Issue of Equity

Banco Santander Central Hispano SA
18 December 2001

                                MATERIAL EVENT

Santander Central Hispano describes resolution of Executive Commission of Banco 
Santander Central Hispano (the 'bank') to increase the bank's capital with a 900
million euros issuance of shares. Current shareholders will not have 
preferential subscription rights.

The capital increase responds to the most recent recommendations of the Bank of 
Spain with respect to the composition of bank capital structures and will, if 
executed, permit the Group to redeem outstanding preferred stock issued by 
subsidiaries of the bank.

The capital increase will be carried out, market conditions permitting, by means
of a private placement.

The shares sold in connection with the capital increase have not and will not be
registered under the Securities Act of 1933 and may not be offered or sold in 
the United States absent an exemption from registration

Disclosure regarding Argentina

Within the environment in Argentina, SANTANDER CENTRAL HISPANO has adopted a 
number of measures aimed at preserving liquidity, optimizing the volume and 
structure of its capital and controlling credit and market risks, strengthening 
NPL coverage ratios and restructuring securities portfolios.

All of these measures implemented during the current period, have situated the 
Group in a better position and have helped to limit the negative impact of the 
recent events and of the debt exchange in which the Group has participated with 
a reduced portfolio in comparison with its presence in the system.

After having made sales of public debt, the net impact of which on the 
consolidated results of the Group until November 30 was - US$220 million before 
taxes and has already been reflected in the Group's results as of that date, in 
December, the Group participated in the new exchange proposed by the Argentinean
Government. Out of the total risk with the Argentinean Government and Provinces,
both exchangeable and non-exchangeable, the face value of which was US$2,541 
million, we tendered bonds and received loans in an amount of US$2,095 million 
(including 389 million of the Province special fiduciary fund exchange, at 
better conditions of interest and maturity than the general exchange).

Madrid, December 18th, 2001