Official Letter Authorizing the Merger of Grupo Financiero Santander México, S.A.B. de C.V. with Banco Santander (México), S.A.

DOF: 09/02/2018

OFFICIAL LETTER authorizing the merger of Grupo Financiero Santander México, S.A.B. de C.V. as the extinguished merged entity with Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander México as the surviving merged entity.

At the margin, a seal with the National Coat of Arms, which reads: United Mexican States.- Ministry of Finance and Public Credit.- Undersecretariat of Finance and Public Credit.- Unit of Banking, Securities and Savings.- Deputy General Directorate of Banking and Securities.- Official Letter No. UBVA/077/2017.

GRUPO FINANCIERO SANTANDER MÉXICO, S.A.B. DE C.V.

Present

The Ministry of Finance and Public Credit, through the Unit of Banking, Securities and Savings, based on the provisions of Articles 31, fraction XXXIV of the Organic Law of the Federal Public Administration, 17 in relation to 19, and 20 of the Law to Regulate Financial Groups, as well as 3 fraction IV, of the General Rules of Financial Groups and in exercise of the powers conferred by Article 27, fractions X and XII of the Internal Regulations of this Ministry of Finance and Public Credit, in attention to the following:

BACKGROUND

1.

Through writings received in this Administrative Unit on March 2, May 12, October 13 and 23, November 9, 14 and 17 and December 11, all of 2017, the lawyers Fernando Borja Mujica and Juan Eduardo Llanos Reynoso, in their capacity as legal representative and authorized person, respectively, of "Grupo Financiero Santander México, S.A.B. de C.V.", of "Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander México", of "Casa de Bolsa Santander, S.A. de C.V., Grupo Financiero Santander México" and of "Banco Santander, S.A.", personality that they have duly accredited before this Department,

requested authorization from this Ministry to carry out a corporate restructuring, which implies the following legal acts:

i.

The merger of "Grupo Financiero Santander México, S.A.B. de C.V." as the merged society that is extinguished, with "Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander México" as the surviving merged society.

ii.

The celebration of the termination agreement to the Single Liability Agreement that that Holding Company has celebrated with the financial entities that integrate it, by virtue of the merger of merit.

iii.

Once the merger in question takes effect, "Banco Santander, S.A." organizes a holding company of a subsidiary financial group, and the constitution and functioning of a financial group whose denomination would be "Grupo Financiero Santander México, S.A. de C.V.".

iv.

The approval of the bylaws of "Grupo Financiero Santander México, S.A. de C.V.", as well as of the Single Liability Agreement to be celebrated by that Holding Company with the financial entities that will integrate it.

v.

The direct acquisition by "Banco Santander, S.A." of the control of "Grupo Financiero Santander México, S.A. de C.V.".

They add that the purpose of said restructuring is to comply with the provisions recently issued by the European Central Bank, which establish that only contributions that are directly made to the share capital of its subsidiaries by minority shareholders unrelated to said Bank may be counted in the consolidated net capital of "Banco Santander, S.A.", provided that the subsidiary is a financial entity that captures deposits from the public, that is, it is a credit institution in the Mexican case and also, regulatory requirements in matters of capitalization indicated in European regulations are satisfied.

Likewise, they point out that the restructuring in question is intended to be achieved through a succession of corporate acts and administrative acts of authority, executed and applied in their order in a joint and simultaneous manner.

Therefore, they request from this Ministry, among others, the following:

a)

Authorization in terms of article 17 of the Law to Regulate Financial Groups for the merger of "Grupo Financiero Santander México, S.A.B. de C.V." as the merged society that is extinguished, with "Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander México" as the surviving merged society.

b)

Approval in terms of article 20 of the Law to Regulate Financial Groups for the celebration of the Termination Agreement to the Single Liability Agreement that that Holding Company has celebrated with the financial entities that integrate it, by virtue of the merger of merit.

2.

Regarding this, the Deputy General Directorate of Banking and Securities attached to this Administrative Unit,

in exercise of the powers conferred by article 28, fraction XXII of the Internal Regulations of

this Ministry and based on the provisions of articles 11, 14, 17, 20, 28 third paragraph,

70, 81, fraction II, and 89 of the Law to Regulate Financial Groups; 3 fractions I, III, IV and

31 of the General Rules of Financial Groups, in scope of the various UBVA/DGABV/157/ 2017, UBVA/DGABV/158/2017, UBVA/DGABV/326/2017,

UBVA/DGABV/327/2017, UBVA/DGABV/ 756/2017, UBVA/DGABV/757/2017, UBVA/DGABV/777/2017, UBVA/DGABV/778/2017,

UBVA/ DGABV/847/2017 UBVA/DGABV/848/2017, UBVA/DGABV/858/2017 and UBVA/DGABV/859/2017 of

March 6, May 19, October 17 and 23, November 14 and 21, all of 2017, requested the opinion of the

Bank of Mexico and of the National Banking and Securities Commission.

Likewise, based on article 28, fraction XXVIII of the Internal Regulations of this

Ministry, through official letters UBVA/DGABV/159/2017, UBVA/DGABV/328/2017,

UBVA/DGABV/758/ 2017, UBVA/DGABV/779/2017,

UBVA/DGABV/849/2017 and UBVA/DGABV/860/2017 of March 6,

May 19, October 17 and 23, November 14 and 21, all of 2017, requested the opinion of the

Deputy General Directorate of Financial Analysis and International Linkage, attached to this Unit

Administrative.

3.

Through official letter UBVA/DGABV/900/2017 of December 11, 2017, this Administrative Unit a

through the Deputy General Directorate of Banking and Securities, communicated to "Grupo Financiero Santander

México, S.A.B. de C.V.", that to be able to resolve what is appropriate, it should remit in

terms of the proposal presented and in accordance with the projects sent in its

writing of December 11 of the current year, the First Testimonies and three simple copies of the

public deeds in which the protocolization, among others, of what is indicated below is recorded:

i.

The Act of the Extraordinary General Assembly of Shareholders of "Grupo Financiero Santander

México, S.A.B. de C.V." in which its merger as a merged society that is

extinguished with "Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero

Santander México" as the surviving merged society and the other agreements relative to the

same.

ii.

The Act of the Extraordinary General Assembly of Shareholders of "Banco Santander (México),

S.A., Institución de Banca Múltiple, Grupo Financiero Santander México" in which its

merger as a surviving merged society with "Grupo Financiero Santander México, S.A.B.

de C.V." as the merged society that is extinguished and the other agreements relative to the same.

iii.

The Merger Agreement celebrated between "Banco Santander (México), S.A., Institución de

Banca Múltiple, Grupo Financiero Santander México" and "Grupo Financiero Santander México, S.A.B.

de

C.V."

iv.

The Termination Agreement of the Single Liability Agreement celebrated between "Grupo

Financiero Santander México, S.A.B. de C.V." and the financial entities integrating the

financial group.

4.

Through writing received in this Administrative Unit on December 12, 2017,

the Lic. Rocío

Erika Bulhosen Aracil, on behalf of "Grupo Financiero Santander México, S.A.B. de C.V." and

of "Banco Santander (México), S.A., Institución de Banca Múltiple, Grupo Financiero Santander

México",

personality that she has duly accredited before this Department, remitted among others,

the following documentation:

i.

First Testimony and three simple copies of public deed No. 100,346 of

December 8

of 2017, granted before the faith of lawyer Miguel Alessio Robles, Holder of Notary No. 19 of

the City of Mexico, in which the protocolization of the Act of the Ordinary General

and Extraordinary Assembly of Shareholders of "Grupo Financiero Santander México, S.A.B. de

C.V.", celebrated on that same date, is recorded, in which among other topics, its merger as

merged society that is extinguished with "Banco Santander (México), S.A., Institución de

Banca Múltiple, Grupo Financiero Santander México" as the surviving merged society is agreed and the

other agreements relative to the same.

ii.

First Testimony and three simple copies of public deed No. 100,347 of

December 8

of 2017, granted before the faith of lawyer Miguel Alessio Robles, Holder of Notary No. 19 of

the City of Mexico, in which the protocolization of the Act of the Ordinary General

and Extraordinary Assembly of Shareholders of "Banco Santander (México), S.A., Institución de

Banca Múltiple, Grupo Financiero Santander México", celebrated on that same date, is recorded, in which

among other topics, its merger as the surviving merged society with "Grupo

Financiero Santander México, S.A.B. de C.V." as the merged society that is extinguished is agreed and the

other agreements relative to the same.

iii.

First Testimony and three simple copies of public deed No. 100,348 of

December 8

of 2017, granted before the faith of lawyer Miguel Alessio Robles, Holder of Notary No. 19 of

the City of Mexico, in which the protocolization of the Merger Agreement celebrated between

"Grupo Financiero Santander México, S.A.B. de C.V." and "Banco Santander (México), S.A.,

Institución de Banca Múltiple, Grupo Financiero Santander México" is recorded.

iv.

First Testimony and three simple copies of public deed No. 100,349 of

December 8

of 2017, granted before the faith of lawyer Miguel Alessio Robles, Holder of Notary No. 19 of

the City of Mexico, in which the protocolization of the Termination Agreement of the

Single Liability Agreement celebrated between "Grupo Financiero Santander México,

S.A.B. de C.V." and the financial entities integrating the financial group is recorded.

CONSIDERING

1.

That the Bank of Mexico through official letter OFI/S33-002-18898 received in this Administrative Unit

on December 8, 2017, issued its opinion to the effect that this Ministry authorize what is requested

in accordance with what is stated by the promoters.

2.

That the National Banking and Securities Commission through official letter 312-1/17037/2017 received in this

Administrative Unit on December 8, 2017, expressed its favorable opinion so that this

Ministry authorizes and approves the acts described in terms of the proposal presented.

3.

That the Deputy General Directorate of Financial Analysis and International Linkage through official letter

UBVA/DGAAF/264/2017 of December 11, 2017, issued its opinion from a

accounting-financial point of view so that the promoters are authorized to carry out the corporate acts

requested.

4.

That the requests for authorization and approval of "Grupo Financiero Santander México, S.A.B. de

C.V.", referred to in Background 1 of this official letter, comply with the legal and

administrative provisions applicable to the authorization and approval procedure for: (i) the merger of a

holding company with a financial entity, and (ii) the modification of the Single Liability

Agreement celebrated by a holding company and the financial entities integrating

the respective Financial Group.

5.

That after analyzing the information and documentation presented by "Grupo Financiero Santander

México, S.A.B. de C.V.", and after hearing the opinion of the Bank of Mexico, of the Commission

National Banking and Securities and of the Deputy General Directorate of Financial Analysis and

International Linkage of this same Administrative Unit, as well as having determined the

proceedings of granting the authorization and approval in question, this Ministry of

Finance and Public Credit through the Unit of Banking, Securities and Savings, issues the following:

RESOLUTION

FIRST.-

The merger of "Grupo Financiero Santander México, S.A.B. de C.V." in quality of

merged society that is extinguished with "Banco Santander (México), S.A., Institución de

Banca Múltiple, Grupo Financiero Santander México" as the surviving merged society is authorized, in the terms agreed by both societies in their respective Ordinary and Extraordinary General Assemblies of Shareholders celebrated on December 8, 2017, whose acts were protocolized through public deeds numbers 100,346 and

100,347 of December 8, 2017, respectively, granted before the faith of lawyer

Miguel Alessio Robles, Holder of Notary No. 19 of the City of Mexico and in terms of the

respective merger agreement protocolized through public deed number 100,348 of

December 8, 2017, granted before the faith of the said Notary.

This authorization is subject to the resolutive condition consisting in that the

receipt of the Public Deed in which the incorporation of the merger in question is agreed is not remitted to this Ministry,

in the respective Public Commerce Registry,

within twenty business days following the date on which this official letter is notified.

SECOND.-

The authorized merger will take effect from the date on which this authorization and the

public instruments in which the Assembly agreements relative to the merger are recorded, are

registered in the corresponding Public Commerce Registry, in accordance with the

provisions of the first paragraph of article 19 of the Law to Regulate Financial Groups, informing this Ministry about the date and other data relative to the

cited registration in a term of ten business days counted from the date on which this

has been verified.

THIRD.-

This authorization as well as the merger agreements adopted by the respective

Shareholder Assemblies must be published in the Official Journal of the Federation in

terms of what is provided by the second paragraph of article 19 of the Law to Regulate the

Financial Groups, at the cost of "Banco Santander (México), S.A., Institución de

Banca Múltiple, Grupo Financiero Santander México".

The carrying out of the cited publications must be notified to this Administrative Unit,

accompanying a copy of the documentation that accredits it, within five business days

following the date on which such publications are verified.

FOURTH.-

As part of the restructuring and in accordance with the relevant provisions, a

public version of the transfer pricing studies based on which

the sale price of the shares of "Casa de Bolsa Santander,

S.A. de C.V., Grupo Financiero Santander México" to "Grupo Financiero Santander México,

S.A. de C.V." must be made known, so that the market and the general public know that the operation

was carried out at market prices, and that persons who have a legitimate interest regarding the reference operation, are sufficiently informed

of such aspects.

FIFTH.-

The Termination Agreement of the Single Liability Agreement

celebrated between "Grupo Financiero Santander México, S.A.B. de C.V.", and the entities

financial integrating the respective financial group, protocolized through public deed

number No. 100,349 of December 8, 2017, granted before the faith of lawyer

Miguel Alessio Robles, Holder of Notary No. 19 of the City of Mexico is approved.

Finally, the First Testimonies of the public deeds attached to its writing are returned to "Grupo Financiero Santander México, S.A.B. de C.V.", with the indication that it must inform this

Department about the date and other data relative to the registration it carries out of the same before the

Public Commerce Registry respective, in a term of ten business days counted from the date on which

such registrations are verified.

This authorization and approval are issued based on the information and documentation

provided by the promoters and are limited exclusively to the acts and operations that, in

accordance with the applicable provisions, compete to resolve this Ministry, and do not prejudge on the

carrying out of any corporate act that the Society carries out, which implies prior authorization or

approval of the financial, tax or any other authorities, in terms of the

current regulations.

Without any other particular matter, I take the opportunity to send you a cordial greeting.

Attentively

Mexico City, December 13, 2017.- The Head of the Unit,

José Bernardo González Rosas.-

Rubric.

(R.- 462246)

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