Bankinter, S.A.

Good afternoon, and thank you for joining this earnings presentation call for the first half of 2025. Financial statements were posted with market authorities earlier this morning. All materials can be found on our corporate website as well. Please refer to the disclaimer in the presentation and note that this call is being recorded. Today, we are joined by our Chief Executive Officer, Gloria Ortiz, and our Chief Financial Officer, Jacobo Diaz. Before handing over to Gloria, I'd like to mention that Bankinte is celebrating its 60th anniversary, marked by innovation, business diversification, and steady organic growth, as illustrated on the cover page in the timeline we've included. Thank you very much, and over to you, Gloria.

Good afternoon. I appreciate Lori highlighting our 60th anniversary with our continued focus and adherence to our core values over the past six decades. have been fundamental to our success, which stems from a strategy focused on innovation, excellent customer service, and effective technology use, topics I will expand on later. Let's start on page five with a key highlight for this first six months of the year. 2025 continues to be marked by accelerated growth and resilient margins. Commercial activity demonstrates positive momentum as overall customer volumes have increased by 9% compared to the previous year. We see solid trends in customer lending activity balanced with retail deposit growth and an exceptional wealth management dynamic with assets under management increasing by 18%. Our business margins have remained strong supported by ongoing balance sheet growth and effective management of deposit costs in alignment with asset yields. Gross revenues rose 6% this semester despite lower NII which reached its inflection point in Q1, and Q1Q had now increased by 4%. Free income continues to be an integral contributor to growth, with 11% increase. Our key management ratios remain best in glass due to the strict cost control and prudent underwriting, both crucial for sustained profitability across any economic cycle. We reported a net profit of 542 million with return on tangible equity surpassing 19%. The following pages examine several key factors that have contributed to these results. Starting with volumes on page six, our differentiation strategy continues to drive diversified volume growth across each category, geography, and product. Customer volumes increased in total by 19 billion this past year, reaching 231 billion. When including the volume of assets under custody, either equity or fixed income, with our retail and institutional clients, total volumes exceeded 300 billion. Customer volumes in our core market in Spain grew high single digit, 8%, with Portugal and Ireland both achieving double digit growth, Portugal 15% and Ireland 20%. Looking at asset origination trends, on the right-hand side of the slide, new mortgage origination is up by more than 20%, corporate and FME banking increased by 15%, and a drop in new customer finance origination specifically in Spain, where we made the conscious decision last year to reduce origination in what we refer to as pure open market. Moving to the next page. Next interest income increased this quarter by 4%, passing the infection point in Q1 and delivering an increase even above fourth quarter of 2024. Growth operating income increased by an impressive 6%, supported by strong free growth. With core revenues stabilizing and strong free growth, we remain confident in achieving our revenue targets for this year. On page eight, prior to moving to the final page, In this section, I would like to take a moment to share a few of our digital transformation priorities, as well as the tangible impact these initiatives are having on improving our efficiency and productivity metrics. Bank Inter has a longstanding commitment to technological innovation. We are focused on artificial intelligence and cloud initiatives, having implemented over 20 new generative artificial intelligence cases in customer management, internal commercial productivity, and back-office operations. With our new cloud platform deployment, we have enhanced our capabilities, currently running over 100 AI and advanced analytical models in production. This approach enables us to reduce processing time, store larger sources of data, and improve scalability to support future business growth. IT investment also supports our strategic commitments, as seen in the Evo merger and integration of its IT systems into BankInter. laying the groundwork for the expansion of Antinter's new digital organization, achieving greater economies of scale. Most importantly, an analysis of productivity and efficiency trends indicates that our targeted IT investments yield positive outcomes. We observe an increase in volume managed per employee, in the graph on the left, as well as a reduction in unit operating costs, enabling maintaining our industry leading cost to income ratio. To close this section of the presentation, I would like to reaffirm our commitment to leading the industry in cost to income ratios and maintaining excellent asset quality levels. Both are strongly associated with maintaining high profitability levels across different economic cycles. and have been key contributors to achieving a ROTI exceeding 19% and an ROE above 18%, placing Bank Inter in the top quartile of our European peers. I will now hand over to Jacobo to review the financial and business performance.

Thank you, Gloria. Good afternoon, everyone. We are quite pleased with our first half results, once again delivering growth and profitability, achieving a 6% increase in gross operating income driven by higher volumes in all businesses and geographies, increased fees, and effective margin management despite a falling rate environment. As stated earlier this year, we are now distributing operating costs more evenly over quarters. The current year-on-year increase should decline in coming quarters as quarterly cost volumes remain stable. Cost of risk and related provisions declined by 10% compared to the prior year, reflecting the continued positive training losses. Net profit rose 14% to 542 million euros, supporting our goal to exceed 1 billion euros in 2025. In the following slides, I will provide additional details about each slide. On page 12, net interest income reached its trough in the first quarter of 2025 and now recovering above the fourth quarter of 2024 levels to reach 560 million euros this quarter. This upward trend in NII has been achieved despite a 140 basis points decline in arrival on average during the first six months compared to the average for the same period in 2024. Asset yields are still in decline, with this quarter's average at 3.71%, down 24 base points from last quarter, after a 30 basis points drop in Uriber between March and April. Customer margin remains above our 270 basis points target, demonstrating effective management of deposit costs, which dropped 23 basis points this quarter. This now brings down the average cost of deposits below 1%, and we expect this trend to continue targeting to end the year below 80 basis points. Deposit costs declined this quarter due to lower front book pricing, a deposit mix shift reduction over 5%, and higher proportion and repricing over digital deposit accounts, which led to decreased site account costs. Our NIM remains above 180 basis points as a result of effective balance sheet management lower wholesale funding costs, and an expanding ARCO portfolio. On slide 13, we present our ARCO portfolio, which has increased to $14.7 billion as we continue to leverage a steeper year curve while remaining with prudent levels relative to our balance sheet size and equity size. Let's move into fees. On slide 24, fees increased by more than 11% on a year-on-year basis, reaching €380 million this quarter, up 2% on a quarter-on-quarter basis. We continue to achieve exceptionally strong results in fund management and brokerage services, increasing by 13%, now representing more than 50% of total gross fees. On page 15, improved results in the trading, dividend, and equity method lines. However, the most significant factor this year has been the lack of any banking tax charge that we announced already last quarter. On operating expenses, as we work to further minimize the seasonality of our expenses, we also maintain rigorous control of costs across the group. Quarter on quarter volumes have remained stable, reflecting a 2% increase compared to the average quarterly cost in 2024. Cost to income ratio remains at an exceptionally low level of 36%. Remain committed to maintaining positive operating jobs this year. On the following page, you can find an overview of the distribution of costs by geography and by category. And on page 18, loan loss provisions continue to decrease, leading to a cost of risk of 32 basis points. Other provisions also remain under control and performing well, down to eight basis points this period. Net profit of this quarter totaled $272 million, comparable to the quarterly high record last year. These results contributed to a solid first half of 2025. Regarding credit quality, credit and asset quality indicators remain strong, with an LPL ratio of 2.14% overall, Spain at 2.5%, Portugal at 1.3%, and Ireland at 0.3%. all well below sector averages. We also continue to strengthen coverage ratio, reaching an unprecedented high of 70%. On liquidity, loan-to-deposit ratio increasing slightly to 97% this quarter. And capital, at the close of the quarter, our Z1 ratio stood at 12.57%. During this period, we consolidated again 59 basis points in retained earnings and allocated 34 basis points to risk-weighted assets growth, resulting in a net organic increase of 25 basis points. Valuation adjustments increased 13 basis points, mainly from our financial investments in Linea Directa and the ALCO portfolios. Let's move on to review the performance across each region and business segment. Commercial momentum remains strong with customer volumes up 8% in Spain, 15% in Portugal, and 20% in Ireland. On page 25, in Spain, loan growth remains strong, increasing 4% to 68 billion euros, growing both in corporate and retail loans. Retail deposits also demonstrate solid growth, increasing by 5%. Strong performance in wealth management, reflected by a 15% increase in assets under management and assets under custody, resulted in a notable 12% rise in fee income. Profit before tax rose 8%, reflecting robust returns and solid income from our core Spanish business. On page 26, Portugal. Portugal delivered exceptional volume growth in lending, up 11%, as well as deposits up 20%. Assets under management and assets under custody also continue to grow up 13%. Moving to Ireland, we continue to see excellent commercial momentum in asset growth in mortgages up 22%, as well as in our commercial financial activity growing 13%. In terms of financial, profit reached 21 million, with a strong increase in NII up 15% this year. The corporate and SME segment continues to demonstrate robust performance with customer lending increasing by 6%, which is twice the sector growth rate in Spain. The international business remains a key growth catalyst, growing currently at 14%. Regarding wealth management, on page 29, the management of customer wealth in both retail and private banking businesses continues to be a key driver in deposit gatherings. as well as investment funds, inflows, and securities trading, all supporting a strong fee income growth. Given our high-quality customer base, we typically see an annual increase between $5 to $7 billion of net new money into the bank. After just six months this year, we are near the lower limit of this range and very optimistic about reaching or surpassing the upper limit by year-end. including this year's market effect, our private and retail banking divisions saw $9 billion increase in wealth, with total assets rising 13% or $16 billion year-on-year. On page 30, continued with retail banking trends, commercial activity remained strong, with increased new client acquisition growing by 7% in our insignia salary and digital accounts, and accelerated mortgage origination up 21% year-on-year, growing each quarter with solid market shares of new production in Portugal, Spain, and Ireland at 6%. The mortgage-backed book grew by a strong 6% year-on-year, output forming sector growth in every region. To conclude this section on page 31, our focus on a niche, high-quality client base has enabled us to maintain double-digit growth in assets under management across proprietary and third-party funds, pension plans, and alternative investment vehicles. Another key source of recurrent fees in our wealth management business is assets under custody, which have grown by 80 billion across retail, private, and institutional clients. So let's move to some closing remarks. After considering these results, I want to revisit our ambitions for this year. Regarding loan volumes, we anticipate growth across all regions and business segments in line with current trends, maintaining, therefore, our ambition of a mid-single-digit growth. Regarding NII, since May, arrival rates have stabilized above 2%. Despite declines in these rates during the first month of the year, we effectively managed the positive cost and achieved NII growth this quarter. The expectation is to achieve flattish NII in 2025. Our current assumption is that we will end the year with 12 multi-arrivers above 2%, slightly above 2%, and we remain confident in our ability to manage customer margins close to 2.7%, as we have done up to date. We continue with a positive outlook regarding fee income trends, and we target high single-digit growth for the year. We continue to distribute and balance cost volumes over the quarters, and we target full year annual costs to grow between low to mid single digit. Since we expect revenue growth to exceed cost growth, we aim to deliver positive operating jobs in 2025. Given this year's improvement in credit quality, we now expect cost of risk for the full year to be 35 basis points. And finally, we'll remain committed to surpassing 1 billion euros in net income in 2025. So Gloria, back to you for any closing comments.