Earnings presentation 2Q20

July 30th 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

Main figures

Strong core business

Net Interest Income

Fee Income

(recurrent)

(recurrent)

+6.4%

+8.4%

1H20 vs 1H19

1H20 vs 1H19

Conservative loan book

Cost of Risk

Reinforced Coverage

53 bps

20 bps

NPLs

REOs

NPAs

+131bps

+217bps

+184ps

1H20

1H20 underlying

QoQ

QoQ

QoQ

Commercial dynamism

Mutual funds

Mortgage book

(performing)

+14.0%

+5.0%

YoY

YoY

Robust Capital

CET1 FLCET1 FL buffer MDA buffer

14.01%

€932m

400 bps

+103bps QoQ

3

1.

Summary

Agenda

2. Commercial Activity

3. Asset Quality

4.

Results analysis

5. Solvency

6.

Liquidity and Fixed Income portfolio

7.

Appendix

4

Highlights

Commercial activity

  • Positive commercial dynamics maintained despite Covid-19 outbreak.
    • Total performing book +7.4% YoY and +3.7% QoQ driven by mortgages +1.0% QoQ and corporates +9.9% QoQ.
    • Customer funds increased +5.0% YoY and +4.9% QoQ.
      • Mutual funds +14.0% YoY and +7.5% QoQ, outperforming the sector by 13 percentage points on a yearly basis.
      • On balance sheet funds +4.6% YoY and +5.0% QoQ.
    • Focus on digital transformation keeps supporting commercial dynamics. Mortgage sales originated by an online lead were 9.5% of total sales in the quarter. Consumer loans signed remotely were 30% in the quarter compared to 16% in 2019.

Asset quality

  • Non-performingloans decreased in the quarter to €806m. NPL ratio stands at 3.1% down from 3.2% last quarter.
  • NPL coverage increases by 131 bps in the quarter and it now stands at 50%.
  • Gross real estate asset outflows of €44m in the quarter, €145m in the year. Stock is down c.8% in the year despite Covid-19.
  • Foreclosed assets coverage increases by 217 bps in the quarter.
  • NPA ratio drops from 8.2% to 7.9% QoQ while coverage increases by 184 bps in the quarter standing at 50%.

5

Highlights

Profitability

  • Recurrent NII +6.4% 1H20 vs 1H19 supported by loan book growth, cheaper retail funding and lower wholesale funding costs that more than offset lower contribution from the ALCO portfolio and NPLs.
  • Recurrent fees +8.4% 1H20 vs 1H19. Strong commercial activity, specially in insurance and mutual funds.
  • Closing transaction of non-life insurance business between Caser and Helvetia.
  • Recurrent cost of risk remains under control at 20 bps in 1H20. Total cost of risk, including extraordinaries, of 53bps in 1H20.
  • Impairments of c. €40m conducted in the quarter on foreclosed assets, absorbing model updates and frontloading the expected impact of the Covid-19.

Solvency & Liquidity

  • CET1 ratio fully-loaded(1) stands at 14.01%, +127bp YoY and +103bp QoQ, supported by organic generation, market recovery, closing of insurance transaction (Caser), reduction of RWAs from state guaranteed loans and SME / infrastructure support factor.
  • TBVps increased to €1.02, +8.5% YoY (incl. cancellation of shares purchased in buyback program).
  • Strong liquidity position. LCR ratio stands at 233%, NSFR at 121% and LtD at 98%.

(1) CET1 FL does incorporate capital release from IFRS-9 and sovereign filter. It deducts the approved and executed but not cancelled share buy back program.

6

1.

Summary

Agenda

2. Commercial Activity

3. Asset Quality

4.

Results Analysis

5. Solvency

6.

Liquidity and Fixed Income portfolio

7.

Appendix

7

Customer funds

Total customer funds breakdown. € m

€ m

2Q19

1Q20

2Q20

QoQ

YoY

Customer funds € bn

Customer Funds

30,971

30,990

32,524

4.9%

5.0%

(exc. Public Institutions)

Customer Funds on Balance Sheet

25,129

25,018

26,277

5.0%

4.6%

30.3

Public Institutions

2,193

2,096

2,236

6.7%

2.0%

28.8

28.9

Retail Customer

22,936

22,923

24,041

4.9%

4.8%

6.2

5.8

6.0

Demand deposits

17,337

18,559

19,874

7.1%

14.6%

Term deposits

5,599

4,363

4,167

-4.5%

-25.6%

5.6

4.4

4.2

Off-balance sheet

5,842

5,972

6,247

4.6%

6.9%

Mutual funds

3,394

3,597

3,868

7.5%

14.0%

19.9

17.3

18.6

Pension Plans

1,467

1,420

1,437

1.2%

-2.0%

Insurance Funds

982

955

942

-1.4%

-4.1%

Number of branches

629

579

579

0.0%

-7.9%

Jun 19

Mar 20

Jun 20

Customer funds per branch (€ m)(1)

47

49

52

5.0%

11.6%

Demand deposits

Term deposits

Off-balance sheet

  • Total customer funds increased by €1.5bn in the quarter, the best 2nd quarter in the last 6 years. The majority of the growth comes from demand deposits at no cost and mutual funds.
  • Mutual funds positive net inflows of €87m in the quarter, 17% market share.
  • Customer funds per branch are up 11.6% YoY supporting our branch network restructuring initiatives.

Note: customer funds do not include repos

8

(1) Adjusted by agencies funds.

Asset management and insurance

Mutual funds AuMs. € bnInsurance premiums. € m

+16%

93

94

3.9

84

CAGR

3.4

23

24

21

3.1

34

39

42

Home

Life

2.5

28

32

28

Other

2Q17

2Q18

2Q19

2Q20

1H18

1H19

1H20

Mutual funds fee income

Recurrent insurance income(1) (€ m)

10

20%

25

15%

23

23

5

10%

5%

0

0%

1H18

1H19

1H20

  • Weight of mutual fund fees over total fee income keeps growing. Positive evolution of mutual fund portfolio profitability due to a more balanced mix.
  • Strong momentum on the residential mortgage business line supports insurance business growth.

(1) Excluded dividends received from Caser.

9

Lending: Performing loan book

Performing loan book breakdown. Gross

Performing loan book growth. YoY

€ m

2Q19

1Q20

2Q20

QoQ

YoY

Public sector

2,575

3,307

3,238

-2.1%

25.8%

Loans to businesses

5,771

5,581

6,132

9.9%

6.2%

5.2%

5.0%

Real Estate Developers

281

341

388

13.8%

38.0%

4.6%

Other Corporates

5,490

5,240

5,744

9.6%

4.6%

Loan to individuals

14,577

15,140

15,283

0.9%

4.8%

Residential mortgages

13,714

14,254

14,403

1.0%

5.0%

1.9%

Consumer and others

863

886

879

-0.8%

1.9%

Other loans

603

336

617

81.2%

2.0%

Total performing book

23,525

24,364

25,270

3.7%

7.4%

Total (exc Public sector)

Corporates

Consumer & others Residential mortgages

Total performing book (exc

20,951

21,056

22,031

4.6%

5.2%

Public sector)

  • Sustainable yearly growth across the entire portfolio of +7.4%.
  • Residential mortgage book posts positive yearly and quarterly growth, capturing market share, despite severe lockdown.

10

Lending: New lending

Total lending € m (excl. public sector)

3,559

2,287

2,330

2,372

1,271

1,177

2Q

1Q

1,015

1,153

1,187

1H18

1H19

1H20

Consumer lending. € m

171

154

128

88

81

52

2Q

73

83

76

1Q

1H18

1H19

1H20

Residential mortgage. € m

927

+12%

856

828

YoY

415

462

376

2Q

394

451

511

1Q

1H18

1H19

1H20

Corporates. € m

2,503

1,273

1,331

1,904

2Q

727

712

1Q

546

618

599

1H18

1H19

1H20

Total new lending in the quarter favored by state guaranteed loans, 68% of total new loans excl. public sector. Residential mortgages new lending is up +12% 1H20 vs 1H19 and +10% 2Q20 vs 2Q19.

Mortgage new lending market share of c. 6%(1) as of May 2020 in the year while maintaining strict lending policies in new production.

1) College of Spanish Notaries as of May.

11

Digital transformation

Consumer

loans

Mortgage

Broker

Digital sales

2Q20

30%

10%

73%

Notable growth

/total

2Q19

16%

1%

46%

wary CAPEX

Active

Playstation

Wallet /

Digital

clients

Bizum

Clients

2Q20

54%

c. 20,000

c. 90,000

Multichannel

48%

accumulated

client acquisition

2Q19

Users in 2Q20

Payments

Wires

Queries

(transactions)

Activity

2Q20

84%

89%

c. 1.2 Million

Increased efficiency

2Q19

75%

83%

& service

+20% QoQ

Continuous development of additional remote capabilities increasing customer experience and sales conversion.

"Junto a ti"

  • Remote managers service launched at the end of 2019.
  • Number of managers have increased by c.6X in the last quarter.
  • Access to c.10% of total active clients.

Liby

  • Artificial intelligence virtual assistant launched in 2Q20.
  • Capabilities to perform and automate specific administrative tasks.

12

1.

Summary

Agenda

2. Commercial Activity

3. Asset Quality

4.

Results Analysis

5. Solvency

6.

Liquidity and Fixed Income portfolio

7.

Appendix

13

Performing loan book

Sector (1)

Liberbank

Businesses loan book

Business

24.3%

42.6%

57.0%

Sector

Weight / total book

(%)

Industry & manufacturing

3.5%

Wholesalers & retail

3.2%

Food industry

2.8%

Services & education

2.3%

Utilities

1.8%

Real Estate

2.1%

Logistics

1.5%

Financial activities

1.2%

Tourism

1.4%

Healthcare

1.0%

Other

3.4%

  • Defensive book with little exposure to the most affected sectors.
  • C. 20% of total businesses loan book already has a state guarantee.
  • Tourism and restaurants exposure remains flat QoQ despite significant growth of loan book backed on state guarantees scheme.
  • Negligible exposure to airlines and oil industry.

Residential mortgage

Public sector

40.1%

5.7%12.8%

Consumer loan book

Pure consumer lending book stands at €611m, -1.4% QoQ representing 2.4% of our total performing loan

book (vs c.7% (3) peers).

NPL ratio of c.4.4%. Average yield is 6.5%, well below the sector.

Revolving credit exposures is negligible, €23m. The product has been removed from portfolio offering.

Other 2

Consumer

4.3%

7.4%

3.5%

2.4%

Liberbank has no open market agreements.

1)

Data from Bank of Spain as of March 2020

14

2)

Other loans in the case of Liberbank are mainly pension advancements to public administration.

3)

Peers are Spanish listed banks

Mortgage porfolio

Total book. Key metrics

95% of loan book from domestic customers.

Geographic breakdown

Average LTV is 52% and affordability ratio c.27%.

13%

12%

  • 4% of the book has LTV > 80% versus 15% in the sector.

7%

0%

Mortgage NPL Ratio (1)

27%

3.5%

8%

20%

4%

2.4%

2.1%

4%

LBK 1Q20

LBK 2Q20

Sector

2020 new origination

  • All risk assessment and management processes are performed by bank staff independently of the origination channel.
  • Holder average age is 39 years.
  • Average ticket size c. 20% up YoY, standing at €144k in 2020.
  • At least one borrower has a permanent job in 99% of the contracts.
  • C.60% of mortgages have two or more debtors.

Metrics at origination

70%26%71%

Loan to value Affordability(2)

Fixed rate

1) Data from Bank of Spain as of May.

15

Customers support

State guaranteed loans (ICO). Key metrics

  • ICO lines: Loans granted under this scheme amount to €1,614m as of June 30th. 75% of this amount is backed by the state.
    • Quota allocated to Liberbank is €1,708m, 1.85% of total ICO Scheme.
    • 71% of the allocated quota has already been granted as of June 30th.
    • c.€500m left to be used until September end.

Guaranteed

1,215

1,614

Total

SMEs

1,278

430

1,708

Corporates

Granted moratoriums

  • Liberbank has been proactive granting moratoriums supporting our customers.

5%1%

  • Two thirds of the moratorium granted come from the private initiative.

Residential mortgages

Consumer loans

16

Activity recovery

Activity evolution. Liberbank

Credit and debit card activity. (base 100)

140

120

112

100

80

60

40

Jun 19

Jul 19

Aug 19

Sept 19

Oct 19

Nov 19

Dec 19

Jan 20

Feb 20

Mar 20

Apr 20

May 20

Jun 20

Point of sale devices activity. (base 100)

180

160

140

120

108

100

80

60

40

20

0

Jun 19

Jul 19

Aug 19 Sept 19

Oct 19

Nov 19

Dec 19

Jan 20

Feb 20

Mar 20

Apr 20

May 20

Jun 20

1600

1400

1200

1000

800

600

400

200

0

Credit lines usage. (€ m)

57%

62%

1,261

43%

1,264

1,079

540

481

616

724

780

463

Dec 19

Mar 20

Jun 20

Drawn (€m)

Undrawn (€m)

Usage (%)

70%

50%

30%

10%

-10%

-30%

-50%

  • Activity levels have recovered in June, standing above 2019 levels as a result of limited exposure to geographies with high reliability on tourism.
  • Drawn credit lines have decreased by 40% versus last quarter. It reflects relatively lower liquidity tension within our clients.
  • Past-dueloans below 90 days are 50% lower than at the end of 2019.

17

Non performing loans

NPL stock evolution. € m

3,205

-20%

YoY

with no portfolio

sales

1,011

812

806

2016

2Q19

1Q20

2Q20

NPLs coverage

NPLs Coverage

100%

+131 bps QoQ

70%

50%

46%

21%

Total

Real Estate

Corporates &

Residential

Other individuals

Developers

SMEs (exc RED)

mortgages

NPL ratio benchmarking (1)

13.9%

11.3%

2nd lowest

among peers (2)

8.6%

9.1%

6.8%

8.4%

7.8%

5.8%

5.7%

5.4%

5.1%

4.8%

4.8%

4.7%

6.4%

4.9%

4.5%

4.1%

3.9%

3.3%

3.2%

3.1%

2016

2Q17

2017

2Q18

2018

1Q19

2Q19

3Q19

2019

1Q20

2Q20

Liberbank Sector

NPLs mix

Other 7%

Real Estate

Developers 10%

Mortgages

39% Corporates

44%

(1)

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

18

(2)

Spanish listed Banks as of most updated available figures.

Impairments

Cost of Risk(1). bps

53

49

24

24

25

23

20

2Q19

3Q19

4Q19

1Q20

2Q20

Underlying CoR (bps)

Total CoR (bps)

Quarterly loan loss provisions. € m

38

31

16

27

16

16

15

15

11

2Q19

3Q19

4Q19

1Q20

2Q20

Recurrent LLP (€ m)

Non-recurrent LLP (€ m)

  • Total cost of risk is 53 bps in the first half of the year, where underlying cost of risk is 20 bps.

(1) Accumulated loan loss provision / gross loans.

19

Foreclosed assets

Foreclosed assets stock evolution. € m

Outflows mix. 1H20 (1)

78

Residential

Property 27%

188

Land 53%

1,462

1,353

CRE 8%

Building under

2019

Entries

Sales & Other

2Q20

construction 11%

  • €44m of outflows in the quarter.
  • Sales mix totally aligned with portfolio in terms of asset breakdown and geographic exposure.
  • > 60% of total sales come from Castilla La Mancha.

Foreclosed assets (€ m)

Gross Debt

NBV

NBV Mix

Coverage

Residential

370

197

29%

47%

Commercial RE

183

113

16%

38%

Building under construction

252

139

20%

45%

Land

548

238

35%

57%

Total

1,353

686

100%

49%

  • Coverage levels increase by 217 basis points in the quarter.
  • Impairments of c. €40m conducted in the quarter on foreclosed assets, absorbing model updates and frontloading the expected impact of the Covid-19.

(1)

Gross debt excluding investment properties

20

(2)

Turnover = Annualized outflows over average foreclosed assets

Non performing assets

Gross NPAs. € m

6,238

50%

NPAs coverage

+184 bps QoQ

3,205

3,836

1,584

2,749

1,011

2,159

3,033

806

2,252

1,738

1,353

2016

2Q18

2Q19

2Q20

NPA ratio (1)

REOs

NPLs

23.96%

14.92%

10.46%

7.87%

2016

2Q18

2Q19

2Q20

NPL ratio

13.93%

6.75%

4.12%

3.09%

2016

2Q18

2Q19

2Q20

Texas ratio (2)

127%

81%

63%

50%

2016

2Q18

2Q19

2Q20

(1) NPA ratio calculated as NPLs & foreclosed assets over gross loans and foreclosed assets (not including repos)

21

(2) Texas ratio calculated as gross NPLs & foreclosed assets over equity (excl. minority interests) and provisions related to NPLs & foreclosed assets

1.

Summary

Agenda

2. Commercial Activity

3. Asset Quality

4.

Results Analysis

5. Solvency

6.

Liquidity and Fixed Income portfolio

7.

Appendix

22

Net interest income

NII performance. € m

NII yearly evolution

136.5

Recurrent

+6.4%

1H20 vs 1H19

14

14.1

7

55

20

259

113.7

116.3

116.3

120.5

122.4

122.3

230

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

NII 1H19 Performing

NPLs

Retail

Fixed

Wholesale Other

NII 1H20

loan book

funding

income

funding

Recurrent

Non-recurrent

  • Recurrent net interest income up by +6.4% 1H20 vs 1H19 supported by loan book growth, cheaper retail funding and lower wholesale funding costs that more than offset lower contribution from the ALCO portfolio and NPLs.

23

Net interest income: Margins

Margin performance (%)

1.64

1.63

1.59

1.62

1.59

1.60

1.58

1.57

1.57

1.26(1)

1.17

1.16

1.18

1.14

1.15

1.13

1.12

1.13

1.11

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

Customer spread

Net Interest Margin

Recurrent Net Interest Margin

Customer loan yield and cost of funds

1.78

1.70

1.72

1.69

1.71

1.68

1.66

1.64

1.61

1.69

1.63

1.69

1.65

1.68

1.64

1.63

1.61

1.58

0.05

0.06

0.06

0.06

0.06

0.05

0.04

0.02

0.01

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

Customer loan yield

Customer loan yield (performing)

Cost of customer funds

  • Both, customer spread and NIM hold resilient to extremely low reference rates.

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

24

Note: NIM = NII / ATAs

Net interest income: Asset yields

Lending yields. Basis points (1)

Yield (bps)

2Q19

3Q19

4Q19

1Q20

2Q20

Total Book (Back book)

171

168

166

164

161

Back Book (Exc. Public sector)

176

175

177

174

172

Front Book

149

124

190

186

168

Front Book (Exc. Public sector)

246

242

217

220

170

Mortgages (Back book)

133

136

135

133

134

Front Book

199

199

173

163

158

SMEs (Back book)

238

232

231

226

224

Front Book

271

254

263

266

185

Corporates (Back book)

162

160

160

157

161

Front Book

199

166

148

156

150

    1. The above rates refer to the drawn amounts and reflect actual contribution to NII
  • Mortgage front book remains above the back book despite strong activity in a challenging scenario.
  • SMEs front book impacted by ICO loans granted in the quarter.

25

Net interest income: Cost of funding

Term deposits maturities

0.89%

1,353

0.79%

1,163

0.69%

0.59%

0.49%

748

764

0.39%

0.29%

0.07%

0.10%

0.12%

0.05%

254

0.19%

0.09%

0.05%

-0.01%

3Q20

4Q20

1Q21

2Q21

> 2Q21

Maturities (€ m)

Cost of maturities

Term deposits. Cost evolution (1)

0.09

0.09

0.09

0.09

0.08

0.08

0.07

0.08

0.06

0.04

0.05

0.05

0.05

0.04

0.02

0.02

0.01

0.00

2Q18

3Q18

4Q18

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

Stock

New Production

Capital markets maturities

4,000

3.00%

3,500

2.08%

1.34%

2.50%

3,000

1.50%

2.00%

2,500

1.50%

2,000

0.38%

1.00%

0.14%

1,500

0.50%

1,000

0.00%

500

-0.50%

400

370

310

1,200

3,250

0

-1.00%

2020

2021

2022

2023

> 2023

Maturities (€ m)

Cost of maturities

€400m of maturities left for the second half

of the year at 38 bps.

(1) Euro currency

26

Fee income

Fee income evolution. € m

86

38

55

6

50

45

45

45

45

49

50

48

2Q19

3Q19

4Q19

1Q20

2Q20

Recurrent

Non-recurrent

Fee income breakdown

€ m

2Q19

1Q20

2Q20

1H19

1H20

YoY

(%)

Total Fees

45

50

86

90

136

na

Recurrent net fees

45

50

48

90

98

8.4%

Banking fees

28

29

29

55

58

5.9%

Non-banking fees

17

21

19

36

40

12.4%

Mutual Funds

8

9

9

15

18

19.1%

Insurance

7

10

8

17

18

6.5%

Others*

2

2

2

3

4

16.0%

Non recurrent fees

0

0

38

0

38

na

Note: Others include brokerage and pension funds among others

  • Recurrent fees increased +8.4% in 1H20 vs 1H19.
    • Resilient card activity and new pricing launched in 2020 is supportive for banking fees while non-banking fees keep growing as activity maintains the positive trend, specially in insurance and mutual funds businesses.

27

Closing of Caser Seguros transaction

Helvetia has closed the acquisition of a controlling stake in Caser, where Liberbank is a significant shareholder. We have sold a 2.2% stake in the transaction and we now hold a stake of just below 10%.

Profitable agreement

  • Distribution agreement novated with Caser:
    • Recurrent fee scheme remains unchanged.
    • One off payment of €43m already received.
      • 38m already accounted for in the quarter.
      • Remaining €5m to be accounted for in a maximum of 4 years.
      • From 2023 onwards we will receive 50% of the insurance business result.
  • Dividend payment from Caser is expected to resume in 2021 at pre transaction levels.

With positive impact in solvency

  • CET1 Fully loaded: Positive impact of 23 bps.
  • Total Capital fully loaded: Positive impact of 42 bps.

Non-life insurance is a key business line for Liberbank and it will continue to be very profitable under the new agreement.

28

Costs

Number of branches

1,379-8%

1,036

YoY

743

629

579

2010 2015 2Q18 2Q19 2Q20

Number of employees

6,838

-3%

5,143

YoY

4,031

3,767

3,668

2010

2015

2Q18

2Q19

2Q20

Costs evolution

-2%

YoY

195

196

(recurrent)

22

20

56

53

118

7

116

1H19

1H20

Personnel costs

Extraordinary

Admin costs

Amortizations

Recurrent efficiency (%) (1)

1H19

1H20

Cost to Income

59%

55%

Cost to Income (exc. Trading)

62%

56%

  • Operating expenses are down 2% YoY on a recurrent basis. There is an extraordinary of c. €7m under personnel expenses in the quarter that comes from previous workforce reduction plans.
  • Recurrent efficiency excluding trading income has improved by 6 percentage points YoY.

(1)

Like for Like comparison. Removes NII extraordinary, Casser fees, dividends and non recurrent personnel expenses.

29

Profit and loss statement

Var. 1H20 vs 1H19

€ m

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

1H19

1H20

€ m

%

Interest Income

134

138

137

140

154

140

272

293

22

8%

Interest Cost

-20

-21

-20

-20

-17

-17

-42

-35

7

-17%

Net Interest Income

114

116

116

121

137

122

230

259

29

13%

Dividends

5

0

0

2

0

0

6

0

-5

-96%

Results from equity method stakes

2

21

3

4

0

25

23

25

2

7%

Net fees

45

45

45

55

50

86

90

136

46

51%

Gains on financial assets & others

5

12

5

2

6

0

16

5

-11

-67%

Other operating revenues/(expenses)

-21

-5

-11

-41

-15

-14

-26

-29

-3

11%

Gross Income

150

188

159

142

177

219

339

396

57

17%

Administrative expenses

-89

-85

-88

-79

-85

-91

-174

-175

-2

1%

Staff expenses

-59

-59

-60

-58

-58

-64

-118

-123

-5

4%

General expenses

-30

-26

-27

-20

-26

-26

-56

-53

3

-5%

Amortizations

-11

-11

-11

-11

-10

-10

-22

-20

1

-7%

Pre Provision Profit

51

93

60

53

82

118

144

200

57

39%

Provisions

-6

-7

-5

-7

-4

-4

-13

-8

5

-36%

Impairment on financial assets

-14

-16

-16

-15

-31

-38

-29

-68

-39

135%

Impairment losses on other assets

0

-2

-2

-1

-2

-9

-2

-12

-10

447%

Other profits or losses

-3

-6

-5

-18

-17

-41

-9

-59

-50

549%

Profit Before Taxes

28

62

31

11

27

25

90

53

-37

-41%

Taxes

-7

-10

-8

3

-8

-4

-17

-12

6

-33%

Net Income Attributable

21

52

24

15

19

21

73

41

-32

-44%

30

1.

Summary

Agenda

2. Commercial Activity

3. Asset Quality

4.

Results Analysis

5. Solvency

6.

Liquidity and Fixed Income portfolio

7.

Appendix

31

Solvency

CET 1 fully loaded quarterly evolution (1)

CET 1 fully loaded benchmark (2)

43

CET1 FL does not include

14.01%

any capital relief: (3)

23

5

19

IFRS 9 transitional

+29 bps

13

11

Sovereign prudential

+3 bps

12.98%

filter

+9 bps

Software deductions

14.1% 14.0%

13.3%

11.9% 11.8% 11.6% 11.5%

10.8%

CET1 Ratio

2Q20

Change in

SME &

Caser Valuation

Other CET1 Ratio

Peer 1 Lbk Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 Peer 7

Mar 20

Earnings

RWAs

infra.

adj. &

June 20

support

others

factor

  • CET1 ratio fully-loaded stands at 14.01%, +103bp QoQ. Organic generation, reduction in RWAs, the closing of Caser transaction, regulatory changes and valuation adjustments all have positive impact in capital ratios in the quarter.
  • Total capital ratio fully-loaded stands at 15.7%, +119 bps in the quarter.

(1)

CET1 FL incorporates the full impact of IFRS-9 and Covid 19 provisions. It includes full net profit 2019 and 2020.

32

(2)

Peers are Spanish listed banks, updated as of 2Q20 when information is available.

(3)

Software deduction is an estimated impact

Solvency

Capital buffers (1) (2)

TBVps (4)

€932m

400 bps

CET 1(3) FL buffer

MDA(3) buffer

15.73%

17.00%

+8.5%

13%

YoY

1.72%

1.72%

2.6%

1.02

0.99

2.0%

0.95

1.4%

0.01

14.01%

15.27%

2.5%

1.02

0.99

8.41%

0.94

4.5%

Fully Loaded

Phased In

June 19

Mar 20

June 20

CET 1

Tier 2

2020 SREP Requirement

TBVps

Dividend

CET 1 Pillar 1 CET 1 CCB CET 1 P2R AT1 T2

  • CET 1 fully-loaded regulatory buffer over the SREP-CET1 requirement has increased by €142m in the quarter. MDA buffer stands at 400bps, +125 bps in the quarter.
  • Treasury shares purchased in the buyback program, representing c.2% of the share capital, are expected to be cancelled shortly.

(1)

CET1 FL incorporates the full impact of IFRS-9. It includes full net profit 2019 and 2020.

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 deducts 61.6 million treasury shares that are intended to be cancelled.

1.

Summary

Agenda

2. Commercial Activity

3. Asset Quality

4.

Results Analysis

5. Solvency

6.

Liquidity and Fixed Income portfolio

7.

Appendix

34

Liquidity position

Liquidity position. € bn

Liquidity ratios

4.9

12.4

7.5

Ratio

2Q19

1Q20

2Q20

LtD

95%

99%

98%

LCR

249%

248%

233%

NSFR

120%

112%

121%

Liquid assets (exc. used Covered Issuance Capacity

Total

collateral and with haircuts)

35

Wholesale funding

Wholesale funding. Breakdown

Wholesale Funding. Price Evolution (%) (1)

0.35%

0.32%

Money

0.28%

Markets 25%

Capital

0.19%

Markets 45%

0.10%

ECB 30%

Mar-18

Mar-19

Dec-19

Mar-20

Jun-20

TLTRO III: €4.5bn

0.88%

-0.48%-0.58%

Money Markets

ECB

Capital Markets

(1) Average cost for the quarter

36

Fixed income portfolio

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

9.6

10.0

9.1

9.1

Mar-19

Dec-19

Mar-20

Jun-20

(1) Based in acquisition cost

Issuer breakdown

Private

Debt 10%

Issuer

€ bn

%

Private Debt

1.0

10%

Public Debt

9.0

90%

Public

ow SAREB

1.7

17%

Debt 90%

Total

10.0

100%

Fixed income portfolio. Breakdown (2)

Portfolio

Amount

Yield

Duration

(€ bn)

Fair value through OCI

0.4

0.35%

0.8

Amortised cost

9.6

1.16%

2.8

Total

10.0

1.13%

2.7

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

37

1.

Summary

Agenda

2. Commercial Activity

3. Asset Quality

4.

Asset Quality

5. Solvency

6.

Liquidity and Fixed Income portfolio

7.

Appendix

38

Balance Sheet

Interbank (€ 3.1 bn)(1)

Net lending

(€ 26.2bn)

Fixed Income

(€ 11 bn)

Foreclosed Assets (€ 0.7bn) (3)

DTAs (€ 1.8bn)

Other (€ 2.0bn) (2)

Investments (€ 0.9bn)

Customer

deposits

(€ 26.3bn)

ECB (€ 4.5bn)

Long term funding (€ 1.5bn)

Interbank & repos (€ 3.8bn)

Covered bonds (€ 3.6bn)

Tax liabilities (€ 0.1bn) &

Rest (€ 2.4bn)(4)

Equity (€ 3.2bn)

Demand deposits

83%

Term deposits

17%

Marketable Securities (€ 0.4bn)

Assets €45.8 bn

(1)Interbank include cash and interbank deposits

Liabilities & Equity €45.8 bn

(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

39

Shareholders and book value

Shareholding base

(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 June 30th 2020

Share metrics and book value (1)

1Q20

2Q20

Share and liquidity:

# O/S shares (m) (2)

2,979

2,979

Last price (€)

0.14

0.15

Max price (€)

0.35

0.19

Min price (€)

0.12

0.13

Avg. traded volume (#shares m)

6.2

7.4

Avg. traded volume (€ m)

1.66

1.20

Market Capitalization (€ m)

415

448

Book Value:

BV. (€ m)

3,098

3,207

TBV. (€ m)

2,946

3,052

Ratios:

BVps (€)

1.04

1.08

TBVps (€) (2)

0.99

1.02

(1)Book value deducting intangible assets

(2)Deducts 61.6 million of treasury shares planned to be cancelled.

40

Institutional Investors & Analysts Contact

relación.inversores@liberbank.es

+ 34 91 422 58 37

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Liberbank SA published this content on 30 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 July 2020 11:00:03 UTC