Division 4.2.7.3.1 Phase 1

Until […], CGD will:

1. 4.2.7.3.1.1.

   Use CGD’s Spanish branch as a vehicle to consolidate the legacy portfolio in Spain, separating core from non-core business activities and shielding the core operation. The non-core wholesale credit and mortgage portfolios of both BCG Spain and CGD’s Spanish Branch (Sucursal em Espanha) will be consolidated in the Spanish Branch, which will stop any new production and manage the run-off of these portfolios (for a detailed list of EUR [1 000-1 500] million assets to be transferred out of BCG Spain see Appendix III);

2. 4.2.7.3.1.2.

   Restructure the retail network of BCG Spain including EUR [5 000-5 500] million of assets as of 31 December 2012 (for a detailed list of EUR [5 000-5 500] million of assets see Appendix III), by re-focusing the operation on its core areas, focusing on cross border SME business and reducing the presence of branches with negative profitability, unsustainable LDR, insufficient customers;

3. 4.2.7.3.1.3.

   The number of branches will be reduced from 173 branches in December 2012 to [100-110] by […] (for a detailed list of branches see Appendix V) and will not be increased during the Restructuring Period;

4. 4.2.7.3.1.4.

   The number of employees will be reduced from 797 in December 2012 to [500-523] by […] and will not be increased during the Restructuring Period;

5. 4.2.7.3.1.5.

   Key performance indicators (KPIs) to be met by […]

   Starting from October 2014, the Monitoring Trustee will start to assess whether the following KPIs for BCG Spain will be met by […].

   1. 4.2.7.3.1.5.1.

      Over the whole period of […] the total of Labour costs and SG&A costs must be below or equal to EUR [50-60], and BCG Spain must achieve a C/I ratio of below or equal to [50-60] %;

   2. 4.2.7.3.1.5.2.

      BCG Spain must be entirely self-funded and sufficiently capitalised. No additional capital and net funding must have been provided in the period of end of 2012 to […], and there must not be any need for additional capital and net funding until the end of the Restructuring Period.

   3. 4.2.7.3.1.5.3.

      The amount of new credit production (net), i.e. credit generated after end of 2012 and not having matured or been redeemed by […], must be equal or above EUR [900-950]. The part of new credit production related to cross-border is equal or above [20-30] %.

   4. 4.2.7.3.1.5.4.

      The new credit production, as defined and referred to in the point 4.2.7.3.1.5.3, generates a weighted average net margin (spread) above reference rate (6 months Euribor) of at least [0-5] %.

   5. 4.2.7.3.1.5.5.

      The NPL ratio of the new credit production, as defined in the point 4.2.7.3.1.5.3, is equal to or below [0-5] %.

   6. 4.2.7.3.1.5.6.

      The total amount of deposits is equal or above EUR [0-5] billion^f1. The weighted average cost of the deposits is not higher than […]^f2; the LDR is equal to or below [100-150] %.