sabadell Banca Privada, S.A. and Banco Guipuzcoano, S.A. €’000 Note 12. Hedging derivatives (assets and liabilities) Note 12. Hedging 2010 are analysed as sheet at 31 December 2011 and items of the consolidated balance The fair values of these follows:: Note 11. Changes in fair value of hedged items in portfolio items of hedged fair value in 11. Changes Note risk rate of interest hedges of the consolidated sides and liability the asset on this heading under the balances 2011 December At 31 rate of the interest by fair value hedges on items covered of gains and losses were made up balance sheet items were €449,245,000 losses on hedged the end of the year instruments. At of financial risk on portfolios associated by gains on their entirely offset losses were almost 2010) but these at 31 December (€451,064,000 hedging derivatives. Micro-hedges value hedgesFair hedgesow Cash fl Macro-hedges: value hedgesFair hedgesow Cash fl denominated Total currency: Analysis by Euro currency denominatedForeign Total 16,641 7,322 417,685 109,317 45,660 487,564 102,962 393,722 9,626 0 11,086 10,130 0 44,773 89 417,685 111,145 474,100 41,471 487,564 104,315 1,828 53,282 3,245 70 417,685 111,145 487,564 104,315 9,492 0 1,353 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo items Hedged Hedging 2011 2010 1,902 2,973 29,809 23,632 74,048 88,213 instruments (63,999) (113,300) 594,880 465,214 489,121 350,396 items Hedged 2011 2010 Hedging instruments Gains and losses recognized during the year on hedging instruments and on hedged items are shown in the in the are shown items and on hedged instruments on hedging the year during recognized and losses Gains In the case of interest rate micro-hedges, the expected cash flows are considered likely to occur in the near In the case of interest rate micro-hedges, to reduce net interest income volatility due to fluctuations in The group enters into cash flow macro-hedges The above totals are made up of non-current assets and liabilities whose book values are expected to be The above totals are made up of non-current assets and liabilities whose book of the Bank in full or part Repossessed assets comprise assets received from borrowers or others debtors held for sale at 31 December 2011 The fair value of the repossessed assets classified as non-current assets Micro-hedgesFixed-rate assetsExchange rate hedgesCapital marketFixed-rate liabilitiesMacro-hedgesxed-rate liabilities Capital market and fi Total 61,764 (9,636) (2,430) 49 (12,763) (55,345) 5,508 9,382 (30,426) 1,953 (55,345) 61,764 (49) 12,986 (120,409) (5,508) 31,011 (1,014) (120,409) 138,581 (28,979) 52,128 (45,963) 135 138,581 (568) 1,098 29,323 (150,835) 0 590 169,592 following table: following €’000 Assets Land and buildings for own use Repossessed assets Intangible assets Other assets Impairment provisions non-current assets held for saleTotal Liabilities associated with non-current assets held for sale 0 530,881 0 351,914 €’000 Note 13. Non-current held for sale and liabilities associated with non-current assets assets held for sale balance sheet at 31 December 2011 and 2010 were as follows: The components of this item of the consolidated b) Cash flow hedges: equity and amounts derecognized from consolidated in consolidated equity in the year and Amounts recognized in for the year are reported in the consolidated statement of changes taken to the consolidated income statement total equity for the Banco Sabadell group. term. The macro-hedge is thus a hedge of future cash flows related to the interest rates over a one-year time horizon. the highly probable liabilities with exposures similar to interest rate risk. At net exposure of a portfolio made up of used for this purpose are interest rate swaps. present time the hedging instruments recoverable on disposal within one year of the balance sheet date. or debtors. settlement of financial assets representing claims against those borrowers was €583,878,000.

Statutory informationBanco Sabadell Annual Report 2011 176 Statutory informationBanco Sabadell Annual Report 2011 177 0 9,995 (6,991) 81,541 82,983 17,108 63,999 19,982 90,314

(24,548) (56,460) (18,346) (59,987)

104,243 220,697 465,214 304,708 594,880 113,300 351,914 530,881 (134,365) WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Repossessed assets Repossessed The group is currently seeking an industrial partner for a joint venture to market the software used on the The group is currently seeking an industrial Information System, S.A. and Accordingly, that part of intangible assets which is attributable to BanSabadell Changes in the group’s repossessed assets for 2011 and 2010 were as follows: were and 2010 for 2011 assets repossessed group’s in the Changes Additions/reductions due to changes in basis of consolidation due to changes Additions/reductions Additions Write-downs and recoveries (*) Transfers group Acquisition of Banco Guipuzcoano to changes in basis of consolidationAdditions/reductions due Additions Write-downs and recoveries Transfers 298 15,783 Additions/reductions due to changes in basis of consolidationAdditions/reductions due to changes in basis Additions Write-downs and recoveries Transfers 11,924 Additions/reductions due to changes in basis of consolidationAdditions/reductions due to changes in basis Additions Acquisition of Banco Guipuzcoano group 0 Write-downs and recoveries Transfers group’s technology platform. The aim would be to develop a business based on generating value from the platform would be to develop a business based on generating value from the platform group’s technology platform. The aim technology solution for the banking industry. Some organizational and legal and promoting it as a comprehensive its to put the scheme onto a solid corporate footing as it expands beyond arrangements have already been made subsidiary. The industrial partner current operational base within BanSabadell Information System, S.A., a group would have control of the new company. assets held for sale. Virtually would be transferred to the future joint venture have been reclassified as non-current all the software classified under this heading has been developed in-house. (*) Total intangible assets transferred intangible S.A. pertaining Information Bansabadell System, to group company (*) Total €’000 Cost: 31 December 2009 Balance at Balance at 31 December 2010 Balance at 31 December Balances at 31 December 2011 Balances at 31 December Balances at 31 December 2011 Net balance at 31 December 2010 Impairmentlosses: Balance at 31 December 2009 Net balance at 31 December 2011 Balance at 31 December 2010

Balance at

31.12.2011 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo and other Translation differences movements

Transfer Transfer of Payment dividends or Disposal dissolution

in capital or increase Acquisition equity- Results of accounted undertakings 7,183 1,959 0 0 0 0 (166)0 1,959 0 0 0 7,183 8,976 47,271 0 400 0 0 0 370 48,041 370 400 0 0 0 47,271 0 Balance at 31.12.2010 ., S.A.., 14,873 1,998 0 0 (3,233) 0 (492) 13,146 the equity method: de Seguros y Reaseguros S.L. Participaciones Comsa Emte, . Costa Blanca, S.L.. Costa Blanca, 2,197 (24) 0 0 0 0 (2,173) 0 (a) Euro equivalent. Air Miles España, S.A. España, S.L. Miles 2,371 Guipúzcoa, Undertakings consolidated by 0 0 0 0 0 143 2,228 S.A.Adelanta Corporación, Air Anara (1,086) A.I.E. Regional Cántabra, Aviación S.A. (a)Banco del Bajío, 0 56 0 0 0 1,030 E.G.F.P BanSabadell Pensiones, 0 38,494 8,446 533 125,438 252 7,886 0 0 5,989 0 0 0 (75) (21,700) (41) 0 0 Other 0 Total (6,767) (1) 110,846 1 38,951 8,658 13,643 (1,531) 813,492 52,641 21,407 (2,460) (48,003) 147 (12) (30,703) (109,440) (65) 696,934 (293) (6,458) 5,431 Note 14. Investments Note 2010. 2011 and December at 31 this item changes in, of, and the composition shows table The following €’000 S.A. BanSabadell Seguros Generales, S.L.S.L.S.A. Aguiver, Promociones, S.L. - Cabaro, Eòlic Veciana Parc Creixent, S.L. Eólico Magaz, Parque S.L.Promociones Abaco Costa Almería, (2,008)Promociones (1,894)Saprosin 0 0 0 0 2,008 0 1,893 SBD S.A. S.I.C.A.V., Sociedad de Cartera del Vallés, y Sociedad de Inversiones 0 0 0 0 0 1 0 (75) 1,860 2,193 2,851 2,290 2,776 (147) 4,722 (701) 0 0 0 0 0 23 17 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (1,713) 0 0 0 0 451 1,492 2,313 5,190 Espazios Murcia, S.L.S.L. S.A. de Seguros y ReasegurosBanSabadell Vida, Murcia, S.A. (a) Centro Financiero B.H.D., S.A. S.L.Desarrollos Inmobiliarios Pronegui, 146,482 S.L. S.A.Dexia Sabadell, S.L. S.A. S.G.E.C.R., Diana Capital Inversión, Solar, 27,225 Espazios Establecimientos Industriales y Servicios, S.L Ilundain, Eurofragance, (40) Garnova, 1,946 1,352 52,645 S.A.Gate 0 37,862 S.A. ArteGrafos, sobre Papel 1,030 (1,906)Harinera 13,262 (2,933) (341)Hidrodata, 0 0 0 0 S.A.Intermas Nets, (607)(11) 2,931 2 0 0 0 0 S.L. 1,884 de la Penya, J. Feliu 1,247 0 0 0 97 6,243 0 0 S.L. Vil I, Key 193,330 (520)10,252 9,612 M.P 1,873 1,345 0 0 0 0 (7,500) 0 0 49,523 0 0 0 0 0 48,698 386 0 0 0 3,382 0 0 0 (13,757) 0 6,800 0 (22) 0 (4,821) 8,232 24,338 0 0 0 161,386 0 0 1,000 0 (865)(2,448) 1,217 928 1,828 1,148 0 (37,862) 0 59,610 0 0 0 0 (1,011) (67) 0 0 7,452 0 0 0 0 (79,725) 0 764 8,524 0 120,791 0 1,127 (505) 0 0 0 0 97 0 0 3,457 0 0 0 24,833 7,367 (1,081) 0

Statutory informationBanco Sabadell Annual Report 2011 178 Statutory informationBanco Sabadell Annual Report 2011 179 Balance toBalance 31.12.2010

and other

Translation differences movements WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo of Payment dividends Transfer or Disposal dissolution in capital or increase Acquisition equity- Results ofResults accounted 0 34 1,826 0 0 0 0 1,860 1,860 1,826 0 0 0 0 34 0 undertakings 6,613 833 0 0 0 0 (263)0 0 0 833 0 6,613 7,183 47,271 160 0 0 (160)0 0 160 47,271 47,271 0 0 Balance toBalance 31.12.2009 ., S.A.., 13,634 3,233 0 0 (1,380) 0 (614) 14,873 Comsa Emte, S.L. Comsa Emte, the equity method: de Seguros y Reaseguros Changes in goodwill associated with investments in the years to 31 December 2011 amounted to €97,345,000. investments in the years to 31 December 2011 amounted to €97,345,000. Changes in goodwill associated with . Costa Blanca, S.L. Blanca, Costa 2,197 2,197 0 0 0 0 0 0 . Desarrollos Inmobiliarios Pronegui, S.L. 1,352 Pronegui, 1,352 0 0 0 0 S.L. 0 0 Inmobiliarios S.L.S.L. S.A. de Seguros y ReasegurosBanSabadell Vida, Murcia, S.A. (a) Centro Financiero B.H.D., S.A.Desarrollos 124,433 S.L. S.A.Dexia Sabadell, S.L. S.A. S.G.E.C.R., Diana Capital Inversión, Solar, I, 20,356 Espazios y Servicios,Establecimientos Industriales S.L Ilundain, Eurofragance, Garnova, 41,973 (19)Gate Vil 0 0 38,319 S.A. ArteGrafos, sobre Papel1,946 S.L.Harinera 15,620 0 1,884 S.L. S.A.Intermas Nets, 0 0 0 0 1,965 S.A. S.L. 2,137 de la Penya, J. Feliu 9,612 1,148 1,860 0 0 0 0 Key 0 5,831 9,050 0 0 0 0 M.P 183,535 0 0 1,148 0 0 (2)24 (754) 0 0 Aguiver, S.L. - Cabaro, Eòlic Veciana Parc (9)1,532 0 0 562 2,931 Promociones, 0 0 S.L. Eólico La Peñuca, Parque 0 20,961 Creixent, 0 48,698 S.L. Eólico Magaz, Parque 47,920 2,933 0 0 0 0 Promociones Abaco 0 0 1,039 S.L. Costa Almería, 3,037 0 0 2,008 Promociones Saprosin (11,058)2,008 0 0 0 0 0 SBD 0 (250) S.A. S.I.C.A.V., Sociedad de Cartera del Vallés, 0 0 277 0 0 0 1,893 y ParticipacionesSociedad de Inversiones 7,327 24,146 1,233 (2,642)(18)0 0 2,143 0 0 2,869 0 3,313 1,693 0 2,463 905 (459) 0 792 2,851 0 5,427 146,482 (5,673) 0 279 180 0 0 0 0 0 (120) 1,419 101 52,645 0 0 0 0 48 0 0 0 0 37,862 0 (5,493) 0 0 0 (3,402) 0 193,330 0 0 1,030 (600) 0 0 0 0 (53) 0 0 68 0 0 0 0 3,382 0 0 (91) 0 0 2,193 24,338 0 8,232 (806) 0 2,290 4,722 OtherTotal(1,037) 5,590 (105) 706,075 79,148 53,244 (3,402) 9,195 0 0 0 13,643 (25,394)813,492 0 3,821 (a) Euro equivalent. Aviación Regional Cántabra, A.I.E.S.L. Cántabra, (247) 8,693 Guipúzcoa, Undertakings consolidated by Regional 8,446 S.A.Adelanta Corporación, 0 0 0 0 0 S.A.Air Miles España, Anara Aviación 1,030 S.A. (a)Banco del Bajío, 0 0 0 1,030 0 E.G.F.P BanSabadell Pensiones, S.A. BanSabadell Seguros Generales, 0 0 37,894 674 100,385 0 12,840 0 88 6,108 2,140 0 0 0 (74) (3,000) 0 0 0 9,105 0 0 125,438 38,494 0 2,228 €’000 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 2010 2011 Cost Depreciation Impairment Net value Cost Depreciation Impairment Net value 667,604 (375,655)667,604 0 291,949 (385,708) 693,598 0 307,890 xed assets 1,583,306 (699,536) (5,835) 877,935 1,621,667 (715,254) (5,894) 900,519 Note 15. Tangible assets 15. Tangible Note follows: were as 2010 2011 and December at 31 sheet balance consolidated item of the of this The composition €’000 Tangible fi Tangible own use:For Computer and related equipment & other equipment vehicles Furniture, BuildingsBuilding work in progressOther 263,889 leasesLeased out under operating (196,153) propertyInvestment Buildings building plots and sitesRural property, 1,455,226 128,080 Total 73,605 0 (656,697) (42,839) 9,137 67,736 (5,835) 422,241 (84,884) 0 291,015 792,694 257,976 (350) 0 (5,835) 27,887 (5) (12,640) 1,480,206 (200,245) 331,522 85,241 459,168 (83,376)27,759 (3) 0 (153) (669,332) (49,429) (12,290) 281,878 27,882 141,461 73,605 27,756 (5,894) 0 228,946 (49,276) 0 8,634 (5,894) (712,176) 1,874,321 0 (45,922) 369,898 220,312 804,980 228,411 219,552 57,731 41,705 (6,880) (55,264) 8,859 1,106,881 1,850,078 (722,184) (6,930) (40,378) 0 (46,345) 0 (40,451) 172,294 (50) 1,081,549 95,539 181,030 (73) 0 41,705 8,736

Statutory informationBanco Sabadell Annual Report 2011 180 Statutory informationBanco Sabadell Annual Report 2011 181

Total Total WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo leases Leased out under operating under operating properties Investments equipment Furniture and buildings Land and The fair value of properties for the group’s own use at 31 December 2011 was €743,461,000 was €743,461,000 The fair value of properties for the group’s own use at 31 December 2011 been fully depreciated at 31 December The gross value of own-use tangible assets that remained in use and had at the close of 2011 (€49,987,000 The net book cost of tangible assets of foreign operations was €57,146,000 Changes in tangible assets in 2011 and 2010 are shown in the following table: the following shown in are and 2010 in 2011 assets in tangible Changes AdditionsWrite-downs and recoveriesChanges in basis of consolidationOther groupAcquisition of Banco Guipuzcoano AdditionsWrite-downs and recoveriesChanges in basis of consolidationOther 66,497 (181,337) 6,852 103,271 (12,947) 821 Additions 10,412 (10,969)Write-downs and recoveries131,898 15,196 63,522 15,941 37,239 Changes in basis of consolidationOther (35,364) (5,367)Acquisition of Banco Guipuzcoano group 0 0 (240,617) 0 (85,922)Additions 112 (5,260) 180,180 251,996 Write-downs and recoveries112,799 28,021 38,286 72,890 (13,156)Changes in basis of consolidation 0 0 28,674 Other (746) (42,371) 15,043 (41,272) 7,673 493 (37,818) (146,816) 22,780 0 82,992 (7,792) (7,049)Additions 176 Write-downs and recoveries 7,193 63,649 692 Changes in basis of consolidation (37,039) 2,373 22,776 95,991 (245) 0 Other (3,053)Acquisition of Banco Guipuzcoano group 0 0 (20,539) 969 (80,937) (1,074) (80,161) 0 Additions 0 (69,848) Write-downs and recoveries 100,683 7,208 67,999 Changes in basis of consolidation (1,677) 0 98,727 4,052 21,424 (446) 0 Other (25,201) 101 699 (631) (2,645) (146) 0 669 0 (108,861) (2,683) (1,983) (2,272) 0 1,379 0 (1,830) 0 2,104 694 4,291 13 26,238 (165) 0 0 27,630 (617) 0 1,647 (13) 0 (451) 0 35,870 35,140 0 8,712 0 7,078 212 518 0 0 (26,705) 0 2,019 (106) 0 (763) 101 0 (27,321) (67) 0 370 543 0 0 (€713,519,000) in 2010. Fair values of properties have been calculated on the basis of assessed values on the basis of assessed values (€713,519,000) in 2010. Fair values of properties have been calculated of property appraisers in certified by independent experts listed in the Bank of Spain’s special registry and certain rights for defined accordance with Ministerial Order ECO/805/2003 on the valuation of properties financial ends. 2011 and 2010 amounted to €279,788,000 and €297,678,000 respectively. at the close of 2010). Cost: 31 December 2009Balance at 2010Balance at 31 December 621,312 2011Balance at 31 December 802,167 Accumulated depreciation: 184,353 Balance at 31 December 2009 140,332 528,632 1,748,164 951,574 228,411 Balance at 31 December 2010 523,733 141,461 931,493 1,850,078 102,996 291,015 Balance at 31 December 2011 448,605 128,080 Impairment losses Balance at 31 December 2009 1,874,321 3,411 83,379 44,316 585,953 599,328 Balance at 31 December 2010 6,930 84,889 571,808 45,922 2,913 722,184 Balance at 31 December 2011 12,640 Net balance at 31 December 2010 2,272 Net balance at 31 December 2011 42,839 712,176 3,461 5,894 0 0 439,359 5,835 433,009 8,646 365,621 40,451 359,685 181,030 0 228,946 95,539 0 49,429 85,241 1,081,549 46,345 1,106,881 0 55,264 €’000 6,353 2,254 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 36,402 45,009 Increase in valuation Of the total amount of assets subject to restatement, €208,000 was written off for depreciation during the year Of the total amount of assets subject to restatement, €208,000 was written sheet as a result of a series of Also included in tangible assets are assets currently on the Bank’s balance In the course of 2010 the group completed sale arrangements for 379 for a total amount of €410 million of €410 amount for a total for 379 sale arrangements completed group 2010 the course of In the that none include the fact lease market, in the operating all of which are common of the leases, Other features in 2010) and have totalled €45,255,000 (€18,430,000 by the group for the year 2011 Rental costs recognized leases, to be incurred by the Bank under all operating of minimum future rental payments The present values operating leases” column of the table, the bulk of the group’s operating With regard to the “Leased out under properties” column showed an aggregate fair value of €267,371,000 Assets comprised within the “Investment Herrero, S.A. and Europea de Inversiones y Rentas, S.L. (both In 1996 Banco de Sabadell, S.A., Banco 2011 for Banco de Sabadell, S.A. (2010: €303,000). S.A., Banco de Asturias, S.A., mergers that have seen the incorporation of Solbank SAD, S.A., Banco Herrero, EFC, S.A., Banco Atlántico, S.A., BanSabadell Leasing EFC, S.A., Solbank Leasing EFC, S.A., BanAsturias Leasing mergers are provided in legalized Banco Urquijo, S.A. and Europea de Inversiones y Rentas, S.L. Details of these accounting records filed with the Mercantile Registry. realizing a net profit of €252,737,000. At the same time, the Bank entered into operating leases with the leases operating into Bank entered time, the the same At €252,737,000. profit of a net realizing leases All the and taxes). insurance maintenance, for responsible Bank being (with the property on the purchaser reviewed per month) will be fixed at €37,500 the rent (initially years, during which terms of 10 are for obligatory no such in another 14 leases in 396 of the leases group is provided exercisable by the A purchase option annually. option is provided. purchase does any of the lease; neither Bank at the end of to revert to the of the property for the ownership of them provide Moreover, the Bank end of the obligatory minimum term. to continue the tenancy beyond the them require the Bank termination of the losses incurred as a result of the early to the buyers in respect of any did not give any guarantee of the properties and leased properties. The sale prices changes in the residual value of the leases or of possible values as of the at on the basis of reasonable market of rent under the leases were arrived subsequent payments date of sale. 34.(f)). in the income statement (note “other general administrative expenses” been recorded under to renew the lease that none of the available options minimum term of the leases (assuming that is, during the exercised) at 31 December 2011 stood at €39,821,000 for one-year terms or purchase the asset are likely to be for terms from one to five years (2010: €120,028,000) and €145,293,000 (2010: €37,813,000), €122,315,000 €170,845,000). for terms of more than five years (2010: Renting, S.A. and consists of vehicle leasing. lease business is carried on by BanSabadell from these investment properties and the direct costs associated with these at the end of the year. Rental income income during the year or not, were not such as to have a significant impact properties, whether giving rise to rental on the consolidated annual accounts. themselves of article 5 of Royal Decree Law 7/1996 of 7 June and now merged into Banco Sabadell) availed their property, plant and equipment in accordance with Royal Decree subsequent legislative provisions to restate amount to which any asset could be revalued was the professionally 2607/1996 of 20 December. The maximum Increases in the valuations of property, plant and equipment for these assessed market value of the asset. undertakings were as follows: (1) Banco Herrero, S.A. was absorbed by Banco de Sabadell, S.A. in 2002. Banco de Sabadell, absorbed by S.A. was (1) Banco Herrero, S.A. in 2008. Banco de Sabadell, absorbed by S.L. was y Rentas, (2) Europea de Inversiones €’000 Banco Herrero, S.A. (1) Banco Herrero, Banco de Sabadell, S.A. Banco de Sabadell, S.L. (2) y Rentas, Europea de Inversiones Total

Statutory informationBanco Sabadell Annual Report 2011 182 Statutory informationBanco Sabadell Annual Report 2011

183 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 1 0 1 984 984 984 2011 2010 2011 9,637 1,613 1,128 1,128 1,128 7,858 7,858 4,923 4,923 2,873 3,312 2,873 823,815 748,622 748,622 823,815 473,837 473,837 285,345 225,619 285,345 82,679 198,346 82,679 198,346 1,022,161 831,301 Contractual relations with customersContractual relations with (Banco Guipuzcoano)Contractual relations with customers and Banco Urquijo brand (Banco Urquijo) MiamiPrivate banking business, Contractual relations with customers (Sabadell United Bank) purchase costs (note 13)Software Other deferred charges 30,326 38,773 48,917 24,149 0 0 24,140 61,177 25,380 16,913 This goodwill was then allocated to the cash-generating units (CGUs) thought likely to benefit from the likely to benefit from the This goodwill was then allocated to the cash-generating units (CGUs) thought basis, to see whether there were any At the end of 2011 the Bank made an assessment, on a recoverable value net profits associated The valuation method used was to estimate the present value of future distributable Total Goodwill Banco Urquijo the cost of the business combination was determined based To measure the goodwill in Banco Urquijo, the liabilities incurred, any potential income and cost synergies on the fair value of the assets surrendered, to the business combination. From a comparison of the cost identified, and the costs directly attributable net fair value of the assets, liabilities and contingent liabilities of the business combination with the of €473,837,000 arose and was recognized in assets as of the acquired undertaking, a difference fair values, increases in property values were recognized for a total goodwill. In measuring assets at their tax) and intangible assets were identified with a value of €78,587,000 of €80,690,000 (€61,410,000 after (€54,598,000 after tax). Banking CGU, and Other Gus. synergies identified. These were the Private Banking CGU, the Commercial in the historical data available for Synergies that could not be allocated to any one CGU because of limitations for the Business Banking CGU was the acquired undertaking were assigned to all Gus. In 2009 the goodwill Banking CGU in line with the group’s assigned to the Commercial Banking CGU and the newly created Corporate current business model. assessment showed there had been indications of impairment in the goodwill associated with Banco Urquijo. The no impairment in the value of the goodwill. years (up to 2016) and to calculate a with the business carried on by Banco Urquijo over a projection period of 5 which the financial projections were terminal value based on a nil growth rate in perpetuity. The key variables on business volumes and rates of built were: growth in net interest income (determined on the basis of forecast interest), changes in other income and expense items, and capital ratios. (1) See note 2. Private Bank & Trust. Lydian arising on the acquisition of the assets and liabilities of the company (2) Includes goodwill €’000 Note 16. Intangible assets 16. Intangible Note follows: was as and 2010 2011 December item at 31 of this The composition Goodwill: S.A. S.C.R., Aurica XXI, S.L. Axel Group, Banco Urquijo S.A. E.F.C., BanSabadell Fincom, S.L. BanSabadell Profesional, S.L. Eólica Sierra Sesnández, Grupo Banco Guipuzcoano (1) S.L. Jerez Solar, (2) N.A. (1) Sabadell United Bank, Other intangible assets: nite useful lives: With fi 46,866 30,961 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo These forecasts were based on a modest recovery in lending growth and declining default and delinquency and delinquency default and declining growth in lending recovery a modest on were based forecasts These demand and control in the light of fragile domestic concerned, inflation will be kept under As far as prices are to meet the initial adjustments, which will make it difficult to focus on ambitious fiscal Economic policy continues growth and little down in a climate of low economic the ECB’s base rate will be held In terms of yield curves, into the market to aid financial stability. The ECB will also continue to inject liquidity income flows used to measure value in use was calculated taking the The present value of future distributable of between 10.75% and 11.56% were used, depending on the CGU that In applying this method discount rates for business volumes in the projection period were between 2% and 4%, The annual growth rates (CAGRs) used following a sensitivity analysis of the key variables used to value No indications of impairment were detected accordance with the Revised Text of the Law on Corporate Income Tax. This goodwill is not tax deductible in future income generation potential This goodwill was assigned to the Commercial Banking CGU and reflects the accounts for a business combination Under current accounting rules the period allowed for the production of final liabilities net of tax, amounting A difference between the fair values and the carrying values of assets and loss ratios were applied to the To determine the fair value of the loan portfolio, a range of estimated expected rates in the latter part of the projection period. The Spanish economy will remain weak in 2012. Domestic Domestic in 2012. weak will remain economy Spanish The period. of the projection part in the latter rates in taking place process the deleveraging by fiscal policies, restrictive by be depressed to will continue demand financial restructuring the The process of granting of credit. conditions on the sector and by tight the private to lose value, negatively assets continue property flow of credit. Meanwhile, further hamper the sector will main situation of Spain’s economic be hit by the worsening Foreign demand will household wealth. affecting imbalance context, the trade demand. In this badly as domestic will not perform as although it trading partners, to adjust. will continue increases in prices could be pushed up by possible capacity utilization rates, although relatively low installed indirect taxes. the structural reforms Finally, Spain is still implementing in the context of a weak economy. targets set, especially to improve the reforms to be adopted include measures Council on 26 October. Key demanded by the European competitiveness. labour market and in the medium term. inflationary pressure capital (Ke) from the standpoint of a market participant. To do this discount rate as the cost of Banco Sabadell’s was used. the Capital Asset Pricing Model (CAPM) was being valued. carried out for each CGU. according to the particular analysis being analysis were: the cost of capital (which has increased by over one goodwill. The variables included in this the growth rate in perpetuity, movements in net interest income percentage point), the core capital requirement, risk. and the increase in the cost of recurring Banco Guipuzcoano has been valued as the difference between the fair value of the shares and The goodwill from Banco Guipuzcoano in ordinary shares and subordinated bonds mandatorily convertible to shares other securities paid (Banco Sabadell the 2010 when control passed to the Bank —a total of €613,479,000— and Banco Sabadell) as of 24 November and liabilities. estimated fair value of the acquired assets synergies identified and the costs of the acquired assets and liabilities, the value of potential cost and income associated with the business combination. fair values of the acquired assets is one year from the date of taking control. As a result of this process, the have been included in the financial and liabilities, and the goodwill associated with the business combination, and €285,345,000. statements for the year to 31 December 2011. These values are €328,134,000 to the amount of €54,862,000 were to €298,311,000, was determined. On the other hand, intangible assets funds. identified in reference to core deposits and the management of investment procedures and having regard to the portfolio. The estimated ratios were determined according to standard market nature of the loans and of any collateral or other security.

Statutory informationBanco Sabadell Annual Report 2011 184 Statutory informationBanco Sabadell Annual Report 2011

185 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo The fair value of the real estate assets taken over by the group was determined from observed percentage percentage from observed determined was by the group over assets taken estate of the real value The fair of of the goodwill of deterioration there were indications whether 2011, the bank determined At closure activity for a profits associated with the bank’s to discount the future net distributable The method used was was calculated for determining the value in use, of the future cash flow to distribute, used The present value the discount rate used was 10.75%. According to this method, assets and price paid in the transaction to different validated the assignation of the An independent expert also indicated resulting assessment and the result was made of the key variables of the A sensitivity analysis 31 December 2011, the goodwill generated is not tax deductible. According to current tax legislation, on was calculated using the capital asset pricing model (CAPM) and was The discount rate used in this assessment of certain assets and liabilities of Lydian Private Bank is calculated The goodwill generated by the acquisition the combination of businesses in Current legislation establishes a period of one year since takeover to include and liabilities has been The difference between the fair value and the tax-free carrying values of assets percentages of expected loss The fair value of the lending portfolio was determined by applying estimated falls in market values. These percentages were determined on the basis of the length of time the assets had had assets of time the length of the on the basis were determined These percentages values. in market falls point the planning/development from their status and their location their use, sheet, balance on the remained of view. rate and interest amount. The macroeconomic of the recuperable of the estimate as a result Bank Guipuzcoano to the Urquijo. According section on Banco in the previous as those described used were the same hypotheses in value. undergone any loss goodwill has not assessment, this result of this growth rate. of its end-value using a perpetual nul 5 years (to 2016) plus the calculation projected period of The CAPM (Ke) from a market participant perspective. of the Bank Sabadell capital cost using a discount rate Model) method was used. (Capital Asset Pricing deterioration test. Guipuzcoano, as well as the goodwill liabilities of Banco The variables used for this analysis were: the capital cost (which has that there was no indication of deterioration. of point), the required core capital, the perpetual growth rate, the variation increased by more than one percentage of the recurrent cost of risk. the interest margin, and the increase Sabadell United Bank deadline set by current legislation, final accounting was made of the In the 2010 financial year, within the of MUNB was assessed by determining the cost of the combination of combination of businesses. The goodwill the the assets and liabilities incurred into account. Comparison of the cost of businesses by taking the fair value of fair value of assets and liabilities showed a difference of USD 41,314,000 combination of businesses and the net in the assets. (€30,174,000) recorded as goodwill of out the assessment of the assets and liabilities acquired and assignation 16.0%. An independent expert carried the price paid. Private Bank derived from the acquisition of the assets and liabilities of Lydian Goodwill value received on the overtake date (19 August 2011) and the from the difference between the accounted assets and liabilities. estimated fair market value of these 2011 included an estimate of the accounts. As a result of this process, the financial statements at 31 December and €1,118,921,000 respectively, the fair value of the assets and liabilities acquired, valued at €1,105,708,000 as well as the goodwill associated with the combination of businesses. the account receivable from Federal calculated at €13,213,000, mainly proceeding from the lending portfolio and asset protection scheme signed with Deposit Insurance Corporation in accordance with the terms established in 3,059,000 were identified in reference this institution. On the other hand, intangible assets to the amount of USD to core deposits and the management of investment funds. the characteristics of the financing in accordance with market standards, determined basically as a function of were used to determine the fair granted, the debt collateral and expected future cash flow. The same premises time. value of the assets with FDIC and the characteristics of this contract over WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo These intangible items have finite useful lives of 12 years for Private Banking customers, seven years for for Private Banking customers, seven have finite useful lives of 12 years These intangible items take place over 15 years from their creation and at 31 December 2011 the The amortisation of these assets will their creation and at 31 December The amortisation of these intangible assets will take place over 10 years from of impairment in any of these Assessments were carried out to determine whether there were indications expense related to outsourced IT The “software purchase costs” item in the table refers principally to deferred Other intangible assets intangible Other Urquijo Banco Urquijo purchase of Banco associated with the main intangibles assets” heading, the “other intangible Under the (OEICs, for certain products Urquijo customers with Banco rights under agreements of contractual are the values the values custody services), brokerage and short-term loans, credit/debit cards, and pension funds, investment (discounted by the income have been valued brand. These assets the Banco Urquijo and the value of of deposits, contractual technique being used for income from with the multi-period excess earnings cash flow) method, to measure the brand value. and the price premium technique relations and deposits, these lives on a categories. They are amortized over customers and five years for other Commercial Banking assets. a way similar to that used for tangible straight-line basis in in Miami Private Banking Business Miami include the the BBVA private banking business in with the 2008 acquisition of The intangibles associated the business and relationships transferred along with arrangements arising from customer value of contractual and also of deposits. As required by the accounting rules, a final accounting consisting mainly of short-term loans from this acquisition was completed in the course of 2009. The final for the business combination resulting intangible assets with a total value of €29,495,000. accounting identified and recognized value was €24,140,000. Banco Guipuzcoano the acquisition of Banco Guipuzcoano basically include the value of the The intangible assets associated with relationship with Banco Guipuzcoano customers for core deposits and contractual rights resulting from the The were assessed by the income approach using the cost saving method. investment funds. The core deposits estimating the current net value of the cash flow generated by the lower fair value was determined, mainly, by financing. The investment fund management was assessed by cost of core deposits compared to alternative profit method. The fair value was determined, mainly, by estimating the the income approach using the excess by the commissions received from marketing investment funds. current net value of the cash flow generated place over a period of ten years as of the acquisition date of Banco The amortisation of these assets takes Guipuzcoano. Sabadell United Bank core 35,051,000 (€25,600,000) have been identified as corresponding to Intangible assets to the amount of USD current customers to access finance at deposits and conceptually their value is derived from the capacity they offer as it is assumed that existing customer interest rates below market rates. This is an intangible with a defined life or changes of institution. The value accounts will be cancelled over time as a result of changes of address, death 9% and 20% per annum depending on was determined by establishing a customer loss rate that varied between as the current value of the cash flow the type of deposit. The profit from the current base of deposits is the same them with alternative sources of calculated as the difference between maintaining the current deposits or replacing financing. 2011 the value was €24,149,000. with the performance assumed intangibles by comparing the actual performance of intangible-generating variables average balance per customer, average in the initial valuation. These variables included possible loss of customers, there is no need to recognize any gross income and the assigned cost:income ratio. As of 31 December 2011 impairment. work and software licence purchases.

Statutory informationBanco Sabadell Annual Report 2011 186 Statutory informationBanco Sabadell Annual Report 2011

187 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 155,697 254,047 2,238,784 1,596,758 2,394,481 1,850,805 1,363 0 1,363 0 1,363 62,163 0 62,163 62,163 0 62,163 Goodwill Impairment Total 0 0 0 0 0 0 0 Cost Amortization Impairment Total (2,845) 3,109 (346) (82) Changes in other intangible assets in 2011 and 2010 were as follows: assets in 2011 and 2010 were Changes in other intangible Changes in goodwill for the years 2011 and 2010 were as follows: 2010 were 2011 and the years for in goodwill Changes The gross value of other intangible assets that were still in use and had been fully amortized at 31 December The gross value of other intangible assets Balance at 31 December 2009Balance at Additions and recoveriesWrite-downs Other 2010Balance at 31 December AdditionsWrite-downs and recoveriesOther 2011Balance at 31 December 582,184 (90,208) (91,254) 749,843 256,504 (175) 90,208 490,930 (1,221) 825,475 0 256,329 13,469 (439) 748,622 (1,660) 0 0 13,030 823,815 0 AdditionsWrite-downs and recoveriesOtherBalance at 31 December 2011 (4,221) 457,830 (254,549) 3,467 66,862 (30,234)(159) (4,935) 79,942 10 0 0 36,628 198,346 79,793 (754) Balance at 31 December 2009 of Additions/reductions due to changes in basis consolidation AdditionsWrite-downs and recoveriesOtherDue to acquisition of Banco Guipuzcoano groupBalance at 31 December 2010 of Additions/reductions due to changes in basis consolidation 441,078 (257,594) 402 (1,343) (4,434) (399) 315,247 179,050 53,068 (62,590) (227,792) 673 0 (175,113) (4,776)(86,100) 0 0 (9,522) 89,009 4 82,679 3 (670) €’000 €’000 Inventories Other Total 2011 and 2010 totalled €226,792,000 and €222,781,000 respectively. 2011 and 2010 totalled €226,792,000 Note 17. Other assets follows: The composition of other assets at 31 December 2011 and 2010 was as €’000 c Specifi

provisions WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo nance real of security Excess value using the loan to fi development, the loan has development, Gross amount c Specifi provisions Real estate Real estate developments Other Total of security Excess value 31.12.2011 31.12.2010 Land Gross 9,402 1,575 717 10,170 1,628 725 amount ed according to the purpose of the loan rather than according to the business or sector of the borrower. ed according to the purpose of the loan rather than according to the business or sector of the borrower. Changes in inventories in 2011 and 2010 were as follows: were as 2010 in 2011 and in inventories Changes The fair value of inventories was €2,715 million at 31 December 2011 (€2,054 million at 31 December 2010), million at 31 December 2011 (€2,054 million at 31 December 2010), The fair value of inventories was €2,715 of inventories subject to a charge or mortgage was €15,085,000. At 31 December 2011 the total value Of which: DoubtfulOf which: Sub-standard the loan has been included in the table. estate for development, 1,564 2,120 323 379 234 482 2,174 1,544 400 296 358 367 For example, if the borrower is: (a) a real estate company using the loan for a purpose using the loan other than construction company is: (a) a real estate if the borrower or real estate example, For in the business of construction that is not but is or real estate development not been included in the table; or (b) a company Balance at 31 December 2009Balance at Additions and recoveriesWrite-downs TransfersImpairment Guipuzcoano groupDue to acquisition of Banco 2010Balance at 31 December AdditionsWrite-downs and recoveries 1,165,800 TransfersImpairment 58,611 2011Balance at 31 December 160,426 (60,656) 90,029 1,052,165 4,618 (145,849) 200,165 517,677 1,330,844 114 542,138 (288,764) (22,991) 0 717,842 (158,021) (2,277) 1,329,217 148,754 2,455 (313,474) (78,803) (208,782) (1,342) 409,178 745,260 908,451 1,596,758 1,154,451 13 78,404 148,640 (52,509) 0 0 (367,567) 1,116 (7) 0 (24,333) (214,113) (471,495) 2,238,784 227,037 (1,345) (267,967) €’000 €Mn. Note 18. Financing for construction and real estate development; assessment of bank’s requirement for Note 18. Financing for construction assessment of bank’s and real estate development; funding wholesale market Information on finance for construction and real estate development real estate development, and associated provisions, are given in the Details of finance for construction and following table: of which 22.80% of the amount corresponds to appraisals that are more than 12 months old. of which 22.80% of the amount corresponds Loans recorded by group credit institutions group credit institutions Loans recorded by (Spanish operations) (1) (1) data relate are classifi The loans to which these

Statutory informationBanco Sabadell Annual Report 2011 188 Statutory informationBanco Sabadell Annual Report 2011 189

Lending: WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Of which: Doubtful Of which: Doubtful Gross amount 31.12.2010 85 21 832 427 Gross amount Gross 356 528 640724620 642 104 1,248 1,133 115 Carrying amount 66,931 68,701 9,402 10,170 8,7624,3403,2951,045 9,528 3,698 4,600 4,033 567 3,680 Gross amount Gross amount 100,437 97,099 Lending: 31.12.2011 31.12.2010 31.12.2011 31.12.2010 Gross amount 31.12.2011 Of which: Doubtful Of which: Doubtful 31.12.2011 31.12.2010 31.12.2011 31.12.2010 Gross amount Gross amount Residential property Other property Residential property Other property Plots prepared for developmentOther land 3,342 3,152 Transactions recorded by credit institutions (Spanish operations): details of finance provided by the group for details of finance provided by credit institutions (Spanish operations): Transactions recorded Completed buildings Buildings under construction Transactions recorded by credit institutions (Spanish operations): a breakdown of home loans secured by Transactions recorded by credit institutions (Spanish operations): a breakdown Transactions recorded by credit institutions (Spanish operations): details of home purchase loans to households (Spanish operations): details of home purchase loans to households Transactions recorded by credit institutions LTV <= 40% LTV <= 60%40% < LTV <= 80% 60% < LTV <= 100%80% < LTV > 100%LTV 4,208 5,395 3,072 1,373 91 241 139 57 67 4,077 5,434 11 2,895 1,340 199 70 36 146 86 11 Land Unsecured by mortgageUnsecured by mortgageSecured by 101 14,187 467 1 13,891 170 402 8 Memorandum item Memorandum off Assets written item: Memorandum loans and advances to other debtors authorities excluding government and local Total (Spanish operations) assets (all operations) Total generic provisions by Exposures covered risk provisions adjustments and credit Value (all operations) construction and real estate development is given in the following table. estate development is given in the construction and real €Mn. €Mn. €Mn. Unsecured by mortgageUnsecured by mortgageSecured by Total LTV Ratios LTV 14,187 467 13,891 402 mortgages, showing the group’s total exposure as a proportion of the most recent available valuation of the mortgages, showing the group’s total exposure as a proportion of the most mortgaged property, is given in the following table. provided by the group is given in the following table. provided by the group is given in the following Loans for purchase of residential property 14,288€Mn. 468 14,061 410 €Mn.

Carrying value (net) 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo (%) Provisions Provisions (amount) Provisions Provisions value (gross) Carrying Carrying value (net) (%) Provisions Provisions 31.12.2011 31.12.2010 (amount) Provisions Provisions 0 0 0 16 10 64% 6 562 100603 18% 253 463 42% 293 350 104 431 35% 277 189 65% 154 value 3,444 1,058 31% 2,385 2,5711,230 774 425 30% 35% 1,797 805 695 219 32% 476 (gross) Carrying Residential propertyOther propertyResidential propertyOther property 736Plots prepared for development 169 361 197Other land 23% 217 77 57 567 21% 29% 57 703 284 140 26% 379 274 160 90 215 106 39% 24% 138 36 34 430 289 17% 32% 27 1,038 179 20% 72 368 111 35% 670 The bank, as part of the general risk policy and in particular that relative to the building industry and real-estate policy and in particular that relative to the building industry and real-estate The bank, as part of the general risk follow-up of risk and re-evaluation of the financial viability of the The main measure put in place is continuous under construction, the key objective is to bring projects With regard to real estate developments site is the key consideration in For land-related loans, again, the saleability of properties to be built on the the mechanism of dation in In the event that the analysis and follow-up do not indicate reasonable viability, to repossession of the assets. Where none of these solutions is viable legal proceedings are taken, leading in settlement of debt or by purchase, All assets taken into the possession of the group, whether by surrender Completed buildingsBuildings under construction 1,097 414Land 246 114 22% 28% 851 300 1,933 594 244 698 126 61 36% 21% 1,235 25% 468 183 1,733 587 34% 1,146 Repossessions recorded by credit institutions in Spain: details of asset repossessions by group undertakings are group undertakings by repossessions of asset details in Spain: institutions by credit recorded Repossessions promotion, has established a series of specific policies in regard to risk mitigation. promotion, has established a series of In the event that it is satisfactory, the relationship continues under credit holder in the new economic situation. in the event that they enable better adaptation to the new the established term, taking on new commitments circumstances. the new properties can be absorbed by the market in the short to to completion where it is expected that medium term. deciding on the provision of finance for construction. payment and/or purchase of assets is resorted to. Estate Management department with or as a result of legal action, are managed in a very active way by the Real three different strategies may be a view to early disposal. Depending on the maturity of the real estate assets, used: 1. Sale commercial, industrial, parking, etc.) A number of mechanisms designed to put completed properties (residential, commercial agents depending on the on the market have been set up using a variety of distribution channels and land/planning viewpoint. A key role in this type, location and state of repair of each property and its status from the strategy is performed by solvia.es, an online real estate market. Real estate assets originating Real estate assets originating from loans to building contractorsand real estate developers given in the following table. in the following given €Mn. Real estate assets originating from mortgage loans to households for the purchase of a home Other repossessed real estate assets Equity instruments, shareholdings and loans to undertakings of these assets real estate portfolioTotal 4,609 1,411 31% 3,198 3,311 1,165 35% 2,146

Statutory informationBanco Sabadell Annual Report 2011 190 Statutory informationBanco Sabadell Annual Report 2011

191 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo demand and allow developers to develop and sell properties. to develop and sell allow developers demand and investors. with participation by have been let. properties once they • Collaboration with real estate developers: this seeks to make building land available in areas of high housing in areas of building land available this seeks to make estate developers: with real Collaboration • use) commercial and industrial sites (for office, to develop “tertiary” the aim of this is programme: An investor • units to be let out and to sell the involves developing social housing A social housing programme: this • a market debt totalled €3,012 million. This was refinanced out of In 2011 Banco Sabadell’s maturing wholesale medium- and long-term wholesale market debt of €3,811 million. In 2012, Banco Sabadell will see maturing policies and strategies for issuing mortgage market securities and the Additional information on the group’s 2. Mobilization: under construction, buildings plots and building sale of the surrounding difficult circumstances the very Given of number plots. A building from liquidity is to generate whose aim adopted has been strategy a mobilization been launched: schemes have mobilization status: 3. Development/planning This is vital as a means to secure development rights. ready for development must be managed Land that is not yet development and sale. of the sites and is key to any subsequent of leveraging the value requirements - financing policy Assessment of liquidity in 2007 Banco Sabadell’s funding policy has focused on generating a Since the onset of the financial crisis and reducing the total amount of finance raised on the wholesale markets liquidity gap from its trading operations, At 31 December 2011 the nominal value of the group’s liquid assets stood increasing the Bank’s liquidity position. at €11,413 million (2010: €12,675 million). in 2011 and by capital market issues totalling €3,332 million; at the same €5,691 million liquidity reserve built up was increased. time, the Bank’s reserve of liquid assets by the Bank since 2007, it is intended that the maturing debts will be In line with the funding strategy pursued generated by the Bank and, to a lesser extent, by capital-raising issues refinanced mainly from the liquidity gap if Banco Sabadell does not issue any debt on the capital markets, it has on the wholesale debt markets. Even cover its maturing debt. sufficient reserves of liquid assets to is provided in note 37 on financial risk management and in note 8 on loans keeping of a special mortgage register and advances to other debtors. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 2011 2010 2011 45,135 31,620 45,135 587,005 467,192 587,005 467,192 161,415 214,638 161,415 810,120 430,429 6,297,269 6,249,332 2,983,741 1,282,570 5,711,519 5,112,863 8,128,791 10,300,991 8,128,791 6,702,212 6,872,308 3,352,521 1,049,933 10,300,991 8,128,791 7,318,671 9,870,562 8,128,791 10,300,991 58,444,050 55,092,555 18,739,971 18,284,503 32,819,805 30,091,528 58,444,050 55,092,555 49,161,785 48,229,930 58,444,050 55,092,555 53,958,484 51,234,307 58,444,050 55,092,555 Average annual rates of interest payable on deposits from other creditors for the years 2011 and 2010 were Average annual rates of interest payable on deposits from other creditors Average annual rates of interest payable on deposits from credit institutions for the years 2011 and 2010 were on deposits from credit institutions for the years 2011 and 2010 were Average annual rates of interest payable Analysis by heading: Analysis by Financial measured at amortized liabilities costTotal type: Analysis by Demand deposits Time deposits Repurchase agreements adjustments Valuation Total sector:Analysis by General government Resident sector Non-resident sector adjustments Valuation Total 58,444,050 currency: Analysis by Euro denominated currency denominatedForeign 55,092,555 Total 4,485,566 3,858,248 Analysis by heading: Analysis by Financial liabilities measured at amortized costTotal type: Analysis by Time deposits Repurchase agreements Other accounts adjustments Valuation Total currency: Analysis by Euro denominated currency denominated Foreign Total 8,128,791 10,300,991 2.04% and 1.57% respectively. 2.41% and 1.41% respectively. The deposits from other creditors reported on the consolidated balance sheet at 31 December 2011 and 2010 can on the consolidated balance sheet at 31 December 2011 and 2010 The deposits from other creditors reported be analysed as follows: €’000 Note 20. Deposits from other creditors Note 19. Deposits from credit institutions credit from 19. Deposits Note for the as follows analysed are sheet, balance the consolidated item on a liability credit institutions, from Deposits and 2010: years 2011 €’000

Statutory informationBanco Sabadell Annual Report 2011 192 Statutory informationBanco Sabadell Annual Report 2011 193 Closing Closing balance balance

31.12.2011 31.12.2010 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo and other and other movements movements (+/-) Exchange (+/-) Exchange redemptions redemptions (-) Buybacks/ (-) Buybacks/ Issues Issues (+) Debt (+) Debt 31.12.2010 31.12.2011 balance balance Opening Opening 602,725 0 10,016 (485,909)126,832 10,016 0 602,725 0 126,832 8,078 0 0 134,910 134,910 (1,652,334)15,1630 0 0 1,270,118 367,053 8,078 126,832 2,163,226 0 5,522,819 (7,342,003)23,011367,053 5,522,819 2,163,226 0 31.12.2009 Guipuzcoano 31.12.2010 20,046,496 1,610,472 2,859,234 (5,629,599) 20,046,496 1,610,472 2,859,234 19,013,612 127,009 19,013,612 3,079,144 (4,511,184)(73,387) 17,508,185 3,079,144 19,013,612 ling of a ling of a cates including bonds including cates €’000 Debt securities issued in an EU Member ling of a State and requiring the fi prospectus Debt securities issued in an EU Member State and not requiring the fi prospectus Debt securities issued in a non-EU Member State Total(13,457,511) 22,812,447 1,610,472 8,392,069 19,507,497 150,020 €’000 in an EU Member Debt securities issued a ling of fi State and requiring the prospectus Note 21. Debt certifi 21. Debt Note to 31 2010 31 December group from by the securities of debt and buybacks/redemptions of issues Details for the previous year. information with comparative the table below together 2011 are given in December in an EU Member Debt securities issued the fi State and not requiring prospectus in a non-EU Debt securities issued Member State Total(6,163,518)(58,224) 17,643,095 19,507,497 4,357,340 Issue currency date Maturity

Euros Euros Euros Euros WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Several Euros Interest rate Miscellaneous Miscellaneous Miscellaneous Miscellaneous in force to 31.12.2011 8,800 -10.03.2011 Euros 8,800 50,000 -07.09.2012 Euros 50,000 38,000 -20.04.2011 Euros 38,000 Between 2.8% and 3.7% Between Between 2.85% and 3.60% Between 1,000,000 -26.10.2011 Euros 1,000,000 76,136 - 76,136 400,000 -21.03.2011 Euros 400,000 2011 2010 2011 74,750 0 EURIBOR 1M + 1.90 09.03.2012 Euros 22,000 132,000 EURIBOR 3M + 1.75 02.08.2012 Euros 50,000 50,000 EURIBOR 3M + 0.14 04.10.2016 Euros 300,000 0 4.25% 29.03.2013 Euros 800,000 800,000 EURIBOR 3M + 0.80 20.02.2012 Euros 750,000 750,000 4.38% 22.05.2012 Euros 600,200 -29.12.2011 Euros 600,200 369,496 - -Several Euros 369,496 116,704 1,200,000 -26.01.2011 Euros 1,200,000 25,000 25,000 1.50% 18.04.2022 Euros 300,000 0 4.25% 29.03.2013 Euros 400,000 398,672 2.38% 30.11.2012 Euros 1,500,000 0 5.44% 22.12.2014 Euros Type of Type 50,000 50,000 3.12% 17.07.2012 Euros 50,000 0 EURIBOR 3M + 2.60 13.07.2021 Euros security 51,000 414,377 146,300 0 1.55% and 4% Between Several Euros 300,000 300,000 120,000 120,000 300,000 4.13% 300,000 4.25% 10.05.2016 16.05.2016 EURIBOR 3M + 0.05 Euros 20.06.2017 Euros Euros 488,500 488,500 100,000 100,000 200,000 150,000 3.50% 200,000 17.02.2012 EURIBOR 3M + 1 150,000 500,000 EURIBOR 3M + 1.30 08.05.2021 Euros EURIBOR 3M + 0.90 31.07.2017 500,000 150,000 18.09.2018 Euros 100,000 Euros EURIBOR 1M + 2.00 150,000 Euros 30.06.2013200,000 EURIBOR 3M + 2.35 Euros 10.12.2020150,000 0 100,000 Euros 500,000 0 EURIBOR 3M + 2.60 0 11.01.2019 4.50% EURIBOR 3M + 2.25134,910 126,832 0 29.12.2014 Euros 07.06.2019 0 EURIBOR 3M + 3.10 Euros Euros EURIBOR 3M + 2.75 12.12.2021 19.01.2019 Euros Euros 194,192 1,160,722 1,500,000 1,500,000 4.50% 29.04.2013 Euros 1,500,000 1,500,000 1,750,000 1,750,000 3.25% 3.50% 15.06.2015 19.01.2016 Euros Euros 1,500,000 1,500,000 4.25% 24.01.2017 Euros 1,000,000 1,000,000 1,000,000 1,000,000 1,200,000 0 3.13% 20.01.2014 4.50% 3.25% 11.02.2013 Euros 10.09.2012 Euros Euros 1,575,889 2,061,428 (1,867,466) (1,002,550) 1,910,574 0 1% and 4.92% Between 17,643,095 19,507,497 uctured bonds 0 Debt securitiesDebt securities Debt securities 0 Debt securities Debt securities Debt securities Debt securities 0 Debt securities Debt securities 0 Notes 0 Notes Notes Notes NotesNotes 0 Debt securities Ordinary bonds 0 Ordinary bonds vered bonds vered bonds 0 vered bonds vered bonds vered bonds vered bonds vered bonds vered bonds vered bonds 0 vered bonds vered bonds vered bonds vered bonds vered bonds vered bonds vered bonds vered bonds vered bonds vered bonds vered bonds vered bonds vered bonds vered bonds vered bonds Ordinary bonds Ordinary bonds Simple bonds guarantee state Simple bonds guarantee state issue Public sector bonds Comm. paper (ECP) 0 Date of Details of debt certificates including bonds issued by the group and recorded on the balance sheet at 31 sheet the balance on and recorded by the group issued bonds including certificates of debt Details Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, 07.09.2010 09.03.2011 Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, 29.09.2011 22.12.2011 Banco de Sabadell, S.A.Banco de Sabadell, 02.08.2010 Banco de Sabadell, S.A.Banco de Sabadell, 20.11.2009 Banco de Sabadell, S.A.Banco de Sabadell, 22.05.2009 December 2011 and 2010 are given in the table below: in the are given and 2010 2011 December Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, 04.10.2006 26.10.2006 10.03.2008 Str Banco de Sabadell, S.A.Banco de Sabadell, 20.04.2009 €’000 Issuer Banco de Sabadell, S.A.Banco de Sabadell, 29.12.2011 Banco Guipuzcoano, S.A.Banco Guipuzcoano, 30.11.2009 Banco Guipuzcoano, S.A.Banco Guipuzcoano, 21.03.2006 Banco Guipuzcoano, S.A.Banco Guipuzcoano, group companiesSubscribed by S.A.Banco de Sabadell, 18.04.2007 (1) 12.03.2009 (1,815,000) (15,000)

Statutory informationBanco Sabadell Annual Report 2011 194 Banco Guipuzcoano, S.A.Banco Guipuzcoano, group companiesSubscribed by S.A.Banco de Sabadell, S.A.Banco de Sabadell, 07.06.2011 29.04.2003 26.01.2004 Co Co (22,553) (142,556) Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, 15.06.2005 19.01.2006 10.05.2006 Co Co Co Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, 16.05.2006 24.01.2007 20.06.2007 29.12.2008 Co Co Co Co Banco de Sabadell, S.A.Banco de Sabadell, 17.02.2009 Co Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, 30.04.2009 S.A.Banco de Sabadell, 17.07.2009 S.A.Banco de Sabadell, 24.07.2009 S.A.Banco de Sabadell, 10.09.2009 S.A.Banco Guipuzcoano, 20.01.2010 S.A.Banco de Sabadell, Co 30.06.2010Own securities Co 10.09.2010 Co 10.12.2010 S.A.BancSabadell d’Andorra, Co 11.01.2011Securitization funds Co 11.02.2011 and other adjustmentsValuation Co 07.06.2011 Co 13.07.2011Total Co 12.12.2011 19.01.2011led with the CNMV. Co (1) A prospectus for an issue of €8,500 million has been fi Co 29.12.2011 dates Various Co Co Co Co dates Various 204,999 280,736 Banco de Sabadell, S.A.Banco de Sabadell, S.A.Banco de Sabadell, S.A. (London branch) Banco de Sabadell, S.A. (1)Banco Guipuzcoano, S.A.Banco Guipuzcoano, 25.06.2008 (1) 09.03.2010 (1) 10.03.2011 (1) 04.06.2009 03.06.2010 Statutory informationBanco Sabadell Annual Report 2011 195 date

Maturity/ repayment WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo at 31.12.2011 Interest rate Buyback acceptances - nominal value Amount 2011 2010 2011 issue Date of This repurchase generated positive results to the amount of €87,054,000 and appear in the financial operations This repurchase generated positive results to the amount of €87,054,000 exchange of 100% of the outstanding On 19 April 2010 Banco de Sabadell, S.A. issued an invitation offering the securities tendered for exchange The nominal values of existing preferred securities and existing subordinated The profit for Banco de Sabadell, S.A. on the exchange was €88,857,000. Sabadell International Equity Ltd. was At 31 December 2011 the rate of interest payable on securities issued by Subordinated liabilities rank below the claims of all other unsecured creditors of the group. All issues are Subordinated liabilities rank below the held on 31 January 2011 agreed to go ahead, conditioned by The Bank de Sabadell, S.A. board meeting as well as the existing nominal values accepted therein are The debt securities affected by repurchase, results section of the Profit and Loss Account (see note 34.(c)). London Stock Exchange and an issue securities of an issue of Series I/2006 preferred securities quoted on the Market, for newly issued Series I/2010 of Series I/2006 subordinated securities traded on the AIAF Fixed Income subordinated securities (the “new securities”). of new securities issued for exchange were €193,950,000 and €283,400,000 respectively. The nominal amount of €93,850,000, bringing the total was €406,150,000. Additional new securities were issued for a nominal amount of the new securities was 99.406%. nominal amount of new securities issued to €500,000,000. The issue price on 26 April 2020. Settlement of The securities will bear interest at an annual rate of 6.25% and will be redeemed the offer and exchange took place on 26 April 2010. 4.5% (4.5% at 31 December 2010). denominated in euros. of the capital increase (see note 28), with the offer for the cash the previous implementation and execution debt securities with the purpose of improving and reinforcing the group’s purchase of the whole or part of certain resources. described below: €’000 Securities in issue Banco de Sabadell - 500,000 Preferred Securities I/2006Banco Guipuzcoano - 125,000 Subordinated Bonds March 2006Banco de Sabadell - 1,000,000 Subordinated Bonds I/2006 23,700 105,000 363,100 (a) Now merged with Banco de Sabadell, S.A. (a) Now merged with Banco de Sabadell, Banco Atlántico, S.A. (a)Banco Atlántico, S.A.Banco de Sabadell, S.A.Banco de Sabadell, S.A. Banco de Sabadell, S.A. Banco de Sabadell, S.A. Banco de Sabadell, Sabadell International Equity Ltd. S.A.Banco Guipuzcoano, S.A.Banco Guipuzcoano, S.A.Banco Guipuzcoano, 21.08.2003 S.A.Banco Guipuzcoano, S.A. 25.05.2006Banco Guipuzcoano, S.A. 20.09.2006Guipuzcoano Capital, 24.02.2009 S.A.Guipuzcoano Capital, 30.03.1999 26.04.2010 353,500 group companiesSubscribed by 25.02.2011 and other adjustmentsValuation 0 49,200 500,000 716,600 250,000 Total 20.12.2001 500,000 154,200 15.02.2002 30,000 500,000 250,000 40,400 15.10.2004 500,000 2.271% 21.03.2006 25.05.2016 5.234% 01.05.1992 4.500% 30,000 4.500% 27.02.2004 20.09.2016 6.250% 0 50,000 19.11.2009 0 125,000 - 26.04.2020 30,000 11.10.2011 25,000 50,000 124,941 50,000 - - 62 5.471% - - 50,000 4.500% 25.02.2021 50,000 4.200% 2.318% 15.10.2012 (164,158) 50,000 15.10.2014 21.03.2016 25,366 62 - (124,439) 1.724% 15.04.2011 7.750% 30,265 - - - - - 1,859,370 2,386,629 - - - €’000 Issuer Note 22. Subordinated liabilities liabilities 22. Subordinated Note sheet at 31 balance the consolidated on and recorded the group issued by liabilities of subordinated Details as follows: 2011 and 2010 are December

- WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo by the amount of the invoice. by 2011 78 2011 2010 2011 2010 2011 95,983 4 Amount % 79,269 35,643 79,269 39,251 14,991 173,348 177,512 173,348 177,512 152,241 184,003 152,241 369,747 352,954 175,145 122,907 625,531 763,096 2,398,137 100 1,470,467 1,390,069 1,470,467 1,390,069 1,470,467 1,431,216 1,375,078 1,470,467 1,390,069 nancial nancial liabilities The following table provides information about deferments of payment in the 2011 financial year: The following table provides information is borne by policyholdersis borne by Analysis by heading: Analysis by Financial liabilities measured at amortized costTotal type: Analysis by Obligations payable Guarantee deposits received Clearing houses collection accounts Tax nancial liabilities (*) Other fi Total currency: Analysis by Euro denominated currency denominated Foreign Total 1,470,467 1,390,069 (1) In those cases where the legal limit is exceeded, there is a wide range of reasons for the late payment. (1) In those cases where the legal limit is exceeded, Note 24. Liabilities under insurance contracts below: The balances for this heading at 31 December 2011 and 2010 are analysed €’000 (*) Weighted average days past due: the number of days each invoice is due after the legal payment period has expired, weighted period has expired, is due after the legal payment each invoice past due: the number of days days average (*) Weighted €’000 Information about deferment of payments to a suppliers. Additional provision three. “Duty of information” of Law Information three. “Duty of information” to a suppliers. about deferment of Law Additional provision of payments dated 5 July 15/2010, Law 3/2004 on 29 December on measures to combat late payment in Under Law 15/2010 on 5 July amending required to provide information on amounts owed to suppliers. The amount commercial transactions, the Bank is agreed payment periods of more than 85 days, stood at a total of outstanding at 31 December 2010, with €7,218,000. (*) Balance payable to suppliers included. (*) Balance payable Note 23. Other fi 23. Other Note analysed 2010 is 2011 and at 31 December sheet balance consolidated of the item liabilities” financial The “other below. €’000 Technical reserves risk for life insurance where the investment Technical Within the maximum legal periodOther (1) in the year payments Total 2,302,154 Total 96 Weighted ave. days past due (*) days ave. Weighted at year end that exceeded the legal time limitDeferred payments Total 424 -

Statutory informationBanco Sabadell Annual Report 2011 196 Statutory informationBanco Sabadell Annual Report 2011

197 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Other 2011 2010 2011 provisions Total 97,082 99,732 97,082 350,203 367,662 350,203 Contingent exposures & commitments similar obligations Pensions and Pensions including pension commitments in respect of employees taking early retirement and similar obligations. including pension commitments in respect of employees taking early retirement financial guarantees or other contractual commitments. normal course of business, including those described in note 35. Details of changes in provisions during the years 2011 and 2010 are given in the following table: in provisions during the years 2011 Details of changes The main provision components are as follows: pensions and similar obligations: includes provisions to cover post-employment benefits, Provisions for • contingent exposures: includes all provisions to cover contingent exposures associated with Provisions for • consists largely of reserve funds assigned by the group to cover certain risks incurred in the Other provisions: • are long-term in character. Most provisions • Personnel expenses 2009Balance at 31 December charged to income statement:Provisions Personnel Interest expense and similar charges expensesProvisioning Releases to income statementActuarial gains/losses exchange differencesForeign 20,064 Utilizations:5,031 189,583 movementsInsurance premiums paid 5,031 0 0 paymentsPension 71,014 Other payments 8,218 81,183 Other expensesDue to acquisition of Banco Guipuzcoano group 6,948 Balance at 31 December 2010 42,501 expenses 6,815 0 0 charged to income statement:Provisions gains/losses Personnel 98,026 313,267 Interest expense and similar charges (193) Provisioning (76,221) 0 10,724 71,014 Releases to income statement 0 (9,353)Actuarial (4,973) (5,341) 8,955 6,948 exchange differencesForeign 981 (38,579) 0 (29,226) 26,895 Utilizations: 8,218 4,955 176,258 Insurance premiums paid (81,194) 0 0 4,955 52,616 0 payments 84,777 Pension 5,760 8,184 8,603 0 Other payments 8,260 66,062 25 91,672 2,016 0 (5,569)Other movements 13,680 66,062 0 0 8,877 88,619 72,295 0 2,016 0 Balance at 31 December 2011 8,877 0 99,732 (44,148) 1,006 0 0 0 (193) 0 101,834 367,662 (9,353) (67,943) 0 (5,569) (29,226) 0 (8,977) (9,663) (5,569) 137 163,510 (36,947) (32,123) 8,260 (77,606) 4,153 0 (4,712) 89,611 8 0 (19,154) 0 97,082 (317) 0 0 (56,101) 145 350,203 17,282 0 (19,154) (8,977) (32,123) 12,253 (15,001) €’000 €’000 Note 25. Provisions Note follows: were as 2010 2011 and December at 31 sheet balance consolidated item of the of this The components Provisions for pensions and similar obligations for pensions Provisions exposures and commitments for contingent Provisions Other provisions Total 89,611 163,510 91,672 176,258 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo assets Fair value Fair of scheme 0 20,106 0 9,353 0 24,630 0 8,978 960 (5,383) 380 (6,284) 5,123 0 1,404 (6,076) 6,774 0 6,040 0 28,296 0 32,622 0 (44,535) (15,309) (54,855) (22,731) to pension commitments Obligations due 2011 2010 2009 2008 2007 2008 2010 2009 2011 (18,600) (13,173) (5,327) (11,745) (717) Obligations covered by specific assets totalled €738,280,000 (including €23,217,000 in commitments to early Obligations covered by specific assets totalled €738,280,000 (including €23,217,000 stood at €162,735,000 at 31 The fair value of pension-linked assets reported in the group balance sheet The return for the Banco Sabadell pension scheme in 2011 was 1.017% and the return for the Banco was 1.017% and the return for the Sabadell pension scheme in 2011 The return for the Banco assets during the in the fair value of pension scheme due to pension commitments and Changes in obligations Balance at 31 December 2009Interest costs Expected returns Normal costs in year t payments Benefi reductions and terminationsSettlements, contributions Employer’s Actuarial gains and losses Other movements Due to acquisition of Grupo Banco GuipuzcoanoBalance at 31 December 2010Interest costs Expected returns Normal costs in year t payments Benefi reductions and terminationsSettlements, contributions Employer’s Actuarial gains and losses Other movements Balance at 31 December 2011 656,430 (13,187) 461,520 141,355 (12,599) 135,234 781,660 (1,107) 592,229 (7,849) 765,700 583,590 retirees) at 31 December 2011, and €764,472,000 (including €35,973,000 for early retirees) at 31 December retirees) at 31 December 2011, and €764,472,000 (including €35,973,000 2010. December 2011 and €183,051,000 at 31 December 2010. Guipuzcoano social insurance society for the year was -0.99%. Guipuzcoano social are shown in the following table: years 2011 and 2010 €’000 Pensions and similar obligations and similar Pensions shown below: are balance sheet group in the recognized liabilities to pension giving rise The balances €’000 Obligations due to pension commitmentsObligations assets not / (losses) in scheme Actuarial gains in income statement recognized scheme assets value of Fair on balance sheetNet liability recognized 765,700 781,660 163,510 656,430 685,994 (583,590) 176,258 (592,229) 738,582 189,583 (461,520) 202,972 (471,277) 262,386 (475,479)

Statutory informationBanco Sabadell Annual Report 2011 198 Statutory informationBanco Sabadell Annual Report 2011 199

Total WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 2011 2010 2011 1,373 1,381 1,373 3,397 3,786 10,854 5,866 0.24%1.75%2.26% 0.23% 5.14% 1.06% 11,025 15,632 25.29% 12.29% 100.00% 100.00% Years nancial assets and liabilities nancial assets 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 31,458 25,727 19,722 15,809 12,988 10,761 31,458 25,727 19,722 15,809 12,988 9,596 9,111 8,735 152,435 8,528 Assets and liabilities stated in the balance sheet at amortized cost have been valued by the discounted future sheet at amortized cost have been valued by the discounted future Assets and liabilities stated in the balance Estimates of probability-weighted present values at 31 December 2011 of benefits payable over the next ten Estimates of probability-weighted present The fair value of scheme assets includes the following financial instruments issued by the Bank: assets includes the following financial The fair value of scheme The main categories of scheme assets as a proportion of total scheme assets were as follows: were as assets scheme of total a proportion as scheme assets of categories The main Probable pension payments Note 26. Fair value of fi Note 26. Fair items valued at amortized cost are shown in the table below. The fair values of the main balance sheet interest rate curve plus a spread to reflect the credit risk of the different cash flow method using the risk-free was derived from the rates financial instruments being valued. The interest rate curve used in the analysis could be derived to calculate present quoted for Spanish government bonds from which pure discount factors from an equation which adjusts to values that the market would accept as unskewed. The curve is constructed period or maturity. observed market rates and gives forward interest rates for any intermediate years are shown below: €’000 €’000 % Own equity instrumentsOwn equity instrumentsOther equity Debt instruments Mutual funds out with non-related parties) taken Other (insurance policies Total Equity instruments Debt instruments Deposits and current accounts Total 70.46% 81.28% WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 2010 2011 32,997 32,996 4,040,717 4,241,927 4,040,717 2,185,169 1,859,370 1,470,460 1,470,467 2,386,629 2,653,037 1,390,069 1,390,059 Account balances value Fair Account balances value Fair Account balances value Fair Account balances Account value Fair Liabilities at amortized cost: banks Deposits from central Deposits from credit institutionsDeposits from other creditors bondscates including Debt certifi Subordinated liabilities nancial liabilities Other fi liabilities at amortized costTotal Assets at amortized cost: Loans and advances to credit institutionsLoans and advances to other debtors assets at amortized costTotal Liabilities at amortized cost: Deposits from central banks 8,128,791 Deposits from credit institutions 17,643,095 Deposits from other creditors 58,444,050 cates including bonds Debt certifi Subordinated liabilities 8,331,248 liabilities nancial Other fi 91,586,490 18,798,683 58,130,170 liabilities at amortized costTotal 93,157,657 2,744,614 73,980,818 2,819,775 76,725,432 77,987,784 80,807,559 10,300,991 19,507,497 55,092,555 10,382,018 88,710,738 20,033,472 53,906,730 88,398,312 Assets at amortized cost: advances to credit institutionsLoans and advances to other debtorsLoans and amortized assets at costTotal 3,628,914 72,654,030 3,659,179 76,282,944 77,966,688 81,625,867 €’000 €’000 €’000 €’000

Statutory informationBanco Sabadell Annual Report 2011 200 Statutory informationBanco Sabadell Annual Report 2011

201 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 239 6,293 239 2011 2010 2011 632,893 599,249 632,893 409,357 517,498 192,242 138,607 5,623,906 4,443,282 5,623,906 4,485,566 3,858,248 4,485,566 5,488,167 4,433,577 The group’s net position in foreign currency assets and liabilities is covered by transactions consisting of assets and liabilities is covered by transactions consisting of The group’s net position in foreign currency spot and forward currency trades and exchange rate swaps in line with the group’s risk management policy exchange rate swaps in line with the group’s risk management policy spot and forward currency trades and (see note 37). €’000 Note 27. Foreign currency transactions 27. Foreign Note group held by the liabilities and assets currency-denominated of foreign classes for different values equivalent Euro were as follows: 2011 and 2010 at 31 December Foreign currency assets: Foreign central banksCash and deposits with credit institutionsLoans and advances to Other equity instruments other debtorsLoans and advances to Other assets Total currency liabilities: Foreign banks Deposits from central 233,548 369,049 3,870,918 224,781 370,532 2,839,363 Deposits from credit institutionsDeposits from other creditors Other liabilities Total 810,120 430,429 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Interim dividend Total t/ Profi loss for the year Banco Guipuzcoano and the fair value of the shares Treasury Other equity instruments account Reserves and share premium share premium 0 (65,408) 0 0 0 0 (65,408) Capital Ongoing management of the group’s capital base has ensured that funding has been available to finance growth Ongoing management of the group’s capital base has ensured that funding Minimum capital requirement - capital management were above the required levels both At 31 December 2011 and 2010, the group’s qualifying capital resources Settlements in Basel (BIS). under Bank of Spain rules and under the requirements of the Bank of International in conformity with minimum regulatory capital requirements. Note 28. Own funds 28. Own Note follows: were as 2010 2011 and the years funds in in own Changes €’000 securities on taking control of the company. Balance at 31 December 2009Balance at 31 yearsts in previous Appropriation of profi Interim dividend for 2009Final dividend for 2009 differences and other movementsTranslation Acquisitions of own equity instrumentsDisposals of own equity instrumentsIssues of other equity instruments (1)Increase in capital Increase in capital expensesnancial instruments paid in Adjustment in fair value of fi 150,000 (2) acquisition of Banco Guipuzcoano 0 Transfers 4,360,047 t for the year 2010 Profi 0 354,489 Interim dividend for 2010 500,000 Balance at 31 December 2010 (138,203) 0 yearsts in previous Appropriation of profi 84 0 522,489 Interim dividend for 2010 0 0 0 Final 0 dividend for 2010 (168,000) (5,132) other movements differences and Translation 0 (30,083) 8,179 Acquisitions of own equity instruments 5,226,333 (93,392) 0 Disposals of own equity instruments 0 325,471 Issues of other equity instruments (1) 0 (1,625) 7,954 Increase in capital (354,489) 0 Increase in capital expenses 0 0 511,688 228,874 0 Adjustment in fair value of own equity instruments (1,673) 157,954 (492,359)Transfers 0 0 t for the year 2011 4,761,117 Profi 93,188 0 0 0 Interim dividend for 2011 0 0 266,313 818,714 0 0 0 0 Balances at 31 December 2011 0 0 (1) See the section on Other equity instruments this note. in 0 0 0 0 0 0 0 (25,686) (168,000) 0 0 (2) the value of securities paid as part This item shows the difference between for securities of of the purchase consideration 0 0 0 26 0 0 0 0 0 380,040 168,000 0 0 0 0 0 0 (5,048) (113,727) 0 518,242 0 (46,275) 7,183 0 57 (83,400) 0 5,978,412 (492,359) 0 0 295,388 0 0 0 0 0 0 15,927 (4,151) (266,313) (204) 0 0 173,881 400,022 0 0 355,256 0 0 (5,274) 0 0 5,299,712 (504,009) 0 0 380,040 0 0 0 814,620 236,828 0 0 0 0 0 (1,673) 0 0 (174,439) 0 0 0 0 0 0 0 0 0 0 0 0 (113,727) (113,727) 231,902 0 0 0 380,040 0 0 113,727 0 (113,727) 0 0 (69,516) 0 0 358,288 0 6,276,160 0 (504,009) 83 0 0 0 0 0 0 (46,275) 0 (83,400) 0 0 231,902 0 0 415,949 0 (5,274) 0 (69,516) 231,902 (69,516)

Statutory informationBanco Sabadell Annual Report 2011 202 Statutory informationBanco Sabadell Annual Report 2011 203

Change

y.o.y. (%) y.o.y. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 2011 Core capital contributed 9.01% towards the BIS ratio and accounted for 82% of qualifying capital resources. This the BIS ratio and accounted for 82% of qualifying capital resources. This Core capital contributed 9.01% towards to core capital and the deduction of certain items (including investments The addition of preference share issues further 9% of the BIS ratio and is made up very largely of subordinated Secondary or Tier II capital provides a to meet this voluntarily share On 13 December 2011, the public instrument for capital increase executed Valencia Stock Exchanges accepted On 21 December 2011, the Governing Bodies of the Barcelona, Madrid and Board of Bank Sabadell The public instrument for increase of capital executed authorised by the Administrative Valencia stock exchanges accepted On 2 September 2011, the Governing Bodies of the Barcelona, Madrid and At 31 December 2011 the group’s qualifying capital under the revised BIS framework (known as Basel II) stood II) stood as Basel (known BIS framework revised under the capital qualifying the group’s 2011 December At 31 CapitalReservesConvertible bondsMinority interestsDeductionsCore capital Core capital (%) deductionsPreference shares and Primary capitalTier I capital ratio (%)Secondary capitalTier II capital ratio (%)Capital base Minimum capital requirementCapital surplus 814,620 BIS Ratio (%) 5,171,378 4,777,188 173,881 157,954 53,239 520,711 assets (RWA)Risk-weighted 10.08 8.25 (1,151,809) 5,061,309 818,714 699,490 39,294 9.01 (829,717) 4,963,433 5,582,020 (0.50) 9.94 567,164 (25.56) 35.49 4,493,377 5,662,923 38.82 8.20 1.01 1.97 1,041,663 6,149,184 4,842,011 9.36 56,167,208 (1.43) 1,655,807 1.72 6,704,586 60,525,138 (45.55) 10.95 (7.20) 1,862,575 (8.28) (7.20) (11.10) 11.08 (1.17) was helped by an increase in core capital from retained profits for the year. was helped by an increase in core capital brings Tier I capital to a total of €5,582,021,000, that is, 91% of qualifying in financial and insurance undertakings) ratio of 9.94%. capital resources, giving a Tier I capital as to eligibility), less other required debt, valuation adjustments and generic provisions (subject to regulatory limits deductions. Share capital Debentures I/2010 issued When the period for voluntarily conversion of the Necessarily Convertible Subordinated as part of the offer public for acquisition as a result of the offer in exchange for shares in Banco Guipuzcoano, S.A. 425 share holders asked for the made by Bank de Sabadell, S.A. expired on 10 November 2011, a total de of the issue, are equivalent to a conversion of 734,346 shares which, according to that stipulated in the terms total of 734,346 shares. conversion was presented in the company register of Barcelona. verified that they complied with the the listing of these new shares after the National Securities Market Commission value of €0.125 each and issued by requirements demanded for listing the 734,346 shares with a nominal face Bank Sabadell. August 2011 to cover the voluntarily on 21 July 2011 was recorded in the company register of Barcelona on 22 Subordinated Debentures I/2009. The conversion of the 1,597 shares of the issue of the Necessarily Convertible ordinary Bank Sabadell shares with capital increase implied Bank Sabadell issuing and releasing a total of 320,455 a nominal face value of €0.125. listing these new shares. at €6,149,184,000. This gives the group a capital surplus of €1,655,807,000, as can be seen from the following the following be seen from as can €1,655,807,000, surplus of a capital group gives the This at €6,149,184,000. table: Capital management €’000 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Number of shares Indirect shareholder Direct holding On 1 February 2011, Bank de Sabadell, S.A. finalised the process of accelerated placement of the increase increase of the placement accelerated of the process finalised S.A. de Sabadell, 2011, Bank February On 1 issue premium) nominal value and (including the the capital increase total amount of The effective ratio of the was to reinforce the core capital capital increase with cash contributions The purpose of the to increase of Banco Sabadell adopted a resolution 2010 an Extraordinary General Meeting On 18 September as part of the offer price, a total of 30,000,000 Banco Sabadell ordinary It was also resolved to hold in reserve, new shares issued by Banco Sabadell as part of the offer price, with a On 19 November 2010 the 63,630,834 Madrid, Barcelona and Valencia stock exchanges via the automatic The Bank’s shares are quoted on the in the consolidated accounts are quoted on any stock exchange. None of the other undertakings included of the Bank are regulated by the Spanish companies legislation The rights attaching to all equity instruments the Securities Market Law As required by article 23 of Royal Decree 1362/2007 of 19 October, implementing in share capital agreed by its Administrative Board in the meeting held on 31 January 2011. Through this capital this capital Through 2011. on 31 January held in the meeting Board by its Administrative agreed capital in share eighty-two and thousand sixty-three hundred and three million twenty-six hundred and of one a total increase and were issued those currently in circulation and series as of the same class ordinary shares (126,363,082) value and including nominal (3.25) per share, and twenty-five cents of three Euros at an effective price subscribed, issue premium. cents Euros and fifty thousand and sixteen hundred and eighty ten million six to four hundred and amounted (410,680,016.50). capital increase offer simultaneously with the funds required to carry out the repurchase bank and obtain the (see note 22). class with a 63,630,834 ordinary shares of a single by the issue and allotment of the capital of the company the offer price in a non-monetary contributions as part of each, to be paid in the form of nominal value of €0.125 at €3.7219 per issue price of the new shares was fixed all shares of Banco Guipuzcoano. The purchase offer for share. of each, representing two and one-half per cent (2.5%) of the share capital shares with a nominal value of €0.125 the of treasury shares, and to keep the said shares in reserve pending the Bank, from the Bank’s available holding outcome of the offer (see note 2). admitted to trading by the management companies of the Barcelona, Madrid nominal value of €0.125 each, were and Valencia stock exchanges. year Share capital at closure of the financial the Bank’s issued share capital at 31 December 2011 was Of the capital movements explained above, registered shares with a nominal value of €0.125 each The €173,881,089.63 divided into 1,391,048,717 2010 was €157,953,854.25, divided into 1,263,630,834 registered shares corresponding figure at 31 December are fully paid and are numbered consecutively from 1 to 1,391,048,717, with the same nominal value. All shares both inclusive. de Bolsas, S.A. quotation system managed by Sociedad his a General Meeting a shareholder may cast votes in a number that reflects (“Ley de Sociedades de Capital”). At proportional holding in the share capital. in Banco Sabadell (i.e. (Law 24/1988 of 28 July), the following table gives details of significant shareholdings 31 December 2011. holdings amounting to 3% or more of the share capital or voting rights) at Mayor Vent, S.L. Unipersonal S.L. Vent, Mayor S.L.Jaipur Investment, S.L. Participaciones, Famol do Grupo BCPFundo de Pensoes 5.000% 4.455% 69,552,974 4.483% 4.536% (1) Isak Andic Ermay 61,968,986 62,355,735 63,099,261 S.A. Banco Comercial Portugues, -- S.L. (2) Hemisferio, Inversiones (1) Holds 99.99% of Mayor Vent, S.L. Unipersonal. Vent, (1) Holds 99.99% of Mayor S.L. (2) Holds 75% of Jaipur Investment, Share premium account (€1,465,980,000 at 31 The balance of the share premium account at 31 December 2011 was €1,861,702,000 December 2010). Undertaking

Statutory informationBanco Sabadell Annual Report 2011 204 Statutory informationBanco Sabadell Annual Report 2011

205 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo total (%) (1) Proportion of e Commission (CNMV) on rcelona, as desribed in the rcelona, 113 113 2011 2010 3,002 3,002 34,750 30,600 price (€) 265,581 252,406 2,947,946 2,849,691 3,438,010 3,295,137 Average share Average (€’000) Nominal value No. of shares Securities Note for the issue of mandatory convertible subordinated bonds, Series I/2009, fi led with the National Stock Exchang fi Securities Note for the issue of mandatory Series I/2009, convertible subordinated bonds, 25 June 2009. On 19 November 2010 the management companies of the Barcelona, Madrid and Valencia stock exchanges stock exchanges Madrid and Valencia of the Barcelona, management companies 2010 the On 19 November each quarterly interest at 7.75% per annum. On have a term of three years and bear The convertible bonds for a total of €500 mandatorily convertible bonds carried out an issue of Series 1/2009 In 2009 Banco Sabadell (2010: €32,939,000). bonds in the year 2011 totalled €64,846,000 Interest paid on the bonds are listed on the Madrid, Barcelona y Valencia securities The mandatorily convertible subordinated Sales 161,169,062 20,146.13 3.83 12.64 3.83 20,146.13 Balance at 31 December 2009PurchasesSales 161,169,062 Balance at 31 December 2010Purchases 35,803,943 SalesBalance at 31 December 2011 (1) 4,475.49 7,679,200 57,948,027 16,630.54 133,044,319 959.90 3.71 4.38 10.49 7,243.50 21,786.54 174,292,304 2.91 124,023,477 15,502.93 12.53 3.34 2.98 2.82 2.93 8.92 0.61 4.17 (1) de Ba shares loaned in a liquidity facility agreement entered into with Caixa d’Estalvis i Pensions This includes 1,506,138 The contributions of consolidated undertakings to group reserves are shown in Annex I. The contributions of consolidated undertakings in own equity instruments Transactions evolution during the year: The Bank’s holdings of shares in the parent company showed the following €’000 Other equity instrumentsOther of be made an issue that resolved Banco Sabadell of Meeting General an Extraordinary 2010 September On 18 as to be offered S.A. de Sabadell, of Banco shares issued into newly convertible mandatorily bonds subordinated note 2). S.A. (see of Banco Guipuzcoano, of the share capital offer for 100% offer price in a takeover part of the effective (€468,000,000); the million euros hundred and sixty-eight issue was four value of the bond The nominal issued was ninety-three subordinated bonds convertible number of mandatorily €325,470,600. The value was (93,600,000). hundred thousand million six with a nominal convertible subordinated bonds to trading of the 93,600,000 mandatorily approved the admission the price of the takeover offer. issued by Banco Sabadell as part of value of €5.00 each a voluntary to pay interest on the bonds or declare Sabadell may, at its discretion, decide payment date Banco price pre-set in each period. which bonds may be converted at a conversion period in the years 2010, 2011 of the Bank on 21 July of each of can be exchanged voluntarily for shares million. The bonds 2013. obligatorily exchangeable on 21 July and 2012 and are for retail investors resident in Spain although they were also available markets. The bonds were intended primarily or non-resident. to qualified investors, whether resident Reserves Restricted reserves: Statutory reserve Reserve for own shares pledged as securityReserve in Canary for investment IslandsShare redenomination reserve 220,620 7,096 211,843 6,848 Capital redemption reserve reservesAvailable Reserves of equity-accounted undertakings Total 224,483 193,040

Net WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo amount Tax effect 991 991 2011 2010 2011 2,790 1,655 Gross (26,663)(30,374) (14,260) (3,934) amount (250,910) (313,232) (389,228) (323,735) Net amount Tax effect 2011 2010 Gross amount Debt securitiesOther equity instruments (17,718) 5,316 88,362 (12,403) (26,509) 61,853 (22,692) (528,938) 6,808 158,682 (370,256) (15,884) The income tax effects of valuation adjustments for the different items of recognized income and expense at 31 for the different items of recognized income and expense at 31 The income tax effects of valuation adjustments Net gains and losses arising on transactions in the Bank’s own equity instruments have been included in Own in Own been included have instruments equity Bank’s own in the transactions on losses arising and Net gains were of €9,399,000 value a nominal Bank with of the shares 75,194,406 a total of the year close of At the by but under management by third parties instruments held S.A. own equity of Banco de Sabadell, The number Other equity instruments Debt securities Cash fl ow hedgesow Cash fl exchange differencesForeign the equity methodEntities accounted for by Other recognized income and expenseTotal (90,107) 0 1,632 0 (90,107) (37,771) (490) 11,331 4,905 0 1,142 (26,440) 11,600 0 5,452 0 (3,480) (1,636) 4,905 (55,602) 8,120 3,816 (10,352) 0 (65,954) (529,673) 160,374 (369,299) 0 0 Available-for-sale fi nancial assets fi Available-for-sale 70,644 (21,193) 49,450 (551,630) 165,490 (386,140) Cash fl ow hedges ow Cash fl exchange differences Foreign the equity methodEntities accounted for by Other valuation adjustments Total (85,062) 5,045 Available-for-sale fi nancial assets fi Available-for-sale (277,573) (327,492) December 2011 and 2010 were: funds - Reserves under Equity in the consolidated balance sheet. sheet. balance the consolidated Equity in under - Reserves funds December 2010). €8,976,000 at 31 nominal value of shares with a security (71,811,184 pledged as with shares or securities, and 1,916,562 2010 was 2,216,301 2011 and at 31 December group undertakings were and 1,905,710 these totals, 2,153,591 respectively. Of and €7,981,000, of €7,431,000 nominal values convertible bonds. rest were mandatorily shares; the Banco Sabadell €’000 Note 29. Valuation adjustments Note 29. Valuation and 2010 are analysed below: for the group at 31 December 2011 Valuation adjustments €’000

Statutory informationBanco Sabadell Annual Report 2011 206 Statutory informationBanco Sabadell Annual Report 2011 207 t/loss Balance at profi 31.12.2011 Attributable 55,107 16,484

(86,205)

135,698 121,084 133,574 108,135 (146,523) WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo in 2011 Changes 600 600 2011 2010 interests Amount % Minority 8,346,422 8,309,422 8,347,022 8,310,022 Balance at 31.12.2010 t/loss profi Attributable in 2010 Changes 2011 2010 interests Amount % Minority 17,137 22,648 5,511 32,485 9,837 Balance at 31.12.2009 Changes in the “minority interests” heading in 2011 and 2010 were as follows: interests” heading in 2011 and Changes in the “minority Changes in proportional shareholdings and other movements Profi t for the yeart for Profi 14,025 2,882 16,907 3,970 20,877 Due to acquisition of Banco Guipuzcoano group Doubtful contingent exposures The movement in the doubtful contingent exposures account was as follows: €’000 Balances on 31 December 2009 Additions Write-downs and recoveries Balances on 31 December 2010 Additions Write-downs and recoveries Balances on 31 December 2011 Note 31. Contingent exposures The breakdown of this item is as follows: €’000 €’000 movements adjustmentsValuation Other 31,162 13,807 53,362 8,393 39,555 (3,781) (1,908) (5,689) (461) (6,150) BancSabadell d’Andorra, S.A.BancSabadell d’Andorra, of Sabadell BS Select Fund (Luxembourg)Hedge Funds SICAV N.A. Sabadell United Bank, OtherTotal 49.03% 50.89% 19,029 17,227 5.22% 3,052 (11) 9,760 49.03% 47.50% 17,585 772 15,488 Total 2,253 652 - - - 1,196 157 47,212 3,970 - - - 793 (23) 33,866 2,882 - 27,381 6,485 33,866 13,346 47,212 Financial guarantees Other contingent exposures €’000 Total Note 30. Minority interests 30. Minority Note follows: are as are held interests minority in which The undertakings WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 7 0 7 981 477 981 2011 2010 2011 2011 2010 2011 2010 2011 8,397 71,843 72,790 75,591 72,790 89,611 91,672 272,263 1,213,508 321,318 620,485 108,128 121,084 121,084 108,128 121,084 108,135 9,590,753 14,305,101 8,988,775 12,399,265 11,657,865 16,133,441 c provisions: 73,771 76,068 Credit institutions General government Other resident sectors Non-resident sector Among the more significant components of the “drawable by third parties” item at 31 December 2011 mortgage Among the more significant components of the “drawable by third parties” Changes in these provisions, which are reported in provisions on the liability side of the balance sheet, are Changes in these provisions, which are Provisions for credit risk arising from doubtful contingent exposures were as follows: risk arising from doubtful contingent Provisions for credit The distribution of contingent exposures by geographical region at 31 December 2011 and 2010 was as was as and 2010 2011 December at 31 region by geographical exposures of contingent The distribution Provisions for credit risk Provisions Exposures covered by specifi by Exposures covered for countryProvisions risk provisions generic by Exposures covered Total third parties by Drawable 15,840 Financial purchase commitments forward asset contractsnancial asset purchase fi Regular way 15,604 Other contingent commitmentsTotal 199,801 104,853 57,285 213,982 1,762,458 1,557,073 Spain Latin America Total credit commitments amounting to €1,251,564,000 (€1,220,795,000 at 31 December 2010). The “other credit commitments amounting to €1,251,564,000 (€1,220,795,000 at 31 types in line with the group’s risk contingent commitments” category consisted mainly of guarantees of other management policy. shown in note 25. follows: €’000 Note 32. Contingent commitments 2011 and 2010 was as follows: The composition of this item at 31 December €’000 €’000

Statutory informationBanco Sabadell Annual Report 2011 208 Statutory informationBanco Sabadell Annual Report 2011

209 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 2011 2011 2010 (2,626) (2,309) 33,665 29,680 13,127 4,290 (25,689)(88,504) (16,806) (27,511) (85,794) (27,864) 417,928 311,667 1,133,237 1,238,518 1,133,237 3,015,818 2,858,299 5,726,873 5,926,378 3,394,082 2,644,787 51,837,631 55,030,200 51,837,631 (1,856,819) (1,185,671) Net fees and commissions on these products are reported in the income statement under fee and commission products are reported in the income statement under fee and commission Net fees and commissions on these Interest and similar income: Cash and balances with central banksLoans and advances to credit institutionsLoans and advances to other debtorsDebt securities Doubtful assets Adjustments to income as a result of hedging transactions to pensionsIncome from insurance contracts linked Other interest Total Interest expense and similar charges: Deposits from central banks Deposits from credit institutionsDeposits from other creditorscates including bonds Debt certifi Subordinated liabilities Adjustments to income as a result of hedging transactionsInterest cost of pension funds Other interest 41,278 Total 43,347 12,750 2,805,126 26,861 6,287 28,620 2,226,244 9,488 28,511 214,027 (237,329) 343,865 (1,086,647) (602,540) (116,542) (740,379) (539,842) Under management by the group: by Under management and mutual funds companies Investment Asset management the group not managed by Mutual funds sold but funds (1) Pension Insurance (1) Financial parties instruments third deposited by Total 1,286,997 6,737,188 7,870,425 1,430,894 7,421,903 33,895,532 8,660,421 36,196,194 income and amounted to €131,015,000 in 2011 (€131,956,000 in 2010). income and amounted to €131,015,000 Some salient aspects of the Group’s consolidated income statement for the years 2011 and 2010 are highlighted consolidated income statement for the years 2011 and 2010 are highlighted Some salient aspects of the Group’s in the following tables. (a) Interest income and expense were as follows: The components of net interest income €’000 (1) The amounts shown for pension funds and insurance relate to pension and other funds distributed by the group. other funds distributed by pension funds and insurance relate to pension and (1) The amounts shown for Note 34. Income statement €’000 Note 33. Off-balance sheet customer funds sheet customer 33. Off-balance Note group by the managed but not funds sold and management group’s under the funds customer sheet Off-balance following types: were of the WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 361 183 2011 2010 6,165 18,575 2011 2010 2011 2011 2010 2011 2010 2011 49,128 67,084 93,245 68,151 87,160 79,034 87,160 16,320 19,086 56,308 81,955 83,333 94,040 60,954 48,396 53,129 39,370 99,429 100,151 139,025 62,324 271,246 204,065 271,246 204,065 637,624 570,695 637,624 (11,402) (11,964) (64,031) (54,233) nancial instrument: In 2011 the group sold off a number of debt securities from its portfolio of available-for-sale financial assets, In 2011 the group sold off a number of debt securities from its portfolio of Fee and commission expenses were as follows: Fee and commission Income from rental of investment propertyIncome from rental of investment Insurance settlements Other income 7,464 8,843 Fees and commissions payable to correspondent and other banks and commissions payable Fees Other fees and commissions Total (52,629) (42,269) On contingent exposures On contingent commitments On contingent currency banknote exchange and Foreign servicesCollection and payment Securities-related services productsnancial fi Distribution of non-bank Other fees and commissions Total 1,307 113,640 240,436 1,202 114,352 220,146 recording gains amounting to €45,347,000 at 31 December 2011 (€62,954,000 at 31 December 2010 Of these recording gains amounting to €45,347,000 at 31 December 2011 (€62,954,000 the Public Administration. results, €756,000 in losses come from the sale of debt securities held with (d) Other operating income years to 31 December 2011 and 2010 The composition of this item of the consolidated income statement for the was as follows: €’000 €’000 (c) Gains and losses on financial assets and liabilities (net) (c) Gains and losses on financial assets income statement for the years to 31 December 2011 and 2010 The composition of this item of the consolidated was as follows: €’000 (b) Fee and commission income and commission (b) Fee following: of the composed was and for services trading from income commission Fee and €’000 Income from insurance and reinsurance contracts writtennancial services Sales and income from non-fi Other operating income Total 34,912 3,563 27,848 23,907 Held for trading t or loss Financial instruments not measured at fair value through profi Other Total type of fi Analysis by Net gain (loss) on equity instrumentsNet gain (loss) on derivatives contractsOther net gains (losses) (note 22) Total 126,056 123,166 (19,229) 148,102 65,153 3,677 Net gain (loss) on debt securities

Statutory informationBanco Sabadell Annual Report 2011 210 Statutory informationBanco Sabadell Annual Report 2011

211 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo (41) (21,346) 2011 2010 2011 2010 2011 (69,728) (62,262) (56,961)(27,103) (45,105) (23,879) (91,210) (94,259) (113,017) (100,290) (742,600) (679,721) The number of staff employed by all group undertakings in 2011 averaged 10,670, of whom 5,703 were men The number of staff employed by all group undertakings in 2011 averaged Expenses from insurance and reinsurance contracts written arose mainly from provisions in respect of contracts written arose mainly from provisions in respect of Expenses from insurance and reinsurance deposit guarantee funds” is made up largely of contributions for Banco The figure shown under “payments to for the most part, of costs to sell items relating to undertakings of a The “other expenses” category consists, Operating expenses on investment property investment Operating expenses on to deposit guarantee funds Payments Other expenses (38) (29,820) (659) (20,567) Income from insurance and reinsurance contracts written includes issued premiums sold by the insurer by the insurer sold premiums issued includes written contracts and reinsurance from insurance Income S.L., Solvia Development, de Sabadell, S.A., mainly by Banco was accounted for property rentals Income from group undertakings. by non-financial of income received income” consists largely shown for “other The figure Salaries and bonuses of current employeesSocial security contributions for pension schemes Provisions Other staff-related costs Total (539,693) (500,460) (20,162) (16,709) Expenses on insurance and reinsurance contracts writtenExpenses on insurance Change in inventories Other operating expenses Total (34,208) (27,808) and 4,967 were women (2010: 9,839 staff of whom 5,928 were men and 5,025 were women). and 4,967 were women (2010: 9,839 staff of whom 5,928 were men and insurance policies and incurred benefit payments for the insurer Assegurances Segur Vida, S.A. (in which the payments for the insurer Assegurances Segur Vida, S.A. (in which the insurance policies and incurred benefit BancSabadell d’Andorra, S.A.). The income from these operations is group holds an indirect interest through shown in note 34(d). Sabadell United Bank, N.A. totalling €2,559,000 and for Banco de Guipuzcoano, S.A. totalling €2,504,000, in 2011. Sabadell, S.A., amounting to €24,197,000 non-financial nature. (f) Administrative expenses statement includes expenses incurred by the Bank in respect of personnel This heading of the consolidated income and other general administrative expenses. expenses Personnel the years to 31 December 2011 and The personnel expenses charged to the consolidated income statement for 2010 are as follows: Assegurances Segur Vida, S.A. (in which the group holds an indirect interest through BancSabadell d’Andorra, S.A.). S.A.). d’Andorra, BancSabadell through indirect interest holds an group which the S.A. (in Segur Vida, Assegurances (e). in note 34 shown are operations of these The costs respectively. and €1,477,000 €1,691,000 income of €1,280,000, reported rental Properties, S.L. which and Solvia operating expenses (e) Other 2011 and 2010 statement for the years to 31 December this item of the consolidated income The composition of was as follows: €’000 €’000 0 0

(524) (332) WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 25,330 24,806 24,474 2011 2010 2011 Men Women Men Women The exercise price for all the SARs is 3.89, with the settlement amount being the positive difference, if any, The exercise price for all the SARs is 3.89, with the settlement amount being Bank entered into hedging At the time the SARs were awarded, to meet the resulting commitment the recognized totalling €6.9 million Personnel expenses associated with the share-based incentive schemes were Of the total number of people employed at 31 December 2011, 69 were recognized as having some form of 2011, 69 were recognized as having of people employed at 31 December Of the total number of the measures staff reduction derived from the impact employees is attributable to the The evolution of group Meeting of was approved by the Annual General scheme for senior group executives A share-based incentive on the winding up of the scheme as the target share price set under the No shares were awarded to employees of for senior group executives was approved by the Annual General Meeting A new share-based incentive scheme a high degree of motivation and loyalty among senior executives. Under The scheme was set up to encourage of SARs awarded under the share-based incentive scheme are as The changes during the year in the value The gender and category split of group employees at 31 December 2011 and 2010 was as follows: was and 2010 2011 31 December at group employees split of category and The gender Awards Cancellations €’000 Balance at 31 December 2009 Balance at 31 December 2010 Balance at 31 December 2011 Awards Cancellations between the quoted share price at the end of the scheme and the exercise price. between the quoted share price at the end of the scheme and the exercise have economic effects that act to offset arrangements with financial institutions outside the group. These contracts (€21.8 million) was considered as the the commitment undertaken by the Bank. The premium paid for the hedge fair value of services received during the 3-year duration of the scheme. for 2011 and €10.9 million for 2010 (see note 1 (p)). disability (60 at 31 December 2010). disability (60 at 31 administrative tasks the centralisation and automation of efficiency program and includes applied in the operative as their increase network of branch offices, as well offices and the reorganisation of the carried out in branch the financial year (see note 2). transactions carried out during associated with corporate came to an end in March 2010. S.A. held on 29 March 2007. The scheme Banco de Sabadell, scheme was not reached. 2010. Banco de Sabadell, S.A. on 25 March appreciation rights (SAR) were given to employees who, when the rights its terms, a certain number of stock shares in the Bank equal in value to the amount by which Banco expired, would become entitled to receive of a maximum period of three years and three months, with an end date Sabadell shares had appreciated over 11 June 2013. follows: Number of employees Number Technical/specialistAdministrativeTotal 4,883 3,964 4,837 3,621 789 1,039 966 1,353 5,672 5,003 5,803 4,974

Statutory informationBanco Sabadell Annual Report 2011 212 Statutory informationBanco Sabadell Annual Report 2011

213 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo sk and the amortization and 2011 2010 2011 2010 2011 (3,928) 3,299 (58,007)(20,277)(35,585)(61,962)(98,825) (56,976) (21,828) (30,919) (54,271) (89,263) (512,633) (395,905) (634,524) (505,761) (402,491) (356,334) nancial assets (note 8). Debt securities (*) Other equity instruments (note 6) (117,963) (113,155) recovery of derecognized impaired fi Available-for-sale fi nancial assets fi Available-for-sale (121,891) (109,856) A total of €978,000 in fees was paid to PricewaterhouseCoopers Auditores, S.L. for auditing services in Spain Auditores, S.L. for auditing in fees was paid to PricewaterhouseCoopers A total of €978,000 in 2010) auditing services in Spain in 2011 (€90,000 were paid to other auditors for Fees totalling €118,000 Auditores, S.L. and other firms operating under the The fees paid to PricewaterhouseCoopers includes the more significant items corresponding to expenses In addition, the section of other expenses Total Loans and receivables (*) t or loss instrumentsnancial profi not measured at fair value through Other fi (121,891) (109,856) Premises, fi ttings and equipment fi Premises, Computer science Communications Advertising promotion and State and local taxes Other expenses Total (127,835) (103,077) in the year 2011 (€1,055,000 in 2010). Fees for auditing services in relation to foreign branches and subsidiaries services in relation to foreign branches in 2010). Fees for auditing in the year 2011 (€1,055,000 in 2011 (€410,000 in 2010). totalled €515,000 in 2010). and subsidiaries in 2011 (€137,000 for services relating to foreign branches plus another €133,000 name for tax advisory services in the year 2011 was €77,000, while PricewaterhouseCoopers Auditores, S.L. services amounted to €560,000. Fees for these services in 2010 totalled fee payments to these firms for other Fees paid to other auditors for other services amounted to €725,000 in €91,000 and €1,168,000 respectively. 2011 (€1,228,000 in 2010). of funds to the amount of €10,879,000 in 2011 (2010: €12,221,000), for Surveillance Services and transfer €9,724,000 in 2011 (2010: €8,996,000) and subcontracted representation and displacement of personal, in 2011 (2010: €27,808,000). services to the amount of €27,919,000 (g) Impairment losses (net) income statement for the years to 31 December 2011 and 2010 The composition of this item of the consolidated was as follows: (*) credit ri to the income statement to cover and reversals thereof taken equals the total provisions The sum of these amounts €’000 €’000 Other general administrative expenses administrative general Other the year: during incurred expenses other administrative includes all This WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 0 6 0 0 (509) (1) (11) (23) (72) 2011 2010 2011 2010 2011 7,878 304,481 7,878 294,287 3,183 5,672 296,111 (2,182) (7,778) (2,206) (8,370) 47,282 136,780 36,701 118,013 (65,454) 16,432 (48,406) 81,419 187,466 464,341 593,966 356,231 (623,826) (364,638) A major component of the “gains (losses) on disposal of tangible assets” item corresponding to the 2010 tangible assets” item corresponding of the “gains (losses) on disposal of A major component Undertakings treated as part of the group for tax purposes are shown in Annex I. Undertakings treated as part of the group tax returns in accordance with the applicable tax regulations. All other group companies submit individual Profi t or loss before tax Profi Increases in taxable income Reductions in taxable income Assessed income for tax purposes (at 30%) Tax training and other allowancesDouble taxation, Net tax payable due to timing differences (net)Tax to be deducted allowance Adjustments on recognition of reinvestment Other adjustments (net) Income tax 0 (10,581) 157,606 (16,000) 455,934 (18,767) (19,653) (37,026) Gains of tangible assets On disposal On disposal of equity investmentsOther Losses assets On disposal of tangible propertyOn investment On disposal of equity investments Other Total 4,695 10,188 financial year consists of gains from sale and leaseback arrangements (see note 15). financial year consists of gains from €’000 Note 35. Taxation (income tax) Note 35. Taxation Undertakings treated as consolidated for tax purposes company of a group treated as consolidated for tax purposes which includes Banco de Sabadell, S.A. is the parent that qualify as dependent companies under the Spanish income tax all Spanish-domiciled group undertakings regulations for consolidated groups. Reconciliation the accounting results for the years 2011 and 2010 and the assessed The reconciliation of the difference between as follows: income for corporation tax purposes is (h) Gains (losses) on derecognition of assets not classified as non-currentclassified not of assets on derecognition (losses) (h) Gains held for sale assets 2010 2011 and to 31 December the years for statement income consolidated item of the of this The composition as follows: was €’000

Statutory informationBanco Sabadell Annual Report 2011 214 Statutory informationBanco Sabadell Annual Report 2011

215 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 66,116 51,375 593,966 356,231 (161,487) (183,201) (623,826) (364,638) In the first quarter of 2011 the Spanish Treasury recognised the deductibility of the difference resulting from from resulting the difference of the deductibility recognised Treasury the Spanish of 2011 first quarter In the tax the deductible definitively established Spanish Treasury quarter of 2011 the also in the first In addition, the fusion with Banco resulting from of the difference of the tax deductibility of the recognition As a result 14 April 2011 Shareholders Meeting held on 3 to these annual accounts, the General As explained in note Permanent differences Permanent differences arising in the current yearTemporary differences arising in earlier yearsTemporary Increases differences Permanent differences arising in the current yearTemporary differences arising in earlier yearsTemporary Reductions 46,323 481,527 (1,609) 7,598 297,258 (460,730) (181,322) (115) the fusion by absorption of Banco Herrero, S.A. which took place by the bank on 18 September 2002, setting this setting 2002, 18 September bank on by the took place S.A. which Herrero, of Banco by absorption the fusion million. at €376.62 difference took place Atlántico, S.A. which of Banco the fusion by absorption arising from from the difference amount resulting €759.09 million. 2004, setting it at on 1 September by the bank S.A., in Banco Atlántico, from the fusion with resulting fixation of the difference and the definitive Herrero, S.A. Tax of the amount under the heading of Corporate Income S.A. has entered a net income 2011 Banco de Sabadell, of €66.2 million. In 2010 the Islands to the amount: of €248,000. endowment for investments in Canary approved an reserve as property, plant the year in fixed assets classifiable made up of various investments during reserve was wholly and equipment. income - increases and reductions Taxable the following table on in the previous table are analysed in reductions in taxable income shown The increases and temporary or permanent differences. the basis of whether they arose from Tax assets - deferred Tax from the Spanish Treasury in respect of deferred tax assets. These This caption shows the amount reclaimable to differences between accounting and tax assessment procedures. The arise primarily from deferred tax due into provisions totalling €383,993,000 (€449,118,000 in 2010), transfers differences relate to non-tax deductible (€75,995,000 in 2010), merger reserves of €179,243,000 (€137,542,000 pension funds totalling €60,537,000 related to the updating to fair value of the assets and liabilities resulting from in 2010) and €94,814,000 to funds Banco Guipuzcoano. €’000 0 (97)

788 308

(274) (130) (169) (231) (714) (634) (625) (197) (404) (500) 6,214 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 8,714 5,190 3,091 1,720 9,885 (2,029) (8,012) (1,630) (2,579) (7,061) 10,337 97,536 30,101 57,542 11,334 48,135 23,310 26,948 41,647 73,910 (19,901) (16,188) (10,139) (15,458) (65,125) 102,786 130,667 680,589 137,523 923,589 997,308 The changes in deferred tax assets, other than those related to valuation adjustments in equity, in the last two in the last equity, in adjustments to valuation related than those other tax assets, deferred in The changes Changes in deferred tax liabilities in the last two years were as follows: Changes in deferred tax liabilities in the years were: years Valuation adjustments Valuation of business/operations Transfer Consolidation adjustments Other Balance at 31 December 2010 Consolidation adjustments Balance at 31 December 2011 €’000 Balance at 31 December 2009 Tax liabilities - deferred Tax the Spanish Treasury in respect of deferred tax liabilities. These liabilities This consists of amounts payable to of depreciation as permitted by the tax regulations, and reversals include deferred tax charges due to accelerated in in 2010) in relation to mergers, and €58,696,000 (€28,595,000 deferred tax totalling €6,049,000 (€6,145,000 2010) due to consolidation adjustments. Due to acquisition of Banco Guipuzcoano group Mergers Deferred tax charges applicable to foreign branches Asset restatements Intragroup transactions Deferred tax charges applicable to foreign branches of business/operations Transfer Asset restatements Other Intragroup transactions Mergers adjustments Valuation €’000 31 December 2009 Balance at Due to acquisition of Banco Guipuzcoano group of Banco Guipuzcoano Due to acquisition Intragroup transactions funds Pension for foreign branches Advance tax payments Non-tax deductible reserve funds Recognition of loan arrangement fees Change in corporation tax rate Accelerated depreciation Consolidation adjustments Non-tax deductible reserve funds Merger reserves Change in corporation tax rate Consolidation adjustments Merger reserves adjustments Valuation Other 2010 Balance at 31 December Intragroup transactions funds Pension Recognition of loan arrangement fees for foreign branches Advance tax payments Accelerated depreciation adjustments Valuation Other Balance at 31 December 2011

Statutory informationBanco Sabadell Annual Report 2011 216 Statutory informationBanco Sabadell Annual Report 2011

217 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo The amount payable to the Spanish Treasury is shown under current tax liabilities. current tax under is shown Treasury the Spanish to payable The amount (€712,089,000 €81,875,000 to approximately amounting made investments group Sabadell the Banco In 2011 2009 financial years in the 2006, 2007, 2008 and subject to deduction for reinvestment The amount of revenue Tax Law, Royal Consolidated Text of the Corporation last paragraph of article 12.3 of the In reference to the tax authorities, audit reports had been issued and were contested both As a result of earlier inspections by the arise as a result of different possible interpretations of the tax rules Tax liabilities of a contingent nature could inspected for any tax which has not been subject to audit and for which All group undertakings are liable to be The business units described below are based on the group organizational structure as it was at the end of The business units described below are based on the group organizational at 31 December 2010), allowing it to make deductions for reinvestment of exceptional profits as permitted by permitted as profits of exceptional for reinvestment deductions it to make allowing 2010), December at 31 March), 4/2004 of 5 Legislative Decree Tax Law (Royal Text of the Corporation of the Consolidated article 42 the generated during correspond to revenue 2010) which at 31 December (€65,514,000 totalling €279,000 2008, generated in the 2007, to revenue 2010 they corresponded (at 31 December of €2,327,000 financial year and €54,522,000, €18,871,000 €46,507,000, €416,360,000, to amounts of 2010 financial years 2009 and respectively). €388,968,000 respectively. €173,641,000, €392,358,000 and was €110,831,000, year, the year, as well as the 2010 financial 4/2004 of 5 March, for the 2011 financial Legislative Decree making up the reports for the different companies in the report appears in the individual information to be included Group. audits Tax the Company Tax for the inspection for disagreement with was given of the final settlement of In 2011 notification of the different motions for reconsideration filed against the final the 2005 financial year, as well as resolution instituted in relation to Company Tax for the years 2003, 2004 and settlements corresponding to the inspections reconsideration filed against the above acts has been contested before 2005. The rejection of the motions for the total amount of the quotas subject to appeal being €870,000, the Central Economic Administrative Tribunal, of the said tax debt. having, nevertheless, paid the amount of subsequently merged companies. The result was a final assessment for tax by the group and by the acquired and All was due to timing differences in the assessment for corporate income tax. €28,585,000 of which €13,259,000 The Bank has, in any event, made suitable provision for any contingencies of these assessments were contested. assessments. that could arise in relation to these tax within the banking industry. However, the possibility of such liabilities applicable to certain types of transaction the resulting tax charge would not be such as to have any significant impact arising is remote, and if they did arise on the annual accounts. the statutory time limit has not expired. Note 36. Segmental information Segmentation policy secondarily according to geography. Segmental reporting is organized primarily according to business units, and Banking and Banco Urquijo), the year 2011. For customer-facing businesses (Commercial Banking, Corporate Asset Management is a cross selling segmentation is based on the types of customer addressed by those units. branch network. business that offers specialized products which are sold through the group’s Asset 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Management Banco Urquijo (32,213) 602,062 187,466 2011 Banking Corporate Banking Commercial t or loss 389,759 183,266 19,325 9,712 ts/losses) 0 ts/losses (1) (382,383) nancial assets and other assets are included. t or loss Operating profi t before tax, by segment by t before tax, t before tax - reconciliation 389,759 183,266t or loss before tax 19,325 9,712 Consolidated Each business division is treated as a free-standing operation. Where services are provided by one division provided by one division services are operation. Where as a free-standing division is treated Each business as well as the generic and analytical accounting, the direct costs allocated to it through Each business pays capital the equivalent of the minimum regulatory in such a way that each business has Capital is allocated table: division are shown in the following Key data for each business of which: personnel expenses (412,659) (6,512) (16,652) (11,705) Provisioning expense (net)Provisioning Impairment lossesOther gains/lossesOperating profi 0 (404,316) 0 2,570 0 0 86 1,583 (41) 0 0 0 Net Interest income and commissions (net)Fees Other incomeGross incomeOperating expenses 379,777 1,275,890 165,901 26,658 24,859 1,680,526 (886,451) 27,753 15,978 201,762 (21,066) 9,203 28,040 509 (32,632) 50,329 6,598 (19,410) 29,122 573 €’000 Business unit segmentation unit Business accounting individual on the is based unit each business for information and methods: principles Presentation and made, have been and adjustments eliminations consolidation after all group undertaking, of each records or more are allocated to one business lines where particular for income and expense accounting on an analytical business to according to the thus be assigned each customer can and expense for entities. The income corporate have been allocated. which they on the The impact of this pricing applies. etc.) inter-unit services, systems, (distribution of products, to another is nil. group’s income statement to Central Services divisions. indirect costs attributable to the requirement is allocated by reference its risk exposure. This minimum capital requirement to cover the National Stock for customer-facing businesses and for each business (the Bank of Spain supervisory authority [CNMV] for Asset Management). Market Commission business unit a) Segmentation by financial data for each business unit for the year 2011 are shown in the table Details of profit before tax and other totals shown in the table with those shown in the consolidated group below, along with a reconciliation of the accounts: Ratios (%) ROE ciencyEffi Other details EmployeesBranches in SpainProfi All Business Units (+/-) Eliminations (inter-segment profi 52.7% 1,322 9.3% 7,259 10.4% 16.3% 2 94 53.7% 6.2% 15 207 66.7% 14.7% 153 -- Profi (+/-) Unallocated profi ts/losses (+/-) Other profi (+/-) Income tax and/or discontinued operationsProfi 0 (1) Impairment of fi

Statutory informationBanco Sabadell Annual Report 2011 218 Statutory informationBanco Sabadell Annual Report 2011 219

Asset Asset WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Management of consolidation from Banco Urquijo 42,181 612,021 464,341 (189,861) 2010 Banking Corporate Banking Commercial Commercial ts/losses) 0 ts/losses ts/losses (1) t or loss 475,175 108,815 13,753 14,278 mortgage loans and credit facilities. The product range for savers includes deposits (on demand and term), mortgage loans and credit facilities. The product range for savers includes mutual funds and pension plans. as financing, treasury services transaction banking to more sophisticated, tailor-made solutions in such areas and corporate finance. managers, portfolio mutual funds managed by the Banco Sabadell group and major global fund on a wide variety of underlyings management, open-end investment companies (OEICs), products issued in fixed-income and equity and with a range of time horizons, unit-linked investments, brokerage services hedge funds, private equity, securities and alternative investment products (collective investments in renewable energy, etc.). funds and investment companies (SICAVs) and actively managing asset portfolios. t or loss before tax t before tax, by segment by t before tax, t before tax - reconciliation 475,175 108,815 13,753 14,278 Consolidated of which: personnel expenses (436,181) (6,452) (19,202) (10,809) Average total assets for the group as a whole at 31 December 2011 were €96,009,015,000 compared with Average total assets for the group as which ordinary income is derived are described below for each business The types of products and services from - Commercial Banking offers products both for investing and for saving. Products for investment include products and payment media such as credit cards and transfers. Also of significance are insurance - Corporate Banking has a comprehensive offering of specialized financing services and solutions, ranging from - Banco Urquijo provides a comprehensive advisory service covering the whole range of financial products: - Asset Management creates investment solutions for customers mainly by administering and managing mutual €’000 (+/-) Eliminations (inter-segment profi (+/-) Other profi (+/-) Income tax and/or discontinued operationsProfi 0 Net Interest incomeNet Interest commissions (net) and Fees Other incomeGross incomeOperating expenses expense (net)Provisioning Impairment lossesOther gains/lossesOperating profi Profi 378,981 1,343,669Ratios (%) ROE ciencyEffi 153,677 17,426Other details Employees 25,924Branches in Spain 1,748,574 (946,009) 26,888 19,173Profi 0All Business Units 183,158 (327,390) 12,055 (23,352)(+/-) Unallocated profi 31,284 17 0 (50,991) (35,029) 49,564 3,503 0 (18,651) 32,942 (191) 1,641 0 (125) 54.1% 11.2% 1,412 0 7,324 (466) 0 12.7% 9.7% 2 (13) 89 59.7% 4.6% 14 219 56.6% 24.5% 158 -- €87,449,374,000 a year earlier. unit: The fi gures for 2010 include Banco Guipuzcoano for the whole of the fi nancial year (Banco Guipuzcoano was included in the scope nancial year (Banco Guipuzcoano was gures for 2010 include Banco Guipuzcoano for the whole of the fi The fi December 2010). property assets. (1) This includes an extraordinary impairment loss recognized against the group’s

total WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Share of av. Share of av. services (*) Income from total return Share of av. Deposits from other creditors intersegmental ordinary income Total Ordinary income Share of av. Share of av. total volume Consolidated Individual Consolidated Distribution of Interest and similar income by geography Distribution of Interest and similar income by total return Share of av. 31.12.2011 31.12.2010 31.12.2011 31.12.2010 Segmentation of net interest income and income from servicesSegmentation of net interest income and income from customers Ordinary income 0 0 (39,621) (49,301) (39,621) (49,301) to other debtors Loans & advances Share of av. Share of av. total volume 31.12.2011 31.12.2010 31.12.2011 31.12.2010 31.12.2011 31.12.2010 The following table shows the net interest income and the net fee and commission income generated by each net fee and commission income generated shows the net interest income and the The following table The ordinary income generated by each business unit in 2011 and 2010 was as follows: was as and 2010 in 2011 unit each business by generated income The ordinary The main financial risks faced by Banco Sabadell group companies in the course of their operations involving the The main financial risks faced by Banco Sabadell group companies in the of risk ensures that shareholder The group is aware that the accurate and efficient management and control European Union Other OECD Other countries 29,970 27,447 36,088 0 18,467 33,477 0 131,762 50,488 66,549 21,513 15,997 business unit in 2011, as a proportion of the total: business unit in 2011, Note 37. Financialrisk management basis to realize synergies and ensure Risk management and risk policy are conducted centrally on a group-wide relates to the group as a whole, overall control. For this reason, most of the information provided in this note Bank. except in a number of cases where the data relates almost entirely to the use of financial instruments are credit risk, market risk and liquidity risk. in a context of sustainable growth. value is maximized and that an appropriate degree of solvency is maintained Total 3,087,604 2,550,588 3,394,082 2,644,787 Domestic market Export markets: 3,030,187 2,496,033 3,207,330 2,511,753 (*) Percentage of the total fee and commission income for each segment. (*) Percentage geography b) Segmentation by income by geography for the years 2011 and 2010 was as follows: The distribution of interest and similar €’000 % Commercial BankingCorporate BankingBanco UrquijoAsset Management to (-) Adjustments and eliminations intersegmental ordinary income 2,596,356 2,370,613 450,043 123,736 336,161 63,937 60,737 126,906 72,327 52,332 2,720,092 938 2,497,519 4,454 6,678 1,062 4,033 9,782 450,981 337,223 68,391 67,415 76,360 62,114 €’000 Total 3,171,073 2,831,433 96,185 92,482 3,267,258 2,923,915 BUSINESS SEGMENT Commercial BankingCorporate BankingBanco UrquijoAsset ManagementTotal 82.1% 16.7% 84.1% 0.0% 1.2% 14.2% 0.0% 88.3% 1.7% 100% 6.9% 89.8% 0.0% 4.8% 100% 8.4% 84.3% 0.0% 1.8% 100% 6.0% 100% 6.2% 3.5% 100% BUSINESS SEGMENT

Statutory informationBanco Sabadell Annual Report 2011 220 Statutory informationBanco Sabadell Annual Report 2011

221 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo The ongoing management of risk is supported by robust control procedures to ensure The ongoing management of risk is supported The Board of Directors is committed to maintaining processes for the management and is committed to maintaining processes The Board of Directors Banco Sabadell has opted for a prudent and balanced policy on risk to ensure sustained and on risk to ensure sustained and opted for a prudent and balanced policy Banco Sabadell has Solvency. creation. It is set by the group for maximum value growth in line with the strategic targets profitable business from building able to prevent concentrations of risk of limits and thresholds should be vital that the structure For this reason, of the Bank’s capital resources. to compromise a significant proportion up in such a way as denominator level and quantified under a common taken into account in decisions at every the risk variable is capital. in terms of assigned levels of the powers and discretions at different on policy, setting limits, assigning control of risk: deciding supervision and techniques of measurement, management models, procedures organization, and approving is a clear separation of functions between risk-originating business and control. At the executive level there managing and controlling risk. units and the functions responsible for defined responsibilities for monitoring indicators and predictive alerts, compliance with specified limits, clearly methodology.. and the use of an advanced risk assessment With this in view, the management and control of risk has been embodied in a broad framework of principles, principles, of broad framework in a embodied has been of risk and control the management this in view, With • • Responsibility. • Monitoring and control. monitoring and control through regular reviews of borrowers’ Credit risk exposure is subjected to rigorous against credit risk, both in respect of specific losses actually incurred at the The group makes provisions to cover provided by each customer and to guarantee an appropriate degree of To maximize the business opportunities with customers and by handling The relationship manager monitors the business aspect through direct contact Committee, which then sub- The Board of Directors delegates powers and discretions to the Risk Control — in line with the New Basel Capital The establishment of advanced methodologies for managing risk exposures which coordinates initial out-of-court Recovery of past-due accounts is the responsibility of a specialized function analysed by asset type, counterparty Year-end carrying values of financial assets involving credit risk exposures, policies, procedures and advanced valuation methods, forming an efficient decision-taking structure whose aim is whose structure decision-taking an efficient forming methods, valuation advanced and procedures policies, risk. return and balance of optimum an to achieve Underlying principles are control of risk. These management and principles for the laid down basic Sabadell group has The Banco in the following paragraphs. described Credit risk of one of the parties to a contract for a financial instrument failing to perform Credit risk arises from the possibility liabilities. the obligations arising from its financial their obligations to the group, with exposure limits for each counterparty creditworthiness and their ability to meet to be acceptable. It is also normal practice to mitigate exposure to credit being adjusted to levels that are deemed collateral or other security to the Bank. risk by requiring borrowers to provide to likely in the light of past experience. This is done in such a way as balance sheet date and for losses considered or loss provisions even in the event of a major change in economic conditions ensure that losses could not exceed in borrower quality. risks is shared between the relationship manager and the risk analyst, who security, responsibility for monitoring view of each customer’s individual by maintaining effective communication are able to obtain a comprehensive circumstances. approach making use of his specialized their day-to-day banking, while the risk analyst takes a more system-based knowledge. on credit approval management delegates authority at each level. The implementation of authority thresholds loss calculated for each business systems ensures that powers delegated at each level are linked to the expected loan or other transaction that is requested. that proactive measures can be Accord (NBCA) and industry best practice — also benefits the process in ensuring risk assessment tools such as credit taken once a risk has been identified. Of vital importance in this process are as indicators that serve as advance rating for corporate borrowers and credit scoring for retail customers, as well alerts in monitoring risk. legal department or by independent negotiations and, where necessary, legal proceedings conducted by the group’s of the recovery process are evaluated legal advisors, depending on the nature and size of the debt. The outcomes place. to measure the effectiveness of the loss mitigation procedures that are in out in the table that follows. These type and instrument type, and for domestic and foreign operations, are set are based on the maximum values give a good indication of maximum exposure to credit risk since they indebtedness for each borrower at the close of each year.

Total WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Foreign Foreign 8 8 2 3 6 6 8 6 2 3 8 7 operations 47 47 19 20 100 100 2011 2010 Spanish Spanish operations Total Foreign Foreign 2011 2010 operations Spanish Spanish operations 2,523,057 2,896,674 373,617 1,783,870 154,681 1,938,551 The values of the credit risk exposures described above have not been reduced by the value of any collateral or The values of the credit risk exposures described above have not been reduced be mortgages on buildings for Guarantees normally consist of charges on property, and will in most cases that is, by framing them in All these risk mitigation techniques are in a form that affords full legal certainty, The group also has exposures and commitments to borrowers of a contingent nature. These generally arise from to borrowers of a contingent nature. These generally arise from The group also has exposures and commitments by Spanish region is as follows: The distribution of gross loans and advances Of which: doubtful assets 4,655,153 88,015 4,743,168 3,854,022 68,051 3,922,073 Of which: doubtful assets 15,110 1,002 16,112 21,597 757 22,354 Of which: doubtful assetsOf which: doubtful 561 298 859 209 298 507 Catalonia Madrid Community of Valencia Balearic Islands Principality of Asturias Basque Country Castile-Leon Andalucía Total other credit enhancement that may have been accepted as security. Such guarantees are in everyday use with the other credit enhancement that may have been accepted as security. Such types of financial instrument dealt in by the group. the Bank will also accept other types residential use, either completed or under construction. To a lesser degree, and the like, or deposits of securities. of security such as mortgages on business premises, industrial buildings is the aval or third-party guarantee, Another type of security commonly used by the Bank to mitigate credit risk provided that it is fully satisfied as to the solvency of the guarantor. jurisdictions, thus ensuring contracts that are legally binding on all parties and can be enforced in all relevant subject to internal review for legal that the security can be realized at any time. The whole contract process is contracts are drawn up under the soundness and legal opinions may be sought from international experts where laws of a foreign country. guarantees given by the group or commitments under credit facilities extended to customers for up to a given limit under credit facilities extended to customers for up to a given limit guarantees given by the group or commitments required. These facilities also involve credit exposure and are subject to so that they have access to funds when and control as described above. the same processes of approval, monitoring % €’000 Exhibition to the credit risk to the Exhibition Cash and central banksCash and central advances to credit Loans and institutions 925,977 364,701 1,290,678 880,189 373,411 1,253,600 Public administrationDebt securitiesinstitutionsPublic assetsCredit Other private sectorsDoubtful derivatives Trading 7,891,190 Derived from coveragecontingents 48,366 7,939,556 11,599,917 6,369,268 Risks 3,007,445 51,850 6,421,118 96,752 3,104,197 Commitments contingents 707,865 2,221,977 693,001 124,357 2,346,334 8,281 12,307,782 Total 1,414,415 0 8,281 23,257 1,437,672 562,747 9,204,995 7,933 1,135,092 417,685 1,255,748 11,133 1,146,225 11,383,793 0 7,933 7,895,158 686,604 451,864 8,347,022 7,970,236 274,072 9,891,599 605,817 339,786 8,310,022 11,657,865 0 510,397 15,758,448 1,116,214 417,685 111,881,829 374,993 4,952,186 106,929,643 111,532,052 16,133,441 105,142,123 6,389,929 487,564 0 487,564 Other private sectors 66,931,057 4,017,365 70,948,422 68,701,250 2,964,499 71,665,749 Public administration other debtorsLoans and advances to Public 68,982,121 4,194,553 73,176,674 69,709,249 2,051,064 3,011,578 2,228,252 177,188 72,720,827 1,007,999 47,079 1,055,078

Statutory informationBanco Sabadell Annual Report 2011 222 Statutory informationBanco Sabadell Annual Report 2011 223 6 1 17 12 34 30

100

2011 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 22 11 23222428 19 25 26 27 100 100 2011 2010 Measured by credit rating /scoring Measured by 2011 2010 2009 2011 2010 nancial assets AAA/AA A BBB BB B Other As much as 82% of the Bank’s credit risk is internally rated. The distribution of these exposures, rated on an As much as 82% of the Bank’s credit risk is internally rated. The distribution As mentioned earlier, the group uses internally generated models to rate most of the borrowers (or transactions) internally generated models to rate most of the borrowers (or transactions) As mentioned earlier, the group uses Guarantees involving a charge on property are drawn up as public instruments and executed before a notary to a notary before and executed instruments up as public are drawn property charge on a involving Guarantees in all but exceptional arranged and will again, favour may be in the Bank’s guarantees or suretyships Personal enters into in line with current industry practice, operations the Banco Sabadell group, In its market trading arises these types of guarantee or credit enhancement of credit risk in relation to all The primary concentration ratios for the Banco Sabadell group are as follows: The loan loss ratios and loan loss coverage Loan loss ratio ratioLoan loss coverage 48.5 5.95 56.6 5.01 69.0 3.73 internal rating scale based on the available information, is as follows. with whom it incurs credit exposure. These models have been designed in accordance with best practice as with whom it incurs credit exposure. These all asset portfolios giving rise to credit risk are subject to these models, partly proposed by the NBCA. However, not a certain degree of experience of actual cases of default. To give because the design of such models demands portfolio, the following table uses risk categories defined in the financial a clear view of the overall quality of the Bank of Spain’s Circular 4/2004. These categories are used to analyse credit reporting standards laid down by the to estimate provisioning requirements to cover against impairment losses risks to which the group is exposed and in portfolios of debt instruments. be fully valid and effective as against third parties. A public instrument, in the case of a real property mortgage, mortgage, real property of a in the case A public instrument, parties. third as against effective valid and be fully third parties vis-à-vis in law and its effectiveness to make registry land the appropriate in be registered will then the Bank. deposited with items are generally pledge, the pledged mortgage or In the case of a chattel complete. loan has in effect until the the security remains by borrowers and termination are not open to unilateral Contracts in full. been repaid up to contract is drawn to ensure that the public instrument authorized in the form of a notarially cases, be of default. Such can be taken to enforce it in the event security and that legal proceedings give maximum legal demand claim against the guarantor. and give the Bank a direct, first guarantees are irrevocable which it trades in the institutional counterparties with up netting arrangements with most of agreements to set measures are Support Annexes (CSAs). Both these and has agreed a number of Credit derivative instruments risk. Security excessive concentrations of, credit the group’s exposure to, and prevent designed to mitigate (€318 million at the the end of 2011 totalled €426 million Sabadell by way of collateral at deposits held by Banco end of 2010). the credit risk exposures resulting from loans to finance home purchases or from the use of mortgages to mitigate of of real estate. Loans secured by mortgages currently account for 55% development of residential or other types all group loans and advances. Analysis of risk exposures credit rating by % % Credit quality of fi Negligible risk Low risk Medium-low risk Medium risk Medium-high risk % High risk Total Total WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 2011 2010 2011 2010 Average Maximum Minimum Average Maximum Minimum known as structural risk. This can be sub-classified into interest rate risk, currency risk and liquidity risk. These interest rate risk, currency risk and liquidity risk. This can be sub-classified into known as structural discussed separately below. categories of risk are markets. Trading on the spot or the derivatives instruments, equities and bonds, whether in foreign exchange this section and capital market operations, with which be undertaken as part of treasury of this kind will often is specifically concerned. Interest rate risk is managed on a consolidated basis for the whole group. This task is performed by the Asset Interest rate risk is managed on a consolidated basis for the whole group. macro-hedge is to reduce the volatility Cash flow macro-hedges of interest rate risk: the purpose of the cash flow Market risk is measured by the VaR (Value at Risk) method, which allows the risks on different types of financial which allows the risks on different by the VaR (Value at Risk) method, Market risk is measured and reports on current risk levels and on compliance with the limits Market risk is monitored on a daily basis by special simulation exercises and extreme market scenarios (stress Risk control of this kind is supplemented by the 1-day VaR at a 99% confidence level were as follows: Risk levels for 2011 and 2010 as measured • Risks generated through proprietary trading or market making activities by group undertakings, including trading or market making activities by group generated through proprietary trading Risks • Different approaches are taken to the management of market risk, depending on which of the group’s main of the group’s depending on which of market risk, to the management approaches are taken Different banking businesses, banking and corporate commercial customer-focused arising from the group’s Risks • Interest rate riskriskCurrency risk - tradingSpreadEquity VaRCredit Aggregate Currency risk - structural 0.82 3.50 1.52 5.24 1.23 2.46 0.61 0.00 0.45 1.56 1.06 1.96 0.55 0.00 0.00 0.00 6.00 10.78 0.02 1.98 4.04 2.61 4.03 10.12 0.91 6.60 0.08 2.89 2.09 0.84 7.32 0.01 0.35 3.29 5.52 2.05 Interest rate risk on different balance sheet assets Interest rate risk arises from changes in market rates of interest that impact movements, which may ultimately feed and liabilities. The group is exposed to this risk of unexpected interest rate as is common in banking, there are through into unforeseen changes in interest margins and economic value if, or off-balance sheet exposures. temporary mismatches in the maturity or repricing dates of asset, liability by means of transactions (micro- and and Liability Committee. This means actively managing the balance sheet expected returns. For risk management macro-hedges) designed to optimize the level of risk exposure in relation to of the interest rate risk from and accounting purposes the group maintains two distinct types of macro-hedge portfolios of financial instruments: horizon. The macro-hedge is thus of net interest income due to changes in interest rates over a one-year time up of highly probable assets and a hedge of future cash flows related to the net exposure of a portfolio made hedging instruments used for this liabilities with exposures similar to interest rate risk. At the present time the purpose are interest rate swaps. €Mn. market transaction to be analysed as a single class. The VaR method provides an estimate of the potential VaR method provides an estimate of to be analysed as a single class. The market transaction result from an adverse, but normal, movement in any of the above risk maximum loss on a position that would money terms and is calculated at a specified date, to a specified confidence factors. This estimate is expressed in level and over a specified time horizon. risk control functions. Limits are assigned by the Board of Directors for each assigned to each unit are sent to the to amounts, VaR or sensitivity limits, as applicable). This makes it possible risk monitoring unit (based on nominal and measure the contribution of each risk factor. keep track of changes in exposure levels that is validated by back testing techniques which are used to verify testing). The reliability of the VaR methodology specified confidence level. Using the VaR methodology does not, however, VaR estimates are consistent with the be above the set limits, as significant market movements may occur that rule out the possibility that losses will exceed the confidence levels being applied. Market risk Market as a instrument of a financial cash flows or future fair value in the fluctuations possible from risk arises Market The distinguished. can be factors market risk types of Several risk. market factors affecting in the of changes result credit spreads. and equity prices and exchange rates are interest rates, main types to the risk: lines has given rise business

Statutory informationBanco Sabadell Annual Report 2011 224 1,175,401

Statutory information5,738,613 Banco Sabadell Annual Report 2011 225 Not Not 181,575 2,232,820 sensitive Total

sensitive Total

1,613,396 0 (1,710,749) 0 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 5 years 5 years More than More than (2,863,194) (10,226,143) 5 years 5 years From 4 to From From 4 to From 0000 4 years 4 years From 3 to From From 3 to From 3 years 3 years From 2 to From 1,455,088 923,467 1,077,649 4,514,224 10,278 13,516,152 From 2 to From 2 years From 1 to From 2 years 1,820,211 From 1 to From From 3 to From 12 months From 3 to From 12 months 785,475 831,423 16,350 14,556 60,840 33,108 67,127 292,398 809,840 306 0 3 months From 1 to From 3 months From 1 to From 0 3,865 826,304 732,243 155,376 130,231 553,355 3,337,239 0 0 0 0 0 0 0 0 0 10,798,10410,798,104 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 8,063,804 8,063,804 8,063,804 0 0 0 0 0 0 0 0 or less 72,857 1 month 242,366 (168,057) 11,756,367 11,312,757 (5,584,172) (5,842,745) (8,243,679) (1,980,674) 1,534,302 0 06,394,6832,454,078 1,850,243 312,255 6,119,611 4,928,9284,092,752 54,097 29,419 300,000 3,577,855 1,649,679 0 1,690,004 2,238,4912,376,721 2,703,783 5,322,460 (1,553,871)13,035,037 0 0 (984,665) 1,588 (2,419,228) (2,284,277) 0 (459,463) 25,362,430 0 2,322 0 0 0 0 12,189,273 13,723,575 1,037,256 312,5451,771,396 811,967 647,316 1,296,524 30631,9612,194,035 0 0 0 0 or less 16,956,098 2,948,463 2,029,67734,996,936 23,143,049 10,652,115 1,363,842 1,314,300 8,739,288 16,889,124 5,271,928 12,413,087 3,940,696 100,437,380 3,503,51519,500,876 1,540,488 16,709,142 22,130,308 542,923 7,547,970 5,443,661 5,453,194 7,323,244 2,835,511 8,137,445 0 10,799,692 51,241,810 100,437,380 12,613,144 22,183,188 32,888,445 1,127,946 574,589 440,375 236,651 757,704 181,575 71,003,618 1 month 998,048 87,831 1,012,688 335,184 0 0 0 0 17,246 2,450,997 17,246 335,184 0 0 0 0 1,012,688 87,831 998,048 7,638,364 6,491,191 722,000 55,540 41,435 240,917 24,795 21,304 36,156 5,026 8,123,339 6,269,607 (1,345,006)8,123,339 6,269,607 (4,181,098)1,286,303 13,408,458 17,393,623 (9,959,445) (148,805) (3,199,676) (1,653,777) (4,366,277) (1,084,012) (2,626,094) (5,980,249) 0 0 4,319,065 379,859 884,357 1,170,329 915,493 543,304 510,528 5,219,441 9,573 13,951,948 5,219,441 1,170,329 915,493 543,304 510,528 9,573 4,319,065 379,859 884,357 9,746,277 1,532,239 678,986 3,934,125 6,576,819 2,624,855 3,344,231 2,040,246 1,536,776 1,637,869 5,035,783 26,895,070 32,173 164,367 66 9 3,758 313 11,993,820 0 12,623,269 22,782,124 34,262,043 1,306,913 762,390 391,438 351,432 578,291 1,306,913 762,390 391,438 351,432 578,291 34,262,043 73,057,900 22,782,124 97,099,209 0 12,623,269 6,518,010 5,833,888 1,918,800 959,536 883,264 2,817,451 36,200,522 23,305,355 18,662,382 14,158,052 5,219,395 2,929,359 2,135,252 11,819,016 8,057,447 783,720 5,043,686 50,146,515 589 97,099,209 10,079,782 8,228,759 2,425,346 17,461,893 8,595,798 4,969,671 3,672,036 16,166,504 25,499,418 Fair value macro-hedges of interest rate risk: The purpose of this kind of hedge as an accounting tool is to tool is to as an accounting of hedge this kind of The purpose rate risk: of interest macro-hedges Fair value out to measure their and tests carried on a regular basis are reviewed of hedging operations The results to be flexible approach allowing a more interest rate risk, are used to measure of methodologies A number table: and 2010 is presented in the following rate sensitivity at 31 December 2011 An analysis of interest cover the economic value of the hedged portfolios, the components of which are fixed-rate assets and liabilities, and liabilities, assets fixed-rate which are of the components hedged portfolios, of the value the economic cover sold derivatives and for example), and floors, (caps sheet items balance linked to in or embedded that are options are used for this purpose hedging instruments present time the Desk. At the through the Treasury to customers swaps. interest rate effectiveness. in interest of net interest income to changes methodologies is to measure the sensitivity taken. One of these values of financial matrix. In this technique the carrying horizon on a maturity and repricing rates over a one-year rates of interest dates or the dates on which their are grouped according to their maturity assets and liabilities is assumed of this analysis the remaining maturity is nearer in time. For the purposes are reviewed, whichever accounts, it is of each payment. In addition, for current 31 December 2011 to the due date to be the time from past experience. agreed terms, in line with the Bank’s maturities will exceed contractually assumed that expected have on net interest that a change in interest rates would an estimate to be made of the effect The analysis allows and in a sustained manner. that all rates change by the same amount income, assuming Hedging derivatives Interest rate sensitivity gap 31.12.2010 Loans and advances market Money Capital market Other assets assets Total Customer accounts market Money Capital market Other liabilities liabilities Total Other assets Customer accounts Interest rate sensitivity gap €’000 €’000 31.12.2011 Loans and advances Administration of which: Public market Money Administration of which: Public Capital market Administration of which: Public Total assets Total market Money Capital market Other liabilities liabilities Total Hedging derivatives WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo The term structure shown in the table is typical for a bank with commercial banking as its main activity, with with activity, its main as banking with commercial a bank typical for table is in the shown structure The term different interest rate the effects of which measure by simulations of analysis is supplemented This kind to a change of in relative terms in the latter case, interest income and net asset values, The sensitivity of net and is generally associated with facilitating customer operations. Foreign currency exposure is not significant limits for intraday position s (positions resulting from all transactions up The Board of Directors sets overall daily on its available cash resources to meet contractual obligations related The group is exposed to daily demands levels and for levels of structural Limits are set by the Board of Directors for the maintenance of minimum cash and outflows over a short, In addition, a review is carried out of gaps or mismatches between cash inflows maturity/repayment dates; for In the matrix presented below, times to maturity have been based on contract gaps or mismatches that are negative in the very short term, positive for terms of up to one year (reflecting the the (reflecting one year of up to for terms positive short term, the very in are negative that or mismatches gaps matrix also The instruments. sensitive or not longer term for and negative portfolio) of the components loan to interest group’s exposure term profile of the in altering the instruments have effects that hedging shows the rate risk. simulations yield curve. These in the slope of the due to changes for example, at different maturities, movements rate effect that interest estimate of the arrive at a more precise scenario so as to to each assign probabilities to changes in interest is to measure the sensitivity of equity have. Another technique that is used movements might time horizon. of interest rate changes over a longer analysis. This measures the effect rates by duration gap (4.49% in 2010). million and 5.86 % respectively in euro interest rates would be €37.6 100 basis points (1%) current accounts as take the estimated average term for used in making this estimate is to The main assumption can be withdrawn speaking, balances in current accounts years even though, contractually roughly two and a half can normally that balances in current accounts is consistent with the observation at any time. This assumption other than is made is to exclude all possible maturities stable. Another assumption that be expected to remain are not taken repayment or requests for early redemption that is, such scenarios as early those fixed by contract, the 100 basis point change in interest rates is immediate and sustained into account. Finally, it is assumed that of this kind is itself hypothetical as there is nothing to indicate that this throughout the time horizon. A change It has been used for illustrative purposes only. particular change should be expected. Currencyrisk in exchange rates between different currencies. The group’s structural Currency risk arises from possible changes throughout 2011 and was associated with long-term investments in foreign currency exposure remained stable foreign branches and subsidiaries. overnight positions (positions reached at the end of the day). These limits to a certain moment in a single day) and basis. are monitored and reviewed on a daily Liquidity risk difficulty in meeting obligations associated with financial liabilities that are This is the risk that a bank may have financial asset. settled by the delivery of cash or another deposits, drawdowns of credit facilities, settlements on derivatives and to financial instruments, such as maturing only a minimum amount is ever actually required and this can be predicted so on. Experience shows, however, that with a high degree of confidence. basis and holds a diversified portfolio borrowing. The group monitors changes in its liquid asset position on a daily of such assets. It also carries out yearly projections to anticipate future needs. between the date to which the medium and long time horizon using a maturity matrix based on the time remaining and liabilities. financial statements were made up and the contract maturity dates of assets time to maturity has been taken as assets and liabilities on which payments are made over a period of time, the the time between 31 December 2011 and the due date of each payment.

Statutory informationBanco Sabadell Annual Report 2011 226 Statutory informationBanco Sabadell Annual Report 2011 227 xed xed No fi No fi maturity Total maturity Total

2,232,820 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 181,576 years Sub-total years Sub-total More than 5 More than 5 years years From 1 to 5 From 1 to 5 From months months From 3 to 12 From 3 to 12 From months months From 1 to 3 From 1 to 3 From less less 1 month or 1 month or 0 0 3,865 826,304 1,571,205 3,337,239 5,738,613 0 5,738,613 00 151,763 245,914 72,857 975,435 292,398 445,529 809,840 232,604 306 2,051,245 0 1,175,401 0 1,175,401 0 1,534,3020 8,672,678 25,781,765 30,767,145 88,024,292 6,679,375 16,123,329 0 12,413,0880 100,437,380 6,398,555 00 1,029,485 1,846,371 2,214,622 312,255 4,196,751 0 0 4,476,267 11,776,349 6,145,224 25,362,430 0 0 00 13,033,4490 4,331,2610 0 6,397,8880 998,048 0 4,996,353 25,362,430 0 1,588 13,706,9120 11,322,583 1,534,302 13,035,037 90,613,031 6,684,826 15,646,639 25,175,856 31,783,127 996,921 21,989,118 97,099,209 6,486,178 87,831 166,851 12,189,274 26,632,721 13,723,575 1,007,6880 73,057,900 32,256 913,751 00 9,746,278 340,184 2,752,6610 1,246,504 18,289 1,532,239 5,112,760 1,420,616 0 13,942,375 0 1,339 678,986 93,893 73,057,900 3,586,606 0 11,915,488 9,573 36,005 2,433,751 37,647 8,561,489 13,951,948 0 0 26,730,704 1,179,005 17,246 10,798,104 6,459,359 312 10,798,104 164,367 2,450,997 11,993,820 7,638,364 26,895,070 0 0 11,993,820 0 0 1,339 8,062,465 8,063,804 0 4,331,5610 5,907,057 1,037,256 13,982,4180 20,376,612 1,765,559 312,545 26,220,395 70,822,043 459,774 811,967 1,328,944 181,576 71,003,618 5,404,847 306 4,546,750 13,505,873 0 10,278 2,162,075 13,516,152 31,961 2,194,035 sight sight Payable at Payable Payable at Payable 7,242,570 8,112,682 4,829,960 15,173,6507,242,570 19,106,804 10,100,724 88,872,378 7,782,815 19,439,242 25,200,223 13,248,730 8,226,831 97,099,209 1,538,923 50,146,515 0 50,146,515 8,579,090 14,209,010 8,979,570 22,595,699 28,496,158 6,778,16210,799,692 89,637,689 100,437,380 8,579,090 6,780,970 4,918,577 18,086,693 12,243,543 632,938 51,241,810 0 51,241,810 (7,242,570) (7,784,221) (1,097,990) (3,792,603) (24,368)(1,740,653) 21,682,404 1,740,653 0 (8,579,090) (5,536,332) (2,300,194) (6,472,370) (2,714,393) 23,988,982 (1,613,397) 1,613,397 0 regulator, the CNMV, and covers issuance of straight and subordinated bonds and mortgage and public and mortgage and public regulator, the CNMV, and covers issuance of straight and subordinated bonds These are offered to investors on sector covered bonds subject to Spanish law through CNMV supervision. Sabadell 2010 nonparticipating the domestic and global markets. The limits for issues under the Banco (€9,168 million at 31 December securities issuance programme at 31 December 2011 were €7,000 million 2010). Banco Sabadell 2011 corporate directed at both institutional and retail investors. On 10 March 2011 the In this analysis the very short-term end of the range is typically where refinancing is most required. This is due to of the range is typically where refinancing is most required. This is due In this analysis the very short-term end in any circumstances. This means, Even so, group policy is to maintain a safety margin to cover financing needs its cash requirements. Most of these The group has commitments of a contingent nature which may also affect on the capital markets is sufficient to Systematic checks are made to verify that the group’s ability to raise funds Issuance Programme: the programme has been filed with Spain’s stock market Nonparticipating Securities • Programme: this covers the issuance of corporate notes (pagarés) and is Commercial Paper Issuance • The maturity matrix at 31 December 2011 and 2010 is as follows: and 2010 2011 December at 31 matrix The maturity continually maturing short-term liabilities which, in banking, tend to have a higher turnover than assets. In practice, which, in banking, tend to have a higher turnover than assets. In practice, continually maturing short-term liabilities their funding requirements, even however, these short-term liabilities are continually being rolled over and therefore where debt volumes are increasing, can be accommodated. by the European Central Bank that inter alia, maintaining a reserve of liquid assets considered as eligible collateral for a 12-month period. is sufficient to provide funding for maturing debt issues on the capital markets the reporting year. Limits on these relate to credit facilities with agreed limits which were undrawn at close of commitments are also set by the Board of Directors and are constantly monitored. group meets its cash needs in a satisfy its requirements in the short, medium and long term. The Banco Sabadell markets to ensure diversified sources number of ways and has programmes in place to raise finance on the capital of funds. Some these funding programmes are described below. Total assets Total Customer accounts market Money Capital market Other liabilities liabilities Total Liquidity gap Other liabilities liabilities Total Liquidity gap €’000 31.12.2010 Loans and advances market Money Capital market Other assets 31.12.2011 Loans and advances Administration of which Public market Money Administration of which Public Capital market Administration of which Public Other assets assets Total Customer accounts market Money Capital market €’000 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo note issuance programme was filed with the CNMV with an upper limit of €5,000 million. On 7 June 2011 June 2011 On 7 million. of €5,000 upper limit with an the CNMV with was filed programme issuance note of €1,000 with a limit CNMV with the was filed programme note issuance corporate Guipuzcoano the Banco programme Sabadell the Banco under in circulation of notes the value 2011 31 December As of million. Euro operates a addition, Banco Sabadell 2010). In million at 31 December million (€1,614 was €2,302 directed The programme is €3,500 million. a nominal value of for up to Paper (ECP) programme Commercial US of currencies: euros, in a variety of short-term securities provides for issues investors and at institutional sterling. dollars and This finance loans and finance lease receivables. of mortgage loans, SME business funds for the transfer of Banco group as a result of the integration funds added to the consolidated does not include securitization capital markets funds have been sold on the of the bonds issued by the securitization Guipuzcoano. A portion are the mortgage bonds held by Banco Sabadell are held by Banco Sabadell. Most of and the remainder of short- with the Bank of Spain for the management on a credit facility held by the Bank pledged as security term liquidity. Other sources of funding include: Other sources of funding loans with financial and other institutions. Medium- and long-term bilateral • in the setting up of 23 securitization Since 1998 the group has participated Issues of asset-backed securities: • a series of measures to help increase the supply of funding to In 2008 the Spanish government introduced at 31 December 2010) involving As of 31 December 2010, there were only seven borrowers (five borrowers incurred by the group and This involves setting up sophisticated systems to measure each type of risk by the new Basel Capital Each year the group carries out its own capital assessment process as prescribed a qualitative internal evaluation The process starts from a broad spectrum of previously identified risks and the group’s capital requirement. This The next stage is to carry out a comprehensive quantitative assessment of the country’s economy. Banco Sabadell and Banco Guipuzcoano availed themselves of these measures to obtain and Banco Guipuzcoano availed themselves of these measures to obtain the country’s economy. Banco Sabadell totalling €5,313 million and €688 million respectively. The time government guarantees for funding transactions used expired on 31 December 2010. However, on 10 June 2011 the within which the guarantees were to be period in which the securities to be guaranteed could be issued until Spanish Treasury decided to extend the 2011 respectively, the period for the issue of securities backed by this 30 June 2011 and up to 31 December 2009 Banco Guipuzcoano did, however, carry out a €400 million issue of government guarantee. In November In December 2011, Banco Sabadell made a first issue of ordinary ordinary bonds backed by the state guarantee. of €1,500 million. The Banco Sabadell group currently has scope to make state-backed debt bonds to the amount a total value of €4,101 million. This is being held for contingent liquidity state-backed issues of securities for purposes. Risk concentrations risk faced by the Banco Sabadell group. As an active player in Credit risk is undoubtedly the main business has a sizeable concentration of exposures to other financial institutions. the global banking industry the group setting of limits by the Board of Directors and the monitoring of these limits Managing these exposures involves the specific measures are also in place to mitigate risk, including netting on a day-to-day basis. As mentioned earlier, agreements with the majority of counterparties with which derivatives are traded. borrowers (four borrowers at 31 individual exposures of more than 10% of the group’s capital; for six of these overall exposure to these borrowers December 2010) the figure did not exceed 15% of the group’s capital. The amounted to €6,015,463,000 (€4,189,326,000 at 31 December 2010). Capital management capital is sufficient to cover the The group’s general policy on capital management is to ensure that its available overall levels of risk being incurred. a broad perspective of risk that takes methodologies capable of integrating all of them. Such an approach requires case. The risk assessment systems account of possible stress scenarios and suitable financial planning in each used are in line with current best practice. and reports the results to the Accord and, in greater detail, by the Bank of Spain’s capital adequacy regulations, supervisory authority. each type of risk and appropriate of policies, procedures and systems for originating, measuring and controlling mitigation techniques. as borrower credit rating or scoring will be based on internal parameters and use the group’s own models (such

Statutory informationBanco Sabadell Annual Report 2011 228 Statutory informationBanco Sabadell Annual Report 2011

229 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo parties (1) Total Total Other related Key staff Joint venture 2011 2010 companies Associated 1 537,676 1,460,641 4,900 22,326 895,738 726,341 357,661 0 24,094 223,369 318,260 9,503 5,804 0 24,240 84 0 2,077 0 0 0 0 0 606 2,192 24,473 49,403 0 2,186 0 0 21,145 6 0 (3) (72,336) (8) (331) (12,456) (85,134) (70,638) 25 43,431 9 65 3,201 46,731 40,346 cant 308 3,349,781 848 10,974 475,302 3,837,213 3,766,888 uence 1,676 94,416 16 615,034 473,254 518,872 54 infl Jointly controlled entity or signifi No transactions that could be described as significant were entered into with directors or senior managers of No transactions that could be described concluded the sale of a building at Paseo de Gracia 36, Barcelona to On 22 June 2010 Banco Sabadell formally other than on an arm’s length basis, with any person or entity The group is not aware of any transaction, by the group with related parties, and the effect on the income statement The most significant balances recorded The group has taken appropriate action on environmental protection and improvement and to minimize possible protection and improvement and to appropriate action on environmental The group has taken Income statement: Interest and similar income Interest expense and similar charges Returns on equity instruments €’000 Assets: Loans and advances to other debtors Liabilities: Deposits from other creditors Memorandum accounts Contingent exposures Note 39. Related party transactions with any major shareholder during the years 2011 and 2010; those No significant transaction took place in the normal course of business and on an arm’s length basis. transactions that did take place were below. Those that did take place were in the normal course of the group’s the Bank, with the exception described or on the terms normally applicable to employees. business or were done at market prices the principal shareholder, Isak Andic Ermay, is a director and shareholder of the Mango Group whose chairman and of €50 million and resulted in a gross profit of €30 million. Bank. The amount involved was in excess senior manager. connected in any way to a director or are shown in the following table: of transactions entered into with them, Note 38. The environment and safety at work. environmental protection and health are subject to legal requirements on All group operations in place to legal requirements and has procedures that it substantially complies with these The group considers ensure such compliance. recycling and group-wide waste treatment, consumable as required by law. A number of environmental impacts, contingencies, Given absence of any environment-related were continued during the year. energy saving schemes any provision for liabilities or charges of this nature. it was not thought necessary to make systems) and other internal estimates appropriate to each type of risk. The assessments for each type of risk are type of for each The assessments of risk. to each type appropriate estimates other internal and systems) and financial business group’s the In addition, assigned. of capital in terms is set and a figure integrated then certain business whether as to a final determination to reach reviewed are exercises stress testing and objectives having to the Bank’s solvency, pose a threat scenarios could nevertheless possible or extreme but developments resources. its available capital regard to Fees and commissions (net) Fees Other operating income pension plans. (1) Includes employees’ Contingent commitments WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo as an independent Director. ce of Third Deputy Chairman. to pensions Total Commitments 2011 2010 2011 2010 2010 2011 Remunerations Amounts paid in salaries and other emoluments to executive directors during the year 2011 totalled €3,225,000 Amounts paid in salaries and other emoluments to executive directors during for all directors of the parent Loan and guarantee risks undertaken by the Bank and consolidated undertakings He will serve as an independent Director. On 25 November 2010 he was appointed by the Board to the offi appointed by 2010 he was On 25 November He will serve as an independent Director. * Executive Directors. * Executive and €440,000 respectively (2010: €3,844,000 and €435,000 respectively). Life assurance premiums covering and €440,000 respectively (2010: €3,844,000 and €435,000 respectively). amounted to a further €3,224,000 contingent pension commitments in respect of pension rights accruing in 2011 (2010: €2,198,000). comprised loans and company totalled €14,390,000 at 31 December 2011. Of this amount €10,028,000 consisting of €8,417,000 in loans €4,362,000 related to avals and documentary credits (2010: €11,037,000, charged was 3.16% (2010: 2.71%). and €2,620,000 in avals and documentary credits The average rate of interest Deposits held by directors totalled €3,971,000 (€3,190,000 in 2010).

José Oliu Creus * (1)Isak Andic Ermay José Manuel Lara Bosch (2) Echenique Landiribar (3)José Javier Jaime Guardiola Romojaro *Miguel Bósser Rovira Casas SelvasFrancesc Héctor María Colonques MorenoSol Daurella Comadrán CorachánJoaquín Folch-Rusiñol Lloveras Garcia-Milà M. Teresa 144.0Joan Llonch Andreu (4) 162.0José Ramón Martínez Sufrategui (5) 252.0 162.0 Cunillera José Permanyer 108.0 126.0Carlos Jorge Ramalho dos Santos Ferreira - 252.0 144.0 126.0Total 108.0 108.0 126.0 144.0 144.0 37.8 153.0 - 126.0 114.0 - 108.0 108.0 132.0 126.0 - - 156.0 18.9 126.0 37.8 108.0 153.0 18.9 - 18.9 - 144.0 - 18.9 18.9 - 289.8 162.0 - 18.9 144.0 18.9 - 162.0 - 18.9 144.0 - 289.8 162.9 162.0 108.0 18.9 - 126.0 126.9 144.9 18.9 162.9 162.9 126.0 - - 108.0 - - 132.9 18.9 150.9 2,142.0 144.9 18.9 - 153.0 1,824.0 126.0 108.0 171.9 162.9 108.0 156.0 126.0 108.0 180.9 151.2 162.9 151.2 - 2,293.2 1,975.2 €’000 Note 42. Remuneration paid to directors group and senior management to 31 December 2011 and 2010, the amounts paid to directors in fees The following table shows, for the years pension commitments for services rendered by them in that capacity: and in contributions to meet directors’ As required by the Spanish Finance Ministry’s Order 734/2004, a report on the group’s Customer Service a report on the group’s Customer Spanish Finance Ministry’s Order 734/2004, As required by the annual accounts. that follows these notes to the provided in the Report of the Directors Department has been Note 41. Customer serviceNote 41. Customer department Note 40. Agents Note group has the Ministry, the Finance drafted by 14 July of 1245/1995 Royal Decree 22 of of article purposes For the regular basis, customers on a agents to deal with appointing any agency agreements into or maintained not entered normally of the type business transactions or formally agreeing purpose of arranging of the Bank, for the on behalf by a bank. engaged in (4) At the meeting of the Board of Directors held on 25 November 2010, Mr. Llonch resigned from the post of Deputy Chairman. (4) Mr. 2010, of DirectorsAt the meeting of the Board held on 25 November (5) a resolution of an Extraordinary of DirectorsAppointed to the Board by General Meeting on 18 September 2010. He will serve (1) Appointed First 2010. the Board of Directors Deputy Chairman on 25 November by (2) 2010. the Board of Directors ChairmanAppointed Second Deputy on 25 November by (3) a resolution of an Extraordinary of DirectorsAppointed to the Board by General Meeting on 18 September 2010.

Statutory informationBanco Sabadell Annual Report 2011 230 Statutory informationBanco Sabadell Annual Report 2011

231 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo cer Salary payments to members of the senior management group (other than those sitting on the Board as on the Board sitting than those (other group management the senior of to members payments Salary the senior management undertakings for and consolidated by the Bank guarantee risks undertaken Loan and directors, management group, including executive rights granted to members of the senior Share appreciation managers with members of the Board and senior agreements between the company and Details of existing 2011 are set areas of responsibility at 31 December senior management group and their The members of the executive directors, for whom details are given above) amounted to €8,771,000 in 2011 (2010: €8,323,000). €8,323,000). (2010: in 2011 to €8,771,000 amounted above) are given whom details for directors, executive (2010: in 2011 totalled €3,335,000 senior managers of entitlements pension of accrued in respect paid Premiums €2,632,000). December €13,796,000 at 31 above) totalled details are provided directors, for whom than executive group (other credits. and documentary €1,497,000 in avals in loans and of €12,299,000 amount was comprised 2011. This totalled €7,143,000. held by senior managers Deposits of €3,189,000 resulted in personnel expenses 2010” (see note 34 (f)) incentive scheme under the new “Plan €2,323,000). during the year (2010: follows these annual out in the report of the directors that on severance of contract are set regard to compensation Governance Report. the section on the Annual Corporate accounts, as part of out below: (*) Joined the Senior Management Group in 2011. José Oliu CreusJaime Guardiola RomojaroJosé Luis Negro Rodríguez CirusAndreu Cabot Luis Buil VallIgnacio Camí CasellasJosé Canalias PuigMaría José García BeatoRafael José García NauffalSalvador Grané TerradasJoan-Mateu Grumé Sierra Junceda Moreno Pablo Juan Krauel Alonso Jaime Matas Vallverdú Managing Director Blanca Montero Corominas Deputy Secretary to the Board & Comptroller General Miquel Montes Güell Chairman Pérez-Hickman MuñozFernando Jaume Puig Balsells Products and Research Investment, Director, Ramón de la Riva Reina Assistant General Manager Rodriguez Castillo (*)Federico Secretary General MasachsEnric Rovira Risk Director, Barcelona Area Director, Catalonia Director, Pol Ramón Rovira Real Estate Management Director, Sánchez SologaistúaPedro Corporate Development Director, Muiña Varela Tomás Banco Herrero Director, Castile & Galicia Madrid, Director, Southern Region & Canary Islands Murcia & Balearic Islands Director, Valencia, Director, - Americas Business Development Director, Operations and Corporate Development Director, Manager - Operations and Corporate Assistant Development Markets and Private Banking Director, Assistant Managing Director Corporate Banking and Global Operations Director, Northern Region Director, Communication and Institutional Relations Director, Chief Financial Offi Javier Vela Hernández Vela Javier SantamansCarlos Ventura Commercial Banking Director, Human Resources Director, WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo ce held responsibility or performs any services, either for their own account or for the account of any other person, in responsibility or performs any services, similar or complementary to those of the Company, with the following any company whose objects are identical, exceptions: Act holds equity interests in any company whose objects are identical, similar or complementary to those of the are identical, similar or complementary in any company whose objects Act holds equity interests following exceptions: Company, with the Note 44. Post-balance sheet events Note 44. Post-balance Sabadell shares Offer for repurchase of Preference Shares and sale and subscription of Banco 2 December 2011, agreed to offer the The Board of Directors of Banco de Sabadell, S.A. in the meeting held on the consolidated Banco Sabadell group, holders of preference shares of issues made by member organisations of the automatic application of said effect indicated below, the repurchase of the whole of their preference shares for of Banco Sabadell shares available by those accepting the Repurchase Offer to the purchase and/or subscription sale of treasury stock of bank shares in a simultaneous public offer for subscription of newly issued shares and exclusively for the holders of these preference shares. DirectorJosé Oliu CreusJosé Oliu CreusJoan Llonch AndreuJoan Llonch AndreuJoan Llonch AndreuJoan Llonch AndreuJaime Guardiola RomojaroMiguel Bósser RoviraCarlos Jorge Ramalho dos Santos FerreiraCarlos Jorge Ramalho dos Santos FerreiraCarlos Jorge Ramalho dos Santos Ferreira S.A. Banco Comercial Português, CunilleraJosé Permanyer S.A.(Polonia) Bank Millenium, S.A. Banco Comercial Português, CunilleraJosé Permanyer S.A. BancSabadell d’Andorra, S.A. Bank Millenium Angola, Sociedad Unipersonal Company S.L., BanSabadell Holding, CunilleraJosé Permanyer Sociedad Unipersonal S.L., BanSabadell Holding, S.A. Banco Guipuzcoano, CunilleraJosé Permanyer S.A. S.I.C.A.V., Sociedad de Cartera del Vallés, Sol Daurella Comadrán S.A. Banco Guipuzcoano, Echenique LandiribarJosé Javier Sociedad Unipersonal S.L., BanSabadell Holding, S.A. BancSabadell d’Andorra, S.A. S.C.R., Aurica XXI, Sociedad Unipersonal S.A., Desenvolupament, BanSabadell Inversió S.A. Banco Guipuzcoano, Chairman cado S.C.R. de Régimen Simplifi Sinia Renovables, Director Chairman S.A. Banco Guipuzcoano, Deputy Chairman Chairman Director Conselho Geral e de Supervisao Vocal do Supervisory Vocal Board Director Chairman Chairman Director Deputy Chairman Director Position/offi Chairman Chairman Director (*) Includes a 0.066% indirect shareholding. c. related to them holds any office or position of The Directors have also confirmed that none of them or any party Director MorenoHéctor María Colonques MorenoHéctor María Colonques Echenique LandiribarJosé Javier Echenique LandiribarJosé Javier Corachán (*)Joaquín Folch-Rusiñol Garcia-Milà LloverasMaria Teresa Jaime Guardiola Romojaro Jaime Guardiola Romojaro S.A. Banco de Valencia, José Oliu Creus S.A. Banco Santander, CunilleraJosé Permanyer S.A. Banco Santander, CunilleraJosé Permanyer S.A. Consulnor, S.A. Banco Santander, CunilleraJosé Permanyer S.A. Banco Santander, Company S.A. Argentaria, Bilbao Vizcaya Banco Santander,S.A. Banco S.A. Banco Santander, Caixabank S.A. S.A. Banco Comercial Português, Argentaria, Vizcaya Banco Bilbao 0.00004 0.00005 0.00001 0.00112 Proportional(%) shareholding 0.0000064 0.092 1.7031 0.00019 0.00014 0.000209 0.00032 0.00109 Note 43. Directors’Note loyalty duty of as approved de Capital) (Ley de Sociedades Act the Companies text of of the consolidated 229 to article Pursuant have made transparency, interests of corporate the Directors, in the 1/2010 of 2 July, Decree by Royal Legislative Company: statement to the the following a. Company. vis-à-vis the conflict of interest to a direct or indirect that would give rise is in a situation No Director b. of the Companies article 231 of the consolidated text related person within the meaning of No Director or any

Statutory informationBanco Sabadell Annual Report 2011 232 Statutory informationBanco Sabadell Annual Report 2011

233 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo representing 97.71% of the total of these preference shares; preference of these the total of 97.71% representing shares; of these preference 91.26% of the total representing €228,142,500, shares; and total of these preference 64.53% of the representing of the total of these preference shares. representing 96.78% the effects of of the Bank object of the offer) to (this is the unit price for each share The Price of the Offer subject to issue and sale as a result of the application by holders The total number of shares in the bank for increasing the share capital of Banco Sabadell by 223,179,763 On 4 January 2012 the public instrument of 128 basic points over the capital ratios shown in note 28 of these This capital increase represents a growth 2011, considering this last capital increase was €0.15 (basic per share The per share profit at 31 December increase in share capital, through cash contributions, by a nominal The points on the agenda included the to extend the share capital by one of Furthermore, it included delegation in the Board of Directors of the faculty Once the period for acceptance of the offer expired on 3 January 2012 repurchase had been requested by: been requested had repurchase 2012 on 3 January expired the offer of for acceptance the period Once a. of €488,534,000, amount nominal to a total shares, preference Banco Sabadell I/2009 Series 488,534 b. amount of to a total nominal Ltd. preference shares, International Equity Series A Sabadell 456,285 c. of €32,266,300, total nominal amount shares to a S.A. sole preference Guipuzcoano Capital, 322,663 Series III d. amount of €48,390,100, to a total nominal preference shares Capital, S.A. sole Series I Guipuzcoano 483,901 at the amount of preference shares, was set 90% of the nominal value of the repurchased making payment of share for the 90 weighted prices of the Banco Sabadell to the arithmetic mean of the mean €2.6461 (equivalent of the repurchased The remaining 10% of the nominal value to 30 December 2011 −inclusive−). calendar days prior paid in accordance value of the preference shares will be increased by 2% on the total nominal preference shares of the totality of the the condition of uninterrupted holding offer once investor compliance with with the terms of the by the Bank. 2012, inclusive, has been verified acquired under this offer until 14 December shares in the bank corresponding to 90% of the nominal value of the preference shares of the preference shares of the effective peaks, was 271,179,763 shares (of which 48,000,000 are treasury stock repurchased, without the corresponding the representing 13.83% of the share capital of the bank, after the result of shares; and 223,179,763 new shares offer). by the company register of Barcelona. These shares were admitted for trading new shares was presented before in exchanges through the Continuous Market system on 12 January 2012. the Barcelona, Madrid and Valencia stock annual accounts. convertible shares €0.13). profit considering the effect of the necessarily Call for an Extraordinary General Shareholders Meeting on 23 February 2012 of Banco de Sabadell, S.A. agreed to call an Extraordinary General On 12 January 2012, the Board of Directors 2012. Shareholders Meeting on 23 February the emission and release of 691,812,205 ordinary shares each with amount of €86,476,525.625, through recognition of the right to preferential subscription and with forecast of a nominal face value of €0.125, with faculties, to execute the capital incomplete subscription, with delegation in the Board of Directors, with replacement increase setting the conditions in all that not foreseen by the Board. subscription. more fold with the faculty, if applicable, of exclusion of the right of preferential

Direct Indirect WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo ce Proportional holding (%) Registered offi Registered ces to Sant Cugat del Vallés, Spain, and changed their names to Ballerton S.L. Servicios, Spain, ces to Sant Cugat del Vallés, tered offi ce Brazil 99.99 0.01 ServicesBankingServicesReal estateReal estateReal estateReal estateReal estateReal estateReal estateNot trading MiamiHolding company Miami Sabadell Miami Sant Cugat del Vallès Sant Cugat del Vallès Sant Cugat del Vallès Sant Cugat del Vallès Sant Cugat del Vallès Valencia San Sebastian San Sebastian 100.00 100.00 100.00 94.78 100.00 100.00 100.00 100.00 100.00 ------100.00 100.00 100.00 Business start-upsReal estateComputer servicesReal estate San Sebastian Madrid Sant Cugat del Vallès Valencia - 100.00 100.00 - - 100.00 - 100.00 Holding companyReal estate fund managersInvestment Real estateReal estateReal estateReal estateReal estate LuxembourgFund managersReal estate San SebastianReal estate San Sebastian London Madrid San Sebastian Valencia San Sebastian Sebastian San 22.00 Alicante - Barcelona 78.00 - 100.00 100.00 97.85 - - - 100.00 - - - 100.00 100.00 100.00 100.00 - - 75.00 100.00 Venture capital companyVenture Financial advisersHolding companyBankingBankingBankingServices BarcelonaElectronic billing services MadridHolding company Cugat del Vallès Sant Equipment leasingHolding company Sant Cugat del Vallès Sabadell San Sebastián Andorra la Vella del Vallès Sant Cugat 100.00 Sant Cugat del Vallès - 100.00 Sant Cugat del Vallès - 100.00 100.00 San Sebastian 100.00 100.00 - 100.00 - 100.00 50.97 - - 100.00 - - - - - 100.00 .E., S.L. .E., and Herrero Internacional Gestión, S.L., respectively. S.L., and Herrero Internacional Gestión, Total (a) the companies Ballerton their regis Corporation On 28 March 2011, S.A.R.L. moved S.A. and Herrerro Serviços, Internacional, Sabadell BS Select Fund of Hedge Funds, S.I.C.A.V S.A.Sabadell BS Select Fund of Hedge Funds, S.L.Sabadell Corporate Finance, S.A.Sabadell d’Andorra Societat Gestora, Inversions Ltd.Sabadell International Equity, Inc. Sabadell Securities USA, N.A. Sabadell United Bank, S.A.U. Serveis d’Assessorament BSA, S.A.Servicio de Administración de Inversiones, S.A. Servicios Reunidos, S.A. S.C.R. de R.S., Sinia Renovables, L.L.C. Solvia Atlantic, S.L Solvia Development, S.L. Solvia Estate, S.L. Solvia Gestió Immobiliària, S.L. Solvia Hotels, S.L. Solvia Housing, S.L. Solvia Properties, Son Blanc Caleta S.L. Alta del Segura S.L.Tierras Vega Holding company S.A. Urdin Oria, S.A. S.G.I.I.C., Urquijo Gestión, S.L. Urumea Gestión, fund managers Investment Financial advisers Holding company Finance company Services Andorra la Vella Luxembourg capital company Venture Property rentals Madrid Madrid George Town Barcelona Real estate 49.11 Andorra la Vella - fund managers Investment 50.67 - Madrid Madrid 100.00 30.00 100.00 100.00 Alicante 70.00 - - - - 50.67 100.00 - - - 100.00 100.00 Interstate LLC Property Holdings, Mariñamendi S.L. S.L. Eólico Loma del Capón, Parque Promociones y Desarrollos S.L. Creaziona Levante S.A.Promociones y Financiaciones Herrero, S.L. Proteo Banking Software, Residencial Kataoria S.L. Ltd. Services, Sabadell Asia Trade Services - Ass.Cial Ltda.Sabadell Brasil Trade Real estate Holding company Real estate holding company Electricity utility Representative offi Services Miami Valencia Oviedo Churriana de la Vega Hong Kong 100.00 - 100.00 - - 100.00 100.00 - 100.00 - Herrero Internacional Gestión, S.L. (a)Herrero Internacional Gestión, S.A. Hobalear, S.P Hondarriberri, Holding company Sant Cugat del Vallès - 100.00 Grao Castalia S.L. S.A. Unipersonal Guipuzcoano Capital, S.L.Guipuzcoano Promoción Empresarial, S.A. Guipuzcoano Valores, S.A. Correduría de Seguros del Grupo Banco Guipuzcoano, Guipuzcoano, S.A. S.G.I.I.C., Guipuzcoano, S.L. La Almazara, Haygon Insurance Holding company Issuer preference shares San Sebastian San Sebastian San Sebastian - 60.00 - - 100.00 100.00 Fully consolidated companies Fully consolidated S.L. 16 Inversiones, Alfonso XII, S.A. Vida, Assegurances Segur S.A. S.C.R., Aurica XXI, S.L. Axel Group, Ballerton S.L. (a) Servicios, Ltd. Bank & Trust, Banco Atlantico Bahamas S.A.M.Banco Atlantico Mónaco S.A. Banco de Sabadell, S.A. Banco Guipuzcoano, S.A.Banco Urquijo Sabadell Banca Privada, S.A. BancSabadell d’Andorra , S.L. BanSabadell Consulting, S.A.BanSabadell Correduría de Seguros, S.L. Bansabadell Factura, S.A E.F.C., BanSabadell Financiación, S.A. E.F.C., Bansabadell Fincom, S.L. BanSabadell Holding, BanSabadell Information System S.A. S.A. Desenvolupament, BanSabadell Inversió S.G.I.I.C. S.A., BanSabadell Inversión, S.A.BanSabadell Professional, S.L. BanSabadell Renting, S.LBanSabadell Securities Services, Bitarte S.A. S.L. PropertyBlueSky Development, S.A. Dominicana, Compañía de Cogeneración del Caribe S.L.Compañía de Cogeneración del Caribe, S.A. Easo Bolsa, estate Real Banking S.A. Ederra, S.A. Europa Invest, Insurance Mall Ltd. Europea Pall S.L. Explotaciones Energéticas SINIA XXI, Gazteluberri Gestión S.L. BankingGazteluberri S.L. Banking Insurance brokers Finance company Holding company Finance company Computer services Barcelona Electricity utility fund managers Investment Bahamas Nassau, Andorra la Vella Services Services Madrid Sant Cugat del Vallès Real estate holding company estate Real Mónaco Sabadell Sant Cugat del Vallès Barcelona Holding company Sabadell Sant Cugat del Vallès Santo Domingo (Dominican Republic) Barcelona 99.99 100.00 - - 0.01 Sabadell Sabadell 100.00 Murcia 100.00 - 50.97 100.00 - 100.00 100.00 Barcelona 100.00 100.00 100.00 - - 81.00 ------100.00 100.00 100.00 - - - - 100.00 100.00 Name of undertaking Annex I: Companies in the Banco Sabadell group at 31 December 2011 December at 31 group Sabadell in the Banco I: Companies Annex

Statutory informationBanco Sabadell Annual Report 2011 234 for tax purposes Treated as Treated consolidated t to profi Contribution consolidated

Statutory informationBanco Sabadell Annual Report 2011 235 to reserves or losses of Contribution undertakings consolidated net

Group WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo investment Total assets 1,537 665,480 24,040 31,790 665,480 1,537 (611) Yes paid (3) 85,632 1,482,952 5,081,272 (289,269) 5,081,272 85,632 1,482,952 Dividends (611) Financial data (1) 100 669 597 273 2,155 263 (295)2,155 263 100 669 597 273 No 358 Capital Reserves Results (2) .E., S.L..E., 259,561 (103,102) (100,750) 0 64,256 51,674 4,903 (100,750) No nal dividends for the previous year and interim dividends paid to the group during the year. the group dividends paid to and interim year the previous nal dividends for fi Assegurances Segur Vida, S.A. Vida, Segur S.A.S.L. companies Fully consolidated S.L. 16 Inversiones, Alfonso XII, No , Assegurances 107 463 174,206 602 S.A. S.C.R., Aurica XXI, S.L. 908 868 602 210 Axel Group, S.A.Ballerton S.L. Servicios, Consulting, Ltd.Banco Atlantico Bahamas Bank & Trust, d'Andorra Banco Atlantico Mónaco S.A.M. S.A.Banco de Sabadell, System S.A.Banco Guipuzcoano, S.L S.A.Banco Urquijo Sabadell Banca Privada, BancSabadell BanSabadell 7,186 3,184 15,326 No S.L. 611,878 S.A.BanSabadell Correduría de Seguros, Information Services, 18,380 6,246 1,020 S.L.Bansabadell Factura, 30,069 S.A E.F.C., BanSabadell Financiación, Yes S.A. E.F.C., Bansabadell Fincom, 11 S.L.BanSabadell Holding, 11,400 Renting, 0 188 3 BanSabadell S.A. 1,546 Securities 11 0 S.A. Desenvolupament, BanSabadell Inversió 0 3 12,330 4,018 240 S.G.I.I.C. S.A., BanSabadell Inversión, Yes 3,687 3,356 4,018 138,678 S.A.BanSabadell Professional, (18,880) 0 BanSabadell 73,148 14,200 BanSabadell 914 11,250 Bitarte 2,760 2,500 6,438 S.A. S.L. PropertyBlueSky Development, (1,404)Yes 12,388 2,500 6,372 2,760 147,679 S.A.Compañía de Cogeneración del Caribe Dominicana, 0 50 S.L.Compañía de Cogeneración del Caribe, 173,881 21,545 5,439 3,293 2,000 12,727 60 Yes 3,293 185,415 3,861 3,485 S.A. Easo Bolsa, 37,378 26 (121) 0 Ederra, 24,040 13,597 4,965,422 S.A.Europa Invest, 15,025 24,350 Mall Ltd.Europea Pall No S.L. 6,128 581,047 S.L. 0 Explotaciones Energéticas SINIA XXI, 35,520 23 81 10,735 Gazteluberri Gestión S.L. 1,018 26,993 235 197,983 6,183 18 Gazteluberri S.L. 14,361 100 17,287 Grao Castalia S.L. 330,340 0 6,691 81 601 S.A. Unipersonal Guipuzcoano Capital, 0 24,324 0 (23) 1,196 (4,998) 6,506 S.L.Guipuzcoano Promoción Empresarial, 69,516 S.A. Guipuzcoano Valores, Software, (5,471) 0 S.A. (303,933) (3,155) Correduría de Seguros del Grupo 1,452,873 Banco Guipuzcoano, 1,312 325 (4) 71,678 60 94,214,316 0 S.A. Guipuzcoano, 3,009 Ltd. 2,500 S.A. 49 S.G.I.I.C., Guipuzcoano, 9,548 S.A.U. 185,310 S.L. La Almazara, Haygon (74,017) 0 143,030 0 0 S.L.Herrero Internacional Gestión, (228) (64) 25,766 Hobalear, 8,743 Banking 2,439 (4,728) 520 S.P Hondarriberri, 516 1,352 (1,993) 2,036 33,602 (4,574) 7,551,457 0 0 17,492 Interstate LLC Property Holdings, Equity, 0 92,099 24,376 (3,795)Mariñamendi S.L. 0 S.L. Eólico Loma del Capón, Parque 19,498 BSA, 11,000 0 Promociones y Desarrollos S.L. Creaziona Levante (4,197) 5,665,921 613,479 15,955 32,314 79,758 S.A.Promociones y Financiaciones Herrero, 19,213 900 15,150 850 0 0 1,040 13,597 (1)Proteo (63)S.A. 16 3 0 524,508 (1,404) 18,528 3,140 60 L.L.C. 119,097 Residencial Kataoria S.L. International 32,902 19,485 0 1,460 257,265 197,983 4,592 125 Ltd. Services, Sabadell Asia Trade 41,717 (13) (1,688) Services 19,368 - Ass.Cial Ltda.Sabadell Brasil Trade (9,934) 23,206 No d'Assessorament 6,128 S.I.C.A.V S.A.Sabadell BS Select Fund of Hedge Funds, 9,079 (121) 28,920 Yes 0 588 718 648 (4,665)No S.L.Sabadell Corporate60 7 1 Finance, 44,315 No 252,953 77 (8,588) S.A. 4,514 27 1 13 Sabadell d'Andorra Societat Gestora, Inversions 14 2 0 Reunidos, (1) (95) Yes 607 0 2 3 0 0 60 0 (4) 700 Sabadell (4,476) 1,196 22,645 235 1 57 27 Atlantic, (6,623) 8,740 46 0 Inc.Sabadell Securities USA, 0 1,503 (31,258) Yes 554 354 N.A.Sabadell United Bank, (38,541) No 0 7,968 959 (519) (175)Serveis 299 (5,369) 71,668 6,330 Yes S.A.Servicio de Administración de Inversiones, 0 (2,063) 33,394 (244,745) 3,456 1,312 6,183 60 163 No (23)S.L. No Servicios No 886 (6,879) 3,124 60 545 7,599 S.A. (25,107) 9,548 S.C.R. de R.S., Sinia Renovables, 40 52,184 6 3,632 Solvia 0 7 0 673 Yes (3,353) 1,416 60 545 N/A S.L Solvia Development, 8,743 0 325 (74,017) 40 0 300 (4) S.L.Solvia Estate, 106 (9,903) Yes (410) 0 (2,952) 3,007 Yes 170 1,130 871 0 10,200 0 0 S.L. Solvia Gestió Immobiliària, 270 200 Yes (327) 3,797 S.L.Solvia Hotels, 55,013 92,501 Gestión, (0) 129 (1,213) S.L. Solvia Housing, 10,183 38,961 0 (228) Yes Yes 0 Yes S.L.Solvia Properties, 0 3,250 (2,001) Yes 13,917 0 (703) 17,655 Son Blanc Caleta S.L. 568 60 19 (0) 10,183 0 0 0 (727) (19,094) Alta del Segura S.L.Tierras Vega 29,163 189 6,010 15,753 (64) (21) 0 S.A. 0 Urdin Oria, 0 (43) 70 (0) 38,914 100,594 45,505 S.A. S.G.I.I.C., Urquijo Gestión, Yes 0 (3,460) (28) 16,880 Urumea (4,197) 0 0 695 (45,025) 1,064 206 Total (1,688) 11,004 618 0 15,000 No 0 (521) (63) 1,352 7,135 757 (1) 2,770 0 79 67 12 16 9 9 (0) 357 (524) 0 9,442 (1,408) (2,822) 58 15 0 0 4,115 No 64,091 Yes 0 3,076 898 77 322,048 336 (1,901) (6,623) 0 Yes (826) 0 400 Yes Yes 36,082 (12,091)(1) 3,014 (1)18 9 2 481 2,705 554 0 0 15,807 (175) 3,725 0 1,139 217 (3) 14,802 0 Name of undertaking Annex I: Companies in the Banco Sabadell group at 31 December 2011 December at 31 group Sabadell in the Banco I: Companies Annex €’000 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Direct Indirect Proportionalholding (%) ce ChemistryProducts of illuminationReal estateReal estate Canovelles Llinars del Vallès Banos y Mendigo Abanto y Zierbena - - - 20.00 - 20.00 40.00 20.00 Real estateReal estateElectricity utility and cosmetics manufacturePerfume productsFood Solar powerProperty investment Rubí Madrid Vigo Murcia Barcelona Granollers Vitoria - 25.00 - 50.00 - - - 30.00 45.00 45.00 - 25.00 - 50.00 Real estateReal estateServicesWind powerServicesReal estateReal estateServicesBanking BarcelonaChemistry BarcelonaReal estateReal estate Ourense OurenseFinancial servicesReal estate Almeria Madrid Alicante Madrid León (Mexico) - Altorricón Domingo (Dominican Republic) Santo - Alicante GuadalajaraGraphic artsReal estate 45.01 - Lisboa 49.78 Real estate -Hydroelectric power - 20.00 25.00Real estate 37.50 Services -Real estate - 25.00 25.00 20.00 30.06 - - 40.00 25.00 Barcelona - Barcelona y Zierbena Abanto Pamplona - - - Vitoria 33.00 - 33.33 Pamplona Buenos Aires (Argentina) 45.00 - - - - 40.00 - 45.00 45.75 20.00 45.00 - - 50.00 35.00 Banking Madrid 40.00 - Principal businessPrincipal Holding companyElectricity utilityElectricity utilitySociedad HoldingReal estateElectricity utility Registered offi Barcelona Palencia Madrid León Joan Despí Sant Alicante - - 62.11 - - - 50.00 100.00 62.10 - 49.00 50.00 Annex I: Companies in the Banco Sabadell group at 31 December 2011 December at 31 group Sabadell in the Banco I: Companies Annex

., S.A.., Management of pension funds Sant Cugat del Vallès 50.00 -

Statutory informationBanco Sabadell Annual Report 2011 236

(a) 25% of the voting rights are held by the parent company. (a) 25% of the voting rights are held by IFOS, S.A. IFOS, S.L. Improbal Norte, S.A. Intermas Nets, S.L de la Penya, J. Feliu S.L. Vil I, Key S.A. Bareño, Kosta managerial control. does not have the equity method because the parent company (1) Accounted for by

Aviones Sella CRJ-900, A.I.E. Sella CRJ-900, Aviones Aviones Gorgos CRJ-900, A.I.E. Gorgos CRJ-900, Aviones Services Madrid 25.00 - Aviones Cabriel CRJ-900, A.I.E. Cabriel CRJ-900, Aviones S.L. Biodiésel Aragón, S.A. Dexia Sabadell, Services Madrid 25.00 - Aviones Alfambra CRJ-900, A.I.E. Alfambra CRJ-900, Aviones Reaseguros S.A. de Seguros y BanSabadell Vida, S.L.Desarrollos Inmobiliarios Pronegui, S.L. Egumar Gestion, S.L. Garnova, S.A. Arte sobre Papel Grafos, Services Insurance S.A. Hidrodata, Real estate Madrid Sant Cugat del Vallès Madrid 50.00 25.00 - - - 40.00 Air Miles España, S.A. (a) Air Miles España, S.L. Aldoluz, S.L. Anara Guipuzcoa, A.I.E. Regional Cántabra, Aviación S.A. Banco del Bajío, E.G.F.P BanSabadell Pensiones, S.A. de Seguros y ReasegurosBanSabadell Seguros Generales, S.L. Casas del Mar levante, S.A. C-Cuspide 6, S.A. Centro Financiero B.H.D., Lda. Cepric Imobiliária, S.L. Desarrollos Inmobiliarios La Serreta, S.G.E.C.R. S.A.Diana Capital Inversion S.L. Espazios Murcia, S.L. ESUS Energía Renovable, S.L. Eurofragance, S.A.FS Colaboración y Asistencia, Insurance S.L. SPE Gate Solar, S.A. Gaviel, S.A.General de Biocarburantes, Services S.L. Guisain, S.A. Harinera Ilundain, S.L.Harugui Gestion y Promoción Inmobiliaria, S.L. Hidrophytic, Real estate Sant Cugat del Vallès Capital Venture Boadilla del Monte Services 50.00 Real estate Madrid Chemistry Madrid 26.42 - - Barcelona Mutilva Baja Marina de Cudeyo - - 25.00 41.23 - - - 35.00 25.00 50.00 6350 Industries, S.L. 6350 Industries, Equity-accounted companies (1) Jerez Solar, S.L. Jerez Solar, S.L. Plaxic Estelar, Total S.A. Adelanta Corporación, S.L. 2011, Atalanta Catalunya

Emte Renovables, S.L. Emte Renovables, S.L. Eólica Mirasierra, S.L. Inerban Proyectos, Name of undertaking Proportionally consolidated companies S.L. Sierra Sesnández, Energias Renovables S.L. Eólica Sierra Sesnández, S.L. Erbisinia Renovables, S.A.Financiera Iberoamericana, Instrumental society Finance company Valladolid Havana - 62.10 50.00 - Statutory informationBanco Sabadell Annual Report 2011

237 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Direct Indirect Proportional holding (%) ce Real estateReal estateElectricity utilityReal estateReal estateReal estateReal estateReal estate Benalmadena Magaz de PisuergaReal estate BenalmadenaReal estate BurgosReal estateReal estate Murcia San Vicente del Raspeig Elda Sabadell - - San Vicente del Raspeig Zarautz - Noain 49.50 49.00 Benalmadena 32.20 - - - 25.00 25.00 23.01 40.00 - - 40.00 - 45.00 - - - 35.91 30.00 45.00 Principal businessPrincipal Real estateReal estateReal estateReal estateReal estate Registered offi Benidorm Benalmadena Murcia Pamplona Murcia - - - - 34.55 42.00 - 45.00 49.70 40.00 Real estateReal estate Malaga y Zierbena Abanto - - 40.00 33.78 (1) Accounted for by the equity method because the parent company does not have managerial control. have does not because the parent company method the equity by for (1) Accounted the parent company. rights are held by (a) 25% of the voting Annex I: Companies in the Banco Sabadell group at 31 December 2011 December at 31 group Sabadell in the Banco I: Companies Annex n 21, S.L. n 21, . Costablanca, S.L. . Costablanca, Parc Eòlic Veciana-Cabaro, S.L. Eòlic Veciana-Cabaro, Parc S.L. Finestrat, Boulevard Parque S.L. del Segura, Parque S.L. Eólico Magaz, Parque S.L. Proburg BG XXI, S.L. Promociones Abaco Costa Almeria, S.L. Promociones Aguiver, S.L. Promociones Florida Casas, S.L. Promociones y Desarrollos Creaziona Castilla la Mancha, S.L. Promociones y Desarrollos Urbanos Oncineda, S.L. Residencial Haygon, S.L. Saprosin Promociones, S.A. SBD Creixent, S.L. Sistema Eléctrico de Conexión Valcaire, S.A. S.I.C.A.V., Sociedad de Cartera del Vallés, S.L. y ParticipacionesSociedad de Inversiones COMSA EMTE, S.L. dels Enginyers, Societat d'Inversió S.L. Sureste, Torre S.L. Txonta Egizastu Promozioak, A.I.E. Urtago Promozioak, S.L. Munain, Vera S.L. Vistas 21, del Parque Total Real estate utility Electricity Real estate Real estate Real estate Holding company Real estate Electricity utility Society of investment Madrid Holding company Barcelona Benidorm Esplugues de Llobregat Pamplona Granada estate Real Sant Cugat del Vallès Granada Alicante Barcelona - - 43.08 Zarautz - 20.00 - 20.00 - - 40.00 - 33.00 50.00 40.00 - - - 46.88 40.00 28.79 - 35.00 Mirador del Segura 21, S.L. 21, Mirador del Segura S.L. Golf, Mursiya S.L. Naguisa Promociones, S.L. NF Desarrollos, Norfi Name of undertaking (1) Equity-accounted companies S.L. Lagar de Tasara, A.I.E. Lizarre Promociones, S.L. Mancha, Castilla la Loalsa Inversiones M.P Real estate Madrid - 20.00 for tax purposes Treated as Treated consolidated t to profi Contribution consolidated to reserves or losses of

Contribution

undertakings consolidated net 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Group investment Total assets 1,199 19,169 (6,043)(1,323) 1,199 19,169 paid (4) Dividends Financial data (2) Capital Reserves Result (3) 10,000 4,895 3,723 63,815 5,000 2,586 1,959 No 0 ., S.A. (a)S.A. ., 9,378 3,667 1,998 48,038 No 16,694 3,676 3,233 7,813 Erbisinia Renovables, S.L. Renovables, Proportionally companies consolidated S.L. (a)Emte Renovables, S.L. (f) Sierra Sesnández, Energias Renovables S.L. (c) Eólica Mirasierra, (h) S.L. (f)Eólica Sierra Sesnández, Erbisinia S.A.Financiera Iberoamericana, S.L. Inerban Proyectos, S.L. (a)Jerez Solar, S.L. (a)Plaxic Estelar, Total S.L. Equity-accounted companies (1) S.L. (c)6350 Industries, S.A.Adelanta Corporación, 3 (3) (d) S.L. 2011, Atalanta Catalunya 3 S.A. (b)Air Miles España, Aldoluz, S.L. (a)Anara Guipuzcoa, A.I.E. (a) Regional Cántabra, Aviación A.I.E. (a) Alfambra CRJ-900, Aviones (3) 8,050 A.I.E. (a) Cabriel CRJ-900, Aviones (1) A.I.E. (a) Gorgos CRJ-900, Aviones 18,669 A.I.E. (a) Sella CRJ-900, Aviones 4 S.A. (a)Banco del Bajío, 64 E.G.F.P BanSabadell Pensiones, (6,628) (163) 0 (8) 6,628 1,000 1,197 0 7,488 (1)No 3,050 (115) 0 0 0 0 0 0 3 40 588 1 (2) 63 29,606 230 301 (21) (1,358) 0 4,496 0 (9,782) 72 4,495 0 39,056 4,495 (176) 1,199 150 (711) (7,186) (0) 664 (1) (338) (1,514) 4,495 0 5,214 (1,511) 15,073 (28) 52,383 0 (1,510) 1,426 134,453 2,429 835 (1,508) No 0 (26,160) (33) 1 0 24 0 4,379 364,100 (493) (9,483) 8,616 24 23 137 75 0 (9,779) 3,776 41 23 59,586 42,523 0 0 0 (95) 133,782 0 177 38,542 0 2 103,202 0 500 20,243 0 1,894 0 0 2,673 37,202 20,064 0 108,290 (533) 4,995,703 40 20,049 32 7,824 0 20,024 12,240 0 0 (13) 20,000 1,217 43 1,060 2,140 (10) 96,900 No 0 1,060 No No (6,153) 1,060 581 10 (153) 1,060 0 14,837 (210) (306) 0 475 No 88 (305) (447) (306) 0 241 No 0 9,728 (306) No No No 0 (134) 7 No No 7 (12) No 6 0 6 No No 55 No No No No No No BanSabadell Seguros Generales, S.A. de Seguros y Reaseguros (a) BanSabadell Seguros Generales, Annex I: Companies in the Banco Sabadell group at 31 December 2011 December at 31 group Sabadell in the Banco I: Companies Annex €’000 Name of undertaking

Statutory informationBanco Sabadell Annual Report 2011 238 Centro Financiero B.H.D., S.A. (f)S.A. B.H.D., Financiero S.A. de Seguros y Reaseguros (a)BanSabadell Vida, S.L. (e)Biodiésel Aragón, 2,298,120 44,936 S.L. (a)Casas del Mar levante, 3,212 13,502 S.A. (g)C-Cuspide 6, 158,876 58,536 37,874 12,486 No Centro Lda. (g)Cepric Imobiliária, (b) S.L. (d)Desarrollos Inmobiliarios La Serreta, S.L. (g)Desarrollos Inmobiliarios Pronegui, S.A. (a)Dexia Sabadell, 43,858 S.G.E.C.R. S.A. (e)Diana Capital Inversion S.L. (a)Egumar Gestion, S.L. S.L. (a) Espazios Murcia, S.L. (a)ESUS Energía Renovable, 236,301 S.L. (a)Eurofragance, S.A. (c )FS Colaboración y Asistencia, Garnova, S.L. SPE (c) Gate Solar, 49,736 S.A. (d)Gaviel, S.A. (f)General de Biocarburantes, 1,756 S.A. Arte (a) sobre Papel Grafos, 2,004 S.L. (d)Guisain, 892 5,911 7,500 606 504 6,370,826 (1,437) 1,000 (5,277) (6,456) 7 5,885 1,425 42,814 No 254,061 106,039 1,826 16,792 5,508 27,106 48,072 520 (258) (722) 600 (105) (605) 50 (884) 4,500 600 194,477 (521) 114,391 302 6,000 2,050 667 26,184 0 (64) 27,225 (175) 3,005 (1) 1,800 (488) 0 0 (723) 0 (3,019) 0 13,598 8,367 (19) 17,351 8,444 No 8,928 1,203 (150) 47,049 (102) 766 (90) 0 0 0 4,200 (134) 18,146,719 3,290 5,035 2,820 278 0 0 17,592 92 (25) 0 0 0 108,026 (2,176) 0 8,833 0 457 608 (2,820) 0 4,190 77,457 6,312 0 0 7,965 580 (148) (2) 0 0 0 0 24,472 10,468 0 (10) 0 887 33,494 (103) 0 3,870 9,050 (202) 23 0 (181) 0 0 0 0 (1) 0 125 2,626 No 20 No 1,503 No 10,052 No No 355 1,296 (20) 0 0 (325) No (130) 0 315 1,220 (9) 24 630 0 (41) No (23) No (31) 0 0 No No (13) No 43 (11) No No No No No (59) (1) No No for tax purposes Treated as Treated consolidated t to profi Contribution consolidated

Statutory informationBanco Sabadell Annual Report 2011 239 467,502 to reserves or losses of Contribution undertakings consolidated net

Group WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo investment Total assets paid (4) Dividends re up-to-date information available. 45,272 502,012 224,483 54,992 224,483 45,272 502,012 132,103 2,004,133 5,299,712 231,902 5,299,712 132,103 2,004,133 010. 011 1 008. 2011 11 Financial data (2) Capital Reserves Result (3) 2,743 (892) (416)15,786 0 0 (53) (83) No xing on 31 December 2011 n 21, S.L. (a) S.L. 21, No 5,000 0 0 0 0 10 0 0 n . Costablanca, S.L. (a). Costablanca, 5,000 (141) (29) 0 53,964 0 0 (13) No IFOS, S.A. (a)S.L. S.A. (1) Equity-accounted companies S.A. Harinera Ilundain, (a) S.L. Harugui Gestion y Promoción Inmobiliaria, S.A. (c) Hidrodata, Hidrophytic, IFOS, S.L. (a) Improbal Norte, S.A. (a)Intermas Nets, S.L (b) de la Penya, J. Feliu S.L. (d) Vil I, Key S.A. (a) Bareño, Kosta S.L. (a)Lagar de Tasara, A.I.E. (d) Lizarre Promociones, S.L. (e) la Mancha, Castilla Loalsa Inversiones 593 M.P S.L. (a) Mirador del Segura 21, No 21 13 471 93 12 186 S.L. (a) Golf, Mursiya 7 0 491 0 0 S.L. (a)Naguisa Promociones, 23 9 0 S.L. (a) NF Desarrollos, 4 (379)Norfi S.L. (a) Eòlic Veciana-Cabaro, Parc S.L. (a) Finestrat, Boulevard Parque S.L. (a) del Segura, Parque No 60 S.L. (a) Eólico Magaz, Parque (214) S.L. (a) Proburg BG XXI, 180 S.L. (c) Promociones Abaco Costa Almeria, 3,720 S.L. (f) Promociones Aguiver, 300 S.L. (a)Promociones Florida Casas, 851 846 91 (6,658) 0 628 835 1,500 4,441 21,897 3,574 27,157 164 (1) (3,397) 3,398 (4) (4,533) 300 (70) 6,847 (3,296) (18) 0 3,205 (833) 801 5,000 300 160 (2) 0 0 (2,197) 922 320 1,752 0 1,500 0 (241) 0 505 (233) 0 (299) 0 (285) (7) 120 1,091 242,378 5,000 4,000 (2,017) (1,185) 0 0 2,354 (152) (566) 15,367 72,454 66,541 (5) 0 (420) (57) 4,974 555 0 (87) (593) 61 0 (4) 20 1,556 22,213 10,501 24,587 0 (107) (252) 6 0 0 41,581 0 1,859 24,838 0 (110) 0 828 0 (11) 1,620 0 43,523 No 0 0 (15) 5,804 0 0 0 6,436 (12) 0 30,526 54 38,448 0 0 1,039 7,871 0 2,739 311 0 2,506 0 (720) 44,370 25,779 0 0 0 168 (1) (2) No (14) No 0 6,398 (546) 0 13,849 0 0 0 0 6,582 No 25,849 0 0 311 No No 0 0 0 (600) 34 21 0 (96) (418) 0 (1) (3) 0 0 (1) No No No 0 (168) 0 (2) No (137) (19) 13 No No (43) 0 (1) (2) No No No No 2 No (44) No (3) No 0 No No No No Total revenues of associated undertakings accounted for by the equity method were €2,616,013,000 in the Total revenues of associated undertakings accounted for by the equity method at the close of 2011 totalled year to 31 December 2011. The overall liabilities of associated undertakings €31,805,166,000. Promociones y Desarrollos Creaziona Castilla la Mancha, S.L. (a) Promociones y Desarrollos la Mancha, Creaziona Castilla Name of undertaking Annex I: Companies in the Banco Sabadell group at 31 December 2011 December at 31 group Sabadell in the Banco I: Companies Annex €’000 gures for the companies referred to in the following notes are based on a year end which is not December 31, there being no mo gures for the companies referreda year end which is not December 31, to in the following notes are based on Promociones y Desarrollos Urbanos Oncineda, S.L. (a)Promociones y Desarrollos Urbanos Oncineda, S.L. (a)Residencial Haygon, S.L. (a) Saprosin Promociones, S.A. (a)SBD Creixent, S.L. (c) Sistema Eléctrico de Conexión Valcaire, S.A. S.I.C.A.V., Sociedad de Cartera del Vallés, S.L. y ParticipacionesSociedad de Inversiones COMSA EMTE, S.L. dels Enginyers, Societat d'Inversió S.L. (a) Sureste, Torre S.L. (a) Txonta Egizastu Promozioak, 300 A.I.E. (a) Urtago Promozioak, S.L. (i) Munain, Vera 15,127 S.L. (a) Vistas 21, del Parque Total 232,468 Consolidation adjustments (7) 175 Total 4,818 managerial control. does not have the equity method because the parent company (1) Accounted for by (2) foreign corporations are converted to euros to the exchange rate fi (2,845) 2,604 the General Committee of Shareholders by (3) Results pending approval year and paid interim dividends to the group (4) Includes equalizing dividends of the previous 541 4,152 The fi (15) 0 390 12,895 (5,168) 600 0 (252) 52 (2) (2,203) 0 (452) 0 100 244,223 300 568 164 (93) 6,935 47,302 0 60 (173) (145) 0 190 0 792 (2) 1 0 5,117 83,600 383 0 0 (2) (268) 0 0 (1) 7,624 0 0 422 20,308 0 82 251 0 0 0 0 0 16,007 1,868 0 2,968 0 (249) 18,628 No 55 0 263 0 0 0 22 (117) 103 5,699 (992) 0 1,910 No 0 0 30 No (14) (23) No 0 0 No 0 (42) 0 No No 2 0 0 (107) No 0 0 No No 0 No 0 No No (a) The details of these indicated societies under the denomination of “Details of the society (2)” correspond on 30 November 2 of the society (2)” correspond(a) The details of these indicated societies under the denomination of “Details on 30 November of the society (2)” correspond(b) The details of these indicated societies under the denomination of “Details on 31 October 20 of the society (2)” correspond(c) The details of these indicated societies under the denomination of “Details on 30 September (d) The details of these indicated societies under the denomination of “Details of the society (2)” correspond 201 on 31 August (e) The details of these indicated societies under the denomination of “Details of the society (2)” correspond 2011 on 31 July (f) The details of these indicated societies under the denomination of “Details of the society (2)” correspond 2011 on 30 June (g) The details of these indicated societies under the denomination of “Details of the society (2)” correspond 2 on 31 December 2010. (h) The details of these indicated societies under the denomination of “Details of the society (2)” correspond on 31 May (i) The details of these indicated societies under the denomination of “Details of the society (2)” correspond 2 on 31 December WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Direct Indirect Proportionalholding (%) ce Holding companyReal estate fund managersInvestment Real estateReal estateReal estateReal estate Luxemburgo Guipúzcoa Guipúzcoa London Madrid Guipúzcoa Valencia 22.00 78.00 - 100.00 - 100.00 97.85 - - - - 100.00 100.00 100.00 Principal businessPrincipal capital companyVenture Financial advisersBankingBankingBanking Registered offi Electronic billing services BarcelonaHolding company MadridEquipment leasingHolding company Sant Cugat del Vallès Sabadell Guipúzcoa Andorra la Vella Sabadell 100.00 Sant Cugat del Vallès 100.00 100.00 - Guipúzcoa - - 100.00 - 50.97 - - 100.00 100.00 - - - - 100.00 Annex I: Companies in the Banco Sabadell group at 31 December 2010 December at 31 group Sabadell in the Banco I: Companies Annex

Statutory informationBanco Sabadell Annual Report 2011 240

Guipuzcoano Mediador de Seguros, Sociedad de Agencia de Seguros, S.L. (a) Sociedad de Agencia de Seguros, Guipuzcoano Mediador de Seguros, Insurance brokers Guipúzcoa - 100.00 Grao Castalia S.L. (a) S.A. Unipersonal (a)Guipuzcoano Capital, Issuer preference shares Guipúzcoa - 100.00

BanSabadell Renting, S.L. BanSabadell Renting, Aurica XXI, S.C.R., S.A. S.C.R., Aurica XXI, S.A. Banco de Sabadell, S.A.BanSabadell Professional, S.A. (a) Easo Bolsa, Services Barcelona 100.00 - Assegurances Segur Vida, S.A. Vida, Assegurances Segur S.A.M.Banco Atlantico Mónaco S.L. BanSabadell Holding, S.G.I.I.C. S.A., BanSabadell Inversión, S.L.Compañía de Cogeneración del Caribe, Insurance Banking fund managers Investment Andorra la Vella Electricity utility Mónaco Sant Cugat del Vallès - Barcelona 100.00 50.97 100.00 - - - 99.99 Alfonso XII, 16 Inversiones, S.L. (a) 16 Inversiones, Alfonso XII, Ltd. Bank & Trust, Banco Atlantico Bahamas S.A. BancSabadell d'Andorra , S.L. Bansabadell Factura, S.A. E.F.C., Bansabadell Fincom, S.A. Desenvolupament, BanSabadell Inversió Bitarte (a) S.A. S.A. Dominicana, Compañía de Cogeneración del Caribe estate Real BankingGazteluberri Gestión S.L. (a) Holding company Finance company Barcelona Electricity utility Bahamas Nassau, Barcelona Sant Cugat del Vallès Santo Domingo (Dominican Rep.) 99.99 - 0.01 100.00 - 100.00 100.00 100.00 - - Name of undertaking companies Fully consolidated S.L. Axel Group, Ballerton Corporation S.A. Serviços, S.A. (a) Banco Guipuzcoano, S.A.Banco Urquijo Sabadell Banca Privada, S.A.BanSabadell Correduría de Seguros, S.A E.F.C., BanSabadell Financiación, BanSabadell Information System S.A. S.LBanSabadell Securities Services, S.L. (a) PropertyBlueSky Development, S.A. (a) Ederra, S.A. Europa Invest, Mall Ltd. Europea Pall S.L. Explotaciones Energéticas SINIA XXI, company Holding Gazteluberri S.L. (a) Banking Insurance brokers Finance company Computer services Madeira Services Real estate Sabadell Madrid Sabadell Holding company de Bages Sant Fruitós - Sabadell Murcia 100.00 100.00 81.00 100.00 Madrid 100.00 - - - - 100.00 - - 100.00 - 100.00 Statutory informationBanco Sabadell Annual Report 2011

241 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Direct Indirect Proportional holding (%) ce usiness of the company was also changed. was usiness of the company ce Brazil 99.99 0.01 Principal businessPrincipal Business start-upsReal estate Registered offi Real estateServices GuipúzcoaBankingReal estateServices MadridReal estateReal estate ValenciaReal estateReal estateReal estateReal estateNot trading MiamiHolding company Barcelona MiamiHolding company - Sabadell Sant Cugat del Vallès 100.00 Sant Cugat del Vallès Sant Cugat del Vallès - Madrid Sant Cugat del Vallès - Valencia 100.00 Guipúzcoa Guipúzcoa 100.00 Guipúzcoa 100.00 100.00 - 100.00 100.00 - - 100.00 100.00 - 100.00 100.00 - - - 100.00 ------100.00 100.00 100.00 100.00 Real estateReal estateHolding companyReal estate Guipúzcoa Luxembourg Alicante Sabadell - - 100.00 - 100.00 - 75.00 100.00 Annex I: Companies in the Banco Sabadell group at 31 December 2010 December at 31 group Sabadell in the Banco I: Companies Annex .E., S.L. (a) .E., (a) Added to the consolidated group following the acquisition of Banco Guipuzcoano, S.A. (a) Added to the consolidated group following the acquisition of Banco Guipuzcoano, the parent company. (b) 100% of the voting rights are held by from Sabadell d’Andorra changed Borsa name was in July 2010. The b S.A.U. S.A.U to Serveis(c) The company d’Assessorament BSA, Interstate LLC Property Holdings, Mariñamendi S.L. (a) Promociones y Desarrollos S.L. (a) Creaziona Levante S.A.Promociones y Financiaciones Herrero, Residencial Kataoria S.L. (a) Ltd. Services, Sabadell Asia Trade Services - Ass.Cial Ltda.Sabadell Brasil Trade S.I.C.A.V S.A.Sabadell BS Select Fund of Hedge Funds, S.L.Sabadell Corporate Finance, S.A.Sabadell d'Andorra Societat Gestora, Inversions Ltd. (b)Sabadell International Equity, Inc. Sabadell Securities USA, N.A. Sabadell United Bank, S.L. Santex Pluser, S.A.U. (c)Serveisd'Assessorament BSA, S.A.Servicio de Administración de Inversiones, S.A. Servicios Reunidos, S.A. S.C.R. de R.S., Sinia Renovables, S.L Solvia Development, S.L. Solvia Estate, S.L. Solvia Gestió Immobiliària, S.L. Solvia Hotels, Real estate S.L. Solvia Housing, S.L. Solvia Properties, Son Blanc Caleta S.L. (a) Alta del Segura S.L. (a)Tierras Vega Holding company S.A. (a) Urdin Oria, Holding company S.A. S.G.I.I.C., Urquijo Gestión, Real estate holding company S.L. (a) Urumea Gestión, Representative offi fund managers Investment S.A. (a) Zurriola Inversiones, Total Services Financial advisers Finance company Miami Valencia Holding company Andorra la Vella Services Luxembourg Oviedo capital company Venture Property rentals Madrid Hong Kong George Town Madrid estate Real Barcelona 100.00 52.50 Andorra la Vella - fund managers Investment - 100.00 50.97 100.00 - - Madrid - 100.00 Madrid 30.00 Alicante - 100.00 100.00 70.00 - - - - - 50.97 100.00 - - - 100.00 100.00 Name of undertaking companies Fully consolidated S.L. (a) Empresarial, Guipuzcoano Promoción S.A. (a) Guipuzcoano Valores, S.A. (a) Correduría Grupo de Seguros del Guipuzcoano, Banco Guipuzcoano, S.A. (a) de Pensiones, Gestora de Fondos Entidad Guipuzcoano, S.A. (a) S.G.I.I.C., Guipuzcoano, (a) S.L. La Almazara, Haygon S.A.R.L. Herrero International, S.A. Hobalear, S.P Hondarriberri, Insurance fund managers Pension Holding company Guipúzcoa Guipúzcoa Fund managers Guipúzcoa Guipúzcoa - - 100.00 60.00 - 100.00 - 100.00 for tax purposes Treated as Treated consolidated t to profi Contribution consolidated

to reserves or losses of

Contribution undertakings consolidated WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo net Group investment Total assets paid (3) 125,097 1,490,392 4,813,132 328,051 4,813,132 125,097 1,490,392 Dividends Financial data (1) 3 546 (31) 0 538 3 0 (5) No 100 558 661 598 2,933 263 100 558 661 598 0 No 36 Capital Reserves Results (2) .E., S.L..E., 259,561 (23,503) (76,899) 0 179,726 160,146 0 (34,424) No del Grupo Banco Guipuzcoano, S.A. del Grupo Banco Guipuzcoano, S.L. Sociedad Agencia de Seguros, Guipuzcoano Valores, S.A.S.A.R.L. Valores, International, S.A.Guipuzcoano Promoción Empresarial S.L. S.A.Guipuzcoano S.G.I.I.C., Guipuzcoano S.L. La Almazara, Haygon Herrero Hobalear, Hondarriberri S.P 4,514 2,056 4,275 32,314 10,893 3,076 429 3,822 0 (41) 0 14 No 59 1,503 0 4,310 4,246 199 (41) (9,992) 60 6,883 60 512 32 Yes 512 0 629 414 32 No 650 13 0 106,142 697 0 22,384 10,039 791 0 3,014 1,108 (3,513) 45 0 No (14) 0 No (22) No Sub-total Assegurances Segur Vida, S.A. Vida, Segur S.L. companies Fully consolidated S.L.Alfonso XII 16 Inversiones Assegurances 178,362 602 No 85 226 S.A. S.C.R., Aurica XXI, S.L. 444 400 602 166 Axel Group, S.A.Ballerton Corporation S.A. Serviços, Consulting, Ltd. (a)Banco Atlantico Bahamas Bank & Trust, Banco Atlantico Mónaco S.A.M. S.A.Banco de Sabadell, System, S.A.Banco Guipuzcoano, S.L. S.A.Banco Urquijo Sabadell Banca Privada, S.A.BancSabadell d'Andorra , BanSabadell S.L. S.A.BanSabadell Correduría de Seguros, Information Services, S.L.Bansabadell Factura, S.A. E.F.C., BanSabadell Financiación, S.A.BanSabadell Fincom E.F.C., 1,497 S.L.BanSabadell Holding, Yes Renting, BanSabadell 11,400 Securities S.A. Desenvolupament, BanSabadell Inversió 3 0 0 3 0 0 0 3 1,599 240 5,444 S.G.I.I.C. S.A., BanSabadell Inversión, Yes 1,599 102,000 3,687 1,643 S.A.BanSabadell Professional, 0 50 BanSabadell 73,148 884 (2,595) 14,200 BanSabadell 11,250 2,500 4,098 2,275 S.A.Bitarte, S.A. S.L. PropertyBlue Sky Development, 138,052 Yes 0 9,205 2,500 4,098 2,275 S.A. (a)Compañía de Cogeneración del Caribe Dominicana, 24,367 (14,715) S.L.Compañía de Cogeneración del Caribe, 157,954 17,591 2,000 3,576 1,858 12,613 60 Yes 1,995 1,858 184,067 3,861 S.A.Easo Bolsa, 37,378 30,069 27 26 0 Ederra, 24,040 4,442,110 S.A.Europa Invest, S.L. 9,627 15,025 Ltd. Mall Europea Pall (17) 3,898 579,116 S.L.Explotaciones Energéticas SINIA XXI, 14,550 35,720 0 S.L.Gazteluberri Gestión, 26,993 126 380,620 75 18 983 Gazteluberri, 100 11,794 0 S.L.Grao Castalia, 330,340 601 S.A. UnipersonalGuipuzcoano Capital, 1,931 97,415 0 29,486 113,727 5,571 Guipuzcoano Correduría de Seguros 1,537 (5,187) 0 0 (265,781) (2,381) S.A. , de Pensiones Guipuzcoano Entidad Gestora de Fondos 5,493 86,558,894 613 3,056 1,609,026 71,651 60 0 14 Guipuzcoano Mediador de Seguros, 2,500 (5,095) 49 129,978 27,510 765 (38,152) 7,415 0 143,030 (110) 0 11,027 (774) 25,893 2,439 832 1,503 217 (1,712) 1,352 (774) 9,916,704 0 0 17,492 639,766 682,213 0 3,140 71,116 0 19,498 4,816,625 6,506 0 613,479 1,650 1,026 10,101 877 1,976 34,738 82,818 (2,712) 0 0 15,044 15,326 24,040 0 0 15,150 (275) 510,439 129 1,041 58 17,980 60 9,627 380,620 19,485 569 36,928 44,315 (17,754) 1,460 294,293 3,957 (73) 125 6,530 126,513 19,368 5,854 (3,794) 25,009 26,993 0 3,898 6,411 588 72,232 702 71 27 9,079 785 0 (4,469) 239,544 (20,785) (11) 0 Yes Yes (4,028) 0 0 700 12,332 126 (5) (17) 58 161 (1,804) (32,864) 1,537 No 607 Yes 3,809 (206,593) (612) 1,249 13,337 No 0 (211) 945 299 No 63 (4,560) 0 268 5,493 0 79,075 No 859 (197) (38,152) (5,095) No 71,641 Yes 5,787 No (13) 0 64,505 0 No 0 613 (2,598) 0 (12,088) (329) 2,762 0 3,007 14 Yes (1,818) 0 11,027 1,130 0 Yes No 14,283 4,672 38,406 Yes (774) 0 0 1,504 No 13,528 (110) Yes 29,370 Yes (584) 138 0 10,735 23,481 38,367 0 100,777 Yes 20,843 231 No (275) 0 5,854 0 1,801 (702) 58 0 (1,146) 0 58 336 Yes Yes No 13 No 0 0 (211) (526) 17 (161) 0 No (1,901) No No No 0 (13) (4) No (279) No No No Annex I: Companies in the Banco Sabadell group at 31 December 2010 December at 31 group Sabadell in the Banco I: Companies Annex €’000 Name of undertaking

Statutory informationBanco Sabadell Annual Report 2011 242 for tax purposes Treated as Treated consolidated t to profi Contribution consolidated

Statutory informationBanco Sabadell Annual Report 2011 243 to reserves or losses of Contribution undertakings consolidated net

Group WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo investment Total assets paid (3) 125,097 1,490,392 4,813,132 328,051 4,813,132 1,490,392 125,097 (47,555) 4,572,112 125,397 1,829,687 Dividends Financial data (1) Capital Reserves Results (2) nancial data” are correct 2010. as of 30 November nal dividends for the previous year and interim dividends paid to the group during the year. nal dividends for the previous Proteo Banking Software, S.L. Software, S.A.U. Banking companies Fully consolidated Sub-total Interstate LLC Property Holdings, S.L.Mariñamendi, S.L. Promociones y Desarrollo Creaziona Levante, BSA, No S.A.Promociones y Financiaciones Herrero, Proteo 3 0 0 0 0 0 3 3 S.L. S.L.Residencial kataoria, S.A. Ltd. Services, Sabadell Asia Trade Services - Ass.Cial Ltda.Sabadell Brasil Trade S.L S.I.C.A.V S.A. (a)Sabadell BS Select Fund of Hedge Funds, No d'Assessorament S.L.Sabadell Corporate Finance, Pluser, S.A.Sabadell d'Andorra Societat Gestora, 7 0 60 Inversions 74 Ltd.Sabadell International Equity, 0 14 0 Reunidos, 60 Immobiliària, Inc.Sabadell Securities USA, 8,740 S.A.Sabadell United Bank, S.A.Santex 31,236 Serveis 3,456 S.L. S.A.Servicio de Administración de Inversiones, Gestió (2,151) 5,987 Servicios S.A. S.C.R. de R.S., Sinia Renovables, Properties,S.L. 1,542 S.LSolvia Development, (94) 300 S.L.Solvia Estate, Oria, (4,258)Solvia 270 (2,495)Solvia Hotels ,S.L. Gestión, 55,013 (1,268) S.L.Solvia Housing, Solvia 0 1,373 3,250 3,435 4,559 2,705 S.L.Son Blan Caleta, 309 S.L.Yes 3,324 4,559 11,108 2,786 Alta del Segura, Tierras Vega (503) 60 20 0 Yes 5,083 0 Urdin 70 (3,988) 6,010 (205) 0 79 67 13 0 0 S.A. 0 S.G.I.I.C., Urquijo Gestión, (57)Urumea 1 642 Zurriola S.A. Inversiones 58 559 0 591 (12,407)Total 12,044 1,699 2,359 15,000 (459) translated into euros at the exchange rate ruling been on 31 December 2010. companies have (1) Foreign-registered 760 0 39,147 5,083 1,446 1,699 No the Annual General Meeting of each company. by (2) Results are subject to approval 0 0 (3) Includes fi (3,361) 33,230 0 67 31 (a) Data shown for these undertakings under “fi 120,495 (168) 300 2,331 1,015 No 76,838 (648) 0 18 9 0 1 15,807 (1) 3,726 60 4 (3) 9 8 0 0 16,400 (2,789) (13,120) 500 278 248 1,262 (11) 114,457 0 532 3,102 (180,490) 0 (178)No 4,550 0 24,185 0 (2,789) 60 60 0 0 (328)63 38,741 500 278 2,073 0 500 (318,255) 38,624 0 3,606 15,483 0 0 (9,474) 250 4,000 300 (1,393) 659 0 (17,388) 981 0 Yes 1,721,057 883 0 1,248 9 721 1,412 6,767 2,396 (1,320) 250,126 (503) (8) (33,564) 0 158 0 (50) 0 No (9,156) 161,343 1,132 60,032 0 16,690 358 1,571,748 (838) No (3,431) (354) 385 0 No (8,048) (8,644) 285 15,000 (57) 1 (5) 0 551 0 41,155 (6,096) (1,903) 0 612 Yes (13,120) 0 No (38) 0 212,323 0 (202,870) No (576) No (2,151) 20,047 1,015 (163) 13 0 (3) 13,386 (318,255) 31 No 13,107 11,159 60 (178) 0 No Yes 532 0 Yes 13 489 3,356 Yes No 5,286 (17,365) 0 Yes 2,853 No No 500 (33,564) (34) 0 631 1,235 0 Yes (2,477) (838) (354) (8) 0 (714) No Yes Yes (5) No (13) Yes No Name of undertaking Annex I: Companies in the Banco Sabadell group at 31 December 2010 December at 31 group Sabadell in the Banco I: Companies Annex €’000 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Direct Indirect Proportionalholding (%) ce Solar powerProperty investmentGraphic artsReal estateReal estateReal estateServicesReal estateReal estateChemistryProducts of illumination Barcelona Álava Barcelona Vizcaya Navarra Álava Canovelles Navarra Argentina Buenos Aires, Alicante Llinars Vallès del 50.00 - - - - - 50.00 - 45.00 - 20.00 40.00 - - 45.00 - 20.00 - 50.00 20.00 35.00 50.00 ServicesServicesReal estateReal estateServicesBankingChemistryReal estateFinancial services OurenseReal estate Almería Madrid AlicanteBankingReal estateReal estateElectricity utility Madrid and cosmetics manufacturePerfume León (Mexico)Food Altorricón Santo Domingo Madrid Rubí Portugal 22.50 - Madrid - Madrid - Murcia Pontevedra Vigo, - 24.00 30.06 20.00 40.00 25.00 - 20.00 Granollers - - 49.78 - - - - 40.00 - 33.00 - 25.00 45.00 - - 45.00 30.00 45.00 - 25.00 Principal businessPrincipal Holding companySociety Holding companyElectricity utilityReal estate Registered offi León Joan Despí Sant Joan Despí Sant Barcelona - - - 62.11 49.00 62.11 - 45.01 Real estate Barcelona - 37.50

Annex I: Companies in the Banco Sabadell group at 31 December 2010 December at 31 group Sabadell in the Banco I: Companies Annex

., S.A.., Management of pension funds Sabadell 50.00 -

Banco Sabadell Annual Report 2011 244 Statutory information

Improbal Norte, S.L. (a) Improbal Norte, S.L. (a) Inerban Proyectos, S.A. Intermas Nets, S.L de la Penya, J. Feliu Total

Garnova, S.L. Garnova, S.A. Arte sobre Papel Grafos, S.L. (a) Hidrophytic, FS Colaboración y Asistencia, S.A.FS Colaboración y Asistencia, S.L. SPE (a) Gate Solar, S.A. Gaviel, S.A.General de Biocarburantes, S.L. (a) Guisain, S.A. (a) Harinera Ilundain, S.L. (a) Harugui Gestion y Promoción Inmobiliaria, S.A. IFOS, Services Real estate Chemistry Barcelona Navarra Marina de Cudeyo - - - 35.00 25.00 50.00

Dexia Sabadell, S.A. Dexia Sabadell, S.L. (a) Egumar Gestion, S.L. ESUS Energía Renovable, Desarrollos Inmobiliarios Pronegui, S.L. (a) Desarrollos Inmobiliarios Pronegui, S.G.E.C.R. S.A. (a)Diana Capital Inversion S.L. (a) Espazios Murcia, S.L.Establecimientos Industriales y Servicios, S.L. Eurofragance, Real estate Capital Venture Electricity utility Madrid Guipúzcoa Barcelona - - - 41.23 40.00 26.75

Aviones Sella CRJ-900, A.I.E. Sella CRJ-900, Aviones Aviones Gorgos CRJ-900, A.I.E. Gorgos CRJ-900, Aviones Services Madrid 25.00 - 6350 Industries, S.L. (a) 6350 Industries, A.I.E. Cabriel CRJ-900, Aviones S.L. Biodiésel Aragón, Services Madrid 25.00 - Emte Renovables, S.L. Emte Renovables, S.L. Jerez Solar, (1) Equity-accounted companies A.I.E. Alfambra CRJ-900, Aviones Reaseguros S.A. de Seguros y BanSabadell Vida, S.A. (a) C-Cuspide 6, Services Insurance Madrid Sabadell 50.00 25.00 - - Name of undertaking Proportionally consolidated companies S.L. Erbisinia Renovables, S.A.Financiera Iberoamericana, S.L. Plaxic Estelar, Total S.A. Adelanta Corporación, S.A. (b) Air Miles España, S.L. (a) Aldoluz, S.L. (a) Anara Guipuzcoa, A.I.E. Regional Cántabra, Aviación S.A. Banco del Bajío, E.G.F.P BanSabadell Pensiones, S.A. de Seguros y ReasegurosBanSabadell Seguros Generales, S.L. (a) Casas del Mar levante, S.A. Centro Financiero B.H.D., Lda. (a) Cepric Inmobiliaria, Finance company Insurance Services Havana Real estate Sant Cugat del Vallès Boadilla del Monte 50.00 50.00 Alicante - - 26.42 - - 33.33 Statutory informationBanco Sabadell Annual Report 2011

245 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Direct Indirect Proportional holding (%) ce Real estateReal estateElectricity utilityReal estateReal estateReal estateReal estateReal estate MálagaReal estate de Pisuerga Magaz MálagaReal estateReal estate AlicanteReal estate Burgos Murcia Alicante Sabadell Alicante - Guipúzcoa - Navarra Málaga 49.00 - 49.50 - - 34.14 - 41.00 25.00 23.01 - 40.00 25.00 - - - - 40.00 - 30.00 45.00 32.20 Principal businessPrincipal Real estateReal estateReal estate Registered offi Alicante Murcia Murcia - - 45.00 - 49.70 40.00 Real estateReal estateReal estateReal estate Murcia Vizcaya Málaga Vizcaya - - - - 40.00 20.00 33.78 40.00 Annex I: Companies in the Banco Sabadell group at 31 December 2010 December at 31 group Sabadell in the Banco I: Companies Annex n 21, S.L. (a) n 21, . Costablanca, S.L. (a) S.L. . Costablanca, (1) Accounted for by the equity method because the parent company does not have managerial control. does not have parent company the equity method because the (1) Accounted for by S.A. Banco Guipuzcoano, (a) Included in the consolidated accounts as a result of the acquisition of the parent company. (b) 25% of the voting rights are held by Parc Eòlic Veciana-Cabaro, S.L. Eòlic Veciana-Cabaro, Parc S.L. (a) Finestrat, Boulevard Parque S.L. (a) del Segura, Parque S.L. Eólico Magaz, Parque S.L. (a) PR 12 PV 15, S.L. (a) Proburg BG XXI, S.L. (a) Promociones Abaco Costa Almeria, S.L. (a) Promociones Aguiver, (a) S.L. Promociones Florida Casas, S.L. (a) Promociones y Desarrollos Creaziona Castilla la Mancha, S.L. (a) Promociones y Desarrollos Urbanos Oncineda, S.L. (a) Residencial Haygon, S.L. (a) Saprosin Promociones, S.A. SBD Creixent, S.A. S.I.C.A.V., Sociedad de Cartera del Vallés, S.L. y ParticipacionesSociedad de Inversiones COMSA EMTE, S.L. (a) Sureste, Torre S.L. (a) Txonta Egizastu Promozioak, A.I.E. (a) Urtago Promozioak, S.L. (a) Munain, Vera S.L. (a) Vistas 21, del Parque Total Real estate Real estate utility Electricity Real estate Real estate Holding company estate Real Society of investment Madrid Real estate Barcelona Alicante Real estate Navarra Esplugues de Llobregat Almería Sant Cugat del Vallès Alicante Alicante Guipúzcoa - - 42.72 - 20.00 - 20.00 - 40.00 - - 33.00 50.00 40.00 - 40.00 - - 45.02 35.00 Mirador del Segura 21, S.L. (a) 21, Mirador del Segura (a) S.L. Golf, Mursiya S.L. (a) Naguisa Promociones, S.L. (a) NF Desarrollos, Norfi Real estate Real estate Málaga Navarra - - 32.20 45.00 Name of undertaking (1) Equity-accounted companies (a) S.L. Vil I, Key S.A. (a) Bareño, Kosta S.L. (a) Lagar de Tasara, A.I.E. (a) Lizarre Promociones, S.L. (a) Mancha, Castilla la Loalsa Inversiones M.P Real estate Madrid - 20.00 for tax purposes Treated as Treated consolidated t to profi Contribution consolidated

to reserves or losses of

Contribution undertakings consolidated WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo net Group investment Total assets 0 14,339 (4,035)(1,335) 0 14,339 paid (4) 26,163 466,476 191,755 79,895 191,755 26,163 466,476 Dividends Financial data (2) Capital Reserves Result (3) 10,000 3,228 1,667 10,000 3,228 49,280 5,000 1,753 0 833 No ., S.A. ., 33,155 9,378 3,667 3,234 No 16,694 6,467 1,380 7,813 Erbisinia Renovables, S.L.(a)S.A. Renovables, S.L. Iberoamericana, (f) Proportionally consolidated companies S.L.(a)Emte Renovables, Erbisinia Industries, Financiera S.L. (a)Jerez Solar, No S.L.Plaxic Estelar, S.L. Total 86 0 0 2,705 Equity-accounted companies (1) 6350 0 721 0 (e)(3) S.A. (b)Adelanta Corporación, 230 0 3 15,716 1,128 S.A. (a)Air Miles España, 282 Aldoluz, 7,443 1,016 23,615 S.L. (a)Anara Guipuzcoa, 0 141 S.A. (6,731) No A.I.E. (c) Regional Cántabra, Aviación S.L. A.I.E. Alfambra CRJ-900, Aviones 6,628 (2) A.I.E. Cabriel CRJ-900, Aviones 10 1 0 0 A.I.E. Gorgos CRJ-900, Aviones No B.H.D., A.I.E. Sella CRJ-900, Aviones S.A. (a)Banco del Bajío, 0 0 0 0 0 103 E.G.F.P BanSabadell Pensiones, No 8,050 Renovable, Financiero Reaseguros S.A. de Seguros y BanSabadell Vida, S.L. (a)Biodiesel Aragón, 2,010,789 38,693 S.L. (a)Casas del Mar levante, 1,348 15,001 S.A. (b) 157,350 11,152 37,610 11,661 C-Cúspide 6, No Centro 3,050 (96) Lda. (b)Cepric Inmobiliaria, Energía (c) S.L. (e)Desarrollos Inmobiliarios Pronegui, 301 29,606 S.A. (a)Dexia Sabadell, 3 S.G.E.C.R. S.A. (a)Diana Capital Inversion S.L. (d)Egumar Gestion, (971)No 4,496 43,858 72 (c) S.L. Espazios Murcia, (58)S.L. 37,441 (1,056) S.L. (a)Establecimientos Industriales y Servicios, 0 0 23 4,495 150 (6,618)0 0 50 0 0 ESUS 4,495 S.L. (b)Eurofragance, 210,590 4,495 S.A. (d)FS Colaboración y Asistencia, (1,463) 3,387 (22) Garnova, 1,859 (1,459) (3,164) S.L. SPE (a) 141,534 Gate Solar, 2,483 444 S.L. (1,459) 0 S.A. (a)Gaviel, S.A. 40,711 S.A. (b)General de Biocarburantes, (1,457) 1,756 S.A. Arte (b) sobre Papel Grafos, 430,473 (51) S.L. (a) 687 Guisain, 892 5,911 S.A. (g)Harinera Ilundain, (52) 74 8,106 0 (58) 606 S.L. Harugui Gestion y Promoción Inmobiliaria, (52) 0 49 0 Hidrophytic, 57,099 IFOS, (51) 0 646 1,000 (3,812) 138,109 (3,130) S.L. Improbal Norte, 7 66,120 S.L. Inerban Proyectos, 5,000 237,061 0 0 2,155 113,694 35,865 6,535,069 S.A. (a)Intermas (2,100) Nets, 42,814 5,106 1,814 13,863 5,374 No 0 S.L (b)89,740 de la Penya, J. Feliu 48,072 0 3,379 754 0 (1,419) 37,202 Sub-total (2,891) (105) 600 600 135,881 (18) 104,517 1,894 20,450 0 4,500 (520) 27,106 4,902,609 7,824 6,347 (262) 20,450 79 (5) 11,162 186 20,435 1 6,000 55,240 593 2,022 618 101,133 20,430 2,140 704 (268) 1,060 No 90,911 0 (9) 1,800 0 (298) 3,005 2,642 (59) 1,060 0 869 93 0 0 0 473 1,060 (5,130) (36) (2,968) 0 40 0 60 5,673 20,356 (225) 1,060 23,698 6,416 17,363 480 60,122 (288) 42 33,458 7,814 14,872 1,203 18,116,324 (5) 0 796 (118) (287) 60 (1,424) 157 0 0 (14) (287) No 2,850 4,200 No 12,369 No (95) 6,196 (311) 101,226 (287) 37,443 2,820 No 0 0 0 0 0 0 0 0 0 1,352 (14) 730 0 1,000 17,417 97 0 No No 8,793 300 88 (34) (15) No (1,915) 0 851 91 0 456 846 (15) No 56,496 (1,882) (272) (15) 0 0 No 0 0 3,888 899 0 113 23,587 No 6,038 No 0 26,872 306 0 23,052 (232) 8,690 (4) No (1) (1,234) 0 (4) 2,081 10,616 19,889 0 No 4,601 No 33,889 (311) 887 2,794 1,944 No 56 42 0 0 No 3,888 0 2,250 0 0 No 9,050 0 0 (10) 0 3,781 29 600 31 1,503 No 0 10,012 0 1,299 No (130) 0 0 0 2,354 No 0 0 0 69,046 38 9,779 0 76,590 822 0 630 0 (20) No 2,933 No 0 22,213 1,542 0 563 10,501 306 (152) 500 No No 0 1,333 18 24 No No No 0 105 No (920) No 0 1,000 No (11) (2) (2) 0 40 No (13) No No No No 0 No No BanSabadell Seguros Generales, S.A. de Seguros y Reaseguros S.A. de Seguros BanSabadell Seguros Generales, Annex I: Companies in the Banco Sabadell group at 31 December 2010 December at 31 group Sabadell in the Banco I: Companies Annex €’000 Name of undertaking

Statutory informationBanco Sabadell Annual Report 2011 246 for tax purposes Treated as Treated consolidated t to profi Contribution consolidated

Statutory informationBanco Sabadell Annual Report 2011 247 to reserves or losses of Contribution undertakings consolidated net

Group WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo investment Total assets paid (4) 26,163 466,476 191,755 79,895 191,755 466,476 26,163 Dividends 26,376 540,029 193,040 79,359 193,040 26,376 540,029 151,773 2,384,055 4,761,117 380,040 4,761,117 151,773 2,384,055 Financial data (2) Capital Reserves Result (3) 2,743 (267)2,743 (482)No 430 0 1 15,706 0 15,000 221,312 1,208 160 254,941 47,271 0 160 No n 21, S.L. (c)S.L. 21, n No 3 0 0 4,786 0 0 10 0 . Costablanca, S.L. (d). Costablanca, 5,000 (116) (1) 0 53,019 2,189 0 0 No Equity-accounted companies (1) Equity-accounted companies Sub-total (e) S.L. Vil I, Key S.A. (a) Bareño, Kosta S.L. (a)Lagar de Tasara, A.I.E. (a) Lizarre Promociones, S.L. (b) la Mancha, Castilla Loalsa Inversiones S.L. M.P S.L. (c)Mirador del Segura 21, S.L. Golf, Mursiya S.L. (a)Naguisa Promociones, S.L. NF Desarrollos, Norfi S.L. (a) Eòlic Veciana-Cabaro, Parc No Aguiver, S.L. (b) Finestrat, Boulevard Parque 2,000 0 0 S.L. (c) del Segura, Parque S.L. (a) Eólico Magaz, Parque 25,716 S.L. (a)PR 12 PV 15, S.L. (d)Proburg BG XXI, 180 S.L. (b)Promociones Abaco Costa Almeria, 20 0 0 5,000 Promociones S.L. Promociones Florida Casas, 835 659 1,500 4,441 3,574 164 (2,970) 300 3,300 (21) (18) 3 (172) 801 5,000 300 0 160 (732) 322 1,752 1,500 (641) (12) (736) (419) 0 0 (179) (126) 1,096 4,000 120 (1,226) (2,066) 180 (2) (879) 0 (1) 15,986 199 0 0 (258) (155) 0 (570) (10) 547 23,569 (298) (6) 0 (1) 0 40,281 24,289 0 36 889 0 0 0 (30) 44,543 533 73 0 6,355 1,649 0 0 6,441 (1) 39,713 296 310 30,226 0 7,728 2,739 2,547 45,869 25,499 0 0 52 0 270 0 1,858 97 0 0 0 31 (87) 6,582 0 12,764 64 125 6,990 0 0 0 844 0 0 0 (519) No (520) 0 853 0 0 48 0 0 No No 0 56 No 0 34 No 21 No 0 0 (1) (1) 0 0 No No No No 0 No No 0 No No 13 0 No No No Promociones y Desarrollos Creaziona Castilla la Mancha, S.L. (b) Promociones y Desarrollos la Mancha, Creaziona Castilla S.L. (c) y ParticipacionesSociedad de Inversiones COMSA EMTE, Name of undertaking Annex I: Companies in the Banco Sabadell group at 31 December 2010 December at 31 group Sabadell in the Banco I: Companies Annex €’000 nal dividends for the previous year and interim dividends paid to the group during the year. nal dividends for the previous Torre Sureste, S.L. (b) Sureste, Torre adjustments S.L. (a)Txonta Egizastu Promozioak, A.I.E. (a)Urtago Promozioak, S.L. (g) Munain, Vera S.L. (c)Vistas 21, del Parque Total Consolidation Total managerial control. does not have the equity method because the parent company (1) Accounted for by translated into euros at the exchange rate ruling been on 31 December 2010. companies have (2) Foreign-registered the Annual General Meeting of each company. by (3) Results are subject to approval (4) Includes fi (a) Data shown for these undertakings under “Financial 2010. data” are correct as of 30 November (b) Data shown for these undertakings under “Financial data” are correct as of 31 October 2010. (c) Data shown for these undertakings under “Financial data” are correct as of 30 September 2010. (d) Data shown for these undertakings under “Financial data” are correct as of 31 August 2010. (e) Data shown for these undertakings under “Financial data” are correct as of 30 June 2010. 600 (f) Data shown for these undertakings under “Financial 2010. data” are correct as of 31 May 349,571 (g) Data shown for these undertakings under “Financial data” are correct as of 31 December 2008. 0 0 0 0 0 0 0 100 300 568 164 60 1,021 206 1 0 (3) (16) 1 (2) 0 1 0 0 15,694 0 20,033 275 0 397 6,194 120 1,910 30 0 53 0 25 0 0 0 0 0 No 2 0 No No 0 No No Promociones y Desarrollos Urbanos Oncineda, S.L. (e)Promociones y Desarrollos Urbanos Oncineda, S.L. (b)Residencial Haygon, S.L. (b)Saprosin Promociones, S.A. (a)SBD Creixent, S.A. S.I.C.A.V., Sociedad de Cartera del Vallés, 300 4,818 (7) 2,604 4,433 541 0 12,895 5,238 (281) (152) (1,889) 0 (192) (100) 53 6,713 84 0 5,186 0 95,338 88 0 422 7,144 1,885 20,722 0 1,989 73 2,968 0 (120) 0 0 (249) (98) No No 103 No 21 No No WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo In the first half of the year instability mainly centred on Greece’s fiscal and political problems and on discussion Greece’s fiscal and political problems year instability mainly centred on In the first half of the financial tension July did not prevent a worsening of by the European Council on 21 The agreements reached at its session on 26 October, again demonstrated the difficulty of In the fourth quarter the European Council, the year has also seen a number Apart from the crisis occasioned by sovereign debt problems in the euro zone, drop towards the end of the year. In Spain, economic activity has stagnated in the year as a whole, with a slight countries maintained clearly In the scenario we have described, the central banks in the main developed Macroeconomic Environment Macroeconomic and Advances in economic euro zone in 2011. debt crisis in the on the sovereign has continued to focus Attention not been sufficient in mechanisms for financial aid have the introduction of improvements fiscal governance and year as a result of intensified in the second half of the Financial instability in the area was to rectify the situation. countries. contagion in systemic swap for Greece. In of the private sector in a debt about the possible voluntary participation by European authorities its internal political crisis. for international assistance following April Portugal asked Italy. The following markets in countries such as Spain and affecting sovereign debt over the summer, significantly final agreement, to aid package for Greece, linked, in the in the July summit: (i) a new agreements were reached held by the private sector; (ii) an improvement in the conditions under which an orderly restructuring of public debt a more flexible bail-out mechanism which could operate via a precautionary countries could be bailed out and (iii) debt on the secondary market. The greater financial instability was the programme, with the purchase of public of bail-out mechanisms, the increasingly critical situation in Greece result of doubts about the implementation rating. The situation was aggravated by fears of a global recession and and rumours of a cut in France’s credit AAA rating by Standard and Poor’s. Against this backdrop Spain and Italy the downgrading of the United States’ and the ECB reactivated its programme to purchase assets, buying debt proposed additional corrective measures from both countries. zone and the measures announced did not inspire confidence in financial reaching agreements within the euro the European banks should be asked to comply with a higher capital ratio markets. In particular, it was agreed that sovereign debt, which led them to reduce their exposure to this asset class. in view of their exposure to European of firm agreements at the G20 meeting in November and the political crises These factors, together with the lack financial instability and the public debt crisis spread to countries like France. in Italy and Greece, accentuated the its risk-free status, risk premiums in inter-bank markets returned to the same Public debt in European countries lost of the markets financing credit entities remained closed. The European levels as at the end of 2008 and many a new budgetary agreement and greater coordination in economic policy Council meeting on 9 December, at which a step in the right direction but still insufficient to solve the euro zone’s were approved, was seen by agents as sovereign debt crisis. geopolitical tension in North Africa and of other shocks that have helped to inhibit world economic growth. Firstly, in March, Japan suffered a major the Middle East lead to a new high in the price of oil in the first quarter. Then, in the United States political opinion is natural disaster, causing disruption in world production chains. Moreover, the economy more difficult. Lastly, the clearly becoming polarised, making the adoption of measures to stimulate implementing to combat the risk of restrictive nature of the economic policies that emerging countries had been of the year. overheating led to a slowdown in their economic activity in the second half policy, a shrinking labour market and Domestic demand has been hampered by factors including restrictive fiscal to introduce structural reforms in financial instability in international markets. Nevertheless, Spain has continued financial sector. Constitutional limits areas such as pensions, collective bargaining and the plan to strengthen the growth of public spending by the state have been placed on the structural deficit and rules introduced governing the 20, the Partido Popular winning an and the largest local corporations. General elections were held on November absolute majority. to provide liquidity. The ECB accommodative monetary policies, including the adoption of coordinated measures to 1.00% in the last quarter, influenced in particular, after increasing its base rate in April and October, reduced it unconventional measures intended by concerns about inflation and the economic downturn. The ECB has adopted such as the introduction of to ease the problems of liquidity in the financial system and the lack of collateral, for reserves, reactivating the financing over 36 months, extensions to eligible collateral, lower requirements rate in the range 0%-0.25% and has programme to buy covered bonds, etc. The Federal Reserve has kept its base Consolidated reportConsolidated of the directors year 2011 for the

Statutory informationBanco Sabadell Annual Report 2011 248 Statutory informationBanco Sabadell Annual Report 2011

249 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo In long-term public debt markets, returns in Germany and the United States fell significantly to all-time lows. to all-time States fell significantly and the United returns in Germany public debt markets, In long-term of the year, against the dollar. In the first few months the euro ended the year down In the currency markets, fairly stably in the first half of the year, experienced a significant drop Finally, equity markets, after performing excluding reverse repos totalled €73,635.3 million at 31 December Gross loans and advances to customers loans and advances), at 5.95%, The loan loss ratio (bad and doubtful loans as a proportion of total qualifying million, up from €49,374.4 million On-balance sheet customer funds at 31 December 2011 stood at €52,827.0 above have resulted in a growth The relative performances of loans and advances and customer funds described the year was €8,024.2 million. This The value of assets in collective investment schemes (CIS’s) at the end of up 3.5% on the figure of €5,926.4 Assets held in pension funds sold by the group totalled €2,858.3 million, million at the close of the year, Overall, customer funds under the group’s management amounted to €96,062.0 indicated that economic conditions will probably ensure that it remains exceptionally low until mid-2013. It has also has also It until mid-2013. low exceptionally it remains that ensure will probably conditions economic that indicated in the mortgage activity support term and in the long rates interest to reduce measures new unorthodox adopted has extended and 0.00%-0.10%, the range in unchanged, its base rate kept has also of Japan The Bank market. and, in base rate at 0.50% part, has kept its of England, for its The Bank monetary programmes. its unorthodox to GBP by GBP 75,000 million programme held under its purchase the assets decided to increase the last quarter million. 275,000 a trend a haven for investors, are acting as that these assets instability has meant continuing financial Europe’s risk premiums In the euro zone’s peripheral countries in world economic activity. reinforced by the deterioration with the sovereign of the euro zone. In the fourth quarter, record highs since the creation are clearly rising, hitting Austria versus the for countries such as France and the whole area, the public debt spread debt crisis affecting the main credit of the EMU. The situation has led reached record levels since the creation German bund also and Ireland, in peripheral countries. The ratings of Portugal downgrade the sovereign debt of the rating agencies to advances in scepticism shown by the agencies regarding downgraded to “speculative”. The particular, have been countries at the end of the credit rating of all the euro zone debt crisis led them to review dealing with the sovereign the year. in European mechanisms for financial support and from ECB statements the euro enjoyed support from advances of Subsequently the euro stabilised and after September fell as a result suggesting an increase in interest rates. debt problems in the euro zone, a different message from the ECB and doubts regarding the solution of sovereign One of the few factors supporting the euro in this period was the repatriation the political crises in Italy and Greece. intervention in the currency market by the authorities, the yen gained ground of capital by European banks. Despite by global financial instability. against the dollar during the year, boosted worsening financial instability and the global economic downturn. Over the in the summer months, in response to a fall of -17.1%, compared to the -13.1% drop on the IBEX. In the United year the EURO STOXX 50 index recorded and finished the year practically unchanged, relatively unaffected by States the S&P recovered after the summer euro terms the S&P ended the year up +3.1% because of the euro’s relative the European sovereign debt crisis. In weakness. Statement of Financial Position stood at €100,437.4 million at the end of 2010, a rise of €3,338.2 Total assets for the Banco Sabadell group for 2010, representing a year-on-year increase of 3.4%. million compared with the year-end figure this heading, the most significant 2011, up from €73,057.9 million at the close of 2010, a rise of +0.8%. Under growth was in the “other loans” category, which increased by €1,921.3 million. The loan loss coverage ratio was was once again below the average for the Spanish financial services industry. 48.49%; this increases to 115.84% if mortgage security is taken into account. million at 31 December 2011. at the end of 2010 (+7.0%). Time deposits in particular grew by 9.1% to €32,819.8 included a €300 million issue of Demand deposits also grew by 2.5%. Customer funds at 31 December 2011 straight bonds launched last September. gap between them of €3,876.9 million in 2011. totalled €19,502.5 million, a fall of Debt securities and other negotiable instruments and subordinated liabilities -10.9% from the previous year’s figure of €21,894.1 million. the period. was 9.4% below the figure for 2010 and was in line with market trends in million at 31 December 20101. a similar amount to the €95,998.2 million reported at the end of 2010. WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Of the total number of branches of the Banco Sabadell group, 950 were operating under the SabadellAtlántico Of the total number of branches of the Banco Sabadell group, 950 were operating At the close of 2011, the group’s net interest margin totalled €1,537.3 million, falling by 5.4% year-on-year. by 5.4% year-on-year. million, falling margin totalled €1,537.3 net interest of 2011, the group’s At the close substantial method totalled €37.7 million and included consolidated by the equity Profits of group undertakings on the year (3.1% increased by €57.1 million (+11.1%) income was €573.6 million and Net fee and commission swap carried a €87.1 million gain on a debt-for-equity totalled €271.2 million, including Net income from trading million, of which €38.1 million corresponded to non-recurring Operating costs in 2011 totalled €1,145.1 impairment and other provisions) for the year 2011 was €1,230.7 million, The resulting operating profit (before million, up from €383.9 million the previous year. Provisions of €536.6 Net loan loss provisions totalled €512.4 in 2011 (€5.7 million) compared with 2010 (€296.1 million), which Profits on asset sales were not significant in 2010. Tier l capital was The net attributable group profit was €231.9 million, down from €380.0 million Branch network than at 31 December 2010. This Banco Sabadell ended the year 2011 with a total of 1,382 branches, 85 less specifically the fusion of different reduction of 85 offices is mainly due to reorganisation of the network, more SabadellGuipuzcoano. branch offices because of duplication of the names SabadellAtlántico and corporate banking branches); 179 name (including 48 specialist business banking branches and 2 specialist in Asturias and León; 110 were (including 5 business banking branches) were part of the Banco Herrero network operating under the Solbank brand, and SabadellGuipuzcoano branches; 15 were Banco Urquijo branches; 83 were 25 operated by Sabadell United Bank. the remaining 43 made up the group’s international network, including the Two ActivoBank customer service centres completed the network. Income and profit performance and profit Income net with a year 2011 ended the group Sabadell the Banco climate, financial and economic the difficult Despite real estate revaluations and securities for loan defaults, million after net provisions profit of €231.9 attributable more than in 2010. million, 8.4% amounting to €1,048.9 write-downs in Guipuzcoano was included of 2010 (Banco for the whole Banco Guipuzcoano like-for-like, including Comparing result of been 4.4% as a decline would have the year-on-year December 2010), of consolidation from the scope spreads and by careful management of interest rate movements. This was partly offset by negative yield curve Liability Committee. a portfolio managed by the Asset and interest income from from affiliate banks in (€14.3 million), and profits the group’s insurance and pension associates contributions from of €21.1 million. which together contributed a total del Bajío and Centro Financiero BHD), Latin America (Banco services, the whole of 2010). Fees for securities-related including Banco Guipuzcoano for on a like-for-like basis loans performed particularly well. cards and syndicated of 126 million BS shares in order to buy back preference shares out in the first quarter (issue and placement Net income in 2010 also included gains of €89.0 million on a transaction and subordinated debt at a discount). bond exchange offer in the second quarter of the year. Financial involving a preference share and subordinated of €139.0 million on the trading portfolio and €45.3 million on sales of earnings in 2011 also included gains available-for-sale fixed-income securities. costs in relation to the acquisition of Banco Guipuzcoano). Non- expenses (severance payments and restructuring million. On a pro forma basis (including Banco Guipuzcoano for the recurring expenses in 2010 totalled €22.6 and of the incorporation of Lydian Private Bank in the second half of 2010 whole of 2010 and excluding the impact 2010), operating costs in 2010 fell by 3.7% year-on-year. The cost:income a sale and leaseback operation in April was 45.75%. ratio with non-recurring costs excluded down 8.3% on the previous year. of real estate and financial assets. €186.0 million of the provisions million were also made to cover impairments to reserves the extraordinary revenues generated from the debt-for-equity made in 2011 were as a result of taking to the gross impact of the Spanish tax authorities’ ruling on the tax treatment swap carried out in February and due “corporate income tax” heading as a net amount of €69.4 million. of goodwill. This latter was taken to the deal in April 2010 and another gain of included a included a one-off gain of €250.0 million on a sale and leaseback Gràcia. €29.0 million euros from the sale of a property in Barcelona’s Passeig de was 9.01%, compared with 8.20% in 9.94%, up from 9.36% at the end of the previous year. The core capital ratio 2010.

Statutory informationBanco Sabadell Annual Report 2011 250 Statutory informationBanco Sabadell Annual Report 2011 251

Change y.o.y (%) y.o.y WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo onsolidation from 9.3% 11.2% 2011 2010 (1) 2010 2011 t 794,075 802,565 (1.1) gures for 2010 include Banco Guipuzcoano for the whole of the fi nancial year (Banco Guipuzcoano was included in the scope of c included nancial year (Banco Guipuzcoano was gures for 2010 include Banco Guipuzcoano for the whole of the fi t or loss before taxt or loss before 389,759 475,175 (18.0) December 2010). In 2011, despite a difficult operating environment, a major promotional effort aimed at attracting new customers In 2011, despite a difficult operating environment, a major promotional effort million in 2011, with pre-tax profits Net interest income attributable to Commercial Banking totalled €1,275.9 Net Interest incomeNet Interest (net) and commissions Fees Other incomeGross incomeOperating expensesOperating profi Impairment lossesProfi Ratios (%): ROE ciencyEffi Loan loss ratio ratioLoan loss coverage 379,777 Business volumes (€Mn) 1,275,890 Loans and advancesCustomer accountsSecurities 1,343,669 378,981 Other details Employees 24,859 1,680,526 (886,451)Branches in Spain (5.0) (404,316) 1,748,574 0.2 (946,009) 25,924 (327,390) (3.9) 48.0% (6.3) (4.1) 6.6% 52.7% 55,788 23.5 54,188 55.7% 54.1% 5.6% 57,115 8,611 8,776 (1.9) 51,018 1,322 7,259 7,324 (0.9) (2.3) 1,412 6.2 (6.4) (1) The fi (1) The the group’s business lines. It focuses on providing financial products and Commercial Banking is the largest of SMEs, retailers and individuals — including private banking, services to large and medium-sized businesses, — and to non-residents and professional groupings. A strong focus personal banking and mass market services customers receive a personalized service to suit their needs, whether from on market specialization ensures that the under the various group brands, or via other channels that support expert staff assigned to branches operating to remote banking services. customer relationship and provide access and deposits was key to achieving increased market shares for the Bank. 52.7%. Loans and advances totalled reaching €389.8 million. The ROE was 9.3% and the cost:income ratio was €55,788 million and customer funds stood at €54,188 million. Corporate Banking and Global Operations services to large corporates and financial Corporate Banking and Global Businesses offers a range of products and International Trade, Consumer Finance, institutions in Spain and abroad, and covers the following business areas: BS Capital, Corporate Finance and Structured Finance. €’000 Divisional review Divisional Banking Commercial WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Change y.o.y (%) y.o.y 94 89 5.6 5.6 94 89 444 1,106 (59.9) 2011 2010 2011 16.3% 9.7% 10.4% 12.7% t 180,696 159,806 13.1 t or loss before tax 183,266 108,815 68.4 Furthermore, maintaining a high level of activity, together with the revaluation of risks conceded, in line with the of activity, together with the revaluation of risks conceded, in line with the Furthermore, maintaining a high level the close of the previous fiscal year, The non-performing loans ratio remained at the minimum levels as those at Ratios (%): ROE Net Interest income (net) and commissions Fees Other incomeGross incomeOperating expensesOperating profi Impairment lossesOther gains/lossesProfi ciency Effi Loan loss ratio ratioLoan loss coverage 26,658 Business volumes (€Mn) 165,901 Loans and advancesCustomer accountsSecurities Other details 153,677 17,426 Employees 9,203 201,762 (21,066)Branches in SpainBranches abroad 2,570 53.0 12,055 183,158 8.0 (23,352) 0 (50,991) (23.7) 10.2 86.7% (9.8) 0.7% 0 11,344 (105.0) 4,207 84.5% 1.1% 10,923 0.0 4,261 2 2 3.9 (1.3) 2 2 0.0 0.0 market situation, permitted us to improve the net interest margin to reach +8%. This, together with the excellent market situation, permitted us to improve the net interest margin to reach operating margin to increase to +13%. performance of the commissions business and lower costs, permitted the account, thus permitting the fiscal and had practically no impact on the forecast with regards the profit and loss year to close at +68% before tax. Banco Urquijo financial market. With a business Banco Urquijo is one of the oldest and most prestigious banks in the Spanish service and its specialization in model focused on private banking, it is characterized by its client focused comprehensive consultancy and wealth management. €’000 Corporate Banking of the position reinforcing segment, market in this active entities leading one of the to be continues Sabadell Banco previous as in maintained was level of activity same year, the the fiscal During corporations. large among the group use of capital (RaRoC on the basis of the with our clients maximizing relations the clear focus of years, with With regards geographical / renovation. rigor in risk concession new clients and as well as capturing system), through from the unit comes year, 20% of revenue consecutive that for the second we must highlight diversification, and Miami). in Paris, London teams located abroad (Corporate our platforms

Statutory informationBanco Sabadell Annual Report 2011 252 Statutory informationBanco Sabadell Annual Report 2011 253

Change y.o.y (%) y.o.y WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo 207 219 (5.5) 207 219 6.2% 4.6% 2011 2010 2011 4,955 5,146 (3.7) 53.7% 59.7% t 17,697 14,535 21.8 t or loss before tax 19,325 13,753 40.5 During the fiscal year, it was able to respond to market demands with a profit before tax of €19.3 million, which to market demands with a profit before tax of €19.3 million, which During the fiscal year, it was able to respond In 2011, it consolidated its leadership as Spain’s best bank specializing in private banking, according to the to the according banking, in private specializing bank Spain’s best as its leadership it consolidated In 2011, Net Interest income (net) and commissions Fees Other incomeGross incomeOperating expensesOperating profi expense (net)Provisioning Impairment lossesOther gains/lossesProfi Ratios (%): ROE ciency Effi Loan loss ratio ratioLoan loss coverage 15,978 27,753 Business volumes (€Mn) Loans and advancesCustomer accountsSecurities 19,173 26,888 Other details 6,598 (32,632)Employees 50,329 Branches in Spain 1,583 (16.7) (35,029) 3,503 49,564 3.2 86 (41) (125) 88.4 (6.8) 219.7% 1.5 (191) (466) 0.9% -- 799 79.6% 2,956 (91.2) -- 2.3% 1,029 3,252 15 (22.4) (9.1) 14 7.1 represented an increase of 40.5% with respect to the previous year. The business volume rose to €8,710 million, respect to the previous year. The business volume rose to €8,710 million, represented an increase of 40.5% with of €7,911 million and total client loans of €799 million. The non- with a total managed and deposited resources performing loans ratio decreased to 0.91%. Products and Research Investment, analysis of financial markets in order Banco Sabadell has a team of professionals dedicated to research and the planning the development of to establish a strategy of asset assignment with the aim of designating investments, for clients. investment products and the analysis mandate of the various investable assets “Best Private Banking Awards” awarded annually by the magazine Euromoney among entities specializing in wealth in specializing entities among Euromoney the magazine by annually awarded Awards” Private Banking “Best and model business of the bank’s success the acknowledged again once publication This financial management. Best award for Spain’s obtained the highest Banco Urquijo service within the sector. the quality of its reaffirmed time. for the second Private Banking Service and Best Global Private Bank €’000 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Change y.o.y. (%) y.o.y. 153 158 (3.2) 153 158 2011 2010 2011 14.7% 24.5% 14.7% 56.6% 66.7% t 9,712 14,291 (32.0) Promoting the catalogue of products and improvement in service through various channels as well as Promoting the catalogue of products and improvement in service through t or loss before taxt or loss before 9,712 14,278 (32.0) The most significant projects carried out during the year, classified as Technological Innovation, were aimed The most significant projects carried out during the year, classified as Technological action: The projects of the Systems Plan were structured on the following lines of Clients: The group’s Asset Management business, which is carried on by the functions responsible for managing its The group’s Asset Management business, management by the Spanish-domiciled mutual fund industry as a whole, At the close of 2011 total assets under funds was maintained during the year and return guarantees were The group’s offering of guaranteed return fund launched in early 2004, ended the year with assets of €990.2 Sabadell BS Inmobiliario FII, a real estate million and the result before tax reached €9.7 million. The ROE ratio In 2011, the gross margin stood at €29.1 Ratios (%): ROE Gross incomeOperating expensesOperating profi Other gains/lossesProfi ciency Effi Business volumes (€Mn) in CIS’s Assets under management not managed including schemes sold but assets in CIS’s Total Other details Employees Branches in Spain 8,024 (19,410) 29,122 8,853 (18,651) 32,942 0 6,737 (9.4) (11.6) 4.1 (13) 7,422 (9.2) ------Research and development and technological integration of During the 2011 financial year, the main transversal project was the operative sector of Information Systems during Banco Guipuzcoano, which required the participation of the entire resources the first four-month period. Growth, Profitability, Efficiency and at the materialization of the 2011-2013 Master Plan, “GREA”, encompassing Ambition. in the EXPANSION line, with pre- the increase in client resources. In this section we can highlight the projects products and services for the granted financing, and the launch of the EXPLORER project for providing advanced project, the Generalitat of Catalonia internationalization of Spanish companies. Also standing out was the GAUDI Comunidad de Madrid. payment gateway and the issue of pre-pay tickets for school expenses in the collective investment schemes (CIS’s), combines asset management with the selling and operation of CIS’s; it also combines asset management with the selling and operation of CIS’s; it collective investment schemes (CIS’s), Sabadell businesses that hold portfolios of assets. manages investments for other Banco were €132,266.5 million. The volume of Spanish-domiciled mutual fund including real estate investment funds, Sabadell group amounted to €5,193.5 million at the close of 2011. assets under management by the Banco as funds totalling €1,176.9 million at 31 December 2011 Guaranteed funds issued in respect of nine guaranteed of assets at the close of the year. Assets in guaranteed funds increased a whole accounted for €2,030.5 million of financial assets under management in funds subject to Spanish in importance relative to the total value the year before. jurisdiction, rising to 48.3% from 40.1% an industry leader for investment in real estate assets on the Spanish million and 16,389 fundholders. It remains market. stood at 14.7% and the efficiency ratio at 66.7%. Asset Management Asset €’000

Statutory informationBanco Sabadell Annual Report 2011 254 Statutory informationBanco Sabadell Annual Report 2011

255 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Projects aimed at improving productivity and efficiency such productivity and efficiency aimed at improving Projects With the aim of developing the integrated tools of front and back the integrated tools of front With the aim of developing With the aim of increasing the scope of BSOnline and promoting the the scope of BSOnline and promoting With the aim of increasing This contemplated the development of business management tools aimed at capturing capturing at tools aimed management of business development the contemplated This Business network: Business of administrative tasks: and elimination Automation Instant Banking and Electronic Channels: Instant Banking and In addition to this primary function, the Department also responds to requests for assistance and information In addition to this primary function, the Department also responds to requests days in highly complex cases (34.11 Average response times in dealing with claims and complaints were 23.68 Treasury, Markets and Wealth Management: Treasury, Markets and new clients in the private client and companies segments. In this sphere, the most relevant projects were the were projects relevant the most this sphere, In segments. companies client and the private clients in new all the front office a single in which integrates desktop a new corporate project, 3.0 of the PROTEO implementation relevant project was also usability. The ARGENT thus improving network of offices, tools used in the systems and the risk-value model, deploying developing the processes, risks, systems for business support in that it integrated system. proposal simulation and business clients and the products model for private pre-granted as the launch of the paperless office and the document digitalization factory, complemented with the centralization with the factory, complemented digitalization office and the document of the paperless as the launch projects for the the corresponding documentation. Also, of Risk Files with the digitalization of of the registrations during this year. of products and services were initiated registration processes and purchasing optimization of client office and developing the activities of the treasury room, the TRADE project was implemented. In the area of wealth the TRADE project was implemented. the activities of the treasury room, office and developing Portfolios, stood out. Management of Multi-asset distribution, the MMP Project, Discretional management product Outlook the a plan created with highly ambitious business objectives which were 2011 was the first year of the Plan CREA, capacity and operative efficiency that the group has achieved in recent result of achieving the high level of business Efficiency were the axis of this new plan, with targets such as capture / share, fiscal years. Growth, Profitability and business and optimization of capital, which was carried out in a complex margin, cost / efficiency, international solvency. The results of the first year were very positive, especially with environment with regards liquidity and even and market shares. This ratified the idea with which it was created and regards to the capturing of new clients bank maintained the highest standards of service quality. more so taking into account that the Risk management policy in the Banco Sabadell group can be found in Note 37. A full description of risk management Customer Service Department Banco Sabadell group. The head of the The Customer Service Department is part of the control function within the Comptroller General. The Department Department is appointed by the Board of Directors and reports directly to the and other users of the is responsible for looking into and resolving claims and complaints from customers contracts or arising from disclosure group’s financial services that relate to their legal rights and interests under best practice. requirements, customer protection legislation and financial services industry the meaning of the Spanish from customers and users on matters that do not amount to complaints within for the Protection of Economics Ministry’s Order 734/2004 of 11 March and the group’s own Regulations were handled by the Department Customers and Users. A total of 973 such enquiries and requests for assistance in 2011, down from 810 in 2010. 2010) and 2.37 days in cases of low days in 2010); 11.51 days for cases of medium complexity (10.48 days in response time under the Economics complexity (5.92 days in 2010). This compares with the 60-day maximum and Users. Ministry’s Order and the group’s own Regulations for the Protection of Customers Cases Handled 2010), of which 3,212 (3,092 in 2010), In 2011 the Customer Service Department received 3,245 cases (3,146 in Ministry’s Order 734/2004. A total of were looked into according to the procedure established by the Economics 54% were complaints (50% in 2010) 3,212 cases were resolved or otherwise dealt with (3,184 in 2010), of which unresolved (186 in 2010). and 46% were claims (50% in 2010). At the end of the year 186 cases remained use of mobile banking, the Personal Finance projects to improve the client’s experience when using the channel improve the client’s experience when the Personal Finance projects to use of mobile banking, operative mobile platform to the market’s relevant availability of all operations from the were completed. The iPhone, etc.) was also extended. systems (Andriod, WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd - WorldReginfo Of the total number of cases examined by the Customer Service Department, 21% resulted in a decision in a decision resulted 21% Department, Service the Customer by examined of cases total number Of the Banco Sabadell to him by customers or users of the with claims or complaints referred The Ombudsman deals were referred directly (429 in 2010) and another 27 were received by the Ombudsman A total of 415 cases Other information sheet events, see notes 28 and 44, For information on purchases of the Bank’s own shares and post-balance respectively. Corporate Governance Market Law, the Banco Sabadell group has prepared an Annual Report As required by Article 61 bis of the Stock 2011 which forms part of this Report of the Directors and has been provided on Corporate Governance for the year a section setting out the procedures put in place by the Bank to verify as a separate document and includes on corporate governance that currently exist in Spain. compliance with the recommendations favourable to the customer or user (23% in 2010), 4% were settled by agreement with the customer or user (3% or user customer with the agreement settled by 4% were 2010), (23% in or user customer to the favourable cases 66% of remaining The (9% in 2010). favour or user’s customer partly in the resolved 9% were and in 2010), (64% in 2010). to the group a decision favourable resulted in Ombudsman and Stakeholder Customer María Faus Mompart. performed by Esteban a role Stakeholder Ombudsman, has a Customer and The group to him by the He also adjudicates on cases referred or on appeal from a prior procedure. group, either directly Customer Service Department. 2010) 13 were Of the 442 claims received (503 in Service Department (74 in 2010). to him by the Customer in 2010), with and resolved by the Ombudsman (440 and 442 were looked into withdrawn by the complainant in 2010). Of the and 5% in the customer’s favour (5% in the group’s favour (44% in 2010) 48% being decided or complaint in 26% the Bank accepted the claim a decision or other settlement was reached, other cases where 2010). In 5% of favourable to the group (17% in and 9% resulted in decisions partly of cases (26% in 2010), prejudice to the to be beyond his competence (without the Ombudsman declared the matter cases (1% in 2010) user and a further 7% were settled by agreement with the customer or claimant’s right to take his claim elsewhere) (7% in 2010). Complaints to SupervisoryAuthorities to users of financial services are entitled to submit complaints or claims Under Spanish law customers and other to the Spanish stock market regulator (CNMV), or to the Directorate- the Bank of Spain’s complaints department, To do so, however, they must first have sought a resolution of the issue General for Insurance and Pension Plans. institution involved. by raising it directly with the bank or other

Statutory informationBanco Sabadell Annual Report 2011 256 — — — — — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — Banco Sabadell group contact details — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — Banco Sabadell — Regional Divisions Plaza Sant Roc, 20 08201 Sabadell — Barcelona Barcelona Av. Diagonal, 407 bis Spain 08008 Barcelona +34 934 033 268

— Catalonia — www.grupobancosabadell.com Plaza de Catalunya, 1 08201 Sabadell +34 902 030 255 — General enquiries +34 902 323 555 — Madrid, Castile and Galicia

[email protected] Príncipe de Vergara, 125 contact details Banco Sabadell group 28002 Madrid — Shareholder relations +34 913 217 159 +34 937 288 882 [email protected] — Northern Region Ercilla, 24, 3ª planta t — Investor relations 48011 Bilbao +34 902 030 255 +34 944 232 100 [email protected] — Southern Region and Canary Islands — Communication Martínez, 11 and institutional relations 29005 Málaga +34 902 030 255 +34 952 122 350 [email protected] — Valencia, Murcia and Balearic Islands — Compliance, CSR Pintor Sorolla, 6 and Corporate Governance 46002 Valencia 2011 Banco Sabadell Annual Report +34 902 030 255 +34 963 984 055 [email protected] — Banco Herrero Fruela, 11 33007 Oviedo +34 985 968 020

259 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — — Credits for this Annual Report — — — Creative Director Mario Eskenazi — — Photography Maria Espeus — — Translation InterSpanish, London

National Bank Catalogue No. B-17201-2012 WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd — anual 2011 — 130è Exercici —Informe Banc Sabadell —Banc — Sabadell — —Informe — Anual 2011 — — 130è — Exercici — — — — — — WorldReginfo - 1390730b-1978-4c67-a557-8d754b1de9cd