June 23, 2010

Europe: Banks

Stress-test adds to transparency, for private and public sector banks

EU wide stress-test results to be disclosed by the end of July
RELATED RESEARCH:
The European Council has announced that the results of the stress-test
carried out by banking supervisors will be disclosed in the second half of Spain: Banks: Sector losses remain, distribution
uneven; SAN relative winner, June 9, 2010
July. The test is a “bottom-up” exercise aimed at addressing the impact of
macro shocks on credit and market risk. It covers over 60% of EU banking Europe: Banks: The Euro-zone challenge for
sector assets. European banks: Greece and contagion, February 8,
2010

A credible stress-test could be a positive for the sector

Market concerns over European banks are twofold: (1) those relating to Prices in this report are as of the market close of
June 22, 2010.
select European sovereigns, with clear direct or indirect implications for
banks and (2) concerns over potential additional clean-up charges on
legacy loan books. A credible stress-test could cap concerns over
sovereign “contingent liabilities” from the banking sector, which we view
as important. In short, we see any additional transparency as a positive.

Scope for surprise limited for major banks under our coverage
We believe the results of the stress-tests for the banks under our coverage
should produce no major surprises; the institutions we cover have
recapitalized, and their risks are under constant scrutiny by the markets.
Credit buffers for the major banks are significant (BBVA and SAN have the
largest buffers), and in general, we view these banks as resilient. However,
private banks are only part of the market in Europe.

Public sector banks – stress-test could add to transparency

For unlisted, public sector institutions, the regulators’ ability to credibly
size cumulative residual losses could go a long way towards restoring
confidence in (and among) the banks, in our view. In addition, it could act
as a catalyst for further change; Spain is a good example, with systemic
changes well under way in the Caja sector.
COVERAGE VIEW: NEUTRAL
We update our estimates, maintain Buys on selected large caps
We update our estimates and price targets post the 1Q2010 results season
and the Goldman Sachs Financials Conference on June 9-10. We keep our
ratings unchanged and continue to favour large European banks with: (1)
dominant foreign components in their business mix; (2) exposure to
growth markets; and (3) an element of protection from “domestic”
problems. Our Buys include Erste, Santander, Unicredit and HSBC, and we
maintain Sells on selected domestic Spanish, Italian and Greek banks.
Jernej Omahen The Goldman Sachs Group, Inc. does and seeks to do business with
+44(20)7774-6324 jernej.omahen@gs.com Goldman Sachs International companies covered in its research reports. As a result, investors should
Jean-Francois Neuez be aware that the firm may have a conflict of interest that could affect
+44(20)7552-9362 jean-francois.neuez@gs.com Goldman Sachs International the objectivity of this report. Investors should consider this report as
Pawel Dziedzic only a single factor in making their investment decision. For Reg AC
+44(20)7774-1279 pawel.dziedzic@gs.com Goldman Sachs International certification, see the end of the text. Other important disclosures follow
Heiner Luz the Reg AC certification, or go to www.gs.com/research/hedge.html.
+44(20)7051-2264 heiner.luz@gs.com Goldman Sachs International Analysts employed by non-US affiliates are not registered/qualified as
research analysts with FINRA in the U.S.

The Goldman Sachs Group, Inc. Global Investment Research

June 23, 2010 Europe: Banks

Stress-test should add to transparency of European bank sector

Structure of the European banking markets is varied

In contrast to other global markets, many European markets have a substantial proportion
of public sector institutions; in Spain, for example, Cajas represent around half of total
sector assets. In Germany too, the public sector accounts for more than a third of total
assets.

Banks under our coverage – limited scope for surprise

We expect very limited surprises for the institutions we cover – the largest listed, private
banks in Europe – for the following reasons:

 The private banks domiciled in the Eurozone have recapitalized to the tune of €106 bn
since the start of the crisis (see Exhibit 1).

 This takes Tier 1 ratios to more than 10% and core Tier 1 ratios to around 8% for the
largest banks that we cover.

 Credit buffers – cash flows available to absorb stress levels from credit losses – are
relatively large for the biggest banks. This is particularly true for institutions that
operate emerging market franchises (see Exhibit 2).

 Finally, in most cases, extensive data is available to apply various levels of stress to the
different components of assets. See, for example, our report on the Spanish banks
stress-test (Spain: Banks: Sector losses remain, distribution uneven; SAN relative
winner, June 9, 2010).

Goldman Sachs Global Investment Research 2

June 23, 2010 Europe: Banks

Exhibit 1: €106 bn of Tier 1 capital raised by Eurozone banks we cover, since start of crisis
Summary of capital raised by European banks under GS coverage since 2008 (ex. repayments)

Source of capital (€bn) Form of capital raising (€mn)
Country of domicile
Private State Total Ords / MCN Other Total
Austria 2.3 2.5 4.7 1.7 3.0 4.7
Benelux 0.0 9.0 9.0 0.0 9.0 9.0
France 24.2 3.9 28.1 24.2 3.9 28.1
Germany 1.0 18.2 19.2 2.8 16.4 19.2
Greece / Cyprus 3.4 3.5 6.9 2.8 4.2 6.9
Italy 7.2 4.1 11.3 4.2 7.1 11.3
Ireland 1.8 8.7 10.4 10.4 0.0 10.4
Spain 15.9 0.0 15.9 11.3 4.7 15.9
Nordics 7.7 4.0 11.7 8.2 3.5 11.7
Switzerland 25.6 3.9 29.5 26.0 3.6 29.5
UK 73.1 79.8 152.9 147.6 5.3 152.9
Eurozone 56 50 106 57 48 106
Non‐Eurozone 106 88 194 182 12 194
Total 162 138 300 239 61 300
as % 54% 46% 100% 80% 20% 100%
Note: Capital raisings by banks within GS coverage universe; excludes capital raisings for the purpose of
acquisitions and preference share offerings to retail clients.

Source: Company data, Goldman Sachs Research estimates.

Goldman Sachs Global Investment Research 3

June 23, 2010 Europe: Banks

Exhibit 2: Top European banks can withstand severe credit quality deterioration, in our view
€ mn, sorted by cumulative credit buffer for 2010-12E period

% of gross loans % of gross loans Credit buffer

GOP + G Prov

GOP + G prov
+ past losses
Provisions
GOP Credit Buffer NPL buffer Credit Buffer NPL buffer Credit costs

Generic
EUR bn
2009A 10-12E 2009A 10-12E 09A 10-12E 2009A 10-12E 2009A 10-12E 2007-09A 09-12E

Raiffeisen 2.1 6.2 0.9 2.1 7.1 2.6 8.8 4.2% 14.0% 5.2% 17.5% 5.7% 4.7% 14.0% 19.7%
BBVA 12.3 37.2 3.0 12.3 40.2 15.4 50.3 3.7% 12.1% 4.6% 15.1% 3.4% 4.2% 12.1% 15.5%
Santander 23.0 73.9 6.7 23.0 80.7 28.7 100.8 3.3% 11.5% 4.1% 14.4% 3.1% 4.1% 11.5% 14.6%
NBG 2.4 7.7 0.0 2.4 7.7 3.0 9.6 3.3% 10.7% 4.1% 13.4% 2.7% 4.8% 10.7% 13.4%
Deutsche Bank 7.8 23.5 1.5 7.8 25.0 9.8 31.2 3.0% 9.6% 3.7% 12.0% 1.7% 1.1% 9.6% 11.2%
Erste Bank 3.3 11.5 0.0 3.3 11.5 4.1 14.4 2.6% 8.9% 3.2% 11.2% 2.8% 3.4% 8.9% 11.7%
Societe Generale 6.0 31.6 1.3 6.0 32.9 7.5 41.1 1.6% 8.5% 1.9% 10.7% 2.1% 2.2% 8.5% 10.6%
EFG Eurobank 1.6 4.8 0.0 1.6 4.8 2.0 6.0 2.7% 8.4% 3.4% 10.5% 4.3% 6.1% 8.4% 12.7%
BNP Paribas 17.2 53.4 5.7 17.2 59.1 21.5 73.9 2.4% 8.4% 3.0% 10.5% 3.0% 1.8% 8.4% 11.3%
Bank of Cyprus 0.6 2.1 0.0 0.6 2.1 0.8 2.6 2.3% 7.9% 2.9% 9.8% 1.5% 3.3% 7.9% 9.4%
Intesa SanPaolo 8.0 26.9 3.0 8.0 29.9 10.0 37.4 2.1% 7.7% 2.6% 9.6% 2.3% 2.0% 7.7% 9.9%
Banco Popular 2.8 6.6 0.9 2.8 7.4 3.5 9.3 2.8% 7.6% 3.5% 9.5% 3.8% 2.5% 7.6% 11.5%
KBC 4.2 12.4 0.0 4.2 12.4 5.3 15.5 2.5% 7.4% 3.2% 9.3% 1.6% 2.1% 7.4% 9.1%
Unicredit 12.5 38.9 2.9 12.5 41.9 15.6 52.3 2.1% 7.0% 2.6% 8.8% 2.5% 2.6% 7.0% 9.5%
Natixis 0.1 6.8 0.8 0.1 7.6 0.2 9.5 0.1% 7.0% 0.1% 8.8% 2.4% 1.0% 7.0% 9.4%
Hellenic Bank 0.1 0.3 0.0 0.1 0.3 0.1 0.4 2.0% 6.9% 2.5% 8.6% 2.3% 3.5% 6.9% 9.2%
Credit Agricole 6.9 27.8 3.6 6.9 31.4 8.7 39.2 1.5% 6.9% 1.9% 8.6% 1.7% 1.6% 6.9% 8.5%
Banesto 1.6 4.5 0.7 1.6 5.2 2.0 6.5 2.0% 6.7% 2.5% 8.4% 2.1% 2.3% 6.7% 8.8%
Banco Pastor 0.7 1.2 0.3 0.7 1.4 0.9 1.8 3.4% 6.7% 4.2% 8.4% 6.0% 3.5% 6.7% 12.7%
BP Milano 0.7 2.0 0.2 0.7 2.2 0.9 2.7 2.2% 6.5% 2.7% 8.1% 2.0% 2.2% 6.5% 8.4%
Alpha Bank 1.2 3.4 0.0 1.2 3.4 1.5 4.2 2.2% 6.3% 2.8% 7.9% 2.7% 3.8% 6.3% 9.1%
Greek Postal Savings Bank 0.1 0.5 0.0 0.1 0.5 0.1 0.6 1.3% 6.3% 1.6% 7.9% 1.3% 1.6% 6.3% 7.6%
Credem 0.3 1.0 0.1 0.3 1.1 0.3 1.3 1.4% 6.0% 1.8% 7.5% 1.2% 1.4% 6.0% 7.3%
Banco Sabadell 1.3 3.3 0.4 1.3 3.7 1.7 4.7 2.0% 5.8% 2.5% 7.2% 2.7% 2.0% 5.8% 8.5%
BMPS 2.0 8.3 0.8 2.0 9.1 2.6 11.4 1.3% 5.7% 1.6% 7.1% 2.5% 2.1% 5.7% 8.2%
Banco Popolare 1.4 5.0 0.6 1.4 5.5 1.7 6.9 1.4% 5.7% 1.7% 7.1% 4.0% 2.0% 5.7% 9.7%
Piraeus Bank 0.8 2.2 0.0 0.8 2.2 1.0 2.7 2.0% 5.7% 2.5% 7.1% 2.6% 3.7% 5.7% 8.2%
Marfin Popular Bank 0.5 1.4 0.0 0.5 1.4 0.6 1.8 1.8% 5.6% 2.3% 6.9% 1.8% 3.0% 5.6% 7.4%
UBI Banca 1.6 4.9 0.5 1.6 5.4 1.9 6.7 1.5% 5.4% 1.9% 6.7% 1.8% 1.7% 5.4% 7.1%
Credito Valtellinese 0.3 1.0 0.1 0.3 1.1 0.4 1.4 1.4% 5.3% 1.8% 6.6% 1.5% 1.8% 5.3% 6.8%
Bankinter 0.6 1.7 0.4 0.6 2.1 0.8 2.6 1.5% 5.1% 1.9% 6.4% 1.7% 1.8% 5.1% 6.8%
Agricultural Bank of Greece 0.4 1.2 0.0 0.4 1.2 0.5 1.4 1.7% 5.1% 2.2% 6.3% 5.0% 4.1% 5.1% 10.1%
Allied Irish Bank 2.1 4.9 0.0 2.1 4.9 2.6 6.1 1.6% 3.8% 2.0% 4.7% 5.6% 10.1% 3.8% 9.4%
Commerzbank 1.9 11.5 1.5 1.9 13.0 2.4 16.3 0.5% 3.6% 0.7% 4.5% 2.3% 2.3% 3.6% 5.9%
Deutsche Postbank 0.8 3.8 0.0 0.8 3.8 1.0 4.8 0.8% 3.4% 0.9% 4.3% 1.3% 1.6% 3.4% 4.7%
Bank of Ireland 0.9 3.9 0.0 0.9 3.9 1.2 4.9 0.8% 3.2% 1.0% 4.0% 2.7% 3.5% 3.2% 5.9%

Total 130 437 36 130 473 163 591 2.1% 7.8% 2.7% 9.8% 1.4% 2.7% 7.8% 9.2%

Source: Company data, Goldman Sachs Research estimates.

Goldman Sachs Global Investment Research 4

June 23, 2010 Europe: Banks

Public sector banks – stress-test could add to transparency

From an equity investor’s perspective, public sector institutions in Europe played a minor
role in the past, and thus were not the focus of attention. This has now changed, as many
investors see the public sector in some countries as posing a potential systemic risk and
hence contingent liability for the sovereign. In our view, a credible stress-test would add to
investor understanding and could act as a “circuit breaker” of negative sentiment.

We have analyzed and stress-tested the Spanish public sector banks in detail; our
conclusion was that the expected losses, even in an extreme case, were manageable for
the system as a whole (see: Spain: Banks: Sector losses remain, distribution uneven; SAN
relative winner, June 9, 2010).

Exhibit 3: Stress-test: Resident banks remain profitable but Cajas fall short of breaking even over 2010-12
Calculations of residual loss, credit buffer and pro-forma impact on PBT and net income for Spanish credit institutions

Base Case Scenario Exreme Case Scenario
€ bn Resident banks Savings  (1) Resident banks Savings  (1)
Total Total
(ex foreign units) banks (ex foreign units) banks

Incremental losses
Cumulative loss ‐56.3 ‐73.9 ‐135.6 ‐103.0 ‐127.0 ‐247.3
(‐) Losses taken to date 21.5 23.0 46.3 21.5 23.0 46.3
= Residual loss ‐34.8 ‐50.9 ‐89.4 ‐81.5 ‐104.0 ‐201.0
Assuming losses are taken over 3 years
Residual loss ‐34.8 ‐50.9 ‐89.4 ‐81.5 ‐104.0 ‐201.0
(+) reserve buffer(2) 5.6 7.3 15.5 5.6 7.3 15.5
(+) pre‐provision profits (3yr)(3) 57.3 41.4 105.3 53.6 38.7 98.6
(+) Credit Buffer 62.8 48.7 120.7 59.2 46.0 114.1
Pro‐forma PBT 28.0 ‐2.2 31.4 ‐22.3 ‐58.0 ‐86.9
(+/‐) tax ‐8.4 0.7 ‐9.4 6.7 17.4 26.1
Pro‐forma Net Income 19.6 ‐1.6 22.0 ‐15.6 ‐40.6 ‐60.9
As % of total credit exposure (4)
Cumulative defaults 14% 17% 15% 21% 23% 22%
Cumulative expected loss 5.9% 7.0% 6.2% 10.8% 12.1% 11.3%
Losses taken to date 2.2% 2.2% 2.1% 2.2% 2.2% 2.1%
Residual loss 3.6% 4.8% 4.1% 8.5% 9.9% 9.2%
Pre‐provision profits (3) 6.0% 3.9% 4.8% 5.6% 3.7% 4.5%
 excluding foreign operations ‐‐ ‐‐ ‐‐ ‐‐ ‐‐ ‐‐
Credit buffer 6.6% 4.6% 5.5% 6.2% 4.4% 5.2%

Excludes profits generated by foreign subsidiaries (c. €50bn for SAN and BBVA on our estimates for 2010‐12E)

(1) Total for all credit institutions (banks, savings banks, credit co‐operatives, specialised credit institutions and the Instituto de Crédito Oficial).
(2) Loan loss reserves (generic and specific) over expected loss on outstanding NPLs.
(3) Cumulative estimated pre‐provision profits for 2010‐12E.
(4) Total exposure includes gross loans, contingent liabilities and acquired real‐estate assets.

Source: Goldman Sachs Research estimates.

Goldman Sachs Global Investment Research 5

June 23, 2010 Europe: Banks

Rating and estimate summary

We make a number of adjustments to our estimates and price targets post the 1Q2010
results season, as well as the Goldman Sachs Financials Conference on June 9 and 10. We
keep our ratings unchanged.

Exhibit 4: We adjust our estimates after the 1Q2010 results season and Goldman Sachs Financials Conference
Price Target Upside / Current EPS GS EPS (old) GS EPS (new) GS EPS (change)
Share Price PT period
Old New Change Downside Rating Currency 2010 2011 2012 2010 2011 2012 2010 2011 2012

Austria
Erste Bank € 28.8 45.0 45.0 0% 56% Buy* 12 months € 2.33 3.42 4.72 2.33 3.42 4.72 0% 0% 0%
Raiffeisen € 35.2 41.0 41.0 0% 17% Neutral 12 months € 3.48 5.09 6.30 3.48 5.09 6.30 0% 0% 0%
France
BNP Paribas € 50.3 65.0 68.0 5% 35% Neutral 12 months € 4.88 6.97 8.34 5.72 6.99 8.34 17% 0% 0%
Credit Agricole € 10.0 13.8 12.1 -12% 21% Neutral 12 months € 1.13 1.84 2.20 1.23 1.97 2.33 8% 7% 6%
Natixis € 3.9 3.1 3.40 10% -12% Neutral 12 months € 0.29 0.45 0.56 0.44 0.51 0.57 53% 12% 2%
Societe Generale € 38.9 60.0 58.0 -3% 49% Buy 12 months € 4.12 6.95 8.38 4.44 6.98 8.18 8% 0% -2%
Benelux
KBC € 33.7 40.0 42.0 5% 25% Buy 12 months € 3.27 4.17 4.55 3.78 3.90 4.58 15% -6% 1%
Germany
Commerzbank € 6.2 7.0 7.10 1% 15% Neutral 12 months € -0.31 0.49 1.61 0.08 0.43 1.60 -125% -13% 0%
Deutsche Bank € 50.3 65.0 65.0 0% 29% Neutral 12 months € 6.89 7.83 8.29 6.89 7.83 8.29 0% 0% 0%
Deutsche Postbank € 25.6 27.4 22.4 -18% -12% Neutral 12 months € 2.11 2.34 2.05 2.05 2.71 -3% -12% --
Greece & Cyprus
Piraeus Bank € 4.0 4.3 3.70 -14% -7% Sell 12 months € 0.23 0.57 0.80 0.21 0.62 0.74 -11% 10% -7%
National Bank of Greece € 10.2 10.1 9.30 -8% -9% Sell 12 months € 1.28 1.66 1.88 0.97 1.67 1.88 -25% 1% 0%
Greek Postal Savings Bank € 2.8 3.3 2.30 -30% -19% Sell 12 months € 0.16 0.29 0.35 0.14 0.36 0.43 -9% 21% 22%
EFG Eurobank € 4.4 5.1 4.50 -12% 3% Neutral 12 months € 0.37 0.58 0.95 0.03 0.26 0.91 -91% -54% -5%
Alpha Bank € 4.8 4.9 4.30 -12% -10% Neutral 12 months € 0.40 0.63 0.93 0.21 0.41 0.90 -48% -35% -3%
Agricultural Bank of Greece € 1.1 1.2 0.45 -61% -60% Sell 12 months € 0.00 0.11 0.16 -0.16 0.08 0.10 nm -34% -39%
Bank of Cyprus € 3.7 4.3 4.00 -7% 7% Neutral 12 months € 0.38 0.54 0.68 0.45 0.54 0.70 19% 1% 3%
Marfin Popular Bank € 1.6 1.9 1.40 -26% -13% Neutral 12 months € 0.17 0.25 0.31 0.15 0.20 0.25 -13% -19% -17%
Hellenic Bank € 1.0 1.3 0.95 -29% -4% Neutral 12 months € 0.10 0.16 0.13 0.15 0.15 23% -5% --
Ireland
Allied Irish Bank € 1.1 2.0 1.55 -23% 40% Buy 12 months € -4.37 -0.23 0.43 -3.88 -0.20 0.37 -11% -14% -14%
Bank of Ireland € 0.9 1.4 1.25 -11% 47% Buy 12 months € -1.06 -0.02 0.32 -0.49 -0.02 0.11 -54% -18% -66%
Italy
BMPS € 1.0 1.1 1.10 0% 10% Neutral 12 months € 0.05 0.12 0.16 0.05 0.12 0.16 0% 0% 0%
Credito Valtellinese € 3.9 5.2 4.80 -7% 22% Neutral 12 months € 0.24 0.44 0.60 0.24 0.44 0.60 0% 0% 0%
UBI Banca € 7.7 11.0 9.60 -13% 25% Neutral 12 months € 0.48 0.94 1.22 0.48 0.91 1.17 0% -3% -4%
BP Milano € 3.7 5.1 4.75 -7% 28% Neutral 12 months € 0.26 0.48 0.64 0.26 0.48 0.64 0% 0% 0%
Banco Popolare € 4.8 5.0 4.95 -1% 4% Sell 12 months € 0.31 0.59 0.73 0.31 0.59 0.73 0% 0% 0%
Credem € 4.9 5.1 5.00 -2% 2% Sell 12 months € 0.27 0.45 0.59 0.27 0.45 0.59 0% 0% 0%
Intesa SanPaolo € 2.4 3.2 3.00 -5% 26% Neutral 12 months € 0.19 0.29 0.35 0.19 0.29 0.35 0% 0% 0%
Unicredit € 2.0 3.0 2.85 -3% 46% Buy* 12 months € 0.10 0.25 0.33 0.10 0.25 0.33 0% 0% 0%
Nordic
Danske Bank Dkr 131.5 164.0 165.0 1% 25% Neutral 12 months Dkr 6.57 14.82 22.53 6.58 14.88 22.62 0% 0% 0%
DnB NOR Nkr 70.6 78.0 78.0 0% 10% Neutral 12 months Nkr 6.88 7.84 8.72 6.88 7.84 8.72 0% 0% 0%
Swedbank Skr 76.9 69.0 69.0 0% -10% Sell 12 months Skr 3.99 6.65 8.40 3.99 6.65 8.40 0% 0% 0%
Nordea Skr 70.3 66.0 66.0 0% -6% Sell 12 months € 0.62 0.71 0.79 0.62 0.71 0.79 0% 0% 0%
SEB Skr 45.2 39.0 39.0 0% -14% Sell* 12 months Skr 2.29 3.77 4.76 2.29 3.77 4.76 0% 0% 0%
Svenska Skr 203.1 213.0 213.0 0% 5% Neutral 12 months Skr 18.10 20.55 23.19 18.10 20.55 23.19 0% 0% 0%
Spain
BBVA € 9.4 12.50 12.90 3% 37% Neutral 12 months € 1.11 1.30 1.73 1.15 1.34 1.78 3% 3% 3%
Santander € 9.4 11.9 11.9 0% 26% Buy 12 months € 1.02 1.17 1.37 1.02 1.17 1.37 0% 0% 0%
Bankinter € 5.4 5.0 4.95 0% -9% Sell 12 months € 0.47 0.44 0.53 0.47 0.44 0.53 0% 0% 0%
Banco Popular € 4.8 5.4 5.35 0% 11% Neutral 12 months € 0.48 0.56 0.74 0.48 0.56 0.74 0% 0% 0%
Banco Sabadell € 3.8 3.3 3.30 0% -12% Sell* 12 months € 0.27 0.29 0.43 0.27 0.29 0.43 0% 0% 0%
Banesto € 7.0 8.2 8.20 0% 17% Neutral 12 months € 0.71 0.75 1.07 0.71 0.75 1.07 0% 0% 0%
Banco Pastor € 3.9 4.1 4.10 0% 6% Sell 12 months € 0.12 0.30 0.53 0.12 0.30 0.53 0% 0% 0%
Switzerland
Credit Suisse SFr 46.3 61.0 61.0 0% 32% Buy 12 months SFr 5.08 6.35 6.73 5.08 6.35 6.73 0% 0% 0%
UBS SFr 16.0 19.4 19.4 0% 21% Neutral 12 months SFr 1.50 2.07 2.25 1.50 2.07 2.25 0% 0% 0%
EFG International SFr 15.6 24.0 24.0 0% 54% Buy 12 months SFr 1.98 2.45 2.96 1.98 2.45 2.96 0% 0% 0%
Julius Baer SFr 34.6 47.0 47.0 0% 36% Buy 12 months SFr 2.86 3.52 4.17 2.86 3.52 4.17 0% 0% 0%
Sarasin SFr 42.9 45.0 51.0 13% 19% Neutral 12 months SFr 2.73 3.66 4.35 2.79 3.97 4.88 2% 8% 12%
Vontobel SFr 30.1 39.0 39.0 0% 30% Neutral 12 months SFr 3.36 3.82 4.34 3.38 3.84 4.36 1% 1% 1%
UK
Barclays £/p 317 348 367 5% 16% Neutral 12 months £/p 24 38 46 32 42 49 31% 12% 7%
HSBC £/p 659 860 860 0% 30% Buy 12 months $ 0.67 1.01 1.29 0.64 0.91 1.17 -4% -10% -9%
Lloyds TSB £/p 57 83 84 1% 48% Buy* 12 months £/p -1 8 11 -1 8 11.1 0% 7% 2%
Royal Bank of Scotland £/p 47 38 42 11% -10% Neutral 12 months £/p -2 2 4 0 3 5 -117% 71% 22%
Standard Chartered £/p 1,792 1800 1800 0% 0% Neutral 12 months $ 1.92 2.29 2.61 1.93 2.27 2.63 0% -1% 1%

Source: Company data, Goldman Sachs Research estimates.

Goldman Sachs Global Investment Research 6

June 23, 2010 Europe: Banks

Exhibit 5: Rationale for estimate and price target changes

Target Price and Estimate Changes

Company Comments
TP EPS 10E EPS 11E EPS 12E

Agricultural Bank of Greece -61% nm -34% -39% Adjusting for weaker outlook and operational trends seen in 1Q10
Allied Irish Bank -23% -11% -14% -14% Price target and estimate changes reflect recent share price performance ahead of pending recapitalization and issuance of shares to NPRFC.
Alpha Bank -12% -48% -35% -3% Adjusting for weaker outlook and operational trends seen in 1Q10
Banco Pastor 0% 0% 0% 0% no changes
Banco Popolare -1% 0% 0% 0% COE adjustment for Italian sovereign spreads
Banco Popular 0% 0% 0% 0% no changes
Banco Sabadell 0% 0% 0% 0% no changes
Banesto 0% 0% 0% 0% no changes
Bank of Cyprus -7% 19% 1% 3% Adjusting for weaker outlook and stronger than expected operational trends seen in 1Q10
Bank of Ireland -11% -54% -18% -66% Adjusting estimates and price target for shares being issued as a part of recapitalizing process and revised level and terms of preference shares.
Bankinter 0% 0% 0% 0% no changes
Barclays 5% 31% 12% 7% Adjusting estimates to reflect lower credit losses than previously expected

BBVA 3% 3% 3% 3% Adjusting for better performance in wholesale banking and LATAM divisions.
BMPS 0% 0% 0% 0% COE adjustment for Italian sovereign spreads
BNP Paribas 5% 17% 0% 0% Better provisions
BP Milano -7% 0% 0% 0% COE adjustment for Italian sovereign spreads

Commerzbank 1% -125% -13% 0% COE adjustment for sovereign spreads, better trading and credit cost in 1Q10, lower core revenue expansion in 2011E
Credem -2% 0% 0% 0% COE adjustment for Italian sovereign spreads
Credit Agricole -12% 8% 7% 6% Better provisions for EPS, refining capital structure adjustments for PT
Credit Suisse 0% 0% 0% 0% no changes

Credito Valtellinese -7% 0% 0% 0% COE adjustment for Italian sovereign spreads

Danske Bank 1% 0% 0% 0% Better than expected trends in fee & trading income as well as lower provisions in 2010-11
Deutsche Bank 0% 0% 0% 0% No changes
Deutsche Postbank -18% -3% -12% -- Recent results

DnB NOR 0% 0% 0% 0% no changes

EFG Eurobank -12% -91% -54% -5% Adjusting cost of equity for weaker outlook and estimates for stronger operational trends seen in 1Q10
EFG International 0% 0% 0% 0% no changes
Erste Bank 0% 0% 0% 0% no changes

Greek Postal Savings Bank -30% -9% 21% 22% Adjusting cost of equity for weaker outlook and estimates for stronger operational trends seen in 1Q10
Hellenic Bank -29% 23% -5% -- Adjusting cost of equity for weaker outlook and estimates for stronger operational trends seen in 1Q10
HSBC 0% -4% -10% -9% Reduced European loan growth, faster Asian loan growth, impact of EUR/GBP depreciation.
Intesa SanPaolo -5% 0% 0% 0% COE adjustment for Italian sovereign spreads

Julius Baer 0% 0% 0% 0% no changes

KBC 5% 15% -6% 1% recent results
Lloyds TSB 1% 0% 7% 2% small changes due to changes in pricing of funding and mortgages
Marfin Popular Bank -26% -13% -19% -17% Adjusting cost of equity for weaker outlook and estimates for stronger operational trends seen in 1Q10

National Bank of Greece -8% -25% 1% 0% Adjusting cost of equity for weaker outlook and estimates for stronger operational trends seen in 1Q10
Natixis 10% 53% 12% 2% High % upgrade due to low base - less losses & provisions
Nordea 0% 0% 0% 0% no changes
Piraeus Bank -14% -11% 10% -7% Adjusting cost of equity for weaker outlook and estimates for stronger operational trends seen in 1Q10

Raiffeisen 0% 0% 0% 0% no changes
Royal Bank of Scotland 11% -117% 71% 22% Adjusting estimates to reflect lower credit losses and lower trading write downs than previously expected
Santander 0% 0% 0% 0% no changes
Sarasin 13% 2% 8% 12% Better inflows, better cost control

SEB 0% 0% 0% 0% no changes
Societe Generale -3% 8% 0% -2% downward revision for capital markets activity
SHB 0% 0% 0% 0% no changes
Standard Chartered 0% 0% -1% 1% Minor estimate changes reflecting Indian IDR issuance, currency movements as well as higher revenues/costs and lower provisions

Swedbank 0% 0% 0% 0% no changes
UBI Banca -13% 0% -3% -4% COE adjustment for Italian sovereign spreads and lower expectation on margin evolution
UBS 0% 0% 0% 0% no changes
Unicredit -3% 0% 0% 0% COE adjustment for Italian sovereign spreads

Vontobel 0% 1% 1% 1% Small house-keeping changes

Source: Company data, Goldman Sachs Research estimates.

Goldman Sachs Global Investment Research 7

June 23, 2010 Europe: Banks

Exhibit 6: Price target methodologies and risks

Company Methodology Risks to our target price

Agricultural Bank of Greece ROTE/COE Better than expected macro environment in Greece; volumes trends and asset spreads; recapitalisation at favourable terms

Allied Irish Bank P/E Downside risk: risks related to recapitalization process, lag in the economic recovery in Ireland and UK, further worsening of commercial real estate conditions in the core markets

Alpha Bank ROTE/COE Better / worse than expected macro environment in Greece / SEE; volumes trends and asset spreads

Banco Pastor ROTE/COE Upside risks: prompt recovery of the Spanish economy, better than expected trends in asset quality, spreads and business volumes and M&A risk. Downside: asset quality

Banco Popolare ROTE/COE Better than expected macroeconomic and asset quality trend; better than expected execution of Italease turnaround and capital managementexecution on Italease acquisition

Banco Popular Espanol ROTE/COE Upside risks include prompt recovery of the Spanish economy, better than expected trends in asset quality, spreads and business volumes and M&A risk. Downside risks are opposite except M&A.

Banco Sabadell ROTE/COE Upside risks include prompt recovery of the Spanish economy, better than expected trends in asset quality, spreads and business volumes and M&A risk.

Banesto ROTE/COE Upside risks include prompt recovery of the Spanish economy, better than expected trends in asset quality, spreads and business volumes and M&A risk. Downside risks are opposite except M&A.

Bank of Cyprus ROTE/COE Better / worse than expected macro environment in Greece / Cyprus / Russia; volumes trends and asset spreads

Bank of Ireland P/E Downside risk: lag in the economic recovery in Ireland and UK, further worsening of commercial real estate conditions in the core markets

Bankinter ROTE/COE Upside risks include prompt recovery of the Spanish economy, better than expected trends in asset quality, spreads and business volumes and M&A risk.

Barclays ROTE/COE Higher/lower impairment charges in GRCB and higher/lower revenues in BarCap

BBVA ROTE/COE Downside risks: include prolonged recession in Spain, sharp slowdown in Mexico and Latam, worse than expected trends in asset quality and spreads in core markets.

BNP Paribas ROTE/COE Upside: continued stronger than expected recovery in capital markets, lower loan loss provisions; downside: integration risk at Fortis, higher provisions

BMPS ROTE/COE Macro environment and asset quality trends; better / worse than expected trend in customer spreads; execution on noncore assets disposals; evolution of European Sovereign spreads

BP Milano ROTE/COE Macro environment and asset quality trends; better / worse than expected trend in customer spreads; evolution of European Sovereign spreads

Commerzbank ROTE/COE Macro environment and asset quality trends; better / worse than expected trend in customer spreads; evolution of European Sovereign spreads

Credem ROTE/COE Better / worse than expected macroeconomic trend; better / worse than expected trend in customer spreads and AM business

Credit Agricole ROTE/COE Sharper slowdown in capital markets; increased writedowns on structured credit assets, sharp deterioration in credit quality

Credit Suisse ROTE/COE Downside: regulatory risk, renewed weakness in asset values and capital markets

Credito Valtellinese ROTE/COE Macro environment and asset quality trends; better / worse than expected trend in customer spreads; evolution of European Sovereign spreads

Danske bank ROE/COE Higher impairments than expected, a slower economic recovery or a more severe downturn in the Danish corporate real estate market.

Deutsche Bank ROTE/COE Upside: sharper than expected recovery in capital markets; downside: additional write downs requiring more capital

Deutsche Postbank ROTE/COE Higher/lower than expected further writedowns on the structured credit portfolio; better / worse than expected trend in asset spreads and asset quality.

DnB NOR ROE/COE Higher/Lower-than-expected loan losses in the Shipping and Baltic loan book. Quicker/Slower economic recovery in the Norway

EFG Eurobank ROTE/COE Better / worse than expected macro environment in Greece / SEE; volumes trends and asset spreads

EFG International P/E Downside: regulatory risk, renewed weakness in asset values

Erste Bank ROTE/COE Worse than expected macro environment in the CEE and SEE regions

Greek Postal Savings Bank ROTE/COE Better than expected macro environment in Greece; volumes trends and asset spreads; M&A speculation

Hellenic Bank ROTE/COE Better / worse than expected macro environment in Greece / Cyprus ; volumes trends and asset spreads

HSBC ROTE/COE US/global macro double dip. Higher than expected HFC credit card/mortgage losses. Sharper than expected NIM, cost pressures.

Intesa SanPaolo ROTE/COE Macro environment and asset quality trends; better / worse than expected trend in customer spreads and AM business; execution on non-core assets disposals; evolution of European Sovereign spreads

Julius Baer ROTE/COE renewed weakness in asset values, less net money flows than expected

KBC SOTP Uncertainty over the severity of the CEE credit impairment cycle, regulatory changes, potential for dilutive capital raises and uncertainty surrounding the groups CDO and ABS portfolios.

Lloyds ROTE/COE Worse than expected losses within commercial real estate; increased regualtion, with regards to capital requirements and liquidity, access to funding intervention

Marfin Popular Bank ROTE/COE Better / worse than expected macro environment in Greece / Cyprus / SEE volumes trends and asset spreads

National Bank of Greece ROTE/COE Better than expected trend in asset quality and margins; better than expected macro environment; spin-of of Turkish unit

Natixis ROTE/COE Volatility in capital markets; increased writedowns on structured credit assets, credit quality

Nordea ROE/COE A more benign macrodevelopment in the Nordics and Baltics, a possible accretive depletion of Nordea capital and potential further share accumulation by Sampo,currently holding 16% of Nordea.

Piraeus Bank ROTE/COE Better than expected macro environment in Greece / SEE; volumes trends and asset spreads

Raiffeisen International ROTE/COE Better / worse than expected macro environment in the CEE and SEE regions

Royal Bank of Scotland ROTE/COE Significant deterioration in the UK economy and UK credit quality, lower/higher revenues in GBM or lower/higher losses in the non core division.

Santander ROTE/COE Downside risks: prolonged recession in Spain, sharp slowdown in Brazil and Latam, worse than expected trends in asset quality and spreads in core markets. Upside risks are the opposite.

Sarasin ROTE/COE Upside: better cost management, sharper recovery in asset values; downside: regulatory risk, cost developments

SEB ROE/COE (1) Better than expected macro development in the Baltics including a Euro entry for Latvia and Lithuania; (2) strong revenues from capital markets in Sweden and (3) reduced competition in Sweden

Societe Generale ROTE/COE Sharper slowdown in capital markets, and worse than expected developments in credit quality

Standard Chartered SOTP Double dip for the US, for Asia, loss of macro.loan growth momentum for China, higher than expected NPLs, revenue pressures in 2H09E or FY10E as part of a long tailed recession scenario.

SHB ROE/COE Higher/lower impairments than expected or quicker/slower economic recovery than expected

Swedbank ROE/COE Better than expected macro development in the Baltics, including a Euro entry for Latvia and Lithuania and reduced competition in Sweden

UBI Banca ROTE/COE Macro environment and asset quality trends; better / worse than expected trend in customer spreads; evolution of European Sovereign spreads

UBS ROTE/COE Upside: sharp turnround in IB profitability (e.g. on cost cuts); downside: regulatory risk, outflows in WM

Unicredit ROTE/COE A sharp deterioration in macroeconomic outlook and credit spread; execution on cost saving plan; sharp deterioration in European Sovereign spreads

Vontobel SOTP Upside: high capital markets activity, downside: regulatory risk, hedging risk on derivatives portfolio

Source: Goldman Sachs Research.

Goldman Sachs Global Investment Research 8

June 23, 2010 Europe: Banks

Appendix 1: Composition of public and private debt by geography

Exhibit 7: Composition of total public and private debt by geography

Debt / GDP - ranked by government debt Debt / GDP - ranked by total debt Debt composition
Gvt Corp Retail Total Total Gvt Corp Retail Total Gvt Corp Retail
1 Greece 115% 41% 41% 197% 1 Luxembourg 353% 14% 263% 76% 100% 4% 75% 22%
2 Italy 113% 70% 32% 216% 2 Cyprus 334% 55% 157% 121% 100% 17% 47% 36%
3 Belgium 94% 55% 30% 179% 3 Ireland 289% 66% 133% 90% 100% 23% 46% 31%
4 France 76% 50% 49% 176% 4 Denmark 255% 40% 79% 135% 100% 16% 31% 53%
5 Portugal 76% 84% 83% 244% 5 Portugal 244% 76% 84% 83% 100% 31% 35% 34%
6 Hungary 76% 35% 29% 140% 6 UK 238% 65% 99% 73% 100% 27% 42% 31%
7 Germany 72% 45% 58% 175% 7 Spain 231% 53% 94% 84% 100% 23% 41% 36%
8 Malta 67% 99% 60% 226% 8 Netherlands 227% 59% 95% 73% 100% 26% 42% 32%
9 Ireland 66% 133% 90% 289% 9 Malta 226% 67% 99% 60% 100% 30% 44% 26%
10 Austria 65% 69% 45% 180% 10 Italy 216% 113% 70% 32% 100% 53% 33% 15%
11 UK 65% 99% 73% 238% 11 Greece 197% 115% 41% 41% 100% 58% 21% 21%
12 Netherlands 59% 95% 73% 227% 12 Austria 180% 65% 69% 45% 100% 36% 38% 25%
13 Cyprus 55% 157% 121% 334% 13 Belgium 179% 94% 55% 30% 100% 52% 31% 17%
14 Spain 53% 94% 84% 231% 14 France 176% 76% 50% 49% 100% 44% 29% 28%
15 Poland 47% 17% 29% 93% 15 Germany 175% 72% 45% 58% 100% 41% 26% 33%
16 Finland 43% 33% 56% 132% 16 Sweden 159% 38% 51% 69% 100% 24% 32% 44%
17 Denmark 40% 79% 135% 255% 17 Latvia 153% 40% 62% 51% 100% 26% 41% 33%
18 Latvia 40% 62% 51% 153% 18 Hungary 140% 76% 35% 29% 100% 54% 25% 21%
19 Sweden 38% 51% 69% 159% 19 Finland 132% 43% 33% 56% 100% 33% 25% 43%
20 Slovenia 35% 66% 24% 126% 20 Slovenia 126% 35% 66% 24% 100% 28% 53% 19%
21 Slovakia 34% 25% 21% 80% 21 Estonia 115% 7% 53% 54% 100% 6% 47% 47%
22 Czech Republic 34% 24% 26% 84% 22 Lithuania 101% 30% 39% 32% 100% 30% 38% 32%
23 Lithuania 30% 39% 32% 101% 23 Poland 93% 47% 17% 29% 100% 51% 18% 31%
24 Romania 22% 19% 19% 59% 24 Bulgaria 90% 15% 47% 28% 100% 16% 52% 31%
25 Bulgaria 15% 47% 28% 90% 25 Czech Republic 84% 34% 24% 26% 100% 40% 29% 31%
26 Luxembourg 14% 263% 76% 353% 26 Slovakia 80% 34% 25% 21% 100% 43% 31% 26%
27 Estonia 7% 53% 54% 115% 27 Romania 59% 22% 19% 19% 100% 37% 31% 32%
Eurozone (11) 77% 64% 55% 196% Eurozone (11) 196% 77% 64% 55% 100% 39% 33% 28%
Western Europe 74% 69% 59% 203% Western Europe 203% 74% 69% 59% 100% 37% 34% 29%
CEE 41% 26% 27% 94% CEE 94% 41% 26% 27% 100% 43% 27% 29%
Total 72% 66% 57% 194% Total 194% 72% 66% 57% 100% 37% 34% 29%

Source: ECB, Eurostat.

Goldman Sachs Global Investment Research 9

June 23, 2010 Europe: Banks

Appendix 2: Capital raisings by Eurozone banks

Exhibit 8: Capital raisings (excluding repayments) – European Banks

Source of capital (€bn) Form of capital raising (€mn)
Announcement 
Company Private State Total Ords / MCN Other Total
date
Bank of Ireland 26/04/10 1.8 1.7 3.4 3.4 3.4
Erste Bank 29/10/09 1.7 1.7 1.7 1.7
Alpha Bank 16/10/09 1.0 1.0 1.0 1.0
SocGen 06/10/09 4.8 4.8 4.8 4.8
Unicredit 29/09/09 4.0 4.0 4.0 4.0
BNP Paribas 29/09/09 4.3 4.3 4.3 4.3
Credito Valtellinese 20/09/09 0.2 0.2 0.2 0.2
Popular 09/09/09 1.2 1.2 1.2 1.2
BBVA 04/09/09 2.0 2.0 2.0 2.0
RIBH 15/07/09 1.3 1.3 1.3 1.3
Sabadell 26/06/09 0.5 0.5 0.5 0.5
Bankinter 14/05/09 0.4 0.4 0.4 0.4
KBC 14/05/09 3.5 3.5 3.5 3.5
GPSB 22/04/09 0.5 0.5 0.5 0.5
Banesto 2Q09 0.5 0.5 0.5 0.5
Banco Pastor 2Q09 0.3 0.3 0.3 0.3
Santander 2Q09 2.0 2.0 2.0 2.0
Popular 2Q09 0.4 0.4 0.4 0.4
BMPS* 27/03/09 1.9 1.9 1.9 1.9
BP Milano 24/03/09 0.2 0.2 0.2 0.2
BP Milano 24/03/09 0.5 0.5 0.5 0.5
Banco Popolare 10/03/09 1.5 1.5 1.5 1.5
Bank of Cyprus 25/02/09 0.6 0.6 0.6 0.6
Allied Irish 11/02/09 3.5 3.5 3.5 3.5
Bank of Ireland 11/02/09 3.5 3.5 3.5 3.5
GPSB 28/01/09 0.2 0.2 0.2 0.2
Piraeus Bank 23/01/09 0.4 0.4 0.4 0.4
National Bank of Greece 22/01/09 1.3 0.4 1.6 1.3 0.4 1.6
KBC 22/01/09 2.0 2.0 2.0 2.0
Natixis 20/01/09 1.9 1.9 1.9 1.9
Alpha Bank 12/01/09 0.9 0.9 0.9 0.9
ATE Bank 12/01/09 0.7 0.7 0.7 0.7
EFG Eurobank 12/01/09 1.0 1.0 1.0 1.0
Commerzbank 08/01/09 10.0 10.0 1.8 8.2 10.0
Sabadell 1Q09 0.5 0.5 0.5 0.5
Santander 10/11/08 7.2 7.2 7.2 7.2
Commerzbank 03/11/08 8.2 8.2 8.2 8.2
Erste Bank 30/10/08 0.5 1.2 1.8 1.8 1.8
Deutsche Postbank 27/10/08 1.0 1.0 1.0 1.0
KBC 27/10/08 3.5 3.5 3.5 3.5
Natixis 20/10/08 2.0 2.0 2.0 2.0
Unicredit 05/10/08 3.0 3.0 3.0 3.0
BBVA 4Q08 1.0 1.0 1.0 1.0
Natixis 16/07/08 3.7 3.7 3.7 3.7
Credit Agricole SA 13/05/08 5.9 5.9 5.9 5.9
SocGen 24/01/08 5.5 5.5 5.5 5.5

Total Eurozone 56 50 106 57 48 106

Total (%) 53% 47% 100% 54% 46% 100%
Note: Capital raisings by banks within GS coverage universe; excludes capital raisings for the purpose of acquisitions

Source: Company data, Goldman Sachs Research.

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June 23, 2010 Europe: Banks

Appendix 3: Fundamental performance up in 1Q; coverage flat

Exhibit 9: Pro-forma for change in coverage ratios, PBT for 1Q10 alone would have been twice as high as FY2009
€ mn
Coverage Ratio Incre. Cov. Incre. Cov. PBT (€mn) Pro-forma PBT change PBT (€mn) Pro-forma PBT change
4Q08 4Q09 1Q10 2009 1Q2010 2009 Pro-forma* €mn % 1Q10 Pro-forma* €mn %

Austria
Erste Bank 68% 58% 60% 37% 93% 1,261 397 -864 -68% 402 565 163 40%
Raiffeisen 111% 69% 68% 49% 58% 365 -1,473 -1,838 -503% 139 73 -66 -47%
Total 77% 62% 63% 43% 73% 1,626 -316 -1,943 -119% 541 664 123 23%

France
BNP Paribas 58% 53% 52% 48% 30% 8,833 6,123 -2,710 -31% 3,840 3,614 -226 -6%
Societe Generale 65% 57% 56% 34% 50% 131 -1,645 -1,776 -1356% 1,500 1,383 -117 -8%
Credit Agricole 65% 65% 68% 65% 199% 2,241 2,218 -23 -1% 850 1,406 556 65%
Natixis 146% 71% 70% 20% 50% -2,272 -5,109 -2,837 125% 555 513 -42 -8%
Total 64% 57% 57% 46% 62% 8,934 1,901 -7,032 -79% 6,745 6,940 195 3%

Germany
Commerzbank 48% 48% 49% 48% 488% -4,659 -4,641 18 0% 771 1,057 286 37%
Deutsche Bank 53% 46% 47% 40% 67% 5,202 4,755 -447 -9% 2,793 2,827 34 1%
Deutsche Postbank 137% 137% 132% 136% 81% 217 215 -2 -1% 131 75 -56 -43%
Total 54% 51% 52% 48% 154% 760 28 -732 -96% 3,695 4,035 340 9%

Greece & Cyprus

Piraeus Bank 52% 51% 50% 47% 47% 254 221 -34 -13% 9 1 -8 -88%
National Bank of Greece 61% 55% 53% 47% 40% 1,206 964 -241 -20% 148 34 -113 -77%
Greek Postal Savings Bank 216% 165% 168% 97% 233% 47 -4 -50 -108% -16 -13 3 -19%
EFG Eurobank 63% 45% 44% 20% 33% 340 -355 -695 -205% 77 33 -44 -57%
Alpha Bank 62% 55% 53% 38% 42% 459 224 -236 -51% 66 22 -43 -66%
Agricultural Bank of Greece 62% 71% 71% 98% 65% -470 -304 165 -35% -45 -54 -8 18%
Bank of Cyprus 86% 59% 58% 27% 46% 365 -45 -410 -112% 91 72 -19 -21%
Marfin Popular Bank 63% 51% 51% 31% 52% 205 16 -189 -92% 54 55 1 2%
Total 65% 55% 53% 35% 43% 2,406 480 -1,926 -80% 383 143 -240 -63%

Italy
BMPS 49% 45% 45% 33% 41% 1,451 759 -691 -48% 215 190 -25 -12%
Credito Valtellinese 56% 43% 40% 24% 9% 143 -70 -213 -149% 42 -9 -51 -121%
UBI Banca 48% 38% 37% 24% 5% 705 53 -652 -92% 137 71 -67 -49%
BP Milano 55% 35% 34% 13% -34% 217 -276 -493 -227% 86 48 -39 -45%
Banco Popolare 48% 31% 30% 17% -5% 487 -1,753 -2,241 -460% 206 94 -112 -54%
Credem 51% 44% 42% 33% 14% 163 113 -49 -30% 38 23 -16 -41%
Intesa SanPaolo 61% 49% 49% 26% 50% 4,328 171 -4,157 -96% 1,131 1,134 3 0%
Unicredit 59% 51% 51% 32% 49% 3,300 -975 -4,275 -130% 1,049 986 -64 -6%
Total 57% 47% 47% 27% 41% 10,794 -2,376 -13,170 -122% 2,906 2,582 -323 -11%

Nordic
Danske Bank 65% 42% 43% 33% 51% 1,039 -1,660 -2,699 -260% 160 251 91 57%
DnB NOR 62% 40% 37% 28% 17% 1,392 694 -698 -50% 433 332 -102 -23%
Swedbank 97% 65% 65% 59% 194% -872 -2,149 -1,277 146% 100 125 25 25%
Nordea 70% 58% 60% 50% 78% 3,074 2,592 -482 -16% 878 945 67 8%
SEB 92% 63% 68% 48% -38% 454 -356 -811 -178% 106 242 136 129%
Svenska Handelsbanken 57% 62% 73% 69% -49% 1,329 1,373 44 3% 372 451 79 21%
Total 71% 50% 51% 42% 61% 6,416 994 -5,423 -85% 2,049 2,220 171 8%

Spain
BBVA 91% 57% 59% 16% 136% 5,736 423 -5,312 -93% 1,862 2,074 211 11%
Santander 91% 75% 74% 54% 42% 11,795 8,036 -3,759 -32% 3,161 2,841 -321 -10%
Bankinter 120% 74% 73% 17% 39% 346 -155 -501 -145% 91 73 -18 -20%
Banco Popular 73% 50% 50% 22% 39% 1,073 -181 -1,254 -117% 290 275 -15 -5%
Sabadell 107% 69% 62% 6% -13% 571 -457 -1,028 -180% 123 -88 -212 -171%
Banesto 105% 63% 61% 10% 3% 780 -297 -1,078 -138% 295 219 -76 -26%
Banco Pastor 49% 52% 56% 58% 338% 131 173 43 33% 48 103 54 113%
Total 90% 66% 65% 34% 48% 20,431 7,584 -12,847 -63% 5,873 5,549 -324 -6%

Switzerland
Credit Suisse 61% 61% 56% 63% 315% 5,349 5,343 -6 0% 1,970 1,903 -67 -3%
UBS 36% 39% 34% 20% 70% -1,697 -1,560 136 -8% 1,861 1,660 -201 -11%
Total 42% 44% 40% 31% 79% 3,652 3,782 129 4% 3,831 3,594 -237 -6%

Benelux
KBC 71% 75% 78% 79% 147% 2,292 2,541 248 11% 767 942 175 23%

Total ex UK & Ireland 64.0% 53.8% 53.8% 38% 54% 57,312 13,940 -43,372 -76% 26,790 26,783 -7 0%

Coverage ratios 1Q10 is already 2x

have stopped as much as
falling FY2009 proforma

Source: Company data, Goldman Sachs Research estimates. Note: we gross up BNP’s NPLs by collateral values for comparability purposes.

Goldman Sachs Global Investment Research 11

June 23, 2010 Europe: Banks

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Analyst compensation: Analysts are paid in part based on the profitability of Goldman Sachs, which includes investment banking revenues. Analyst

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June 23, 2010 Europe: Banks

as officer or director: Goldman Sachs policy prohibits its analysts, persons reporting to analysts or members of their households from serving as an
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approved this research in connection with its distribution in the United Kingdom and European Union.

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June 23, 2010 Europe: Banks

European Union: Goldman Sachs International, authorized and regulated by the Financial Services Authority, has approved this research in
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Goldman Sachs Global Investment Research 14