Slide 1: Proposed distribution of share premium
“Proposed distribution of share premium” 19 December 2019
Slide 2: Executive summary
Executive summary • Bankinter’s Board of Directors shall propose to the next AGM, the in-kind distribution of the entire share premium by delivering to its shareholders 82.6% of Línea Directa Aseguradora (‘LDA’) shares, which will subsequently be admitted to trading. • This distribution aims to spli
Slide 3: Agenda
Agenda 1 2 3 Proposed Línea Directa Bankinter transaction profile post distribution 3
Slide 4: Agenda
Agenda 1 2 3 Proposed Línea Directa Bankinter transaction profile post distribution 4
Slide 5: Strategic rationale
Agenda Strategic rationale 1 Strategic flexibility By creating two publicly-traded entities, Bankinter and LDA’s management will be able to design their own strategies independently. Stronger With robust and diversified banking operations , Bankinter can carry out this 2 banking business extraordina
Slide 6: Transaction details
Transaction details • At its next AGM, Bankinter will propose the in-kind distribution of its entire share premium (pursuant to Article 41 of its corporate by-laws) by delivering to its shareholders 82.6% of its LDA shareholding. Legal • The number of shares in which LDA’s share capital is divided w
Slide 7: The transaction will be carried out with the distribution of Bankinter's share premium as LDA shares
The transaction will be carried out with the distribution of Bankinter’s share premium as LDA shares 1 2 3 4 Admission to trading Prior dividend and Share premium Starting point of Línea Directa Aseguradora shares share split distribution Bankinter shareholders Bankinter shareholders Bankinter share
Slide 8: Linea Directa a great financial investment, with a clear value generation for Bankinter shareholders
Linea Directa a great financial investment, with a clear value generation for Bankinter shareholders Investment Return €36 €426 €1.058 €1.184 €250 million million million million million Capital investment from Acquisition in 2009 of 50% in-kind distribution of Estimated market value of 1994 to 1997
Slide 9: The split of Linea Directa will account for a positive 5bps impact on Bankinter's CET1
The split of Linea Directa will account for a positive 5bps impact on Bankinter’ CET1 Impact as of Sep-19 CET1 +5 bps 0,11% -0,36% 0,30% 11,57% 11,62% CET1 Sep 19 Dividend Distribution of the share Recognition of retained CET1 Sep 19 Post premium & shareholding deconsolidation 9
Slide 10: The transaction will generate in 2020 aprox. €1bn in profits
The transaction will generate in 2020 aprox. €1bn in profits and therefore the reduction of Shareholders equity will be less than €0,2bn Shareholder’ equity reduction by Shareholder’ equity increase by ≈ -€1,2MM ≈ +€1MM • Bankinter will distribute the share premium of €1.184 billion in the form of L
Slide 11: To be proposed at the AGM in March 2020, pending the regulatory approvals afterwards
To be proposed at the AGM in March 2020, pending the regulatory approvals afterwards December February March September 2019 2020 2020 2020 Board of Board of Regulatory AGM Listing Directors Directors authorizations D D+1 D+7 D+2 Proposed Prospectus Call to the AGM decision about registry at transact
Slide 12: Agenda
Agenda 1 2 3 Proposed Línea Directa Bankinter transaction profile post distribution 12
Slide 13: LDA is currently a highly attractive business, operating with full autonomy and independence
Agenda LDA is currently a highly attractive business, operating with full autonomy and independence Leading franchise in the Strong brand recognition Consistently growing ahead direct motor insurance and technological reference of the market industry in the industry Vast potential for growth Discipl
Slide 14: Linea Directa a story of success
Linea Directa a story of success First insurer to offer insurance Launch of Home insurance. over the internet Opening of repair unit 1 mill. customers premises >3 mill. customers Línea Directa Purchase by Bankinter founded of the remaining 50% Health insurance 1995 1997 1999 2004 2005 2007 2009 2012
Slide 15: Linea Directa is no. 5 auto insurer in Spain (by issued premiums)
Linea Directa is no. 5 auto insurer in Spain (by issued premiums) Market shares in Auto insurance (as of Sep-2019) Market shares in Home insurance (as of Sep-2019) Peer 1 15,2% Peer 1 19,1% Peer 2 9,6% Peer 2 13,3% Peer 3 5,8% Peer 4 5,3% Peer 3 11,8% Peer 5 5,2% Peer 4 8,7% Peer 6 4,9% Peer 7 4,8%
Slide 16: Recurrently outperforming the market growth in the last few years
Recurrently outperforming the market growth in the last few years Market shares and market growth in Auto insurance (LDA vs sector) Market shares and market growth in Home insurance (LDA vs sector) Market Market share 6,1% 6,2% 6,4% 6,7% 6,8% share 1,8% 1,9% 2,1% 2,3% 2,5% # of risks # of risks (Mn)
Slide 17: Results based on solid growth supported by disciplined risk management and cost control
Results based on solid growth supported by disciplined risk management and cost control Linea Directa insurance technical result (€million), Claims and combined ratios (in %) 86,7% 85,4% 86,4% 85,3% 85,6% 87,4% Combined ratio (%) 67,5% 66,4% 68,1% 67,8% 66,0% 64,8% Claims ratio (%) 147 151 127 134 1
Slide 18: LDA consistently maintains an attractive profitability, enabling a 90% pay-out ratio
LDA consistently maintains an attractive profitability, that it has enabled a 90% pay-out ratio while keeping high solvency levels Net profit (€million), ROE (%) and Solvency ratio (%) ROE (%) 24% 30% 33% 35% 38% 36% 231% 227% Solvency ratio 216% 205% 204% 209% (%) 112 117 106 Net profit(€Mn) 94 99
Slide 19: LDA highly independent business with limited impact from the transaction
LDA highly independet business with limited impact from the transaction I II III IV V Governance No share functions Self managment No crossed-business Stake-Holders • Board of directors • Internal Audit is the • Independent strategy • Minimun impact from crossed • Internal control comittee only shar
Slide 20: Agenda
Agenda 1 2 3 Proposed Línea Directa Bankinter transaction profile post distribution 20
Slide 21: Bankinter will keep the banking business, that accounts for over 80% of total group net income
Bankinter will keep the banking business, that accounts for over 80% of total group net income Bankinter, S.A. 100% 100% 100% 100% 100% 50% 50% 100% Línea Bankinter BK Gestion BK Global Other Directa BKCF EVO BKSdV BKSG Luxemburg de Activos Services subsidiaries Aseguradora Direct Consumer Digital P
Slide 22: The contribution to net income of the banking business grows faster than the one from insurance
The contribution to net income of the banking business grows faster than the one from insurance Relative contributions to the Group’s net income (€million and % ) 526 490 495 22% 444 Total Net income Bankinter (€million) 22% 23% LDA contribution (%) 376 18% 26% 276 215 34% 78% 78% 77% 82% Rest of th
Slide 23: The business model allows us to maintain adequate diversification post transaction
The business model allows us to maintain and adequate diversification post transaction Gross operating Gross operating income income 2010 3Q2019 Corporate/SME banking Spain Other Corporate/SME 33% banking Spain 33% Other 11% EVO 1% 7% AvantCard 3% 17% 27% Bankinter Portugal 8% Gross op. income LDA c
Slide 24: Pro-Forma P&L impacts
Pro-Forma P&L impacts Proforma p&l Post transaction Bankinter ROE 3Q 2019 Bankinter Proforma € million Total LDA Pro-Forma Sector average Sep-2019 group adjusted (ex Bankinter** 12,6% 11,1% Gross operating income* 1.545 -290 1.255 6,3% Operating expenses -793 204 -589 Pre-provision profit 752 -87 66
Slide 25: Thank you
Thank you bankinter.