Bankia, S.A. and subsidiaries forming the Bankia Group __________________ Consolidated financial statements for the year ended 31 December 2013 Translation of consolidated financial statements originally issued in Spanish and prepared in accordance with the regulatory financial reporting framework applicable to the Group (see Notes 1-3 and 50). In the event of a discrepancy, the Spanish-language version prevails. CONTENTS PAGE CONSOLIDATED FINANCIAL STATEMENTS x Consolidated balance sheet .................................................................................................................................................. 1 x Consolidated income statement ............................................................................................................................................ 2 x Consolidated statement of recognised income and expense ................................................................................................ 3 x Consolidated statement of changes in total equity ................................................................................................................ 4 x Consolidated statement of cash flows................................................................................................................................... 6 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (1) Description of the Group, beginnings of the incorporation of Bankia, reporting framework applied to draw up the consolidated financial statements and other information ..................................................................................................... 7 (2) Accounting policies and measurement bases ....................................................................................................................... 26 (3) Risk management ................................................................................................................................................................. 62 (4) Capital management ............................................................................................................................................................ 81 (5) Earnings per share ............................................................................................................................................................... 84 (6) Remuneration of Board members and senior executives ..................................................................................................... 85 (7) Proposed appropriation of profit of Bankia, S.A. ................................................................................................................... 89 (8) Cash and balances with central banks ................................................................................................................................. 89 (9) Financial assets and liabilities held for trading ...................................................................................................................... 89 (10) Other financial assets at fair value through profit or loss .................................................................................................... 91 (11) Available-for-sale financial assets ...................................................................................................................................... 92 (12) Loans and receivables ........................................................................................................................................................ 94 (13) Held-to-maturity investments ............................................................................................................................................ 101 (14) Hedging derivatives (debtors and creditors) ..................................................................................................................... 103 (15) Non-current assets held for sale and Liabilities associated with non-current assets held for sale .................................... 105 (16) Investments ...................................................................................................................................................................... 111 (17) Tangible assets ................................................................................................................................................................ 113 (18) Intangible assets ............................................................................................................................................................... 115 (19) Other assets ..................................................................................................................................................................... 116 (20) Financial liabilities at amortised cost ................................................................................................................................ 117 (21) Liabilities under insurance contracts ................................................................................................................................. 120 (22) Provisions ......................................................................................................................................................................... 120 (23) Other liabilities .................................................................................................................................................................. 122 (24) Non-controlling interests ................................................................................................................................................... 122 (25) Valuation adjustments ...................................................................................................................................................... 125 (26) Equity - Share capital and share premium, treasury share transactions, reserves and other information ........................ 127 (27) Fair value .......................................................................................................................................................................... 130 (28) Tax matters ....................................................................................................................................................................... 138 (29) Other significant disclosures ............................................................................................................................................. 149 (30) Contribution to consolidated profit or loss by company .................................................................................................... 152 (31) Interest and similar income ............................................................................................................................................... 153 (32) Interest expense and similar charges ............................................................................................................................... 153 (33) Return on equity instruments ............................................................................................................................................ 153 (34) Share of profit/loss of entities accounted for using the equity method .............................................................................. 154 (35) Fee and commission income ............................................................................................................................................ 154 (36) Fee and commission expense .......................................................................................................................................... 154 (37) Gains and losses on financial assets and liabilities (net) .................................................................................................. 155 (38) Exchange differences (net) ............................................................................................................................................... 155 (39) Other operating income .................................................................................................................................................... 155 (40) Other operating expenses ................................................................................................................................................ 156 (41) Administrative expenses ± Staff costs .............................................................................................................................. 156 (42) Administrative expenses - Other general administrative expenses .................................................................................. 166 (43) Amortisation ...................................................................................................................................................................... 167 (44) Provisions (net) ................................................................................................................................................................. 167 (45) Impairment losses on financial assets (net) ...................................................................................................................... 167 (46) Impairment losses on other assets (net) ........................................................................................................................... 167 (47) Gains/(losses)