Sabadell. 1Q15 Results. April 24th, 2015

Sabadell 1Q15 Results April 24th, 2015

Disclaimer Sabadell cautions that this presentation may contain forward looking statements with respect to the business. financial condition. results of operations. strategy. plans and objectives of the Sabadell Group. While these forward looking statements represent our judgement and future expectations concerning the development of our business. a certain number of risks. uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include. but are not limited to. (1) general market. Macroeconomic. governmental. political and regulatory trends. (2) movements in local and international securities markets. currency exchange rate. and interest rates. (3) competitive pressures. (4) technical developments. (5) changes in the financial position or credit worthiness of our customers. obligors and counterparts. These risk factors could adversely affect our business and financial performance published in our past and future filings and reports. including those with the Spanish Securities and Exchange Commission (Comisión Nacional del Mercado de Valores). Sabadell is not nor can it be held responsible for the usage. valuations. opinions. expectations or decisions which might be adopted by third parties following the publication of this information. Financial information by business areas is presented according to GAAP as well as internal Sabadell group s criteria as a result of which each division reflects the true nature of its business. These criteria do not follow any particular regulation and can include forecasts and subjective valuations which could represent substantial differences should another methodology be applied. The distribution of this presentation in certain jurisdictions may be restricted by law. Recipients of this presentation should inform themselves about and observe such restrictions. These slides do not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe to any securities nor shall they or any one of them form the basis of or be relied on in connection with any contract or commitment whatsoever.

1. Quarterly highlights 2. Recommended cash offer for TSB Banking Group 3. Rights issue 4. 1Q15 Results 5. Commercial activity 6. Liquidity and ALCO portfolio 7. Risk and capital management 2

Quarterly highlights Sabadell has launched a recommended cash offer for TSB Banking Group In April, Sabadell has successfully completed a rights issue of 1.6 billion Result highlights NII continues to grow on a quarterly basis driven by lower cost of funding Net fee income is resilient in a seasonally soft quarter High level of gains from financial operations related to the management of the ALCO portfolio. The extraordinary gains have been neutralised by additional impairments resulting in increased NPL coverage ratios Commercial dynamics continue to improve, with positive growth in performing loans led by SMEs and companies. Stable development of on-balance sheet customer funds Total NPLs fell by a record 1bn and NPL ratio is reduced to 11.7% 3

Strategic rationale Internationalisation UK market Management track record Entering new markets is a key part of the Triple Business plan Stable financial system with attractive returns and prospects Fragmented challenger bank market with opportunities for growth Successfully delivery of all strategic plans to date Proven ability and IT know-how in integrating acquisitions onto Sabadell s platform TSB Financial returns Pure-play retail focused UK bank, aligned with Sabadell s expertise Sabadell s expertise in SME lending in Spain provides a value added tool to develop efficient SME services in the UK market Substantial pre-tax synergies of c.gbp160m from IT optimisation in the third year after completion GBP450M contribution by Lloyds to TSB more than offsets implementation costs of IT migration CET1 capital neutral post rights offering and medium term earnings enhancing 5

TSB financial highlights Total assets 34,900M Gross loans to customers 27,900M Customer deposits 31,600M Net profit 167M Employees 8,638 Branches 631 Note: Data as of December 2014. 6

Sabadell successfully completed a capital increase of 1.6 billion Amount size of the rights offering: 1,607 million new Rights issue exchange ratio: 3 shares for every 11 outstanding shares Subscription price: 1.48 Theoretical ex-rights price (TERP): 2.132 1 (discount to TERP: 30.6%) New shares will have the same right to receive dividends 2 as the outstanding shares ( 0.05) Number of shares post rights issue: 5,110,409,582 During the rights trading period (27 March to 17 April), Sabadell s share price increased by 5% New shares will start to trade on 28 April, 2015 1 Using the March 27th, 2015 closing price of 2.31 per share and adjusted for treasury shares. 2 The dividend is pending the approval by the AGM. 8

1Q15 results Mar. 14 Mar. 15 Mar. 15 % var 15/14 as reported as reported * comparable basis comparable basis Net Interest Income 530.0 643.1 643.1 21.3% Equity Method & Dividends 0.0 10.4 10.4 --- Commissions 201.0 225.8 225.8 12.4% Trading Income & Forex 946.7 801.7 801.7-15.3% Other Operating Results -29.7-15.1-61.5 --- Gross Operating Income 1,648.0 1,665.9 1,619.4-1.7% Personnel Costs -298.8-301.0-301.0 0.8% Administrative Costs -151.9-146.3-146.3-3.6% Depreciations -68.0-76.1-76.1 11.9% Pre-provisions Income 1,129.4 1,142.4 1,096.0-3.0% Total Provisions & Impairments -1,096.5-906.5-906.5-17.3% Gains on sale of assets 69.9 9.6 9.6 --- Profit before taxes 102.8 245.5 199.1 93.6% Taxes and others -21.7-70.9-56.9 --- Attributable Net Profit 81.2 174.6 142.1 75.2% Note: Following the early adoption of IFRIC 21 on levy liabilities, the payments related to the Deposit Guarantee Fund will now be reflected in the P&L as one single payment at the end of the year, instead of being accrued throughout the year. All numbers referring to the change year over year are on a comparable basis, as if the payments related to the DGF had been accrued. 10

Increase in net interest income driven by lower cost of funding and slight volume pick-up Net interest income evolution Euros in million +5.5% QoQ YoY growth: +21.3% 11

Continued improvement in customer spreads in a low interest rate environment Margin evolution In percentage Customer loan yield and cost of customer funds In percentage 2.06% 1.86% 1.75% 1.62% 1.59% 2.22% 2.29%2.35%2.44% 1.57% 3.94% 3.66% 3.49% 3.51%3.50%3.47% 3.39% 3.32%3.32% 2.19% 2.07%1.87%1.65% 1.29% 1.36%1.40%1.49% 1.17% 1.14%1.00% 1.05% 1.44% 1.25%1.10% 0.97% 0.88% 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Customer spread Net interest margin 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 Customer loan yield Cost of customer funds 12

Term deposits are repricing at lower rates Contractual rates on term deposits In percentage 3.58% 3.35% 3.36% 3.13% 3.39% 2.84% 3.06% 2.16% 2.37% 2.16% 1.85% 1.83% 1.61%1.51% 1.67%1.52% New term deposits at 0.49% 1.29% 1.38% 1.05% 0.75% 0.60% 0.49% Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Stock New production/renewals 13

Gradual reduction of loan spreads Our strong SME franchise allows Sabadell to cushion the impact of lower spreads Back book loan spreads by segment In basis points 270 277 282 285 284 268 266 260 243 229 186 187 186 184 181 87 89 90 92 94 Evolution of loan spreads by segment In percentage 1Q14 2Q14 3Q14 4Q14 1Q15 Total Mortgages to individuals SMEs Corporates 1Q14 2Q14 3Q14 4Q14 1Q15 Back book Front book Back book Mortgages to individuals 87 227 89 214 90 209 92 201 94 187 SME 270 500 277 492 282 494 285 445 284 459 Corporates 268 327 266 302 260 297 243 265 229 233 Front book Back book Front book Back book Front book Back book Front book 14

Commission income is growing Commission income evolution Euros in million 201.0 213.5 215.1 231.3 225.8 107.9 109.6 112.7 121.3 116.0 YoY growth: +12.4% 53.4 55.3 53.6 57.0 54.2 39.7 48.6 48.9 53.0 55.6 1Q14 2Q14 3Q14 4Q14 1Q15 Asset Mgmt 1 Lending Services 1 Includes mutual funds commissions and pension funds and insurance brokerage. 15

with mutual funds performing well Volume evolution YoY, by type of fund Euros in million 12,318 +51.6% +53.8% 18,674 1,215 2,860 An increase of 51.6% in funds under management 790 1,247 4,440 +129.3% +53.6% +19.2% 6,821 3,673 Higher margin products growing at a faster pace 3,081 2,760 +48.7% 4,105 March 2014 March 2015 Fixed income funds Guaranteed funds SICAV, External funds and Others Balanced funds Equity funds 16

Stable personnel costs Personnel expenses evolution Euros in million 298.8 6.0 310.9 296.8 296.1 301.0 24.9 1.8 0.6 5.6 YoY growth: +0.8% 292.8 286.0 295.0 295.5 295.5 1Q14 2Q14 3Q14 4Q14 1Q15 Recurrent Non-recurrent 17

and general expenses are down YoY General expenses evolution Euros in million 151.9 3.8 141.6 137.9 139.3 146.3 2.2 0.9 1.1 YoY change: -3.6% 148.1 139.4 137.9 138.5 145.2 1Q14 2Q14 3Q14 4Q14 1Q15 Recurrent Non-recurrent 18

Inflexion in lending has arrived Customer funds and loans evolution Euros in million Mar-14 Dec-14 Mar-15 % Var. YoY % Var. QoQ Total assets 161,094 163,346 167,480 4.0% 2.5% Of which: Gross loans to customers ex repos 120,192 117,964 118,527-1.4% 0.5% Fixed income portfolio 20,623 23,408 27,259 32.2% 16.5% Total liabilities 150,529 152,130 155,901 3.6% 2.5% Of which: On-balance sheet customer funds 94,690 94,461 94,899 0.2% 0.5% Other on-balance sheet term funds 1 57,608 51,186 49,419-14.2% -3.5% Sight deposits 37,082 43,275 45,480 22.6% 5.1% Wholesale funding 24,701 23,085 22,340-9.6% -3.2% ECB Funding 5,500 7,200 8,900 61.8% 23.6% Off-balance sheet funds 26,866 30,379 34,215 27.4% 12.6% Of which: Mutual funds 12,318 15,706 18,674 51.6% 18.9% Pension funds 4,314 4,335 4,529 5.0% 4.5% Third party insurance products 7,973 7,421 7,220-9.4% -2.7% 1 Other on-balance sheet term funds include term deposits and other funds placed in the retail network. Exclude repos. 20

Loan growth is confirmed SME and company loans evolution Euros in million Cumulative monthly residential mortgage production Euros in million 800 +66% YoY 29.4 29.9 600 508M 28.9 28.3 28.6 400 27.9 200 305M Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 0 Jan Feb Mar Apr May Jun Fourth quarter in a row of growth in SME and company loans 2015 2014 As of March 2015 new residential mortgage production 66% above 2014 level Note: SME and company loans include loans to SMEs, corporates and public sector and exclude NPLs. 21

Performing loans grow for the second quarter in a row Performing loans evolution Euros in million +1.5% QoQ 22

Overall position in on-balance sheet customer funds maintained Evolution of customer funds and mutual funds Euros in million Evolution of market share in investment funds 12,318 13,705 14,665 15,706 18,674 Mar-14 Mar-15 Market share* 4.53% 5.36% 57,608 55,625 53,705 51,186 49,419 37,082 39,418 43,670 43,275 45,480 Growth rate in investment funds: +18.9% QoQ 1Q14 2Q14 3Q14 4Q14 1Q15 Sight deposits On-balance sheet term funds Mutual funds Note: On-balance sheet term funds include term deposits and other funds placed in the retail network: preference shares, mandatory convertible bonds, senior debt, commercial paper and other. Exclude repos. *According to Inverco. 23

With the highest standards in quality of service Level of service quality Evolution of Sabadell quality index vs sector 7.54 6.95 7.21 6.77 7.32 6.61 7.20 7.24 6.90 6.89 6.11 6.06 6.01 6.03 7.16 6.29 7.51 6.73 Sabadell has increased its score and stays well above the rest of the sector 2007 2008 2009 2010 2011 2012 2013 2014 1Q15 Sabadell Sector Sabadell has obtained the highest mark on commercial performance Source: STIGA, EQUOS RCB Análisis de Calidad Objetiva en Redes Comerciales Bancarias (1T 2015). 24

Sabadell has improved its brand recognition among core SME customers Sabadell brand recognition evolution among SME customers (turnover 6-100M) Brand recognition among Spanish SME customers (turnover 6-100M) +4.6pp +3.2pp 50.3% 80.8% 79.0% +5.6pp 68.0% +7.9pp 31.0% 31.3% 33.9% 42.4% +2.6pp 50.3% 43.2% +1.3pp 32.8% 2006 2008 2010 2012 2014 Entity 1 Entity 2 Entity 3 Sabadell Entity 5 Entity 6 2014 2012 Source: FRS Inmark Financial behaviour on SMEs in Spain 2014. Percentage of SME customers mentioning Sabadell among first 5 banks. Based on 913 interviews with SME customers with an annual turnover of 6 to 100 million. 25

Maintaining a balanced funding structure Group funding structure Group wholesale funding breakdown Wholesale funding 15.6% ECB 6.2% Deposits 64.2% Securitisation 15.4% GGB 4.7% ICO financing 4.7% Repos 7.6% Retail issues 1.7% ECP 12.0% Prefs + Subordinated 4.1% Senior debt 4.9% Covered bonds 58.9% 27

and efficiently managing liquidity Group wholesale funding maturities Euros in million ECB liquidity position Euros in million 8,800 5,500 7,200 8,900 Dec-13 Mar-14 Dec-14 Mar-15 2015 2016 2017 2018 2019 2020 2020 The size represents the volume of maturities The percentage number is the current level of coupon payment Maturity by product type Euros in million 2021 >2022 2Q15 3Q15 4Q15 2016 2017 2018 2019 2020 2021 2022 >2022 Outst. Amount Covered Bonds (CH) 1,550 0 255 2,874 1,937 1,563 924 476 2,014 1,119 439 13,152 GGB 0 0 0 0 1,059 0 0 0 0 0 0 1,059 Senior Debt 0 0 0 890 0 100 57 0 0 25 0 1,071 Preferred Shares and Subordinated Debt 0 0 0 318 66 0 0 425 40 0 15 864 Other mid- and long-term financial instruments 0 0 0 0 0 18 0 0 10 0 7 35 Total 1,550 0 255 4,082 3,062 1,681 981 900 2,065 1,144 461 16,181 28

The ALCO portfolio contribution is stable Fixed income portfolio evolution Euros in billion ALCO portfolio Euros in billion and in percentage 2.4 12.0 ALCO portfolio Yield 3.0% 2.5 15.3 9.0 9.5 ALCO portfolio Dec-14 Mar-15 ALCO portfolio 21.0 24.8 % of total assets 12.9% 14.8% Duration (in years) 5.2 5.2 ECB liquidity position 7.2 8.9 Dec-14 Spanish public debt Life insurance portfolio Mar-15 Other Evolution of ALCO portfolio in run-off scenario Euros in billion, yield in % 2015e 2016e 2017e 2018e Amount ( bn) 25.4 23.1 21.7 20.8 Yield (%) 2.9% 2.9% 2.9% 2.9% 29

with increased diversification Fixed income portfolio composition evolution Euros in billion Dec 14 Mar-15 Spanish Government 9.7 10.6 Italian Government 4.7 6.1 US Government 1.5 2.8 Other Government 1.7 1.6 of which: Portuguese Government 0.8 0.9 Mexican Government 0.6 0.6 Netherlands Government 0.1 0.1 Agencies 1.5 1.7 Covered Bonds 2.0 1.9 Corporates & Fin 2.3 2.6 TOTAL 23.4 27.3 The ALCO portfolio has followed an active strategy and is today more diversified Note: All numbers refer to ALCO portfolio plus life insurance portfolio. 30

Higher capital ratios Common Equity Tier 1 phased-in In percentage 11.1% 11.4% 11.8% 11.7% 11.8% 11.7% 1Q14 2Q14 3Q14 4Q14 1Q15 Fully loaded 1Q15 32

The stock of NPLs continues the downward trend NPL evolution Data include 20% of APS. Euros in million 1bn further reduction of NPLs during 1Q15 17,727 17,386 16,777 15,910 14,863 The decline in total problematic assets accelerates 1Q14 2Q14 3Q14 4Q14 1Q15 On-balance sheet RE assets evolution Data include 20% of APS. Euros in million Total problematic assets Data include 20% of APS. Euros in million 8,151 8,474 8,569 8,848 9,059 25,878 25,860 25,347 24,758 23,922 1Q14 2Q14 3Q14 4Q14 1Q15 1Q14 2Q14 3Q14 4Q14 1Q15 All figures refer to ex-aps perimeter and 20% of APS Note: NPLs include contingent risk. 33

with improved dynamics in the last quarters Evolution of NPLs and RE assets Data include 20% of APS. Euros in million 1Q14 2Q14 3Q14 4Q14 1Q15 Ordinary net entries 25-244 -385-569 -802 Change in RE assets 77 323 96 279 211 Net entries + Change in RE assets 102 79-289 -290-591 Write-offs 265 97 224 298 245 Re assets and NPL quarterly change -163-18 -513-588 -836 Total problematic assets are reduced by 836M 34

NPL ratio improvement is accelerating with high coverage levels Evolution of NPL ratios by segment In percentage 1Q14 2Q14 3Q14 4Q14 1Q15 Real Estate development and/or construction purposes 52.56% 52.11% 51.47% 52.17% 49.21% Construction purposes non-related to real estate dev. 8.38% 7.41% 7.35% 8.08% 9.03% Large corporates 6.19% 6.13% 6.30% 6.46% 6.55% SME and small retailers and self-employed 13.08% 13.08% 13.11% 12.60% 12.20% Individuals with 1st mortgage guarantee assets 9.85% 9.75% 9.23% 9.25% 9.12% NPL ratio 13.94% 13.85% 13.44% 12.74% 11.68% NPL ratio is reduced by more than 100bps to 11.68% Coverage of NPL s: 51.4% Note: NPL ratio is calculated including contingent risk and 20% of the APS. 35

Maintaining good real estate sales results Number of units sold 2,882 3,271 3,123 1,992 Solvia has become one of the main servicers of the Spanish market 1Q12 1Q13 1Q14 1Q15 36

For any additional information, please do not hesitate to contact us. Investor Relations InvestorRelations@bancsabadell.com +34 93 728 12 00