Bankia S A : emphasises that merger with CaixaBank will create value for shareholders and lift earnings per share by 69%

• The merged bank will be the leader in Spain, with 660,000 million euros in assets, more than 20 million customers and allow annual cost savings of 770 million euros, with new revenue generating capacity of 290 million euros
• Bankia has held its '3rd Meeting with Retail Shareholders' in which shareholders received information from the institution's executives on the merger with CaixaBank and the bank's strategy and on the general economic situation
• Bankia's deputy chief financial officer Leopoldo Alvear explained that the merged bank 'will be more profitable than the two banks separately, with a very solid balance sheet and capital comfortably above regulatory requirements and, moreover, feature excellent corporate governance'
• For the head of Bankia Research, José Ramón Díez, 'the outlook has brightened in recent weeks, with political uncertainty receding after the US elections and the encouraging announcement of advances in the vaccines, which represent a ray of hope'

Bankia's deputy chief financial officer Leopoldo Alvear gave the bank's shareholders details of the proposed merger with CaixaBank, a deal that will create major value, lifting earnings per share by 69% over the estimate for Bankia as an independent bank in 2022.

Bankia has organised its '3rd Meeting with Retail Shareholders'. The encounter was held online and also addressed by the head of Bankia Research, José Ramón Díez, and the head of Relations with Investors and Ratings, Íñigo Velázquez.

In reply to questions raised by shareholders regarding the exchange ratio, Bankia's deputy chief financial officer explained that the agreed swap ratio was 0.845 new ordinary shares of CaixaBank for each Bankia share, a 'very interesting' exchange for Bankia shareholders as it represents a 20% premium over the bank's trading price of this past September 3rd.

In addition, Alvear stated that the merger, which must be approved by the bank's shareholders at their upcoming December 1st Extraordinary General Meeting, 'will give rise to the number one bank in Bank of Spain, with more than 660,000 million euros in assets, 20 million customers and a market share in loans and deposits of close to 25%'.

'The new bank will be more profitable than the two banks separately, with a very solid balance sheet and capital comfortably above the regulatory requirements', assured Alvear, who also emphasised that the new institution 'will feature excellent corporate governance, with a high percentage of independent directors, and will continue pursuing its objective of providing financing to households and businesses to further support our country's economic and social recovery'.

The new bank will be more profitable than the two banks separately, with a very solid balance sheet and capital comfortably above the regulatory requirements.

Leopoldo Alvear
Bankia's deputy chief financial officer

Bankia's financial executive underscored the importance of moving quickly because this will allow the bank to 'have the critical size needed to obtain economies of scale, increase its financial robustness to achieve a well provisioned and strongly capitalised balance sheet and attain sustainable profitability with deep revenue-generating capacity'.

Alvear also stressed that 'the solid capital position of the combined bank will defray the restructuring costs and valuation adjustments', while at the same time pointing to the 'successful track record of integrations carried out by both banks in recent years'.

Improved Economic Outlook

The head of Bankia Research, José Ramón Díez, reviewed the current economic situation and noted that, although the world economy is seeing uneven success in dealing with the crisis, 'a gradual widespread return to normality in 2021 is plausible'.

In this regard, Díez explained that 'the outlook has brightened in recent weeks, with political uncertainty receding after the US elections and the encouraging announcement of advances in the vaccines, which represent a ray of hope'.

'All of this gives us confidence in a major rebound in the economy and employment next year. Above all, because central banks and fiscal policy will continue offering support to avoid another downturn', he added.

Nevertheless, Díez has warned that without an effective vaccine, countries where the pandemic is not under control will continue to be plagued by a slow and erratic recovery. In Spain, pre-Covid GDP levels will not be recovered until early 2023.

Upcoming Extraordinary General Meeting of Shareholders

The '3rd Meeting with Retail Shareholders' held comes one week before the Extraordinary General Meeting on December 1st in Valencia when shareholders are to vote on the proposed terms of the Bankia-CaixaBank merger.

Bankia's goal in these encounters is to fill shareholders in on the bank's strategy and key information, as well as to listen to and analyse the concerns and opinions voiced by the shareholders, their recommendations, requirements and suggestions through an open and transparent discussion aimed at enhancing and delivering the best service possible.

'The merger with CaixaBank represents a major milestone in the recent history of our bank. That is why the participation by Bankia shareholders in the General Meeting is more important than ever', underscored the head of Relations with Investors and Ratings, Íñigo Velázquez.

The Extraordinary General Meeting will mark another step forward in the merger-takeover of Bankia by CaixaBank, on track to be completed in the first quarter of 2021, after all the required regulatory clearances have been obtained.