Credit Ratings

Banco Santander Central Hispano SA
17 January 2001


Ratings Affirmed on Banco Santander Central Hispano and Entities

LONDON (Standard & Poor's CreditWire) Jan. 17, 2001---Standard
& Poor's today affirmed all its long- and short-term ratings on
Banco Santander Central Hispano S.A. (BSCH) and related entities--
including the parent's single-'A'-plus long-term and 'A-1' short
term counterparty credit ratings. At the same time, all the banks'
long-term ratings were removed from CreditWatch, where they had
been placed with negative implications on Nov. 21, 2000, following
the announcement of BSCH's successful bid for a 30% stake in Banco
do Estado de Sao Paolo (Banespa) in Brazil. The outlook on BSCH,
which was stable prior to the CreditWatch placement, is now
negative.

In  a  related  action,  Standard  & Poor's  also  affirmed  and  removed  from
CreditWatch with negative implications:

      --  All  its  ratings on  Banco  Santander Puerto Rico,
including the  single- 'A'    long-term    and 'A-1'  short-term
counterparty credit ratings;

      --  Its local currency single-'A' long-term and 'A-1'  short-term
counterparty credit ratings and its single 'A'-minus subordinated  debt  (which
had   been   placed  on  CreditWatch  Negative  on  Jan.3,  2001)   on   Banco
Santander-Chile; and

      --  Its   single 'A'  long-term  and   'A-1'  short-term
counterparty credit ratings on  Banco Totta & Acores, S.A.

(See list below for all ratings affected.)

The  affirmation of BSCH's ratings reflects the balance achieved  between  the
bank's  strong  position  in  its  domestic  market  and  its  improving  global
performance,  and  the  higher  leverage  and  credit  risk  arising  from   its
investments in Latin America.

BSCH  has a diversified balance sheet---with leading positions in all  segments
of the Spanish banking system---and a well-established network of alliances with
some  of  the main European banks. Consistent in its strategy, BSCH is  also
building a strong commercial banking franchise throughout Latin America.

BSCH was created in early 1999 from the merger between Banco Santander,S.A. and
Banco  Central Hispanoamericano, S.A. The integration process has  been  smooth,
consolidating  BSCH's  strong  market position in Spain, while  streamlining 
its global structure. Although  separate  commercial networks are being
maintained domestically,  BSCH has  integrated all of the back-office services,
information  systems,  and global business units of the two banks.


The  streamlining process and the closure of about 15% of the domestic
branch  network has led to a similar reduction in staff, and the  overall
effect  has  been  increased  efficiency and improved  bottom-line
profits.  Integration has not only focused on cost reductions, but  also
on  improving  cross-selling opportunities--the main  rationale  behind
the  maintenance of separate networks. Optimizing this multibrand  model
in  order  to  boost  consolidated revenues  is  an  ongoing  challenge,
however.

Efficiency gains have led to better performances in all BSCH's business units in
the past two years. Besides the benefits reaped from the cost containment
measures, consolidated profitability has gradually improved owing to the
increasing  contribution from Banesto, rising profit contributions  from Latin
American subsidiaries and higher noninterest income resulting from business
diversification.  The group also  benefits from continuing improvement in the 
quality of its  domestic lending, which represents about half of  the  
consolidated loan book. Against a  background of a strong economic environment,
healthy asset quality in Spain is ensured by BSCH's high credit standards and
Banesto's improved creditworthiness.

BSCH's strong position in its domestic market and the good performance of some
of its more established subsidiaries in Latin America is  helping the group to
consolidate its Latin American franchise.

Following  several  acquisitions  in 2000,  BSCH's  affiliates  in  the
region are poised to contribute one-third of the group's loans and  a
higher  portion  of  net income. This high contribution  of  the  Latin
American  banks  to  the consolidated accounts increases  the  group's
credit  risk profile, exposing BSCH to the greater volatility of  the
Latin  American  banking  sector.  To  date,  however,  Latin  American
subsidiaries  have  gradually increased their contribution  to  BSCH's
results,  and the group has benefited from diversification  within  the
region.  The  recent  surge  in investments,  however,  especially  the
acquisition of Banespa, poses the challenge of improving the performance
of  the  acquired banks to levels that will  compensate  for the higher risk
entailed in Latin American banking.

Despite the bank's constant recourse to the capital markets to
finance  its acquisitions in Latin America and Europe,  BSCH's  rapid
pace  of  investment and, in particular, the acquisition  of  Banespa,
have  strained the coverage of risks by core equity. Even if BSCH maintains
stronger regulatory ratios, these paint a  rather flattering  picture for a bank
that has significant exposure to  emerging markets  and  that relies heavily on
subordinated debt  and  preferred stock  in  its  capital  structures. Thus,
BSCH's  Tier  1  Bank  for International  Settlements ratio--excluding 
preferred  stock--has fallen gradually to close to 4% at year-end 2000, from
6.2% in the mid-1990s,  a  weaker level than that of its European  peers. 
Concerns  about higher leverage are somewhat offset by the substantial  hidden
gains  in  BSCH's industrial and financial portfolios, and the  bank's
strong and improving profitability. In the past, the bank  has  used
these  capital gains from the sale of group companies  to  write  off
part of  the  goodwill accumulated by the Latin American  acquisitions,
and this policy is expected to continue in the future.

The  negative  outlook  reflects the fact that BSCH's  riskier  profile
after  the rapid investment in Latin America is covered by a relatively
lower proportion of tangible common equity; if this situation does  not
improve,  a rating downgrade could occur. The bank's higher leverage
is  mitigated  by  latent  gains on its equity  portfolio  and  by  the
group's  improving  performance. Hidden gains on the  equity  portfolio
could  be  quite volatile, however, potentially reducing the  financial
flexibility the bank currently enjoys.  Increased exposure to Latin America has
heightened BSCH's  vulnerability  to  changing economic conditions at  a  time 
when  core  capital  is  stretched.  Therefore, deterioration  in the  economic
situation of the major Latin American countries, or  a  substantial
weakening  of  the performances of the bank's subsidiaries  would
also  put downward pressure on BSCH's ratings, Standard & Poor's  said.
- - CreditWire

   RATINGS AFFIRMED AND WITHDRAWN FROM CREDITWATCH WITH NEGATIVE
   IMPLICATIONS; OUTLOOKS REVISED TO NEGATIVE
                                                Rating
Banco Santander Central Hispano S.A.
   Long-term counterparty credit rating          A+
   Long-term certificate of deposit              A+
   Senior unsecured debt                         A+
   Subordinated debt                             A
  
BCH Capital, Ltd.
   Preference stock(l)                           BBB+

BCH Cayman Islands Ltd.
   Subordinated debt(l)                          A

BCH Eurocapital, Ltd.
   Preference stock(l)                           BBB+

BCH Financial Services, Ltd.
   Subordinated debt(l)                          A
   
BCH International Finance, Ltd.
   Senior unsecured debt(l)                      A+


BSCH Finance Ltd.
   Preference stock(l)                           BBB+

Banco Espanol de Credito S.A.
   Long-term counterparty credit rating          A+
   Long-term certificate of deposit              A+

Banesto Finance Ltd.
   Senior unsecured debt(2)                      A+
   Subordinated debt(2)                          A
  
Banesto Issuances Ltd.
   Senior unsecured debt(2)                      A+
   Subordinated debt(2)                          A

Central Hispano International, Inc.

Preferred stock(l)                               BBB+

Santander Finance B.V.
   Subordinated debt(l)                          A
 
BSCH Issuances Ltd.
   Senior unsecured debt(l)                      A+
   Subordinated debt (1)                         A
  
BSCH International Ltd.
   Senior unsecured debt(l)                      A+
   Subordinated debt(l)                          A

Banco Totta & Acores, S.A.
   Counterparty credit ratings                A/A-1
   Certificates of deposit                    A/A-1
Totta & Acores Financing, Ltd.
   Preference stock(3)                        BBB+
  Pinto Totta International Finance Ltd.
   Preference stock(3)                        BBB+

Banco Santander-Chile
   Local currency counterparty credit ratings A/A-1

Banco Santander Puerto Rico
   Counterparty credit ratings                A/A-1
   Certificates of deposit                    A/A-1
   Senior unsecured debt                      A
   Preferred stock                            BBB+
   Commercial paper                          A-1

Santander Overseas Bank, Puerto Rico
   Preferred stock(l)                         BBB+

        
RATINGS AFFIRMED
Banco Santander Central Hispano, S.A.
   Short-term counterparty credit rating      A-1
   Short-term certificate of deposit          A-1
   Commercial paper                           A-1

Banco Espanol de Credito, S.A.
   Short-term counterparty credit rating      A-1
   Short-term certificate of deposit          A-1
  
BCH North American Capital Corp,
    Commercial paper(l)                       A-1

Banesto (DE) Inc.
   Commercial paper(2)                        A-1

Banesto Issuances Ltd.
   Commercial paper(2)                        A-1

Santander Central Hispano Finance (Delaware) Inc.
   Commercial paper(l)                        A-1

BSCH International Ltd.
   Commercial paper(l)                        A-1

BSCH Issuances Ltd.
   Short-term debt(l)                         A-1
  
Banesto Finance Ltd.
   Short-term debt(2)                         A-1
 
BCH International Finance, Ltd.
   Short term debt(l)                         A-1

(1)Guaranteed by Banco Santander Central Hispano, S.A.
(2)Guaranteed by Banco Espanol de Credito, S.A,
(3)Guaranteed by Banco Totta & Acore