EUR 500.00 For Business Accounts Only

Proxy Report - 27/04/2018

In item 4, shareholders are called to a binding vote on the remuneration policy adopted by the Bank for executive Directors and other executives with strategic responsibilities. We strongly regret that short-term performance conditions are only disclosed ex-post, and the Bank has not disclosed the metrics used to calcul ate the CEO's individual bonus in 2018. Therefore, we recommend opposition.

In item 8, the Board proposes to approve a new long-term incentive plan consisting of a one-time grant of call options vesting after a performance period of 4 years. The call options will be automatically exercised at the end of the vesting period and the final incentive will be entirely paid in shares over a 6-year period. The incentive is capped at the equivalent of 50% of the base salary on an average annual basis. The vesting of the call options is subject to the achievement of disclosed "gate conditions" in terms of CET 1 Ratio, Net Stable Funding Ratio, Liquidity Coverage Ratio, no loss and positive gross income in the year of vesting. Failure to maintain one of the "gate conditions" in any year of the Plan will result in a 25% reduction of the call options. The final incentive will also depend on the level of achievement of disclosed targets in terms of NPL ratio and Operating Income-on-Risk Weighted Assets Ratio. In our opinion, the Plan is adequately structured to align the interests of executives and shareholders in the long term. Also taking into account the reasonable amount and that all conditions are disclosed and quantified, we recommend approval.

In item 10 (Extraordinary Agenda), it is proposed to approve the mandatory conversion of all saving shares into ordinary shares. Each holder of saving shares will receive 1.04 ordinary shares per saving share held, corresponding to a premium of 9.7% to the 6- month average closing price ending February 5 (date of the announcement of the proposal). The conversion of all saving shares into ordinary shares will restore the principle of equality of shareholders and the Bank will have more flexibility in the definition of future dividends, which will not be subject to the privileged distribution of dividends to saving shareholders. Also taking into account that the maximum dilutive effects on ordinary shareholders' voting rights are reasonable (5.8%), we recommend approval.