Presentación de PowerPoint...2017/09/12 · 10 GROSS CREDIT STOCK | CONSUMERFINANCE 2.8 +18.1% JUN 16 €bn 3.4 JUN 17 Lendingvolumeson theup GROSS CREDIT STOCK | PERFORMINGBUSINESS

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Barclays Global

Financial Services Conference

New York

12th September 2017

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DisclaimerThis document was originally prepared in Spanish. The English version published here is for information purposes only. In theevent of any discrepancy

between the English and the Spanish version, the Spanish version will prevail.

This document has been prepared by Bankia, S.A. (“Bankia”) and is presented exclusively for information purposes. It is not aprospectus and does not constitute

an offer or recommendation to invest.

This document does not constitute a commitment to subscribe for, 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.

This document includes, or may include, forward-looking information or statements. Such information or statements represent the opinion and expectations of

Bankia regarding the developmentof its business and revenue generation, but such development may be substantially affected inthe future by certain risks,

uncertainties and other material factors that may cause the actual business development and revenue generation to differ substantially from our expectations.

These factors include i) market conditions, macroeconomic factors, government and supervisory guidelines, ii) movements in national and international

securities markets, exchange rates and interest rates and changes in market and operational risk, iii) the pressure of competition, iv) technological changes, v)

legal and arbitration proceedings, and vi) changes in the financial situation or solvency of our customers, debtors and counterparties. Additional information

about the risks that could affect Bankia's financial position, may be consulted in the Registration Document approved and registered in the Official Register of

the CNMV.

Distribution of this document in other jurisdictions may be prohibited, 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.

This document does not reveal all the risks or other material factors relating to investments in the securities/ transactionsofBankia. 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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CONTENTS

Merger with BMN3

Conclusions4

The recovery in Spain1

Bankia 1H172

4

One of the most dynamic economies in Europe

The recovery in Spain

Barclays – Financial services conference

… with a resilient growth over the last quartersSpain is growing at a faster rate than EMU over the last three years…

GDP Growth – (%) 0.9%GDP Growth – (%)

Forecasts

5

Robust growth figures and significant reduction in unemployment



Unemployment downwards trend correlated with NPL reduction

Spain Unemployment Rate – (%) NPLs volume – (€Bn)

16,514,7

13,2

202,4

121,1

26,9

18,6

0

5

10

15

20

25

30

0

50

100

150

200

250

Mil

lone

s

RED credit transfer to

Sareb

‘07A ‘08A ‘09A ‘10A ‘11A ‘12A ‘13A ‘14A ‘15A ‘16A ’17E ’18E ’19E

Source: Company Information, Bloomberg as of 23 of June 2017, Bank of Spain as of May 2017 and International Monetary Fund (W orld Economic Outlook Database) as of April 2017

International tourist arrivals

+46% 2017e vs 2012

TOURISM KEY TO SPANISH ECONOMY

2010 2016

10,2% 11,2%

Number of exporting business

+21% 2016 vs 2011

Source: ICEX & Bankia Estudios

Exports of goods

+18% 2017e vs 2012

GROWINGEXPORTSDUE TO IMPROVEMENTIN COMPETITIVENESS

Source: INE & Bankia Estudios


Source: INE

Weight of tourist activity in GDP

6

Household consumption remains strong



Housing recovery gaining strength

Number of residential property transactions (yearly figures)

Highest Lowest June 2017

Prices (€/m ) 2.101 1.456 1.5262

+ 48% …… from the lowest+ 13.2% … YTD

+ 4.8% …… from the lowest+ 2.2% …… YoY

Source: Min. de Fomento

Source: INE

775.300

293.351

432.775

Number of credit cards

+20% 1T17e vs 1T12

1T12 1T17

41,6MM 49,9MM

Car sales (Thousands)

+71% 2017e vs 2012

2011 2016

699 1,202

Point of sale transactions

+26% 2016 vs 2012

2012 2016

€98bn €124bn

Source: Bank of Spain & Bankia Estudios

Consumer loans

+29% 2017e vs 2012

2014 2017 (July)

€58bn €75bn


Source: Bank of Spain & Bankia Estudios

Source: Bankia Estudios

7

Deleveraging process reaching its conclusion



… albeit at an increasingly moderate rateOutstanding stock of loans continues to shrink…

170

107

90

50

100

150

200

Mar

-03

Mar

-04

Mar

-05

Mar

-06

Mar

-07

Mar

-08

Mar

-09

Mar

-10

Mar

-11

Mar

-12

Mar

-13

Mar

-14

Mar

-15

Mar

-16

Mar

-17

% o

f G

DP

Spain Italy Germany France Euro area

Loans. Households & Non-financial corporations

Source: BCE & Bankia Estudios

- €640 billion

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CONTENTS

Merger with BMN3

Conclusions4


Bankia 1H172

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Commercial positioning gathers strength

Net new customers

+107,000 Jun 17 vs Jun 16

NEW CUSTOMERS

New direct deposits of income

+108,000 Jun 17 vs Jun 16

DIRECT DEPOSIT OF INCOME

Credit cards (units)

+169,000Jun 17 vs Jun 16

NET NEW CARDS

Bankia cards in retail outlets

+12.7%1H17 vs 1H16

CARD SALES

Point of sales terminals installed

+15.9%Jun 17 vs Jun 16

Total sales

+23%1H17 vs 1H16

POINT OF SALES IN SERVICE

POINT OF SALES ACTIVITY

Bankia 1H17


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GROSS CREDIT STOCK | CONSUMER FINANCE

2.8

+18.1%

JUN 16

€bn

3.4

JUN 17

Lending volumes on the up

GROSS CREDIT STOCK | PERFORMINGBUSINESS

€bn+1.6%

29.1

JUN 16

29.5

JUN 17

New loans to SMEs +27.9% 1H17 vs 1H16

New loans to OTHER ENTERPRISES +10.1% 1H17 vs 1H16

New CONSUMER FINANCE loans +20.0% 1H17 vs 1H16

New CONSUMER FINANCE loans + 8.4% 2Q17 vs 1Q17

New MORTGAGE LOANS 2.3x 1H17 vs 1H16

New MORTGAGE LOANS +54.9% 2Q17 vs 1Q17

INTERESTRATESON NEW MORTGAGES

% 1.48%

1Q 17

1.67%

2Q 17

1.28%

2016

%

Bankia 1H17


CONSUMER FINANCE

BUSINESS

MORTGAGES

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Net profit for the half-year is up 6.7% year-on-year based on ….

ATTRIB. PROFIT

€mn

1H16

481 514

+6.7%

1H17

Gross income is stable(2.3%) 1H17 vs 1H16

Operating expenses are down

(2.8%) 1H17 vs 1H16

Cost of risk has improved

-3 bps 1H17 vs 1H16

ROE

%

1H16

8.2% 8.6%

+0.4 p.p.

1H17

Bankia 1H17


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Sustained reduction of NPLs, with 47% decrease since 2013

NPLS, NPL RATIO AND COVERAGE

20,0 16,5 13,0 11,5 11,0 10,6

DEC 13 DEC 14 DEC 15 DEC 16 1Q17 2Q17

12.9%

57.6%

14.7%

56.5%

10.8%

60.0%

9.8%

55.1%

9.5%

53.7%

NPL ratio

Coverage ratio

NPLs(€ Bn)

47% reduction

9.1%

53.9%

Over 4bn of NPL reduction through wholesale disposals✓

Bankia 1H17


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Bankia 1H17


80 bps of CET1 capital generated in the first half of the year

14.36% 15.85%

+ 249 bps

DEC 16 JUN 17

TOTAL CAPITAL RATIO FULLY LOADED%

The solvency ratios include the profit attributable to the Group and discount the regulatory adjustment for the planned dividendIf the unrealized gains on the sovereign portfolio were included in the fully loaded ratio at 30 June 2017, the CET1ratio would have been 14.22% and the Total Solvency ratio, 16.25%

13.02% 13.82%

+ 80 bps

DEC 16 JUN 17

CET1 RATIO FULLY LOADED %

16.85%

JUN 17 PF

After AT1 issue

AT1 issue: 1.00%

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Great reception in the market of subordinated debt and AT1 issues during the year

CONVERTIBLE BOND ISSUE (AT1) JUNE 2017

Volume (€mn)

Oversubscribed (# times)

Coupon

3.3x

€750 mn

6.00%Impact on capital

+ 100 bps at total capital level

(Basel III FL)

DETAILS OF THE ISSUE

SUBORDINATED DEBT ISSUE (TIER 2) MARCH 2017

Volume (€mn)

Oversubscribed (# times)

Coupon

>10x

€500 mn

3.375%Impact on capital

+ 66 bps at total capital level

(Basel III FL)

DETAILS OF THE ISSUE

Bankia 1H17


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CONTENTS

Merger with BMN3

Conclusions4


Bankia 1HQ172

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Merger with BMN


BMN brings a significant increase in scale and client base

Gross Loans (€bn) (1)

Deposits (€bn)

Clients (millions)

Branches (#)

As of 4Q16

105.2

29.4 134.5

Bankia BMN Bankia PF

6.51.7 8.2


+20%

+28% +36%

+26%

Source: Company information(1) Excluding temporay asset acquisition

110.122.2 132.3


1,855

660 2,515


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Bankia’s Integration Track Record Significantly Mitigates Execution Risks

Bankia Integration 2011-2013

> 90% 100%> 60%

CajaMadrid

Caja de ÁvilaBancaja

CajaSegovia

CaixaLaietana

La Caja Insular de Canarias

Caja Rioja

Q1 Q2 Q3 Q4 Q1 Q2

201320122011

Q1 Q2 Q3 Q4

% total customers

▪ Successful integration completed within a record time

▪ Bankia’s technological capabilities allowed the integration of 7

entities in one platform in less than 24 months

Bankia Restructuring Plan 2012

▪ Bankia was able to outperform its targets announced in the Strategic Planin 2012

Source: Company Information(1) Excluding CNB operating expenses

BMN integration expected for 1H18

Merger with BMN


2012 2015

2,3

COST OF RISK

LIQUIDITY (LTD RATIO)

CAPITAL GENERATION

1,6

74bps 43bps

120.4% 101.9%

2012-15: +544bps

Target

1,7

50bps

<110%

480bps

Achievement over target (%)

+117%

+ 129%

+ 178%

+ 113%

COST BASE (€bn)(1)

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Merger with BMN


Expected €155 MM of Pre-tax Cost Synergies

Annual Cost Savings Target (Pre-tax)

~€66 MM

~€149 MM ~€155 MM

Year 1 Year 2 Year 3

▪ €155mn reduction in recurrent

costs (pre-tax) expected by year 3

▪ €334 MM of restructuring costs

associated (pre tax)

€mn

Synergies represent 40% of BMN 2016 cost base - Restructuring costs as 2.15x of synergies run rate

Source: Company Information

42%

Synergies Phasing (%)

96% 100%

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Opportunity to generate revenue synergies (not factored-in in the estimates)

…that could be replicated on BMN’s client base

Significant client

penetration gap between Bankia

and BMN on higher yielding

products

Product Client Penetration

▪ c.200% higher for BankiaMutual Funds

▪ >35% higher for BankiaPayroll and

Pensions

▪ >40% higher for BankiaCredit Card

Client Penetration as of December 2016

Source: Company Information

Bankia: significant increase in market shares…

Market Shares (%)

Mutual Funds Pension Plans

4.4

5.6

Dec 12 Mar 17

4.9

6.3

Dec 12 Mar 17

+27% +28%

Credit Cards Consumer Finance

5.3

7.3

Dec 12 Dec 16

3.6

4.9

Dec 13 Mar 17

+38% +35%

Merger with BMN


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Merger with BMN


59.0%

27.8%

5.0%4.2% 1.5% 2.4%

Bankia will remain being the Entity with Lowest Exposure to Real Estate Developers….

Loans to Real Estate Developers 1.5% of Bankia’s PF loan book

63.9%

25.2%

5.5%

2.7% 0.5% 2.2%

BMN Standalone Bankia PF

Total: €21.9 Bn Total: €130.4 Bn

Tha bank with lowest RED Exposure

12.8%

6.7% 6.3%

4.2% 3.9% 3.4%2.3%

1.5%

Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7 Bankia PF

Bankia PF as of 1Q17 and Peers as of 4Q16 (%) – RED Loans as % Gross Loans (1)Gross Loans as of 1Q17 (%)

69%

RED NPL Ratio (%)

89% 64%31% 30% 62% 14% 68%

Residential Mortgages Consumer SMEs & Corporates

Other Construction Public SectorReal Estate Developers Lowest RED Exposure combined with one of the highest NPL recognition

Source: Company Information(1) Peers are BBVA Spain (Incl. RE Unit), Bankinter (Ex Portugal where disclosed), CaixaBank (Ex BPI where possible), Liberbank, Popular, Sabadell (Ex TSB where disclosed) and Santander Spain (Incl. RE Unit)

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Merger with BMN


… And One of the Lowest Exposures to Foreclosed Assets …

BMN Bankia PF

Total: €1.1 Bn Total: €3.1 Bn

64.6%

19.1%

16.3%

75.2%

5.7%

19.1%

Bankia will continue to have a reduced exposure to Land One of the Lowest Net Foreclosed Real Estate Assets Exposure as % Total Assets

Net foreclosed assets / Total Assets (%)(1)(2)

Bankia PF as of 1Q17 and Peers as of 4Q16Net Foreclosed Assets as of 1Q17(%)(2)

Finished Buildings & Mortgages(3) Land Other

50%

Average Peers (4Q16) (1) (2)

28%

22%

Source: Company Information(1) Peers include BBVA Spain (Incl. RE Unit), Bankinter (Ex Portugal where disclosed), CaixaBank (Ex BPI where disclosed), Liberbank, Popular, Sabadell (Ex TSB where disclosed) and Santander Spain (Incl. RE Unit)(2) Including equity instruments of entities holding property assets foreclosed or received in settlement of debt(3) Including finished buildings from loans to construction and real estate developers and real estate assets from mortgage lendi ng to households

7.0%

5.4%

3.7%

2.0% 1.7% 1.5% 1.4%

0.4%

Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Bankia PF Peer 7

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Bankia Maintains its Prudent Coverage Levels Post Merger

Foreclosed Real Estate Assets – PF Coverage 36%Non Performing Loans – PF Coverage 55%

Net Foreclosed AssetsBankia PF as of 1Q17 and Peers as of 4Q16

Coverage vs Peers (1)(3)(4)

Bankia PF as of 1Q17 and Peers as of 4Q16

Real Estate Developers’sNPLs

~6%

~94%

Net NPLsBankia PF as of 1Q17 and Peers as of 4Q16

Coverage vs Peers (1) (5)

Bankia PF as of 1Q17 and Peers as of 4Q16

NPLs Ex Real Estate

Developers

48%53%

Average Peers Bankia PF

51%

73%


Source: Company Information(1) Peers include BBVA Spain (Incl. RE Unit), Bankinter (Ex Portugal where disclosed), CaixaBank (Ex BPI where diclosed), Liberbank, Popular, Sabadell (Ex TSB where disclosed) and Santander Spain (Incl. RE Unit)(2) Including finished buildings from loans to construction and real estate developers and real estate assets from mortgage lendi ng to households(3) Including equity instruments of entities holding property assets foreclosed or received in settlement of debt(4) Allowances for foreclosed assets from foreclosing (where not disclosed, total reported provisions are considered)(5) Excluding mortgage floors provisions from credit book provisions

Bankia PF Average Peers

~73%

~27%

Bankia PF Average Peers

Finished Buildings(2)

~75%

29%35%

Average Peers Bankia PF~50%

~19%

Other

30% 31%


~22%

~6%

Land

47%57%

Average Peers Bankia PF~28%

Merger with BMN


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Transaction Terms

Fuente: Company information(1) Number of shares to be issued: 205.684.373

▪ Shares Exchange: c. 206(1) million of Bankia’s new shares inexchange for 100% of BMN’s share capital, with no additional cashpayment

– Implicit valuation of €825mn for 100% of BMN (based onBankia’s share price as of 23 June 2017 at 4.011 euros)

– Implicit 0.41x BMN TBV 2016 pre adjustments

▪ BMN receives Bankia shares representing 6.7% of the resultingentity

‒ FROB mantains a 66.6% equity stake pro forma

Merger with BMN


Attractive Transaction For Bankia Shareholders

Source: Company Information, analyst consensus as of 23 of June 2017(1) EPS increase calculation and improvement in ROTE based on 2020 analyst consensus for Bankia

NET INCOME INCREASE

EPS INCREASE (%) (1)

€245mn BY YEAR 3

16% BY YEAR 3POSITIVE FROM YEAR 1 (3)

ROIC (%) 12% IN YEAR 3

ROTE UPLIFT (%) (1) ~120 bps IN YEAR 3

CET1 FL PF 2017(E) 12%

Value Creation with Low Execution Risk

✓Optimal Use of Bankia’sExcess Capital

✓

Impacts of BMN Merger

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CONTENTS

Merger with BMN3

Conclusions4


Bankia 1H172

25

Conclusions

Conclusions


Growth in customers and loyalty is reflected in positive performance of the banking business in the main segments: mortgages, consumer finance and businesses

Growth of 6.7% in attributable profit and reduction of €1.1 bn in NPLs and foreclosed assets.

€504 mn of organic CET1 capital generation and €1,250 mn of bonds issued in the first half of the year.

The integration with BMN will reinforce Bankia’s franchise and have a positive impact on profitability

Commercial positioning Profitability

Capital Merger with BMN

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Documents

Presentación de PowerPoint...2017/09/12 · 10 GROSS CREDIT STOCK | CONSUMERFINANCE 2.8 +18.1% JUN 16 €bn 3.4 JUN 17 Lendingvolumeson theup GROSS CREDIT STOCK | PERFORMINGBUSINESS