#1ANDBANK Private Bankers Andbank Investor Presentation June 2020 ANDRA#2Table of Contents 1. Overview of Andorra 2. Andbank at a glance ANDBANK Private Bankers 2#31. Overview of Andorra ANDBANK Private Bankers 3#4Andbank Investor 2020 Geographic and demographic information Andorra is an independent European co-principality situated in the southern peaks of the Pyrenees Mountains, bounded by France and Spain. The capital is Andorra la Vella. The total population is approximately 80.000 people with strong levels of immigration from Spain, France and Portugal. Andorra is a wealthy economy, with high income per capita - EUR 36,335 in 2019. Distribution of the population by nationality in 2019(1) Pants Colo 12% 4% 10% 25% 0 (1) Source: Department of Statistics - Government of Andorra Andorra 49% Spain Portugal Others France ANDBANK Private Bankers 4 FRANCE Soldau Actral Cardia Undine APL Oda Massana Pas da Casa D Encamp Escaldes-Engordarry Andorra la Vella Sant Jul de Loria SPAIN 4#5Andbank Investor 2020 Key Macro data 2019 Real GDP growth (%) 2,3 2,0 -1,3- 2,2 1,5 Public debt to GDP (%) 33,7 ANDBANK Private Bankers 117,7 95,5 98,1 86,1 Andorra Spain France Portugal Andorra Spain France Portugal GDP per cápita (EUR k) 36 33 25 28 18 Unemployment rate (%) 2,0 13,7 8,2 6,9 6,7 Andorra Spain France Portugal Andorra Spain France Portugal Sources: Eurostat Government of Andorra - S&P 5#6Andbank Investor 2020 Andorra Ratings ANDBANK Private Bankers Standard & Poor's Report - April 2020 • • • April 2020 S&P has affirmed the BBB Rating for Andorra and revised the Outlook to Stable from Positive due to the Covid19 crisis. S&P recognizes that Andorra's health authorities have so far successfully stabilized the contagion curve. The economy will be affected by the economic outlook of its main trading partners, Spain and France. But Andorra faces the pandemic in a robust fiscal and debt position after 7 consecutive years of surplus. Long-Term IDR Fitch Report • Latest Fitch Ratings Report was published January 2020, before the Covid 19 outbreak. It affirms Andorra's Ratting to BBB+ with stable outlook. Andorra's 'BBB+' rating is supported by high GDP per capita, political stability, and prudent fiscal policy. BBB Outlook Stable Short-Term IDR A2 Long-Term IDR BBB+ Outlook Stable Short-Term IDR F2 Regulatory Improvements International Standards: full implementation of Basel III capital rules / CRR/CRDIV; adoption of IFRS accounting standards; Mifid completed by December 2020 Robust Economy Good tourist numbers, better industrial activity and great real state activity Stable Outlook Debt reduction is supported by a near- balanced central government position, sustained local government surpluses, and by moderate GDP growth. Public Debt Ratio Debt/GDP has been reduced to 33,7% from 40% + By Law annual deficit can not exceed 1%. Obvious exception after Covid 19 crisis. Source: Fitch Ratings S&P Global Ratings 6#7Andbank Investor 2020 ANDBANK Private Bankers Regulatory framework Andorra's political system is a Parliamentary co-principality (France & Spain). Public institutions Judicial power High Council of Justice High Court of Justice Civil Court Criminal Court Tribunal de Corts Batlles Court Administrative Court Private sector associations • Legislative power Executive power General Council Government AAFA Supervisory authorities Autoritat Financera Andorrana Prudential supervision of all entities of the financial system Exercise legislative power Approve government budget Appoint head of Government and promote/control his actions Executive body to direct national and international policies Exercise regulatory power *AREB Manage the process for the resolution of banking institutions Look after the interests of the financial sector and ensure its representation in all relevant forums Additional regulatory standards UIFAND Unitat de Prevenció I Lluita contra la Corrupció (UPLC) Supervise all entities in AML&CTF matters Centralize and coordinate all actions regarding anti-corruption (2) ASSOCIACIÓ D'ENTITATS FINANCERES D'INVERSIÓ Andorran Banking AAA (1) Associació de Bancs Andorrans ADEFI • Satisfactory evaluations by MONEYVAL FATCA+ IQ compliant COUNCIL OF EUROPE Application of Common Reporting Standards (CRS) on automatic exchange of information. FATCA Foreign Account Tax Compliance CONSEIL DE L'EUROPE (1) Associació d'Assegurances d'Andorra (2) Associació d'Entitats Financeres d'Inversió OECD COMMON REPORTING STANDARD 7#8Andbank Investor 2020 ANDBANK Private Bankers The way to transparency Andorra has aligned its regulation and information exchange with European and international standards. These reforms converge with international practices of financial supervision. CRS - Automatic exchange of information OECD COMMON REPORTING STANDARD First exchange of information took place in 2018. Since January 1st 2017, the Andorran authorities have enacted regulations that have led to the automatic exchange of information on financial accounts between Andorra and the EU, and the exchange of information with other countries too. International Financial Reporting Standards (IFRS) Since January 1st 2018, Andorran financial institutions and banks have adopted International Financial Reporting Standards 9 for accounting purposes. 2016 2017 2018 Andorra GAAP IAS 39 IFRS 9 8#9Andbank Investor 2020 Regulatory developments Banking Key developments in banking regulation: • • Implementation of MiFID principles in Andorran regulation Implementation of Basel III principles in Andorran regulation: CRD IV in place Re-enforcements of Human Resources in all of the Regulatory Institutions. וחו CRD IV, Banking regulation Insurance ANDBANK Private Bankers Key developments in insurance regulation in place: New Insurance Distribution Law • New Insurance Regulation Law • New Pension Funds Law Inclusion of the insurance sector under the supervision of the Andorran Regulator November 2018 a new Law has been approved in the Parliament in order to implement the European CRD IV legislation EV Out of the Grey List Andorra is out of the Ecofin Grey List since late 2018 SEPA 5/0 IMF Membership EU Partnership Agreement March 2019 Andorra has gained direct access to the European System of Payments, SEPA January 2020 Andorra has formally applied for IMF Membership Andorra is currently negotiating a Partnership Agreement with the EU similar to those of Norway or Switzerland. 9#10Andbank Investor 2020 ANDBANK Private Bankers Moneyval - another positive report, January 2020 As a result of Andorra's progress in strengthening its framework to tackle money laundering and terrorist financing since its mutual evaluation in September 2017, MONEYVAL has re-rated some country Recommendations. Andorra has been in an enhanced follow-up process, following the adoption of its mutual evaluation report, which assessed the effectiveness of Andorra's anti- money laundering and counter-terrorist financing (AML/CFT) measures and their compliance with the Recommendations by the Financial Action Task Force (FATF). In line with MONEYVAL's rules of procedure, the country has reported back to MONEYVAL on the progress it has made to strengthen its AML/CFT framework. MONEYVAL Andorra is now "compliant" on ten of the 40 FATF Recommendations and "largely compliant" on twenty-seven of them. It remains "partially compliant" on three of the 40 FATF Recommendations. MONEYVAL decided that Andorra will remain in the enhanced follow-up process and will continue to report back to MONEYVAL on further progress to strengthen its implementation of AML/CFT measures. 10#11Andbank Investor 2020 Andorra, current situation The ultimate negative impact of the Covid19 outbreak on Andorran GDP is still uncertain. Andorra is a small economy that depends extensively on tourism and the financial sector. After seven consecutive years of surplus the country is in a robust fiscal and debt position to face the crisis. Andorra's health authorities have been successful in stabilizing the Covid 19 contagion curve and in fact it has been the first country in the world to test all of its citizens. The Government is expecting to complete adherence to the IMF in October 2020. Andorra has also continued negotiating the UE Association Agreement (similar to Norway or Switzerland). The Government is also negotiating with the EU and the ECB to gain direct access to the Central Bank monetary policy. ANDBANK Private Bankers 11#122. Andbank at a glance ANDBANK Private Bankers 12#13Andbank Investor 2020 Andbank at a glance We are an international Family-owned Bank, with presence in 11 countries. For over 85 years we have specialized in Wealth Management for the Private Banking industry. We are leading providers of the best solutions to our clients, through innovative value offers and with the highest quality standards. Vision Become a leading player in family-owned Private Banking in Europe and Latin America. Continue with our on-shore strategy offering wealth management services to clients of the affluent segment and to those of the wealth segment. With long-term value creating strategy and a proposal of technological/digital value. ANDBANK Private Bankers 13#14Andbank Investor 2020 Corporate Values Corporate Social Responsability Excellence in service Family company ANDBANK Private Bankers Innovation International footprint Specialization in Wealth Management 14#152000 Andbank Investor 2020 International expansion strategy 2001 Switzerland Investment advisor Bahamas Banking License CLOSED 2018 Andorra Merger Agrícol & Banca Reig Switzerland Wealth Management and Investment Advisor 2010 Luxembourg Banking License Panama New Broker-Dealer License 2011 2002 2003 2004 2012 Panama Representative Office CLOSED 2019 2013 2005 2006 2014 Mexico Representative Office ANDBANK Private Bankers 2007 2008 2009 Mexico Joint-venture in Columbus. Independent Wealth Management Advisor Panama Banking License CLOSED 2019 Uruguay Acquisition of Quest. Brokerage Firm Luxembourg Asset Management Company Uruguay Representative Office 2015 2016 2017 2018 2019 Acquisition of Banco. Inversis' Private Banking Division Monaco Spain Spain Spain Acquisition of Monte Luxembourg's Bank Banking License Paschi subsidiary Branch (Banking License) Spain Miami Brazil Acquisition of LLA. Membership FINRA Broker-dealer Company for Collective Investment Institutions. Andbank Wealth Management Miami Acquisition of Swiss Asset Advisors portfolio Brazil Acquisition of Banco Bracce Banking License Uruguay Incorporation of an Investment Advisor and a new Representative Office of Andbank Panamá Spain Brazil Incorporation of Agreement with Merchbank Capital Investimentos Asset Management Brazil Agreement with Triar Miami Broker-Dealer asset Management and Investment Advisor Asset Management License & Broker Dealer Spain Acquisition of a Brokerage and a Agency Company (Joint-venture with Barcelona Medical Association) Israel Agreement for acquisition of Sigma Investment House 15#16Andbank Investor 2020 AuMs geographical diversification Great international private banking and wealth management diversification with more than 80% of AuM booked outside Andorra. Europe 15% LATAM 20% Israel 7% INTERNATIONAL GROUP Andorra 18% ANDBANK Private Bankers Andorra Spain LATAM Europe Spain 40% Israel 16#17Andbank Investor 2020 Shareholders structure 25,15% 36,95% 37,90% 74.85% Family owners ANDBANK Private Bankers Família Cerqueda (Cerqueda Donadeu, SA - Andosins Capital) Família Ribas Duró (Reig Finances, SAU - Reig Patrimonia) Other minority shareholders 17#18Andbank Investor 2020 Key Figures 2019 24 BN€ BBB Stable AUMS Fitch Ratings ANDBANK Private Bankers 267% 141% LCR / NSFR 28 MM€ Net Profit 537 MM € Core Capital 2,93% NPL Ratio 5,4% ROE 12.44% CET1 100,5% NPL Coverage ratio 14,33% ROTE 14.95% TIER 1 7.26% Leverage Ratio 18#19Andbank Investor 2020 Solid Balance Sheet Sustainable growth AuMs (MM€) 23.842 21,774 Liquidity ROE LCR LtD 360% 5,4% 5,4% 267% ANDBANK Private Bankers 56,80% 55,14% Var. +2.1 bn Var. -93% Var. +1,66% Dec 19 Dec'18 Dec 19 Dec'18 Dec'19 Dec 19 Dec 19 Dec'18 Capital TIER 1 CET1 15,76% 14.95% Dec'19 Dec 18 Var. -0.81% Solvency calculated with CRR criteria 13.09% 12.44% Dec'19 Dec 18 Var. -0,65% Asset Quality NPL ratio 3.65% 2.93% Dec 19 Dec 18 Var. -0,72% Coverage ratio 100,5% 104% Var. -3,5% Dec'19 Dec'18 19#20Andbank Investor 2020 Solvency & Liquidity Position Andbank maintains a solid solvency position, significantly above minimum levels required by regulations with a leading position in the international market. TIER 1 2019 SUBS 22,0% Morgan Stanley 19,2% CREDIT SUISSE 17,1% 15,6% Deutsche Bank Goldman Sachs 15,2% ANDBANK BNY MELLON 14.95% 14,8% JPMORGAN CHASE & CO. 14,1% CAF REOLE 13,7% BBVA 13,6% Iciti Santander NATIXIS RAME OF ENERICA Source: Bloomberg 13,4% 13,1% 13,1% 12,6% LCR 2019 ANDBANK Private Bankers ANDBANK 267% CREDIT SUISSE 198% Julius Bär 179% 160% BARCLAYS HSBC 150% 147% Santander 141% Deutsche Bank UBS 134% BBVA 129% BNP PARIBAS * 125% SOCIETE GENERALE 119% 20 20#21Andbank Investor 2020 Spanish Peers Andbank's risk management indicators and capital ratios show its privileged position with regard to the average of Spanish banking industry. Andbank has never sold an NPL Portfolio. NPL Ratio 2,4% 2,93% 2019 3,9% 4,0% 4,1% 3,7% TIER 1 2019 ANDBANK Private Bankers 5,4% 15,9% 14,95% 14,5% 13,9% 13,6% 13,5% 13,1% Liber bank ANDBANK CaixaBank BBVA Sabadell Bankia Bankia ANDBANK Liber bank Santander Sabadell BBVA CaixaBank Santander Source: Bloomberg 21#22Andbank Investor 2020 Assets & Liabilities ANDBANK Private Bankers Assets 2019 2018 Liabilities 2019 2018 Cash, Central Banks & Credit Institutions 1.059 1.433 Deposits 3.283 3.242 Investment Securities 894 858 Debt Securities 458 473 Loans & Receivables 1.990 1.699 Other 297 211 Tangible & Intangible Assets 440 299 Capital 537 517 Other Assets 192 154 Total Assets 4.575 4.443 Total Assets 4.575 4.443 Total assets (MM €) 5.064 4.950 5.029 4.485 4.575 4.443 4.097 3.747 2012 Figures in MM€ 2013 2014 2015 2016 2017 2018 2019 22 22#23Andbank Investor 2020 ANDBANK Private Bankers Asset side - Cash & Central Banks vs Banks & Credit Institutions 2012 2013 2014 2015 2016 2017 2018 2019 Since 2012, Andbank has increased Cash, Central Banks 42 37 77 Banks & Credit Institutions 538 580 liquidity in cash and central banks Total Assets 580 617 1.311 41 1.270 1.030 1.107 1.737 1.661 1.433 941 959 843 740 796 702 590 319 1.059 But moving to consolidate efficiency under an overall high degree of liquidity. Cash & central banks (MM €) Banks & credit institutions (MM €) 1.270 42 37 41 77 T 941 959 843 740 2012 2013 2014 2015 2016 2017 2018 2019 538 580 1.030 796 702 illi II 590 319 2012 2013 2014 2015 2016 2017 2018 2019 Andbank gained direct access to the ECB through its Banks in Spain, Luxembourg and Monaco. Figures in MM€ Systemic Risks have been dramatically reduced. 23 23#24Andbank Investor 2020 Asset side – Loans & NPLs ANDBANK Private Bankers Type of guarantee 2012 2013 2014 2015 2016 2017 2018 2019 Total loans (MM €) 1.825 1.768 1.900 1.860 Mortgage 961 923 801 771 733 629 615 734 1.638 1.657 1.507 1.513 Pledge 458 476 731 733 651 649 719 782 guarantee Personal/ 406 369 368 356 254 229 179 141 Others Total 1.825 1.768 1.900 1.860 1.638 1.507 1.513 1.657 NPL Ratio 2012 2013 2014 2015 2016 2017 2018 2019 Coverage ratio 122,5% 104,0% 100,5% 3,87% 3,57% 3,34% 3,47% 3,65% 3,22% 2,93% 67,7% 69,0% 58,4% 59,3% 2013 2014 2015 2016 2017 2018 2019 2013 2014 2015 2016 2017 2018 2019 24#25Andbank Investor 2020 Asset Side - Financial Assets Total Financial Assets 772 MM € USA 227 MM Govs & Public Spain 195 MM Sector 384 MM Banks 344 MM Andorra 82 MM Italy 79 MM France 52 MM UK 43 MM Germany 38 MM Belgium 21 MM Brazil 17 MM Netherlands 13 MM Others 6 MM By Country Corporates 43 MM Others 0 MM AAA 146 MM AA+ to AA- 10 MM A+ to A- 312 MM BBB+ to BBB- 287 MM ANDBANK Private Bankers Others 17 MM By Sector By Rating 25#26Andbank Investor 2020 Andbank Fitch Ratings . April 2020 Fitch Ratings affirmed Andbank's Long- Term IDR at 'BBB' but changed the Outlook to "Negative" from "Stable" due to the disruption caused by the coronavirus pandemic in Andorra and globally. Andbank is the best rated Andorran Bank as international private banking activities should provide greater resilience to earning pressures from the domestic retail and commercial activity. The Agency states that Andbank has headroom to emerge from the crisis with its ratings intact. Long-Term IDR BBB Outlook Negative Short-Term IDR F3 Viability rating bbb Support rating 5 Support rating floor NF ANDBANK Private Bankers ANDBANK Private Bankers AR 2013 2014 2015 2016 2018 2019 2020 Andorra A- (Negative) BBB+ BBB (Stable) (Stable) BBB (Positive) BBB+ (Positive) BBB+ (Stable) BBB+ (Stable) A- BBB Andbank (Negative) (Stable) BBB (Stable) BBB (Stable) BBB (Stable) BBB (Stable) BBB (Negative) 26#27Andbank Investor 2020 Supervisory framework Country Regulator Eurosistema. CNMV COMISION NACIONAL DEL MERCADO DE VALORES Spain • Banco de España • CNMV BANCO DE ESPAÑA Luxembourg ✡ Israel Mexico • CSSF cssf Commission de Surveillance du Secteur Financier • ISA • Ministry of Finance ⚫ CNBV Monaco • Banque de France( Brazil ⚫ BACEN • FINRA USA Andorra ישראל COMISION CNBV NACIONAL BANCARIA Y DE VALORES ACP AUTORITÉ DE CONTROLE PRUDENTIEL BANQUE DE FRANCE BANCO CENTRAL DO BRASIL • SEC finra • AFA • UIFAND ES AN ANGE CO AAFA UIFAND ANDBANK Private Bankers 27 27#28ANDBANK Private Bankers www.andbank.com