Bankia Overview

XVII European Financial Conference

June 2013 1Q 2013

April 2013

June 20132 of 20

May July Sept Nov Dec Apr 28 May

Last year milestones

Recapitalization Process Completed

20122012 20132013

Appointment of

new MANGEMENT

TEAM and new

BOARD OF

DIRECTORS

Signing of the MoU

between the

Government of Spain

and the EU

Results of

OLIVER WYMAN

stress tests

APPROVAL OF THE

RECAPITALIZATION

PLAN

Total capital needs of

€15.5bn in Bankia

Transfer of RE

assets and loans

to SAREB

Bankia Capital

Increase

Prospectus filed

within the CNMV

June 20133 of 20

Recapitalization Process

15.5

Capital

Needs

10.7

4.9

Exchange of

hybrids

Rights

Issue

Capital

Increase

-5.2

2012

Book Value

Capital

Increase

PF Book Value

2012 Post

Recap

10.4

+15.6

Bankia’s recapitalization – Capital Increase

+0.1 Trad. Income

10.5

June 20134 of 20

~

~

BFA

68.4%

Freefloat

31.6%

Capital Increase

Shareholder’s structurepost Capital Increase

Shareholders’ structure

Economics

Total Amount (€m) 15,572

Subscription price (€)

Number of new shares (m)

1.3527

11,497

Total number of shares (m) 11,517

% new shares / total 99.83%

100%

June 20135 of 20

� Developer risk reduced (3.4% of portfolio)

� High coverage of total credit portfolios: 8.1%

� Investments marked to market

� EBA core tier 1 ratio 10.1% (post capital increase)

� Self-sustainable model of capital and liquidity generation

� >90% of total Group maturities covered SOLVENCY & LIQUIDITY

CLEAN

BALANCE SHEET

Bankia: Our fundamentals

2

3

� Profit Before Tax generation: €191 million in Bankia 1Q 13

� Operating costs reduction: down 10.7% on 4Q 2012

� Growth in PPP generated mainly by reduction in cost base

PROFITABILITY &

EFFICIENCY

4

� 4th largest bank in Spain

� Nationwide franchise (> 7.5 MM clients)

� IT systems fully integrated

HIGH FRANCHISE

VALUE

1

June 20136 of 20

Our fundamentals: High franchise value

(1) Source for market shares: Bankia, Banco de España, Dec 2012 and Jan. 2013

LARGE CUSTOMER BASE

RELATIONSHIP WITH OUR CUSTOMERS

New Management Team

CHAIRMAN / EXECUTIVE

Mr. José Ignacio Goirigolzarri

Former CEO of BBVA and previously, responsible for Retail Banking at BBVA.

GENERAL MANAGER OF CHAIRMAN’S OFFICE

Mr. José Sevilla

Former CRO BBVA

GENERAL MANGER OF PEOPLE, ORGANISATIONAND TECHNOLOGY

Mr. Antonio Ortega

Former General Manager of Human Resources and Quality at BBVA

Our Key Strengths: Customer base and Organizational Strengths

EX

TE

RN

AL

INT

ER

NA

L

1

Broad customer base

� > 7.5 million customers, with a close relationship

� > 260,000 SMEs and > 290,000 self-employed

High market share

� ~9% share of customer deposits

� 4th largest bank in Spain

Strong presence in original home territories

� Leader financial institution in its home regions, with

~15% market share

Organizational strengths

� New Management team

� Advanced IT systems

June 20137 of 20

Our fundamentals: A Cleaned Balance Sheet

Bankia Group data. €bn

Credit Portfolio 2013

Developers

down from 17%

in 2011 to 3% of

the credit

portfolioGross customer loans €142.6bn

Net customer loans €131.1bn

Pre-SAREB

Net Assets Transferred to Sareb (Dec. 2012)

19.1

2.7

31.12.12

16.4

Transferred Pre-SAREB

6.02.9

31.12.12

3.1

Transferred

>70% of RE

assets on the

balance sheet

are finished

houses

Net Credit to Developers Foreclosed Assets

Asset quality – Real Estate Exposure2

June 20138 of 20

High

COVERAGE

RATIOS

over total NPLs 61.9%

Coverage Ratios

Coverage over total portfolio 8.1%

over Restructured

Loans25%

Asset quality – NPL & Coverage Level2

Our fundamentals: A Cleaned Balance Sheet

Provisions over gross customer loans

3.2%

15.0%

46.7%

Individuals

Corporates

Real Estate

Coverage ex RE 6.7%

Dec 2012

Gross Total Risks 152.5

NPL 19.8

NPL ratio

NPL ratio coverage

13.0%

61.8%

NPL & Coverage Level

Mar 2013

149.6

19.6

13.1%

61.9%

NPL and NPL coverage stable in the first

quarter 2013

June 20139 of 20

Main liquidity indicators - Bankia

Commercial gap

LTD stable around 120%

Our fundamentals: Solvency and Liquidity

2Q 2012

60.2

1Q 2013

32.8

4Q 2012

33.3

3Q 2012

60.4

Bankia Group data. €bn

� Transfer of deposits to investment funds

seeking higher returns

� Acceleration of branch closures

� Change in policy on deposit interest rates

Continued reduction in the Commercial gap in the

following context:

3

Commercial gap: Net credit – mediation loans – retail commercial paper – strict customer deposits

LTD ratio: (Net credit / (retail commercial paper + strict customer deposits + ICO/EIB deposits + single-certificate covered bonds))

June 201310 of 20

Bankia Group – EBA CORE TIER 1

Actual December 2012

Capital increase(1)

Generated organically

+ 8 bps+ 39 bps9.6%

10.1%

DEC 2012 MAR 2013↑Prof. ↓RWAs

4.9 %

4.7%

4.9 %

4.7%

0.5%

3 Capital Generation

Our fundamentals: Solvency and Liquidity

Self-sustaining capital generation by:

Profit generation

RWA reduction

June 201311 of 20

Proforma(1) 1Q results

Our fundamentals: Profitability

Mar 2013

Net interest income

Gross income

Operating expenses

Pre-provision profit

601

957

(494)

463

Provisions and other expenses

Profit before tax

(272)

191

(1)Pro forma income statement excludes €89 million interest expense for the quarter from the subordinated loan granted by BFA to Bankia, to be

cancelled after the capital increase.

Profit generation

NPLs stabilisation

Cost reduction

Income statement getting

“back to normality”

Bankia Group data. €bn

4

June 201312 of 20

Bankia Group data. %

12M EURIBOR

Although further reductions for loan

yield are expected, reflecting the last

section of the Euribor curve, this

effect will be offset by:

Loan yield and customer deposits

� Wider spreads on new loan production

� Lower interest rates on deposits

� Repurchases and maturities of wholesale issues

� Lower funding costs on regained access to markets

2,99% 3,03%3,26% 3,44% 3,49% 3,41%

3,13%2,99%

2,72%

1,70%

2,06% 1,96% 1,97% 1,90%

1,69%

1,95% 1,95% 1,86%

1T 2011

pro

forma

2T 2011

pro

forma

3T 2011 4T 2011 1T 2012 2T 2012 3T 2012 4T 2012 1T 2013

Rendimiento créditos Coste depósitos de clientesLoan yield Cost of deposits

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13

1,74

2,13 2,11 2,051,67

1,280,90

0,60 0,57

1Q11

pro

forma

2Q11

pro

forma

3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13

EURIBOR 12M (quarterly avge.)

Our fundamentals: Profitability

Pressure on Net Interest Margin4

pro

forma

pro

forma

Stability in Net Interest Margin

June 201313 of 20

Non-developer

SMEs and

corporates

1Q13

4.00

Spreads on new production

+32 bps

Third-party

mortgages

Loans and advances to customers Customer deposits

Wider LOAN

SPREADS

NEW

PRODUCTION

Lower

DEPOSIT

INTEREST RATES

2012

3.68

1Q13

2.81

+66 bps

2012

2.15

Sight

deposits

1Q13

0.34

-9 bps

2012

0.43

Time

deposits

1Q132012

2.43

-46 bps

2.89

IMPROVEMENT

IN SPREADS

Bankia Group data. bps

Our fundamentals: Profitability

Pricing and business policies focused on margin and fee management4

June 201314 of 20

Bankia Group data, € bn, %

Our fundamentals: Profitability

Asset Mix rebalancing4

Projected evolution of the Credit Portfolio

€145bn

€125bn

60%

30%

10%

58%

38%

4%

� Natural Maturities of the

Mortgage portfolio will be

the main source of change

in the mix.

� >80% of new production in

2012 was related to SMEs

Change in mix without

aggressive growth strategy:

June 201315 of 20

1 Source: Banco de España and Bankia, as of September 2012

OUR KEY STRENGTH: LARGE CUSTOMER BASE

OUR OBJECTIVE: RELATIONSHIP WITH OUR CUSTOMERS

RETAIL1 SMEs

Pension funds

Market share

Mutual funds

Consumer finance

Credit cards

4.9%

4.6%

4.6%

5.6%

11%

10%

7%

16%

Compared to a market share of 10%

Commercial effects

Leasing, Factoring, Reverse factoring

Foreign trade activities

Services: Payroll

Share

Compared to an average customer investment share

of ≈ 26%

Our fundamentals: Profitability

Strengthening our Competitive Positioning4

June 201316 of 20

Bankia Group data. units

Our fundamentals: Efficiency

Branches 2012 – 2015 according to Plan

~1,900

2015e

~3,100

Dec 2012

-38%

9%

91%

1,143

1,888

Branch

network

Closures

Contribution

to PPP (*)

Bankia network after

reorganisation

Low contribution of closed branches

Accelerated Plan

1Q13 2Q13 1Q14

197

607

1,143

(*) Pre-provision profit

Network reorganization4

Maintaining our presence throughout the national territory

� Branch closures envisaged in Strategic Plan to

be accelerated

� Madrid and Valencia networks (60% of total)

fully restructured by June 2013, ahead of

planned

� All planned closures are expected to have

been completed by 1Q 2014

June 201317 of 20

Bankia Group data. units and €bn

Our fundamentals: Efficiency

Workforce 2012 – 2015

~14,500

2015e

~20,500

Dec 2012

-28%

Workforce and Operating Expenses4

*Includes depreciation and amortization

Operating costs 2012 – 2015*

€1.7bn

2015e

€2.3bn

Dec 2012

-26%

Operating expenses evolution

1Q 2013Q4 2012

553

Q1 2012

588

- 10.7%

y/y

- 15.9%

494

� Restructuring costs already provided for in

2012

� Workforce agreement reached in February

2013

Objective efficiency ratio: 40-45%

June 201318 of 20

Bankia Group data. €bn and %

Gross Margin

Total expenses

Pre Provision Profit

4.1

-2.3

1.7

2012

3.9

-1.7

2.2

2015e

Target ROE >10.5%

Cost reduction is the main lever for growth in Pre Provision Profit

Our fundamentals: Efficiency

Improvement of our efficiency4

Cost of Risk ~60 bps

June 201319 of 20

Return to be a solid and

sustainable financial

institution, among the best in

Spanish commercial banking

Our goal

Focus on our customers:

individuals, SMEs and

businesses in original home

territories

Solid and sustainable franchise

Solvent EfficientProfitable

Our strategy

Conclusions

Core Capital >14.5%* ROE >10.5%Cost Income

40% – 45%

*It does not envisage dividend payments, although it is expected that the Bank will resume its shareholder’s policy remuneration in 2014