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

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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


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Covered Bonds Investor Presentation

March 2019

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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

  • r 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.

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1Q19 HIGHLIGHTS

NON-PERFORMING LOANS

8.0

11.6

NPL COVERAGE RATIO

55.0% 55.1%

NPL RATIO

6.2% 8.7%

ATRIBUTABLE PROFIT

205

3M19

FULLY LOADED CET1

12.6% 12.7% %

ASSET QUALITY MAR 2019 MAR 2108 PROFITABILITY & CAPITAL MAR 2019 MAR 2018 COST OF RISK

14

3M19

bps % % €bn

ROE

€mn % %

CURRENT ISSUER RATINGS LONG TERM OUTLOOK SHORT TERM S&P GLOBAL RATINGS FITCH RATINGS

BBB Stable A-2 BBB Stable F3

  • 01. EXECUTIVE SUMMARY

Bankia Results 1

COMMERCIAL ACTIVITY

€728mn

New mortgages

+14.6% mar19 vs mar18

€589

New consumer lending

+25.8% mar19 vs mar18

2

EFFICIENCY & PROFITABLITY

56.1%

Cost to Income ratio

Mar19

  • 6.0%

Operating expenses

Mar19 vs Mar18

3

LIQUIDITY

90.1%

LTD ratio

Mar19

€34bn

Liquid Assets

Mar19

4

CAPITAL

+453bps

Mar19 CET1 Phase in Buffer vs SREP 2019 requirements DBRS

BBB (high) Stable R-1 (low)

229

3M18

6.6%

3M19

7.5%

3M18

€ 1.500mn

Issuance of TIER2: €1,000mn.

Issuance of Senior Preferred: €500mn.

SCOPE RATINGS

BBB+ Stable S-2

23

3M18

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ATTRIBUTABLE PROFIT

€703mn

NET INTEREST INCOME

€2,049mn

PHASE IN CET1

13.80%

FULLY LOADED CET1

12.39%

  • 01. EXECUTIVE SUMMARY

Bankia Results

LOAN TO DEPOSIT RATIO

91,2%

€ BRANCHES

2,298

CUSTOMER FUNDS

€171,793mn

GROSS CUSTOMER LOANS

€122,505mn

2018 HIGHLIGHTS

UNIVERSAL BANKING MODEL, based on a multichannel distribution model with a presence throughout Spain, and with leading market shares in core regions which contributes 38% of Spain’s GDP. BEST IN CLASS CORPORATE GOVERNANCE,

  • ptimal
  • rganizational structure and highly respected management

team. SOLVENT, EFFICIENT AND PROFITABLE INSTITUTION, with best in class efficiency and contained costs, and good speed in capturing cost synergies post-merger with BMN. SOLID BALANCE SHEET, with proven best class risk management and low real estate developer exposure. 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.

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  • 01. EXECUTIVE SUMMARY

Covered Bonds Ratings

2013 2014 2015 2016 2017 2018

BBB A- A S&P Global Ratings DBRS

2014 2015 2016 2017 2018

A- A+ A+ AA A+ AA +

AA-

Positive

AAA

DBRS

A+

Stable

AAA

Stable Fitch Ratings A- A BANKIA’S COVERED BONDS RATINGS HAVE IMPROVED ON THE BACK OF A STRENGTHENED INTRINSIC ASSESMENT OF BANKIA. AT THE SAME TIME THE MATURITY PROFILE OF THE COVERED BONDS OUTSTANDING AND THE OC LEVEL ALSO IMPROVES. RECENT RATING ACTIONS HAVE IMPROVED THE LCR ELIGIBILITY OF OUR COVERED BONDS TO HQLA LEVEL 1. A+ AAA

2015 2016 2017 2018 2019

A A AA- AAA A+ RECENT RATING ACTIONS

  • FITCH. On 5 February 2019, following the upgrade of Bankia’s long-term rating to BBB,

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-”,

  • utlook 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.

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10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Millones

80,826 70,708 54,881 43,905 27,658 16,246

Total Collateral Elegible Legal Issuance Issued

  • 02. MORTGAGE COVER POOL

Cover Pool Metrics

AMPLE ISSUANCE CAPACITY TY HIGH OC OC LEVEL STRONG ELEGIBL IBLE COVER POOL

COLLATERAL AND CB’s OUTSTANDING

88%

Residential

12%

Commercial

78%

  • f the cover

pool eligible

€ 16,246

million Issuance Capacity X 80%

2015 2016 2017 2018 2019

X 2,56

  • ver-collateralized

Collateral CB’s Outstanding

ACTIVE OC MANAGEMENT

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  • 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

84% OF THE COVER POOL HAS A LTV RATIO BELOW 80% NPL’S DECLINING TREND D ALTERED D BY THE MERGER WITH BMN

2016 2017 2018 2019

(1) Includes BMN`s cover pool since 4Q17. (2) Considering more than 90 days doubtful loans.

5.000 10.000 15.000 20.000 25.000

0-40 40-60 60-80 80-100 >100

Millones

5,61% 5,48% 5,41% 5,35% 5,31% 5,82% 5,51% 5,79% 5,79% 5,71%

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

NPL RATIO (1)

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RESIDENTIAL PORTFOLIO

  • 02. MORTGAGE COVER POOL

Residential Sub-Pool

RESIDENC NCIA IAL L PORTFOLIO LIO ELIGIBI IBILITY LITY STANDS AT 81% AVERAGE LTV OF THE ELIGIBLE IBLE PORTFOLIO LIO IS 48%

Q1 2019 Q4 2018 Collateral Eligible Collateral Eligible Outstanding (million €) 61,276 41,771 61.873 50.054 Number of loans 813,687 701,032 818.391 702.945 Number of debtors 739,256 649,278 742.882 650.705 Average Seasoning (months) 112 117 111 116 Time to maturity (months) 251 232 252 233 Average LTV 57,8 48,3 58,1 48,4 MATURITY DISTRIBUTION GEOGRAPHIC DISTRIBUTION

Collateral (€mn)

Q1 2019 Madrid 16,831

  • C. Valenciana

9,588 Andalucía 8,507 Catalunya 7,620 Murcia 4,201 Baleares 3,688 Castilla La Mancha 2,614 Canarias 2,542 Castilla y León 2,012 Rest 3,674

84%

LOANS FOR PRIMARY RESIDENCE

98%

FIRST RANKED MORTGAGES

27% 12% 16% 4% 3% 4% 1% 1% 1% 1% 1% 1% 1% 14% 6% 7%

5.000 10.000 15.000 20.000 25.000 30.000

1-5 5-10 10-20 20-30 >30

Millones
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COMMERCIAL PORTFOLIO

RESTRIC ICTIO TIONS NS TO REAL ESTATE LENDIN ING IN RECENT YEARS ENDED IN DEC.17 17 AVERAGE LTV OF THE ELIGIBL IBLE COMMERCIAL L PORTFOLIO LIO STANDS AT 35%

Q1 2019 Q4 2018 Collateral Eligible Collateral Eligible Outstanding 9,432 5,110 9,628 5,194 Number of loans 51,394 35,296 52,461 35,198 Number of debtors 35,595 25,987 36,272 26,370 Average Seasoning (months) 80 84 79 84 Time to maturity (months) 132 120 133 121 Average LTV 62,4 34,9 62,6 35,2 SPLIT BY INDUSTRY CODE MATURITY DISTRIBUTION

  • 02. MORTGAGE COVER POOL

Commercial Sub-Pool

Real Estate Building & Materials Business Services Retail Food / Beverage / Tobacco Lodging/ Restaurants Consumer Products Healthcare Leisure / Entertainment Industrial Farming/ Agricultural Services Others

21% 15% 12% 9% 6% 4% 4% 3% 3% 3% 3% 16%

500 1.000 1.500 2.000 2.500 3.000 3.500 4.000

1-5 5-10 10-20 20-30 >30

Millones
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2.264 418 2.025 13.356 4 35 600 175 3.750 1.522

2019 2020 2021 >2021

  • 03. WHOLESALE MATURITIES

Wholesale Maturities Amortizing Profile

2,269 418 2,235 19,227 Amount Outstanding (€mn) 24,149 Covered Bonds (1) 18,063 Senior Debt 640 Subordinated debt 3,925 Securitizations sold to third parties 1,522 (1) Not including retained covered bonds

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  • 04. ANNEXES

Macroeconomic Indicators

SPAIN SOVEREIGN DEBT RATING

LONG TERM OUTLOOK DATE STANDARD & POOR’S FITCH RATINGS

A- Positive Sep18 A- Stable Jan19

MOODY’S DBRS

Baa1 Stable Apr18 A Stable Sep18

“GROWTH CONSOLIDA DATI TION ” “FAVOURABLE EMPLOYMEN ENT T TREND”

Sales (deflated and seasonally adjusted)

RETAIL TRADE INDEX (Annual Rate %) UNEMPLOYMENT RATE IN SPAIN QUARTERLY SERIES GDP. PREVIOUS QUARTER RATE (%)

0,7 0,6 0,5 0,6 0,6 0,7 0,6 0,9 0,8 1T 2019 4T 2018 3T 2018 2T 2018 1T 2018 4T 2017 3T 2017 2T 2017 1T 2017

0% 5% 10% 15% 20% 25% 30%

1T 2019 4T 2018 3T 2018 2T 2018 1T 2018 4T 2017 3T 2017 2T 2017 1T 2017 4T 2016 3T 2016 2T 2016 1T 2016

  • 1
  • 0,5

0,5 1 1,5 2 2,5 3 3,5

ENE18 FEB18 MAR18 ABR18 MAY18 JUN18 JUL18 AGO18 SEP18 OCT18 NOV18 DIC18 ENE19 FEB19 MAR19

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  • 04. ANNEX

Spanish Real Estate Market

MORTGAGES CONSTITUTED OVER DWELLINGS EVOLUTION OF THE QUARTERLY RATE OF THE GENERAL HPI

“Mortgages

  • ver dwelling

ngs increase 14% vs Q4 Q4-2017” “New housing prices increased ed by 1,2%”

EVOLUTION OF THE QUARTERLY RATE OF THE HPI BY TYPE OF HOUSING 4Q 2018. ANNUAL VARIATION RATE (%) OF THE HPI BY AUTON. COMMUNITY

New housing Second-hand housing

10.000 20.000 30.000 40.000 50.000 60.000 70.000 80.000 90.000 100.000 Q1-2017 Q2-2017 Q3-2017 Q4-2017 Q1-2018 Q2-2018 Q3-2018 Q4-2018

0,4 2,2 2,6 1,4 0,9 1,8 2 2,3 0,4

Q4-2018 Q3-2018 Q2-2018 Q1-2018 Q4-2017 Q3-2017 Q2-2017 Q1-2017 Q4-2016

0,3 2,2 2,6 1,3 1,1 1,9 1,9 2,1 0,7 1,2 2,0 2,6 2,1

  • 0,6

1,6 2,6 3,7

  • 1,4

Q4-2018 Q3-2018 Q2-2018 Q1-2018 Q4-2017 Q3-2017 Q2-2017 Q1-2017 Q4-2016

2 4 6 8 10 12

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