Strategic Alliance etc

Banco Santander Central Hispano SA
31 January 2000


                        
The banking Groups Banco Santander Central Hispano and Societe Generale, whose 
cooperation goes back to 1194, want to report the progress made in their
strategic alliance.  Both Groups share the view that opportunities exist to
create value for then shareholders by combining certain business lines and
launching new activities.

Following a study of different areas of collaboration, they have decided
initially to develop cooperation agreements and specific joint ventures within
the following business lines.


1.  Asset Management,
2.  Specialised Financial Services
3.  Wholesale & investment Banking
4.  Retail Banking
5.  Internet Banking & Brokerage

The foregoing forms the basis for the development of a Strategic Alliance among
equals between the two Groups, which needs to be accompanied by the
participation of each one in the capital of the other.  It is now the intention
of both Groups that SG will take a participation of up to 3% in BSCH and BSCH
will increase its participation to up to 7% in SG.

As a consequence of the above, both Groups have reached the following agreements
which will be developed in due course.


A/ General Organisational Principles

As  a general rule, Banco Santander Central Hispano and Societe Generale will
take equal stakes in any joint company set up  as a result of this agreement.

In order to guarantee rapid implementation and efficient management  structures,
the following governance arrangements will be established subject to legal
constraints.

A Joint Business Committee will be set up for  each  business line.   These  
committees  will  supervise their respective technical  agreements  and  will 
be responsible for further developing any new opportunities that may arise.

In any joint company, the Board of Directors will be named by mutual agreement
and each Group will have the same number of seats on the Board.

The CEO will be chosen on the basis of competence and will have wide powers
delegated to him by the Board.

Additionally,  one representative from each Institution will simultaneously he
appointed Member of the Board of Directors of the other Institution.


B/  Development of the Industrial Plan

1)  Asset Management

    BSCH and SG undertake to:

-   Set up a joint venture with a view to acquiring fund management companies   
    outside France and Spain.

-   Sign management delegation agreements for a number of asset-classes.

-   Cooperate  in  the macro economic research, equity  research and  asset     
   allocation areas. A monthly meeting will be established  to  share market    
  views and to facilitate the common understanding of the investment teams.

-   Share 'state of the art' processing IT solutions, and control and           
   performance attribution models.

-   Jointly analyse the launching of new products in the retail areas.

An asset management Joint Business Committee will be responsible for managing
the pooling of these businesses and  deciding on foreign investments.


2)  Specialised Financial Services.

    BSCH  and SG intend to develop commercial agreements and joint companies in 
   the following areas of business:

-   Consumer Credit
-   Mortgage Loans for individual customers
-   Point-of-Sale financing for cars and boats
-   Long-term leasing of car and truck fleets
-   Company financing and 'Vendor programs'
-   Leasing
-   Computer equipment leasing

Where feasible, joint companies will be created by the merger of  existing ones
and new companies will be created on a 50-50 basis to tackle new markets.

3)  Wholesale & Investment Banking

In  this business area, BSCH and SG intend to put in place the conditions  for 
cross-fertilising their respective capabilities, leveraging their distribution
capacities and cutting costs in those  sectors  where  this  is possible  by 
pooling certain resources.

These areas of cooperation will include, as a first step:

-   Mergers  and acquisitions: cross-border business  worldwide
    involving Spain, Portugal, Latin America.

-   Convertible bond origination and distribution, and Warrant structuring  and 
   distribution to retail and  institutional investors in Spain, Portugal and   
  Latin America. 

-   Emerging market equities and research: establishment of  a
    common  marketing team to cover Latin America under the responsibility of   
   BSCH, with one or more common  marketing teams being established  for  the   
  remaining emerging markets, under the responsibility of SG.

-   Trade  Finance and local banking services in Latin  America and  Asia:  
    SG  will  provide the Trade Finance  and  local banking  services  in Asia  
   for BSCH's clients,  while  BSCH will  provide the same services in Latin    
  America  for  SG's clients.

-   A  Joint  Business Committee will be appointed to supervise the  areas  of  
   cooperation outlined above, as well as to look into further opportunities    
  for collaboration.

4)  Retail Banking and Banking Services

BSCH and SG will establish a Coordination Committee to work towards the
following objectives.


-   The  two-way  referral of business with a view to providing to the          
   customers  of each  bank a similar level of services to that which they      
  would receive in their own.

-   The preferential channeling of business between the two banks in the area   
   of operations,  especially that related to the movement of funds.

-   The development of common platforms in the area of credit and debit cards,  
   processing and ATMs

-   The joint development of products in the area of Banking Services, Treasury 
   and Cash Management/Cash Pooling, International Payment processing and       
  Trade services 
                 
-   The sharing of best practices in areas such as Marketing, Database          
   Marketing, Telephone Banking, Internet and Service Quality.

5)  Internet Hanking & Brokerage.

Because of the  importance  of  developments  linked  to internet for financial
services, BSCH and SG intend  to  set a common strategy in this area.

With this in mind, SG will further strengthen its e-brokerage  arm through
Fimatex, and BSCH is similarly planning to further develop its  stand-alone  
e-banking subsidiary Open Bank.  Both Groups are convinced that, by joining 
forces in this  area,  potential synergies could be achieved and new
opportunities for organic growth or acquisitions could be more easily realised.
The  Internet Banking and Brokerage Business Committee will be responsible for
evaluating possible areas of collaboration in  this  field, sharing analyses and
experiences and making proposals that will result in the common development of
meaningful  propositions, including a possible  common European platform.  As a
first  step,  a Cooperation agreement between Fimatex Germany and Santander
Direkt Bank in Germany will be established.


Summary 4th Quarter Results

Balance sheet                            31.12.99     31.12.98   Variation (%)
                            Euro MM      Pta. MM.     Pta. MM.      1999/1998

Total Assets                256,438.5    42,667,768   39,234,602         8.75

Loans                       127,472.1    21,209,569   18,698,985        13.43
Customer funds              232,232.3    38,640,197   33,575,974        15.08
  Customer deposits         153,756.6    25,582,941   22,011,372        16.23
  Mutual funds               59,840.3     9,956,596    9,113,471         9.25
  Pension funds              13,071.6     2,174,933    1,568,813        38.64
  Managed portfolios          5,563.7       925,727      882,318         4.92
Capital accounts              8,026.2     1,335,455    1,460,504        (8.56)
Total managed funds         334,914.1    55,725,024   50,799,204         9.70

Income statement            January - December 1999   Jan. - Dec. Variation (%)
                                                         1998
                         Euro MM            Pta. MM       Pta.MM     1999/1998
Net interest revenue     6,669.9          1,109,784    1,029,950          7.75
Basic revenue            9,747.1          1,621,776    1,487,681          9.01
Net operating income     3,479.0            578,853      490,736         17.96
Income before taxes      2,715.6            451,835      358,398         26.07
Net consolidated income  2,172.0            361,395      285,320         26.66
Net attributable income  1,575.1            262,076      207,945         26.03

Ratios

                        31.12.99           31.12.99     31.12.98

ROA                                            0.88         0.73
RORWA                                          1.50         1.28
ROE                                           18.51        16.04
Personnel and general
 expenses/net operating
 revenue                                      57.70        62.11
BIS ratio                                     12.03        12.48
Tier 1                                         8.19         8.42
NPL ratio                                      1.97         1.86
NPL coverage                                 120.84       120.13

Shares and Shareholders*
Number of shareholders                       761,086     942,426
Shares outstanding (millions)                  3,668       3,668
Share price (Euro, Pta.)    11.24              1,870       1,410
Market capitalization
 (millions)              41,226.0          6,859,428   5,163,848
Net attributable income
 per share (Euro, Pta.)      0.43               71.5        56.5
P/E ratio                                      26.17       24.83

Other data**
Number of branches                              8,473      9,093
- Spain                                         6,011      6,463
- Abroad                                        2,462      2,630
Number of employees                            95,442    106,485
- Spain                                        45,175     49,598
- Abroad                                       50,267     56,887

(*)  All per share data have been adjusted for the stock split carried out on
11.06.99.
(**) Includes the total number of branches and employees of Banco Santiago,
Bancosur, Banco Tornquist and Banco de Asuncion, at all relevant dates.

Note:  The information contained in this report has not been audited.  However,
it has been produced utilizing generally accepted accounting principles and
criteria.  All figures for December 1998 are proforma and basically correspond
to the aggregate of the Santander and BCH Groups.
           


Performance during the quarter
   
Mission accomplished in the first year of Santander Central Hispano

During the fourth quarter, Santander Central Hispano took major steps to
achieve the ambitious business, strategic and integration goals set for
1999

The strong activity developed by the Santander Central Hispano Group during the
fourth quarter of 1999 spurred fulfillment of the goals set in Program ONE for
its first year.

The Group's activities revolved around four basic areas: the integration and
increased efficiency of the organization, the business drive of the networks in
Spain, strengthening of the Group's strategic position in Europe and further
consolidation in Latin America.

A single and efficient organization

The process of technological, operational and functional integration proceeded
according to plan in 1999, with completion due in the year 2000.  The objective
this year is to forge a single and efficient organization which supports the
Group in Spain, maintaining the multi-brand strategy, and in the other countries
where it operates.  Among the main measures taken during the fourth quarter
were:

- Launch of the Technological Integration Project to develop a common IT
platform.  This will begin to be established in BSCH's retail networks as of
February 19, in a gradual process lasting the whole year.  In order to do this,
10,000 employees have received special training and close to 8,000 computers
have been replaced.

In parallel, BSCH carried out the last contingency tests relating to the Y2K
effect, which went off without problems.

- Design of the Intranet Project as a new platform of global corporate
communication (it already existed in some areas, such as Wholesale and
Investment Banking), which will replace and improve the existing channels.  Its
development, in parallel with the Technological Integration Project, will
incorporate new management and information tools which will facilitate team
work.

At the moment, 700 branches of the Banco Santander and BCH networks and the
Central Services in Spain have the necessary infrastructure to establish
Intranet.  This year, some 20,000 work posts, excluding the international units,
will have access to this system.

The program will be developed in three phases, starting in the fourth quarter of
1999 and ending in the first half of 2001.

- Significant progress was made in the unification of retail banking risks:
central and regional structures, integration of working teams, the re-design of
processes, the adoption of best practices, etc.  The goal is a single and
integrated risk management system at customer level (during admission, analysis
and recovery), independent of the distribution network from which they proceed,
and without losing flexibility or speed.

- The drawing up of a single and universal Quality Model at BSCH, integrating
the best practices of both banks, which will be extended to the rest of
subsidiaries and geographic areas during this year.  This model has begun to be
validated by external auditors, as shown by the ISO 9001 certificates obtained
by Banco Santander Central Hispano and Hispamer.

- Progress in the optimization of the structure of subsidiaries: legal
formalization of the merger of fund management entities; restructuring the
investment banking activities in Spain - custody, securities, corporate (grouped
under Santander Central Hispano Investment) and private banking (under BSN
Banif), integration of specialized financing units in Spain under the holding
Hispamer Banco Financiero.

As well as the above-mentioned measures, whose positive effect on efficiency
will become apparent in the months to come, Banco Santander Central Hispano has
increased efforts to achieve a quicker optimization of the organization, a key
aspect for attaining the cost savings envisaged in the merger and fulfilling the
goals of Program ONE.

The steps taken during the fourth quarter were simultaneously developed on three
fronts: the optimization of the branch networks, the rationalization of
headcount and trimming of general expenses.

- In 1999 the number of branches was cut by 425, either through closures or
transferring business to other branches of the same or a different network.  The
reduction was made with no significant loss of business (less than 2%), which
places it among the best practices worldwide.  Of note also was the streamlining
and unification of regional support structures for BSCH's retail networks
(resources, risks).

- Networks were also streamlined in some Latin American countries.

- The goals for headcount rationalization were met.  The number of Group
employees worldwide was reduced to 95,442 at the end of 1999 from 106,485 (in
like-for-like terms) a year earlier.

- The first phases of plans to trim general expenses offset the impact of
increased investments during the period.  General expenses rose by only 0.2%,
compared with increases of more than 10% in revenues and business volumes.

An energetic and fruitful business drive

The focus of effort on the merger and optimization processes did not distract
Banco Santander Central Hispano from its vision, which is to make customers the
center of gravity.  The Group was one of the most active promoters of new
distribution channels and financial products, in response to customers'
increasingly demanding needs and the markets new requirements.  The main actions
during the fourth quarter included:

- Fulfillment of the marketing objectives for unit linked products after the
promotion campaign which began last September.  More than Pta. 200 billion of
premium income was obtained from 42,500 new policies.

The Group's mutual funds also continued to outperform the market during the last
months of 1999.  The continuous rise in market share enabled the year to end at
all-time highs.

- Launch of Mobile Telephone Banking with WAP protocol (Internet banking via
mobile phone) at Santander Central Hispano and Banesto and of Channel BSCH
(Interactive Digital TV Banking).

These new remote channels represent a new step in the Group's multi-channel
strategy, which was strongly boosted during the fourth quarter.  The
incorporation of new internet banking services and the launch of Broker.com,
among other actions, increased the total number of the Group's Internet
customers in Spain to over 200,000, including the subsidiaries in Spain and
Latin America, the number amounted to more than 300,000.

This put the Group in a very strong starting position in its strategy of
strengthening and broadening Internet business, on three fronts:

- Continue to provide banking and securities' services to support the
traditional networks

- Bolster Open Bank as an internet bank

- Invest in companies which conduct their business via Internet.

A stronger strategic position in europe

The activities developed during the fourth quarter led Banco Santander Central
Hispano to strengthen its position significantly in those regions considered as
strategic for the Group's future development.

In Europe, the negotiations to establish a stronger presence in Portugal were
concluded successfully, while the support provided to one of its partners has
opened up a process that will enable the Group to participate in the
consolidation of the British banking sector:

- In Portugal, Banco Santander Central Hispano reached an agreement to acquire
Banco Totta & Acores and Credito Predial Portugues, after the commitments
subscribed with the Champalimaud Group, and Caixa Geral de Depositors Under this
agreement, before June 30, 2000, Mr Antonio de Sommer Champalimaud will receive
shares in Banco Santander Central Hispano equivalent to 4.14% of its capital, as
approved by the extraordinary shares holders' meeting of Banco Santander Central
Hispano held on January 18, 2000.  Mr Champalimaud has joined the Bank's Board. 
After acquiring both banks, the BSCH Group will become the fourth largest
banking group in Portugal with a market share of more than 10%.

- In the United Kingdom, Banco Santander Central Hispano and The Royal Bank of
Scotland Group signed a collaboration agreement relating to the bid launched by
the latter for NatWest.

As a strategic partner and the largest shareholder of The Royal Bank of Scotland
(9.64%), Banco Santander Central Hispano has pledged its votes in favor of the
offer of its ally and is willing to subscribe shares amounting to £1,200 million
(around Pta. 320 billion).  In exchange, BSCH will deliver new shares (whose
issue was approved at the aforementioned extraordinary shareholders' meeting)
for the same amount which will be placed among strategic European bank
investors. 

Following this agreement, which depends on the success of the takeover, Banco
Santander Central Hispano would have a stake of more than 7% of the new bank,
the second largest banking group in the UK.

Consolidating the Group's position in Latin America

The Santander Central Hispano Group continued to implement measures to improve
the level of management and efficiency of its subsidiaries, while lifting its
stake in profitable and low risk businesses, and in regions where its presence
is not so strong.  Of note were:

- The conclusion of the legal and accounting aspects of the merger of the
Peruvian banks, Banco Santander Peru and Bancosur.

- The agreements to acquire various pension fund management entitles:

In Peru, the purchase of 100% of Union, which together with Nueva Vida, raises
the Group's market share to 25% of Participants and 29% of managed assets.

In Colombia, the acquisition of 100% of Davivir and 75% of Colmena bring the
Group to the Colombian pensions market, with an 18% share of participants.

An agreement was reached in January 2000 to acquire 97% of Meriodional Financial
Group, which includes the Meridional (retail) and Bozano Simonsen (investment)
banks.

This operation forms part of the Group's strategy of selectively increasing its
presence in south and southeast Brazil, which generates 78% of the country's
GDP.  Banco Meridional is the largest private bank in the state of Rio Grande do
Sul, with a market share of 25% of the private banking sector and 10% of the
whole banking system.

The operation, which is subject to , will make Santander Central
Hispano the fifth largest private banking group in Brazil, with assets of
US$12,500 million, 1.7 million customers and 704 points of sale (401 branches
and 303 customer assistance outlets).  Banco Meridional has been restructured
and has one of the best ratios of employees per branch in Brazil.

Banco Bozano is one of the leading investment banks in Brazil, with long
experience in advisory services, privatizations, origination, etc and has been
selected best investment bank in Brazil three years running by Euromoney.

- Lastly, the Group also acquired Merrill Lynch's business in Puerto Rico of
securities sales to individual customers, which enables it to attain critical
mass and a market share which would have taken five years to achieve through
natural business growth.  The operation gives the Group high net worth customers
and facilitates cross-selling of products.

The Group's strong activity during the fourth quarter was in many cases the
result of processes and activities developed throughout 1999.

In order to facilitate the review of the Group's activities during its first
year, the main highlights are set out in chronological order.


Merger, integration and strategic positioning process. Summary of 1999

JANUARY

* The merger is announced on January 15: by then a series of measures
  essential for the merger's subsequent development had already been
  adopted, including the establishment of the legal head office and the
  operational headquarters, the composition of the administration and senior   
  management bodies and the share exchange of the two banks. In addition, and   
 already focusing on business, the income goals for 1999-2000 were set, cost   
  savings were estimated and a multi-brand strategy developed: Banco Santander, 
 BCH and Banesto. 
* Presentation of the merger project to the National Securities Commission    
  () and to Spanish and foreign analysts and institutional investors. 
* Work started to integrate IT systems and optimize branch networks.

FEBRUARY     

* The merger project is inscribed in the Madrid and Santander Mercantile     
  Registers.
* The Group's new corporate image is launched. 

MARCH 

* Employment Protocol Agreement with the main trade unions. 
* Senior management convention attended by 1,700 Group executives from all over 
 the world at which:
  
  -  The new Bank's corporate culture and main management guidelines are
     announced. 
  -  Goals by divisions are set for 1999 and 2000 under Program ONE.

* Shareholder meetings of Banco Santander and Banco Central Hispanoamericano    
 approve the merger of both banks. 

APRIL 

* Presentation of the merger prospectus and registration of the merger deed.    
 Legal birth of the new hank. 
* On April 17 the Board of Banco Santander Central Hispano meets for the first  
 time. 
* On April 19 the SCH shares begin to trade in Spain and in international       
 markets. 

MAY 

* Operational integration of treasury, the first of those envisaged during 1999 
 in the Wholesale Banking and Asset Management areas.
* Integration of the internal audit departments. 
* Creation of the Internal Communication Committee, a key aspect of management  
 at BSCH as regards the Group's configuration and cohesion. 
* Sale of the stake in Banco Comercial Portugues, which produced a capital gain 
 of Pta. 81,000 million.
* Purchase from the Luksic Group of its stake in the OHCH holding, whereby      
 Banco Santander Central Hispano attained 43.5% of Banco Santiago (Chile), 90%  
of Bancosur (Peru), 78% of Banco Asuncion (Paraguay) and the whole of Banco    
Tornquist (Argentina).

JUNE
 
* Launch of a plan to trim general expenses. 
* Acquisition of an additional 16.3% of Airtel Movil and subsequent transfer of 
 5.4% to two Spanish savings banks, bringing the holding to 25%.
* Merger of the banks in Brazil.
* First agreement with the Portuguese financier Mr. Antonio de Sommer    
  Champalimaud. 
* Integration of the Management Control departments. 
* Integration of the departments of General Auditing.
* Integration of branches abroad.
* Unification of Internal Suggestion Schemes.

JULY

* In accordance with the report drawn up by the Fair Trade Authority, which 
  sets out the limits of stakes held by banks in public service companies,    
  Banco Santander Central Hispano sold its stake in Retevision, reduced its 
  holdinq in Endesa, committed itself to the sale of Uni2 and focused its  
  presence in the electricity sector through Union Fenosa.
* Recognition of the ISO certifications in the merged areas: Asset Management,  
 Telephone Banking and Multimedia, Training, Electronic Banking, Corporate      
Banking, Internal Auditing and Consultation Line (for the design, management   
and resolution of all types of legal advice in the retail networks).
* New quality certifications obtained in Bansafina, Gestarsa, Hispamer    
  (management of financial services and consumer area) and Banesto (Telephone  
  Banking). 
* Catalan Quality Award granted by the regional government of Catalonia to   
  BCH's network of corporate branches in Catalonia. 
* The International Private Banking area completes its integration. 

AUGUST 

* The SCH share begins to trade on the Milan stock exchange.
* The stake in San Paolo-IMI reaches 6.9% 

SEPTEMBER 

* Integration of Corporate Banking completed.
* Closure of the IT center at Pinar del Rey and upgrading of the two remaining  
 centers (optimizing costs and increasing total processing capacity). 
* Commencement of the first phase of the Intranet Project, the new single     
  communication platform.
* The SCH share joins the selective Euro Stoxx 50 index.
* After several stages, the stake in Societe Generale reaches 5.06%. 
* Redemption of the shares of minority interests of Hispamer Banco Financiero.  
 BSCH acquires full ownership. Massive launch of unit-linked products,          
generating Pta. 200,000 million in premium income.
* Launch of Banco Santander Central Hispano Broker.com. 
* Legal merger of Banco Santander's and BCH's broker-dealers. 

OCTOBER 

* Implementation of the new Internal Risk model.
* Quality certification obtained for adapting IT systems to the Y2K effect.
* Launch of the Technological Integration Project. 
* Launch of mobile telephone banking with WAP protocol.
* Agreement to purchase the pension fund management companies Union (Peru) and  
 Davivir and Colmena (Colombia).

NOVEMBER

* Legal merger of the banks in Peru.
* Legal merger of the mutual fund management entities (Gesbansander, BCH
  Gestion and Banesto Fondos).
* Development or a single and universal quality model at Santander
  Central Hispano.
* Integration of specialized financing units (Hispamer, Bansarina,
  Gestarsa) under HBF Banco Financiero (new name of Hispamer Banco Financiero)
* Definitive agreement with the Champalimaud Group to acquire Banco Totta
  & Acores and Credito Predial Portugues
* Agreement with The Royal Bank of Scotland in relation to the latter's bid for 
 Natwest, providing financial support.

  DECEMBER

* The plan to optimize branch networks in 1999 is completed, with the
  closure of 425 branches.
* Launch of the private banking in Spain project through BSN-Banif. The
  integration plans for various management and marketing teams of BSN Banca     
 Privada and Banif, in the process or being merged, are put into effect.
* Restructuring of investment banking activities (custody, securities and
  corporate) into Santander Central Hispano Investment
* Launch of a new interactive banking service by TV.
* Quality certifications for HBF Banco Financiero (at a global level,
  which broadens the scope of the previous one) and for Development and         
 Selection of Human Resources,
* Unification of almost all the contractual documents used by the retail
  networks.
* Y2K effect: successfully overcome, after having completed all the
  necessary adaptation processes.

Income Statement             January - December 1999         Jan-Dec 1998
                          Euro MM.    Pta. MM    %ATA     Pta.MM      %ATA

Interest revenues         19,612.0    3,263,169   7.93   3,032,896    7.72
Dividends                    331.7       55,187   0.13      42,264    0.11
Interest expenses         13,273.8    2,208,572   5.37   2,045,210    5.21
Net interest revenue       6,669.9    1,109,784   2.70   1,029,950    2.62
Net fees and 
 commissions               3,077.1      511,992   1.24     457,731    1.17
Basic revenue              9,747.1    1,621,776   3.94   1,487,681    3.79
Trading gains                379.6       63,164   0.15      63,030    0.16
Net operating
 revenue                  10,126.7    1,684,940   4.10   1,550,711    3.95
Personnel and
 general expenses          5,843.2      972,224   2.36     963,111    2.45
a) Personnel expenses      3,775.8      628,240   1.53     619,839    1.58
b) General expenses        2,067.4      343,984   0.84     343,272    0.87
Depreciation                 735.8      122,424   0.30     100,397    0.26
Other operating
 costs                        68.7       11,439   0.03      (3,533)  (0.01)
Operating costs            6,647.7    1,106,087   2.69   1,059,975    2.70
Net operating
 income                    3,479.0      578,853   1.41     490,736    1.25
Income from 
 equity - accounted
 holdings                    322.8       53,717   0.13      39,405    0.10
Less:
 Dividends from
 equity-accounted
 holdings                    240.3       39,977   0.10      25,447    0.06
Earnings from 
 Group transactions          740.5      117,220   0.28      64,937    0.17
Net provisions
 for loan-losses             988.1      164,401   0.40     110,359    0.28
Writedown of 
 investment securities         4.0          658      -       1,095       -
Goodwill amortization        648.0      107,819   0.26       55,471   0.14
Other income                (150.7)     (25,077) (0.06)     (69,755) (0.18)
Income before taxes        2,715.6      451,835   1.10      358,398   0.91
Corporate tax                543.6       90,440   0.22       73,078   0.19
Net consolidated
 income                    2,172.0      361,395   0.88      285,320   0.73
Minority interests           231.2       38,463   0.09       29,953   0.08
Dividend-preferred
 shareholders                365.8       60,856   0.15       47,422   0.12
Net attributable
 income                    1,575.1      262,076   0.64      207,945   0.53
Note:
 Average Total 
    Assets               247,222.1   41,134,295          39,289,814
 Average Share
  holders' Equity          8,511.4    1,416,178           1,296,415


Income Statement           
                                 Variation 99/98
                              Amount           %

Interest revenues            230,273         7.59
Dividends                     12,923        30.58
Interest expenses            163,362         7.99
Net interest revenue          79,834         7.75
Net fees and 
 commissions                  54,261         11.85
Basic revenue                134,095          9.01
Trading gains                    134          0.21
Net operating               
 revenue                     134,229          8.66
Personnel and
 general expenses              9,113          0.95
a) Personnel expenses          8,401          1.36
b) General expenses              712          0.21
Depreciation                  22,027         21.94
Other operating
 costs                        14,972             -
Operating costs               46,112          4.35
Net operating
 income                       88,117         17.96
Income from 
 equity - accounted
 holdings                     14,312         36.32
Less:
 Dividends from
 equity-accounted
 holdings                     14,530         57.10
Earnings from 
 Group transactions           52,283         80.51
Net provisions
 for loan-losses              54,042         48.97
Writedown of 
 investment securities          (437)       (39.91)
Goodwill amortization         52,348         94.37
Other income                  44,678             -
Income before taxes           93,437         26.07
Corporate tax                 17,362         23.76
Net consolidated
 income                       76,075         26.66
Minority interests             8,510         28.41
Dividend-preferred
 shareholders                 13,434         28.33
Net attributable
 income                       54,131         26.03
Note:
 Average Total 
    Assets                 1,844,481          4.69
 Average Share
  holders' Equity            119,763          9.24


Average yield of assets

                            January-December 1999      January-December 1998
(%)                       % of total    Average rate  % of total   Average rate 

Central banks and          13.95           5.34        14.83          6.35
 Government debt 
 securities
Due from banks             14.47           5.77        19.46          6.06
Loans                      48.32           9.10        44.65         10.38
 EMU currency              30.43           5.69        28.58          7.13
 Other currencies          17.89          14.91        16.06         16.18
Investment securities      12.73           6.66        11.91          6.44
Other assets               10.53              -         9.15             -
Other revenue                  -           1.24            -          0.30
Total                     100.00           8.07       100.00          7.83

Average cost of funds

                            January-December 1999      January-December 1998
(%)                       % of total    Average rate  % of total   Average rate 

Due to banks               28.37           4.33        29.07          5.71
Customer deposits          46.68           4.31        50.21          4.91
 EMU currency              27.87           1.90        32.81          2.62
 Other currencies          18.82           7.88        17.39          9.24
Debt securities and
 subordinated debt         10.07           7.79         7.97          8.91
 EMU currency               2.16           5.78         2.61          6.85
 Other currencies           7.92           8.34         5.36          9.91
Net shareholders'
 equity                     3.99              -         3.57             -
Other liabilities          10.88           0.91         9.19          0.53
Other costs                    -           1.25            -          0.32
Total                     100.00           5.37       100.00          5.21


Consolidated Balance Sheet
                                 31.12.99        31.12.98       Variation 99/98
                        Euro MM    Pta.MM        Pta. MM      Amount      (%) 

Assets
Cash and central
 banks                   6,226.9  1,036,067      586,720     449,347    76.59
Government debt
 securities             29,717.6  4,944,590    5,238,413    (293,823)   (5.61)
Due from banks          30,226.3  5,029,230    6,171,079  (1,141,849)  (18.50)
Loans                  127,472.1 21,209,569   18,698,985   2,510,584    13.43
Investment 
 securities             36,037.7  5,996,162    4,379,860   1,616,302    36.90
Fixed income            25,613.8  4,261,772    3,151,218   1,110,554    35.24
Equity                  10,423.9  1,734,390    1,228,642     505,748    41.16
- Shares and other
  securities             5,526.2    919,474      554,391     365,083    65.85
- Equity stakes          4,036.7    671,656      531,918     139,738    26.27
- Equity stakes in
  Group companies          861.0    143,260      142,333         927     0.65
Tangible and 
  intangible assets      6,302.8  1,048,693    1,073,268     (24,575)   (2.29)
Treasury stock              35.7      5,939       19,997     (14,058)  (70.30)
Goodwill                 2,542.6    423,053      365,703      57,350    15.68
Other assets            17,040.2  2,835,244    2,568,509     266,735    10.38
Prior years' results
 from consolidated
 companies                 836.7    139,221      132,068       7,153     5.42
Total Assets           256,438.5 42,667,768   39,234,602   3,433,166     8.75
Liabilities
Due to banks            63,252.2 10,524,283   11,556,677  (1,032,394)   (8.93)
Customer deposits      121,573.1 20,228,069   18,975,034   1,253,035     6.60
- Deposits             104,756.2 17,429,961   15,721,453   1,708,508    10.87
- REPOS                 16,817.0  2,798,108    3,253,581    (455,473)  (14.00)
Debt Securities         24,084.8  4,007,367    1,986,096   2,021,271   101.77
Subordinated debt        8,098.7  1,347,505    1,050,242     297,263    28.30
Pension and other
 allowances              4,370.2    727,148      562,765     164,383    29.21
Minority interests       6,340.1  1,054,902      831,465     223,437    26.87
Net consolidated
 income                  2,172.0    361,395      285,320      76,075    26.66
Capital                  1,833.9    305,135      210,898      94,237    44.68
Reserves                 6,358.4  1,057,941    1,299,507    (241,566)  (18.59)
Other liabilities       18,355.0  3,054,023    2,476,598     577,425    23.32
Total liabilities      256,438.5 42,667,768   39,234,602   3,433,166     8.75
Other managed funds
 (off balance sheet)    78,475.7 13,057,256   11,564,602   1,492,654    12.91
Total Managed funds    334,914.1 55,725,024   50,799,204   4,925,820     9.70
Contingent 
 liabilities            20,895.4  3,476,705    3,155,337     321,368    10.18
Guarantees              17,618.2  2,931,418    2,728,165     203,253     7.45
Documentary credits      3,277.2    545,287      427,172     118,115    27.65

Loans

                                 31.12.99        31.12.98       Variation 99/98
                        Euro MM    Pta.MM        Pta. MM      Amount      (%) 

Public sector            4,099.6    682,112      676,285       5,827     0.86
Private sector          71,443.4 11,887,179   10,589,160   1,298,019    12.26
- Secured loans         23,899.7  3,976,575    3,303,677     672,898    20.37
- Other loans           47,543.7  7,910,604    7,285,483     625,121     8.58
Non-resident sector     55,394.2  9,216,819    7,937,597   1,279,222    16.12
- Secured loans         14,508.5  2,414,003    1,785,943     628,060    35.17
- Other loans           40,885.7  6,802,816    6,151,654     651,162    10.59
Gross loans            130,937.2 21,786,110   19,203,042   2,583,068    13.45
Less: allowance
 for loan losses         3,465.1    576,541      504,057      72,484    14.38
Net loans              127,472.1 21,209,569   18,698,985   2,510,584    13.43
Note: Doubtful loans     2,999.6    499,097      414,820      84,277    20.32
- Public sector              8.7      1,447        2,423        (976)  (40.28)
- Private sector           850.0    141,432      174,640     (33,208)  (19.02)
Non-Resident sector      2,140.9    356,218      237,757     118,461    49.82

Evolution of non-
   performing loans*

                                 31.12.99        31.12.98       Variation 99/98
                        Euro MM    Pta.MM        Pta. MM      Amount      (%) 

Non-performing loans     2,997.8    498,789      418,604      80,185    19.16
NPL ratio (%)                          1.97         1.86        0.11
Allowances for loan
 losses                  3,622.6    602,755      502,869      99,886    19.86
NPL coverage (%)                     120.84       120.13        0.71
Non-performing loans**   2,593.3    431,489      355,715      75,774    21.30
NPL ratio (%)**                        1.71         1.59        0.12
NPL coverage (%)**                   139.69       141.37       (1.68)

(*)  Excluding country-risk
(**) Excluding NPLs backed by residential mortgages
Note - NPL ratio:  Non performing loans / computable risk


Customer funds

                                    31.12.99   31.12.98   Variation 99/88
                          Euro MM.   Pta. MM.   Pta. MM.    Amount    (%)

Public sector              2,151.5    357,976    354,803     3,173   0.89
Private sector            62,458.6 10,392,237 11,003,090  (610,853) (5.55)
 Demand deposits          19,127.0  3,182,457  2,745,177   437,280  15.93
 Saving accounts          13,008.3  2,164,395  1,934,079   230,316  11.91
 Time deposits            19,206.2  3,195,638  3,957,989  (762,351)(19.26)
 REPOS                    10,971.4  1,825,495  2,349,770  (524,275)(22.31)
 Other accounts              145.8     24,252     16,075     8,177  50.87
Non-resident sector       56,963.1  9,477,856  7,617,141 1,860,715  24.43
 Deposits                 51,267.1  8,530,131  6,716,824 1,813,307  27.00
 REPOS                     5,695.9    947,725    900,317    47,408   5.27
Total customer deposits  121,573.1 20,228,069 18,975,034 1,253,035   6.60
Debt securities           24,084.8  4,007,367  1,986,096 2,021,271 101.77
Subordinated debt          8,098.7  1,347,505  1,050,242   297,263  28.30
Total customer funds on 
 balance sheet           153,756.6 25,582,941 22,011,372 3,571,569  16.23
Total managed funds 
 (off-balance sheet)      78,475.7 13,057,256 11,564,602 1,492,654  12.91
Mutual funds              59,840.3  9,956,596  9,113,471   843,125   9.25
 Spain                    51,365.7  8,546,531  7,944,997   601,534   7.57
 Abroad                    8,474.7  1,410,065  1,168,474   241,591  20.68
Pension funds             13,071.6  2,174,933  1,568,813   606,120  38.64
 Spain                     4,537.2    754,930    711,157    43,773   6.16
  Individuals              3,971.6    660,815    629,054    31,761   5.05
 Abroad                    8,534.4  1,420,003    857,656   562,347  65.57
Managed portfolios         5,563.7    925,727    882,318    43,409   4.92
 Spain                     2,922.8    486,308    433,505    52,803  12.18
 Abroad                    2,641.0    439,419    448,813    (9,394) (2.09)
Total customer funds     232,232.3 38,640,197 33,575,974 5,064,223  15.08

Note: All data for 1998 has been adjusted for the new Bank of Spain regulations
for collection accounts and other special accounts.

Main data by business areas

                                    January - December 1999    Jan-Dec 98
                                   Euro MM.         Pta. MM.      Pta. MM.    

Retail Banking in Spain               732.8          121,931      102,817
Banesto                               297.5           49,499       34,334
Retail Banking Abroad                 510.3           84,907       75,831
Asset Management & Private Banking    136.4           22,696       11,662
Global Wholesale Banking              268.3           44,647       24,921
Corporate Activities                 (370.2)         (61,604)     (41,620)
Total                               1,575.1          262,076      207,945


                                   Net attributable income         ROE (%)
                                          Var. 99/98    January - December      
                                                                
                                       Amount      (%)      1999      1998

Retail Banking in Spain                19,114     18.59    35.08     34.07
Banesto                                15,165     44.17    17.89     15.15
Retail Banking Abroad                   9,076     11.97    15.10     18.64
Asset Management & Private Banking     11,034     94.61    18.08     13.22
Global Wholesale Banking               19,726     79.15    13.06      7.05
Corporate Activities                  (19,984)        -        -         -
Total                                  54,131     26.03    18.51     16.04


                                    January - December 1999     Jan-Dec 98
                                   Euro MM.         Pta. MM.      Pta. MM.    

Retail Banking in Spain             1,153.4          191,913      171,389
Banesto                               427.8           71,177       62,175
Retail Banking Abroad               1,628.3          270,919      201,141
Asset Management & Private Banking    245.1           40,785       21,281
Global Wholesale Banking              457.2           76,064       53,892
Corporate Activities                 (432.8)         (72,005)     (19,142)
Total                               3,479.0          578,853      490,736


                                    Net operating income    Efficiency (%)
                                        Var. 99/98      January - December    
                                       Amount      (%)      1999      1998 

Retail Banking in Spain                20,524    11.98     56.71     59.44
Banesto                                 9,002    14.48     58.84     62.64
Retail Banking Abroad                  69,778    34.69     54.21     61.07
Asset Management & Private Banking     19,504    91.65     52.69     59.48
Global Wholesale Banking               22,172    41.14     46.24     61.02
Corporate Activities                  (52,863)       -         -         -
Total                                  88,117    17.96     57.70     62.11


                                                     NPL ratio (%)
                                              31.12.99         31.12.98
Retail Banking in Spain                           0.98             1.44
Banesto                                           1.21             1.85
Retail Banking Abroad                             3.74             3.33
Asset Management & Private Banking                0.29               -
Global Wholesale Banking                          1.49             0.77
Total                                             1.97             1.86


                                                NPL coverage (%)
                                           31.12.99          31.12.98
Retail Banking in Spain                      134.32            112.51
Banesto                                      168.79            135.49
Retail Banking Abroad                        106.29            107.00
Asset Management & Private Banking                -                 -
Global Wholesale Banking                     127.47            137.03           
                 
Total                                        120.84            120.13



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