Quarterly results presentation 2Q 2015 27 July 2015
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Contents 1. 1H 2015 Highlights 2. 2Q 2015 results 3. Asset quality and risk management 4. Liquidity and solvency 5. Conclusions 3 of 32 / July 2015
1H 2015 Highlights 1 2 ASSET QUALITY COMMERCIAL ACTIVITY +€1.4 bn Customer Funds vs. Dec14 €1.2bn reduction in NPLs vs. Dec14 +4.0% growth in credit to businesses Coverage ratio: 60.6% (+3.0 p.p. vs Dec14) and consumers JUN15 vs.JUN14 4 3 EFFICIENCY AND CAPITAL GENERATION PROFITABILITY Eficiency ratio: 41.5% 1H15 +71 bps of capital generation in 1H15 Attributable profit: +11.5% vs. 1S14 (CET1 BIS III FL) ROE 1H15: 9.8% 4 of 32 / July 2015
Half ‐ year highlights 1 Positive performance of customer funds under Commercial activity management during 1H15 CUSTOMER FUNDS PERFORMANCE MUTUAL FUNDS MKT. SHARE % € Bn € Bn +39 bp 94.9 95.0 115.9 117.3 +1.4 22.3 +1.3 6.3 (6.2) 21.0 +0.1 5.27% 95.0 94.9 5.09% 4.98% 4.92% 4.88% DEC 14 JUN 15 Strict Strict Term Demand deposits deposits JUN14 SEP 14 DEC 14 MAR 15 JUN 15 deposits deposits Strict cust. Off ‐ balance ‐ DEC 14 JUN 15 deposits sheet funds Source: Inverco Customer funds up €1.4bn Transfer from term deposits to demand deposits and increased in 1H15 market share in mutual funds 5 of 32 / July 2015
1H 2015 Highlights 1 Commercial activity +55.3% increase in new lending vs. 1H14 NEW LENDING TOTAL LOANS PERFORMANCE € Mn € Bn JUN15 vs JUN 14 DEC 14 JUN 15 DEC 14 4,957 7,700 + 55.3% 125.6 121.8 119.7 ‐ 2.1 Total gross loans 541 ‐ 2.2 Mortgages 75.4 72.4 70.2 + 38.4% Developer 3.3 3.0 2.5 ‐ 0.5 391 +0.6 46.9 46.4 47.0 Businesses & consumer 7,159 + 56.8% 1.7 Portfolio sales * 0.4 4,566 +€1.0 bn (+2.2%) 46.0 45.2 47.0 Businesses & consumer, organic 1H 14 1H 15 +€1.8 bn (+4.0%) Businesses Consumer Businesses includes public sector Gross loans excludes BFA reverse repurchase agreements Note: Does not include forbearance * Accumulated portfolio sales for the period: Jun 14 – Dec 14 €1.3 bn and Dec 14 – Jun 15 €0.4 bn + 4,0% organic growth in key business segments: businesses Significant increase in new lending in key segments in 1H15 and consumer finance 6 of 32 / July 2015
1H 2015 Highlights 1 Mystery shopping results above sector Commercial activity average Mystery shopping ‐ Sector comparison Product sales 7.09 Performance 1H15 vs. 1HS14 6.61 Credit & Debit cards + 33% 6.65 Performance (net new cards) 6.03 6.01 2012 – 1H15 6.29 5.88 POS terminals + 70% 5.55 (no. of customers) Bankia Overall sector 2012 2013 2014 1H2015 Pension funds + 51% Net new funds 0.44 0.32 Gap ‐ 0.15 ‐ 0.46 vs. the Payroll +11% sector 2012 2013 2014 1H2015 (new accounts) Improvement of mystery shopping results, increasing the lead over the sector average 7 of 32 / July 2015
1H 2015 Highlights 2 Asset quality performs Asset quality positively quarter from quarter NPL RATIO NPLs €Bn % 12.9% 12.2% ‐ 0.7 p.p. 18.6 16.5 15.3 ‐ €1.2bn DEC 14 JUN 14 DEC 14 JUN 15 JUN 15 COVERAGE RATIO COST OF RISK bps % 66 55 53 57.6% 60.6% +3.0 p.p. ‐ 2 bps DEC 14 JUN 15 1H14 2H14 1H15 NPL ratio continues to reduce with …while reducing NPLs and increase in coverage… lowering cost of risk 8 of 32 / July 2015
1H 2015 Highlights 3 Continued cost control as a Efficiency and profitability key element for profitability OPERATING EXPENSES EXPENSES / RWAs: Bankia vs. sector € Mn 2.90% (3.8%) 2.76% * 2.75% 2.75% 2.71% 2.70% 876 843 2.50% 80 bps 80 bps 2.30% 2.10% 1.97% 1.94% 1.95% 1.94% 1.91% 1.90% 1.70% 2Q14 3Q14 4Q14 1Q15 2Q15 Expenses / RWAs Weighted average Peers Expenses / RWAs BKIA 1H 14 1H 15 Includes listed banks and former savings banks *Excludes extraordinary expenses …as a competitive advantage to increase Continued expense reduction… profitability 9 of 32 / July 2015
1H 2015 Highlights 3 Efficiency and profitability Attributable profit increases 11.5% vs. 1H2014 Continued positive trend …with strong increase in profit and ROE of main indicators… Stable €Mn ATTRIBUTABLE PROFIT Gross income + 11.5% 556 498 +0.1% 1H15 vs. 1H14 Reducing Operating expenses (3.8%) 1H15 vs. 1H14 1H 14 1H 15 % ROE Improving + 1.9 p.p 9.8% 7.9% Cost of risk ‐ 13 bps 1H15 vs. 1H14 1H 14 1H15 ROE stands at 9.8% in 1H15 10 of 32 / July 2015
1H 2015 Highlights 4 Capital generation 71 bps of capital generation in 1H15 …and creating value for our Generating capital… shareholders % CET1 BIS III FULLY LOADED TBV PER SHARE, JUN 2013 – MAR 2015 + 136 bps Bankia 20% 9.95% * 10.60% 11.31% Peer 1 7% +71 bps 1% Peer 2 ‐ 2% Peer 3 ‐ 6% Peer 4 JUN 14 DEC 14 JUN 15 The solvency ratios include the profit allocated to reserves for the period and discount a potential Group dividend, based on Decision (EU) 2015/656 of the European Central Bank of 4 February 2015 (assuming the 2014 payout ratio: 27%, which represents €150 million in the semester). ‐ 7% Peer 5 2014 dividend distribution ‐ 10% ‐ 5% 0% 5% 10% 15% 20% 25% of €202 million Peers: main listed banks included in the Ibex 35 TBV: tangible book value 11 of 32 / July 2015
1H 2015 Highlights Income statement 1H 2015 – BFA Group vs. Bankia Group € Mn Gross income 2,041 2,029 Operating expenses (848) (843) Pre ‐ provision profit 1,193 1,186 Provisions and others (384) (433) Profit before tax 809 753 619 562 Profit after tax 775 Net non ‐ recurring profit/(loss)* 1,393 562 Reported profit after tax * Includes NTI from portfolio sales and non ‐ recurring provisions in BFA 12 of 32 / July 2015
Contents 1. 1H 2015 Highlights 2. 2Q 2015 results 3. Asset quality and risk management 4. Liquidity and solvency 5. Conclusions 13 of 32 / July 2015
2Q 2015 results I ncome statement – Bankia Group 1Q 2015 1H 2014 Diff. % 2Q 2015 Diff. % 1H 2015 € Mn 693 695 1,427 1,388 Net interest income 0.2% (2.8%) A Fees and commissions 233 248 468 481 2.9% 6.7% 992 1,037 2,027 2,029 Gross income 0.1% 4.6% (423) (420) (876) (843) B Operating expenses (3.8%) (0.7%) 569 617 1,151 1,186 C Pre ‐ provision profit 8.6% 3.1% (219) (211) (564) (430) Provisions (3.4%) (23.8%) (14) 10 102 (3) Results from sales and others ‐‐ ‐‐ D (92) (105) (190) (197) Taxes and minority interests 14.9% 3.5% 244 311 498 556 Profit attrib. to the Group 27.3% 11.5% 14 of 32 / July 2015
2Q 2015 results Net interest income A Net interest income performance penalised by repricing of SAREB portfolio Net interest income performance analysis € Mn Net interest income ‐ 56% performance in the quarter influenced by … + 6% � Lower yield of SAREB 1,427 202 1,225 1,300 88 1,388 bonds � Downward trend in interest rates + 75 Gross income ex ‐ SAREB …which has been offset by: ‐ 114 SAREB income � Reduction of cost of customer deposits � Increase in lending to SMEs and NII NII SAREB SAREB NII NII consumers Margin Margin ex SAREB ex SAREB 1H14 1H15 Excluding the impact of the SAREB bonds, net interest income grows 6% 15 of 32 / July 2015
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