Press Release

Bankinter to Transfer Linea Directa

Banking Organizations
December 20, 2019

Bankinter has announced plans for its insurance subsidiary, Linea Directa (LDA), to become an independent publicly traded company. The transaction will have a marginal positive impact on capital ratios. Nevertheless, the Bank will also lose an important source of revenues. LDA contributed to 18% of Bankinter´s net attributable income in 9M19.

Key highlights of the commentary include:

• Bankinter announced a proposal to transfer Linea Directa Aseguradora shares to its shareholders via an in-kind dividend.
• The transaction is expected to have a marginal positive impact on capital.
• Nevertheless, we view the transaction as negative for Bankinter´s earnings power, business mix and internal capital generation.

“We view the transaction as negative for Bankinter´s earnings power, business mix and internal capital generation. After the transaction is closed, Bankinter will lose an important revenue source which provided support to revenues, especially during economic down-turns. Nevertheless, the transaction will have no impact on Bankinter´s regulatory capital, and the Bank has improved its revenue diversification in recent times” said Pablo Manzano, Vice President - Global Financial Institutions Group, DBRS Morningstar.

The full commentary, titled “Bankinter to Transfer Linea Directa” can be found on dbrs.com.

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