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Presentation Overview. Investment Thesis External Analysis PEST Analysis Industry Analysis Internal Analysis Qualitative Size-Up Quantitative Analysis Discounted Cash Flow Competitor Comparables Investment Risks Recommendation. Investment Thesis. Industry Analysis. Internal Analysis. Qu

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    2. Presentation Overview Investment Thesis External Analysis PEST Analysis Industry Analysis Internal Analysis Qualitative Size-Up Quantitative Analysis Discounted Cash Flow Competitor Comparables Investment Risks Recommendation

    3. Investment Thesis Stock Price is Very Undervalued One of the lowest Leverage Ratios Was not involved in risky credit securities Profitable Even during Financial Crisis Painted with the same brush

    4. External Analysis P.E.S.T Analysis Industry Analysis

    5. P.E.S.T Analysis Political Political Intervention in Capital Markets Economical Credit Crisis Possible World Wide Recession? Housing Markets Social People becoming more risk-averse Growth in Emerging Markets? Technological Online Banking??

    6. Industry Competitors

    7. Key Industry Ratios

    8. Industry Analysis Effects of Leverage

    9. Industry Analysis Effects of Leverage

    10. Industry Analysis Effects of Leverage

    11. Industry Analysis Effects of Leverage

    12. Company Overview Large Spanish Bank Market Cap of $50.85 Billion 133,000+ Employees in 3 Continents 11,685 Branches Predominantly in Retail Banking Removed from Credit Crisis

    13. Industry Consolidation Two major acquisitions Acquired Sovereign Bancorp Inc (US company based in Philadelphia) 13/10/08 75.65% stake (already owned 24.35%) $1.910 billion 3.81/share 0% premium 0.2924 ADR for 1 SOV (Stock-for-stock) Acquired Alliance & Leicester plc (UK mortgage bank) 14/07/08 $2.511 billion 5.97/share 36.4% premium 1 share for 3 A&A Financed through issuance of 138.9 million new STD shares

    14. Write-downs vs Stock price

    15. Qualitative Analysis

    16. Qualitative Analysis

    17. Qualitative Analysis

    18. DCF Valuation

    19. DCF Sensitivity Analysis

    20. Comparable Valuations

    21. Triangulation

    22. Investment Risks Non Performing Loan (NPL) Risk Currency Risk Merger Execution Risk Political Risk Market Risk

    23. Recomendation Buy 100 Shares @ $8.13 = $813.00

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