Bankia S A : The company submits a presentation for press and analysts about the results for the fourth quarter of 2019.

Annual results presentation

2019

28 January 2020

Disclaimer

2

This document was originally prepared in Spanish. The English version published here is for information purposes only. In the event 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 a prospectus 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 development of its business and revenue generation, but such development may be substantially affected in the 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/ 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

CONTENTS

1 2019 HIGHLIGHTS

2 2019 RESULTS

3 ASSET QUALITY AND RISK MANAGEMENT

4 LIQUIDITY AND SOLVENCY

5 CLOSING REMARKS

APPENDIX

3

ANNUAL RESULTS PRESENTATION

2019 Highlights

In the second year of our Strategic Plan we have demonstrated important

advances in each of its key pillars…

1	Commercial activity boosted	2	Efficency and cost control	3	Accelerated reduction of NPAs

Income from high value	Larger than expected	€2.5 bn reduction of NPAs
synergies from the merger
products increases	in the year
with BMN

…allowing us, while maintaining the dividend, to increase our CET 1 FL ratio by 63 bps to

13.02%

4

ANNUAL RESULTS PRESENTATION

2019 Highlights

Customers: Quality

Quality indicators continue to increase and stand at maximum levels

CUSTOMER SATISFACTION

			+0.4
88.2	86.9	89.9	90.3
1H 18	2H 18	1H 19	2H 19
Source: Bankia
	NPS BRANCHES (1)
			+2.6 p.p.
38.7%	37.2%	46.1%	48.7%
1H 18	2H 18	1H 19	2H 19

Source: Bankia

MYSTERY SHOPPING

			Bankia								8.28
			Global Sector							7.79
										7.31	7.44
								6.92				7.20	7.36
										.7.04	7.03
						6.29	6.74
	6.01			6.03					#1 VS
			6.27
													PEERS (1)
					5.61								12M 2019
	5.42
	2012			2013	2014	2015		2016	2017	2018	2019
	Ranking		2016	2017		2018		2019
	Bankia			2nd	2nd		3rd			1st

Source: STIGA research on mystery shopping satisfaction

1. Peers: Santander, BBVA, Caixabank, B. Sabadell & Bankinter

The customer is at the center of our strategy

5

(1) "Net Promoter Score". Retail customers' recommendation rate index

ANNUAL RESULTS PRESENTATION

2019 Highlights

Customer and digitalization

More customers and more digital

CUSTOMERS NET GROWTH

Net growth

243,000

DEC 19 vs DEC 17

DIRECT INCOME DEPOSITS

Net growth

190,000

DEC 19 vs DEC 17

DIGITAL CUSTOMERS (1)

% of total customers

+12.8 p.p.	STATEGIC PLAN
65%
	2020E

40.5%53.3%

DEC 17

DEC 19

DIGITAL SALES

% of total sales

+20.1 p.p.	STRATEGIC PLAN
35%
	2020E

15.9%36.0%

DEC 17

DEC 19

6	(1) Active customer aged over 18 who in the last 12 months has connected at least once to a digital channel (App, Bankia Online or Bankia Online-Companies). The denominator for the percentage is the number of customers aged over 18.

ANNUAL RESULTS PRESENTATION

2019 Highlights

Digital transformation progress

Assessment of our Digital Channels		Key Milestones

APP

		89.8	91.8
	88.0
84.5
2017	2018	1H 2019	2H 2019

		APP	#2 (1)
1	Peer 1		AA
2	Peer 2		AB
2	BANKIA		AB
2	Peer 3		AB
3	Peer 4		BA

Bankia Online

86.3 86.5

84.0

81.2

2017

2018

1H 2019

2H 2019

AQMETRIX TOP 5 4Q 19

Bankia Online #2

1	Peer 1	AAA
2	BANKIA	AA
3	Peer 2	BA
4	Peer 3	BA
5	Peer 4	BB

Bankia Online Empresas

			84.6							Bankia Gestión
		80.9							Experta Online
	77.0
74.9
										Bankia Online
2017	2018	1H 2019	2H 2019
			#2							Autónomos
Bankia Online Empresas						Hipoteca ON
1	Peer 1		AAA
2	BANKIA		AB			€
3	Peer 2		BB
			Property Valuation
4	Peer 3		BC
						Tool
5	Peer 4		BC

1. Same qualification

7	Peers: Caixa, Santander, BBVA, Sabadell, Bankinter, Abanca, Kutxabank

ANNUAL RESULTS PRESENTATION

2019 Highlights

High value products

Lead position in net inflows to mutual funds during the year

NET INFLOWS MUTUAL FUNDS (1)

€mn+74%

911

MUTUAL FUNDS

Assets under management

€bn +16.8%

885 632

1,543

19.1 20.7 22.3

2018	1H 19	2H 19	2019
MARKET SHARE NET INFLOWS		#1 2019
MUTUAL FUNDS: SECTOR RANKING (1)

22.5%

DEC 18JUN 19DEC 19

MUTUAL FUNDS - MARKET SHARE *

STRATEGIC PLAN

7.20%

13.4% 11.8% 10.7% 5.2%

BANKIA

PEER 1

PEER 2

PEER 3

PEER 4

6.55% +50 bps	7.05%
DEC 18	DEC 19
* Source: Inverco

2020E

8	(1)	Source: Inverco. Market share calculated as a percentage of net positive inflows.
	(2)	Peers: Santander AM, Mutuactivos, Ibercaja Gestión & Kutxabank Gestión.

ANNUAL RESULTS PRESENTATION

2019 Highlights

High value products

Positive dynamics in other high value products

CARDS TURNOVER

INSURANCE PREMIUMS - NEW PRODUCTION

In-store credit and debit cards - YOY variation (%)

+12.8%+14.7%

YOY variation (%)

NON-LIFE

+24%

LIFE

+29%

DEC 18 vs DEC 17DEC 19 vs DEC 18

CARDS TURNOVER - MARKET SHARE *

12.0%	+0.4 p.p.	12.4%
DEC 18		SEP 19
CARDS STOCK - MARKET SHARE *
			STRATEGIC PLAN
8.2%	+0.4 p.p.	8.6%	9.0%
2020E
DEC 18		SEP 19

9

+26.2%

+1.4%

DEC 18 vs DEC 17

DEC 19 vs DEC 18

BANK ASSURANCE - MARKET SHARE (TOTAL RISK) **

6.53%	+3 bps	6.56%
SEP 18		SEP 19
** Source: ICEA

* Source BoS. Last available market share

ANNUAL RESULTS PRESENTATION

2019 Highlights

Credit stock

Performing credit stock increases improving our mix

PERFORMING CREDIT STOCK	PERFORMING CREDIT STOCK MIX
HOME MORTGAGES + CONSUMER + COMPANIES + DEVELOPERS	HOME MORTGAGES + CONSUMER + COMPANIES + DEVELOPERS

€bn

	+0.3
			2017		2019		2020 SP
	+3.0
(3.3)	Home mortgages		66%		61%		58%
+0.6

	HOME				Consumer		4%		5%		5%
106.4	MORTGAGES	CONSUMER	COMPANIES (1)	106.7
					Companies & Developers		30%		34%		37%
					Note: 2017 includes BMN
DEC 18				DEC 19

10 (1) Includes performing credit stock of the developer segment

ANNUAL RESULTS PRESENTATION

2019 Highlights

Consumer lending

Pre-approved consumer loan model continues to be reflected in double digit growth

	NEW CONSUMER LENDING			CONSUMER LENDING STOCK
€mn	+15.8%				€bn +12.5%		CAGR 17-20
				SP
			1,371					+16.2%
							5.4
	2,286	1,276	2,647	4.8	5.0
	2018	1H 19	2H 19	2019		DEC 18	JUN 19	DEC 19
	NEW CONSUMER LENDING - MARKET SHARE (1)		CONSUMER LENDING STOCK - MARKET SHARE (1)	STRATEGIC PLAN
	6.42%	+84 bps	7.26%		5.58%	+30 bps 5.88%	6.6%
		2020E
	DEC 18		NOV 19 *			DEC 18	NOV 19 *

Start of commercial activity of the consumer lending JV

11	(1) Source: BoS. Accumulated new lending market share. (* last available market share)

ANNUAL RESULTS PRESENTATION

2019 Highlights

Lending to companies

Commercial activity notably increases in the business sector during 2019

NEW LENDING TO COMPANIES

€mn

14,484		7,200	14,248
7,048
2018	1H 19	2H 19	2019

NEW LENDING TO COMPANIES - MARKET SHARE (2)

7.88%	+161 bps	9.49%
DEC 18		NOV 19 *

COMPANIES STOCK (1)

€bn	+9.0%	CAGR 17-20
	SP

+7.9%

33.5 35.1 36.5

DEC 18

JUN 19

DEC 19

COMPANIES STOCK - MARKET SHARE (2)

			STRATEGIC PLAN
7.42%	+33 bps	7.75%	7.7%
2020E
DEC 18		NOV 19 *

12	(1)	Includes performing credit stock of the real estate segment
	(2)	Source: BoS. Accumulated new lending market share: renegotiated companies and real estate developers (* last available market share)

ANNUAL RESULTS PRESENTATION

2019 Highlights

Mortgage lending

Mortgage lending continues at the same rate

NEW MORTGAGE LENDING

€mn

2,928 2,922

2018

2019

NEW MORTGAGE LENDING - AVERAGE INTEREST RATE (1)

1.6%1.5%

2018

2019

(1) Weighted average interest rate

MORTGAGES TO NEW CUSTOMERS

of new mortgages

33%

12M 2019

FIXED RATE MORTGAGES

of new mortgages amount

48%

12M 2019

AVERAGE LTV

of new mortgages

64%

12M 2019

13

ANNUAL RESULTS PRESENTATION

2019 Highlights

Sustainability

Committed to sustainable finance

OUR COMMITTMENT TO SUSTAINABILITY…

European Dow Jones Sustainability Index

United Nations Principles for Responsible

Banking

Bankia committed to becoming carbon neutral

in 2020

New Sustainable Business and Financing

Division

… IS REFLECTED IN OUR COMMERCIAL ACTIVITY

Bankia Futuro Sostenible Mutual Fund

First fund to be launched in Spain that follows the Sustainable Development Goals

Financing energy efficient housing

Agreement reached with EIB to facilitate access to energy

efficient and low emissions housing in Spain

	Sustainable finance
€9bn	We have contributed to raising €9 bn of funding for
sustainable purposes, including corporate loans,

project finance, bond issuance and developer loans

• €900 mn financed

14

ANNUAL RESULTS PRESENTATION

2019 Highlights

Efficiency and synergies

Larger synergies than expected achieved a year in advance

OPERATING EXPENSES

€bn

(2.5%)

1.95 1.86 1.82

	2017	2018 (1)	2019
	Bankia + BMN	Bankia + BMN	Bankia + BMN
(1)	2018 proforma includes estimated impact of IFRS 16 so as to be comparable with 2019
15

SYNERGIES ACHEIVED

€mn

>50%

of BMN 2017

cost base

155 190 220

2020e	2020e	2019
Initial target BMN	Revised target	Target achieved
merger 2017	Strategic Plan 2018

ANNUAL RESULTS PRESENTATION

2019 Highlights

Asset quality

94% of NPA reduction target achieved in only two years

NON PERFORMING ASSETS PERFORMANCE

GROSS NPLs+ GROSS FORECLOSED ASSETS

€bn
(€8.4 bn)	-50%
(€2.5 bn)	94%

STRATEGIC PLAN

2020E

16.8	10.9			(8.9)
	8.4	(8.4)

		DEC 17	DEC 18 (1)	DEC 19		Achieved	SP reduction
		2018-2019	2020e
(1)	Proforma data after non-performing assets portfolio sales
16

GROSS NPA RATIO

11.9% 8.2% 6.4%<6.0%

DEC 17

DEC 18 (1)

DEC 19

SP 2020e

NET NPA RATIO

6.3% 4.3% 3.3% <3.0%

DEC 17

DEC 18 (1)

DEC 19

SP 2020e

ANNUAL RESULTS PRESENTATION

2019 Highlights

"Core" Result

€mn

1,240

2018 (2)

Positive "Core" Result performance

"CORE" RESULT PERFORMANCE (1)

+3.8%

(15)

+33	(48)	+16	+46	1,287
	Fixed income
Customer	Net fees and	Operating
portfolios &
Margin	commissions	expenses
others

2019

17	(1)	"Core" Result: NII + net fee and commission income - operating expenses
(2)	2018 proforma includes estimated impact of IFRS 16 so as to be comparable with 2019

ANNUAL RESULTS PRESENTATION

2019 Highlights

Profit

Profit performance

€mn

(17.5%)

916

PBT 2018

+47(113)(94)

"Core"	Net	Provisions &
Result	trading	others
	income

756

PBT 2019

(215)

Taxes &

others

541

PAT 2019

18

ANNUAL RESULTS PRESENTATION

2019 Highlights

Capital generation

Organic capital generation increases in the year

CET1 FULLY LOADED

REGULATORY RATIOS (1)

+63 pbs

13.02%

12.39%

STRATEGIC PLAN

EXTRAORDINARY CAPITAL

DISTRIBUTION o/ 12% CET1

DEC 18

DEC 19

Surplus capital over 12% CET1 FL of €795 mn

The 2019 solvency ratios include the profit attributable to the Group and discount the expected dividend based on 2019 pay-out (65.6%)

19 (1) Ratios include unrealized capital gains on fair value sovereign portfolio

ANNUAL RESULTS PRESENTATION

2019 Highlights

Dividend distributions

Distribution to shareholders is maintained

50%

11.576

DIVIDEND

PAY-OUT

DIVIDEND

PER SHARE

(cents. €)

TANGIBLE VALUE PER SHARE

		EUROS PER SHARE	4.33
65%
		0.116	DIVIDEND PAID
	DIVIDEND YIELD (1)	4.18
	6.1%

11.576

4.21

2018

2019

DEC 18

DEC 19

Total accumulated dividends of €709 mn in 2018 and 2019

20 (1) Dividend yield based on market price at 31.12.2019

CONTENTS

1	2019 HIGHLIGHTS

2	2019 RESULTS

3	ASSET QUALITY AND RISK MANAGEMENT

4	LIQUIDITY AND SOLVENCY

5	CLOSING REMARKS

APPENDIX

21

ANNUAL RESULTS PRESENTATION

2019 Results

Income statement

€mn	2018 (1)	2019	Diff €mn	Diff %
Net interest income	2,038	2,023	(15)	(0.7%)
Net fee and commission income	1,065	1,081	16	1.5%
Net trading income	411	298	(113)	(27.4%)
Other income	(157)	(157)	-	(0.2%)
Gross income	3,357	3,245	(112)	(3.3%)
Operating expenses	(1,863)	(1,817)	(46)	(2.5%)
"Core" Result (2)	1,240	1,287	47	3.8%
Pre-provision profit	1,494	1,428	(66)	(4.4%)
Financial and non-financial asset provisions	(417)	(482)	65	15.8%
Other provisions and other results	(161)	(190)	29	18.3%
Profit before tax	916	756	(160)	(17.5%)
Profit attributable to the Group	700	541	(159)	(22.7%)

((1) 2018 proforma includes estimated impact of IFRS 16 so as to be comparable with 2019. 2018 impact: -€11mn net interest margin and -€7mn operating expenses; aggregated impact in PAT: -€3mn

(2) "Core" Result: NII + net fee and commission income - operating expenses

22

ANNUAL RESULTS PRESENTATION

2019 Results

Net interest income

Net interest income stability despite interest rate scenario

EURIBOR 12M				NET INTEREST INCOME
0,50			€mn
0,40					+33	(48)
0,30
0,20
0,10					Customer	Fixed
				Income
			2,038	Margin	2,023
0,00			Portfolios &
-0,10						Others
-0,20
-0,30
-0,40			2018	(1)			2019
Eur 12m Fwd Curve. Nov 2018.	Eur 12m Real	Eur 12m Fwd Curve. Nov 2018.			Gross customer margin 1.64%

23	(1) 2018 proforma includes estimated impact of IFRS 16 so as to be comparable with 2019

ANNUAL RESULTS PRESENTATION

2019 Results

Net fees and commissions

Net fees and commissions perform well

NET FEES AND COMMISSIONS

€mn	RECURRENT COMISSIONS
1,023(1)	+5.6%	1,081
+1.5%

1,0651,081

2018

2019

+4.6%		+6.7%
510	533	513	548
1H 2018	1H 2019	2H 2018	2H 2019

PAYMENT SERVICES

Credit cards, POS terminals, ATMs…

+9.9% (€30 mn) 2019 vs 2018

ASSETS UNDER MANAGEMENT

Mutual funds, pension funds, insurance…

+4.7% (€18 mn) 2019 vs 2018

The new stance will have a positive impact on net fees and commissions in 2020

24

(1): 2018 figure adjusted for non-recurrent commissions of €24 mn from maintenance costs of BMN customer accounts and €18 mn for management of write-offs.

ANNUAL RESULTS PRESENTATION

2019 Results

Gross margin

Gross income stable excluding Net Trading Income

GROSS INCOME EXCL. NET TRADING INCOME

€mn

(15)	+16
NII	Net fees and
commissions
2,946	2,947

2018 (1)

2019

25

(1) 2018 proforma includes estimated impact of IFRS 16 so as to be comparable with 2019

ANNUAL RESULTS PRESENTATION

2019 Results

Operating expenses

Cost reduction as a key management lever

OPERATING EXPENSES

OPERATING EXPENSES/RWAS

€mn

(2.5%)

(4.3%)

(124 bps)

1,863	1,817	466	447	3.58%	2.34%

		2018 (1)	2019	4Q 18 (1)	4Q 19	SECTOR LAST 12	BANKIA LAST 12
						MONTHS (2)	MONTHS (1)
						SEP 18 - SEP 19	DEC 18 - DEC 19
26	(1)	2018 proforma includes estimated impact of IFRS 16 so as to be comparable with 2019
(2)	Sector data includes peers: Santander, BBVA, Caixabank, B. Sabadell and Bankinter

ANNUAL RESULTS PRESENTATION

2019 Results

"Core" Result

Positive performance of "Core"(1) Result

"CORE" (1) RESULT PERFORMANCE

€mn

+3.8%

	+0.6%	+12.4%
+0.7%		+1.9%

	306	331	333	307	341	1,240	1,287
304	304
	301

1Q 18 (2)

1Q 19

2Q 18 (2)

2Q 19

3Q 18 (2)

3Q 19

4Q 18 (2)

4Q 19

2018 (2)

2019

27	(1)	"Core" Result: NII + net fees and commissions income - operating expenses
(2)	2018 proforma includes estimated impact of IFRS 16 so as to be comparable with 2019

ANNUAL RESULTS PRESENTATION

2019 Results

Cost of risk

Organic cost of risk stable at 25 bps

COST OF RISK	GROSS NPL ENTRIES
	€mn

		24 bps	410	446	401	413
		STRATEGIC PLAN
		2020E
18	26	20 - 25			1Q 19	2Q 19	3Q 19	4Q 19
			NET NPL ENTRIES
bps	bps	bps
	€mn
2018	2019	2020e	(92)	(144)	(90)	(123)

1Q 19

2Q 19

3Q 19

4Q 19

28

ANNUAL RESULTS PRESENTATION

2019 Results

Cost of risk

Provisions impacted by the important efforts made to reduce NPAs

€mn

TOTAL PROVISIONS

FINANCIAL AND NON-FINANCIAL PROVISIONS

OTHER PROVISIONS AND OTHERS

NPA REDUCTION

Of which WRITE-OFFS

Of which NPA portfolio sales

NPA RATIO NET

PROVISIONS BREAKDOWN

1Q 19

2Q 19

3Q 19

4Q 19

(88) (131) (165) (288)

(59) (92) (137) (195)

Extraordinary impacts

(29) (39) (28) (93) in 2019 (one-off ) and not expected in 2020

(450) (500) (453) (1,125)

(69) (72) (306) (245)

(346) (336) - (819)

4.1% 3.8% 3.7% 3.3%

29

CONTENTS

1 2019 HIGHLIGHTS

2 2019 RESULTS

3 ASSET QUALITY AND RISK MANAGEMENT

4 LIQUIDITY AND SOLVENCY

5 CLOSING REMARKS

APPENDIX

30

ANNUAL RESULTS PRESENTATION

Asset quality and risk management

Asset quality

NPA reduction of €2.5 bn in the year

NPA STOCK GROSS

€bn

(€2.5 bn)

-23%

10.9 9.5 8.4

DEC 18 (1)

SEP 19

DEC 19

NPA COVERAGE GROSS

%

+0.5 p.p.

48.2% 48.1% 48.7%

DEC 18 (1)SEP 19DEC 19

31	(1) Proforma data after non-performing asset portfolio sales

NPA RATIO GROSS

%

(1.8 p.p.)

8.2% 7.2% 6.4%<6.0%

DEC 18 (1)

SEP 19

DEC 19

SP 2020e

NPA RATIO NET

%

(1.0 p.p.)

4.3%	3.7%	3.3%	<3.0%
DEC 18 (1)	SEP 19	DEC 19	SP 2020e

ANNUAL RESULTS PRESENTATION

Asset quality and risk management

Asset quality

Good progress of key asset quality metrics

	NPLS	NPL RATIO	NPL COVERAGE RATIO
€bn	%		%
	(€1.9 bn)	(1.5 p.p.)	(0.6 p.p.)

8.4	7.1		6.5%	5.5%	54.6%	53.7%	54.0%
	6.5
			5.0%

DEC 18 (1)

SEP 19

DEC 19

DEC 18 (1)

SEP 19

DEC 19

DEC 18 (1)

SEP 19

DEC 19

32	(1) Proforma data after non-performing asset portfolio sales

ANNUAL RESULTS PRESENTATION

Asset quality and risk management

Foreclosed assets

Porfolio sales of foreclosed assets boost their reduction

FORECLOSED ASSETS

€bn

(€0.6 bn)

STOCK	2.5	2.4	1.9

	DEC 18 (1)	SEP 19	DEC 19
COVERAGE	26.4%	+4.2 p.p.	30.6%
RATIO

FORECLOSED ASSETS - SALES

€mn

363

792

429

PORTFOLIOS

RETAIL

2019

33	(1) Proforma data after non-performing asset portfolio sales

CONTENTS

1 2019 HIGHLIGHTS

2 2019 RESULTS

3 ASSET QUALITY AND RISK MANAGEMENT

4 LIQUIDITY AND SOLVENCY

5 CLOSING REMARKS

APPENDIX

34

ANNUAL RESULTS PRESENTATION

Liquidity and solvency

Liquidity

Issuances in the year to reach the MREL target

LOAN TO DEPOSIT RATIO

%

+0.6 p.p.

91.2%91.8%

DEC 18

DEC 19

DISINTERMEDIATION RATIO

%

11.5%	+1.8 p.p.	13.3%
DEC 18		DEC 19

1. Mutual Funds/Customer deposits + Mutual Funds

LIQUIDITY

MREL RATIO

		+3.6 p.p.
LCR	204%	%
Dec 2019	vs. 163% Dec 18			23.66%
			21.9%
		18.3%
NSFR	124%
Dec 2019	vs. 120% Dec 18	DEC 18	DEC 19 Requirement

1 JUL 2021

+3,500 mn debt issuance realized

in 2019

35

ANNUAL RESULTS PRESENTATION

Liquidity and solvency

Solvency ratios - Fully Loaded performance

CET1 Fully Loaded ratio stands at 13.02% at year end

REGULATORY RATIO

MANAGEMENT RATIO

REGULATORY RATIO

MANAGEMENT RATIO

(1)

(1)

	CET1 FULLY LOADED
12.39%			13.02%	+ 63 bps
+66 bps	-43 bps	+34 bps
PAT	Dividend	RWAs & others	12.85%	+ 57 bps
12.28%

DEC 18	DEC 19
	TOTAL SOLVENCY FULLY LOADED
16.17%	16.79%
16.06%	16.62%

LEVERAGE RATIO FL: 5.4% Dec 19

The 2019 solvency ratios include the profit attributable to the Group and discount the expected dividend based on 2019 pay-out (65.6%)

(1) Ratios exclude unrealized capital gains on fair value sovereign portfolio

36

CONTENTS

1 2019 HIGHLIGHTS

2 2019 RESULTS

3 ASSET QUALITY AND RISK MANAGEMENT

4 LIQUIDITY AND SOLVENCY

5 CLOSING REMARKS

APPENDIX

37

ANNUAL RESULTS PRESENTATION

Closing remarks

We close the year 2019:

Commercial dynamism

Growth in performing credit stock and high value products

Asset quality

NPA reduction of €2.5 bn in the year (-23%)

"Core" Result

€1,287 mn

+3.8%

CET1 FL

13.02%

Efficiency improvement

Synergies of €220 mn (>50% of BMN cost base in

2017) vs. forecasted €190 mn

Capital

+63 bps CET1 FL capital improvement

38

CONTENTS

1 2019 HIGHLIGHTS

2 2019 RESULTS

3 ASSET QUALITY AND RISK MANAGEMENT

4 LIQUIDITY AND SOLVENCY

5 CLOSING REMARKS

APPENDIX

39

ANNUAL RESULTS PRESENTATION

Appendix

Income statement - Bankia Group

€mn	4Q 18 (1)	1Q 19	2Q 19	3Q 19	4Q 19
Net interest income	504	502	516	502	503
Net fee and commission income	266	260	273	263	284
Net trading income	30	37	102	97	62
Other income	(141)	14	(33)	13	(150)
Gross income	659	813	858	875	699
Operating expenses	(466)	(456)	(456)	(458)	(447)
"Core" Result (2)	304	306	333	307	341
Pre-provision profit	193	357	402	417	252
Financial and non-financial asset provisions	(100)	(59)	(92)	(137)	(195)
Taxes, minority interests, other provisions and other items	(49)	(93)	(115)	(104)	(91)
Profit attributable to the Group without extraordinaries	44	205	195	176	(34)
Extraordinary impact (3)	(85)	-	-	-	-
Financial and non-financial asset provisions	(41)	205	195	176	(34)

	(1)	2018 proforma includes estimated impact of IFRS 16 so as to be comparable with 2019. 2018 impact: -€11mn net interest margin and -€7mn operating expenses; aggregated impact in PAT: -€3mn
40	(2)	"Core" Result: NII + net fee and commission income - operating expenses
	(3)	Extraordinary impacts related to €85mn of extraordinary net provisions associated with the sale of NPA portfolios in 4Q18.

ANNUAL RESULTS PRESENTATION

Appendix

Income statement - Bankia Group

2018 income statement pre IFRS 16

IFRS 16

€mn	1Q 18	2Q 18 3Q 18	4Q 18	1Q 19 2Q 19	3Q 19	4Q 19
Net interest income	526	521	495	507	502	516	502	503
Net fee and commission income	264	270	265	266	260	273	263	284
Net trading income	139	152	90	30	37	102	97	62
Other income	10	(40)	15	(141)	14	(33)	13	(150)
Gross income	939	903	865	662	813	858	875	699
Operating expenses	(486)	(459)	(458)	(468)	(456)	(456)	(458)	(447)
"Core" Result (1)	305	332	302	305	306	333	307	341
Pre-provision profit	453	444	407	194	357	402	417	252
Financial and non-financial asset provisions	(120)	(56)	(76)	(100)	(59)	(92)	(137)	(195)
Taxes, minority interests, other provisions and other items	(104)	(103)	(102)	(49)	(93)	(115)	(104)	(91)
Profit attributable to the Group without extraordinaries	229	285	229	45	205	195	176	(34)
Extraordinary impact (2)	-	-	-	(85)	-	-	-	-
Profit attributable to the Group with extraordinaries	229	285	229	(40)	205	195	176	(34)

41	(1)	"Core" Result: NII+ net fee and commission income - operating expenses
	(2)	Extraordinary impacts related to €85mn of extraordinary net provisions associated with the sale of NPA portfolios in 4Q18.

ANNUAL RESULTS PRESENTATION

Appendix

Solvency ratios - Capital buffers

Ample buffers vs. SREP requirements

CET1 PHASE IN RATIO

Buffer

+508

bps

TOTAL SOLVENCY PHASE IN RATIO

Buffer

+535

bps

14.33%

9.25%

12.75%

18.10%

Requirements	DEC 19
SREP 2020

Requirements	DEC 19
SREP 2020

The 2019 solvency ratios include the profit attributable to the Group and discount the expected dividend based on 2019 pay-out (65.6%)

42

ANNUAL RESULTS PRESENTATION

Appendix

The share

43

ANNUAL RESULTS PRESENTATION

Appendix

Performing credit breakdown

GROSS PERFORMING CREDIT	GROSS PERFORMING CREDIT
DECEMBER 2018	DECEMBER 2019

%

44

ANNUAL RESULTS PRESENTATION

Appendix

Debt maturities and breakdown

Debt maturities and breakdown

€mn

0.4	2.2	3.3	17.0
			1.4
			1.2
			1.5
			2.6
	0.1		10.3
0.4	2.1	3.3
2021	2022	> 2022
2020

45

ANNUAL RESULTS PRESENTATION

Appendix

Funding structure

Funding structure

Funding structure		Wholesale market breakdown
DECEMBER 2019		DECEMBER 2019

46

ANNUAL RESULTS PRESENTATION

Appendix

Portfolio breakdown

€23.4bn ALCO portoflio as of December 2019 close

FIXED INCOME (ALCO)

ALCO PORTFOLIO

€bn

€bn

26.8 28.5 25.1 23.5 23.4

DEC 18

MAR 19

JUN 19

SEP 19

DEC 19

Dec 18 Mar 19 Jun 19 Sep 19 Dec 19

23.4

21.0

ALCO fixed income portfolio (€Bn)	26.8	28.5
Non-hedged fair value portfolio	8.3	6.3
Hedged fair value portfolio	5.4	7.8
At amortised cost	13.1	14.4

FV average duration IRS adjusted

ALCO portfolio average duration IRS adjusted

25.1	23.5	23.4
4.0	2.4	2.4
7.8	7.7	7.6
13.3	13.4	13.4

0.49	0.26
3.08	2.85

19.2

2019

2020

2021

47

ANNUAL RESULTS PRESENTATION

Appendix

Alternative Performance Measures (APR)

Glossary

In addition to the financial information prepared in accordance with generally accepted accounting principles (IFRS), the Bankia Group uses certain alternative performance measures ("APMs") that are normally used in the banking sector as indicators for monitoring the management of the Group's assets and liabilities and its financial and economic position. In compliance with the ESMA guidelines on transparency and investor protection in the European Union, published in October 2015, the following tables give details of all the APMs used in this document, including their definition and a reconciliation with the balance sheet and income statement line items used in their calculation.

	Performance measure-	Definition
	RWAs	Risk Weighted Assets
	Digital Customer	Active customer aged over 18 who in the last 12 months has connected at least once to a digital channel (App, Bankia Online or Bankia Online-Companies). The denominator for
		the percentage is the number of customers aged over 18
	Cost of Risk (%)	Measures the ratio of loan loss provisions to total amount of loans and advances to customers and contingent liabilities
	Operating Expenses / RWAs	Operating Expenses divided by Risk Weighted Assets
	IFRS	International Financial Reporting Standards
	LCR (%)	Loan Coverage Ratio
	LTD (%)	Loan to Deposit Ratio
	Net pre-provision profit	Gross income minus administrative expenses minus depreciation and amortization
	MREL	Minimum Requirement of Elegible Liabilities.
	NPAs	Non Performing Assets
	NSFR (%)	Net Stable Funding Ratio
	NPL coverage ratio	Measures the degree to which the impairment of non-performing assets is covered, for accounting purposes, by loan loss provisions.
	NTI	Net trading income. Sum of the gains or losses obtained from management of portfolios of financial assets and liabilities and accounting hedges.
	SREP	Supervisory Review and Evaluation Process
	NPL ratio	Non-performing loans and advances to customers and contingent risks divided by total loans and advances to customers and contingent liabilities
	NPls	Gross book amount (before provisions) of doubtful loans and advances to customers and contingent liabilities (NPE)
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