Unicaja Banco, S.A.

Good morning, everyone, and thank you very much for attending our first quarter 2025 presentation. This morning, as usually, before market opening, we published this presentation along with the rest of our usual financial information at the CNMV and our corporate website. Today, we have with us our Chief Financial Officer, Pablo González, that will be this time the one going through the slides. So without further delay, I'll give the floor to him. Pablo, whenever you want.

Thank you very much, Jaime. I will start on page three, where we show the main highlights for the quarter. Starting with commercial activity, I would like to highlight that business volumes improved by 2.4% year on year, supported by some positive trends that have been confirmed in the first quarter of 2025. where of balance sheet funds grew 3.8%, but also thanks to much more stable trends in performing loans that grew 0.3% quarter on quarter. Such loan growth was explained by an impressive improvement in private sector new lending that in the first three months of the year was 44% above the first three months of last year. Regarding profitability, net income grew 43% year-on-year in Q1 2025 to €158 million, representing a return on tangible equity adjusted by excess of capital of 11%. The positive dynamics at the beginning of the year are also reflected in the cost-to-income ratio that improved 3 percentage points in the year to 46%. The start of the year on credit quality terms was also very positive. NPL fell 5% quarter-on-quarter and foreclosed assets fell 7% in that same period. This left total NPAs 22% below first quarter 24%. A significant decrease of NPAs that has taken place while we also increased their coverage from 71% at the end of 2024 to the current 73%. The cost of risk was 27 basis points in the first quarter of 25 below current annual guidance of around 30 basis points. Finally, the bank's solvency and liquidity have also been strengthened. Seed 1 improved by 27 basis points in the quarter to 15.4% despite the accrual of 60% dividend payout. The loan-to-deposit ratio remained below 70% and the liquidity coverage ratio stands at 270%. I will continue with the commercial activity on page five. As you can see, the total customer funds fell 1.2% year to date, owing to the regular quarterly seasonality. However, they were 4.9% above first quarter of 24. With unbalanced sheet funds, 3.4% above first quarter of 24. and of balance sheet funds, 9.4% above last year. Of balance sheet funds, trends continue to be very positive in the first three months of the year, with mutual funds reaching 14.4 billion euros. That is almost 7% above the previous quarter and 22% above the previous year. On the following page, we show you the details of the assets under management and insurance. As I mentioned before, and you can see on the left-hand side, assets under management have grown 9% year on year, and in the case of mutual funds, the growth has been 22%. It is worth noting the significant improvement that we have had in net inflows. As we show at the bottom, net inflows continue to improve during the beginning of 2025 to almost 1 billion, representing a 9% market share. On the right, we show assets under management and insurance revenues that have improved 14% in the last two years, representing 18% of total quarterly revenues. With regard to loans, during the quarter, total performing loans were stable, growing by 0.3% quarter on quarter, confirming better trends than the ones we have reported in previous quarters. Such an improvement is mainly explained by the significant increase in new loans that we will see in the following slide. But before that, let me review with you the loan growth by segments. Private sector loans were flat in the quarter with positive trends from both corporate and individual loans. On the corporate side, the quarterly growth was 1% when excluding developers. On household loans, residential mortgages fell 0.3% in the quarter, while consumer loans grew by 1.4%. As you can see, there is a positive trend that has been improving during the last quarter, supported by higher new loan production, as we show in the following slide. On page eight, we show the credit formalizations. Private sector lending grew 44% year-on-year to 2.3 billion, showing positive trends in all segments. As you can see, the business and self-employed segment is particularly noteworthy, where formalizations in the first three months grew from 0.9 billion to almost 1.4 billion, representing almost 50% increase. In mortgages, new lending grew 37%, and in consumer lending, another 33%. In slide 9, we show you some ESG figures that highlight the significant progress we are making in our transition plan. We continue to grow our sustainable business, which we are also financing with the issuance of green bonds. We have ambitious decarbonisation targets for both our own carbon footprint and emissions finance, which already cover 70% of the risk to the private sector and new targets in other portfolios have been approved and will increase this coverage. We maintain our commitment to society, focusing on groups at risk of exclusion, advancing in financial education, increasing the number of people rich. In addition, we continue to increase our tax contribution and our contribution to shareholder foundations through dividend payments. Finally, I would like to highlight the recognition we have received with the highest rating from AENOR for our good corporate governance. We now continue with the review of the P&L in the next section. As we show in slide 11, Net interest income fell 3% quarter-on-quarter to $369 million, impacted by the lower day count and the ongoing repricing of loans. However, this was partially mitigated by lower cost of liabilities. Income showed a positive 1% quarterly growth supported by mutual funds and insurance contribution. On the rest of the revenues, the most relevant impact comes from the change in the accounting of the new banking tax. Last year, the former levy was booked in other operating charges and accounted in full in the first quarter of 2024. Now, the new tax is accounted in the tax line and it is accrued through the whole year. All in all, the gross margin reached 550 million, quite stable compared with the previous quarter and 11.5% above the previous year. Total costs grew 4.5% in line with our guidance and mainly reflecting the agreement on salary increase and some of the investments considered in the initiatives of our business plan, leaving pre-provision profit 18% above the previous year at $280 million. Long-lost charges reached 32 million, representing 27 basis points cost of risk, slightly below our 30 basis points guidance for the year. Other provisions were stable and within our guidance that is considering less than 100 million for the full year. All this left pre-tax profit at 227 million, which is 40% above the previous quarter and 23% above the previous year. Total taxes of 69 million include 5 million of the new banking tax that will be now booked through the year, explaining the higher effective tax rate. Finally, net income reached 158 million, which is 30% above last quarter and 43% above the first quarter of 2024. We will now review the P&L in some more detail, starting with net interest income. On the next page, we have the customer spread evolution. As you can see, lower rates explain a 20 basis point decrease in our loan book. However, this was partially compensated by eight basis point lower cost of deposits, leaving first quarter 25 customer spread at around 250 basis points and net interest income at 170 basis point, which is 11 basis points below first quarter 24. On the following page, we show the details regarding the quarterly evolution of NII that fell 3.1% or 1.8% when excluding the lower day count of the quarter that represented around 5 million. On top of the calendar effect, the lower cost of deposits that had a positive impact of around 14 million, partially mitigating the negative impact of the repricing of loans that was 31 million. On top of this, and following the liquidity generation in recent quarters, we have considered higher structural liquidity, so we have increased the size of our debt portfolio. This effect has also increased its contribution to NAI. However, in exchange for lower income from liquidity, leaving both effects together very stable this quarter, improving one million net of the calendar effect. Finally, the lower rates were also reflected in the lower cost of wholesale funding. If we move now to fees, we can see how they maintain a positive evolution in the quarter with a 1% growth compared with fourth quarter 24 and 1.6% above the first quarter of 2024, mainly explained by higher income from mutual funds and insurance that are the two businesses pushing up total fees and compensating the lower transactional fees following the implementation of lower payment and collection fees for more loyal customers. Following the review of the P&L, we now show you the details of the rest of revenues, which also shows a positive evolution in the year due to the new banking tax, which is now included in the tax line of the P&L while the 2024 was booked in other operating charges. Regarding total cost, personal expenses, grew due to the salary improvements agreed with the unions. Other administrative expenses also reflect some of the initiatives needed to execute our business plan, leaving total quarterly costs 4.5% above the previous year, in line with our mid single digit growth guidance for this year. In the right hand side, you have our cost to income ratio that continue to improve to 46% in the first three months of the year. On the next page, we continue with the cost of risk and other provisions which remain very stable compared with last year. Overall provisions were 53 million in line with first quarter 24 and well below the first quarter 23 where we book 88 million. The cost of risk for the quarter was 27 basis points, slightly below our 30 basis point guidance. Other provisions were 22 million that if we analyze, they were also in line with our current guidance that is considering total other provisions below 100 million for the whole year. On slide 18, we finish the P&L review with some profitability metrics. On the left hand side, You have the net income evolution for the last four years. In 2025, net income is 2.5 times the one in 2022 and more than four times the one in 2023 and 1.4 times the one we reported last year. A significant change in scale that is also reflected on the right-hand side where we show the return on tangible equity trends. Our profitability has improved from 4% in 2023 to 6% in 2024, to the current around 10% or slightly above 11% when considering the 12.5 seed one. As you can see, this is a very positive and important improvement achieved in the last two years. Let's move now onto the credit quality section. where we continue to see very positive evolution. As you can see on the slide, non-performing loans fell again this quarter by 5%, representing a year-on-year decline of 16%. All in all, NPL ratio reached a new low of 2.6%. In addition, it is worth noting the very remarkable evolution of the coverage ratio, which was again reinforced this quarter by another two percentage points, reaching a level of 70%, a very high and conservative level, considering, as we always remember, that more than half of the non-performing risk has additional collateral. Moving to foreclosed assets, we can also see how the evolution continues to be very positive. Gross balances fell another 7% in the quarter and 30% in the year, reaching 843 million. If we also consider that these assets have a coverage ratio of 76%, in net terms, the balance is reduced to levels close to 200 million. In terms of NPAs, which group together NPLs and foreclosed assets, the drop in the year was 22%, with coverage improving from 71% to 73%. This positive evolution has allowed the NPA ratio in net terms to reach a level of 1.2%, which is now not material. Let's move now to the last section of the presentation to see solvency and liquidity. Starting with solvency, on page 23, you can see the further strengthening of our seed-1 fully loaded ratio this quarter by 27 basis points, which increases to 88 basis points in the last 12 months. In the quarter, the improvement, mainly explained by organic generation through retained earnings, to which we deduct the accrual of the dividend, that, as you know, we have increased to 60% payout. The rest of the moving parts of the quarter are not material because the small CRR3 fully loaded impact is compensated by lower risk weighted assets. So seed one fully loaded under CRR3 reach 15.4%. And if we consider the transitional arrangements of CRR3, The seed-one-face-in or regulatory ratio improves 12 basis points to 15.5%, one of the highest among Spanish banks. On the next page, we show you our MREL position. As you can see, our MREL ratio stands at 27.4% in the quarter, maintaining an ample buffer against the main requirements that you have on the right-hand side. Among them, an MDA buffer that has grown to 689 basis points. Regarding liquidity, we continue to have a very strong position with a significant amount of liquid assets, a loan-to-deposit ratio of 69, the NSFR 15, at 162% and the LCR at 270%. All of them best in class liquidity metrics. Finally, we show you the fixed income portfolio details. As I mentioned before, following the generation of additional structural liquidity in recent quarters, we have increased the size of our portfolio to 30 billion, which is the balance of structural excess of funding of the bank. The portfolio is mainly accounted in the amortized cost portfolio with an stable 2.6% yield and a slightly higher interest rates duration than has reached 2.8 years. To conclude, let me share with you a few quick final remarks before moving on to the questions section. First quarter 2025 result showed an excellent start of the year we continue to confirm a higher structural profitability of the bank. In March 2025, our adjusted return on tangible equity, calculated with the last 12 months' results, has gone slightly above 11%, which compares with 6% return on tangible equity of previous year. We have improved our structural profitability while we continue to further reduce the MPA's balances. An impressive 22% drop in the last 12 months or 6% in the last three months, a significant improvement to levels that are already not material. Higher profitability and better asset quality trends have come together with a strong capital generation that left seed 1 fully loaded at the end of March at 15.4%, 88 basis points above the previous year. And finally, As a consequence, among others of the three improvements mentioned, we decided to increase our payout ratio to 60% at the end of last year, something that has enabled us to pay against 2024 results 13.4 euro cents per share, offering an attractive remuneration to our shareholders. So thank you very much. And I leave it here. And we can now move on to the Q&A. Please, Jaime, whenever you want.

Thank you, Pablo. We will start now the Q&A. Please, remember to ask only two questions each one. Also, remember to mute your line after the questions. Operator, please open the line for the first question.