Results 2Q10. Thursday, July 22nd 2010

Transcription

1 Results 2Q10 Thursday, July 22nd

2 Bankinter presents its financial statements following format and criteria stated by Circular of Banco de España 4/04. Bankinter cautions that this presentation contains forward looking statements. Such forward looking statements are found in various places throughout this document and include, without limitation, statements concerning our future business development and economic performance. While these forward looking statements represent our judgment and future expectations regarding the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to (1) general market, macro-economic, governmental and new regulations, (2) variation in local and international securities markets, currency exchange rates and interest rates as well as change to market and operational risk, (3) competitive pressures, (4) technological developments, (5) changes in the financial position or credit worthiness of our customers, obligors and counterparties. 2

3 Results Asset Quality Solvency The Business 3

4 Resilient results Gross -9% 32% operating Operational Income from income Costs non credit stability Banking Group risk business 4

5 The gross operating income shows stability despite headwinds Gross operating income (million ) 612,3 601,1-1,8% 1H09 1H10 5

6 Increasing diversification of income sources Gross operating income breakdown (million ) 410,3 141,7 24,8 24,2 Insurance Asset Management Brokerage 32% 6

7 Net Interest Income reflects the effect of the yield curve evolution Net Interest income (million ) -22,2 Difference between the 12 month and 3 month Eur12M moving avg 25% 2,5% 302,22 400,7 88,7 311,6 8,0 2,0% 1,5% 1,0% 0,5% 307,6 312,0 303,6-5,4-1,0% 0,0% -0,5% jun-08 ago-08 oct-08 dic-08 feb-09 abr-09 jun-09 ago-09 oct-09 dic-09 feb-10 abr-10 jun-10 1H08 1H09 1H10 Basic NII Lag effect Mortgages 7

8 The ALCO portfolio reduces its contribution to NII ALCO portfolio s carry (in million ) 39,7 33,2-16,3% 1H09 1H10 8

9 Fee income continues to be resilient despite market volatility Net fees (million ) 1H2010 1H2009 Difference Diff. % Transactional 36,1 36,9-0,8-2,2 AUM 23,5 20,4 32 3,2 15,6 Insurance 21,1 18,3 2,8 15,4 Broker 20,9 22,2-1,3-5,8 Risk 15,2 12,9 2,3 18,2 Unpayment + other 15,7 25,0-9,3-37,4 Fees received 132,5 135,7-3,1-2,3 Fees paid 32,5 34,6-2,1-6,0 Net fees 100,0 101,0-1,1-1,1 9

10 Trading gains are backed by retail business Trading income(million ) 75,6 85% Retail client driven 51,9 Client Business + +99% Hedges 1H09 1H % Intl. I. Funds +31% Intl. equities 10

11 Other operating results reflect the contribution of LDA insurance business Other operating results (million ) 97,4 39,4 1H09 1H10 11

12 Supported by cost contention efforts and efficiency gains Operational Costs (million ) ,2% -8,8% 8% Banking Group LDA comparable ,6% Cost Income ratio Banking Group 1H09 1H10 Banking Group LDA* Intangible Amort. * LDA only 2 months in 1H09. Full Year -8,8%. 12

13 1H10 pre provision profit continues to show resilience and absorbs b 09 repricing effect. Pre provisioning profit (million ) 88,7 8-13% 229,8 +17,1% 269,2 1H09 Basic Pre Provision Profit 1H10 Repricing Effect 13

14 Increasing NPL coverage and accelerating provisions Break down by type of provision (in million ) 22,6 110,0 174,4 74% coverage ratio -66,8 1H09 1H10 Specific Generic Loss recognition acceleration 14

15 1H10 results improve the groups solvency and balance sheet structure 1.- Enhanced quality and diversification of income sources 2.- Cost contention, efficiency and productivity gains 3.- Unrealized gains on Balance Sheet untouched 4.- Improved risk coverage and limited use of the generic provision 15

16 Results 1H10 P&L Thousand jun-10 jun-09 Dif Dif % Interest and related income ,13 Interest and related charges ,50 50 Net Interest Income ,21 Dividend income ,40 Equithy method ,11 Net fees and commissions ,05 Trading income ,50 Other operating income/expense ,29 Gross Operating Income ,82 Personnel expenses ,06 General expenses/amortization ,92 Pre provisioning profit ,96 Provisions n.r Asset impairment charges ,80 Net Operating Profit ,65 Gains/losses on disposals of assets ,37 Profit Before Taxes ,22 Corporate tax ,09 Net Income ,13 16

17 Best Asset Quality 1/2 1/3 System NPL ratio System Problematic Assets No significant sovereign risk exposure 17

18 Outperforming the system in NPLs over the cycle NPL ratio evolution * 1,9% Sector Bankinter 5,50% Developer loans o/total loans 2,69% 1/2 Overall NPL ratio Vs system 2T10 1T * Sector data : May

19 NPL entries continue to slow down Quarterly net NPL entries (million ) 121,7 111,4 87,9 72,9 51,3 2Q09 3Q09 4Q09 1Q10 2Q10 19

20 The non performing book has significant collateral coverage NPL s distribution by type of collateral 29% 22% 54% LTV of NPL 49% 1sr residence <80% LTV Other mortgages Personal guarantee 20

21 Foreclosed assets are low compared to system levels - Annual gross additions of foreclosed assets (million ) M 0,6% market share 22% Coverage o/ accounting value H10 36% Coverage o/ appraisal value 21

22 and show a balanced distribution by type and geography - Foreclosed assets by type (in million ) Commercial Coastal Urban Land Other 74 22

23 Facilitating their disposal with no negative impact on results - Evolution of foreclosed assets sales- 45,00 40,00 35,00 30,00 25,00 13% , , % sales (annualized) avg. discount 20,00 80 Over gross Book Value 15, ,00 5,00 0, , Book Value Num. Assets 23

24 An outstanding asset quality further reinforced when adding up other problematic assets - Problematic assets (in mill )- Bankinter System* NPL % Coverage vs 31% the system Substandard Foreclosures TOTAL Adjusted d ratio 38% 3,8% 11,6% 1/3 Of the system 0,8% market share * Source Bank of Spain financial stability report and statistics 24

25 No significant sovereign exposure with reduced mark to market risk Trading book No net exposure to Spanish sovereign risk No exposure to peripheric UE sovereign risk HTM portfolio : No mark to market risk 2,4bn : 96% Spain Gov, 4% French Gov. AFS portfolio : limited mark to market risk 0,9bn : 45% Spain Gov., 11% French Gov., 8% German Gov., 35% Corporate 25

26 Adequate solvency levelsl 74% 7,2% 1,3bn NPL Comparable Retail Coverage Core Capital deposits Ratio Ratio in 2Q10 26

27 We continue to reinforce provisions Total provisions evolution (million ) % 572 Total provisions Q09 3Q09 4Q09 1Q10 2Q10 Generic Specific Foreclosed Assets 27

28 Better coverage quality and still significant loss net-out potential Net NPL entries vs. provisions in the quarter (in %) 57% 18,8 38,6 System Specific cover 74% 26,9 64% alfa 47,1 170% Bankinter Generic cover Coverage w/ guaranties 28

29 Foreclosed asset coverage levels are also adequate and impact of new BoE provision requirements is low Maximum potential impact of new BoE provisioning system for real estate assets (million ) Year of provision requirement Additional provision requirement , , ,3 * Based on existing stock 29

30 Solvency is adequate for the business risk profile Comparable core capital ratio (%) 6,51 0,71 7,21 Core w/o deduct. Generic net Core comparable 30

31 Bankinter has an adequate solvency buffer Capital and provision coverage (million ) Unrealized capital gains One year pre.prov. prov profit Excess capital Provisions Total * 1H2010 annualized 31

32 even in heavily stressed scenarios Solvency buffer X2 current problematic asset levels * (7,6% NPA ratio) 6 Yrs The highest ever cost of specific provisions (486M 2009) equivalent to 440bn problematic assets in the system (23% NPA ratio) * Including foreclosed assets and substandard loans 32

33 Stress assumptions need to account for the distribution of the book and its quality Applying standard expected losses sector wide means under stressing weaker institutions and over stressing lower risk profile ones Immaterial exposure to developers* and real estate. 1/2 the NPL ratio of the system 1/3 the NPL ratio of the system in residential mortgages (59% of the loan book) Lower regulatory LGS s Higher provisioning levels * Developer loans : 1,9% loan book 33

34 Working ahead of wholesale maturities during 1H10 Annual wholesale maturities vs issues (in bn ) 90% 3,6 25 2,5 2,2 1, Maturities Issues 2010 maturities financed 85bn 8,5bn Liquid assets 34

35 Increasing the retail base funding base and gaining market share in deposits - Retail funding evolution (in bn ) - 1,2 1,0 0,9 +1,3bn +8% in 2Q10 16,6 17,2 15,9 +10bps Market share 1,5% 4Q09 1Q10 2Q10 Deposits ex repos Retail CP 35

36 A strong business model 33,3 Gaining market New Clients (thousands) share LDA +5,5% Premiums 36

37 Clear strategic focus on quality of service Evolution of quality ISN indicator 74,22 74,15 +4, , ,77 69,88 2Q09 3Q09 4Q09 1Q10 2Q10 BK Sector 37

38 Investing in client acquisition in objective segments Number of clients acquired 1H Affluents 912 Corporates Individuals Sme s Total

39 Beating the market with a best quality new mortgage production Residential mortgages annual growth rate evolution (%) Internal credit rating of new residential mortgage production 60% 1H10 1H09 Volume 1.912, ,8 50% Number 9.071, ,0 40% 6,4 6,2 6 5,8 30% 5,6 20% 5,4 5,2 10% 5 0% -10% 4,8 Jun-09 Jul-09 Ago-09 Sep-09 Oct-09 Nov-09 Dic-09 Ene-10 Feb-10 Mar-10 Abr-10 May-10 Jun-10 Bankinter System 39

40 . and regaining g market share in retail deposits - Retail funding evolution (in bn ) - +1,3bn +8% in 2Q10 1,0 15,9 0,9 17,2 +10bps Market share 1,5% 1Q10 Deposits ex repos 2Q10 Retail CP 40

41 A clear strategic focus in the affluent and mass affluent segments - Bankinter customer income profile- 30% 25% 20% 15% 10% +16,5% Affluent clients acquisition in 1H10 5% 0% < > 70 Income in Thous Spain Bankinter 41

42 Developing innovative added value services for our target clients - Brokerage number of orders (in thousand) Broker plus If you wish, I can improve your vision as an equity investor 1H09 1H10 vs -22% Ibex35 in the period 6% of total orders (in 3 monts of service) 42

43 Outperforming the sector in the upper end of the affluent segment SICAVS assets under management (million ) +7% Ranked 3º In number of SICAVs H H10 7,7% Market share +5% Number of sicavs 43

44 AUM business is strong and the mix improvement continues Investment funds data +15,6% fees In thousand 1H09 1H10 Dif % Own funds ,8% Third party funds ,4% Total AUM ,1% % monetary funds % Avg Fee (pbs) ,1% 44

45 Distribution of insurance products keeps on supporting business results Pension funds (in million ) +6,6% 6% +3% Saving % Non lf life policies 1H09 1H10 +15% Life policies 45

46 LDA continues outperforming the sector in policy acquisitions Home insurance policies (in thousand) Auto insurance policies (in thousand) +55% +5% H09 1H10 1H09 1H10 5,7% Market share 46

47 Transforming the business to achieve technological leadership and excellence in the transactional processes gneis. Focalization and specialization Processes centralization Value chain differentiation New business opportunities 47

48 In summary. 48

49 Enhanced quality of results Best in class asset quality Solvency adequate even in stressed scenarios Business shows strength and clear focus 49

50 A different kind of bank, stubbornly different. 50