Proposed capital issue

Banco Santander Central Hispano SA
08 September 2004


Banco Santander Central Hispano, S.A.


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE US, CANADA,
AUSTRALIA OR JAPAN

FOR IMMEDIATE RELEASE


Proposed issuance of €500 million - €750 million preference share capital to be
              guaranteed by Banco Santander Central Hispano, S.A.


                                                                8 September 2004


Banco Santander Central Hispano, S.A. ('Banco Santander') today announces the
filing of a prospectus with the Comision Nacional del Mercado de Valores (the
Spanish securities regulator) on 7 September 2004, relating to the proposed
issuance of €500 million of preference shares. The value of shares to be issued
may be increased up to €750 million at the issuer's discretion. The issue, which
will be guaranteed by Banco Santander, will be made by Santander Finance
Capital, S.A. Unipersonal, which is a wholly owned subsidiary of Banco
Santander. The preference shares will be offered in Spain mainly to retail
investors.

Banco Santander intends to use the proceeds raised through this capital
placement for general operational purposes. The issue forms part of Banco
Santander's overall capital structure and cost management strategy, aimed at
creating a more efficient capital base.

During July, Banco Santander redeemed €1,000 million of outstanding preference
shares (BSCH Finance Limited Serie O) and issued €750 million of new preference
shares (Santander Finance Capital, S.A. Unipersonal Serie III) both qualifying
as Tier 1 Capital. In addition, on September 1, 2004 Banco Santander redeemed a
further €332 million of outstanding preference shares (BSCH Finance Limited
Serie P) qualifying as Tier 1 Capital.

In its announcement of the recommended acquisition of Abbey National plc ('Abbey
') on July 26, 2004, Banco Santander set out its Tier 1 Capital ratio on a
standalone basis and the Tier 1 Capital ratio of the combined group, after
adjustments and the special dividend of 25 pence per Abbey ordinary share to be
paid by Abbey, as at June 30, 2004. These figures were 8.1% and 8.1%
respectively, indicating that the Tier 1 Capital ratio of Banco Santander would
be maintained following completion of the acquisition of Abbey.

Based on the Tier 1 Capital ratios of Banco Santander and Abbey as at June 30,
2004 and taking into account the capital changes referred to above, including
the planned issuance announced today (assuming €750 million of preference shares
are issued), the Tier 1 Capital ratio of Banco Santander on a standalone basis
and the Tier 1 Capital ratio of the combined group, after adjustments and the
special dividend referred to above, would be 8.2% and 8.1% respectively.

The Core Capital ratio of the combined group, after adjustments and the special
dividend referred to above, as at June 30, 2004 of 5.8% as set out in the
announcement of July 26, 2004 is not affected by these changes in Banco
Santander's capital structure.

The full impact of the capital changes already completed and planned is shown in
the tables below, assuming €750 million of preference shares are issued.



Impact on Banco Santander Capital Ratios

€bn                                            Banco Santander (June 04)   Banco Santander (June 04 adjusted)

RWA                                                                217.1                                217.2
Core Capital                                                        13.8                                 13.8
Core Capital (%)                                                     6.4                                  6.4
Tier 1 Capital                                                      17.6                                 17.8
Tier 1 Capital (%)                                                   8.1                                  8.2
Tier 2 Capital                                                       8.6                                  8.6
Total Capital                                                       26.3                                 26.4
Total Capital (%)                                                   12.1                                 12.2



Impact on Combined Group Capital Ratios

€bn                                  Banco Santander and Abbey (June 04)   Banco Santander and Abbey (June 04
                                                                                                    adjusted)

RWA                                                                303.7                                303.7
Core Capital                                                        17.7                                 17.7
Core Capital (%)                                                     5.8                                  5.8
Tier 1 Capital                                                      24.5                                 24.7
Tier 1 Capital (%)                                                   8.1                                  8.1
Tier 2 Capital                                                      11.5                                 11.6
Total Capital                                                       36.0                                 36.2
Total Capital (%)                                                   11.9                                 11.9



Enquiries:

Banco Santander
Keith Grant (Head of International Media)                   + 34 91 289 5206
Peter Greiff (Deputy Head of International Media)           + 34 91 289 5207

Maitland
Angus Maitland                                              + 44 207 379 5151

Brunswick
Rurik Ingram                                                + 44 207 404 5959


Goldman Sachs International ('Goldman Sachs'), which is regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for Banco
Santander as joint financial adviser and no one else in connection with the
recommended acquisition of Abbey by Banco Santander (the 'Acquisition') and will
not be responsible to anyone other than Banco Santander for providing the
protections afforded to clients of Goldman Sachs nor for providing advice in
relation to the Acquisition, or any matter referred to herein.

J.P. Morgan plc ('JPMorgan'), which is regulated in the United Kingdom by the
Financial Services Authority, is acting exclusively for Banco Santander as joint
financial adviser and no one else in connection with the Acquisition and will
not be responsible to anyone other than Banco Santander for providing the
protections afforded to clients of JPMorgan nor for providing advice in relation
to the Acquisition, or any matter referred to herein.

Merrill Lynch International ('Merrill Lynch'), which is regulated in the United
Kingdom by the Financial Services Authority, is acting exclusively for Banco
Santander as joint financial adviser and no one else in connection with the
Acquisition and will not be responsible to anyone other than Banco Santander for
providing the protections afforded to clients of Merrill Lynch nor for providing
advice in relation to the Acquisition, or any matter referred to herein.




                      This information is provided by RNS
            The company news service from the London Stock Exchange