Covered Bonds Investor Presentation March 2019 1 Index 01 - PDF document

Covered Bonds Investor Presentation March 2019 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 Disclaime imer This document has been prepared by Bankia, S.A. (“Bankia”) and is presented exclusively for information purposes. It is not a prospectus and does not constitute an offer or recommendation to invest. This document does not constitute a commitment to subscribe, or an offer to finance, 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 future results and no guarantee is given in that respect. Distribution of this document in other jurisdictions may be prohibited, and therefore 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. 2

01. EXECUTIVE SUMMARY Bankia Results 1Q19 HIGHLIGHTS ASSET QUALITY MAR 2019 MAR 2108 8.0 11.6 NON-PERFORMING LOANS € bn € 55.0% 55.1% NPL COVERAGE RATIO % 6.2% 8.7% NPL RATIO % % 14 23 COST OF RISK bps 3M19 3M18 COMMERCIAL 1 PROFITABILITY & CAPITAL MAR 2019 MAR 2018 ACTIVITY €728mn €589 205 229 ATRIBUTABLE PROFIT € mn € 3M19 3M18 New consumer New mortgages +14.6% mar19 vs lending 6.6% 7.5% mar18 ROE +25.8% mar19 vs mar18 % 3M19 3M18 EFFICIENCY & 2 PROFITABLITY 12.6% 12.7% FULLY LOADED CET1 % 56.1% -6.0% CURRENT ISSUER RATINGS Cost to Income Operating expenses ratio Mar19 vs Mar18 SHORT TERM LONG TERM OUTLOOK Mar19 BBB Stable A-2 S&P GLOBAL RATINGS 3 LIQUIDITY BBB Stable F3 FITCH RATINGS BBB (high) Stable R-1 (low) DBRS 90.1% €34bn BBB+ Stable S-2 SCOPE RATINGS LTD ratio Liquid Assets Mar19 Mar19 4 CAPITAL +453bps € 1.500mn Mar19 CET1 Phase in Issuance of TIER2: Buffer vs SREP €1,000mn. 2019 requirements Issuance of Senior Preferred: €500mn. 3

01. EXECUTIVE SUMMARY Bankia Results 2018 HIGHLIGHTS ATTRIBUTABLE PROFIT € €703mn NET INTEREST INCOME €2,049mn LOAN TO DEPOSIT RATIO € 91,2% PHASE IN CET1 13.80% UNIVERSAL BANKING MODEL, based on a multichannel distribution model with a presence throughout Spain, and FULLY LOADED CET1 with leading market shares in core regions which contributes 38% of Spain’s GDP. 12.39% BEST IN CLASS CORPORATE GOVERNANCE , optimal BRANCHES organizational structure and highly respected management team. 2,298 SOLVENT, EFFICIENT AND PROFITABLE INSTITUTION , with CUSTOMER FUNDS best in class efficiency and contained costs, and good speed €171,793mn in capturing cost synergies post-merger with BMN. SOLID BALANCE SHEET , with proven best class risk GROSS CUSTOMER LOANS € management and low real estate developer exposure. €122,505mn Continuing good asset quality dynamics post-merger with BMN, with a reduction of € 6.0bn in NPAs in 12M18. SUSTAINABLE CAPITAL AND LIQUIDITY GENERATION. Strong and consistent capital generation, with best in class solvency level with a CET1 Fully Loaded of 12.39% as of Dec.18. A SUCCESSFUL COMMERCIAL APPROACH, combined with effective cost control and low cost of risk translates into solid profitability levels. 4

01. EXECUTIVE SUMMARY Covered Bonds Ratings A+ AA- Stable 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 5 February 2019, following the upgrade of Bankia’s long-term rating to BBB, BONDS TO HQLA LEVEL 1. Fitch raised Bankia’s covered bonds to A+, outlook Stable . The rating had previously been affirmed on 23 January 2018 at “A”, outlook Stable upon the merger through absorption of BMN. Additionally, on 23 March 2018, following the application of the European RMBS Rating Criteria published on 2 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 January 2018, 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 21 September 2018 DBRS completed its annual review of Bankia’s covered bonds confirming the rating at “AAA” . Scope Ratings. On 12 July 2018 Scope Ratings affirmed its rating of Bankia’s covered bonds at “AAA” with a Stable outlook. Fitch Ratings S&P Global Ratings DBRS AA- AA + A+ AAA A+ A+ A+ AAA A A A AA A A+ A- A- BBB A- 2013 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2015 2016 2017 2018 2019 5

02. MORTGAGE COVER POOL Cover Pool Metrics STRONG AMPLE HIGH ELEGIBL IBLE ISSUANCE OC OC COVER CAPACITY TY LEVEL POOL 88% 12% Residential Commercial X 2,56 over-collateralized 80,826 78% 70,708 of the cover pool eligible € 16,246 million Issuance 54,881 Capacity 43,905 16,246 27,658 X 80% Total Collateral Elegible Legal Issuance Issued ACTIVE OC COLLATERAL AND CB’s OUTSTANDING MANAGEMENT Collateral CB’s Outstanding 80.000 Millones 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 2015 2016 2017 2018 2019 6

02. MORTGAGE COVER POOL Cover Pool Metrics Q1 2019 Q4 2018 Collateral Eligible Collateral Eligible Outstanding (million €) 70,708 54,881 71,501 55,249 Number of loans 865,081 736,328 870,852 738,143 Number of debtors 772,071 673,764 776,301 675,536 Average Seasoning (months) 108 114 107 113 Time to maturity (months) 235 222 236 222 Average LTV 58% 47% 59% 47% Q1 2019 Q4 2018 Collateral Eligible Collateral Eligible Residential 61,276 49,771 61,873 50,054 Commercial 9,432 5,110 9,628 5,194 COLLATERAL LTV DISTRIBUTION 25.000 Millones 84% OF THE 20.000 COVER POOL HAS A LTV 15.000 RATIO BELOW 80% 10.000 5.000 0 0-40 40-60 60-80 80-100 >100 NPL RATIO (1) NPL’S DECLINING 5,61% 5,82% 5,79% 5,79% 5,71% TREND D ALTERED D BY 5,48% 5,51% 5,41% 5,35% 5,31% THE MERGER WITH BMN Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2016 2017 2018 2019 (1) Includes BMN`s cover pool since 4Q17. (2) Considering more than 90 days doubtful loans. 7