SAB.MC

Provided the principles established herein and the legal and regulatory framework are complied with, and where the levels of solvency and liquidity as well as the economic and financial environment so permit, Banco Sabadell will allocate between 40% and 60% of its consolidated annual earnings to shareholder remuneration. Additionally, and subject to the same conditions set out in the preceding paragraph, the Bank shall remunerate shareholders through the distribution of capital in excess of a minimum level previously determined by the Board of Directors, and upon obtaining the relevant regulatory authorisations, by charging such distribution to freely distributable reserves and/or the share premium account. Since, in this case, the distribution of excess capital is not linked to the entity’s profit, such distribution shall not be taken into account for the purposes of the Pay-Out ratio established by the institution. [...] In this regard, the repurchase of the Bank’s shares for their cancellation, which is subject to the corresponding legal and regulatory approvals, constitutes an instrument that contributes to shareholder remuneration as an alternative to the payment of dividends. [...] As a general rule, the Bank will pay the Institution’s annual shareholder remuneration out of the earnings of a given financial year within the month following the Institution's Annual General Meeting in which shareholders approve the annual accounts and the allocation of the earnings of the financial year in question, without detriment to the power of the Board of Directors to decide to pay one or more interim dividends prior to that time which, if so decided, the Institution will seek to satisfy on 29 August (or next business day) and on 29 December (or next business day) of the financial year against which they are paid.