BANKINTER, SA
Otras Comunicaciones #27239 - 16/09/2008 15:03
La sociedad remite la presentación que realizará en el día de hoy Jacobo Diaz García a las 15:15 (hora española) en Londres en la KBW European Financials Conference
PDF Adjunto:
Bankinter
September 2008
KBW European Financials
Conference
1
Bankinter presents its financial statements following format and criteria stated by
Circular of Banco de España 4/04. Capital ratios have been estimated according to the
draft legislation issued by Banco de España about the determination and control of
the minimum capital requirements. Internal models are used for the following
portfolios: Residential mortgages, small enterprises and medium size enterprises.
Models are pending official authorization. Internal capital ratios assume no
implementation period
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
Agenda
Bankinter maintains its privileged asset
quality
Bankinter holds comfortable solvency
levels, consistent with its risk profile
Bankinter’s business model has enhanced
value under current market context
Revenues have increased, thus confirming
the soundness of our strategic options
Bankinter maintains its
privileged asset quality
78% 0,33% 2,4%
Residential mortgage Developers /total
Collateralized portfolio
vs. 68% system
NPLs Real Estate act. BK 7,8%
vs. 0,99% system vs. 17,3% system
61% banks
0,63% banks 16,3% banks
Market data as of March 08, except for collateralization as of May 08
4
Our loan book is widely collateralized
Gross loan book breakdown excl. securitization (%)
6%
4%
4%
5%
42bn€
11% excl. securitization
78%
70%
collateralized
Mortgages Credit lines
Unguaranteed loans Paper discount
Leasing At sight and other
5
Credit risk on the book has been
significantly transferred
Mortgage book evolution (€bn)
+12,2
29,4
26,2
15,9
15,5 9bn€
Of securitized assets hold
no credit risk
synthetic securitization
13,9 of first equity pieces
10,3
2007 2008
Securitized No securitized
6
We have built a conservative
mortgage book…
Mortgage portfolio breakdown
Average
LTV* NPL
% /total amount
% %
Thous.€
Residential 85,4 116,3 58,2 0,33
First 74,8 115,4 58,5 0,28
Second 10,6 122,9 55,7 0,71
Developers 3,3 1.188,9 82,9 0,24
Other 11,3 248,4 76,5 0,43
Total 100,0 127,8 61,1 0,35
Developers market share ** Residential Mortg. market share**
0,42% 3,92%
* Original valuation
7
** Over total system. Data as at mar ‘08
… focused on high profile clients
Residential mortgages annual Evolution of client profile in new
growth rate evolution (in %) mortgage production (%)
50% Bankinter
Financial Institutions* 80% Book: 85,5% 70,0%
(High + Med.)
25% 30%
40%
12,7%
21,6%
34%
11,1% 8,4%
0% 0%
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08
'99
'00
'01
'02
'03
'04
'05
'06
'07
'08
High: + 40K€ Medium: 40-24K€ Low: -24k€*
* As at mar08
* Annual Income after taxes and social charges
8
Investment in SME’s is also widely
covered…
SME’s portfolio by guarantee type (%)
3%
7,9bn€
47%
50% 19,3% / total
loan book
Personal
Commercial Mortgages
Other guaranties
9
… with low concentration in
decelerating sectors
SME portfolio breakdown by sector (%)
11%
14%
41%
16%
18%
Services Asset holding Industry
Construction Other
10
Greater asset quality is reflected in
the NPL ratio
0,67% 0,33%
Mortgage NPLs
NPLs
vs. 0,99% sector
vs. 1,53% system
0,63% banks
1,23% banks
Overall NPL figures as of May 08. Mortgage NPL figures as of March 08
11
Bankinter holds
comfortable solvency
levels, consistent with its
risk profile
coverage solvency liquidity
331M€ 6,02% 1,5bn€
Excess provisions Covered bond issue
Core capital
212% 52bps
12
coverage
Increased coverage reinforces the
quality of assets
Evolution of non performing loans and
provisions (thousand €)
550.000
626.709
212% coverage
450.000 571.853
0,67% NPL ratio
350.000
296.159
250.000 113.805
150.000
50.000
J07 J A S O N D J F M A M J08
NPLs Provisions
13
coverage
NPLs are limited to higher risk
segments
Investment
NPL M.€ Ratio %
% /total
Individuals 64,2 157 0,55
Corporate 18,2 26 0,32
SME’s 17,6 113 1,43
Total 100 296 0,67
14
solvency
Capital ratios are calculated using
conservative variables
Through the cycle Down turn
PD % LGD %
Residential mortgages 1,73 11,24
Very small companies 9,68 26,50
Personal and other 3,99 16,97
Medium size companies 6,09 20-30
Large companies 4,51 20-30 45%
Regulatory
LGD
Very large companies 1,11 20-30
Advanced IRB Basic IRB standard
Advanced IRB: PD and internal LGD
Basic IRB: Internal PD, regulatory LGD (45% for companies)
15
solvency
Capital ratios excluding excess
generics are maintained within
adequate levels
Capital ratios (%)
419M€ 710M€
Excess capital Excess capital
11,0
9,59 9,48
2,86
2,70 2,70
0,92
0,88 0,76
'
7,22
6,01 6,02
Mar 08 regulatory Jun 08 regulatory Jun 08 internal
Core* Tier I Tier II
*core capital without deductions
16
liquidity
The financing structure is well
balanced
Split down of wholesale funds (%)
5% 4%
23%
23% securitizations
8%
matched to maturity
9%
13% 20% 59% Medium and long
term
18%
Securitizations Local CP Senior Debt
Coverd B. Repos Interbank
Other ECP
17
liquidity
Bankinter has a comfortable liquidity
situation…
Commercial gap evolution (thousand €)
3.000
1.500
0
-1.500
-3.000
-4.500
-6.000
'2006 '2007 'Jun08
Retail deposits Credits Gap
18
liquidity
… reinforced by the covered bonds
issued in 2Q08
Recent issues of covered bonds
Thousand €
1bn€ bps
LT debt maturity
until 2010
2.000 90
Amount
80
Spread
70
1.500
60
50
1.000
40
30
500 20
10
0 0
Caja 1 Bankinter Bank 1 Bank 2 Caja 2 Caja 3 Caja 4
19
Bankinter’s business
model has enhanced value
under current market
context
7,6% 6,2 67,1%
Churn rate
Products per client Remote transactions
(13,2 yrs)
20
Shares are priced at early 90’ PBV
levels
Evolution of price / book value (PBV) with generics
4
3,5
3
2,5
2
1,5
1,19
x3 1,15
1
EPS
0,5
0
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08*
*Share price as at close of 22nd July 08 (6,44€)
21
The current macroeconomic
environment is clearly different from
those days
Unemployment
GDP
20,6 Pts…€
X 2,8 (9,9% ’08)
Reference
Deficit Rates
3,8%GDP
(-2,2% ’07)
15,7
(5,3% ’08)
*Current data compared to Dec’92
22
Bankinter has gained greater financial
strength and reinforced commercial
capacity…
X 4,3 X 12,2 X 5,6
Loans
Active clients Client Deposits
42MM€ 23MM€
773mil
X 2 71%
Employees Real guarantee
Branches vs. 17%
23
… and holds a more defensive and
diversified portfolio with greater coverage
Evolution of cost of credit * vs. investment risk profile**
Specific/ Risk APR / AT
1,6% 1,4
1,4% 1,2
Asset risk profile and cost of risk
1,2% Specific/Risk APR/AT are highly correlated
1
1,0%
0,8
0,8% Generic provisions set a limit to
0,6 the cost of risk
0,6%
Limit: Beta
0,4
0,4% 150m€
34bps
0,2% 0,2
385M€
Excess
0,0% 0 generics
'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08
* Cost of credit: specific provision / risk exposure
** Investment risk profile: Risk weighted assets / total assets without gov. debt
24
Additionally,…
Bankinter counts with a
unique business model
and has set clear strategic
options
25
A retail driven bank focused on clients
with higher income profile,…
EVA (Economic Value Added)
Client distribution by Income
distribution by business segment
11,8% 30%
25%
33,6%
20% BK
24,4%
15%
10%
5% Spain
30,2%
0%
< 7K 7/ 14K 14/ 21/ 28K/ 35K/ 42K/ > 70K
21K 28K 35K 42K 70K
Affluents Individuals
Corporates Sme's
…that maximizes client potential
through cross selling
Ordinary margin by product Client relationship matrix
type (%) affluents and individuals
Products per client % clients % revenues
+
24,4%
29% 17%
5% 8,4 55%
7,5
27%
Loyalty
8%
6% 5,9 34%
38% 18%
4,7
17% 22% -
- Profitability +
Other Loans Deposits Mortgages
Funds Other
A business model supported by solid
strategic levers,…
7,6% 67,1%
Churn rate Remote transactions
Quality Innovation Multichannel
6,2
Products per client
Technology Talent
28
… and with clear strategic options
Affluents
SME´s
Affluents
We are focused on a segment of high
return that self finances growth..
65 6,5% 7,2
+18% +10%
Clients (thousand) Market share Products per
SICAVs client
5.636 5.820 3,8
+25% +24% 23,6 yrs
Loans Deposits Churn rate (%)
(million €) (million €)
30
SME’s
… and built a unique and highly
competitive value proposition
81 50 +21%
+12% +31% 8bn€
Clients (thousand) Operating income Credits and loans
(million €)
5,3 76% 162
Products per client Remote SME centers
transactions (%)
31
In a nutshell, a business model that will
continue delivering value
Evolution of EPS (in €)
0,8
0,7
0,6
0,67
0,5
0,4
0,3
0,2 0,21
0,1
0
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08
32
Revenues confirm the
soundness of our strategic
options
+11,5% 500M€
Net Interest Income Ordinary Income
excl. dividends +4,9%
33
Net Interest Income has confirmed its
growing trend…
Quarterly Net Interest Income excl. dividends
(million €)
156,3
+11,8
150,8 151,4
141,9
139,8
2T07 3Q07 4Q07 1Q08 2Q08
34
… despite the reference rate context
Evolution of Euribor 3M and 12M (%)
5,33
Flat curve
4,48 4,93
4,13
J07 J A S O N D J F M A M J08
EUR3M EUR12M
35
Client margins are solid and show
considerable potential
Evolution of cost of liabilities and Evolution of client margins (%)
asset yield (%)
+8bps
5,31
+0,62%
4,69 1,99
+0,64% 3,97 1,91 1,90
1,87
1,85
3,33
2Q07 3Q07 4Q07 1Q08 2Q08 2Q07 3Q07 4Q07 1Q08 2Q08
Cost of liabilities Asset yield
36
Investment spreads are being
thoroughly managed
Quarterly spread of the new Average quarterly spread of
production of mortgage loans (%) client credit and loans (%)
+10%
7bps
0,79
0,81
0,72
0,71
0,60 0,59
0,51
2Q07 3Q07 4Q07 1Q08 2Q08
2Q07 2Q08
37
Client deposits have financed
selective growth of credit
Quarterly credit and loans growth (million €)
1.776
1.629
1.296
1.225
855
607
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08
38
Costs maintain a decreasing pattern
Costs inter-annual growth rate (%)
20,7
+13,1
19,3
-7,6 vs Dec
18,2
16,5
13,1
11,9
1Q07 2Q07 3Q07 4Q07 1Q08 2Q08
39
Provisioning effort has been kept at
similar levels
Evolution of provisions (million €)
10,6
13,2
33,0
39,1
16,5
Jun 07' Jun 08'
Generic Specific Voluntary
* Includes 8M€ reduction of generics limit in 2007
40
Results have shown resilience
Comparable quarterly net income (million €)
77,0
64,0 62,8
60,4
48,1
2Q07 3Q07 4Q07 1Q08 2Q08
* One off items 2008: voluntary provisions
* One off items 2007: Sale of 50% BK SV, non recurrent costs, incorporation of 50% BKCF, reduction of the maximum limit of the
generic provision, synthetic securitization of the first equity pieces.
41
Agenda
Bankinter maintains its privileged asset
quality
Bankinter holds comfortable solvency
levels, consistent with its risk profile
Bankinter’s business model has enhanced
value under current market context
Revenues have increased, thus confirming
the soundness of our strategic options
Fuente: CNMV