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  2. Procedure for pursuing arbitration - FAQs

BankiaProcedure for pursuing arbitration - FAQs

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FAQS

1. What is arbitration?

Consumer arbitration is a free procedure that is an alternative to court proceedings, which can be used for dealing with and resolving claims relating to issues about the marketing of specific products or services (for example misselling, the inability of the investor to contract, etc.). When the arbitration procedure is used, the decision that is adopted (the award) is binding on the entity and the claimant.

2. What are the characteristics of arbitration?

It is voluntary for both parties.

It is free. There is no need for a lawyer or court attorney.

It is faster than going to court.

It is binding. The arbitration award has the same effect as a court ruling

3. Which customers can use arbitration?

Arbitration is available to individuals and non-profit entities provided that they are retail customers of Bankia and are holders of preferred participating securities or subordinate debt from the savings banks that merged to form the Bankia group.

4. Does the arbitration procedure delay the share conversion process?

Arbitration does not delay the conversion process in any way, which will continue its expected course. They are two independent processes.

5. Where should arbitration applications be submitted?

Formal arbitration applications should be submitted to the Bankia branch at which the customer has his or her normal relationship, using the forms that will be available in all Bankia branches and via the www.bankia.com website. (Donwload)

Group arbitration applications will not be accepted since the procedure is individual and is treated on a case by case basis

6. What documentation must be provided?

Bankia recommends that the customer completes the arbitration application form as well as including all those documents that are related to the product (securities account agreement, purchase order, appropriateness test, etc.) and any other documentation that accredits their personal circumstances.

7. Who assesses the application?

Bankia will send the application to an independent expert (in this case KPMG), which will issue a report about whether the application does or does not meet the conditions for arbitration according to the criteria established by the government's Monitoring Committee. If the application is upheld, the maximum amount that the customer may claim will also be set.

8. What are the next steps once the expert valuation has been made?

If the KPMG report establishes that the application does not fulfil the aforementioned conditions, the customer is informed and is free to continue the claim via other channels, at the customer's discretion.

If the KPMG report finds that the application does meet the aforementioned conditions, the Bankia branch will contact the customer and will inform him or her of the result. The customer may then decide whether or not to continue with the arbitration process.

In the event that the customer does not wish to carry on, he or she may waive this process and the claim can be pursued via other channels, including court proceedings.

If the customer accepts the conditions, he or she will sign an Arbitration Agreement that will state the maximum amount that can be returned as well as the settlement formula. The Bankia branch will contact the customer to arrange for the Agreement to be signed.

This Agreement shall subsequently be submitted to the Consumer Arbitration Board, which will issue the award.

The Board will inform the customer and Bankia of the award. In the event that the award is in the customer's favour, Bankia will pay the amount indicated in the award to the customer's account based on the settlement formula in the Arbitration Agreement.

The award is binding on the parties and cannot be appealed via the courts.

9. How much will each customer that receives an award obtain?

The award will define the amount that the customer can receive in each case. This amount will never exceed the maximum possible return amount indicated in the Arbitration Agreement calculated in the following way:

(+) Amount subscribed: valuing the securities at their par value or the purchase price (if they were acquired at the time of the issue or subsequently).

(-) Less any interest effectively received (coupons paid)

(+) Plus the interest that may have been obtained during the same period, as a traditional deposit, based on the evolution of the Euribor 12 month index. The maximum value will be limited to 100% of the par value in all cases.

Any amount payable shall be settled for the difference between the maximum possible return amount and the value of the Bankia shares received in the repurchase transaction (conversion), taking the closing market share price on the day prior to the date of the signing of the arbitration agreement, unless the Customer has previously sold the share, in which case the amount resulting from their sale shall be deducted.

The customer will therefore know the amount to be received when he or she signs the Arbitration Agreement (based on the settlement formula in the Arbitration Agreement), assuming the market risk for the evolution of the share price from this moment forwards if he or she decides to hold the shares.

10. Can customers file a lawsuit?

All the arbitration applications submitted by customers will initially be assessed by an independent expert (KPMG), which will issue a report about whether the application does or does not meet the conditions for arbitration according to the criteria established by the government's Monitoring Committee. If according to the report the conditions for arbitration are not fulfilled, the customer may choose to pursue the matter via the courts.

For those applications that, according to KPMG, do fulfil the aforementioned conditions for arbitration, KPMG shall evaluate the maximum amount that the parties may receive through arbitration.

The corresponding Bankia branch shall contact the customer to inform him or her of the maximum amount stated in the report.

Once the customer agrees to arbitration and signs the Arbitration Agreement, he or she may not pursue the matter via the courts.

11. Can the customer sell his or her shares if he or she has requested arbitration?

Yes. The customer may sell his or her shares at any time, regardless of the arbitration process. In the event of a favourable award, the amount received from the sale of the shares will be discounted from the maximum amount that can be received according to the formula in the Arbitration Agreement.

Go to Arbitration for preferred securities>>

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