Annual Results Presentation 4Q 2013
description
Transcript of Annual Results Presentation 4Q 2013
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Annual results presentation
2013
3 February 2014
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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 the year
2. 2013 results
3. Asset quality and risk management
4. Liquidity and solvency
5. Conclusions
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On track to meet the goals of our Strategic Plan
Recapitalisation and clean up the balance sheet
The Turnaround Year
Developing our commercial model
2012
2013
2014
IN PROCESS
Highlights of the year
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IT integration and workforce agreement
RECAPITALISATION COMPLETED, RESTRUCTURING PLAN EXECUTED
Additional non-strategic divestments
PROFITABILITY AND CAPITAL GENERATION TARGETS MET
Branch network restructuring completed two years ahead of schedule
1
Commercial momentum picked up
Highlights of the year
2013: THE TURNAROUND YEAR
2
Recapitalisation of Bankia completed
Recurring profit improved
Profit in line with expectations
Improved liquidity, sharp increase in capital
Investor and customer confidence in Bankia
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Highlights of the year
ORGANISATIONAL RESTRUCTURING AND SIMPLIFICATION…
Branch network Organisational structure
Branch closures completed two years earlier than planned
Organisational structure simplified
AREA HEAD OFFICES REGIONAL HEAD OFFICES NUMBER OF RETAIL BRANCHES
2,800 2,400
1,900
Q1 2013 Q2 2013 Q4 2013
2,100
Q3 2013
3,000
ORIGIN
CLOSURES PROGRESS
17% 58% 81% 100%
- 38%
35% YoY reduction
33% YoY reduction
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Highlights of the year
…REGAINING COMMERCIAL MOMENTUM…
Sales volume
Productivity levels have improved
Products sold (thousands)
Products sold per employee (# per month)
DEC 12 DEC 13
30.1 44.8
+ 48.8%
DEC 12 DEC 13
382 466
+ 22.0%
“Dar Cuerda” programme
More than €14,900 million of new loans granted in 2013.
80% went to self employed, SMEs and corporates.
Dec 2012
9.22%
Nov 2013
9.56%
5.55%
Nov 2013
5.97%
Dec 2012
Credit market shares
Total OSRs SMEs and corporates
Source: Bank of Spain
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Highlights of the year
…PROFITS IN LINE WITH EXPECTATIONS…
Efficiency ratio improved significantly, bringing our profit into line with projections
Efficiency ratio ex trading income Net profit
4Q12 1Q13 2Q13 3Q13 4Q13
* Recurring efficiency ratio ex trading income and exchange differences. Calculated with pro forma data
63.3% 62.1% 60.1% 54.2% 52.6%
- 10.7 pp
818
608 (1) Net profit does not include hibrids exchange result and fiscal adjustments (2) Real figures adjusted by the subordinated loan of BFA to Bankia canceled on 23rd of May
(1) (2) *
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Highlights of the year
…SIGNIFICANT IMPROVEMENT IN LIQUIDITY AND CAPITAL…
Solid liquidity position and more than 200 bps of capital generated in the year
LTD RATIO (%) EBA CORE TIER 1
115.4
4Q12
120.4
%
1Q13 2Q13 3Q13 4Q13
120.9 118.2 116.7
-5.0 pp
11.71%
DEC 2013
9.62%
PF DEC 2012
+ 209 pbs
Organic Generation
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60,0
80,0
100,0
120,0
140,0
160,0
180,0
200,0
Highlights of the year
The share of international investors in the Bank’s capital went from 3.8% to more than 10.4% in seven months
First issue of senior debt since the Group was created, with an international demand of 85%
Share performance vs. IBEX 35
Included in Ibex 35 in Dec 13
IBEX 35 BANKIA
…WITH THE CONFIDENCE AND BACKING OF THE MARKET
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Contents
1. Highlights of the year
2. 2013 results
3. Asset quality and risk management
4. Liquidity and solvency
5. Conclusions
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Bankia Group financial performance
Profit after tax in 2013 ex exchange of hybrids amounts to €608 million.
Net interest income was up for the third quarter in a row at €2,567 million, with operating expenses down 17% year-on-year.
Results
Asset quality
Liquidity & solvency
Non-performing loans (ex transfer of refinanced loans to non-performing under new regulations) were down for the fourth quarter in a row, giving a cumulative reduction of around €1,200m for the year.
The coverage ratio on the loan book stands at 8.2% of total loans and 56.5% of non-performing loans.
The commercial gap has been further reduced and the LTD ratio has improved to 115.4%.
The Bankia Group increased its capital ratio by more than 200 bps to reach an EBA Core Tier 1 ratio of 11.7%.
2013 Results
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Bankia Pro Forma Income Statement – €m
The following pro forma income statements exclude the cost of the subordinated loan by BFA to Bankia in the amount of €109m in 2012 and of €89m in Q1 and €53m in Q2, which was cancelled on 23 May. In 2013, profit from discontinued operations, in the amount of €158 million, is included in profit from the sale of investees and other profit.
2013 Results
A
B
C
D
Net interest income
Gross income
Operating expenses
Pre-provision profit
Provisions and other expenses
E
2012
3,198
4,119
(2,293)
1,826
(23,907)
2013
2,567
3,772
(1,905)
1,867
(1,287)
Diff %
(19.7%)
(8.4%)
(16.9%)
2.3%
-
Profit after tax (19,098) 608 -
Diff €
(631)
(347)
(388)
41
-
-
of which activation of monetisable DTAs 230
of which maximum provision for litigation (230)
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Taxes 2,982 28 - -
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Net interest income – Bankia
Bankia Group data. €m
Quarterly trend of net interest income
The positive trend in net interest income was consolidated during 4Q 2013, driven by the fall in the cost of deposits and asset repricing policies.
2013 Results
Loan yield vs. cost of deposits
A
€m
Client yield stabilised.
The cost of customer deposits decreased significantly during 4T 2013.
+14.8%
(1) Actual numbers, adjusted for the finance cost associated with the subordinated loan from BFA to Bankia, which was cancelled on 23 May.
2012 1Q13
601
2Q13
633
3Q13
643
4Q13
690
3,198 2,567
(1) (1)
(1) (1)
109
89 53
2.99%
2.69% 2.63% 2.46% 2.49%
1.95% 1.86% 1.70% 1.67%
1.54%
1.04% 0.83% 0.93%
0.79% 0.95%
4Q2012 1Q2013 2Q2013 3Q2013 4Q2013
Credit yield Deposits cost Customer margin
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Fee and commission income - Bankia
Bankia Group data. €m
Fee income generation is stable
2013 Results
Mutual Funds evolution
€m
Fee volume up 5% in the last quarter, despite large number of branches closed during the year
Mutual funds market share increased from 4.52% at the end of 2012 to 4.82% in Dec
2013
2012 1Q13
225
2Q13
225
3Q13
237
4Q13
249
992 936 8,216
Dec 2013
6,460
Dec 2012
+27.2%
Source: Bank of Spain
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Basic banking business contribution up 13.7% compared to the first quarter
Gross income – Bankia B
Bankia Group data. €m
(1) Actual figures, adjusted for the finance cost associated with the subordinated loan from BFA to Bankia, which was cancelled after the Bankia capital increase
(2) Exchange diff. + Dividends + Equity method + Other operating income
Trend of gross income
2012
4,119 (1)
4Q13
(27)
912
3,772 (1)
Rest (2) Net interest income + Fee income
2013 Results
€m
3Q13
65
945
2Q13
100
958
1Q13
132
957
939 880 858 826
+13.7%
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Operating expenses and efficiency – Bankia C
Bankia Group data. €m
Trend of efficiency ratio ex trading income*
Through cost containment efforts and acceleration of the restructuring plan, the Group succeeded in reducing total costs by almost €400 million (-17%) year-on-year, out of the €600 million envisaged in
the Strategic Plan. The efficiency ratio was down 10.7 pp in the last quarter compared to 4Q 2012.
2013 Results
%
4Q12
Operating expenses
2012
2,293
1Q13
494
2Q13
488
3Q13
464
4Q13
459
1,905
-16.9%
€m.
1Q13 2Q13 3Q13 4Q13
* Recurring efficiency ratio ex trading income and exchange differences. Calculated with pro forma data
63.3% 62.1% 60.1% 54.2% 52.6%
- 10.7 pp
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D Profit before provisions – Bankia
2013 Results
Pre-provision profit up 2% in 2013, mainly due to cost containment effort, offsetting decline in net interest income.
Pre-provision profit
1,826 +2%
2012
1,867
2013
Pre-provision profit ex trading income
1Q13
297
2Q13
338
3Q13
398
4Q13
419
1,452
€m
+41.1%
€m
(1)
(1) Real figures adjusted by the subordinated loan of BFA to Bankia canceled after Bankia’s recapitalization process
(1)
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Profit after tax - Bankia E
Cumulative profit after tax was €608 million, in line with forecasts Cost of risk stabilised at 74 bps.
(1) Includes €89 million of net interest income in Q1 and €53 million in Q2 due to the impact of the subordinated loan (2) Includes the recurring profit of Aseval
RECURRING COST OF RISK 2013 74 bps
2013 Results
Pre-provision profit (1)
Profit from sales and other profit
Bankia Group data. €m
Recurring profit on discont. operations
Provisions
470
296
32
1Q 2013
(585)
2Q 2013
463
(272)
0
0
481
21
21
(294)
3Q 2013
453
53
24
(353)
4Q 2013
(2) (2) (2) (2)
Profit after tax 157 134 161 156
608
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Contents
1. Highlights of the year
2. 2013 results
3. Asset quality and risk management
4. Liquidity and solvency
5. Conclusions
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Asset quality and risk management
Credit quality
Bankia Group data. €bn
Portfolios
Retail
Corporates and SMEs
87.6
43.0
Gross amount
Developers 4.8
Total loan portfolio 145.8
Provisions as % gross loans
3.3%
14.8%
44.8%
8.0%
Dec 2012
Gross loans and provision coverage ratios
Dec 2013
Total excluding developers 141.0 6.7%
82.2
37.8
Gross amount
3.9
129.8
Provisions as % gross loans
3.5%
16.2%
42.7%
8.2%
126.0 7.2%
The NPL coverage ratio excluding real estate developers rose from 6.7% to 7.2%
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Asset quality and risk management
Bankia Group data. €bn
NPLs ex refinanced loans was down by around €1,200m over the year
Trend of non-performing loans, NPL ratio and NPL coverage
MAR 2013
19.6
DEC 2012
19.8
JUN 2013
19.3
SEP 2013
19.0
Non-performing loans
(€bn)
Total risk assets 152.5 149.6 144.5 140.3
NPL ratio 13.0% 13.1% 13.4% 13.6%
NPL coverage (1) 61.8% 61.9% 63.0% 62.6%
20.0
* Transfer of €1,404 million of refinanced loans to non-performing under the new regulations on refinancings.
Credit quality
€bn
18.6
DEC 2013
136.7
14.7%
56.5%
DEC 2013
+ 1.4*
Refinanced loans
- €1.2bn
(1) Credit provisions / Total NPL volume
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Asset quality and risk management
Credit quality
Bankia Group data. €bn
Structure of refinanced loans
48% of refinanced loans were classified as non-performing at year-end 2013
Portfolios
Non-performing
Substandard
8.9
3.3
Dec 2012
Performing 7.2
Total refinanced 19.4
Total coverage ratio 24.9%
12.0
4.0
Dec 2013
8.9
24.9
22.4%
By situation
Portfolios
Developers
Corporates
1.5
10.4
Dec 2013
Individuals 13.0
Total refinanced 24.9
Total coverage ratio 22.4%
6.0%
41.8%
% of total
52.2%
By type
€bn €bn
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Contents
1. Highlights of the year
2. 2013 results
3. Asset quality and risk management
4. Liquidity and solvency
5. Conclusions
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Liquidity and solvency
Bankia Group data. €bn
Trend of LTD ratio (%)
Liquidity indicators
Trend of commercial gap
Main liquidity ratios improved significantly during 2013: LTD ratio fell 5 pp, while commercial gap was reduced by 25%
115.4
4Q12
120.4
€bn %
1Q13 2Q13 3Q13 4Q13
120.9 118.2
116.7 25.1
4Q12
33.3
1Q13 2Q13 3Q13 4Q13
32.8 29.6
27.6
-5.0 pp -24.6%
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Liquidity and solvency
Excellent response to the Group’s first issue, in the amount of €1bn, which was 3.5 times oversubscribed, with 85% of international demand.
Characteristics of senior debt issue
Markets reopened
Characteristics Geographic distribution of demand
Issue volume
Maturity date
Spread
Oversubscription
€1,000 million
17/01/2019
MS + 235 bps
3.5x
# Orders > 250 orders
Spain 15%
Rest of world 85%
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Liquidity and solvency
Capital generated organically
Bankia Group – EBA CORE TIER 1
+ 49 bps 11.06%
11.71%
SEP 2013 DEC 2013
↑Profit ↓RWAs
More than 200 bps of capital generated in 2013, reaching an EBA CT1 ratio of 11.7%
Gen. organically: + 65 bps
+ 16 bps
9.62%
PF DEC 2012
Gen. organically: +144 bps
9.84% 11.27% 11.97%
BIS II RATIO – SOLVENCY RATIO
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2013 Results
SUMMARY OF KEY FINANCIALS
RESULTS
PRE-PROVISION PROFIT IMPROVED:
+2%
POSITIVE TREND IN BANKING BUSINESS
BALANCE SHEET
COST REDUCTION:
- 17%
COST OF RISK CONTAINED: 74 bps
PAT: €608m
PRUDENT PROVISIONING POLICY
OPTIMAL LIQUIDITY MANAGEMENT
HIGH CAPITAL GENERATION
NPLs* reduced
- €1.2bn
LTD ratio improved
- 5 p.p.
EBA CT1
+ 209 bps
* Excluding the impact of the transfer of refinanced loans to non-performing
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Contents
1. Highlights of the year
2. 2013 results
3. Asset quality and risk management
4. Liquidity and solvency
5. Conclusions
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Conclusions
On track to meet the goals of our Strategic Plan
Recapitalisation and clean up the balance sheet
The Turnaround Year
Developing our commercial model
2012
2013
2014
IN PROCESS