CaixaBank obtains attributable net profits of 458 million euros and increases its solvency to a Core Capital figure of 12.5%

•  CaixaBank consolidates its position in the Spanish banking sector, with close to 14 million customers, a market share of 27.4% in personal banking and a leading position in most segments and products: payroll deposits (21.3%), pensions deposits (19.9%), loans (15.2%), deposits (14.2%) and mutual funds (14.2%, the leading mutual fund manager by number of participants).  Total customer funds rise to 299,332 million, an increase over the last twelve months of 8,404 million (+2.9%). Retail banking resources increase by 3.8%, representing year-on-year growth of 9,183 million euros.

• Robust generation of results. In a complex and demanding environment, the robust nature of CaixaBank's retail business and income from its investments have allowed it to obtain gross income totalling 5,276 million euros, up by 2.6%. Net interest income totals 2,936 million (+3.2%) and displays a positive trend in comparison with the previous quarter, with growth of 1%.

• High levels of solvency, with a BIS II Core Capital figure of 12.5%, 150 bp up on December, with a notable ability to generate capital (Core Capital up by 169 basis points during the first 9 months of the year). Taking account of the transitional period, Core Capital according to the BIS III criteria applicable in 2014 would stand, in September 2013, at 11.8%.

• Excellent liquidity of 66,289 million euros (+13,197 million for the year), 19.3% of the Group's total assets, with a robust financing structure. At the beginning of October, CaixaBank also issued 1,000 million in senior bonds, generating demand for 2,800 million at a cost of Mid-Swap +170 basis points.

• Active credit risk management. With the new classification of refinanced operations, the non-performing loan ratio stands at 11.40% (+23 basis points over the quarter), which is lower than the average for the sector as a whole (12.12% in August), with allowance coverage at 65%.

• Total write-downs and provisioning charges amount to 5,956 million euros, 3,449 million of which has been entered against results and the remainder recorded as reasonable value adjustments at Banco de Valencia and Banca Cívica. CaixaBank also provided advance cover in June for the impact of the new criteria governing the classification and provision of refinancing operations, with an increase of 540 million in associated coverage.

CaixaBank obtained attributable net profits of 458 million euros during the first nine months of 2013 (173 million euros during the same period in 2012). The balance sheet includes the integration of the accounts of both Banca Cívica (from 1 July 2012) and Banco de Valencia (from 1 January 2013), and it reflects the sustained generation of income from banking business and investments, the implementation of strict policies to reduce costs with the early achievement of synergies, and high levels of prudence in risk management and coverage.

CaixaBank, with Isidro Fainé as Chairman and Juan María Nin as Deputy Chairman and CEO, has initiated the second phase of its 2011-2014 Strategic Plan in 2013, focusing its efforts on prioritising the institution's reputation and quality of service, and maintaining its leading position in the sector with profitable growth.

CaixaBank consolidates its position as Spanish market leader, with 13.7 million customers: 27 out of every 100 people in Spain are customers of CaixaBank

After completing the incorporation of Banca Cívica and Banco de Valencia, CaixaBank has further consolidated its position as Spain's leading financial institution, with 13.7 million customers, assets worth 342,675 million euros and business volumes totalling 514,644 million. According to the most recent data published, CaixaBank's share of the personal banking segment is now 27.4% (with 22.7% using CaixaBank as their preferred bank).

CaixaBank's commercial focus remains centred on winning and retaining customers, as shown by the rise of 386,300 in payroll deposits during the first nine months of this year (+135% on 2012). In addition, InverCaixa has consolidated its position as the leading mutual fund manager by number of participants (a total of 723,731), managing funds totalling 20,090 million (up by 18.2%).

As a consequence of these intense levels of commercial activity and the incorporation of the Banca Cívica and Banco de Valencia business, the Group has enhanced its leading position, with the following market shares according to the most recent data available:

 

Total customer funds amount to 299,332 million euros, an increase over the last twelve months of 8,404 million (+2.9%), following the incorporation of the funds from Banco de Valencia and good quality commercial management. Retail banking resources stand at 251,754 million euros, representing year-on-year growth of 9,183 million (+3.8%).

Gross customer loans fell by 3.5% to 215,312 million, which is the result, among other things, of the general deleveraging process focused principally on the property development sector (-12.3%), and the replacement of bank financing with debt issues by both large companies and public sector institutions.

If this last factor were not taken into account, the fall in the loans portfolio would have been just 2.1%. Indeed, during the last 12 months, 85,000 million has been granted in loans, in a total of more than 1.37 million operations for the Group as a whole. 
 

High and sustained levels of recurring income, strict cost management and expected total synergies of 682 million euros from 2015 onwards

The robustness of the retail banking business, the integration of Banca Cívica and Banco de Valencia, income from investments and the management of assets and liabilities on the balance sheet have led to a rise in the gross margin to 5,276 million euros (up by 2.6% on the same period last year). 

Net interest income totalled 2,936 million euros, a year-on-year increase of 3.2%. This figure is affected by the negative revaluation of the mortgage portfolio, the deleveraging process, the improved rates from new operations and a clear reduction in financing costs.

Net interest income for the third quarter of 2013 totalled 977 million euros and displayed a positive trend in comparison with the previous quarter, with growth of +1.0%.

CaixaBank has also continued with its exacting cost management policy. During the first six months of 2013, recurring costs were reduced by 6.2% on a like-for-like basis (taking account of the incorporation of Banca Cívica and Banco de Valencia when making the comparison with the same period in 2012). Extraordinary costs of 832 million euros have also been recorded during the year as part of the plan to optimise Group structure.

The intense restructuring plan for the CaixaBank workforce will lead to increased efficiency, thus ensuring achievement of the cost synergies forecast as a result of the integration of Banca Cívica and Banco de Valencia. By 30 September, 98.3% of the synergies forecast for 2013 had been achieved (423 million) and 265 million euros had already been recognized on the income statement.

Total synergies forecast from 2015 onwards have risen to 682 million euros (some 93.8% of which had already been achieved by September 2013), a 9.1% increase on the initial forecast of 625 million.

Particularly notable during the first nine months of the year are the robust provisioning charges and write-downs, the return on investments and income from financial operations

• Losses due to the impairment of financial assets rose to 3,449 million euros, up by 28.2% on the same period for the previous year. This figure includes 375 million in provisioning charges for refinancing and the entry of 902 million euros to cover 100% of the coverage required under Royal Legislative Decree 18/2012.

• High levels of provisioning charges and write-downs have been maintained, with total provisions of 5,956 million euros, including 2,507 million euros entered as reasonable value adjustments at Banco de Valencia and Banca Cívica.

• Net fees rose by 4.1% to 1,320 million euros over the year, due to the increase in banking business, specialisation by segment and growth resulting from the management of off-balance-sheet resources.

• Income from the investments portfolio totalled 569 million euros (-21%), affected by the reduction in the dividend from Telefónica.

• Income from financial operations rose to 601 million euros (+91.4%), due to the close management of the Group's financial assets and liabilities, which allowed it to take advantage of market opportunities.

• Net operating income excluding extraordinary expenses stands at 2,269 million euros (-12.3%). Operating costs were affected by the 832 million euros of extraordinary expenses, almost entirely the result of workforce adjustments at CaixaBank.

• The entry "Profit/loss from the disposal of assets and others" in 2013 includes, among other items, the impact of the negative difference resulting from the consolidation of Banco de Valencia.

CaixaBank provided advance cover for the impact of the new criteria governing the classification and provision of refinancing operations

CaixaBank had already provided cover for the impact of the new criteria governing the classification and provision of refinanced loans, during the first half of 2013. The application of this review meant that 3,287 million euros were classified as doubtful loans, with an increase in the associated allowance coverage of 540 million euros. Of this amount, 375 million euros was charged against the results for the year.

The non-performing loan ratio stands at 11.40%, below the average for the sector (12.12% in August), with allowance coverage of 65% (63% on 31 December 2012), 143% if mortgage guarantees are taken into account.

The main influence on the year-on-year evolution of the non-performing loans figure has been the new criteria for refinanced operations (+134 basis points) and the deleveraging process (+101 basis points). For the first nine months of this year, the increase in doubtful loans only accounts for 19 basis points of the year-on-year variation in the non-performing loans ratio. 

The total amount of doubtful loans was reduced during the third quarter by 173 million euros, including the impact of the integration of both Banca Cívica and Banco de Valencia, along with the application of the new criteria for refinanced operations.

CaixaBank liquidity totals 66,289 million euros, with a robust financing structure

The liquidity figure stands at 66,289 million euros, amounting to 19.3% of total assets. This figure has increased by 13,197 million over the course of the year. At the beginning of October, CaixaBank also issued 1,000 million in senior bonds, generating demand for 2,800 million at a cost of Mid-Swap +170 basis points.

This healthy level of liquidity, as confirmed by the repayment during the first half of the year of 12,613 million euros to the ECB (including 6,500 million euros of the LTRO), has allowed CaixaBank to meet 5,378 million euros of maturing debt over the course of the year. As of 30 September, the amount of liquidity on the balance sheet exceeded the amount drawn down under the ECB facility.

CaixaBank also consolidated its improved financing structure, as demonstrated by the Loan to Deposits ratio, which has fallen by 10.5 percentage points in 2013 to 117.6%.

Excellent solvency of 12.5% with a notable capacity for capital generation (169 basis points in 2013)

CaixaBank maintains high levels of solvency, with a Core Capital figure of 12.5% (150 basis points more than in December), following the integration of Banco de Valencia, early payment of the public assistance received by Banca Cívica from the FROB, and the partial sale of its holding in the Inbursa Financial Group.

A notable element in this is the institution's capacity for capital generation, which has led to an increase of 169 basis points in its Core Capital figure during the first nine months of this year. Taking account of the transitional period, Core Capital according to the BIS III criteria applicable in 2014 would stand, in September 2013, at 11.8%.

CaixaBank's attributable own funds amounted to 18,919 million euros, with a surplus of 7,605 million. Risk-weighted assets (RWA) stand at 141,425 million euros.

Reduction of exposure in the property development sector and sales and rentals worth 1,544 million euros (3,613 million euros at their original value)

Commercial activities by Building Center, CaixaBank's real estate subsidiary, have brought sales and rentals worth 1,544 million euros, up 141% on the same period last year. The total number of buildings marketed reached 12,988 units. If commercial activities are valued at the original investment value, the total rises to 3,613, with 21,705 buildings sold, including development properties.

During the first nine months of 2013, financing of the property development sector was reduced by 3,318 million euros (-12.3%).

For its part, the total portfolio of net assets handed over and available for sale amounts to 6,327 million euros, with coverage of 49% (+3.5% for the year so far).

"la Caixa" Social Projects: a founding commitment that is more necessary than ever

For the sixth year running, the Caja de Ahorros y Pensiones de Barcelona, "la Caixa", controlling shareholder of CaixaBank, maintained its Social Projects budget during 2013 at 500 million euros. The institution's founding commitment, to take a percentage of the profits it obtains from its financial operations and pay it back to society, remains more valid than ever almost 110 years since "la Caixa" was founded in 1904. 

Attending to the most pressing social problems continues to be its strategic priority: 334 million euros have been allocated for the development of social and welfare programmes (67% of the total amount invested); 67.1 million for scientific and environmental initiatives; 64.3 million for cultural activities; and 34.6 million euros for educational and research projects.

The Social Projects programme focuses its efforts on combatting poverty and exclusion in Spain; creating employment among disadvantaged groups; facilitating access to housing; providing psychosocial attention for the terminally ill and their families; improving social cohesion in areas with high levels of cultural diversity; and encouraging healthy aging among the elderly. It also provides support for training for many different groups of people, research and the imparting of scientific knowledge, the dissemination of culture and the preservation and improvement of the environment, as permanent lines of action. 

During the first nine months of 2013, the Social Projects programme has provided 33.4 million euros in grants to 49,255 children in a project designed to break the continuing cycle of poverty. As part of this project, during the last quarter more than 5,700 boys and girls suffering from conditions of exclusion took part in children's summer camps, while 773 families began a positive parenting programme in September.

The Incorpora programme has provided 10,495 jobs for vulnerable people at 3,500 companies since January this year. Adhesion to the Employment Ministry's Strategy for Young Entrepreneurship and Employment, with an investment of 6 million euros from "la Caixa" and a promise to contribute to the creation of 10,000 new job opportunities has further underlined this commitment.

As part of the programme that offers support to the terminally ill and their families, the Social Projects programme has helped 10,406 patients and more than 14,700 family members at more than 50 hospitals where the programme is running, as well as through home visits.

Attending to the elderly at 598 centres distributed around the whole of Spain (63 owned by "la Caixa" and 535 operated under agreements with various authorities) is another priority for the Social Projects. More than one and a half million elderly people are now taking part in the "la Caixa" Generation 3.0 project, which is founded on the principles of active and healthy aging and full participation by the elderly in society.

The Social Projects also work to provide access to housing for the most disadvantaged groups. The "la Caixa" Group currently has more than 13,000 social housing units for use by the disadvantaged, as part of programmes such as Accessible Housing and Assisted Renting).

The commitment of the Social Projects programme to education was further underlined with the award of grants to 120 students to allow them to continue their postgraduate studies at some of the best universities in the world, in a ceremony hosted by the King and Queen on 10 July, the promotion of social entrepreneurship, and support for schools via the eduCaixa platform, which involves more than a million schoolchildren and teachers each year.

In the environmental arena, the Social Projects programme continued to support the conservation and improvement of natural spaces across the whole of Spain (131 projects, which also helped more than 631 people re-enter the labour market between January and September, bringing the total number to 10,485 since the programme began in 2005).

The renewal of the joint agreement between the Social Projects and CSIC to extend the Science City project to 10 new towns with fewer than 40,000 inhabitants, combined with the Summer Science Camps, which have allowed 1,808 Secondary School and Baccalaureate students to enhance their access to knowledge are further evidence of the aim of the Social Projects to disseminate scientific learning, a goal exemplified by CosmoCaixa.

The Social Projects also promote the advancement of research (in areas such as AIDS, cancer and cardiovascular and neurodegenerative disorders) and the offer of scientific learning to all sectors of society. The offer of culture to audiences of all ages and educational abilities is the aim of the exhibitions held at the CaixaForum cultural centres, with recent shows dedicated to Pissarro and Sorolla in Barcelona and Le Corbousier and Sebastiao Salgado in Madrid. The academic programme at Palau Macaya and completion of the final phase of CaixaForum Zaragoza, which is planned to open in April 2014, further extend the Social Projects' work in this area.

At an international level, the Social Projects programme is currently operating 69 projects in 26 developing countries, and more than 2 million children have now been vaccinated as part of its Child Vaccination programme, which it runs jointly with GAVI Alliance.

In short, nine busy months in which the institution has placed the emphasis, even more than ever, on the true raison d'être of the "la Caixa" Social projects programme: its contribution to the advancement of society and the welfare of all people.