QUARTERLY REPORT 2Q14 APRIL-MAY-JUNE

QUARTERLY REPORT 2Q14 APRIL-MAY-JUNE

Main highlights (Amounts in thousand) 30.06.14 30.06.13 Var. % Business volume Total assets managed 173,535,322 174,362,869 (0.5) On-balance sheet total assets 157,180,162 159,287,391 (1.3) Own funds 12,742,911 10,998,271 15.9 Customer deposits 86,611,004 83,578,477 3.6 Lending to customers (gross) 110,558,169 113,423,240 (2.5) Solvency CET 1 ratio (%) 11.38 10.08 Tier 1 ratio (%) 11.38 10.08 Total capital ratio (%) 11.76 10.90 Fully loaded Basel III Leverage ratio (%) 6.04 1 Risk management Total risks 150,587,184 153,638,271 (2.0) Non-performing loans 21,036,304 16,597,452 26.7 Allowances for credit losses 9,271,550 8,711,595 6.4 % nonperforming ratio 13.97 10.80 % coverage of non-performing and written-off loans 53.96 62.46 % coverage of non-performing and not written-off loans 44.07 52.43 % coverage with guarantees 101.47 2 108.51 Earnings Net interest income 1,129,562 1,235,254 (8.6) Gross operating income 2,140,111 1,807,174 18.4 Profit before provisions 1,242,036 965,789 28.6 Profit before tax 176,641 233,032 (24.2) Consolidated profit for the year 128,056 171,608 (25.4) Net profit attributed to the Group 128,507 170,360 (24.6) Net return and efficiency Average total assets 151,630,765 156,436,386 (3.1) Average risk-weighted assets (RWA) 84,238,982 91,418,903 (7.9) Average total equity 12,588,223 10,770,910 16.9 ROA (%) 0.17 0.22 RORWA (%) 0.30 0.29 ROE (%) 2.04 3.16 Operating efficiency (%) 38.40 42.39 Per share data Final number of shares fully diluted (thousands) 2,132,717 3 2,044,805 4.3 Average number of shares (thousands) 2,096,565 3 1,995,758 5.1 Adjusted share closing market price ( ) 4.88 2.36 > Market capitalization 10,407,657 4 4,815,515 > Book value per share diluted ( ) 5.99 5.88 1.9 Net earnings per share ( ) 0.062 3 0.101 (38.6) Price/Book value 0.81 0.40 Price/Earnings (annualized) 39.35 11.66 Other data Shareholders 272,230 297,196 (8.4) Employees 15,546 15,905 (2.3) Spain: 13,688 14,060 (2.6) Men 8,600 8,941 (3.8) Women 5,088 5,119 (0.6) Abroad: 1,858 1,845 0.7 Men 1,126 1,120 0.5 Women 732 725 1.0 Branches: 2,155 2,206 (2.3) Spain 1,954 2,007 (2.6) Abroad 201 199 1.0 ATMs 2,716 2,886 (5.9) Note: From January 1st 2014, due to the entry into force of IFRS 11, the equity method is applied to jointly controlled entities. For comparative purposes, this criterion has been applied to information concerning the financial year 2013. 1. Fully loaded Basel III Leverage Ratio CRR. 2. Coverage ratio (value of guarantees after haircuts Bank of Spain included) 3. Including 36,051 thousand shares converting in November 2015 and 6,831 thousand shares converting in December 2014. 4. Including the mandatory convertible notes. The Group s consolidated financial statements as of June 30th 2014, the audit of which is being finalized, were prepared in accordance with the accounting principles and methods established by the International Financial Reporting Standards adopted by the European Union (IFRS-EU), consistent with those used in the formulation of the audited financial statements in the Annual Report for the year 2013. 3

Salient aspects General environment and evolution of earnings in 2Q14 The economic environment continues to exhibit positive signs which seem to confirm the recovery of the economy. This trend has been joined very recently by the employment rate which has shown a positive annual variation for the first time in the last six years. The economic recovery is being reflected by the main national and international bodies, which have been revising upwards their forecasts for Spain in 2014-2015. Even so, there are remaining imbalances, most notably an unemployment rate of 24.5%. In short, the figures seem to point to a consolidation of the recovery, even though it is therefore necessary to maintain prudence in the face of a recovery which will be less speedy than in previous episodes because of the depth of the crisis and the effects wreaked on the economic agents. Under this maxim of prudence, Banco Popular continued to demonstrate its ability to generate income and to continue strengthening its balance sheet. Highlights of the quarter The second quarter of 2014 saw confirmation of the change of trend in non-performing loans (NPLs) which, for the second quarter running, fell to 13.97%. In addition, there was a recovery in the business, supported, on the hand, by moderate growth (up 1% since March) in lending and, more importantly, in the growth of the interest margin (up 6% on 1Q), with liability costs continuing to fall month by month. Gross operating income of 1,223 million in the quarter The net interest income of 580 million in the quarter was 6% higher and was again the highest of the banking sector in relative terms. This increase was based mainly on management of customer spreads and, very significantly, in the decline in the cost of retail liabilities. The second quarter also saw a continuing decline in the cost of time deposits and new deposits were arranged, on average, at 31 basis points lower than in the first quarter and 90 basis points below the cost of the stock. Moreover, further progress was made in changing the structure, increasing the relative weight of demand deposits. Wholesale financing will contribute in coming quarters to an improvement in the margin, since the upcoming maturities are at rates higher than present market rates. Fees and commissions amounted to 168 million in the second quarter, impacted by the effect of corporate transactions. The past due fees have fallen a 42% on annual basis as a result of a better economic situation. Financial asset and liability transactions, on the contrary, contributed positively to the gross income, thanks to the management of the debt portfolio. Additionally, the Bank s operating income reflected two extraordinary events. On the one hand, the sale of the economic rights associated with the distribution of the portfolio of certain insurance products contributed 96 million, whereas the exceptional losses recorded by certain investees had a negative impact of 23 million in the quarter. Thus, gross operating income amounted to 1,223 million in the quarter, the highest in the Bank s history. High net operating income Administrative expenses, including depreciation and amortisation, were held at 453 million in the quarter, the same level as in recent quarters. During the year, the personnel expenses remained flat while the general expenses grew a 17.5% mainly due to corporate transactions and the property maintenance. Although at a less pronounced rate, the Bank continued to optimise its branch network and at 30 June had 2,155 branches open, 11 fewer than in 1Q. 4

The strength of income and the stability of costs led to net operating income of 770 million, with an efficiency ratio of 34%. The 725 million of provisions booked in the quarter were enough to enhance by 2 percentage points the coverage of doubtful loans. Also booked in the quarter were the capital gains on the sale of the collective investment institution depositary business. The net profit for the quarter was 65 million Commercial activity: growth of lending to business enterprises Both the gross lending and the interest-earning lending grew again in the second quarter, with even stronger commercial activity focused on the Bank s natural market. Thus, SMEs lending grew in the quarter and the balance of lending at 30 June stood at 31,462 million. As noted earlier, management of retail liabilities made it possible to go further in cutting prices while also increasing the relative weight of demand deposits, thus trimming the cost even further and endowing liabilities with greater stability. Risk management: decrease in non-performing loans The reduction of non-performing loans was consolidated and for the second consecutive quarter both the stock of doubtful balances and the NPL ratio fell, the latter to 13.97%, 31 basis points less than in the preceding quarter. The amount of subjective doubtful balances was 3,409 million and contributed 2.26 percentage points to the NPL ratio. By sectors, the non real estate NPL rate fell to 7.20%, compared with 7.43% in the previous quarter. However, that of the real estate sector was up 117 basis points at 56.34%. The provisions for bad debts increased to 9,272 million, raising the coverage rate to 44% and to 54% including write-offs. Taking into account all risks subject to provisions including property, the total coverage for these risks stood at 13.7%. In line with the Bank s announced strategy, the sale of properties continued to accelerate and the 350 million sold in the second quarter were 41% more than in 1Q and twice the same figure in 2013. It should be noted that the provisions booked allow to sell above the book value without incurring in losses, this fact, together with the stabilisation perceived in the property market, makes it possible to look forward with confidence to continue upping the rate of sales in the future. The combination of the containment of NPLs, a rising level of sales and the booking of provisions makes it possible to observe a change of trend in the net NPA stock, which fell with respect to the preceding quarter after very sharp recent increases. Solvency: CET1 OF 11.4% and leverage ratio of over 6% The regulatory tier 1 core capital ratio stood at 11.38%, 72 basis points higher than at March end, although part of the improvement was attributable to the application of the phase-in arrangements to the deduction of intangibles. The complete application of the new fully loaded capital accord would place the ratio at 10.43% taking into account the MCNs. The leverage ratio of 6.04% places the Bank in a privileged position in the banking sector. 5

Balance Sheet Variation % (Amounts in thousand) 30.06.14 31.12.13 30.06.13 6 months 12 months ASSETS Cash and balances with central banks 992,642 2,826,838 2,066,356 (64.9) (52.0) Financial assets held for trading 1,703,341 1,510,574 1,814,480 12.8 (6.1) Other financial assets at fair value through profit or loss 542,025 363,680 392,776 49.0 38.0 Investment portfolio 24,833,997 16,175,138 25,863,642 53.5 (4.0) Loans and receivables: 110,116,191 108,035,587 112,111,501 1.9 (1.8) Loans and advances to other debtors 101,899,157 101,123,996 105,324,735 0.8 (3.3) Other loans and receivables 6,017,134 5,531,536 5,567,590 8.8 8.1 Of which Interbank deposits 853,229 356,242 886,599 > (3.8) Fixed income 2,199,900 1,380,055 1,219,176 59.4 80.4 Changes in the fair value of hedged items in portfolio hedges of interest rate risk 234,787 159,571 154,540 47.1 51.9 Hedging derivatives 407,898 579,029 656,505 (29.6) (37.9) Non-current assets held for sale 7,281,111 6,296,601 5,502,448 15.6 32.3 Investments 1,228,510 1,262,705 1,137,254 (2.7) 8.0 Insurance contracts linked to pensions 143,828 142,948 142,218 0.6 1.1 Reinsurance assets 15,289 14,462 5,623 5.7 > Tangible assets 1,853,777 1,835,903 1,884,052 1.0 (1.6) Intangible assets 2,459,786 2,457,550 2,483,550 0.1 (1.0) Tax assets 3,431,556 3,516,827 3,412,298 (2.4) 0.6 Other assets 1,935,424 1,531,634 1,660,148 26.4 16.6 Total Assets 157,180,162 146,709,047 159,287,391 7.1 (1.3) LIABILITIES Financial liabilities held for trading 1,184,767 954,426 1,159,676 24.1 2.2 Other financial liabilities at fair value through profit or loss 627,321 601,367 567,433 4.3 10.6 Financial liabilities at amortised cost: 138,865,528 130,213,814 143,729,420 6.6 (3.4) Liabilities of credit institutions 22,318,307 21,693,222 35,050,217 2.9 (36.3) Of which Interbank deposits 2,122,209 2,020,691 1,906,923 5.0 11.3 Deposits from other creditors 98,311,044 89,162,479 86,956,815 10.3 13.1 Debt certificates including bonds 15,641,462 16,282,375 18,626,590 (3.9) (16.0) Subordinated liabilities 1,467,199 2,324,019 2,095,911 (36.9) (30.0) Other financial liabilities 1,127,516 751,719 999,887 50.0 12.8 Hedging derivatives 1,852,328 1,473,749 1,659,914 25.7 11.6 Insurance contract liabilities 419,623 371,311 361,348 13.0 16.1 Provisions for contingent exposures 492,812 532,964 484,875 (7.5) 1.6 Tax liabilities 554,620 550,826 387,750 0.7 43.0 Other liabilities 683,380 384,219 479,683 77.9 42.5 Total liabilities 144,680,379 135,082,676 148,830,099 7.1 (2.8) Equity Total equity 12,742,911 11,925,494 10,998,271 6.9 15.9 Capital, reserves and retained earnings 12,614,404 11,600,195 10,827,911 8.7 16.5 Profit or loss for the period 128,507 325,299 170,360 (24.6) Dividends paid and declared - - - Valuation adjustments (266,102) (350,500) (585,878) (24.1) (54.6) Minority interests 22,974 51,377 44,899 (55.3) (48.8) Net asset value 12,499,783 11,626,371 10,457,292 7.5 19.5 Total liabilities and equity 157,180,162 146,709,047 159,287,391 7.1 (1.3) 6

Commercial GAP (Amounts in thousand) 30.06.14 Lending to customers 101,899,157 Asset repos (valuation adjustments included) (6,472,604) Total net lending to customers (ex asset repos) (a) 95,426,553 Current accounts 27,863,111 Term deposits 47,964,565 Valuation adjustments 183,010 Subtotal customer deposits (ex repos, ex-treasury) 76,010,686 Retail Commercial paper 437,239 Mediation loans 1 8,557,977 Securitizations sold to third parties 485,816 Marketable securities distributed through the branch network 2 468,588 Tax collection accounts 650,698 Total customer deposits (b) 86,611,004 GAP (a-b) 8,815,549 LTD (a/b) 110.2% 1. Funding from ICO and BEI public credit lines (prefunded for corporates loans). 2. Including mandatory convertible notes, preferred shares and subordinated debt distributed through the branch network. 7

Funds Managed Variation % (Amounts in thousand) 30.06.14 31.12.13 30.06.13 6 months 12 months Customer deposits: General government 19,891,090 10,732,015 8,841,360 85.3 > Other private sectors: 72,243,483 72,111,152 70,663,477 0.2 2.2 Residents 64,103,085 63,595,104 62,292,043 0.8 2.9 Nonresidents 8,140,398 8,516,048 8,371,434 (4.4) (2.8) Valuation adjustments (±) 183,010 181,979 193,986 0.6 (5.7) Subtotal customer deposits and General Government 92,317,583 83,025,146 79,698,823 11.2 15.8 Deposits at central counterparty entities 5,993,461 6,137,333 7,257,992 (2.3) (17.4) Total customer deposits 98,311,044 89,162,479 86,956,815 10.3 13.1 Unadjusted debt certificates including bonds: 15,296,073 15,917,942 18,205,644 (3.9) (16.0) Bonds and other securities outstanding 14,308,662 14,922,018 16,141,814 (4.1) (11.4) Commercial paper 987,411 995,924 2,063,830 (0.9) (52.2) Valuation adjustments (±) 345,389 364,433 420,946 (5.2) (17.9) Total debt certificates including bonds 15,641,462 16,282,375 18,626,590 (3.9) (16.0) Subordinated liabilities 1,467,199 2,324,019 2,095,911 (36.9) (30.0) Total on-balance sheet funds (a) 115,419,705 107,768,873 107,679,316 7.1 7.2 Mutual funds 8,465,821 8,341,528 7,665,279 1.5 10.4 Asset portfolio management 883,227 764,781 727,732 15.5 21.4 Pension funds 5,168,768 5,038,528 4,849,109 2.6 6.6 Insurance premium 1,837,344 1,808,398 1,833,358 1.6 0.2 Total other intermediated funds (b) 16,355,160 15,953,235 15,075,478 2.5 8.5 Total funds managed (a+b) 131,774,865 123,722,108 122,754,794 6.5 7.3 Retail Funds Variation % (Amounts in thousand) 30.06.14 31.12.13 30.06.13 6 months 12 months Demand deposits (ex-treasury) and Other accounts 1 27,863,111 24,178,369 23,625,680 15.2 17.9 Demand deposits 47,964,565 50,277,210 49,428,379 (4.6) (3.0) Time deposits 15,369,897 8,387,588 6,450,778 83.2 > Asset repos 183,010 181,979 193,986 0.6 (5.7) Subtotal cusotmer deposits and General Government (ex-treasury) 1 91,380,583 83,025,146 79,698,823 10.1 14.7 Retail Commercial paper 437,239 652,641 1,620,950 (33.0) (73.0) ICO Mediation loans 2 8,557,977 7,798,768 6,372,731 9.7 34.3 Securitizations sold to third parties 485,816 534,312 610,970 (9.1) (20.5) Marketable securities distributed through the branch network 3 468,588 1,165,071 1,256,892 (59.8) (62.7) Tax collection accounts 650,698 349,353 468,889 86.3 38.8 Asset repos (15,369,897) (8,387,588) (6,450,778) 83.2 > Total Retail Funds 86,611,004 85,137,703 83,578,477 1.7 3.6 1. Treasury repos have been deducted from Demand deposits (937 mlns in June 2014). 2. Funding from ICO and BEI public credit lines (prefunded for corporates loans). 3. Including mandatory convertible notes, preferred shares and subordinated debt distributed through the branch network. 8

Lending to customers Variation % (Amounts in thousand) 30.06.14 31.12.13 30.06.13 6 months 12 months Lending to general government 5,817,955 1,565,801 3,737,931 > 55.6 Lending to other private sectors: 104,526,024 107,204,803 109,467,050 (2.5) (4.5) Residents 94,585,128 97,328,718 99,494,382 (2.8) (4.9) Nonresidents 9,940,896 9,876,085 9,972,668 0.7 (0.3) Total lending to customers 110,343,979 108,770,604 113,204,981 1.4 (2.5) Other loans 214,190 246,826 218,259 (13.2) (1.9) Total credit to customers 110,558,169 109,017,430 113,423,240 1.4 (2.5) Valuation adjustments (±) (8,659,012) (7,893,434) (8,098,505) 9.7 6.9 Total 101,899,157 101,123,996 105,324,735 0.8 (3.3) Lending to customers by type Variation % (Amounts in thousand) 30.06.14 31.12.13 30.06.13 6 months 12 months Trade loans and discounts 3,428,532 3,370,774 3,512,622 1.7 (2.4) Secured loans 41,082,479 43,005,888 48,137,337 (4.5) (14.7) Mortgage 39,808,007 42,040,253 46,848,340 (5.3) (15.0) Other 1,274,472 965,635 1,288,997 32.0 (1.1) Repos 6,472,604 7,102,146 6,309,083 (8.9) 2.6 Term loans and other lending 36,541,136 32,479,201 36,678,325 12.5 (0.4) Leasing 2,244,001 2,322,267 2,505,741 (3.4) (10.4) Doubtful assets 20,789,417 20,737,154 16,280,132 0.3 27.7 Total lending to customers 110,558,169 109,017,430 113,423,240 1.4 (2.5) 9

Risk Management Performance* Variation (Amounts in thousand) 30.06.14 30.06.13 Amount In % Nonperforming loans Balance at 1 January 21,216,003 13,935,871 7,280,132 52.2 Additions 2,308,920 5,493,254 (3,184,334) (58.0) Recoveries 2,428,901 1,883,858 373,466 19.8 Net variation (119,981) 3,609,396 (3,729,377) % increase (0.6) 25.9 Writeoffs (59,718) (947,815) 888,097 (93.7) Balance at 30 June 21,036,304 16,597,452 4,438,852 26.7 Variation (Amounts in thousand) 30.06.14 30.06.13 Amount In % Credit loss allowances Balance at 1 January 8,525,999 9,128,749 (602,750) (6.6) Annual provision: Gross 2,880,750 3,173,668 (292,918) (9.2) Recoveries (1,845,176) (2,543,296) 698,120 (27.5) Net 1,035,574 630,372 405,202 64.3 Other variations (230,536) (99,964) (130,572) > Writeoffs (59,487) (947,562) 888,075 (93.7) Balance at 30 June 9,271,550 8,711,595 559,955 6.4 Of which sub-standard risk provisions 828,481 904,627 (76,146) (8.4) (Amounts in thousand) Specific General Country risk Total Balance at 1 January 8,524,616-1,383 8,525,999 Net provisions 1,035,783 - (209) 1,035,574 Amount used 59,487 - - 59,487 Other variations and transfers (230,562) - 26 (230,536) Balance at 30 June 9,270,350-1,200 9,271,550 *Including doubtful off-balance sheet risks and country risk and the related risk allowance 10

Risk Management Performance Variation (%) 30.06.14 30.06.13 Amount In % Risk quality measures Total Risks ( thousand) 150,587,184 153,638,271 (3,051,087) (2.0) Nonperformance (Nonperforming loans/total risks) 13.97 10.80 3.17 Credit risk premium 1.96 0.92 1.04 Pre-provision margin over lending 2.51 1.86 0.66 (Amounts in thousand) 30.06.14 Coverage by type of non-performing balance Non-performing balances without mortgage guarantee or pledge guarantee 5,677,556 Non-performing balances with mortgage guarantee or pledge guarantees 15,358,748 Value of guarantees (incuding haircuts) 12,140,597 Total non-performing balances 21,036,304 Loans fully written off 4,515,853 Non-performing balances+loans fully written off 25,552,157 Total value of guarantees* 12,140,597 Provisions for insolvency 9,271,550 Provisions for insolvency with written-off balances 13,787,403 % Coverage for non-performing and written-off balances 53.96 % Coverage for non-performing balances excl written-off balances 44.07 % Coverage with guarantees 101.47 * Does not include written-off loan guarantees Coverage analysis ( million) 25,552 NPLs 21,036 Coverage: 101.47% 25,928 Provisions 13,787 53.96% Loans fully written off 4,516 Effective collaterals incl. BoS haircut 12,141 (47.51%) NPLs+Loans fully writen off Effective collateral + B-S provision Variation (Amounts in thousand) 30.06.14 30.06.13 Amount In % asset impairment Financial assets 942,725 495,377 447,348 90.3 Credit risk and provisioning 933,451 494,758 438,693 88.7 Of which: writeoffs recovered 108,685 129,694 (21,009) (16.2) Investments 9,274 619 8,655 > Non-financial assets and property 167,345 477,272 (309,927) (64.9) Total 1,110,070 972,649 137,421 14.1 11

Solvency (Amounts in thousand) 30.06.14 30.06.13 Capital 8,160,547 6,457,903 Reserves 3,941,428 3,893,484 Minority interest 18,743 35,725 Capital deductions (2,595,492) (1,231,585) Ordinary tier 1 capital 9,525,226 9,155,527 CET 1 ratio (%) 11.38% 10.08% MCNs 677,986 1,661,677 Preferred shares 605,315 136,676 Capital deductions (1,283,301) (1,798,353) Tier 1 capital 9,525,226 9,155,527 Tier 1 ratio (%) 11.38% 10.08% Total Capital 9,840,942 9,901,835 Total capital ratio (%) 11.76% 10.90% Fully loaded Basel III Leverage ratio (%) 1 6.04% Total risk weighted assets 83,670,289 90,872,218 from which credit risk 76,596,274 83,390,212 from which operational risk 6,520,771 6,782,694 from which market risk 553,244 699,313 1. Fully loaded Basel III Leverage Ratio CRR. Equity (Amounts in thousand) Capital & reserves Valuation adjustments Minority interests Net asset value Balance at 31/12/2013 11,925,494 (350,500) 51,377 11,626,371 Capital increase 1 769,436 - - 769,436 Variation in treasury stock (386) - - (386) Gain on treasury stock transactions 874 - - 874 Actuarial differences - (4,937) - (4,937) Remuneration of mandatory convertible debentures (47,995) - - (47,995) Consolidation operations and other (net) (33,734) - (2,114) (35,848) Corporate operations 715 - (25,838) (25,123) Value adjustments - 89,335-89,335 Net profit at 31 march 2013 128,507 - (451) 128,056 Dividends paid/announced in 2013 - - - - Balance at 30/06/2014 12,742,911 (266,102) 22,974 12,499,783 1. Script-dividend and MCNs conversion. Mandatory convertible notes (Amounts in thousand) Amount Balance sheet consideration Conversion price Conversion date BSOC II/2012 644,595 Equity Fixed price: 17.88 November 2015 BSOC IV/2012 33,333 Subordinated debt TOTAL 677,928 Floating at market price Floor:2.50 1/3 June 2014 1/3 Dec. 2014 12

Consolidated income and profitability (Amounts in thousand) 30.06.14 30.06.13 Variation In % (Annualized % of ATA) 30.06.14 30.06.13 Variation Interest and similar income 2,118,535 2,546,741 (16.8) 2.79 3.26 (0.47) - Interest expense and similar charges 988,973 1,311,487 (24.6) 1.30 1.68 (0.38) =Net interest income 1,129,562 1,235,254 (8.6) 1.49 1.58 (0.09) +Return on equity instruments 6,733 10,592 (36.4) 0.01 0.01 (0.00) +Share of results of entities accounted for using the equity method (5,946) 14,063 (0.01) 0.02 (0.03) +Fees and commissions, net 343,751 382,977 (10.2) 0.46 0.49 (0.03) ±Gains or losses on financial assets and liabilities (net) 602,594 175,930 > 0.79 0.23 0.56 +Exchange differences (net) 21,054 25,806 (18.4) 0.03 0.03 (0.00) ±Other operating results 42,363 (37,448) 0.05 (0.05) 0.10 =Gross operating income 2,140,111 1,807,174 18.4 2.82 2.32 0.50 - Administrative expenses: 821,849 766,132 7.3 1.08 0.98 0.10 Personnel expenses 459,955 458,188 0.4 0.60 0.59 0.01 Other general administrative expenses 361,894 307,944 17.5 0.48 0.40 0.08 - Depreciation & amortisation 76,226 75,253 1.3 0.10 0.10 0.00 =Net operating income (Pre-provision profit) 1,242,036 965,789 28.6 1.64 1.24 0.40 - Financial asset impairment and provisioning 942,725 495,377 90.3 1.25 0.64 0.61 - Impairment of other assets 167,345 477,272 (64.9) 0.22 0.61 (0.39) ±Gains/(Losses) on assets sales (net) 44,675 239,892 (81.4) 0.06 0.31 (0.25) =Profit before tax 176,641 233,032 (24.2) 0.23 0.30 (0.07) -Income tax 48,585 61,424 (20.9) 0.06 0.08 (0.02) +Gains/losses on discontinued operations (net) - - - - - - =Consolidated profit for the year 128,056 171,608 (25.4) 0.17 0.22 (0.05) - Profit attributed to minority interests (451) 1,248 - - - =Profit attributed to the controlling company 128,507 170,360 (24.6) 0.17 0.22 (0.05) Net return on risk-weighted assets (RORWA) (%) 0.30 0.29 0.01 Net return on equity (ROE) (%) 2.04 3.16 (1.12) Operating efficiency ratio (%) 38.40 42.39 (3.99) In million Average total assets 151,631 156,436 (4,806) Average risk-weighted assets (RWA) 84,239 91,419 (7,180) Average equity 12,588 10,771 1,817 13

Quarterly Consolidated Income (Amounts in thousand) 2014 2013 2Q 1Q 4Q 3Q 2Q Interest and similar income 1,057,401 1,061,134 1,116,158 1,200,098 1,263,096 -Interest expense and similar charges 477,047 511,926 534,609 605,436 612,339 =Net interest income 580,354 549,208 581,549 594,662 650,757 +Return on equity instruments 5,622 1,111 3,586 3,612 5,053 +Share of results of entities accounted for using the equity method (11,776) 5,830 11,727 6,474 8,563 +Fees and commissions, net 167,657 176,094 184,640 191,642 195,088 ±Gains or losses on financial assets and liabilities (net) 399,616 202,978 127,977 157,194 134,153 ±Exchange differences (net) 10,420 10,634 12,422 14,192 13,462 ±Other operating results 71,363 (29,000) (47,162) 6,929 (17,082) =Gross operating income 1,223,256 916,855 874,739 974,705 989,994 -Administrative expenses: 414,999 406,850 421,396 385,031 386,598 Personnel expenses 232,532 227,423 240,524 230,398 231,748 Other general administrative expenses 182,467 179,427 180,872 154,633 154,850 -Depreciation & amortisation 38,104 38,122 37,099 38,270 39,150 =Net operating income (Pre-provision profit) -Financial asset impairment and provisioning 770,153 471,883 416,244 551,404 564,246 619,408 323,317 454,360 304,495 248,707 -Impairment of other assets 105,207 62,138 524,497 180,152 278,376 ±Gains/(Losses) on assets sales (net) 41,202 3,473 712,645 9,483 45,306 =Profit before tax 86,740 89,901 150,032 76,240 82,469 -Income tax 21,701 26,884 50,867 18,864 15,526 +Gains/losses on discontinued operations (net) - - - - - =Consolidated profit for the year 65,039 63,017 99,165 57,376 66,943 -Profit attributed to minority interests (413) (38) 1,095 507 805 =Profit attributed to the controlling company 65,452 63,055 98,070 56,869 66,138 14

Quarterly Profitability (Annualized % of ATA) 2014 2013 2Q 1Q 4Q 3Q 2Q Interest and similar income 2.76 2.83 3.01 3.13 3.21 - Interest expense and similar charges 1.24 1.37 1.43 1.59 1.55 =Net interest income 1.52 1.46 1.58 1.54 1.66 +Return on equity instruments 0.01-0.01 0.01 0.01 +Share of results of entities accounted for using the equity method (0.03) 0.02 0.03 0.02 0.02 +Fees and commissions, net 0.44 0.47 0.50 0.50 0.50 ±Gains/losses on financial assets and liabilities (net) 1.04 0.54 0.34 0.41 0.34 ±Exchange differences (net) 0.03 0.03 0.03 0.04 0.03 ±Other operating results 0.18 (0.08) (0.13) 0.02 (0.04) =Gross operating income 3.19 2.44 2.35 2.55 2.53 - Administrative expenses: 1.08 1.09 1.13 1.01 0.99 Personnel expenses 0.60 0.61 0.65 0.60 0.59 Other general administrative expenses 0.48 0.48 0.48 0.40 0.40 - Depreciation & amortisation 0.10 0.10 0.10 0.10 0.10 =Net operating income (Pre-provision profit) 2.01 1.25 1.12 1.44 1.44 - Financial asset impairment and provisioning 1.62 0.85 1.22 0.80 0.64 - Impairment of other assets 0.27 0.17 1.41 0.47 0.71 ±Gains/(Losses) on assets sales (net) 0.11 0.01 1.92 0.02 0.12 =Profit before tax 0.23 0.24 0.40 0.20 0.21 - Income tax 0.06 0.07 0.13 0.05 0.04 +Gains/losses on discontinued operations (net) - - - - - =Consolidated profit for the year 0.17 0.17 0.27 0.15 0.17 - Profit attributed to minority interests - - 0.01 - - =Profit attributed to the controlling company 0.17 0.17 0.26 0.15 0.17 Net return on risk-weighted assets (RORWA) (%) 0.31 0.30 0.37 0.19 0.37 Net return on equity (ROE) (%) 2.08 2.00 3.51 2.09 2.45 Operating efficiency ratio (%) 33.93 44.37 48.17 39.50 39.05 In million Average total assets 153,171 150,091 148,632 153,726 157,161 Average risk-weighted assets (RWA) 84,129 84,349 89,381 90,710 91,677 Average equity 12,582 12,588 11,179 10,883 10,799 15

Yields and Costs (Amounts in thousand and rates annualized) Average balance Distribution (%) 30.06.14 30.06.13 Income or expense Average rate (%) Average balance Distribution (%) Income or expense Average rate (%) Financial system 5,926,388 3.91 22,801 0.77 6,002,740 3.84 13,018 0.43 Loans and discounts (a) 98,865,450 65.20 1,834,640 3.71 104,055,947 66.52 2,158,460 4.15 Securities portfolio 25,516,327 16.83 254,587 2.00 26,483,425 16.93 371,516 2.81 Other assets 21,322,600 14.06 6,507 0.06 19,894,274 12.72 3,747 0.04 Total earning assets (b) 151,630,765 100.00 2,118,535 2.79 156,436,386 100.00 2,546,741 3.26 Financial system 25,628,112 16.90 166,927 1.30 29,581,031 18.91 194,372 1.31 Customer funds (c) 90,118,845 59.43 543,861 1.21 89,337,013 57.11 832,985 1.86 Demand accounts 18,767,408 12.38 40,818 0.43 15,307,166 9.78 34,460 0.45 Savings and time deposits 66,728,707 44.01 492,057 1.47 65,276,103 41.73 723,681 2.22 Deposits at central counterparty entities 4,223,765 2.79 6,016 0.28 5,501,179 3.52 9,376 0.34 Retail commercial paper 398,965 0.26 4,970 2.49 3,252,565 2.08 65,468 4.03 Marketable debt securities & other 17,281,336 11.40 272,631 3.16 19,710,163 12.60 277,236 2.81 Other interest-bearing liabilities 347,529 0.23 5,554 3.20 383,440 0.25 6,894 3.60 Other funds 5,666,721 3.74 - - 6,653,829 4.25 - - Equity 12,588,223 8.30 - - 10,770,910 6.89 - - Total funds (d) 151,630,765 100.00 988,973 1.30 156,436,386 100.00 1,311,487 1.68 Customer spread (a-c) 2.50 2.28 Spread (b-d) 1.49 1.58 16

Quarterly Yields and Costs (Data in % and rates annualized) 2014 2013 2Q 1Q 4Q 3Q 2Q Rate Rate Rate Rate Distribution Distribution Distribution Distribution Distribution Financial system 3.75 0.68 4.07 0.86 4.14 0.75 4.18 0.42 4.03 0.43 Loans and discounts (a) 64.34 3.71 66.09 3.71 66.92 3.87 66.82 3.99 66.05 4.11 Securities portfolio 17.81 1.89 15.83 2.12 14.58 2.61 15.79 2.75 17.16 2.80 Other assets 14.11 0.09 14.02 0.03 14.37 0.04 13.21 0.04 12.77 0.04 Rate Total earning assets (b) 100.00 2.76 100.00 2.83 100.00 3.01 100.00 3.13 100.00 3.21 Financial system 18.86 1.13 14.90 1.52 15.84 1.43 17.68 1.26 18.73 1.27 Customer funds (c) 57.79 1.18 61.11 1.24 60.13 1.46 59.20 1.69 57.92 1.74 Demand accounts 12.35 0.44 12.41 0.43 11.13 0.47 10.27 0.45 9.92 0.45 Savings and time deposits Deposits at central counterparty entities 42.86 1.43 45.18 1.52 45.16 1.77 45.02 2.04 43.09 2.10 2.33 0.30 3.25 0.27 3.43 0.32 3.29 0.40 3.74 0.39 Retail commercial paper 0.25 2.39 0.27 2.58 0.41 3.35 0.63 3.76 1.17 3.97 Marketable debt securities & other Other interest-bearing liabilities 11.22 3.08 11.58 3.23 12.00 2.73 12.44 2.77 12.38 2.46 0.22 3.19 0.23 3.20 0.23 3.34 0.23 3.33 0.24 3.31 Other funds 3.70-3.78-4.28-3.36-3.86 - Equity 8.21-8.39-7.52-7.08-6.87 - Total funds (d) 100.00 1.24 100.00 1.37 100.00 1.43 100.00 1.59 100.00 1.55 Customer spread (a-c) 2.53 2.48 2.41 2.30 2.36 Spread (b-d) 1.52 1.46 1.58 1.54 1.66 17

Net Fee and Commission Income (Amounts in thousand) Distributions (%) 30.06.14 30.06.13 Variation In % 30.06.14 30.06.13 Banking services 331,863 362,474 (8.4) 96.5 94.6 Portfolio administration 52,633 46,513 13.2 15.3 12.2 Securities portfolios 16,273 15,523 4.8 4.7 4.1 Asset portfolio management 1,964 1,416 38.7 0.6 0.4 Mutual funds 29,454 20,982 40.4 8.6 5.5 Pension plans 4,942 8,592 (42.5) 1.4 2.2 Other banking services 246,798 265,602 (7.1) 71.8 69.4 Securities and foreign currency purchase and sale 7,270 5,218 39.3 2.1 1.4 Demand account administration 53,611 55,606 (3.6) 15.6 14.5 Provision of collateral and other guarantees 67,811 72,919 (7.0) 19.7 19.0 Asset transaction services 19,861 19,721 0.7 5.8 5.1 Collection and payment handling 37,515 40,315 (6.9) 10.9 10.5 Other 60,730 71,823 (15.4) 17.7 18.8 Means of payment 32,432 50,359 (35.6) 9.4 13.1 Defaults 11,888 20,503 (42.0) 3.5 5.4 Total 343,751 382,977 (10.2) 100.0 100.0 18

Personnel and general expenses (Amounts in thousand) Distributions (%) 30.06.14 30.06.13 Variation In % 30.06.14 30.06.13 Personnel expenses: 459,955 458,188 0.4 56.0 59.8 Wages and salaries 338,419 343,488 (1.5) 41.1 44.8 Social security charges 90,824 88,364 2.8 11.1 11.5 Other personnel expenses 16,069 14,102 13.9 2.0 1.8 Pensions 14,643 12,234 19.7 1.8 1.7 General expenses: 361,894 307,944 17.5 44.0 40.2 Rents and common services 68,584 71,620 (4.2) 8.3 9.3 Communications 15,840 15,911 (0.4) 1.9 2.1 Maintenance of premises and equipment 36,942 23,702 55.9 4.5 3.1 IT and other technical expenses 93,451 71,749 30.2 11.3 9.5 Stationery and office supplies 3,051 4,054 (24.7) 0.4 0.5 Technical reports and legal expenses 25,636 20,671 24.0 3.1 2.7 Advertising and publicity 16,863 16,056 5.0 2.1 2.1 Insurance 4,238 4,038 5.0 0.5 0.5 Security and fund transport services 9,542 12,495 (23.6) 1.2 1.6 Travel 4,907 4,427 10.8 0.6 0.6 VAT and other 66,516 52,378 27.0 8.1 6.8 Other general expenses 16,324 10,843 50.5 2.0 1.4 Total 821,849 766,132 7.3 100.0 100.0 19

The Banco Popular Share 30.06.14 30.06.13 Shareholders and share price Shareholders 272,230 297,196 Number of shares outstanding (thousands) 2,089,835 1,713,515 Closing price ( ) 4.88 2.36 Market capitalization (thousand ) 2 10,198,395 4,035,327 Maximum price ( ) 1 5.92 3.82 Minimum price ( ) 1 4.35 2.36 Trading volume Daily average number of shares traded (thousands) 19,625 86,636 Daily average trading volume (thousand ) 102,782 60,026 Stock market ratios Net earnings per share ( ) 3 0.062 0.101 Dividend per share paid in the period ( ) 0.040 - Book value per share diluted ( ) 4 5.99 5.88 Price/Earnings (annualized) 39.35 11.66 Price/Book value 0.81 0.40 (1) Closing prices. Prices before June 2013 reverse stock split (1x5) has been adjusted to be homogeneous (2) Calculated on shares outstanding (3) Calculated on average number of shares (4) Includes the mandatory convertible bonds and fully diluted shares Popular shares vs. Spanish and European indices (30/06/2013 = 100) 260 240 220 200 180 160 140 120 100 80 30.06.13 30.06.14 n Banco Popular n Ibex35 n Eurostoxx Banks 20

Basis of presentation and accounting principles and standards Pursuant to Regulation 1606/2002 of the European Parliament and Council, dated July 19, 2002, the obligation for companies whose securities were listed on a regulated market in a Member State of the European Union at the date of their balance sheets to prepare consolidated financial statements in accordance with the International Financial Reporting Standards (IFRS) came into force on January 1, 2005. The Bank of Spain, as the accounting regulator of the Spanish banking industry, implemented and adapted the accounting standards for credit institutions in its Circular 4/2004, as published in the Official State Gazette on December 30, 2004, subsequently partially modified. From January 1st 2014, due to the entry into force of IFRS 11, the equity method is applied to jointly controlled entities. For comparative purposes, this criterion has been applied to information concerning the financial year 2013. Accounting principles and policies and valuation standards The Group s accounting policy is based on the accounting principles set forth in Note 15 to the 2013 consolidated financial statements, which included most notably the following: A) Impairment of the value of assets: The treatment of financial assets differs from that of all other assets, as discussed below. Coverage is envisaged for the losses on financial assets, provided that they are based on objective evidence. Specific and general allowances are booked for customer-attributable credit-loss risk, and specific allowances for country risk. The specific allowance reflects the deterioration of assets individually identified as impaired, and the general allowance reflects the inherent loss incurred based on the nature of each risk and estimated by statistical procedures pending allocation to specific transactions. The Bank of Spain has stipulated models and methodology conforming to IFRS for the calculation of the foregoing allowances. The regulations require strict treatment in the classification of doubtful balances in customer transactions, since default in the payment of one installment triggers the classification as nonperforming of the entire transaction. For all other assets, including goodwill, impairment is deemed to exist if and when the book value of the assets exceeds their recoverable amount. In the case of goodwill, an impairment test must be performed at least once a year, since goodwill is not systematically amortized, and the appropriate writedown is booked if there is evidence of impairment. B) Income: B1) Fees: Under IFRS the treatment of fees collected or paid differs depending on whether they are compensation for a service rendered or a cost incurred, or are remuneration additional to the interest rate on the transaction. The former are recognized as income when the service is rendered or the cost is incurred, and the latter are accrued over the term of the transaction. B2) Interest and dividends: Interest is recognized on an accrual basis by the effective interest rate method, and dividends are recorded when declared. C) Financial instruments are classified for valuation purposes and recorded as follows: - Instruments classified in the trading portfolio, including financial derivatives, are recorded at fair value, with changes taken to the income statement. - Loans and discounts and held-to-maturity investments are recorded at their amortized cost. 21

- Available-for-sale financial assets are valued at fair value, and changes in value are recorded in net worth until realized, at which time they are recognized in the income statement. - Substantially all financial liabilities are valued at amortized cost. D) Non-financial and intangible assets and inventories. These are valued at cost. For the valuation of tangible assets, the Banco Popular Group has not, on a general basis, taken the option provided in IFRS to revalue them, and accordingly they are presented in the balance sheet at cost restated, where appropriate, pursuant to the applicable enabling legislation, net of accumulated depreciation. E) Non-current assets held for sale. Recorded in this caption are the assets bought or foreclosed. Disclaimer This financial report has been prepared by Banco Popular solely for purposes of information. It may contain estimates and forecasts with respect to the future development of the business and to the financial results of the Banco Popular Group, which stem from the expectations of the Banco Popular Group and which, by their very nature, are exposed to factors, risks and circumstances that could affect the financial results in such a way that they might not coincide with such estimates and forecasts. These factors include, but are not restricted to, (i) changes in interest rates, exchange rates or any other financial variable, both on the domestic as well as on the international securities markets, (ii) the economic, political, social or regulatory situation, and (iii) competitive pressures. In the event that such factors or other similar factors were to cause the financial results to differ from the estimates and forecasts contained in this report, or were to bring about changes in the strategy of the Banco Popular Group, Banco Popular does not undertake to publicly revise the content of this report. This financial report contains summarised information and in no case shall its content constitute an offer, invitation or recommendation to subscribe or acquire any security whatsoever, nor is it intended to serve as a basis for any contract or commitment whatsoever. 22

NOTES BANCO POPULAR ESPAÑOL Registered office: C/ Velázquez 34, 28001 Madrid Teléfono: 91 520 72 65 Fax: 91 577 92 09 banco popular español Banco popular portugal totalbank TargoBank banco popular-e,com popular banca privada Banco Pastor www.bancopopular.es 23

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