3rd Quarter Results

Banco Santander Central Hispano SA
31 October 2002


SANTANDER CENTRAL HISPANO 9 MONTHS NET ATTRIBUTABLE PROFIT 1,721.9 MILLION EUROS

                                    (-13,6%)


  • Improved efficiency ratio (-2.9 points) and conservative provisioning for
    loan losses and potential writeoffs

  • Operating income rose 7.6%, excluding Argentina, and 25.5% if excluding
    dividends and trading gains

  • Positive trend in commissions, those generated by mutual and pension funds
    rising 2.5%, portfolio management by 13.9% and insurance business by 39.56%


Madrid October 29, 2002 - Santander Central Hispano recorded net attributable
income of 1,721.9 million euros in the first nine months of 2002, a decline of
13.6% over the same period last year. Excluding Argentina, which again made a
zero contribution, net attributable income was down 7.5%.


In a negative international environment, the Group has focused actively on
generating revenue, reducing the cost base, managing the risk portfolio,
improving the capital base and restructuring some business areas.


During the third quarter, a series of measures were implemented to stimulate
business activity, as a result of which the Santander Central Hispano branch
network gained market share in deposits and mutual funds. Sales drives for
innovative new products helped attract 6 billion euros in new funds in Spain up
to September.


Results

Net interest revenues were 4% lower at 7,279.3 million euros, reflecting the
negative situation in Argentina and exchange rate trends. Excluding these
factors, net interest revenues rose 9.0%, driven by improved business margins in
Europe and in the main Latin American markets. In Spain, increased business
volumes offset narrower customer margins.


Fees and commissions declined 5.5% due to lower revenues from Argentina.
Excluding Argentina, they rose 4%, and eliminating the impact of currency
depreciation, by 9%. Mutual and pension fund business generated a 2.5% rise in
fee income, portfolio management 13.9% and insurance business one of 39.5%.


Measures taken in past few months yielded fruit in the form of positive
performance from fees and commissions in retail banking in Spain, which
continued their positive trend with a 10% third quarter rise over the same
period last year.


Net trading gains were 70.6% lower due to market volatility. Net operating
revenues were down 7.9% at 10,760.9 million euros, though this narrows to only
1.8% lower if Argentina is excluded. Nearly 90% of total net operating revenues
came from retail banking in Spain and abroad.


Cost control in personnel and general expenses, which declined by 12.8% in the
first nine months, led to Group efficiency ratio improving 2.9 percentage points
(or 3.8 points if Argentina is excluded) to 51.2%. Personnel costs fell 12.7%
and other administrative costs by 13%.


Net operating income, also affected by Argentina, declined 1.5% to 4,401.6
million euros. Excluding Argentina it rose 7.6%, despite an inauspicious
economic environment. Underpinning this result was retail banking in Europe
(+19.9%) and recurring income business lines. Excluding dividends and trading
gains, net operating income rose 25.5%.


Loan loss provisions rose 7.9% to 1,429.6 million euros and 553.5 million euros
in goodwill was amortized.


Net attributable income of 1,721.9 million euros was 13.6% down on the same
period last year but only 7.5% lower if Argentina is excluded. The result is in
line with Group objectives for the year of a net attributable income of 2,250
million euros (down 10% on 2001). Retail banking business contributed 82% to
total net income (49% from Europe and 33% from Latin America), asset management
and private banking 10%, global wholesale banking 7% and income from share
stakes, not including capital gains, 1%.


In Latin America, business activity and results were deeply affected by currency
depreciation and market volatility. The Group has progressed in its strategy of
promoting recurring income business while redefining its presence in less
profitable markets. In the first nine months, net attributable income in the
region came to 1,063 million euros, with excellent results in Brazil, Mexico,
Chile and Venezuela.


In Argentina, the Group has provisioned its entire investment (including
goodwill), as well as intra-group cross-border risk and cross-border risk with
third parties required by the regulatory authorities. The country remains
immersed in a restructuring process, but the situation shows signs of
stabilizing. Results from Argentina continue to be neutralized from the point of
view of Group accounts, while local business units have concentrated on
maximizing asset quality and, above all, in maintaining adequate liquidity
levels in the absence of capital injections from the parent Group.


In Brazil, which has been affected by intense market volatility, the Group has
focused on preserving liquidity levels, reducing the portfolio of public sector
bonds, reducing cross-border risk and maintaining strict controls on market and
credit risk. The Group's portfolio of Brazilian public sector bonds has been
reduced to US$4.2 billion, excluding pension-related holdings. The Group
maintains low levels of provisionable country-risk (US$31 million).


The Group obtained in Brazil net attributable income of 417 million euros in the
first nine months, a rise of 9.8%, or an increase of 22.6% if the effects of
currency depreciation are excluded. All the objectives set at the time of the
acquisition of Banespa are being met, and the profit forecast for this year is
in excess of US$600 million.


Mexico registered a 32% rise in net attributable income to US$542 million. In
Chile, net attributable for the nine months rose 2.2% to US$212 million.


In Spain, Banesto continued to grow in terms of revenue and profit, with a 12.4%
rise in pre-tax income to 446.4 million euros. Volume rose 14% in loans and 8%
in on-balance sheet customer funds. The bank has continued to place special
emphasis on asset quality, with NPL ratio at 0.80% and provision cover of 276%
(compared to 0.85% and 238%, respectively, in September 2001)


Balance sheet


On and off-balance sheet activities were negatively affected by Argentina and
the depreciation of the principle Latin American currencies and of the US dollar
against the euro. This has offset the favourable impact of retail banking in
Europe in overall figures.


Loans were 1.9% lower at 169,703 million euros. Excluding Argentina there was a
6.5% rise. In Spain, loans to the public sector rose 15.9% and loans to other
resident sectors 5.3%, including a 16.2% increase in mortgage-backed loans.


Total Group customer funds were 2.8% lower at 308,735 million euros, though
excluding Argentina and the currency effect there was a rise of 6.9%.


Among customer funds, term deposits rose 13.8%, basically as a result of success
in marketing the SuperSatisfaction and Super Yield products. This led to an
increase in market share among term deposits as well as in total banking sector
deposits. There was also a positive trend in mutual funds in the domestic
market, which increased 7.5% over the 12 months, consolidating the Group's
leadership with a market share above 27%. Personal pension plans in Spain rose
10.6% in volume, thus preserving the Group's leadership in this segment with a
market share in excess of 19%.


The Group continues to apply rigorous risk management criteria. The NPL ratio
stood at 2.09% in September (0.98% in Spain and 4.05% in Latin America),
compared to 1.85% in June and in line with the level in September 2001, despite
significant deterioration in the economic environment since then. Provision
cover was 132.9%.


Excluding Argentina, the NPL ratio in Latin America (which consolidates on the
basis of local criteria and is therefore not homogenous with the rest of the
Group), stood at 3.14% on the basis of provisional data, with provision cover at
142%.


In this regard, it is worth noting that Santander Central Hispano risk is well
diversified, with 80% concentrated in OECD countries and only 5% in non-
investment grade countries, with no exposure to multinational risk.


Solvency ratios

At the close of the third quarter, eligible capital according to BIS criteria
stood at 21,243 million euros, as a result of which BIS ratio stood at 10.81%
with a Tier I of 7.29%.


With the goal of strengthening capital ratios, the Group has prepared a number
of options aimed at reducing risk-weighted assets, improving capital composition
and accelerating goodwill amortization. Moreover, other steps are being taken
which were not included in the end-September accounts which will improve the
equity base, with an estimated 40 basis point increase in Tier I and one of 60
basis points in core capital to levels of 7.7% and 5.0%, respectively. As a
result, the BIS ratio will increase to 11.6%, close to Group objectives.


Dividends

Last August 1, Santander Central Hispano paid a first dividend for 2002 of
0.0775 euros per share and it is envisaged that a second interim payment of
0.0751 euros will be made from November 1. The Group anticipates distributing a
dividend for 2002 identical to the 2001 payment, as announced by the Chairman in
his letter to shareholders of August 1.





Consolidated income statement
                                                Jan-Sept 2002      Jan-Sept 2001         02/01
                                                  mln euros          mln euros             %

NET INTEREST REVENUE                               7,279.3            7,584.5            (4.02)
Net fees and commissions                           3,303.3            3,495.7            (5.50)
BASIC REVENUE                                      10,582.6           11,080.2           (4.49)
Trading gains                                       178.4              605.8            (70.56)
Net operating revenues                             10,760.9           11,686.0           (7.92)
Personnel and general expenses                    (5,508.6)          (6,320.1)          (12.84)
a) Personnel                                      (3,453.2)          (3,956.6)          (12.72)
b) General expenses                               (2,055.4)          (2,363.6)          (13.04)
Depreciation and other results                     (850.7)            (899.4)            (5.41)
NET OPERATING INCOME                               4,401.6            4,466.5            (1.45)
Income from equity accounted holdings               182.6              440.4            (58.52)
Earnings from Group transactions                    199.3              598.0            (66.67)
Net provisions for loan losses                    (1,429.6)          (1,324.4)            7.94
Writedown of investment securities                  (0.3)              (0.4)            (31.08)
Goodwill amortization                              (553.5)           (1,495.1)          (62.98)
Other income                                        (62.9)             709.4              ---
Income before taxes                                2,737.3            3,394.3           (19.36)
Corporate Tax                                      (605.6)            (737.0)           (17.83)
Net consolidated income                            2,131.8            2,657.3           (19.78)
Minority interests                                  104.0              287.2            (63.80)
Dividend - preferred shareholders                   305.9              377.4            (18.94)
NET ATTRIBUTABLE INCOME                            1,721.9            1,992.8           (13.59)




    Data excluding Argentina

    Basic revenue                        10,375.7     10,103.6     2.69

    Net operating revenues               10,526.7     10,721.8     (1.82)

    Net operating income                  4,336.9      4,028.9      7.64

    Net attributable income               1,721.9      1,860.9     (7.47)













Customer funds
                                                          30.09.2002         30.09.2001     02/01        31.12.01
                                                           mln euros          mln euros         %       mln euros

Public sector                                               14,476.6          11,343.3      27.62        14,466.9
Private sector                                              76,224.8          69,743.6       9.29        71,891.3
Demand deposits                                             20,794.6          19,608.7       6.05        21,252.2
Savings accounts                                            15,941.4          14,975.6       6.45        15,472.4
Time deposits                                               21,795.6          21,668.1       0.59        19,155.9
REPOS                                                       17,666.3          13,351.1      32.32        15,928.3
Other accounts                                                  26.9             140.2    (80.83)            82.6
Non-resident sector                                         79,274.3          84,435.6     (6.11)        90,923.7
Deposits                                                    70,806.4          74,797.3     (5.34)        80,656.0
REPOS                                                        8,468.0           9,638.2    (12.14)        10,267.7
Total customer deposits                                    169,975.7         165,522.5       2.69       177,281.9
Debt securities                                             32,424.6          41,084.6    (21.08)        40,376.0
Subordinated debt                                           13,105.1          12,696.4       3.22        12,996.0
Total customer funds on-balance sheet                      215,505.4         219,303.5     (1.73)       230,653.8
Total managed funds (off-balance sheet)                     88,605.3          83,782.3       5.76        91,716.2
Mutual funds                                                66,424.1          63,227.4       5.06        68,227.0
Spain                                                       50,876.2          47,345.3       7.46        49,487.6
Abroad                                                      15,547.8          15,882.1     (2.10)        18,739.5
Pension funds                                               14,386.0          13,423.0       7.17        15,619.6
Spain                                                        5,228.6           4,798.1       8.97         5,443.8
Individuals                                                  4,547.9           4,110.5      10.64         4,698.0
Abroad                                                       9,157.4           8,624.9       6.17        10,175.8
Managed portfolios                                           7,795.2           7,131.9       9.30         7,869.6
Spain                                                        2,356.3           2,013.9      17.00         2,432.0
Abroad                                                       5,438.9           5,118.0       6.27         5,437.6
Total customer funds - excl. Argentina                     304,110.7         303,085.9       0.34       322,370.0
Total customer funds - Argentina                             4,624.6          14,633.0    (68.40)         9,008.9
Total customer funds on-balance sheet                      308,735.3         317,718.8       2.83       331,378.9




Loans
                                            30.09.2002            30.09.2001         02/01          31.12.01
                                             mln euros             mln euros             %         mln euros

Public sector                                  4,337.2               3,742.3         15.90           4,249.7
Private sector                                87,010.5              82,672.1          5.25          84,721.7
Secured loans                                 36,291.4              31,225.5         16.22          33,028.3
Other loans                                   50,719.1              51,446.6        (1.41)          51,693.4
Non-resident sector                           75,965.8              79,316.5        (4.22)          85,799.7
Secured loans                                 21,463.6              22,214.9        (3.38)          23,308.7
Other loans                                   54,502.3              57,101.5        (4.55)          62,491.0
Gross loans (ex-Argentina)                   167,313.6             165,730.9          0.95         174,771.1
Less: net allowance for loan losses            5,102.6               5,308.7        (3.88)           5,068.7
(ex-Argentina)
Net loans - ex-Argentina                     162,210.9             160,422.2          1.12         169,702.4
Net loans - Argentina                          2,131.9               6,914.4       (69.17)           4,119.7
Net loans - total                            164,342.8             167,336.6        (1.79)         173.822.0
Note: doubtful loans                           4,152.4               4,219.4        (1.59)           3,894.5
Public sector                                      3.5                   5.6       (36.84)               4.5
Private sector                                 1,055.8                 828.8         27.39             931.0
Non-resident sector                            3,093.1               3,385.1        (8.63)           2,959.0





Shareholders' equity and capital ratios*
                                                            30.09.2002          30.09.2001      02/01      31.12.01
                                                             mln euros           mln euros          %     mln euros

Subscribed capital stock                                       2,384.2             2,280.8       4.53       2,329.7
Paid-in surplus                                                9,685.6             8,080.4      19.86       8,651.0
Reserves                                                       5,461.2             5,444.6       0.31       5,466.4
Reserves at consolidated companies (net)                       (312.2)             1,528.5        ---       1,545.9
Total primary capital                                         17,218.8            17,334.3     (0.67)      17,993.0
Net attributable income                                        1,721.9             1,992.8    (13.59)       2,486.3
Treasury stock                                                  (16.9)              (51.6)    (67.15)        (21.4)
Distributed interim dividend                                   (369.6)             (342.7)       7.84       (685.4)
Shareholders' equity at period end                            18,554.2            18,932.8     (2.00)      19,772.5
Interim dividend pending distribution                               --                  --         --       (350.0)
Final dividend                                                      --                  --         --       (294.0)

Shareholders' equity after
Allocation of period end results                              18,554.2            18,932.8     (2.00)      19,128.4
Preferred shares                                               5,933.4             7,101.7    (16.45)       5,979.0
Minority interests                                               856.4             1,460.4    (41.36)       1,394.9
Shareholders' equity & minority interests                     25,344.0            27,494.9     (7.82)      26,502.4
Basic Capital (Tier I)                                        14,319.8            15,755.3     (9.11)      16,357.9
Supplementary Capital                                          6,922.8             6,788.4       1.98       8,239.1
Eligible capital                                              21,242.7            22,543.7     (5.77)      24,597.0
Risk-weighted assets (BIS criteria)                          196,556.7           198,037.4     (0.75)     204,310.5
BIS ratio* (1)                                                   10.81               11.38                    12.04
Tier I (1)                                                        7.29                7.96                     8.01
Excess (amount)                                                5,518.1             6,700.7    (17.65)       8,252.2


    * The impact of amortization in 2002 of preferred stock is reflected in 2001
      end year accounts.

Present estimated BIS ratio of 11.6% (Tier I 7.7%) includes Banesto and Bital
operations yet to be executed at 30.9.02





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