ANNUAL REPORT ON THE REMUNERATION OF DIRECTORS OF …

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ANNUAL REPORT ON THE REMUNERATION

OF DIRECTORS OF

LISTED COMPANIES

2015

DATA IDENTIFYING ISSUER

ENDING DATE OF REFERENCE FINANCIAL YEAR: 31/12/2015

TAX IDENTIFICATION CODE (C.I.F.): A28157360

Registered Name: BANKINTER, S.A .

Registered Address: PASEO DE LA CASTELLANA, 29 – 28046 MADRID

This English version is a translation of the original in Spanish for information

purposes only. In case of a discrepancy, the Spanish original will prevail.

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A. COMPANY REMUNERATION POLICY FOR THE CURRENT FINANCIAL

YEAR (2016)

A.1. Explain the company’s remuneration policy.

The purpose of Bankinter’s remuneration policy is to establish the essential

principles and elements of a remuneration system fully compatible with the

Institution’s business strategy, objectives, values and long-term interests, and

with sound and prudent risk management, both in absolute terms and in

comparison with the sector, defining the Bank’s remuneration practices and

establishing monitoring and control mechanisms to ensure the Institution’s

soundness at all times, by not encouraging behaviour involving the

assumption of excessive risk, as well as by a remuneration structure

appropriate to the dedication and responsibility assumed by individuals,

attracting, retaining and motivating the most outstanding professionals.

Consequently, Bankinter’s remuneration policy is governed by the following

general principles, applicable to the remuneration of the entire workforce:

Prudent and effective risk management.

Alignment with long-term interests.

Appropriate balance between fixed and variable components.

Multiple elements.

Internal fairness and external competitiveness.

Supervision and effectiveness.

Flexibility and transparency.

Simplicity and customisation.

Attracting, retaining and motivating the most outstanding professionals.

Remunerating the dedication and responsibility assumed by individuals.

With regard to Directors, Bankinter’s remuneration policy provides for the

following types of remuneration, depending upon the duties performed:

i) Remuneration of directors in their capacity as such: as of 1 January 2015,

remuneration accrued by members of the Board of Directors for their

supervisory and collective decision-making duties consists of an annual fixed

amount that does not include variable components, provided that earning it is

not subject to achieving targets or indexed to profits, thus satisfying the

corporate governance recommendations.

Total remuneration received individually may be satisfied by means of one or

a combination of three of the following remuneration items, all included in

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the institution’s corporate By-Laws: i) annual fixed amount for membership of

the Board of Directors and exercise of duties as chairmen of its committees; ii)

fees for attending meetings of the Board and its committees; and iii) delivery

of shares, options on said shares or remuneration indexed to the value of the

shares.

For financial year 2016, remuneration will include only the first two items.

ii) Fixed Remuneration of the Chairman of the Board of Directors for

performance since January 2013 of non-executive institutional duties (as

described in section A.3 below) additional to those duties performed in his

capacity as Chairman of the collective decision-making body, the latter

remunerated in accordance with the structure of the preceding point. The

Chairman of the Board of Directors shall receive no variable remuneration

whatsoever, for the same reasons as noted in the previous point for non-

executive directors.

iii) Remuneration of the Executive Directors for their executive duties: in

addition to the remuneration mentioned in point i), for the exercise of their

executive powers and as part of the commercial administration agreements

binding them to the company, the executive directors (Executive Vice-

Chairman and CEO) receive annual remuneration consisting of a fixed portion

and another variable portion, depending on the fulfilment of previously

established targets, aligned with prudent risk management and consistent

with the institution’s long-term interests. The executive directors are also

entitled to participate in long-term variable remuneration systems that the

institution resolves to implement at any time.

Bankinter’s remuneration policy clearly distinguishes between the criteria for

the establishment of:

Fixed-base remuneration, primarily reflecting professional experience and

responsibility within the organisation, and

Variable remuneration, reflecting a sustainable, risk-adjusted return.

The fixed and variable components shall be duly balanced for the executive

directors, with the fixed component constituting a sufficiently high portion of

total remuneration.

At its meeting of 20 January 2016, the Board of Directors adopted, among

other resolutions, the annual variable remuneration structure for 2016

applicable to both the executive directors for the exercise of their executive

duties and the institution’s Senior Management, with a new configuration of

relevant indicators, the features of which are described in section A.4 below.

The total annual variable remuneration that executive directors might receive

for the exercise of their executive duties in a scenario of 100% fulfilment of all

targets set by the Bank for financial year 2016 would amount to 30.23% of

the fixed remuneration set for their executive duties in the case of the Vice-

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Chairman and 31.75% for the CEO, with said percentage being lower in any

case if total remuneration is considered as that which is accrued for the

supervisory and executive duties of directors.

At the same meeting of 20 January 2016, the Board of Directors also

approved a long-term incentive plan covering 60 beneficiaries, including both

the executive directors for the exercise of their executive duties and the

institution’s Senior Management and a portion of the members of the

identified group, with the features of said multi-year plan also described in

section A.4 below.

A.2. Information regarding preparatory work and the decision-

making process followed to determine the remuneration policy,

and any role played by the Remuneration Committee and other

control bodies in the configuration of the remuneration policy.

This information shall include, if appropriate, the mandate and

composition of the Remuneration Committee and the

identification of external advisers whose services have been used

to determine the remuneration policy. There shall also be a

statement of the nature of any directors who have participated in

the determination of the remuneration policy.

Bankinter’s general remuneration policy was proposed by the Appointments

and Remuneration Committee (currently the Remuneration Committee) at its

meeting of 20 January 2015 and approved by the Board of Directors at its

meeting of 21 January 2015.

Bankinter’s Board of Directors is responsible for establishing a control and

supervisory system for remuneration policy, to which end it may delegate

monitoring and supervision thereof to a committee.

In accordance with the above and with Article 35 of its By-Laws, on 21

January 2015 Bankinter established a separate Remuneration Committee, to

which it entrusted general powers to propose and report on remuneration

matters.

For its part, Article 37 of the Regulations of the Board assigns to said

Committee the following duties, among others:

Proposing for the approval of the board the remuneration policy for

directors and their individual remuneration, as well as the corresponding

annual director remuneration report, which the board shall submit to the

shareholders at the General Shareholders’ Meeting for a consultative vote.

Proposing to the board the individual remuneration of the executive

directors and, if applicable, the external directors, for performance of their

duties other than mere advising and other conditions of their contracts.

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Proposing the remuneration policy for senior management, including

general directors or those who carry out their senior management duties

under the direct control of the board, the executive committees or the CEO,

as well as individual remuneration and other basic conditions of their

contracts.

The remuneration of members who, while not part of senior management,

receive significant remuneration, particularly the variable portions, and

whose activities may have a material impact on the assumption of risks by

the Group.

Overseeing the scope of application of the remuneration policy in general

during the financial year, and ensuring compliance therewith.

Periodically reviewing the remuneration programmes, considering their

suitability and returns and ensuring that director remuneration conforms

to criteria of moderation and adjustment to the company’s results.

Ensuring the transparency of the remuneration and its inclusion in the

annual report and in any other annual reports containing information on

director remuneration and to this end, submitting any applicable

information to the Board.

Reporting on incentive plans for officers or employees related to the

performance of the Bank’s shares or to other variable indices, as well as on

the remuneration systems of the institution’s management team based on

group insurance systems or deferred remuneration systems, if any.

With relation to their remuneration, in accordance with the same articles 35

of the By-Laws and 38 of the Regulations of the Board, the Remuneration

Committee consists of four directors, appointed by the Board of Directors, all

of them external and non-executive, in accordance with the provisions of the

Companies Act (Ley de Sociedades de Capital), all of them independent

directors, including the director chairing the Committee.

Such members of the Committee have an indefinite term of office, as it falls to

the Board of Directors to approve their replacement as stipulated in article 37

of its Regulations.

Taking the above into account, as at the date of approval of this report, the

composition of Bankinter’s Remuneration Committee was the following:

Chairman

Mrs Rosa María García García (independent external director).

Members:

Mr Jaime Terceiro Lomba (independent external director).

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Mr Gonzalo de la Hoz Lizcano (independent external director).

Mr Rafael Mateu de Ros Cerezo (independent external director).

On 18 March 2015, Mr John de Zulueta Greenebaum, then an external

independent director of the Institution, ceased to chair the Remuneration

Committee after resigning as Director, for the reasons set forth in the Annual

Corporate Governance Report and also made available to the shareholders

upon the call to the General Shareholders’ Meeting that will be held in March

2016. Since 22 April 2015, Mrs. Rosa María García García, an external

independent director, has chaired the Remuneration Committee. Pursuant to

Article 31.1 of Royal Decree 84/2015 of 13 February, implementing Law

10/2014 of 26 June on the organisation, supervision and solvency of credit

institutions (hereinafter, “LOSS”), all directors have the appropriate level and

profile of training to perform their duties within the committee, particularly

in the areas of banking and financial services, and the practical experience

deriving from their previous occupations over sufficient periods of time.

In addition to the skills corresponding to the Remuneration Committee, the

Risk Committee’s duties in relation to remuneration policy include

collaborating to establish reasonable remuneration policies and practices

(article 42 of Royal Decree 84/2015, implementing the LOSS, and article 36 of

the Regulations of the Board of Directors). For such purposes, at its meeting

held on 19 January 2016, notwithstanding the duties of the Remuneration

Committee, the Committee confirmed that the incentives provided for in the

remuneration system take into consideration the risk, capital, liquidity and

probability and timeliness of earnings.

Finally, article 37 of the Regulations of the Board provides that the

Remuneration Committee must have access to all information and

documentation needed for the exercise of its duties, and may receive

assistance from advisors, consultants, experts and other dependent

professionals.

In this regard, in the process of adopting their respective decisions concerning

remuneration, the Remuneration Committee and the Board have been able to

use the comparative studies carried out by the consultant Towers Watson,

which compare the relevant remuneration data for the institution with those

of comparable markets and institutions, given the Bank’s scope,

characteristics and activities, including Abanca, Banco Mare Nostrum, Banco

Sabadell, Banco Santander, Bankia, BBVA, Caixabank, Evo Banco, Laboral

Kutxa, and Liberbank.

Further, the Remuneration Committee and the Board of Directors received

advice from the KPMG Abogados firm, as an independent expert witness in

preparing the Bankinter Group’s remuneration policy adjusted to the

requirements of Royal Decree 771/2011 of 3 June and Law 10/2014 of 26 June

on the organisation, supervision and solvency of credit institutions. Bankinter

has also received advice from the same firm for the preparation of this report.

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A.3. State the amount and nature of the fixed components, with a

breakdown, if applicable, of remuneration for the performance by

the executive directors of the duties of senior management, of

additional remuneration as chair or member of any committee of

the board, of attendance fees for participation on the Board and

the committees thereof, or other fixed remuneration as director,

and an estimate of the annual fixed remuneration to which they

give rise. Identify other benefits that are not paid in cash and the

basic parameters upon which such benefits are provided.

As noted in point A.1 of this report, Bankinter has a remuneration system

that distinguishes between remuneration of directors for performing their

supervisory and collective decision-making duties, i.e., in their capacity as

such, remuneration of the Chairman for performing non-executive

institutional duties, and remuneration of the executive directors for

performing executive duties. The fixed components remunerating the various

types of duties to be exercised by directors are explained below:

i. Fixed remuneration of all directors in their capacity as such (supervisory

and collective decision-making duties):

Pursuant to articles 37 of the By-Laws and 23 of the Regulations of the

Board, directors shall be entitled to receive remuneration for their

appointment as members of the Board of Directors, the annual maximum

amount of which for all directors shall be set by the shareholders at the

general shareholders’ meeting and which may be satisfied by means of:

An annual fixed allotment.

Attendance fees.

Delivery of shares, option rights thereon or remuneration indexed to

the value of the shares.

Pursuant to sections 217 and 529 septdecies of the Companies Act (Ley de

Sociedades de Capital), the General Shareholders’ Meeting of 18 March

2015 resolved to set the maximum amount of the annual remuneration of

the directors in their capacity as such at the amount of 1,600,000 euros,

which amount shall remain in effect for so long as the shareholders do not

approve an amendment thereof.

The specific decision as to the amount corresponding to each director for

the items mentioned above is set annually by the Board of Directors, taking

into account the duties performed by each director in the collective

decision-making body itself and his or her membership and attendance at

meetings of the board and the various committees. In this regard, the

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Board of Directors, at its meeting of 16 December 2015, approved the

following breakdown for 2016:

Annual fixed allotment:

Chairman: 175,950 euros annually.

The executive directors: 155,250 euros annually.

Other members of the Board: 87,975 euros annually.

Chairmen of some of the Committees: Additional 15,525 euros

annually.

Attendance fees, to be paid after each meeting:

Board of Directors: 2,070 euros per meeting to the Chairman of the

Board and 1,552.50 euros per meeting to the members.

Committees: 1,552.50 euros per meeting to the Chairman of the

Board and 1,035 euros per meeting to the members.

Delivery of shares, option rights thereon or remuneration indexed to

the value of the shares: not provided.

These amounts have been subject to an adjustment of 3.5% for 2015, in

line with the average increase in remuneration for the rest of the

workforce, and far below the Bank’s increased earnings in recent years.

In the event of death, it is established that all rights to sums pending

receipt but already accrued that correspond to the director shall be passed

on to his or her heirs or beneficiaries, taking such actions as may be

necessary to this end. The same shall occur in the event of disability of the

director in performing his or her duties.

In cases of resignation by the director for any reason other than those

indicated in the preceding section, with regard to the fixed annual amount,

it is established that the resigning director shall be entitled to the

proportional share corresponding to the number of days the director has

spent in the position.

It is also necessary to note that directors Mr Gonzalo de la Hoz Lizcano and

Mr Rafael Mateu de Ros, in their capacity as non-executive directors,

receive fees for attending Board of Directors’ meetings of other group

companies. The breakdown of the aforementioned fees and their amounts

are specified in sections C and D of this report, respectively.

ii. Fixed remuneration of the Chairman of the Board for non-executive

institutional duties.

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Bank’s Board, the Chairman of the Board of Directors is ultimately

responsible for the effective functioning of the Board of Directors. The

Chairman’s duties include the following:

1. Duties of the Chairman of the Board of Directors in his capacity as

such

The Chairman of the collective decision-making body is responsible for the

following duties, among others, in his capacity as such:

a) Ensuring the effective functioning of the Board;

b) Convening and chairing the Board;

c) Leading the Board and its discussions and ensuring their coverage;

d) Preparing and submitting to the board of directors the schedule of

dates and issues to be discussed;

e) Promoting discussion of the institution’s strategic objectives;

f) Maintaining relations with directors, facilitating their exercise of their

duties;

g) Organising and coordinating the periodic assessment of the board as

well as that of the company’s top executive, if applicable; and

h) Approving and reviewing the knowledge refresher programmes for

each director, which the circumstances so require.

2. Institutional representation duties to the institution’s benefit

In addition to the duties corresponding thereto as Chairman of the

collective decision-making body and notwithstanding the institution’s legal

representation, which in each case corresponds to the individuals

appointed for that purpose, the Chairman performs specific duties within

the scope of institutional relations, which under no circumstances involve

the exercise of management or any other executive powers, which

correspond exclusively to the directors appointed as such by the Board.

Within this scope, the Chairman performs the following activities, among

others:

a) Maintaining institutional relations with domestic and international

supervisory bodies and sectoral bodies, establishing periodic contacts

with them, if applicable;

b) Contributing to the institution’s relations with domestic and

international investors, credit rating agencies, etc., maintaining

contact with them for such purpose in coordination with the areas

responsible for the institution’s institutional relations;

c) Contributing to the strengthening of institutional relations with

domestic and international bodies representing sectoral interests;

d) Maintaining institutional relations with the leading institutions in the

markets, clearing houses and other similar institutions; and

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e) Assisting the various business units of the institution and of its

subsidiaries, at their request, in their institutional relations with

customers, suppliers or any other commercial partners.

3. Duties relating to Corporate Social Responsibility

Within the scope of Corporate Social Responsibility and in accordance with

Bankinter’s Policy, the following duties correspond to the Chairman:

a) Ensuring coordination [of] the activities of the Innovation Foundation

with the Bank’s various departments, setting targets and assessing its

Director and proposing his or her remuneration to the Board

[Patronato];

b) Chairing the Sustainability Committee;

c) Proposing, coordinating and overseeing the Sustainability Committee’s

activities with regard to:

i) Changes in the Sustainability Policy and in the resulting Plans,

Lines and Programmes, ensuring their dissemination and

seeking the involvement of all BANKINTER interest groups,

particularly strategic groups (employees, shareholders,

customers, etc.).

ii) The Sustainability Strategy and its Master Plan, their planning

and the monitoring of their corresponding initiatives.

iii) The effective integration of the principles contained in the

Sustainability Policy and Strategy into the management of each

company business unit, both consistently and integrated into

the Bank’s overall Strategy.

iv) Ensuring the availability of the resources and tools needed to

implement and improve Sustainability Management in the

Institution, promoting innovation and the use of the best

available technologies.

v) Managing the information needed to extend and maintain

management systems, thus contributing to improving the

Institution’s economic, social and environmental efficiency.

vi) Preparing the Sustainability Report and reviewing it prior to its

presentation to the Board of Directors through the

Appointments and Corporate Governance Committee.

vii) Analysing the repercussions of possible organisational changes

for Sustainability Management, and establishing appropriate

measures to ensure the continuity and efficiency of the

management system.

viii) Participating in the review of progress and performance of

Sustainability Management to ensure its proper functioning.

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d) Periodically informing the Board of Directors, through its

Appointments and Corporate Governance Committee, of the

Sustainability Committee’s monitoring of the Sustainability Strategy

and its main points of progress.

e) Any other points that the Board may agree to assign thereto.

4. Duties concerning the Internal Audit Division

According to article 36 of the Regulations of the Board of Directors, the

Bank’s Audit Division, reporting to the Audit and Regulatory Compliance

Committee, functionally reports to the Chairman, pursuant to which its

duties are the following:

a) Proposing the targets and remuneration of the Internal Audit

Director for approval by the Audit and Regulatory Compliance

Committee; and

b) Performing ordinary monitoring of the Division’s activities without

prejudice to the exclusive competence of the Board’s Audit and

Regulatory Compliance Committee, to which it directly reports.

In view of the above, and in accordance with articles 37 of the By-Laws and

23 of the Regulations of the Board, in view of the responsibilities assigned

thereto and other objective circumstances, upon the prior proposal of the

Remuneration Committee, the Board of Directors at its meeting of 16

December 2015, without the presence of the Chairman, awarded the

following amount of additional fixed remuneration to the Chairman of the

Board for 2016:

Chairman of the Board: 661,500 euros per year (receives no variable

remuneration).

This amount has been adjusted by 5% for 2015, due to the excellent

performance of the duties that have been assigned thereto, as

previously described.

iii. Fixed remuneration of executive directors


Board, directors will be entitled to receive the remuneration (wages,

incentives, bonus, pension, insurance, severance payments) deemed

appropriate for performance of their duties other than those involving

supervision and collective decision-making as members of the board, upon

the prior proposal of the Remuneration Committee and by approval of the

Board of Directors.

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Bankinter’s Board of Directors has two executive directors: (i) the CEO, Ms

María Dolores Dancausa Treviño, and (ii) the Executive Vice-Chairman, Mr

Alfonso Botín-Sanz de Sautuola y Naveda, representing Cartival, S.A.

Pursuant to article 27 of the By-Laws, the CEO has been assigned the

ordinary management of the business, with the highest executive duties,

as well as all the powers of the Board of Directors, except those which

cannot be delegated under law, the By-Laws themselves or the Regulations

of the Board.

In turn, the Executive Vice-Chairman’s duties include the following, among

others:

Chairing the Executive Committee;

Chairing the Assets and Liabilities Committee;

The delegated executive [duties] assigned thereto under the By-

Laws and the Regulations of the Board; and

Duties relating to risk and Investment Banking.

The fixed remuneration of the company’s executive directors is also based

on the level of responsibility of the position held and on the experience,

performance and training of the individual holding it. The remuneration

levels that have been established are adapted to the Bank’s values, giving

additional weight to teamwork over individual work, consistent with the

Bank’s culture.

Annually, applying the principle of market analysis, Bankinter participates

in sectoral remuneration studies to establish the market references against

which it is compared. These references are also taken into account, along

with other internal criteria, in developing the salary ranges that are

established for each position. Specifically, in setting remuneration for

financial year 2016, the Remuneration Committee and the Board of

Directors made use of a study performed by the consulting firm Towers

Watson on the analysis of the competitiveness of the chief executive’s

remuneration, which compares Bankinter to 12 IBEX35 companies,

namely: Amadeus, Abertis, Ferrovial, Red Eléctrica, Grifols, Enagas,

Mediaset, Acerinox, Día, Gamesa, Técnicas Reunidas and Indra. Said study

also includes a second comparison with the following group of Spanish

financial institutions: Santander España, CaixaBank, BBVA España, Banco

Sabadell and Banco Popular. The results of said study indicate that the

remuneration of Bankinter’s executive directors for the exercise of their

executive duties is significantly below the average of their peers.

In view of the above, at its meeting of 16 December 2015, without the

presence of the executive directors and at the proposal of the Remuneration

Committee, the Board of Directors awarded the following fixed

remuneration to them for 2016:

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CEO: 785,333 euros annually.

Executive Vice-Chairman: 562,555 euros annually.

Said remuneration was subject to an adjustment of 12% in the case of the

CEO and of 8% in the case of the Executive Vice-Chairman for 2015, by

reason of their dedication and performance in recent years, while still

maintaining a significant difference from peers in other companies, as

shown by the abovementioned remuneration studies.

Fixed remuneration

2016

Fixed remuneration

2015

Non-Executive Chairman 661,500 euros annually 630,000 euros annually

Executive Directors:

- Vice-Chairman 562,555 euros annually 520,884 euros annually

- CEO 785,333 euros annually 701,190 euros annually

A.4. Explain the amount, nature, and main features of the variable

components of the remuneration systems.

As noted previously, the only directors who receive variable remuneration are

those who exercise executive duties: the Executive Vice-Chairman and the

CEO.

The purpose of this variable remuneration is to incentivise performance by

orienting it toward the targets set by the Institution, so as to ensure a proper

correlation between the resulting remuneration levels and the evolution of

the company’s results, directly indexed to overall banking activity targets

while at the same time promoting sound and effective risk management that

prevents the variable remuneration from creating incentives for individual

behaviour involving the assumption of excessive risk.

The remuneration plans from which the executive directors benefit are set

forth below.

i. Annual variable remuneration

Bankinter has not defined a specific variable remuneration structure for the

Executive Directors, but rather applies the same annual variable incentive

system to them as to the rest of the workforce that receives this type of

remuneration.

The purpose of the annual incentive is to ensure a proper correlation

between the resulting remuneration levels and the evolution of the results,

directly indexed to the Earnings Before Tax target of the group’s banking

activity, with a system of individual distribution based on assigned duty

and responsibility.

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Furthermore, in the established target indicators, the annual variable

remuneration system includes, in addition to those referring to that year,

financial indicators defined to ensure proper correlation between the

resulting remuneration levels and the evolution of the group’s medium-

and long-term results, preventing excessive risks from being incurred.

To ensure the variable remuneration of the executive directors has these

characteristics, Earnings Before Tax (EBT), to contribute to the appropriate

management of risks and their association with medium- and long-term

management, and Gross Margin, a critical factor in medium- and long-

term business sustainability and in alignment with the institution’s risk

policy, have been set as financial indicators for financial year 2016.

Each of these indicators, EBT and Gross Margin, independently account for

60% and 40%, respectively, of variable remuneration. The variable

component accrues from the achievement of 90% and up to a maximum of

120% of the targets, potentially resulting in between 80 and 120% of the

variable amount assigned to each beneficiary, according to the

aforementioned achievement percentages. Pursuant to the foregoing, the

incentive to be received in the event of maximum achievement of the

targets is 120% of the target incentive. This information is broken down in

the following table:

Target Weighting % Compliance % Incentive

Accrual

EBT 60% 90% ≤ x ≤ 100%

100% < x ≤ 100%

80% ≤ x ≤ 100%

100% < x ≤ 120%

Gross margin 40% 90% ≤ x ≤ 100%

100% < x ≤ 100%

80% ≤ x ≤ 100%

100% < x ≤ 120%

Additionally, accrual of this variable remuneration is contingent upon

achieving a solvency indicator: the level of capital measured by “Core

Equity Tier One” (CET1) must be 10% to accrue 100% of the achieved

incentive. If this Capital Ratio is between 9% and 10%, 50% of the

achievement will be accrued, and below 9%, no amount whatsoever will be

accrued.

CET1 % compliance

x < 9% 0

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9% ≤ x < 10% 50%

x ≥ 10% 100%

In light of all the foregoing, upon the proposal of the Remuneration

Committee, Bankinter’s Board of Directors has approved the following

amounts as variable remuneration for 2016, which the executive directors

will receive if they meet 100% of the defined targets:

For accrual of the variable remuneration for financial year 2016, if

applicable, the Vice-Chairman will receive 170,060 euros, subject to the

clauses described below.

The variable remuneration set for the CEO for financial year 2016 is

249,343 euros, subject to the clauses described below.

Variable remuneration

2016(*)

Variable remuneration

2015(**)

Non-Executive

Chairman

0 0

The executive directors:

- Vice-Chairman 170,060 euros annually 161,289 euros annually

- CEO 249,343 euros annually 228,038 euros annually (*)

Estimated amount for 100% achievement of the targets to which the 2016 variable

remuneration is indexed. (**)

Accrued amount according to a target-achievement percentage of 102.43%

This annual variable remuneration is subject to the following clauses:

Deferral: a substantial portion of the variable remuneration element,

specifically 40%, will be deferred over a period of three years, correctly

adjusted to the nature of the business units, their risks and the

activities of the members of the identified group.

This deferred remuneration shall be paid over the three years

immediately following receipt of the non-deferred portion, in thirds,

and thus the remuneration payable under the deferral provisions will

not be received more quickly than is proportionate, through annual

payments of the same amount.

Payment in shares: a substantial portion of the variable remuneration

element, specifically 50%, will be delivered in Bankinter shares.

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The provisions of this section will apply both to the portion of the

variable component of deferred remuneration and to the portion of the

variable component of non-deferred remuneration.

Holding period: Bankinter shares delivered to the executive directors as

variable remuneration shall be subject to a one-year holding policy as

from the date of their delivery, during which the shares will not be

available and may not be traded.

The features of said share delivery are contained in the report

submitted by the Remuneration Committee to the Board of Directors

for this purpose. Said report also explains the conditions inherent to

the payment of variable remuneration, with respect to the share

holding period, the prohibition on hedging transactions on said share

deliveries, and ex-post adjustments to remuneration, among others.

Prohibition on hedging and ex-post adjustment: The information

concerning this clause is set forth in section A.13 below.

ii. Multi-year variable remuneration: It is also necessary to mention that at its

meeting of 20 January 2016, at the proposal of the Remuneration

Committee, Bankinter’s Board of Directors approved the implementation of

a multi-year incentive plan from which the executive directors, among

others, will benefit. The essential features of said plan are the following:

1.- Plan Objectives

To improve the level of commitment and loyalty of key employees.

To transmit a long-term view of the bank to key officers in order to

generate a culture of sustainability.

2.- Participants: Executive Vice-Chairman, CEO, Management Team,

Organisation Directors and other Key Individuals. In total, 60 persons.

3.- Duration: Three years to calculate the accrued amount and four years as

from the final accrual date (31 December 2018) for the full payment of the

accrued amount (applying the deferral clauses).

Accrual: One third each year (end of 2016, 2017 and 2018)

Settlement dates:

17

4.- Reference amount of Incentive:

Two annual instalments of gross annual fixed salary for 2015

received by the plan beneficiary.

In calculating the incentive amount, the items of remuneration in

kind and corporate benefits, as well as any other type of variable

remuneration received in 2015, are expressly excluded from the

calculation.

5.- Indicators and Adjustment Mechanism

One hundred per cent of the Incentive is subject to the following final

conditions:

Each year, the Bank’s ROE must be above the mid-point for the peer

group of institutions as at 31 December of each year. The peer group

for 2016 is made up of: Santander, BBVA, CaixaBank, Bankia,

Sabadell, Popular and Liberbank. The peer group of institutions will

be subject to review each year by the Remuneration Committee to

adapt it to variations in the market, thus ensuring that in the event

of market changes, the peer group continues to be representative.

% of Bank ROE

% of accrued incentive as

at

31 December 2016

% of accrued incentive as at

31 December 2017

% of accrued incentive as

at

31 December 2018

X => mid-point of the peer

group of institutions

100% of 1/3 of the total

incentive


incentive


incentive

X < mid-point of the peer 0% 0% 0%

18

group of institutions

The ROE for Customer Activity must also exceed 10% at 31 December

2018 in order to receive 100% of the accrued variable incentive,

according to the following accrual scale:

% Customer ROE % of accrued incentive

8% ≤ x < 9% 50% ≤ x < 75%

9% ≤ x < 10% 75% ≤ x < 100%

10% ≤ x < 11% 100% ≤ x < 125%

11% ≤ x < 12% 125% ≤ x < 150%

x ≥ 12% x = 150%

6.- Basic conditions for payment of the Multi-Year Incentive

This Incentive is in addition to the rest of the variable remuneration

plans existing now or in the future at the Bankinter Group.

Furthermore, the following shall be necessary and indispensable

conditions for payment:

a. Being part of and active in the group on the accrual dates.

Termination of the employment or commercial relationship prior

to the payment dates, for any reason, will automatically and

without need for any notification whatsoever result in termination

of the right to be paid this Incentive.

b. Retaining the functional level or current responsibilities.

The Malus and Clawback clauses will be applied according to the

Bank’s Remuneration Policy.

Share holding period of one year.

7.- Definitions:

Bank ROE: Return on Equity of the Consolidated Group as a ratio

between earnings after tax and average equity.

ROE for Customer Activity: Net return resulting from inventoried

banking activity involving Adjusted Net Equity, adjusted to the

requirement that the CET 1 Capital Ratio be 10%.

Its formulation would be:

ROE = EAT / Adjusted Net Equity

Where:

19

EAT = Earnings After Tax of Bankinter, S.A. and

Bankinter Consumer Finance, S.A., EFC. (excluding cash

transactions).

Adjusted Net Equity = Net Equity excluding Línea Directa

Aseguradora * (10.0% / CET 1 Capital Ratio)

A.5. Explain the main features of the long-term saving systems,

including retirement and any other survival benefit, either

wholly or partially financed by the company, and whether

funded internally or externally, with an estimate of the

equivalent annual amount or cost thereof, stating the type of

plan, whether it is a defined-contribution or benefit plan, the

conditions for the vesting of economic rights in favour of the

directors, and the compatibility thereof with any kind of

indemnity for early termination or severance of the contractual

relationship between the company and the director.

With respect to the members of the Board of Directors, Bankinter has

established no retirement system, nor does it maintain retirement

commitments for its directors.

As an exception to the above, in the case of the CEO, it is necessary to clarify

that as CEO of the Bankinter subsidiary Línea Directa Aseguradora S.A.

(hereinafter Línea Directa), in 2005 she was awarded a defined-contribution

retirement plan that Bankinter’s Board of Directors, at the proposal of its

Appointments and Remuneration Committee (currently Remuneration

Committee), resolved to maintain at the time she joined the Bank. The

amount contributed to the aforementioned plan was 600,000 euros and

covered normal retirement, death and disability contingencies, and being a

defined contribution plan there was no commitment by Línea Directa or

Bankinter to make new contributions. Thus, no new contributions have been

made for this item up to the date of approval of this report, nor is there any

commitment to do so in future years.

A.6. State any severance payments agreed to or paid in case of

termination of duties as a director.

In the case of the Chairman, the Executive Vice-Chairman and the other

directors, no severance payments whatsoever have been established in the

event of termination for any reason.

The Chairman, Vice-Chairman and CEO have entered into commercial service

agreements with the company to cover all principal and accessory conditions

and features of their respective relations with the company.

20

In the case of the CEO, the severance payments provided for in the agreement

signed with the company apply solely to cases similar to those established for

ordinary employment relations in the Workers’ Statute and are subject to a

severance limit that may not under any circumstances exceed the limit set in

labour regulations for all employees of the Institution. In any event, pursuant

to best corporate governance practices, the severance does not exceed twice

the amount of annual total remuneration.

In any case, there is no right to receive severance payments relating to

circumstances or situations of change of control at the institution.

A.7. State the conditions that must be included in the contracts of the

executive directors performing senior management duties.

Include information regarding, among other things, the term,

limits on severance payment amounts, continuance in office

clauses, prior notice periods and payment in lieu of prior notice,

and any other clauses relating to hiring bonuses, as well as

benefits or golden parachutes due to early termination or

severance of the contractual relationship between the company

and the executive director. Include, among other things, any

clauses or agreements on non-competition, exclusivity,

continuance in office or loyalty, and post-contractual non-

competition.

The Vice-Chairman and CEO entered into commercial service agreements

with the company on 25 October 2010 to cover all principal and accessory

conditions and features of the commercial administration relationship

binding on directors pursuant to the organic relationship deriving from the

performance of their executive duties, in addition to those corresponding to

their remuneration.

A description of the conditions of the executive directors’ agreements is set

forth below:

Obligation of exclusivity and non-compete agreement: The executive

directors may not enter into other commercial or service agreements with

other companies or institutions without express authorisation of the

board of directors, establishing in any case a non-compete obligation with

relation to companies and activities of a kind similar to those of the Bank

and its consolidated group.

Submission to the Code of Professional Ethics and the Bankinter Group

Securities Market Code of Conduct: The obligation is established to

comply with the Code of Professional Ethics and the Bankinter Group

Securities Market Code of Conduct.

21

Obligation of confidentiality and return of documents: A rigorous duty of

confidentiality is established during the lifetime of the relationship as

well as after its termination, at which point documents and personal

objects related to the executive director’s activities and that are in his or

her possession must be returned to the Bank.

Duration, Prior Notice Periods and Severance Payments for Termination

of the Agreement: The Agreement is in full force as of the date of the

appointment as Executive Director and remains fully valid so long as the

appointment with executive powers remains current. In the event that

resignation is presented for any reason whatsoever, written notice must

be given three months in advance in the case of the CEO and 15 days in

advance in the case of the Executive Vice-Chairman, with the company

having the power to discount from the Director’s settlement the amount

corresponding to the unsatisfied prior notice period, unless agreed

otherwise by the Board.

Section A.6 above establishes the severance payments, if applicable,

provided for in the aforementioned agreements.

Post-contractual obligations: The CEO assumes the post-contractual non-

compete obligations during the 18-month period after the termination

date of her commercial agreement, undertaking not to engage in

employment activities or provide professional services, on her own account

or on behalf of others, that compete with those of the Bank or entities of its

Group. Remuneration under the agreement consists of a sum equal to 50%

of the last total annual fixed remuneration approved by the Board of

Directors, to be paid after the lapse of the aforementioned 18-month

period.

A.8. Explain any supplementary remuneration accrued by the

directors in consideration for services provided other than those

inherent in their position.

Bankinter directors have accrued no remuneration whatsoever under

this item other than that mentioned above.

A.9. State any remuneration in the form of advances, loans, or

guarantees provided, with an indication of the interest rate,

main features, and amounts ultimately returned, as well as the

obligations assumed on their behalf as a guarantee.

The members of the Bankinter Board of Directors have received no sum

whatsoever in the form of advances, credits or loans from the Institution

22

or guarantees established by the same in favour of directors, in the form

of remuneration.

Nevertheless, Bankinter directors maintain risk positions in their name,

all of them consistent with the company’s ordinary course of business

and under market conditions, that is, pursuant to agreements with

standardised conditions and which are generally and customarily

applied to all other customers..

A.10. Explain the main features of remuneration in kind.

The Chairman and CEO of Bankinter are beneficiaries of health

insurance policies underwritten with the Bank. The Bank pays the

corresponding premiums, which are attributed to the directors as

remuneration in kind.

The Bank also compensates the aforementioned directors, as applicable,

with other remuneration in kind, such as leasing of vehicles and other

corporate benefits applicable to the other employees.

A.11. State the remuneration accrued by the director by virtue of

payments made by the listed company to a third party to which

the director provides services, if such payments are intended to

provide remuneration for the services thereof in the company.

Bankinter’s directors have accrued no remuneration whatsoever for

this item.

A.12. Any item of remuneration other than those listed above, of

whatever nature and provenance within the group, especially

when it is deemed to be a related-party transaction or when the

making thereof detracts from a true and fair view of the total

remuneration accrued by the director.

Bankinter’s directors have accrued no remuneration whatsoever for

this item other than that mentioned above.

A.13. Explain the actions taken by the company regarding the

remuneration system in order to reduce exposure to excessive

risk and align it with the long-term targets, values, and

interests of the company, including any reference to: measures

provided to ensure that the remuneration policy takes into

account the long-term results of the company, measures

23

establishing an appropriate balance between the fixed and

variable components of remuneration, measures adopted with

respect to those categories of personnel whose professional

activities have a significant impact on the institution’s risk

profile, recovery formulas or clauses giving the right to demand

the return of the variable components of remuneration based on

results if such components have been paid based on data that is

later clearly shown to be inaccurate, and measures provided to

avoid any conflicts of interest.

The variable remuneration structure established by the Bank is

consistent with the principles of the regulatory provisions and

European regulations governing it. Said regulations require that the

remuneration policy be compatible with appropriate and effective risk

management, promote this type of management and offer no

incentives to assume risks that exceed the level of risk tolerated by the

credit institution. Bankinter’s remuneration policy satisfies the

aforementioned principles based on the following:

The incentive plan targets that shape the variable remuneration

are not indexed to individual and/or short-term targets, but rather

to the bank’s overall earnings before tax, thus incorporating, as

achievement parameters, all those risk elements that the

Institution needs to take into consideration, as well as the

corresponding evaluation elements for units, departments and the

achievement of individual targets in the appropriate proportion.

Bankinter’s remuneration policy is compatible with the institution’s

business strategy, targets, values and long-term interests.

In terms both absolute and in comparison with the sector, and

resulting from the studies carried out by Towers Watson for

Bankinter, both fixed and variable amounts that have been

received may be classified as moderate and prudent and in any case

in proportion to the annual earnings generated by the Bank, the

remuneration offered annually to shareholders, and earnings

retained to strengthen share capital each year.

There have been no cases in which individual accrual targets for

variable remuneration might act as encouraging the assumption of

risks not consistent with the Bank’s general risk profile because,

among other reasons, the targets are always primarily set in

reference to fulfilment of the Bank’s overall earnings before tax

target and, where applicable, to the specific targets of each

department or business centre, and only partially, and not always,

based on the fulfilment of individual targets. In any case, there are

24

rigorous separate and independent controls with relation to the

areas of greatest involvement with the markets, such as Treasury,

to ensure adequate management of the risk assumed at any time

and compliance with the investment framework established each

year by the Board of Directors.

The criteria for accrual of the variable items take into account

expected losses from that activity. The losses resulting from the

risks incurred in previous financial years necessarily affect the

annual fulfilment of group and individual targets.

The Bank has adequate and sufficient tools for the measurement

and monitoring of fulfilment of the variable remuneration system

targets.

The control areas have no variable remuneration indexed to

fulfilment of the objectives of the areas they control.

The Bank has no golden parachutes for the executive directors.

Under no circumstances are they entitled to receive severance

payments associated with circumstances or situations of change of

control at the institution. There are neither “golden parachutes” nor

guaranteed bonuses.

The composition of the Bank’s balance sheet, its levels of

delinquency and risk incurred, and the extremely prudent risk

management culture constitute a clear and evident display of

alignment of the bank’s remuneration systems with its desired

level of risk.

The composition of the Remuneration Committee, its duties and its

role in defining and approving the variable contribution systems

satisfies not only the regulatory provisions but also the principal

national and international Good Corporate Governance standards.

Each year an internal, central and independent assessment is

performed of the application of the remuneration policy, with a

view to verifying fulfilment of the remuneration standards and

procedures adopted by the Committee itself and the Board in this

regard.

Bankinter has established certain appropriate ratios among the

fixed and variable total remuneration components for members of

the identified group, which includes the executive directors, with

the following principles applying to them:

- The variable component shall not exceed 100% of the fixed

component of each individual’s total remuneration.

25

- Nevertheless, the Institution’s General Shareholders’ Meeting

may approve a level higher than stipulated in the preceding

section, provided it does not exceed 200% of the fixed

component.

Deferral: Notwithstanding the application of the principle of

proportionality as explained in the Institution’s remuneration

policy, a substantial portion of the variable remuneration

component, specifically 40%, shall be deferred over a period of

three years, correctly adjusting to the nature of the businesses,

their risks and the activities of the members of the identified group.

This deferred remuneration shall be paid over the three years

immediately following that of the receipt of the non-deferred

portion in thirds, and therefore the remuneration payable under

the deferral provisions will not be received more quickly than is

proportionate.

Payment in shares and holding periods: Notwithstanding

application of the principle of proportionality as set forth in the

Institution’s remuneration policy, a substantial share of the

variable remuneration component, specifically 50% of any variable

remuneration component, shall be delivered in Bankinter shares.

The provisions of this section shall apply both to the portion of the

variable component of deferred remuneration and to the portion of

the variable component of non-deferred remuneration.

The resulting amounts in cash and shares shall be paid net of taxes

(or withholdings).

By application of this section, Bankinter shares delivered to

members of the identified group, which includes the executive

directors, shall be subject to a holding policy of one year from

delivery, which is considered an appropriate practice for the

incentives to be consistent with the Institution’s long-term

interests.

Ex-post adjustments: The variable remuneration, including the

deferred portion, shall be paid or consolidated only if sustainable in

accordance with the financial situation of the Institution as a

whole, and if justified based on the results of the Institution, the

business unit and the individual in question.

Bankinter has established the following malus and clawback

clauses that will apply to up to 100% of the total variable

remuneration. They establish specific criteria that particularly

cover situations in which the employee has participated in or is

26

responsible for conduct that resulted in significant losses to the

Institution and in which the relevant requirements of suitability

and adjustment were violated.

- Deferred variable remuneration in both cash and shares that is

pending payment shall be subject to reduction by Bankinter if

any of the following circumstances occur during the period until

its consolidation:

- A reformulation of annual accounts that does not result

from a regulatory change, and provided that according to

the aforementioned reformulation, it results in variable

remuneration to be paid that is lower than that initially

accrued, or no payment of any remuneration whatsoever

has been made in accordance with Bankinter’s variable

remuneration system.

- If the accrual of the variable remuneration was due to

certain targets the fulfilment of which was achieved as a

direct or indirect consequence of:

Fraudulent action by the member of the identified

group.

The occurrence of circumstances that result in the

disciplinary dismissal of the employee in accordance

with applicable labour regulation or, if involving a

director, the occurrence of circumstances that result in

his or her removal from the position of director due to

breach of his or her duties, any actions or omissions

that cause harm to the Institution, or the occurrence of

the necessary circumstances for the Institution to be

able to take corporate liability action against him or

her.

The member of the identified group causing serious

harm to the Institution due to fraud or negligence.

The member of the identified group having been

sanctioned for a serious and fraudulent breach of any of

Bankinter’s internal standards that may apply.

The member of the identified group having been

punished for a violation of the organisation and

discipline standards under Title IV, Law 10/2014 of 26

June on the organisation, supervision and solvency of

credit institutions, classified as serious or very serious.

- If, as a consequence of an action attributable to the member

of the identified group, any of the following circumstances

occur:

27

Failure to meet the capital ratios legally established at

any time by applicable regulation, for a continuous

period greater than three (3) months.

Failure to meet the liquidity ratios legally established

at any time by applicable regulation, for a continuous

period greater than three (3) months.

Significant negative changes occurring to the

Institution’s risk profile due to actions taken at the

margin of the policies and limits approved by the

Committee.

The gross margin or earnings before and after tax (EBT

and EAT, respectively), after deducting the variable

remuneration owed, are negative.

The Institution’s operating costs are not covered due to

significant deterioration in financial margins or due to

a significant increase in general or personal expenses.

Notwithstanding the provisions of this clause, the circumstances

for the application of a “malus” may be modified, broadened or

adjusted depending on the relevant regulation that may be

established at any time or if Bankinter’s Board of Directors deems it

to be appropriate.

The variable remuneration already paid in both cash and shares to

members of the identified group, which includes the executive

directors, whether deferred or not, will be partially or wholly

recovered by Bankinter if, during the two years immediately after

its payment, it is clearly shown that the payment and, therefore,

the non-application of the adjustment mechanisms, occurred

partially or wholly based on information the falsity or serious

inaccuracy of which has been clearly demonstrated a posteriori, or

risks materialising that were assumed during the contingent

period, or other circumstances not provided for or assumed by the

Bank that have a material negative effect on the income

statements for any of the financial years applying thereto.

A decision by the Board of Directors that circumstances have

occurred that must cause the triggering of this clause and the

percentage to be returned to the Bank, as well as the procedure by

which the Bank will be able to reclaim a proportional return of the

amount paid or even offset it against other remuneration of any

kind the individual is entitled to receive, as well as the latter’s

obligation to repay to the Institution part or all of the amount, will

be consistent with the remuneration return policy applicable to the

identified group that the Bank has approved for these purposes.

28

Prohibition on hedging transactions: No personal hedging or

insurance strategies may be used concerning remuneration and

liability that impair the effects of alignment with sound

management of risks that its remuneration systems encourage.

Specifically, members of the identified group may not engage in

hedging transactions of any kind nor contract any insurance on

deferred variable remuneration that is pending payment as set

forth in relation to the deferral clause in the Institution’s

remuneration policy.

Nor may they engage in hedging transactions involving Bankinter

shares already delivered that are subject to the holding period.

B. OVERALL SUMMARY OF THE APPLICATION OF THE

REMUNERATION POLICY DURING THE YEAR JUST ENDED

B.1. Summarise the main features of the structure and items of

remuneration from the remuneration policy applied during the

financial year just ended, which give rise to the breakdown of

individual remuneration accrued by each of the directors as

reflected in Section C of this report, and provide a summary of

the decisions made by the board to apply such items.

An overall summary of the application of the remuneration policy for the

last financial year (2015) is set out below.

i) Remuneration of directors for duties of supervision and collective

decision-making:

According to the report submitted to the shareholders at the 2015

Ordinary General Shareholders’ Meeting on a consultative basis and

approved by the same, total remuneration received on an individual

basis has been paid by means of the following remuneration items, both

established in the institution’s By-Laws: i) annual fixed allotment for

membership on the Board of Directors and performance of their duties as

chairs of their committees, and ii) attendance fees for meetings of the

Board and of the committees thereof.

No variable remuneration whatsoever has been received for the exercise

of these duties.

Thus, the amounts received for the remuneration items noted above are

as described below:

Annual fixed allotment:

29

- Chairman: 170,000 euros annually.

- The executive directors: 150,000 euros annually.

- Other members of the Board: 85,000 euros annually.

- Chairmen of any of the Committees: Additional 15,000 euros

annually.

Attendance fees, to be paid after each meeting:

- Board of Directors: 2,000 euros per meeting to the Chairman of

the Board and 1,500 euros per meeting to the members.

- Committees: 1,500 euros per meeting to the Chairman of the

Board and 1,000 euros per meeting to the members.

No shares, option rights thereon or remuneration indexed to the value

of the shares were delivered during 2015.

In 2015, the Independent Directors Mr Gonzalo de la Hoz Lizcano and

Mr Rafael Mateu de Ros received the sums of 25,500 euros and 15,000

euros, respectively, as fees for attending the meetings of the Board of

Directors of Línea Directa Aseguradora, S.A.. The sum received by Mr

Gonzalo de la Hoz Lizcano includes attendance fees as member of both

the Board of Directors and the Control Committee of Línea Directa

Aseguradora. Mr Gonzalo de la Hoz Lizcano is also Non-Executive

Chairman of Bankinter Global Services, S.A., a Group technology

services and operations company, and received fees in the amount of

7,200 euros for attending meetings of the Board of Directors in 2015.

As regards the remuneration of members of Bankinter’s Board of

Directors, the section on remuneration of the Board of Directors in the

legal note on Bankinter and its Group contains an individualised

breakdown of the remuneration accrued by all directors in 2015 (which

is included as an exhibit to this report).

At year-end 2015, the number of directors of Bankinter S.A. was the

same as at year-end 2014, that is, 10 directors.

ii) The fixed remuneration received by the Chairman of the Board of

Directors for performing the non-executive institutional duties (as

described in section A.3 above) additional to those he performs in his

capacity as Chairman of the decision-making body, the latter

remunerated according to the structure in the preceding point,,

amounted to 630,000 euros per year.

iii) Remuneration of executive directors for their executive duties:

30

In addition to the remuneration received for performance in their

capacity as mere directors, in 2015 the Executive Directors accrued

remuneration (for their executive services) in the following amounts:

As fixed remuneration:

- CARTIVAL, S.A., Executive Vice-Chairman of Bankinter, received a

total of 520,884 thousand euros as fixed remuneration.

- María Dolores Dancausa Treviño, CEO of Bankinter, received a total

of 701,190 thousand euros as fixed remuneration.

As variable remuneration:

The system of annual variable remuneration of the executive directors

is the same as that applied to the rest of the workforce of the Bankinter

Group receiving this type of remuneration.

As already indicated in the director remuneration report approved by

the shareholders at the General Shareholders’ Meeting of last year,

such annual variable remuneration is linked to the achievement of the

Group’s banking activity results target, in terms of earnings before tax,

as approved by the Board of Directors at the proposal of the

Remuneration Committee. Each of the executive Directors was

assigned an amount in the case of meeting 100% of the established

target. However, the accrual of this variable incentive occurs from the

achievement of 80% of the target and up to a maximum of 120%

thereof, it being possible to receive between 70% and 120% of the

variable amount assigned to each of the beneficiaries according to the

aforementioned achievement percentages. In 2015, the achievement

percentage was 102.43% (in 2014, it was 120%).

The annual variable remuneration accrued in 2015 was also directly

linked to other targets: i) the indicator of overall external quality

perceived by the customer (using the NPS, or Net Promoter Score,

which measures the preparedness of customers to recommend an

institution, rated on a scale from 0 to 10 as Promoters, Passives and

Detractors; and it is calculated by subtracting the percentage of

Detractor customers (scores between 0 and 6) from the percentage of

Promoter customers (scores 9 and 10), meaning the resulting amount

may vary between -100% and 100%), and ii) the solvency ratio (CET1)

of the institution. Each of these indicators independently accounted for

the payment of 10 per cent of the variable remuneration, varying

between zero and one hundred within this percentage of variable

remuneration subject to the achievement of such targets. In 2015, the

achievement percentage was 100% for both indicators, for which

reason the amount of variable remuneration to be received for the EBT

31

(Earnings Before Tax) target was not reduced, such that the final

achievement percentage was the aforementioned 102.43%.

The annual variable remuneration accrued in 2015 will be paid 50% in

cash and 50% in shares, part in 2016 and the deferred portion over

three years, as follows:

- 60% of the annual variable remuneration will be paid in 2016, in

halves and net of taxes, in cash and shares.

- The remaining 40% will be deferred in thirds and will be paid, if

applicable, in the following financial years (through 2019). The

corresponding amount will be paid each year net of taxes, half in

cash and half in shares.

In any event, in the case of Executive Directors, the deliveries of shares

are conditional upon their approval by the shareholders at Bankinter’s

General Shareholders’ Meeting to be held in 2016 (the year following

the year of accrual), as required by section 219 of the Companies Act.

A description of the amounts accrued during 2015 by the company’s

the executive directors is set out below:

At the end of financial year 2015, the achievement percentage was

102.43%, which led to the accrual of a variable incentive of 161,289

euros for the executive Vice-Chairman and of 228,038 euros for the

Chief Executive Officer, which will be paid in the form and over the

terms indicated below::

o In cash (the gross accrued amounts are set out below; such

amounts will be paid net of tax):

- 50% of the non-deferred variable remuneration accrued under

the variable incentive in 2015: 48,387 euros to the executive

Vice-Chairman of the Board and 68,411 euros to the Chief

Executive Officer.

- 50% of the deferred variable remuneration accrued under the

variable incentive in 2015 will be paid in shares:

1/3 of 50% of the deferred variable remuneration accrued

under the variable incentive in 2015 will be paid in

January 2017: 10,753 euros to the executive Vice-

Chairman of the Board and 15,202 euros to the Chief

Executive Officer.





Executive Officer.





32

Executive Officer.

o In shares (as stated above, conditional upon the approval of the

shareholders at the General Shareholders’ Meeting). The maximum

number of shares to be delivered is as set out below, calculated on

the gross accrued amounts:

o 50% of the non-deferred variable remuneration accrued under

the variable incentive in 2015: 7,844 shares to the executive

Vice-Chairman and 11,091 shares to the Chief Executive

Officer, at a price of 6.1680769 euros/share, this being the

average listing price of the Bankinter share at the close of

business for the trading sessions held between 4 January and

20 January 2016, both inclusive. If the shareholders at the

General Shareholders’ Meeting that is held in 2016 approve the

aforementioned delivery of shares, the shares will be delivered

within 5 trading days following the approval.

o 50% of the deferred variable remuneration accrued under the

variable incentive in 2015 will be paid in shares; taking into

account that the share reference price to obtain the amount of

shares to be delivered is the same as that stated above

(6.1680769 euros/share), the amounts to be received in the

coming years are broken down below:

Executive Vice-Chairman:

- 1,743 shares will be delivered in the month of January

2017, corresponding to 1/3 of 50% of the deferred variable

remuneration accrued under the variable incentive in

2015.




2015.




2015.

Chief Executive Officer:

33




2015.




2015.




2015.

In short, the sum of the amounts accrued by the executive directors (for

their executive duties) in 2015 was a total of 1,611 thousand euros. In

2014, it was 1,597 thousand euros.

During 2015, delivery was made to the executive Directors of the shares

corresponding to the deferred variable remuneration accrued in 2011,

2012 and 2013, as well as of the shares corresponding to the

immediate delivery of the remuneration accrued in 2014, according to

the resolutions approved by the shareholders at the General

Shareholders’ Meetings held in 2012, 2013, 2014 and 2015,

respectively. The section on director remuneration in the individual

legal note for Bankinter and for the consolidated Group for financial

year 2015 includes an itemised description of the deliveries made

during 2015:

C. BREAKDOWN OF INDIVIDUAL REMUNERATION ACCRUED BY EACH

OF THE DIRECTORS

Name Type Accrual period 2015

Pedro Guerrero Guerrero Other external From 01/01/2015 to 31/12/2015

CARTIVAL, S.A. Executive From 01/01/2015 to 31/12/2015

María Dolores Dancausa Treviño Executive From 01/01/2015 to 31/12/2015

Fernando Masaveu Herrero Proprietary From 01/01/2015 to 31/12/2015

Marcelino Botín-Sanz de Sautuola y Naveda Proprietary From 01/01/2015 to 31/12/2015

Rafael Mateu de Ros Cerezo. Independent From 01/01/2015 to 31/12/2015

Rosa María García García Independent From 18/03/2015 to 31/12/2015

Jaime Terceiro Lomba Independent From 01/01/2015 to 31/12/2015

Gonzalo de la Hoz Lizcano Independent From 01/01/2015 to 31/12/2015

María Teresa Pulido Mendoza Independent From 01/01/2015 to 31/12/2015

John de Zulueta Greenebaum Independent From 01/01/2015 to 18/03/2015

34

C.1. Complete the following tables regarding the itemised

remuneration of each of the directors (including remuneration

for the performance of executive duties) accrued during the

financial year.

a) Accrued remuneration at the company covered by this report:

i) Cash remuneration (thousands of €)

Name/Type/accrua

l period 2015

Salary Fixed

remuneration

Attend

ance

fees

Short-term

variable

remuneratio

n

Long-term

variable

remuneratio

n

Remuneration

for belonging

to committees

of the board

Termination

benefits

Others Total

2015

Total 2014

Pedro

Guerrero

Guerrero

0 800 34 0 0 0 0 3 837 817

CARTIVAL,

S.A.

521 165 35 161 0 0 0 0 882 859

María Dolores

Dancausa

Treviño

701 150 27 228 0 0 0 5 1,111 1,093

Fernando

Masaveu

Herrero

0 85 32 0 0 0 0 0 117 121

Marcelino

Botín-Sanz de

Sautuola y

Naveda

0 85 20 0 0 0 0 0 105 84

Rafael Mateu

de Ros Cerezo.

0 100 60 0 0 0 0 0 160 158

Rosa María

García García

0 75 17 0 0 0 0 0 92 0

Jaime

Terceiro

Lomba

0 100 59 0 0 0 0 0 159 156

Gonzalo de la

Hoz Lizcano

0 100 52 0 0 0 0 0 152 130

María Teresa

Pulido

Mendoza

0 85 18 0 0 0 0 0 103 39

John de

Zulueta

Greenebaum

0 25 15 0 0 0 0 0 40 127

ii) Share-based remuneration systems

35

iii) Long-term savings systems

Name/Type/total

accrual period in

years

Contribution for the year by the

Company (€ thousands)

Amount of accumulated funds (€

thousands)

Financial Year

2015

Financial Year

2014

Financial Year

2015

Financial Year

2014

María Dolores

Dancausa Treviño

0 0 600 600

iv) Other benefits (in thousands of €)

Remuneration in the form of advances, loans

Name/Type Interest rate for the

transaction

Main features of the

transaction

Amounts potentially

returned

Life insurance premiums Guarantees provided by the

company in favour of the directors

Name/Type Financial Year

2015

Financial Year

2014

Financial Year

2015

Financial Year

2014

Pedro Guerrero

Guerrero

1.19 0.49 0 0

María Dolores

Dancausa

Treviño

0.42 0.15 0 0

Name/Type/acc

rual period

2015

Name of Plan

and date of

implementatio

n

Ownership of options at beginning of 2015

Options allocated during 2015

Shares delivered in

2015

No. of

options

No.

shares

affected

Exercise

price (€)

Exercise

period

No. of

options

No. shares

affected

Exercise

price (€)

Exercise

period

Conditions

for exercise

No

.

Price Amo

unt

Options exercised during 2015

Options

expired

and not

exercised

Options at end of 2015

Name/Type/acc

rual period

2015

Name of Plan

and date of

implementatio

n

No. of

options No.

shares

affected

Exercise

price (€) Gross

Profit (€) No. of

options No. of

options No. shares

affected Exercise

price (€) Exercise

period Other

requireme

nts for

exercise

36

b) Remuneration accrued by directors of the company for belonging to

boards at other companies of the group:

i) Cash remuneration (thousands of €)

Name/Type/accrua

l period 2015

Salary Fixed

remuneration

Attend

ance

fees

Short-term

variable

remuneratio

n

Long-term

variable

remuneratio

n

Remuneration

for belonging

to committees

of the board

Termination

benefits

Others Total

2015

Total

2014

Rafael Mateu

de Ros Cerezo.

0 0 15 0 0 0 0 0 15 7

Gonzalo de la

Hoz Lizcano

0 0 33 0 0 0 0 0 33 19

ii) Share-based remuneration systems

iii) Long-term savings systems

iv) Other benefits (in thousands of €)

c) Summary of remuneration (in thousands of €): The summary must

include the amounts for all items of remuneration included in this

report that have been accrued by the director, in thousands of euros.

In the case of long-term saving systems, include contributions or

funding for these types of systems:

Name/Type

Accrued remuneration at the Company Accrued remuneration at companies of the group Totals

Total cash

remunerat

ion

Amount

of shares

provided

Gross profit

on options

exercised

Total

financial

year 2015

company

Total cash

remuneratio

n

Amount

of shares

provided

Gross profit

on options

exercised

Total

2015

group

Total

2015

Total 2014 Contribution

to savings

systems

during the

year

Pedro

Guerrero

Guerrero

837 0 0 837 0 0 0 0 837 817 0

CARTIVAL,

S.A.

882 0 0 882 0 0 0 0 882 859 0

María

Dolores

1,111 0 0 1,111 0 0 0 0 1,111 1,093 0

37

C.2 Report the relationship between remuneration obtained by the

directors and the results or other indicators of the institution’s

performance, explaining how any changes in the company’s

performance may have influenced changes in the remuneration

of the directors.

As noted throughout the report, only the executive directors receive

variable remuneration which is indexed to, among other factors, the

Bank’s earnings before tax. In this regard, note that there are no cases

in which the individual targets for accrual of variable remuneration

may act as encouraging the assumption of risks not consistent with the

Bank’s general risk profile because, among other reasons, the targets

are always set primarily in reference to fulfilment of the Bank’s overall

earnings before tax target.

Dancausa

Treviño

Fernando

Masaveu

Herrero

117 0 0 117 0 0 0 0 117 121 0

Marcelino

Botín-Sanz

de Sautuola

y Naveda

105 0 0 105 0 0 0 0 105 84 0

Rafael

Mateu de

Ros Cerezo.

160 0 0 160 15 0 0 15 175 165 0

Rosa María

García

García

92 0 0 92 0 0 0 0 92 0 0

Jaime

Terceiro

Lomba

159 0 0 159 0 0 0 0 159 156 0

Gonzalo de

la Hoz

Lizcano

152 0 0 152 33 0 0 33 185 149 0

María

Teresa

Pulido

Mendoza

103 0 0 103 0 0 0 0 103 39 0

John de

Zulueta

Greenebau

m

40 0 0 40 0 0 0 0 40 127 0

38

C.3 Report the results of the consultative vote of the shareholders on

the annual remuneration report for the preceding financial year,

indicating the number of votes against, if any:

Number % of total

Votes cast 657,537,786 73.16

Number % of votes cast

Votes against 143,329,194

21.80

Votes in favour 508,939,092

77.40

Abstentions 5,253,384

0.80

D. OTHER INFORMATION OF INTEREST

If there are any significant aspects regarding director remuneration

that could not be included in the other sections of this report, but

should be included in order to provide more complete and well-

reasoned information regarding the remuneration structure and

practices of the company with respect to its directors, briefly describe

them.

Extraordinary remuneration accrued in 2013:

In January 2013, at the proposal of the then Appointments and

Remuneration Committee, Bankinter’s Board of Directors approved

contingent extraordinary remuneration for a group of individuals (40 from

the institution) including the Executive Vice-Chairman and CEO, which it

reported at the General Shareholders’ Meeting of March 2013, through the

director remuneration report submitted for a consultative vote at the General

Shareholders’ Meeting.

This extraordinary remuneration was accrued in its entirety in 2013, with its

payment subject to the fulfilment of certain conditions. Upon confirming said

fulfilment, the beneficiaries of said remuneration, including the executive

directors, will receive the amount in cash or in shares during 2016, as

described below.

39

It is important to note that this does not involve any increase whatsoever in

the total annual remuneration accrued by its beneficiaries in 2015 and 2016,

as it is a payment that corresponds to an accrual that occurred in the last

financial year and is not consolidated in the annual remuneration for future

financial years.

Said extraordinary remuneration recognised and remunerated, on one hand,

the positive results of the group management carried out in the preceding

years, in a context of general crisis, with special recognition for Bankinter

overcoming the recent capital and solvency challenges, and on the other

hand, individual management during this period by a number of persons,

whose direct and indirect responsibility and contribution through their teams

was decisive for the Bank’s income statement. It further took into account the

prudence with which the institution was generally managed. Said dedication

and success in prudently managing the institution during the years of the

financial crisis permitted Bankinter to successfully pass the Spanish banking

stress tests without the need for capital increases or other ad hoc measures.

Thus, extraordinary remuneration was approved of twice the beneficiary’s

fixed salary as at 31 December 2012, which was accrued at the same time as

its approval. The amounts accrued by the executive directors in 2013 were the

following:

- Executive Vice-Chairman: 720,000 euros.

- CEO: 1,200,000 euros.

Although not long-term variable remuneration, but rather remuneration

accrued a single time only, that is, a one-off payment, a three-year deferral

was applied (“contingency period”) to ensure that at the time of its payment

no risks or losses had appeared that were not anticipated or acceptable under

other circumstances that, had they occurred prior to approval of the

remuneration, would have prevented its accrual.

Taking the above into account, the payment of said extraordinary variable

remuneration was subject to the following conditions:

- Earnings before Tax (EBT) Target: Thirty-five per cent of the

extraordinary remuneration was contingent upon exceeding 100% of the

EBT target (banking activity) proposed by the then Appointments and

Remuneration Committee and approved by the Board of Directors for

each year. The adjustment percentages according to the level of

achievement of this target were also set by the Board of Directors each

financial year, as shown in the table below:

40

% Compliance % Incentive

Accrual

100 50

102 60

104 70

106 80

108 90

110 100

The EBT-based adjustment mechanism was therefore independent each

year, and thus, after the application of any necessary adjustment, said

amount would be consolidated each year.

According to the EBT targets proposed by the Committee for each year as

shown below, the achievement and accrual percentages for this target

are as follows:

Year EBT Target

(in millions of

euros)

% final compliance

reached

% final incentive

accrual

2013 190 100 50

2014 230 121.7 100

2015 391 102.4 62.15

- ROE Target: Sixty-five per cent of the extraordinary remuneration was

contingent upon meeting the ROE (return on capital in banking activity)

target in the form set forth below:

Annually: ROE must be above the mid-point of the peer group at 31

December of each year. The annual adjustment is made to one third

of the 65% previously identified (annual ROE amount). In this

41

regard, it must be noted that over the past three years (2013, 2014

and 2015) ROE has successfully been above the mid-point for the

peer group, comprising Banco Sabadell, Banco Popular, La Caixa,

Unicaja and Kutxabank, and thus the annual adjustment was not

triggered by this mechanism.

Additionally: the minimum ROE at 31 December 2015 could not be

less than 10%. In this case, there would be an adjustment to 100% of

the 65% even if the annual targets had been met (total ROE

amount), and therefore if it had been below said 10%, no sum

whatsoever would have been received from this portion of the

extraordinary remuneration on the payment date. At 31 December

2015, ROE was 10.91%, above the target rate of 10%, and therefore

this adjustment mechanism was again not triggered.

As noted above, the percentages of payment of the extraordinary

remuneration for each of the years as well as the resulting final percentage

are below, taking into account that the ROE achieved at 31 December 2015

exceeded 10%.

Year 2013 2014 2015 % final

payment

EBT 5.83% 11.68% 7.23% 24.75%

ROE Payment

of 1/3 of

65%

Payment

of 1/3 of

65%

Payment

of 1/3 of

65%

65%

Total 89.74%

That is, each beneficiary of the plan will ultimately receive 89.75% of the

accrued value of this extraordinary remuneration.

Fifty per cent of this extraordinary remuneration will be delivered in

Bankinter shares. To that end, in March 2016 this delivery of shares to the

executive directors and members of the institution’s senior management who

are also beneficiaries of this remuneration will be submitted to a vote as a

separate item on the agenda of the General Shareholders’ Meeting.

42

The aforementioned agreement breaks down the number of shares to be

delivered and the value used to calculate them.

If applicable, Bankinter shares that are delivered to beneficiaries of the

extraordinary remuneration will be subject to a holding policy for one year

from their delivery, during which the shares may not be traded.

The Bank may also claim the proportional return of the amount paid or even

offset it against other remuneration of any kind that the beneficiary is

entitled to receive, if it is clearly shown that the payment (and therefore the

non-application of the adjustment mechanisms) occurred partially or wholly

based on information the falsity or serious inaccuracy of which has been

clearly demonstrated a posteriori, or risks materialising that were assumed

during the contingent period, or other circumstances not provided for or

assumed by the Bank that have a material negative effect on the income

statements for either of the two years of the clawback period. If applicable, the

Board of Directors shall determine whether any circumstances have occurred

that might cause the triggering of this clause, and the percentage that must

be returned to the Bank.

Finally, in order to be paid this amount it was an absolute condition to be part

of and active in the group on the payment date (31 December 2015) and not

to have lost the level of duties or responsibilities on which accrual of the

remuneration was based.

Breakdown of remuneration received by directors for membership on

boards of directors of Group companies:

With regard to the statements in section A.3 above, a breakdown of

remuneration to be received by the directors Mr Gonzalo de la Hoz Lizcano

and Mr Rafael Mateu de Ros for their membership on boards of other group

companies is set forth below:

In their capacity as non-executive directors, Mr Gonzalo de la Hoz

Lizcano and Mr Rafael Mateu de Ros will receive the sums of 25,000 euros

and 15,000 euros, respectively, as fees for attending meetings of the Board

of Directors of Línea Directa Aseguradora, S.A. The amount received by Mr

Gonzalo de la Hoz Lizcano includes fees as member of both the Board of

Directors and the Control Commission of Línea Directa Aseguradora. In

addition, Mr Gonzalo de la Hoz Lizcano is Chairman of Bankinter Global

Services, S.A., a group technology services and operations company, and

43

will receive the sum of 7,200 euros as fees for attending the meetings of

the Board of Directors.

In addition, as supplementary information and though it does not apply to

this report, by virtue of the Bank’s commitment to maximum

transparency, we note that Mr Alfonso Botín-Sanz de Sautuola y Naveda,

representing the corporate director CARTIVAL, S.A. on Bankinter’s Board of

Directors, is personally Executive Chairman of Línea Directa Aseguradora,

S.A. Compañía de Seguros y Reaseguros, a wholly-owned subsidiary of the

bank, and accrued 166,950 euros as fixed remuneration and 61,227 euros

as annual variable remuneration as remuneration for his executive duties

as Chairman of the aforementioned subsidiary in 2015. In addition, on 31

December 2015 he accrued a long-term incentive approved by the Board of

Directors of the subsidiary company three years previously, in the gross

amount of 236,100 euros.

This annual remuneration report was approved by the board of directors of

the company at its meeting of 16/02/2016.

State whether any directors voted against or abstained in connection with

the approval of this Report.

Yes No X

Individual or company name of the

members of the board of directors

who did not vote in favour of approval

of this report

Reasons (opposed,

abstained, absent)

Explain the reasons

44

Anexo.- Legal Note on Remuneration of and Balances Payable to Members of

the Board of Directors

Remuneration of the Board of Directors

On 18 March 2015, Bankinter submitted the director remuneration report,

with the structure established in Circular 4/2013, of 12 June, of the National

Securities Market Commission (Comisión Nacional del Mercado de Valores), to

its shareholders at its General Shareholders’ Meeting for a consultative vote,

which report included information on its general policy in this regard, its

application to financial year 2014 and the remuneration system applicable to

financial year 2015. While this practice has only been obligatory since 2014,

Bankinter has submitted this report to the shareholders at its General

Shareholders’ Meeting since 2008, following the recommendations of the

Good Governance Code of Listed Companies.

The director remuneration report was approved by 77.40% of the total share

capital represented in person and by proxy at the aforementioned General

Shareholders’ Meeting of 2015 (96.51% at the General Shareholders’ Meeting

of 2014) and contained, among other information, the director remuneration

for financial year 2015, which is described and broken down in this note.

i) Director remuneration for the performance of their duties in their

capacity as such:

According to the By-laws of Bankinter, the directors may be remunerated for

the performance of their duties as directors via the following items:

- Fixed annual amount,

- Fees for attendance at meetings of the Board of Directors and of the

Committees of the Board of Directors to which they belong,

- Delivery of shares, acknowledgement of share option rights or

remuneration linked to the value of the shares, upon the corresponding

prior approval of a resolution by the shareholders at the General

Shareholders’ Meeting regarding number, price and other items

established by law.

The shareholders at the General Shareholders’ Meeting of 18 March 2015

resolved, pursuant to sections 217 and 529 septdecies of the Companies Act

(Ley de Sociedades de Capital), to establish the maximum amount of annual

remuneration of the directors for the performance of their duties as such in

the amount of 1,600,000 euros, which amount shall remain in effect for so

long as the modification thereof is not approved by the shareholders at the

general shareholders’ meeting.

45

Upon a proposal of the Remuneration Committee, the Board of Directors

established the specific amount corresponding to each of the directors, in line,

when legally applicable, with the resolution of the shareholders at the

General Shareholders’ Meeting.

The total individual remuneration received for financial year 2015 was paid

via: i) a fixed annual payment for their membership on the Board of Directors

and the performance of their duties as chairmen of its committees; and (ii)

fees for attendance at the meetings of the Board and of its committees, such

that there was no delivery of Bankinter shares as remuneration during this

year.

The remuneration of the non-executive directors does not include variable

components, insofar as obtaining it is not subject to the achievement of

targets, thereby complying with corporate governance recommendations in

this respect.

At year-end 2015, the number of directors of Bankinter, S.A. remained at 10,

as at the end of the two previous years.

With regard to the remuneration of the members of Bankinter’s Board of

Directors, the individualised breakdown of the total remuneration received in

their capacity as directors (supervision and collective decision-making duties)

for financial years 2015 and 2014 is as follows:

In Euros

Directors 2015 2014

Pedro Guerrero Guerrero 204,000 206,800

María Dolores Dancausa Treviño 177,500 165,880

Cartival, S.A. 199,500 182,820

Marcelino Botín-Sanz de Sautuola y Naveda 105,000 84,275

Fernando Masaveu Herrero 117,000 121,141

Rosa María García García (1)

91,500 -

Gonzalo de la Hoz Lizcano 151,500 130,134

Jaime Terceiro Lomba 159,000 155,883

María Teresa Pulido Mendoza (2)

103,000 39,685

Rafael Mateu de Ros Cerezo 159,500 158,101

Ex-directors (3)

40,000 176,009

1,507,500 1,420,728 (1)

Rosa María García García was appointed external independent

director of Bankinter by the shareholders at the General

Shareholders’ Meeting held on 18 March 2015. (2) María Teresa Pulido Mendoza was appointed director of Bankinter

on an interim basis on 23 July 2014, such appointment being

subsequently ratified by the shareholders at the General

Shareholders’ Meeting held on 18 March 2015. (3) Within the category of ex-directors, the amounts included in the

table for financial years 2015 and 2014 correspond to those received

by Pedro González Grau, who ceased to be a director of Bankinter on

25 April 2014, and John de Zulueta Greenebaum, who ceased to be a

director of Bankinter on 18 March 2015.

46

The overall amounts set out in the above table corresponding to each director

in their capacity as such, as fixed remuneration and fees for attendance at the

meetings of the Board of Directors and of the Committees of the Board during

financial years 2015 and 2014, are broken down below in an individualised

form and by item:

In Euros

Directors

2015 2014

Fixed Remuneration

Attendance

Fees

Fixed

Remuneration

Attendance

Fees

Pedro Guerrero Guerrero 170,000 34,000 72,160 90,640

María Dolores Dancausa Treviño 150,000 27,500 54,120 78,760

Cartival, S.A. 165,000 34,500 54,120 95,700

Marcelino Botín-Sanz de Sautuola y

Naveda 85,000 20,000 36,080 26,195

Fernando Masaveu Herrero 85,000 32,000 36,080 63,061


75,000 16,500 - -

Gonzalo de la Hoz Lizcano 100,000 51,500 36,080 72,054

Jaime Terceiro Lomba 100,000 59,000 36,080 97,803


85,000 18,000 16,400 13,600

Rafael Mateu de Ros Cerezo 100,000 59,500 36,080 100,021

Ex-directors (3)

25,000 15,000 49,200 92,298

Subtotals 1,140,000 367,500 426,400 730,132

Total 1,507,500 1,156,532 (1)

Rosa María García García was appointed external independent










As previously stated, since 1 January 2015 there have been no deliveries of

shares to directors as remuneration in their capacity as such, for which reason

the individualised breakdown of the deliveries of shares to directors in their

capacity as such for financial years 2015 and 2014 is as follows:

47

Directors

2015 2014

Amounts

Invested

No. of

Shares

Delivered

Amounts

Invested

No. of Shares

Delivered

Pedro Guerrero Guerrero 0 0 44,000 7,199

María Dolores Dancausa Treviño 0 0 33,000 5,399

Cartival, S.A. 0 0 33,000 5,399

Marcelino Botín-Sanz de Sautuola y Naveda 0 0 22,000 3,598

Fernando Masaveu Herrero 0 0 22,000 3,598


0 0 - -

Gonzalo de la Hoz Lizcano 0 0 22,000 3,598

Jaime Terceiro Lomba 0 0 22,000 3,598


0 0 9,685 1,499

Rafael Mateu de Ros Cerezo 0 0 22,000 3,598

Ex-directors (3)

0 0 34,511 4,883

0 0 264,196 42,369 (1) Rosa María García García was appointed external independent










ii) Fixed Remuneration of the Chairman of the Board of Directors for the

performance, since January 2013, of non-executive institutional duties

(described in section A.3 of the director remuneration report) additional

to those which he performs in his capacity as Chairman of the collective

decision-making body, the latter being remunerated as described in the

preceding item. The amount of this remuneration was 630,000 euros for

2015 (for 2014, the amount of such remuneration was 600,000 euros).

The Chairman of the Board of Directors does not receive any variable

remuneration, for the same reasons stated in the preceding item with

regard to non-executive directors.

iii) Remuneration of executive directors for their executive duties

During 2015, the executive directors accrued the following amounts as

remuneration for their activity, approved by the Board of Directors upon a

proposal of the then Appointments and Remuneration Committee

(currently the Remuneration Committee):

Fixed Remuneration:

48

- CARTIVAL, S.A., executive Vice-Chairman of Bankinter, received

a total of 521 thousand euros as fixed remuneration.

- María Dolores Dancausa Treviño, Chief Executive Officer of

Bankinter, received a total of 701 thousand euros as fixed

remuneration.

Variable Remuneration:

The annual variable remuneration system for the executive Directors is

the same as that applied to the rest of the workforce of the Bankinter

Group that receives this type of remuneration.

As already indicated in the director remuneration report approved by

the shareholders at the General Shareholders’ Meeting of last year,

such annual variable remuneration is linked to the achievement of the

Group’s banking activity results target, in terms of earnings before tax,

as approved by the Board of Directors at the proposal of the

Remuneration Committee. Each of the executive Directors was

assigned an amount in the case of meeting 100% of the established

target. However, the accrual of this variable incentive occurs from the

achievement of 80% of the target and up to a maximum of 120%

thereof, it being possible to receive between 70% and 120% of the

variable amount assigned to each of the beneficiaries according to the

aforementioned achievement percentages. In 2015, the achievement

percentage was 102.43% (in 2014, it was 120%).

The annual variable remuneration accrued in 2015 was also directly

linked to other targets: i) the indicator of overall external quality

perceived by the customer (using the NPS, or Net Promoter Score,

which measures the preparedness of customers to recommend an

institution, rated on a scale from 0 to 10 as Promoters, Passives and

Detractors; and it is calculated by subtracting the percentage of

Detractor customers (scores between 0 and 6) from the percentage of

Promoter customers (scores 9 and 10), meaning the resulting amount

may vary between -100% and 100%), and ii) the solvency ratio (CET1)

of the institution. Each of these indicators independently accounted for

the payment of 10 per cent of the variable remuneration, varying

between zero and one hundred within this percentage of variable

remuneration subject to the achievement of such targets. In 2015, the

achievement percentage was 100% for both indicators, for which

reason the amount of variable remuneration to be received for the EBT

(Earnings Before Tax) target was not reduced, such that the final

achievement percentage was the aforementioned 102.43%.

The annual variable remuneration accrued in 2015 will be paid 50% in

cash and 50% in shares, part in 2016 and part deferred over three

years, as follows:

49

- 60% of the annual variable remuneration will be paid in 2016, in

halves and net of tax, in cash and in shares.

- The remaining 40% will be deferred in thirds, and will be paid, if

applicable, in the following financial years (until financial year

2019). In each year, the corresponding amount will be paid, net of

tax, half in cash and half in shares.

In any event, in the case of Executive Directors, the deliveries of shares

are conditional upon their approval by the shareholders at Bankinter’s

General Shareholders’ Meeting to be held in 2016 (the year following

the year of accrual), as required by section 219 of the Companies Act.

The amounts accrued by the company’s executive Directors during

2015 are set out below:

At the end of financial year 2015, the achievement percentage was

102.43%, which led to the accrual of a variable incentive of 161,289

euros for the executive Vice-Chairman and of 228,038 euros for the

Chief Executive Officer, which will be paid in the form and over the

terms indicated below:

o In cash (the gross accrued amounts are set out below; such

amounts will be paid net of tax):

- 50% of the non-deferred variable remuneration accrued under

the variable incentive in 2015: 48,387 euros to the executive

Vice-Chairman of the Board and 68,411 euros to the Chief

Executive Officer.

- 50% of the deferred variable remuneration accrued under the

variable incentive in 2015 will be paid in cash:





Executive Officer.





Executive Officer.





Executive Officer.

o In shares (as stated above, conditional upon the approval of the

shareholders at the General Shareholders’ Meeting). The maximum

number of shares to be delivered is as set out below, calculated on

50

the gross accrued amounts:

o 50% of the non-deferred variable remuneration accrued under

the variable incentive in 2015: 7,844 shares to the executive

Vice-Chairman and 11,091 shares to the Chief Executive

Officer, at a price of 6.1680769 euros/share, this being the

average listing price of the Bankinter share at the close of

business for the trading sessions held between 4 January and

20 January 2016, both inclusive. If the shareholders at the

General Shareholders’ Meeting that is held in 2016 approve the

aforementioned delivery of shares, the shares will be delivered

within 5 trading days following the approval.

o 50% of the deferred variable remuneration accrued under the

variable incentive in 2015 will be paid in shares; taking into

account that the share reference price to obtain the amount of

shares to be delivered is the same as that stated above

(6.1680769 euros/share), the amounts to be received in the

coming years are broken down below:

Executive Vice-Chairman:




2015.




2015.1,743 shares will be delivered in the month of

January 2019, corresponding to 1/3 of 50% of the deferred

variable remuneration accrued under the variable

incentive in 2015.

Chief Executive Officer:




2015.




2015.




2015.

51

In short, the sum of the amounts accrued by the executive directors (for

their executive duties) in 2015 was a total of 1,611 thousand euros. In

2014, it was 1,597 thousand euros.

During 2015, delivery was made to the executive Directors of the shares

corresponding to the deferred variable remuneration accrued in 2011,

2012 and 2013, as well as of the shares corresponding to the

immediate delivery of the remuneration accrued in 2014, according to

the resolutions approved by the shareholders at the General

Shareholders’ Meetings held in 2012, 2013, 2014 and 2015,

respectively. The section on director remuneration in the individual

legal note for Bankinter and for the consolidated Group for financial

year 2015 includes an itemised description of the deliveries made

during 2015:

Executive

Director

Delivery of shares

corresponding to

variable remuneration

accrued in 2011

(13.33%)

Delivery of shares

corresponding to

variable remuneration

accrued in 2012

(13.33%)

Delivery of shares

corresponding to

variable

remuneration accrued

in 2013

(13.33%)

Delivery of shares

corresponding to

variable

remuneration accrued

in 2014

(10.00%)

Unit price

assigned

to each

share1

In shares Unit price

assigned to

each share2

In

shares

Unit price

assigned to

each share3

In

shares

Unit price

assigned to

each share4

In

shares

CARTIVAL 3.1059855 8,628 2.605153847 7,179 5.46476923

3,663 6.56261538 2,840

María

Dolores

Dancausa

Treviño

3.1059855 8,628 2.605153847 9,572 5.46476923

4,884 6.56261538 3,876

1Average listing price of the Bankinter share at the close of business for each of the trading sessions held

between 2 January and 20 January 2012 (the initial price was 4.831533, but after the adjustment due to

the increase in capital by means of a scrip issue of April 2013, the new value is 3.1059855). 2 Average listing price of the Bankinter share at the close of business for each of the trading sessions held

between 2 January and 20 January 2013 (the initial price was 4.0524615, but after the adjustment due to

the increase in capital by means of a scrip issue of April 2013, the new value is 2.605153847). 3 Average listing price of the Bankinter share at the close of business for each of the trading sessions held

between 2 January and 20 January 2014 4 Average listing price of the Bankinter share at the close of business for each of the trading sessions held

between 2 January and 20 January 2015.

Bankinter does not have pension commitments to its external or

non-executive directors, nor does it have new or different

commitments to its executive directors other than those already

stated in the Remuneration Report for previous years. Bankinter

does not have new pension commitments or commitments other

than those already stated in the Director Remuneration Reports for

previous financial years for its executive directors or for the

members of Senior Management.

52

Bankinter has not agreed on any parachute provisions with any of its

executive directors in their commercial administration agreements, or

with the Chairman in his services agreement, which tie the accrual of

financial rights to situations of change of control at the bank (customary

provisions in this type of agreement in large companies), as is stated in

the director remuneration report that will be submitted to the

shareholders at the General Shareholders’ Meeting of 2016 for a

consultative vote, as in the past year.

Bankinter has not agreed on any parachute provisions with any of the

members of Senior Management in their Senior Management

agreements, or clauses that tie the accrual of financial rights to situations

of change of control at the bank (customary provisions in senior

management agreements and in fact provided for in Royal Decree

1382/1985, regulating the special employment relationship of senior

management).

Summary of remuneration, receivables and other benefits of directors

Remuneration by item

Thousand euros

2015(*) 2014(*)

Fixed remuneration (1) 1,852 1,766

Variable remuneration (2) 389 434

Fees (3) 368 730

By-law-mandated Benefits (4) 1,140 690

Share options and/or other financial instruments - -

Other - -

3,749 3,620

(*) Does not include remuneration in kind received by the Chairman and the Chief Executive

Officer (8 thousand euros)

(1) Fixed remuneration accrued in 2015, exclusively corresponding to

the executive directors in their capacity as executives and to the

Chairman of the Board of Directors for the performance of his

institutional non-executive duties.

(2) Variable remuneration corresponding solely to the executive directors in their

capacity as executives, deriving from the annual variable remuneration accrued in

financial year 2015. Each of the executive directors was assigned an amount that

they would receive in the case of meeting the established target, as has been

explained in the “Remuneration of executive directors for their executive duties”

section. Purely for purposes of clarification, the Chairman of the Board does not

receive variable remuneration.

(3) Fees for attending Board and Committee meetings (directors).

(4) Comprises fixed remuneration of the Board plus the free-of-charge

delivery of shares (for their duties as directors).

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Remuneration by class of director, including all items

Thousand euros

2015 2014

Class of Director By Company1 By Group (**) By Company1 By Group (**)

Executive (*) 1,988 - 1,945 -

External Proprietary 222 - 205 -

External Independent 705 41 660 27

Other External (***) 834 - 810 -

3,749 41 3,620 27

1

Does not include the remuneration in kind

received by the Chairman and the Chief Executive

Officer (8 thousand euros)

(*) CARTIVAL, S.A., executive Vice-Chairman, and

María Dolores Dancausa Treviño, Chief Executive

Officer, have the classification of executive directors.

(**) During 2015, the directors Mr Gonzalo de la Hoz Lizcano and

Mr Rafael Mateu de Ros, classified as non-executive directors,

received the amount of 25,500 euros and 15,000 euros,

respectively, as fees for attending the meetings of the Board of

Directors of Línea Directa Aseguradora, S.A. Included in the amount

received by Mr Gonzalo de la Hoz Lizcano are fees as member of

both the Board of Directors and the Control Committee of Línea

Directa Aseguradora. Additionally, Mr Gonzalo de la Hoz Lizcano is

Chairman of Gneis Global Services, S.A., a technology services and

operations company within the Group, and received the amount of

7,200 euros as fees for attending the meetings of the Board of

Directors during 2015.

(***) The Chairman, Mr Pedro Guerrero Guerrero, is classified as

“other external”.

Other benefits Thousand euros

Advances -

Loans granted -

Pension Funds and Plans: Contributions -

Pension Funds and Plans: Contracted obligations 600

Life insurance premiums 1.6

Guarantees created by the company in favour of the directors -

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