Annual Report

2019 ANNUAL REPORT

Fondo de Garantía de Depósitos de Entidades de Crédito

FONDO DE GARANTÍA DE DEPÓSITOS DE ENTIDADES DE CRÉDITO*

ANNUAL REPORT 2019

Approved by the Management Committee on 11 May 2020 and presented to their members and to the Bank of Spain.

*Translation of the annual report originally issued in Spanish. In the event of a discrepancy, the Spanish language version prevails Abbreviations, acronyms and signs

EUR M.: Million Euro. EUR B.: Billion Euro. EUR t.: Thousand Euro. FGDEC: Fondo de Garantía de Depósitos de Entidades de Crédito. (Deposits Guarantee Fund of Credit Institutions) FGDEB: Fondo de Garantía de Depósitos en Establecimientos Bancarios. (Deposits Guarantee Fund of Banks Institutions) FGDCA: Fondo de Garantía de Depósitos en Cajas de Ahorro. (Deposits Guarantee Fund of Saving Banks) FGDCC: Fondo de Garantía de Depósitos en Cooperativas de Crédito. (Deposits Guarantee Fund of Credit Unions) FROB: Fondo de Reestructuración Ordenada Bancaria. (Fund for Orderly Bank Restructuring) SAREB: Sociedad de Gestión de Activos Procedentes de la Reestructuración Bancaria, SA. (Asset Management Company From Banking Restructuring)

Management: Sociedad Gestora de los Fondos de Garantía de Depósitos en Entidades de Crédito, AIE. (Management Company for the Deposits Guarantee Fund) —: Amount equal to zero or non-existence of the considered concept. ( ): In an amount, indicates it is negative.

FONDO DE GARANTÍA DE DEPÓSITOS DE ENTIDADES DE CRÉDITO José Ortega y Gasset, 22 - 28006 MADRID

5 MANAGEMENT COMMITTEE OF THE FONDO DE GARANTÍA DE DEPÓSITOS DE ENTIDADES DE CRÉDITO (At 31 December 2019)

(Integrated under the Royal Decree – Law 16/2011 of 14 October)

President Ms. Margarita Delgado Tejero Deputy Governor of Bank of Spain

Vice president Mr. Carlos San Basilio Pardo General Secretariat of the Treasury and International Financing

Secretary Mr. Francisco Javier Priego Pérez General Secretariat of Bank of Spain

Regular Members Mr. Pablo Arellano Pardo State Management Financial Controller

Mr. José Francisco Doncel Razola Director General of Intervention and Management Financial Controller of Banco Santander, SA

Mr. Xabier Egíbar Gainza Director of Business Development Area of Laboral Kutxa

Mr. Isidro Fainé Casas President of the Confederación Española de Cajas de Ahorros

Mr. José María Méndez Álvarez-Cedrón Director General of the Confederación Española de Cajas de Ahorros

Ms. Mercedes Olano Librán Supervision Director General of the Bank of Spain

Ms. Cristina de Parias Halcón Spain and Portugal Director of BBVA

Mr. Jesús Saurina Salas Director General of Financial Stability, Regulation and Resolution of the Bank of Spain

Substitute Members Mr José Luis Aguirre Loaso President of Ibercaja Banco, SA

5 Substitute Members Ms. Elena Aparici Vázquez de Parga (since 30 May 2019) Director General of Treasury and Financial Politics

Ms. Lucía Arranz Alonso Legal Department Director of the Bank of Spain

Mr. Juan Ayuso Huertas Director General of Operations, Markets and Payment Systems Bank of Spain

Mr. Juan Miguel Bascones Ramos Director National Accounting Office, Ministry of Finance and Public Administration

Ms. María Dolores Dancausa Treviño CEO of Bankinter, SA

Mr. Jaime Guardiola Romojaro CEO of Banco Sabadell, SA

Mr. Alberto Martín del Campo Sola (until 30 May 2019) Deputy General Director on Legislation of Credit Entities, and Bank and Payment Services of the Economy and Business Ministry

Mr. Guillermo Téllez Vázquez Director General of Caja Rural del Sur, SCC

Mr. Gregorio Villalabeitia Galarraga CEO of Kutxabank, SA

General Director Mr. Mariano Herrera García-Canturri

Subsequent to 31 December 2019 the following changes were made to the Management Commi- ttee of the FGDEC: appointment of Mr. Ángel Estrada García, Bank of Spain Director General of Financial Stability, Regulation and Resolution, and Mr. Pello Xabier Belausteguigoitia Mateache, BBVA Spain and Portugal Director, as sitting members; appointment of Mr. Pablo de Ramón-Laca Clausen, Director General of Treasury and Financial Policy, as substitute member; and resignation of Mr. Jesús Saurina Salas and Ms. Cristina de Parias Halcón as sitting members; and Ms. Elena Apa- rici Vázquez de Parga as substitute member.

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Pages

MANAGEMENT REPORT 2019 ...... 9

ANNUAL ACCOUNTS 2019

Balance sheet ...... 31

Income statements ...... 33

Income and expenses statement ...... 34

Cash ﬂ ow statements ...... 35

DIRECTOR’S REPORT 2019

Notes to the annual accounts ...... 39

Notes to the balance sheet ...... 52

Notes to the income statements ...... 79

Other Notes to the annual accounts ...... 87

ANNEXES

Annex 1 Allocation of the annual accounts for 2019 to deposits guarantee and securities guarantee compartments ...... 91

Annex 2 List of shareholdings at 31 December 2019 ...... 94

Annex 3 Historical series of contributions, money deposits and securities, assets, and investments ...... 96

Annex 4 Credit institutions members at 31 December 2019 ...... 103

Annex 5 Rehabilitation or restructuring operations of credit institutions ...... 106

Annex 6 Legislative index ...... 113

5 Article 2nd - 4 b) of Royal Decree 2606/1996, of 20 December, on deposits guarantee funds of credit institutions states that it is a function of the Management Committee the approval of the accounts that the Fondos de Garantía de Depósitos (now the Fondo de Garantía de Depósitos de Entidades de Crédito) must report annually to its members and the Bank of Spain.

In compliance with this legal mandate, on 4 May 2020 the fi nancial statements for 2019, comprising the balance sheet, income statement, statement of changes in equity, the cash fl ow statement and the report, are issued providing information on the activities carried out in 2019, showing a fair equity presentation and fi nancial situation of the Fondo de Garantía de Depósitos de Entidades de Crédito at year-end as well as management results and resources obtained and applied in that period, information that is extended with data concerning the year 2018 and the fi nancial statements resulting from the di erential allocation of resources to the deposits guarantee compartment or to the securities guarantee compartment, as set out in the article 6 - 2 of Royal Decree-law 16/2011, of October 14, by which the deposit guarantee fund of credit institutions is created, according to the wording given by the tenth fi nal provision of Law 11/2015, of 18 June, on recovery and resolution of credit institutions and investment services companies.

5 MANAGEMENT REPORT 2019

ANNUAL REPORT 2019

MANAGEMENT REPORT

Establishment

1. On 15 October 2011 came into force Royal Decree Law 16/2011 of 14 October, and the Fondo de Garantía de Depósitos de Entidades de Crédito (FGDEC) is created, dissolving the three existing deposits guarantee funds (the Fondo de Garantía de Depósitos en Cajas de Ahorro, the Fondo de Garantía de Depósitos en Establecimientos Bancarios, and the Fondo de Garantía de Depósitos en Cooperativas de Crédito), their assets were integrated into the FGDEC, and all rights and obligations of those were subrogated.

The references that appear in this report to FGDCA, FGDEB and FGDCC correspond to the three deposits guarantee funds dissolved.

Operation

2. The FGDEC has legal personality, with full capacity for the development of its purposes under private law and not subject to the rules governing public agencies and state corporations.

FGDEC function is the guarantee of deposits in credit institutions as provided in Royal Decree-Law 16/2011 and Royal Decree-Law 2606/1996, about deposits guarantee funds in ﬁ nancial entities.

Constitution of separate compartments

3. The tenth ﬁ nal disposal of Law 11/2015, of 18 June, on recovery and resolution of credit institutions and investment services companies amended the Royal Decree-Law 16/2011, determining that, from the date of entry into force of the mentioned law, the resources of the FGDEC will be allocated to «deposits guarantee compartment» or «securities guarantee compartment», which will be separated accounts, and each compartment should be liable for its own costs, expenses and obligations. The same rule states that rights and obligations acquired by the FGDEC prior to its entry into force shall be allocated to the deposits guarantee compartment.

Fundraising

4. In accordance with article 6 of Royal Decree 16/2011, modifi ed by fi nal provision ten of Law 11/2005, in order to fulfi l its functions, the FGDEC is funded by: a) the annual contributions made by the member entities; b) the expenditures made by these entities, distributed in line with the calculated contributions and the regulatory limits determined, recording these in equity when agreed; and c) the funds raised on securities markets, loans or any other borrowing operations. In any event, when the equity of the FGDEC is insu cient to carry out its functions, the FGDEC will undertake the necessary actions to restore its capital adequacy.

In addition, the deposits guarantee compartment can be funded by the payment commitments of the entities to the FGDEC provided that these commitments: a) are fully backed by low- risk asset guarantees, free from encumbrances and freely available for the FGDEC; and b) they account for less than 30% of the total funds available to the compartment.

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Pursuant to article 6 of Royal Decree-Law 16/2011 and the article 3 of Royal Decree 2606/1996, modifi ed by the fi rst fi nal provision of Royal Decree 1012/2015, which developed Law 11/2015, the annual contributions of the member entities, both to the deposits guarantee compartment and to the securities guarantee compartment shall be determined by the Management Committee of the FGDEC, in accordance with the respective calculation bases established in paragraphs a) and b) of section 2 of said article 3 of Royal Decree 2606/1996, and in the case of the deposits guarantee fund, from 2016, to the risk profi le of each entity.

In addition, article 6 of Royal Decree-Law 16/2011, supplemented by its second additional provision incorporated under the tenth ﬁ nal provision of Law 11/2015, states that:

• The ﬁ nancial resources available of the deposits guarantee compartment must attain at least, and no later than 3 July 2024, the 0.8% of the amount of the guaranteed deposits. However, the FGDEC may ask the European Commission to reduce this level to 0.5% taking into account certain factors.

• Annual contributions to the securities guarantee compartment may not exceed 0.3% of the amount of the guaranteed values.

• Contributions to a compartment is suspended when the available ﬁ nancial means not engaged in operations object of the mentioned compartment equals or exceeds 1% of the total amounts guaranteed by the compartment.

Based on the current level of ordinary contributions, the FGDEC will reach the stated target on 3 July 2024.

Guaranteed deposits and asset coverage

5. Royal Decree 1642/2008, of 10 October, which sets the guaranteed amounts amending Royal Decree 2606/1996, of 20 December, and Royal Decree 948/2001, of 3 August, on compensation schemes of investors, stating that the guaranteed amount of deposits will be limited to the amount of EUR 100,000 per account holder and the secured amount guaranteed to the investors that have entrusted securities and ﬁ nancial instruments to the credit institution shall be independent and will reach a maximum of EUR 100,000 per account holder.

Subsequently, the amount of the aforementioned guarantees was formally incorporated into the texts of Royal Decree 2606/1996 and Royal Decree 948/2001 through Royal Decree 628/2010, of May 14, by which both regulations are modiﬁ ed.

Subsequently, the tenth ﬁ nal disposition of the Law 11/2015, amending Royal Decree-Law 16/2011, has expanded the amount of guaranteed deposits, by providing that, in addition to the amount above mentioned, will be guaranteed, regardless of the amount and for three months from the time the amount has been credited or from the moment when such deposits have become legally transferable:

i) the amounts from transactions with residential real estate and private nature; ii) those arising from payments one-o basis received by the depositor relating to marriage, divorce, retirement, dismissal, disability or death; iii) which are based on the payment of insurance beneﬁ ts or compensation for damages resulting from a crime or a miscarriage of justice.

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In turn, the regulatory changes mentioned have assumed that, since 2015, has come to defi ne as «eligible deposits» those defi ned in previous legislation as «guaranteed deposits»; now defi ned as «guaranteed deposits» those previously denominated «covered deposits». This change has not a ected the securities deposits that still retain their previous terminology, i.e. the guaranteed securities (equivalent to eligible in the deposits compartment) and covered (equivalent to those guaranteed in the deposits compartment). In addition, from 2015 the calculation basis of the contributions that entities must make on cash deposits becomes composed by the guaranteed deposits (before it was by the eligible).

The following image shows the evolution of the eligible guaranteed cash deposits and their percentage coverage from 31 December 1993 to 31 December 2019, in billions of Euros:

Allowable and guaranteed deposits 1,200 90%

73.3% 80% 1,000 69.0% 70%

800 60%

50% 600 40%

400 30%

20% 200 10%

- 0% 9 4 0 4 1 4 9 3 9 5 9 6 9 7 9 8 9 0 0 1 0 2 0 3 0 5 0 6 0 7 0 8 0 9 1 0 1 1 2 1 3 1 5 1 6 1 6 1 7 1 7 1 8 1 8 1 9 1 9 1 9 2 0 2 0 1 9 1 9 1 9 1 9 1 9 1 9 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 0 . 3 1 . 3 0 . 3 1 . 3 0 . 3 1 . 3 0 . 3 1 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 0 6 . 1 2 . 0 6 . 1 2 . 0 6 . 1 2 . 0 6 . 1 2 .

Allowable deposits (a) Guaranteed deposits (b) %Coverage deposits (b/a) (right axis)

Since 2008, the year in which Royal Decree 1642/2008 established the guaranteed value of cash deposits at EUR 100,000 per holder, and up to the 2019 closing, eligible deposits have increased at an annual rate of 2.1% above the annual growth rate recorded in guaranteed deposits, which has come to 1.6%. In the last two years, annual growth rates for both eligible and guaranteed deposits are slightly higher than the annual average for the period analysed. In 2018 and 2019, speciﬁ cally, eligible deposits grew at rates of 4.4% and 5.1% each year and guaranteed deposits grew by 2.7% and 4.6%, respectively.

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The increase in coverage meant that in 2008 the coverage ratio for eligible cash deposits went from 44.5% in 2007 to 73.3%, ﬂ uctuating to over 75.0% at times, until 2014, when the rate began to drop gradually to level o at 69.0% at the end of 2019.

Eligible and guaranteed cash deposits in the deposits guarantee compartment at 31 December 2019 have amounted to EUR 1,101.5 billion and EUR 759.7 billion, respectively (EUR 1,048.6 billion and EUR 726.3 billion at 31 December 2018).

The following image shows the evolution of guaranteed and hedged securities and their percentage coverage from 31 December 2001 to 31 December 2019, in billions of euros:

Covered and guaranteed values

450 50%

400 45% 40% 350 32.3% 35% 300 30% 250 21.3% 25% 200 20% 150 15%

100 10%

50 5%

- 0% 0 4 1 4 0 1 0 2 0 3 0 5 0 6 0 7 0 8 0 9 1 0 1 1 2 1 3 1 5 1 6 1 6 1 7 1 7 1 8 1 8 1 9 1 9 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 1 2 . 0 6 . 1 2 . 0 6 . 1 2 . 0 6 . 1 2 . 0 6 . 1 2 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 1 . 3 0 . 3 1 . 3 0 . 3 1 . 3 0 . 3 1 . 3 0 . 3 1 . Guaranteed values Covered values Coverage values (right axis)

There has been signiﬁ cant volatility in the evolution of securities deposits between 2008 and 2019. Since 2008, annual variation rates for guaranteed securities have ﬂ uctuated between -25.7% and 33.9%, while hedged securities have gone between -12.0% and 59.6%, with both variables showing a moderate correlation ratio of 0.5%.

The coverage ratio for guaranteed securities, after going from 15.1% in 2007 to 32.3% in 2008 due to the increase in coverage to EUR 100,000, remained somewhat volatile, with an upward trend until 2012, when it settled at 43.6%. From then, the coverage ratio dropped sharply at ﬁ rst to 25.5% in 2015, continuing to fall gradually but steadily thereafter to 21.3% in 2019.

At 31 December 2019, guaranteed and hedged securities amounted to EUR 362.6 billion and EUR 77.3 billion, respectively (EUR 333.0 billion and EUR 79.5 billion at 31 December 2018).

Section 3.2 of Annex 3 includes the evolution of eligible and guaranteed cash deposits and guaranteed and hedged securities at the end of each year since 1993.

Investment coverage function

6. By resolution of the Secretary of the State Economy (Secretario de Estado de Economía) of 1 August 2002, issued pursuant to the provisions of paragraph 3 of Article 74 of Law 24/2001 of 27 December on ﬁ scal and administrative measures and on social order, were set the percentages

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that would satisfy each of the three deposits guarantee funds then existing and the Fondo General de Garantía de Inversiones on the total compensation for the obligations incurred by such Fondo as a consequence of the failures of investment companies prior to the entry into force of the Law 24/2001.

Under that resolution, the percentage distribution of the total amount of compensation to be paid to the harmed investors between the dissolved deposits funds and the Fondo General de Garantía de Inversiones was established as follows:

Deposit % Fondo de Garantía de Depósitos de Entidades de Crédito 99.83 Fondo de Garantía de Depósitos en Establecimientos Bancarios 53.98 Fondo de Garantía de Depósitos en Cajas de Ahorro 40.90 Fondo de Garantía de Depósitos en Cooperativas de Crédito 4.95 Fondo General de Garantía de Inversiones 0.17

The total amount of compensations estimated by the Gestora del Fondo General de Garantía de Inversiones SA amounted to EUR 79.7 M., corresponding to the deposits guarantee funds an amount of EUR 79.5 M. On 4 April 2017 the aforementioned Managing Entity informed to the FGDEC that certain obligations had prescribed, after which the amount of outstanding claims assumed by the FGDEC since 2017 are estimated in EUR 0.7 M.

Activity report

7. The management and administration of the FGDEC in 2019 have focused on acting and following the guidelines of recent years, in terms of:

• Preparation of the management committees and material execution of the decisions taken.

• Management of the liquid assets of the FGDEC investing them in government debt.

• Operations related to the management and the divestment of assets acquired in 2010 from the Caja de Ahorros de Castilla-La Mancha (CCM), in accordance with the provisions of the action plan of the entity.

• Operations related to the management and development of assets portfolios related to the APS granted in 2011 and 2012 to Banco CAM, SA, and Unnim Banc, SA, respectively, in each case in accordance with the corresponding plan of action or restructuring plan approved for that purpose.

• Monitoring of the ﬁ nancial guarantee granted to the Government of Finland within the framework of the operation of European ﬁ nancial assistance for the recapitalization of Spanish banks.

• Management and administration of extraordinary contributions from FGDEC member institutions.

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• Actions related to the deferred collections and payments arising from the sales of shareholdings in NCG Banco, SA and Catalunya Banc, SA, carried out in 2014 and 2015, respectively. Both shares were acquired by the FGDEC through voluntary purchase o ers announced by the FGDEC on 10 June 2013.

• Continue with the management, initiated in 2015, of the payments of guaranteed deposits up to a limit of EUR 100,000 to depositors of Banco de Madrid, SAU, having determined the Bank of Spain, on 18 March 2015 that given its ﬁ nancial situation this entity was unable to restore their cash deposits in the immediate future.

• Continue with the management, initiated in 2015, of the assets acquired in exercise of the right of ﬁ rst refusal in the APS granted to Banco CAM on the assets covered by this scheme, in order to minimize the losses in said APS.

• Management of cash equivalents in investments in state debt.

• Management of credits granted to investees and the other assets acquired in credit institutions as a consequence of previous actions on credit institutions.

• Development of the international activity of the FGDEC.

• Preparation and updating of the Liquidity Contingency Plan for the deposits guarantee compartment.

• Activities carried out by the FGDEC in defence of its interests before the criminal courts.

Integrated entities and their contributions

8. At 1 January 2019, 119 entities were adhered. During 2019 have been deregistered 1 entity, so at year end there were 118 adhered entities. The list of the member institutions at 31 December 2019 is in Annex 4 of these annual accounts.

In accordance with its governing regulations described in section 4 above, at the session held on 2 October 2019, the Management Committee of the FGDEC determined the 2019 annual contributions for both the deposits guarantee and securities guarantee compartments. The contribution of the deposits guarantee compartment was set at 1.8/1000 of the guaranteed cash deposits existing at 30 June 2019, to be calculated for the entity based on its guaranteed deposits and its risk proﬁ le. The contribution of the securities guarantee compartment was set at 2/1000 of the 5/100 of the valuation on the last business day of 2019 for the securities deposited at 31 December 2019. The Management Committee also ruled that both contributions would be made on the last business day of February 2020.

All contributions made since 1997 have been from FGDEC member institutions as, according to the prevailing legislation, the Bank of Spain has not been required to make contributions since then.

The attached chart shows, in million of euros, ordinary and extraordinary contributions and expenditure allocations made by the FGDEC member institutions from 1980 to 2019:

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Contributions 2,700 2,550 2,400 2,250 2,100 1,950 1,800 1,650 1,500 1,350 1,200 1,050 900 750 600 450 300 150 0

Total

Up to and including 2011, the contributions shown on the chart above include the total combined amount of the contributions corresponding to the former Fondos de Garantía de Bancos, de Cajas y de Cooperativas de Crédito. Growth recorded in 2012 is attributable to: (i) the fact that the ordinary contribution rate for cash deposits increased to 2/1000 of eligible deposits, which led to a contribution of EUR 1,847.7 M., more than double the prior years’ contribution (EUR 885.9 M.); and (ii) the extraordinary contribution temporarily established by law for cash deposits with yield above certain limits, which amounted to EUR 669.7 M. In 2013, the chart only shows ordinary contributions amounting to EUR 1,809.9 M., while in the years between 2014 to 2016, in addition to the ordinary contributions of EUR 1,873.8 M., EUR 1,131.9 M. and EUR 1,158.0 M., respectively, extraordinary contributions of EUR 466.5 M., EUR 697.6 M. and EUR 697.6 M., respectively, were also collected. Since 2017 only ordinary contributions have been collected, which in the deposits guarantee compartment were set for the three years at 1.8/1000 of the guaranteed deposits and in the securities guarantee compartment at 2/1000 of 5/100 of the guaranteed securities.

In addition, annual expenditure allocations have been collected since 2012 totaling approximately EUR 234 M., however, this does not have an impact on the total amount collected since an equivalent amount is deducted from the ordinary annual contribution payment made.

Action Plan of Caja de Ahorros de Castilla-La Mancha

9. Management and divestment of assets from actions in CCM have been continued, assets that in 2012 were transferred to Inversiones Corporativas, SA (IC), also from CCM and since 2010 a subsidiary of the FGDEC in 100% through a nonmonetary contribution of such assets by an expansion of its share capital. IC stems from CCM and has been a fully-owned subsidiary of the FGDEC since 2010.

After all these assets were put together, from 2013 to 2019 both included, funds resulting from the divestments have been applied to IC expenses or from its subsidiaries, as well as to reducing their debt, as a consequence the FGDEC has not received any cash from such divestitures.

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As of 31 December 2015, as a consequence of the deterioration of its ﬁ nancial investments, the balance of IC had negative net equity, as a result of which FGDEC's participation in the company was fully deteriorated. Since then, the likelihood that the FGDEC would obtain any return from IC has been deemed remote, and its investment has therefore been kept fully impaired.

Subsequently, on 27 December 2016, the company formalized with its principal creditor BdCLM a removal of part of its debt as well as the transformation of another part of its debt into a participatory loan, which has allowed it to continue its operations focused on the realization of its assets.

Also on 27 December 2016, the FGDEC, its fully-owned indirect subsidiary Midamarta, SL which holds a share of its parent company Inversiones Corporativas, SA, and Liberbank, SA, signed an agreement whereby the latter granted a put option to the two former parties, and the two former parties granted a call option to a Liberbank Group company, respectively, on the shares representing its capital holding in Inversiones Corporativas, SA, for a strike price equal to either one euro or their market value, whichever higher, to be carried out within thirty calendar days of 30 June 2020 or before, subject to certain circumstances. This agreement is not expected to lead to any loss for the FGDEC. On 20 March 2020, the Management Committee of the FGDEC has agreed to exercise its right to sell the IC shares to a Liberbank Group company, under the terms agreed between the parties.

At 31 December 2019, IC, whose total assets amount to EUR 131.2 M., has presented a new situation of capital imbalance, however, it has the formal commitment of Liberbank, SA to transform part of its debt into a participating loan equivalent to the amount needed to redress the capital balance.

At the date of preparation of these annual accounts, the directors of IC had already applied to Liberbank, SA for the aforementioned participating loan.

Restructuring of Banco CAM, SA

10. The commitments arising from the restructuring of Banco CAM, SA obey to the APS granted on certain assets portfolio, assuming the FGDEC the 80% of the losses that might occur in it for a period of ten years from 31 July 2011 above the existing provisions on the said portfolio, with the limit established in the Clariﬁ cation Agreement to Section II of the Protocol that regulates the APS of December 17, 2018. At the end of 2019, the FGDEC has accounted, at its current value, the amount of the payments to be made to meet all the losses expected until the end of the APS according to the latest available estimate.

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The following chart shows the evolution, in nominal values, of the expected loss for the FGDEC of the APS granted to Banco CAM, SA and the amount paid by the FGDEC to the recipient thereof at the end of each year for the settlement of losses incurred, from the start of the APS to 31 December 2019 in millions of euros:

APS Banco CAM, SA

8,000 7,386 7,386

7,000 6,693

6,255 6,141 6,000

5,315 4,814 5,000 4,884 4,294 3,974 4,000 4,086 3,300 2,966 3,000 3,092

1,810 2,000 1,340

1,000 826

0 12.31.2011 12.31.2012 12.31.2013 12.31.2014 12.31.2015 12.31.2016 12.31.2017 12.31.2018 12.31.2019

Estimated losses FGDEC Accumulated APS payments

Estimated losses unliquidated

In February 2020, the FGDEC has paid the beneﬁ ciary EUR 1,330.6 M. (EUR 994.6 M. in February 2019), with the payments made at the date of preparation of these accounts totalling EUR 5,624.9 M. (EUR 4,294.3 M. upon preparation of the 2018 accounts).

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The chart below shows the evolution of the portfolio protected of the APS granted by the FGDEC to Banco CAM, SA at the end of each year, from the start of the APS to 31 December 2019, in millions of euros:

APS Banco CAM, SA 30,000

24,644 25,000 24,496 22,651

20,000 19,716

17,428

15,000 14,668

12,464 9,643 10,000 7,675 5,328 5,000 2,935 2,760 2,821 2,347 1,845 2,288 2,204 1,968 148 0

Portfolio protected Portfolio annual amortization

From 31 December 2011 to 31 December 2019, the protected portfolio has been amortised annually by amounts of between EUR 1,845 M. and EUR 2,935 M., with the annual average being EUR 2,396 M. At 2019 year end, the remaining portfolio amounted to EUR 5,328 M., which is 21.6% of the initially protected portfolio.

Restructuring of Unnim Banc, SA

11. The commitments arising from the restructuring of Unnim Banc, SA, obey to the APS granted on certain portfolio, assuming the FGDEC the 80% of the losses that might occur in it for a period of ten years from 31 October 2011, above the existing provisions on the said portfolio with the limit established in the Clariﬁ cation Agreement to Section II of the Protocol that regulates the APS of December 13, 2018. At the end of 2018, the FGDEC has accounted, for its current value, the amount of payments to be made to meet all the losses expected until the end of the APS according to the latest available estimate.

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The following chart shows the evolution, in nominal values, of the expected loss for the FGDEC of the APS granted to Unnim Banc, SA and the amount paid by the FGDEC to the recipient thereof at the end of each year for the settlement of losses incurred, from the start of the APS to 31 December 2019 in millions of euros:

APS Unnim Banc, SA

2,500

1,998 1,992 2,000 1,817 1,843 1,733 1,591 1,710

1,500 1,506 1,323 1,280

998 1,000

712 492 500

133

0 12.31.2012 12.31.2013 12.31.2014 12.31.2015 12.31.2016 12.31.2017 12.31.2018 12.31.2019 Estimated losses FGDEC Accumulated APS payments

Estimated losses unliquidated

The FGDEC has estimated that the payment to be made to the beneﬁ ciary in June 2020 will amount to EUR 511.3 M. (EUR 788.0 M. paid in June 2019).

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The chart below shows the evolution of the protected portfolio of the APS granted by the FGDEC to Unnim Banc, SA at the end of each year, from the start of the APS to 31 December 2019, in millions of euros:

APS Unnim Banc, SA 8,000 7,360 7,239 7,000 6,903

6,000 5,452 5,000 5,052 4,593 4,000 4,201 3,599

3,000

1,989 2,000 1,451 1,610 1,182 807 1,000 602 336 400 459 392 121 0

Portfolio protected Portfolio annual amortization

From 31 December 2011 to 31 December 2019, the protected portfolio has been amortised annually by amounts of between EUR 336 M. and EUR 1,610 M., with the annual average being EUR 804 M. At 2019 year end, the remaining portfolio amounted to EUR 807 M., which is 11% of the initially protected portfolio. There was a sharper drop in the protected portfolio in 2018 and 2019 due to sales of asset portfolios by the beneﬁ ciary institution.

European ﬁ nancial assistance

12. On 16 July 2012, and in order to facilitate the operation of European fi nancial assistance for the recapitalization of Spanish banks under the terms established in the fi fth additional provision of Royal Decree-Law 21/2012, of 13 July, on liquidity measures of the Public Administrations and the fi nancial sector, and under paragraph 4 of that provision, the FGDEC signed a guarantee in favour of the Republic of Finland, committing itself to create pledges for an amount equivalent to 40% of the risk assumed by the said State in disbursements to be made by the European Financial Stability Facility to the Kingdom of Spain, contract subsequently adapted to the fi nal establishment of the European Stability Mechanism by the corresponding addendum of 28 November 2012.

The participation of the Republic of Finland in the European Stability Mechanism at 28 November 2012 was of 1.7974%, and disbursements made to the Kingdom of Spain were EUR 39,468 M. in November 2012 and EUR 1,865 M. in January 2013, because of which the FGDEC constituted two

20 5 ANNUAL REPORT 2019

separate cash deposits as a guarantee, the ﬁ rst on 28 November 2012 amounting to EUR 283.8 M. and the second on 22 January 2013 amounting to EUR 13.4 M. Subsequently, and in accordance with the terms of the guarantee agreement, these amounts have been invested in securities issued by Member States of the euro area with the highest credit rating. It is estimated that the granting of the said guarantee shall not entail any losses for the FGDEC.

Extraordinary contributions approved

13. In order to restore the capital adequacy of the FGDEC in accordance with article 6.2 of Royal Decree Law 16/2011, at its meeting on 30 July 2012, the Management Committee of the FGDEC agreed on a extraordinary contribution by member institutions for a nominal amount of EUR 2,346.0 M., distributed based on the contributions at 31 December 2011, payable by each entity in ten equal annual instalments of EUR 234.6 M., to be settled on the same day the ordinary annual contributions are paid, with the option for each member institution to deduct the proportional amount from the ordinary annual contribution paid on the same date and up to the amount of said ordinary contribution.

At 31 December 2019, annual payments to be made by the member institutions have decreased slightly to EUR 234.1 M., the same amount as in 2018, due to several entities settling their extraordinary contribution in advance upon leaving FGDEC membership, with the exception of Banco de Madrid, SAU, which still has an amount outstanding at 31 December 2019.

In 2020 the amount of the eighth annual instalment was paid, leaving EUR 468.1 M. pending settlement.

Subscription of shares of NCG Banco, SA, and Catalunya Banc, SA

14. Under the ﬁ fth additional provision of Royal Decree-Law 21/2012, of 13 July, as amended by Article 2 of Royal Decree Law 6/2013, of 22 March, on protection to holders of certain saving and investment products and other ﬁ nancial measures, on 10 June 2013 the FGDEC announced the o er of voluntary purchase o er for common shares of NCG Banco, SA, and Catalunya Banc, SA, with certain considerations and conditions. As a result of these, the FGDEC acquired 640,964,146 shares of Catalunya Banc, SA (Representing 32.4% of its capital), for a total cost of EUR 1,000.9 M.; and 603,671,160 shares of NCG Banco, SA (Representing 25.6% of its capital), for a total cost of EUR 802.4 M., signing at the same time with the controlling shareholder, the Fund for Orderly Bank Restructuring (FROB), certain agreements of partial coverage of the evolution of the value and the result of the sale of such shares.

On 18 December 2013, the FROB announced the award, after the study of the binding o ers received in the corresponding sales process, of a shareholding of 88.3% of NCG Banco, SA to Banco Etcheverría, SA (Banesco Group). As provided in Articles 26.2 and 64.1.c of Law 9/2012, of 14 November, on restructuring and resolution of credit institutions, the referral sale process included the shares owned by the FGDEC. Subsequently, on 25 June 2014 the FROB announced the consummation of the transaction after obtaining all the necessary authorizations.

21 5 ANNUAL REPORT 2019

items 26.2 and 64.1.c of Law 9/2012, the referenced sales process included the shares owned by the FGDEC. The transaction was subject to compliance with the legally established requirements and to the corresponding approval by the relevant national and international authorities. Subsequently, on 24 April 2015 the FROB announced the completion of the operation for the 98.4%, after obtaining all the necessary authorizations.

The settlements of both share sale operations are deemed provisional because: (i) certain ﬁ nancial guarantees granted by the FROB to the buyers, which are still in force, have been provisionally settled by the FGDEC at their estimated value; and (ii) there are agreements between FROB and FGDEC regarding partial coverage of the evolution of the value and of the result of the sale of the stake.

At 31 December 2019, the estimated net sale price of the shares in NCG Banco, SA amounted to EUR 218.6 M. (EUR 202.6 M. in 2018), estimating the expected net collection at EUR 2.1 M. (EUR 1.3 M. in 2018).

At the same date, the estimated net sale price of the shares in Catalunya Banc, SA amounted to EUR 187.4 M. (EUR 171.9 M. in 2018), estimating the net expected collection at EUR 5.3 M. (No amount in 2018).

The breakdown of collections and payments arising from the purchase and sale of shares in NCG Banco, SA and Catalunya Banc, SA up to 31 December 2019, in millions of euros, is shown as follows:

Item NCG Banco, SA Catalunya Banc, SA Cost of acquisition of shares (802.4) (1,000.9) Net sale price of shares 290.2 383.1 Estimated value of guarantees granted to buyer (143.6) (268.7) FROB compensation as per coverage agreement 72.0 73.0 Of which outstanding at 12.31.2019 2.1 5.3 Cost of the operation (583.8) (813.5)

In 2013 and 2014 the acquisition cost of the shares in NCG Banco, SA and Catalunya Banc, SA were reduced for accounting purposes by the amounts paid by the FROB based on the agreements of partial coverage of the evolution of the value of the said stake, i.e. EUR 3.7 M. and EUR 12.4 M., respectively. However, in the table above these amounts are recorded under the caption “FROB compensation as per coverage agreement”.

Depositors’ coverage of Banco de Madrid, SAU

15. From the information received from the Bankruptcy Administration of the entity, the FGDEC proceeded, during 2015 and subsequently according to the new information received, to inform depositors of Banco de Madrid, SAU the status of their deposits and the guaranteed amounts, requesting their conformity to proceed with the payment of those amounts. At 31 December 2019, the guaranteed amounts reported to depositors amounted EUR 127.0 M., (the same amount in 2018), with no outstanding amount to communicate to depositors.

At the same date of 31 December 2019, once received in each case the conformity of the depositor, the FGDEC had paid guaranteed amounts for a total of EUR 125.8 M., (EUR 125.7 M. in 2018) thus outstanding payments amount to EUR 1.2 M. (EUR 1.3 M. in 2018) which could not been made because

22 5 ANNUAL REPORT 2019

the depositors were untraceable, or in disagreement to the data or other incidents managed by the Bankruptcy Administration.

The evolution of hedged deposits and coverage payments made up to 31 December 2019 is as follows (expressed in millions of euros):

Banco de Madrid, SAU

140 126 126 127 125 127 126 127 126 119 123 120

100

0 31/12/2015 31/12/2016 31/12/2017 31/12/2018 31/12/2019

Guaranteed deposits Accumulated payments

After receiving the inventory of depositors from Banco de Madrid, SAU, the FGDEC notifi ed 94% of the depositors and placed their guaranteed amounts at their disposal on the following business day. The rest of the depositors were notifi ed of their guaranteed amounts when the Bankruptcy Administration of the institution had resolved the existing issues. At the end of 2015, the year in which the bankruptcy was fi led, the FGDEC had paid the depositors of Banco de Madrid, SAU 94% of the guaranteed deposits at that date.

At 31 December 2019, Banco de Madrid, SAU has paid the FGDEC an amount of EUR 103.1 M. (EUR 93.8 M. at 31 December 2018), thus reducing its obligation to pay for the guaranteed deposits paid by the FGDEC to depositors of that entity, which have the ordinary credit rating in the creditors’ tender.

As of December 31, 2019, in view of the information provided by the aforementioned Bankruptcy Administration, a provision has been constituted on the described collection rights in the amount of EUR 9.5 M. (the same amount in 2018).

Acquisition of assets in exercise of the right of ﬁ rst refusal

16. On 17 November 2015 and 16 March 2016, in exercise of the right of ﬁ rst refusal provided for in the APS Protocol granted to Banco CAM, SA, FGDEC acquired certain real estate properties at a cost of EUR 30.0 M. and 0.2 M. In 2019 the FGDEC has continued to commercialize these mentioned assets initiated in 2016, with the net book cost of the real estate in the portfolio at 31 December 2019 amounting to EUR 7.6 M. and the net proﬁ t obtained since the start of the management to EUR 20.1 M.

23 5 ANNUAL REPORT 2019

Financial situation

17. The ﬁ nancial resources (consisting of contributions and extraordinary contributions from member institutions accounted in for short-term, public investments in short- and long-term government debt, and cash) amounted to EUR a 6,291.9 M. at 31 December 2019 (EUR 6,633.2 M. at 31 December 2018), having decreased in the year by EUR 341.3 M. (EUR 402.3 M. in 2018). The ﬁ nancial resources have been invested in public debt of the State.

At year-end, ﬁ nancial investments in short and long term Spanish State debt amounted to EUR 4,754.6 M. (EUR 5,249.1 M. in 2018), and are invested in Treasury bills, bonds and debentures. The weighted average maturity is 552.2 days (615.3 days in 2018).

Income from ﬁ nancial investments in Spanish State debt have amounted to EUR 17.2 M. (EUR 17.1 M. in 2018), which, over an average investment, excluding coupons, during the year of EUR 4,565.9 M. (EUR 5,006.9 M. in 2018), has provided an annual yield of 0.38% (0.34% in 2018).

However, fi nancial results, which include income on fi nancial investments, the cost of fi nancing received, the proceeds from the sale of state debt and the e ect of the fi nancial adjustment of the payments expected in the asset protection schemes (APS) granted, as well as other payments and collections expected, have resulted in a net fi nancial loss of EUR 105.4 M. (EUR 126.5 M. in 2018).

Disputes with heirs of Mr. Domingo López Alonso

18. With regard to the judicial proceeding initially held with the former president of Banco de Valladolid, SA (later, Barclays Bank, SAU, later absorbed by Caixabank, SA), Mr. Domingo López Alonso, and later with his heirs, the legal proceedings continue for the recovery of the amounts (EUR 27.4 M.) delivered at the end of 2003 by the FGDEC to Mr. Domingo López Alonso in execution of the judgment of October 6, 1998. However, it should be noted that at present there is no information about the destination of the money given to Mr. López Alonso and of the result of the ﬁ nal liquidation of the inheritance that was accepted for the beneﬁ t of inventory. It also continues the judicial proceeding to claim amounts from the heirs of Mr. Domingo López Alonso in favour of the FGDEC for an amount of EUR 1.6 M., stemming from an executive judgment of 1981.

International activity

19. During 2019, the FGDEC has intensiﬁ ed its work on the international fora in which it participates. Along these lines:

• In April 2019, it joined the International Association of Deposit Insurers (IADI), later taking up a seat on its Executive Committee in October 2019; • It has continued its collaboration on the projects developed by the European Forum of Deposit Insurers (EFDI); • It has continued to take part in the task force of the European Banking Authority (EBA), which the regulator set up in 2018 for the purposes of supporting the European Commission in the drafting of a report on the degree of transposition of the European guarantee funds directive and on areas in which a future regulatory modiﬁ cation could be recommendable.

24 5 ANNUAL REPORT 2019

Liquidity Contingency Plan

20. As part of the Liquidity Contingency Plan of the deposits guarantee compartment of the FGDEC and in order to reinforce its fi nancial capacity, in addition to the capacity derived from the annual and extraordinary contributions made; in line with the stipulations of the guarantee funds Directive 2014/49/CE regarding the sources of fi nancing of these funds and the recommended best practices including those of the International Association of Deposit Insurers (IADI), the Management Committee approved the signing of a credit facility for EUR 4,000 M., at six months, extendible thereafter for a further six months. This credit facility was entered into on 19 December 2019 with seven fi nancial institutions.

Activities carried out by the FGDEC in defence of its interests before the criminal courts

21. The FGDEC appears as joint plainti in proceedings ﬁ led by FROB against directors of Caja de Ahorros del Mediterráneo (CAM), claiming public liability for economic damages caused. In 2019, the FGDEC supported the motion ﬁ led by the Prosecution Service in one of the aforementioned proceedings, which has generated extraordinary income of EUR 14.0 M.

Proﬁ t and equity

22. The year closed with a surplus of EUR 1,082 M., (surplus of EUR 177.7 M. in 2018) as detailed below, in millions of Euros:

2019 2018 Items Management Financial Total Management Financial Total Revenue 1,155.9 21.0 1,176.9 1,096.0 20.9 1,116.9 Management and ﬁ nancial expenses (6.7) (126.4) (133.1) (7.4) (147.4) (154.8) Exceptional items 38.2 — 38.2 (784.4) — (784.4) Total 1,187.4 (105.4) 1,082.0 304.2 (126.5) 177.7 Memorandum: Deposits guarantee compartment 1,151.7 (105.9) 1,045.8 271.5 (127.0) 144.5 Guaranteed securities compartment 35.7 0.5 36.2 32.7 0.5 33.2

The management revenues include EUR 1,155.9 M. of the current value (EUR 1,096.0 M. in 2018) of the corresponding ordinary contributions paid by the member institutions to the FGDEC in 2020; of that amount EUR 1,120.0 M. (EUR 1,063 M. in 2018) correspond to deposits guarantee compartment and EUR 35.9 M. (EUR 33.0 M. in 2018) to the securities guarantee compartment.

The exceptional items correspond to the higher costs of the actions or restructuring processes of credit institutions with respect to those calculated in previous years, all of which relate to the deposits guarantee compartment.

Management costs assigned to the deposits and securities guarantee compartments during 2019 have amounted to EUR 6.5 M. and EUR 0.2 M., respectively (EUR 7.1 M. and EUR 0.3 M. in 2018). Regarding ﬁ nancial income and expenses, net expenses of EUR 105.9 M. correspond to the deposits

25 5 ANNUAL REPORT 2019

compartment, and net revenues of EUR 0.5 M. to the securities compartment (EUR 127.0 M. and EUR 0.5 M. in 2018).

Accumulated equity at 31 December 2019, including the surplus for the year is positive with EUR 3,269 M. (EUR 2,181.2 M. in 2018). The accumulated assets from 1980 to 2019 are as follows:

Accumulated Equity Evolution

10,000

8,000

6,000

4,000

2,000

-2,000

-4,000 4 4 4 4 0 1 2 3 5 6 7 8 9 0 1 2 3 5 6 7 8 9 0 1 2 3 5 6 7 8 9 0 1 2 3 5 6 7 8 9 1 9 8 1 9 2 0 2 0 1 1 9 8 1 9 8 1 9 8 1 9 8 1 9 8 1 9 8 1 9 8 1 9 8 1 9 8 1 9 1 9 1 9 1 9 1 9 1 9 1 9 1 9 1 9 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1

Accumulated equity (in million of Euro)

In addition, on 28 February 2020 the FGDEC has received from member institutions the seventh annual payment corresponding to the extraordinary contributions mentioned in paragraph 13 above, amounting to EUR 234.1 M. (the same in 2019) although the collection of this amount, even when it concerns the ﬁ nancial situation of the FGDEC, does not a ect its assets situation, as it was already recorded as an asset and as equity in its balance sheet.

Economic and ﬁ nancial control

Audit Court

23. At the date of preparation of this report the contracts formalised in 2019 have already been forwarded to the Court of Auditors.

External audit

24. The audit report for the year, conducted by Grant Thornton S.L.P, Sociedad Unipersonal, is incorporated.

26 5 ANNUAL REPORT 2019

Subsequent events

25. Note 7 to the fi nancial statements, included in the 2019 annual accounts, details the signifi cant events occurred after 31 December 2019 and until the date of preparation of the fi nancial statements.

27 5

ANNUAL ACCOUNTS FINANCIAL YEAR 2019

ANNUAL REPORT 2019

BALANCE SHEET Millions of Euros ASSET Notes 12.31.2019 12.31.2018 NON CURRENT ASSET Intangible assets 8 0.5 0.3 Property, plant and equipment 9 0.6 0.7 Real estate investments 10 2.0 2.1 Non-current investments in Group companies and associates 11 — — Company shares 11 3.3 673.0 Impairment shareholdings 11 (3.3) (673.0) Non-current fi nancial assets 12 2,698.4 5,140.0 Credit entities. Extraordinary contribution 12.1 445.8 659.1 Debtors for provided guarantees by APS 12.2 2.1 3.6 Contributions collection rights and contributions Banco Madrid 12.3 0.1 0.2 Payment receivables depositors Banco Madrid 12.4 14.4 23.7 National debt euro area 12.5 293.2 294.8 Guarantee deposit made 12.5 — 0.3 National debt 12.6 1,940.2 4,155.7 Subordinate debentures (net) 12.7 2.3 2.2 Other fi nancial assets 12.8 0.1 0.1 Sta loans 12.9 0.2 0.3 Total non-current assets 2,701.5 5,143.1 CURRENT ASSETS Non-current assets for sale 13 5.8 9.8 Debtors and other account receivables 14 1.9 2.6 Current investments in Group companies and associates 15 7.8 7.8 Current fi nancial assets 16 4,258.6 2,467.8 Credit entities. Extraordinary contribution 16.1 and 12.1 233.0 233.0 Ordinary contributions 16.2 1,155.9 1,096.0 Short term loans FROB-NCG Banco, SA 16.3 2.0 1.2 Short term loans FROB-Catalunya Banc, SA. 16.4 5.2 — National debt 16.5 2,814.4 1,093.4 National debt accrued interest 16.6 48.0 44.0 Sta loans 16.7 0.1 0.2 Current prepayments and accrued income 17 5.7 — Cash and cash equivalents 18 100.4 11.1 Total current assets 4,380.2 2,499.1 TOTAL ASSETS 7,081.7 7,642.2

31 5 ANNUAL REPORT 2019

BALANCE SHEET Millions of Euros Equity and liabilities Notes 12.31.2019 12.31.2018 EQUITY Own funds 19 3,237.6 2,134.7 Equity fund 19 2,134.7 1,929.8 Extraordinary contribution 19.1 20.9 27.2 Surplus (Defi cit) fi nancial year 1,082.0 177.7 Adjustments for changes in value fi nancial investments 19.2 31.5 46.5 Total equity 3,269.1 2,181.2 NON-CURRENT LIABILITIES Long term provisions 20 1,893.0 3,671.9 Disbursement provision APS Banco CAM 20.1 1,698.7 2,935.9 Disbursement provision APS Unnim Banc, 20.2 189.8 670.6 Provision for asset management commission 22.1 — 60.9 Compensations (Art. 74, Law 24/2001) 20.3 0.7 0.7 Commitments with sta 20.4 1.3 1.6 Other provisions 20.5 2.5 2.2 Long term debts 21 1.7 1.8 Total non-current liabilities 1,894.7 3,673.7 CURRENT LIABILITIES Short term debts 22 1,917.9 1,787.3 Accruals commisions for asset management 22.1 87.7 — Creditors and other payables 22.2 1.0 9.1 Public administrations payables 22.3 0.2 0.2 Creditors payables APS Banco CAM 22.4 1,827.8 1,776.7 Commitments to depositors of Banco de Madrid 22.5 1.2 1.3 Total current liabilities 1,917.9 1,787.3 Total liabilities 3,812.6 5,461.0 TOTAL EQUITY AND LIABILITIES 7,081.7 7,642.2

32 5 ANNUAL REPORT 2019

INCOME STATEMENTS Millions of Euros Continuing operations Notes 2019 2018 Income 23 1,155.9 1,096.0 Contributions from member institutions 23.1 1,155.9 1,096.0 Operating expenses 24 (6.7) (7.4) Extraordinary items 25 38.2 (784.4) Operating proﬁ t/(loss) 1,187.4 304.2 Financial income 26 21.0 20.9 Financial costs 27 (126.4) (147.4) Financial proﬁ t/(loss) (105.4) (126.5) CONTINUING OPERATIONS SURPLUS/LOSS 1,082.0 177.7 SURPLUS (DEFICIT) FINANCIAL YEAR 1,082.0 177.7

33 5 ANNUAL REPORT 2019

INCOME AND EXPENSES STATEMENT

In 2019 and 2018, the only items of income and expense recognized directly in equity have been those that have had their origin in: i) the current higher value of the expected collection of the extraordinary contribution, adopted on 30 July 2012, and ii) the revaluation of ﬁ nancial investments. STATEMENT OF CHANGES IN NET EQUITY Millions of Euros

Items 12.31.2019 12.31.2018 INITIAL EQUITY 2,181.2 1,990.7 Member credit entities contributions 1,155.9 1,096.0 Operating expenses (6.7) (7.4) Extraordinary items 38.2 (784.4) Operating proﬁ t/loss 1,187.4 304.2 Financial loss (105.4) (126.5) SURPLUS (DEFICIT) FINANCIAL YEAR 1,082.0 177.7 Variation of value of ﬁ nancial investments (15.0) (14.4) Credit entities extraordinary contribution 20.9 27.2 INCREASE (DECREASE) IN EQUITY FINANCIAL YEAR 1,087.9 190.5 FINAL EQUITY 3,269.1 2,181.2

34 5 ANNUAL REPORT 2019

STATEMENTS OF CASH FLOWS Prepared using the indirect method

Millions of Euros

2019 2018 Surplus/(defi cit) fi nancial year 1,082.0 177.7 Adjustments 94.5 929.2 Depreciation and amortisation charge 0.3 0.3 Impairment losses — 3.0 Changes in provisions 109.8 941.4 Finance income (15.6) (15.5) Changes in working capital (1,604.9) (1,589.5) Trade and other receivables 164.8 257.3 Other current assets (11.5) (8.8) Trade and other payables (1,758.2) (1,838.0) Other cash fl ows from operating activities 15.7 15.5 Collection of interests 15.7 15.5 Cash fl ows from management activities (412.7) (467.1) Payments due to investments (1,011.8) (886.4) Fixed assets (0.4) — Other fi nancial assets (1,011.4) (886.4) Proceeds on divestments 1,513.8 1,303.5 Real-estate investment 0.5 0.4 Other fi nancial assets 1,513.3 1,303.1 Cash fl ows from investing activities 502.0 417.1 Net increase/decrease in cash and cash equivalents 89.3 (50.0) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 11.1 61.1 CASH AND CASH EQUIVALENTS AT END OF YEAR 100.4 11.1

35 5 ANNUAL REPORT 2019

STATEMENTS OF CASH FLOWS Prepared using the direct method

Millions of Euros: Income/ (Disbursements)

CONTINUING ACTIVITY 2019 2018 Contributions from credit institutions 1,335.3 1,309.8 Payment APS CAM (994.6) (1,490.0) Payment APS UNNIM (788.0) (359.1) Debtors fee APS 1.8 2.0 Interests APS BdCLM — 43.7 Comissions (6.1) — Finance income 17.2 15.5 Operating expenses (9.8) (9.0) IVA refund 0.6 0.1 Payments depositors Banco de Madrid, SAU. (0.1) (0.5) Partial receipt depositors Banco de Madrid, SAU... 9.3 31.5 Partial receipt of extraordinary contributions Banco de Madrid SAU — 0.2 Receipt from criminal procedure Banco CAM, SA. 14.3 — Litigation costs APS BdCLM 0.4 — Other minor — — Total variation of continuing activity (419.7) (455.8) INVESTMENT ACTIVITY Maturity and divestment of ﬁ nancial investments 1,227.0 1,254.0 Acquisition of ﬁ nancial investments (751.2) (887.9) Acquisition of shares Catalunya Banc, SA 10.2 16.1 Acquisition of shares NCG Banco, SA 15.2 1.6 Income sale shares Bankia SA & Unicaja Banco, SA — 1.4 Income sale Aguas de Panticosa, SA — 0.1 Reinvestment of cash Euro Area 0.3 0.7 Interests public debt Euro Area 10.2 6.1 Maturity of public debt Euro Area 281.8 — Purchase of public debt and cash contribution Euro Area (292.2) (6.8) Purchase and sale of Properties to Activos Valencia, SA 7.7 20.5 Changes in the total investment activity 509.0 405.8 Net increase/(decrease) in cash or equivalent 89.3 (50.0) INITIAL CASH 11.1 61.1 FINAL CASH 100.4 11.1

36 5 DIRECTOR’S REPORT FINANCIAL YEAR ENDED AT 31 DECEMBER 2019

ANNUAL REPORT 2019

NOTES TO THE ANNUAL ACCOUNTS

1. CREATION, NATURE, PURPOSES AND GUARANTEES

Creation: On 15 October 2011 came into force Royal Decree Law 16/2011 of 14 October, which established the Fondo de Garantía de Depósitos de Entidades de Crédito (FGDEC) and the dissolution of the three existing deposits guarantee funds until that date (the Fondo de Garantía de Depósitos en Cajas de Ahorro, the Fondo de Garantía de Depósitos en Establecimientos Bancarios and the Fondo de Garantía de Depósitos en Cooperativas de Crédito), their assets were integrated into the FGDEC, and all rights and obligations of those were subrogated by this latter.

Nature: The FGDEC has legal personality and full capacity for the development of its purposes, under private law.

It is governed and administered by a Management Committee composed of eleven members: a representative of the Ministry of Economy and Business, one of the Ministry of Finance, four appointed by the Bank of Spain and ﬁ ve representing the associated credit entities, in the terms established by the regulations.

Representatives of the Bank of Spain are appointed by its Executive Committee. One of them is the Deputy Governor who will hold the Presidency of the Management Committee.

The representative of the Ministry of Economy and Business is the Secretary General of the Treasury and International Financing, which holds the Vice Presidency of the Management Committee and replaces the President in his duties in case of vacancy, absence or illness.

The representative of the Ministry of Finance is the General Comptroller of the State Administration.

The representatives of the member institutions are designated under the terms established by the regulations, as follows: two by associations representing banks, two for the savings bank and one by the credit unions.

The registered o ce is in Madrid, José Ortega y Gasset, No. 22, and the scope of its actuation is national.

The Spanish commercial regulations require, with certain exceptions, that the dominant entities of corporate groups formulate annually the corresponding consolidated ﬁ nancial statements and the consolidated management report. However, commercial law also states that, in exceptional cases where the application of a legal provision in accounting is incompatible with the fair image that annual accounts must provide, such provision shall not apply.

In this sense, the FGDEC has conducted an analysis of the need to present consolidated fi nancial statements and, given its special legal nature, given the specifi c legal regulations that regulate it and given the special characteristics of performing investments in investees, it has concluded that it has no need to prepare consolidated fi nancial statements, on the understanding that these would not meet the purpose of o ering the fair presentation of the nature and purpose of the shares of the FGDEC,

39 5 ANNUAL REPORT 2019

not being additionally required to do so in the specifi c legislation regulating the FGDEC. Among the issues considered are the extremely special circumstances requiring participation of the FGDEC in processes in which it has acquired majority shares, which the taking of such majority holdings is aimed at completing a restructuring process and there is no aim for profi t, and the consideration that the presentation of these consolidated fi nancial statements would not provide relevant information to potential users of such information.

Purposes: The purpose of the FGDEC is to guarantee deposits in credit institutions as provided for in Royal Decree-Law 16/2011, of October 14, and on its implementing regulations.

Guarantees: The guarantees provided by the FGDEC are di erent and independent for cash deposits and securities or other ﬁ nancial instruments deposits, which have a maximum independent limit in each for the amount of EUR 100,000 per depositor and credit institution, as it was established by Royal Decree 628/2010 of 14 May. The guarantee of cash deposits reaches unpaid accrued interests up to the date of the events giving rise to the execution of the guarantee, without exceeding in any case the above limits.

In addition to the aforementioned limit, the tenth ﬁ nal disposition of Law 11/2015 of 18 June, amending Royal Decree-Law 16/2011, has expanded the amount of guaranteed cash deposits for, i) the amounts from transactions with residential real estate nature and sole owner; ii) those arising from payments one-o basis received by the depositor relating to marriage, divorce, retirement, dismissal, disability or death; and iii) those which are based on the payment of insurance beneﬁ ts or compensation for damages resulting from a crime or a miscarriage of justice; all of them regardless of their amount and for three months from the time the amount has been credited or from when such deposits have become legally transferable.

Eligible deposits: Deposits are considered eligible when the creditors’ balances held in account, including funds from transitory situations by tra c operations and excluding deposits referred to in article 4 paragraph 4 of Royal Decree 2606/1996, of December 20, which the entity must repay under the legal and contractual conditions applicable, whatever the currency in which they are denominated and provided they are made only in Spain or in another member State of the European Union, including ﬁ xed-term deposits and savings deposits.

Guaranteed deposits: Guaranteed deposits are those eligible deposits not exceeding the coverage levels mentioned above.

Guaranteed securities: Guaranteed securities are securities and ﬁ nancial instruments referred to in Article 2 of the Law on the Securities Market that have been entrusted to the credit institution for deposit or registration, or for performing some investment service of certain characteristics described in the current legislation.

Guaranteed securities covered: Guaranteed securities covered are the part of guaranteed securities that no exceed the coverage levels mentioned above.

40 5 ANNUAL REPORT 2019

2. BASIS OF PRESENTATION a) Fair image

The balance sheet, income statement, statement of changes in equity, the cash fl ow statement and Notes 1 to 31 of the accompanying report are displayed before the application of results, and have been prepared on the basis of the accounting records of the FGDEC and are presented in accordance with the regulatory framework of fi nancial information indicated in Note 2 c), and in particular with the accounting principles and criteria contained therein, which is the one that the management understands that best suits the nature and activity of the FGDEC in order to show the fair presentation of the equity and fi nancial position at 31 December 2019 and the results of operations and cash fl ows that have occurred during the year.

There are no mandatory accounting principles that, having a signiﬁ cant e ect on the ﬁ nancial statements, haven’t been applied. b) Use of estimates

In the accounts have been used estimates to quantify various assets, liabilities, income, expenses and commitments, as detailed in each section; the estimates have been made based on the best information available at the time of its formulation and referred to 31 December 2019; however, it is possible that future events may have e ects on these estimates; these e ects are recognized in the income statement of the years concerned under the heading of extraordinary items.

The FGDEC has granted various guarantees in order to carry out the restructuring of certain entities (see Notes 20.1, 20.2 and 22.4). The FGDEC has estimated the amount of provisions according to the methodology indicated in these Notes. Although these estimates were made on the basis of the best information available at the date of preparation of these ﬁ nancial statements, the amount of the provisions made for these items will depend on the fulﬁ lment of the key assumptions used in their determination, as well as the future evolution of the contingencies covered by these guarantees. c) Formulation of annual accounts, comparison of information and regulatory framework applied by the FGDEC

The accounts have been prepared in accordance with the rules established in the General Accounting Plan approved by Royal Decree 1514/2007, of 16 November, and the later amendments.

The annual accounts are expressed in millions of Euros, unless otherwise stated, and, for comparative purposes, in addition to the ﬁ gures for 2019 are presented those corresponding to the previous year. d) Deposits guarantee compartment and securities guarantee compartment

In compliance with the provisions of the tenth ﬁ nal disposition of Law 11/2015, which amended the Royal Decree-Law 16/2011, and from the entry into force of that law the FGDEC resources should be allocated to the deposits guarantee compartment or to the securities guarantee compartment, which will be accounted separately, so that the corresponding assets, costs, expenses and obligations are the proper response to the intended use of the funds. The same rule states that rights acquired and obligations of the FGDEC prior to its entry into force shall

41 5 ANNUAL REPORT 2019

be allocated to the deposits guarantee compartment. The aggregation of both compartments composes the FGDEC annual accounts at 31 December 2019.

The detail of the balance sheet and proﬁ t and loss account as at 31 December 2019, for each compartment is attached in Annex 1.

e) Participation in the capital of other companies

The FGDEC directly and indirectly is involved in many societies. Units are presented under “Investments in group companies and associates” measured at acquisition cost, net of related impairment. Equity information is provided in Annex 2.

f) Classification of current and non-current items

For the classiﬁ cation of current items, the maximum term of one year has been considered since the date of these annual accounts.

3. ACCOUNTING POLICIES AND VALUATION

The accounting principles and standards applied are the generally accepted, and are contained in the General Accounting Plan and supplementary provisions.

a) Accrual

The accounts have been prepared on the accrual basis, regardless of when the cash ﬂ ows of collection or payment occur, except in the cash ﬂ ow statement presented by the direct method.

b) Intangible fixed assets

The intangible ﬁ xed assets are recorded in the asset by its acquisition cost, amortised over a period of four years.

c) Tangible assets

Assets included in this group are valued at their purchase price. They are amortised over their estimated from six to eight years for movables and facilities and in four years for computer equipment.

d) Financial investments

Financial investments available for sale are initially recorded at cost of acquisition, proceeding to adjust monthly to fair value in the case of ﬁ nancial assets with a value of liquid market and annually in the case of illiquid markets, taking to equity the di erences between the carrying amount and the market value determined by valuations obtained from the secondary market until the asset is sold or its value becomes impaired, at which moment those earnings previously recognized in equity are recognized in the proﬁ t and loss account.

42 5 ANNUAL REPORT 2019

Financial investments held to maturity are recorded at acquisition cost, subsequently being valued at amortised cost. Accrued interest is recognized in the consolidated income statement by applying the e ective interest rate.

Additionally, in the case of ﬁ nancial assets they are adjusted accordingly if there is objective evidence that their impairment is a result of a reduction or delay in the estimated future cash ﬂ ows in the case of acquired debt instruments or by lack of recoverability of the carrying value of the asset in the case of investments in equity instruments. The valuation adjustment is the di erence between its cost and its amortised cost minus, where appropriate, any previously recognized valuation adjustment in the income statement and the fair value at the time the assessment is made. In the case of equity instruments measured at cost because its fair value cannot be determined, the correction value is determined in the same way as for investments in the equity of group companies, joint ventures and associates.

If there is objective evidence of irreversible impairment in fi nancial assets classifi ed as available for sale it is recorded in the income statement for the cumulative loss previously recognized in equity by decrease in its fair value. The impairment losses thus recognized in the profi t and loss account for equity instruments are not reversed through the income statement.

The fair values of quoted investments are based on current purchase prices. If the market for a ﬁ nancial asset is not active (and for unlisted securities), fair value is established using valuation techniques that include the use of duly informed recent transactions between stakeholders, references to other substantially similar instruments, discounting methods of future estimated cash ﬂ ows and pricing models of options making maximum use of observable market data and relying as little as possible on subjective considerations.

Financial investments are included in current assets when their maturity is equal or less than twelve months, and are classiﬁ ed as non-current assets when their maturity is more than twelve months. e) Non-current assets and disposable groups of elements held for sale

A non-current asset is classiﬁ ed as held for sale when its carrying amount is expected to mainly be recovered through sale rather than through continuing use and provided that the following conditions are met:

1. The asset is available in its current condition for immediate sale, subject to usual and customary terms for sale.

2. Its sale is highly probable, because the following circumstances:

2.1. The holding company is committed to a plan to sell the asset, as it has initiated a program to locate a buyer and complete the plan.

2.2. The sale of the asset is being actively negotiated at the right price in relation to its current fair value.

43 5 ANNUAL REPORT 2019

2.3. It is expected to complete the sale within one year from the date of classiﬁ cation of the asset as held for sale, unless, by events or circumstances beyond the control of the holding, the period of sale has to be extended, although it will remain committed to the asset disposal plan.

2.4. Actions to complete the plan indicate that it is unlikely that signiﬁ cant changes may occur or that it will be withdrawn.

Non-current assets held for sale are measured at book value at the time of classiﬁ cation in this category or fair value minus selling costs, if the latter is lower, registering in this case an impairment loss of that asset.

While an asset is classiﬁ ed as non-current held for sale, it is not amortised, allocating the appropriate valuation adjustments so that the carrying amount does not exceed the fair value minus selling costs.

The valuation adjustments due to impairment losses of non-current assets held for sale, as well as its reversion when the circumstances that motivated them have ceased to exist, are recognised in the income statement except when it is appropriate to record them directly in equity according to the criteria generally applicable to the assets in their speciﬁ c rules.

f) Revenue recognition

Revenues from ordinary contributions are recognised on an accrual basis. The extraordinary expenditures and contributions are recorded, once agreed and in accordance with applicable regulations, directly in equity at the present value of expected cashing; subsequent capitalization is also recorded as equity.

Interest on investments is recognised using the method of e ective interest rate.

g) Collections and payments deferred in time

These are recognised by the amount resulting from the updating and ﬁ nancial capitalization of expected cash ﬂ ows at market rates. In 2019 the annual rate applied to update is 3%, the same as in 2018.

h) Transactions with related parties

Transactions with related parties are carried out under market conditions and in accordance with the assumed commitments. The subsequent valuation is performed in accordance with the provisions of the relevant regulations.

i) Impairments

Impairments are carried out on items where there is objective evidence that there have been circumstances that allow to not assuming the full recovery of the carrying amount of the assets.

j) Restructuring costs of credit institutions

The equity e ect on the FGDEC arising as a result of restructuring or action plans of credit institutions, or other related operation, is charged to income in the year in which it occurs, taking

44 5 ANNUAL REPORT 2019

into account data resulting from agreements contained in speciﬁ c operations and the best estimate of the e ect of the acquired commitments. In the event that future events may modify these estimates, this variation in cost is recognized in the proﬁ t and loss account under the heading of extraordinary items. k) Commitments with the employees

The commitments on supplementary pension of the sta entitled to such a beneﬁ t are outsourced to insurance companies. l) Tax regime

There is an exemption from corporation tax, as required by Article 9.1.c) of the revised text of the Corporation Tax Act, and indirect tax exemption on grounds of acts and operations that the FGDEC performs in fulﬁ lling its purposes as determined in section 2.b) of Article 3 of Royal Decree-law 16/2011.

4. APPLICATION OF RESULTS

The surplus or deﬁ cit for the year is allocated to the equity fund.

5. FINANCIAL RISK MANAGEMENT

In compliance with the legal mandate of the FGDEC, the non-committed assets are materialised in government bonds or other assets of high liquidity and low risk. Likewise, ﬁ nancial resources committed pending of disbursement are invested in beforementioned assets.

6. RESTRUCTURING OR ACTION PLANS OF MEMBER ENTITIES

In addition to other very residual items arising from the restructurings of entities previously carried out, the ﬁ nancial statements for the years 2019 and 2018 show amounts related to:

i) the assets arrived at the FGDEC in 2010 from the restructuring of the Caja de Ahorros de Castilla-La Mancha (CCM), represented by the participation of FGDEC in its subsidiary Inversiones Corporativas, SA, which is totally deteriorated;

ii) the APS granted in 2011 and 2012 to Banco de Castilla-La Mancha, SA (BdCLM), Banco CAM, SA, and Unnim Banc, SA, respectively;

iii) rights and collection obligations relating to the sale of the shares of NCG Banco SA and Catalunya Banc, SA;

iv) and obligations and rights derived from the amounts guaranteed by the FGDEC to the depositors of Banco de Madrid, SAU.

v) the assets acquired from the target portfolio of the APS granted to Banco CAM, SA in the exercise of the right of ﬁ rst refusal.

45 5 ANNUAL REPORT 2019

Restructuring of Caja de Ahorros de Castilla-La Mancha (CCM)

On 3 November 2009, the Management Committee of the FGDCA approved the action plan for CCM, by which the assets of the company not integrated into the banking business or to the welfare fund were transferred to the FGDCA in an exchange for ﬁ nancial support thereto amounting to EUR 1,650 M. in advance, which was subsequently increased to EUR 1,740.3 M.

On 13 April 2012 the remaining assets received were grouped in the company Inversiones Corporativas, SA, a fully-owned subsidiary of the FGDEC which was also contributed by CCM. The FGDEC’s stake in Inversiones Corporativas, SA has been fully impaired since 31 December 2015.

The plan also included the granting to BdCLM of an APS assuming the FGDCA for a period of ﬁ ve years, extendable to seven by agreement of the parties, the losses from a predetermined portfolio of assets in a maximum amount of EUR 2,475 M. This limit amount was full used during the contract period, setting as e ective termination date 31 December 2016. In 2018, the FGDEC approved the settlement presented by BdCLM.

Restructuring of Banco CAM, SA

On 7 December 2011 the Management Committee of the FGDEC agreed to take part in the restructuring of Banco CAM, SA, assuming the following commitments:

a) Acquire the 100% capital of Banco CAM, SA, by subscribing one or more capital increases amounting to EUR 5,249 M., and then sell for one euro to Banco Sabadell, SA, the shares thus acquired.

b) To grant Banco CAM, SA, an APS assuming the FGDEC, for a period of ten years from 31 July 2011, 80% of the losses on a portfolio of assets for a predetermined amount of EUR 24,644.3 M., with provisions of EUR 3,882.2 M., once absorbed the provisions made on those assets

Such losses comprise those resulting from disposals of assets, repossessions, adjudications or other similar operations related to asset disposals and irreversible impairment revealed in the assets during the term of the APS, as well as the reasonable estimated impairment in the protected portfolio to the due date of the APS.

After that date, and subsequently of an operation which reduced to zero the capital of Banco CAM, SA, on 15 December 2011, the FGDEC signed a ﬁ rst capital increase for an amount of EUR 2,800 M. Following authorization by the competent authorities of the restructuring operation of Banco CAM, SA, on 1 June 2012, the FGDEC signed a second capital increase of EUR 2,449 M., selling then for one euro to Banco Sabadell, SA, the total subscribed shares of the capital of Banco CAM, SA.

On December 17, 2018, Banco de Sabadell, the FGDEC and the FROB signed a Clariﬁ cation Agreement to Section II of the Protocol that regulates the APS, by virtue of which certain situations regarding the content and development of the indicated Section have been clariﬁ ed,

46 5 ANNUAL REPORT 2019

and it has been established that the amount of payments that would correspond to the FGDEC, from its signature, will be limited to a maximum of EUR 4,147 M., giving rise to a maximum loss for the FGDEC of EUR 7,386 M.

Restructuring of Unnim Banc, SA

On 7 March 2012 the Management Committee of the FGDEC agreed to take part in the restructuring of Unnim Banc, SA, assuming the following commitments:

a) Financially support the purchase by BBVA to the FROB of the entire share capital of Unnim Banc, SA, for the price of one euro, providing the necessary funds for the FROB to recover, in the sales process, the full amount of its participation in Unnim Banc, SA, which amounted to EUR 953.3 M.

b) Grant to Unnim Banc, SA, an APS assuming the FGDEC for a period of ten years from 31 October 2011, 80% of the losses on a portfolio of assets amounting to EUR 7,359.7 M. with provisions of EUR 1,330.3 M., once absorbed the provisions made on those assets.

As in the APS granted to Banco CAM, SA, such losses comprise those resulting from disposals of assets, repossessions, adjudications or other similar operations related to asset disposals and irreversible impairment revealed in the assets during the term of the APS, as well as the reasonable estimated impairment in the protected portfolio to the due date of the APS.

Following approval by the competent authorities of the restructuring operation of Unnim Banc, SA, on 27 July 2012, the purchase by BBVA to the FROB of the entire share capital of Unnim Banc, SA was formalized, for the price of one euro. Next, in order to compensate the losses of the FROB in the operation, the FGDEC recognised a loan of EUR 953.3 M., maturing on 1 March 2013. In consideration, the FROB granted a card payment by that amount, cancelling the FGDEC’s loss compensation commitment. On 1 March 2013, this loan was repaid.

On December 13, 2018, BBVA, the FGDEC and the FROB signed a Clariﬁ cation Agreement to Section II of the Protocol that regulates the APS, by virtue of which certain situations regarding the content and development of the indicated Section have been clariﬁ ed, and it has been established that the amount of payments that would correspond to the FGDEC, from its signature, will be limited to a maximum of EUR 1,506 M., giving rise to a maximum loss for the FGDEC of EUR 1,997.7 M.

Expected losses of the APSs granted to Banco CAM, SA and Unnim Banc, SA

The losses for the FGDEC that may arise from the APS that have been granted to Banco CAM and Unnim Banc are shown provisioned on basis: (i) of the reports issued by independent experts that, in view of the situation of protected portfolios at year closement, they have estimated the total loss in each of them at the end of the corresponding APS and (ii) of the Clariﬁ cation Agreements signed with the beneﬁ ciary entities at 31 December 2018.

The coverage constituted at 31 December 2019 and 2018 corresponds to the current value of the payments the FGDEC expects to make in each APS to cover the portion of the total loss to be borne based on the commitments acquired in each institution.

47 5 ANNUAL REPORT 2019

Collection rights and obligations relating to the sale of the shares of NCG Banco, SA and Catalunya Banc, SA

On 23 March 2013 was published the Royal Decree Law 6/2013 of 22 March, which modiﬁ es in its second article the ﬁ fth additional provision of Royal Decree-Law 21/2012, of 13 July, allowing the FGDEC to subscribe or acquire shares or debt of the Sareb and shares not admitted to listing of the entities that have transferred assets to the Sareb, thus allowing to provide liquidity to such shares received by holders in mandatory redemptions made within management exercises of hybrid capital instruments and subordinated debt performed in restructuring and resolution processes.

Under that provision, the FGDEC acquired in 2013 shares of NCG Banco SA and Catalunya Banc SA. Both shares have been sold in 2014 and 2015, respectively, and the FROB granted, on behalf of the FGDEC, certain ﬁ nancial guarantees to the buyers, some of which are still in force.

The cost of acquiring the shares of NCG Banco, SA was EUR 802.4 M., with the net estimated sale price being EUR 218.6 M., EUR 290.2 M. corresponding to the purchase price of the shares, EUR 143.6 M. to the payment for guarantees extended to the buyer and EUR 72.0 M. to the collection of the share value coverage agreement signed with FROB.

The cost of acquiring the shares of Catalunya Banc was EUR 1,000.9 M., with the net estimated sale price being EUR 187.4 M.; EUR 383.1 M. corresponding to the purchase price of the shares, EUR 268.7 M. to the payment for guarantees extended to the buyer, and EUR 73.0 M. to the collection of the share value coverage agreement signed with FROB.

The 2019 and 2018 balance sheets reﬂ ect the expected cash ﬂ ows on the sale of these shares at their current value.

Payment of Banco de Madrid, SAU depositors’ coverage

On 16 March 2015 the provisional administrators of Banco de Madrid, SAU, designated the 12th of that month by the Bank of Spain, requested the bankruptcy of the entity. On 18 March 2015 the Bank of Spain, after consultation with the Management Committee of the FGDEC determined that, having produced non-payment of due and payable cash deposits, for reasons directly arising from the ﬁ nancial situation of the institution, it was unable to return them in the immediate future, a situation that, under the provisions of Article 8.1.b) of Royal Decree-law 16/2011, the FGDEC was compelled to pay the guaranteed deposits to the entity clients.

Earlier that day, on 18 March 2015, the FROB agreed not to carry out a process of resolution of that entity. In turn, on 25 March 2015 the Commercial Court number 1 of Madrid declared voluntary bankruptcy of Banco de Madrid, SAU.

Until 31 December 2019 and according to the information received from the Bankruptcy Administration of the company, the FGDEC had completed the communication process of informing to the clients of the entity the state of their accounts and their guaranteed amounts. At that date, the FGDEC has paid guaranteed amounts to the depositors totalling EUR 125.8 M., and the institution has paid the FGDEC an amount of EUR 103.1 M., reducing its payment obligation by the guaranteed deposits paid by the FGDEC.

48 5 ANNUAL REPORT 2019

In addition, in view of the information provided by the aforementioned Bankruptcy Administration, a provision has been made for the collection rights payable to the FGDEC deriving from the coverage payments, totalling EUR 9.5 M.

Acquisition of assets in exercise of the right of ﬁ rst refusal

On 17 November 2015, in exercise of the right of fi rst refusal provided for in the APS Protocol granted to Banco CAM, SA, FGDEC acquired a fi rst lot of real estate properties at a cost of EUR 30.0 M. During 2016 and in exercise of the same right of fi rst refusal, the FGDEC acquired further properties at a cost of EUR 0.2 M. In 2019, the FGDEC has continued to commercialize these properties, as commenced in 2016.

Net income on commercializing these properties is shown in the table below in the column “Commissions/Commercializing of net assets” within the restructuring process of Banco CAM, SA.

Summary of actions and restructuring of the Spanish ﬁ nancial system

A summary of the net grants awarded to member institutions and to the FROB from 2009 to 31 December 2019, in nominal values and millions of euros, is shown below:

Cost Recoveries

Year of Share Commissions/ Institution Capital Asset Guarantees Total intervention sales/ Commercializing injections acquisitions extended compensations of net assets

2009 FROB (2,250.0) — — — — (2,250.0)

2010 Caja de Ahorros Castilla La Mancha — (1,740.3) (2,475.0) — 174.2 (4,041.1)

2011 Banco CAM, SA (5,249.0) — (7,386.0) — 37.5 (12,597.5)

2012 Unnim Banc, SA (953.3) — (1,991.6) — 3.5 (2,941.4)

2013 NCG Banco, SA (802.4) — (143.6) 362.2 — (583.8)

2013 Catalunya Banc, SA (1,000.9) — (268.7) 456.1 — (813.5)

2015 Banco de Madrid, SAU — — (125.8) 103.1 — (22.7)

Total (10,255.6) (1,740.3) (12,390.7) 921.4 215.2 (23,250.0)

The contribution to FROB capital was carried out in accordance with article 2.4 of Royal Decree 9/2009 of 26 June on bank restructuring and strengthening the equity of credit institutions. Deposit Guarantee Funds (in banks, savings banks and credit cooperatives) were required to make a contribution to constitute the FROB, amounting to EUR 2,250 M.

Additionally, in 2020, as part of the restructuring process of Caja de Ahorros de Castilla La Mancha, the FGDEC paid CCM’s asset management ﬁ rm an amount of EUR 89.3 M., including VAT, as described in note 7.

Details of grants awarded by the previous deposit guarantee funds from 1978 to 2008 (FGDEB, FGDCA and FGDCC) are shown in Annex 5.

49 5 ANNUAL REPORT 2019

7. EVENTS AFTER THE REPORTING DATE

In 2020, the FGDEC received EUR 1,395.5 M. from the member institutions, of which EUR 1,125.3 M. and EUR 36.1 M. (notes 16.2 and 23.1) corresponds, respectively, to the annual contributions of the member institutions to the deposits and securities guarantee deposits, respectively, and EUR 234.1 M. (notes 12.1, 16.1 and 23.1) to the eighth payment of the extraordinary contribution to the deposits guarantee compartment and the ninth and tenth instalments of the extraordinary contribution from one institution, that were paid in conjunction with its eighth instalment and its annual contribution to the deposits guarantee compartment on 7 January 2020, upon its departure from FGDEC membership. With the exception of the aforementioned advance, the ordinary annual contributions and eighth instalment of the extraordinary expenditure allocation were settled on 28 February 2020.

The collection of the extraordinary contribution does not a ect the equity situation of the FGDEC since it is already registered as assets and equity on the balance sheet.

On 28 February 2020, the FGDEC has made the sixth payment relating to the coverage granted by the APS to Banco CAM, SA for EUR 1,330.6 M. The FGDEC balance sheet at 31 December 2019 reﬂ ects the current value of this amount under current liabilities, as described in notes 20.1 and 22.4 of these notes.

On 3 March 2020, the Provincial Court of Madrid has passed sentence denying the appeal ﬁ led by the FGDEC on 17 June 2019 regarding the dispute held with Briareo Gestión, SA (Briareo) in relation to the manner and time in which the FGDEC should have settled the remuneration stipulated in the management contract of 3 December 2010. The aforementioned sentence rules that the FGDEC should pay Briareo the disputed invoices for services rendered, in cash, plus interest and legal costs. In view of this sentence and given that no appeal has been ﬁ led, at the date of preparation of these accounts, the FGDEC has paid Briareo for the invoices issued, plus interest and legal costs, which amounts to EUR 89.3 M., including VAT (note 22.1). The FGDEC will recover approximately EUR 11.5 M. of this amount in VAT refunds.

On 11 March 2020, the World Health Organization declared the outbreak of the Covid-19 Coronavirus pandemic, which was rapidly spreading across the globe, a ecting over 150 countries. The majority of the Governments are adopting restrictive measures to contain the spread, including isolation, quarantine, conﬁ nement and restriction of free movement, closure of public and private premises, except essential services and healthcare, border closures and drastic restrictions in air, sea, rail and land travel.

The Government of Spain has adopted Royal Decree 463/2020 of 14 March, declaring the state of alarm in order to manage the healthcare crisis caused by Covid-19, the initial duration of which was 15 days. Subsequently, Royal Decrees 476/2020 of 27 March and 487/2020 of 10 April were passed, enforcing consecutive extensions to the state of alarm, until midnight on 12 April, 26 April 2020 and 10 May 2020, respectively.

This situation is having a signiﬁ cant impact on the global economy, due to the interruption or slowdown in the supply chains and the signiﬁ cant rise in economic uncertainty, as evidenced by increased volatility in asset prices.

50 5 ANNUAL REPORT 2019

In order to mitigate the economic impacts of this crisis, from 17 March 2020 a series of Royal Decree- Laws were passed, introducing urgent extraordinary measures to tackle the economic and social impact of Covid-19.

At the date of preparation of these annual accounts, no relevant consequences have been felt by the FGDEC and it is not yet possible to estimate the potential future impacts of this crisis. During 2020, the FGDEC will assess the impact of the events a ecting its equity and the ﬁ nancial situation at 31 December 2020, and on the results of its operations and cash ﬂ ows for the year then ending.

Other than the points stated above, no further signiﬁ cant events subsequent to 31 December 2019 are known that could impact the accounts of the FGDEC.

51 5 ANNUAL REPORT 2019

NOTES TO THE BALANCE SHEET

8. INTANGIBLE ASSETS

Corresponding to licenses for computer use, amortised over a period of four years.

9. PROPERTY, PLANT AND EQUIPMENT

It covers moveable goods, facilities, computer equipment and vehicles that have been acquired by the FGDEC or were transferred to it from the Management Committee upon its dissolution, for their net book value.

They are amortised over their estimated durability from six to eight years for movables and facilities and in four years for computer equipment.

10. REAL ESTATE INVESTMENTS

Real estate investments relate to properties acquired mostly in 2015 and partially in 2016 in exercise of the right of ﬁ rst refusal provided for in the APS Protocol of 7 December 2011 granted to Banco CAM, SA. Amortisation is based in the value of construction, and their estimated useful life in 50 years. The cost value amounts, during 2019 and 2018, in millions of euros, are the following:

Item 12.31.2019 12.31.2018 Accounting cost 2.1 2.2 Accumulated amortisation (0.1) (0.1) Net book value 2.0 2.1

During 2019 rental incomes obtained amounted to EUR 0.4 M. (EUR 0.5 M. in 2018) (note 25.1).

The movement in 2019 and 2018, in millions of Euros, is as follows:

Items Real Estate Investments Cost at 01.01.2018 2.1 Net transfers Non-current assets for sale (Note 13) 0.5 Sales of assets (0.4) Cost at 12.31.2018 2.2 Net transfers Non-current assets for sale (Note 13) 0.4 Sales of assets (0.5) Cost at 12.31.2019 2.1

52 5 ANNUAL REPORT 2019

11. NON-CURRENT INVESTMENTS IN GROUP COMPANIES AND ASSOCIATES

This caption mainly includes the shareholdings acquired by the FGDEC through the action plan for CMM and, to a lesser extent, through other previous actions. At 31 December 2019 and 2018 all of these have been fully impaired due to the equity situation of these companies. Their carrying value, in millions of euros, is as follows:

Item 12.31.2019 12.31.2018 Company shares 3.3 673.0 Impairment shareholdings (3.3) (673.0) Total — —

Company shares relates mainly to the acquisitions made in the action plan of CCM. On December 27, 2016, the FGDEC, its indirect 100% subsidiary, Midamarta, SL holding a share of Inversiones Corporativas, SA, and Liberbank, SA, entered into an agreement pursuant to which the latter granted a put option to the ﬁ rst two, and the former two to the latter an option to purchase in this respect the shares representing the capital of Inversiones Corporativas, SA, at an exercise price equal to the greater of one euro and its market value, to be exercised during the term of thirty calendar days after June 30, 2020, or sooner if certain circumstances were met. It is estimated that this agreement does not imply any breach for the FGDEC.

Based on the aforementioned agreement, as of December 31, 2019, the participation in Inversiones Corporativas, SA, for an amount of EUR 669.7 M., has been recorded in the short term (note 15).

The composition of the balance sheet at 31 December 2019 is as follows, in millions Euros:

12.31.2019

Companies % direct holding % Indirect holding Costs Impairment

C. R. Aeropuerto SL 6.07 30.36 2.7 (2.7) Other investees 0.6 (0.6) Total 3.3 (3.3)

The composition of the balance sheet at 31 December 2018 is as follows, in millions Euros:

12.31.2018

Companies % direct holding % Indirect holding Costs Impairment

Inversiones Corporativas, SA 99.99 0.01 669.7 (669.7) C. R. Aeropuerto SL 6.07 30.36 2.7 (2.7) Other investees 0.6 (0.6) Total 673.0 (673.0)

The detail of direct and indirect holdings is attached in Annex 2.

53 5 ANNUAL REPORT 2019

12. NON CURRENT FINANCIAL ASSETS

The detail at 31 December 2019 and 2018 is as follows, in millions of Euros:

Items Notes 12.31.2019 12.31.2018 Credit entities. Extraordinary contribution 12.1 445.8 659.1 Receivables for provided guarantees APS 12.2 2.1 3.6 Contributions collection rights & contributions 12.3 0.1 0.2 Banco de Madrid

Payment receivables depositors 12.4 14.4 23.7 Banco de Madrid National debt euro area 12.5 293.2 294.8 Cash deposits constituted guarantee Finland 12.5 __ 0.3 National debt 12.6 1,940.2 4,155.7 Subordinate debentures 12.7 2.3 2.2 Other ﬁ nancial assets 12.8 0.1 0.1 Sta loans 12.9 0.2 0.3 Total 2,698.4 5,140.0

12.1. Credit entities. Extraordinary contribution

The Management Committee of the FGDEC, at its meeting on 30 July 2012, agreed to make an extraordinary contribution by the member institutions for a total amount of EUR 2,346.0 M., distributed according to the calculation basis of regular contributions at 31 December 2011, payable in ten equal annual instalments of EUR 234.6 M. to be settled the same day as the ordinary contributions from 2013 to 2022, and may be deducted from the regular annual contribution of each entity up to the amount of their corresponding ordinary contribution.

At 31 December 2019 the nominal value of each of the outstanding annual instalments stood at EUR 234.1 M. (the same import in 2018) (Notes 7, 16.1 and 23.1) as a result that entities members of the FGDEC upon the approval of the extraordinary contribution have later deregistered, proceeding to pay the current value of their outstanding disbursements, except for Banco de Madrid, SAU that as of December 31, 2019 has a part pending payment (note 12.3).

The current value of the outstanding extraordinary contribution, using an annual discount rate of 3%, at 31 December 2019 and 2018 is as follows (expressed in millions of euros):

Item 12.31.2019 12.31.2018 Extraordinary contribution classiﬁ ed as current asset (note 16.1) 233.0 233.0 Extraordinary contribution classiﬁ ed as non-current asset 445.8 659.1 Outstanding contribution 678.8 892.1

The instalment receivable on 28 February of the following year is recorded as current assets. The remaining instalments outstanding are recorded as non-current assets, under the non-current ﬁ nancial investments caption.

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12.2. Receivables for provided guarantees APS

The APSs granted to Banco CAM, SA and Unnim Banc, SA include a compensation fee of 0.01% on the available balance of the respective APS at the beginning of each year, which must be received by the FGDEC as a consideration of the guarantee throughout its validity, whose future charges are estimated annually according to the best available information on the expected evolution of each APS.

The variation for the ﬁ nancial years 2019 and 2018 was as follows, in millions of Euros:

Items Banco CAM Unnim Banc Total Balance at 01.01.2018 3.9 1.3 5.2 Invoicing corresponding to 2018 (Note 14.1) (1.3) (0.4) (1.7) Financial update (Note 26) 0.1 — 0.1 Balance at 12.31.2018 2.7 0.9 3.6 Invoicing corresponding to 2019 (Note 14.1) (1.2) (0.4) (1.6) Financial update (Note 26) 0.1 — 0.1 Balance at 12.31.2019 1.6 0.5 2.1

The amount of the ﬁ nancial update, at 3% per annum according to the temporary estimate of the collection of the aforementioned commissions, was of EUR 0.1 M. in 2018 and 2019 (note 26).

12.3. Extraordinary contribution collection rights and extraordinary contribution Banco Madrid

At 31 December 2015, under Article 146 of the Insolvency Act, the FGDEC qualiﬁ ed as expired the outstanding amounts of Banco de Madrid, SAU in respect of the extraordinary contribution, agreed by the Management Committee of the FGDEC at its meeting of 30 July 2012, and the extraordinary contribution established in Royal Decree Law 6/2013 because the entity was in bankruptcy (Notes 19.1 and 12.1).

On 16 April 2019, 22 March 2018 and 14 December 2017, Banco de Madrid, SAU paid the FGDEC EUR 0.1 M., EUR 0.2 M. and EUR 0.4 M., respectively, equivalent to 82% of the said collection rights, thus reducing its obligation to pay for the extraordinary expenses and the extraordinary contribution.

12.4. Depositors collection rights Banco Madrid

This item includes, at nominal value, the amount of guaranteed deposits to depositors of Banco de Madrid, SAU, according to information received from the Bankruptcy Administration, pending collection by the FGDEC at 31 December 2019. Up to date, Banco de Madrid, SAU had paid the FGDEC an amount of EUR 103.1 M. (EUR 93.8 M. at 31 December 2018) reducing the payment obligation in respect of the guaranteed deposits paid by FGDEC to depositors of that entity, payment obligation that has the ordinary credit rating in the bankruptcy.

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As of 31 December 2019, in light of the information provided by the aforementioned Bankruptcy Administration, the FGDEC has remained the provision on the described collection rights registered in 2018 of to a total amount of EUR 9.5 M. (Note 25.12).

12.5. Public debt of the euro area and guarantee deposit made

On 16 July 2012, in order to facilitate the operation of European fi nancial assistance for the recapitalization of Spanish banks under the terms provided in the fi fth additional provision of Royal Decree-Law 21/2012, of July 13, and under paragraph 4 of that provision, the FGDEC signed a guarantee in favour of the Republic of Finland pledging to make pledges for an amount equivalent to 40% of the risk assumed by that State in disbursements that would be made by the European Financial Stability Fund to the Kingdom of Spain. Subsequently, as a result of the defi nitive establishment of the European Stability Mechanism, on 28 November 2012 the FGDEC and the Republic of Finland signed an addendum to that contract in order to adapt to the new situation. The participation of the Republic of Finland in the European Stability Mechanism on 28 November 2012 was of 1.7974%.

In fulﬁ lment of that commitment, on 28 November 2012 the FGDEC made a cash guarantee deposit amounting to EUR 283.8 M. due to the ﬁ rst disbursement facilitated by the indicated Mechanism to the Kingdom of Spain. On 22 January 2013 a second contribution was made, amounting to EUR 13.4 M. This guarantee has been fully allocated to the deposits guarantee compartment since it was set up in 2015.

Since their constitution, and in accordance with the provisions of the signed contract, the indicated deposits, which are assigned to the deposits guarantee compartment, together with the interests produced are being invested in securities issued by Member States of the euro area with the highest credit rating less the portion that may appear as balance cash account, which is also open as guarantee in the custodian entity. Annex 5.4 shows the evolution of the guarantee since it was established.

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The classiﬁ cation of these investments in the long term corresponds to what is expected to happen before they can be released given the commitment assumed with the securitised. The detail of these securities at 31 December 2019 and 31 December 2018 is as follows, in millions of Euros:

Titles-value Maturity 12.31.2019 12.31.2018 Finnish National Debt 4,375% 07.04.2019 — 68.1 French National Debt 1% 05.25.2019 — 109.3 Austrian National Debt 1,95% 06.18.2019 — 107.8 Finnish National Debt 3,375% 04.15.2020 77.3 6.3 Austrian National Debt 3,9% 07.15.2020 102.8 — French National Debt 0% 05.25.2021 109.5 — Total 289.6 291.5 Accrued interests 3.6 3.3 Total market value 293.2 294.8 Liquidity — 0.3 Accounting value of guarantee 293.2 295.1 Memorandum Equity adjustment (note 19.2) (0.4) (0.2)

The market value of these investments is less than the accounting cost in EUR 0.4 M. (EUR 0.2 M. at 31 December 2018) (Note 19.2), which amount is included as an adjustment in equity. Except for the market variations to which these securities may be subjected, the granting of this guarantee is not expected to give rise to any losses for the FGDEC, and therefore no coverage has been taken out in relation thereto.

During 2019, income of EUR 10.2 M. has been recorded on account of coupon collections (EUR 6.1 M. in 2018) and EUR 281.8 M. in 2019 on investment maturities (none in 2018). Investment for the year has amounted to EUR 292.2 M. due to the proposed reinvestment upon maturity (EUR 6.5 M. in 2018).

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12.6. National debt

This item records investments in Spanish government debt with remaining maturities of over one year. Investments in non-current public debt are classiﬁ ed in the available-for-sale investment portfolio through equity and their market value is higher than their carrying cost by EUR 11.4 M. (EUR 46.6 M. in 2018) (note 19.2), which is included as an adjustment in equity. The breakdown of these investments at 31 December 2019 was as follows, in millions of Euros:

Amounts at Carrying Titles-maturity ISIN codes maturity amounts Investments assigned to the deposits compartment Bonds 0.75% maturity 07.30.2021 ES00000128B8 470.8 479.4 Bonds 0.05% maturity 10.31.2021 ES0000012C46 94.0 94.8 Obligations 5.85% maturity 01.31.2022 ES00000123K0 44.1 49.8 Bonds 0.40% maturity 04.30.2022 ES00000128O1 298.4 303.8 Bonds 0.45% maturity 10.31.2022 ES0000012A97 223.3 228.1 Bonds 5.4% maturity 01.31.2023 ES00000123U9 204.0 239.8 Bonds 0.25% 07.30.2024 ES0000012E85 336.6 341.9 Bonds 2.75% maturity. 10.31.2024 ES00000126B2 80.1 91.1 Total deposits compartment 1,751.3 1,828.7 Equity adjustments (nota 19.2) 10.3 Investments assigned to the securities compartment Bonds 0.75% maturity 07.30.2021 ES00000128B8 74.3 75.6 Bonds 4.40% maturity 10.31.2023 ES00000123X3 1.5 1,8 Bonds 4.80% maturity 01.31.2024 ES00000121G2 26.9 32.3 Bonds 2.75% maturity 10.31.2024 ES00000126B2 1.6 1.8 Total securities compartment 104.3 111.5 Equity adjustments (nota 19.2) 1.1 Total 1,855.6 1,940.2

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The breakdown of these investments at 31 December 2018 was as follows, in millions of Euros:

Amounts at Carrying Titles-maturity ISIN Code maturity amounts Investments assigned to the deposits compartment Obligations 4% maturity 04.30.2020 ES00000122D7 593.3 627.9 Bonds 1.15% maturity 07.30.2020 ES00000127H7 705.2 721.9 Obligations 4.85 % maturity 10.31.2020 ES00000122T3 1,406.6 1,538.5 Bonds 0.75% maturity 07.30.2021 ES00000128B8 470.7 481.9 Bonds 0.05% maturity 10.31.2021 ES0000012C46 94.0 94.3 Obligations 5.85% maturity 01.31.2022 ES00000123K0 44.1 52.1 Bonds 0.40% maturity 04.30.2022 ES00000128O1 298.5 302.8 Bonds 0.45% maturity 10.31.2022 ES0000012A97 223.3 226.3 Total deposits compartment 3,835.7 4,045.7 Ajuste valor en Patrimonio neto (nota 19.2) 45.6 Investments assigned to the securities compartment Bonds 1.15% maturity 07.30.2020 ES00000127H7 2.7 2.8 Obligations 4.85% maturity 10.31.2020 ES00000122T3 26.9 29.4 Bonds 0.75% maturity 07.30.2021 ES00000128B8 74.3 76.0 Bonds 4.40% maturity 10.31.2023 ES00000123X3 1.5 1.8 Total securities compartment 105.4 110.0 Equity adjustments (note 19.2) 1.0 Total 3,941.1 4,155.7

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12.7. Subordinated debentures (net)

The balance of this item corresponds to perpetual debentures or to 99 years with zero interest acquired as aid for rehabilitation of savings banks in prior years.

The detail at 31 December 2019 is as follows, in millions of Euros:

Depreciation Net Issuer entities Subscription fund amount Perpetual debentures – Savings banks M.P. and C.A.S.Fdo.,Guadalajara, Huelva, Jerez and Sevilla (currently Caixabank) 18.0 (17.8) 0.2 Caja de Ahorros del Mediterráneo (currently Banco Sabadell) 15.1 (14.9) 0.2 Unicaja 24.0 (23.8) 0.2 Subtotal 57.1 (56.5) 0.6 Debentures 99 years – Savings banks M.P. and C.A.S.Fdo.,Guadalajara, Huelva, Jerez and Sevilla (currently Caixabank) 15.0 (13.3) 1.7 TOTAL 72.1 (69.8) 2.3

The detail at 31 December 2018 was as follow, in millions of Euros:

The di erence between the balance of the item at 31 December 2019 (EUR 2.3 M.) and at 31 December 2018 (EUR 2.2 M.) corresponds to the lower depreciation of debentures to 99 years because of their nearer maturity.

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12.8. Other ﬁ nancial assets

The detail of this item at 31 December 2019 and 31 December 2018 is as follows, in millions of Euros:

12.31.2019 and 12.31.2018 Items Cost Impairment Net Third debtors 34.3 (34.3) — Bonds and deposits 0.6 (0.5) 0.1 Total 34.9 (34.8) 0.1

Third debtors. From the total amount, EUR 27.1 M. are the resulting net balance (amount received minus the recovered plus expenses) of the allocation that the previous FGDEB made in 2003 before the Court of 1st Instance No 4 in Madrid, in favour of Mr. Domingo López Alonso, since then, object to the corresponding claiming in court; the remaining amount of EUR 7.2 M. responds to several remnant balances in charge of Mr. López Alonso and his corporate group. Both amounts are fully impaired. These balances have not changed in recent years.

Bonds and deposits. This item includes at 31 December 2019 and 31 December 2018, in millions of euros:

Item Cost Impairment Net Judicial consignations 0.5 (0.5) — Guarantees of the FGDEC o ce and real estate investments 0.1 — 0.1 Total 0.6 (0.5) 0.1

12.9. Sta loans

In this item are recognised the instalments with more than one year maturity of the loans granted to the employees amounting. These loans are repaid monthly, with ﬁ nal maturity in 2026.

13. NON CURRENT ASSETS FOR SALE

This item recognises the net value of the impairment of the real estate owned by the FGDEC available for sale and not rented to third parties. Of its balance, EUR 5.6 M. (EUR 9.6 M. at 31 December 2018) correspond to the price paid and costs associated with the purchase of real estate acquired in the exercise of the right of fi rst refusal on the assets covered by the APS granted to Banco CAM. The rest, amounting to EUR 0.2 M. (the same amount in 2018) come from the fi nancial restructuring of other entities and recoveries made on judicial procedures related to them. The assets included in this section meet the requirements described in Note 3.e) of these fi nancial statements.

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The movement in this item during 2019 and 2018 is as follows:

Non current Item assets for sale Balance 01.01.2018 20.4 Net transfers to the heading Real Estate Investment (Note 10) (0.5) Sales of assets (10.1) VAT deductible for transfer to Real Estate Investment (0.1) Residual property net recoveries 0.1 Balance 12.31.2018 9.8 Net transfers to the heading Real Estate Investment (Note 10) (0.4) Sales of assets (3.5) Other net movements (0.1) Balance 12.31.2019 5.8

14. OTHER RECEIVABLES /PAYABLES

The detail is as follows, in millions of Euros:

Items Notes 12.31.2019 12.31.2018 Debtors fee APS 14.1 1.6 1.7 Public Administrations 14.2 0.2 0.6 Debtors for assets sales 14.3 0.1 0.3 Total 1.9 2.6

14.1. Debtors fee APS

Amounts outstanding arising from invoicing of commissions charged to the beneﬁ ciaries of the APSs granted (note 12.2).

At 31 December 2019, the FGDEC had issued invoices on account of the aforementioned commissions of EUR 13.2 M. to the APS granted to Banco CAM, SA and EUR 3.8 M. to the APS granted to Unnim Banc, SA, with the invoices for 2019 outstanding for both APSs, respectively, at EUR 1.2 M. (EUR 1.3 M. in 2018) and EUR 0.4 M. (EUR 0.4 M. in 2018). Details of the invoices issued, collected and the outstanding amounts, in millions of euros, are as follows:

Item Banco CAM Unnim Banc Total Invoicing period 2011 to 2017 10.7 3.0 13.7 Invoicing period 2018 (note 12.2) 1.3 0.4 1.7 Invoicing period 2019 (note 12.2) 1.2 0.4 1.6 Total invoices issued 13.2 3.8 17.0 Total invoices received (12.0) (3.4) (15.4) Total 1.2 0.4 1.6

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14.2. Public Administrations

It includes mainly the VAT that has to be received for 2019, amounting to EUR 0.2 M. (EUR 0.6 M. in 2018).

14.3. Other debtors

This item mainly includes debts deriving from ordinary activity of the FGDEC and net debts: (i) on rehabilitations of institutions prior to 2011; and (ii) on the management and marketing of properties acquired in the exercise of the right of ﬁ rst refusal on assets covered by the APS granted to Banco CAM.

15. INVESTMENTS IN GROUP COMPANIES AND ASSOCIATES

This caption comprises: (i) collection rights of the FGDEC from subsidiaries on loans acquired in rehabilitations of credit institutions and expenses paid on account thereof; and (ii) with the investment held by the FGDEC in Inversiones Corporativas, SA measured at EUR 669.7 M. (note 11), fully impaired since 2015 and classiﬁ ed as current.

In 2018, the FGDEC granted a short-term participating loan to the subsidiary Realizaciones Patrimoniales, SA for the purposes of redressing its equity situation, for an amount of EUR 0.1 M., which was fully impaired upon granting (note 25.14).

16. SHORT TERM FINANCIAL INVESTMENTS

The detail is as follows, in millions of Euros:

Items Notes 12.31.2019 12.31.2018 Credit institutions. Extraordinary contributions 16.1 233.0 233.0 Ordinary contributions 16.2 1,155.9 1,096.0 Short term loans FROB-NCG Banco, S.A. 16.3 2.0 1.2 Short term loans FROB-Catalunya Banc, S.A. 16.4 5.2 __ National debt (Bills, bonds and Government bonds) 16.5 2,814.4 1,093.4 National debt accrued interests 16.6 48.0 44.0 Sta loan 16.7 0.1 0.2 Total 4,258.6 2,467.8

16.1. Credit entities. Extraordinary contributions

At 31 December 2019 it corresponds to the current value of the eighth collection of the extraordinary contributions agreed on 30 July 2012 of a nominal of EUR 234.1 M. maturing on 28 February 2020. At 31 December 2018 it reﬂ ected the current value of the seventh collection due on 28 February 2019 of a nominal of EUR 234.1 M. (Notes 7, 12.1 and 23.1).

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16.2. Ordinary contributions

At 31 December 2019, it records the present value of the ordinary contributions calculated according to the calculation basis at 30 June 2019 for the contributions corresponding to the deposits compartment, and according to the calculation basis at 31 December 2019 for the contributions corresponding to the securities compartment, to which, in each case, the rectiﬁ cations to the contributions for the year 2018 are incorporated due to subsequent rectiﬁ cations of the information taken for the calculation of those, which the member entities paid to the FGDEC on 28 February 2020, except for one institution which settled payment on 7 January 2020 (note 7), as shown below in millions of euros:

Current value Nominal value Ordinary contributions 12.31.2019 12.31.2018 12.31.2019 12.31.2018 Deposits compartment (notes 7, 23.1 y 26) 1,120.0 1,063.0 1,125.3 1,068.1 Securities compartment (notes 7, 23.1 y 26) 35.9 33.0 36.1 33.1 Saldo ﬁ nal 1,155.9 1,096.0 1,161.4 1,101.2

16.3. Short term loans FROB-NCG Banco S.A.

Under the ﬁ fth additional provision of Royal Decree-Law 21/2012, as amended by Article 2 of Royal Decree Law 6/2013, on 10 June 2013 the FGDEC announced an o er to acquire common shares of NCG Banco, SA, with certain considerations and conditions. As a result of that o er, the FGDEC acquired 603,671,160 shares of NCG Banco, S.A. (Representing 25.6% of its capital), for a total cost of EUR 802.4 M., while subscribing with the controlling shareholder of the entity, the FROB, certain agreements of partial coverage of the evolution of the value and of the result of the sale of the stake.

On 18 December 2013, the FROB announced the award of a shareholding of 88.3% of NCG Banco, SA, after the study of the binding o ers received in the corresponding sales process, to Banco Etcheverría, SA (Banesco Group). As provided in Articles 26.2 and 64.1.c of Law 9/2012 of 14 November, the referenced sales process included the shares owned by the FGDEC. On 25 June 2014 the FROB announced the consummation of the transaction after obtaining all the mandatory authorizations.

Thereafter, the FROB notifi ed the FGDEC of the provisional settlement of the transaction which, in accordance with article 26.4 of Law 9/2012, included: (i) the sale price; (ii) the administrative and other expenses incurred by the FROB, including the estimated value of the fi nancial support instruments it had granted to the buyer; and (iii) the estimated value of the aforementioned value coverage granted by the FROB to the FGDEC. Subsequently, the initial settlement has varied a number of times due to changes in the estimated values of the fi nancial supports and the aforementioned value coverage, as well as the initially planned timing of collections and payments. Specifi cally, the FROB notifi ed the FGDEC of modifi cations to the consecutive settlements on 20 July 2015, 21 July 2016, 9 October 2017, 19 October 2018 and 28 October 2019.

At 31 December 2019, the estimated net sale price of this operation amounted to EUR 218.6 M. (EUR 202.6 M. in 2018), with EUR 290.2 M. corresponding to the sale price net of costs (same ﬁ gure in 2018), EUR 143.6 M. to the estimated value of the ﬁ nancial supports granted by the FROB to the buyer and borne by the FGDEC (EUR 155.6 M. in 2018) and EUR 72.0 M. to the estimated value

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of the partial coverage of the evolution of the value and of the proceeds on the sale of the stake granted by the FROB to the FGDEC (EUR 68.0 M. in 2018).

Annex 5.5 shows the settlements made by the FROB at each year end on account of the sale of NCG Banco, SA, together with the current value of the net payment rights pending collection.

In the settlement made by the FROB at 28 October 2019, the FROB: (i) increased by EUR 4.0 M. the amount of the partial value coverage of the shares, signed between the FROB and the FGDEC, paying EUR 3.2 M. and deferring payment of EUR 2.1 M. until 2020, which led to an extraordinary income of EUR 4.0 M. (note 25.3); and (ii) decreased and paid, also in 2019, a lower estimated cost of the guarantees granted to the buyer for an amount of EUR 12.0 M., recorded as extraordinary results (note 25.3).

In the settlement made by the FROB, on 19 October 2018, the FROB: (i) paid an amount of EUR 2.8 M. on account of agreements signed for partial value coverage of the shares and deferred until 2019 the remaining payment of EUR 1.3 M.; and (ii) increased and charged a higher cost of guarantees granted to the buyer for EUR 1.2 M. (note 25.3).

At 31 December 2019 only EUR 2.1 M. remains outstanding (EUR 1.3 M. in 2018) corresponding to the partial share value coverage granted by the FROB to the FGDEC, recorded in the balance sheet at the current value of EUR 2.0 M. (EUR 1.2 M. in 2018).

16.4. Shor-term loan FROB-Catalunya Banc, SA

Under the ﬁ fth additional provision of Royal Decree-Law 21/2012, of 13 July, as amended by Article 2 of Royal Decree Law 6/2013, of 22 March, on protection to holders of certain saving and investment products and other ﬁ nancial measures, on 10 June 2013 the FGDEC announced the o er of voluntary purchase of common shares of Catalunya Banc, SA, with certain considerations and conditions. As a result of that o er, the FGDEC acquired 640,964,146 shares of Catalunya Banc, SA (representing 32.4% of its capital), for a total cost of EUR 1,000.9 M., while subscribing with the controlling shareholder, the Fund for Orderly Bank Restructuring (FROB), certain agreements of partial coverage of the evolution of the value and of the proceeds on the sale of these shares.

On 21 July 2014, the FROB announced the award, after the study of the binding o ers received in the corresponding sales process of a stake of 98.4%, or 100% under certain circumstances, of Catalunya Banc, SA, to Banco Bilbao Vizcaya Argentaria, SA (BBVA). As provided in the aforementioned items 26.2 and 64.1.c of Law 9/2012, the referenced sales process included the shares owned by the FGDEC. On 24 April 2015, the FROB announced the completion of the operation for the 98.4%, after obtaining all the necessary authorizations.

Thereafter, the FROB notifi ed the FGDEC of the provisional settlement of the transaction which, in accordance with article 26.4 of Law 9/2012, included: (i) the sale price; (ii) the administrative and other expenses incurred by the FROB, including the estimated value of the fi nancial support instruments it had granted to the buyer; and (iii) the estimated value of the aforementioned value coverage granted by the FROB to the FGDEC. Subsequently, the initial settlement has varied due to changes in the estimated values of the said fi nancial supports and the aforementioned value coverage, as well as the initially planned timing of collections and payments. Specifi cally, the FROB notifi ed the FGDEC of modifi cations to the consecutive settlements on 16 November 2016, 18 October 2018 and 5 December 2019.

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At 31 December 2019, the estimated net sale price of this operation amounted to EUR 187.4 M. (EUR 171.9 M. in 2018), with EUR 383.1 M. corresponding to the sale price net of costs (same ﬁ gure in 2018), EUR 268.7 M. to the estimated value of the ﬁ nancial supports granted by the FROB to the buyer and borne by the FGDEC (EUR 258.4 M. in 2018) and EUR 73.0 M. to the estimated value of the partial coverage of the evolution of the value and of the proceeds on the sale of the stake granted by the FROB to the FGDEC (EUR 47.2 M. in 2018).

Annex 5.6 shows the settlements made by the FROB at each year end on account of the sale of Catalunya Banc, SA, together with the current value of the net payment rights pending collection.

In the settlement made by the FROB at 5 December 2019, the FROB: (i) increased by EUR 25.8 M. the amount of the partial value coverage of the shares, signed between the FROB and the FGDEC, paying EUR 20.5 M. and deferring payment of the remaining EUR 5.3 M. until 2020; and (ii) increased and charged, also in 2019, a higher estimated cost of the guarantees granted to the buyer for an amount of EUR 10.3 M., leading to an extraordinary income of EUR 15.4 M. (note 25.2).

In the settlement made by the FROB, on 18 October 2018, the FROB paid an amount of EUR 16.0 M. (note 25.2) on account of a lower cost of guarantees granted to the buyer.

At 31 December 2019 only EUR 5.3 M. remains outstanding (nil in 2018) corresponding to the partial share value coverage granted by the FROB to the FGDEC, recorded in the balance sheet at the current value of EUR 5.2 M. (nil in 2018).

16.5. National debt (treasury bills and government bonds)

Its content responds to purchases of government bonds and obligations with a maturity lower than a year assigned to the deposits guarantee compartment. The detail at 31 December 2019 is as follows, in millions of Euros:

Amount at Account Titles-maturity ISIN codes maturity amount Investments in compartment deposits Obligations 4% maturity 04.30.2020 ES00000122D7 593.3 602.2 Bonds 1,15% maturity 07.30.2020 ES00000127H7 705.3 711.8 Obligations 4,85% maturity 10.31.2020 ES00000122T3 1,406.6 1,469.6 Total compartment deposits 2,705.2 2,783.6 Adjustments in Equity (note 19.2) 20,2 Investments in compartment securities Bonds 1,15% maturity 07.30.2020 ES00000127H7 2.7 2.7 Obligations 4,85% maturity 10.31.202 ES00000122T3 26.8 28.1 Total compartment securities 29.5 30.8 Adjustments in Equity (note 19.2) 0,3 Total 2,734.7 2,814.4

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At 31 December 2019 the public debt is classiﬁ ed in the investment portfolio available for sale with changes in equity, with their market value higher than book cost in EUR 20.5 M., which amount is included as an adjustment in equity (EUR 0.1 M. in 2018) (Note 19.2).

The inventory of Treasury bills and bonds and debentures at 2018 with a term of less than one year was as follows, in millions of Euros:

Amount at Account Titles – maturity ISIN Codes maturity amount Investments assigned to deposits compartment Bonds 0.25% maturity 01.31.2019 ES00000128AD 748.3 748.8 Obligations 4.60% maturity 07.30.2019 ES00000121L2 311.5 319.2 Obligations 4.30% maturity 10.31.2019 ES00000121O6 24.5 25.4 Total deposits compartment 1,084.3 1,093.4 Adjustments in Equity (nota 19.2) 0.1

The variation in 2019 and 2018 was as follows, in millions of Euros:

Items Amount Balance 01.01.2018 1,135.9 Acquisitions — Long-term transfers 1,106.0 Maturities (1,129.8) Issuance premium accrual/deferral and adjustments to market value (18.7) Balance at 12.31.2018 1,093.4 Acquisitions — Long-term transfers 2,848.5 Maturities (1,084.3) Issuance premium accrual/deferral and adjustments to market value (43.2) Balance at 12.31.2019 2,814.4

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16.6. National debt accrued interests

This item includes accrued interest not expired from ﬁ nancial investments in long and short term debts. At 31 December 2019 it shows a balance of EUR 48.0 M. (EUR 44.0 M. in 2018), of which EUR 46.4 M. correspond to the deposits compartment and EUR 1.6 M. to the securities compartment (EUR 43.5 M. and EUR 0.5 M. respectively in 2018). The variation in 2019 and 2018 was as follows, in millions of Euros:

Items 12.31.2019 12.31.2018 Initial balance 44.0 51.5 Coupon income in the acquisition 0.3 1.7 Accrued interests 131.3 130.4 Accrued interests expired and collected (127.6) (139.6) Final balance 48.0 44.0

16.7. Sta loans and other ﬁ nancial assets

Under this item at 31 December 2019 are recognised the instalments with a maturity of less than one year of loans granted to sta .

At 31 December 2018, in addition to the previous item, this caption included current payment rights on the sale of Aguas de Panticosa, SA acquired by the FGDEC in the exercise of the right of ﬁ rst refusal over assets covered by the APS granted to Banco CAM, SA collected in 2019.

17. SHORT-TERM ACCRUAL/DEFERRALS

The balance of this caption mainly reﬂ ects the amount pending deferral of the arrangement fee on the ﬁ nancing contract signed by the FGDEC on 19 December 2019 for a period of six months, the total amount of which came to EUR 6.0 M. (notes 22.6 and 25.15).

As of 31 December 2018, it corresponded to the accrual of annual payments of insurance premiums linked to employees and real estate assets of the FGDEC and to the advance payments not accrued to suppliers.

18. CASH AND CASH EQUIVALENTS

Freely available balances in credit institutions and in the Bank of Spain. Of the total cash, EUR 100.1 M. corresponds to the deposits guarantee compartment and EUR 0.3 M. to the securities guarantee compartment (EUR 11.0 M. and EUR 0.1 M. in 2018). The increase in cash during the year is due to the estimated payments to be made by the FGDEC in the short term. The composition is as follows, in millions of Euros:

Entities 12.31.2019 12.31.2018 Bank of Spain 99.2 9.0 Credit institution 1.2 2.1 Total 100.4 11.1

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19. NET EQUITY

Net equity at 31 December 2019 is positive in EUR 3,269.1 M., (EUR 2,181.2 M. at 31 December 2018) detailed as follows, in millions of Euros:

Items 12.31.2019 12.31.2018 INITIAL EQUITY 2,181.2 1,990.7 Operating loss/profi t 1,187.4 304.2 Financial loss/profi t (105.6) (126.5) SURPLUS (DEFICIT) FINANCIAL YEAR 1,082.0 177.7 Surplus (defi cit) deposits compartment 1,045.8 144.5 Surplus (defi cit) securities compartment 36.2 33.2 EXTRAORDINARY CONTRIBUTIONS CREDIT INSTITUTIONS (Note 19.1) 20.9 27.2 Adjustment for variation of value of fi nancial investments (Note 19.2) (15.0) (14.4) INCREASE (DECREASE) IN EQUITYFINANCIAL YEAR 1,087.9 190.5 FINAL EQUITY 3,269.1 2,181.2 Final equity of deposits compartment 3,089.0 2,037.6 Final equity of securities compartment 180.1 143.6

In section 3.3 of the annex 3 the equity historical evolution from 1980 to 2019 is detailed.

19.1. Extraordinary contribution

Note 12.1 details the source of the extraordinary contribution. The total amount of payments that would be collected by the FGDEC from the member institutions was EUR 2,346.0 M. Its equity accounting record at 31 December 2019 was as follows, in millions of Euros:

Items Amount Nominal amount of recoveries 2,346.0 Financial discount charges at 30 July 2012 (320.0) Amount recognised in equity upon extraordinary contributions approval 2,026.0 Capitalization pending charges recognised in equity 2012 25.1 Capitalization pending charges recognised in equity 2013 55.7 Capitalization pending charges recognised in equity 2014 50.3 Capitalization pending charges recognised in equity 2015 45.0 Capitalization pending charges recognised in equity 2016 39.1 Capitalization pending charges recognised in equity 2017 33.2 Capitalization pending charges recognised in equity 2018 27.2 Capitalization pending charges recognised in equity 2018 20.9 Amount recognised in equity at 31 December 2019 2,322.5

On 31 December 2019, a member institution of the FGDEC deregistered, paying the nominal amount of the outstanding payments on the January 2020 extraordinary contribution.

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During 2018, nine entities a liated to the FGDEC have been deregistered, seven of them have been integrated into other adhered entities and the other two have paid the nominal value of the outstanding payments of the extraordinary contribution.

Between 2014 and 2017 a further nine institutions deregistered, paying the current value of the payments pending on the extraordinary contribution.

Due to the deregistrations, the amount the FGDEC will ultimately pay at the end of the term for the extraordinary contribution will be lower than the total nominal amount of EUR 2,346.0 M. by an amount equal to the di erence between the nominal amount that would have been payable to the institutions deregistered at the end of the planned payment dates and the lower payment made due to the ﬁ nancial adjustment made for early payment.

In addition, at 31 December 2015, in accordance with article 146 of the Bankruptcy Law, the outstanding instalments of Banco de Madrid, SAU were transferred from the caption “Credit institutions. Extraordinary contribution” to the caption “Contributions collection rights and contributions Banco de Madrid”, since they fell due when the institution went bankrupt and entered into liquidation (note 12.3).

19.2. Adjustments for changes in value of ﬁ nancial investments

The adjustments for changes in value of ﬁ nancial investments in the ﬁ nancial year were as follows, in millions of Euros:

Items 12.31.2019 12.31.2018 Initial balance (Notes 12.5, 12.6 and 16.5) 46.5 60.9 National debt adjustment euro area (Note 12.5) (0.2) (0.1) National debt adjustment long term(Note 12.6) (35.2) (13.5) National debt adjustment short term (Note 16.5) 20.4 (0.8) Final balance 31.5 46.5 Adjustments change of value compartment deposits 30.1 45.5 Adjustments change of value compartment securitie 1.4 1.0

20. LONG TERM PROVISIONS

The detail is as follows, in millions of Euros:

Items Notes 12.31.2019 12.31.2018 Disbursement provisions APS Banco CAM, SA 20.1 1,698.7 2,935.9 Disbursement provisions APS Unnim Banc, SA 20.2 189.8 670.6 Asset management fee provision 22.1 - 60.9 Compensations (art. 74, Law 24/2001) 20.3 0.7 0.7 Commitments with sta 20.4 1.3 1.6 Other provisions 20.5 2.5 2.2 Final balance 1,893.0 3,671.9

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20.1. Disbursement provisions APS Banco CAM, SA

Under the restructuring plan of Banco CAM, SA, the FGDEC granted an APS to that entity (now absorbed by Banco Sabadell, SA), by which the FGDEC assumed, for a period of ten years from 31 July 2011, 80% of the losses from a portfolio of assets of a predetermined amount of EUR 24,644.3 M. with provisions made by EUR 3,882.2 M., once absorbed these provisions.

Afterwards, on December 17, 2018, Banco de Sabadell, the FGDEC and the FROB signed a Clariﬁ cation Agreement to Section II of the Protocol that regulates the APS, by virtue of which certain situations regarding the content and development of the indicated Section have been clariﬁ ed, and it has been established that the amount of payments that would correspond to the FGDEC, from its signature, will be limited to a maximum of EUR 4,147.0 M.; therefore, the maximum loss for the FGDEC derived from the APS, taking into account the payments made up to the date of the Agreement, shall not exceed EUR 7,386.0 M.

From the start of the APS, provision has been made for the losses that could arise, recording these at their current value based on: (i) the estimated expected losses calculated by an recognised independent expert at the end of each year; (ii) the aforementioned Clariﬁ cation Agreement, from 2018; and (iii) the payments made at each year end for the losses incurred by the beneﬁ ciary institution of the APS. Therefore, the coverage constituted at each year end corresponds to the current value of all the scheduled payments that should be made to cover the expected losses deriving from the APS, in line with the timeline arranged.

Notwithstanding, in 2016, for the purposes of estimating the provision, the FGDEC considered an expected total loss on the portfolio covered by the APS of EUR 286.6 M. more than the EUR 11,272 M. concluded by the independent expert in their report. This, in anticipation that the positive evolution highlighted by the independent expert in the expected level of impairment of the sub-portfolios of loans with land guarantees and adjudicated land observed each year would not continue.

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The following chart shows, in millions of euros: (i) the evolution of expected losses on the protected portfolio estimated by the independent expert, with the adjustment made by the FGDEC in 2016; (ii) the maximum loss to be covered by the FGDEC; (iii) the payments made by the FGDEC due to the settlements of losses made by the beneﬁ ciary institution of the APS; and (iv) the current value of the expected loss for the FGDEC pending settlement.

Payments Current value of the expected loss pending settlement Accumulated Expected loss on the Expected made payments Date protected portfolio- loss for the during the made by independent expert FGDEC year by the Total Current Non-current the FGDEC FGDEC

12.31.2011 5,557.4 1,340.2 — — 1,145.5 — 1,145.5

12.31.2012 7,589.3 2,965.7 — — 2,680.5 — 2,680.5

12.31.2013 8,850.1 3,974.3 — — 3,647.9 — 3,647.9

12.31.2014 9,899.5 4,813.9 — — 4,551.1 — 4,551.1

12.31.2015 11,701.1 6,255.2 — — 5,852.5 821.8 5,030.7

12.31.2016 11,558.6 6,141.1 825.9 825.9 5,018.9 977.1 4,041.8

12.31.2017 12,248.8 6,693.3 983.8 1,809.7 4,670.2 1,422.3 3,247.9

12.31.2018 13,184.3 7,386.0 1,490.0 3,299.7 3,925.6 989.7 2,935.9

12.31.2019 13,141.5 7,386.0 994.6 4,294.3 3,022.7 1,324.0 1,698.7

Up to 2017, the expected loss for the FGDEC is equal to 80% of the expected loss of the protected portfolio less the provisions made at the start of the APS (EUR 3,882.2 M.). From 2018, due to the Clariﬁ cation Agreement, the expected loss for the FGDEC is the minimum between the aforementioned amount and EUR 7,386.0 M.

The independent expert report drawn up on the basis of the status of the protected portfolio at 31 December 2019 estimated a total loss during the course of the APS of EUR 13,141.5 M. (EUR 13,184.3 M. in 2018), which would mean an estimated loss for the FGDEC of EUR 7,389.6 M. (EUR 7,441.7 M. in 2018), which is higher in both years than the EUR 7,386.0 M. of maximum loss according to the Clariﬁ cation Agreement signed in December 2018.

Taking into account the maximum loss and the payments made up to 31 December 2019 amounting to EUR 4,294.3 M. (EUR 3,299.7 M. in 2018), there is an estimated loss pending settlement of EUR 3,091.7 M. (EUR 4,086.3 M. in 2018). The updated value of this amount at 3%, in line with the expected payment dates, amounts to EUR 3,022.7 M. at 31 December 2019 (EUR 3,925.6 M. in 2018).

In 2019 an income amount of EUR 1.2 M. (note 25.4) was recorded in “Extraordinary items” for the variation in the estimated current value of the provision made for future payments of the APS based on an estimated advance in cash ﬂ ow on payments. In 2018, EUR 641.0 M. was charged to “Extraordinary items” (note 25.4) for the increase in expected losses of the APS.

The current value of the payments thus estimated that the FGDEC should still make is recorded in current liabilities amounting to EUR 1,324.0 M. (EUR 989.7 M. in 2018) (Note 22.4) and in non- current liabilities in the amount of EUR 1,698.7 M. (EUR 2,935.9 M. in 2018) (Note 27).

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On February 28, 2020 the FGDEC made a ﬁ fth payment for an amount of EUR 1,330.6 M. (Note 7) for the losses incurred declared until December 31, 2019 by the beneﬁ ciary of the APS. After that, the payments made by the FGDEC amounted to EUR 5,624.9 M.

20.2. Disbursement provisions APS Banco Unnim Banc, SA

As a consequence of the restructuring of Unnim Banc SA, the FGDEC granted an APS to that entity (now absorbed by BBVA) by which the FGDEC would assume, during the period of ten years from 31 October 2011, the 80% of losses on a portfolio of assets of a predetermined amount of EUR 7,359.7 M., with provisions made by EUR 1,330.3 M., once absorbed these provisions.

Subsequently, on December 13, 2018, a Clariﬁ cation Agreement was signed between BBVA, the FGDEC and the FROB to Section II of the Protocol that regulates the APS, by virtue of which certain situations relating to the content and development of the aforementioned Section have been clariﬁ ed, and it has been established that the amount of payments that would correspond to the FGDEC, from its signature, will be limited to a maximum of EUR 1,506.0 M., therefore, the maximum loss for the FGDEC derived from the APS, taking into account the payments made up to the date of the Agreement, shall not exceed EUR 1,997.7 M.

Payments Accumulated Current value of the expected loss pending settlement Expected loss on the Expected made payments Date protected portfolio- loss for the during the made by independent expert FGDEC year by the Total Current Non-current the FGDEC FGDEC

12.31.2012 2,578.0 998.1 — — 885.7 — 885.7

12.31.2013 2,984.0 1,322.9 — — 1,201.2 — 1,201.2

12.31.2014 3,319.0 1,590.9 — — 1,487.8 — 1,487.8

12.31.2015 3,497.0 1,733.3 — — 1,577.0 — 1,577.0

12.31.2016 3,602.0 1,817.3 — — 1,688.7 204.6 1,484.1

12.31.2017 3,633.5 1,842.5 132.6 — 1,608.9 354.4 1,254.5

12.31.2018 3,831.5 1,997.7 359.1 491.7 1,457.6 787.0 670.6

12.31.2019 3,819.8 1,991.6 788.0 1,279.7 693.6 503.8 189.8

Up to 2017, the expected loss for the FGDEC is equal to 80% of the expected loss of the protected portfolio less the provisions made at the start of the APS (EUR 1,330.3 M.). From 2018, due to the Clariﬁ cation Agreement, the expected loss for the FGDEC is the minimum between the aforementioned amount and EUR 1,997.7 M.

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The independent expert report drawn up on the basis of the status of the protected portfolio at 31 December 2019 estimated a total loss during the course of the APS of EUR 3,819.8 M. (EUR 3,831.5 M. in 2018), which meant an estimated loss for the FGDEC of EUR 1,991.6 M. (EUR 2,000.9 M. in 2018), which is EUR 6.1 M. lower than the EUR 1,997.7 M. of maximum loss according to the Clariﬁ cation Agreement signed in December 2018 (EUR 158.4 M. higher in 2018).

Taking into account the maximum loss and the payments made up to 31 December 2019 amounting to EUR 1,279.7 M. (EUR 491.7 M. in 2018), there is an estimated loss pending settlement of EUR 711.9 M. (EUR 1,506.0 M. in 2018). The updated value of this amount at 3%, in line with the expected payment dates, amounts to EUR 693.6 M. at 31 December 2019 (EUR 1,457.6 M. in 2018).

In 2019 an income amount of EUR 8.0 M. (note 25.5) was recorded in “Extraordinary items” for the variation in the estimated current value of the provision made for future payments of the APS. This variation is mainly due to the decrease in the aforementioned expected loss of the APS. In 2018, a net amount of EUR 164.8 M. was charged to “Extraordinary items” (note 25.5). This variation was mainly due to the increase in expected losses of the APS.

The current value of the payments thus estimated that the FGDEC should make is recorded in current liabilities amounting to EUR 503.8 M.. (EUR 787.0 M. in 2018) (note 22.4) and in non- current liabilities in the amount of EUR 189.8 M. (EUR 670.6 M. in 2018).

At the date of preparation of these annual accounts a settlement was received from the beneﬁ ciary institution reporting losses in the protected portfolio at 31 December 2019 for an amount that exceeds the existing provisions at 31 October 2011 by EUR 2,238.9 M. (EUR 1,633.3 M. in 2018). Taking into account the payments already made, the payment due at 30 June 2020 is EUR 511.3 M. (EUR 798.7 M. in 2018), which has been recorded as current liabilities at its current value at 31 December 2019, without prejudice to the amount that may ultimately apply after the settlement is fully reviewed.

20.3. Compensations (Art. 74, Law 24/2001)

Outstanding amounts resulting from the obligation under Article 74 of Law 24/2001 of 27 December, regarding the distribution rate between the FGDEC and the Fondo General de Garantía de Inversiones on compensations derived from the retroactive e ect of the investment guarantee system.

The variation is as follows, in millions of Euros:

Items 12.31.2019 12.31.2018 Provision 2002 63.7 63.7 Provision 2004 15.8 15.8 Disbursements between 2002 and 2010 (64.9) (64.9) Disbursements in 2011 (0.1) (0.1) Provisions cancellation reduction in 2011 (8.8) (8.8) Disbursements between 2012 and 2016 (0.1) (0.1) Adjustment by procedure prescription in 2017 (4.9) (4.9) Final balance 0.7 0.7

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On 4 April 2017, the Manager of the General Investment Guarantee Fund sent a communication to the FGDEC in which it reported that, due to the prescription of some of the payment obligations, the maximum amount to be paid as compensation for both Funds amounted to EUR 0.7 M. This amount remains steady at 31 December 2019.

20.4. Commitments with sta

Among the agreements signed in 2000 on the occasion of the transfer of sta from FGDEB and FGDCC to the Management Company, remnant personnel that was transferred in turn to the FGDEC in December 2012, it was included that the company would not assume the costs for possible compensations for dismissal of the personnel coming from the two deposits guarantee funds mentioned, so the possible amount of this was calculated at 30 June 2000, an amount that has been updated annually until 31 December 2011.

The variation in this provision in 2019 is attributable to the agreed lay-o s that took place during the year.

It also includes the current value of other obligations with sta , the expected cost of which is accrued throughout their term of work.

20.5. Other provisions

This heading includes: i) the extraordinary provision, reasonably su cient to meet the expenses to be paid by FGDEC in the case of a payment event of guaranteed deposits a ecting an entity with a volume of guaranteed deposits equal to that at the end of the third quarter of the adhered entities, other than systemic ones, supervised by the European Central Bank or foreseeably subject to resolution measures in case of event, as deﬁ ned in the “Guidelines on strength tests of deposit guarantee schemes under Directive 2014/49/EU”, issued by the European Banking Authority on 19 October 2016; and ii) provisions for business risks arising from past actions in credit institutions.

Changes in Other provisions in 2018 and 2019 are as follows:

Extraordinary provision Provision for business Items for expenses risks and liabilities

Balance at 01.01.2018 1.3 0.5 Allowance for the year (note 25.11) 0.4 — Balance at 31.12.2018 1.7 0.5 Allowance for the year (note 25.11) 0.3 — Balance at 31.12.2019 2.0 0.5

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21. LONG TERM DEBTS

The detail is as follows, in millions of Euros:

Items Notes 12.31.2019 12.31.2018 Commitments to depositors 21.1 1.5 1.5 Other creditors 0.2 0.3 Final balance 1.7 1.8

21.1. Commitments to depositors

It corresponds to the amount of compensation for depositors in credit institutions, other than Banco de Madrid SAU, which have not been claimed and deposits received for the lease of real estate registered in the heading Real estate investments.

22. SHORT TERM DEBTS

The detail of the balance at the end of the year is as follows, in millions of Euros:

Items Notes 12.31.2019 12.31.2018 Accrued asset management fee 22.1 87.7 — Creditors and other payables 22.2 1.0 9.1 Public administrations payables 22.3 0.2 0.2 Creditors payables APS 22.4 1,827.8 1,776.7 Commitments with depositors of Banco de Madrid 22.5 1.2 1.3 Final balance 1,917.9 1,787.3

22.1. Accrued asset management fee

In accordance with the CCM action plan, divestment and management services for maintaining the value of the assets acquired by the FGDEC were conducted by Briareo Gestión, SA (Briareo), a subsidiary of Liberbank, SA (Liberbank) under the contract dated 3 December 2010 valid for a seven-year period from that date, setting the payment of a ﬁ xed annual commission and variable quarterly commissions based on the value of the managed assets.

Subsequently, a disagreement arose between the FGDEC and Briareo regarding the interpretation of this contract and whether, after a certain time, the method of payment of the services rendered by Briareo should be in cash or in the form of asset transfers and regarding the quantitative limit of the aforementioned payment obligations by the FGDEC.

In light of Briareo’s disagreement regarding the payment of its invoices in non-monetary assets, in October 2015, the FGDEC ﬁ led a common lawsuit with the Madrid courts in order to obtain a resolution determining the form and limit of the disputed payments. Briareo, in turn, ﬁ led a counterclaim.

On 27 December 2016, the FGDEC, Briareo and Liberbank agreed to terminate the management contract of 3 December 2010 e ective immediately, upholding the aforementioned dispute,

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which was the purpose of the procedure pursued before Madrid Court of 1st Instance No. 6. In this process, the FGDEC was the claimant, Briareo the counterclaimant and Liberbank the respondent.

On 27 March 2019 the aforementioned Court passed a sentence dismissing the suit ﬁ led by the FGDEC and ordering it to pay Briareo the management commissions including VAT plus legal interest on the aforementioned amounts, plus legal costs. On 17 June 2019, the FGDEC ﬁ led an appeal before the Madrid Provincial Court requesting the appealed sentence to be revoked and the Briareo counterclaim fully dismissed.

At 31 December 2019, the FGDEC had recorded a provision to cover the aforementioned litigation, for an amount of EUR 87.7 M., corresponding to: (i) EUR 60.9 M. for the total principal amount of the invoices issued by the management company, from the third quarter of 2012 to December 2016, plus one adjustment invoice to amend the invoices issued in June 2017 (note 28); (ii) EUR 12.8 M. in VAT on these invoices (note 28); (iii) EUR 12.1 M. in legal interest; and (iv) EUR 1.9 M. in legal costs. Provision has been made to cover the legal interest plus the costs together with EUR 4.5 M. in VAT, i.e. EUR 18.5 M. (note 25.9), under “Extraordinary items” in 2019.

At 31 December 2018 this item, classiﬁ ed as non-current, reﬂ ects the principal amount of the invoices issued by the management company for an amount of EUR 60.9 M. and an amount of EUR 8.3 M. is recorded in Creditors and other payables for VAT on invoices registered by the FGDEC (note 22.2).

Changes in the provision from 2015 to 2019 were as follows, in millions of euros:

Items Amounts Balance at 31.12.2015 71.3 Financial update 0.6 Provision recovery (10.7) Balance at 31.12.2016 61.2 Provision recovery (0.3) Balance at 31.12.2017 and 31.12.2018 60.9 Provision for interest (note 25.9) 12.1 Provision for legal costs (note 25.9) 1.9 Provision for VAT on invoices not recognised (note 25.9) 4.5 Reclassiﬁ cation of VAT on invoices recognised (note 22.2) 8.3 Balance at 31.12.2019 87.7

At the date of preparation of these annual accounts, the Provincial Court of Madrid has dismissed the aforementioned appeal and, after opting out of ﬁ ling a counterappeal, the FGDEC, has obeyed the sentence, paying the management company an amount of EUR 89.3 M. in 2020. The FGDEC will recover approximately EUR 11.5 M. of this amount in VAT refunds (note 7).

22.2. Creditors and other payables

This caption mainly includes: (i) payables to group companies and creditors for interventions prior to 2009 which could not be paid by the FGDEC; and (ii) EUR 0.3 M. surplus paid to the FGDEC which was refunded in January 2020 (note 25.7).

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At 31 December 2018, this caption mainly included EUR 8.3 M. of the invoices described in note 22.1.

22.3. Public administrations payables

Includes amounts for the withholding on income tax and the contribution to Social Security of December of the corresponding ﬁ scal year, whose settlement has been submitted at the beginning of the following ﬁ scal year.

22.4. Creditors payables APS

At 31 December 2019, this item includes (i) the present value of the payment made on 28 February 2020 and 28 February 2019 related to the coverage of the protected portfolio by the APS granted to Banco CAM, SA. This payment is the ﬁ fth reimbursement made by the FGDEC in relation to said APS (Note 20.1) and (ii) the current value of the payment to be made by the FGDEC on 30 June 2020 and which was expected to be realised on 30 June 2019 with the coverage of the portfolio protected by the APS granted to Unnim Banc, SA (note 20.2).

Details are as follows, in millions of euros:

Item 12.31.2019 12.31.2018 Payment Banco CAM, SA-28.02. (nota 20.1) 1,324.0 989.7 Payment Unnim Banc, SA-30.06.(nota 20.2) 503.8 787.0 Total 1,827.8 1,776.7

22.5. Commitments with depositors of Banco de Madrid

In this item the outstanding amounts are reﬂ ected in respect of guaranteed deposits to the depositors of Banco de Madrid, SAU, according to the information provided by its bankruptcy administrator, that have not been paid in the most part because of the absence or di culty locating the depositors and, to a lesser extent, for having claimed their disagreement or due to other incidents managed by the Bankruptcy Administration.

22.6. FGDEC credit facility

As part of the Liquidity Contingency Plan of the deposits guarantee compartment of the FGDEC and in order to reinforce its fi nancial capacity, in addition to the capacity derived from the annual and extraordinary contributions made, and in order to tackle hypothetical payment stress; in line with the stipulations of the guarantee funds Directive 2014/49/CE regarding the sources of fi nancing of these funds and the recommended best practices including those of the International Association of Deposit Insurers (IADA), the FGDEC Management Committee approved the signing of a credit facility for EUR 4,000 M., at six months, extendible thereafter for a further six months. This credit facility was signed on 19 December 2019 with seven fi nancial institutions and it has not been drawn down at the date of preparation of these annual accounts (note 17).

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NOTES TO THE INCOME STATEMENTS

23. INCOME

23.1. Contributions from member entities

At its meeting on 2 October 2019, the FGDEC Management Committee set the annual contribution to the deposits guarantee compartment in an amount equal to 1.8/1000 of the guaranteed cash deposits existing as of 30 June 2019, which would be calculated for each entity based on its guaranteed deposits and its risk proﬁ le, and the annual contribution to the securities guarantee compartment in an amount equal to 2/1000 of the 5/100 of the value at the last trading day of 2019 of the Securities deposited at 31 December 2019, also determining that the disbursement of these contributions be made on the last business day of February 2020.

On 28 February 2020, the annual contributions of the member institutions have been received, except for one institution which was no longer a member of the FGDEC at 31 December 2019 and paid its contribution in advance on 7 January 2020, as shown in the table (expressed in millions of euro). Furthermore, the institutions have settled the eighth instalment of the extraordinary expenditure for an amount of EUR 234.1 M. (same amount in February 2019) (notes 7, 12.1 and 16.1):

2019 2018

Deposits Securities Deposits Securities Item Compartment Compartment Compartment Compartment Contribution of the exercise (Notes 7 and 16.2) 1,125.3 36.1 1,068.1 33.1

Total 1,125.3 36.1 1,068.1 33.1

The table below shows the current value of contributions taken to income at 31 December 2019, in millions of euros:

millions of euros:Current value of contributions 2019 2018 Deposits compartment (note 16.2) 1,120.0 1,063.0 Securities compartment (note 16.2) 35.9 33.0 Final balance 1,155.9 1,096.0

In paragraph 3.1 of Annex 3 is detailed the historical development of contributions from credit institutions to all deposits guarantee funds.

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24. OPERATING EXPENSES

The detail is as follows, in millions of Euros:

Items Notes 2019 2018 Sta costs 24.1 4.8 5.0 Professional services 24.2 0.4 0.2 Other operating expenses 24.3 0.7 1.4 Leases 24.4 0.5 0.5 Amortisation 24.4 0.3 0.3 Total 6.7 7.4 Memorandum Deposits compartment 6.5 7.1 Securities compartment 0.2 0.3

Operating expenses charged to the securities guarantee compartment do not exceed EUR 50,000, except in the case of sta costs.

24.1. Sta costs

The breakdown of the sta costs is as follows, in millions of Euros:

Item 2019 2018 Wages and salaries 4.0 4.2 Social Security 0.8 0.8 Total 4.8 5.0 Memorandum Deposits compartment 4.7 4.9 Securities compartment 0.1 0.1

In 2019 the sta of the FGDEC has reduced compared to the one existing in 2018 in nine people. The “Other social expenditure” relates mainly to the accrual of employee life insurance premiums, and contributions or insurance premiums paid by the sta pension funds to those entitled to such beneﬁ t.

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The average number of employees of the FGDEC in the years 2019 and 2018 distributed by professional categories and gender, is shown in the following table:

2019 2018

Classification Average Total at 12.31.2019 Average Total at 12.31.2018

Men Women Total Men Women Total Men Women Total Men Women Total

Executives 2 2 4 2 2 4 2 2 4 2 2 4

Specialists 26 13 39 24 10 34 27 13 40 27 13 40

Administrative sta 2 5 7 2 5 7 3 7 10 3 7 10

Total 30 20 50 28 17 45 32 22 54 32 22 54

In 2019 and 2018 the FGDEC has not recorded any costs related to per diems for the Management Commission.

At 31 December 2019 and 2018, there were not advances or loans, or either acquisitions of pension commitments, life insurance, or guarantees commitments to any previous or current members of the Management Committee of the FGDEC.

At 31 December 2019 the wages corresponding to the FGDEC’s senior management (CEO, CFO and General Counsel) totalled EUR 529.7 t. and the cost of insurance premiums to EUR 13.1 t. (EUR 525.8 t. and EUR 9.3 t. in 2018, respectively).

24.2. Professional services

It corresponds to the total cost of the services provided by lawyers, auditors, and notaries or similar.

24.3. Other operating expenses

It includes costs of security, cleaning, repairs and also for publications, subscriptions, banking fees, and other minor expenses.

24.4. Leasing and amortisation

This item mainly includes the lease on the head o ces of the FGDEC and the depreciation of property, plant and equipment.

25. EXTRAORDINARY ITEMS

Includes amounts from the positive and negative deviations from the initial estimates of the costs of the actions or restructuring plans of credit institutions.

The balance of this item corresponds to the deposits compartment since all rehabilitation originating it have occurred prior to 19 June 2015.

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The detail in millions of Euros is as follows:

Items Notes 2019 2018 Net results acquired assets APS CAM 25.1 3.8 10.5 Recovery Catalunya Banc, S.A. 25.2 15.4 16.0 Recovery NCG Banco, S.A 25.3 16.0 — Cost APS Banco CAM, SA. 25.4 1.2 — Cost APS Unnim Banc, SA 25.5 8.0 — Provision recovery on commission APS BdCLM 25.6 0.4 — Other results 25.7 14.0 1.3 Other extraordinary income 25.8 0.1 0.2 Income 58.9 28.0 Net impairment NCG Banco, SA 25.3 — (1.2) Cost APS Banco CAM, SA. 25.4 — (641.0) Cost APS Unnim Banc, SA 25.5 — (164.8) Default interest APS BdCLM 25.6 — (0.3) Asset management Fee 25.9 (18.5) — Professional services provided 25.10 (1.4) (1.3) Provision on expenses for events payment of coverage to depositors 25.11 (0.3) (0.4) Impairment collection rights Banco de Madrid, SAU 25.12 — (3.0) Professional services provided Banco de Madrid SAU 25.13 — (0.1) Other extraordinary expenditures 25.14 — (0.3) Financing comissions 25.15 (0.5) — Expenses (20.7) (812.4) TOTAL 38.2 (784.4)

25.1. Net results acquired assets APS CAM

At 31 December 2019 and 2018, this caption shows the net income generated on the management of properties acquired in the exercise of the right of ﬁ rst refusal set forth in the APS Protocol granted to Banco CAM, SA (notes 10 and 13) as shown in the table below (in millions of euros):

Item 2019 2018 Proﬁ ts on sale 4.4 11.7 Rental income (note 10) 0.4 0.5 Income adjustment, VAT pro-rata 0.2 0.5 Management, maintenance and tax expenses (1.2) (2.2) Total 3.8 10.5

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25.2. Recovery Catalunya Banc, S.A.

At 31 December 2019 this item reﬂ ects the net income resulting from the increase in the guarantees granted to the buyer and the compensation made by the FROB based on the agreements signed, as described in note 16.4.

At 31 December 2018, it reﬂ ects the payment made by the FROB to the FGDEC in the year as a consequence of the lower estimated cost of the guarantees granted to the buyer and consequently the higher income obtained by the FGDEC in the sale of its participation (note 16.4).

25.3. Rehabilitation NCG Banco, S.A.

At 31 December 2019, this caption includes positive results for 2019 deriving from the modiﬁ cation of the settlement on the sale of shares in NCG Banco, SA presented by FROB to the FGDEC on 28 October 2019, as described in note 16.3.

At 31 December 2018, it reﬂ ected higher impairment recorded on the sale of the stake in NCG Banco, SA, according to the new information sent by the FROB to the FGDEC each year (note 16.3).

25.4. Cost APS Banco CAM, S.A.

The allocation or the recovery of the provision made at the end of each year corresponds to the variation in the current estimated value of the provision made to cover future expected APS payments due to changes in the expected loss or cash ﬂ ow on estimated payments at the end of the year (Note 20.1).

25.5. Cost APS Unnim Banc, S.A.

25.6. Costs and default interest APS BdCLM

At 31 December 2019 this item includes the costs paid by BdCLM for the lawsuit ﬁ led by the FGDEC taking issue with the procedure for calculating the invoices for APS commissions granted to BdCLM.

At 31 December 2018 this caption reﬂ ected an increased cost relating to the interest in arrears corresponding to the invoices issued in 2013 when BdCLM rectiﬁ ed the information initially provided for the APS granted. These were cancelled by the FGDEC as, based on the information available, their collection as deemed unlikely.

25.7. Other results

The FGDEC appears as joint plainti in proceedings ﬁ led by FROB against directors of Caja de Ahorros del Mediterráneo (CAM), claiming public liability for economic damages caused. In 2019, the FGDEC

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supported the motion ﬁ led by the Prosecution Service in one of the aforementioned proceedings, which has generated extraordinary income of EUR 14.0 M., included in this item. In addition, the FGDEC has received an amount of over EUR 0.3 M. recorded in the caption Creditors and other payables (note 22.2).

During 2018, in accordance with the agreement adopted by its Management Committee, the FGDEC sold its entire stake in Bankia, SA, representing 0.01% of its capital, generating a proﬁ t of EUR 1.3 M., which was taken to income for the year.

25.8. Other extraordinary income

In 2019, this caption includes: (i) interest paid by beneﬁ ciary institutions of the APSs granted to Banco CAM, SA and Unnim Banc, SA on surplus losses settled in prior years; and (ii) the current value of the amounts expected to be collected on guarantees granted in each of the current APSs (note 12.2).

At 31 December 2018, this caption mainly included the recovery of assets available for sale on rehabilitations of credit institutions.

25.9. Management fees of assets received from CCM

At 31 December 2019, this caption includes the allocation made for interest in arrears, costs and VAT in accordance with the sentence passed on 29 March 2019 by the Court of 1st Instance nº 6 in Madrid, following a criterion of maximum prudence (note 22.1).

25.10. APSs Professional services provided

At 31 December 2019 and 2018, it reﬂ ects the amount invoiced by professionals, mainly appraisal companies, independent experts and law ﬁ rms, for advice related to the di erent APSs granted or managed by the FGDEC.

25.11. Provision on expenses for payment events of coverage to depositors

As of December 31, 2019 and 2018, it includes the provision made that is deemed necessary to cover the expenses that the FGDEC would have to pay if there were a payment event of guaranteed deposits in an adhered entity of those described in the note 20.5.

25.12. Impairment collection rights Banco de Madrid, SAU

At 31 December 2018, this caption reﬂ ected the allocation to create the provision deemed necessary for the collection rights held by the FGDEC with the entity, up to the amount of EUR 9.5 M. (note 12.4).

25.13. Representative ad litem fees BdCLM

As of December 31, 2018, it reﬂ ects the imputation to results of the appropriation made in favour of a representative ad litem following the ruling of the Provincial Court of Madrid.

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25.14. Other extraordinary expenditures

At 31 December 2018, this caption mainly comprised: (i) the impairment of collection rights of the FGDEC with subsidiaries, amounting to EUR 0.1 M. (note 15); (ii) the best estimate of the variation in the current value of the amounts expected to be collected on the guarantees granted in each of the APSs in force, based on the new estimate of the commission settlements (note 12.2); and (iii) the amount invoiced by external auditors and representatives ad litem for the advisory services relating to Banco de Madrid, SAU.

25.15. Credit facility commissions

This caption includes the amount accrued in 2019 on account of the arrangement fee of the ﬁ nancing contract signed on 19 December 2019 (note 17) and the amount paid and accrued on other minor commissions on that contract.

26. FINANCIAL INCOME

From the total ﬁ nancial income recognised in 2019, EUR 15.2 M. corresponds to the deposits compartment (EUR 15.3 M. in 2018) and EUR 0.4 M. to the securities compartment (EUR 0.3 M. in 2018) and its detail is as follows, in millions of Euros:

Items 2019 2018 Financial income 15.6 15.6 Bonds and State obligations interests 17.2 17.1 National debt euro area (1.6) (1.5) Financial updates 5.4 5.3 Assets ﬁ nancial update 5.4 5.3 TOTAL 21.0 20.9

In the same ﬁ nancial year, the ﬁ nancial update of assets corresponds to the income from the update at 3% of the estimated amount as follows, in millions of euros:

Item 2019 2018 APS commissions receivable (note 12.2) 0.1 0.1 Deposits compartment contributions, collected 28.02.2019 (note 16.2) 5.1 4.9 Securities compartment contributions, collected 28.02.2019 (note 16.2) 0.1 0.2 Other updates 0.1 0.1 Total 5.4 5.3 Memorandum Deposits guarantee compartment 5.3 5.1 Securities guarantee compartment 0.1 0.2

The balance reﬂ ected in “Other updates” corresponds to the ﬁ nancial adjustment of the collection rights of: (i) the obligations of the San Fernando, Guadalajara, Huelva, Jerez and Seville savings banks; (ii) the sale of NCG Banco, SA; and (iii) the sale of Catalunya Banc, SA, described in notes 12.7, 16.3 and 16.4, respectively.

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27. FINANCIAL COSTS

All fi nancial expenses recorded in 2019 and 2018 were allocated to the deposits compartment, and correspond to the fi nancial update of fi nancial liabilities at the rate of 3%, as are the estimates that have to be paid by APS disbursements and the amounts payable on cash balances held in the Bank of Spain.

The breakdown of ﬁ nancial expenses is as follows, in millions of Euros:

Items 2019 2018 APS Banco CAM, SA 93.0 104.4 APS Unnim Banc, SA 32.0 43.0 Payment of interest for bank accounts 1.4 — Total 126.4 147.4

Of the ﬁ nancial cost of the APS of Banco CAM, SA for 2019: (i) EUR 4.9 M. (EUR 7.0 M. in 2018) correspond to adjusting the short-term provision to 28 February 2019 (note 22.4); and (ii) the remaining EUR 88.1 M. (EUR 97.4 M. in 2018) correspond to updating the long-term provision (note 20.1).

Of the ﬁ nancial cost of the APS of Unnim Banc, SA for 2019: (i) EUR 11.6 M. (EUR 5.3 M. in 2018) correspond to updating the short-term provision to 30 June 2019 (note 22.4); and (ii) the remaining EUR 20.4 M. (EUR 37.7 M. in 2018) correspond to updating the long-term provision (note 20.2).

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OTHER NOTES TO THE ANNUAL ACCOUNTS

28. INFORMATION ABOUT THE AVERAGE PAYMENT PERIOD TO SUPPLIERS. THIRD ADDITIONAL DISPOSAL, «DUTY OF DISCLOSURE», OF LAW 15/2010, OF 5 JULY

The detail of the average payment period of 2019 and 2018, as well as the payments made during those years and the outstanding payments at 31 December 2019 and 2018, pursuant to the provisions of Law 15/2010, of 5 July, establishing measures to combat late payment is as follows, in days and millions of Euros:

2019 2018 Items Days Days Average payment period to suppliers 27 13 Ratio of paid operations 28 13 Ratio of outstanding payment transactions 13 11 Amount Amount Total payments 4.2 5.2 Total outstanding payments 0.3 0.3

This information is presented as established in the only additional provision of the Resolution of 29 January 2016, of the Institute of Accounting and Auditing, on the information to be included in the Notes to the ﬁ nancial statements in relation to the average period payment to suppliers in commercial transactions.

Due to the litigation regarding the invoices described in note 22.1, these have not been included for the calculation of the table above.

29. TAX SITUATION

The FGDEC has a tax exemption of corporate tax and indirect taxes that may accrue by reason of its constitution, its operation and acts and transactions undertaken in fulﬁ lment of its purposes.

According to current legal provisions, tax settlements cannot be considered deﬁ nitive until they have been inspected by the tax authorities or the limitations period has elapsed, currently set at four years. The FGDEC has open to inspection the last four years for all taxes that are applicable.

30. OTHER DISCLOSURES

The auditor of the entity is Grant Thornton, SLP, and Single-member Company. Audit fees for the year amount to EUR 44.0 t. (EUR 44.0 t. in 2018). At 31 December 2019 Grant Thornton, SLP had invoiced other services amounting EUR 4.0 t. (EUR 4.0 t. in 2018).

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31. ENVIRONMENTAL IMPACT

They are considered minimal, and in any case, the environmental risks that may arise from the activity are adequately covered, and it is estimated that no additional liabilities will arise with this risk. In 2019 and 2018 no expenses have been occurred for this item or environment-related grants received.

Report issued on 4 May 2020.

88 5 ANNEXES Annex 1 Allocation of the annual accounts for 2019 to deposits guarantee and securities guarantee compartments.

Annex 2 List of shareholdings at 31 December 2019. Annex 3 Historical series of contributions, cash and securities deposits, assets and investments. Annex 4 Credit institutions members at 31 December 2019. Annex 5 Rehabilitation or restructuring operations of credit institutions. Annex 6 Legislative index.

5 ANNUAL REPORT 2019

ANNEX 1

ALLOCATION OF THE ANNUAL ACCOUNTS FOR 2019 TO DEPOSITS GUARANTEE AND SECURITIES GUARANTEE COMPARTMENTS

BALANCE SHEET

Millions of Euros DEPOSITS GUARANTEE SECURITIES GUARANTEE ASSETS Notes COMPARTMENT COMPARTMENT

12.31.2019 12.31.2018 12.31.2019 12.31.2018 NON CURRENT ASSETS Intangible assets 8 0.5 0.3 — — Property, plant and equipment 9 0.6 0.7 — — Real estate investments 10 2.0 2.1 — — Non-current investments in Group 11 — — — — companies & associates Shareholdings 11 3.3 673.0 — — Impairment shareholdings 11 (3.3) (673.0) — — Non-current fi nancial assets 12 2,586.9 5,030.0 111.5 110.0 Credit entities. Extraordinary expenditure 12.1 445.8 659.1 — — Receivables for provided guarantees APS 12.2 2.1 3.6 — — Ext. expenditure & contribution 12.3 0.1 0.2 — — collection rights Banco Madrid Depositors collection rights Banco Madrid 12.4 14.4 23.7 — — Public debt euro area 12.5 293.2 294.8 — — Guarantee deposits made 12.5 — 0.3 — — National debt 12.6 1,828.7 4,045.7 111.5 110.0 Subordinate debentures (net) 12.7 2.3 2.2 — — Other fi nancial assets 12.8 0.1 0.1 — — Sta loans 12.9 0.2 0.3 — — Total non-current assets 2,590.0 5,033.1 111.5 110.0 CURRENT ASSETS Non-current assets for sale 13 5.8 9.8 — — Debtors and other account receivables 14 1.9 2.6 — — Investments in Group companies & associates 15 7.8 7.8 — — Short term fi nancial investments 16 4,190.3 2,434.3 68.3 33.5 Credit entities. Extraordinary expenditure 16.1 & 12.1 233.0 233.0 — — Ordinary contributions 16.2 1,120.0 1,063.0 35.9 33.0 Short term loans FROB-NCG Banco, S.A. 16.3 2.0 1.2 — — Short term loans FROB-Catalunya Banc, S.A. 16.4 5.2 — — — National debt 16.5 2,783.6 1,093.4 30.8 — National debt accrued interests 16.6 46.4 43.5 1.6 0.5 Other short term loans 0.1 0.2 — — Short term accrual/deferrals 17 5.7 — — — Cash & cash equivalents 18 100.1 11.0 0.3 0.1 Total current assets 4,311.6 2,465.5 68.6 33.6 TOTAL ASSETS 6,901.6 7,498.6 180.1 143.6

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ANNEX 1

ALLOCATION OF THE ANNUAL ACCOUNTS FOR 2019 TO DEPOSITS GUARANTEE AND SECURITIES GUARANTEE COMPARTMENTS

BALANCE SHEET

Millions of Euros DEPOSITS GUARANTEE SECURITIES GUARANTEE EQUITY AND LIABILITIES Notes COMPARTMENT COMPARTMENT

12.31.2019 12.31.2018 12.31.2019 12.31.2018 EQUITY AND LIABILITIES EQUITY Own funds 19 3,058.9 1,992.1 178.7 142.6 EQUITY fund 19 1,992.2 1,820.4 142.5 109.4 Extraordinary expenditure 19.1 20.9 27.2 — — Surplus (defi cit) fi nancial year 1,045.8 144.5 36.2 33.2 Adjustments for value changes 19.2 30.1 45.5 1.4 1.0 fi nancial investments

Of which National Debt long term 19.2 10.3 45.6 1.1 1.0 Of which National Debt short term 19.2 20.2 0.1 0.3 — Of which Debt zone euro 19.2 (0.4) (0.2) — — Total equity 3,089.0 2,037.6 180.1 143.6 NON-CURRENT LIABILITIES Long term provisions 20 1,893.0 3,671.9 — — Disbursement provision APS Banco CAM 20.1 1,698.7 2,935.9 — — Disbursement provision APS Unnim Banc 20.2 189.8 670.6 — — Assets management fee provision 22.1 — 60.9 — — Compensations (Art. 74, Law 24/2001) 20.3 0.7 0.7 — — Commitments with sta 20.4 1.3 1.6 — — Other provisions 20.5 2.5 2.2 — — Long term debts 21 1.7 1.8 — — Total non-current liabilities 1,894.7 3,673.7 — — CURRENT LIABILITIES Short terms debts 22 1,917.9 1,787.3 — — Assets management fee provision 22.1 87.7 — — — Creditors and other payables 22.2 1.0 9.1 — — Public administrations payables 22.3 0.2 0.2 — — Creditors payables APS 22.4 1,827.8 1,776.7 — — Commitments with depositors 22.5 1.2 1.3 — — of Banco de Madrid

Total current liabilities 1,917.9 1,787.3 — — Total liabilities 3,812.6 5,461.0 — — TOTAL EQUITY AND LIABILITIES 6,901.6 7,498.6 180.1 143.6

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ANNEX 1

ALLOCATION OF THE ANNUAL ACCOUNTS FOR 2019 TO DEPOSITS GUARANTEE AND SECURITIES GUARANTEE COMPARTMENTS

INCOME STATEMENT

Millions of Euros DEPOSITS GUARANTEE SECURITIES GUARANTEE CONTINUING OPERATIONS Notes COMPARTMENT COMPARTMENTS

2019 2018 2019 2018

Income 23 1,120.0 1,063.0 35.9 33.0

Contributions from member institutions 23.1 1,120.0 1,063.0 35.9 33.0

Operating expenses 24 (6.5) (7.1) (0.2) (0.3)

Extraordinary items 25 38.2 (784.4) — —

Management results 1,151.7 271.5 35.7 32.7

Financial income 26 20.5 20.4 0.5 0.5

Financial loss 27 (126.4) (147.4) — —

Financial results (105.9) (127.0) 0.5 0.5

RESULT OF CONTINUING OPERATIONS 1,045.8 144.5 36.2 33.2

SURPLUS (DEFICIT) FINANCIAL YEAR 1,045.8 144.5 36.2 33.2

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ANNEX 2

LIST OF SHAREHOLDINGS AT 31 DECEMBER 2019

% Direct % Indirect % Total Entities - Direct and indirect holdings above 10% holding holding Holding

CCM Conecta, SA - 100.00 100.00 CCM Iniciativas Industriales, SL - 100.00 100.00 CCM Inmobiliaria Centrum, 2004, SL (En liquidación) 0.01 99.99 100.00 CCM Servicios Turísticos, SAU (En liquidación) - 100.00 100.00 Explotaciones Forestales y Cinegéticas Alta-Baja, SAU - 100.00 100.00 Inmobiliaria San Miguel del Cross, SAU 100.00 - 100.00 Instituto de Economía y Empresa, SLU - 100.00 100.00 Inversiones Corporativas, SA 99.99 0.01 100.00 Midamarta, SL - 100.00 100.00 Planes e Inversiones CLM, SA (En liquidación) - 100.00 100.00 Pombo 22, SAU 100.00 - 100.00 Prominca, SAU (En liquidación) 100.00 - 100.00 Promociones Miralsur, SL - 100.00 100.00 Realizaciones Patrimoniales, SAU 100.00 - 100.00 Gesimca, SA (En liquidación) 99.97 - 99.97 Empresa Constructora Cantabria, SA (En liquidación) - 95.16 95.16 Agrocaja, SA (En liquidación) - 93.79 93.79 H2 Puente Largo, SA (En liquidación) - 83.71 83.71 Icatejo, SA (En liquidación) - 73.68 73.68 Centro de Servic. de - 52.00 52.00 Castilla-La Mancha, SA (En liquidación) Polígono Romica, SA - 50.00 50.00 Aldaban Iniciativas, SL (En liquidación) - 49.00 49.00 Claudia Zahara 22, SL (En liquidación) - 38.25 38.25 Airport Operaciones, SL (En liquidación) - 36.43 36.43 C. R. Aeropuertos, SL (En liquidación) 6.07 30.36 36.43 Madrid Sur Rail, SL (En liquidación) - 36.43 36.43 Industrializaciones Estratégicas, SA - 35.00 35.00 Atalia Iniciativas, SL - 33.33 33.33 Kipoa de Inversiones, SL (En liquidación) - 30.00 30.00 Área Logística Oeste, SL (En liquidación) - 27.28 27.28 Hormigones y Áridos Aricam, SL (En liquidación) - 25.00 25.00 Grupo Naturener, SA - 20.00 20.00

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% Direct % Indirect % Total Entities - Direct and indirect holdings above 10% holding holding Holding

Naturener Asset Management, SL - 20.00 20.00 Naturener North America, LLC - 20.00 20.00 Naturener Solar, SAU - 20.00 20.00 Telecom Castilla-La Mancha, SA - 20.00 20.00 Urbanizadora Montearagón, SL - 20.00 20.00 Desarrollo Industrial Aricam, SL (En liquidación) - 19.81 19.81 Obenque, SA (En liquidación) - 18.20 18.20 DHO Grupo Constructor Corporativo, SL (En liquidación) - 16.01 16.01 Tranvía de Parla, SA - 15.00 15.00 Toletum Visigodo, SL - 13.54 13.54 El Reino de D. Quijote de La Mancha, SA (En liquidación) - 12.80 12.80 Soc. Des. Ind. Castilla-La Mancha, SA - 11.82 11.82 EBM Alisma, FCR (En liquidación) - 11.66 11.66 EBM Vaccaria, FCR (En liquidación) - 11.11 11.11 Espírito Santo Iberia I, FCR (En liquidación) - 10.89 10.89 Baring Iberia III Inversión en Capital, FCR - 10.38 10.38 Desarrollos Tecnológicos y Logísticos, SA - 10.07 10.07 Alqlunia 8, SRL - 10.00 10.00 Inversora de Autopistas del Sur, SL (En liquidación) - 10.00 10.00 Jardines de la Ribera del Tajo, SL (En liquidación) - 10.00 10.00

Indirect participations of the Grupo Naturener, SA are not included because of its high number.

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ANNEX 3

HISTORICAL SERIES OF CONTRIBUTIONS, CASH AND SECURITIES DEPOSITS, ASSETS, AND INVESTMENTS

3.1. Contributions of member entities

The year-on-year evolution of the contributions made to FGDEC and to the dissolved deposits guarantee funds was as shown in the table below, in nominal millions of Euros.

As it can see in the table, until 1996 the Bank of Spain made contributions to FGDEC.

Credit (%) Year Bank of Spain Totals institutions changes

1980 38.9 38.9 77.8 — 1981 46.7 46.7 93.4 20.1 1982 84.3 84.3 168.6 80.5 1983 98.7 98.7 197.4 17.1 1984 112.2 112.2 224.4 13.7 1985 143.2 143.2 286.4 27.6 1986 148.8 148.8 297.6 3.9 1987 151.0 151.0 302.0 1.5 1988 120.2 120.2 240.4 (20.4) 1989 202.0 114.8 316.8 31.8 1990 277.7 154.2 431.9 36.3 1991 312.7 173.7 486.4 12.6 1992 339.3 189.9 529.2 8.8 1993 231.3 138.2 369.5 (30.2) 1994 260.7 155.9 416.6 12.7 1995 331.0 303.3 634.3 52.3 1996 325.2 308.1 633.3 (0.2) 1997 164.1 — 164.1 (74.1) 1998 161.2 — 161.2 (1.8) 1999 167.9 — 167.9 4.2 2000 183.8 — 183.8 9.5 2001 287.8 — 287.8 56.6 2002 251.4 — 251.4 (12.6) 2003 266.8 — 266.8 6.2 2004 277.8 — 277.8 4.1 2005 297.0 — 297.0 6.9 2006 328.7 — 328.7 10.7

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Credit (%) Year Bank of Spain Totals institutions changes

2007 379.6 — 379.6 15.5 2008 417.6 — 417.6 10.0 2009 447.5 — 447.5 7.2 2010 771.2 — 771.2 72.3 2011 885.9 — 885.9 14.9 2012 2,517.4 — 2,517.4 184.2 2013 1,809.9 — 1,809.9 (28.1) 2014 2,340.3 — 2,340.3 29.3 2015 1,829.5 — 1,829.5 (21.8) 2016 1,855.6 — 1,855.6 1.4 2017 1,308.8 — 1,308.8 (29.5) 2018 1,335.3 — 1,335.3 2.0 2019 1,395.5 — 1,395.5 4.5 Total 22,904.5 2,482.1 25,386.6

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3.2. Eligible and guaranteed cash deposits and guaranteed and hedged values

The table below shows the year-on-year evolution of the eligible and guaranteed cash deposits and of the guaranteed and hedged securities, adjusted to current law terminology at the end of each year, has been the following in Billions of euros since 1993:

Elegible Guarantee %Coverage Guaranteed Hedged %Coverage Year deposits deposits deposits securities securities securities

31.12.1993 279.9 133.7 47.78 _ _ _ 31.12.1994 298.1 142.1 47.67 _ _ _ 31.12.1995 320.0 148.7 46.46 _ _ _ 31.12.1996 316.9 185.3 58.48 _ _ _ 31.12.1997 317.4 182.9 57.62 _ _ _ 31.12.1998 337.4 185.4 54.94 _ _ _ 31.12.1999 377.9 205.3 54.32 _ _ _ 31.12.2000 417.8 244.4 58.49 _ _ _ 31.12.2001 463.9 256.1 55.21 279.0 55.0 19.73 31.12.2002 495.8 268.1 54.06 244.5 50.3 20.57 31.12.2003 533.7 281.3 52.71 277.5 54.2 19.54 31.12.2004 573.4 296.3 51.67 276.4 54.4 19.67 31.12.2005 636.5 315.8 49.61 313.7 56.1 17.87 31.12.2006 733.3 338.6 46.18 394.3 58.0 14.72 31.12.2007 809.5 360.1 44.48 400.3 60.3 15.06 31.12.2008 873.4 640.1 73.29 297.6 96.2 32.32 31.12.2009 901.7 662.7 73.49 320.2 118.4 36.98 31.12.2010 934.3 674.9 72.24 282.5 115.4 40.85 31.12.2011 908.5 670.5 73.80 305.2 121.8 39.91 31.12.2012 891.8 680.1 76.26 263.0 114.7 43.62 31.12.2013 923.2 694.1 75.19 273.8 102.7 37.51 31.12.2014 925.7 695.0 75.07 267.3 93.3 34.91 31.12.2015 947.3 684.9 72.30 358.0 91.4 25.53 30.06.2016 967.7 700.8 72.42 324.2 79.0 24.37 31.12.2016 979.6 699.0 71.35 363.5 91.1 25.06 30.06.2017 993.7 706.0 71.04 389.0 94.4 24.26 31.12.2017 1,004.7 707.1 70.38 376.4 90.3 24.00 30.06.2018 1,035.9 723.3 69.82 371.1 86.7 23.37 12.31.2018 1,048.6 726.3 69.27 333.0 79.5 23.87 30.06.2019 1,093.0 755.1 69.09 355.2 79.9 22.50 31.12.2019 1,101.5 759.7 68.97 362.6 77.3 21.33

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3.3. Inter-annual changes in equity of deposits guarantee funds

The inter-annual evolution of the assets of the FGDEC and the dissolved deposits guarantee funds was as follows, in millions of Euros:

Value adjust- Extraordinary Year Surplus/(déficit) ment financial expenditures and Equity Fund for the year investments contributions 1980 54.6 — — 54.6 1981 11.2 — — 65.8 1982 24.5 — — 90.3 1983 (281.3) — — (191.1) 1984 (49.0) — — (240.0) 1985 (18.0) — — (258.0) 1986 108.7 — — (149.3) 1987 285.4 — — 136.0 1988 156.9 — — 293.0 1989 124.4 — — 417.4 1990 88.3 — — 505.7 1991 (21.7) — — 484.0 1992 557.7 — — 1,041.7 1993 409.7 — — 1,451.4 1994 (778.7) — — 672.7 1995 674.0 — — 1,346.7 1996 736.4 — — 2,083.1 1997 319.9 — — 2,403.0 1998 294.6 — — 2,697.6 1999 275.3 — — 2,972.8 2000 304.7 — — 3,277.5 2001 442.9 — — 3,720.4 2002 331.7 — — 4,052.1 2003 362.1 — — 4,414.2 2004 390.2 — — 4,804.4 2005 410.5 — — 5,214.9 2006 461.2 — — 5,676.1 2007 826.7 — — 6,502.7 2008 698.5 — — 7,201.3 2009 677.3 — — 8,005.1 2010 (2,104.2) — — 5,793.2 2011 (7,829.5) 10.8 — (2,025.5) 2012 (1,263.8) (9.3) 2,051.1 (1,247.5)

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Value adjust- Extraordinary Year Surplus/(déficit) ment financial expenditures and Equity Fund for the year investments contributions 2013(*) (613.9) (1.5) 1,864.8 1.9 2014 (274.5) 0.1 1,638.8 1,366.3 2015 (419.8) 0.7 75.1 1,022.3 2016 468.7 57.5 49.3 1,597.8 2017 357.0 2.8 33.1 1,990.7 2018 177.7 (14.4) 27.2 2,181.2 2019 1,082.0 (15.0) 20.9 3,269.1

(*) The 2013 data are presented with the restatement made in that year to record the ordinary contributions in the year in which they are approved instead of the year in which they are collected. The column “surplus / (deﬁ cit) for the year” reﬂ ects the ordinary contribution approved for the year 2013 in the amount of EUR 1,639.2 M.. The column of “extraordinary expenses and extraordinary contribution” includes the ordinary contribution for the year 2012, amounting to EUR 1,575.3 M. together with the extraordinary expenses and extraordinary contribution for a joint amount of EUR 289.5 M.

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3.4. Inter-annual evolution of ﬁ nancial investments in National debt

The year-on-year evolution of ﬁ nancial investments in National debt of the FGDEC and the dissolved deposits guarantee funds is as follows, in millions of Euros:

Year Investments 1987 50.6 1988 93.6 1989 191.0 1990 181.8 1991 315.7 1992 417.6 1993 928.8 1994 1,305.8 1995 1,465.6 1996 1,676.2 1997 2,010.5 1998 2,396.9 1999 2,688.5 2000 2,960.3 2001 3,255.0 2002 3,755.6 2003 4,035.8 2004 4,482.8 2005 4,881.1 2006 5,311.1 2007 6,371.5 2008 7,069.1 2009 4,423.4 2010 3,639.8 2011 1,260.9 2012 356.5 2013 59.8 2014 1,838.0 2015 4,371.0 2016 5,597.4 2017 5,620.3 2018 5,249.1 2019 4,754.6

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The graphical representation is as follows:

Spanish Public Debt

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

Investments

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ANNEX 4

CREDIT INSTITUTIONS MEMBERS AT 31 DECEMBER 2019

The institutions members of the FGDEC at year-end 2019 are as follows:

Entity Code A&G Banca Privada, S.A. 0241 Abanca Corporación Bancaria, S.A. 2080 Allfunds Bank, S.A. 0011 Andbank España, S.A. 1544 Aresbank, S.A. 0136 Arquia Bank, S.A. 3183 Banca March, S.A. 0061 Banca Pueyo, S.A. 0078 Banco Alcalá, S.A. 0188 Banco Bilbao Vizcaya Argentaria, S.A. 0182 Banco Caixa Geral, S.A. 0130 Banco Caminos, S.A. 0234 Banco Cetelem, S.A. 0225 Banco Cooperativo Español, S.A. 0198 Banco de Albacete, S.A. 0091 Banco de Crédito Social Cooperativo, S.A. 0240 Banco de Depósitos, S.A. 0003 Banco de la Nación Argentina, Sucursal en España 0169 Banco de Sabadell, S.A. 0081 Banco Europeo de Finanzas, S.A. 0184 Banco Finantia Spain, S.A. 0220 Banco Industrial de Bilbao, S.A. 0113 Banco Inversis, S.A. 0232 Banco Mediolanum, S.A. 0186 Banco Occidental, S.A. 0121 Banco Pichincha España, S.A. 0235 Banco Santander, S.A. 0049 Bancofar, S.A. 0125 Bank Degroof Petercam Spain, S.A. 0200 Bankia, S.A. 2038 Bankinter, S.A. 0128 Bankoa, S.A. 0138 BMCE Bank International, S.A. 0219 Caixa de Creditd els Enginyers- Caja de Crédito de los Ingenieros, S. Coop. de Crédito 3025 Caixa Popular-Caixa Rural, S. Coop. de Crédito V. 3159 Caixa Rural Altea, Cooperativa de Crédit Valenciana 3045 Caixa Rural Benicarló, S. Coop. de Crédit V. 3162

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Entity Code Caixa Rural D'Algemesi, S. Coop. V. de Crédit 3117 Caixa Rural de Callosa D'En Sarriá, Cooperativa de Crédito Valenciana 3105 Caixa Rural de L'Alcudia, Sociedad Cooperativa Valenciana de Crédito 3096 Caixa Rural de Turis, Cooperativa de Crédito Valenciana 3123 Caixa Rural Galega, Sociedad Cooperativa de Crédito Limitada Gallega 3070 Caixa Rural La Vall 'San Isidro', Sociedad Cooperativa de Crédito Valenciana 3111 Caixa Rural Les Coves de Vinromá, S. Coop. de Crédit V. 3166 Caixa Rural Sant Josep De Vilavella, S. Coop. de Crédito V. 3160 Caixa Rural Sant Vicent Ferrer de La Vall D'Uixo, Coop. de Crédit V. 3102 Caixa Rural Torrent, Cooperativa de Crédit Valenciana 3118 Caixa Rural Vinarós, S. Coop. de Crédit. V. 3174 Caixabank, S.A. 2100 Caja de Ahorros y Monte de Piedad de Ontinyent 2045 Caja de Crédito de Alcoy, Cooperativa de Crédito Valenciana (En Liquidación) 3184 Caja de Crédito de Petrel, Caja Rural, Cooperativa de Crédito Valenciana 3029 Caja Laboral Popular Coop. de Crédito 3035 Caja Rural Católico Agraria, S. Coop. de Crédito V. 3110 Caja Rural Central, Sociedad Cooperativa de Crédito 3005 Caja Rural de Albacete, Ciudad Real y Cuenca, Sociedad Cooperativa de Crédito 3190 Caja Rural de Albal, Cooperativa de Crédito Valenciana 3150 Caja Rural de Alginet, Sociedad Cooperativa de Crédito Valenciana 3179 Caja Rural de Almendralejo, Sociedad Cooperativa de Crédito 3001 Caja Rural de Aragón, Sociedad Cooperativa de Crédito 3191 Caja Rural de Asturias, Sociedad Cooperativa de Crédito 3059 Caja Rural de Baena Ntra. Sra. de Guadalupe, Sociedad Cooperativa de Crédito Andaluza 3089 Caja Rural de Burgos, Fuentepelayo, Segovia y Castelldans, S. Cooperativa de Crédito 3060 Caja Rural de Cañete de Las Torres Ntra. Sra. del Campo, S. Coop. Andaluza de Crédito 3104 Caja Rural de Casas Ibáñez, S. Coop. de Crédito de Castilla-La Mancha 3127 Caja Rural de Cheste, Sociedad Cooperativa de Crédito 3121 Caja Rural de Extremadura, Sociedad Cooperativa de Crédito 3009 Caja Rural de Gijón, Sociedad Cooperativa Asturiana de Crédito 3007 Caja Rural de Granada, Sociedad Cooperativa de Crédito 3023 Caja Rural de Guissona, Sociedad Cooperativa de Crédito 3140 Caja Rural de Jaén, Barcelona y Madrid, Sociedad Cooperativa de Crédito 3067 Caja Rural de Navarra, S. Coop. de Crédito 3008 Caja Rural de Nueva Carteya, Sociedad Cooperativa Andaluza de Crédito 3098 Caja Rural de Salamanca, Sociedad Cooperativa de Crédito 3016 Caja Rural de Soria, Sociedad Cooperativa de Crédito 3017 Caja Rural de Teruel, Sociedad Cooperativa de Crédito 3080 Caja Rural de Utrera, Sociedad Cooperativa Andaluza de Crédito 3020 Caja Rural de Villamalea, S. Coop. de Crédito Agrario de Castilla-La Mancha 3144 Caja Rural de Villar, Coop. de Crédito V. 3152 Caja Rural de Zamora, Cooperativa de Crédito 3085

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Entity Code Caja Rural del Sur, S. Coop. de Crédito 3187 Caja Rural La Junquera de Chilches, S. Coop. de Crédito V. 3157 Caja Rural 'Nuestra Madre del Sol', S. Coop. Andaluza de Crédito 3115 Caja Rural Nuestra Señora de La Esperanza de Onda, S. Coop. de Crédito V. 3134 Caja Rural Regional San Agustín Fuente Álamo Murcia, Sociedad Cooperativa de Crédito 3018 Caja Rural San Isidro de Vilafames, S. Coop. de Crédito V. 3165 Caja Rural San Jaime de Alquerías Niño Perdido, S. Coop. de Crédito V. 3119 Caja Rural San José de Alcora, S. Coop. de Crédito V. 3113 Caja Rural San José de Almassora, S. Coop. de Crédito V. 3130 Caja Rural San José de Burriana, S. Coop. de Crédito V. 3112 Caja Rural San José de Nules, S. Coop. de Crédito V. 3135 Caja Rural San Roque de Almenara, S. Coop. de Crédito V. 3095 Cajamar Caja Rural, Sociedad Cooperativa de Crédito 3058 Cajasiete, Caja Rural, Sociedad Cooperativa de Crédito 3076 Cajasur Banco, S.A. 0237 Cecabank, S.A. 2000 Colonya - Caixa D' Estalvis de Pollensa 2056 Credit Suisse Ag, Sucursal en España 1460 Deutsche Bank, S.A.E. 0019 EBN Banco de Negocios, S.A. 0211 Eurocaja Rural, Sociedad Cooperativa de Crédito 3081 Evo Banco, S.A. 0239 Ibercaja Banco, S.A. 2085 JPMorgan Chase Bank National Association, Sucursal en España 0151 Kutxabank, S.A. 2095 Liberbank, S.A. 2048 Nuevo Micro Bank, S.A. 0133 Open Bank, S.A. 0073 Renta 4 Banco, S.A. 0083 Ruralnostra, S. Coop. de Crédito V. 3138 Sabadell Consumer Finance, S.A. 0242 Santander Consumer Finance, S.A. 0224 Santander Investment, S.A. 0036 Santander Securities Services, S.A. 0038 Self Trade Bank, S.A. 1490 Targobank, S.A. 0216 Unicaja Banco, S.A. 2103 Wizink Bank, S.A. 0229

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ANNEX 5

REHABILITATION OR RESTRUCTURING OPERATIONS OF CREDIT INSTITUTIONS

Grants made by the deposits guarantee funds in the rehabilitation or restructuring operations of credit institutions. On these amounts are not considered the recovered amounts.

5.1. Fondo de Garantía de Depósitos en Establecimientos Bancarios, until 31 December 2008

Detail, by entities, of the grants provided by the FGDEB until 31 December of 2008, in millions of Euros:

Total in Tangible Financial Shares in Payment CPI Year Entities Shares Loans Losses Total M Euros Assets Assets companiess Deposits 2018=100 2019 (*)

1978 Banco de Navarra, SA (1) — — 3.6 — — 25.0 — 28.6 188.1 15.2

1978 Banco Cantábrico, SA (2) 4.7 4.2 — — 25.3 — — 34.2 225.0 15.2

1978 Banco Meridional, SA (3) 6.1 — 61.1 4.7 — — — 71.9 472.9 15.2

1978 Banco de Valladolid, SA (4) — 7.0 64.3 11.8 60.1 — 33.0 176.2 1,159.0 15.2

1979 Banco de Granada, SA (5) 18.1 — — — 57.2 — 31.7 106.9 608.3 17.6

1980 Banca López Quesada, SA (6) 18.1 16.8 — — 80.7 — — 115.5 570.5 20.2

1980 Banco Promoción de Negocios, SA (1) 9.3 — 51.7 4.2 47.6 — 3.2 115.7 571.5 20.2

1980 Banco Catalán de Desarrollo, SA (7) 18.0 — — — — — 96.2 114.2 564.1 20.2

1980 Banco de Asturias, SA (8) 6.0 — 1.6 — 12.0 — — 19.6 96.8 20.2

1980 Banco Industrial del Mediterráneo, SA (9) 15.0 — — — — — 42.1 57.1 282.0 20.2

1981 Banco de Los Pirineos, SA (1) — — — — — 17.0 — 17.0 73.4 23.2

1981 Banco de Descuento, SA (10) 14.9 15.1 80.6 5.2 26.5 — — 141.7 611.8 23.2

1981 Banco Occidental, SA (**) 21.4 9.4 240.9 21.3 90.2 — — 383.2 1,654.5 23.2

1982 Banca Más Sardá, SA (11) — — — — 12.0 — 28.9 40.9 154.9 26.4

1982 Banco Unión, SA (12) — 60.1 30.1 139.7 — — 90.4 319.6 1,210.4 26.4

1982 Banco de Préstamo y Ahorro, SA (13) — — 35.6 1.3 — — 9.0 45.9 173.8 26.4

1982 Banco de Alicante, SA (14) — 11.3 5.0 — 41.3 — — 57.6 218.1 26.4

1982 Banco de Crédito e Inversiones, SA (15) — 5.7 61.7 — 42.8 — — 110.2 417.4 26.4

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Total in Tangible Financial Shares in Payment CPI Year Entities Shares Loans Losses Total M Euros Assets Assets companiess Deposits 2018=100 2019 (*)

1982 Banca Catalana, SA (***) (16) 81.8 43.5 574.2 46.8 214.3 — 49.2 1,009.6 3,823.7 26.4

1982 Banco de Gerona, SA (17) — — 1.2 — — — — 1.2 4.5 26.4

1982 Banco de Levante, SA (18) 33.1 1.0 193.6 55.8 44.8 — 30.8 359.1 1,360.0 26.4

1984 Banco Simeón, SA (19) — 11.0 — — — — — 11.0 34.1 32.3

1985 Banco de Finanzas, SA (20) — — 15.0 — — — — 15.0 42.9 34.9

1985 Banco Urquijo Unión, SA (21) — — 207.6 144.0 — — — 351.6 1,006.3 34.9

1991 Bank of Credit and Commerce, SAE (1) — — — — — 26.2 — 26.2 52.1 50.3

1991 Banco Europeo de Finanzas, SA — — — — — 3.3 — 3.3 6.6 50.3

1992 Banco Ibercorp, SA (23) — — — — — 0.7 — 0.7 1.3 53.0

1994 Banco Español de Crédito, SA (23) 1,081.8 — — — 1,893.2 — 1,712.4 4,687.4 8,089.2 57.9

1996 Banco Credipás, SA (1) — — — — — 13.2 — 13.2 21.2 62.4

2004 Eurobank del Mediterráneo, SA (1) — — — — — 82.7 — 82.7 105.9 78.1

Total 1,328.3 185.1 1,627.8 434.8 2,648.0 168.1 2,126.9 8,517.0 23,800.3

(*) This column states the total of the rehabilitation operations, the amounts updated according to the CPI, establishing as base 100 December 2018. (**) Includes its subsidiary Banco Comercial Occidental, SA. (***) Includes its subsidiaries Banco Industrial de Cataluña, SA and Banco Industrial del Mediterráneo, SA. (1) Deregistered entity. (2) Integrated in Banco de Gestión Financiera, SA. (Currently integrated in BBVA). (3) Integrated in Banco de Jerez, SA. (Currently integrated in CaixaBank, SA). (4) Integrated in Barclays Bank, SA. (Currently integrated in CaixaBank, SA). (5) Integrated in CaixaBank, SA. (6) Integrated in BNP Paribas España, SA. (7) Integrated in Banco Sanpaolo, SA. (Currently integrated in Banco Sabadell, SA). (8) Integrated in Banco de Sabadell, SA. (9) Integrated in Novo Banco, SA, branch o ce in Spain. (Entity non-adhered to the FGDEC). (10) Integrated in Bank of Credit and Commerce, SAE. (Subsequent deregistration in the Entities Registry). (11) Integrated in Banca Catalana, SA. (Currently integrated in BBVA). (12) Integrated in Banco Urquijo, SA. (Currently integrated in Banco Sabadell, SA). (13) Integrated in Banco de Crédito Canario, SA. (Currently integrated in BBVA). (14) Integrated in BBVA. (15) Integrated in Banco Gallego, SA. (Currently integrated in Banco Sabadell, SA). (16) Integrated in BBVA. (17) Integrated in Solbank SBD, SA. (Currently integrated in Banco Sabadell, SA). (18) Integrated in Citibank España, SA. (Subsequent deregistration in the Entities Registry). (19) Integrated in Banco Caixa Geral, SA. (20) Integrated in Banco Caixa Geral, SA. (21) Integrated in Banco Sabadell, SA. (22) Integrated in Probanca, Servicios Financieros, SA. (Currently integrated in EBN Banco de Negocios, SA). (23) Integrated in Banco Santander, SA.

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5.2.Fondo de Garantía de Depósitos en Cajas de Ahorro, until 31 December 2008

Detail by entities of the grants provided by the FGDCA until 31 December of 2008, in millions of Euros:

Maximum Year Entities Purchase Subordinates collateral Loan Total Total in M CPI of assets debentures provisions Euros 2019 (*) (2019=100)

1983 Cáceres (1) — — — 37.0 37.0 124.9 29.6

1985 Cáceres (1) 4.5 — — — 4.5 12.9 34.9

1987 Cáceres (1) 3.4 — — — 3.4 8.6 39.6

1986 Plasencia (2) 10.2 — — — 10.2 27.0 37.8

1989 Plasencia (2) 23.5 — — 0.5 24.0 53.6 44.8

1983 Cádiz (2) — — — 12.0 12.0 40.5 29.6

1991 Unicaja (2) — 24.0 — — 24.0 47.7 50.3

1985 Palencia (3) — — — 7.2 7.2 20.6 34.9

1985 Central Ávila (4) 12.0 — — 36.1 48.1 137.7 34.9

1987 Huelva (5) — — — 9.0 9.0 22.7 39.6

1990 Huelva (5) — 18.0 — — 18.0 37.8 47.7

1989 Valladolid Popular (6) 2.1 — — — 2.1 4.7 44.8

1989 Valladolid Provincial (6) 2.5 — — 1.3 3.8 8.5 44.8

1990 España de Inversiones (6) — 6.6 — — 6.6 13.8 47.7

1990 Ceuta (7) 3.8 — — 11.4 15.2 31.9 47.7

1990 Provincial de Granada (8) — 12.0 — — 12.0 25.2 47.7

1991 Provincial de Alicante y Valencia (9) 3.1 — — — 3.1 6.2 50.3

1992 Provincial de Alicante y Valencia (9) — 15.0 — — 15.0 28.3 53.0

1994 C. A. San Fernando de Sevilla y Jerez (10) — 15.0 — — 15.0 25.9 57.9

Total 65.1 90.6 — 114.5 270.2 678.4

(*) This column states the total of the rehabilitation operations, the amounts updated according to the CPI, establishing as base 100 December 2018. (a) States the maximum amount guarantee granted by the FGDEC in an APS. (1) Integrated in Caja de Ahorros y Monte de Piedad de Extremadura. (Currently integrated in Unicaja Banco SA) (2) Integrated in Monte de Piedad y Caja de Ahorros de Ronda, Cádiz, Almería, Málaga y Antequera (Unicaja). (3) Integrated in Caja de Ahorros de Salamanca y Soria. (Currently integrated in Unicaja Banco SA) (4) Integrated in Caja de Ahorros y Monte de Piedad de Ávila. (Currently integrated in Bankia, SA) (5) Integrated in Monte de Piedad y Caja de Ahorros de Huelva y Sevilla. (Currently integrated in Caixabank SA) (6) Integrated in Caja España de Inversiones, Caja de Ahorros y Monte de Piedad. (Currently integrated in Unicaja Banco SA) (7) Integrated in Caja de Ahorros y Monte de Piedad de Madrid. . (Currently integrated in Caixabank SA) (8) Integrated in Caja General de Granada. . (Currently integrated in Caixabank SA) (9) Integrated in Caja de Ahorros del Mediterráneo. . (Currently integrated in Banco Sabadell SA) (10) Integrated in Banca Cívica. . (Currently integrated in Caixabank SA)

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5.3. Fondo de Garantía de Depósitos en Cooperativas de Crédito, until 31 December 2008

Detail by entities of the grants provided by the FGDCC until 31 December of 2008, in millions of Euros:

Purchase Financial Total in M CPI Year Entities of assets Assets Loans Total Euros 2019 (*) (2019=100)

1982 CRP Jaén (1) - - 1.8 1.8 6.8 26.4 1983 C. Laboral y E. Salamanca (2) - - 1.3 1.3 4.4 29.6 1984 C. Cto. Ind. Coop. Madrid (3) - - 4.2 4.2 13.0 32.3 1984 Coop. Cto. Jávea (2) - - 2.0 2.0 6.2 32.3 1984 CRP Las Palmas (4) - - 3.1 3.1 9.6 32.3 1984 CRP La Coruña (5) 1.0 - 14.3 15.3 47.4 32.3 1984 CRP Badajoz (6) - - 2.7 2.7 8.4 32.3 1984 CRP La Rioja (7) - - 2.9 2.9 9.0 32.3 1984 CRP Palencia (3) - 10.3 52.6 62.9 194.8 32.3 1986 CRP Palencia (3) - - 0.2 0.2 0.5 37.8 1984 CRP Pontevedra (5) - - 24.6 24.6 76.2 32.3 1984 CRP Sevilla (8) 5.6 - 28.0 33.6 104.1 32.3 1984 CRC Interp. Creta (9) - - 2.7 2.7 8.4 32.3 1984 CR Cto. U. C. Avicultura (10) - - 1.5 1.5 4.6 32.3 1984 CRP Santander (3) - 19.4 2.5 21.9 67.8 32.3 1984 CRP Alicante (11) - 4.2 - 4.2 13.0 32.3 1984 CRP Málaga (12) - - 3.3 3.3 10.2 32.3 1984 CR Sax, Montaña y Vinalopó (13) - - 3.5 3.5 10.8 32.3 1987 CR Sax, Montaña y Vinalopó (13) - - 4.2 4.2 10.6 39.6 1984 CRP Ávila (14) - - 9.1 9.1 28.2 32.3 1984 CRP Teruel - - 15.3 15.3 47.4 32.3 1984 CRP Murcia (15) - - 18.0 18.0 55.7 32.3 1984 CRP Madrid (3) - - 1.8 1.8 5.6 32.3 1984 CRP Baleares (4) 2.8 - 3.1 5.9 18.3 32.3 1984 CR Nacional (16) - 19.1 - 19.1 59.1 32.3 1985 CR La Mancha, S. C. Agrícola (17) - - 4.5 4.5 12.9 34.9 1986 C. Inversión C. Coop. Cto. Ltda. (3) - - 2.1 2.1 5.5 37.8 1986 CR Pirineo (18) - - 6.0 6.0 15.9 37.8 1987 CRP Cádiz (19) - - 20.3 20.3 51.3 39.6 1987 CRP Salamanca - - 3.6 3.6 9.1 39.6 Total 9.4 53.0 239.2 301.6 914.8

(*) This column states the total of the rehabilitation operations, the amounts updated according to the CPI, establishing as base 100 December 2018. (1) Acquired by Caja Rural de Jaén, Barcelona and Madrid, SCC. (2) Withdrawal by agreement of the executive committee of the Bank of Spain. (3) Acquired by CA and MP Madrid. (Currently integrated in Bankia, SA). (4) Acquired by Cajamar Caja Rural, SCC. (5) Acquired by Caja de Ahorros de Galicia. (Currently integrated in Abanca Corporación Bancaria, SA). (6) Acquired by Caja Rural de Extremadura, SCC. (7) Acquired by Caja de Ahorros de la Rioja. (Currently integrated in Bankia, SA). (8) Acquired by Caja Rural del Sur, SCC. (9) Acquired by Caja de Ahorros para la Vejez y de Ahorros de Cataluña y Baleares. (Currently integrated in CaixaBank, SA). (10) Acquired by Caja de Ahorros de Cataluña. (Currently integrated in BBVA). (11) Acquired by Caja Rural Valencia, SCC. (Currently integrated in Cajamar Caja Rural, SCC). (12) Acquired by Caja Rural de Almería y Málaga, SCC. (Currently integrated in Cajamar Caja Rural, SCC). (13) Acquired by Caja Rural de Valencia, CCV. (Currently integrated in Cajamar Caja Rural, SCC). (14) Acquired by Caja de Ahorros y MP de Salamanca. (Currently integrated in Unicaja Banco, SA). (15) Acquired by Caja de Ahorros de Murcia. (Currently integrated in Bankia, SA). (16) Acquired by Banco de Crédito Agrícola, SA (Currently integrated in BBVA). (17) Acquired by C. R. P. Albacete. (Currently integrated in Globalcaja). (18) Acquired by C. A. P. Barcelona. (Currently integrated in BBVA). (19) Acquired by C. A. P. San Fernando. (Currently integrated in CaixaBank, SA).

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5.4. Evolution of Guarantee granted to Finland by the FGDEC in 2013

The following table shows the evolution of the guarantee granted by the FGDEC from its start to 2019 year end, in millions of euros:

Public debt euro area 2013 2014 2015 2016 2017 2018 2019 Opening balance — 292.0 292.4 290.3 92.8 292.9 291.5 Ex-dividend investment 299.0 114.2 187.4 — 296.7 6.4 287.5 Maturities — (106.5) (183.4) (191.3) (92.6) — (281.8) Share premium accrued (6.9) (7.4) (6.7) (5.6) (3.9) (7.7) (7.4) Equity adjustment (variation) (0.1) 0.1 0.6 (0.6) (0.1) (0.1) (0.2) Market value 292.0 292.4 290.3 92.8 292.9 291.5 289.6 Interest accrued 5.5 5.7 3.4 2.1 3.2 3.3 3.6 Closing balance 297.5 298.1 293.7 94.9 296.1 294.8 293.2

Guarantee deposit made 2013 2014 2015 2016 2017 2018 2019 Opening balance 297.2 — — 4.8 202.7 0.7 0.3 Amortisation/Net investment (299.0) (7.7) (4.0) 191.3 (204.1) (6.4) (5.8) Coupon paid on purchase (1.5) (0.3) (0.2) — (0.2) (0.1) (4.7) Interest collected 3.3 8.0 9.0 6.6 2.3 6.1 10.2 Closing balance — — 4.8 202.7 0.7 0.3 —

In January 2013, in accordance with the contract signed, EUR 283.8 M was invested in public debt issued by the Member states of the euro zone with the highest credit rating and charged to the deposit of EUR 297.2 M made. In February 2013, the second contribution payment was invested in the same type of securities, up to a total of EUR 297.2 M.

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5.5. Payments made by the FROB on the sale of NCG Banco, SA

The time evolution of the amounts paid by the FROB to the FGDEC and the collections and net payments made and pending from the FGDEC at each year end to make this settlement, together with the current value of the net rights pending collection, taking into account their payment date, is as follows (in millions of euros):

Annual movements Item 2014 2015 2016 2017 2018 2019 Sale price net of cost of fi nancial supports and 227.0 (7.2) 19.7 (39.4) (1.2) 16.0 value coverage Sale price net of costs 290.2 — — — — — Estimated value of fi nancial supports (110.1) (7.2) 2.3 (39.4) (1.2) 12.0 Estimated value share value coverage 46.9 — 17.4 — — 4.0 Net collections (and payments) made 135.9 — 59.0 1.1 1.6 15.2 Net collections (and payments) pending 91.1 — (46.5) (40.5) (2.8) 0.8 Current value of the net collection right pending 84.8 (4.3) (37.3) (39.2) (2.8) 0.8 Charge to statement of profi t and loss Net charge to profi t and loss (note 25.3) — (6.8) 19.9 (39.0) (1.2) 16.0 Net fi nancial adjustment (note 26) 0.6 2.5 1.8 0.8 — —

The accumulated annual balances resulting from the aforementioned movements are as follows (in millions of euros):

Balances at year end Memorandum: 2014 2015 2016 2017 2018 2019 Sale price net of cost of ﬁ nancial supports and 227.0 219.8 239.5 200.1 198.9 214.9 value coverage Sale price net of costs 290.2 290.2 290.2 290.2 290.2 290.2 Estimated value of ﬁ nancial supports (110.1) (117.3) (115.0) (154.4) (155.6) (143.6) Estimated value share value coverage 46.9 46.9 64.3 64.3 64.3 68.3 Net collections (and payments) made 135.9 135.9 194.9 196.0 197.6 212.8 Net collections (and payments) pending 91.1 91.1 44.6 4.1 1.3 2.1 Current value of the net collection right pending 84.8 80.5 43.2 4.0 1.2 2.0

In 2013 after arranging the sale transaction of shares of NCG Banco, SA, the FROB paid the FGDEC EUR 3.7 M in relation to the agreements for partial coverage of the evolution of the value and of the proceeds on the sale of these shares. This amount, which was recorded as a reduction in the cost of the investment, is not included in the previous tables.

111 5 ANNUAL REPORT 2019

5.6. Payments made by the FROB on the sale of Catalunya Banc, S.A.

Annual movements Item 2015 2016 2017 2018 2019 Sale price net of cost of fi nancial 142.5 1.0 — 16.0 15.5 supports and value coverage Sale price net of costs 383.1 — — — — Estimated value of fi nancial supports (275.4) 1.0 — 16.0 (10.3) Estimated value share value coverag 34.8 — — — 25.8 Collections/payments made (142.5) (1.0) — (16.0) (10.2) Collections/payments pending — — — — 5.3 Current value collection right — — — — 5.2 Charge to statement of profi t and loss Net charge to profi t and loss (note 25.2) 8.6 1.0 — 16.0 15.4

The accumulated annual balances resulting from the aforementioned movements are as follows (in millions of euros):

Balances at year end Memorandum: 2015 2016 2017 2018 2019 Sale price net of cost of ﬁ nancial supports 142.5 143.5 143.5 159.5 175.0 and value coverage Sale price net of costs 383.1 383.1 383.1 383.1 383.1 Estimated value of ﬁ nancial supports (275.4) (274.4) (274.4) (258,4) (268,7) Estimated value share value coverage 34.8 34.8 34.8 34.8 60.6 Net collections (and payments) made 142.5 143.5 143.5 159.5 169.7 Net collections (and payments) pending — — — — 5.3 Current value of the net collection right pending — — — — 5.2

In 2014, after arranging the sale transaction of shares of Catalunya Banc, SA, the FROB paid the FGDEC EUR 12.4 M in relation to the agreements for partial coverage of the evolution of the value and of the proceeds on the sale of these shares. This amount, which was recorded as a reduction in the cost of the investment is not included in the previous tables.

112 5 ANNUAL REPORT 2019

ANNEX 6

LEGISLATIVE INDEX

Basic law

• Royal Decree-law 16/2011, of 14 October, under which the Fondo de Garantía de Depósitos de Entidades de Crédito is created.

• Royal Decree 2606/1996, of 20 December, on deposits guarantee funds of credit institutions.

Additional legislation

• Royal Decree 102/2019, of March 1, which creates the Macro prudential Authority Financial Stability Board, establishes its legal regime and develops certain aspects related to macro prudential tools.

• Circular 1/2019, of January 30, of the Bank of Spain, by which Circular 8/2015, of December 18, is modiﬁ ed, to the entities and branches attached to the Fondo de Garantía de Depósitos de Entidades de Crédito, on information to determine the basis for calculating the contributions to the Fondo de Garantía de Depósitos de Entidades de Crédito (entry into force on August 8, 2019).

• Articles 30 quater and 43 of Royal Decree 217/2008, of February 15, on the legal regime of investment services companies and other entities that provide investment services and which partially modiﬁ es the Regulations of the Law 35/2003, of November 4, of Collective Investment Institutions, approved by Royal Decree 1309/2005, of November 4, included by the Fourth Final Provision of Royal Decree 1464/2018, of December 21 (entry into force on April 17, 2019).

• Circular 1/2018, of January 31, which modiﬁ es the Circular 5/2016, of May 27, on the method of calculation so that the contributions of the entities adhered to the Fondo de Garantía de Depósitos de Entidades de Crédito are proportional to their risk proﬁ le; and Circular 8/2015, of December 18, to the entities and branch o ces attached to the Fondo de Garantía de Depósitos de Entidades de Crédito, on information to determine the calculation bases of the contributions to the Fondo de Garantía de Depósitos de Entidades de Crédito.

• Royal Decree-Law 11/2017, of 23 June, on urgent ﬁ nancial measures.

• Corrections of errors of Circular 5/2016 of 27 May, of the Bank of Spain, on the method of calculating the contributions of the member institutions to the Fondo de Garantía de Depósitos de Entidades de Crédito, for them to be proportional to their risk proﬁ le.

• Circular 5/2016 of 27 May, of the Bank of Spain, on the method of calculating the contributions of the member institutions to the Fondo de Garantía de Depósitos de Entidades de Crédito, for them to be proportional to their risk proﬁ le1.

• Correction of errors of Circular 8/2015 of 18 December of the Bank of Spain to the entities and subsidiaries members of the Fondo de Garantía de Depósitos de Entidades de Crédito, on

1 Circular modiﬁ ed by Circular 1/2018, of 31 January, published in the BOE on 9 February 2018.

113 5 ANNUAL REPORT 2019

information to determine the basis for calculating contributions to the Fondo de Garantía de Depósitos de Entidades de Crédito.

• Circular 8/2015 of 18 December, of the Bank of Spain to the entities and subsidiaries members of the Fondo de Garantía de Depósitos de Entidades de Crédito, on information to determine the basis for calculating the contributions to the Fondo de Garantía de Depósitos de Entidades de Crédito2.

• Royal Decree 1012/2015, of 6 November, implementing Law 11/2015, of 18 June, on recovery and resolution of credit institutions and investment services companies, developing and amending the Royal Decree 2606/1996, of 20 December, on deposits guarantee funds of credit institutions.

• Law 11/2015, of 18 June, on recovery and resolution of credit institutions and investment services companies.

• Sixth Additional Provision of Royal Decree 84/2015, of 13 February, by which it is implemented the Law 10/2014 of 26 June on management, supervision and solvency of credit institutions (representatives of the member entities in the Management Committee of the Fondo de Garantía de Depósitos de Entidades de Crédito).

• Law 9/2012, of 14 November, on restructuring and resolution of credit institutions.

• Royal Decree-Law 2/2011, of 18 February, to strengthen the ﬁ nancial system.

• Royal Decree 628/2010, of 14 May, amending the Royal Decree 2606/1996, of 20 December, on deposits guarantee funds in credit institutions and the Royal Decree 948/2001, of 3 August on compensation mechanisms to the investors.

Community Legislation

• Guidelines of the European Banking Authority (EBA) on strength tests of deposit guarantee schemes under Directive 2014/49/EU (EBA/GL/2016/04).

• Guidelines of the European Banking Authority (EBA) on methods for calculating contributions to deposits guarantee schemes (EBA/GL/2015/10).

• Guidelines of the European Banking Authority (EBA) on cooperation agreements between deposit guarantee schemes under Directive 2014/49/UE (EBA/GL/2016/02).

• Guidelines of the European Banking Authority (EBA) on payment commitments under Directive 2014/49/UE regarding deposit guarantee schemes (EBA/GL/2015/09).

• Commission Delegated Regulation (EU) 2015/63 of 21 October 2014 supplementing Directive 2014/59/EU of the European Parliament and of the Council with regard to ex ante contributions to resolution ﬁ nancing arrangements.

• Directive 2014/59/EU of the European Parliament and of the Council, of 15 May 2014, establishing a framework for the restructuring and resolution of credit institutions and investment services ﬁ rms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/ EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Council. 2 Circular modiﬁ ed by Circular 1/2018, of 31 January, published in the BOE on 9 February 2018.

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• Directive 2014/49/EU, of 16 April, of the European Parliament and of the Council, on deposits guarantee schemes.

• Directive 2009/14/EC of the European Parliament and of the Council of 11 March 2009, amending Directive 94/19/EC on deposit-guarantee schemes as regards the coverage level and the pay- out delay.

• Directive 97/9/EC of the European Parliament and of the Council of 3 March 1997 on investor- compensation schemes.

• Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on deposit- guarantee schemes.

115 5 Fondo de Garantía de Depósitos de Entidades de Crédito

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