The accompanying explanatory Notes 1 to 16 are an integral part of the condensed consolidated statement of cash flows
SANTANDER GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2016 AND 2015
(Millions of reais)
|
|
|
|
|
|
|
|
|
|
|
Note
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
|
A. CASH FLOWS FROM OPERATING
ACTIVITIES
|
|
|
|
|
(17,217)
|
|
|
(37,307)
|
Consolidated profit for the
period
|
|
|
|
|
8,254
|
|
|
6,645
|
Adjustments made to obtain the cash
flows from operating activities:
|
|
|
|
|
20,449
|
|
|
15,837
|
Depreciation and amortisation
charge
|
|
|
|
|
2,517
|
|
|
1,904
|
Other adjustments
|
|
|
|
|
17,932
|
|
|
13,933
|
Net increase/(decrease) in operating
assets and liabilities:
|
|
|
|
|
(45,679)
|
|
|
(60,178)
|
Operating assets
|
|
|
|
|
(99,187)
|
|
|
(129,844)
|
Operating liabilities
|
|
|
|
|
53,508
|
|
|
69,666
|
Income tax recovered/(paid)
|
|
|
|
|
(241)
|
|
|
389
|
B. CASH FLOWS FROM INVESTING
ACTIVITIES
|
|
|
|
|
(6,185)
|
|
|
(4,330)
|
Payments:
|
|
|
|
|
9,447
|
|
|
8,236
|
Tangible assets
|
|
7
|
|
|
7,389
|
|
|
4,530
|
Intangible assets
|
|
|
|
|
1,890
|
|
|
530
|
Investments
|
|
|
|
|
13
|
|
|
93
|
Subsidiaries and other business
units
|
|
|
|
|
155
|
|
|
3,083
|
Non-current assets held for sale and
associated liabilities
|
|
|
|
|
-
|
|
|
-
|
Held-to-maturity investments
|
|
|
|
|
-
|
|
|
-
|
Other payments related to investing
activities
|
|
|
|
|
-
|
|
|
-
|
Proceeds:
|
|
|
|
|
3,262
|
|
|
3,906
|
Tangible assets
|
|
7
|
|
|
2,342
|
|
|
2,414
|
Intangible assets
|
|
|
|
|
-
|
|
|
675
|
Investments
|
|
|
|
|
30
|
|
|
32
|
Subsidiaries and other business
units
|
|
|
|
|
-
|
|
|
190
|
Non-current assets held for sale and
associated liabilities
|
|
6
|
|
|
890
|
|
|
595
|
Held-to-maturity investments
|
|
|
|
|
-
|
|
|
-
|
Other proceeds related to investing
activities
|
|
|
|
|
-
|
|
|
-
|
C. CASH FLOWS FROM FINANCING
ACTIVITIES
|
|
|
|
|
(4,094)
|
|
|
28,687
|
Payments:
|
|
|
|
|
6,100
|
|
|
2,120
|
Dividends
|
|
3
|
|
|
3,198
|
|
|
1,023
|
Subordinated liabilities
|
|
|
|
|
971
|
|
|
219
|
Redemption of own equity
instruments
|
|
|
|
|
-
|
|
|
-
|
Acquisition of own equity
instruments
|
|
|
|
|
1,766
|
|
|
878
|
Other payments related to financing
activities
|
|
|
|
|
165
|
|
|
-
|
Proceeds:
|
|
|
|
|
2,006
|
|
|
30,807
|
Subordinated liabilities
|
|
|
|
|
-
|
|
|
6,755
|
Issuance of own equity instruments
|
|
11
|
|
|
-
|
|
|
23,830
|
Disposal of own equity instruments
|
|
|
|
|
2,006
|
|
|
222
|
Other proceeds related to financing
activities
|
|
|
|
|
-
|
|
|
-
|
D. EFFECT OF FOREIGN EXCHANGE RATE
CHANGES
|
|
|
|
|
(21,616)
|
|
|
26,152
|
E. NET INCREASE/(DECREASE) IN CASH AND
CASH EQUIVALENTS
|
|
|
|
|
(49,112)
|
|
|
13,202
|
F. CASH AND CASH EQUIVALENTS AS AT
BEGINNING OF PERIOD
|
|
|
|
|
350,666
|
|
|
223,607
|
G. CASH AND CASH EQUIVALENTS AS AT END
OF PERIOD
|
|
|
|
|
301,554
|
|
|
236,809
|
|
|
|
|
COMPONENTS OF CASH AND CASH EQUIVALENTS
AS AT END OF PERIOD
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
|
28,105
|
|
|
23,548
|
Cash equivalents at central banks
|
|
|
|
|
273,449
|
|
|
213,261
|
Other financial assets
|
|
|
|
|
-
|
|
|
-
|
Less - Bank overdrafts refundable on
demand
|
|
|
|
|
-
|
|
|
-
|
TOTAL
CASH AND CASH EQUIVALENTS AS AT END OF PERIOD
|
|
|
|
|
301,554
|
|
|
236,809
|
(*) Presented for comparison purposes only (see Note 1.e).
The accompanying explanatory Notes 1 to 16 are an integral part of the condensed consolidated statement of cash flows
for the three-month period ended 31 March 2016.
Translation of interim condensed consolidated financial statements originally issued in
Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group in Spain (see Notes 1 and 16). In the event of a discrepancy, the Spanish-language version prevails.
Banco Santander, S.A. and Companies composing Santander Group
Explanatory notes to the interim condensed consolidated financial statements for the three-month period ended 31 March 2016
1. Introduction, basis of presentation of the interim condensed consolidated financial statements and other information
Banco Santander, S.A. (the Bank or Banco
Santander) is a private-law entity subject to the rules and regulations applicable to banks operating in Spain. The Bylaws and other public information on the Bank can be consulted on the website of the Bank (www.santander.com) and at its
registered office at Paseo de Pereda 9-12, Santander.
In addition to the operations carried on directly by it, the Bank is the head
of a group of subsidiaries that engage in various business activities and which compose, together with it, Santander Group (the Group or Santander Group).
The Groups interim condensed consolidated financial statements for the three-month period ended 31 March 2016 (interim
financial statements) were prepared and signed by the Groups directors at the board meeting held on 26 April 2016.
|
b)
|
Basis of presentation of the interim financial statements
|
Under Regulation
(EC) no. 1606/2002 of the European Parliament and of the Council of 19 July 2002, all companies governed by the law of an EU Member State and whose securities are admitted to trading on a regulated market of any Member State must prepare their
consolidated financial statements for the years beginning on or after 1 January 2005 in accordance with the International Financial Reporting Standards (IFRSs) previously adopted by the European Union (EU-IFRSs). In
order to adapt the accounting system of Spanish credit institutions to the new standards, the Bank of Spain issued Circular 4/2004, of 22 December, on Public and Confidential Financial Reporting Rules and Formats.
Banco Santander, S.A.s policy is to present its interim financial statements using the euro as its presentation currency, for their
use in the various markets. These interim financial statements were prepared to comply with the requirements and specific provisions established in CVM Instruction no. 480/2009 of the Securities and Exchange Commission of Brazil (CVM), as a result
of the trading of the Banks marketable securities in Brazilian regulated markets, which requires the presentation of interim consolidated financial statements prepared in accordance with financial reporting standard IAS 34 issued by the IASB,
in Brazilian reais and in Brazilian Portuguese. Accordingly, these interim consolidated financial statements may not be suitable for other purposes.
1
The Groups consolidated financial statements for 2015 prepared in accordance with the
requirements and specific provisions of CVM Instruction no. 480/2009 of the Securities and Exchange Commission of Brazil were prepared by the Bank (and approved at the board of directors meeting on 12 February 2016) in compliance with
International Financial Reporting Standards as adopted by the European Union, taking into account Bank of Spain Circular 4/2004, and with the International Financial Reporting Standards adopted by the International Accounting Standards Board
(IASB-IFRSs), using the basis of consolidation, accounting policies and measurement bases described in Note 2 to the aforementioned consolidated financial statements and, accordingly, they presented fairly the Groups consolidated equity and
consolidated financial position at 31 December 2015 and the consolidated results of its operations, the consolidated recognised income and expense, the changes in consolidated equity and the consolidated cash flows in 2015.
These interim financial statements were prepared and are presented in accordance with IAS 34, Interim Financial Reporting, for the
preparation of interim condensed financial statements and contain disclosures relating to the three-month period ended 31 March 2016.
In accordance with IAS 34, the interim financial report is intended only to provide an update on the content of the latest annual
consolidated financial statements authorised for issue, focusing on new activities, events and circumstances occurring during the first quarter, and does not duplicate information previously reported in the latest approved annual consolidated
financial statements. Consequently, these interim financial statements do not include all the information that would be required for a complete set of consolidated financial statements prepared in accordance with IFRSs and, accordingly, for a proper
comprehension of the information included in these interim financial statements, they should be read together with the Groups consolidated financial statements for the year ended 31 December 2015.
These interim financial statements are presented in euros (the Banks functional currency and the Groups presentation
currency) and in Brazilian reais. The amounts presented in reais are included solely to comply with the requirements of CVM Instruction no. 480/2009 of the Securities and Exchange Commission of Brazil and subsequent amendments thereto. The balances
were translated to reais in accordance with the policies set forth in Note 2.a to the Groups consolidated financial statements for 2015, which were prepared to comply with the requirements and specific provisions of CVM Instruction no.
480/2009 of the Securities and Exchange Commission of Brazil. As indicated in the aforementioned Note 2.a, for practical reasons, balance sheet was translated at closing period exchange rate, the shareholders equity at historical exchange rate and
income and expenses were translated at the average exchange rate for the period; the application of this exchange rate or that corresponding to the date of each transaction does not give rise to significant differences in the Groups interim
financial statements.
The accounting policies and methods used in preparing these interim financial statements are the same as those
applied in the consolidated financial statements for 2015, taking into account the standards and interpretations that came into force in the first quarter of 2016. In this connection it should be noted that the following standards came into force in
the first quarter of 2016:
- Disclosure Initiative (Amendments to IAS 1) (obligatory for annual
reporting periods beginning on or after 1 January 2016, early application permitted) - the main objective of these amendments is to improve financial statement presentation and disclosures. To this end, the amendments introduce certain
qualifications relating to materiality, aggregation and disaggregation of items and the structure of the notes.
- Amendments to IAS 16 and IAS 38 - Clarification of Acceptable Methods of Depreciation and Amortisation
(obligatory for annual reporting periods beginning on or after 1 January 2016, early application permitted) - these amendments clarify that when an item of property, plant and equipment or an intangible asset is accounted for using the
revaluation model, the total gross carrying amount of the asset is adjusted in a manner that is consistent with the revaluation of the carrying amount of the asset, so that the accumulated depreciation or amortisation is equal to the difference
between the gross carrying amount and the carrying amount of the asset after revaluation (after taking into account any impairment losses).
2
|
-
|
|
Amendments to IASs 16 and 41 - Bearer Plants (obligatory for annual reporting periods beginning on or after
1 January 2016, early application permitted) - under these amendments, plants of this nature are now within the scope of IAS 16 and must be accounted for in the same way as property, plant and equipment rather than at their fair value.
|
|
-
|
|
Amendments to IAS 27 - Equity Method in Separate Financial Statements (obligatory for annual reporting periods beginning
on or after 1 January 2016, early application permitted) - these amendments permit the use of the equity method as an option in the separate financial statements of an entity for accounting for investments in subsidiaries, joint ventures and
associates.
|
|
-
|
|
Amendments to IFRS 11 - Accounting for Acquisitions of Interests in Joint Operations (obligatory for annual reporting
periods beginning on or after 1 January 2016, early application permitted) these amendments specify how to account for the acquisition of an interest in a joint operation in which the activity of the joint operation constitutes a
business.
|
|
-
|
|
Improvements to IFRSs, 2012-2014 cycle (obligatory for reporting periods beginning on or after 1 January 2016, early
application permitted) - these improvements introduce minor amendments to IFRS 5, IFRS 7, IAS 19 and IAS 34.
|
The
application of the aforementioned accounting standards did not have any material effects on the Groups interim financial statements.
The consolidated results and the determination of
consolidated equity are sensitive to the accounting policies, measurement bases and estimates used by the directors of the Bank in preparing the interim financial statements. The main accounting policies and measurement bases are set forth in Note 2
to the consolidated financial statements for 2015.
In the interim financial statements estimates were occasionally made by the
senior management of the Bank and of the consolidated entities in order to quantify certain of the assets, liabilities, income, expenses and obligations reported herein. These estimates, which were made on the basis of the best information
available, relate basically to the following:
|
1.
|
The income tax expense, which, in accordance with IAS 34, is recognised in interim periods based on the best estimate of
the weighted average tax rate expected by the Group for the full financial year;
|
|
2.
|
The impairment losses on certain assets - available-for-sale financial assets, loans and receivables, non-current assets
held for sale, investments, tangible assets and intangible assets;
|
|
3.
|
The assumptions used in the calculation of the post-employment benefit liabilities and commitments and other obligations;
|
|
4.
|
The useful life of the tangible and intangible assets;
|
|
5.
|
The measurement of goodwill arising on consolidation;
|
|
6.
|
The calculation of provisions and the consideration of contingent liabilities;
|
3
|
7.
|
The fair value of certain unquoted assets and liabilities; and
|
|
8.
|
The recoverability of deferred tax assets.
|
In the three-month period ended 31 March 2016 there were no significant changes in the estimates made at 2015
year-end
other than those indicated in these interim financial statements.
|
d)
|
Contingent assets and liabilities
|
Note 2.o to the Groups
consolidated financial statements for the year ended 31 December 2015 includes information on the contingent assets and liabilities at that date. There were no significant changes in the Groups contingent assets and liabilities from
31 December 2015 to the date of formal preparation of these interim financial statements.
|
e)
|
Comparative information
|
The information for 2015 contained in these
interim financial statements is presented for comparison purposes only with the information relating to three-month period ended 31 March 2016.
In order to interpret the changes in the balances with respect to December 2015, it is necessary to take into consideration the exchange
rate effect arising from the volume of foreign currency balances held by the Group in view of its geographic diversity (see Note 51.b to the consolidated financial statements for the year ended 31 December 2015) and the impact of the
appreciation/depreciation of the various currencies against the euro in the first three months of 2016, considering the exchange rates at the end of the three-month period, was as follows: Mexican peso (-3.45,%), US dollar (-4.37%), Brazilian real
(+4.72%), pound sterling (-7.28%), Chilean peso (+1.42%) and Polish zloty (+0.15%).
|
f)
|
Seasonality of the Groups transactions
|
In view of the business
activities carried on by the Group entities, their transactions are not cyclical or seasonal in nature. Therefore, no specific disclosures are included in these explanatory notes to the condensed consolidated financial statements for the three-month
period ended 31 March 2016.
In determining the note disclosures to be made on the various
items in the financial statements or other matters, the Group, in accordance with IAS 34, took into account their materiality in relation to the financial statements for the first quarter of 2016.
|
h)
|
Events after the reporting period
|
It should be noted that from
1 April 2016 to the date on which the interim financial statements for the first quarter of 2016 were authorised for issue, the following significant event occurred at Santander Group:
|
-
|
|
Commercial transformation plan: During April the Group has started negotiations with the trade unions in order to drive a
commercial transformation plan for Santander Spain and move ahead with the construction of a more simple Corporative Center that creates more value to the subsidiaries. On the signing date of these interim consolidated financial statements,
Groups directors consider that it isnt possible to estimate financial impact figures of these measures because of it is in a preliminary realization phase and the characteristics that a process like this leads to.
|
4
|
i)
|
Condensed consolidated statements of cash flows
|
The following terms are
used in the condensed consolidated statements of cash flows with the meanings specified:
|
-
|
|
Cash flows: inflows and outflows of cash and cash equivalents, which are short-term, highly liquid investments that are
subject to an insignificant risk of changes in value, irrespective of the portfolio in which they are classified.
|
The Group classifies as cash and cash equivalents the balances recognised under Cash and balances with central banks in the condensed
consolidated balance sheet.
|
-
|
|
Operating activities: the principal revenue-producing activities of credit institutions and other activities that are not
investing or financing activities.
|
|
-
|
|
Investing activities: the acquisition and disposal of long-term assets and other investments not included in cash and
cash equivalents.
|
|
-
|
|
Financing activities: activities that result in changes in the size and composition of the equity and liabilities that
are not operating activities.
|
2. Santander Group
Appendices I, II and III to the consolidated financial statements for the year ended 31 December 2015 provide relevant information
on the Group companies at that date and on the equity-accounted companies.
Also, Note 3 to the aforementioned consolidated financial
statements includes a description of the most significant acquisitions and disposals of companies performed by the Group in 2015, 2014 and 2013.
There were no significant adquisitions/ disposals of ownership interests, as well as on other significant corporate transactions, in the
first quarter of 2016.
The most significant transactions in process in the first quarter of 2016 were as follows:
Other transactions
Custody business
On 19 June 2014, the Group announced that it had reached an agreement with FINESP Holdings II B.V., a subsidiary of Warburg
Pincus, to sell a 50% stake in Santanders custody business in Spain, Mexico and Brazil. The remaining 50% will be retained by the Group.
On March 16, 2016, the parties agreed disregard the original investment structure and continue to work in good faith until June 30, 2016,
on an alternative investment structure that would allow the sale by Santander of the 50% stake referred to above.
5
Agreement with UniCredit, Warburg Pincus and General Atlantic
On 23 April 2015, the Group announced that, together with its partners Warburg Pincus and General Atlantic, it had entered into a
heads of terms and exclusivity agreement with UniCredit, subject to the signing of the final agreement, to merge Santander Asset Management and Pioneer Investments.
The agreement provides for the creation of a new company comprising the local asset managers of Santander Asset Management and Pioneer
Investments. The Group will have a 33.3% direct stake in the new company, UniCredit another 33.3%, and Warburg Pincus and General Atlantic will share a 33.3% stake. Pioneer Investments operations in the United States will not be included in
the new company but rather will be owned by UniCredit (50%) and Warburg Pincus and General Atlantic (50%).
On 11 November 2015,
the final framework agreement was signed by UniCredit, Santander, Warburg Pincus and General Atlantic for the integration of these businesses in accordance with the aforementioned structure.
At present the transactions is scheduled to be completed in 2016 once the preconditions established in the framework agreement have been
met and the relevant regulatory authorisations have been obtained
Purchase of shares to DDFS LLC in Santander Consumer USA (SCUSA)
Also, on 3 July 2015, the Group announced that it had reached an agreement to purchase the 9.68% ownership interest held by DDFS LLC
in SCUSA. Following this transaction, which is subject to the obtainment of the relevant regulatory authorisations, the Group will have an ownership interest of approximately 68.62% in SCUSA.
3. Shareholder remuneration system and earnings per share
|
a)
|
Shareholder remuneration system
|
The cash remuneration paid by the Bank to
its shareholders in the first three months of 2016 and 2015 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
% of par
value
|
|
|
Euros per
share
|
|
|
Amount
(millions
of euros)
|
|
|
% of par
value
|
|
|
Euros per
share
|
|
|
Amount
(millions
of euros)
|
|
|
|
|
|
|
|
|
Ordinary
shares
|
|
|
10.00
|
%
|
|
|
0.05000
|
|
|
|
722
|
|
|
|
4.75
|
%
|
|
|
0.02375
|
|
|
|
328
|
|
Other shares (non-voting, redeemable, etc.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total remuneration paid
|
|
|
10.00
|
%
|
|
|
0.05000
|
|
|
|
722
|
|
|
|
4.75
|
%
|
|
|
0.02375
|
|
|
|
328
|
|
Remuneration paid out of profit
|
|
|
10.00
|
%
|
|
|
0.05000
|
|
|
|
722
|
|
|
|
4.75
|
%
|
|
|
0.02375
|
|
|
|
328
|
|
Remuneration paid with a charge to reserves or share premium
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Remuneration paid in kind
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
% of par
value
|
|
|
Reais per
share
|
|
|
Amount
(millions
of reais)
|
|
|
% of par
value
|
|
|
Reais per
share
|
|
|
Amount
(millions
of reais)
|
|
|
|
|
|
|
|
|
Ordinary
shares
|
|
|
10.00
|
%
|
|
|
0.22147
|
|
|
|
3.198
|
|
|
|
4.75
|
%
|
|
|
0.07406
|
|
|
|
1.023
|
|
Other shares (non-voting, redeemable, etc.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total remuneration paid
|
|
|
10.00
|
%
|
|
|
0.22147
|
|
|
|
3.198
|
|
|
|
4.75
|
%
|
|
|
0.07406
|
|
|
|
1.023
|
|
Remuneration paid out of profit
|
|
|
10.00
|
%
|
|
|
0.22147
|
|
|
|
3.198
|
|
|
|
4.75
|
%
|
|
|
0.07406
|
|
|
|
1.023
|
|
Remuneration paid with a charge to reserves or share premium
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Remuneration paid in kind
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
b)
|
Earnings per share from continuing and discontinued operations
|
i. Basic earnings per
share
Basic earnings per share for the period are calculated by dividing the net profit attributable to the Group for the period
(adjusted by the after-tax amount relating to the remuneration of contingently convertible preference shares recognised in equity) by the weighted average number of ordinary shares outstanding during the period, excluding the average number of
treasury shares held in the period.
Accordingly:
|
|
|
|
|
|
|
|
|
|
|
31/03/16
|
|
|
31/03/15
|
|
Net profit attributable to the Parent
(millions of euros)
|
|
|
1,633
|
|
|
|
1,717
|
|
Remuneration of contingently convertible preference shares (millions of euros)
|
|
|
(84)
|
|
|
|
(68)
|
|
|
|
|
1,549
|
|
|
|
1,649
|
|
Of which:
|
|
|
|
|
|
|
|
|
Profit/Loss from discontinued operations (millions of euros)
|
|
|
-
|
|
|
|
-
|
|
Profit from continuing operations (millions of euros)
|
|
|
1,549
|
|
|
|
1,649
|
|
Weighted average number of shares outstanding
|
|
|
14,391,044,388
|
|
|
|
13,664,257,942
|
|
Basic
earnings per share (euros)
|
|
|
0.11
|
|
|
|
0.12
|
|
Of
which: from discontinued operations (euros)
|
|
|
-
|
|
|
|
-
|
|
from continuing operations (euros)
|
|
|
0.11
|
|
|
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31/03/16
|
|
|
31/03/15
|
|
Net profit attributable to the Parent
(millions of reais)
|
|
|
7,017
|
|
|
|
5,520
|
|
Remuneration of contingently convertible preference shares (millions of reais)
|
|
|
(260)
|
|
|
|
(219)
|
|
|
|
|
6,757
|
|
|
|
5,301
|
|
Of which:
|
|
|
|
|
|
|
|
|
Profit/Loss from discontinued operations (millions of reais)
|
|
|
-
|
|
|
|
-
|
|
Profit from continuing operations (millions of reais)
|
|
|
6,757
|
|
|
|
5,301
|
|
Weighted average number of shares outstanding
|
|
|
14,391,044,388
|
|
|
|
13,664,257,942
|
|
Basic
earnings per share (reais)
|
|
|
0.47
|
|
|
|
0.39
|
|
Of
which: from discontinued operations (reais)
|
|
|
-
|
|
|
|
-
|
|
from continuing operations (reais)
|
|
|
0.47
|
|
|
|
0.39
|
|
7
ii. Diluted earnings per share
Diluted earnings per share for the period are calculated by dividing the net profit attributable to the Group for the period (adjusted by
the after-tax amount relating to the remuneration of contingently convertible preference shares recognised in equity) by the weighted average number of ordinary shares outstanding during the period, excluding the average number of treasury shares
and adjusted for all the dilutive effects inherent to potential ordinary shares (share options, warrants and convertible debt instruments).
Accordingly, diluted earnings per share were determined as follows:
|
|
|
|
|
|
|
|
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
|
Net profit
attributable to the Parent (millions of euros)
|
|
|
1,633
|
|
|
|
1,717
|
|
Remuneration of contingently convertible preference shares
(millions of euros)
|
|
|
(84)
|
|
|
|
(68)
|
|
Dilutive
effect of changes in profit for the period arising from potential conversion of ordinary shares
|
|
|
-
|
|
|
|
-
|
|
Net profit
attributable to the Parent (millions of euros)
|
|
|
1,549
|
|
|
|
1,649
|
|
Of
which:
|
|
|
|
|
|
|
|
|
Profit/Loss from discontinued operations (millions of euros)
|
|
|
-
|
|
|
|
-
|
|
Profit
from continuing operations (millions of euros)
|
|
|
1,549
|
|
|
|
1,649
|
|
|
|
|
Weighted
average number of shares outstanding
|
|
|
14,391,044,388
|
|
|
|
13,664,257,942
|
|
Dilutive
effect of:
|
|
|
|
|
|
|
|
|
Options/
receipt of shares
|
|
|
53,907,515
|
|
|
|
21,188,883
|
|
Adjusted number of shares
|
|
|
14,444,951,903
|
|
|
|
13,685,446,825
|
|
Diluted earnings per share (euros)
|
|
|
0.11
|
|
|
|
0.12
|
|
Of which: from discontinued operations (euros)
|
|
|
-
|
|
|
|
-
|
|
from
continuing operations (euros)
|
|
|
0.11
|
|
|
|
0.12
|
|
8
|
|
|
|
|
|
|
|
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
|
Net profit
attributable to the Parent (millions of reais)
|
|
|
7,017
|
|
|
|
5,520
|
|
Remuneration of contingently convertible preference shares
(millions of reais)
|
|
|
(286
|
)
|
|
|
(219
|
)
|
Dilutive
effect of changes in profit for the period arising from potential conversion of ordinary shares
|
|
|
-
|
|
|
|
-
|
|
Profit
attributable to the Parent (millions of reais)
|
|
|
6,731
|
|
|
|
5,301
|
|
Of
which:
|
|
|
|
|
|
|
|
|
Profit/Loss from discontinued operations (millions of reais)
|
|
|
-
|
|
|
|
-
|
|
Profit
from continuing operations (millions of reais)
|
|
|
6,731
|
|
|
|
5,301
|
|
|
|
|
Weighted
average number of shares outstanding
|
|
|
14,391,044,388
|
|
|
|
13,664,257,942
|
|
Dilutive
effect of:
|
|
|
|
|
|
|
|
|
Options/
receipt of shares
|
|
|
53,907,515
|
|
|
|
21,188,883
|
|
Adjusted number of shares
|
|
|
14,444,951,903
|
|
|
|
13,685,446,825
|
|
Diluted earnings per share (reais)
|
|
|
0.47
|
|
|
|
0.39
|
|
Of which: from discontinued operations (reais)
|
|
|
-
|
|
|
|
-
|
|
from continuing operations (reais)
|
|
|
0.47
|
|
|
|
0.39
|
|
4. Remuneration and other benefits paid to the Banks directors and senior
managers
Note 5 to the Groups consolidated financial statements for the year ended 31 December 2015 includes the detail of the
remuneration and other benefits paid to the Banks directors and senior managers in 2015 and 2014.
The most salient data
relating to the aforementioned remuneration and benefits for the three-month periods ended 31 March 2016 and 2015 are summarised as follows:
Remuneration of directors
(1)
|
|
|
|
|
|
|
|
|
|
|
Thousands of euros
|
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
|
Members
of the board of directors:
|
|
|
|
|
|
|
|
|
Type of
remuneration-
|
|
|
|
|
|
|
|
|
Fixed
salary remuneration of executive directors
|
|
|
1,741
|
|
|
|
2,165
|
|
Variable
remuneration in cash of executive directors
|
|
|
-
|
|
|
|
-
|
|
Attendance
fees of directors
|
|
|
262
|
|
|
|
508
|
|
Bylaw-stipulated annual directors emoluments (2)
|
|
|
946
|
|
|
|
-
|
|
Other
(except insurance premiums)
|
|
|
589
|
|
|
|
347
|
|
Sub-total
|
|
|
3,538
|
|
|
|
3,020
|
|
|
|
|
Transactions with shares and/or other financial instruments
|
|
|
-
|
|
|
|
-
|
|
|
|
|
3,538
|
|
|
|
3,020
|
|
9
|
|
|
|
|
|
|
|
|
|
|
Thousands of reais
|
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
|
Members
of the board of directors:
|
|
|
|
|
|
|
|
|
Type of
remuneration-
|
|
|
|
|
|
|
|
|
Fixed
salary remuneration of executive directors
|
|
|
7,479
|
|
|
|
6,960
|
|
Variable
remuneration in cash of executive directors
|
|
|
-
|
|
|
|
-
|
|
Attendance
fees of directors
|
|
|
4,064
|
|
|
|
-
|
|
Bylaw-stipulated annual directors emoluments (2)
|
|
|
1,126
|
|
|
|
1,633
|
|
Other
(except insurance premiums)
|
|
|
2,530
|
|
|
|
1,116
|
|
Sub-total
|
|
|
15,199
|
|
|
|
9,709
|
|
|
|
|
Transactions with shares and/or other financial instruments
|
|
|
-
|
|
|
|
-
|
|
|
|
|
15,199
|
|
|
|
9,709
|
|
|
|
|
|
|
(1) The notes to the annual consolidated financial statements for 2016 will contain detailed
and complete information on the remuneration paid to all the directors, including executive directors.
(2) During 2015 the stipulated annual directors emoluments has been modified. The
accrual during the first three f months of 2015 amounted to 862 thousand Euro (BRL: 2.771 thousand).
|
Other benefits of the directors
|
|
|
|
|
|
|
|
|
|
|
Thousands of euros
|
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
|
Members
of the board of directors:
|
|
|
|
|
|
|
|
|
Other
benefits-
|
|
|
|
|
|
|
|
|
Advances
|
|
|
-
|
|
|
|
-
|
|
Loans
granted
|
|
|
101
|
|
|
|
4,262
|
|
Pension
funds and plans: Provisions and/or contributions (1)
|
|
|
1,124
|
|
|
|
1,330
|
|
Pension
funds and plans: Accumulated rights (2)
|
|
|
117,675
|
|
|
|
136,968
|
|
Life
insurance premiums
|
|
|
475
|
|
|
|
377
|
|
Guarantees provided for directors
|
|
|
-
|
|
|
|
-
|
|
10
|
|
|
|
|
|
|
|
|
|
|
Thousands of reais
|
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
|
Members
of the board of directors:
|
|
|
|
|
|
|
|
|
Other
benefits-
|
|
|
|
|
|
|
|
|
Advances
|
|
|
-
|
|
|
|
-
|
|
Loans
granted
|
|
|
415
|
|
|
|
14,898
|
|
Pension
funds and plans: Provisions and/or contributions (1)
|
|
|
4,629
|
|
|
|
4,649
|
|
Pension
funds and plans: Accumulated rights (2)
|
|
|
484,515
|
|
|
|
478,813
|
|
Life
insurance premiums
|
|
|
1,956
|
|
|
|
1,318
|
|
Guarantees provided for directors
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
(1) Corresponds to the provisions and/or contributions made in the first quarter of 2016 and
2015 for retirement pensions and supplementary benefits (surviving spouse and child benefits, and permanent disability).
(2) Corresponds to the pension rights accumulated by the directors. In addition, at
31 March 2016 and 2015, former Board members held accumulated pension rights amounting to EUR 114,943 thousand (BRL 460,914 thousand) and EUR 89,471 thousand (BRL 312,773 thousand), respectively.
|
Also, in their capacity as members of the boards of directors of other Group companies, Mr Matías
Rodríguez Inciarte received EUR 10.5 thousand (BRL 45 thousand) in the first quarter of 2015 as non-executive director of U.C.I., S.A. (first quarter of 2015: EUR 10.5 thousand (BRL 37 thousand).
Remuneration of senior managers
(1) (2) (3)
|
|
|
|
|
|
|
|
|
|
|
Thousands of euros
|
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
|
Senior
management:
|
|
|
|
|
|
|
|
|
Total remuneration of senior management
|
|
|
5,651
|
|
|
|
8,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thousands of reais
|
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
|
Senior
management:
|
|
|
|
|
|
|
|
|
Total remuneration of senior management
|
|
|
24,277
|
|
|
|
28,543
|
|
|
|
|
|
|
(1) The above amounts reflect the quarterly remuneration irrespective of the months in which
the senior managers have held positions as members of the Banks general management, and they exclude the remuneration of executive directors.
(2) The number of senior managers of the Bank, excluding executive directors, changed from 28
in the first quarter of 2015 to 20 in the first quarter of 2016.
(3) In addition, members of Senior Management who, at March 31, 2016, had ceased their duties,
received remunerations or payments related to their resignations in the amount of 784 thousand euros (BRL: 3.368 thousand) during the three month period ended March 31, 2016.
|
11
The annual variable remuneration (or bonus) for 2015 paid to the directors and the other
members of senior management was disclosed in the information on remuneration set forth in the notes to the financial statements for that year. Similarly, the variable remuneration allocable to 2016 profit or loss, which will be submitted for
approval by the board of directors, will be disclosed in the notes to the financial statements for 2016.
5. Financial assets
The detail, by nature and category for measurement purposes, of
the Groups financial assets, other than the balances relating to Cash and balances with central banks and Hedging derivatives, at 31 March 2016 and 31 December 2015 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
31/03/16
|
|
Financial
assets held
for trading
|
|
|
Other financial
assets at fair
value through
profit or loss
|
|
|
Available-
for-sale
financial
assets
|
|
|
Loans and
receivables
|
|
|
Held-to-
maturity
investments
|
|
|
|
|
|
|
Loans and
advances to credit institutions
|
|
|
4,468
|
|
|
|
30,714
|
|
|
|
-
|
|
|
|
52,220
|
|
|
-
|
Loans and
advances to customers
|
|
|
6,866
|
|
|
|
13,884
|
|
|
|
-
|
|
|
|
752,702
|
|
|
-
|
Debt
instruments
|
|
|
50,060
|
|
|
|
3,564
|
|
|
|
113,656
|
|
|
|
12,487
|
|
|
4,566
|
Equity
instruments
|
|
|
14,584
|
|
|
|
609
|
|
|
|
4,642
|
|
|
|
-
|
|
|
-
|
Trading
derivatives
|
|
|
76,643
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
152,621
|
|
|
|
48,771
|
|
|
|
118,298
|
|
|
|
817,409
|
|
|
4,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
31/03/16
|
|
Financial
assets held
for trading
|
|
|
Other financial
assets at fair
value through
profit or loss
|
|
|
Available-
for-sale
financial
assets
|
|
|
Loans and
receivables
|
|
|
Held-to-
maturity
investments
|
|
|
|
|
|
|
Loans and
advances to credit institutions
|
|
|
18,397
|
|
|
|
126,462
|
|
|
|
-
|
|
|
|
215,011
|
|
|
-
|
Loans and
advances to customers
|
|
|
28,270
|
|
|
|
57,166
|
|
|
|
-
|
|
|
|
3,099,175
|
|
|
-
|
Debt
instruments
|
|
|
206,117
|
|
|
|
14,674
|
|
|
|
467,967
|
|
|
|
51,414
|
|
|
18,800
|
Equity
instruments
|
|
|
60,048
|
|
|
|
2,507
|
|
|
|
19,113
|
|
|
|
-
|
|
|
-
|
Trading
derivatives
|
|
|
315,570
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
628,402
|
|
|
|
200,809
|
|
|
|
487,080
|
|
|
|
3,365,600
|
|
|
18,800
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
31/12/15
|
|
Financial
assets held
for trading
|
|
|
Other financial
assets at fair
value through
profit or loss
|
|
|
Available-
for-sale
financial
assets
|
|
|
Loans and
receivables
|
|
|
Held-to-
maturity
investments
|
|
|
|
|
|
|
Loans and
advances to credit institutions
|
|
|
2,293
|
|
|
|
26,403
|
|
|
|
-
|
|
|
|
50,256
|
|
|
-
|
Loans and
advances to customers
|
|
|
6,081
|
|
|
|
14,293
|
|
|
|
-
|
|
|
|
770,474
|
|
|
-
|
Debt
instruments
|
|
|
43,964
|
|
|
|
3,717
|
|
|
|
117,187
|
|
|
|
10,907
|
|
|
4,355
|
Equity
instruments
|
|
|
18,225
|
|
|
|
630
|
|
|
|
4,849
|
|
|
|
-
|
|
|
-
|
Trading
derivatives
|
|
|
76,724
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
147,287
|
|
|
|
45,043
|
|
|
|
122,036
|
|
|
|
831,637
|
|
|
4,355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
31/12/15
|
|
Financial
assets held
for trading
|
|
|
Other financial
assets at fair
value through
profit or loss
|
|
|
Available-
for-sale
financial
assets
|
|
|
Loans and
receivables
|
|
|
Held-to-
maturity
investments
|
|
|
|
|
|
|
Loans and
advances to credit institutions
|
|
|
9,887
|
|
|
|
113,842
|
|
|
|
-
|
|
|
|
216,689
|
|
|
-
|
Loans and
advances to customers
|
|
|
26,219
|
|
|
|
61,627
|
|
|
|
-
|
|
|
|
3,322,053
|
|
|
-
|
Debt
instruments
|
|
|
189,560
|
|
|
|
16,027
|
|
|
|
505,275
|
|
|
|
47,028
|
|
|
18,777
|
Equity
instruments
|
|
|
78,581
|
|
|
|
2,716
|
|
|
|
20,907
|
|
|
|
-
|
|
|
-
|
Trading
derivatives
|
|
|
330,811
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
|
635,058
|
|
|
|
194,212
|
|
|
|
526,182
|
|
|
|
3,585,770
|
|
|
18,777
|
13
|
b)
|
Sovereign risk with peripheral European countries
|
The detail at
31 March 2016 and 31 December 2015, by type of financial instrument, of the Group credit institutions sovereign risk exposure to Europes peripheral countries and of the short positions held with them, taking into consideration
the scope established by the European Banking Authority (EBA) in the analyses performed on the capital needs of European credit institutions (see Note 54 to the consolidated financial statements for 2015), is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sovereign risk by country of issuer/borrower at 31 March 2016 (*)
|
|
|
|
|
|
|
Millions of euros
|
|
|
|
|
|
|
|
|
Debt instruments
|
|
|
|
|
|
|
|
|
Derivatives (***)
|
|
|
Financial
assets held
for
trading
and Other
financial
assets at fair
value
through
profit or loss
|
|
|
Short
positions
|
|
|
Available-
for-sale
financial
assets
|
|
|
Held-to
maturity
investments
|
|
|
Loans and
receivables
|
|
|
Loans
and
advances
to
customers
(**)
|
|
|
Total net
direct
exposure
|
|
|
Other than
CDSs
|
|
|
CDSs
|
|
Spain
|
|
|
8,191
|
|
|
|
(3,040
|
)
|
|
|
24,544
|
|
|
|
1,210
|
|
|
|
2,015
|
|
|
|
14,624
|
|
|
|
47,544
|
|
|
|
41
|
|
|
|
-
|
|
Portugal
|
|
|
179
|
|
|
|
(400
|
)
|
|
|
5,235
|
|
|
|
932
|
|
|
|
6
|
|
|
|
900
|
|
|
|
6,852
|
|
|
|
-
|
|
|
|
(1
|
)
|
Italy
|
|
|
3,773
|
|
|
|
(1,761
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,012
|
|
|
|
(2)
|
|
|
|
2
|
|
Greece
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Ireland
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
44
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sovereign risk by country of issuer/borrower at 31 March 2016 (*)
|
|
|
|
|
|
|
Millions of reais
|
|
|
|
|
|
|
|
|
Debt instruments
|
|
|
|
|
|
|
|
|
Derivatives (***)
|
|
|
Financial
assets held
for
trading
and Other
financial
assets at fair
value
through
profit or loss
|
|
|
Short
positions
|
|
|
Available-
for-sale
financial
assets
|
|
|
Held-to
maturity
investments
|
|
|
Loans and
receivables
|
|
|
Loans
and
advances
to
customers
(**)
|
|
|
Total net
direct
exposure
|
|
|
Other than
CDSs
|
|
|
CDSs
|
|
Spain
|
|
|
33,726
|
|
|
|
(12,517
|
)
|
|
|
101,057
|
|
|
|
4,982
|
|
|
|
8,297
|
|
|
|
60,213
|
|
|
|
195,758
|
|
|
|
169
|
|
|
|
-
|
|
Portugal
|
|
|
737
|
|
|
|
(1,647
|
)
|
|
|
21,555
|
|
|
|
3,837
|
|
|
|
25
|
|
|
|
3,706
|
|
|
|
28,213
|
|
|
|
-
|
|
|
|
(4
|
)
|
Italy
|
|
|
15,535
|
|
|
|
(7,251
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
8,284
|
|
|
|
(8)
|
|
|
|
8
|
|
Greece
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Ireland
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
181
|
|
|
|
-
|
|
|
(*)
|
Information prepared under EBA standards. Also, there are government debt securities on insurance companies balance
sheets amounting to EUR 11,835 million (BRL 48,730 million) (of which EUR 10,389 million, EUR 606 million and EUR 840 million (BRL 42,776 million, BRL 2,495 million and BRL 3,459 million) relate to Spain, Portugal and Italy, respectively) and
off-balance-sheet exposure other than derivatives contingent liabilities and commitments amounting to EUR 1,989 million (BRL 8,190 million) (of which EUR 1,850 million, EUR 75 million,EUR 62 million and EUR 2 million. (BRL 7,618million,
BRL 309 million, BRL 255 million and BRL 8 million) relate to Spain, Portugal, Italy and Ireland , respectively).
|
|
(**)
|
Presented without taking into account the valuation adjustments recognised (EUR 24 million (BRL 99 million)).
|
|
(***)
|
Other than CDSs refers to the exposure to derivatives based on the location of the counterparty, irrespective
of the location of the underlying. CDSs refers to the exposure to CDSs based on the location of the underlying.
|
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sovereign risk by country of issuer/borrower at 31 December 2015 (*)
|
|
|
|
|
|
|
Millions of euros
|
|
|
|
|
|
|
|
|
Debt instruments
|
|
|
Loans and
advances to
customers (**)
|
|
|
Total net direct
exposure
|
|
|
Derivatives (***)
|
|
|
Financial
assets held
for
trading
and Other
financial
assets at fair
value
through
profit or loss
|
|
|
Short
positions
|
|
|
Available-
for-sale
financial
assets
|
|
|
Held-to
maturity
investments
|
|
|
Loans and
receivables
|
|
|
|
|
Other than
CDSs
|
|
|
CDSs
|
|
Spain
|
|
|
7,647
|
|
|
|
(2,446
|
)
|
|
|
26,443
|
|
|
|
1,032
|
|
|
|
2,025
|
|
|
|
13,993
|
|
|
|
48,694
|
|
|
|
(217)
|
|
|
|
-
|
|
Portugal
|
|
|
278
|
|
|
|
(174
|
)
|
|
|
7,916
|
|
|
|
916
|
|
|
|
-
|
|
|
|
1,071
|
|
|
|
10,007
|
|
|
|
-
|
|
|
|
1
|
|
Italy
|
|
|
3,980
|
|
|
|
(1,263
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,717
|
|
|
|
(4)
|
|
|
|
4
|
|
Greece
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Ireland
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sovereign risk by country of issuer/borrower at 31 December 2015 (*)
|
|
|
|
|
|
|
Millions of reais
|
|
|
|
|
|
|
|
|
Debt instruments
|
|
|
Loans and
advances to
customers (**)
|
|
|
Total net direct
exposure
|
|
|
Derivatives (***)
|
|
|
Financial
assets held
for
trading
and Other
financial
assets at fair
value
through
profit or
loss
|
|
|
Short
positions
|
|
|
Available-
for-sale
financial
assets
|
|
|
Held-to
maturity
investments
|
|
|
Loans and
receivables
|
|
|
|
|
Other than
CDSs
|
|
|
CDSs
|
|
Spain
|
|
|
32,972
|
|
|
|
(10,598
|
)
|
|
|
114,014
|
|
|
|
4,450
|
|
|
|
8,731
|
|
|
|
60,334
|
|
|
|
209,903
|
|
|
|
(936)
|
|
|
|
-
|
|
Portugal
|
|
|
1,199
|
|
|
|
(750
|
)
|
|
|
34,131
|
|
|
|
3,950
|
|
|
|
-
|
|
|
|
4,618
|
|
|
|
43,148
|
|
|
|
-
|
|
|
|
4
|
|
Italy
|
|
|
17,161
|
|
|
|
(5,446
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
11,715
|
|
|
|
(17)
|
|
|
|
17
|
|
Greece
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Ireland
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
26
|
|
|
|
-
|
|
|
(*)
|
Information prepared under EBA standards. Also, there are government debt securities on insurance companies balance
sheets amounting to EUR 11,273 million (BRL 48,606 million) (of which EUR 9,892 million, EUR 605 million and EUR 776 million (BRL 42,651 million, BRL 2,609 million and BRL 3,346 million) relate to Spain, Portugal and Italy, respectively) and
off-balance-sheet exposure other than derivatives contingent liabilities and commitments amounting to EUR 3,134 million (BRL 13,513 million) (of which EUR 3,045 million and EUR 89 million (BRL 13,129 million and BRL 384 million) relate
to Spain and Portugal, respectively).
|
|
(**)
|
Presented without taking into account the valuation adjustments recognised (EUR 31 million (BRL 134 million)).
|
|
(***)
|
Other than CDSs refers to the exposure to derivatives based on the location of the counterparty, irrespective
of the location of the underlying. CDSs refers to the exposure to CDSs based on the location of the underlying.
|
15
The detail of the Groups other exposure to other counterparties (private sector,
central banks and other public entities that are not considered to be sovereign risks) in the aforementioned countries at 31 March 2016 and 31 December 2015 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exposure to other counterparties by country of issuer/borrower at 31 March
2016 (*)
|
|
|
|
Millions of euros
|
|
|
|
|
|
|
|
|
|
Debt instruments
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives (***)
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
Loans and
|
|
|
|
|
|
|
|
|
|
Balances
with central
banks
|
|
|
Reverse
repurchase
agreements
|
|
|
held for
trading
and Other
financial assets
at FVTPL
|
|
|
Available-
for-sale
financial
assets
|
|
Loans and
receivables
|
|
|
Held-to
maturity
investments
|
|
|
advances to
customers
(**)
|
|
|
Total net
direct
exposure
|
|
|
Other
than
CDSs
|
|
|
CDSs
|
|
Spain
|
|
|
1,843
|
|
|
|
18,266
|
|
|
|
1,386
|
|
|
5,082
|
|
|
1,023
|
|
|
|
-
|
|
|
|
151,697
|
|
|
|
179,297
|
|
|
|
3,759
|
|
|
|
(37)
|
|
Portugal
|
|
|
1,087
|
|
|
|
-
|
|
|
|
124
|
|
|
497
|
|
|
3,093
|
|
|
|
245
|
|
|
|
29,540
|
|
|
|
34,586
|
|
|
|
1,831
|
|
|
|
-
|
|
Italy
|
|
|
6
|
|
|
|
-
|
|
|
|
467
|
|
|
848
|
|
|
-
|
|
|
|
-
|
|
|
|
6,986
|
|
|
|
8,307
|
|
|
|
161
|
|
|
|
5
|
|
Greece
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
45
|
|
|
|
45
|
|
|
|
38
|
|
|
|
-
|
|
Ireland
|
|
|
-
|
|
|
|
-
|
|
|
|
47
|
|
|
218
|
|
|
90
|
|
|
|
-
|
|
|
|
727
|
|
|
|
1,082
|
|
|
|
272
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exposure to other counterparties by country of issuer/borrower at 31 March
2016 (*)
|
|
|
|
Millions of reais
|
|
|
|
|
|
|
|
|
|
Debt instruments
|
|
|
|
|
|
|
|
|
|
|
|
Derivatives (***)
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
Loans and
|
|
|
|
|
|
|
|
|
|
Balances
with central
banks
|
|
|
Reverse
repurchase
agreements
|
|
|
held for
trading
and Other
financial assets
at FVTPL
|
|
|
Available-
for-sale
financial
assets
|
|
Loans and
receivables
|
|
|
Held-to
maturity
investments
|
|
|
advances to
customers
(**)
|
|
|
Total net
direct
exposure
|
|
|
Other
than
CDSs
|
|
|
CDSs
|
|
Spain
|
|
|
7,588
|
|
|
|
75,208
|
|
|
|
5,707
|
|
|
20,925
|
|
|
4,212
|
|
|
|
-
|
|
|
|
624,597
|
|
|
|
738,237
|
|
|
|
15,477
|
|
|
|
(152)
|
|
Portugal
|
|
|
4,476
|
|
|
|
-
|
|
|
|
511
|
|
|
2,046
|
|
|
12,735
|
|
|
|
1,009
|
|
|
|
121,628
|
|
|
|
142,405
|
|
|
|
7,539
|
|
|
|
-
|
|
Italy
|
|
|
25
|
|
|
|
-
|
|
|
|
1,923
|
|
|
3,492
|
|
|
-
|
|
|
|
-
|
|
|
|
28,764
|
|
|
|
34,204
|
|
|
|
663
|
|
|
|
21
|
|
Greece
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
-
|
|
|
|
185
|
|
|
|
185
|
|
|
|
156
|
|
|
|
-
|
|
Ireland
|
|
|
-
|
|
|
|
-
|
|
|
|
194
|
|
|
898
|
|
|
371
|
|
|
|
-
|
|
|
|
2,993
|
|
|
|
4,456
|
|
|
|
1,120
|
|
|
|
-
|
|
(*)
|
Also, the Group has off-balance-sheet exposure other than derivatives contingent liabilities and commitments
amounting to EUR 63,454 million, EUR 7,272 million, EUR 3,648 million, EUR 13 million and EUR 399 million (BRL 261,265 million, BRL 29,942 million, BRL 15,020 million, BRL 54 million and BRL 1,643 million) to counterparties in Spain, Portugal,
Italy, Greece and Ireland, respectively.
|
(**)
|
Presented excluding valuation adjustments and impairment losses recognised (EUR 11,500 million (BRL 47,350 million)).
|
(***)
|
Other than CDSs refers to the exposure to derivatives based on the location of the counterparty, irrespective
of the location of the underlying. CDSs refers to the exposure to CDSs based on the location of the underlying.
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exposure to other counterparties by country of issuer/borrower at 31 December
2015 (*)
|
|
|
|
Millions of euros
|
|
|
|
|
|
|
|
|
|
Debt instruments
|
|
|
|
|
|
|
|
|
Derivatives (***)
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances
with central
banks
|
|
|
Reverse
repurchase
agreements
|
|
|
held for trading
and Other
financial assets at
FVTPL
|
|
|
Available-
for-sale
financial
assets
|
|
Loans and
receivables
|
|
|
Loans and
advances to
customers
(**)
|
|
|
Total net
direct
exposure
|
|
|
Other than
CDSs
|
|
|
CDSs
|
|
Spain
|
|
|
2,349
|
|
|
|
15,739
|
|
|
|
1,545
|
|
|
4,166
|
|
|
1,143
|
|
|
|
153,863
|
|
|
|
178,805
|
|
|
|
3,367
|
|
|
|
(42)
|
|
Portugal
|
|
|
2,938
|
|
|
|
-
|
|
|
|
159
|
|
|
992
|
|
|
2,999
|
|
|
|
29,928
|
|
|
|
37,016
|
|
|
|
1,729
|
|
|
|
-
|
|
Italy
|
|
|
5
|
|
|
|
-
|
|
|
|
167
|
|
|
813
|
|
|
-
|
|
|
|
6,713
|
|
|
|
7,698
|
|
|
|
35
|
|
|
|
5
|
|
Greece
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
44
|
|
|
|
44
|
|
|
|
32
|
|
|
|
-
|
|
Ireland
|
|
|
-
|
|
|
|
-
|
|
|
|
63
|
|
|
239
|
|
|
40
|
|
|
|
734
|
|
|
|
1,076
|
|
|
|
300
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exposure to other counterparties by country of issuer/borrower at 31 December
2015 (*)
|
|
|
|
Millions of reais
|
|
|
|
|
|
|
|
|
|
Debt instruments
|
|
|
|
|
|
|
|
|
Derivatives (***)
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balances
with central
banks
|
|
|
Reverse
repurchase
agreements
|
|
|
held for trading
and Other
financial assets at
FVTPL
|
|
|
Available-
for-sale
financial
assets
|
|
Loans and
receivables
|
|
|
Loans and
advances to
customers
(**)
|
|
|
Total net
direct
exposure
|
|
|
Other than
CDSs
|
|
|
CDSs
|
|
Spain
|
|
|
10,128
|
|
|
|
67,862
|
|
|
|
6,662
|
|
|
17,963
|
|
|
4,928
|
|
|
|
663,411
|
|
|
|
770,954
|
|
|
|
14,517
|
|
|
|
(181)
|
|
Portugal
|
|
|
12,668
|
|
|
|
-
|
|
|
|
686
|
|
|
4,277
|
|
|
12,931
|
|
|
|
129,041
|
|
|
|
159,603
|
|
|
|
7,455
|
|
|
|
-
|
|
Italy
|
|
|
22
|
|
|
|
-
|
|
|
|
720
|
|
|
3,505
|
|
|
-
|
|
|
|
28,944
|
|
|
|
33,191
|
|
|
|
151
|
|
|
|
22
|
|
Greece
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
190
|
|
|
|
190
|
|
|
|
138
|
|
|
|
-
|
|
Ireland
|
|
|
-
|
|
|
|
-
|
|
|
|
272
|
|
|
1,030
|
|
|
172
|
|
|
|
3,165
|
|
|
|
4,639
|
|
|
|
1,294
|
|
|
|
-
|
|
(*)
|
Also, the Group has off-balance-sheet exposure other than derivatives contingent liabilities and commitments
amounting to EUR 64,159 million, EUR 6,374 million, EUR 3,746 million, EUR 17 million and EUR 387 (BRL 276,634 million, BRL 27,483 million, BRL 16,152 million, BRL 73 million and BRL 1,669 million) to counterparties in Spain, Portugal, Italy, Greece
and Ireland, respectively.
|
(**)
|
Presented excluding valuation adjustments and impairment losses recognised (EUR 11,641 million (BRL 50,192 million)).
|
(***)
|
Other than CDSs refers to the exposure to derivatives based on the location of the counterparty, irrespective
of the location of the underlying. CDSs refers to the exposure to CDSs based on the location of the underlying.
|
17
Following is certain information on the notional amounts of the CDSs detailed in the
foregoing tables at 31 March 2016 and 31 December 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31/03/16
|
Millions of euros
|
|
|
Notional amount
|
|
Fair value
|
|
|
Bought
|
|
Sold
|
|
Net
|
|
Bought
|
|
Sold
|
|
Net
|
Spain
|
|
Sovereign
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Other
|
|
724
|
|
1,007
|
|
(283)
|
|
(2)
|
|
(35)
|
|
(37)
|
Portugal
|
|
Sovereign
|
|
26
|
|
288
|
|
(262)
|
|
1
|
|
(2)
|
|
(1)
|
|
Other
|
|
35
|
|
56
|
|
(21)
|
|
-
|
|
-
|
|
-
|
Italy
|
|
Sovereign
|
|
169
|
|
434
|
|
(265)
|
|
(1)
|
|
3
|
|
2
|
|
Other
|
|
623
|
|
729
|
|
(106)
|
|
(3)
|
|
8
|
|
5
|
Greece
|
|
Sovereign
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Other
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Ireland
|
|
Sovereign
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Other
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31/03/16
|
Millions of reais
|
|
|
Notional amount
|
|
Fair value
|
|
|
Bought
|
|
Sold
|
|
Net
|
|
Bought
|
|
Sold
|
|
Net
|
Spain
|
|
Sovereign
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Other
|
|
2,981
|
|
4,146
|
|
(1,165)
|
|
(8)
|
|
(144)
|
|
(152)
|
Portugal
|
|
Sovereign
|
|
107
|
|
1,186
|
|
(1,079)
|
|
4
|
|
(8)
|
|
(4)
|
|
Other
|
|
144
|
|
230
|
|
(86)
|
|
-
|
|
-
|
|
-
|
Italy
|
|
Sovereign
|
|
696
|
|
1,787
|
|
(1,091)
|
|
(5)
|
|
13
|
|
8
|
|
Other
|
|
2,565
|
|
3,002
|
|
(437)
|
|
(12)
|
|
33
|
|
21
|
Greece
|
|
Sovereign
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Other
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Ireland
|
|
Sovereign
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Other
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31/12/15
|
Millions of euros
|
|
|
Notional amount
|
|
Fair value
|
|
|
Bought
|
|
Sold
|
|
Net
|
|
Bought
|
|
Sold
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spain
|
|
Sovereign
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
-
|
|
Other
|
|
724
|
|
991
|
|
(267)
|
|
(3)
|
|
|
(39)
|
|
|
(42)
|
Portugal
|
|
Sovereign
|
|
28
|
|
187
|
|
(159)
|
|
-
|
|
|
1
|
|
|
1
|
|
Other
|
|
71
|
|
77
|
|
(6)
|
|
-
|
|
|
-
|
|
|
-
|
Italy
|
|
Sovereign
|
|
183
|
|
448
|
|
(265)
|
|
(1)
|
|
|
5
|
|
|
4
|
|
Other
|
|
553
|
|
618
|
|
(65)
|
|
4
|
|
|
2
|
|
|
6
|
Greece
|
|
Sovereign
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
-
|
|
Other
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
-
|
Ireland
|
|
Sovereign
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
-
|
|
Other
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31/12/15
|
Millions of reais
|
|
|
Notional amount
|
|
Fair value
|
|
|
Bought
|
|
Sold
|
|
Net
|
|
Bought
|
|
Sold
|
|
|
Net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spain
|
|
Sovereign
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
-
|
|
Other
|
|
3,122
|
|
4,273
|
|
(1,151)
|
|
(13)
|
|
|
(168)
|
|
|
(181)
|
Portugal
|
|
Sovereign
|
|
121
|
|
806
|
|
(685)
|
|
-
|
|
|
4
|
|
|
4
|
|
Other
|
|
306
|
|
332
|
|
(26)
|
|
-
|
|
|
-
|
|
|
-
|
Italy
|
|
Sovereign
|
|
789
|
|
1,932
|
|
(1,143)
|
|
(4)
|
|
|
22
|
|
|
18
|
|
Other
|
|
2,384
|
|
2,665
|
|
(281)
|
|
17
|
|
|
9
|
|
|
26
|
Greece
|
|
Sovereign
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
-
|
|
Other
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
-
|
Ireland
|
|
Sovereign
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
-
|
|
Other
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
-
|
|
c)
|
Valuation adjustments of financial assets
|
c.1) Available-for-sale financial assets
As of 31 March 2016, the net impairment losses over financial assets available for sale was EUR 44 million - BRL 189
million- (first quarter of 2015: EUR 32 million (BRL 103 million)), of which EUR 8 million (BRL 35 million) relates to assets impairment (EUR 21 million (BRL 68 million) in the first quarter of 2015).
Changes in value of these assets are presented in equity under Valuation adjustments - Available-for-sale financial assets (see Note 11).
The changes in valuation adjustments in the three-month period are recognised in the condensed consolidated statement of recognised income and expense.
19
c.2) Loans and receivables
The changes in the balance of the allowances for impairment losses on the assets included under Loans and receivables in the three-month
periods ended 31 March 2016 and 2015 were as follows:
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
Balance at beginning of period
|
|
|
26,631
|
|
|
27,321
|
|
|
|
Impairment
losses charged to income for the period
|
|
|
2,732
|
|
|
2,874
|
Of
which:
|
|
|
|
|
|
|
Impairment losses charged to income
|
|
|
4,363
|
|
|
4,270
|
Impairment losses reversed with a credit to income
|
|
|
(1,631)
|
|
|
(1,396)
|
Write-off
of impaired balances against recorded impairment allowance
|
|
|
(2,699)
|
|
|
(2,715)
|
Exchange
differences and other changes
|
|
|
(274)
|
|
|
674
|
|
|
|
|
|
|
|
Balance at end of period
|
|
|
26,390
|
|
|
28,154
|
|
|
|
Of which,
relating to:
|
|
|
|
|
|
|
Impaired
assets
|
|
|
17,784
|
|
|
20,135
|
Of
which, arising from country risk
|
|
|
19
|
|
|
23
|
Other assets
|
|
|
8,606
|
|
|
8,019
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
Balance at beginning of period
|
|
|
114,825
|
|
|
87,994
|
|
|
|
Impairment
losses charged to income for the period
|
|
|
11,737
|
|
|
9,240
|
Of
which:
|
|
|
|
|
|
|
Impairment losses charged to income
|
|
|
18,744
|
|
|
13,728
|
Impairment losses reversed with a credit to income
|
|
|
(7,007)
|
|
|
(4,488)
|
Write-off
of impaired balances against recorded impairment allowance
|
|
|
(11,113)
|
|
|
(8,729)
|
Exchange
differences and other changes
|
|
|
(6,791)
|
|
|
9,916
|
|
|
|
|
|
|
|
Balance at end of period
|
|
|
108,658
|
|
|
98,421
|
|
|
|
Of which,
relating to:
|
|
|
|
|
|
|
Impaired
assets
|
|
|
73,224
|
|
|
70,388
|
Of
which, arising from country risk
|
|
|
78
|
|
|
80
|
Other assets
|
|
|
35,434
|
|
|
28,033
|
20
Previously written-off assets recovered in the first three months of 2016 and 2015 amounted
to EUR 360 million and EUR 343 million (BRL1,547 million and BRL 1,103 million), respectively. Considering these amounts and those recognised under Impairment losses charged to income in the foregoing table, the impairment losses on loans and
receivables amounted to EUR 2,372 million in the first quarter of 2016 (BRL 10,190 million) (first quarter of 2015: EUR 2,531 million (BRL 8,137 million)). If the impairment losses on available-for-sale financial assets (see Note 5.c.1) are added to
these amounts, total impairment losses on financial assets amounted to EUR 2,416 million (BRL 10,379 million) for the three-month period ended 31 March 2016 (31 March 2015: EUR 2,563 million (BRL 8,240 million)).
The detail of the changes in the three-month periods
ended 31 March 2016 and 2015 in the balance of financial assets classified as loans and receivables and considered to be impaired due to credit risk is as follows:
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
Balance at beginning of period
|
|
|
36,298
|
|
|
40,552
|
Net additions
|
|
|
1,902
|
|
|
2,155
|
Written-off assets
|
|
|
(2,699)
|
|
|
(2,715)
|
Changes in scope of consolidation
|
|
|
-
|
|
|
54
|
Exchange differences and other
|
|
|
80
|
|
|
860
|
Balance at end of period
|
|
|
35,581
|
|
|
40,906
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
Balance at beginning of period
|
|
|
156,506
|
|
|
130,606
|
Net additions
|
|
|
8,170
|
|
|
6,928
|
Written-off assets
|
|
|
(11,113)
|
|
|
(8,729)
|
Changes in scope of consolidation
|
|
|
-
|
|
|
174
|
Exchange differences and other
|
|
|
(7,062)
|
|
|
14,019
|
Balance at end of period
|
|
|
146,501
|
|
|
142,998
|
This amount, after deducting the related allowances, represents the Groups best estimate of the
discounted value of the flows that are expected to be recovered from the impaired assets.
21
|
e)
|
Fair value of financial assets not measured at fair value
|
Following is a
comparison of the carrying amounts of the Groups financial assets measured at other than fair value and their respective fair values at 31 March 2016 and 31 December 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
Millions of euros
|
|
|
31/03/16
|
|
|
31/12/15
|
|
|
Carrying
amount
|
|
|
Fair
value
|
|
|
Carrying
amount
|
|
|
Fair
value
|
Loans and receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to credit
institutions
|
|
|
52,220
|
|
|
|
52,406
|
|
|
|
50,256
|
|
|
50,440
|
Loans and advances to customers
|
|
|
752,702
|
|
|
|
760,103
|
|
|
|
770,474
|
|
|
775,713
|
Debt
instruments
|
|
|
17,053
|
|
|
|
16,970
|
|
|
|
15,262
|
|
|
15,071
|
ASSETS
|
|
|
821,975
|
|
|
|
829,479
|
|
|
|
835,992
|
|
|
841,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
|
Millions of reais
|
|
|
31/03/16
|
|
|
31/12/15
|
|
|
Carrying
amount
|
|
|
Fair
value
|
|
|
Carrying amount
|
|
|
Fair
value
|
Loans and receivables:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and advances to credit
institutions
|
|
|
215,011
|
|
|
|
215,776
|
|
|
|
216,689
|
|
|
217,482
|
Loans and advances to customers
|
|
|
3,099,175
|
|
|
|
3,129,648
|
|
|
|
3,322,053
|
|
|
3,344,642
|
Debt
instruments
|
|
|
70,214
|
|
|
|
69,872
|
|
|
|
65,805
|
|
|
64,982
|
ASSETS
|
|
|
3,384,400
|
|
|
|
3,415,296
|
|
|
|
3,604,547
|
|
|
3,627,106
|
The main valuation methods and inputs used in the estimates of the fair values of the financial
assets in the foregoing table are detailed in Note 51.c to the consolidated financial statements for 2015.
6. Non-current assets held for sale
The detail, by nature, of the Groups non-current assets held for sale at 31 March 2016 and 31 December 2015 is as follows:
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
31/03/16
|
|
|
31/12/15
|
|
|
|
Tangible
assets
|
|
|
5,702
|
|
|
5,623
|
Of
which:
|
|
|
|
|
|
|
Foreclosed assets
|
|
|
5,607
|
|
|
5,533
|
Of
which: Property assets in Spain
|
|
|
5,066
|
|
|
4,983
|
Other
tangible assets held for sale
|
|
|
95
|
|
|
90
|
Other
assets
|
|
|
25
|
|
|
23
|
|
|
|
5,727
|
|
|
5,646
|
22
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
|
31/03/16
|
|
|
31/12/15
|
|
|
|
Tangible assets
|
|
|
23,477
|
|
|
24,245
|
Of which:
|
|
|
|
|
|
|
Foreclosed assets
|
|
|
23,086
|
|
|
23,857
|
Of which: Property assets in
Spain
|
|
|
20,859
|
|
|
21,485
|
Other tangible assets held for
sale
|
|
|
391
|
|
|
388
|
Other assets
|
|
|
103
|
|
|
99
|
|
|
|
23,580
|
|
|
24,344
|
At 31 March 2016, the allowance that covers the value of the foreclosed assets represents a coverage
ratio of 51.2% of the gross value of the portfolio (31 December 2015: 51.4%). The net charges recorded in the first quarter of 2016 amounted to EUR 42 million (BRL 173 million) (first quarter of 2015: EUR 39 million (BRL 125 million)).
In the first quarter of 2016, the Group sold foreclosed properties for a net total of approximately EUR 194 million (BRL 834
million) with a gross carrying amount of EUR 276 million (BRL 1,186 million), for which provisions totalling EUR 106 million (BRL 455 million) had been recognised. In the first quarter of 2016, these sales gave rise to gains of EUR 23 million (BRL
103 million) which are recognised under Gains/(losses) foreclosed assets in the condensed consolidated income statements for the first quarter of 2016 and 2015. Also, in the first three months of 2016 other foreclosed assets were sold for EUR 13
million (BRL 56 million) with a gain of EUR 3 million (BRL 13 million).
7. Tangible assets
In the first three months of 2016, tangible assets
were acquired for EUR 1,720 million (BRL 7,389 million) (first three months of 2015: EUR 1,409 million (BRL 4,530 million)).
Also,
in the first three months of 2016, tangible asset items were disposed of with a carrying amount of EUR 536 million (BRL 2,303 million) (first three months of 2015: EUR 742 million (BRL 2,385 million)), giving rise to a net gain of EUR 9 million
(BRL 39 million) (first three months of 2015: EUR 9 million (BRL 29 million)).
In the first three months of 2016, there were impairment
losses on tangible assets (mainly investment property) amounting to EUR 12 million (BRL 51 million) (first three months of 2015: EUR 29 million (BRL 93 million)), which were recognised under Impairment losses on other assets.
|
c)
|
Property, plant and equipment purchase commitments
|
At 31 March 2016
and 2015, the Group did not have any significant commitments to purchase property, plant and equipment items.
23
8. Intangible assets
The detail of Goodwill at 31 March 2016 and 31 December
2015, based on the cash-generating units giving rise thereto, is as follows:
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
31/03/16
|
|
|
31/12/15
|
|
|
|
Santander
UK
|
|
|
9,388
|
|
|
10,125
|
Banco
Santander (Brazil)
|
|
|
4,807
|
|
|
4,590
|
Santander
Consumer USA
|
|
|
2,946
|
|
|
3,081
|
Bank
Zachodni WBK
|
|
|
2,427
|
|
|
2,423
|
Santander
Bank NA
|
|
|
1,804
|
|
|
1,886
|
Santander
Consumer Germany
|
|
|
1,217
|
|
|
1,217
|
Banco
Santander Totta
|
|
|
1,040
|
|
|
1,040
|
Banco
Santander - Chile
|
|
|
653
|
|
|
644
|
Grupo
Financiero Santander (Mexico)
|
|
|
499
|
|
|
517
|
Santander
Consumer Bank (Nordics)
|
|
|
546
|
|
|
546
|
Other
companies
|
|
|
882
|
|
|
891
|
|
|
|
26,209
|
|
|
26,960
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
|
31/03/16
|
|
|
31/12/15
|
|
|
|
Santander UK
|
|
|
38,654
|
|
|
43,656
|
Banco Santander (Brazil)
|
|
|
19,792
|
|
|
19,791
|
Santander Consumer USA
|
|
|
12,130
|
|
|
13,284
|
Bank Zachodni WBK
|
|
|
9,993
|
|
|
10,447
|
Santander Bank NA
|
|
|
7,428
|
|
|
8,132
|
Santander Consumer Germany
|
|
|
5,011
|
|
|
5,247
|
Banco Santander Totta
|
|
|
4,282
|
|
|
4,484
|
Banco Santander - Chile
|
|
|
2,689
|
|
|
2,777
|
Grupo Financiero Santander
(Mexico)
|
|
|
2,055
|
|
|
2,229
|
Santander Consumer Bank (Nordics)
|
|
|
2,248
|
|
|
2,354
|
Other companies
|
|
|
3,631
|
|
|
3,842
|
|
|
|
107,913
|
|
|
116,243
|
In the first quarter of 2016, goodwill decreased by EUR 750 million due to exchange differences which,
pursuant to current regulations, were recognised with a credit to Valuation adjustments - Exchange differences in equity in the consolidated statement of recognised income and expense.
24
Note 17 to the consolidated financial statements for the year ended 31 December 2015
includes detailed information on the procedures followed by the Group to analyse the potential impairment losses on the goodwill recognised with respect to its recoverable amount and to recognise the related impairment, as appropriate.
Accordingly, based on the analysis performed of the available information on the performance of the various cash-generating units which
might evidence the existence of indications of impairment, the Groups directors concluded that in the first quarter of 2016 there were no impairment losses which required recognition.
|
b)
|
Other intangible assets
|
During the first three months of 2016 and 2015,
there were no significant impairment losses.
9. Financial liabilities
The detail, by nature and category for measurement purposes, of
the Groups financial liabilities, other than hedging derivatives, at 31 March 2016 and 31 December 2015 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
31/03/16
|
|
|
31/12/15
|
|
|
Financial
liabilities held
for trading
|
|
|
Other financial
liabilities at fair
value through
profit or loss
|
|
|
Financial
liabilities at
amortised cost
|
|
|
Financial
liabilities
held
for
trading
|
|
|
Other financial
liabilities at
fair value
through profit
or loss
|
|
|
Financial
liabilities at
amortised cost
|
|
|
|
|
|
|
|
Deposits from central banks
|
|
|
771
|
|
|
|
14,010
|
|
|
|
36,483
|
|
|
|
2,178
|
|
|
|
16,486
|
|
|
38,872
|
Deposits from credit institutions
|
|
|
205
|
|
|
|
17,464
|
|
|
|
101,835
|
|
|
|
77
|
|
|
|
8,551
|
|
|
109,207
|
Customer deposits
|
|
|
9,570
|
|
|
|
28,484
|
|
|
|
632,554
|
|
|
|
9,187
|
|
|
|
26,357
|
|
|
647,578
|
Marketable debt securities
|
|
|
-
|
|
|
|
3,445
|
|
|
|
197,383
|
|
|
|
-
|
|
|
|
3,373
|
|
|
201,656
|
Trading derivatives
|
|
|
78,608
|
|
|
|
-
|
|
|
|
-
|
|
|
|
76,414
|
|
|
|
-
|
|
|
-
|
Subordinated liabilities
|
|
|
-
|
|
|
|
-
|
|
|
|
20,784
|
|
|
|
-
|
|
|
|
-
|
|
|
21,153
|
Short positions
|
|
|
19,413
|
|
|
|
-
|
|
|
|
-
|
|
|
|
17,362
|
|
|
|
-
|
|
|
-
|
Other financial liabilities
|
|
|
-
|
|
|
|
1
|
|
|
|
23,368
|
|
|
|
-
|
|
|
|
1
|
|
|
20,877
|
|
|
|
108,567
|
|
|
|
63,404
|
|
|
|
1,012,407
|
|
|
|
105,218
|
|
|
|
54,768
|
|
|
1,039,343
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
|
31/03/16
|
|
31/12/15
|
|
|
Financial
liabilities held
for trading
|
|
Other financial
liabilities at
fair value
through profit
or loss
|
|
Financial
liabilities at
amortised cost
|
|
Financial
liabilities held
for trading
|
|
Other financial
liabilities at fair
value through
profit or loss
|
|
Financial
liabilities at
amortised cost
|
|
|
|
|
|
|
|
Deposits from central banks
|
|
3,175
|
|
57,685
|
|
150,215
|
|
9,391
|
|
71,083
|
|
167,604
|
Deposits from credit institutions
|
|
844
|
|
71,906
|
|
419,295
|
|
332
|
|
36,869
|
|
470,868
|
Customer deposits
|
|
39,404
|
|
117,280
|
|
2,604,478
|
|
39,612
|
|
113,643
|
|
2,792,162
|
Marketable debt securities
|
|
-
|
|
14,184
|
|
812,705
|
|
-
|
|
14,543
|
|
869,480
|
Trading derivatives
|
|
323,661
|
|
-
|
|
-
|
|
329,474
|
|
-
|
|
-
|
Subordinated liabilities
|
|
-
|
|
-
|
|
85,576
|
|
-
|
|
-
|
|
91,205
|
Short positions
|
|
79,931
|
|
-
|
|
-
|
|
74,860
|
|
-
|
|
-
|
Other financial liabilities
|
|
-
|
|
4
|
|
96,215
|
|
-
|
|
4
|
|
90,015
|
|
|
447,015
|
|
261,059
|
|
4,168,484
|
|
453,669
|
|
236,142
|
|
4,481,334
|
|
b)
|
Information on issuances, repurchases or redemptions of debt instruments
|
Following is a detail, at 31 March 2016 and 2015, of the outstanding balance of the debt instruments which at these dates had been
issued by the Bank or any other Group entity. Also included is the detail of the changes in this balance in the first three months of 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
31/03/16
|
|
|
Outstanding
beginning
balance at
01/01/16
|
|
Issues
|
|
Repurchases or
redemptions
|
|
Exchange rate
and other
adjustments
|
|
Outstanding
ending balance
at 31/03/16
|
|
|
|
|
|
|
Debt instruments issued in an EU member
state for which it was necessary to file a prospectus
|
|
147,103
|
|
11,236
|
|
(16,631)
|
|
(3,972)
|
|
137,736
|
Debt instruments issued in an EU member
state for which it was not necessary to file a prospectus
|
|
4,531
|
|
526
|
|
(418)
|
|
411
|
|
5,050
|
Other debt instruments issued outside EU
member states
|
|
74,548
|
|
15,092
|
|
(12,217)
|
|
1,404
|
|
78,827
|
|
|
226,182
|
|
26,854
|
|
(29,266)
|
|
(2,157)
|
|
221,612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
|
31/03/16
|
|
|
Outstanding
beginning
balance at
01/01/16
|
|
Issues
|
|
Repurchases or
redemptions
|
|
Exchange rate
and other
adjustments
|
|
Outstanding
ending balance
at 31/03/16
|
|
|
|
|
|
|
Debt instruments issued in an EU member
state for which it was necessary to file a prospectus
|
|
634.264
|
|
48.270
|
|
(71.448)
|
|
(43.972)
|
|
567.114
|
Debt instruments issued in an EU member
state for which it was not necessary to file a prospectus
|
|
19.535
|
|
2.260
|
|
(1.796)
|
|
793
|
|
20.792
|
Other debt instruments issued outside EU
member states
|
|
321.429
|
|
64.835
|
|
(52.485)
|
|
(9.220)
|
|
324.559
|
|
|
975.228
|
|
115.365
|
|
(125.729)
|
|
(52.399)
|
|
912.465
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
31/03/15
|
|
|
Outstanding
beginning
balance at
01/01/15
|
|
Issues
|
|
Repurchases or
redemptions
|
|
Exchange rate
and other
adjustments
|
|
Outstanding
ending balance
at 31/03/15
|
|
|
|
|
|
|
Debt
instruments issued in an EU member state for which it was necessary to file a prospectus
|
|
148,105
|
|
17,481
|
|
(18,189)
|
|
1,094
|
|
148,491
|
Debt
instruments issued in an EU member state for which it was not necessary to file a prospectus
|
|
2,084
|
|
24
|
|
(214)
|
|
55
|
|
1,949
|
Other
debt instruments issued outside EU member states
|
|
63,832
|
|
24,713
|
|
(21,239)
|
|
10,311
|
|
77,617
|
|
|
214,021
|
|
42,218
|
|
(39,642)
|
|
11,460
|
|
228,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
|
31/03/15
|
|
|
Outstanding
beginning
balance at
01/01/15
|
|
Issues
|
|
Repurchases or
redemptions
|
|
Exchange rate
and other
adjustments
|
|
Outstanding
ending balance
at 31/03/15
|
|
|
|
|
|
|
Debt
instruments issued in an EU member state for which it was necessary to file a prospectus
|
|
477,002
|
|
56,201
|
|
(58,478)
|
|
44,370
|
|
519,095
|
Debt
instruments issued in an EU member state for which it was not necessary to file a prospectus
|
|
6,712
|
|
77
|
|
(688)
|
|
712
|
|
6,813
|
Other
debt instruments issued outside EU member states
|
|
205,583
|
|
79,452
|
|
(68,283)
|
|
54,581
|
|
271,333
|
|
|
689,297
|
|
135,730
|
|
(127,449)
|
|
99,663
|
|
797,241
|
|
c)
|
Other issues guaranteed by the Group
|
At 31 March 2015 and 2016, there
were no debt instruments issued by associates or non-Group third parties that had been guaranteed by the Bank or any other Group entity.
27
|
d)
|
Case-by-case information on certain issuances, repurchases or redemptions of debt instruments
|
The main characteristics of the most significant issuances (excluding promissory notes, securitisations and issuances maturing within
less than one year), repurchases or redemptions performed by the Group in the first three months of 2016, or guaranteed by the Bank or Group entities, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuer data
|
|
Data on the transactions performed in the first quarter of 2016
|
Name
|
|
Relationship with
the Bank
|
|
Country of
registered
office
|
|
(*) Issuer or
issue credit
rating
|
|
Transaction
|
|
ISIN code
|
|
Type of security
|
|
Transaction
date
|
|
Amount of
the
issue,
repurchase
or redemption
(millions
of euros)
(a)
|
|
Balance
outstanding
(millions
of euros)
(a)
|
|
Interest
rate
|
|
Market where
listed
|
|
Type of
guarantee
provided
|
|
Risks additional
to the guarantee
that the Group
would
assume
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ABBEY NATIONAL TREASURY SERVICES
PLC
|
|
Subsidiary
|
|
UK
|
|
A1/A/A
|
|
Issue
|
|
XS1363002459
|
|
Senior
|
|
12/02/2016
|
|
750
|
|
750
|
|
EU3M + 0.55%
|
|
London
|
|
Santander UK plc
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ABBEY NATIONAL TREASURY SERVICES
PLC
|
|
Subsidiary
|
|
UK
|
|
Aaa/AAA/AAA
|
|
Issue
|
|
XS1360443979
|
|
Mortgage-backed bond
|
|
09/02/2016
|
|
1,000
|
|
1,000
|
|
0,25%
|
|
London
|
|
Santander UK plc
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ABBEY NATIONAL TREASURY SERVICES
PLC
|
|
Subsidiary
|
|
UK
|
|
Aa3 /A /-
|
|
Issue
|
|
XS1377475709
|
|
Senior
|
|
23/03/2016
|
|
237
|
|
237
|
|
Cupon 0
|
|
Dublin
|
|
Santander UK plc
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ABBEY NATIONAL TREASURY SERVICES
PLC
|
|
Subsidiary
|
|
UK
|
|
A1/A/A
|
|
Issue
|
|
US002799AX28
|
|
Senior
|
|
14/03/2016
|
|
1,449
|
|
1,449
|
|
2,50%
|
|
TRACE
|
|
Santander UK plc
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ABBEY NATIONAL TREASURY SERVICES
PLC
|
|
Subsidiary
|
|
UK
|
|
A1/A/A
|
|
Issue
|
|
US002799AY01
|
|
Senior
|
|
14/03/2016
|
|
307
|
|
307
|
|
US Libor 3M + 0,14%
|
|
TRACE
|
|
Santander UK plc
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER, S.A.
|
|
Parent
|
|
Spain
|
|
Aa2/AA/ -
|
|
Issue
|
|
ES0413900392
|
|
Mortgage-backed bond
|
|
25/01/2016
|
|
1,000
|
|
1,000
|
|
1,50%
|
|
AIAF
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER, S.A.
|
|
Parent
|
|
Spain
|
|
Aa2/AA/ -
|
|
Issue
|
|
ES0413900400
|
|
Mortgage-backed bond
|
|
29/02/2016
|
|
393
|
|
393
|
|
2,03%
|
|
AIAF
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER - CHILE
|
|
Subsidiary
|
|
Chile
|
|
Aa3 /A /A+
|
|
Issue
|
|
BSTDR10915
|
|
Senior
|
|
02/03/2016
|
|
208
|
|
208
|
|
2,50%
|
|
Chile
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER - CHILE
|
|
Subsidiary
|
|
Chile
|
|
Aa3 /A /A+
|
|
Issue
|
|
BSTDR20915
|
|
Senior
|
|
16/03/2016
|
|
331
|
|
331
|
|
2,60%
|
|
Chile
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER CONSUMER FINANCE,
S.A.
|
|
Subsidiary
|
|
Spain
|
|
A3e/A-/ -
|
|
Issue
|
|
XS1377492035
|
|
Senior
|
|
16/03/2016
|
|
244
|
|
244
|
|
EU3M + 0.82%
|
|
Dublin
|
|
N/A
|
|
N/A
|
SANTANDER CONSUMER BANK A.S.
|
|
Subsidiary
|
|
Norway
|
|
A3 / - / BBB+
|
|
Issue
|
|
XS1369254310
|
|
Senior
|
|
25/02/2016
|
|
500
|
|
500
|
|
1,00%
|
|
Dublin
|
|
Santander Consumer Finance S.A.
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER INTERNATIONAL DEBT,
S.A.U.
|
|
Subsidiary
|
|
Spain
|
|
A3/A-/A-
|
|
Issue
|
|
XS1373211900
|
|
Senior
|
|
08/03/2016
|
|
300
|
|
300
|
|
EU3M + 0.58%
|
|
Dublin
|
|
Banco Santander S.A.
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER INTERNATIONAL DEBT,
S.A.U.
|
|
Subsidiary
|
|
Spain
|
|
A3/A-/A-
|
|
Issue
|
|
XS1370695477
|
|
Senior
|
|
03/03/2016
|
|
1,000
|
|
1,000
|
|
1,37%
|
|
Dublin
|
|
Banco Santander S.A.
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER UK GROUP HOLDINGS PLC
|
|
Subsidiary
|
|
Uk
|
|
Baa1/A/BBB
|
|
Issue
|
|
US80281LAD73
|
|
Senior
|
|
08/01/2016
|
|
878
|
|
878
|
|
3,12%
|
|
TRACE
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER UK GROUP HOLDINGS PLC
|
|
Subsidiary
|
|
Uk
|
|
Baa1/A/BBB
|
|
Issue
|
|
XS1345415472
|
|
Senior
|
|
14/01/2016
|
|
632
|
|
632
|
|
3,62%
|
|
London
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ABBEY NATIONAL TREASURY SERVICES
PLC
|
|
Subsidiary
|
|
Uk
|
|
Aa3/A/-
|
|
Cancellation
|
|
XS1023278887
|
|
Senior
|
|
27/01/2016
|
|
500
|
|
-
|
|
EU3M + 0.35%
|
|
London
|
|
Santander UK plc
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER, S.A.
|
|
Parent
|
|
Spain
|
|
Aa2/AA/-
|
|
Cancellation
|
|
ES0413440084
|
|
Mortgage-backed bond
|
|
18/01/2016
|
|
1,433
|
|
-
|
|
3,50%
|
|
AIAF
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER, S.A.
|
|
Parent
|
|
Spain
|
|
Aa2/AA/AA
|
|
Cancellation
|
|
ES0413900228
|
|
Mortgage-backed bond
|
|
20/01/2016
|
|
993
|
|
-
|
|
4,62%
|
|
AIAF
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER, S.A.
|
|
Parent
|
|
Spain
|
|
Aa2/AA/-
|
|
Cancellation
|
|
N/A
|
|
Mortgage-backed bond
|
|
15/03/2016
|
|
200
|
|
-
|
|
EUR BEI
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER, S.A.
|
|
Parent
|
|
Spain
|
|
A3/A-/A-
|
|
Cancellation
|
|
ES0313440143
|
|
Senior
|
|
23/03/2016
|
|
336
|
|
-
|
|
4,08%
|
|
AIAF
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER - CHILE
|
|
Subsidiary
|
|
Chile
|
|
Aa3/A/A+
|
|
Cancellation
|
|
USP15069AM29
|
|
Senior
|
|
19/01/2016
|
|
430
|
|
-
|
|
3ML+1,60%
|
|
US
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER BRASIL, S.A.
|
|
Subsidiary
|
|
Brazil
|
|
Ba3/BBB-/BB
|
|
Cancellation
|
|
US05966UAH77
|
|
Senior
|
|
14/01/2016
|
|
747
|
|
-
|
|
4,25%
|
|
TRACE
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER BRASIL, S.A.
|
|
Subsidiary
|
|
Brazil
|
|
Ba3/BBB-/BB
|
|
Cancellation
|
|
US05966UAR59
|
|
Senior
|
|
18/03/2016
|
|
304
|
|
-
|
|
8,00%
|
|
Multiple
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER CONSUMER FINANCE, S.A.
|
|
Subsidiary
|
|
Spain
|
|
Baa1/A-/BBB
|
|
Cancellation
|
|
XS1107321710
|
|
Senior
|
|
15/03/2016
|
|
298
|
|
-
|
|
EU3M + 0.50%
|
|
Dublin
|
|
N/A
|
|
N/A
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuer data
|
|
Data on the transactions performed in the first quarter of 2016
|
Name
|
|
Relationship with
the Bank
|
|
Country of
registered
office
|
|
(*) Issuer or
issue credit
rating
|
|
Transaction
|
|
ISIN code
|
|
Type of security
|
|
Transaction
date
|
|
Amount of
the
issue,
repurchase
or redemption
(millions
of euros)
(a)
|
|
Balance
outstanding
(millions
of euros)
(a)
|
|
Interest
rate
|
|
Market where
listed
|
|
Type of
guarantee
provided
|
|
Risks additional
to the guarantee
that the Group
would
assume
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER CONSUMER FINANCE,
S.A.
|
|
Subsidiary
|
|
Spain
|
|
Aa3/AA-/A+
|
|
Cancellation
|
|
ES0413495005
|
|
Mortgage-
backed bond
|
|
23/03/2016
|
|
1,144
|
|
-
|
|
3,78%
|
|
Multiple
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER CONSUMER FINANCE,
S.A.
|
|
Subsidiary
|
|
Spain
|
|
Baa2/BBB+/BBB-
|
|
Cancellation
|
|
XS1016635580
|
|
Senior
|
|
29/01/2016
|
|
865
|
|
-
|
|
1,45%
|
|
Dublin
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER INTERNATIONAL DEBT,
S.A.U.
|
|
Subsidiary
|
|
Spain
|
|
A3/A-/A-
|
|
Cancellation
|
|
XS0899343387
|
|
Senior puttable
|
|
14/03/2016
|
|
339
|
|
-
|
|
2,15%
|
|
Luxemburgo
|
|
Banco Santander S.A.
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER INTERNATIONAL DEBT,
S.A.U.
|
|
Subsidiary
|
|
Spain
|
|
Baa1/A-/BBB+
|
|
Cancellation
|
|
XS1169932289
|
|
Senior
|
|
26/01/2016
|
|
250
|
|
-
|
|
EU3M + 0.27%
|
|
Dublin
|
|
Banco Santander, S.A.
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER INTERNATIONAL DEBT,
S.A.U.
|
|
Subsidiary
|
|
Spain
|
|
A3/A-/A-
|
|
Cancellation
|
|
XS1171573188
|
|
Senior
|
|
28/01/2016
|
|
200
|
|
-
|
|
EU3M + 0.23%
|
|
Dublin
|
|
Banco Santander, S.A.
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER INTERNATIONAL DEBT, S.A.U.
|
|
Subsidiary
|
|
Spain
|
|
A3/A-/A-
|
|
Cancellation
|
|
XS0828735893
|
|
Senior
|
|
21/03/2016
|
|
2,188
|
|
-
|
|
4,62%
|
|
Multiple
|
|
Banco Santander S.A.
|
|
N/A
|
(a)
|
The amounts relating to securities denominated in foreign currencies were translated to euros at the exchange rate
prevailing at the end of the first quarter of 2016.
|
(*) Belonging to: Moodys, Fitch and Standard &
Poors.
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuer data
|
|
Data on the transactions performed in the first quarter of 2016
|
Name
|
|
Relationship with
the Bank
|
|
Country of
registered
office
|
|
(*)Issuer or
issue credit
rating
|
|
Transaction
|
|
ISIN code
|
|
Type of security
|
|
Transaction
date
|
|
Amount of
the
issue,
repurchase
or redemption
(millions
of reais)
(a)
|
|
Balance
outstanding
(millions
of reais)
(a)
|
|
Interest
rate
|
|
Market where
listed
|
|
Type of
guarantee
provided
|
|
Risks additional
to the guarantee
that the Group
would
assume
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ABBEY NATIONAL TREASURY SERVICES
PLC
|
|
Subsidiary
|
|
UK
|
|
A1/A/A
|
|
Issue
|
|
XS1363002459
|
|
Senior
|
|
12/02/2016
|
|
3,088
|
|
3,088
|
|
EU3M + 0.55%
|
|
London
|
|
Santander UK plc
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ABBEY NATIONAL TREASURY SERVICES
PLC
|
|
Subsidiary
|
|
UK
|
|
Aaa/AAA/AAA
|
|
Issue
|
|
XS1360443979
|
|
Mortgage-
backed bond
|
|
09/02/2016
|
|
4,117
|
|
4,117
|
|
0,25%
|
|
London
|
|
Santander UK plc
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ABBEY NATIONAL TREASURY SERVICES
PLC
|
|
Subsidiary
|
|
UK
|
|
Aa3 /A /-
|
|
Issue
|
|
XS1377475709
|
|
Senior
|
|
23/03/2016
|
|
976
|
|
976
|
|
Cupon 0
|
|
Dublin
|
|
Santander UK plc
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ABBEY NATIONAL TREASURY SERVICES
PLC
|
|
Subsidiary
|
|
UK
|
|
A1/A/A
|
|
Issue
|
|
US002799AX28
|
|
Senior
|
|
14/03/2016
|
|
5,967
|
|
5,967
|
|
2,50%
|
|
TRACE
|
|
Santander UK plc
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ABBEY NATIONAL TREASURY SERVICES
PLC
|
|
Subsidiary
|
|
UK
|
|
A1/A/A
|
|
Issue
|
|
US002799AY01
|
|
Senior
|
|
14/03/2016
|
|
1,266
|
|
1,266
|
|
US Libor 3M + 0,14%
|
|
TRACE
|
|
Santander UK plc
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER, S.A.
|
|
Parent
|
|
Spain
|
|
Aa2/AA/ -
|
|
Issue
|
|
ES0413900392
|
|
Mortgage-
backed bond
|
|
25/01/2016
|
|
4,117
|
|
4,117
|
|
1,50%
|
|
AIAF
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER, S.A.
|
|
Parent
|
|
Spain
|
|
Aa2/AA/ -
|
|
Issue
|
|
ES0413900400
|
|
Mortgage-
backed bond
|
|
29/02/2016
|
|
1,618
|
|
1,618
|
|
2,03%
|
|
AIAF
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER - CHILE
|
|
Subsidiary
|
|
Chile
|
|
Aa3 /A /A+
|
|
Issue
|
|
BSTDR10915
|
|
Senior
|
|
02/03/2016
|
|
856
|
|
856
|
|
2,50%
|
|
Chile
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER - CHILE
|
|
Subsidiary
|
|
Chile
|
|
Aa3 /A /A+
|
|
Issue
|
|
BSTDR20915
|
|
Senior
|
|
16/03/2016
|
|
1,364
|
|
1,364
|
|
2,60%
|
|
Chile
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER CONSUMER FINANCE,
S.A.
|
|
Subsidiary
|
|
Spain
|
|
A3e/A-/ -
|
|
Issue
|
|
XS1377492035
|
|
Senior
|
|
16/03/2016
|
|
1,006
|
|
1,006
|
|
EU3M + 0.82%
|
|
Dublin
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER CONSUMER BANK A.S.
|
|
Subsidiary
|
|
Norway
|
|
A3 / - / BBB+
|
|
Issue
|
|
XS1369254310
|
|
Senior
|
|
25/02/2016
|
|
2,059
|
|
2,059
|
|
1,00%
|
|
Dublin
|
|
Santander Consumer Finance S.A.
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER INTERNATIONAL DEBT,
S.A.U.
|
|
Subsidiary
|
|
Spain
|
|
A3/A-/A-
|
|
Issue
|
|
XS1373211900
|
|
Senior
|
|
08/03/2016
|
|
1,235
|
|
1,235
|
|
EU3M + 0.58%
|
|
Dublin
|
|
Banco Santander S.A.
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER INTERNATIONAL DEBT,
S.A.U.
|
|
Subsidiary
|
|
Spain
|
|
A3/A-/A-
|
|
Issue
|
|
XS1370695477
|
|
Senior
|
|
03/03/2016
|
|
4,117
|
|
4,117
|
|
1,37%
|
|
Dublin
|
|
Banco Santander S.A.
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER UK GROUP HOLDINGS PLC
|
|
Subsidiary
|
|
Uk
|
|
Baa1/A/BBB
|
|
Issue
|
|
US80281LAD73
|
|
Senior
|
|
08/01/2016
|
|
3,617
|
|
3,617
|
|
3,12%
|
|
TRACE
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER UK GROUP HOLDINGS PLC
|
|
Subsidiary
|
|
Uk
|
|
Baa1/A/BBB
|
|
Issue
|
|
XS1345415472
|
|
Senior
|
|
14/01/2016
|
|
2,601
|
|
2,601
|
|
3,62%
|
|
London
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ABBEY NATIONAL TREASURY SERVICES
PLC
|
|
Subsidiary
|
|
Uk
|
|
Aa3/A/-
|
|
Cancellation
|
|
XS1023278887
|
|
Senior
|
|
27/01/2016
|
|
2,059
|
|
-
|
|
EU3M + 0.35%
|
|
London
|
|
Santander UK plc
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER, S.A.
|
|
Parent
|
|
Spain
|
|
Aa2/AA/-
|
|
Cancellation
|
|
ES0413440084
|
|
Mortgage-
backed bond
|
|
18/01/2016
|
|
5,902
|
|
-
|
|
3,50%
|
|
AIAF
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER, S.A.
|
|
Parent
|
|
Spain
|
|
Aa2/AA/AA
|
|
Cancellation
|
|
ES0413900228
|
|
Mortgage-
backed bond
|
|
20/01/2016
|
|
4,090
|
|
-
|
|
4,62%
|
|
AIAF
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER, S.A.
|
|
Parent
|
|
Spain
|
|
Aa2/AA/-
|
|
Cancellation
|
|
N/A
|
|
Mortgage-
backed bond
|
|
15/03/2016
|
|
823
|
|
-
|
|
EUR BEI
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER, S.A.
|
|
Parent
|
|
Spain
|
|
A3/A-/A-
|
|
Cancellation
|
|
ES0313440143
|
|
Senior
|
|
23/03/2016
|
|
1,384
|
|
-
|
|
4,08%
|
|
AIAF
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER - CHILE
|
|
Subsidiary
|
|
Chile
|
|
Aa3/A/A+
|
|
Cancellation
|
|
USP15069AM29
|
|
Senior
|
|
19/01/2016
|
|
1,770
|
|
-
|
|
3ML+1,60%
|
|
US
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO SANTANDER BRASIL, S.A.
|
|
Subsidiary
|
|
Brazil
|
|
Ba3/BBB-/BB
|
|
Cancellation
|
|
US05966UAH77
|
|
Senior
|
|
14/01/2016
|
|
3,074
|
|
-
|
|
4,25%
|
|
TRACE
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BANCO
SANTANDER BRASIL, S.A.
|
|
Subsidiary
|
|
Brazil
|
|
Ba3/BBB-/BB
|
|
Cancellation
|
|
US05966UAR59
|
|
Senior
|
|
18/03/2016
|
|
1,250
|
|
-
|
|
8,00%
|
|
Multiple
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER CONSUMER FINANCE, S.A.
|
|
Subsidiary
|
|
Spain
|
|
Baa1/A-/BBB
|
|
Cancellation
|
|
XS1107321710
|
|
Senior
|
|
15/03/2016
|
|
1,227
|
|
-
|
|
EU3M + 0.50%
|
|
Dublin
|
|
N/A
|
|
N/A
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuer data
|
|
Data on the transactions performed in the first quarter of 2016
|
Name
|
|
Relationship with
the Bank
|
|
Country of
registered
office
|
|
(*)Issuer or
issue credit
rating
|
|
Transaction
|
|
ISIN code
|
|
Type of security
|
|
Transaction
date
|
|
Amount of
the
issue,
repurchase
or redemption
(millions
of reais)
(a)
|
|
Balance
outstanding
(millions
of reais)
(a)
|
|
Interest
rate
|
|
Market where
listed
|
|
Type of
guarantee
provided
|
|
Risks additional
to the guarantee
that the Group
would
assume
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER CONSUMER FINANCE,
S.A.
|
|
Subsidiary
|
|
Spain
|
|
Aa3/AA-/A+
|
|
Cancellation
|
|
ES0413495005
|
|
Mortgage-backed bond
|
|
23/03/2016
|
|
4,709
|
|
-
|
|
3,78%
|
|
Multiple
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER CONSUMER FINANCE,
S.A.
|
|
Subsidiary
|
|
Spain
|
|
Baa2/BBB+/BBB-
|
|
Cancellation
|
|
XS1016635580
|
|
Senior
|
|
29/01/2016
|
|
3,560
|
|
-
|
|
1,45%
|
|
Dublin
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER INTERNATIONAL DEBT,
S.A.U.
|
|
Subsidiary
|
|
Spain
|
|
A3/A-/A-
|
|
Cancellation
|
|
XS0899343387
|
|
Senior puttable
|
|
14/03/2016
|
|
1,395
|
|
-
|
|
2,15%
|
|
Luxemburgo
|
|
Banco Santander S.A.
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER INTERNATIONAL DEBT,
S.A.U.
|
|
Subsidiary
|
|
Spain
|
|
Baa1/A-/BBB+
|
|
Cancellation
|
|
XS1169932289
|
|
Senior
|
|
26/01/2016
|
|
1,029
|
|
-
|
|
EU3M + 0.27%
|
|
Dublin
|
|
Banco Santander, S.A.
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER INTERNATIONAL DEBT,
S.A.U.
|
|
Subsidiary
|
|
Spain
|
|
A3/A-/A-
|
|
Cancellation
|
|
XS1171573188
|
|
Senior
|
|
28/01/2016
|
|
823
|
|
-
|
|
EU3M + 0.23%
|
|
Dublin
|
|
Banco Santander, S.A.
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SANTANDER INTERNATIONAL DEBT, S.A.U.
|
|
Subsidiary
|
|
Spain
|
|
A3/A-/A-
|
|
Cancellation
|
|
XS0828735893
|
|
Senior
|
|
21/03/2016
|
|
9,010
|
|
-
|
|
4,62%
|
|
Multiple
|
|
Banco Santander S.A.
|
|
N/A
|
(a)
|
The amounts relating to securities denominated in foreign currencies were translated to reais at the exchange rate
prevailing at the end of the first quarter of 2016.
|
(*) Belonging to: Moodys, Fitch and Standard &
Poors.
31
|
e)
|
Fair value of financial liabilities not measured at fair value
|
Following
is a comparison of the carrying amounts of the Groups financial liabilities measured at other than fair value and their respective fair values at 31 March 2016 and 31 December 2015:
|
|
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
31/03/16
|
|
31/12/15
|
|
|
Carrying amount
|
|
Fair
value
|
|
Carrying amount
|
|
Fair
value
|
Financial
liabilities at amortised cost:
|
|
|
|
|
|
|
|
|
Deposits from central banks
|
|
36,483
|
|
36,768
|
|
38,872
|
|
38,894
|
Deposits from credit institutions
|
|
101,835
|
|
101,992
|
|
109,207
|
|
109,478
|
Customer deposits
|
|
632,554
|
|
631,947
|
|
647,578
|
|
646,916
|
Marketable debt securities
|
|
197,383
|
|
200,560
|
|
201,656
|
|
204,290
|
Subordinated liabilities
|
|
20,784
|
|
20,485
|
|
21,153
|
|
21,085
|
Other
financial liabilities
|
|
23,368
|
|
23,324
|
|
20,877
|
|
21,178
|
LIABILITIES
|
|
1,012,407
|
|
1,015,076
|
|
1,039,343
|
|
1,041,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
|
31/03/16
|
|
31/12/15
|
|
|
Carrying amount
|
|
Fair
value
|
|
Carrying amount
|
|
Fair
value
|
Financial
liabilities at amortised cost:
|
|
|
|
|
|
|
|
|
Deposits from central banks
|
|
150,215
|
|
151,389
|
|
167,604
|
|
167,699
|
Deposits from credit institutions
|
|
419,295
|
|
419,942
|
|
470,868
|
|
472,036
|
Customer deposits
|
|
2,604,478
|
|
2,601,979
|
|
2,792,162
|
|
2,789,308
|
Marketable debt securities
|
|
812,705
|
|
825,786
|
|
869,480
|
|
880,837
|
Subordinated liabilities
|
|
85,576
|
|
84,345
|
|
91,205
|
|
90,912
|
Other
financial liabilities
|
|
96,215
|
|
96,034
|
|
90,015
|
|
91,313
|
LIABILITIES
|
|
4,168,484
|
|
4,179,475
|
|
4,481,334
|
|
4,492,105
|
The main valuation methods and inputs used in the estimates of the fair values of the financial
liabilities in the foregoing table are detailed in Note 51.c to the consolidated financial statements for 2015.
10. Provisions
The detail of Provisions at 31 March 2016 and
31 December 2015 is as follows:
|
|
|
|
|
|
|
Millions of euros
|
|
|
31/03/16
|
|
31/12/15
|
|
|
|
Provisions for pensions and similar
obligations
|
|
8,125
|
|
8,272
|
Provisions for taxes and other legal
contingencies
|
|
2,629
|
|
2,577
|
Provisions for contingent liabilities and
commitments
|
|
611
|
|
618
|
Of which: due to country
risk
|
|
2
|
|
2
|
Other
provisions
|
|
2,927
|
|
3,027
|
Provisions
|
|
14,292
|
|
14,494
|
32
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
|
31/03/16
|
|
|
31/12/15
|
|
|
|
Provisions
for pensions and similar obligations
|
|
|
33,454
|
|
|
35,666
|
Provisions
for taxes and other legal contingencies
|
|
|
10,825
|
|
|
11,111
|
Provisions
for contingent liabilities and commitments
|
|
|
2,516
|
|
|
2,665
|
Of
which: due to country risk
|
|
|
8
|
|
|
9
|
Other provisions
|
|
|
12,052
|
|
|
13,052
|
Provisions
|
|
|
58,847
|
|
|
62,494
|
|
b)
|
Provisions for pensions and similar obligations
|
The change in Provisions
for pensions and similar obligations in the first quarter of 2016 related to benefit payments exceeding EUR 300 million (BRL 1,289 million), as well as to the greater obligations arising from the increase in the cumulative actuarial gains and losses
as a result of the change in actuarial assumptions.
|
c)
|
Provisions for taxes and other legal contingencies and Other provisions
|
Set forth below is the detail, by type of provision, of the balances at 31 March 2016 and at 31 December 2015 of Provisions for
taxes and other legal contingencies and Other provisions. The types of provision were determined by grouping together items of a similar nature:
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
31/03/16
|
|
|
31/12/15
|
|
|
|
Provisions
for taxes
|
|
|
1,059
|
|
|
997
|
Provisions
for employment-related proceedings (Brazil)
|
|
|
640
|
|
|
581
|
Provisions
for other legal proceedings
|
|
|
930
|
|
|
999
|
Provision
for customer remediation
|
|
|
807
|
|
|
916
|
Regulatory
framework-related provisions
|
|
|
311
|
|
|
308
|
Provision
for restructuring
|
|
|
403
|
|
|
404
|
Other
|
|
|
1,406
|
|
|
1,399
|
|
|
|
5,556
|
|
|
5,604
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
31/03/16
|
|
|
31/12/15
|
|
|
|
Provisions
for taxes
|
|
|
4,360
|
|
|
4,299
|
Provisions
for employment-related proceedings (Brazil)
|
|
|
2,635
|
|
|
2,505
|
Provisions
for other legal proceedings
|
|
|
3,829
|
|
|
4,308
|
Provision
for customer remediation
|
|
|
3,323
|
|
|
3,951
|
Regulatory
framework-related provisions
|
|
|
1,281
|
|
|
1,329
|
Provision
for restructuring
|
|
|
1,659
|
|
|
1,742
|
Other
|
|
|
5,790
|
|
|
6,028
|
|
|
|
22,877
|
|
|
24,162
|
33
Relevant information is set forth below in relation to each type of provision shown in the
preceding table:
The provisions for taxes include provisions for tax-related proceedings.
The provisions for employment-related proceedings (Brazil) relate to claims filed by trade unions, associations, the prosecutors
office and ex-employees claiming employment rights to which, in their view, they are entitled, particularly the payment of overtime and other employment rights, including litigation concerning retirement benefits. The number and nature of these
proceedings, which are common for banks in Brazil, justify the classification of these provisions in a separate category or as a separate type from the rest. The Group calculates the provisions associated with these claims in accordance with past
experience of payments made in relation to claims for similar items. When claims do not fall within these categories, a case-by-case assessment is performed and the amount of the provision is calculated in accordance with the status of each
proceeding and the risk assessment carried out by the legal advisers. The average duration of the employment-related proceedings is approximately eight years.
The provisions for other legal proceedings include provisions for court, arbitration or administrative proceedings (other than those
included in other categories or types of provisions disclosed separately) brought against Santander Group companies.
The provisions
for customer remediation include the estimated cost of payments to remedy errors relating to the sale of certain products in the UK and Germany. To calculate the provision for customer remediation, the best estimate of the provision made by
management is used, which is based on the estimated number of claims to be received and, of these, the number that will be accepted, as well as the estimated average payment per case.
The regulatory framework-related provisions include mainly the provisions for the extraordinary contribution to the Deposit Guarantee
Fund in Spain and those relating to the FSCS and the bank levy in the UK.
The provisions for restructuring include only the direct
costs arising from restructuring processes carried out by the various Group companies.
Qualitative information on the main
litigation is provided in Note 10.d.
Our general policy is to record provisions for tax and legal proceedings in which we assess the
chances of loss to be probable and we do not record provisions when the chances of loss are possible or remote. We determine the amounts to be provided for as our best estimate of the expenditure required to settle the corresponding claim based,
among other factors, on a case-by-case analysis of the facts and the legal opinion of internal and external counsel or by considering the historical average amount of the loss incurred in claims of the same nature. The definitive date of the outflow
of resources embodying economic benefits for the Group depends on each obligation. In certain cases, the obligations do not have a fixed settlement term and, in others, they depend on legal proceedings in progress.
34
The main changes in Provisions for taxes and other legal contingencies and Other provisions
are disclosure in the chart above. With regard to Brazil, the main charges to profit or loss in the period ended 31 March 2016 relate to EUR 48 million (BRL 208 million) due to civil contingencies and EUR 80 million (BRL 344 million) arising
from employment-related claims. This increase was partially offset by the use of available provisions, of which EUR 51 million (BRL 221 million) related to labour payments and EUR 75 million (BRL 322 million) to civil payments to restructuring
provisions used. With regard to the United Kingdom, were recognised, EUR 14 million (BRL 60 million) of restructuring provisions. These increases were partially offset by the use of EUR 45 million (BRL 193 million) of customer remediation
provisions, EUR 29 million (BRL 125 million) regulatory framework (Bank Levy and FSCS) and EUR 30 million (BRL 128) of restructuring.
|
d)
|
Litigation and other matters
|
i. Tax-related litigation
At 31 March 2016, the main tax-related proceedings concerning the Group were as follows:
|
-
|
|
Legal actions filed by Banco Santander (Brasil), S.A. and certain Group companies in Brazil challenging the increase in
the rate of Brazilian social contribution tax on net income from 9% to 15% stipulated by Interim Measure 413/2008, ratified by Law 11,727/2008, a provision having been recognised for the amount of the estimated loss.
|
|
-
|
|
Legal actions filed by certain Group companies in Brazil claiming their right to pay the Brazilian social contribution
tax on net income at a rate of 8% and 10% from 1994 to 1998. No provision was recognised in connection with the amount considered to be a contingent liability.
|
|
-
|
|
Legal actions filed by Banco Santander, S.A. (currently Banco Santander (Brasil) S.A.) and other Group entities claiming
their right to pay the Brazilian PIS and COFINS social contributions only on the income from the provision of services. In the case of Banco Santander, S.A., the legal action was declared unwarranted and an appeal was filed at the Federal Regional
Court. In September 2007 the Federal Regional Court found in favour of Banco Santander, S.A., but the Brazilian authorities appealed against the judgment at the Federal Supreme Court. On 23 April 2015, the Federal Supreme Court issued a
decision granting leave for the extraordinary appeal filed by the Brazilian authorities with regard to the PIS contribution to proceed, and dismissing the extraordinary appeal lodged by the Brazilian Public Prosecutors Office in relation to
the COFINS contribution. The Federal Supreme Court has not yet handed down its decision on the PIS contribution and, with regard to the COFINS contribution, on 28 May 2015, the Federal Supreme Court in plenary session unanimously rejected the
extraordinary appeal filed by the Brazilian Public Prosecutors Office, and the petition for clarification (embargos de declaraçao) subsequently filed by the Brazilian Public Prosecutors Office, which on
3 September admitted that no further appeals may be filed. In the case of Banco ABN AMRO Real, S.A. (currently Banco Santander (Brasil) S.A.), in March 2007 the court found in its favour, but the Brazilian authorities appealed against the
judgment at the Federal Regional Court, which handed down a decision partly upholding the appeal in September 2009. Banco Santander (Brasil) S.A. filed an appeal at the Federal Supreme Court. Law 12,865/2013 established a programme of payments or
deferrals of certain tax and social security debts, under which any entities that availed themselves of the programme and withdrew the legal actions brought by them were exempted from paying late-payment interest. In November 2013 Banco Santander
(Brasil) S.A. partially availed itself of this programme but only with respect to the legal actions brought by the former Banco ABN AMRO Real, S.A. in relation to the period from September 2006 to April 2009, and with respect to other minor actions
brought by other entities in its Group. However, the legal actions brought by Banco Santander, S.A. and those of Banco ABN AMRO Real, S.A. relating to the periods prior to September 2006, for which a provision for the estimated loss was recognised,
still subsist.
|
35
|
-
|
|
Banco Santander (Brasil), S.A. and other Group companies in Brazil have appealed against the assessments issued by the
Brazilian tax authorities questioning the deduction of loan losses in their income tax returns (IRPJ and CSLL) on the ground that the relevant requirements under the applicable legislation were not met. No provision was recognised in connection with
the amount considered to be a contingent liability.
|
|
-
|
|
Banco Santander (Brasil), S.A. and other Group companies in Brazil are involved in administrative and legal proceedings
against several municipalities that demand payment of the Service Tax on certain items of income from transactions not classified as provisions of services. No provision was recognised in connection with the amount considered to be a contingent
liability.
|
|
-
|
|
In addition, Banco Santander (Brasil), S.A. and other Group companies in Brazil are involved in administrative and legal
proceedings against the tax authorities in connection with the taxation for social security purposes of certain items which are not considered to be employee remuneration. No provision was recognised in connection with the amount considered to be a
contingent liability.
|
|
-
|
|
In December 2008 the Brazilian tax authorities issued an infringement notice against Banco Santander (Brasil), S.A. in
relation to income tax (IRPJ and CSLL) for 2002 to 2004. The tax authorities took the view that Banco Santander (Brasil), S.A. did not meet the necessary legal requirements to be able to deduct the goodwill arising on the acquisition of Banespa
(currently Banco Santander (Brasil), S.A.). Banco Santander (Brasil) S.A. filed an appeal against the infringement notice at Conselho Administrativo de Recursos Fiscais (CARF), which on 21 October 2011 unanimously decided to render the
infringement notice null and void. The tax authorities have appealed against this decision at a higher administrative level. In June 2010 the Brazilian tax authorities issued infringement notices in relation to this same matter for 2005 to 2007.
Banco Santander (Brasil), S.A. filed an appeal against these procedures at CARF, which was partially upheld on 8 October 2013. This decision has been appealed at the higher instance of CARF (Tax Appeal High Chamber). In December 2013 the
Brazilian tax authorities issued the infringement notice relating to 2008, the last year for amortisation of the goodwill. Banco Santander (Brasil), S.A. appealed against this infringement notice and the court found in its favour. The Brazilian tax
authorities appealed against this decision at CARF. Based on the advice of its external legal counsel and in view of the first decision by CARF, the Group considers that the stance taken by the Brazilian tax authorities is incorrect and that there
are sound defence arguments to appeal against the infringement notices. Accordingly, the risk of incurring a loss is remote. Consequently, no provisions have been recognised in connection with these proceedings because this matter should not affect
the consolidated financial statements.
|
|
-
|
|
In May 2003 the Brazilian tax authorities issued separate infringement notices against Santander Distribuidora de
Títulos e Valores Mobiliarios Ltda. (DTVM, currently Produban Serviços de Informática S.A.) and Banco Santander (Brasil), S.A. (currently Banco Santander (Brasil) S.A.) in relation to the Provisional Tax on Financial Movements
(CPMF) with respect to certain transactions carried out by DTVM in the management of its customers funds and for the clearing services provided by Banco Santander (Brasil) S.A. to DTVM in 2000, 2001 and the first two months of 2002. The two
entities appealed against the infringement notices at CARF, with DTVM obtaining a favourable decision and Banco Santander (Brasil) S.A. an unfavourable decision. Both decisions were appealed by the losing parties at the High Chamber of CARF, and
unfavourable decisions were obtained by Banco Santander (Brasil) S.A. and DTVM on 12 and 19 June 2015, respectively. Both cases were appealed at court in a single proceeding and a provision was recognised for the estimated loss.
|
|
-
|
|
In December 2010 the Brazilian tax authorities issued an infringement notice against Santander Seguros, S.A., as the
successor by merger to ABN AMRO Brazil Dois Participações, S.A., in relation to income tax (IRPJ and CSLL) for 2005. The tax authorities questioned the tax treatment applied to a sale of shares of Real Seguros, S.A. made in that year.
The bank filed an appeal for reconsideration against this infringement notice. As the former parent of Santander Seguros, S.A. (Brasil), Banco Santander (Brasil), S.A. is liable in the event of any adverse outcome of this proceeding. No provision
was recognised in connection with this proceeding as it was considered to be a contingent liability.
|
36
|
-
|
|
In June 2013, the Brazilian tax authorities issued an infringement notice against Banco Santander (Brasil), S.A. as the
party liable for tax on the capital gain allegedly obtained in Brazil by the entity not resident in Brazil, Sterrebeeck B.V., as a result of the incorporação de ações (merger of shares) transaction carried out
in August 2008. As a result of the aforementioned transaction, Banco Santander (Brasil), S.A. acquired all of the shares of Banco ABN AMRO Real, S.A. and ABN AMRO Brasil Dois Participações, S.A. through the delivery to these
entities shareholders of newly issued shares of Banco Santander (Brasil), S.A., issued in a capital increase carried out for that purpose. The Brazilian tax authorities take the view that in the aforementioned transaction Sterrebeeck B.V.
obtained income subject to tax in Brazil consisting of the difference between the issue value of the shares of Banco Santander (Brasil), S.A. that were received and the acquisition cost of the shares delivered in the exchange. In December 2014 the
Group appealed against the infringement notice at CARF after the appeal for reconsideration lodged at the Federal Tax Office was dismissed. Based on the advice of its external legal counsel, the Group considers that the stance taken by the Brazilian
tax authorities is incorrect and that there are sound defence arguments to appeal against the infringement notice. Accordingly, the risk of incurring a loss is remote. Consequently, the Group has not recognised any provisions in connection with
these proceedings because this matter should not affect the consolidated financial statements.
|
|
-
|
|
In November 2014 the Brazilian tax authorities issued an infringement notice against Banco Santander (Brasil) S.A. in
relation to income tax (IRPJ and CSLL) for 2009 questioning the tax-deductibility of the amortisation of the goodwill of Banco ABN AMRO Real S.A. performed prior to the absorption of this bank by Banco Santander (Brasil) S.A., but accepting the
amortisation performed after the merger. On the advice of its external legal counsel, Banco Santander (Brasil), S.A. lodged an appeal against this decision at the Federal Tax Office and obtained a favourable decision in July 2015, which will
foreseeably be appealed at CARF by the Brazilian tax authorities. No provision was recognised in connection with this proceeding as it was considered to be a contingent liability. Banco Santander (Brasil) S.A. has also appealed against infringement
notices issued by the tax authorities questioning the tax deductibility of the amortisation of the goodwill arising on the acquisition of Banco Comercial e de Investimento Sudameris S.A. No provision was recognised in connection with this matter as
it was considered to be a contingent liability.
|
|
-
|
|
Legal action brought by Sovereign Bancorp, Inc. (currently Santander Holdings USA, Inc.) claiming its right to take a
foreign tax credit in connection with taxes paid outside the United States in fiscal years 2003 to 2005 in relation to financing transactions carried out with an international bank. Santander Holdings USA, Inc. considers that, in accordance with
applicable tax legislation, it is entitled to recognise the aforementioned tax credits as well as the related issuance and financing costs. In addition, if the final outcome of this legal action is favourable to the interests of Santander Holdings
USA, Inc., the amounts paid over by the entity in relation to this matter with respect to 2006 and 2007 would have to be refunded. In 2013 and in 2015 at second instance the US courts found against two taxpayers in cases with a similar structure. In
the case of Santander Holdings USA, Inc., on 13 November 2015, the district judge found for Santander Holdings USA, Inc. in the final decision. On 13 January 2016, the judge ordered the amounts paid over with respect to 2003 to 2005 to be
refunded to Santander Holdings USA, Inc. On 11 March 2016 the US government appealed the judges decision at the Court of Appeals. The estimated loss relating to this proceeding was provided for.
|
|
-
|
|
Santander UK has proactively engaged with HM Revenue & Customs to resolve a number of outstanding legacy tax matters,
all of which relate to periods prior to Santander UK plcs adoption of the Code of Practice on Taxation for Banks. However, litigation proceedings were commenced in relation to a small number of these issues, with respect to which the court of
first instance found in favour of HM Revenue & Customs. Santander UK has decided not to appeal these rulings. The provision recognised for the amounts relating to these matters has been used in full.
|
At the date of approval of these interim financial statements certain other less significant tax-related proceedings were also in
progress.
37
ii. Non-tax-related proceedings
At 31 March 2016, the main non-tax-related proceedings concerning the Group were as follows:
|
-
|
|
Customer remediation: claims associated with the sale by Santander UK of certain financial products (principally payment
protection insurance or PPI) to its customers.
|
The remaining provision for PPI redress and related costs amounted
to £436m, which included £450m of additional provisions made for Q415. Monthly utilisation, excluding pro-active customer contact, during the quarter was in line with the 2015 average.
Although we are comfortable with our current position, we will continue to review our provision levels in respect of recent claims
experiences and the observed impact of the two-year deadline.
|
-
|
|
After the Madrid Provincial Appellate Court had rendered null and void the award handed down in the previous arbitration
proceeding, on September 8, 2011, Banco Santander, S.A. filed a new request for arbitration with the Spanish Arbitration Court against Delforca 2008, Sociedad de Valores, S.A. (formerly Gaesco Bolsa Sociedad de Valores, S.A.), claiming
66 million that the latter owes it as a result of the declaration on January 4, 2008 of the early termination by the Bank of all the financial transactions agreed upon between the parties.
|
On August 3, 2012, Delforca 2008, S.A. was declared to be in a position of voluntary insolvency by Barcelona
Commercial Court no. 10, which had agreed as part of the insolvency proceeding to stay the arbitration proceeding and the effects of the arbitration agreement entered into by Banco Santander, S.A. and Delforca 2008, S.A. The Arbitration Court, in
compliance with the decision of the Commercial Court, agreed on January 20, 2013 to stay the arbitration proceedings at the stage reached at that date until a decision could be reached in this respect in the insolvency proceeding.
In addition, as part of the insolvency proceeding of Delforca 2008, S.A., Banco Santander, S.A. notified its claim against the insolvent
party with a view to having the claim recognized as a contingent ordinary claim without specified amount. However, the insolvency manager opted to exclude Banco Santander, S.A.s claim from the provisional list of creditors and, accordingly,
Banco Santander, S.A. filed an ancillary claim, which was dismissed by a Court decision on February 17, 2015. This decision also declared that Banco Santander, S.A. had breached its contractual obligations under the framework financial transaction
agreement it had entered into with Delforca 2008, S.A.
As part of the same insolvency proceeding, Delforca 2008, S.A. has filed
another ancillary claim requesting the termination of the arbitration agreement included in the framework financial transactions agreement entered into by that party and Banco Santander, S.A. in 1998, as well as the termination of the obligation
that allegedly binds the insolvent party to the High Council of Chambers of Commerce (Spanish Arbitration Court). This claim was upheld in full by the Court.
On December 30, 2013, Banco Santander filed a complaint requesting the termination of the insolvency proceeding of Delforca 2008, S.A.
due to supervening disappearance of the alleged insolvency of the company. The complaint was dismissed by a decision handed down on June 30, 2014. A court order dated 25 May 2015 declared the end of the common phase of the insolvency proceeding
and the opening of the arrangement phase. Banco Santander, S.A. lodged an appeal against the courts decisions 1) to stay the arbitration proceeding and the effects of the arbitral award, 2) to terminate the arbitration agreement 3) not to
recognize the contingent claim, and to declare a breach by Banco Santander, S.A. and 4) not to conclude the proceeding due to the non-existence of insolvency.
38
On 23 June 2015, Delforca 2008, S.A. submitted an arrangement proposal entailing the
payment in full of the ordinary and subordinate claims.
In its appeal documents Banco Santander, S.A. requested the stay of any
proceedings that might be affected by the decision on the appeals filed, including the stay of the insolvency proceeding and the processing of the arrangement phase until a decision has been handed down on the appeals. By means of an interlocutory
order made on 16 September 2015 the Court resolved to postpone the holding of the creditors meeting until the Provincial Appellate Court has handed down a decision on the requested stay of the proceedings.
In addition, in April 2009 Mobilaria Monesa, S.A. (parent of Delforca 2008, S.A.) filed a claim against Banco Santander, S.A. at
Santander Court of First Instance no. 5, claiming damages which it says it incurred as a result of the (in its opinion) unwarranted claim filed by the Bank against its subsidiary, reproducing the same objections as Delforca 2008, S.A. This
proceeding has currently been stayed on preliminary civil ruling grounds, against which Mobilaria Monesa, S.A. filed an appeal which was dismissed by the Cantabria Provincial Appellate Court in a judgment dated January 16, 2014.
Lastly, on April 11, 2012, Banco Santander, S.A. was notified of the claim filed by Delforca 2008, S.A., heard by Madrid Court of First
Instance no. 21, in which it sought indemnification for the damage and losses it alleges it incurred due to the (in its opinion) unwarranted claim by the Bank. Delforca 2008, S.A. made the request in a counterclaim filed in the arbitration
proceeding that concluded with the annulled award, putting the figure at up to EUR 218 million. The aforementioned Court has dismissed the motion for declinatory exception proposed by Banco Santander, S.A. as the matter has been referred for
arbitration. This decision was upheld in an appeal at the Madrid Provincial Appellate Court in a judgment dated May 27, 2014. The Group considers that the risk of loss arising as a result of these matters is remote and, accordingly, it has not
recognized any provisions in connection with these proceedings.
|
-
|
|
Former employees of Banco do Estado de São Paulo S.A., Santander Banespa, Cia. de Arrendamiento Mercantil: a claim
was filed in 1998 by the association of retired Banespa employees (AFABESP) on behalf of its members, requesting the payment of a half-yearly bonus initially envisaged in the entitys Bylaws in the event that the entity obtained a profit and
that the distribution of this profit were approved by the board of directors. The bonus was not paid in 1994 and 1995 since the bank did not make a profit and partial payments were made from 1996 to 2000, as agreed by the board of directors, and the
relevant clause was eliminated in 2001. The Regional Employment Court ordered the bank to pay this half-yearly bonus in September 2005 and the bank filed an appeal against the decision at the High Employment Court (TST) and,
subsequently, at the Federal Supreme Court (STF). The TST confirmed the judgment against the bank, whereas the STF rejected the extraordinary appeal filed by the bank in a decision adopted by only one of the Court members, thereby also
upholding the order issued to the bank. This decision was appealed by the bank and the association. Only the appeal lodged by the bank has been given leave to proceed and will be decided upon by the STF in plenary session.
|
39
|
-
|
|
Planos economicos: Like the rest of the banking system, Santander Brazil has been the subject of claims from
customers, mostly depositors, and of class actions brought for a common reason, arising from a series of legislative changes relating to the calculation of inflation (planos economicos). The claimants considered that their vested rights
had been impaired due to the immediate application of these adjustments. In April 2010, the High Court of Justice (STJ) set the limitation period for these class actions at five years, as claimed by the banks, rather than twenty years,
as sought by the claimants, which will probably significantly reduce the number of actions brought and the amounts claimed in this connection. As regards the substance of the matter, the decisions issued to date have been adverse for the banks,
although two proceedings have been brought at the STJ and the Supreme Federal Court (STF) with which the matter is expected to be definitively settled. In August 2010, STJ handed down a decision finding for the plaintiffs in terms of
substance, but excluding one of the planos from the claim, thereby reducing the amount thereof, and once again confirming the five-year statute of limitations period. Shortly thereafter, the STF issued an injunctive relief order whereby
the proceedings in progress were stayed until this court issues a final decision on the matter.
|
|
-
|
|
Proceeding under Criminal Procedure Law (case no. 1043/2009) conducted at Madrid Court of First Instance no. 26,
following a claim brought by Banco Occidental de Descuento, Banco Universal, C.A. against the Bank for USD 150 million in principal plus USD 4.7 million in interests, upon alleged termination of an escrow contract.
|
The court upheld the claim but did not make a specific pronouncement on costs. A judgment handed down by the Madrid Provincial Appellate
Court on October 9, 2012 upheld the appeal lodged by the Bank and dismissed the appeal lodged by Banco Occidental de Descuento, Banco Universal, C.A., dismissing the claim. The dismissal of the claim was confirmed in an ancillary order to the
judgment dated December 28, 2012. An appeal was filed at the Supreme Court by Banco Occidental de Descuento against the Madrid Provincial Appellate Court decision. The appeal was dismissed in a Supreme Court judgment dated October 24, 2014. Banco
Occidental de Descuento filed a motion for annulment against the aforementioned judgment which was dismissed in an order dated 2 December 2015. The complainant has stated that it will appeal. The Bank has not recognized any provisions in this
connection.
|
-
|
|
On January 26, 2011, notice was served on the Bank of an ancillary insolvency claim to annul acts detrimental to the
assets available to creditors as part of the voluntary insolvency proceedings of Mediterráneo Hispa Group, S.A. at Murcia Commercial Court no. 2. The aim of the principal action is to request annulment of the application of the proceeds
obtained by the company undergoing insolvency from an asset sale and purchase transaction involving
32 million in principal and
2.7 million
in interest. On November 24, 2011, the hearing was held with the examination of the proposed evidence. Upon completion of the hearing, it was resolved to conduct a final proceeding. The Court dismissed the claim in full in a judgment dated November
13, 2013. The judgment was confirmed at appeal by the Murcia Provincial Appellate Court in a judgment dated July 10, 2014. The insolvency managers have filed a cassation and extraordinary appeal against procedural infringements against the
aforementioned judgment.
|
|
-
|
|
The bankruptcy of various Lehman Group companies was made public on September 15, 2008. Various customers of Santander
Group were affected by this situation since they had invested in securities issued by Lehman or in other products which had such assets as their underlying.
|
At the date of this annual report, certain claims had been filed in relation to this matter. The Banks directors and its legal
advisers consider that the various Lehman products were sold in accordance with the applicable legal regulations in force at the time of each sale or subscription and that the fact that the Group acted as intermediary would not give rise to any
liability for it in relation to the insolvency of Lehman. Accordingly, the risk of loss is considered to be remote and, as a result, no provisions needed to be recognized in this connection.
40
|
-
|
|
The intervention, on the grounds of alleged fraud, of Bernard L. Madoff Investment Securities LLC (Madoff
Securities) by the U.S. Securities and Exchange Commission (SEC) took place in December 2008. The exposure of customers of the Group through the Optimal Strategic US Equity (Optimal Strategic) subfund was EUR 2,330
million, of which EUR 2,010 million related to institutional investors and international private banking customers, and the remaining EUR 320 million made up the investment portfolios of the Groups private banking customers in Spain, who were
qualifying investors.
|
At the date of this financial statements, certain claims had been filed in relation to this
matter. The Group considers that it has at all times exercised due diligence and that these products have always been sold in a transparent way pursuant to applicable legislation and established procedures. Therefore, the risk of loss is considered
to be remote or non-material.
|
-
|
|
At the end of the first quarter of 2013, news stories were published stating that the public sector was debating the
validity of the interest rate swaps arranged between various financial institutions and public sector companies in Portugal, particularly in the public transport industry.
|
The swaps under debate included swaps arranged by Banco Santander Totta, S.A. with the public companies Metropolitano de Lisboa, E.P.E.
(MdL), Metro de Porto, S.A. (MdP), Sociedade de Transportes Colectivos do Porto, S.A. (STCP) and Companhia Carris de Ferro de Lisboa, S.A. (Carris). These swaps were arranged prior to 2008, i.e. before the start of the financial crisis, and had been
executed without incident.
In view of this situation Banco Santander Totta, S.A. took the initiative to request a court judgment on
the validity of the swaps in the jurisdiction of the United Kingdom to which the swaps are subject. The corresponding claims were filed in May 2013.
After the Bank had filed the claims, the four companies (MdL, MdP, STCP and Carris) notified Banco Santander Totta, S.A. that they were
suspending payment of the amounts owed under the swaps until a final decision had been handed down in the UK jurisdiction in the proceedings. MdL, MdP and Carris suspended payment in September 2013 and STCP did the same in December 2013.
Consequently, Banco Santander Totta, S.A. extended each of the claims to include the unpaid amounts.
On November 29, 2013, the companies presented their defense in which they claimed that the swaps were null and void under Portuguese law
and, accordingly, that they should be refunded the amounts paid. On February 14, 2014, Banco Santander Totta, S.A. answered the counterclaim, maintaining its arguments and rejecting the opposing arguments in its documents dated November 29, 2013.
On April 4, 2014, the companies issued their replies to the Banks documents. The preliminary hearing took place on
May 16, 2014.
The case was heard from October 12 to December 10, 2015.
The judgment was handed down on March 4, 2016. The Court decided in favor of Banco Santander Totta, S.A. on all requests submitted by it
and against the transport companies on all requests made by them. It considered all nine swap contracts to be valid and binding.
41
Banco Santander Totta, S.A. and its legal advisers consider that this judgment confirmed
that the bank acted at all times in accordance with applicable legislation and under the terms of the swaps. As a result, the Group has not recognized any provisions in this connection.
|
-
|
|
Most of the German banking industry has been affected by two German Supreme Court decisions in 2014 in relation to
handling fees in consumer loan agreements.
|
In May 2014 the German Supreme Court held handling fees in loan
agreements to be null and void. The Court subsequently handed down a ruling at the end of October 2014 extending from three to ten years the statute of limitation period on claims relating to old transactions. Therefore, any claims relating to
handling fees paid between 2004 and 2011 became statute-barred in 2014. This situation gave rise to numerous claims at the end of 2014 which affected the income statements of banks in Germany.
Santander Consumer Bank AG stopped including these handling fees in agreements from January 1, 2013 and ceased charging these fees
definitively at that date, i.e. before the Supreme Court handed down its judgment on the issue.
Provisions of approximately EUR 455
million were recognized in 2014 to cover the estimated cost of the claims. In order to calculate the provision, the claims already received, as well as an estimate of those that could be received in 2015 (the year in which the period for making
claims ends as they become statute-barred) were taken into account. The provisions recognized to cover the claims received were used progressively throughout 2014 and 2015.
The Bank and the other Group companies are subject to claims and, therefore, are party to certain legal proceedings incidental to the
normal course of their business (including those in connection with lending activities, relationships with employees and other commercial or tax matters).
In this context, it must be considered that the outcome of court proceedings is uncertain, particularly in the case of claims for
indeterminate amounts, those based on legal issues for which there are no precedents, those that affect a large number of parties or those at a very preliminary stage.
With the information available to it, the Group considers that at March 31, 2016, it had reliably estimated the
obligations associated with each proceeding and had recognized, where necessary, sufficient provisions to cover reasonably any liabilities that may arise as a result of these tax and legal situations. It also believes that any liability arising from
such claims and proceedings will not have, overall, a material adverse effect on the Groups business, financial position or results of operations.
42
11. Equity
In the three-month periods ended 31 March 2016 and 2015 there were no quantitative or qualitative changes in the Groups equity
other than those indicated in the consolidated statements of changes in total equity.
On 8 January 2015, the Group announced that its board
of directors had resolved to increase capital through an accelerated bookbuilt offering with disapplication of pre-emption rights. The capital increase amounted to EUR 7,500 million (BRL 23,830 million), of which EUR 607 million (BRL 1,928 million)
related to the par value of the 1,213,592,234 new shares issued and EUR 6,893 million (BRL 21,902 million) to the share premium.
On
29 January, 29 April and 4 November 2015, the bonus issues through which the Santander Dividendo Elección scrip dividend scheme is instrumented took place, whereby 262,578,993, 256,046,919 and 117,859,774 shares (1.90%; 1.82%
and 0.82% of the share capital) were issued for an amount of EUR 131, 128 and 59 million (BRL 395, 426 and 240 million).
At
31 March 2016, the Banks share capital consisted of 14,434,492,579 shares (31 December 2015:14,060,585,886), with a total par value of EUR 7,217 million (BRL 18,016 million). ( 31 December 2015: EUR 7,030 million (BRL 17,350
million)).
|
b)
|
Valuation adjustments - Available-for-sale financial assets
|
Valuation
adjustments - Available-for-sale financial assets includes the net amount of unrealised changes in the fair value of assets classified as available-for-sale financial assets (see Note 5.b).
43
The breakdown, by type of instrument and geographical origin of the issuer, of Valuation
adjustments - Available-for-sale financial assets at 31 March 2016 and 31 December 2015 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
31/03/16
|
|
|
31/12/15
|
|
Revaluation
gains
|
|
|
Revaluation
losses
|
|
|
Net
revaluation
gains/
(losses)
|
|
|
Fair
value
|
|
|
Revaluation
gains
|
|
|
Revaluation
losses
|
|
|
Net
revaluation
gains/
(losses)
|
|
|
Fair
value
|
|
|
|
|
|
|
|
|
|
Debt
instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government
debt securities and debt instruments issued by central banks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spain
|
|
|
729
|
|
|
|
(41)
|
|
|
|
688
|
|
|
|
34,843
|
|
|
|
641
|
|
|
|
(62
|
)
|
|
|
579
|
|
|
35,283
|
Rest of Europe
|
|
|
76
|
|
|
|
(68)
|
|
|
|
8
|
|
|
|
17,025
|
|
|
|
283
|
|
|
|
(47
|
)
|
|
|
236
|
|
|
20,310
|
Latin America and rest of the world
|
|
|
149
|
|
|
|
(379)
|
|
|
|
(230
|
)
|
|
|
33,597
|
|
|
|
42
|
|
|
|
(671
|
)
|
|
|
(629
|
)
|
|
32,185
|
Private-sector debt securities
|
|
|
170
|
|
|
|
(169)
|
|
|
|
1
|
|
|
|
28,191
|
|
|
|
165
|
|
|
|
(253
|
)
|
|
|
(88
|
)
|
|
29,409
|
|
|
|
1,124
|
|
|
|
(657)
|
|
|
|
467
|
|
|
|
113,656
|
|
|
|
1,131
|
|
|
|
(1,033
|
)
|
|
|
98
|
|
|
117,187
|
|
|
|
|
|
|
|
|
|
Equity
instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
55
|
|
|
|
(9)
|
|
|
|
46
|
|
|
|
1,140
|
|
|
|
66
|
|
|
|
(5
|
)
|
|
|
61
|
|
|
1,140
|
Rest of Europe
|
|
|
374
|
|
|
|
(10)
|
|
|
|
364
|
|
|
|
1,234
|
|
|
|
438
|
|
|
|
(14
|
)
|
|
|
424
|
|
|
1,338
|
United States
|
|
|
16
|
|
|
|
(1
|
)
|
|
|
15
|
|
|
|
898
|
|
|
|
14
|
|
|
|
(2
|
)
|
|
|
12
|
|
|
980
|
Latin America and rest of the world
|
|
|
246
|
|
|
|
(9)
|
|
|
|
237
|
|
|
|
1,370
|
|
|
|
251
|
|
|
|
(2
|
)
|
|
|
249
|
|
|
1,391
|
|
|
|
691
|
|
|
|
(29)
|
|
|
|
662
|
|
|
|
4,642
|
|
|
|
769
|
|
|
|
(23
|
)
|
|
|
746
|
|
|
4,849
|
Of
which:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Listed
|
|
|
370
|
|
|
|
(24)
|
|
|
|
346
|
|
|
|
1,834
|
|
|
|
436
|
|
|
|
(15
|
)
|
|
|
421
|
|
|
1,986
|
Unlisted
|
|
|
321
|
|
|
|
(5)
|
|
|
|
316
|
|
|
|
2,808
|
|
|
|
333
|
|
|
|
(8
|
)
|
|
|
325
|
|
|
2,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,815
|
|
|
|
(686)
|
|
|
|
1,129
|
|
|
|
118,298
|
|
|
|
1,900
|
|
|
|
(1,056
|
)
|
|
|
844
|
|
|
122,036
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
31/03/16
|
|
|
31/12/15
|
|
Revaluation
gains
|
|
|
Revaluation
losses
|
|
|
Net
revaluation
gains/
(losses)
|
|
|
Fair
value
|
|
|
Revaluation
gains
|
|
|
Revaluation
losses
|
|
|
Net
revaluation
gains/
(losses)
|
|
|
Fair
value
|
|
|
|
|
|
|
|
|
|
Debt
instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Government
debt securities and debt instruments issued by central banks
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spain
|
|
|
3,001
|
|
|
|
(169
|
)
|
|
|
2,832
|
|
|
|
143,462
|
|
|
|
2,764
|
|
|
|
(267
|
)
|
|
|
2,497
|
|
|
152,130
|
Rest of Europe
|
|
|
313
|
|
|
|
(280
|
)
|
|
|
33
|
|
|
|
70,099
|
|
|
|
1,220
|
|
|
|
(203
|
)
|
|
|
1,017
|
|
|
87,570
|
Latin America and rest of the world
|
|
|
613
|
|
|
|
(1,560
|
)
|
|
|
(947)
|
|
|
|
138,332
|
|
|
|
181
|
|
|
|
(2,893
|
)
|
|
|
(2,712)
|
|
|
138,772
|
Private-sector debt securities
|
|
|
700
|
|
|
|
(696
|
)
|
|
|
4
|
|
|
|
116,074
|
|
|
|
711
|
|
|
|
(1,091
|
)
|
|
|
(380)
|
|
|
126,803
|
|
|
|
4,627
|
|
|
|
(2,705
|
)
|
|
|
1,922
|
|
|
|
467,967
|
|
|
|
4,876
|
|
|
|
(4,454
|
)
|
|
|
422
|
|
|
505,275
|
|
|
|
|
|
|
|
|
|
Equity
instruments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International
|
|
|
226
|
|
|
|
(37
|
)
|
|
|
189
|
|
|
|
4,694
|
|
|
|
285
|
|
|
|
(22
|
)
|
|
|
263
|
|
|
4,915
|
Rest of Europe
|
|
|
1,540
|
|
|
|
(41
|
)
|
|
|
1,499
|
|
|
|
5,081
|
|
|
|
1,889
|
|
|
|
(61
|
)
|
|
|
1,828
|
|
|
5,769
|
United States
|
|
|
66
|
|
|
|
(4
|
)
|
|
|
62
|
|
|
|
3,697
|
|
|
|
60
|
|
|
|
(8
|
)
|
|
|
52
|
|
|
4,225
|
Latin America and rest of the world
|
|
|
1,013
|
|
|
|
(37
|
)
|
|
|
976
|
|
|
|
5,641
|
|
|
|
1,082
|
|
|
|
(9
|
)
|
|
|
1,073
|
|
|
5,998
|
|
|
|
2,845
|
|
|
|
(119
|
)
|
|
|
2,726
|
|
|
|
19,113
|
|
|
|
3,316
|
|
|
|
(100
|
)
|
|
|
3,216
|
|
|
20,907
|
Of
which:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Listed
|
|
|
1,523
|
|
|
|
(98
|
)
|
|
|
1,425
|
|
|
|
7,551
|
|
|
|
1,880
|
|
|
|
(65
|
)
|
|
|
1,815
|
|
|
8,563
|
Unlisted
|
|
|
1,322
|
|
|
|
(21
|
)
|
|
|
1,301
|
|
|
|
11,562
|
|
|
|
1,436
|
|
|
|
(35
|
)
|
|
|
1,401
|
|
|
12,344
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,472
|
|
|
|
(2,824
|
)
|
|
|
4,648
|
|
|
|
487,080
|
|
|
|
8,192
|
|
|
|
(4,554
|
)
|
|
|
3,638
|
|
|
526,182
|
44
In the first quarter of 2016 the Group recognised EUR 8 million (BRL 35 million) in the
income statement in relation to impairment of debt instruments.
|
c)
|
Valuation adjustments - Hedges of net investments in foreign operations and Exchange differences
|
Valuation adjustments - Hedges of net investments in foreign operations includes the net amount of the changes in value of hedging
instruments in hedges of net investments in foreign operations, in respect of the portion of these changes considered to be effective hedges.
Valuation adjustments - Exchange differences includes the net amount of exchange differences arising on non-monetary items whose fair
value is adjusted against equity and the differences arising on the translation to euros of the balances of the consolidated entities whose functional currency is not the euro.
The net changes in both these items in the first quarter of 2016 recognised in the statement of recognised income and expense reflect the
effect arising from the depreciation of foreign currencies, mainly the pound sterling and the US dollar, and the appreciation of the Brazilian real. Of the change in the balance in the first quarter, a loss of approximately EUR 750 million related
to the measurement of goodwill using the period-end exchange rate
.
|
d)
|
Valuation adjustments - Other valuation adjustments
|
The changes in the
balance of Valuation adjustments - Other valuation adjustments are shown in the condensed consolidated statement of recognised income and expense and include the actuarial gains and losses generated in the period and the return on plan assets,
excluding amounts included in net interest on the net defined benefit liability (asset), less the administrative expenses and taxes inherent to the plan, and any change in the effect of the asset ceiling.
The most significant changes in the first three months of 2016 related to:
|
-
|
|
Increase of EUR 187 million (BRL 803 million) in the cumulative actuarial losses relating to the Groups businesses in the UK, due to the change in the discount rate from 3.74% to 3.41% and a higher than expected
return on plan assets.
|
|
-
|
|
Changes as a result of changes in exchange rates, mainly in the UK (depreciation of the pound), and Brazil (appreciation of the real).
|
45
12. Segment information
In 2015 the Group made changes to its criteria for the management and presentation of its financial information by segment:
Information related to the three-month period ended 31 March 2015 following has been re-elaborated under these criteria to be
comparative.
For Group management purposes, the primary level of segmentation, by geographical area, comprises five segments: four
operating areas plus Corporate Activities. The operating areas, which include all the business activities carried on therein by the Group, are Continental Europe, the United Kingdom, Latin America and the United States, based on the location of the
Groups assets.
Following is the breakdown of revenue by the geographical segments used by the Group. For the purposes of the
table below, revenue is deemed to be that recognised under Interest and similar income, Income from equity instruments, Fee and commission income, Gains/losses on financial assets and liabilities (net) and Other operating income in the accompanying
consolidated income statements for the three-month periods ended 31 March 2016 and 2015.
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
|
|
Revenue (Millions of euros)
|
|
Revenue from external
customers
|
|
Inter-segment
revenue
|
|
Total
revenue
|
|
31/03/16
|
|
31/03/15
|
|
31/03/16
|
|
31/03/15
|
|
31/03/16
|
|
31/03/15
|
|
|
|
|
|
|
|
Continental
Europe
|
|
5,351
|
|
5,429
|
|
(90)
|
|
156
|
|
5,261
|
|
5,585
|
United
Kingdom
|
|
2,458
|
|
2,957
|
|
235
|
|
(157)
|
|
2,693
|
|
2,800
|
Latin
America
|
|
8,198
|
|
8,110
|
|
(332)
|
|
(213)
|
|
7,866
|
|
7,897
|
United
States
|
|
2,454
|
|
2,512
|
|
16
|
|
(6)
|
|
2,470
|
|
2,506
|
Corporate
Activities
|
|
(160)
|
|
(641)
|
|
1,663
|
|
4,279
|
|
1,503
|
|
3,638
|
Inter-segment revenue adjustments and eliminations
|
|
-
|
|
-
|
|
(1,492)
|
|
(4,059)
|
|
(1,492)
|
|
(4,059)
|
Total
|
|
18,301
|
|
18,367
|
|
-
|
|
-
|
|
18,301
|
|
18,367
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
|
|
Revenue (Millions of reais)
|
|
Revenue from external
customers
|
|
Inter-segment
revenue
|
|
Total revenue
|
|
31/03/16
|
|
31/03/15
|
|
31/03/16
|
|
31/03/15
|
|
31/03/16
|
|
31/03/15
|
|
|
|
|
|
|
|
Continental
Europe
|
|
22,989
|
|
17,454
|
|
(386)
|
|
502
|
|
22,603
|
|
17,956
|
United
Kingdom
|
|
10,558
|
|
9,507
|
|
1,009
|
|
(506)
|
|
11,567
|
|
9,001
|
Latin
America
|
|
35,220
|
|
26,073
|
|
(1,425)
|
|
(686)
|
|
33,795
|
|
25,387
|
United
States
|
|
10,544
|
|
8,077
|
|
68
|
|
(21)
|
|
10,612
|
|
8,056
|
Corporate
Activities
|
|
(688)
|
|
(2,062)
|
|
7,145
|
|
13,761
|
|
6,457
|
|
11,699
|
Inter-segment revenue adjustments and eliminations
|
|
-
|
|
-
|
|
(6,411)
|
|
(13,050)
|
|
(6,411)
|
|
(13,050)
|
Total
|
|
78,623
|
|
59,049
|
|
-
|
|
-
|
|
78,623
|
|
59,049
|
46
Also, following is the reconciliation of the Groups consolidated profit after tax for
the three-month periods ended 31 March 2016 and 2015, broken down by business segment, to the profit before tax per the condensed consolidated income statements for these periods:
|
|
|
|
|
|
|
Consolidated profit
(Millions of euros)
|
Segment
|
|
31/03/16
|
|
31/03/15
|
|
|
|
Continental Europe
|
|
776
|
|
712
|
United Kingdom
|
|
462
|
|
479
|
Latin America
|
|
841
|
|
985
|
United States
|
|
160
|
|
356
|
Corporate Activities
|
|
(318)
|
|
(465)
|
Total profit of the segments
reported
|
|
1,921
|
|
2,067
|
(+/-) Unallocated profit/loss
|
|
-
|
|
-
|
(+/-) Elimination of inter-segment
profit/loss
|
|
-
|
|
-
|
(+/-) Other profit/loss
|
|
-
|
|
-
|
(+/-) Income
tax and/or profit from discontinued
operations
|
|
810
|
|
922
|
|
|
|
Profit
before tax
|
|
2,731
|
|
2,989
|
|
|
|
|
|
Consolidated profit
(Millions of
reais)
|
Segment
|
|
31/03/16
|
|
31/03/15
|
|
|
|
Continental Europe
|
|
3,332
|
|
2,288
|
United Kingdom
|
|
1,986
|
|
1,540
|
Latin America
|
|
3,612
|
|
3,168
|
United States
|
|
689
|
|
1,146
|
Corporate Activities
|
|
(1,365)
|
|
(1,497)
|
Total profit of the segments
reported
|
|
8,254
|
|
6,645
|
(+/-) Unallocated profit/loss
|
|
-
|
|
-
|
(+/-) Elimination of inter-segment
profit/loss
|
|
-
|
|
-
|
(+/-) Other profit/loss
|
|
-
|
|
-
|
(+/-) Income
tax and/or profit from discontinued
operations
|
|
3,480
|
|
2,964
|
|
|
|
Profit
before tax
|
|
11,734
|
|
9,609
|
13. Related parties
The parties related to the Group are deemed to include, in addition to its subsidiaries, associates and jointly controlled entities, the
Banks key management personnel (the members of its board of directors and the executive vice presidents, together with their close family members) and the entities over which the key management personnel may exercise significant influence or
control.
Following is a detail of the transactions performed by the Group with its related parties in the first three months of 2016
and 2015, distinguishing between significant shareholders, members of the Banks board of directors, the Banks executive vice presidents, Group entities and other related parties. Related party transactions were made on terms equivalent
to those that prevail in arms-length transactions or, when this was not the case, the related compensation in kind was recognised.
47
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
31/03/16
|
Expenses and income
|
|
Significant
shareholders
|
|
Directors and
executives
|
|
Group
companies
or entities
|
|
Other related
parties
|
|
Total
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
Finance costs
|
|
-
|
|
-
|
|
4
|
|
-
|
|
4
|
Management or cooperation
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
R&D transfers and licensing
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Leases
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Services received
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Purchases of goods (finished or in
progress)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Valuation adjustments for uncollectible or
doubtful debts
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Losses on derecognition or disposal of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Other expenses
|
|
-
|
|
-
|
|
4
|
|
-
|
|
4
|
|
|
-
|
|
-
|
|
8
|
|
-
|
|
8
|
Income:
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
-
|
|
-
|
|
29
|
|
4
|
|
33
|
Management or cooperation
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
R&D transfers and licensing
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Dividends received
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Leases
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Services rendered
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Sale of goods (finished or in
progress)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Gains on derecognition or disposal of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Other income
|
|
-
|
|
-
|
|
253
|
|
1
|
|
254
|
|
|
-
|
|
-
|
|
282
|
|
5
|
|
287
|
48
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
|
31/03/16
|
Expenses and income
|
|
Significant
shareholders
|
|
Directors and
executives
|
|
Group
companies
or entities
|
|
Other related
parties
|
|
Total
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
Finance costs
|
|
-
|
|
-
|
|
17
|
|
-
|
|
17
|
Management or cooperation
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
R&D transfers and licensing
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Leases
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Services received
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Purchases of goods (finished or in
progress)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Valuation adjustments for uncollectible or
doubtful debts
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Losses on derecognition or disposal of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Other expenses
|
|
-
|
|
-
|
|
17
|
|
-
|
|
17
|
|
|
-
|
|
-
|
|
34
|
|
-
|
|
34
|
Income:
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
-
|
|
-
|
|
125
|
|
17
|
|
142
|
Management or cooperation
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
R&D transfers and licensing
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Dividends received
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Leases
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Services rendered
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Sale of goods (finished or in
progress)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Gains on derecognition or disposal of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Other income
|
|
-
|
|
-
|
|
1.087
|
|
4
|
|
1.091
|
|
|
-
|
|
-
|
|
1.212
|
|
21
|
|
1.233
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
31/03/16
|
Other transactions
|
|
Significant
shareholders
|
|
Directors and
executives
|
|
Group
companies
or entities
|
|
Other related
parties
|
|
Total
|
|
|
|
|
|
|
Purchases of tangible, intangible or other
assets
|
|
-
|
|
2
|
|
-
|
|
-
|
|
2
|
Financing agreements: loans and capital
contributions (lender)
|
|
-
|
|
20
|
|
7,647
|
|
1,339
|
|
9,006
|
Finance leases (lessor)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Repayment or termination of loans and
leases (lessor)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Sales of tangible, intangible or other
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Financing agreements: loans and capital
contributions (borrower)
|
|
-
|
|
45
|
|
1,472
|
|
62
|
|
1,579
|
Finance leases (lessee)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Repayment
or termination of loans and leases (lessee)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Guarantees
provided
|
|
-
|
|
-
|
|
42
|
|
187
|
|
229
|
Guarantees
received
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Commitments acquired
|
|
-
|
|
6
|
|
59
|
|
143
|
|
208
|
Commitments/guarantees cancelled
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Dividends
and other distributed profit
|
|
-
|
|
2
|
|
-
|
|
8
|
|
10
|
Other
transactions
|
|
-
|
|
-
|
|
3,640
|
|
2,435
|
|
6,075
|
|
|
|
|
|
Millions of reais
|
|
|
31/03/16
|
Other transactions
|
|
Significant
shareholders
|
|
Directors and
executives
|
|
Group
companies
or entities
|
|
Other related
parties
|
|
Total
|
|
|
|
|
|
|
Purchases of tangible, intangible or other
assets
|
|
-
|
|
8
|
|
-
|
|
-
|
|
8
|
Financing agreements: loans and capital
contributions (lender)
|
|
-
|
|
82
|
|
31,486
|
|
5,513
|
|
37,081
|
Finance leases (lessor)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Repayment or termination of loans and
leases (lessor)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Sales of tangible, intangible or other
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Financing agreements: loans and capital
contributions (borrower)
|
|
-
|
|
185
|
|
6,061
|
|
255
|
|
6,501
|
Finance leases (lessee)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Repayment
or termination of loans and leases (lessee)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Guarantees
provided
|
|
-
|
|
-
|
|
173
|
|
770
|
|
943
|
Guarantees
received
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Commitments acquired
|
|
-
|
|
25
|
|
243
|
|
589
|
|
857
|
Commitments/guarantees cancelled
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Dividends
and other distributed profit
|
|
-
|
|
8
|
|
-
|
|
33
|
|
41
|
Other
transactions
|
|
-
|
|
-
|
|
14,987
|
|
10,026
|
|
25,013
|
50
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
31/03/15
|
Expenses and income
|
|
Significant
shareholders
|
|
Directors and
executives
|
|
Group
companies
or entities
|
|
Other related
parties
|
|
Total
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
Finance costs
|
|
-
|
|
-
|
|
4
|
|
-
|
|
4
|
Management or cooperation
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
R&D transfers and licensing
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Leases
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Services received
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Purchases of goods (finished or in
progress)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Valuation adjustments for uncollectible or
doubtful debts
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Losses on derecognition or disposal of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Other expenses
|
|
-
|
|
-
|
|
5
|
|
-
|
|
5
|
|
|
|
|
|
|
|
|
-
|
|
-
|
|
9
|
|
-
|
|
9
|
Income:
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
-
|
|
-
|
|
25
|
|
4
|
|
29
|
Management or cooperation
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
R&D transfers and licensing
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Dividends received
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Leases
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Services rendered
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Sale of goods (finished or in
progress)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Gains on derecognition or disposal of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Other income
|
|
-
|
|
-
|
|
236
|
|
5
|
|
241
|
|
|
-
|
|
-
|
|
261
|
|
9
|
|
270
|
|
|
|
|
|
|
|
Millions of reais
|
|
|
31/03/15
|
Expenses and income
|
|
Significant
shareholders
|
|
Directors and
executives
|
|
Group
companies
or entities
|
|
Other related
parties
|
|
Total
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
Finance costs
|
|
-
|
|
-
|
|
13
|
|
-
|
|
13
|
Management or cooperation
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
R&D transfers and licensing
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Leases
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Services received
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Purchases of goods (finished or in
progress)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Valuation adjustments for uncollectible or
doubtful debts
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Losses on derecognition or disposal of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Other expenses
|
|
-
|
|
-
|
|
16
|
|
-
|
|
16
|
|
|
-
|
|
-
|
|
29
|
|
-
|
|
29
|
Income:
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
-
|
|
-
|
|
80
|
|
13
|
|
93
|
Management or cooperation
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
R&D transfers and licensing
agreements
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Dividends received
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Leases
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Services rendered
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Sale of goods (finished or in
progress)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Gains on derecognition or disposal of
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Other income
|
|
-
|
|
-
|
|
759
|
|
16
|
|
775
|
|
|
-
|
|
-
|
|
839
|
|
29
|
|
868
|
51
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
31/03/15
|
Other transactions
|
|
Significant
shareholders
|
|
Directors and
executives
|
|
Group
companies
or entities
|
|
Other related
parties
|
|
Total
|
|
|
|
|
|
|
Purchases of tangible, intangible or other
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Financing agreements: loans and capital
contributions (lender)
|
|
-
|
|
28
|
|
6,954
|
|
604
|
|
7,586
|
Finance leases (lessor)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Repayment or termination of loans and
leases (lessor)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Sales of tangible, intangible or other
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Financing agreements: loans and capital
contributions (borrower)
|
|
-
|
|
31
|
|
1,283
|
|
74
|
|
1,388
|
Finance leases (lessee)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Repayment
or termination of loans and leases (lessee)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Guarantees
provided
|
|
-
|
|
-
|
|
43
|
|
194
|
|
237
|
Guarantees
received
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Commitments acquired
|
|
-
|
|
5
|
|
55
|
|
182
|
|
242
|
Commitments/guarantees cancelled
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Dividends
and other distributed profit
|
|
-
|
|
5
|
|
-
|
|
21
|
|
26
|
Other
transactions
|
|
-
|
|
-
|
|
4,356
|
|
1,816
|
|
6,172
|
|
|
|
|
|
Millions of reais
|
|
|
31/03/15
|
Other transactions
|
|
Significant
shareholders
|
|
Directors and
executives
|
|
Group
companies
or entities
|
|
Other related
parties
|
|
Total
|
|
|
|
|
|
|
Purchases of tangible, intangible or other
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Financing agreements: loans and capital
contributions (lender)
|
|
-
|
|
98
|
|
24,310
|
|
2,111
|
|
26,519
|
Finance leases (lessor)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Repayment or termination of loans and
leases (lessor)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Sales of tangible, intangible or other
assets
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Financing agreements: loans and capital
contributions (borrower)
|
|
-
|
|
108
|
|
4,485
|
|
259
|
|
4,852
|
Finance leases (lessee)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Repayment
or termination of loans and leases (lessee)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Guarantees
provided
|
|
-
|
|
-
|
|
150
|
|
678
|
|
828
|
Guarantees
received
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Commitments acquired
|
|
-
|
|
17
|
|
192
|
|
636
|
|
845
|
Commitments/guarantees cancelled
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Dividends
and other distributed profit
|
|
-
|
|
17
|
|
-
|
|
73
|
|
90
|
Other
transactions
|
|
-
|
|
-
|
|
15,228
|
|
6,348
|
|
21,576
|
In addition to the detail provided above, there were insurance contracts linked to pensions
amounting to EUR 288 million (BRL 1,184million) at 31 March 2016 (31 March 2015: EUR 334 million (BRL 1,168 million)).
52
14. Average headcount
The average number of employees at the Group and at the Bank, by gender, in the three-month periods ended 31 March 2016 and 2015 was
as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average headcount
|
|
Bank
|
|
|
Group
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
31/03/16
|
|
|
31/03/15
|
|
|
|
|
|
|
Men
|
|
|
12,902
|
|
|
|
13,081
|
|
|
|
87,193
|
|
|
|
83,489
|
|
Women
|
|
|
10,221
|
|
|
|
10,152
|
|
|
|
107,216
|
|
|
|
102,421
|
|
|
|
|
23,123
|
|
|
|
23,233
|
|
|
|
194,409
|
|
|
|
185,910
|
|
15. Other disclosures: valuation techniques for financial assets and liabilities
The following table shows a summary of the fair values, at the end of the three-month periods ended 31 March 2016 and
31 December 2015, of the financial assets and liabilities indicated below, classified on the basis of the various measurement methods used by the Group to determine their fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
31/03/16
|
|
31/12/15
|
|
|
Published
price
quotations
in
active
markets
|
|
Internal
models
|
|
Total
|
|
Published
price
quotations
in
active
markets
|
|
Internal
models
|
|
Total
|
|
|
|
|
|
|
|
Financial assets held for trading
|
|
64,179
|
|
88,442
|
|
152,621
|
|
65,849
|
|
81,438
|
|
147,287
|
|
|
|
|
|
|
|
Other financial assets at fair value
through profit or loss
|
|
3,148
|
|
45,623
|
|
48,771
|
|
3,244
|
|
41,799
|
|
45,043
|
Available-for-sale financial assets
(1)
|
|
86,821
|
|
29,718
|
|
116,539
|
|
92,284
|
|
27,962
|
|
120,246
|
Hedging derivatives (assets)
|
|
38
|
|
8,543
|
|
8,581
|
|
271
|
|
7,456
|
|
7,727
|
Financial liabilities held for
trading
|
|
17,424
|
|
91,143
|
|
108,567
|
|
17,058
|
|
88,160
|
|
105,218
|
|
|
|
|
|
|
|
Other financial liabilities at fair value
through profit or loss
|
|
-
|
|
63,404
|
|
63,404
|
|
-
|
|
54,768
|
|
54,768
|
Hedging derivatives (liabilities)
|
|
13
|
|
8,054
|
|
8,067
|
|
400
|
|
8,537
|
|
8,937
|
Liabilities under insurance
contracts
|
|
-
|
|
656
|
|
656
|
|
-
|
|
627
|
|
627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
|
31/03/16
|
|
31/12/15
|
|
|
Published
price
quotations
in
active
markets
|
|
Internal
models
|
|
Total
|
|
Published
price
quotations
in
active
markets
|
|
Internal
models
|
|
Total
|
|
|
|
|
|
|
|
Financial assets held for trading
|
|
264,254
|
|
364,148
|
|
628,402
|
|
283,922
|
|
351,136
|
|
635,058
|
|
|
|
|
|
|
|
Other financial assets at fair value
through profit or loss
|
|
12,961
|
|
187,848
|
|
200,809
|
|
13,987
|
|
180,225
|
|
194,212
|
Available-for-sale financial assets
(1)
|
|
357,477
|
|
122,361
|
|
479,838
|
|
397,901
|
|
120,563
|
|
518,464
|
Hedging derivatives (assets)
|
|
157
|
|
35,174
|
|
35,331
|
|
1,169
|
|
32,148
|
|
33,317
|
Financial liabilities held for
trading
|
|
71,742
|
|
375,273
|
|
447,015
|
|
73,550
|
|
380,119
|
|
453,669
|
|
|
|
|
|
|
|
Other financial liabilities at fair value
through profit or loss
|
|
-
|
|
261,059
|
|
261,059
|
|
-
|
|
236,142
|
|
236,142
|
Hedging derivatives (liabilities)
|
|
51
|
|
33,164
|
|
33,215
|
|
1,726
|
|
36,808
|
|
38,534
|
Liabilities under insurance
contracts
|
|
-
|
|
2,701
|
|
2,701
|
|
-
|
|
2,703
|
|
2,703
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
In addition to the financial instruments measured at fair value shown in the foregoing table, at 31 March 2016, the
Bank held equity instruments classified as available-for-sale financial assets and carried at cost amounting to EUR 1,759 million (BRL 7,242 million) (31 December 2015: EUR 1,790 million (BRL 7,718 million)).
|
Financial instruments at fair value, determined on the basis of published price quotations in active markets (Level 1), include
government debt securities, private-sector debt securities, derivatives traded in organised markets, securitised assets, shares, short positions and fixed-income securities issued.
In cases where price quotations cannot be observed, management makes its best estimate of the price that the market would set, using its
own internal models. In most cases, these internal models use data based on observable market parameters as significant inputs (Level 2) and, in very specific cases, they use significant inputs not observable in market data (Level 3). In order to
make these estimates, various techniques are employed, including the extrapolation of observable market data. The best evidence of the fair value of a financial instrument on initial recognition is the transaction price, unless the fair value of the
instrument can be obtained from other market transactions performed with the same or similar instruments or can be measured by using a valuation technique in which the variables used include only observable market data, mainly interest rates.
The Group did not make any material transfers of level 3 financial instruments in the first three months of 2016.
The Group has developed a formal process for the systematic valuation and management of financial instruments, which has been implemented
worldwide across all the Groups units. The governance scheme for this process distributes responsibilities between two independent divisions: Treasury (development, marketing and daily management of financial products and market data) and Risk
(on a periodic basis, validation of pricing models and market data, computation of risk metrics, new transaction approval policies, management of market risk and implementation of fair value adjustment policies). The approval of new products follows
a sequence of steps (request, development, validation, integration in corporate systems and quality assurance) before the product is brought into production. This process ensures that pricing systems have been properly reviewed and are stable before
they are used. Observable market data are including credit risk components.
The most important products and families of derivatives,
and the related valuation techniques and inputs, by asset class, are detailed in the consolidated financial statements as at 31 December 2015.
The CVA and DVA recognised at 31 March 2016 amounted to EUR 868 million and EUR 518 million (BRL: 3,574 AN 2,134 million)),
respectively.
54
Set forth below are the financial instruments at fair value whose measurement was based on
internal models (Levels 2 and 3) at 31 March 2016 and 31 December 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of euros
|
|
|
|
|
Fair values calculated
using internal models at
31/03/2016
|
|
|
Fair values calculated
using internal models at
31/12/2015
|
|
|
|
|
|
|
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Valuation techniques
|
|
Main inputs
|
ASSETS:
|
|
|
|
|
169,994
|
|
|
|
2,332
|
|
|
|
156,174
|
|
|
|
2,481
|
|
|
|
|
|
Financial assets held for
trading
|
|
|
|
|
87,450
|
|
|
|
992
|
|
|
|
80,488
|
|
|
|
950
|
|
|
|
|
|
Loans and advances to credit
institutions
|
|
|
|
|
4,468
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data
|
Loans and advances to customers
(a)
|
|
|
|
|
6,866
|
|
|
|
-
|
|
|
|
2,293
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data
|
Debt and equity instruments
|
|
|
|
|
1,050
|
|
|
|
7
|
|
|
|
6,081
|
|
|
|
43
|
|
|
Present Value Method
|
|
Observable market data, HPI
|
Trading derivatives
|
|
|
|
|
75,066
|
|
|
|
985
|
|
|
|
650
|
|
|
|
907
|
|
|
|
|
|
Swaps
|
|
|
55,914
|
|
|
|
55
|
|
|
|
71,464
|
|
|
|
54
|
|
|
Present Value Method, Gaussian Copula (b)
|
|
Observable market data, basis,
liquidity
|
Exchange rate options
|
|
|
1,145
|
|
|
|
-
|
|
|
|
52,904
|
|
|
|
-
|
|
|
Black-Scholes Model
|
|
Observable market data, liquidity, credit
spread
|
Interest rate options
|
|
|
8,790
|
|
|
|
702
|
|
|
|
1,005
|
|
|
|
619
|
|
|
Blacks Model, Heath-Jarrow-Morton Model
|
|
Observable market data, liquidity,
correlation, credit spread
|
Interest rate futures
|
|
|
348
|
|
|
|
-
|
|
|
|
8,276
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data, credit
spread
|
Index and securities options
|
|
|
1,489
|
|
|
|
111
|
|
|
|
84
|
|
|
|
120
|
|
|
Black-Scholes Model
|
|
Observable market data, dividends,
correlation, liquidity, HPI, credit spread
|
Other
|
|
|
7,380
|
|
|
|
117
|
|
|
|
1,585
|
|
|
|
114
|
|
|
Present Value Method, Monte Carlo simulation and
other
|
|
Observable market data, credit spread and
other
|
Hedging derivatives
|
|
|
|
|
8,516
|
|
|
|
27
|
|
|
|
7,438
|
|
|
|
18
|
|
|
|
|
|
Swaps
|
|
|
7,786
|
|
|
|
27
|
|
|
|
6,437
|
|
|
|
18
|
|
|
Present Value Method
|
|
Observable market data, basis, credit
spread
|
Exchange rate options
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Black-Scholes Model
|
|
Observable market data, credit
spread
|
Interest rate options
|
|
|
21
|
|
|
|
-
|
|
|
|
19
|
|
|
|
-
|
|
|
Blacks Model
|
|
Observable market data, credit
spread
|
Other
|
|
|
709
|
|
|
|
-
|
|
|
|
982
|
|
|
|
-
|
|
|
N/A
|
|
N/A
|
Other financial assets at fair value
through profit or loss
|
|
|
|
|
45,108
|
|
|
|
515
|
|
|
|
41,285
|
|
|
|
514
|
|
|
|
|
|
Loans and advances to credit
institutions
|
|
|
|
|
30,714
|
|
|
|
-
|
|
|
|
26,403
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data
|
Loans and advances to customers
(c)
|
|
|
|
|
13,801
|
|
|
|
83
|
|
|
|
14,213
|
|
|
|
81
|
|
|
Present Value Method
|
|
Observable market data, HPI
|
Debt and equity instruments
|
|
|
|
|
593
|
|
|
|
432
|
|
|
|
669
|
|
|
|
433
|
|
|
Present Value Method
|
|
Observable market data
|
Available-for-sale financial
assets
|
|
|
|
|
28,920
|
|
|
|
798
|
|
|
|
26,963
|
|
|
|
999
|
|
|
|
|
|
Debt and equity instruments
|
|
|
|
|
28,920
|
|
|
|
798
|
|
|
|
26,963
|
|
|
|
999
|
|
|
Present Value Method
|
|
Observable market data
|
LIABILITIES:
|
|
|
|
|
162,895
|
|
|
|
362
|
|
|
|
151,768
|
|
|
|
324
|
|
|
|
|
|
Financial liabilities held for
trading
|
|
|
|
|
90,795
|
|
|
|
348
|
|
|
|
87,858
|
|
|
|
302
|
|
|
|
|
|
Deposits from central banks
|
|
|
|
|
771
|
|
|
|
-
|
|
|
|
2,178
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data
|
Deposits from credit institutions
|
|
|
|
|
205
|
|
|
|
-
|
|
|
|
76
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data
|
Customer deposits
|
|
|
|
|
9,570
|
|
|
|
-
|
|
|
|
9,187
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data
|
Marketable debt securities
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data,
liquidity
|
Trading derivatives
|
|
|
|
|
77,698
|
|
|
|
348
|
|
|
|
74,893
|
|
|
|
302
|
|
|
|
|
|
Swaps
|
|
|
57,883
|
|
|
|
1
|
|
|
|
55,055
|
|
|
|
1
|
|
|
Present Value Method, Gaussian Copula (b)
|
|
Observable market data, basis, liquidity,
HPI, credit spread
|
Exchange rate options
|
|
|
1,037
|
|
|
|
-
|
|
|
|
901
|
|
|
|
-
|
|
|
Black-Scholes Model
|
|
Observable market data, liquidity, credit
spread
|
Interest rate options
|
|
|
10,190
|
|
|
|
247
|
|
|
|
9,240
|
|
|
|
194
|
|
|
Blacks Model, Heath-Jarrow-Morton Model
|
|
Observable market data, liquidity,
correlation, credit spread
|
Index and securities options
|
|
|
1,765
|
|
|
|
100
|
|
|
|
2,000
|
|
|
|
107
|
|
|
Black-Scholes Model
|
|
Observable market data, dividends,
correlation, liquidity, HPI, credit spread
|
Interest rate and equity futures
|
|
|
371
|
|
|
|
-
|
|
|
|
101
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data, credit
spread
|
Other
|
|
|
6,453
|
|
|
|
-
|
|
|
|
7,596
|
|
|
|
-
|
|
|
Present Value Method, Monte Carlo simulation and
other
|
|
Observable market data, credit spread and
other
|
Short positions
|
|
|
|
|
2,551
|
|
|
|
-
|
|
|
|
1,524
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data
|
Hedging derivatives
|
|
|
|
|
8,045
|
|
|
|
9
|
|
|
|
8,526
|
|
|
|
11
|
|
|
|
|
|
Swaps
|
|
|
7,461
|
|
|
|
9
|
|
|
|
7,971
|
|
|
|
11
|
|
|
Present Value Method
|
|
Observable market data, basis, credit
spread
|
Exchange rate options
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Black-Scholes Model
|
|
Observable market data, credit
spread
|
Interest rate options
|
|
|
16
|
|
|
|
-
|
|
|
|
12
|
|
|
|
-
|
|
|
Blacks Model
|
|
Observable market data, credit
spread
|
Other
|
|
|
569
|
|
|
|
-
|
|
|
|
543
|
|
|
|
-
|
|
|
N/A
|
|
N/A
|
Other financial liabilities at fair
value through profit or loss
|
|
|
|
|
63,399
|
|
|
|
5
|
|
|
|
54,757
|
|
|
|
11
|
|
|
Present Value Method
|
|
Observable market data
|
Liabilities under insurance
contracts
|
|
|
|
|
656
|
|
|
|
-
|
|
|
|
627
|
|
|
|
-
|
|
|
Present Value Method
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Millions of reais
|
|
|
|
|
Fair values calculated
using internal models at
31/03/2016
|
|
|
Fair values calculated
using internal models
at 31/12/2015
|
|
|
|
|
|
|
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Level 2
|
|
|
Level 3
|
|
|
Valuation techniques
|
|
Main inputs
|
ASSETS:
|
|
|
|
|
699.932
|
|
|
|
9.599
|
|
|
|
673,375
|
|
|
|
10,697
|
|
|
|
|
|
Financial assets held for
trading
|
|
|
|
|
360.066
|
|
|
|
4.082
|
|
|
|
347,040
|
|
|
|
4,096
|
|
|
|
|
|
Loans and advances to credit
institutions
|
|
|
|
|
18.397
|
|
|
|
-
|
|
|
|
9,887
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data
|
Loans and advances to customers
(a)
|
|
|
|
|
28.270
|
|
|
|
-
|
|
|
|
26,219
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data
|
Debt and equity instruments
|
|
|
|
|
4.323
|
|
|
|
28
|
|
|
|
2,803
|
|
|
|
185
|
|
|
Present Value Method
|
|
Observable market data, HPI
|
Trading derivatives
|
|
|
|
|
309.076
|
|
|
|
4.054
|
|
|
|
308,131
|
|
|
|
3,911
|
|
|
|
|
|
Swaps
|
|
|
230.220
|
|
|
|
226
|
|
|
|
228,106
|
|
|
|
233
|
|
|
Present Value Method, Gaussian Copula (b)
|
|
Observable market data, basis,
liquidity
|
Exchange rate options
|
|
|
4.714
|
|
|
|
-
|
|
|
|
4,333
|
|
|
|
-
|
|
|
Black-Scholes Model
|
|
Observable market data, liquidity, credit
spread
|
Interest rate options
|
|
|
36.192
|
|
|
|
2.890
|
|
|
|
35,684
|
|
|
|
2,669
|
|
|
Blacks Model, Heath-Jarrow-Morton Model
|
|
Observable market data, liquidity,
correlation, credit spread
|
Interest rate futures
|
|
|
1.433
|
|
|
|
-
|
|
|
|
362
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data, credit
spread
|
Index and securities options
|
|
|
6.131
|
|
|
|
457
|
|
|
|
6,834
|
|
|
|
517
|
|
|
Black-Scholes Model
|
|
Observable market data, dividends,
correlation, liquidity, HPI, credit spread
|
Other
|
|
|
30.386
|
|
|
|
481
|
|
|
|
32,812
|
|
|
|
492
|
|
|
Present Value Method, Monte Carlo simulation and
other
|
|
Observable market data, credit spread and
other
|
Hedging derivatives
|
|
|
|
|
35.063
|
|
|
|
111
|
|
|
|
32,070
|
|
|
|
78
|
|
|
|
|
|
Swaps
|
|
|
32.058
|
|
|
|
111
|
|
|
|
27,754
|
|
|
|
78
|
|
|
Present Value Method
|
|
Observable market data, basis, credit
spread
|
Exchange rate options
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Black-Scholes Model
|
|
Observable market data, credit
spread
|
Interest rate options
|
|
|
86
|
|
|
|
-
|
|
|
|
82
|
|
|
|
-
|
|
|
Blacks Model
|
|
Observable market data, credit
spread
|
Other
|
|
|
2.919
|
|
|
|
-
|
|
|
|
4,234
|
|
|
|
-
|
|
|
N/A
|
|
N/A
|
Other financial assets at fair value
through profit or loss
|
|
|
|
|
185.728
|
|
|
|
2.120
|
|
|
|
178,009
|
|
|
|
2,216
|
|
|
|
|
|
Loans and advances to credit
institutions
|
|
|
|
|
126.462
|
|
|
|
-
|
|
|
|
113,842
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data
|
Loans and advances to customers
(c)
|
|
|
|
|
56.824
|
|
|
|
342
|
|
|
|
61,282
|
|
|
|
349
|
|
|
Present Value Method
|
|
Observable market data, HPI
|
Debt and equity instruments
|
|
|
|
|
2.442
|
|
|
|
1.778
|
|
|
|
2,885
|
|
|
|
1,867
|
|
|
Present Value Method
|
|
Observable market data
|
Available-for-sale financial
assets
|
|
|
|
|
119.075
|
|
|
|
3.286
|
|
|
|
116,256
|
|
|
|
4,307
|
|
|
|
|
|
Debt and equity instruments
|
|
|
|
|
119.075
|
|
|
|
3.286
|
|
|
|
116,256
|
|
|
|
4,307
|
|
|
Present Value Method
|
|
Observable market data
|
LIABILITIES:
|
|
|
|
|
670.706
|
|
|
|
1.491
|
|
|
|
654,377
|
|
|
|
1,395
|
|
|
|
|
|
Financial liabilities held for
trading
|
|
|
|
|
373.840
|
|
|
|
1.433
|
|
|
|
378,818
|
|
|
|
1,301
|
|
|
|
|
|
Deposits from central banks
|
|
|
|
|
3.175
|
|
|
|
-
|
|
|
|
9,391
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data
|
Deposits from credit institutions
|
|
|
|
|
844
|
|
|
|
-
|
|
|
|
328
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data
|
Customer deposits
|
|
|
|
|
39.402
|
|
|
|
-
|
|
|
|
39,610
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data
|
Marketable debt securities
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data,
liquidity
|
Trading derivatives
|
|
|
|
|
319.915
|
|
|
|
1.433
|
|
|
|
322,915
|
|
|
|
1,301
|
|
|
|
|
|
Swaps
|
|
|
238.327
|
|
|
|
4
|
|
|
|
237,382
|
|
|
|
4
|
|
|
Present Value Method, Gaussian Copula (b)
|
|
Observable market data, basis, liquidity,
HPI, credit spread
|
Exchange rate options
|
|
|
4.271
|
|
|
|
-
|
|
|
|
3,883
|
|
|
|
-
|
|
|
Black-Scholes Model
|
|
Observable market data, liquidity, credit
spread
|
Interest rate options
|
|
|
41.954
|
|
|
|
1.017
|
|
|
|
39,838
|
|
|
|
836
|
|
|
Blacks Model, Heath-Jarrow-Morton Model
|
|
Observable market data, liquidity,
correlation, credit spread
|
Index and securities options
|
|
|
7.267
|
|
|
|
412
|
|
|
|
8,626
|
|
|
|
461
|
|
|
Black-Scholes Model
|
|
Observable market data, dividends,
correlation, liquidity, HPI, credit spread
|
Interest rate and equity futures
|
|
|
1.528
|
|
|
|
-
|
|
|
|
435
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data, credit
spread
|
Other
|
|
|
26.568
|
|
|
|
-
|
|
|
|
32,751
|
|
|
|
-
|
|
|
Present Value Method, Monte Carlo simulation and
other
|
|
Observable market data, credit spread and
other
|
Short positions
|
|
|
|
|
10.504
|
|
|
|
-
|
|
|
|
6,574
|
|
|
|
-
|
|
|
Present Value Method
|
|
Observable market data
|
Hedging derivatives
|
|
|
|
|
33.127
|
|
|
|
37
|
|
|
|
36,761
|
|
|
|
47
|
|
|
|
|
|
Swaps
|
|
|
30.720
|
|
|
|
37
|
|
|
|
34,369
|
|
|
|
47
|
|
|
Present Value Method
|
|
Observable market data, basis, credit
spread
|
Exchange rate options
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Black-Scholes Model
|
|
Observable market data, credit
spread
|
Interest rate options
|
|
|
65
|
|
|
|
-
|
|
|
|
53
|
|
|
|
-
|
|
|
Blacks Model
|
|
Observable market data, credit
spread
|
Other
|
|
|
2.342
|
|
|
|
-
|
|
|
|
2,339
|
|
|
|
-
|
|
|
N/A
|
|
N/A
|
Other financial liabilities at fair
value through profit or loss
|
|
|
|
|
261.038
|
|
|
|
21
|
|
|
|
236,095
|
|
|
|
47
|
|
|
Present Value Method
|
|
Observable market data
|
Liabilities under insurance
contracts
|
|
|
|
|
2.701
|
|
|
|
-
|
|
|
|
2,703
|
|
|
|
-
|
|
|
Present Value Method
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Includes mainly short-term loans and reverse repurchase agreements with corporate customers (mainly brokerage and
investment companies).
|
|
(b)
|
Includes credit risk derivatives with a positive net fair value of EUR 3 million (BRL 12 million) recognised in the
consolidated balance sheet. These assets and liabilities are measured using the Standard Gaussian Copula Model.
|
|
|
(c)
|
Includes home mortgage loans to financial institutions in the UK (which are regulated and partly financed by the
Government). The fair value of these loans was obtained using observable market variables, including current market transactions with similar amounts and collateral facilitated by the UK Housing Association. Since the Government is involved in these
financial institutions, the credit risk spreads have remained stable and are homogeneous in this sector. The results arising from the valuation model are checked against current market transactions.
|
|
56
The measurements obtained using the internal models might have been different had other
methods or assumptions been used with respect to interest rate risk, to credit risk, market risk and foreign currency risk spreads, or to their related correlations and volatilities. Nevertheless, the Banks directors consider that the fair
value of the financial assets and liabilities recognised in the consolidated balance sheet and the gains and losses arising from these financial instruments are reasonable.
Level 3 financial instruments
Set forth below are the Groups main financial instruments measured using unobservable market data that constitute significant inputs
of the internal models (Level 3):
|
-
|
|
Instruments in Santander UKs portfolio (loans, debt instruments and derivatives) linked to the House Price Index
(HPI). Even if the valuation techniques used for these instruments may be the same as those used to value similar products (present value in the case of loans and debt instruments, and the Black-Scholes model for derivatives), the main factors used
in the valuation of these instruments are the HPI spot rate, the growth rate of that rate, its volatility and mortality rates, which are not always observable in the market and, accordingly, these instruments are considered illiquid.
|
|
●
|
|
The HPI spot rate: for some instruments the NSA HPI spot rate, which is directly observable and published on a monthly
basis, is used. For other instruments where regional HPI rates must be used (published quarterly), adjustments are made to reflect the different composition of the rates and adapt them to the regional composition of Santander UKs portfolio.
|
|
●
|
|
HPI growth rate: this is not always directly observable in the market, especially for long maturities, and is estimated
in accordance with existing quoted prices. To reflect the uncertainty implicit in these estimates, adjustments are made based on an analysis of the historical volatility of the HPI, incorporating reversion to the mean.
|
|
●
|
|
HPI volatility: the long-term volatility is not directly observable in the market but is estimated on the basis of more
short-term quoted prices and by making an adjustment to reflect the existing uncertainty, based on the standard deviation of historical volatility over various time periods.
|
|
●
|
|
Mortality rates: these are based on published official tables and adjusted to reflect the composition of the customer
portfolio for this type of product at Santander UK.
|
|
-
|
|
Trading derivatives on baskets of shares. These are measured using advanced local and stochastic volatility models, using
Monte Carlo simulations; the main unobservable input is the correlation between the prices of the shares in each basket in question.
|
|
-
|
|
Callable interest rate trading derivatives (Bermudan-style options) where the main unobservable input is mean reversion
of interest rates.
|
The net gain recognised in the income statement for the first three months of 2016 arising from
the aforementioned valuation models amounted to EUR 125 million (BRL: 536 million).
57
The table below shows the effect, at 31 March 2016, on the fair value of the main
financial instruments classified as Level 3 of a reasonable change in the assumptions used in the valuation. This effect was determined by applying the probable valuation ranges of the main unobservable inputs detailed in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio / Instrument
|
|
Valuation technique
|
|
Main unobservable inputs
|
|
Range
|
|
Weighted
average
|
|
Impacts (in millions of euros)
|
(Level 3)
|
|
|
|
|
|
Unfavourable
scenario
|
|
Favourable
scenario
|
Financial assets held for trading
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
instruments
|
|
Partial differential equations
|
|
Long-term volatility
|
|
27% - 41%
|
|
37,03%
|
|
(0,1)
|
|
0,1
|
Trading
derivatives
|
|
Present Value Method
|
|
Curves on TAB indices (*)
|
|
(a)
|
|
(a)
|
|
(2,0)
|
|
2,0
|
|
|
Present Value Method
|
|
Prepaid Curves
|
|
(a)
|
|
(a)
|
|
(0,4)
|
|
0,4
|
|
|
Present Value Method, Modified Black-Scholes Model
|
|
HPI forward growth rate
|
|
0%-5%
|
|
2,69%
|
|
(40,5)
|
|
34,7
|
|
|
Present Value Method, Modified Black-Scholes Model
|
|
HPI spot rate
|
|
n/a
|
|
695,42(**)
|
|
(11,4)
|
|
11,4
|
|
|
Standard Gaussian Copula Model
|
|
Probability of default
|
|
0%-5%
|
|
2,21%
|
|
(3,9)
|
|
3,1
|
|
|
Advanced local and stochastic volatility models
|
|
Correlation between share prices
|
|
57,1%-77,1%
|
|
67,10%
|
|
(8,7)
|
|
8,7
|
|
|
Advanced multi-factor interest rate models
|
|
Mean reversion of interest rates
|
|
0,0001-0,03
|
|
0,01 (***)
|
|
-
|
|
40,4
|
|
|
|
|
|
|
|
Hedging Derivatives (Assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging
Derivatives
|
|
Advanced multi-factor interest rate models
|
|
Mean reversion of interest rates
|
|
0,0001-0,03
|
|
3,0%
|
|
(0,01)
|
|
-
|
|
|
|
|
|
|
|
Other
financial assets at fair value through profit or loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
and advances to customers
|
|
Weighted average by probability (according to forecast
mortality rates) of European HPI options, using the Black-Scholes model
|
|
HPI forward growth rate (Corrected by mortality
rates)
|
|
0%-5%
|
|
2,8%
|
|
(8,9)
|
|
6,9
|
Debt and
equity instruments
|
|
Weighted average by probability (according to forecast mortality rates) of HPI forwards, using the present value model
|
|
HPI forward growth rate(Corrected by mortality
rates)
|
|
0%-5%
|
|
2,7%
|
|
(50,0)
|
|
42,9
|
|
|
Weighted average by probability (according to forecast mortality rates) of HPI forwards, using the present value model
|
|
HPI spot rate
|
|
n/a
|
|
695,42 (**)
|
|
(24,5)
|
|
24,5
|
|
|
|
|
|
|
|
Available-for-sale financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt and
equity instruments
|
|
Present Value Method, others
|
|
Non-performing loans and prepayment ratios, cost of
capital, long-term earnings growth rate
|
|
(a)
|
|
(a)
|
|
(0,8)
|
|
0,8
|
|
|
|
|
|
|
|
Financial liabilities held for trading
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging
derivatives
|
|
Present Value Method, Modified Black-Scholes Model
|
|
HPI forward growth rate
|
|
0%-5%
|
|
2,21%
|
|
(16,2)
|
|
12,8
|
|
|
Present Value Method, Modified Black-Scholes Model
|
|
HPI spot rate
|
|
n/a
|
|
667,8 (**)
|
|
(18,3)
|
|
19,5
|
|
|
Present Value Method, Modified Black-Scholes Model
|
|
Curves on TAB indices (*)
|
|
(a)
|
|
(a)
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
Advanced local and stochastic volatility models
|
|
Correlation between share prices
|
|
57,1%-77,1%
|
|
67,10%
|
|
(b)
|
|
(b)
|
|
|
|
|
|
|
|
|
|
Advanced multi-factor interest rate models
|
|
Mean reversion of interest rates
|
|
0,0001-0,03
|
|
0,01 (***)
|
|
(b)
|
|
(b)
|
|
|
|
|
|
|
|
Hedging Derivatives (Liabilities)
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging
derivatives
|
|
Advanced multi-factor interest rate models
|
|
Mean reversion of interest rates
|
|
0,0001-0,03
|
|
3,00%
|
|
(0,01)
|
|
-
|
Other financial liabilities at fair value through profit or loss
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(b)
|
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio / Instrument
|
|
Valuation technique
|
|
Main unobservable inputs
|
|
Range
|
|
Weighted
average
|
|
Impacts (in millions of reais)
|
(Level 3)
|
|
|
|
|
|
Unfavourable
scenario
|
|
Favourable
scenario
|
Financial assets held for trading
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt
instruments
|
|
Partial differential equations
|
|
Long-term volatility
|
|
27% - 41%
|
|
37,03%
|
|
(0,2)
|
|
0,6
|
Trading
derivatives
|
|
Present Value Method
|
|
Curves on TAB indices (*)
|
|
(a)
|
|
(a)
|
|
(8,5)
|
|
8,5
|
|
|
Present Value Method
|
|
Prepaid Curves
|
|
(a)
|
|
(a)
|
|
(1,6)
|
|
1,6
|
|
|
Present Value Method, Modified Black-Scholes Model
|
|
HPI forward growth rate
|
|
0%-5%
|
|
2,69%
|
|
(173,9)
|
|
149,0
|
|
|
Present Value Method, Modified Black-Scholes Model
|
|
HPI spot rate
|
|
n/a
|
|
695,42(**)
|
|
(48,8)
|
|
48,8
|
|
|
Standard Gaussian Copula Model
|
|
Probability of default
|
|
0%-5%
|
|
2,21%
|
|
(16,7)
|
|
13,2
|
|
|
Advanced local and stochastic volatility models
|
|
Correlation between share prices
|
|
57,1%-77,1%
|
|
67,10%
|
|
(37,4)
|
|
37,4
|
|
|
Advanced multi-factor interest rate models
|
|
Mean reversion of interest rates
|
|
0,0001-0,03
|
|
0,01 (***)
|
|
-
|
|
173,6
|
|
|
|
|
|
|
|
Hedging Derivatives (Assets)
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging
Derivatives
|
|
Advanced multi-factor interest rate models
|
|
Mean reversion of interest rates
|
|
0,0001-0,03
|
|
3,0%
|
|
(0,04)
|
|
-
|
|
|
|
|
|
|
|
Other
financial assets at fair value through profit or loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans
and advances to customers
|
|
Weighted average by probability (according to forecast
mortality rates) of European HPI options, using the Black-Scholes model
|
|
HPI forward growth rate (Corrected by mortality
rates)
|
|
0%-5%
|
|
2,8%
|
|
(38,1)
|
|
29,7
|
Debt and
equity instruments
|
|
Weighted average by probability (according to forecast mortality rates) of HPI forwards, using the present value model
|
|
HPI forward growth rate(Corrected by mortality
rates)
|
|
0%-5%
|
|
2,7%
|
|
(214,8)
|
|
184,1
|
|
|
Weighted average by probability (according to forecast mortality rates) of HPI forwards, using the present value model
|
|
HPI spot rate
|
|
n/a
|
|
695,42 (**)
|
|
(105,3)
|
|
105,3
|
|
|
|
|
|
|
|
Available-for-sale financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt and
equity instruments
|
|
Present Value Method, others
|
|
Non-performing loans and prepayment ratios, cost of
capital, long-term earnings growth rate
|
|
(a)
|
|
(a)
|
|
(3,3)
|
|
3,3
|
|
|
|
|
|
|
|
Financial liabilities held for trading
|
|
|
|
|
|
|
|
|
|
|
|
|
Hedging
derivatives
|
|
Present Value Method, Modified Black-Scholes Model
|
|
HPI forward growth rate
|
|
0%-5%
|
|
2,21%
|
|
(69,7)
|
|
55,2
|
|
|
Present Value Method, Modified Black-Scholes Model
|
|
HPI spot rate
|
|
n/a
|
|
667,8 (**)
|
|
(78,7)
|
|
83,6
|
|
|
Present Value Method, Modified Black-Scholes Model
|
|
Curves on TAB indices (*)
|
|
(a)
|
|
(a)
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
Advanced local and stochastic volatility models
|
|
Correlation between share prices
|
|
57,1%-77,1%
|
|
67,10%
|
|
(b)
|
|
(b)
|
|
|
|
|
|
|
|
|
|
Advanced multi-factor interest rate models
|
|
Mean reversion of interest rates
|
|
0,0001-0,03
|
|
0,01 (***)
|
|
(b)
|
|
(b)
|
|
|
|
|
|
|
|
Hedging Derivatives (Liabilities)
|
|
|
|
|
|
|
|
|
|
|
|
-
|
Hedging
derivatives
|
|
Advanced multi-factor interest rate models
|
|
Mean reversion of interest rates
|
|
0,0001-0,03
|
|
3,00%
|
|
(0,04)
|
|
-
|
Other financial liabilities at fair value through profit or loss
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(b)
|
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*)
|
TAB: Tasa Activa Bancaria (Active Bank Rate). Average deposit interest rates (over 30, 90, 180 and 360
days) published by the Chilean Association of Banks and Financial Institutions (ABIF) in nominal currency (Chilean peso) and in real terms, adjusted for inflation (Unidad de Fomento - UF).
|
|
(**)
|
There are national and regional HPI indices. The HPI spot value is the weighted average of the indices that correspond
to the positions of each portfolio. The impact reported is a change of 10%.
|
|
(***)
|
Theoretical average value of the parameter. The change arising on a favourable scenario is from 00001 to 0.03. An
unfavourable scenario is not considered as there is insufficient margin for an adverse change from the current parameter level. The Group is also exposed, to a lesser extent, to this type of derivative in currencies other than the euro and,
therefore, both the average and the range of the unobservable inputs are different. The impact in an unfavourable scenario would be losses of EUR 2.3 million (BRL 9.8 million).
|
|
(a)
|
The exercise was conducted for the unobservable inputs described in the Main unobservable inputs column under probable
scenarios. The range and weighted average value used are not shown because the aforementioned exercise was conducted jointly for various inputs or variants thereof (e.g. the TAB input comprises vector-time curves, for which there are also nominal
yield curves and inflation-indexed yield curves), and it was not possible to break down the results separately by type of input. In the case of the TAB curve the gain or loss is reported for changes of +/-100 b.p. for the total sensitivity to this
index in Chilean pesos and UFs.
|
|
(b)
|
The Group calculates the potential impact on the measurement of each instrument on a joint basis, regardless of whether
the individual value is positive (assets) or negative (liabilities), and discloses the joint effect associated with the related instruments classified on the asset side of the consolidated balance sheet.
|
|
59
Lastly, the changes in the financial instruments classified as Level 3 in the first quarter
of 2016 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31/12/15
|
|
Changes
|
|
31/03/16
|
Millions of euros
|
|
Fair value
calculated using
internal
models
(Level 3)
|
|
Purchases
|
|
Sales
|
|
Issues
|
|
Settlements
|
|
Changes in fair
value
recognised
in
profit or loss
(unrealised)
|
|
Changes in fair
value recognised
in profit or
loss
(realised)
|
|
Changes in
fair value
recognised
in
equity
|
|
Level
reclassifications
|
|
Other
|
|
Fair value
calculated using
internal models
(Level 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held for trading
|
|
950
|
|
-
|
|
(73)
|
|
-
|
|
-
|
|
157
|
|
-
|
|
-
|
|
(32)
|
|
(10)
|
|
992
|
Debt and
equity instruments
|
|
43
|
|
-
|
|
(5)
|
|
-
|
|
-
|
|
1
|
|
-
|
|
-
|
|
(32)
|
|
-
|
|
7
|
Trading
derivatives
|
|
907
|
|
-
|
|
(68)
|
|
-
|
|
-
|
|
156
|
|
-
|
|
-
|
|
-
|
|
(10)
|
|
985
|
Swaps
|
|
54
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1
|
|
-
|
|
-
|
|
-
|
|
-
|
|
55
|
Interest
rate options
|
|
619
|
|
-
|
|
(59)
|
|
-
|
|
-
|
|
142
|
|
-
|
|
-
|
|
-
|
|
-
|
|
702
|
Index
and securities options
|
|
120
|
|
-
|
|
(9)
|
|
-
|
|
-
|
|
3
|
|
-
|
|
-
|
|
-
|
|
(3)
|
|
111
|
Other
|
|
114
|
|
-
|
|
-
|
|
-
|
|
-
|
|
10
|
|
-
|
|
-
|
|
-
|
|
(7)
|
|
117
|
Hedging
derivatives
|
|
18
|
|
-
|
|
(7)
|
|
-
|
|
-
|
|
16
|
|
-
|
|
-
|
|
-
|
|
-
|
|
27
|
Swaps
|
|
18
|
|
-
|
|
(7)
|
|
-
|
|
-
|
|
16
|
|
-
|
|
-
|
|
-
|
|
-
|
|
27
|
Other
financial assets at fair value through profit or loss
|
|
514
|
|
-
|
|
(9)
|
|
-
|
|
-
|
|
31
|
|
-
|
|
-
|
|
-
|
|
(21)
|
|
515
|
Loans and
advances to customers
|
|
81
|
|
-
|
|
-
|
|
-
|
|
-
|
|
9
|
|
-
|
|
-
|
|
-
|
|
(7)
|
|
83
|
Debt and
equity instruments
|
|
433
|
|
-
|
|
(9)
|
|
-
|
|
-
|
|
22
|
|
-
|
|
-
|
|
-
|
|
(14)
|
|
432
|
Available-for-sale financial assets
|
|
999
|
|
6
|
|
(71)
|
|
-
|
|
(12)
|
|
-
|
|
-
|
|
3
|
|
-
|
|
(127)
|
|
798
|
TOTAL
ASSETS
|
|
2,481
|
|
6
|
|
(160)
|
|
-
|
|
(12)
|
|
204
|
|
-
|
|
3
|
|
(32)
|
|
(158)
|
|
2,332
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held for trading
|
|
302
|
|
-
|
|
(24)
|
|
-
|
|
-
|
|
76
|
|
-
|
|
-
|
|
-
|
|
(6)
|
|
348
|
Trading
derivatives
|
|
302
|
|
-
|
|
(24)
|
|
-
|
|
-
|
|
76
|
|
-
|
|
-
|
|
-
|
|
(6)
|
|
348
|
Swaps
|
|
1
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1
|
Interest
rate options
|
|
194
|
|
-
|
|
(22)
|
|
-
|
|
-
|
|
76
|
|
-
|
|
-
|
|
-
|
|
(1)
|
|
247
|
Index
and securities options
|
|
107
|
|
-
|
|
(2)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(5)
|
|
100
|
Hedging
derivatives
|
|
11
|
|
-
|
|
(3)
|
|
-
|
|
-
|
|
2
|
|
-
|
|
-
|
|
-
|
|
(1)
|
|
9
|
Swaps
|
|
11
|
|
-
|
|
(3)
|
|
-
|
|
-
|
|
2
|
|
-
|
|
-
|
|
-
|
|
(1)
|
|
9
|
Other
financial liabilities at fair value through profit or loss
|
|
11
|
|
-
|
|
-
|
|
-
|
|
-
|
|
1
|
|
-
|
|
-
|
|
-
|
|
(7)
|
|
5
|
TOTAL
LIABILITIES
|
|
324
|
|
-
|
|
(27)
|
|
-
|
|
-
|
|
79
|
|
-
|
|
-
|
|
-
|
|
(14)
|
|
362
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31/12/15
|
|
Changes
|
|
31/03/16
|
Millions of reais
|
|
Fair value
calculated using
internal models
(Level
3)
|
|
Purchases
|
|
Sales
|
|
Issues
|
|
Settlements
|
|
Changes in fair
value
recognised in
profit or loss
(unrealised)
|
|
Changes in fair
value recognised
in profit
or loss
(realised)
|
|
Changes in
fair value
recognised
in
equity
|
|
Level
reclassifications
|
|
Other
|
|
Fair value
calculated using
internal models
(Level 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held for trading
|
|
4,096
|
|
-
|
|
(314)
|
|
-
|
|
-
|
|
674
|
|
-
|
|
-
|
|
(137)
|
|
(237)
|
|
4,082
|
Debt and
equity instruments
|
|
185
|
|
-
|
|
(21)
|
|
-
|
|
-
|
|
4
|
|
-
|
|
-
|
|
(137)
|
|
(3)
|
|
28
|
Trading
derivatives
|
|
3,911
|
|
-
|
|
(292)
|
|
-
|
|
-
|
|
670
|
|
-
|
|
-
|
|
-
|
|
(235)
|
|
4,054
|
Swaps
|
|
233
|
|
-
|
|
-
|
|
-
|
|
-
|
|
4
|
|
-
|
|
-
|
|
-
|
|
(11)
|
|
226
|
Exchange
rate options
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Interest
rate options
|
|
2,669
|
|
-
|
|
(253)
|
|
-
|
|
-
|
|
610
|
|
-
|
|
-
|
|
-
|
|
(136)
|
|
2,890
|
Index
and securities options
|
|
517
|
|
-
|
|
(39)
|
|
-
|
|
-
|
|
13
|
|
-
|
|
-
|
|
-
|
|
(34)
|
|
457
|
Other
|
|
492
|
|
-
|
|
-
|
|
-
|
|
-
|
|
43
|
|
-
|
|
-
|
|
-
|
|
(54)
|
|
481
|
Hedging
derivatives
|
|
78
|
|
-
|
|
(30)
|
|
-
|
|
-
|
|
68
|
|
-
|
|
-
|
|
-
|
|
(5)
|
|
111
|
Swaps
|
|
78
|
|
-
|
|
(30)
|
|
-
|
|
-
|
|
68
|
|
-
|
|
-
|
|
-
|
|
(5)
|
|
111
|
Other
financial assets at fair value through profit or loss
|
|
2,216
|
|
-
|
|
(39)
|
|
-
|
|
-
|
|
135
|
|
-
|
|
-
|
|
-
|
|
(192)
|
|
2,120
|
Loans and
advances to customers
|
|
349
|
|
-
|
|
-
|
|
-
|
|
-
|
|
39
|
|
-
|
|
-
|
|
-
|
|
(46)
|
|
342
|
Debt and
equity instruments
|
|
1,867
|
|
-
|
|
(39)
|
|
-
|
|
-
|
|
96
|
|
-
|
|
-
|
|
-
|
|
(146)
|
|
1,778
|
Available-for-sale financial assets
|
|
4,307
|
|
26
|
|
(305)
|
|
-
|
|
(52)
|
|
-
|
|
-
|
|
13
|
|
-
|
|
(703)
|
|
3,286
|
TOTAL
ASSETS
|
|
10,697
|
|
26
|
|
(688)
|
|
-
|
|
(52)
|
|
877
|
|
-
|
|
13
|
|
(137)
|
|
(1,137)
|
|
9,599
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets held for trading
|
|
1,301
|
|
-
|
|
(104)
|
|
-
|
|
-
|
|
327
|
|
-
|
|
-
|
|
-
|
|
(91)
|
|
1,433
|
Trading
derivatives
|
|
1,301
|
|
-
|
|
(104)
|
|
-
|
|
-
|
|
327
|
|
-
|
|
-
|
|
-
|
|
(91)
|
|
1,433
|
Swaps
|
|
4
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
4
|
Interest
rate options
|
|
836
|
|
-
|
|
(95)
|
|
-
|
|
-
|
|
327
|
|
-
|
|
-
|
|
-
|
|
(51)
|
|
1,017
|
Index
and securities options
|
|
461
|
|
-
|
|
(9)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(40)
|
|
412
|
Other
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
Hedging
derivatives
|
|
47
|
|
-
|
|
(13)
|
|
-
|
|
-
|
|
9
|
|
-
|
|
-
|
|
-
|
|
(6)
|
|
37
|
Swaps
|
|
47
|
|
-
|
|
(13)
|
|
-
|
|
-
|
|
9
|
|
-
|
|
-
|
|
-
|
|
(6)
|
|
37
|
Other
financial liabilities at fair value through profit or loss
|
|
47
|
|
-
|
|
-
|
|
-
|
|
-
|
|
5
|
|
-
|
|
-
|
|
-
|
|
(31)
|
|
21
|
TOTAL
LIABILITIES
|
|
1,395
|
|
-
|
|
(117)
|
|
-
|
|
-
|
|
341
|
|
-
|
|
-
|
|
-
|
|
(128)
|
|
1,491
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16. Explanation added for translation to English
These interim condensed consolidated financial statements are presented on the basis of the financial reporting
framework applicable to the Group in Spain and to comply with certain regulatory requirements and specific provisions established in CVM in Brazil (see Note 1.b).
61
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banco Santander, S.A.
|
|
|
|
|
|
Date: May 4, 2016
|
|
|
|
|
|
By:
|
|
/s/ José García Cantera
|
|
|
|
|
|
|
|
|
Name:
|
|
José García Cantera
|
|
|
|
|
|
|
|
|
Title:
|
|
Chief Financial Officer
|
Banco Santander (NYSE:SAN)
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