SECOND SUPPLEMENT. (dated 4 August 2014) to the BASE PROSPECTUS. (dated 16 January 2014) BANIF BANCO INTERNACIONAL DO FUNCHAL, S.A.

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1 SECOND SUPPLEMENT (dated 4 August 2014) to the BASE PROSPECTUS (dated 16 January 2014) BANIF BANCO INTERNACIONAL DO FUNCHAL, S.A. (incorporated with limited liability in Portugal) EUR 3,000,000,000 Covered Bonds Programme This supplement dated 4 August 2014 (the Second Supplement ) to the Base Prospectus dated 16 January 2014 and supplemented on 24 July 2014 (the Base Prospectus ), constitutes a supplement to the Base Prospectus, in the meaning of article 16 of Directive 2003/71/EC, as amended, prepared in connection with the Covered Bonds Programme (the Programme ) established by Banif Banco Internacional do Funchal, S.A. (the Issuer, fully identified in the Base Prospectus). Terms defined in the Base Prospectus have the same meaning when used in this Second Supplement. Banif Banco Internacional do Funchal, S.A., with head office at Rua de João Tavira, no. 30, Funchal, Portugal, the members of its Board of Directors, the members of its Audit Committee and its Statutory Auditor have taken all reasonable care to ensure that the information contained in the Base Prospectus, as supplemented by this Second Supplement, is, to the best of their knowledge, in accordance with the facts and contains no omission likely to affect its import. This Second Supplement is supplemental to, and should be read in conjunction with, the Base Prospectus. To the extent that there is any inconsistency between any statement in this Second Supplement and any other statement in or incorporated by reference in the Base Prospectus, the statements in this Second Supplement will prevail. 1

2 Save as disclosed in this Second Supplement, no other significant new factor, material mistake or inaccuracy relating to information included in the Base Prospectus has arisen or been noted, as the case may be, since the approval of the Base Prospectus. This Second Supplement and the Base Prospectus and the First Supplement are available for viewing in the following websites: Website of the issuer: Website of the Comissão do Mercado de Valores Mobiliários: 2

3 I. GENERAL AMENDMENTS This Second Supplement dated 4 August 2014 shall be referred to together with the Base Prospectus. II. DOCUMENTS INCORPORATED BY REFERENCE On page 44 of the Base Prospectus, the first paragraph shall be amended by the addition of a new line (d) as follows: (d) the consolidated results of the Issuer for the period ended 30 June III. DESCRIPTION OF THE ISSUER 1. Following the resignation by Maria Teresa Henriques da Silva Moura Roque and by Nuno José Roquette Teixeira to the Board of Directors, the list of the members of the Board of Directors under the heading Members of the Board, on page 135 of the Base Prospectus, shall be replaced by the following: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) Luís Filipe Marques Amado (Chairman of the Board) - Independent Jorge Humberto Correia Tomé (Vice-Chairman of the Board and Chairman of the Executive Comittee) Not Independent Maria Teresa Henriques da Silva Moura Roque (Vice-Chairman of the Board) Not Independent** Vitor Manuel Farinha Nunes (Member of the Board) Not Independent Nuno José Roquette Teixeira (Member of the Board) Not Independent** João Paulo Pereira Marques de Almeida (Member of the Board) Not Independent João José Gonçalves de Sousa (Member of the Board) Not Independent António Carlos Custódio de Morais Varela (Member of the Board) Not Independent Fernando Mário Teixeira de Almeida (Member of the Board and Chairman of the Audit Committee) Not Independent (x) António Ernesto Neto da Silva (Member of the Board and the Audit Committee) Independent (xi) (xii) Thomaz de Mello Paes de Vasconcellos (Member of the Board and the Audit Committee) Independent Issuf Ahmad (Member of the Board and the Audit Committee) Not Independent 3

for the period ended 30 June 2014. III. DESCRIPTION OF THE ISSUER 1.

4 ** Maria Teresa Henriques da Silva Moura Roque and Nuno José Roquette Teixeira have presented their resignation to the Board of Directors which will be effective by the end of August, unless their respective substitutes are appointed or elected. 2. On page 124, as amended by the First Supplement, after the last paragraph under the heading Main Financial Indicators of Banif Financial Group as of March 2014, a new section with the heading Main Financial Indicators of Banif Financial Group as of June 2014 shall be added with the following table and text: 4

On page 124, as amended by the First Supplement, after the last paragraph under the heading Main Financial Indicators of Banif Financial

5 Balance Sheet (millions of euros) Jun-14 Dec-13 Cash and balances at central banks Deposits with banks Financial assets held for trading Financial assets at fair value through profit or loss Available-for-sale financial assets 2, ,782.0 Loans and advances to banks Loans and advances to customers 7, ,969.0 Held-to-maturity investment securities Financial assets with repurchase agreements - - Non-current assets held for sale 1, ,607.0 Investment property Other tangible assets Intangible assets Investments in associates, affiliates and joint ventures Current tax assets Deferred tax assets Other assets Total Assets 13, ,603.5 Deposits from central banks 2, ,077.6 Financial liabilities helding for trading Financial liabilities at fair value through profit or loss Deposits from banks Customer accounts and other loans 6, ,303.3 Financial liabilities 1, ,258.1 Non-current liabilities held for sale 1, Provisions Current tax liabilities Deferred tax liabilities Instruments representing capital Other subordinated liabilities Other liabilities Total Liabilities 12, ,723.9 Share capital 1, ,582.2 Issue premiums Other equity instruments - - Own shares - - Revaluation reserves Other reserves and retained earnings Profit for the period Minority interests Total Equity 1, Total Equity + Liabilities 13, ,

2 7,969.0 Held-to-maturity investment securities 8.1 12.1 Financial assets with repurchase agreements - - Non-current assets held for sale 1,555.3 1,607.0 Investment property 809.9 827.

6 Profit and Loss Account (millions of euros) Jun-14 Jun-13 D 14/13 Restated Interest and similar income % Interest and similar expense % Net interest income % Dividend income Net fees and commissions % % Fees and commission income % Fees and commission expense % Gains and losses in financial operations Other operating income Operating revenue % Personnel costs % Selling and General Administrative costs % Depreciation and amortisation % Provisions net of reinstatement and write-offs Loans impairment net of reversals % Impairment of other financial assets net of reversals and recovery Impairment on other assets net of reversals % Equity accounted earnings Profits before tax % Taxes Profits after tax % Income from discontinued operations % Minority interests Net income for the period % In the first half of 2014, operating income rose by 69.0%, year-on-year, to million euros. A number of factors contributed to this performance, most notably the following: The 29.1 per cent. rise in net interest income, to 66.1 million euros, reflecting the ongoing adjustments the Issuer has made to its business model. This growth in net interest income was achieved in an economic context that was significantly marked by the credit volume effect, resulting from the deleveraging of the non-financial sectors in the economy, continuing low reference interest rates and the cost of the CoCos. The full redemption of the CoCos, with the repurchase of the final tranche of 125 million euros expected to take place before the end of 2014, will contribute to a reduction in financing costs and so improving net interest income. 6

7 33.4 - Other operating income 34.2 5.1 - Operating revenue 216.1 127.8 69.0% Personnel costs -67.9-61.8 10.0% Selling and General Administrative costs -36.4-39.7-8.

7 Structure costs in the first half of 2014 totalled million euros. This figure reflects the rationalisation and optimisation measures taken to reshape the bank's organisational structure, in the light of the current business context and the ongoing restructuring process. Excluding the costs (9.0 million euros in the first half of 2014, against 0.3 million euros in the first half of 2013) associated with the voluntary redundancy programme, which began in March, operating costs fell 7.7% compared to the first half of Net provisions and impairments for the first half of 2014 came to million euros, against the million euros recorded for the first half of 2013, a year-on-year increase of 3.4 per cent.. This figure reflects an increase in net provisions for credit impairment in the amount of million euros at the end of the first half of This is largely explained by a rise in impairments in our domestic business, particularly at Banif, S.A., where net provisions were million euros, including an additional impairment accruing from the across-the-board Bank of Portugal instruction regarding the exposure to GES entities. As at 30 June 2014, the Common Equity Tier 1 ratio, calculated in accordance with the CRD IV/CRR rules applicable in 2014 (phasing in) stood at 10.0 per cent., above the minimum level required by the regulatory authorities. IV. GENERAL INFORMATION On page 190 of the Base Prospectus, the first paragraph, line (b) under the heading Documents Available shall be amended and replaced by the following: the audited consolidated financial statements of the Issuer and the auditor s report contained in the Issuer s Annual Report in respect of the financial years ended 31 December 2011 (in respect of the Issuer s former designation as Banif SGPS, S.A. ), 31 December 2012 and 31 December 2013, and the unaudited consolidated financial statements of the Issuer for the period ended 31 March 2014, and the consolidated results of the Issuer for the period ended 30 June

process. Excluding the costs (9.0 million euros in the first half of 2014, against 0.

FIRST SUPPLEMENT. (dated 24 July 2014) to the BASE PROSPECTUS. (dated 16 January 2014) BANIF BANCO INTERNACIONAL DO FUNCHAL, S.A.

FIRST SUPPLEMENT. (dated 24 July 2014) to the BASE PROSPECTUS. (dated 16 January 2014) BANIF BANCO INTERNACIONAL DO FUNCHAL, S.A. FIRST SUPPLEMENT (dated 24 July 2014) to the BASE PROSPECTUS (dated 16 January 2014) BANIF BANCO INTERNACIONAL DO FUNCHAL, S.A. (incorporated with limited liability in Portugal) EUR 3,000,000,000 Covered