Earnings presentation 1Q20

May 4th 2020

Disclaimer

This document was prepared by LIBERBANK, S.A., ("LIBERBANK") and is presented exclusively for informational purposes. It is not a prospectus and does not constitute an offer or recommendation to invest.

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2

1Q 2020 - Highlights

Strong core business

Recurrent NII

Fee Income

+8%+10%

YoYYoY

Conservative loan book

Underlying CoR (2)Total CoR (2)

23 bps

49 bps

1Q20

1Q20

  • 23m of Covid19 provisions:
    • 16m Loans + € 7m REOs

Rigorous cost policy

OPEX

Efficiency (1)

64% 58%

1Q19 1Q20

Resilient Capital

CET1 FL

CET1 FL

MDA buffer

buffer

13.0%

€791m

275 bps

Caser(3)

+17 bps (CET1) & 37bps (Total)

3

  1. Like for Like comparison. Removing SRF contribution from 1Q19 and non-recurrent NII from 1Q20

(2) LLP over average loans (3) Impacts will take place once Caser transaction is approved by the regulator.

1Q 2020 - Highlights

Commercial activity

  • Steady growth in volumes with limited effects from Covid-19 in the quarter.
    • Total performing book increased +6.8% YoY and +0.7% QoQ driven by mortgages (+1.2% QoQ) while corporates fell 1.9% QoQ due to the amortization of some large tickets.
    • Customer funds increased +3.3% YoY and +0.3% QoQ.
      • On balance sheet increased +1.4% QoQ.
      • Mutual funds fell 4.6% outperforming the sector by c.6 percentage points. Net inflows in the quarter are €126m, (+56% vs 1Q19).
    • Strengthening remote and digital capabilities. High convenience offered to clients with total availability of services.

Profitability

  • Recurrent NII increased +8% YoY and +2% QoQ supported by lower funding cost and lending growth that more than offset the 1Q seasonality and lower contribution from the fixed income portfolio.
  • Recurrent fees increased +10% YoY and +1% QoQ supported by off balance sheet products and increased banking activity.
  • Opex down 4.5% YoY while reinforcing digital channels.
  • Underlying cost of risk is 23bp (49bp incl. Covid) in the quarter.
  • The bank booked generic provisions of € 23m (€16m loans and €7m REOs) as precautionary measures.

4

1Q 2020 - Highlights

Asset Quality

  • NPA ratio drops from 8.6% to 8.2% QoQ. Texas ratio drops to 52%.
  • NPL ratio falls from 3.3% to 3.2% in the quarter.
  • Gross real estate asset outflows of € 100m, of which 61% is land.

Solvency & Liquidity

  • CET1 ratio fully-loaded(1) stands at 13.0%, +52bp YoY and flat QoQ, as market impact and lending growth are offset by organic generation, NPAs reduction and 2019 dividend added back to capital.
  • Caser transaction is not included in the capital ratios reported. Positive impact of +17bps and +37bps in CET1 and total capital fully loaded respectively. Additionally, Liberbank will receive a € 43m cash payment maintaining the current commissions scheme for distribution (2).
  • TBVps increased by € 0.06 to € 0.99, +7% YoY (incl. share buy back programme).
  • Strong liquidity position. LCR ratio stands at 248%, NSFR at 112% and LtD at 99%.

(1)

CET1 FL incorporates the full impact of IFRS-9 (28pb) and the full net profit 2019 and 1Q20. It deducts the approved and executed but not cancelled share buy back programme as

5

well as 71 bps of software intangible deductions.

(2)

Subject to certain suspensive conditions as competition authority approvals that are expected to be met in the coming months.

1. Covid-19 response

Agenda 2. Commercial Activity

  1. Results analysis
  2. Asset Quality
  3. Solvency
  4. Liquidity and Fixed Income portfolio
  5. Appendix

6

COVID-19 Liberbank's reponse (I/II)

Employees

Clients

Business

Remote work for 90% of HQ

Branch attention under

Robust technology allows

and c.50% branch network.

appointment.

the bank to serve our

customers remotely.

Liberbank's employees are

Pension payments

contributing to the pandemic

advancements.

Strengthened IT security.

through different personal

initiatives.

Actively contacted business

100% of branch ATMs

clients to understand their

available.

needs and facilitate specific

products like the ICO Lines.

Contactless ATM withdrawal

enabled.

Branch Management

Contact center. Avg weekly queries

20%

March -April27,500

RetailBusiness

20%60%

100%

2x

Pre-Covid15,000

Open Partially open Closed

7

COVID-19 Liberbank's reponse (II/II)

Credit lines

57%

62%

51%

60%

1,264

1,261

1,219

50%

Very low use

481

40%

rate increase

540

594

by our clients

30%

20%

at quarter

724

780

625

10%

end.

0%

31 Dec 19

31 Mar 20

28 Apr 20

Drawn (€m)

Undrawn (€m)

Usage (%)

State guaranteed lines - ICO (1)

  • Two tranches approved so far, worth €40 bn.
  • Take up for Liberbank is €719m, 1.7% mkt share.
  • It could add up to c. €958m of total lending, 17% of corporates loan book.

1st tranche use - 100%

2nd tranche use - 68%

Activity (1)

€ 114 m

April

Residential

origination

mortgage

€ 14 m

+3% AuMs

April net

vs end - March 2020

Mutual funds

Inflows

Moratorium (1)

Liberbank offers relief measures to support households via "public moratorium" and "private moratorium".

Residential

€290m requested c.2% of the book

mortgage

Consumer €6m requested < 1% of the book

loans

(1) Data as of April 30th.

8

1. Covid-19 response

Agenda 2. Commercial Activity

  1. Results analysis
  2. Asset Quality
  3. Solvency
  4. Liquidity and Fixed Income portfolio
  5. Appendix

9

Customer funds

Total Customer Funds breakdown. € m

Customer Funds € bn

€ m

1Q19

4Q19

1Q20

QoQ

YoY

Customer Funds

29,988

30,900

30,990

0.3%

3.3%

(exc. Public Institutions).

+2.9%

YoY

Customer Funds on Balance Sheet

24,313

24,675

25,018

1.4%

2.9%

Public Institutions

1,904

1,826

2,096

14.8%

10.1%

29.1

28.9

Retail Customer

22,409

22,849

22,923

0.3%

2.3%

28.1

Demand deposits

16,629

18,066

18,559

2.7%

11.6%

6.2

6.0

5.7

Term deposits

5,778

4,783

4,363

-8.8%

-24.5%

Other

1

0

0

na

na

5.8

4.8

4.4

Off-balance sheet

5,675

6,225

5,972

-4.1%

5.2%

18.1

18.6

Mutual funds

3,239

3,772

3,597

-4.6%

11.0%

16.6

Pension Plans

1,460

1,481

1,420

-4.1%

-2.7%

Insurance Funds

976

972

955

-1.7%

-2.1%

Mar 19

Dec 19

Mar 20

Number of branches

644

582

579

-0.5%

-10.1%

Demand deposits

Term deposits

Off-balance sheet

Customer funds per branch (€ m)(1)

43

49

49

0.8%

14.1%

  • Customer funds on balance sheet remain strong with customer deposits paying almost zero across the client base.
  • Mutual funds' assets under management outperformed the sector by c.6 percentage points in the quarter.

Note: customer funds do not include repos

(1) Adjusted by agencies funds.

10

Off balance sheet products

Mutual funds AuMs. € bn.

3.6

3.0

3.2

2.4

1Q17

1Q18

1Q19

1Q20

Mutual funds fee income

18%

16%

20%

14%

18%

16%

11%

14%

12%

9

10%

8%

6

7

6%

5

4%

2%

0%

1Q17

1Q18

1Q19

1Q20

Mutual Funds fees (€m) (%) over recurrent fees

Insurance premiums. € m.

58

60

52

11

12

10

17

15

16

26

30

33

1Q18

1Q19

1Q20

Life

Other

Home

Recurrent insurance income (1) (€ m)

13

14

12

1Q18

1Q19

1Q20

  • Mutual funds fees represent 18% of total recurrent fees in the 1st quarter, up 7 pp since 2017.
  • Net inflows in the quarter are €126m, up 56% versus same quarter last year.
  • Insurance premiums are up 5% YoY, lead by strong performance in life and home insurance which are up 12% and 3% respectively.

(1) Excludes dividend received in 1Q19

11

Lending

Performing loan book breakdown. Gross € m

Performing loan book growth. YoY

€ m

1Q19

4Q19

1Q20

QoQ

YoY

6.6%

Public sector

2,280

3,174

3,307

4.2%

45%

Loans to businesses

5,745

5,690

5,581

-1.9%

-2.9%

4.5%

Real Estate Developers

321

300

341

13.8%

6.3%

Other Corporates

-2.8%

-3.4%

2.6%

5,424

5,390

5,240

Loan to individuals

14,462

14,972

15,130

1.1%

4.6%

Residential mortgages

13,640

14,091

14,254

1.2%

4.5%

Consumer and others

822

881

876

-0.6%

6.6%

Other loans

325

351

346

-1.6%

6.3%

-2.9%

Total performing book

22,812

24,186

24,364

0.7%

6.8%

Total performing book (exc

Total (exc

Corporates

Consumer &

Residential

20,532

21,013

21,056

0.2%

2.6%

Public sector)

others

mortgages

Public sector)

  • Good commercial momentum leads to +6.8% YoY growth (+2.6% excl. public institutions).
  • Mortgage book maintains the good pace with +4.5% YoY growth while "consumer and others" grows at +6.6% YoY.
  • Corporate book falls in the quarter due to the amortization of some large tickets.

12

Lending: new production

Total lending (excl. public sector). € m

Residential mortgage. € m

1,015

+3%

YoY

1,1531,187

+13%

YoY

511

158

March

203

394

451

Feb.

114

150

Jan.

1Q18

1Q19

1Q20

Consumer lending. € m

-8%

YoY

76

25

March

73

83

25

Feb.

25

9

Jan.

1Q18

1Q19

1Q20

April 20

1Q18

1Q19

1Q20

April 20

Corporates. € m

-3%

750

YoY

599

268

March

185

618

Feb.

546

146

Jan.

1Q18

1Q19

1Q20

April 20

  • Total new origination excluding public sector is +3% YoY, with no ICO lines signed in the quarter.
  • Activity continues in April, corporates origination boosted by ICO credit lines.

13

Mortgage portfolio

Total book. Key metrics

  • 15% of the book comes from public employees.
  • 27% affordability* ratio in the portfolio.
  • 93% is first home and 95% are domestic customers.
  • 4% of the book has LTV > 80% versus 15% in the sector.
  • Average LTV in the book is 51%.

Mortgage NPL Ratio

Geographic breakdown

13% 12%

6%

0%

26%

4%

3.5%

8%

20%

2.4%

4%

Lbk

Sector

2018 - 2020 new origination.

  • At least one of the borrowers has a permanent job in 99% of the contracts.
  • 69% of mortgage contracts have two or more borrowers.
  • All risk assessment and management processes are performed by bank staff independently of the origination channel.

Metrics at origination

69%26%62%

Loan to value Affordability*

Fixed rate

(*) Affordability ratio: Mortgage payment over total monthly income.

14

Note: 2018-20 origination LTV and affordability are calculated at origination.

Performing loan book

Performing book breakdown

Business

Public

Residential mortgage

Consumer Other

sector

bn

24.3€

23%

14%

Low risk business portfolio is well diversified:

Sector

Weight (%)

Industry & manufacturing

3.2%

Wholesalers & retail

3.0%

Food industry

2.8%

Services & education

2.2%

Utilities

1.8%

Real Estate

1.6%

Logistics

1.5%

Financial activities

1.4%

Tourism, hotels & restaurants

1.4%

Healthcare

0.9%

Other

3.1%

  • Negligible exposure to Oil & Gas and airlines industries, €6 m total.
  • Hotels, restaurants and tourism account for 1.4% of the

loan book.

59%

3%

2%

Liberbank has a very conservative consumer loan book:

  • Pure consumer loans amount to € 620m, 2.5% of the book.
  • 1.15% market share, well bellow natural market share.
  • No open market agreements for direct lending.
  • Negligible revolving credit, € 23m.
  • Average yield of 6.5%, portfolio is composed of mostly pre approved loans to existing clients.

(*) Other included: Auto industry, telecommunications, asset management, among others.

15

Business portfolio

Geographic breakdown

Business book breakdown (1)

10%

8%

4%

7% 6%

Large corporates (> €150m)

1%

28%

32%

9%17%

2%

3%

Corporates (€7m - €150m)

22%

SMEs (< €7m)

Self employed

37%

Real Estate

Businesses age distribution

35%

30%

25%

20%

15%

10%

5%

0%

0-1 Years 1-5 Years 5-10 years 10-15

15-25

25-50 > 50 Years

Years

Years

Years

  • 76% of the book comes from home regions and Madrid.
  • Low volume of restructured loans
    (€ 381m), 1.5% of the loan book, out of which 65% are NPLs.

(1) Breakdown by turnover volume.

16

Digital transformation

Consumer

loans

Mortgage

Stocks

Digital

1Q20

20%

7%

56%

Notable growth

Sales/total

1Q19

14%

2%

46%

wary CAPEX

Active

New digital

Wallet /

Digital

clients

Bizum

1Q20

43%

c. 10,000

>50,000

Multichannel

Clients

38%

in 1q20

clients

client acquisition

1Q19

Payments

Wires

Queries

(transactions)

Activity

1Q20

78%

85%

1 Million

Increased efficiency

1Q19

73%

82%

& service

Remote managers

  • Capabilities to sell all retail products remotely.
  • Increased efficiency both in terms of sales and costs.
  • Improved NPS and customer support of the service.

Online sales capabilities

  • Well advanced remote mortgage origination platform. Launch expected in Q3.
  • Consumer loan, credit card and accounts 100% online in place.
  • Off balance sheet products.

17

1. Covid-19 response

Agenda 2. Commercial Activity

  1. Results analysis
  2. Asset Quality
  3. Solvency
  4. Liquidity and Fixed Income portfolio
  5. Appendix

18

Net Interest Income

NII performance. € m

NII YoY evolution. € m

Recurrent

+8%

YoY

137

14

117

116

116

121

122

114

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

Recurrent

Non-recurrent

14

-

2

3

4

137

117

120

123

114

114

NII 1Q19

Performing

Retail

Wholesale

Others (*)

NII 1Q20

Loan Book

funding

funding

  • Recurrent NII increased +8% YoY supported by loan book and lower wholesale and retail funding cost. Quarterly comparison (+2% QoQ) is affected by the 1Q seasonality and lower contribution from the fixed income portfolio that is more than offset by lower funding costs and performing loan book.
  • Good commercial activity in the 1st quarter, increasing Euribor, lower cost of wholesale funding and a stable loan book allow for a supportive net interest income in 2020.

(*) Includes mainly the DGF moratory interest.

19

Net Interest Income: Margins

Margin performance (%)

Customer loan yield and cost funds (%)

1.59

1.64

1.63

1.59

1.62

1.59

1.61

1.58

1.57

1.26(1)

1.17

1.16

1.18

1.14

1.15

1.13

1.12

1.13

1.10

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

Customer spread

Net Interest Margin

Recurrent Net Interest Margin

1.71

1.78

1.70

1.72

1.69

1.71

1.68

1.66

1.64

1.64

1.69

1.63

1.69

1.65

1.68

1.64

1.63

1.61

0.05

0.05

0.06

0.06

0.06

0.06

0.05

0.04

0.02

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

Customer loan yield

Customer loan yield (performing)

Cost of customer funds

  • Liberbank has been able to maintain stable margins despite lower reference rates.

(1) Explained by extraordinary income of € 14m from the DGF dispute.

20

Note: NIM = NII / ATAs

Net Interest Income: Asset yields

Quarterly yields on lending. Basis points (1)

Yield (bps)

1Q19

2Q19

3Q19

4Q19

1Q20

Total Book (Back book)

169

171

168

166

164

Back book (Exc. Public sector)

173

176

175

177

174

Front Book

149

149

124

190

186

Front Book (Exc. Public sector)

234

246

242

217

220

Mortgages (Back book)

128

133

136

135

133

Front Book

195

199

199

173

163

March mortgage front

SMEs (Back book)

233

238

232

231

226

book stood at

Front Book

260

271

254

263

266

171bps

(1) The above rates refer to the drawn amounts and reflect actual contribution to NII

  • Front book yields (excl. Public sector) stand 46 bp above back book.

21

Net Interest Income: Cost of funding

Term deposit cost performance (%) (1)

0.09

0.09

0.09

0.09

0.08

0.08

0.08

0.07

0.08

0.06

0.06

0.05

0.05

0.05

0.04

0.02

0.02

0.01

1Q18

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

Stock

New Production

Term Deposits. Maturity, cost and volume

1,597

0.89%

0.79%

0.69%

1,110

0.59%

841

779

0.49%

0.39%

0.29%

307

0.11%

0.19%

0.06%

0.07%

0.05%

0.09%

0.09%

-0.01%

2Q20

3Q20

4Q20

1Q21

> 1Q21

Maturities. Eur m

Cost of maturities

Maturities of the quarter:

  • 1.7bn of term deposits at 8 bps.
  • 88m covered bonds at 118 bps.

Capital Markets Maturities (€ m)

2.08%

1.41%

1.50%

0.38%

0.17%

400

370

310

1,200

3,050

2020

2021

2022

2023

> 2023

Maturities

Cost of maturities

3.00%

2.50%

2.00%

1.50%

1.00%

0.50%

0.00%

-0.50%

-1.00%

(1) Euro currency

22

Fee Income

Fee income performance (€ m)

Fee income breakdown

Recurrent

+10%

YoY

55

650

45 45 45

45

45

49

50

45

1Q19

2Q19

3Q19

4Q19

1Q20

Recurrent fee income

Extraordinaries

€ m

1Q19

4Q19

1Q20

QoQ

YoY

(%)

(%)

Total Fees

45

55

50

-9.6%

9.6%

Recurrent net fees

45

49

50

1.0%

9.6%

Banking fees

27

29

29

-2.3%

6.8%

Non-banking fees

19

20

21

5.7%

13.6%

Mututal Funds

7

9

9

2.7%

25.9%

Insurance

10

10

10

3.2%

0.0%

Others*

2

2

2

32.9%

42.2%

Non recurrent fees

0

6

0

na

na

Note: Others include brokerage and pension funds among others

  • Recurrent fees increase +10% in 1Q20 vs 1Q19.
    • Non-bankingfees increase +14% in 1Q20 vs 1Q19, supported by mutual funds +26%.
    • Banking fees show a positive trend mainly explained by increased activity.

23

Costs

Number of branches

1,379-10%

1,036

YoY

752

644

579

2010

2015

1Q18

1Q19

1Q20

Number of employee

-3%

6,838

YoY

5,143

4,007

3,802

3,701

2010

2015

1Q18

1Q19

1Q20

Costs performance. € m

-4.5%

99

YoY

95

11

10

30

26

59

58

1Q19

1Q20

Personnel costs

Admin costs

Amortizations

Efficiency (%) (1)

1Q19

1Q20

Cost to Income

64%

58%

Cost to Income (exc. Trading)

66%

60%

  • Operating expenses fall by 4.5% YoY supported by administrative expenses and personnel costs.
  • Cost to income ratio keeps improving.
  • Liberbank keeps investing in restructuring the branch network and in digital transformation of the bank.

(1)

Like for Like comparison. Removing SRF contribution from 1Q19 and non-recurrent NII from 1Q20

24

Impairments

Quarterly Cost of Risk (1)

49

COVID 19

25

25

25

24

23

1Q19

2Q19

3Q19

4Q19

1Q20

Underlying CoR

Total CoR

Quarterly loan loss provisions

40

35

31

30

25

16

20

15

10

14

16

16

15

14

5

0

1Q19

2Q19

3Q19

4Q19

1Q20

Underlying LLP (Eur m)

Generic LLP (Eur m)

  • Liberbank booked a € 16m generic credit provision, as a precautionary measure.

(1)

CoR: annualized loan loss provisions divided by average loans.

25

P&L

Var. QoQ

Var. YoY

€m

1Q19

2Q19

3Q19

4Q19

1Q20

€m

%

€m

%

Interest Income

134

138

137

140

154

13

10%

20

15%

Interest Cost

-20

-21

-20

-20

-17

3

-13%

3

-15%

NET INTEREST INCOME

114

116

116

121

137

16

13%

23

20%

Dividends

5

0

0

2

0

-2

-89%

-5

-96%

Results from equity method stakes

2

21

3

4

0

-4

-95%

-2

-89%

Net fees

45

45

45

55

50

-5

-10%

4

10%

Gains on financial assets & others

5

12

5

2

6

4

231%

1

16%

Other operating revenues/(expenses)

-21

-5

-11

-41

-15

26

-63%

6

-27%

GROSS INCOME

150

188

159

142

177

35

25%

27

18%

Administrative expenses

-89

-85

-88

-79

-85

-6

8%

4

-4%

Staff expenses

-59

-59

-60

-58

-58

0

0%

0

-1%

General expenses

-30

-26

-27

-20

-26

-6

30%

3

-11%

Amortizations

-11

-11

-11

-11

-10

0

-3%

1

-6%

PRE PROVISION PROFIT

51

93

60

53

82

29

55%

31

61%

Provisions

-6

-7

-5

-7

-4

3

-44%

2

-30%

Impairment on financial assets

-14

-16

-16

-15

-31

-15

101%

-17

126%

Impairment losses on other assets

0

-2

-2

-1

-2

-1

197%

-2

nm

Other profits or losses

-3

-6

-5

-18

-17

1

-5%

-14

nm

Discontinued operations (net)

0

0

0

0

0

0

-150%

0

nm

PROFIT BEFORE TAXES

28

62

32

11

27

16

138%

-1

-3%

Taxes

-7

-10

-8

3

-8

-11

nm

-1

7%

NET INCOME ATTRIBUTABLE

21

52

24

15

19

5

34%

-2

-8%

26

1. Covid-19 response

Agenda 2. Commercial Activity

  1. Results analysis
  2. Asset Quality
  3. Solvency
  4. Liquidity and Fixed Income portfolio
  5. Appendix

27

NPLs

NPL evolution. € m

-€2,393m

(-75% vs

3,205

2016)

1,142

813812

2016

2018

2019

1Q20

NPL ratio market evolution (1)

13.9%

2nd lowest

11.3%

among

8.6%

peers (2)

9.1%

6.8%

8.4%

7.8%

5.8%

5.7%

5.4%

5.2%

4.8%

4.8%

6.4%

4.9%

4.5%

4.1%

3.9%

3.3% 3.2%

2016

2Q17

2017

2Q18

2018

1Q19

2Q19

3Q19

2019

1Q20

Liberbank

Sector

NPLs coverage.

NPLs Mix

113%

Real Estate

Developers

9%

Other

17%

49%

51%

44%

23%

Corporates

31%

Mortgages

43%

Total

Real Estate

Corporates &

Residential

Other

Developers

SMEs (exc

mortgages

individuals

RED)

(1)

NPLs over gross loan book (not including repos nor off-balance sheet assets).Source: Bank of Spain. February data.

28

(2)

Spanish listed Banks as of most updated available figures.

Foreclosed assets

Foreclosed assets evolution (gross book value € m) (1)

28

133

1,462

1,357

2019

Entries

Sales & Other

1Q20

Turnover rate (1), (2)

40%

35%

29%

30%

25%

25%

22%

20%

15%

10%

5%

0%

1Q18

1Q19

1Q20

Outflows mix. 1Q20 (1)

Foreclosed assets breakdown

Gross

NBV

NBV Mix

Coverage

(€ m)

Debt

Residential

373

209

29%

44%

100 million Euros of total outflows in the quarter

Commercial RE

185

121

17%

35%

Residential

Property 26%

Building under construction

254

133

19%

48%

Land

545

255

35%

53%

Land 61%

CRE 3%

Total

1,357

718

100%

47%

Building under

construction

10%

(1)

Gross debt excluding investment properties

29

(2)

Turnover = Annualized outflows over average foreclosed assets

NPAs. Summary

Gross NPA. € bn

6.2

3.24.2

1.82.9

1.12.2

3.0

0.8

2.5

1.9

1.4

2016

1Q18

1Q19

1Q20

REOs

NPLs

NPA ratio(1)

24.0%

16.9%

11.4%

8.2%

2016

1Q18

1Q19

1Q20

NPL ratio

13.9%

7.8%

4.5%

3.2%

2016

1Q18

1Q19

1Q20

Texas ratio(2)

127%

87%

66%

52%

2016

1Q18

1Q19

1Q20

30

  1. NPA ratio calculated as NPLs & foreclosed assets over gross loans and foreclosed assets (not including repos)
  2. Texas ratio calculated as gross NPLs & foreclosed assets over equity (excl. minority interests) and provisions related to NPLs & foreclosed assets

1. Covid-19 response

Agenda 2. Commercial Activity

  1. Results analysis
  2. Asset Quality
  3. Solvency
  4. Liquidity and Fixed Income portfolio
  5. Appendix

31

Solvency

CET1 fully-loaded performance (1) (2)

11

13.0%

13

13.0%

8

17

CET1 Ratio

1Q20

Change in

Valuation

Dividend

CET1 Ratio

Dec 19

Earnings

RWAs

adj. & others

2019

Mar 20

Upside to CET1 and total capital fully-loaded

  • Caser transaction: +17bps and +37bps in CET1 and total capital fully loaded.(3)
  • Market valuation as of 30th April (EDP and fixed income portfolio) +12bps.
  • EC package, pending details and impact calculation:
    • Software-intangible current deduction of € 123m (71pb).
    • SME and infrastructure supporting factor: +3bps.
  • 2020 Organic capital generation.
  • IRB models approval.
  • IFRS9. CET1-FL incorporates the full impact (28pb).
  • CET1 ratio fully-loaded stands at 13.0%, +52bp YoY and flat QoQ, as market impact and lending growth are offset by organic generation, NPAs reduction and 2019 dividend added back to capital ratios.
  • We expect potential upside to our CET1 due to Caser transaction, market evolution, recent legislative initiatives and organic generation among others.

(1)

CET1 FL incorporates the full impact of IFRS-9. It includes full net profit 2019 and 1Q20. It fully deducts €123m of intangibles from software.

32

(2)

The solvency ratios deduct 61.6 million treasury shares acquired under the share repurchase program approved in December19.

(3)

Caser, subject to final regulatory approval.

Solvency

Capital buffers (1) (2)

€791m

275 bps

CET 1 FL buffer

MDA buffer

(3)

(3)

15.8%

14.5%

13.0%

1.6%

1.6%

2.6%

2.0%

1.4%

14.2%

2.5%

13.0%

4.5%

8.41%

2020 SREP

Fully Loaded

Phased In

Requirement

CET 1 Pillar 1

CET 1 CCB

CET 1 P2R

AT1

T2

TBVps (4)

+7%

YoY

0.98

0.99

0.01

0.93

0.01

0.88

0.97

0.99

0.92

0.88

Dec 18

Mar 19

Dec19

Mar 20

TBVps

Dividend

  • As of March20, Liberbank has a 457 bp (€ 791m) buffer over the SREP-CET1 requirement(3) and 275bp MDA buffer(3).
  • The Board has established that the new proposed application of 2019 results, which will be submitted for approval by a new general shareholders meeting to be held within the legal term prescribed, is to apply the 2019 results in full to voluntary reserves, which means the cancellation of the dividend of € 22m against 2019 results, without prejudice to the possibility of eventually deciding to propose to such general shareholders meeting a distribution following a reevaluation of the situation when the uncertainties caused by the COVID-19 crisis disappear.

(1)

CET1 FL incorporates the full impact of IFRS-9. It includes full net profit 2019 and 1Q20. It fully deducts €123m of intangibles from software.

33

(2)

The solvency ratios deduct 61.6 million treasury shares acquired under the share repurchase program approved in December19.

  1. Applying P2R (CRD-V) flexibility. Maximum distributable amount calculated as total capital phased in minus total SREP requirement.
  2. TBVPs deducst 61.6 million treasury shares that are intended to be cancelled.

1. Covid-19 response

Agenda 2. Commercial Activity

  1. Results analysis
  2. Asset Quality
  3. Solvency
  4. Liquidity and Fixed Income portfolio
  5. Appendix

34

Liquidity position

Liquidity position. € bn

Liquidity ratios

5.1

10.7

Ratio

1Q19

4Q19

1Q20

5.7

LtD

95%

100%

99%

LCR

265%

221%

248%

NSFR

123%

113%

112%

Liquid assets (exc.

Covered Issuance

Total

used collateral and

Capacity

with haircuts)

35

Wholesale funding

Wholesale funding. Breakdown (€ bn)

Wholesale Funding. Price Evolution (%)(1)

€ 1.5bn

0.35%

0.32%

Money

0.28%

Markets

€ 5.3bn

12%

Capital

Markets 42%

ECB 45%

Mar-18

Mar-19

Dec-19

€ 5.7bn

1.10%

-0.49%-0.47%

Money Markets

ECB - TLTRO2 Capital Markets

1. Price at the end of the period Source: Liberbank Treasury (inventarios)

36

Fixed Income portfolio

Fixed income portfolio. Evolution (€ bn) (1)

9.7

9.6

9.1

9.1

Dec-18

Mar-19

Dec-19

Mar-20

(1) Based in acquisition cost

Fixed income portfolio. Issuer breakdown

€0.9bn Private

Debt 10%

Public

Debt 90%

€8.2bn

  • 1.7bn of SAREB

bonds included.

Fixed income portfolio. Breakdown (2)

Portfolio

Amount

Yield

Duration

(€ bn)

Fair value through OCI

0.4

1.13%

0.53

Amortised cost

8.7

1.33%

3.14

Total

9.1

1.32%

3.04

(2) Weighted average duration in years. Yields EOP.

37

1. Covid-19 response

Agenda 2. Commercial Activity

  1. Results analysis
  2. Asset Quality
  3. Solvency
  4. Liquidity and Fixed Income portfolio
  5. Appendix

38

Policy support

Spanish Government

  • Government guarantees ("ICO Lines): Up to €100bn government backed loans for Corporates and SMEs, €40bn have already been approved. Coverage by the State stands between 60% and 80%. The full €100bn would represent c.25% of current business loan book in Spain and c.10% of GDP.
  • Payment holidays: for customers in need for mortgages, consumer loans and SMEs.
  • ERTEs: Facilitation of temporary layoffs or working hours reduction, remunerated by the state, up to 70% of the salary with certain limitations.
  • Salary support: Mainly aimed at unemployed, self-employed and house workers.
  • Tax payment delays: Mainly aimed at SMEs and self employed. Maximum of 6 months as of now.

European Union

  • Corona response: € 37bn investment supporting SMEs and health sector.
  • European investment bank: € 25bn guarantees program for viable but vulnerable companies.
  • Working capital. € 8bn of liquidity lines for c. 100k SMEs across Europe.
  • SURE Project: € 100bn fund to help affected companies and employees across Europe, under discussion.

Regulators

•

Pandemic Emergency Purchase Program: Envelope of €750 bn until the end of 2020 with additional

assets included and capital key flexibility.

•

TLTRO III: Increased eligible amount, 50bps cost decrease for one year & relaxed collateral requirements.

•

Liquidity and solvency relaxation: LCR allowed to drop below 100%, Banks allowed to operate bellow P2G,

AT1 and T2 allowed to cover P2R.

•

ECB has given flexibility in prudential treatment of loans backed by Covid-19 measures, and has asked not

to apply excessive procyclical measures when applying IFRS 9.

•

Stress tests and NPE strategy: Both postponed, NPE strategy until further notice and Stress test until

2021.

39

Note: This is a representation of the main measures announced by public entities, although there could be some additional ones not reflected.

Balance Sheet

Interbank (€ 2.2 bn)(1)

Net lending

(€ 25.3bn)

Fixed Income

(€ 10 bn)

Foreclosed Assets (€ 0.7bn) (3)

DTAs (€ 1.8bn)

Other (€ 2.0bn) (2)

Assets € 42.9 bn

(1)Interbank include cash and interbank deposits

Investments (€ 0.9bn)

Customer

deposits

(€ 25.0bn)

ECB (€ 5.7bn)

Long term funding (€ 1.5bn)

Interbank & repos (€ 1.6bn)

Covered bonds

(€ 3.4bn)

Tax liabilities (€ 0.1bn) &

Rest (€ 2.1bn)(4)

Equity (€ 3.1bn)

Liabilities & Equity € 42.9 bn

Demand deposits

81%

Term deposits

19%

Marketable Securities (€ 0.4bn)

(2)Rest of assets include tangible and intangible assets and derivative hedging among others (3)Assets currently held for sale

(4)Rest of liabilities include provisions, accrued interests and micro-hedging among others

40

Shareholders and Book value

Shareholder base

Foundations (2)

Share, Book value and Tangible Book Value(1)

4Q19

1Q20

Share and liquidity:

# O/S shares (m) (2)

3,041

2,979

Last price (€)

0.34

0.14

Free Float

39.7%

23.4%

Corporación

Masaveu (1)

5.8%

Aivilo Spain SL

(4) 7.1%

Max price (€)

0.34

0.35

Min price (€)

0.27

0.12

Avg. traded volume (#shares m)

4.4

6.2

Avg. traded volume (€ m)

1.34

1.66

Market Capitalization (€ m)

1,019

415

Book Value:

Oceanwood (3)

DWS 3.2%

17.7%

BV. (€ m)

3,114

3,098

Norges 3.1%

(1)Includes Flicka Forestal, Corporación Masaveu and Fundación María Cristina Masaveu (2)Includes Fundación Caja Asturias, Fundación Caja Extremadura and Fundación Caja Cantabria (3)Includes stake through derivatives

(4)Includes Inmosan SA

Source: CNMV as of March 31st 2020

TBV. (€ m)

2,964

2,946

Ratios:

BVps (€)

1.02

1.04

TBVps (€) (2)

0.98

0.99

(1)Book value deducting intangible assets

(2)1Q20 deducts 61.6 million of treasury shares planned to be cancelled.

41

Institutional Investors & Analysts Contact

desarrollo.corporativo.relación.inversores@liberbank.es

+ 34 91 422 58 37

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Liberbank SA published this content on 04 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 May 2020 12:38:19 UTC