colour scheme quarterly results presentation 2q14 · colour scheme 206 201 161 disclaimer this...
TRANSCRIPT
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Quarterly Results Presentation
2Q14
28th July 2014
“Trabajamos desde los principios para poner la
mejor banca a tu servicio”
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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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Contents
1. Highlights of 1H14
2. 2Q14 results
3. Asset Quality and Risk Management
4. Liquidity and solvency
5. Conclusions
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Highlights of 1H14
+€3.8Bn Customer Funds
+26.8% New Credit
1 3
IMPROVED PROFITABILITY
COMMERCIAL ACTIVITY DYNAMIZATION
Net Profit Bankia: €431Mn Net Profit BFA: €827Mn
2 4
BALANCE SHEET STRENGTH
NPL: -€1.4Bn CET 1: +113pbs
Issuances: €3.3Bn
MARKETS CONFIDENCE
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COMMERCIAL ACTIVITY DYNAMIZATION 1
DEC 13 MAR 14
€bn
JUN 14
90.0 90.7
QUARTERLY PERFORMANCE OF STRICT CUSTOMER FUNDS
20.8 21.7
+0.7 92.3
22.3
+1.6
+0.6 +0.9
110.8 112.4 114.6
Strict customer deposits Off-balance-sheet customer funds
+2.2 +1.6
Total strict dep. + off-balance
(0.4)
+1.1
+0.7
SEP 13
90.4
19.7
110.1
Total strict customer funds up 3.9% year on year
+ 3.9%
JUN 13
91.7
18.6
110.3
(1.3)
+1.1
(0.2)
Highlights of 1H14
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New credit grows 26.8% quarter on quarter. In businesses, new credit rises 46.9%
€ Mn
NEW CREDIT
Significant increase in market shares
2,800
1,931
1Q 14 2Q 14
3,551
869
2,837
714
+ 26.8 %
Businesses Individuals
CREDIT MARKET SHARES – NEW CREDIT
9.33% 11.69% +236 bps %
Source: ICO
ICO
Financing DEC 13 JUN 14
8.50% 10.90% +240 bps %
Source: BdE
Businesses
>€1MM
DEC 13
9.52%
MAY 14
10.39% +87 bps %
Source: BdE
Businesses
<€1MM
+ 46.9 %
COMMERCIAL ACTIVITY DYNAMIZATION 1
Highlights of 1H14
DEC 13 JUN 14
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NPL down €1.4bn during 1H14
NPL
€bn
DEC 13
20.0
- 1.4 bn
NPL RATIO
%
NPL COVERAGE
%
NPL DECREASE AND COVERAGE INCREASES 2
JUN 14
18.6
DEC 13
14.7%
- 0.7 p.p.
JUN 14
14.0%
NPL ratio falls to 14% NPL coverage increases
to almost 59%
DEC 13
56.5%
+ 2.4 p.p.
JUN 14
58.9%
Highlights of 1H14
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LTD RATIO CET 1 BIS III - PHASE IN
%
DEC 13
115.4%
-5.7 p.p.
%
LTD ratio falls below 110% 113 bps of capital generation
during 1H14
SIGNIFICANT LIQUIDITY AND CAPITAL GENERATION 2
LTD ratio: (Net credit / (strict customer deposits + ICO/EIB deposits + single-certificate covered bonds)
JUN 14
109.7%
DEC 13
10.69%
+ 113 bps
JUN 14
11.82%
Highlights of 1H14
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Efficiency ratio ex-NTI at 46.1% (43.4% including NTI)
PRE-PROVISION PROFIT EX NET TRADING INCOME EFFICIENCY RATIO EX-NTI (1)
INCREASE IN RECURRING RESULTS AND A NEW IMPROVEMENT IN THE EFFICIENCY RATIO 3
€ Mn
2Q13
338
3Q13
397
4Q13
419
1Q14
468
2Q14
514
+ 54.6%
+ 10.0%
53
(1)
1Q13
297
89
(1)
982 635
Highlights of 1H14
(1) Figures adjusted excluding the finance cost (€89Mn in 1Q13 and €53Mn in 2Q13) of the subordinated loan from BFA to Bankia, which was cancelled on 23 May 2013. Thus the reported profits for these periods were lower.
%
(1) Efficiency ratio ex-NTI and exchange differences
62.1%60.1%
54.2%
52.6%
49.3%
46.1%
1Q 13 2Q 13 3Q 13 4Q 13 1Q 14 2Q 14
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…WHICH LEADS TO A CONTINUED IMPROVEMENT IN PROFITABILITY 3
PROFIT AFTER TAXES
BANKIA GROUP
1H13
291
2H13
317
1H14
431
ROE 5.94% 7.92%
+ 48%
Highlights of 1H14
(1)
(1) Figures adjusted excluding the finance cost (€142Mn in 1H13) of the subordinated loan from BFA to Bankia, which was cancelled on 23 May 2013. Thus the reported profit for that period was €192Mn.
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MARKETS CONFIDENCE 4
SALE OF BANKIA’S 7.5%
Total amount €1,304 Mn
Selling price (€) €1.51
% of Bankia’s capital 7.50%
Amount
Maturity
Spread
Oversubs.
€1,000 Mn
17/01/2019
MS + 235 bps
3.5x
# Orders > 250 orders
SENIOR DEBT
Oversubscription ≈ 2.0x
Amount
Maturity
Spread
Oversubs.
€1,000 Mn
22/05/2024
MS + 316.6 bps
3.5x
# Orders > 270 orders
SUBORDINATED DEBT
More than €3.3bn raised in wholesale markets during 1H14: senior debt issuance (€1Bn), sale of 7.5% of Bankia (€1.3Bn) and subordinated debt issuance (€1Bn)
Highlights of 1H14
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Contents
1. Highlights of 1H14
2. 2Q14 Results
3. Asset Quality and Risk Management
4. Liquidity and Solvency
5. Conclusions
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2Q14 Results Pro forma income statement – Bankia Group
A
B
C
Net interest income
Gross income
Operating expenses
Pre-provision profit
Provisioning & others
D
2Q13
633
958
(488)
470
(257)
2Q14
730
1,002
(435)
567
(241)
Diff %
15.3%
4.6%
(10.9%)
20.7%
(6.2%)
Profit after tax 157 245 56.1%
€Mn
Fee and commission income 225 237 5.5%
Gross income ex NTI 826 949 14.9%
E Taxes (56) (81) 44.6%
Pre-provision profit ex NTI 338 514 52.1%
1H13
1,234
1,915
(982)
933
(529)
1H14
1,427
1,932
(876)
1,056
(462)
291 431
449 468
1,617 1,858
(113) (163)
635 982
The pro forma income statement for 1H 2013 excludes the cost of the subordinated loan by BFA to Bankia in the amount of €89 million in 1Q 2013 and €53 million in 2Q 2013, which was cancelled on 23 May 2013. Thus the reported profits for these periods were lower.
Diff %
15.7%
0.9%
(10.8%)
13.2%
(12.7%)
48.0%
4.1%
14.9%
44.2%
54.6%
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Quarterly performance of net interest income
€Mn
2Q13
633
3Q13
643
4Q13
690
1Q14
698 (1)
53
2Q14
730
+ 15.3%
Net interest income upward trend started in 2Q13 continues: +4.6% in the quarter
Net interest income up 15.7% compared with 1H13
A Core banking business: net interest income
Interest margin positive trend consolidates
+ 4.6%
Half-year performance net interest income
1H13
1,234
1H14
1,427
+15.7% €Mn
142
(1)
2Q14 Results
(1) Figures adjusted excluding the finance cost (€89Mn in 1Q13 and €53Mn in 2Q13) of the subordinated loan from BFA to Bankia, which was cancelled on 23 May 2013. Thus the reported profits for these periods were lower.
(1) Figures adjusted excluding the finance cost (€89Mn in 1Q13 and €53Mn in 2Q13) of the subordinated loan from BFA to Bankia, which was cancelled on 23 May 2013. Thus the reported profits for these periods were lower.
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Cost of stock term deposits vs. new additions
The cost of new deposits in 2Q14 is 1.10%
A Core banking business: net interest income
Growth in net interest income driven by an improvement in spreads
Stock and new additions - quarterly average. Excludes City National Bank.
Loan yield vs. cost of deposits (1)
Gross customer spread up another 10 bps in the quarter
(1) Excludes City National Bank from the series
2Q14 Results
% %
1.17%
1.17%
1.07%
0.99%
1.00%
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Quarterly performance fee and commission income Core banking business performance
€Mn
2Q13
225
3Q13
237
4Q13
249
1Q14
231
2Q14
237
+ 5.5%
Fee and commission income up 5.5% quarter on quarter, due to an increase in the sale of
off-balance-sheet products
2Q13
857
2Q14
967
+12.8%
Core banking business: fee and commission income
Fee and commission income generation performs better than previous year
€Mn
Core banking business = net interest income + fee and commission income
A
Core banking business up 12.8% compared with 1H13
53
(1)
2Q14 Results
(1) Figures adjusted excluding the finance cost (€89Mn in 1Q13 and €53Mn in 2Q13) of the subordinated loan from BFA to Bankia, which was cancelled on 23 May 2013. Thus the reported profits for these periods were lower.
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Quarterly performance of gross income Gross income ex NTI
€Mn
826
2Q13
958
861
3Q13
945
878
4Q13
912
909
1Q14
930 (1)
949
2Q14
1,002
+ 7.7%
Recurring gross income excluding net trading income up 14.9% quarter on
quarter and half on half
Gross income ex net trading income up 4.4% compared to previous quarter
132 84 34 21 53 NTI
GI
ex
NTI
Gross income Solid growth of gross income
53
2Q13
826
2Q14
949
+14.9%
€Mn
B
53
+ 4.4%
(1) GI
2Q14 Results
(1) Figures adjusted excluding the finance cost (€89Mn in 1Q13 and €53Mn in 2Q13) of the subordinated loan from BFA to Bankia, which was cancelled on 23 May 2013. Thus the reported profits for these periods were lower.
(1) Figures adjusted excluding the finance cost (€89Mn in 1Q13 and €53Mn in 2Q13) of the subordinated loan from BFA to Bankia, which was cancelled on 23 May 2013. Thus the reported profits for these periods were lower.
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Quarterly performance of operating expenses Efficiency ratio ex net trading income
€m
2Q13
488
3Q13
464
4Q13
459
1Q14
441
2Q14
435
- 10.9%
Continued quarter on quarter reduction in operating expenses
- 1.5%
Efficiency ratio ex NTI falls 3.2 p.p. in quarter, reaching 46.1%
Operating expenses Continued cost reduction
%
(1) Efficiency ratio excluding net trading income and exchange differences
C
- 14.0 p.p.
2Q14 Results
60.1%
54.2%52.6%
49.3%
46.1%
2Q 13 3Q 13 4Q 13 1Q 14 2Q 14
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Pre-provision profit
Recurring pre-provision profit ex net trading income up 10% quarter on quarter and 52.1% compared with 2Q13
2Q13
470
2Q14
567
+ 20.7%
Pre-provision profit Very positive performance of pre-provision profit
Pre-provision profit ex net trading income
€Mn
2Q13
338
3Q13
397
4Q13
419
1Q14
468
2Q14
514
+ 52.1%
+ 10.0%
€Mn
53
D
(1)
53
2Q14 Results
(1)
(1) Figures adjusted excluding the finance cost (€89Mn in 1Q13 and €53Mn in 2Q13) of the subordinated loan from BFA to Bankia, which was cancelled on 23 May 2013. Thus the reported profits for these periods were lower.
(1) Figures adjusted excluding the finance cost (€89Mn in 1Q13 and €53Mn in 2Q13) of the subordinated loan from BFA to Bankia, which was cancelled on 23 May 2013. Thus the reported profits for these periods were lower.
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Net profit reaches €431 million in the first half of the year, up 48% from 1H 2013
RECURRING COST OF RISK 2Q14 (CREDIT) 63 bps
Pre-provision profit
Profit from sales and others
Profit from discont. op.(2)
Provisions
567
3
17
(262)
2Q14
Profit after tax 245
Profit after tax Significant increase in net profit compared to same quarter of previous year
(1) Figures adjusted excluding the finance cost (€89Mn in 1Q13 and €53Mn in 2Q13) of the subordinated loan from BFA to Bankia, which was cancelled on 23 May 2013. Thus the reported profits for these periods were lower.
(2) Includes recurring profit of Aseval
+56.1%
€Mn
E
470
296
32
(585)
2Q13
157
(1)
481
21
21
(294)
3Q13
161
453
53
24
(353)
4Q13
156
489
62
21
(303)
1Q14
186
2Q14 Results
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Contents
1. Highlights of 1H14
2. 2Q14 Results
3. Asset Quality and Risk Management
4. Liquidity and Solvency
5. Conclusions
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Performance of NPL, NPL ratio and NPL coverage
NPLs
Total risk assets
NPL ratio
NPL coverage (1)
€Bn DEC 2013
136.7
14.7%
56.5%
(1) Loan loss provisions / NPLs
Asset Quality and Risk Management Credit quality Decrease in NPL and reduction of NPL ratio
JUN 2014
132.4
14.0%
58.9%
Organic reduction
NPL performance
NPL ratio reduces to 14%, while NPL fall by €1.4 Bn in 1H14 NPL coverage up 2.4 p.p. in 1H14
28 bps
151 bps
20.0 18.6 €0.6 bn
- 45 bps
NPL Formation
+ 17 bps Denominator
effect
MAR 2014
134.0
14.3%
57.4%
19.2
NPL March 2014
+ Gross additions
- Recoveries
19.2
- Write-offs
NPL June 2014
+ 0.9
- 1.4
- 0.1
18.6
Net additions - 0.5
- Sales -
€Bn
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Balance of credit exposure and coverage ratios
Asset Quality and Risk Management Credit quality Coverage increased in almost all segments
Coverage ratios increase in RE developers and businesses segments Coverage ex RE developers reaches 7.3%
MAR 14
81.1
JUN 14
80.8
3.5%
COVERAGE RATIOS
Individuals
3.5%
MAR 14
36.8
JUN 14
35.8
16.4%
Businesses
16.9%
MAR 14
3.5
JUN 14
3.3
44.7%
Real estate developers
45.3%
MAR 14
127.6
JUN 14
125.6
8.2%
Total portfolio
8.3%
GROSS EXPOSURE
MAR 14
124.1
JUN 14
122.3
7.2%
Total portfolio (ex RE developers)
7.3%
€bn
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Contents
1. Highlights of 1H14
2. 2Q14 Results
3. Asset Quality and Risk Management
4. Liquidity and Solvency
5. Conclusions
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LTD ratio (%) Commercial gap
LTD falls to 109.7%, while commercial gap is down 37% year on year
109.7
2Q13
118.2
€Bn %
3Q13 4Q13 1Q14 2Q14
116.7 115.4 111.9 18.7 29.6 27.6 25.1 21.6
2Q13 3Q13 4Q13 1Q14 2Q14
- 36.7% - 8.5 p.p.
Liquidity and Solvency Liquidity indicators Good liquidity management leads to improved ratios
- 2.2 p.p. - 13.1%
LTD ratio: (Net credit / (retail commercial paper + strict customer deposits + ICO/EIB deposits + single-certificate covered bonds)
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Liquidity and Solvency Significant organic capital generation Continued high level of capital generation
CET 1 BIS III phase-in ratio CET 1 BIS III fully loaded ratio
CET 1 BIS III phase-in ratio close to 12%
JUN 14 DEC 13
9.95% 8.60%
JUN 14 DEC 13
11.82% 10.69%
CET 1 BIS III fully loaded ratio almost 10%
+ 45 bps
↑Profit ↓RWAs
Generated organically:
+ 113 bps
+ 68 bps
+ 57 bps
↑Profit ↓RWAs
Generated organically:
+ 135 bps
+ 78 bps
13.29% 11.06% TOTAL SOLVENCY 11.43% 8.98% TOTAL SOLVENCY
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Contents
1. Highlights of 1H14
2. 2Q14 Results
3. Asset Quality and Risk Management
4. Liquidity and Solvency
5. Conclusions
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Conclusions
Important commercial capabilities acceleration
Strong push to recurrent results generation (pre-provision profit: + 54.6%)
1H14: First half of our Strategic Plan concluded…
Efficiency ratio already stands at 46%
NPL ratio reduction and coverage increases
Additional progress in the capital ratio
Normalization of Bankia in the financial markets
…with ROE close to reaching 8%
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Investor Relations
“Trabajamos desde los principios para poner la
mejor banca a tu servicio”