1st Quarter Results

Banco Santander Central Hispano SA
10 May 2005

Press Release

Grupo Santander net attributable income increases 38.5% to EUR 1,185 million in
                           the first quarter of 2005

  • The income statement includes Abbey for the first time, with a
    contribution of EUR 153 million to net attributable income. Without Abbey,
    profit would have increased 20.6%.
  • The EUR 717 million extraordinary capital gain from the sale of 2.57% of
    The Royal Bank of Scotland was offset by a provision that will be allocated
    in the course of the year and thus has had no effect on results.
  • Increased profit is based on high business growth and revenue from retail
    banking, where net operating income increased by 24.4%.
  • In continental Europe, net operating income rose 23% and net attributable
    income 45% (to EUR 752 million). In Latin America, net operating income and
    profit improved 14% in dollars (to $553 million), its operating currency.
  • This growth is due to good business performance, especially in lending,
    with increases of more than 15% in Latin America, Spain and Santander
    Consumer.
  • Cost control has led to a 0.8 percentage point improvement in the
    efficiency ratio, to 47.0%. If Abbey is included, the efficiency ratio is
    50.9% for the Group as a whole.
  • The NPL ratio is 1.07% for overall lending, with coverage of 162%. Without
    Abbey, the NPL ratio fell by 0.11 percentage points from March 2004 to
    1.22%, with coverage increasing 33 points, to 202%.


Madrid, May 10, 2005 - Grupo Santander registered net attributable income of EUR
1,185 million in the first quarter of 2005, an increase of 38.5% from the same
period in 2004. This was the first quarter in which Abbey (consolidated on the
balance sheet at the end of 2004) was included in the income statement,
contributing EUR 153 million in profit. Without Abbey, Grupo Santander's income
would have increased 20.6% from the same quarter last year. The results were not
affected by the EUR 717 million capital gain obtained from the sale of 2.57% of
The Royal Bank of Scotland, which was offset by a provision for contingencies
which will be allocated in the course of the year.

Grupo Santander has drawn up its 2005 financial statements following the new
international financial reporting standards (IFRS) and has redrafted restated
all the information for 2004 in line with these criteria. The application of
these standards involves changes in accounting principles, the presentation of
statements and the structure of business areas.

The performance of Grupo Santander in the first quarter of 2005 was marked by
significant growth in business activity - and therefore in revenue - from retail
banking in Europe and Latin America. This growth came hand in hand with cost
control and a reduction in loan-loss provisions, as the limit for generic
provisions had already been reached. This combination of higher revenue with
cost control and a reduced need for provisions enabled income to grow by more
than 20% without Abbey and more than 38% when Abbey is included.

Grupo Santander results Q1' 05 EUR million

                                Q1'05          % change       Q1'05          % change
                                w/o Abbey      on Q1'04       with Abbey     on Q1'04
Commercial revenue                  3,328           +7.3          4,096          +32.1
Gross operating income              3,669           +7.3          4,538          +32.7
Operating costs                    - 1,930          +5.3          -2,591         +41.3
Net operating income                1,784          +10.2%         2,054          +26.9
Loan-loss provisions                 -223          -32.0           -281          -14.3
Income before taxes                 1,387          +20.3          1,618          +40.4
Attributable income                 1,032          +20.6          1,185          +38.5

 Attributable income does not include the capital gain (EUR 717 million) from the sale of
                                    RBS in January 2005

(*) Commercial revenue: basic revenue + insurance activity

Earnings

Growth in business activity helped push net interest revenue income to EUR 2,358
million in the first quarter of 2005, up 27.9% (6.6% excluding Abbey) from the
same period in 2004. The increases in fee income and insurance (+7.9%) and
income from equity-accounted holdings (+11.7%) generated commercial revenue of
EUR 4,096 million euros, up 32.1% (7.3% without Abbey). Trading gains rose to
EUR 441 million, growth of 38.8% (7.5% without Abbey), putting net operating
revenue at EUR 4,538 million, an increase of 32.7% (7.3% excluding Abbey). This
increase occurred with a lower contribution from the Group's treasuries.

Grupo Santander's overall personnel and general expenses account for 50.9% of
revenue, whilst for the Group without Abbey the efficiency ratio would be 47.0%,
an improvement of 0.8 points from a year earlier. This is due to the fact that
general and administration expenses, including new projects, grew 5.5%, whilst
revenue increased by almost two points more. This enabled net operating income
to grow 10.2% without Abbey and 26.9% for the Group as a whole.

Provisions amounted to EUR 291 million, a drop of 20.4% (-36.3% without Abbey).
Most of this item (EUR 281 million) stems from loan-loss provisions. Without
taking Abbey into consideration, such provisions would be 32.0% lower, with
decreases in all geographical areas and main business units.

The fall in provisions is due to the heavy contributions made in previous years
in applying the Bank of Spain's norms, bringing us back to provisions more in
line with the business risk involved. Specific loan-loss provisions increased
15.6%, below the growth of lending activity.

Main Units Europe Q1'05

Millions of euros and % change on Q1'4

Gross operating income: 2,267; +12.8%    Net operating income: 1,301; +22.8%   Attributable income: 752; +44.9%
SAN Network: 906; +5.6%                               475; +12.0%                            306; +38.2%
Banesto: 438; +5.7%                                   279; +14.1%                            126; +19.8%
Santander Consumer: 366; +33.2%                       243; +40.7%                            111; +77.8%
Portugal: 253; +7.9%                                  130; +16.9%                             94; +21.6%
Other (*): 304; +32.9%                                174; +63.5%                            115; +117.5%

(*) Private Banking, Asset management and Global Wholesale Banking

These provisions, together with other losses amounting to EUR 144 million (EUR
164 million without Abbey) resulted in income before taxes of EUR 1,618 million,
up 40.4% (20.3% excluding Abbey). Under 'other income', a profit of EUR 717
million is included following the sale of 2.57% of The Royal Bank of Scotland
and the setting-up of a contingency fund for the same amount. Therefore, this
sale has no impact on final earnings.

The Group's first quarter net attributable income after taxes and minority
interests was EUR 1,185 million, an increase of 38.5% (20.6% without Abbey). Of
these earnings, 57% were generated by the Group's businesses in Continental
Europe, 32% from Latin America and 11% from the U.K. (Abbey). Earnings from
continental Europe improved 44.9% and Latin America again registered positive
growth rates in euros of 8.8%.

Principal countries in Latin America Q1'05

Millions of US$ million and % change on Q1'4

Gross operating income: 1,950; +12.4%    Net operating income: 881; +13.9%     IBT: 761; +16.4%
Comm. Brazil: 563; +17.7%                             177; +19.6%                            151; +57.9%
Comm. Mexico: 374; +21.6%                             146; +48.1%                            119; +31.8%
Comm. Chile: 242; +27.9%                              119; +87.0%                             86; 132.3%
Comm. Other countries: 320; +31.3%                    136; +81.8%                             99; +67.3%
BPI: 65; +13.2%                                       37; +18.2%                              36; +21.6%
AMgt&Ins: 142; 31.2%                                  88; +50.8%%                             94; +72.1%
GWB: 243; -30.5%                                      179; -40.3%                             175;-38.9%

Business

The volume of funds managed by Grupo Santander amounted to EUR 841,155 million
at the close of the first quarter of this year. This amount represents growth of
74.9% in one year, which would have been 13.3% without Abbey. Of these overall
resources, EUR 698,581 million is on the balance sheet, and the remainder
off-balance sheet customer deposits such as mutual funds and pensions.

The consolidation of Abbey caused a quantitative leap in business figures,
doubling the amount of loans and increasing customer managed funds by 70.0%. But
it was also a qualitative leap, contributing greater geographical diversity in
risk, with 47% of loans in continental Europe, 43% in the U.K. and the remaining
10% in Latin America.

Grupo Santander's gross lending amounted to EUR 370,061 million at the close of
the first quarter of 2005, up 101.7%. Without Abbey, lending volume reached EUR
215,850 million, an increase of 15.8%, discounting the effect of
securitisations. Lending to other resident sectors rose 17.6%, reflecting
business activity in Spain, with 23.0% growth in mortgage lending. Lending to
the non-resident sector grew 14.0%.

Lending rose 15% in continental Europe, across all countries and units. Business
in the Santander branch network in Spain increased 18%, in Banesto 21%, in
Portugal 6% and in Santander Consumer 31%. In turn, Latin America improved 23%
in local currency terms, with strong growth in the main countries: Brazil (33%),
Mexico (24%) and Chile (13%).

Total managed customer funds amounted to EUR 607,828 million at the end of the
first quarter of 2005, an increase of 70.0% compared to last year. Without
Abbey, this figure would be EUR 392,671 million (+9.8%). Balance sheet
resources, without Abbey, grew 10.4% to EUR 265,055 million, whilst off-balance
sheet items (basically mutual funds and pensions) rose 8.7%, to EUR 127,616
million. Between March 2004 and March 2005, mutual funds increased 7%, pension
plans 10.6% and managed portfolios, 20.2%.

Continental Europe
                                           Change Mar'05 / Mar'04
                                                 Loans (*)                      Customer funds (**)
SAN Network                                        +18%                                 +7%
Banesto                                            +21%                                 +10%
Santander Consumer                                 +31%                                 +18%
Portugal                                            +6%                                 +4%

(*) Including Securitisations
(**) Customer funds ex-REPOs, mutual funds and pension funds

Latin America
                                           Change Mar'05 / Mar'04
                                                 Loans (*)                      Customer funds (**)
Brazil                                             +33%                                 +21%
Mexico (*)                                         +24%                                 +15%
Chile                                              +13%                                 +12%

(*) Including Securitisations
(**) Customer funds ex-REPOs, mutual funds and pension funds

In continental Europe, customer funds under management amounted to EUR 247,970
million, an increase of 9.7%. In Spain, which accounts for more than 80%,
customer funds under management rose by 10.6% to EUR 205,066 million. The Group
remains the leader in mutual funds in Spain, with a market share of around 27%
after growing 5.0% in net worth from March 2004.

In Latin America, customer resources funds amounted to EUR 92,842 million,
growth of 15% without the exchange rate effect. In deposits less
securitisations, all countries registered double-digit growth, especially Brazil
(+32%), whilst Mexico and Chile increased at around 12%. Mutual funds grew 16%,
with noteworthy increases in Argentina, Mexico, Colombia and Puerto Rico. In
pension plans, overall growth was 13%.

Abbey

The acquisition of Abbey was completed on 12th November 2004, with just its
balance sheet consolidated in Grupo Santander at year-end. This is the first
quarter in which Abbey's earnings are included in those of Grupo Santander.

The management team was completed this year, with new division heads in Sales
and Marketing, as well as Insurance and Asset Management, to form a new, more
flexible and business-focused organisation. The new corporate image identity was
also adopted, in line with the Group's global imagebrand, adding the Santander
red colour, flame and lettering to Abbey's brand. The implementation of this new
mageidentity will commence in May.

With a view to improving productivity, a new management structure has been out
in place in branches and a training programme is being carried out to increase
the number of sales personnel. In addition, the mortgage product catalogue has
been revised, with a re-launch of fixed-income mortgages. The marketing of a new
range of investment products has also begun.

Although it is too soon for these initiatives to have a significant impact on
sales, the performance of business in the first quarter has begun to reflect
signs of recovery. Customer-related sales, such as the opening of current
accounts and the granting of credit cards, increased from the last quarter of
2004. Likewise, the volume of mortgages approved in March was the highest in
fifteen months. This overall activity is helping to stabilise recurrent income.

Total lending reached EUR 161,406 million, a 2.4% increase in the quarter.
Managed customer funds (minus repos) amounted to EUR 212,472 million,
practically the same as at the close of 2004.

Regarding cost reduction, the processes of headcount reduction, renegotiation
with global suppliers and certain aspects of technological development are being
addressed simultaneously. At the end of the quarter, 2,400 redundancies had been
notified, with 1,000 employees having already left the Group. A headcount
reduction of some 4,000 roles is expected for 2005. At the same time, two
customer help lines have been closed and the closure of another has been
announced. The impact of these measures, as well as the renegotiation of global
agreements with suppliers, the cancellation of non-essential projects and the
start-up of new technological and business platforms will be felt over the next
quarters.

Management and capital ratios

The expansion of the Group's lending activity came with a drop in the NPL ratio,
meaning that the ratios of NPLs and doubtful loans reached an all-time low at
the end of the first quarter of 2005. Grupo Santander's NPL rate is 1.07%, with
162% coverage. Excluding Abbey, this rate would show a decrease from 1.33% to
1.22% in the year, with coverage increasing by 33 points, to 202%.

Management ratios

Efficiency ratio
               Q1'04                               Q1'05                             Change %
               47.8%                             47.0% (*)                           -0.8 p.p.

(*) Without Abbey. Including Abbey: 50.9%

BIS ratio
             Core cap.                            Tier I                             BIS ratio
               5.3%                                7.2%                                13.0%

NPL ratio
              Mar'04                              Mar'05                              Change %
               1.33%                             1.22% (*)                           -0.11 p.p.

(*) Without Abbey. Including Abbey: 1.07%

Coverage ratio
              Mar'04                              Mar'05                             Change %
               169%                              202% (*)                            +33 p.p.

(*) Without Abbey. Including Abbey: 162%

In Spain, the NPL rate is 0.59%, 0.14 points lower than in March 2004, with
coverage at 359%, 101 points higher. Consumer finance (Santander Consumer)
closed March with a NPL rate of 2.4% and 127% coverage, slight increases in both
items in the quarter. In Latin America, NPLs fell 0.47 points, to 2.73% in the
year, whilst coverage increased 20 points, to 160%, in the same period. Both
ratios also improved from the last quarter of 2004.

The Group's eligible capital amounted to EUR 46,525 million at the end of March
2005, with a surplus of EUR 17,818 million over minimum requirements. With this
capital base, the BIS ratio is 13%, with Tier I at 7.2%.

The share

Santander shares ended March 2005 at EUR 9.39. In the second half of last year
its performance was affected by the takeover offer for Abbey. Between the
announcement of the transaction until the end of March, it appreciated by 20.5%.
At the end of March, Santander's market capitalisation was EUR 58,728 million,
reinforcing its position as the leading bank in the euro zone and ninth in the
world.

Banco Santander previously announced in connection with its acquisition of Abbey
National plc its intention to make an application for its ordinary shares to be
admitted to the Official List and to trading on the London Stock Exchange's
market for listed securities. It had initially been expected that such a listing
would be obtained in the first half of 2005. In light of the forthcoming changes
to the UK listing regime as a result of the implementation of the Prospectus
Directive, it is now anticipated that, subject to the UK government implementing
the Prospectus Directive as planned on 1 July 2005, the listing will become
effective as soon as practicable thereafter. As a result, the free share dealing
facility established at the time of the acquisition of Abbey will continue in
full force and effect in accordance with its terms until such time as the Banco
Santander ordinary shares are listed in London. A further announcement will be
made in due course.

The third interim dividend charged to the 2004 earnings was paid on February 1st
and the fourth dividend on May 1st, amounting to EUR 0.083 and EUR 0.084,
respectively. These two dividends were also paid to the holders of the new
shares handed over in November 2004 to the former shareholders of Abbey,
amounting to an additional EUR 250 million in dividend payout. Following these
dividends, the amount received on 2004 earnings was EUR 0.3332 per share, an
increase of 10%. The return per dividend obtained by Santander shareholders
amounted to 3.82%, based on the average share price throughout 2004.

In April, the Bank's Board of Directors agreed to appoint Luis Angel Rojo as an
independent external director. Following this appointment, Santander's Board
comprises 20 members holding 4.2% of the Bank's capital.

Grupo Santander's shareholder base increased significantly following the
acquisition of Abbey, to 2,578,094 shareholders. 125,933 people work in the
Group, serving 63 million customers in 9,935 branches.

Income statement

Million euros
                                                           Q1'05                Q1'04              Variation %
                                                 with Abbey     w/o Abbey                    w/o Abbey    with Abbey
Net interest income (w/o dividends)                   2.321,4       1.928,8        1.798,5          7,25         29,08
Dividends                                                36,4          36,4           44,6        (18,42)       (18,27)
Net interest income                                   2.357,9       1.965,2        1.843,1          6,63         27,93
Income from companies accounted for by the              140,5         140,0          125,3         11,71         12,14
equity method
Net fees                                              1.384,2       1.170,1        1.101,6          6,22         25,65
Insurance activity                                      213,6          52,3           31,5         66,19        578,52
Commercial revenue                                    4.096,2       3.327,6        3.101,5          7,29         32,07
Gains (losses) on financial transactions                441,5         341,8          318,1          7,45         38,80
Gross operating income                                4.537,7       3.669,4        3.419,5          7,31         32,70
Income from non-financial services                      155,7         100,9           88,8         13,68         75,39
Non-financial expenses                                 (35,0)        (35,0)         (38,4)         (8,84)        (8,84)
Other operating income                                 (13,2)        (21,3)         (17,9)         19,29        (26,20)
Operating costs                                     (2.591,4)     (1.929,9)      (1.833,5)          5,26         41,34
General administrative expenses                     (2.311,4)     (1.723,1)      (1.633,5)          5,49         41,50
Personnel                                           (1.383,7)     (1.074,0)      (1.016,7)          5,64         36,10
Other administrative expenses                         (927,7)       (649,0)        (616,7)          5,24         50,41
Depreciation and amortisation                         (280,1)       (206,8)        (200,0)          3,40         40,02
Net operating income                                 2.053,7       1.784,0        1.618,6          10,22         26,89
Impairment loss on assets                             (291,3)       (233,2)        (365,9)        (36,25)       (20,37)
Net loan loss provisions                              (281,1)       (223,0)        (328,1)        (32,05)       (14,35)
Goodwill                                                 0,0           0,0           (2,4)       (100,00)      (100,00)
Other assets                                           (10,3)        (10,3)         (35,3)        (70,90)       (70,90)
Other income                                          (144,5)       (163,7)        (100,1)         63,63         44,42
Income before taxes                                  1.617,9       1.387,1        1.152,6          20,34         40,37
Corporate income tax                                  (314,4)       (237,0)        (189,1)         25,36         66,30
Net income from ordinary activity                    1.303,4       1.150,1          963,5          19,36         35,28
Net income from discontinued operations                  0,5           0,5            2,2         (79,85)       (79,85)
Net consolidated income                              1.303,9       1.150,5          965,8          19,13         35,01
Minority interests                                     118,8         118,8          110,2           7,78          7,78
Attributable income to the Group                     1.185,1       1.031,7          855,6          20,59         38,52

Customer loans

Million euros
                                                         31.03.05              31.03.04            Variation %
                                                 with Abbey     w/o Abbey                    w/o Abbey    with Abbey
Public sector                                           4.279         4.279          5.626       (23,94)       (23,94)
Other residents                                       128.876       128.876        110.053         17,10         17,10
Secured loans                                          62.962        62.962         51.655         21,89         21,89
Other loans                                            65.914        65.914         58.398         12,87         12,87
Non-resident sector                                   244.101        82.695         72.555         13,98        236,43
Secured loans                                         155.693        20.855         20.636          1,06        654,46
Other loans                                            88.408        61.840         51.919         19,11         70,28
Gross loans and credits                               377.256       215.850        188.235         14,67        100,42
Credit loss allowance                                   7.195         6.223          4.775         30,32         50,69
Net loans and credits                                 370.061       209.628        183.460         14,26        101,71
Pro memoria: Doubtful loans                             4.489         3.135          2.990          4,84         50,12
Public sector                                               2             2              3        (22,33)       (22,33)
Other residents                                           898           898            955        (5,94)        (5,94)
Non-resident sector                                     3.589         2.235          2.033          9,94         76,54

Customer funds under management

Million euros
                                                         31.03.05              31.03.04            Variation %
                                                 with Abbey     w/o Abbey                    w/o Abbey    with Abbey

Public sector                                          18.172        18.172         11.467         58,48         58,48
Other residents                                        83.104        83.104         83.194         (0,11)        (0,11)
Demand deposits                                        46.123        46.123         42.306          9,02          9,02
Time deposits                                          20.786        20.786         21.422         (2,97)        (2,97)
REPOs                                                  16.054        16.054         19.275        (16,71)       (16,71)
Other                                                     141           141            191        (26,28)       (26,28)
Non-resident sector                                   183.455        80.171         75.905          5,62        141,69
Demand deposits                                        98.380        31.036         28.314          9,61        247,45
Time deposits                                          50.002        25.831         25.739          0,36         94,26
REPOs                                                   9.818         7.134          7.891         (9,60)        24,42
Public Sector                                           2.658         2.658          2.225         19,45         19,45
Other                                                  22.597        13.512         11.735         15,15         92,57
Customer deposits                                     284.732       181.447        170.566          6,38         66,93
Debt securities                                       116.119        62.963         47.529         32,47        144,31
Subordinated debt                                      21.999        13.131         12.759          2,91         72,41
Insurance liabilities                                  42.404         7.513          9.343        (19,58)       353,86
On-balance-sheet customer funds                       465.253       265.055        240.197         10,35         93,70
Mutual funds                                           94.707        93.258         87.172          6,98          8,64
Pension plans                                          36.218        22.709         20.533         10,60         76,39
Managed portfolios                                     11.649        11.649          9.692         20,19         20,19
Off-balance-sheet customer funds                      142.574       127.616        117.397          8,70         21,45
Customer funds under management                       607.828       392.671        357.594          9,81         69,98

Shareholders' equity and capital ratios

Million euros
                                                                                      Variation
                                                  31.03.05       31.03.04       Amount           %          31.12.04

Capital stock                                           3.127          2.384           743         31,16          3.127
Additional paid-in surplus                             20.370          8.721        11.649        133,58         20.370
Reserves                                               10.495          8.219         2.276         27,70          6.949
Treasury stock                                             (2)           (17)           15        (87,55)          (104)
On-balance-sheet shareholders' equity                  33.990         19.306        14.684         76,06         30.342
Net attributable income                                 1.185            856           330         38,52          3.606
Interim dividend distributed                           (1.311)        (1.109)         (202)        18,22           (792)
Shareholders' equity at period-end                     33.865         19.053        14.811         77,74         33.156
Interim dividend not distributed                         (527)          (336)         (191)        56,85         (1.046)
Shareholders' equity                                   33.338         18.718        14.620         78,11         32.111
Valuation adjustments                                   1.735          2.202          (467)       (21,21)         1.778
Minority interests                                      2.283          2.046           238         11,62          2.085
Preferred securities                                    7.061          4.184         2.877         68,77          7.623
Shareholders' equity and minority interests            44.417         27.149        17.268         63,61         43.596
Basic capital                                          25.992         17.088         8.904         52,11         24.419
Supplementary capital                                  20.533          8.894        11.639        130,86         19.941
Computable capital (BIS criteria)                      46.525         25.982        20.543         79,07         44.360
Risk-weighted assets (BIS criteria)                   358.834        211.375       147.459         69,76        340.946
BIS ratio                                               12,97          12,29          0,68                        13,01
Tier 1                                                   7,24           8,08         (0,84)                        7,16
Cushion (BIS ratio)                                    17.818          9.072         8.747         96,42         17.084


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