ABanca Cuentas Consolidadas 1s 2019 en

ABANCA Corporación
Bancaria, S.A. and Subsidiaries

that make up the
ABANCA Corporación Bancaria
Group
Condensed Consolidated Interim Financial Statements
30 June 2019
Consolidated Interim Directors’ Report

First half of 2019
(With Limited Review Report Thereon)
(Free translation from the original in Spanish. In the event of
discrepancy, the Spanish-language version prevails.)
KPMG Auditores, S.L.
Pº. de la Castellana 259 C
28046 Madrid
Limited Review Report on the Condensed Consolidated

Interim Financial Statements
(Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails.)
To the Shareholders of ABANCA Corporación Bancaria, S.A.

commissioned by the Board of Directors
Introduction______________________________________________________________
We have conducted a limited review of the accompanying condensed consolidated interim financial
statements (the “interim financial statements”) of ABANCA Corporación Bancaria, S.A. (the “Bank”)
and subsidiaries (together the “Group”), which comprise the balance sheet at 30 June 2019, and the
income statement, statement of recognised income and expense, statement of changes in equity
and statement of cash flows for the six-month period then ended, and the notes thereto (all
condensed and consolidated). The Directors of the Bank are responsible for the preparation of these
interim financial statements in accordance with International Accounting Standard (IAS) 34 Interim
Financial Reporting as adopted by the European Union for the preparation of condensed interim
financial information, pursuant to article 12 of Royal Decree 1362/2007. Our responsibility is to
express a conclusion on these interim financial statements based on our limited review.
Scope of Review__________________________________________________________
We conducted our limited review in accordance with the International Standard on Review
Engagements 2410, “Review of Interim Financial Information Performed by the Independent Auditor
of the Entity”. A limited review of interim financial statements consists of making inquiries, primarily
of persons responsible for financial and accounting matters, and applying analytical and other review
procedures. A limited review is substantially less in scope than an audit conducted in accordance
with prevailing legislation regulating the audit of accounts in Spain and, consequently, does not
enable us to obtain assurance that we would become aware of all significant matters that might be
identified in an audit. Accordingly, we do not express an audit opinion on the accompanying
condensed consolidated interim financial statements.
KPMG Auditores S.L., sociedad española de responsabilidad limitada y firma Inscrita en el Registro Oficial de Auditores de Cuentas con el nº.S0702, y en el
miembro de la red KPMG de firmas independientes afiliadas a KPMG International Registro de Sociedades del Instituto de Censores Jurados de Cuentas con el nº.10.
Cooperative (“KPMG International”), sociedad suiza. Reg. Mer Madrid, T. 11.961, F. 90, Sec. 8, H. M -188.007, Inscrip. 9
Paseo de la Castellana, 259C – Torre de Cristal – 28046 Madrid N.I.F. B-78510153
2
(Translation from the original in Spanish. In the event of discrepancy, the Spanish-language version prevails.)
Conclusion_______________________________________________________________
Based on our limited review, which can under no circumstances be considered an audit, nothing has
come to our attention that causes us to believe that the accompanying condensed consolidated
interim financial statements for the six-month period ended 30 June 2019 have not been prepared,
in all material respects, in accordance with International Accounting Standard (IAS) 34 Interim
Financial Reporting, as adopted by the European Union for the preparation of condensed interim
financial information, pursuant to article 12 of Royal Decree 1362/2007.
Emphasis of Matter_______________________________________________________
We draw your attention to the accompanying note 1.2, which states that these condensed
consolidated interim financial statements do not include all the information that would be required in
a complete set of consolidated financial statements prepared in accordance with International
Financial Reporting Standards as adopted by the European Union. The accompanying interim
financial statements should therefore be read in conjunction with the Group’s consolidated annual
accounts for the year ended 31 December 2018. This matter does not modify our conclusion.
Report on Other Legal and Regulatory Requirements________________________
The accompanying consolidated interim directors’ report for the six-month period ended 30 June
2019 contains such explanations as the Directors of the Bank consider relevant with respect to the
significant events that have taken place in this period and their effect on the interim financial
statements. The consolidated interim directors’ report is not an integral part of the interim financial
statements. We have verified that the accounting information contained therein is consistent with
that disclosed in the condensed consolidated interim financial statements for the six-month period
ended 30 June 2019. Our work is limited to the verification of the consolidated interim directors’
report within the scope described in this paragraph and does not include a review of information
other than that obtained from the accounting records of ABANCA Corporación Bancaria, S.A. and its
subsidiaries.
KPMG Auditores, S.L.

On the Spanish Official Register of Auditors (“ROAC”) with No. S0702
(Signed on original in Spanish)
Julio Álvaro Esteban

On the Spanish Official Register of Auditors (“ROAC”) with No. 1,661
29 July 2019
ABANCA CORPORACIÓN BANCARIA GROUP
CONSOLIDATED BALANCE SHEETS AT 30 JUNE 2019 AND AT 31 DECEMBER 2018
(Thousands of euros)
ASSETS Note 30.06.2019 31.12.2018 (*) LIABILITIES AND EQUITY Note 30.06.2019 31.12.2018 (*)
Cash, cash balances with central banks and other demand deposits 8.2 789,872 1,367,528 Financial liabilities held for trading 8.3.2 123,692 72,716
Financial assets held for trading 8.3.1 128,615 99,216 Financial liabilities measured at amortized cost 14.1 45,136,723 44,133,966
Non-trading financial assets mandatorily at fair value through profit or loss 8.4 309,455 372,594 Derivatives - hedge accounting 14.2 265,629 135,298
Financial assets at fair value through other comprehensive income 8.5 3,787,152 7,779,322 Liabilities covered by insurance or reinsurance contracts 18 1,537,657 1,395,968
Provisions 15
Financial assets at amortized cost 8.6 41,593,709 35,363,973 Pensions and other post-employment defined benefit obligations 154,307 158,437
Outstanding taxes legal proceedings and litigation 17,223 17,195
Commitments and guarantees given 78,880 83,644
Other provisions 70,572 85,249
320,982 344,525
Derivatives - hedge accounting 8.7 45,199 31,087 Tax liabilities 16
Current tax liabilities 38,865 14,187
Deferred tax liabilities 183,185 177,453
Investments in joint ventures or associates 10 222,050 191,640
Associates 208,333 222,543
208,333 222,543 Other liabilities 277,682 244,876
TOTAL LIABILITIES 47,884,415 46,518,989

Assets covered by insurance or reinsurance contracts 18 5,318 4,476
EQUITY 17
OWN FUNDS
Tangible assets 11
Fixed assets Capital
For own use 915,382 868,727 Paid-up capital 2,453,657 2,453,657
Investment property 286,796 294,804 2,453,657 2,453,657
1,202,178 1,163,531
Share premium 433,901 433,901
Intangible assets
Goodwill 12 61,731 61,731 Equity instruments issued other than capital 250,000 250,000
Other intangible assets 306,312 297,415
368,043 359,146 Retained earnings 1,669,008 1,398,874
Tax assets 16 Other reserves (43,496) (22,781)

Current tax assets 66,559 94,998
Deferred tax assets 3,362,089 3,358,402 Treasury shares (230,534) (229,727)
3,428,648 3,453,400
Profit attributable to the owners of the Parent 250,112 430,415
Other assets 13
Insurance contracts linked to pensions 136,232 136,232 Interim dividend (62,484) (159,307)
Inventories 60,680 61,948
Other assets 192,032 157,818 ACCUMULATED OTHER COMPREHENSIVE INCOME
388,944 355,998
Items that will not be reclassified to profit or loss
Actuarial gains or losses on defined benefit pension plans (19,183) (19,183)
Fair value changes of equity instruments measured at fair value through other
Non-current assets and disposal groups classified as held for sale 9 392,191 409,603 comprehensive income 2,655 2,696
Items that may be reclassified to profit or loss
Foreign currency translation 21 21

Hedging derivatives. Cash flow hedges reserve (effective portion) 16,406 (18,700)
Fair value changes of debt securities measured at fair
value through other comprehensive income 43,511 (45,316)
Share of other recognized income and expense of investments in
joint ventures and associates (343) (11,133)
43,067 (91,615)
MINORITY INTERESTS (non-controlling interests)
Accumulated other comprehensive income - -

Other items 11 11
11 11
TOTAL EQUITY 4,763,242 4,463,428

TOTAL ASSETS 52,647,657 50,982,417 TOTAL EQUITY AND LIABILITIES 52,647,657 50,982,417
MEMORANDUM ITEM: OFF-BALANCE SHEET EXPOSURES 34

Loan commitments granted 5,659,539 5,318,151
Financial guarantees granted 520,842 502,363
Other commitments granted 1,110,519 1,012,796
(*) Presented solely and exclusively for comparison purposes. See Note 1.3.
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS FOR THE SIX-MONTH PERIODS

ENDED 30 JUNE 2019 AND 2018
Income / (Expenses)
Note
30.06.2019 30.06.2018 (*)
Interest income 19 362,325 347,961

Interest expense 20 (90,225) (90,194)
NET INTEREST INCOME 272,100 257,767
Dividend income 21 7,505 8,639

Share of profit or loss of equity-accounted investees 22 (3,311) 4,981
Fee and commission income 23 104,220 97,885
Fee and commission expense 24 (11,038) (9,706)
Gains or losses on derecognition of financial assets and liabilities not measured at fair value through profit or loss, net 25 72,044 98,988
Gains or losses on financial assets and liabilities held for trading, net 25 (85) (1,301)
Gains or losses on non-trading financial assets mandatorily at fair value through profit or loss, net 25 22,100 10,447
Gains or losses on financial assets designated at fair value through profit or loss, net 25 - -
Gains or losses from hedge accounting, net 25 13,813 (79)
Exchange differences, net 2,430 1,809
Other operating income 26 31,894 47,363
Other operating expenses 29 (32,692) (43,476)
Income from assets covered by insurance or reinsurance contracts 26 170,977 160,321
Expenses from liabilities covered by insurance or reinsurance contracts 29 (159,338) (150,387)
GROSS INCOME 490,619 483,251
Administrative expenses (272,192) (251,731)

Personnel expenses 27 (164,112) (153,876)
Other administrative expenses 28 (108,080) (97,855)
Depreciation and amortization 30 (30,426) (25,728)
Provisions or reversals of provisions 8,891 716
Impairment or reversal of impairment on, and gains and losses arising from changes in cash flows from financial assets not
measured at fair value through profit or loss, and modification net gains or losses (10,324) 1,562
Financial assets at fair value through other comprehensive income 312 (2,036)
Financial assets at amortized cost 8.6.3 (10,636) 3,598
NET OPERATING INCOME 186,568 208,070
Impairment or reversal of impairment on investments in joint ventures or associates 6 670

Impairment or reversal of impairment on non-financial assets (643) (450)
Other 7 100
Tangible assets (650) (550)
Gains or losses on derecognition of non-financial assets, net 31 16,999 15,673
Negative goodwill taken to profit or loss 4 51,191 -
Gains or losses on non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations 32 12,600 23,400
PROFIT OR LOSS BEFORE TAX FROM CONTINUING OPERATIONS 266,721 247,363
Income tax expense or income related to profit or loss from continuing operations (16,610) (359)
PROFIT OR LOSS AFTER TAX FROM CONTINUING OPERATIONS 250,111 247,004
Profit or loss after tax from discontinued operations - -
PROFIT/(LOSS) FOR THE PERIOD 250,111 247,004
Attributable to minority interests (non-controlling interests) (1) -

Attributable to the owners of the parent 250,112 247,004
EARNINGS PER SHARE (euro) 30.06.2019 30.06.2018

Basic 0.1118 0.1104
Diluted 0.1118 0.1104
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE SIX-MONTH PERIODS
ENDED 30 JUNE 2019 AND 2018
30.06.2019 30.06.2018 (*)
A) PROFIT/(LOSS) FOR THE PERIOD 250,111 247,004
B) OTHER COMPREHENSIVE INCOME
1. Items that will not be reclassified to profit or loss (41) (284)
Actuarial gains or (-) losses on defined benefit pension plans - -
Fair value changes of equity instruments measured at fair value through other comprehensive
income (59) (406)
Income tax relating to items that will not be reclassified 18 122
2. Items that may be reclassified to profit or loss 134,723 (55,555)
Foreign currency translation - (21)

Exchange gains or (-) losses recognized in equity - (21)
Cash flow hedges (effective portion) 50,151 7,518

Gains or (-) losses recognized in equity 50,151 7,518
Debt securities at fair value through other comprehensive income 126,896 (89,664)
Valuation gains or (-) losses taken to equity 199,352 9,560
Transferred to profit or loss (72,456) (99,224)
Share of other recognised income and expense arising from investments in joint
ventures and associates 15,414 2,803
Income tax relating to items that may be reclassified to profit

or loss (57,738) 23,809
C) TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 384,793 191,165
Attributable to minority interests (non-controlling interests) - -

Attributable to the owners of the parent 384,793 191,165
CONSOLIDATED STATEMENTS OF TOTAL CHANGES IN EQUITY
FOR THE SIX-MONTH PERIODS ENDED 30 JUNE 2019 AND 2018 (*)
Minority interests
Profit Accumulated
Equity Accumulated
Share Retained Other (-) Treasury attributable to (-) Interim other
Capital instruments other Total
premium earnings reserves shares the owners of dividends comprehensiv Other items
issued other comprehensiv
the Parent e income
than capital e income
Balance at 31 December 2017 2,453,657 433,901 - 1,180,238 (9,821) (226,940) 367,074 (110,581) 17,842 - 12 4,105,382
Adjustments on initial application of IFRS 9 - - - - (14,755) - - - (22,493) - - (37,248)
Opening balance 2,453,657 433,901 - 1,180,238 (24,576) (226,940) 367,074 (110,581) (4,651) - 12 4,068,134
Total comprehensive income for the period - - - - - - 247,004 - (55,839) - - 191,165
Other changes in equity - - - 212,475 7,218 91 (367,074) 48,481 - - - (98,809)
Treasury shares purchased - - - - - 91 - - - - - 91

Transfers between equity line items - - - 212,828 7,416 - (367,074) 146,830 - - - -
Share-based payments - - - - - - - - - - - -
Dividends or shareholder remuneration - - - - - - - (98,349) - - - (98,349)
Other increases or (-) decreases in equity - - - (353) (198) - - - - - - (551)
Balance at 30 June 2018 2,453,657 433,901 - 1,392,713 (17,358) (226,849) 247,004 (62,100) (60,490) - 12 4,160,490
Balance at 31 December 2018 2,453,657 433,901 250,000 1,398,874 (22,781) (229,727) 430,415 (159,307) (91,615) - 11 4,463,428
Opening balance 2,453,657 433,901 250,000 1,398,874 (22,781) (229,727) 430,415 (159,307) (91,615) - 11 4,463,428
Total comprehensive income for the period - - - - - - 250,112 - 134,682 - (1) 384,793
Other changes in equity - - - 270,134 (20,715) (807) (430,415) 96,823 - - 1 (84,979)
Treasury shares purchased - - - - - (2,246) - - - - - (2,246)

Transfers between equity line items - - - 248,475 9,774 - (430,415) 172,166 - - - -
Share-based payments - - - - - 1,439 - - - - - 1,439
Dividends or shareholder remuneration - - - - - - - (75,343) - - - (75,343)
Other increases or (-) decreases in equity - - - 21,659 (30,489) - - - - - 1 (8,829)
Balance at 30 June 2019 2,453,657 433,901 250,000 1,669,008 (43,496) (230,534) 250,112 (62,484) 43,067 - 11 4,763,242
CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX-MONTH PERIODS ENDED 30 JUNE 2019 AND 2018
30.06.2019 30.06.2018 (*)
A) CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES (781,342) (558,733)
1. Profit/(loss) for the period 250,111 247,004
2. Adjustments to reconcile net income to net cash from operating activities 41,303 42,462
(+) Depreciation and amortization 30,426 25,728
(+/-) Other adjustments 10,877 16,734
3. Net increase/decrease in operating assets (2,355,850) 183,046

(+/-) Financial assets held for trading (29,399) (13,359)
(+/-) Non-trading financial assets mandatorily at fair value through profit or loss 63,139 -
(+/-) Financial assets designated at fair value through profit or loss (75,715)
(+/-) Financial assets at fair value through other comprehensive income 2,085,798 1,763,949
(+/-) Assets at amortized cost (4,514,221) (1,716,384)
(+/-) Other operating assets 38,833 224,555
4. Net increase/decrease in operating liabilities 1,269,615 (1,024,135)

(+/-) Financial liabilities held for trading 50,976 (403)
(+/-) Financial liabilities designated at fair value through profit or loss - -
(+/-) Financial liabilities at amortized cost 1,002,757 (1,111,154)
(+/-) Other operating liabilities 215,882 87,422
5. Income tax receipts/(payments) 13,479 (7,110)
B) CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES (31,982) 18,053
1. Payments: (132,510) (70,096)

(-) Tangible assets (54,782) (36,256)
(-) Intangible assets (23,761) (3,971)
(-) Investments in joint ventures and associates (32,149) -
(-) Subsidiaries and other business units - -
(-) Non-current assets and liabilities classified as held for sale (16,578) (29,969)
(-) Held-to-maturity investments - -
(-) Other payments related to investing activities (5,240) 100
2. Receipts: 100,528 88,149

(+) Tangible assets 12,278 -
(+) Intangible assets - -
(+) Investments in joint ventures and associates 50,533 840
(+) Non-current assets and liabilities classified as held for sale 37,717 57,938
(+) Other receipts related to investing activities - 29,371
C) CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES 282,978 (98,571)
1. Payments: (75,343) (98,576)

(-) Dividends (75,343) (98,349)
(-) Subordinated liabilities - -
(-) Redemption of own equity instruments - -
(-) Acquisition of own equity instruments - (227)
(-) Other payments related to financing activities - -
2. Receipts: 358,321 5
(+) Subordinated liabilities 357,514 5
(+) Issuance of own equity instruments - -
(+) Disposal of own equity instruments 807 -
(+) Other receipts related to financing activities - -
D) EFFECT OF EXCHANGE RATE FLUCTUATIONS - -
E) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C+D) (530,346) (639,251)
F) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD 1,103,452 1,319,380
G) CASH AND CASH EQUIVALENTS AT END OF THE PERIOD (E+F) 573,106 680,129
COMPOSITION OF CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 30.06.2019 30.06.2018
(+) Cash 165,368 154,943

(+) Cash equivalents balances in central banks 407,738 525,186
(+) Other financial assets - -
(-) Less: bank overdrafts repayable on demand - -
TOTAL CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD 573,106 680,129
Of which: held by Group entities but not available to the Group - -
Condensed Consolidated Interim Financial Statements for

the six-month period ended 30 June 2019
Contents
1. Introduction, Basis of presentation and Other Information 1
2. Seasonal nature of operations, unusual events and significant changes in estimates 6
3. Consolidated statement of cash flows 7
4. Changes in the composition of the Group and business combinations 7
5. Remuneration of the Board of Directors and Senior Management 9
6. Segment reporting 10
7. Fair value 14
8. Financial assets 18
9. Non-current assets and disposal groups classified as held for sale and liabilities included in
disposal groups classified as held for sale 35
10. Investments in joint ventures and associates 36
11. Tangible assets 36
12. Intangible assets 37
13. Other assets 38
14. Financial Liabilities 38
15. Provisions 42
16. Taxation 44
17. Equity 44
18. Assets covered by insurance or reinsurance contracts and Liabilities covered by insurance or
reinsurance contracts 47
19. Interest income 47
20. Interest expense 48
21. Dividend income 48
22. Share of profit or loss of equity-accounted investees 49
23. Fee and commission income 49
24. Fee and commission expense 49
25. Gains or losses on financial assets and liabilities 50
26. Other operating income and Income from assets covered by insurance or reinsurance contracts 51
27. Personnel expenses 51


28. Other administrative expenses 52
29. Other operating expenses and Expenses from liabilities covered by insurance or reinsurance
contracts 53
30. Depreciation and amortization 53
31. Gains or losses on derecognition of non-financial assets, net 53
32. Gains or losses on non-current assets and disposal groups classified as held for sale not qualifying
as discontinued operations. 54
33. Related-party transactions 54
34. Changes in the contingent assets and Liabilities of the Group and off-balance sheet customers’
funds 54
35. Events after the reporting period 55


1. Introduction, Basis of presentation and Other Information
1.1. Introduction
ABANCA Corporación Bancaria, S.A. (hereinafter “ABANCA” or the “Bank”) is a private credit and savings
institution, corporate purpose of which is the performance of all types of activities, transactions and services
befitting the banking business in general or directly or indirectly related thereto and permitted under the
existing legislation, including the provision of investment and ancillary services and the performance of
insurance mediation activities, as well as the acquisition, holding, enjoyment and disposal of all types of
transferable securities.
The Bank was incorporated on 14 September 2011 as a public limited company in Spain, for an open-ended
period, as a result of the split-off of the financial activity carried out up until that time by the entity resulting
from 2010 merger of Caixa de Aforros de Vigo, Ourense e Pontevedra and Caja de Ahorros de Galicia
(hereinafter “Novacaixagalicia”).
The transfer of shares to the Spanish company Banesco Holding Financiero 2, S.L.U. (currently ABANCA
Holding Financiero, S.A), to which the FROB Steering Committee, in a resolution dated 18 December 2013,
had awarded 88.33% of the Bank in the framework of the competitive sale of the Bank, was completed on 25
June 2014.
On 1 December 2014, the Bank’s Extraordinary General Meeting of Shareholders approved the adoption of
the corporate name ABANCA Corporación Bancaria, S.A. (formerly known as NCG Banco, S.A.) and the
consequential amendment to its articles of association.
For the performance of its activity, at 30 June 2019 the Bank has 500 operating branches in the Autonomous
Region of Galicia (500 at 31 December 2018), 116 branches in the rest of Spain (116 at 31 December 2018), 44
in Portugal (4 at 31 December 2018), 1 in Switzerland (1 at 31 December 2018), and 1 in USA (1 at 31 December
2018), as well as representative offices in Brazil, Mexico, Panama, Venezuela, Switzerland, Germany, Great
Britain and France.
Additionally, the Bank owns equity interests in several companies (subsidiaries and associates) performing
industrial and commercial activities, and which, together with the Bank, form the ABANCA Corporación
Bancaria Group (hereinafter, the “Group” or “ABANCA Group”).
Furthermore, the Bank is part of ABANCA Holding Group, parent company of which is ABANCA Holding
Financiero, S.A. The registered office and address for tax purposes of the Parent are in Madrid, at number 77
Calle Claudio Coello, 3rd floor.
On 10 June 2019, ABANCA Annual General Meeting approved the merger through absorption of ABANCA
Holding Financiero, S.A. (absorbed company) by ABANCA (absorbing company), whereby the absorbed
company will cease to exist and will transfer en bloc all its assets to the absorbing company, with the express
provision of prior payment of a dividend against reserves as a condition precedent for the merger in
accordance with the common draft terms approved by the respective Boards of the aforementioned
companies.
The Bank is subject to the standards and regulations applicable to financial institutions operating in Spain. The
management and use of external funding that financial institutions obtain from customers, as well as other
aspects of their economic and financial activity, are subject to certain legal standards that regulate their
activity. The Bank is part of the Deposit Guarantee Fund.
The Company has its registered office in Betanzos, A Coruña, at number 2 calle Cantón Claudino Pita. The
articles of association and other public information about the Group are available both on the official website
of the Group (www.abanca.com) and at the registered office.1.2. Basis of presentation of the condensed
consolidated interim financial statements.
1

1.2 Basis of presentation of the condensed consolidated interim financial statements.
The condensed consolidated interim financial statements of the Group at 30 March 2019 are presented in
accordance with International Accounting Standard (“IAS”) 34 as adopted by the European Union as of the
date on which they were authorised for issue.
In particular, the accompanying condensed consolidated interim financial statements for the six-month
period ended 30 June 2019, as was the case for the consolidated financial statements of the Group for the
annual period ended 31 December 2018, have been prepared on a going concern basis.
The condensed consolidated interim financial information presented by the directors of the Group should be
read in conjunction with the consolidated financial statements for the annual period ended 31 December
2018, which were prepared under IFRS-EU and Bank of Spain Circular 4/2017 and other mandatory standards
approved by the Bank of Spain, and which were authorized for issue on 25 March 2019 and approved by the
Annual General Meeting on 10 June 2019. Therefore, repetition or update of certain notes and estimates
included in the aforementioned consolidated financial statements is not required. Rather, the accompanying
selective explanatory notes include the explanation of the events or variations, if any, significant when
explaining changes in the consolidated financial position and the consolidated results of operations, and
changes in consolidated equity and consolidated cash flows of the Group between 31 December 2018, the
reporting date for the aforementioned consolidated financial statements, and 30 June 2019.
The accounting policies and measurement standards applied in preparing the condensed consolidated interim
financial statements for the six-month period ended 30 June 2019 are consistent with those applied when
preparing the consolidated financial statements of the Group for the annual period ended 31 December 2018,
which were disclosed under Note 2 to said consolidated annual financial statements; Directors have further
taken into account any Standards and Interpretations that have become effective during the first six months
of 2019 (see Note 1.2.1). As such, the condensed consolidated interim financial statements have been prepared
applying the accounting policies and measurement standards set forth in International Financial Reporting
Standards as adopted by the European Union (hereinafter, “IFRS-EU”).
The directors of the Bank are responsible for the information contained in the condensed consolidated interim
financial statements of the Group.
Unless otherwise stated, the figures disclosed in the condensed consolidated interim financial statements of
the Group are expressed in thousands of euros.
1.2.1. Recent changes to IFRS
The accounting principles and policies and measurement standards applied in the preparation of the
accompanying condensed consolidated interim financial statements do not differ significantly from those
disclosed under Note 2 to the Consolidated Annual Financial Statements for 2018, except for the application
of IFRS 16, which became effective as of 1 January 2019.
a) Standards and interpretations endorsed by the European Union and most recently effective
In 2019 the following amendments to IFRSs and interpretations thereof (hereinafter, “IFRIC”) having an impact
on the consolidated financial statements of ABANCA Group, have entered into force.
2

IFRIC 23 – Uncertainty over income tax treatment

The Interpretation clarifies application of recognition and measurement requirements in IAS 12 when there is
uncertainty over income tax treatments.
When the entity considers that taxation authorities will likely accept an uncertain tax treatment, the
Interpretation requires the entity to determine taxable profit (tax loss), tax bases, unused tax losses, unused
tax credits or tax rates consistently with the tax treatment used or planned to be used in the entity’s income
tax filings.
When the entity considers that taxation authorities will not likely accept an uncertain tax treatment, the
Interpretation requires the entity to use the most likely amount or the expected value (the sum of possible
amounts weighted by probability) when determining taxable profit (tax loss), tax bases, unused tax losses,
unused tax credits or tax rates. The method used by the entity shall be the one the entity expects to better
predict the resolution of the uncertainty.
The entry into force of this standard on 1 January 2019 has not had any significant impact on the Group’s
consolidated financial statements.
IFRS 16 – “Leases”
On 13 January 2016, IASB issued IFRS 16 that will replace IAS 17 “Leases” for annual periods beginning on or
after 1 January 2019. The new standard introduces a single accounting model for lessees and requires lessees
to recognize all assets and liabilities under lease contracts. The only permitted exceptions are short-term
contracts or leases where the underlying asset is of low value. Lessee is required to recognize a right-of-use
asset representing its right to use the underlying leased asset and a lease liability representing its obligation to
make lease payments.
For lessor accounting, the IFRS 16 substantially carries forwards the accounting requirements of IAS 17.
Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for
those two types of leases differently.
With regards to the estimated impact on the consolidated financial statements arising from application of the
standard as of the transition date (1 January 2019), the Group has elected to apply a modified retrospective
method consisting in recognizing lease liabilities for an amount equal to the actual value of future payment
commitments as of 1 January 2019. As for lease assets, the Group has elected to recognized right-of-use
assets for an amount equal to relevant lease liabilities. As a result of this approach, at 1 January 2019 the Group
has recognized right-of-use assets and lease liabilities amounting to approximately 25,630 thousand euros,
relating mostly to the Group’s business in Spain and to leases of commercial premises from its branch network.
At 30 June 2019, the impact amounts to €37,838 thousand, mainly relating to the integration of Deutsche
Bank’s Private & Commercial Business (‘PCB’) Portugal’s retail banking unit (see Note 4). In terms of Capital
(CET1), the estimated impact for the Group does not reach 2 basis points.
Amendments to IFRS 9 – Prepayment features with negative compensation
The amendments to IFRS 9 enables permit entities to measure certain prepayable financial assets with negative
compensation either at amortized cost or at fair value through other comprehensive income when a specific
condition is met, instead of measuring them at fair value through profit or loss. The financial asset shall met
the condition of fulfilling the requirement that its contractual cash flows are solely payments of principal and
interest except for the prepayment option.
3

Amendments to IAS 28 – Long-term interests in associates and joint ventures

The amendments to IAS 28 clarify that a company applies IFRS 9 to long-term interests in an associate or joint
venture that form part of the net investment in the associate or joint venture to which the equity method is
not applied.
Annual improvements to IFRSs 2015-2017 cycle

The annual improvements to IFRS 2015-2017 cycle make small amendments and clarifications to IFRS 3 –
Business combinations; IFRS 11 – Joint arrangements; IAS 12 – Income taxes, and IAS 23 – Borrowing costs.
Amendments to IAS 19 – Plan amendment, curtailment or settlement

Small amendments are made to IAS 19 Employee Benefits in connection with accounting for defined benefits
plans amendments, curtailments or settlements during the period. In those cases, the entity shall use updated
actuarial assumptions to determine current service costs and net interest for the remainder of the period after
the amendment, curtailment or settlement of a plan.
Amendments to IFRS 4 – “Insurance contracts”

The amendments to IFRS 4 address concerns about applying IFRS 9 before the forthcoming insurance
contracts standard, by introducing two solutions of optional application:
- Deferral or temporary exemption approach, allowing companies whose activities are predominantly
connected with insurance to defer application of IFRS 9 and to continue to apply IAS 39 until 2021.
- Overlay approach, allowing all issuers of insurance contracts to recognize in equity, instead than in
profit or loss, the additional accounting volatility that may arise from applying IFRS 9 compared to
applying IAS 39 prior to applying the forthcoming insurance contracts standard.
4

b) Standards and interpretation that are not yet effective at 30 June 2019
As of the reporting date of these consolidated financial statements, new International Financial Reporting
Standards and interpretations had been published the application of which was not mandatory as of 30 June
2019. Although IASB permits early application of the amendments in certain cases, ABANCA Group has not
applied early these amendments.
Amendments to IFRS 10 – “Consolidated financial statements” and Amendments to IAS 28

The amendments to IFRS 10 and IAS 28 provide that when an entity sells or contributes assets that constitute
a business (including its consolidated subsidiaries) to one of its associates or joint ventures, the latter entities
must recognize the resulting gain or loss in full. However, if the assets sold or contributed do not constitute a
business, the gains or losses are to be recognized only in proportion to the stake held in the associate or joint
venture by other investors not related to the entity.
These amendments will be effective for annual periods beginning on or after the date of entry into force,
which has yet to be determined, although early application is permitted.
IFRS 17 – Insurance contracts

IFRS 17 establishes the principles that an entity shall apply to account for insurance contracts. This new
standard supersedes IFRS 4. The new standard introduces a single accounting model for all insurance
contracts and requires entities to use updated assumptions in their estimates.
An entity shall divide insurance contracts into groups and shall recognize and measure insurance contracts at
the total of:
- The “fulfilment cash flows”, which comprise: estimates of future cash flows; an adjustment to reflect
the time value of money and the financial risks related to the future cash flows; and, a risk adjustment
for non-financial risk.
- The contractual service margin that represents the unearned profit.
The entity shall disaggregate the amounts recognized in the statement of profit or loss into insurance revenue;
insurance service expenses, and insurance finance income or expenses. Insurance revenue and insurance
service expenses presented in profit or loss shall exclude any investment components. Insurance revenue shall
be recognized over the period the entity provides insurance coverage and shall be allocated to accounting
periods in proportion to the value of insurance coverage provided by the insurer during the relevant period.
This standard will be effective for annual periods beginning on or after 1 January 2021.
Amendments to IRFS 3 – Definition of a business

The amendments clarify the difference, for accounting purposes, between a business acquisition and the
acquisition of a group of assets. To determine whether a transaction is a business acquisition, an entity shall
assess and conclude that the following two conditions are met:
- fair value of the acquired assets is not concentrated in a single asset or group of similar assets.
- the acquired set of activities and assets includes, at a minimum, an input and a substantive process
that together significantly contribute to the ability to create output.
This standard will be effective for annual periods beginning on or after 1 January 2020, although early
application is permitted.
5

Amendments to IAS 1 and IAS 8 – Definition of material

The amendments clarify the definition of materiality for preparation of financial statements, by aligning the
definition in the Conceptual Framework, IAS 1 and IAS 8 (which, prior to the amendment, included similar but
not identical definitions). The new definition of material is as follows: “Information is material if omitting,
misstating or obscuring it could reasonably be expected to influence decisions that the primary users of
general purpose financial statements make on the basis of those financial statements, which provide financial
information about a specific reporting entity”.
This standard will be effective for annual periods beginning on or after 1 January 2020, although early
application is permitted.
1.3. Information for 2018

In accordance with legislation in force, the information for 2018 contained in these explanatory notes is
presented solely for the purposes of comparison with the information for the six-month period ended 30
June 2019.
Furthermore, certain immaterial information relating to 2018 has been restated for consistency with respect
to the six-month period ended 30 June 2019.
2. Seasonal nature of operations, unusual events and significant changes in estimates
2.1. Seasonal nature of operations
Given the nature of the most significant activities and operations conducted by the Group, which are
fundamentally the activities typically befitting financial institutions, its operations are not affected by the
seasonal or cyclical factors that may be present in other types of businesses.
However, certain income and results of the Group, while not having a significant effect on the condensed
consolidated interim financial statements for the six-month period ended 30 June 2019, do historically have
a seasonal or cyclical component in terms of their distribution throughout the annual period, or display uneven
performance throughout that period.
2.2. Unusual events and significant changes in estimates
No significant events that were unusual in terms of their nature, amount or impact occurred during the six-
month period ended 30 June 2019, having a substantial effect on the assets, liabilities, own funds or profit and
loss of the Group, except for those disclosed, where applicable, under the different sections of these Notes.
In the consolidated annual financial statements of the Group for 2018, Directors occasionally used estimates
to quantify certain assets, liabilities, income, expenses and commitments therein disclosed. These estimates
basically refer to the following:
• Impairment losses on, recovery and fair value of certain assets.
• Assumptions used in the actuarial calculation of the liabilities and commitments for post-employment
benefits and other long-term commitments with employees.
• The useful lives of tangible and intangible assets.
• The estimate of provisions and contingent liabilities, which were made under certain assumptions.
• Provisions that may arise from legal claims in relation to the management of hybrid instruments and
subordinated debt, and claims concerning the marketing of mortgage loans that include floor clauses.
• The probability that certain losses are being identified to which the Group is subject by its activity.
• Measurement of goodwill on consolidation.
• Recoverability of deferred tax assets.
6

Although estimates were based on the best information available at the calculation date, future events may
require these estimates to be substantially increased or decreased in subsequent years. In accordance with
legislation in force, any changes in accounting estimates would be recognised prospectively in the
consolidated statement of profit or loss for the affected annual periods.
During the six-month period ended 30 June 2019 there were no significant changes with respect to the
estimates calculated by the Group at 31 December 2018.
3. Consolidated statement of cash flows
When preparing the consolidated statement of cash flows, current, highly-liquid investments with a low risk
of change in value have been treated as “cash and cash equivalents”. The Group therefore considers the
following assets as cash and cash equivalents:
- Cash held by the Group, recognized under “Cash, cash balances with central banks and other demand
deposits” in the consolidated balance sheet.
- Receivables from central banks, recognized under “Cash, cash balances with central banks and other
demand deposits” in the consolidated balance sheet.
4. Changes in the composition of the Group and business combinations
Note 2 to the consolidated annual financial statements of the Group at 31 December 2018 describes the
criteria applied by the Group for an entity to be considered a subsidiary, joint venture or associate, and also
details the consolidation and measurement methods applied to each one when preparing those consolidated
annual financial statements, as well as changes in the consolidation perimeter for 2018.
Appendix I to the notes to those consolidated annual financial statements includes details of each company
considered as a subsidiary, joint venture or associate, respectively, for the purposes of preparation of the
aforementioned consolidated annual financial statements, as well as certain relevant information thereon that
was available at the date on which those annual financial statements were prepared.
In preparing the accompanying condensed consolidated interim financial statements for the six-month period
ended 30 June 2019, the criteria applied for a company to be considered a subsidiary, joint venture or
associate, and the consolidation and measurement methods applied to each type of company, are consistent
with the aforementioned criteria applied at 31 December 2018.
During the six-month period ended on 30 June 2019, the Group has sold its 26.42% interest in Autopista de
Guadalmedina, S.A.
Particularly noteworthy among purchases during the six-month period ended on 30 June 2019 is the
acquisition of additional interests in our associate Nueva Pescanova, S.L., whereupon the Group’s interest has
reached 33.26% at 30 June 2019.
Disclosed in Note 2 to the consolidated annual financial statements of the Group are the changes in the
composition of the Group occurred during 2018.
7

The following business combination was completed during the six-month period ended 30 June 2019:
In 2018 ABANCA submitted the successful bid in the formal sale process of Deutsche Bank’s Private &
Commercial Business (‘PCB’) Portugal retail banking unit. With this transaction ABANCA increases its
international business and gains presence in the personal and private banking segment in which Deutsche
Bank PCB Portugal specializes.
On 9 June 2019, upon completion of the conditions precedent and upon reception of the mandatory
authorizations from supervisors, ABANCA Group formally executed the purchase of Deutsche Bank’s Private
& Commercial Business (‘PCB’) Portugal retail banking unit. With this transaction, ABANCA Group has
integrated a business unit having 69,133 customers; a lending portfolio amounting to €2,584 million; €912
million in customer deposits, and €2,988 million in off-balance sheet customers funds.
At the acquisition date of the business combination, the Group has calculated the fair value of the acquired
business and has recognized negative goodwill amounting to €51,191 thousand for the difference between
the acquisition price and the fair value of the acquired business; this negative goodwill has been recognized
in the statement of profit or loss for the six-month period ended 30 June 2019.
Presented in these financial statements is the measurement and accounting for of this business combination,
based on the fair values of assets and liabilities as estimated by Management, albeit the Group is currently
performing the allocation of transaction costs to specific assets, liabilities and contingent liabilities (“Purchase
Price Allocation” or PPA), a process that is expected to be completed by 31 December 2019.
Additionally, on 22 November 2018 ABANCA was also awarded in the formal sale process of Banco Caixa
Geral, S.A. organized by the Portuguese Government. Banco Caixa Geral, S.A. is the Spanish bank through
which Caixa Geral de Depósitos Group operates in Spain. With the integration of Banco Caixa Geral, ABANCA
will increase its commercial network, extend its presence to new provinces and strengthen its position in other
provinces where the Bank already operates. At 30 June 2019 this transaction is still pending completion,
completion thereof is expected prior to 31 December 2019.
During the six-month period ended 30 June 2018 there were no business combinations.
8

5. Remuneration of the Board of Directors and Senior Management
Aggregate details of the total amount of remuneration accrued by the directors and senior management in
the nine-month periods ended 30 June 2019 and 2018 are as follows:
a) Directors
Thousands of euros
30.06.2019 30.06.2018
Remuneration item
Fixed remuneration 1,203 1,137

Variable remuneration (*) 650 650
Per diems 510 411
Directors’ fees - -
Transactions involving shares and/or other financial
instruments - -
Total 2,363 2,198
(*) Upon approval of the relevant resolutions by the General Meeting of Shareholders and by the
Board of Directors, a “Long-Term Incentive 2017-2023” (LTI) linked to the fulfilment of the 2018-
2020 Strategic Plan has been established as a further, exceptional and additional to the above
mentioned, component of variable remuneration. Following the General Meeting held on 25 June
2018, a maximum amount of €1,170 thousand (maximum amount that may eventually be reduced
or entirely cancelled if the Bank does not meet certain targets of the 2018-2020 Strategic Plan) has
been established in favor of ABANCA’s CEO; upon fulfilment of the Plan’s vesting conditions, this
amount will be entirely settled in Bank shares in 2022.
Thousands of euros
30.06.2019 30.06.2018
Other fringe benefits
Advances - -
Loans granted 1,060 1,041
Pension funds and schemes: contributions 33 33
Pension funds and schemes: obligations undertaken 204 98
Life insurance premiums - -
Guarantees extended on behalf of the directors - -
Total 1,297 1,172
b) Senior Management.
Thousands of euros
30.06.2019 30.06.2018
Total remuneration received by Senior Management (*) 2,537 2,443
(*) At 30 June 2019, remuneration received by members of Senior Management of the Bank has
amounted to €2,537 thousand. Following the General Meeting held on 25 June 2018, an additional
maximum amount of €3,067 thousand (maximum amount that may eventually be reduced or
entirely cancelled if the Bank does not meet certain targets of the 2018-2020 Strategic Plan) has
been established for the “Long-Term Incentive 2017-2023” (LTI) linked to the fulfilment of the 2018-
2020 Strategic Plan; upon fulfilment of the Plan’s vesting conditions, this amount will be entirely
settled in Bank shares in 2022.
9

For the purposes of the preceding paragraphs, 13 individuals, excluding the CEO, were considered to be key
senior management personnel during the six-month period ended 30 June 2019. During the same reporting
period in 2018, 13 individuals were considered to be key senior management personnel.
6. Segment reporting
6.1. Segmentation criteria

The following business lines have been defined on the basis of the organizational structure of the Group, with
the business structure divided into the following areas:
1. Retail banking: This encompasses the financial activity carried out with private individuals, companies and
public entities, whether through the network of branches or through alternative distribution channels
(Internet, Electronic Banking, Mobile Banking, etc.).
2. Wholesale banking: Wholesale banking basically includes treasury transactions and activity in financial
markets (issues, fixed income and equities portfolio).
3. Non-financial subsidiaries: This segment includes the contribution of companies of the economic group
considered ineligible for consolidation for the purposes of solvency regulations, as they are not classified as
financial institutions and their activity is not an extension of the financial business of the Parent.
Segment reporting is initially structured around the different business lines of the Bank (primary segment) and
then in accordance with the geographical distribution (secondary segment).
6.2. Basis and methodology used in compiling segment reporting

The following segment reporting is based on the monthly reports prepared on the basis of the information
provided by a management control software application.
The structure of this information is designed as if each business line were a separate business, and the net
interest and revenues of business lines are calculated by applying arm's length transfer prices to the relevant
assets and liabilities. Equity portfolio returns are distributed among business lines based on their respective
percentage interest therein.
Administrative expenses include direct and indirect costs and are distributed among business lines and support
service units on the basis of the internal use made of the services.
The assets distributed between the different business segments include trading and securities portfolios and
receivables from financial institutions and customers, net of their respective provisions for losses. The liabilities
distributed among the different business segments include marketable debt securities and payables to
financial institutions and customers.
10

6.3. Segment reporting

The following tables show segment reporting by business segment:
Six-month period ended 30 June 2019-
Thousands of euros
Non-
Retail Wholesale
financial
banking banking Total
subsidiaries
Net interest income 291,479 (35,740) 16,361 272,100

Dividend income (Note 21) - 7,505 - 7,505
Share of profit or loss of equity-
accounted investees (Note 22) - - (3,311) (3,311)
Fee and commission income and expense
(Notes 23 and 24) 93,182 - - 93,182
Gains or losses on financial assets and
liabilities (Note 25) (*) - 107,872 - 107,872
Exchange differences, net - 2,430 - 2,430
Other operating income and expenses
(Notes 26 and 29) (**) (14,818) 2,828 22,831 10,841
Gross income 369,843 84,895 35,881 490,619
Personnel expenses (Note 27) (150,519) (7,138) (6,455) (164,112)
Other administrative expenses,
depreciation and amortisation (Notes 28
and 30) (101,236) (13,271) (23,999) (138,506)
Provisions or reversals of provisions, and
impairment or reversal of impairment on,
and gains and losses arising from changes
in cash flows from financial assets not
measured at fair value through profit or
loss, and modification net gains or losses (4,923) 3,504 (14) (1,433)
Net Operating Income 113,165 67,990 5,413 186,568
Impairment or reversal of impairment on
investments in joint ventures or associates
and on non-financial assets (2,039) 1,388 14 (637)
Gains or losses on derecognition of non-
financial assets, net (Note 31) (209) 18,263 (1,055) 16,999
Negative goodwill taken to profit or loss 51,191 - - 51,191
Gains/(losses) on non-current assets and
disposal groups classified as held for sale
not qualifying as discontinued operations
(Note 32) 13,331 (710) (21) 12,600
Profit before tax from continuing
operations 175,439 86,931 4,351 266,721
(*) Includes gains or losses on derecognition of financial assets and liabilities not measured at fair value
through profit or loss, net; gains or losses on financial assets and liabilities held for trading, net; gains or
losses on non-trading financial assets mandatorily at fair value through profit or loss, net; gains or losses
on financial assets designated at fair value through profit or loss, net; and, gains or losses on hedge
accounting, net.
(**) “Other operating income and expenses” includes other operating income; other operating expenses;
income from assets covered by insurance or reinsurance contracts; and expenses from liabilities covered
by insurance or reinsurance contracts.
11

Thousands of euros
Non-
Retail Wholesale
financial
banking banking Total
subsidiaries
Net interest income 263,001 (21,683) 16,449 257,767

Dividend income (Note 21) - 8,639 - 8,639
Share of profit or loss of equity-
accounted investees (Note 22) - - 4,981 4,981
Fee and commission income and expense
(Notes 23 and 24) 88,179 - - 88,179
Gains or losses on financial assets and
liabilities (Note 25) (*) 1 107,950 104 108,055
Exchange differences, net - 1,809 - 1,809
Other operating income and expenses
(Notes 26 and 29) (**) (10,005) 3,271 20,555 13,821
Gross income 341,176 99,986 42,089 483,251
Personnel expenses (Note 27) (140,929) (6,938) (6,009) (153,876)
Other administrative expenses,
depreciation and amortisation (Notes 28
and 30) (91,668) (13,190) (18,725) (123,583)
Provisions or reversals of provisions, and
impairment or reversal of impairment on,
and gains and losses arising from changes
in cash flows from financial assets not
measured at fair value through profit or
loss, and modification net gains or losses 4,234 (1,726) (230) 2,278
Net Operating Income 112,813 78,132 17,125 208,070
Impairment or reversal of impairment on
investments in joint ventures or associates
and on non-financial assets (126) (425) 771 220
Gains or losses on derecognition of non-
financial assets, net (Note 31) 15,873 81 (281) 15,673
Negative goodwill taken to profit or loss - - - -
Gains/(losses) on non-current assets and
disposal groups classified as held for sale
not qualifying as discontinued operations
(Note 32) 23,036 294 70 23,400
Profit before tax from continuing
operations 151,596 78,082 17,685 247,363
(*) Includes gains or losses on derecognition of financial assets and liabilities not measured at fair value
through profit or loss, net; gains or losses on financial assets and liabilities held for trading, net; gains or
losses on non-trading financial assets mandatorily at fair value through profit or loss, net; gains or losses
on financial assets designated at fair value through profit or loss, net; and, gains or losses on hedge
accounting, net.
(**) “Other operating income and expenses” includes other operating income; other operating expenses;
income from assets covered by insurance or reinsurance contracts; and expenses from liabilities covered
by insurance or reinsurance contracts.
12

6.4 Segment reporting by geographical area
The table below shows interest and similar income by geographical area, on both separate and consolidated
basis, for the six-month periods ended 30 June 2019 and 2018:
Distribution of interest income by

geographical area
Separate Consolidated
Geographical Area 30.06.2019 30.06.2019
Domestic market 293,719 301,765

Foreign market
a) European Union 33,994 35,436
b) Other countries 24,383 25,124
Total 352,096 362,325
Distribution of interest income by

geographical area
Separate Consolidated
Geographical Area 30.06.2018 30.06.2018
Domestic market 293,481 307,460

Foreign market
a) European Union 22,026 23,236
b) Other countries 16,925 17,265
Total 332,432 347,961
13

7. Fair value
The measurement criteria and methods used to estimate the fair value of financial instruments at 30 June
2019 do not differ from those disclosed under Note 2 to the consolidated annual financial statements of the
Group for 2018.
At 30 June 2019 and 31 December 2018, the breakdown of the fair value of the financial assets and liabilities
of the Group, together with their respective carrying amounts at those dates, is as follows:
At 30 June 2019-
Thousands of euros
Carrying amount Fair value
Assets:
Cash, cash balances with central banks, other demand
deposits and loans and advances to credit institutions 1,553,769 1,553,769
(Notes 8.2 and 8.6.1)
Loans and advances to customers 34,583,515 37,657,015
Financial assets at amortized cost (Note 8.6.1) 34,582,816 37,656,250
Non-trading financial assets mandatorily at fair value
through profit or loss (Note 8.4) 699 765
Fixed income portfolio - 10,038,253 10,053,227
through profit or loss (Note 8.4) 29,674 29,674
Financial assets at fair value through other
comprehensive income (Note 8.5) 3,761,583 3,761,583
Financial assets held for trading (Note 8.3.1) - -
Equity portfolio - 304,651 304,651
comprehensive income (Note 8.5) 25,569 25,569
Investments in joint ventures or associates (Note 10) 208,333 208,333
Derivatives held for trading (Note 8.3.1) 128,615 128,615
Derivatives - hedge accounting (Note 8.7) 45,199 45,199
Liabilities:
Deposits from central banks and credit institutions (Notes
14.1.1 and 14.1.2) 6,512,941 6,590,506
Deposits from customers (Note 14.1.3) 37,182,307 37,300,935
Debt securities issued (Note 14.1.4) 1,169,112 1,203,072
Other financial liabilities (Note 14.1) 272,363 272,363
14

At 31 December 2018-
Thousands of euros
Carrying amount Fair value
Assets:
Cash, cash balances with central banks, other demand
deposits and loans and advances to credit institutions
(Notes 8.2 and 8.6.1) 2,702,092 2,702,092
Loans and advances to customers - 30,161,563 32,690,509
Fixed income portfolio - 11,637,772 11,637,772
comprehensive income (Note 8.5) 7,736,289 7,736,289
Financial assets held for trading (Note 8.3.1) - -
Equity portfolio - 381,990 381,990
comprehensive income (Note 8.5) 43,033 43,033
Investments in joint ventures or associates (Note 10) 222,543 222,543
Non-current assets and disposal groups classified as held
for sale (Note 9) 409,603 409,603
Liabilities:
Deposits from central banks and credit institutions (Notes
14.1.1 and 14.1.2) 7,730,016 7,757,180
Deposits from customers (Note 14.1.3) 35,404,417 35,540,885
Debt securities issued (Note 14.1.4) 754,827 759,304
Other financial liabilities (Note 14.1) 244,706 244,706
During the period from 1 January to 30 June 2019, no significant transfers of financial instruments were carried
out among the various levels in the hierarchy of measurement methods applied, and any variations reflect
changes in the fair value of financial instruments.
15

A summary of the various measurement techniques used by the Group to measure the financial instruments
recognised at fair value at 30 June 2019 and 31 December 2018 is as follows:
Percentage
Market value based on 30.06.2019 31.12.2018
Assets Liabilities Assets Liabilities
Quoted price in active markets 91.87% - 96.35% -
Internal measurement models based on
observable market data 4.02% 99.80% 1.53% 98.03%
Internal measurement models not based on
observable market data 4.11% 0.20% 2.12% 1.97%
A breakdown of financial instruments at 30 June 2019 and 31 December 2018 by measurement method is as
follows:
Thousands of euros
30.06.2019
Internal Internal
Quoted price models models not
in active based on based on Total
markets observable observable
market data market data
Financial assets
held for trading
(assets) - 126,459 2,156 128,615
Non-trading
financial assets
mandatorily at fair
value through
profit or loss
(Assets)
135,923 - 173,532 309,455
Financial assets
designated at fair
value through
profit or loss - - - -
Financial assets at
fair value through
other
comprehensive
income (Assets) 3,787,152 - - 3,787,152
Derivatives - hedge
accounting (Assets) - 45,199 - 45,199
Financial liabilities
held for trading
(Liabilities) - 122,895 797 123,692
Derivatives - hedge
accounting
(Liabilities) - 265,629 - 265,629
16

Thousands of euros
31.12.2018
Internal Internal
Quoted price models models not
in active based on based on Total
markets observable observable
market data market data
Financial assets
held for trading
(assets) - 95,619 3,597 99,216
Non-trading
financial assets
mandatorily at fair
value through
profit or loss
(Assets)
200,226 - 172,368 372,594
Financial assets
designated at fair
value through
profit or loss - - - -
Financial assets at
fair value through
other
comprehensive
income (Assets) 7,779,322 - - 7,779,322
Derivatives - hedge
accounting (Assets) - 31,087 - 31,087
Financial liabilities
held for trading
(Liabilities) - 68,621 4,095 72,716
Derivatives - hedge
accounting
(liabilities) - 135,298 - 135,298
17

8. Financial assets
8.1. Breakdown of financial assets by nature and category
At 30 June 2019 and at 31 December 2018, the breakdown of the carrying amount of the financial assets
owned by the Bank and the Group, classified by nature and by the category, as defined in the applicable
legislation, is as follows:
Thousands of euros (*)

30.06.2019
Financial
assets at fair
Non-trading value
financial assets through Financial
Financial mandatorily at fair other assets at
assets held for value through comprehensi amortized
trading profit or loss ve income cost
Figures from the Bank’s separate
ledgers:
Derivatives 128,615 - - -
Equity instruments - 49,495 880 -
Debt securities - 28,366 2,759,716 6,246,996
Loans and advances
Central banks - - - -
Credit institutions - - - 830,873
Customers - 699 - 35,472,359
Total separate accounting 128,615 78,560 2,760,596 42,550,228
Figures from the Group’s

consolidated ledgers:
Equity instruments - 279,082 25,569 -
Debt securities - 29,674 3,761,583 6,246,996
Loans and advances
Credit institutions - - - 763,897
Customers - 699 - 34,582,816
Total consolidated accounting 128,615 309,455 3,787,152 41,593,709
(*) Excluding balances with central banks and other demand deposits, cash balances and hedging derivatives.
18


31.12.2018
Financial
assets at fair
Non-trading value
financial assets through Financial
Financial mandatorily at fair other assets at
assets held for value through comprehensi amortized
trading profit or loss ve income cost
Figures from the Bank’s separate
ledgers:
Debt securities - 28,925 6,776,900 3,868,852
Loans and advances
Central banks - - -
Credit institutions - - 1,403,197
Customers - 699 30,981,799
Total separate accounting 99,216 146,268 6,779,965 36,253,848

Debt securities - 32,631 7,736,289 3,868,852
Loans and advances
Credit institutions - - - 1,334,564
Customers - 1,006 - 30,160,557
Total consolidated accounting 99,216 372,594 7,779,322 35,363,973
(*) Excluding balances with central banks and other demand deposits, cash balances and hedging derivatives.
8.2. Cash, cash balances with central banks and other demand deposits
The breakdown of this item in the consolidated balance sheets at 30 June 2019 and at 31 December 2018 is
as follows:
Thousands of euros
30.06.2019 31.12.2018
Cash 165,368 149,489

Deposits in other central banks 407,738 953,963
Other demand deposits 216,766 264,076
789,872 1,367,528
19

8.3. Financial instruments held for trading
8.3.1. Financial assets held for trading

At 30 June 2019 and 31 December 2018, the breakdown of financial assets held for trading is as follows:
Thousands of euros
30.06.2019 31.12.2018
Derivatives 128,615 99,216

Equity instruments - -
Debt securities - -
Loans and advances - -
128,615 99,216
At 30 June 2019 and 31 December 2018, the breakdown of financial assets in this category, presented by
geographical location of risk, counterparty and type of instrument, is as follows:
Thousands of euros
30.06.2019 31.12.2018
Counterparty
General government 30,568 23,641
Credit institutions 7,849 9,481
Other resident sectors 65,868 54,242
Other non-resident sectors 24,330 11,852
128,615 99,216
Instrument
Debt securities - -
128,615 99,216
Geographical area
Spain 100,606 81,196
Other European Union countries 25,749 15,656
Other Non-EU European countries 60 86
Rest of the world 2,200 2,278
128,615 99,216
In the table above, the carrying amount shows the maximum credit risk exposure assumed by the Group in
connection with the financial instruments therein included.
20

8.3.2. Financial liabilities held for trading

At 30 June 2019 and 31 December 2018, the breakdown of financial liabilities held for trading is as follows:
Thousands of euros
30.06.2019 31.12.2018

Short positions - -
Deposits - -
Debt securities issued - -
Other financial liabilities - -
123,692 72,716
At 30 June 2019 and 31 December 2018, the breakdown of financial liabilities in this category, presented by
Thousands of euros
30.06.2019 31.12.2018
Counterparty
General government 565 562
Credit institutions 80,784 49,362
123,692 72,716
Instrument
123,692 72,716
Geographical area
Spain 55,739 53,743
Other Non-EU European countries 45 42
Rest of the world 394 136
123,692 72,716
21

8.4. Non-trading financial assets mandatorily at fair value through profit or loss
8.4.1. Composition of the stock and maximum credit risk

At 30 June 2019 and 31 December 2018, the breakdown of non-trading financial assets mandatorily at fair
value through profit or loss is as follows:
Thousands of euros
30.06.2019 31.12.2018
Debt securities 29,674 32,631

Equity instruments 279,082 338,957
Loans and advances 699 1,006
309,455 372,594
geographical location of risk and counterparty, is as follows:
Thousands of euros
30.06.2019 31.12.2018
Geographical area-
Spain 290,189 304,567
Other 93 12,310
(Impairment losses) - -
Other valuation adjustments - -
309,455 372,594
Instrument-
Loans and advances 699 1,006
309,455 372,594
Counterparty-
Resident credit institutions 5,301 8,609
Spanish general government 682 678
Non-resident general governments 1 -
(Impairment losses) - -
Other valuation adjustments - -
309,455 372,594
22

8.5. Financial assets at fair value through other comprehensive income
8.5.1. Breakdown
Thousands of euros
30.06.2019 31.12.2018

Debt securities 3,761,583 7,736,289
Loans and advances - -
3,787,152 7,779,322
geographical location of risk and counterparty, is as follows:
Thousands of euros
30.06.2019 31.12.2018
Geographical area-
Spain 1,946,078 4,290,251
Other European Union countries 1,572,643 3,270,346
Other 167,741 160,121
Other valuation adjustments 100,690 58,604
3,787,152 7,779,322
Instrument-
3,787,152 7,779,322
Counterparty-
Resident credit institutions 708,583 732,940
Spanish general government 1,353,959 3,626,795
Non-resident general governments 779,362 1,918,590
Other non-resident sectors 677,652 1,238,512
Other valuation adjustments 100,690 58,604
3,787,152 7,779,322
In the table above, the carrying amount shows the maximum credit risk exposure assumed by the Group in
connection with the financial instruments therein included.
8.5.2 Risk hedging
At 30 June 2019, the Group has recognized in equity €1,898 thousand as a collective hedge for the assets in
this portfolio (€2,211 thousand at 31 December 2018).
8.5.3 Other information

As previously stated under Note 4, in 2018 ABANCA approved the purchase of Deutsche Bank’s Private and
Commercial Business (‘PCB’) Portugal retail banking unit and of Banco Caixa Geral, S.A., the Spanish bank
through which Caixa Geral de Depósitos Group operates in Spain. These transactions will contribute assets in
excess of €7,500 million, of which €2,584 million relating to Deutsche Bank’s Private and Commercial Business
(‘PCB’) Portugal have already been recognized at 30 June 2019 and have contributed to reinforce the Group’s
presence in Spain and Portugal (see Note 4).
23

As a direct result of the aforementioned acquisitions and for the purposes of strengthening the Group’s
solvency position and of increasing control over own funds’ volatility, on 27 March 2019 the Group decided
to discontinue its investment in portfolios at fair value through other comprehensive income, specifically for
the following debt securities sub-portfolios:
- Debt securities with agreed maturity over 20 years (currently, debt securities maturing after 2039).
- Debt securities issued by the Republic of Italy
As from that date, all Group investments in these securities may not be managed within a business model
whose main objective is to hold financial assets for the purposes of both collecting contractual cash flows
and selling financial assets.
The Group considers that, at the date of the business model change, immediate sale is not the best option for
recovering the investments held in the affected portfolios. Accordingly, any assets of this kind currently held
in the portfolio will be henceforth managed within a business model whose objective is to hold financial assets
in order to collect contractual cash flows.
In view of the above, the Group considers that a business model change has occurred that affects any
securities not meeting the criteria required to be held within portfolios at fair value through other
comprehensive income, consequently these securities should be transferred to portfolios at amortized cost.
Under the existing accounting regulations, the reclassification took place, for accounting purposes, on 1 April
2019, which is the first day of the reporting period following the last reporting period in the first quarter of
2019.
In accordance with IFRS 9 provisions, on 1 April 2019 the reclassified portfolio, whose carrying amount was
€1,628,395 thousand, was recognized as if it had always been measured at amortized cost. To this end, any
cumulative gains or losses previously recognized in other comprehensive income and, where applicable, any
amounts previously recognized as deferred tax assets or liabilities, have been removed from equity and
adjusted against the fair value of the reclassified portfolio. Consequently, no impact has been recognized in
profit or loss.
At 30 June 2019, the breakdown of the financial assets included within these portfolios is as follows:
Thousands of euros
Carrying Fair value
Nominal value
amount
Assets maturing beyond 2039 567,000 829,305 904,501

Assets issued by the Republic of Italy 796,400 863,071 831,059
1,363,400 1,692,376 1,735,560
24

8.6. Financial assets at amortized cost
8.6.1. Composition of the stock and maximum credit risk

Thousands of euros
30.06.2019 31.12.2018

Of which: Impairment losses - -
Loans and advances
Central banks - -
Of which: Impairment losses - -
Credit institutions 763,897 1,334,564
Of which: Impairment losses (1) -
Customers 34,582,816 30,160,557
Of which: Impairment losses (648,786) (613,339)
41,593,709 35,363,973
25

Thousands of euros
30.06.2019 31.12.2018
Instrument and status:

Commercial loans 1,389,405 1,288,136
Secured loans 18,866,187 16,344,786
Demand and other loans 1,453,628 1,102,085
Other term loans 12,275,372 10,962,151
Repurchase agreements - -
Impaired assets 1,137,205 1,093,807
35,121,797 30,790,965
Borrower’s sector:
Spanish general government 3,092,292 2,773,025
Other resident sectors 25,951,881 24,577,621
Non-resident 6,077,624 3,440,319
35,121,797 30,790,965
Geographical area:
Spain 29,044,173 27,350,646
European Union (excluding Spain) 4,829,727 2,295,547
United States of America and Puerto Rico 409,908 350,254
Other OECD countries 545,207 547,635
Latin America 136,291 109,093
35,121,797 30,790,965
Type of interest rate:
Fixed interest rate 7,118,920 6,371,307
Floating interest rate 28,002,877 24,419,658
35,121,797 30,790,965
Currency:
Euros 33,314,113 29,353,591
Foreign currency 1,807,684 1,437,374
35,121,797 30,790,965
Add loans and advances to credit institutions 763,897 1,335,033

Add debt securities 6,246,996 3,868,852
Valuation adjustments:
Impairment losses (648,787) (613,339)
Accrued interest 56,769 35,582
Commissions (70,170) (57,761)
Discount on acquisition (18,755) (14,948)
Micro-hedges 105,953 13,189
Transaction costs 36,009 6,400
41,593,709 35,363,973
In the table above, the carrying amount shows the maximum level of exposure to credit risk assumed by the
Group in connection with the financial instruments therein included.
At 30 June 2019, “Debt securities” includes €3,259,900 thousand in bonds issued by Sareb (€3,275,300
thousand at 31 December 2018).
26

At 30 June 2019 and 31 December 2018, the breakdown of financial assets at amortized cost, presented by
accounting classification and impairment, is as follows:
Thousands of euros
Gross amount
30.06.2019 31.12.2018
Performing exposures 32,535,671 28,547,221

Exposures under special monitoring 1,448,921 1,149,937
Non-performing exposures 1,137,205 1,093,807
Total gross amount 35,121,797 30,790,965
Thousands of euros
Impairment losses 30.06.2019 31.12.2018
Performing exposures 78,344 72,292

Exposures under special monitoring 94,479 87,499
Non-performing exposures 475,963 453,548
Total impairment losses 648,786 613,339
By measurement method:
Individually measured 287,335 280,862

Collectively measured 253,357 230,085
Impairment losses incurred but not reported losses 108,094 102,392
Thousands of euros
Carrying amount
30.06.2019 31.12.2018
Performing exposures 32,457,327 28,474,929

Exposures under special monitoring 1,354,442 1,062,438
Total carrying amount 34,473,011 30,177,626
8.6.2. Impaired assets
At 30 June 2019 and 31 December 2018, the breakdown of financial assets classified as loans and receivables
and considered impaired due to credit risk, is as follows:
Thousands of euros
Between Between 9
Up to 6 6 and 9 and 12 More than
months months months 12 Months Total
Balance at 30 June 2019 528,704 47,871 37,373 523,257 1,137,205
Balance at 31 December 2018 551,913 41,035 53,595 447,264 1,093,807
At 30 June 2019 and 31 December 2018, the amount of impaired assets entirely relates to credit facilities and
loans granted by the Group.
27

At 30 June 2019, “Impaired assets” presented in the table above include secured exposures amounting to
€829,443 thousand (€809,689 thousand at 31 December 2018). Additionally, at 30 June 2019, “Impaired assets
up to 6 months” includes €401,851 thousand relating to non-performing exposures for subjective reasons
(€457,559 thousand at 31 December 2018).
8.6.3. Credit risk hedging
The breakdown of changes, during the six-month period ended 30 June 2019 and during 2018, in impairment
losses recognized for credit risk hedges relating to debt instruments classified as loans and advances to
customers, and the cumulative amount thereof at the beginning and end of those periods, is as follows:
Thousands
of Euros
Balance at 1 January 2019 613,339

Charges to consolidated profit/loss for the period 25,924
Integration of Deutsche Bank’s Private & Commercial Business
(‘PCB’) Portugal (Note 4) 49,590
Transfers to provisions for foreclosed assets (3,929)
Reversal of provisions on reclassification to write-off loans (36,137)
Balance at 30 June 2019 648,787
Thousands
of Euros
Balance at 1 January 2018 795,116

Net charges to consolidated profit/loss for the period 35,853
Impact from application of IFRS 9 31,843
Transfers to provisions for foreclosed assets (6,227)
Reversal of provisions on reclassification to write-off loans (133,100)
Use of provisions for loan cancellation/waiver (38,046)
Sale of loan portfolio (*) (72,100)
Balance at 31 December 2018 613,339
(*) The balance of this item basically relates to derecognitions resulting from
loans sold in 2018.
During the period from 31 December 2018 to 30 June 2019, recovery of written-off assets amounted to
€17,816 thousand and have been recognized under “Impairment or reversal of impairment on, and gains and
losses arising from changes in cash flows from financial assets not measured at fair value through profit or
loss, and modification net gains or losses” in the consolidated statement of profit and loss (€38,621 thousand
in 2018). Additionally, this line item of the accompanying interim consolidated statement of profit or loss at
30 June 2019 also includes €2,528 thousand in direct allowances for loans that were considered as write-offs
(€26,419 thousand in 2018).
28

The breakdown of changes, during the six-month period ended 30 June 2019 and in 2018, in the impaired
financial assets of the Group, which have not been recognized as the probability of their recovery is considered
remote, although the Group continues its efforts to collect the amounts receivable, is as follows:
Thousands
of Euros
Financial assets for which the probability of recovery

is considered remote at 1 January 2019 3,235,206
Additions
Balances for which recovery during the period is considered remote (Note
10.d) 36,137
Net allowance charged to profit or loss 2,528
Other (*) 120,109
Integration of Deutsche Bank’s Private & Commercial Business (‘PCB’) Portugal
(Note 4) 20,450
Recoveries
Cash receipt without additional refinancing (17,816)
Derecognition due to foreclosures (5,080)
Derecognition due to debt remission (10,987)
Derecognition due to sale of portfolio (**) (21,126)
is considered remote at 30 June 2019 3,359,421
Thousands
of Euros

is considered remote at 1 January 2018 3,411,280
Additions
Balances for which recovery during the period is considered remote (Note 133,100
10.d)
Net allowance charged to profit or loss 26,419
Other (*) 152,798
Recoveries
Cash receipt without additional refinancing (38,621)
Derecognition due to foreclosures (22,310)
Derecognition due to debt remission (42,009)
Derecognition due to sale of portfolio (**) (48,295)
Derecognition due to other reasons (***) (337,156)
is considered remote at 31 December 2018 3,235,206
(*) The balance recognized in this item primarily reflects past-due receivables.
(**) The balance recognized under this item primarily reflects derecognitions due to sale of one
loan portfolio completed during the first half-year of 2019 (one loan portfolio sold in 2018),
the gain on which was recognised under “Gains or losses on derecognition of non-financial
assets, net”.
(***) The balance recognized under this item basically relates to derecognitions resulting
from loans sold in 2018.
29

8.6.4. Real estate exposure
Presented below is information about the Bank’s maximum level of exposure arising from finance granted to
the real estate market.
Exposure to real estate-related credit risk
The item “Exposure to real estate-related credit risk” includes any and all financing granted under the form of
both mortgage-secured and unsecured loans, credits, debt securities and other financial assets intended for
real estate construction and property development in Spain (including land), irrespective of the borrower’s
nature.
Thousands of euros
Gross amount
30.06.2019 31.12.2018
Financing intended for real estate construction and

property development (including land) 948,824 815,080
Of which: non-performing 23,181 24,327
Total gross amount 948,824 815,080
Thousands of euros
Impairment losses
30.06.2019 31.12.2018

property development (including land) (*) 10,695 12,208
Thousands of euros
Carrying amount
30.06.2019 31.12.2018

property development (including land) (**) 938,129 802,872
Total carrying amount 938,129 802,872

Total carrying amount of financing granted to
customers 34,473,011 30,177,626
(*) This figure includes impairment losses on exposures under special monitoring.
(*) This figure includes the carrying amount of exposures under special monitoring.
30

The following table shows quantitative information on the value of the collaterals received to secure
collection. Collateral value is the maximum eligible amount of the collateral, except for collaterals securing
non-performing exposures where collateral value is equal to the fair value of the collateral.
Thousands of euros
Collaterals received
30.06.2019 31.12.2018
Collateral value 18,673,374 15,834,371

Of which: securing performing exposures 17,396,031 14,737,562
Of which: securing exposures under special
monitoring 750,099 601,897
Of which: securing non-performing exposures 527,244 494,912
Other collateral value - -
Total value of collaterals received 18,673,374 15,834,371
Thousands of euros
Financial guarantees granted
30.06.2019 31.12.2018
Loan commitments granted 5,946,434 5,542,855

Of which: amount classified as non-performing 664 747
Amount recognized in the liabilities side of the
balance sheet - -
Financial guarantees granted 535,036 516,963

Of which: amount classified as non-performing 14,193 14,599
balance sheet - -
Other commitments granted 1,113,451 1,015,910

Of which: amount classified as non-performing 100,747 106,809
balance sheet - -
31

8.6.5. Refinancing and restructuring (transactions with forbearance measures

The following tables show information on refinanced or restructured transactions:
Thousands of euros
Gross amount
30.06.2019 31.12.2018
Performing exposures (*) - -

Exposures under special monitoring (*) 686,161 690,431
Total gross amount 1,440,278 1,511,974
Thousands of euros
Impairment losses
30.06.2019 31.12.2018


Specific impairment allowances for financial assets,
estimated individually 215,115 232,372
Specific impairment allowances for financial assets,
estimated collectively 132,654 147,196
Impairment losses incurred but not reported losses 16,643 15,920
Thousands of euros
Carrying amount
30.06.2019 31.12.2018


Total carrying amount of financing granted to
customers 34,473,010 30,177,626
(*) The risk arising from refinancing and restructuring transactions classified as performing exposures and
as exposures under special monitoring is covered by the impairment allowances funded by the Group
for incurred but not reported losses.
32

The following table shows information on collateral received; collateral value is the maximum eligible amount
of the collateral, except for collaterals securing non-performing exposures where collateral value is equal to
the fair value of the collateral.
Thousands of euros
Collaterals received
30.06.2019 31.12.2018
Collateral value 714,216 752,464

Of which: securing non-performing exposures 428,530 436,429
Other collateral value - -
Total value of collaterals received 714,216 752,464
The following table shows information on the carrying amount of refinanced and restructured transactions,
distinguishing between: General government; other legal entities and individual entrepreneurs, and natural
persons:
Thousands of euros
Distribution by segments
30.06.2019 31.12.2018
Credit institutions - -
General government 189 224
Other financial companies and individual
entrepreneurs (financial business) 698 882
Non-financial companies and individual entrepreneurs
(non-financial business) 500,462 513,142
Of which: Financing of real estate construction and
property development (including land) 11,624 12,979
Rest of households 574,518 602,238

ADDITIONAL INFORMATION
Financing classified as non-current assets and disposal
groups classified as held for sale - -
8.6.6. Securitizations
During the six-month period ended 30 June 2019, the Bank has not carried out any securitization operations.
In 2018 the Bank carried out no securitization operations. Moreover, in 2018 the Bank cancelled a mortgage
securitization operation.
33

8.7 Derivatives - hedge accounting (assets)
8.7.1 Fair value hedges
At 30 June 2019 and 31 December 2018, the breakdown of fair values and notional amounts of derivatives
designated as hedging instruments in fair value hedge transactions, presented by type of product, is as follows:
Thousands of euros
30.06.2019 31.12.2018
Fair Fair
Value Notional Value Notional
Interest rate swaps

(IRS) 17,645 2,759,005 10,074 2,199,832
Forward sale contracts - - 3,127 471,655
17,645 2,759,005 13,201 2,671,487
8.7.2 Cash flow hedges
designated as hedging instruments in cash flow hedge transactions, presented by type of product, is as
follows:
Thousands of euros
30.06.2019 31.12.2018
Fair Fair
Other interest rate transactions:

Interest rate swaps
(IRS) 27,554 599,140 17,886 755,140
27,554 599,140 17,886 755,140
34

9. Non-current assets and disposal groups classified as held for sale and liabilities included in disposal groups
classified as held for sale
The breakdown, by nature of the relevant asset, of the balance of “Non-current assets and disposal groups
classified as held for sale” in the accompanying consolidated balance sheets, is as follows:
Thousands of euros
30.06.2019 31.12.2018
Tangible assets: 392,191 409,603

Investment property and Assets for own use 77,926 76,604
Foreclosures or repossessions 314,265 332,999
392,191 409,603
At 30 June 2019 and 31 December 2018, no amounts have been recognized under “Liabilities included in
disposal groups classified as held for sale” in the accompanying consolidated balance sheets.
Assets foreclosed or received in payment of debt
The following tables show information on all real estate assets from foreclosures or received in payment of
debt, irrespective of the purpose of the financing granted.
Thousands of euros
Gross amount
30.06.2019 31.12.2018
Properties foreclosed or received in payment of debt 821,923 865,432

Of which: land 243,258 238,189
Investments in real estate companies - -
Total gross amount 821,923 865,432
Thousands of euros
Impairment losses
30.06.2019 31.12.2018

Of which: land 177,868 174,446
Thousands of euros
Carrying amount
30.06.2019 31.12.2018

Of which: land 65,390 63,743
Total carrying amount 314,265 332,999
35

10. Investments in joint ventures and associates
The breakdown of “Investments in joint ventures and associates” in the accompanying condensed
consolidated interim balance sheets is as follows:
Thousands of euros
30.06.2019 31.12.2018
By type of entity
Associates 208,333 222,543
208,333 222,543
11. Tangible assets
The breakdown of the balance of “Tangible Assets” in the accompanying consolidated balance sheets is as
follows:
Thousands of euros
30.06.2019 31.12.2018
Tangible assets for own use 915,382 868,727

Cost 1,530,819 1,464,695
Accumulated depreciation (569,333) (550,169)
Impairment (46,104) (45,799)
Investment property 286,796 294,804

Cost 397,935 403,062
Accumulated depreciation (44,285) (41,749)
Impairment (66,854) (66,509)
1,202,178 1,163,531
36

12. Intangible assets
12.1. Goodwill
The breakdown and changes under this line item in the accompanying consolidated balance sheet, based on
the relevant originating cash generating unit (“CGU”), are as follows:
Thousands of euros
ABANCA Vida y
ABANCA Pensiones de
Servicios Seguros y
Financieros, Reaseguros,
E.F.C, S.A.U. S.A.U.
Balance at 1 January 2018 13,745 47,986

Additions - -
Adjustments to provisional values - -
Derecognitions - -
Transfers to other intangible
assets - -
Balance at 31 December 2018 13,745 47,986
Additions - -
Adjustments to provisional values - -
Derecognitions - -
Transfers to other intangible
assets - -
Balance at 30 June 2019 13,745 47,986
12.2. Other intangible assets
The breakdown of the balance of “Other intangible assets” in the accompanying consolidated balance
sheets is as follows:
Thousands of euros
30.06.2019 31.12.2018
Computer software 22,888 12,376

Cost 45,239 30,906
Accumulated amortization (22,351) (18,530)
Impairment - -

Cost 323,006 319,160
Accumulated amortization (39,582) (34,121)
Impairment -
306,312 297,415
37

13. Other assets
At 30 June 2019 and 31 December 2018, the breakdown of “Debt securities issued” in the consolidated balance
Thousands of euros
30.06.2019 31.12.2018
Other assets
Insurance contracts linked to pensions 136,232 136,232
Inventories 60,680 61,948
Other assets 192,032 157,818
388,944 355,998
14. Financial Liabilities
At 30 June 2019 and 31 December 2018, the breakdown of the carrying amount of the financial liabilities of
the Group, classified by nature and by the category, as defined in the applicable legislation, is as follows:

30.06.2019 31.12.2018
Financial Financial
liabilities Financial liabilities Financial
designated liabilities designated liabilities
Financial at fair value measured at Financial at fair value measured at
liabilities held through amortized liabilities held through amortized
for trading profit or loss cost for trading profit or loss cost
Figures from the Bank’s

separate ledgers:
Derivatives 123,692 - - 72,716 - -
Short positions - - - - - -
Deposits
Central banks - - 3,428,918 - - 3,435,881
Credit institutions - - 3,083,934 - - 4,294,000
Customers - - 39,444,122 - - 37,380,941
Debt securities issued - - 1,169,112 - - 754,827
Other financial liabilities - - 121,570 - - 84,252
Total separate accounting 123,692 - 47,247,656 72,716 - 45,949,901

Derivatives 123,692 - - 72,716 - -
Short positions - - - - - -
Deposits
Central banks - - 3,428,918 - - 3,435,881
Credit institutions - - 3,084,023 - - 4,294,135
Customers - - 37,182,307 - - 35,404,417
Debt securities issued - - 1,169,112 - - 754,827
Other financial liabilities - - 272,363 - - 244,706
Total consolidated
accounting 123,692 - 45,136,723 72,716 - 44,133,966
(*) Not including hedging derivatives.
38

14.1. Financial liabilities at amortized cost

At 30 June 2019 and 31 December 2018, the breakdown of financial liabilities held for trading is as follows:
Thousands of euros
30.06.2019 31.12.2018
Deposits 43,695,248 43,134,433

Central banks 3,428,918 3,435,881
Credit institutions 3,084,023 4,294,135
Customers 37,182,307 35,404,417
Debt securities issued 1,169,112 754,827
Other financial liabilities 272,363 244,706
45,136,723 44,133,966
14.1.1. Deposits from central banks
The breakdown of the balances of this line item in the consolidated balance sheets at 30 June 2019 and 31
December 2018 is as follows:
Thousands of euros
30.06.2019 31.12.2018
Bank of Spain 3,462,470 3,462,470

Valuation adjustments (33,552) (26,589)
3,428,918 3,435,881
14.1.2. Deposits from credit institutions
At 30 June 2019 and at 31 December 2018, the breakdown, by nature of transactions, of the balance of this
line item in the consolidated balance sheets is as follows:
Thousands of euros
30.06.2019 31.12.2018
Term or notice deposits:

Term accounts 1,728,204 1,677,256
Repurchase agreements 1,094,888 2,400,211
Other accounts 253,740 208,820
Valuation adjustments 7,191 7,848
3,084,023 4,294,135
39

14.1.3. Deposits from customers
At 30 June 2019 and 31 December 2018, the breakdown of the balance of this line item in the consolidated
balance sheets, presented by geographical location, nature and counterparty of the financial liabilities, is as
follows:
Thousands of euros
30.06.2019 31.12.2018
Geographical area:
Spain 33,891,070 33,135,966
European Union (excluding
Spain) 1,655,013 656,054
United States of America and
Puerto Rico 114,835 98,907
Other OECD countries 788,492 770,549
Latin America 622,944 604,078
37,122,180 35,320,574
Nature:
Demand:
Current accounts 10,887,520 9,755,647
Savings accounts 14,361,997 13,545,267
Term deposits-
Fixed-term deposits 11,369,882 11,050,171
Hybrid financial liabilities 64,726 62,941
Repurchase agreements 438,055 906,548
37,122,180 35,320,574
Currency:
Euro 35,664,090 34,137,907
Foreign currency 1,458,090 1,182,667
37,122,180 35,320,574
Transaction costs (8,147) (8,992)
Micro-hedges 37,748 40,799
37,182,307 35,404,417
40

14.1.4. Debt securities issued
At 30 June 2019 and 31 December 2018, the breakdown of “Debt securities issued” in the consolidated balance
Thousands of euros
30.06.2019 31.12.2018
Nature:
Mortgage-backed securities 800,000 1,050,000
Other non-convertible securities - -
Own securities - (329,984)
Subordinated liabilities 355,789 5,789
1,155,789 725,805
Currency:
Euros 1,155,789 725,805
1,155,789 725,805
Micro-hedges 10,618 431
Transaction costs (9,710) -
1,169,112 754,827
14.1.5. Changes
At 30 June 2019 and 31 December 2018, the breakdown of changes in the nominal value of the balance of
this item is as follows:
Thousands
of Euros
Opening balance 2017 1,060,395

Redemptions (3,895)
Closing balance 2018 1,056,500
Issues 1,100,000
Redemptions (1,000,000)
Balance at 30 June 2019 1,156,500
During the period from 1 January 2019 to 30 June 2019, bonds totaling €1,000,000 thousand have matured
(€3,895 thousand in 2018).
Dated 11 January 2019, the Group laid down the economic conditions for the issue of €350,000 thousand in
subordinated notes. These notes were issued at par value and will bear interests, payable annually in arrears,
at a 6.125% annual fixed rate until 18 January 2024; thereafter the interest rate will be reviewed by applying a
5.927% spread on 5-year Mid-Swap Rate. These notes will mature on 18 January 2029, subject to ABANCA’s
option to redeem them early under certain circumstances.
Dated 28 May 2019, the Group laid down the economic conditions for the issue of €750,000 thousand in
covered bonds. These bonds were issued at 99.34% of their nominal value and will bear interests, payable
annually in arrears, at a 0.75% annual fixed rate until 28 January 2029. These bonds will mature on 28 May
2029, subject to ABANCA’s option to redeem them early under certain circumstances.
Neither ABANCA Corporación Bancaria, S.A. nor any Group company have secured any issue, repurchase or
redemption carried out by associates, equity-accounted joint ventures or any other non-Group company,
during the six-month period ended 30 June 2019 and in 2018.
41

14.2. Derivatives - hedge accounting (liabilities)
14.2.1 Fair value hedges

designated as hedging instruments in fair value hedge transactions, presented by type of product, is as follows:
Thousands of euros
30.06.2019 31.12.2018
Fair Fair
Interest rate swaps

(IRS) 244,753 3,604,153 105,824 5,620,668
Forward sale contracts 20,876 413,070 - -
265,629 4,017,223 105,824 5,620,668
14.2.2 Cash flow hedges

designated as hedging instruments in cash flow hedge transactions, presented by type of product, is as
follows:
Thousands of euros
30.06.2019 31.12.2018
Fair Fair
Other interest rate transactions:

Interest rate swaps
(IRS) - - 29,474 1,300,000
- - 29,474 1,300,000
15. Provisions
Changes in “Provisions” during the six-month period ended 30 June 2019 and in 2018 are as follows:
Thousands of euros
Outstanding Pensions and
taxes-related other post- Commitments
legal employment and
proceedings defined benefit guarantees Other
and litigation obligations given provisions
Balance at 1 January 2019 17,195 158,437 83,644 85,249
(Net) allowances charged to profit or loss - 8,561 (4,764) (4,225)

Other charges to profit or loss 28 - - 550
Provisions used - (12,691) - (11,002)
Transfers - - - -
Balance at 30 June 2019 17,223 154,307 78,880 70,572
42

Financial Year 2018-
Thousands of euros
Pensions and
Outstanding other post-
taxes-related employment
legal defined Commitments
proceedings benefit and guarantees Other
and litigation obligations given provisions
Balance at 1 January 2018 2,276 176,781 75,674 154,946
(Net) allowances charged to profit or loss 14,919 - (3,512) 8,312

Other charges to profit or loss - 174 - -
Provisions used and other - (13,244) (9,666) (39,522)
Transfers - - - -
Impact from application of IFRS 9 - - 21,148 -
Other changes - (5,274) - (38,487)
Balance at 31 December 2018 17,195 158,437 83,644 85,249
Outstanding taxes-related legal proceedings and litigation
This line item includes provisions recognised for possible litigation contingencies whose risk has been
classified as likely.
Pensions and other post-employment defined benefit obligations
The notes to the consolidated annual financial statements of the Group at 31 December 2018 include the
disclosure of the main characteristics of the Group’s pension commitments.
Commitments and guarantees given
This item includes the amount of the provisions recognized for contingent risks, defined as those transactions
in which the Group guarantees third-parties’ obligations arising from financial guarantees given or other types
of contracts; and for contingent commitments, defined as irrevocable commitments that may give rise to the
recognition of financial assets.
Other provisions
Other provisions include the allowances recognized by the Group for liabilities arising from past events that
are likely to give rise to future outflows in connection with the Group’s ordinary operations.
At 30 June 2019, “Other provisions” in the table above basically includes provisions recognized by the Group
for other liabilities of a specific nature, either certain or contingent. These provisions consist of €5 million for
the contingency arising from the judgment on claims relating to mortgage floor clauses (€12 million at 31
December 2018); €3 million for claims concerning the arrangement of interest rate hedges tied to mortgage
loans granted to families and self-employed persons (€3 million at 31 December 2018); approximately €6
million for possible contingencies stemming from the management of hybrid equity instruments and
subordinated debt (€5 million at 31 December 2018); and €57 million to cover commitments with third parties
in connection with the activity of the Group (€65 million at 31 December 2018).
43

The above mentioned €5 million provision for mortgage floor clauses (€12 million at 31 December 2018)
includes approximately €1 million covered by the existing guarantee set out in the Bank sale-purchase
agreement and recognized under “Loans and receivables” in the asset side of balance sheet (€2 million at 31
December 2018).
The amount relating to the existing guarantee set out in the sale-purchase agreement related to the floor
clauses is recognized under “Financial assets at amortized cost” in the asset side of the consolidated balance
sheet.
16. Taxation
At 30 June 2019 the Group has recognized deferred tax assets amounting to €3,362,089 thousand
(€3,358,402 thousand at the 2018 year-end). These deferred tax assets mainly relate to balances that can be
monetized in accordance with the provisions of Royal Decree-Law 14/2013 and Royal Decree 634/2015,
which develops the procedure for offset and collection of receivables from the taxation authorities. Details of
these assets, and the criteria applied in their capitalization, are disclosed in Note 28 to the consolidated
financial statements of the Group for 2018. In compliance with IAS 34, corporate income tax expense/income
is recognized in interim periods based on the best estimate of the weighted average tax rate that the Group
expects for the full financial year.
17. Equity
During the six-month period ended 30 June 2019, no quantitative or qualitative variations have occurred in
the equity of the Group other than those reflected in the accompanying interim consolidated statements of
comprehensive income and of total changes in equity.
On 29 July 2019, the Board of Directors of the Bank approved the distribution to Shareholders of an interim
dividend for 2019 amounting to €37,560 thousand that will be paid on 2 August 2019.
Set out below is the mandatory provisional accounting statement issued pursuant to the provisions of Article
277 of the Companies Law to reflect the existence of sufficient liquidity at the date of approval of the interim
dividend:
Supporting accounting statement Thousands

of euros
Profit or loss obtained between 01/01/2019 and 06/30/2019 211,115

Interim dividends for 2019 already paid 62,484
Interim dividend proposed on 29 July 2019 37,560
In accordance with the minutes of the Board of Directors' meeting held on 29 April 2019, an interim dividend
for 2019 amounting to €62,484 thousand was paid to shareholders on 3 May 2019.

of euros

Interim dividends for 2019 already paid -
Interim dividend proposed on 29 April 2019 62,484
44

In accordance with the minutes of the Board of Directors' meeting held on 4 February 2019, an interim
dividend for 2018 amounting to €12,859 thousand was paid to shareholders on 5 February 2019.

of euros

Interim dividend proposed on 4 February 2019 12,859
On 29 October 2018, the Board of Directors of the Bank approved the distribution to Shareholders of an
interim dividend amounting to €60,505 thousand that was paid on 30 October 2018.
Supporting accounting statement Thousands of

euros

Interim dividend paid 29 October 2018 60,505
On 27 July 2018, the Board of Directors of the Bank approved the distribution to Shareholders of an interim
dividend amounting to €36,702 thousand that was paid on 30 July 2018.

euros

Interim dividend paid on 27 July 2018 36,702
On 27 April 2018, the Board of Directors of the Bank approved the distribution to Shareholders of an interim
dividend amounting to €62,100 thousand that was paid on 30 April 2018.

euros

Interim dividends for 2018 already paid -
Interim dividend proposed on 27 April 2018 62,100
Equity instruments issued other than capital
Dated 24 September 2018, ABANCA Corporación Bancaria, S.A. laid down the economic conditions for an
issue of €250,000 thousand in perpetual bonds, the principal amount of which may eventually be reduced, as
a bail-in tool. Perpetual bonds were issued at par value and will bear a fixed annual interest payable quarterly
in arrears and subject to review throughout the bond issue life. Interest will be 7.5% p.a. until 2 January 2023;
thereafter the interest rate will be reviewed every fifth year by applying a 7.326% spread on 5-year Mid-Swap
Rate. In any case, payment of interest is subject to certain conditions and, additionally, is at the issuer’s
discretion.
45

These bonds are perpetual, subject to the Entity’s option to redeem them under certain circumstances.
Additionally, the principal amount of each perpetual bond may be temporarily reduced down to €0.01 in the
event that ABANCA, ABANCA Group or ABANCA Holding Group (a group whose parent company is ABANCA
Holding Financiero, S.A) common equity tier 1 (CET1), calculated pursuant to the provisions of Regulation (EU)
No. 575/2013 of the European Parliament and of the Council, of 26 June 2013, on prudential requirements
for credit institutions and investment firms (“Regulation 575/2013) should at any time fall below 5.125%.
The issue was exclusively addressed to professional customers and eligible counterparties.
This issue was paid up and closed on 2 October 2018 and was subsequently admitted to trading in AIAF fixed-
income market.
The competent Supervisory Authority has authorized classification of this issue of perpetual bonds as tier 1
capital.
The payment of the dividend associated to these instruments is recognized in equity under “Other reserves”.
Solvency disclosure
At 30 June 2019 and 31 December 2018, the capital ratios determined pursuant to the provisions of Directive
2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit
institutions and the prudential supervision of credit institutions and investment firms (CRD IV), of Regulation
(EU) 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for
credit institutions and investment firms (CRR) and the corresponding implementing legislation, were as
follows:
30.06.2019 31.12.2018
Capital ratios
Eligible Common Equity Tier 1 capital (thousands of Euros) (a) 4,179,663 3,971,455
Eligible Additional Tier 1 capital (thousands of Euros) (b) 250,000 250,000
Eligible Tier 2 capital (thousands of Euros) (c) 351,345 1,918
Exposure (thousands of Euros) (d) 28,480,428 26,663,438
Common Equity Tier 1 capital ratio (CET 1) (A)=(a)/(d) 14.68% 14.89%
Additional Tier 1 capital ratio (AT1) (B)=(b)/(d) 0.88% 0.94%
Tier 1 capital ratio (Tier 1) (A)+(B) 15.55% 15.83%
Tier 2 capital ratio (Tier 2) (C)=(c)/(d) 1.23% 0.01%
Total capital ratio (A)+(B)+(C) 16.79% 15.84%
30.06.2019 31.12.2018
Leverage
Tier 1 capital (thousands of Euros) (a) 4,429,663 4,221,455

Exposure (thousands of Euros) (b) 53,332,089 51,684,567
Leverage ratio (a)/(b) 8.31% 8.17%
46

18. Assets covered by insurance or reinsurance contracts and Liabilities covered by insurance or reinsurance
contracts
Assets covered by insurance or reinsurance contracts:
At 30 June 2019 and 31 December 2018 “Assets covered by insurance or reinsurance contracts” relates to the
assets recognized by ABANCA Vida y Pensiones de Seguros y Reaseguros, S.A.U in the course of its activity.
Liabilities covered by insurance or reinsurance contracts:
At 30 June 2019 and 31 December 2018 “Liabilities covered by insurance or reinsurance contracts” reflect the
assets recognized by ABANCA Vida y Pensiones de Seguros y Reaseguros, S.A.U in the course of its activity.
The breakdown of this item is as follows:
Thousands of euros
30.06.2019 31.12.2018
Provision for life insurance

Provision for unearned premiums 25,190 20,765
Mathematical provision 628,229 636,501
Provision for life insurance policies where the
investment risk is borne by the policyholder 660,466 554,994
Provision for claims 38,023 38,748
Provision for bonuses and rebates 2,290 1,583
Provisions for to accounting mismatches 183,459 143,377
1,537,657 1,395,968
The balance of this item mainly consists of technical provisions relating to “Direct Insurance”.
19. Interest income
This item comprises the interest accrued in the period on all financial assets with an implicit or explicit return,
calculated by applying the effective interest rate method, irrespective of measurement at fair value; and the
rectification of income originating from hedge accounting.
A breakdown of the most significant sources of interest income accrued by the Group in the six-month period
ended 30 June 2019 and in 2018 is as follows:
Thousands of euros
30.06.2019 30.06.2018
Deposits in central banks 5,881 6,538

Deposits with credit institutions 4,209 5,284
Loans and advances to customers 276,661 249,268
Non-performing assets 20,117 24,604
Rectification of income originating from
hedge accounting (16,292) (15,924)
Other income 18,999 19,747
362,325 347,961
47

20. Interest expense
This item reflects the interest accrued in the period on all financial liabilities with an implicit or explicit return,
including remuneration in kind, calculated by applying the effective interest rate method, irrespective of
measurement at fair value; the rectification of costs originating from hedge accounting; and the interest cost
attributable to pension funds.
The breakdown of this item in the consolidated statements of profit and loss for the six-month period ended
30 June 2019 and for 2018 is as follows:
Thousands of euros
30.06.2019 30.06.2018
Central banks - -
Deposits from credit institutions 17,067 9,557
Deposits from customers 47,496 58,119
Marketable debt securities 3,785 16,052
Subordinated liabilities 9,632 -
Rectification of costs originating from hedge accounting (5,260) (10,959)
Cost attributable to pension funds created 4,365 4,365
Other charges 13,140 13,060
90,225 90,194
21. Dividend income
This item comprises the dividends and payments on equity instruments deriving from profits generated by
investees.
The breakdown of this line item in the consolidated statements of profit and loss for the six-month periods
ended 30 June 2019 and for 2018, by nature of the financial instruments and distinguishing between listed
and unlisted securities, is as follows:
Thousands of euros
30.06.2019 30.06.2018
Equity instruments classified as:

Non-trading assets mandatorily at fair value through profit
or loss 7,351 8,285
Financial assets at fair value through other comprehensive
income 154 354
7,505 8,639
Nature of equity instruments:
Listed 1,711 2,796
Unlisted 5,794 5,843
7,505 8,639
48

22. Share of profit or loss of equity-accounted investees
This item comprises the share attributable to the Group in profit or loss for the period of associates and jointly-
controlled entities accounted for using the equity method.
The breakdown of this item in the consolidated statements of profit and loss for the six-month periods ended
30 June 2019 and 2018 is as follows:
Thousands of euros
30.06.2019 30.06.2018
Empresa Naviera Elcano, S.A. 953 2,750

Grupo Empresarial COPO, S.A. 2,599 1,782
Transmonbús, S.L. 309 628
Nueva Pescanova, S.L. (7,295) -
Other 123 (179)
(3,311) 4,981
23. Fee and commission income
This item comprises the amount of all fees and commissions accrued in the period, except those that are
integral part of the effective interest rate on financial instruments and those relating to financial instruments
carried at fair value through profit or loss.
The breakdown of fee and commission income accrued by the Group in the six-month period ended 30 June
2019 and in 2018, classified according to the main sources thereof, is as follows:
Thousands of euros
30.06.2019 30.06.2018
Guarantees extended 6,022 6,598

Contingent commitments given 2,418 2,247
Arising from collection and payment services 41,506 38,531
Arising from exchange of foreign currencies and
banknotes 208 211
Arising from securities services 2,105 1,939
Arising from non-banking services 30,673 27,267
Other 21,288 21,092
104,220 97,885
24. Fee and commission expense
This item comprises the amount of all fees and commissions paid or payable during the period, except those
that are an integral part of the effective interest rate on financial instruments and those relating to financial
instruments carried at fair value through profit or loss.
The breakdown of fee and commission expense incurred by the Group in the six-month periods ended 30
June 2019 and 2018, classified according to the main sources thereof, is as follows:
Thousands of euros
30.06.2019 30.06.2018
Fees and commissions assigned to other entities and 1,509 1,774

correspondents
Other fees and commissions 9,529 7,932
11,038 9,706
49

25. Gains or losses on financial assets and liabilities
This note groups together the following line items of the statement of profit or loss: “Gains or losses on
derecognition of financial assets and liabilities not measured at fair value through profit or loss, net”; “Gains or
losses on financial assets and liabilities held for trading, net”; “Gains or losses on non-trading financial assets
mandatorily at fair value through profit or loss, net”, and “Gains or losses on hedge accounting, net” from the
consolidated statement of profit or loss.
“Gains or losses on derecognition of financial assets and liabilities not measured at fair value through profit or
loss, net” includes the amount of gains or losses resulting from the derecognition of financial assets and
liabilities measured at cost and amortized cost, as well as financial assets at fair value through other
comprehensive income — except investments in subsidiaries, joint ventures and associates, and instruments
classified as non-current assets and disposal groups held for sale.
“Gains or losses on financial assets and liabilities held for trading, net” include the amount of gains or losses
on financial instruments held for trading, except those attributable to interest accrued applying the effective
interest method.
“Gains or losses on non-trading financial assets mandatorily at fair value through profit or loss, net” includes
the amount of gains or losses on financial instruments in this category, except those attributable to interest
accrued applying the effective interest method.
“Gains or losses on hedge accounting, net” includes the gains and losses arising from hedging instruments
and from hedged items in fair value hedges, as well as the ineffective portion of cash flow hedges and hedges
of net investments in foreign transactions recognized in profit or loss.
The breakdown of these line items in the consolidated statements of profit and loss for the six-month period
ended 30 June 2019 and for 2018 is as follows:
Thousands of euros
30.06.2019 30.06.2018
Gains or losses on derecognition of financial assets and

liabilities not measured at fair value through profit or loss,
net 72,044 98,988
Gains or losses on financial assets and liabilities held for

trading, net (85) (1,301)
Gains or losses on non-trading financial assets

mandatorily at fair value through profit or loss, net 22,100 10,447
Gains or losses from hedge accounting, net 13,813 (79)
107,872 108,055
50

26. Other operating income and Income from assets covered by insurance or reinsurance contracts
The breakdown of the heading “Other operating income” in the consolidated statements of profit and loss for
the six-month periods ended 30 June 2019 and 2018 is as follows:
Thousands of euros
30.06.2019 30.06.2018
Income from investment properties

and operating leases 7,611 6,929
Sales and income from the provision of
non-financial services 17,735 17,116
Other 6,548 23,318
31,894 47,363
The heading “Income from assets covered by insurance or reinsurance contracts” in the consolidated profit
and loss includes insurance premiums collected and insurance or reinsurance income accrued by subsidiaries.
During the six-month period ended 30 June 2019, the Group has recognized €170,977 thousand under this
item (€160,321 thousand during the six-month period ended 30 June 2018).
27. Personnel expenses
This item comprises all remuneration items paid during the reporting period to permanent and temporary
personnel on the payroll, irrespective of their functions or activity, including the current cost of services of
pension schemes, shared-based remuneration and any expenses capitalized as part of the value of assets.
The breakdown of “Personnel expenses” in the consolidated statements of profit and loss for the six-month
periods ended 30 June 2019 and 2018 is as follows:
Thousands of euros
30.06.2019 30.06.2018
Salaries and wages 123,603 118,725

Social Security contributions 30,622 28,179
Contributions to defined benefit pension plans 74 54
Contributions to defined contribution pension plans 4,082 55
Termination benefits 128 685
Other personnel expenses 5,603 6,178
164,112 153,876
The average headcount of both the Bank and the Group in the six-month periods ended 30 June 2019 and
2018 is as follows:
Bank Group
30.06.2019 30.06.2019
Men 2,319 2,538
Women 2,424 2,675
Total average headcount 4,743 5,213
51

Bank Group
30.06.2018 30.06.2018
Men 2,241 2,454
Women 2,295 2,530
Total average headcount 4,536 4,984
28. Other administrative expenses
Thousands of euros
30.06.2019 30.06.2018
Property, fixtures and materials 13,834 15,629

Information technology 24,019 22,161
Advertising and publicity 16,230 15,610
Communications 7,610 7,396
Taxes 4,346 4,145
Outsourced administrative services 15,391 13,536
Legal expenses and attorney fees 1,572 2,090
Technical reports 6,975 3,444
Surveillance and security carriage services 3,197 2,977
Entertainment and personnel service expenses 3,598 2,668
Insurance premiums 1,736 1,268
Governing and control bodies 1,512 1,283
Other expenses 8,060 5,648
108,080 97,855
52

29. Other operating expenses and Expenses from liabilities covered by insurance or reinsurance contracts
The breakdown of the heading “Other operating expenses” in the consolidated statements of profit and loss
for the six-month periods ended 30 June 2019 and 2018 is as follows:
Thousands of euros
30.06.2019 30.06.2018
Investment property expenses 677 648

Other 32,015 42,828
32,692 43,476
The balance under “Other” in the table above includes expenses associated with taxes, contribution to the
resolution fund in Spain, deposits and non-recurring services, such as the operational management of claims
relating to floor clauses, etc.
"Expenses from liabilities covered by insurance or reinsurance contracts" include claims paid and other
expenses directly associated with insurance contracts, premiums paid to third parties for reinsurance, and the
net provisions recognized to cover the risks arising under insurance contracts accrued by subsidiaries. During
the six-month period ended 30 June 2019, the Group has recognized €159,338 thousand under this item
(€150,387 thousand during the six-month period ended 30 June 2018).
30. Depreciation and amortization
Thousands of euros
30.06.2019 30.06.2018
Tangible assets
For own use 19,164 15,517
Investment property 2,536 2,368

30,426 25,728
31. Gains or losses on derecognition of non-financial assets, net
Thousands of euros
Gains / (Losses)
30.06.2019 30.06.2018
On disposals of tangible assets 1,961 (7)

On disposals of investments 16,114 -
Other (1,076) 15,680
16,999 15,673
53

32. Gains or losses on non-current assets and disposal groups classified as held for sale not qualifying as
discontinued operations.
Thousands of euros
Gains / (Losses)
30.06.2019 30.06.2018
Impairment of foreclosed assets (710) 364

Gains/(losses) on disposals of foreclosed assets 11,823 23,036
Gains/(losses) on disposals of investees - -
Other gains/(losses) on non-current assets held for sale 1,487 -
12,600 23,400
33. Related-party transactions
Note 43 to the consolidated financial statements for 2018 includes the disclosure on the main transactions
with related parties.
As a financial institution, ABANCA had transactions with related parties in the normal course of its business.
These transactions were completed on an arm’s length basis.
34. Changes in the contingent assets and Liabilities of the Group and off-balance sheet customers’ funds
34.1. Contingent assets
During the six-month period ended 30 June 2019 changes in the contingent assets of the Group, compared
to the disclosures presented in the consolidated financial statements of the Group at 31 December 2018, are
due to the Bank’s ordinary business.
34.2. Contingent liabilities
The condensed consolidated interim financial statements of the Group include all significant provisions for
which the probability of the obligation requiring settlement is estimated to be more likely than not. Contingent
liabilities are not recognized in the consolidated financial statements, although information thereon is
disclosed, in accordance with IAS 37. There have been no significant changes in the contingent liabilities of
the Group compared to the disclosures presented in the consolidated financial statements of the Group at 31
December 2018.
54

34.3 Off-balance sheet customers’ funds
At 30 June 2019 and at 31 December 2018, the breakdown of off-balance sheet customers’ funds marketed
by the Group is as follows:
Thousands of euros
30.06.2019 31.12.2018
Investment funds (*) 5,821,924 3,757,360

Pension funds 1,406,971 1,372,026
Securities deposited by third parties (**) 4,743,415 3,804,674
Insurance products 1,396,915 1,241,418
13,369,225 10,175,478
(*) At 30 June 2019, the value of the secured funds for which the Bank has
provided a guarantee totals €735,351 thousand (€644,163 thousand at
31 December 2018).
(**) At 30 June 2019, this item includes €887,996 thousand in structured

products.
35. Events after the reporting period
Dated 8 July 2019, ABANCA and Crédit Agricole Assurances made public the agreement whereby over the
next 30 years both companies will jointly operate in the Spanish and Portuguese insurance market through a
50%-owned joint venture. This alliance combines ABANCA’s knowledge of customers and Crédit Agricole
Assurances’ capacity in the European insurance market, and seeks to foster ABANCA Group’s commitment
with the insurance segment, a segment considered strategic in ABANCA’s strategic plan.
On 18 July 2019, DBRS Ratings has upgraded ABANCA long-time issuer rating to BBB from BBB (low), and
ABANCA short-term rating to R-2 (high) from R-2 (middle), both ratings have been assigned a stable outlook.
According to the rating agency, the strengthening of recurrent income and the quality of assets have been
key factors for its decision.
55
Consolidated Management Report for

1. Scope, sphere and global framework of Management Report
This management report for the ABANCA Corporación Bancaria, S.A. Group (hereinafter ABANCA Group
or the Group) describes the initiatives, business performance and profits/losses of the Group during the
first six months of 2019.
2. Economic, financial and regulatory environment
Economic environment
• The Spanish economy continued on its expansive path during the second quarter of 2019, with
an (estimated) quarterly 0.6% GDP growth, one tenth of a percentage point less than in the first
quarter of the year.
• The labor market continued to offer a positive behavior, although job creation rates have started
to moderate. During the first six months of the year, Spain created 494 thousand jobs (547
thousand during the same period last year). In June, Social Security registration rate stood at
2.7% year-on-year, compared to 3.1% as of December 2018.
• Inflation slowed down during the final stretch of the half-year, basically thanks to energy prices.
As such, general inflation rate decreased in June down to 0.4%, its lowest rate since late 2016,
whereas the underlying inflation rate stood at 0.9%.
• In Galicia, the second quarter available indicators suggest a continued economic expansion,
driven by the dynamism of the services sector that offsets the comparative weakness of the
industrial sector. As for the labor market, during the first six months of the year, Galicia created
19.1 thousand jobs (21.1 thousand during the same period last year).
Financial environment
• The European Central Bank modified, in its June meeting, its guidance on official interest rates,
and announced that interest rates will remain at their present levels at least through the first half
of 2020 (six months later than the previously announced deadline). ECB additionally specified
the terms for new targeted long-term refinancing operations (TLTRO-III).
• This monetary policy accommodation resulted in a further reduction of 12-month Euribor, which
averaged -0.14% during the second quarter (-0.11% in the first quarter). In July, the reduction in
the interbank offered rate intensified, reaching a new all-time low (-0.30%).
• In government bond markets, returns registered strong contractions. As such, at the end of the
quarter the Spanish 10-bond’s yield stood at 0.40%, while for German 10-bonds yield was -
0.33%. In this context, at the end of the quarter Spain’s risk premium stood at 73 basis points, a
reduction compared to its level at the end of 2018.
• In Spain, retail lending stock increased by 0.3% over the first five months of 2019, driven by the
positive performance of consumer loans (+1.2%) and business loans (+0.7%), while loans for
house purchase continued to decrease (-0.3%). During the first five months of the year, new
retail lending decreased by 3.4% year-on-year, dragged down by the contraction of loans to
companies (-5.3%) notwithstanding the 3.5% increase in registered in loans to individuals, with
advances in both house loans and consumer loans.
• New retail deposits in Spain increased by 1.9% over the first five months of 2019, albeit the
outflow from term deposits (-6.3%) towards demand deposits (+3.6%) and investment funds
(whose net worth increased by 2.7% in the year to May 2019) continued.
• The context of negative real interest rates and the reduction in new lending keep putting pressure
on net interest income for Spanish financial institutions.
1

Regulatory environment
During the first half-year of 2019, the following regulatory activity had a significant impact on the banking
sector:
• Law 5/2019, of 15 March, on credit agreements relating to immovable property.
The law introduces provisions for the protection of borrowers, including provisions for
transparency in the marketing of credits and in the conduct of lenders, credit intermediaries or
appointed representatives. The law also defines the legal status of, and sanctions for credit
intermediaries, their appointed representatives and lenders in credit agreements relating to
immovable property.
• Ministerial Order ECE/228/2019, of 28 February, basic payment accounts, procedure for account
switching and the requirements for comparison websites.
• Royal Decree 164/2019, of 22 March, introducing free-of-charge payment accounts with basic
features for vulnerable individuals or individuals at risk of financial exclusion.
• Bank of Spain Circular 2/2019, of 29 March, on the requirements of the Fee Information
Document and the Statement of Fees, and payment accounts comparison websites, amending
Circular 5/2012, of 27 June, addressed to credit institution and payment services providers, on
the transparency of banking services and responsible lending.
The 3 above-mentioned legal provisions implement Royal Decree-Law 19/2017, of 24

November, on basic payment accounts, account switching and comparability of payment
accounts’ fees, transposing Directive 2014/92/EU of the European Parliament and of the Council,
of 23 July 2014, on the comparability of fees related to payment accounts, payment account
switching and access to payment accounts with basic features.
• Commission Delegated Regulation (EU) 2019/980 of 14 March 2019 supplementing Regulation

(EU) 2017/1129 of the European Parliament and of the Council as regards the format, content,
scrutiny and approval of the prospectus to be published when securities are offered to the public
or admitted to trading on a regulated market, and repealing Commission Regulation (EC) No
809/2004.
• Regulation (EU) 2019/876 of the European Parliament and of the Council of 20 May 2019
amending Regulation (EU) No 575/2013 as regards the leverage ratio, the net stable funding ratio,
requirements for own funds and eligible liabilities, counterparty credit risk, market risk, exposures
to central counterparties, exposures to collective investment undertakings, large exposures,
reporting and disclosure requirements, and Regulation (EU) No 648/2012.
3. Relevant events during the first half-year of 2019
• On 11 January 2019, ABANCA reopened the European market for subordinated debt, by laying
down the economic conditions for an issue of €350 million in subordinated notes (Fixed Rate
Reset Subordinated Notes). This issue was paid up and closed on 18 January 2019.
These instruments will mature on 18 January 2029, subject to ABANCA’s option to redeem them
early under certain circumstances.
The issue was exclusively addressed to professional customers and eligible counterparties.
2

The securities issued are eligible as tier 2 capital (Tier 2) instruments in accordance with the
provisions of Law 10/2014, of 26 June, on the regulation, supervision and solvency of credit
institutions and in accordance with the criteria of Regulation (EU) No. 575/2013 of the European
Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions
and investment firms.
• ABANCA received the European Central Bank’s decision regarding minimum prudential capital
requirements for 2019 applicable to the various supervised levels, following the results of the
Supervisory Review and Evaluation Process (SREP).
The decision sets a minimum Common Equity Tier 1 Regulatory capital (CET1 phase-in)
requirement of 8.75% and a minimum phase-in Total Capital requirement of 12.25%. These
requirements include:
i) A Pillar 1 minimum general requirement of 4.50% of CET1 and 8.00% of Total Capital;
ii) a Pillar 2 requirement of 1.75%; and
iii) a general requirement of 2.5% as capital conservation buffer.
ABANCA Corporación Bancaria, S.A. current capital ratios are significantly above ECB regulatory
requirements and, accordingly, do not entail the activation of any regulatory restriction to
payment of dividends, variable remuneration or coupons to holders of additional tier 1 capital
securities.
• On 22 February 2019, ABANCA Corporación Bancaria, S.A. and its controlling shareholder
expressed to the Board of Directors of Liberbank S.A. their interest in promoting a corporate
operation consisting in ABANCA launching a voluntary takeover bid on Liberbank, addressed to
Liberbank’s shareholders and subject to the results of a Due Diligence.
On 25 February 2019, CNMV urged ABANCA to declare, within a non-renewable term of ten
business days, its decision whether to launch a takeover bid in the terms provided for in Royal
Decree 1066/2007, of 27 July, on takeover bids.
In view of the above-mentioned requirement and taking into account the terms of the relevant
fact published by Liberbank on 25 February 2019 confirming that Liberbank continued working
on the corporate operation notified in a relevant fact dated 12 December 2018, it is no longer
possible for ABANCA and its controlling shareholder to conduct the aforementioned Due
Diligence or, consequently, to make a final decision on the eventual launching of a takeover bid
on Liberbank.
Accordingly, in view of the aforementioned circumstances, on 26 February 2019 ABANCA and

its controlling shareholder decided to abandon their interest in promoting a corporate operation
between ABANCA and Liberbank and, consequently, not to launch a takeover bid on Liberbank.
• On 10 June 2019, ABANCA Annual General Meeting approved the merger through absorption of
ABANCA Holding Financiero, S.A. (absorbed company) by ABANCA (absorbing company),
whereby the absorbed company will cease to exist and will transfer en bloc all its assets to the
absorbing company, with the express provision of prior payment of a dividend against reserves
as a condition precedent for the merger in accordance with the common draft terms approved
by the respective Boards of the aforementioned companies.
The effectiveness of the Merger is subject to the fulfilment of conditions precedent set forth in
the agreement.
• On 10 May 2019, ABANCA notified a Relevant Fact informing that the Bank of Spain had formally
notified the Minimum Requirement for Own Funds and Eligible Liabilities (“MREL”) applicable to
ABANCA Corporación Bancaria, S.A. on a consolidated basis, that have been established by the
Single Resolution Board (SRB).
3

The requirement has been established as 10.55% of all consolidated own funds and liabilities,
calculated on the basis of the reporting information at 31 December 2017; the requirement must
be met not later than 1 January 2022.
Based on the reporting information 31 December 2017, MREL on a consolidated basis would be
20.06% in terms of risk-weighted assets.
The MREL decision is aligned to ABANCA projections and to the financing plan included in its
strategic plan.
• On 16 May 2019, ABANCA completed an issue of mortgage covered bonds, in which ABANCA
has raised €750 million. The operation was closed with a 0.75% coupon and a 10-year maturity.
The securities issued meet all necessary requirements to be allocated the ECBC Covered Bond
label.
This issue has been rated Aa2 and AA (positive) by Moody’s and Standard & Poor’s, respectively.
• On 9 June 2019, upon completion of the conditions precedent and upon reception of the
mandatory authorizations from supervisors, ABANCA Group formally executed the purchase of
Deutsche Bank’s Private & Commercial Business (‘PCB’) Portugal retail banking unit. With this
transaction, ABANCA Group has integrated a business unit having 69,133 customers; a lending
portfolio amounting to €2,584 million; €912 million in customer deposits, and €2,988 million in
off-balance sheet customers funds.
Following completion of the integration process, which was seamless and without any impact
whatsoever on services to customers, the bank begins a new phase in the Portuguese market.
ABANCA will retain the strengths of the acquired business, such as its position and prestige within
the private banking segment, and will strengthen its operational and business capabilities in areas
such as corporate banking, insurance or digital banking.
• Changes in ABANCA's credit ratings during the first half-year of 2019 were as follows:
o Standard & Poor’s has upgraded (03-18-2019) the rating of ABANCA’s mortgage covered
bonds to AA (from AA-) and confirmed the positive outlook.
The AA with a positive outlook rating is the maximum rating assigned by Standard & Poor’s
to Spanish covered bonds currently in force, bearing in mind the current sovereign rating
(A- with a positive outlook).
o Fitch Ratings (03-19-2019) has upgraded ABANCA long-time issuer rating to BBB- from BB+,
thereby rating it as investment grade with stable outlook.
The rating agency has highlighted the substantial improvement of the Entity’s asset quality,
as well as the strength of its franchise, its sound capital position, the stability of its funding
and liquidity profile, and the improvement of its recurrent profitability.
4

Fitch has also upgraded the following ratings:

• Bank viability rating to bbb- from bb+
• Short-term IDR to F3 from B.
• Long-term rating for Tier 2 subordinated debt to BB+ from BB.
As a result of the upgrading of long-term rating, Fitch Ratings (03-22-2019) has upgraded
the rating of ABANCA’s covered bonds to A from A-, with a stable outlook.
4. Activities of ABANCA Group entities at 30 June 2019
4.1. Business and results
At the end of June 2019, ABANCA Group balance sheet stands at €52,648 million. The Group’s non-
performing loan ratio (3.3%) continues to improve while coverage of non-performing assets increases to
59.0%.
a) Results
ABANCA Group has posted a net profit of €250.1 million, placing its ROE at 10.7%.
During this half-year, ABANCA Group has continued to register a positive performance from its most
recurring revenue lines in profit or loss, as shown by the 5.6% and 5.7% increases in net interest
income and net fee and commission income, respectively. Both items have contributed to bring core
revenues up to €365.3 million, a 5.6% increase on the same period last year.
Additionally, net gains on financial assets and liabilities amounted to €107.9 million, while exchange
gains totaled €2.4 million, dividend income was €7.5 million and profit of equity-accounted investees
was €-3.3 million.
As a result of all the foregoing, at the end of this half-year, ABANCA gross income stands at €490.6
million.
At the end of June 2019, operating expenses amounted to €302.6 million. This item reflects
ABANCA’s commitment to implement strategic projects aiming at strengthening both the entity’s
technological capabilities and its financial profile and the efficient generation of income.
During the first six months of 2019, ordinary impairments have amounted to €23.7 million, bringing
ABANCA’s cost of risk to lower levels than its competitor’s benchmarks. ABANCA has achieved these
good levels due to the lower amount of non-performing assets in its balance sheet (€263 million less
compared to June 2018) and by its high NPL coverage ratios (57.1% at the end of June 2019).
On the other hand, year-to-date recoveries in specific borrowers and in the written-off loan portfolio
amounted to €22.3 million, and contributed to offsetting ordinary impairments.
Lastly, during this half-year ABANCA Group has posted €51.2 million in negative goodwill arising from
the recent acquisition of Deutsche Bank’s Private & Commercial Business (‘PCB’) Portugal.
5

b) Business
During the second quarter of 2019, the Group has competed the aforementioned integration of
PCB business, a circumstance that has driven the significant increase registered in the entity’s main
balance sheet items.
At the end of June 2019, loans to performing customers amounted to €32,826 million, with a 13.5%
increase on the same period last year.
The fixed-income portfolio stands at €10,038 million, down by 13.4% compared to June 2018, as
the Group continues to apply a policy of optimizing the weight of this item in the balance sheet.
Customer deposits stood at €44,515 million, a 14.3% year-on-year increase. In terms of the
composition of these balances, the shift towards demand balances and off-balance sheet items
continues as a result of the current environment of minimum rates. At the end of June 2019, off-
balance sheet items stood at €9,514 million (a 44.7% increase compared to June 2018).
Aside from the impact that PCB business has had on ABANCA Group’s balance sheet, the entity has
continued to perform positively in significant items, such as loans to performing customers and
customer deposits. Excluding the effects of the Portuguese business performance, these items have
increased by 4.9% and 4.7%, respectively.
Lastly, insurance (general and life) products have also registered a significant growth in underwriting
rates (both for life and general insurance classes), with new premiums reaching €164.6 million, a
7.4% increase on the same period of the preceding year.
c) Risk quality, solvency and liquidity
At the end of June 2019, ABANCA Group’s non-performing loans had decreased by €263 million,
i.e. a 18.8% reduction compared to the same period in the preceding year, and currently stand at
€1,137 million, thereby taking non-performing loan ratio down to 3.3%. This improvement has been
achieved because ABANCA has maintained both its capacity to recover non-performing assets and
its low rates of new non-performing assets, as well as thanks to the good quality of the lending
portfolio acquired in the integration of PCB. At the end of June, the balance of credit loss allowance
stands at €649 million, resulting in a NPL coverage ratio of 57.1%.
Foreclosed assets fell by €101 million compared to June 2018, while the coverage ratio stands at
61.8%. The foregoing figures, together with the figures for non-performing loans, resulted in total
coverage of non-performing assets rising to 59.0%.
ABANCA Group’s solvency level continues to be broadly above the requirements of the regulator.
With liquid assets plus issuance capacity of €12,270 million, the Group easily meets ECB
requirements in terms of both short-term Liquidity Coverage Ratio (LCR) and long-term Net Stable
Financing Ratio (NSFR).
6

d) Other information
At the end of June 2019 ABANCA Group has an operational network of 616 branches in Spain, of
which 500 are located in Galicia and 116 in the rest of the country.
At the end of June, ABANCA Group has 44 branches (with a further 26 points of sale) in Portugal,
thanks to the recent integration of PCB business. This acquisition has given the Group the
opportunity to strengthen its presence in a territory sharing many similarities and cross-business
with the original areas of ABANCA.
ABANCA international presence is supplemented with two operational branches, in Switzerland and
Miami, and 8 representative offices in various foreign regions, bringing its total branch network up
to 670.
At the end of June 2019, Group has 1,052 ATMs, 35,073 POS terminals located in retail outlets, and
had issued 2 million cards in Spain.
At 30 June 2019, the Group has 5,487 employees.
4.2. Transactions involving the portfolio of investees
Particularly noteworthy among the transactions completed during the first quarter of 2019 are the sales
of the 26.42% interest held by the Group in Autopista de Guadalmedina, S.A. and the 15.96% interest in
Helena Activos Líquidos, S.L.
Particularly noteworthy among purchases is the acquisition of additional interests in the company Nueva
Pescanova, S.L..
5. Exposure to market, credit, liquidity, interest rate, currency and operational risk
For each of the risk types attaching to in its financial activities, ABANCA has defined general policies and
limits, set out in its internal management manuals, together with a framework of powers and delegation
thereof, in order to facilitate decision-making. The limits for each area of risk are defined so as to reduce
capital consumption, in accordance with the retail profile of the entity.
The most relevant aspects relating to the policies and limits for each type of risk exposure at the end of
June 2019 are as follows:
• Market Risk: Management thereof is based, on the one hand, in the segregation of functions between
the risk-taking areas and those in charge of risk measurement and control, and on the other hand, in
establishing limits to permitted activities and risks to be assumed in terms of positions, potential losses
and results (using the VaR method). At the same time, analyses are conducted to test sensitivity to
variations in market prices, as well as scenario analysis, or stress-testing. At 30 June 2019, the value at
risk of the trading portfolios stood at €281 thousand.
• Credit Risk: Credit risk control relies on the following pillars: i) objectivity, independence and an
overview in decision-making; ii) a global system to limit concentration by customers, and exposure
by segments, sectors, guarantees, countries, etc.; iii) a decentralized loan approval system that
combines an individual expert analysis with the use of appropriately validated statistical systems and
models that are supervised in accordance with the policies of the Bank; iv) involvement of the
governing bodies and senior management in decision-making; v) ongoing monitoring of the quality
of the investment by the entire structure of the entity. At 30 June 2019, ABANCA Group had loans
totaling €1,137 million classified as non-performing, for which provisions of €649 million have been
registered.
• Liquidity risk: Management thereof is based on the existence of an annual liquidity plan designed on
the basis of the analysis of scenarios and maturities, that takes into account not only normal market
situations but also other contingencies that may occur and that are transferred to the contingency
plan. Liquidity risk control focuses on checking the availability of liquid assets sufficient to cope with
7

potential liquidity stress situations and daily monitoring of the liquidity position through indicators,
alerts and stress analysis. Liquid assets amounted to €5,823 million at the end of June 2019, a volume
that allows x 1.9 cover of the total net issues of treasury stock.
• Interest rate risk: For its control, models are used to establish limits and determine the sensitivity of
the financial margin and the economic value of the entity to variations in the interest rate. At the end
of June 2019, a 200 b.p. rise in interest rates would have a positive effect of €917 million on the
economic value and a positive impact of +€157 million on net finance income.
• Currency risk: Currency risk is managed by setting limits to global exchange positions in the currencies
of greater relevance in international operations; at the end of June 2019, the equivalent value in euros
of the global position of ABANCA was below the maximum threshold of 2%.
• Operational Risk: Management practices are geared towards identifying, assessing and mitigating the
operational risk attaching to all relevant products, activities, processes and systems in order to afford
the Bank greater control over the risks to which it is exposed, backed by the management tasks carried
out by the business and support units and by the independent corporate function performed by the
Operational Risk unit.
6. Research, development and innovation activities
During the first quarter of 2019, the Group has continued some of the strategic actions initiated in 2015
focused on the digital transformation of ABANCA, and launched some new actions.
The most relevant lines of work include:
• Technological Renewal: continuation of the Plan for the 2018-2020 period with the objective of
systems optimization (Core Software, Applications and Infrastructure) in order to ensure adaption to
the latest technological developments, incorporation of leading international solutions renowned for
their ease of operation and security, and implementation of best practices in Banking functions.
• Robotic Process Automation (RPA): During the first quarter of 2019 the Group has continued the
automation of further processes. Process automation has led to a significant increase in productivity
in different areas of the Bank, both in business and back-office, as well as to a reduction of
operational risk, the improvement of response times to customers in some tasks and to a substantial
reduction of the administrative work-load.
• Corporate online banking: The Group has redesigned its website for legal entities, self-employed
workers and professionals, in order to bring it in line with a structure based on customer
segmentation. The new website allows customers to identify both their respective needs and the
solutions that ABANCA can offer within each customer segment.
• Implementation of TIPS technology: Having completed the adaptation process for the use of TIPS
(Target Instant Payment Settlement) ABANCA has consolidated its technological leadership as the
first financial institution certified by the Bank of Spain to operate in the ECB new instant payment
platform.
8

• Mobile Banking: The Mobile Banking of ABANCA is a product in constant evolution, with a defined
roadmap that allows us to increasingly move towards digital transformation. Besides improving
existing functions, in recent months new functions have been introduced to the Digital Space in order
to facilitate the interaction of customer and branch and to allow customers’ access to
correspondence and available contracts. The new functions are:
0. Deferred Execution allows customers to complete the contracting process at different

points in time and from different locations.
1. Remote request/submission of documents.
2. Contracting insurance flat rate and displaying the customer’s insurance portfolio.
3. Access to the catalogue of products available for contracting or subject to an appointment

at the branch being requested.
4. The possibility is introduced to activate/deactivate certain insurance products contracted by

customers, so they can be used within the specific time-frames aligned to their respective
needs.
• “Alavuelta” Service: A new service to customers has been implemented, which has placed ABANCA
has a reference in advanced analytics, as it takes Big Data at the service of ‘business’. This new service
seeks to provide businesses with 360° information on every transaction completed, as well as
comprehensive information on their respective sales, comparison with their respective industries or
area of influence, thereby allowing a better knowledge of their customers.
• Samsung pay: the app has been connected to Visa International gateway, thereby allowing users to
enjoy the following new services:
0. Payment with biometrics authentication.
1. Pay on Watch: Allows registration of cards on Samsung watches for payment purposes.
• Apple Pay: This new function, allowing registration of ABANCA cards on Apple devices for payment
purposes, has been enabled.
7. Activities and outlook for 2019
Spain’s economy continues in a process of mild slowdown, albeit its growth rates are still robust. Major
institutions forecast a 2.3%-2.4% GDP growth for the whole 2019 year, following their recent review of
the initial forecasts. This trend would confirm again Spain’s leading position among major European
economies.
This context affirms the adequacy of the priorities presiding over ABANCA’s business and defined in the
2018-2020 Strategic Plan, which hinges on three main axes: transforming the organization, improving
the customer experience and increasing recurrent return on capital. Following the integration of
Deutsche Bank’s Private & Commercial Business Portugal, inorganic growth, defined in the strategic plan
as one of the axes for the entity’s transformation and growth, will see another significant milestone in the
second half-year of 2019, with the expected integration of Banco Caixa Geral, S.A.
9

8. Events after the reporting date
• Dated 8 July 2019, ABANCA and Crédit Agricole Assurances made public the agreement whereby over
the next 30 years both companies will jointly operate in the Spanish and Portuguese insurance market
through a 50%-owned joint venture.
This alliance combines ABANCA’s knowledge of customers and Crédit Agricole Assurances’ capacity in
the European insurance market, and seeks to foster ABANCA Group’s commitment with the insurance
segment, a segment considered strategic in ABANCA’s strategic plan.
• On 18 July 2019, DBRS Ratings has upgraded ABANCA long-time issuer rating to BBB from BBB (low), and
ABANCA short-term rating to R-2 (high) from R-2 (middle), both ratings have been assigned a stable
outlook.
According to the rating agency, the strengthening of recurrent income and the quality of assets have
been key factors for its decision.
10

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ABANCA Corporación

Bancaria, S.A. and Subsidiaries

Consolidated Interim Directors’ Report

Limited Review Report on the Condensed Consolidated

To the Shareholders of ABANCA Corporación Bancaria, S.A.

Report on Other Legal and Regulatory Requirements________________________

KPMG Auditores, S.L.

(Signed on original in Spanish)

Julio Álvaro Esteban

TOTAL LIABILITIES 47,884,415 46,518,989

Tax assets 16 Other reserves (43,496) (22,781)

Items that may be reclassified to profit or loss

Foreign currency translation 21 21

Accumulated other comprehensive income - -

TOTAL EQUITY 4,763,242 4,463,428

MEMORANDUM ITEM: OFF-BALANCE SHEET EXPOSURES 34

CONSOLIDATED STATEMENTS OF PROFIT OR LOSS FOR THE SIX-MONTH PERIODS

Interest income 19 362,325 347,961

NET INTEREST INCOME 272,100 257,767

Dividend income 21 7,505 8,639

GROSS INCOME 490,619 483,251

Administrative expenses (272,192) (251,731)

NET OPERATING INCOME 186,568 208,070

Impairment or reversal of impairment on investments in joint ventures or associates 6 670

PROFIT OR LOSS BEFORE TAX FROM CONTINUING OPERATIONS 266,721 247,363

PROFIT OR LOSS AFTER TAX FROM CONTINUING OPERATIONS 250,111 247,004

Profit or loss after tax from discontinued operations - -

PROFIT/(LOSS) FOR THE PERIOD 250,111 247,004

Attributable to minority interests (non-controlling interests) (1) -

EARNINGS PER SHARE (euro) 30.06.2019 30.06.2018

30.06.2019 30.06.2018 (*)

A) PROFIT/(LOSS) FOR THE PERIOD 250,111 247,004

B) OTHER COMPREHENSIVE INCOME

1. Items that will not be reclassified to profit or loss (41) (284)

Actuarial gains or (-) losses on defined benefit pension plans - -

Income tax relating to items that will not be reclassified 18 122

2. Items that may be reclassified to profit or loss 134,723 (55,555)

Foreign currency translation - (21)

Cash flow hedges (effective portion) 50,151 7,518

Income tax relating to items that may be reclassified to profit

C) TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 384,793 191,165

Attributable to minority interests (non-controlling interests) - -

Adjustments on initial application of IFRS 9 - - - - (14,755) - - - (22,493) - - (37,248)

Total comprehensive income for the period - - - - - - 247,004 - (55,839) - - 191,165

Other changes in equity - - - 212,475 7,218 91 (367,074) 48,481 - - - (98,809)

Treasury shares purchased - - - - - 91 - - - - - 91

Other changes in equity - - - 270,134 (20,715) (807) (430,415) 96,823 - - 1 (84,979)

Treasury shares purchased - - - - - (2,246) - - - - - (2,246)

CONSOLIDATED STATEMENT OF CASH FLOWS

30.06.2019 30.06.2018 (*)

A) CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES (781,342) (558,733)

1. Profit/(loss) for the period 250,111 247,004

3. Net increase/decrease in operating assets (2,355,850) 183,046

4. Net increase/decrease in operating liabilities 1,269,615 (1,024,135)

5. Income tax receipts/(payments) 13,479 (7,110)

B) CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES (31,982) 18,053

1. Payments: (132,510) (70,096)

2. Receipts: 100,528 88,149

C) CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES 282,978 (98,571)

1. Payments: (75,343) (98,576)

D) EFFECT OF EXCHANGE RATE FLUCTUATIONS - -

(+) Cash 165,368 154,943

Condensed Consolidated Interim Financial Statements for