Barclays Global Financials Services Conference New York · DEC 14 -0.5 Businesses & consumer 46.9 46.4 47.0 +0.6 Portfolio sales * 1.7 Businesses includes public sector 0.4 € Mn

Barclays Global Financials Services Conference

New York

17th September 2015

2 of 14 / September 2015

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Disclaimer

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.


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Confronting the last semester of the Strategic Plan

GDP growth 2012: -2.6% Cost-to-income ratio

40 – 45%

Cost of risk 50 – 55 bps

10% ROE

Unemployment

Euribor 12M

Risk premium

2012: 26%

2012: 1.1%

637 bps

Source: Bloomberg/Average 2012

Source: Reuters/Maximun July 2012

TARGET for 2015 2012 ENVIROMENT

Source: INE

Source: EPA


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Confronting the last semester of the Strategic Plan

Interest rates Euribor 12M: 0.16%

10Y SPGB: 2.00%

Improving Profitability

GDP growth Unemployment

GDP 2015E: 3.1% Unemployment 2015E:

20.9%

Commercial Activity

Focus

Compression in asset spreads

Productivity Competitive Environment

… to achieve our Strategic Plan Goals

Current environment…

1

2

3

Source GDP: IMF/ Source unemployment: EPA

Source: Bloomberg


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Commercial activity 1

CUSTOMER FUNDS PERFORMANCE

Customer funds up €9bn since December 2012

DEC 12

14.6

93.7*

108.3

Strict cust. deposits

Off-balance-sheet funds

JUN 15

22.3

95.0

117.3

Transfer from term deposits to demand deposits and increased market share in mutual funds

+1.3

+7.7

+9.0

Demand deposits

Strict deposits DEC 12

Term deposits

93.7*

Strict deposits JUN 15

95.0

(6.2) 7.5

MUTUAL FUNDS MKT. SHARE

DEC 12

4.39%

Source: Inverco

DEC 13

4.74%

DEC 14

4.98%

JUN 15

5.27%

+20%

€ Bn € Bn %

* Excludes retail “pagarés”


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+ 4.0% organic growth in key business segments: businesses and consumer finance

Significant increase in new lending in key segments in 1H15

NEW LENDING

4,957

4,566

1H 14 1H 15

7,700

391

7,159

541

+ 55.3%

Businesses Consumer

+ 56.8%

+ 38.4%

Note: Does not include forbearance

TOTAL LOANS PERFORMANCE

Total gross loans 121.8

Mortgages 72.4

119.7

70.2

DEC 14 JUN 15

Gross loans excludes BFA reverse repurchase agreements * Accumulated portfolio sales for the period: Jun 14 – Dec 14 €1.3 bn and Dec 14 – Jun 15 €0.4 bn

125.6

75.4

JUN 14

Developer 3.0 2.5 3.3

-2.1

-2.2

JUN15 vs DEC 14

-0.5

Businesses & consumer 46.4 47.0 46.9 +0.6 Portfolio sales * 1.7

Businesses includes public sector

0.4

€ Mn € Bn

Dec 14

46.0

Jun 15

47.0

Jun 14

45.2

+€1.8 bn (+4.0%)

+€1.0 bn (+2.2%)

Businesses & consumer, Organic

Commercial activity 1


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Productivity

2014-2015 Network segmentation...

…allows us to continue increasing productivity per

employee…

Recovery centres (RCs)

(managing 80% of NPLs)

~1,750

~ 35

Commercial branches

2Q 14

23.3

2Q 15

32.5

+39.5%

PRODUCTS SOLD PER EMPLOYEE/MONTH IN BRANCHES

2

Reestructuring...

3,128

2013 & today

~ 2,000

NUMBER OF BRANCHES

NUMBER OF EMPLOYEES

2012

20,005 14,099

2012

~ 50

Transactional branches

~ 150

Advisory branches

2015

Jun 15


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Gross Customer Margin

%

Loan yield vs. cost of deposits (1)

Back book and front book, quarterly average (excluding impact of City National Bank)

Cost of term deposits – Back book vs. Front book

%

(1) City National Bank has been excluded from the series.

Average cost of term deposits (back book)

2.0%

2015e ≈1.0%

1.22% 1.26% 1.41%

1.40% 1.44%

Gross customer margin

…with a significant scope for improvement in 2016 due to downward repricing of term deposits

2014

Gross customer margin has increased 47% since Dec 2013…

2.10% 2.18%

2.36% 2.34% 2.45%

0.66%

0.9% 0.95%

1.08% 1.23%

2Q 20151Q 20154Q 20143Q 20142Q 2014

Customer yields Customer deposit cost

2.10% 1.83%

1.58% 1.32% 1.13% 1.10%

0.85% 0.64% 0.54% 0.37%

2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015

Back Book Front Book

Improving Profitability through lower cost of funding

Profitability 3


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+ € 0.6Bn cost reduction since 2012 to 2015E …Lower expenses representing+ 0.56%RoRWA or +4% in ROE

EFFICIENCY INDICATORS

Efficiency Cost Control will continue to be key for profitability

Cost-to-income ratio performance

Cost-to-income ratio ex NTI: total expenses / gross income ex NTI and ex exchange differences

COST-TO-INCOME RATIO

Profitability

Ex NTI*

1H 15

1.94%

OPERATING EXPENSES / RWAs BANKIA GROUP

1H 15

2.50%

% OPERATING EXPENSES / RWAs

SECTOR - DOMESTIC

Operating expenses 1H2015 annualised

Sector - Domestic: Includes weighted average of top 10 domestic banks (ex Bankia)

3

Sector - Domestic: Includes top 10 domestic banks (ex Bankia)


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+35% PPP increase in 2Q 2015 vs 2012*

Pre-provision profit Pre-provision profit increases in the second quarter of the year

Pre-provision profit

1Q15

569

2Q15

617 +8.6%

Gross income

1Q15

992

2Q15

1,037 +4.6%

Operating expenses

2Q14

1,055

2Q14

620

€ Mn € Mn

€ Mn

Profitability

2012*

1,030

…

1Q15

423

2Q15

420 -0.7%

2Q14

435

2012*

573

… 2012*

456

…

* Average per quarter

3

+35%




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NPL June 14 – June 15

NPL ratio NPL and foreclosed assets change y-o-y

NPL coverage ratio stands at 60.6%

Cost of Risk

2014

60 bps

2Q15

51 bps

€ Mn

* Peers: main listed banks included in the Ibex 35

Profitability

Asset quality and Cost of Risk NPL reduction and coverage level key to control cost of risk

1Q 15

55 bps

3

2013

74 bps

2,530

13

-662

-888

-1,524

-3,198

-4.000 -2.000 0 2.000 4.000

Peer 5

Peer 4

Peer 3

Peer 1

Peer 2

Bankia

NPL and foreclosed assets June 14 – June 15

1,373

-1,830

-2,453

-2,789

-3,083

-3,147

-4.000 -3.000 -2.000 -1.000 0 1.000 2.000

Peer 5

Peer 4

Peer 3

Peer 2

Peer 1

Bankia


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Profit after tax

Profitability

Controlled Cost of Risk

53 bps 1H15

Continued pressure on Expenses

+47% since Dec 2013

Improving Gross Customer Margin

Cost to Income: 41.5% 1H15

ROE stands at 9.8% in 1H15

* Annualized attributable profit / average equity.

2Q 14 2Q 15 1Q 15

€ Mn

250 312 245

ROE *

1.9 pp

3

9.8% 7.9%

1Q 14

186


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Cost-to-income ratio

40 – 45% 41.5%

Cost of risk 50 – 55 bps 53 bps

TARGET 2015 1H 2015

10% 9.8% ROE

Delivering the targets of the Strategic Plan…

…while confronting the last semester


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…with an organic capital generation of 449 bps BIS III FL since year-end 2012

Generating capital…

2014 dividend distribution of €202 million

CET1 BIS III FULLY LOADED

DEC 13

8.60%

JUN 15

11.31%

+ 4.49 pp

%

*

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).

TBV PER SHARE, JUN 2013 – JUN 2015

…and creating value for our shareholders

-28%

-9%

-3%

-2%

1%

16%

-30% -20% -10% 0% 10% 20%

Peer 5

Peer 4

Peer 3

Peer 2

Peer 1

Bankia

DEC 12

6.82%

Peers: main listed banks included in the Ibex 35 TBV: tangible book value

+71 bps

DEC 14

10.60%

Investor Relations

[email protected]

Documents

Barclays Global Financials Services Conference New York · DEC 14 -0.5 Businesses & consumer 46.9 46.4 47.0 +0.6 Portfolio sales * 1.7 Businesses includes public sector 0.4 € Mn