Covered Bonds Investor Presentation March 2018 1
Index 01 EXECUTIVE SUMMARY Bankia Results ……………………………………………………………………. 3 Covered Bonds Ratings…………………………………………………….. 5 02 MORTGAGE COVER POOL Cover Pool Metrics …………………………………………………………….. 6 Residential Sub- Pool……………………………………..…………………. 8 Commercial Sub- Pool……………………………………………………….. 9 03 WHOLESALE MATURITIES Wholesale Maturities profile ………………………………………..… 10 04 ANNEXES Macroeconomic Indicators ……………………………………………. 11 Spanish Real Estate Markets …………………………………………. 12 Disclaimer This documenthas beenpreparedbyBankia,S .A. (“Bankia”) and is presentede xclusive ly for information purposes. It is nota prospectus and doesnot constitute an offer or re commendation to invest. This documentdoes not constitute a commitment to subscribe,or an offer to finance,or an offer to sell,or asolicitation ofoffers to buyse curities ofBankia, allof which are subject to internal approval by Bankia. Bankia does not guarantee the accuracy or comple teness of the information contained in this document. The information contained here in has been obtained from sources that Bankia conside rs re liable ,butBankia doesnot representor warrant that the information is complete or accurate, in particular with respect to data provided by third parties. This documentmay contain abridged orunaudited information and re cipients are invited to consult the publicdocuments and information submitted byBankia to the financial marke tsupervisory authorities. All opinions and estimates are given as of the date stated in the document and so maybe subject to change. The value of any investment may fluctuate as a result of changes in the marke t. The information in this document is not intended to predict future results and no guarantee is given in that respect. Distribution of this document in other jurisdictions may be prohibited, and there fore re cipients of this documentor any persons who maye ventually obtain a copy of it are responsible for being aware ofand complying with said restrictions. By accepting this documentyou 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 mustensure that they fully understand the terms of the securities/ transactions and the risks inhe rent in them. This document is not a prospectus for the securities described in it.Potential investors should only subscribe forse curities ofBankia on the basis of the information published in the appropriate Bankia prospectus, noton the basis of the information contained in this document. 2
01. EXECUTIVE SUMMARY Bankia Results 1Q18 HIGHLIGHTS MAR 2018 MAR 2107 ASSET QUALITY 11.6 11.0 NON-PERFORMING LOANS (1) € bn € 55.1% 53.7% NPL COVERAGE RATIO % 8.7% 9.5% NPL RATIO % % 23 31 COST OF RISK (3) bps 3M18 3M17 COMMERCIAL 1 MAR 2018 MAR 2017 PROFITABILITY & CAPITAL ACTIVITY €635mn 65% 229 304 ATRIBUTABLE PROFIT € mn € 3M18 3M17 New residential Average LTV new mortgages mortgages 7.5% 10.2% 3M18 ROE % 3M18 3M17 EFFICIENCY & 2 PROFITABLITY 12.7% 13.6% FULLY LOADED CET1 % 51.7% 0.8% CURRENT ISSUER RATINGS Cost to Operating Income expenses SHORT TERM 1Q18 vs 1Q17 LONG TERM OUTLOOK ratio Mar18 proforma Bankia+BMN BBB Stable A-2 S&P GLOBAL RATINGS 3 LIQUIDITY BBB- Positive F3 FITCH RATINGS BBB (high) Stable R-1 (low) DBRS 92.7% €33.6bn BBB+ Stable S-2 SCOPE RATINGS LTD ratio Liquid Assets Mar18 Mar18 (1) As of 31/12/2017 was €9.7bn before effect of consolidating BMN. Post BMN the amount as of 31/12/2017 was €12.1bn 4 CAPITAL +533bps 15.67% CET1 Phase in Total Solvency Ratio Fully Loaded Buffer vs SREP Mar18 2018 requirements 3
01. EXECUTIVE SUMMARY Bankia Results 2017 HIGHLIGHTS (1) ATTRIBUTABLE PROFIT (2) € €816mn NET INTEREST INCOME €1,968mn CUSTOMER FUNDS (3) € +22.8% PHASE IN CET1 14.15% UNIVERSAL BANKING MODEL, based on multi-channel management, with a presence throughout Spain and high FULLY LOADED CET1 (4) market shares in historical core regions, strengthened with the mergerof Banca Mare Nostrum(BMN). 12.46% BEST IN CLASS CORPORATE GOVERNANCE , optimal BRANCHES organizational structure and highly respected management team. > 2,400 SOLVENT, EFFICIENT AND PROFITABLE INSTITUTION , the CUSTOMER FUNDS Groupended2017 with anROE of 6.6%. €175,960mn CLEAN BALANCE SHEET , with continuing asset quality dynamics post merger with BMN, with a reduction of € GROSS CUSTOMER LOANS € 0.5bnin NPLs in1Q18. €128,782mn SUSTAINABLE CAPITAL AND LIQUIDITY GENERATION. Comfortable solvency levels with a Phase In CET1 ratio of 14.15% and Fully Loaded CET1 ratio of 12.46%, as of December2017. POSITIVE COMMERCIAL DYNAMICS, reflected in the (1) Dec.17 data post merger between Bankia and BMN. growth of fee and commission income (+3.2% year-on-year at Dec17 and +2.4% year-on-year at Mar18 vs proforma (2) The “Profit/(loss) attributable to the group as reported” amounts to € 505mn after including Bankia+BMN), offsetting part of the pressure that the integration cost with BMN for € 312mn. The Bankia euriborcontinues to exerton net interestincome. Group reported income statement, includes BMN’s contribution to the results for the month of December only. (3) Includes the off-balance sheet products marketed by BMN, w hich as from 2018 will be managed by Bankia. (4) Includes IFRS9 impact of-20 bps 4
01. EXECUTIVE SUMMARY Covered Bonds Ratings A AA- Positive Positive DBRS BANKIA’S COVERED BONDS RATINGS HAVE IMPROVED ON THE AAA AAA BACK OF A STRENGTHENED INTRINSIC ASSESMENT OF BANKIA. Stable AT THE SAME TIME THE MATURITY PROFILE OF THE COVERED BONDS OUTSTANDING AND THE OC LEVEL ALSO IMPROVES. RECENT RATING RECENT RATING ACTIONS ACTIONS HAVE IMPROVED THE LCR ELIGIBILITY OF OUR COVERED FITCH. On 23 January 2018, following the merger through absorption of BMN, Fitch BONDS TO HQLA LEVEL 1. affirmed Bankia’s covered bonds at “A”, outlook Stable . Aditionally, on 23 March 2018, following the application of the European RMBS Rating Criteria published on 02 February 2018 and the calibration of certain Spanish residential mortgage credit assumptions reflecting the upgrade of Spain’s long-term Issuer default rating (A- /Stable/F1) on 19 January2018, Fitch affirmed Bankia’s covered bonds rating at “A”, and raised the outlook to Positive. S&P. On 27 March 2018, following the upgrade of Spain’s long-term rating (A- /Positive/A-2) on 23 March, S&P raised Bankia’s covered bonds rating to “AA - ”, outlook Positive. DBRS. On 22 September 2017 DBRS completed its annual review of Bankia’s covered bonds raising the rating to “AAA” . Scope Ratings. Scope Ratings assigns a rating of “AAA” with a Stable outlook to Bankia’s covered bonds. Fitch Ratings S&P Global Ratings DBRS AA- AAA AA + A A A A+ A+ A+ AA A A- A+ A- BBB+ BBB A- 2013 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 5
02. MORTGAGE COVER POOL Cover Pool Metrics (1) STRONG AMPLE HIGH ELEGIBLE ISSUANCE OC OC COVER CAPACITY TY LEVEL POOL 88% 12% Res idential Commercial X 2,44 over-collateralized 85,368 76% 73,680 of the cover pool eligible € 14,654 million Issuance 56,019 Capacity 44,815 14,654 30,162 X 80% Total Collateral Elegible Legal Issuance Issued ACTI TIVE OC COLLATERAL AND CB’s OUTSTANDING MANAGEMENT Collateral CB’s Outstanding 90.000 80.000 70.000 60.000 50.000 40.000 30.000 20.000 10.000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Cartera Base Total Cédulas emitidas 2014 2015 2016 2017 2018 (1) Includes BMN`s cover pool. 6
02. MORTGAGE COVER POOL Cover Pool Metrics (1) Q1 2018 Q1 2017 Collateral Eligible Collateral Eligible Outstanding (million €) 73,680 56,019 60,079 45,969 Number of loans 876,653 735,468 673,226 574,803 Number of debtors 795,549 674.367 605,719 529,085 Average Seasoning (months) 102 110 94 104 Time to maturity (months) 239 224 244 233 Average LTV 59% 47% 58% 48% Q1 2018 Q1 2017 Collateral Eligible Collateral Eligible Residential 63,174 50,514 52.024 42.462 Commercial 10,506 5,505 8,055 3,507 COLLATERAL LTV DISTRIBUTION 30.000 83% OF THE 25.000 COVER POOL 20.000 HAS A LTV TV RATI TIO BELOW 15.000 80% 10.000 5.000 0 0-40% 40%-60% 60%-80% 80%-100% >100% NPL RATIO NPL’S DECLINING 5,82% 5,61% 5,48% TREND ALTE TR TERED BY 5,41% 5,31% 5,35% THE MERGER WITH BMN Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 2018 (1) Includes BMN`s cover pool. 7
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