Bankia 28 October 2011 Disclaimer Disclaimer This document has - PDF document

2011 Third Quarter Results Bankia 28 October 2011

Disclaimer Disclaimer This document has been prepared by Bankia, S.A. (“Bankia”) for information purposes only. It is not a prospectus and does not constitute an offer or recommendation to invest. This document does not constitute a commitment to subscribe for, or an offer to finance the purchase of, or an offer to sell, or a solicitation of offers to buy, securities of Bankia, all of which are subject to internal approval by Bankia. Bankia does not guarantee the accuracy or completeness of the information contained in this document. The information contained herein has been obtained from sources that Bankia considers reliable, but Bankia does not represent or warrant that the information is complete or accurate, in particular with respect to data provided by third parties. This document may contain abridged or unaudited information and recipients are invited to consult the public documents and information submitted by Bankia to the financial market supervisory authorities. All opinions and estimates are given as of the date stated in the document and so may be subject to change. The value of any investment may fluctuate as a result of changes in the market. The information in this document is not intended to predict actual results and no guarantee is given in that respect. Distribution of this document in other jurisdictions may be prohibited, so recipients of this document or any persons who may eventually obtain a copy of it are responsible for being aware of and complying with said restrictions. By accepting this document you accept the foregoing restrictions and warnings. This document does not reveal all the risks or other material factors relating to investments in the securities/transactions of Bankia. Before entering into any transaction, potential investors must ensure that they fully understand the terms of the securities/transactions and the risks inherent in them. This document is not a prospectus for the securities described in it. Potential investors should only subscribe for securities of Bankia on the basis of the information published in the appropriate Bankia prospectus not on the basis of the information contained in this document Bankia prospectus, not on the basis of the information contained in this document. 2 of 39 / September 2011

Contents Contents 1. Q3 2011 highlights and Strategic Plan 2. Key financial data 3. Income statement 4. 4 Balance sheet and liq idit Balance sheet and liquidity 5. Risk management and capital strength 6. Group objectives 3 of 39 / September 2011

Third quarter 2011 highlights Third quarter 2011 highlights Increase in net interest income I i t i t t i I Improved efficiency due to strict control of operating costs d ffi i d t t i t t l f ti t Integration Plan, linked to resizing of installed capacity, running well ahead of Integration Plan, linked to resizing of installed capacity, running well ahead of initial schedule Increased loan loss provisioning Strong capital position 4 of 39 / September 2011

Capital Requirements estimated by EBA for the BFA Group Capital Requirements estimated by EBA for the BFA Group The exercise is applicable to the BFA Group; However Bankia’s core capital under EBA methods, including sovereign risk, currently exceeds the new required minimum ratio of 9%. With this strong capital position, Bankia will easily meet the EBA’s minimum requirements g p p , y q by 30 June 2012 BFA Group EBA results The BFA Group will reach the required The BFA Group will reach the required 9% capital ratio by 30 June 2012 9% capital ratio by 30 June 2012 9% capital ratio by 30 June 2012 9% capital ratio by 30 June 2012 -0.3 % without the use of public funds, without the use of public funds, -0.1% through the following, amongst other, through the following, amongst other, -0.3% measures: measures: 9.1% • Organic growth • Organic growth 8.7% • Adequate balance sheet management • Adequate balance sheet management 8.4% • Portfolio or non-strategic asset sales • Portfolio or non-strategic asset sales Portfolio or non strategic asset sales Portfolio or non strategic asset sales • Other capital management measures • Other capital management measures Core June Tier I Impact Basel EBA core Sovereign EBA core + 2011 deductions 2.5 risk sovereign Provisional calculations indicated by EBA lead to €1,140m of capital requirements, of which €650m are for sovereign risk. It is worth noting that this calculation does not take into consideration generic provisions, which reach €1,075m (Sep 2011) 5 of 39 / September 2011

Additional efficiency improvements Additional efficiency improvements • In addition to the improvements in planned costs under the Integration Plan, new efficiency- related initiatives are to be started • Involvement in the achievement of results by all employees Optimisation of operational management headquarters buildings Initiatives already Rationalisation of technological support g pp under way or planned y p for the short term Improvements in the management of equity investments Optimisation of purchases by category Longer-term initiatives Redesign of commercial and customer processes 6 of 39 / September 2011

Tighter asset quality management Tighter asset quality management • Adoption of best practices throughout the organisation • Proactive management of arrears, with a conservative approach to new cases entering arrears g , pp g • Results linked to objectives and incentives MAIN OBJECTIVES PREVENT INFLOWS AND REDUCE STOCKS OF NPLS EXPEDITE OUTFLOWS Forward-looking Management alert system o a d oo g a age e t a e t syste Unmatured Unmatured NPL Management NPL Management (+90 days) Early Management 0-35 days Preventive Management Preventive Management 36-90 days 36 90 days Additional actions during the quarter to support the Asset Quality Management Plan: • Targeted management of branches with highest NPL levels • Adaptation of manager profile to recovery and monitoring function 7 of 39 / September 2011

Remuneration policy for Bankia executives Remuneration policy for Bankia executives Establishment of a single remuneration system for executives at Bankia IONS Balance between fixed and variable components of pay B l b t fi d d i bl t f NSIDERAT Variable pay linked to the institution’s performance, with particular attention to risk management g KEY CON For executives whose work has a significant impact on the risk profile, 40% of variable pay will be deferred over a period of 3 years; and 50% of variable pay deferred or otherwise will be in shares of Bankia pay, deferred or otherwise, will be in shares of Bankia 8 of 39 / September 2011

Integration Plan virtually complete Integration Plan virtually complete Branch closures Workforce optimisation Target of 657 branch closures exceeded by Target of 657 branch closures exceeded by Headcount reduced by 3,497 by October, more than 100% more than 100% equivalent to 93% of planned reductions 3.756 >100% of target >100% of target Completed in Q3 2011 85% 3.210 701 Completed in H1 2011 657 2,879 476 275 1,766 Q1 2011 H1 2011 Q3 2011 Projected Q1 2011 H1 2011 Q3 2011 Projected closures reductions reductions Cuts implemented as % of target Additional branch closures: 225 branches in Q3 2011, 44 more than the target for all of 2011. Workforce reduced by 331 people in Q3 2011 W kf d d b 331 l i Q3 2011 9 of 39 / September 2011

Technological integration on schedule Technological integration on schedule • In October, as planned, Caja Ávila was integrated in the Bankia IT platform. • Bankia’s systems already cover more than 60% of the Group’s customers. Once Bancaja customers are included, the figure will rise to 90%. i l d d th fi ill i t 90% Timeline for the technological integration of the Cajas in Bankia 2011 2011 2012 2012 2013 2013 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Q1 Q2 Q3 Q4 Q1 Q2 Caixa Caja Laietana Laietana Madrid Madrid La Caja de Canarias Bancaja Caja de Ávila Caja j Caja Caja Rioja Segovia % of customers integrated % of customers integrated > 60% 60% > 90% 90% 100% 100% in the Bankia platform: COMPLETED WITHOUT COMPLETED WITHOUT INCIDENT INCIDENT 10 of 39 / September 2011

Contents Contents 1. Q3 2011 highlights and Strategic Plan 2. Key financial data 3. Income statement 4. 4 Balance sheet and liq idit Balance sheet and liquidity 5. Risk management and capital strength 6. Group objectives 11 of 39 / September 2011