Liberbank : Presentación de resultados del tercer trimestre de 2018

Financial Results 3Q18

October 30th 2018

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Operating profit

• (1) Equos index as of September2018

• (2) Including amortization

•  Liberbank continues showing strong commercial dynamics while significant growth potential exists.

•  Loan performing book increased € 2.1bn YoY (+10.6% YoY):

  •  Mortgages: +3.9% YoY.

  •  Corporates: +13.3% YoY.

  •  Consumer & others: +5.7% YoY.

•  Customer funds increased € 1.4bn YoY (+5.1% YoY). Mutual funds keep growing in a volatile market (+2.0% QoQ, +27% YoY) with new products launched together with JP Morgan.

•  Customer satisfaction continues improving and remains above the sector(1).

•  NII increases +10.9% in the 9M18 vs 9M17. Liberbank expects to surpass the 2018 target of +10% vs 2017.

•  Recurrent fees improve +4.4% YoY supported by mutual funds, insurance business and banking activity.

•  Operating costs(2) decreased 6.6% in 9M18 vs 9M17. Reorganization of the commercial network continues (number of branches reduced by 8% in the 3Q18).

•  Recurrent cost of risk stands below 25bp in the 3Q18 in line with guidance.

•  Net income reached € 108m in the 9M18.

•  NPAs down -7% QoQ in a seasonally weak quarter and -35% during the last 12 months, representing a reduction of € 1,895m. NPA ratio drops to 14.0%, 90bp down QoQ and 761bp YoY.

•  NPL ratio falls to 6.15%, 60bp down QoQ and 437bp YoY. NPL entries are down 25%

  Asset qualitySolvencyOthers

  • (1) Incorporating the full impact from IFRS-9

  • (2) Subject to AGM and regulatory approvals

  in the 9M18 vs 9M17.

•  Gross real estate asset disposals of € 144m in the quarter, of which 56% was land.

•  NPA coverage remains stable at 50% as of Sep18, excluding write offs.

•  Texas ratio drops from 81% to 77% QoQ, already below the target for 2018YE.

•  CET1 ratio fully-loaded(1) stands at 12.1% supported by organic capital generation and despite market volatility.

•  CET1 phased-in ratio stands at 13.9% and total capital ratio at 15.4%, well above regulatory requirements.

•  Target to migrate to IRB models, starting with the mortgage book.

•  Liberbank plans to amortize the treasury shares, mainly arising from the CoCos conversion (27m shares, 0.88% of the outstanding shares)(2).

•  Liberbank maintains a strong liquidity position, LCR ratio stands at 219% and LtD at 96% as of Sep18.

Agenda 2. Results analysis

• 3. Asset Quality

• 4. Solvency

• 5. Liquidity and Fixed Income portfolio

• 6. Closing remarks

• 7. Appendix

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