Bolsas y Mercados Españoles (Spanish Exchanges) Held Its General Shareholders Meeting

• Bolsas y mercados españoles completed its first full year in 2003
• BME’s income, including extraordinary items, reached 90 million euros in 2003
• Bolsas y mercados españoles shareholders’ equity stands at 562 million euros
• BME to pay a 19.4 euro cent dividend, in addition to the same dividend paid in march
• BME to pay a special dividend of 59.79 cents out of the company’s reserve capital
• The pay-out from consolidated results is 55.41%
• The BME group posted income of 33 million euros in the first quarter, 31% up onthe same period last year
• The efficiency ratio betters that of the major European stock markets
• Jose Barreiro Hernandez and Franciso Gomez Roldan to join the board

“Bolsas y Mercados Españoles (hereinafter “the Group”) posted consolidated pre-tax profits of 90 million Euros in 2003, including extraordinary items worth 1.5 million euros. The positive results allow the Group to build on its sound financial muscle to develop its strategy, initiatives and projects in an efficient manner”, said Antonio Zoido during the Group’s General Shareholders’ Meeting yesterday.

BME posted EBITDA of 91.6 million Euros in 2003, 23% up on 2002. Following the group’s capital increase, fully subscribed by Banco de España in exchange for the bank’s contribution of its shares in Iberclear, the Group’s shareholders’ equity stands at 562 million euros.

The distribution scheme for the income generated in 2003, which is shown in the notes to the financial statements, includes the payment of a gross dividend of 38.8 cents per share, according to the Board Chairman. On 30 March 2004, half of this amount, that is 19.4 cents, was paid as an interim dividend. The General Shareholders Meeting decided to distribute the other half through a second gross dividend payment of 19.4 cents per share.

It is worth mentioning the pay-out from 2003 consolidated results, which has been fixed at 55.41%.

Bolsas y Mercados Españoles’ incorporation process ended in 2003. In September, the General Shareholders Meeting agreed on a capital increase operation which allowed the Group to acquire a 39.7 stake in Iberclear, which until then was held by Banco de España. At the same time, the operation allowed Banco de España to became a shareholder in BME.

Antonio Zoido also mentioned the change of BME’s subsidiary, FC&M, to BME Consulting. The company’s core business will be to carry out technology and consulting development and export projects for the capital, derivatives and commodities markets, mainly in Europe and Latin America.

The Group also expanded its board. The new members will help the Group shape a professional management structure while at the same time strengthening the management potential with a view to boosting the Group’s growth and development.

Up to 22 April 2004, the main benchmark for the Spanish securities market increased by 7%. As for equities, the value of trading in this product soared by over 50% on the same period 2003. Trading in equities reached 169.8 bn Euros, setting the best performing quarter ever.

The value of trading in Government fixed income products up to March reached 646.9 bn Euros, a similar figure to that in 2003. Accumulated Corporate Debt trading in the first quarter reached 119.5 bn Euros, a 43.1% increase on the same period last year.

In the first quarter 1,157,836 futures contracts were traded on the Ibex 35 index, a 26% increase on the same period last year, said Antonio Zoido.

The Group’s income for the first quarter of 2004 came in at 54 million euros, 22% up on the previous quarter. Pre-tax profits for the same period exceeded 33 million euros, a 31 % increase over the same period last year. In terms of EBITDA results, BME reached 33 million euros.

The Board agreed on a 50 million euros pay-out from the paid-in capital reserve, corresponding to a near 60 cents per share payment.

The distribution of this special dividend, charged to accumulated reserves, is, according to the Board Chairman, part of the Group’s commitment to increasing payments made to shareholders while at the same time boosting shareholders’ equity. Ahead of the payment of a special dividend and bearing in mind the results for the first quarter, the Group’s ROE ratio approximates to16%.

The latest reports published by the European Commission and OCDE stress the fact that Spain will continue to be a leading economy and will grow 2.8% in 2004, one basis point above the European average.

During the General Shareholders Meeting, Antonio Zoido stressed the contribution of regulatory bodies in helping galvanise the Spanish markets through new financial legislation. Their contribution has been translated into new market rules aimed at increasing investor protection and market transparency.

With regard to the European securities industry, Zoido stressed that it is developing in the shape of competing vertical structures. He also stated that the structure adopted by the Spanish markets will help them compete in the European arena more efficiently, thus not having to avoid competition.

As far as the business model of companies operating in the sector is concerned, it is worth mentioning the significant weight that the derivatives and settlement activities have gained recently. This is particularly the case with the Deutsche Börse and Euronext by means of takeover strategies. According to Antonio Zoido, these acquisition strategies stress the unfavourable conditions attached to organic growth in this particular sector.

Also worth mentioning is the efficiency ratio, which already anticipates a cost reduction strategy among BME’s major competitors which underlines how important it is for these companies to cut costs as much as possible. In this regard BME boasts the best efficiency ratio of the European exchanges.

In the next few months the Group’s objectives will be to help develop new synergies.

The Spanish market will continue to gain size, depth and efficiency. In this regard, BME will contribute the necessary financial muscle in a sector based on increasingly sophisticated technology solutions where there is a need to provide more and more cost-effective services. The Group will continue to research, develop and export new services and technology while at the same time contributing to the Group’s international expansion.

BME continues considering a possible listing and therefore the Group is exploring the advantages of being a public company.

The general Shareholders Meeting approved the appointment of the following board members: José Barreiro Hernández and Francisco Gómez Roldán, who will join the Group’s management. Josep Manuel Basañez tendered his resignation as member of the Board.

José Barreiro holds a Degree in Economics from Universidad Complutense de Madrid. He is the Chairman of Iberclear and BBVA Bolsa and Head of Global Markets and Distribution, BBVA.

Francisco Gómez Roldán holds a Degree in Aeronautics Engineering and a Degree in Economics. He is the Managing Director of the Finance Division, Grupo Santander.