Private Banking

The qualitative and quantitative efforts made by Bankinter, have prompted improvements in all ratios in this segment.

Assets under management belonging to Private Banking customers amount to €23,094 million.

A strategic mainstay for the Bank. Bankinter made efforts to improve in Private Banking throughout 2014. In the first place, it strengthened its team of private bankers, which now numbers 205. But the team improved qualitatively as well as quantitatively thanks to an ambitious training plan which includes in-house rotation to improve employees' knowledge of the area. The training is intensive and continuous, focusing on matters such as management and advisory services, tax aspects, regulatory compliance, products, etc.

Bankinter also launched a range of specific products for customers in this segment, which performed well in terms of both sales and return. Also, in Bankinter Gestión de Activos, the Bank's asset management subsidiary , a team was set up to focus specifically on the investments of this type of customers.

As a result of these efforts, the number of new customers captured increased by 31% to 5,239 and assets under management reached €23,094 million, up 26% over the course of the year. Average deposits and investment posted increases of 28% and 7% respectively.

During 2014 Bankinter also consolidated its lead position in the SICAV (open-ended collective investment company) ranking, with 383 companies managed, placing it second in the sector, with a market share of 11.9%. This means that practically one in every three new SICAVs established during the year was Bankinter's.

These figures confirm the success of the transformation of this segment, which was started in 2012. Now that this process is well under way, the Bank is well aware of the solidity of its model, and aspires to become Spain's best Private Banking institution.

The improvement in the Service Quality index for its part denotes that customers' perception of the service received is highly satisfactory and responds to Bankinter's differential values in Private Banking:

• Broad sense of responsibility in advising customers.
• A workforce that is highly engaged with the Bank.
• Brand recognition, image of solvency and safety.
• High level of commitment and involvement by Senior Management.
• Powerful management of reporting.
• Rigorous selection processes to capture the best private bankers in the country.
• Professionals strongly focused on market analysis.
• Tax area with excellent quality and involvement.

Personal Banking

The sales efforts and the improvement in service quality prompted a 14% increase in the rate of capture, to 26,781 new customers.

The number of active customers grew by 12% compared with the previous year.

The portfolio of payroll accounts grew by 18% and new mortgage lending rose 219% in volume against 2013 levels.

Assets under discretionary portfolio management grew by 210%.

The second biggest segment by number of customers. In 2014 the Personal Banking division saw the mortgage lending business start to revive after several years of crisis, and the fall in lending starting to slow, leading to significant growth in both controlled resources (13.7%) and average lending (1.3%). The sales efforts and the improvement in the quality of the service led to a 14% increase in the number of customers captured in the year, to 26,781 new customers. This segment is consolidating its position as the Bank's second biggest by number of active customers.

Personalised service is the hallmark of Personal Banking, in which Bankinter analyses the particular needs of customers, adapts the products to each profile and helps to manage and organise financial planning.

Based on the knowledge and experience acquired in the successful transformation of Private Banking, we concluded that the same knowledge and experience could be used to meet the needs detected in a type of customer that demanded greater attention and thus contribute to strong growth in a medium-high income segment in which Bankinter has historically had a significant presence.

With the transformation of this division, which will continue throughout 2015, Bankinter seeks to bring Personal Banking customers the best of Private Banking. To this end significant investments are being made in technology, developing new products and training the professionals in this segment.

Conditions are conducive to growth in this segment, due to the restructuring of the sector, which has reduced the number of institutions with an active presence in this business; the reactivation of the mortgage lending market and growing customer demand for advisory services and investment products in a zero interest rate environment.

Private individuals

This past year was one of the best ever as far as winning over new customers is concerned: 32,259 - an increase of 38%.

Average controlled resources in this segment amounted to €4,474 million, 15% more than in 2013.

Good customers in terms of risk. For the whole year 2014, Bankinter boasted average controlled resources in this segment of €4,474 million and average lending of €14,140 million, making Retail Banking one of the Bank's main areas of activity. 2014 was one of the best years in its history as far as winning over new customers is concerned (32,259, 38% up on the previous year) thanks to the demand for products such as the payroll account and the mortgage loan. New mortgage lending to customers in the Retail network posted growth of 252%, reaching €542 million in 2014.

Average customer deposits also grew strongly, by 14%, to reach €3,529 million. However there was a slight fall of 3% in the volume of fixed deposits, in a context of record low interest rates.

The two pillars on which the Retail strategy is based are firstly cross-selling, which is used to ensure that relationships will be long-lasting; and secondly, consumer finance products, such as credit cards and consumer loans. These types of product are aimed at customers, but the Bank's intention going forward is to extend sales to take in non-customers too.

Foreign customers

The number of new foreign customers in 2014 was 54% up on the previous year

Bank and home in Spain. The Foreign Customers segment covers non-Spanish customers requesting financing to buy a residence in Spain and requiring specialised services. It is a business that Bankinter handles in differentiated form on the Mediterranean coast and in the Balearic and Canary Islands.

Average controlled resources in this segment amount to €232 million and average lending to €601 million. The margin improved by 6% against 2013 and the number of new customers was up 54%. This segment has traditionally been less volatile than the Retail segment. At the worst points in the crisis it contracted much less sharply than the domestic business did, and now it is recovering more strongly.

In this segment the situation of customers' countries of origin is crucial. For example British customers, who were more active in the past due to the strength of the pound against the euro, have given way to Germans, Scandinavians and French. There has been a notable increase in demand from French customers as a result of changes in the tax law penalising owners of secondary residences in France.

For foreigners too, quality of service is essential. To provide appropriate service to this customer group, Bankinter has a highly trained workforce, with knowledge of languages and familiarity
with the specific needs of foreign customers.