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Covered Bonds Investor Presentation March 2019 1 Index 01 - - PDF document
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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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
4
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
Millones5,61% 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
Millones9
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
Millones10
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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