European Banks Conference London, March 2006 · BANKINTER cautionsthatfigures correspondingto2005 resultsare estimatesand thereforeprovisional, subjectto severalrequirements, amongothers,

Morgan StanleyEuropean BanksConference

London, March 2006

BANKINTER cautions that figures corresponding to 2005 results are estimates andtherefore provisional, subject to several requirements, among others, the compulsoryaccounts statement to be made by the Board of Directors to be approved by theGeneral Shareholders Meeting.BANKINTER also cautions that this presentation contains forward looking statements. These forward looking statements are found in various places throughtout thispresentation and include, without limitation, statements concerning our futurebusiness development and economic performance. While these forward lookingstatements represent our judgment and future expectations concerning thedevelopment of our business, a number of risks, uncertainties and other importantfactors could cause actual developments and results to differ materially from ourexpectations. These factors include, but are not limited to (1) general market, macro-economic, governmental and regulatory trends, (2) movements in local andinternational securities markets, currency exchange rates, and interest rates, (3) competitive pressures, (4) technological developments, (5) changes in the financialposition or credit worthiness of our customers, obligors and counterparties. The riskfactors and other key factors that we have indicated could adversely affect ourbusiness and financial performance contained in our past and future filings andreports, including those with the Securities and Exchange Commission of the UnitedStates of America.BANKINTER presents its financial statements following format and criteria stated by Circular of Banco de España 4/04.

01 Reinforcing the CompetitiveAdvantage:

• IT • Innovation• Quality of Service• Talent

02 ...in fostering the growth story

01

BankinterReinforcingtheCompetitiveAdvantage

Reinforcing ourCompetitive

Advantage

01Our Competitive Advantages

TalentIT Innovation Quality ofService

01Reinforcing our

CompetitiveAdvantage

01

Technology as a Competitive Advantage


Advantage

IT

01IT Investments

Ordinary Margin Total Costs

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05

10%10% 21%21%


Advantage

IT

01IT: Three dimensions of value creation

ManagementTools

MultichannelPlatform

CRM

•Risk quality•Risk premia•Cost allocation•Capital allocation•EVA compensation•Management ofTalent•...

•Quality Perception•Conveniency•Usability•Innovation•Higher loyalty•Lower cost•Accurate pricing•...

•Matching client’s needs to surprise•Anticipation/Eventdriven•Advisory•Boosting cross-selling•…


Advantage

IT

01IT Investments breakdown

0%

20%

40%

60%

80%

100%

2004 2005 2006

Telecom. Infraestructure Outsourcing Software Develop.

42%

58%


Advantage

IT

01Development

2001 2002 2003 2004 2005 2006

Investment in Development

2001-2006:•Cumulative investment: €170 mill.•C.A.G.R.: 7%


Advantage

IT

01Development breakdown

0%

50%

100%

2004 2005 2006

Mantainance

New Developments: Products, CRM, Management tools...

46%

54%


Advantage

IT

01IT Management tools: Capturing thebenefits of credit risk quality

2,972

2,249

837

1,703

3,8663,470

703

29

409298

0.00

0.05

0.10

0.15

0.20

0.25

9 8 7 6 5 4 3 2 1 0

Exp

ecte

d Lo

ss (%

Exposu

re (

€ M

ill .

Risk Exposure % Expected loss

-BIS II: Mortgages IRB Advanced


Advantage

IT

01Keeping the best credit track-record

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

86 88 90 92 94 96 98 00 02 04 05

Sector Bankinter

0.56%

0.23%

-NPL ratio-


Advantage

IT

01IT: Multichannel Conveniency

0%

20%

40%

60%

80%

100%

94 95 96 97 98 99 2000 2001 2002 2003 2004 2005

Internet Cards & ATMs Branches Telephone Banking Mobile

32%

4%

52%


Advantage

IT

01IT: CRM


Advantage

IT

01Helps to boost cross selling and customerprofitability

0.5

1

1.5

2

2.5

0.75 1 1.25 1.5 1.75 2

Bank 2

Bank 3Bank 4

Bank 5Bank 6

Source: JP Morgan October 2004. Spain average base 1

Managing customers

Products per client % clients % revenues

Loyalty

-

+

- +Profitability

8.1

29%

61%


Advantage

IT

01

29%16%

5.7

4.4

7.0

20%

35%

5%

5%


Advantage

IT

01Avrg. Cross selling (nr. products) & Revenues per customer

5 / €575

7 / €715

8 / €886

9 / €1,103Multichannel

Three channels

Two channels

One channel

01Reinforcing our


Innovation

01

Innovation as a sign of identity


Advantage

Innovation

01

Why not?


Advantage

Innovation

01Co-opetition, broker in a box


Advantage

Innovation

01Co-opetition, card-less ATM cash disposals


Advantage

Innovation

01Providing a new standard of accessibility

01

Quality of Service as asource of differentiation

An outstanding quality of service

68

70

72

74

76

78

80

Dec'99 Dec'00 Dec'01 Dec'02 Dec'03 Dec'04 Dec'05

Qua

lity

Perc

eive

d

+6.45

Bankinter

Market avrg.


Advantage

Quality of Service

01

Quality perception, ISN

77.5

78.2

78.5

78.8Multichannel

Three channels

Two channels

One channel


Advantage

Quality of Service

01


Advantage

Quality of Service

01Complaints per every 10,000 transactions

0.9

1.15

1.4

1.65

1999 2000 2001 2002 2003 2004 2005

1.611.61

0.950.95


Advantage

Quality of Service

01Time to complaint resolution 2005

72%

10%

6%

12%

0 days

1-2 days

2-10 days

More than 10days


Advantage

Quality of Service

01The lowest churn rate

6.1%

6.9%

5.5

6.0

6.5

7.0

2004 2005

01Reinforcing our


Talent

01

Talentthe way of being unique


Advantage

Talent

01Talent: People make the difference

3.712 people

16 Nationalities

Avrg. age: 36.6 years

71% University graduates

External job rotation: 7%

Internal turnover: 29%

Teleworkers: 54%

Free to negotiate

68% shareholders

66% EVA linked salary


Advantage

Talent

01...in a friendly environment

85%

91%

91%

81%

79%

78%

72%

15%

9%

9%

19%

21%

22%

28%

30% 10% 10% 30% 50% 70% 90%

Overall satisfaction as an employee

Job satisfaction

Customer focus

Direct boss management performance

Clarity of strategy

BK as a recommended place to work

Trainning

2003

▲ 66%

▲ 78%

▲ 76%

▲ 77%

▲ 73%

▲ 69%

▲ 67%

2005

Source: 2005 Internal survey of labor and organizational climate


Advantage

Talent

01A strong corporate culture

Technology

Commitment

TrainingDiversity

Organization

Flexibility

Satisfaction Freedom


Advantage

01A unique business model

Talent

Culture

Innovation

Technology

Difficult toimitate

Quality of Service

In Fosteringthe growthstory

1987

High yield deposits

Pioneering Mutual Funds

1992 1994 1995 2005

SMEs

Triggering the Mortgage Market

Applying the model to exploit opportunities

1994-2005:

CAGR 22.1%

Fostering thegrowth story

...growing organically

Fostering thegrowth storyClient gathering

0

50.000

100.000

150.000

2001 2002 2003 2004 2005

2005: 48.5%

450.000

500.000

550.000

600.000

Dec'01 Dec'02 Dec'03 Dec'04 Dec'05

Active customers

X 1.3

Market capitalization


0

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

4.500

1965

1970

1975

1980

1985

1990

1995

1997

1998

1999

2000

2001

2002

2003

2004

2005

Mar

'06

An outstanding, recurrent growth story


0

10,000

20,000

30,000

40,000

50,000

60,000

1970 1975 1980 1985 1990 1995 2000 2005 2010

SMEsWhy not?

Thank you

Investor RelationsDavid Pérez Renovales +34913397532 [email protected] Alonso +34913398579 [email protected]

mailto:[email protected]

mailto:[email protected]

Documents

European Banks Conference London, March 2006 · BANKINTER cautionsthatfigures correspondingto2005 resultsare estimatesand thereforeprovisional, subjectto severalrequirements, amongothers,