9 Months Results - Part 1

Banco Santander Central Hispano SA
30 October 2000



PART 1

Performance during the quarter

The keys to the quarter: consolidation, development and integration of
new investments

Banco Santander Central Hispano carried out a series of measures and projects to
achieve a rapid and efficient integration of the new incorporations. These
activities enhance the Group's competitive position and enable it to take on
increasingly ambitious goals.

After the intense investment and fund capturing activity during the first half 
of the year, Santander Central Hispano focused in the third quarter on 
consolidating, developing and efficiently integrating into the Group the new 
entities and businesses acquired. The objective is to achieve the maximum level
of synergies and optimize the profitability of the investments, so that they
contribute positively to the Group's management goals and create shareholder
value.

The incorporation of the Serfin and Meridional groups in Latin America and of
the Totta and Credito Predial Portugues banks, the increased stake in Royal Bank
of Scotland (after its acquisition of NatWest) and in the rest of the  European
banks with whom there are alliances, as well as investments in new  economy
projects, provided a quantitative and qualitative step forward in Santander
Central Hispano's position.

As well as strengthening its strategic position, these operations added more
than four million new customers to the Group, contributing loans and managed 
funds amounting to more than EUR 54,100 million (Pta. 9.0 trillion). The Group's
activities in the third quarter raised the degree of integration in  the areas
and businesses which constitute the core elements of its strategy: the domestic
market, Latin America and Europe.  Progress was also made in various fronts of
the new economy.

Increasing the competitiveness in the domestic market

The actions taken in the third quarter boosted the already strong presence of
the Santander BCH and Banesto networks in the Spanish banking market.  These 
measures were aimed at raising the efficiency and productivity of business
activity, boosting the business drive of the networks, redesigning and
optimizing the networks within the multi-brand and multi-channel strategy and
improving the control and quality of processes.  Highlights include:

- The success of marketing campaigns to encourage customers to move into the  
three networks' low cost channels, which raised the number of Internet 
banking customers by close to 150,000 during the quarter.

- The completion in July of the establishment of the Unified Technological
Platform (RETO) in the 1,440 branches of the Banco Santander retail network,  
achieved in a record five months.  This was achieved after satisfactorily  
overcoming the initial problems stemming from the fast pace of this process. 
Moreover the new platform has provided the branches of the BCH network with 
200 new functions which improve the existing services provided.  The           
telephone and corporate electronic banking platforms were also completed.

Once it was fully established, the RETO platform optimization phase was begun, 
structured around 'best practices' and 'support and back-up for the network'
plans.  These aim to achieve an optimum level of use of new technology based on
the experience of the branches themselves.

- Launch of the second phase of the Customer Relation Management (CRM) plan,
which will develop a personal relation with the customer in a multi-channel  
environment (integration of Internet), lifting the level and efficiency of 
service.

- The network optimization plan for this year is close to completion having 
successfully met its objectives.  By the end of October all the 500 branches  
earmarked will have been closed, with a minimum impact on the volume of  
business (only 2.3% of business from the branches closed has been lost) and    a
significant improvement in costs.

- The obtaining of ISO 9001 and ISO 9002 quality certificates by the
Communications and Economic Research divisions and the General Secretariat,  
which joined those obtained by other divisions and Group subsidiaries in the 
first half.  This reflects the continued efforts made by Santander Central  
Hispano to improve their business, activity and service quality processes.

- Constant improvement in efficiency, profitability and customer business at  
the Santander, BCH and Banesto networks.  In the year to September 30, 2000,  
Banesto improved its efficiency ratio by 348 basis points to below 55% and it 
raised its ROE by 330 basis points to more than 22%.

Latin America: a decisive step in the consolidation of Project America

The steps taken and the incorporation of new entities during 2000 have enabled 
significant progress to be made in attaining the goals set in Project America.
Since its launch, the area has lifted its market share by more than 200 basis
points, improved its efficiency ratio by 860 basis points (from 61.4% in 1998 to
52.8%) and increased the ROE from 13% in 1998 to 19%.  Net attributable income
is on target to be double that of 1998.  All this while maintaining the
strictest risk management control.

The Group continues its selective loan concession policy in the region.  In  the
newly incorporated entities procedures have been implemented that allow  risks
to be managed so as to achieve quality levels similar to those of the rest of
the Group.

Project America is extending the use of a uniform management model in critical 
areas of the banks in the region (business, risk, human resources, technology,
quality).  Highlights of this include:

- The fulfillment of deadlines set in the Altair project for the creation of a 
  common platform of basic retail banking applications for the Group's banks  
  in the region.  Most of the functions of this platform are already operative 
  in Argentina, Chile, Venezuela and Colombia (first phase of the project),
  which is scheduled to be completed in the first half of 2001.  In addition, 
  the first viability and start-up studies in Brazil, Mexico and Puerto Rico 
  have been carried out.

- The launch in several countries (Chile, Mexico, Argentina and Brazil) of a  
  treasury service for corporate clients via internet, which links the 
  positions of a company in different countries.

- The adoption of measures to achieve cost savings, such as the integration
  into a single structure of the management of resources and costs of all
  the entities in each country, as well acting on specific costs by exploiting  
  the acquisition capacity of the combined entities and the experiences put 
  into practice in the rest of the Group.

The steps, developed under the guidelines of Project America, have improved  
the level of efficiency and increased the degree of diversification (geographic
and by businesses), which endow the results with high growth potential and 
stability.  This strategy is being recognized by the international financial
community, reflected in the awards 'Best Bank in Latin America'  and 'Best
Foreign Bank in Latin America' received from The Banker and Euromoney,
respectively.

Santander Central Hispano continues to examine new opportunities which may 
enable it to strengthen its position in those countries and business areas with
the greatest potential, or where its presence is smaller than desired.  A
consequence of this was the recent agreement between Banco de Venezuela and the
main shareholder of Banco Caracas to acquire the latter through a public tender
offer.  This will enable the Group to increase significantly its market share in
Venezuela to around 20%.

Europe, greater activity and contribution to the Group

The Santander Central Hispano Group improved its position during the third 
quarter in specific markets and  businesses, obtaining higher results from its 
extensive network of alliances.  The main highlights include:

- The operational integration of Banco Totta and Credito Predial Portugues with 
the Santander Central Hispano Portugal Group was begun.  This will create a 
common back office and technology for all the banks, while retaining certain 
special features at each one.  The process is scheduled to be completed by 
the fourth quarter of 2001, although most of the basic operations are 
expected to be working by January 2001.

- The strategic alliance with Societe Generale continues to be cemented with  
new collaboration projects.  Particularly noteworthy is the acquisition by  
BSN-Banif of Societe Generale's private banking business in Spain, which       
boosts the customer base of the Group's specialized subsidiary.  The           
collaboration projects already underway are estimated to generate over EUR 90  
million of synergies in 2001.

The European network of alliances not only provides a strategic advantage but
also contributes significantly to Group results.  In the first nine months of 
the year, the combined contribution of the banking allies was EUR 498 million, a
rise of 123% over the same period of 1999.

A decisive bid for e-business

The Group made determined progress during the third quarter in the four basic
fronts that comprise its global strategy in e-business: Internet to transform 
the bank, Patagon as a global financial site, strategic alliances with
telecommunication and media companies and venture capital investments in 
e-commerce projects. The main highlights include:

- The widespread use of intranet as Banco Santander Central Hispano's
  management and global communication tool.  As of October more than 25,000 of 
  the Bank's 29,000 employees in Spain were connected.

- The revamping of the transactional site of BCH's and Banco Santander's retail 
  networks.  The new design, mainly focused on sales, speeds up and facilitates 
  the access of users to a larger number of products and services, offering 
  specific sections for each customer profile.

- The launch of a virtual card with Sistemas 4B and MasterCard for small amount 
  Internet transactions.

- The start-up of Universia.net, 'the universities' portal for students',
  following its launch in Spain in the middle of September.  So far more than   
  40 universities, representing 90% of the Spanish university community have 
  joined this initiative or are in the process of doing so.

- The new developments of Patagon.  In Spain, Patagon Internet Bank underwent a 
  profound reorganization in the third quarter after the integration of Open  
  Bank.  This involved: re-designing its web page; launching the Patagon 
  Account (27,000 accounts and EUR 451 million captured), re-launching the 
  Financial Supermarket (14 fund managers and 130 mutual funds), improving on-
  line brokerage services (which currently cover 26 markets and another eight 
  via the telephone) and transferring the debt and loan portfoliod to Hispamer 
  Banco Financiero (HBF), in order to minimize credit and interest rate risks,
  in line with the strategic profile of a financial site.

  Abroad, the purchase of the US broker Key Trade Online has enabled            
 Patagon.com to extend its presence to seven countries and advance in its 
  strategy of consolidation as a global financial site.

- In the area of B2B, the most significant event was the launch of             
BtoBfactory an e-commerce platform that encompasses the Group's various B2B 
initiatives.  The investment made amounts to USD 150 million.  Initial 
projects include the 50/50 joint establishment with AT Kearney of an 
e-procurement site and the agreement to acquire an incubator of B2B projects 
in Latin America.

In B2C, Banco Santander Central Hispano and American Online AOL) have reached 
an agreement to for the development and commercialization of AOL's interactive 
services.  The alliance is based on the Prodigios project in which AOL has 
taken a 40% stake, equal to that held by Santander Central Hispano.  The
alliance commences with the launch of AOL Avant which, by distributing 
500,000 Internet access terminals, aims to make the Internet available to the 
same number of customer and employee households.  It will also provide a 20 
channel portal and an Internet Service Provider (ISP).

- The expansion of mobile telephone banking services through the WAP system, 
with the development of a fully transactional website which offers the 
fullest range of products and services.  Available via the Airtel and 
MoviStar networks, it envisages the incorporation of new functions 
differentiated by customer profile.  At the moment it has more than 40.000 
customers.

- The agreement between Banco Santander Central Hispano and Amena to integrate 
the latter into the mobile telephone payment system.  Currently being tested, 
the system aims to have 100,000 users and 30,000 participating commercial      
outlets within a year.

- The Group made two new investments in the third quarter via the investment 
fund 'Capital Riesgo Internet', bringing the number of projects to 13 and a 
total investment of EUR 31 million.

Lastly, mention should be made of the successful public subscription offering 
of Banco Santander Central Hispano, with an issue of 345 million new SCH shares
(including the green shoe option).  The capital increase was the largest by a
Spanish bank.  It received massive support from investors, as reflected in the
high level of orders received.  This underscores the confidence that  
individual and institutional investors place in the Bank's strategy and
projects.

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