Bankia International Confirming

DIRECTORATE

Foreign Trade

CREATION DATE

April 2016

Definition

“Bankia International Confirming” is a service through which Bankia:

• Manages the deferred payments by its customers to their foreign suppliers.

• Offers these suppliers (the beneficiaries of the deferred payments) a non-

recourse discount on their receivable invoices (Advance Payment) or guarantees

collection on their due date (Guaranteed Confirming).

Bankia Customer = Importer = Purchaser

Our customer’s supplier = Seller

Structure of the product

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2. Irrevocable payment order on the due date

3. Confirming Offer: Advance or Guaranteed Payment

4. Acceptance: a) Advance payment b) Guaranteed confirming

5.a) Advance payment: Payment discounted for interest and fees5.b) Issue of a guarantee of payment on the due date

6.b) Payment on due date (less guarantee fees)

6. Execution of payment orders on the due date

Bankia

Customer

Supplier

Mechanism

1. Once a commercial agreement has been signed between our customer and its suppliers…

2. Bankia receives an irrevocable payment order from the importer via the available channels (Oficina

Internet for Businesses, Swift, Editran) for invoices to be paid to its suppliers, indicating the agreed

deferred payment periods (usually 60, 90 or 120 days).

3. Bankia then informs the supplier (the seller) that it has received a mandate to manage payment of the

customer’s invoices and informs the supplier of the invoice payment amounts and dates.

This communication is not a payment guarantee from Bankia, since the supplier has not accepted any

of the Confirming options offered.

Bankia offers the supplier :

a) The opportunity for a non-recourse discount on payment of the invoices being managed, without

needing to wait until the invoice due date, in exchange for certain conditions (fees and interest), or

b) The possibility to receive a payment guarantee for the invoices from Bankia with the seller

assuming the cost of the fees for the guarantee.

Mechanism

4. If the supplier accepts either of the proposed options: (a) non-recourse discount, or (b) guaranteed

confirming, Bankia sends a confirmation of the selected option with details of the applicable fees

and interest.

If the supplier does not accept either of the options and does not respond within the valid offer

period, Bankia will only act as the payment bank and shall assume no liability.

5. Once the supplier has accepted the offer, Bankia will:

a) Make the payment, discounting the interest and fees, or

b) Issue a guarantee of payment on the due date.

6. On the due date, Bankia will execute the payment order, debiting our customer’s account and

cancelling the financing.

7. In the event of b) guaranteed confirming, Bankia will pay the supplier the original amount, discounting

the fees for the guarantee.

Advantages of International Confirming

o A useful product for importers that regularly purchase from international suppliers.

o Enables negotiations with suppliers since it provides them with access to financing without

using their bank credit lines (longer payment periods and therefore improved working capital).

o Alternative to more complex and expensive payment methods. It provides suppliers with an

integral payment management service.

o Bankia can act as a trusted institution between both parties, acting as guarantor in these

situations.

Eliminates credit risk

Provides liquidity from deferred payments

Reduces the use of its bank credit lines

Advantages for the supplier:

“Pronto Pago” International Confirming

o The “Pronto Pago” option enables invoices with a future due date to be managed, by immediately

advancing payment to suppliers, enabling better commercial conditions to be negotiated thanks to

prompt payment.

o The cost of this product (the fee plus interest) is assumed by our customer (the purchaser), in exchange

for International Confirming with Advance Payment or International Confirming Guaranteed, which are

paid for by the supplier.

o Our customer’s files can be easily processed via Bankia’s Oficina Internet for Businesses (OIE) or via

other channels such as Editran and Swift.

o If the files are generated via OIE, the International Confirming format can be selected when each invoice

is registered.

o When the files are processed, supplier payments will be issued for the nominal amount of the

invoice.

ANNEX

Quick guide to generating and sending International Confirming files

via the Oficina Internet for Businesses (OIE)

OIE Operations – Sending files

You can register your International Confirming files via OIE or send files previously generated by a proprietary

program using the Foreign Trade / International Confirming option in the menu.

OIE Operations – Data input

You can register your invoices one by one

in the “Add Data” tab.

You can start managing your international confirming orders by accessing Foreign Trade /

International Confirming.

OIE Operations – Data input

Click on “Manual Entry” to input any invoices that

you wish to include in each international

confirming file, which can be subsequently sent.

If you have a foreign trade line with availability,

you can request financing for each invoice as well

as associating a foreign exchange hedge on the

due date.

You may select the “Pronto Pago Confirming”

option if this is activated in your foreign trade line.

An electronic signature will be required for any

users of the associated account in order to send

the file.

OIE Operations – Generate files

Once the invoices have been recorded in the system, a file can be created by clicking on “New file”,

which will contain the invoices to be subsequently issued.

OIE Operations – Generate files

A file can be marked as a favourite in

order to use it as a template for future files

Select “Include invoices” to add the invoices that are to be processed, which must always be for a single

foreign trade line.

OIE Operations – Generate files

Once the invoices have been included, the file can be saved so that it can be sent immediately or at a

later time.

OIE Operations – Send files

Use the “Send” option to select

the file to send and to issue it.

IMPORTACIONES S.A. A summary of the invoices

contained in the file is

shown. Click on “OK” to

access the electronic

signature screen.

OIE Operations – Send files

Once the electronic signature has been entered, the file is sent. If more than one electronic signature

is required, it can be included at the same time or the order can be subsequently retrieved using the

“Pending signature” option.

OIE Operations – Send files

The list of sent files can be consulted in the “Sent” tab, which shows the status and details of each

one.

OIE Operations – Import files

An International Confirming file generated by an external application can also be imported to be

processed via Oficina Internet for Businesses.

OIE Operations – Supplier database / FavouritesA database of suppliers can be created and specific files can be flagged as favourites so they can be

used again.

OIE Operations – Invoice details

The invoice details will include all of the relevant

information, such as a copy of the offer, conditions of the

advance payment or guarantee issued, as well as information

on post-financing instructions or about the associated foreign

exchange hedge for the payment due date.

OIE Operations – Financing instructions / Foreign exchange hedges

…as well as financing instructions for previously

sent invoices or those pending issue.

One or more foreign exchange hedges may be

associated…

Invoice enquiry with instructions

Aviso Legal

Bankia hereby states that this document is for information purposes only. The information contained

herein should not be considered as definitive and is subject to modifications and change. Moreover,

its provision does not imply any direct contracting of the product under any circumstance.

Bankia is not required to publicly review the contents of this or any other document should events

not correspond with the information contained herein or if events lead to changes in the stated

strategy or intentions.

The customer agrees to study any transaction itself and draw its own conclusions in relation to its

legal and fiscal aspects. Any customer that ultimately contracts a product under the conditions

established in the corresponding agreement, shall assume all associated risks.

Distribution of this document in other jurisdictions may be forbidden or subject to restrictions, and

holders of this document shall be solely responsible for understanding those restrictions and

complying with them, as well as proper use of this document.

By receiving this report you hereby state that you are aware of the aforementioned restrictions.