CaixaBank Fixed Income Presentation April 2014

Transcription

1 CaixaBank Fixed Income Presentation April 2014

2 Disclaimer The purpose of this presentation is purely informative and the information contained herein is subject to, and must be read in conjunction with, all other publicly available information. In particular, regarding the data provided by third parties, neither CaixaBank, S.A. ( CaixaBank ), nor any of its administrators, directors or employees, is obliged, either explicitly or implicitly, to vouch that these contents are exact, accurate, comprehensive or complete, nor to keep them updated, nor to correct them in the case that any deficiency, error or omission were to be detected. Moreover, in reproducing these contents in any medium, CaixaBank may introduce any changes it deems suitable, may omit partially or completely any of the elements of this document, and in case of any deviation between such a version and this one, assumes no liability for any discrepancy. This document has at no time been submitted to the Comisión Nacional del Mercado de Valores (CNMV the Spanish Stock Markets regulatory body) for approval or scrutiny. In all cases its contents are regulated by the Spanish law applicable at time of writing, and it is not addressed to any person or legal entity located in any other jurisdiction. For this reason it may not necessarily comply with the prevailing norms or legal requisites as required in other jurisdictions. CaixaBank cautions that this presentation might contain forward-looking statements. While these statements represent our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. Statements as to historical performance, historical share price or financial accretion are not intended to mean that future performance, future share price or future earnings for any period will necessarily match or exceed those of any prior year. Nothing in this presentation should be construed as a profit forecast. This presentation on no account should be construed as a service of financial analysis or advice, nor does it aim to offer any kind of financial product or service. In particular, it is expressly remarked here that no information herein contained should be taken as a guarantee of future performance or results. In making this presentation available, CaixaBank gives no advice and makes no recommendation to buy, sell or otherwise deal in CaixaBank shares, or any other securities or investment whatsoever. Any person at any time acquiring securities must do so only on the basis of such person s own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information having taken all such professional or other advice as it considers necessary or appropriate in the circumstances and not in reliance on the information contained in this presentation. Without prejudice to legal requirements, or to any limitations imposed by CaixaBank that may be applicable, permission is hereby expressly refused for any type of use or exploitation of the contents of this presentation, and for any use of the signs, trademarks and logotypes which it contains. This prohibition extends to any kind of reproduction, distribution, transmission to third parties, public communication or conversion into any other medium, for commercial purposes, without the previous express permission of CaixaBank and/or other respective proprietary title holders. Any failure to observe this restriction may constitute a legal offence which may be sanctioned by the prevailing laws in such cases. In so far as it relates to results from investments, this financial information from the CaixaBank Group for 1Q 2014 has been prepared mainly on the basis of estimates. 2

3 1Q14 Highlights 1Q 2014: results on a gradual path to normality 1. Strong assetgathering growth Retail funds up 2.1% YTD despite falling deposit rates Low deposit yields lead to 4.4% YTD increase in off-balance sheet products Market share growth continues: deposits at 14.4% and pension plans at 18.7% 2. Solid recovery in recurrent preimpairment income 829 M of recurring pre-impairment income (+22.5% yoy): o NII flat yoy as improved deposit costs offset lower volumes Customer spread up 17 bps yoy as both deposit and loan yields improve Deposit front book now at 110 bps (-70 bps yoy) o Off -balance sheet products drive commissions up 1.8% yoy o BME disposal and bond sales boost trading income o Good cost performance in line with expectations (-7.8% yoy) 3. Positive trends in asset quality now well established NPL stock falls for third consecutive quarter (- 1.4 bn YTD) First decline in NPL ratio since Q4 2006: 11.4% (-30 bps YTD) Foreclosed asset disposals remain high: 630 M sales and rentals in 1Q Recurrent Cost of Risk at 115 bps is still high but improving 5. Improved best in class liquidity and solvency 6.5 bn of LTRO prepaid in 1Q14 with 9 bn outstanding on a clear downward trajectory CET1 B3 FL now at 12.1% (+40 bps YTD) Early redemption of 1.2 bn MCBs increases phase-in CET1 B3 to 12.4% (+120 bps YTD) 3

4 Commercial activity Taking the initiative as the network gears up for the recovery CaixaNegocios campaign brings la Caixa branch to the small business client Undisputed leadership in payrolls is reinforced 214,091 additional payrolls in 1Q 2014 Market share gains Payroll deposits market share 98,046 new accounts 21.6% 22.1% 20.0% 30% small business client penetration % 14.8% 14.9% 15.6% 15.7% 12.9% 2nd peer ( ) M-14 (1) Target market: shops, micro SMEs and self-employed individuals. Source: FRS Inmark (2) Source: FRS Inmark 4

5 Commercial activity Control of key client income flows enables cross-selling and reinforces customer loyalty Consumer finance 58,851 new costumers 343 M new financing (+44% yoy) Consumer loans market share 14.1% 9.8% 2007 F-14 Pension plans 362 M gross inflows (+21% yoy) Pension plans market share % 11.2% Life Insurance 568,830 new policies (+47% yoy) M premia (+45% yoy) Life-risk insurance market share 9.1% 14.9% Savings insurance market share 14.1% 21.1% (1) Includes pension plans ( PPIs ) and insured pension plans ( PPAs ) Sources: INVERCO, Bank of Spain and ICEA. In 2014, latest data available 5

6 Asset gathering volumes grow despite declining deposit rates Financial results analysis Total funds breakdown In Billion Euros 31 st Mar. YTD I. Funds on balance sheet % Demand deposits Time deposits Debt securities % 2.1% (3.8%) Franchise delivers strong asset gathering growth: Subordinated liabilities Institutional issuance Insurance Other funds II. Off-balance sheet funds Mutual funds Pension plans Other managed resources 1 Total funds % 0.6% 1.4% (17.4%) 4.4% 6.3% 3.4% 1.3% 1.9% Retail funds increase by 5.4 bn YTD (+2.1%) Time deposits up 2.1% YTD despite fall in new production costs to 110 bps (-19 bps YTD) Migration to fee earning off-balance sheet products continues: +4.4% YTD (+6.3% in mutual funds) Retail funds % Wholesale funds % (1) Primarily includes regional govt. securities, and Caja de Ahorros y Pensiones de Barcelona sub debt. 6

7 Financial results analysis Deleveraging still high but pace is gradually slowing Loan-book breakdown In Billion Euros, gross 31 st Mar. YTD Credit volumes decline but show a degree of stabilisation: I. Loan to individuals Residential mortgages home purchases Other II. Loan to businesses (1.6%) (1.2%) (2.9%) (4.7%) RE developer loan book delivers higher declines at -7.1% YTD Loans to individuals show gradual slowing in deleveraging as new production picks up Non -RE businesses Real Estate developers (3.9%) (7.1%) Low credit demand for capital expenditure projects impacts business loans: la Caixa RE subsidiaries Loans to individuals & businesses III. Public sector % (2.8%) (2.3%) o Large corporates continue to access wholesale funding markets o Slowing SME deleveraging trends consistent with improving macro environment Total loans (2.8%) Funding gap continues to shrink with LTD ratio now at 105% (-5 pps YTD) 7

8 Financial results analysis With integration processes now behind us results show a gradual return to normality Consolidated income statement In Million Euros 1Q14 1Q13 yoy (%) qoq (%) Net interest income Net fees Income from investments 1 Gains on financial assets Other operating revenue & exp (49) (63) (27.5) 93.3 (22.5) (2.5) (15.3) Solid recovery in recurring preimpairment income (+22.5% yoy) o NII flat yoy as improved deposit costs offset lower credit volumes Gross income Recurring operating expenses Recurring Pre-impairment income Extraordinary operating expenses Pre-impairment income Impairment losses Profit/loss on disposal of assets and others 3 1,769 (940) (650) (53) 1,696 (1,019) 677 (759) (82) (1,951) 2, (7.8) 22.5 (66.7) (26.3) (83.3) o Fees up 1.8% yoy driven by strong growth of off-balance sheet products o Trading income boosted by 47 M BME capital gains and sale of bonds o Recurrent costs fall by 7.8% yoy and consolidate cost improvements Pre-tax income Taxes 4 Profit for the period Minority interest (1) (33.9) (81.3) (54.3) -- (96.8) Impairment charges still high but gradually declining (CoR: 115 bps) Profit attributable to the Group (54.6) (1) Includes dividends and income from associates. (2) 2014 includes 32 M income from the insurance business, -83 M deposit guarantee fund contribution and 2M other includes 18 M income from the insurance business, -72 M deposit guarantee fund contribution and -9 M other (3) 2014 includes losses from the sale of foreclosed assets includes mainly: (+) 2.4bn BdV badwill, -118 M impairments on foreclosed assets and -21 M others. (4) Taxes affected by the exemption of income from investments 8

9 Customer spread increases on the back of lower deposit costs Financial results analysis Improved pricing dynamics of Q1 NII offset by seasonal impacts and deleveraging NII evolution (In Million Euros) +0.1% Customer spread up 9 bps qoq as jaws continue to widen In % Q13 2Q13 3Q13 4Q13 1Q , Loans and credits Customer funds Customer spread NIM improves at slower pace due to lower income from securities portfolio In % 1Q13 2Q13 3Q13 4Q13 1Q14-2.5% Q13 2Q13 3Q13 4Q13 1Q14 Total assets Total liabilities NIM 9

10 Lower retail funding costs contribute to improved pricing dynamics Financial results analysis Strict pricing continues to reduce costs of new time deposits Time deposits and retail CP - Back vs. front book (bps) Higher loan-book yields supported by lower impact of negative index resets on mortgages and resilient front book yields bps bps bps +103 bps +158 bps +172 bps bps bps Q13 2Q13 3Q13 4Q13 1Q bps Back Front Front book falling to 110 bps (-70 bps in 12 months ) 1Q shows relative lower impact on back book due to lower volumes repriced in the quarter and less expensive maturities Loan book yields - Back vs. front book (bps) -94 bps Back Front Expect sequential NII improvement in forthcoming quarters: Cost of time deposits to be significantly reduced: o Front book continues to decline (<100 pbs April-to-date) o More expensive maturities in 2Q14 (average cost of 2.2% vs 1.6% in 1Q14) o Production increasingly focused on offbalance sheet products Expensive wholesale maturities concentrated at the end of Q2 will reduce wholesale costs End of negative index resets on mortgages during Q2 Next quarters expected to benefit from a slowing deleveraging trend if macro trends continue 1Q13 2Q13 3Q13 4Q13 1Q14 10

11 Financial results analysis Performance in fees driven mainly by insurance and off-balance sheet products Net fees (In Million Euros) Net fee breakdown (In Million Euros) 1Q14 yoy (%) qoq (%) +1.8% Banking fees 325 (6.9) Mutual funds Insurance and pension plans Net fees Q13 2Q13 3Q13 4Q13 1Q % Banking fees gradually recover as economic activity picks up Continuous growth in mutual funds, pension and insurance fees reflect net inflows from deposits 11

12 Other income sources also show increased contribution Financial results analysis Income from investments (In Million Euros) Trading income (In Million Euros) Other operating revenue & exp. (In Million Euros) -28% +93% -23% (63) (58) (49) (123) 1Q13 4Q13 1Q14 1Q13 4Q13 1Q14 1Q13 4Q13 1Q % +182% -15% Partial disposal of Inbursa stake affects yoy evolution Significant qoq growth as Q4 was affected by one-off items (REP) Gains on financial assets boosted by: o 47 M capital gain from sale of BME stake o Sale of AFS bonds Improvement supported by: o Higher premia from life-risk insurance products o More than offsetting higher deposit insurance fees 12

13 Financial results analysis Cost perfomance in line with expectations Evolution of operating costs (In Million Euros) ,778 Recurrent costs 759 Extraord. 1,019 1, % Higher contribution of cost synergies reduces expenses by 7.8% yoy Costs flat qoq as lower amortisations and general expenses offset organic pressure on personnel expenses 152 M of cost synergies included in 1Q14 figures ( 654 M expected for full year 2014) 1Q 13 Total costs 1Q13 2Q13 3Q13 4Q13 1Q14 13

14 Financial results analysis Cost of risk still high but gradually improving Cost of Risk evolution Recurrent credit provisions In Million Euros 2.98% 2.30% 1.95% 1.86% 1.15% 1.15% average: ~ Q13 2Q13 3Q13 4Q13 1Q14 1Q13 2Q13 3Q13 4Q13 1Q14 2,764 M Cost of Risk declines to 115 bps supported by the absence of extraordinary items and the positive impact of a more benign macro environment. 14

15 Asset quality Positive trends in asset quality now well entrenched NPLs (in Billion Euros) Refinanced loans 22.5 BdV NPL stock falls for third consecutive quarter: bn from 2Q13 peak and bn YTD Q13 2Q13 3Q13 4Q13 1Q14 NPL ratio (in %) o NPLs fall across segments particularly in RE developer book o NPL inflows show significant decrease even excluding one-off impacts of previous quarters 11.17% 11.40% 11.66% 11.36% NPL ratio finally declines 30 bps despite high deleveraging 9.41% NPL coverage maintained at 61% with 14.7 bn of credit provisions 1Q13 2Q13 3Q13 4Q13 1Q14 15

16 Asset quality NPL ratio finally declines despite high deleveraging QoQ changes in NPLs by segments and evolution of NPL ratios NPL ratios Loans to individuals NPLs qoq var. ( M) (253) 31 st Mar % 31 st Dec % Decline of NPLs across all segments and mainly in RE developer book (- 1 bn qoq): Residential mortgages - home purchase (128) Other (125) Loans to businesses (1,066) Corporate and SMEs (97) Real Estate developers (969) Public sector (52) Total loans 1 (1,352) 4.32% 8.56% 22.77% 11.21% 58.68% 1.36% 11.36% 4.41% 8.73% 23.06% 10.94% 59.39% 1.84% 11.66% NPL ratio decreases for the first time since crisis started: o Third consecutive decline in residential mortgage NPL ratio o Improvement in NPL ratio of RE Developers supported by continued clean-up o Ratio still increasing in corporates (ex RE) due to denominator effect Ex- Real Estate developers (383) 6.80% 6.83% YTD change: -30bps Deleveraging: (lower denominator) NPL formation: +32 bps -62 bps (1) Includes contingent liabilities 16

17 Real estate developer loan exposure has fallen by almost a third in one year Asset quality RE developer loans breakdown evolution In Billion Euros bn (-29.9%) % 20.0 Coverage NPL % Substandard ( 5.9 bn) % Performing ( 0.3 bn) Mar'13 Jun'13 Sep'13 Dec'13 Mar'14 RE developers book down 30% yoy and 7.1% qoq: o Decline focused on NPLs (- 1 bn qoq) and driven by foreclosures and write-offs o Intensive clean-up is expected to continue in upcoming quarters 6.2 bn of total provisions for RE developer book: o Coverage of RE problematic loans at 53% o Coverage of total exposure at 34% 17

18 Asset quality Increase in net foreclosures with gradual reduction of inflows Building Center 1 repossessed real estate Assets for sale As of March Net amount in Million Euros Net amount Coverage % coverage RE assets from loans to construction and RE development 4,619 55% 48% 49% 49% 54% 53% Finished buildings 2,627 46% Buildings under construction % 6,327 6,412 Land RE assets from mortgage loans to households 1,746 1,256 64% 46% 6,160 6,169 Other repossessed assets % Total RE assets for sale (net) 6, % 5,753 Rental portfolio (net) 2,064 Net foreclosed assets increase in 1Q14: Mar'13 Jun'13 Sep'13 Dec'13 Mar'14 o Q413 decline driven by reinforcement of provisions Coverage in line with Q4 at 53.4% (1) The real estate holding company of CaixaBank, S.A. 18

19 Asset quality High disposal pace consistent with cleaning up approach Building Center commercial activity Building Center commercial activity In Million Euros In number of units , , Sales Rentals Sales Rentals 4,134 2, ,302 6, E F M A M J Jl A S O N D 0 E F M A M J Jl A S O N D Disposals continue at high rate: 630 M of sales & rentals, +71% yoy o Sales increasing by 29% qoq but still loss making o Rentals represent 42% of activity o Total rental portfolio increased to 2.1 bn NBV, with 88% occupancy ratio 19

20 Solvency Best-in-class solvency continues to improve CET1 evolution - In % Dec 13 March % +38bps 12.4% +78bps 12.1% Phase-in Fully Loaded Organic MCB Conversion Tier Total 15.5% 15.3% Leverage ratio 5.7% 5.5% B3 phase-in B3 phase-in B3 FL CET1 RWAs 17.0 bn bn 18.2 bn bn Lower comparable RWAs (deleveraging) drive CET1 B3 FL ratio up to 12.1% (+40 bps qoq) Early redemption of 1.2bn MCBs increases CET1 B3 phase-in from 11.2% 1 to 12.4% (1) According to final arrangements of BoS for the transitional period, B3 phased-in as of Dec 13 achieved 11.2% rather than 11.0% disclosed in Jan 14 (according to preliminary draft arrangements). Main difference is the transitional treatment of intangible assets. 20

21 Liquidity and funding Ample liquidity facilitates prepayment of ECB funds Closing funding gap boosts liquidity and reduces LTD ratio LTD ratio evolution 1 ECB funds down 74% from YE12 peak ECB funding In Billion Euros 125% 117% 118% 110% 105% % Mar'13 Jun'13 Sep'13 Dec'13 Mar' Dec'12 (max) Mar'14 Total available liquidity - In Billion Euros + 4.2bn Balance sheet liquidity 2 Unused ECB discount facility 6.5 bn repaid with 9 bn outstanding in Q1 and on clear downward trajectory Sovereign bond banking book of 29.7 bn with 2 year duration Access to wholesale markets still improving: o First issuance of a 10-yr covered bond since crisis started: 1 bn at MS+ 80 bps Dec'13 Mar'14 (1) Defined as: gross loans ( 201,357 M) net of loan provisions ( 14,145 M) (total loan provisions excluding those corresponding to contingent guarantees) and excluding pass-through funding from multilateral agencies ( 7,119 M) / retail funds (deposits, retail issuances) ( 171,560 M) (2) Includes cash, interbank deposits, accounts at central banks and unencumbered sovereign debt 21

22 Presence in wholesale markets in 2014, with lower funding costs Liquidity and funding Issuer Spanish Covered Bonds Issues in 2014 Rating M/S&P/F Deal Size Issuance date Maturity Spread Coupon Mare Nostrum -/-/BBB /01/ MS % Banco Popular Baa1/-/- 1,000 01/04/ MS % CaixaBank A1/AA-/- 1,000 11/03/ MS % Stats: Book / orders 2600 / 150 Non Spanish Allocation 88% Real Money Accounts 81% Issuer Spanish Senior Unsecured Issues in 2014 Rating Deal Size Issuance date Maturity Spread Coupon Stats M/S&P/F Book / orders SCF Baa1*/BBB-/BBB+ 1,500 20/03/ MS % 1400 / 140 SCF Baa2*/BBB-/BBB+ 1,000 10/01/ MS % 2000 / 180 Banco Popular Ba3/-/BB /01/ MS % 1200 / 125 Santander Baa1/BBB/BBB+ 1,500 11/03/ MS % 2800 / 210 Bankia B1/BB-/BBB- 1,000 09/01/ MS % 3500 /240 BBVA Baa3** / BBB- / BBB+ 1,000 10/01/ MS % 2600 / 200 * Baa1 as of 10/01/2014. Baa2 since 12/03/2014 ** Baa3 as of 10/01/2014. Baa2 since 04/03/2014 Issuer Spanish Subordinated Debt Issues in 2014 Rating Deal Size Spanish AT1 Issues in 2014 Issuance date Maturity Spread Coupon M/S&P/F BBVA Baa3/BB+/BBB 1,500 02/04/ NC5 MS % Issuer Rating Deal Size Issuance date Maturity Conversion mechanism Coupon Santander M/S&P/F Ba2/-/- 1,500 05/03/2014 PerpNC5 Equity conversion 6.250% 22

23 Liquidity and funding Assets Encumbrance ENCUMBERED UNENCUMBERED LOANS PORTFOLIO TOTAL LEGALLY REQUIRED COLLATERAL COVERED BONDS 1 REMAINING COLLATERAL RMBS/ABS TOTAL ENCUMBERED TOTAL UNENCUMBERED MORTGAGES PORTFOLIO (ex - sec) 134,252 70,926 63, , PUBLIC SECTOR PORTFOLIO (ex - sec) 11,619 10,000 1, , SECURITISATIONS 2 8, ,179 8, PLEDGED LOANS ECB 1, , OTHER LOANS PORTFOLIO (ex - sec) 22, ,589 LOANS TO CUSTOMERS 178,099 80,926 64,946 8, ,051 24,048 REPOS 6, , OTHER ENCUMBERED ASSETS 3 12, , INSURANCE COMPANIES ASSETS (ENCUMBERED) 36, c 36,655 c --- REST OF ASSETS (UNENCUMBERED) 97, ,599 TOTAL ASSETS 331,376 80,926 64,946 8, , ,647 31/03/2014 PUBLIC ISSUANCE RETAINED TOTAL ISSUED MORTGAGE COVERED BONDS 38,373 18,368 56,741 PUBLIC SECTOR COVERED BONDS 350 6,650 7,000 RMBS/ABS 2 1,929 6,619 8,179 SENIOR DEBT (except GGB) 7, ,778 GOVERNMENT GUARANTEED BONDS 1, ,734 TOTAL ISSUED 49,748 32,053 81,432 (1) Legally required OC ratio is 125% for Mortgage CB and 142,9% for Public Sector CB. Nevertheless, CB are backed by the whole portfolio, which thus it's fully encumbered. (2) Internal data (3) Includes, among others, bonds pledged in ECB, guarantees MEFF, LCH, BEI. NOTE: 41.8 bn of loans, bonds, and self-retained issuances are pledged for ECB discount facility, but only 9bn out of those 41.8 bn are used (Almost 33 bn of unused discount facility) Data in million euros 2 3

24 Liquidity and funding Institutional Caixabank Issues: Maturity Profile as of March ,000 10,000 8,000 7,985 7,038 5,023 INSTITUTIONAL DEBT OUTSTANDING 1 : Mn 6,000 7,178 5,649 4,000 2,000-2,874 2,484 2,364 1,394 1,000 1, Perp. Senior Debt (includes GGB) Covered Bonds Subordinated debt/preferred Stock Other (1) Data in Million, excluding retained issues and including debt in subsidiaries balance sheet. Source: CaixaBank 24

25 CaixaBank Covered Bonds Programme - Highlights Covered Bonds Best rated Covered Bonds in Spain Moody s Investors Service A1 AA- High quality collateral & strong overcollateralization Low risk profile: mortgage portfolio prudently managed 72% of residential loans, out of which: 91% with LTV < 80% 90% First home loans Solid OC levels Total OC: 237% -> and flexibility to optimize our collateral: 18 bn of retained Covered Bonds Legal OC: 136% Comfortably above the legally required ratio (125%)..Despite following eligibility criteria stricter than legal Remaining Issuing Capacity: 6 Bn (mortgage & public sector CB) Always aiming to the best market standards Covered Bond Label Compliant since 1 st January 2013 Transparency: complete quarterly information available in our web page: 25

26 Mortgage Covered Bond Programme CaixaBank Covered Bonds Programmes - Main figures Mar 14 Covered Bonds MORTGAGE COVER POOL Cover Pool Size (mill ) 31/03/ ,252 Residential Assets 96,955 72% Comercial Assets 37,297 28% Elegible Pool (mill ) 77,007 Number of loans 1,464,739 Average loan Balance ( ) 91,656 WA Seasoning (years) 6.9 yrs WA Remaining Term (years) 19.2 yrs WA LTV 56.5% WA LTV Elegible Pool 48.8% MORTGAGE COVERED BONDS 31/03/2014 Outstanding nominal (mill ) 56,741 OC (total) 237% OC (legal - eligible portfolio) 136% Issuing Capacity (mill ) 4,865 Average Maturity (years) 5.96 RATINGS Moody's S&P A1 AA- Spanish Public Sector Covered Bond Programme PUBLIC SECTOR COVER POOL Cover Pool Size (mill ) 31/03/ ,619 Number of loans 6,600 Average loan Balance ( ) 1,760,517 WA Seasoning (years) 3.7 yrs WA Remaining Term (years) 6.6 yrs PUBLIC SECTOR COVERED BONDS 31/03/2014 Outstanding nominal (mill ) 7,000 OC 166% Issuing Capacity 1,134 Average Maturity (years) 3.4 RATINGS Moody's A1 Issuing capacity & Collateral type Remaining Issuing Capacity 5,999 Bn Collateral by Type Public Sector CB; 1,134 26% 8% 66% Mortgages CB; 4,865 Residential Commercial Public Sector 26

27 CaixaBank Mortgage Covered Bond Programme Mar 14 Covered Bonds Remaining Issuing Capacity Mortgages Mortgages Public Sector Total Collateral for Covered Bonds 134,252 Elligible Portfolio Total Collateral for Covered Bonds 145,758 77,007 11,659 Elligible Portfolio 101,130 11,659 In Billion Total Collateral (Mortgages+Public Sector) Elegible vs nonelegible 113 bn 157 bn bn REMAINING ISSUING CAPACITY: 4.9 Bn Cédulas Hipotecarias Cédulas Hipotecarias Cédulas Territoriales Used Collateral 70,926 Covered Used Collateral Bond Issued Amount 99,199 56,741 9,571 Covered Bond Issued Amount 79,359 6,700 Over Collaterization 237% Over Collaterization (**) 184% 174% Available Collateral Available Collateral 1,932 6,081 2,087 REMAINING ISSUING REMAINING CAPACITY ISSUING (*) CAPACITY 1,545 (*) 4,865 1,461 Mn Max. CB Issuance Outstanding CBs E 89,1 bn L I 77.0 G 86,1 bn I B L E 3,006 Available Issuing Capacity x 80% 3 bn Remaining 61.6 Issuing Capacity I s s u e d (*) Issuing Capacity= 80% of Collateral Available for C. Hipotecarias and 70% for C. Territoriales (**) Data Due to in million the early amortisation of 3 Bn of retained cedulas on April 15th, OC ratio is currently higher Data in Million Maturity Profile Total Collateral Eligible vs non-eligible Max. CB Issuance Outstanding CBs vs Remaining Issuing Capacity 8, ,000 6,000 5,000 4,000 3,000 6,887 1, , , ,999 4, ,063 2,900 1,264 Total Covered Bonds -> 56,741 Bn Public -> 38,373 Bn Retained -> 18,368 Bn 3,000 2,800 1,900 2, ,144 2,874 1,000 1,000 1, , , Public Issues Retained Issues 27

28 CaixaBank Mortgage Covered Bond Programme Mar 14 Covered Bonds OC Evolution Decision of generating additional collateral for the ECB credit facility to anticipate any potential deterioration in markets Banca Cívica integration Retained Covered Bonds Amortization OC Legal 136% Q & Q1 2014: Active collateral management Retained Covered Bonds amortization Market enviroment improvement has reduced the need of liquidity buffers Adding value to investors TOTAL OC: improves to 237% LEGAL OC: improves to 136% ENCUMBRANCE: improves 28

29 CaixaBank Mortgage Covered Bond Programme Mar 14 Covered Bonds RESIDENTIAL ASSETS Cover Pool Description Main figures Total Mortgage Loans (ex securitization) ( k) 96,955,463 Number of loans 1,259,635 Average Loan balance ( ) 76,971 Number of Borrowers 1,074,482 Number of properties 1,385,289 WA Seasoning in months yrs WA Remaining term in months yrs Expected WA life of the portfolio in years 12.0 yrs WA LTV (%) 56.4% First Rank 93.9% Floating Rate loan Interest Rate type: 99.4% WA Interest Rate (Floating Rate loans) 2.2% WA Interest Rate (Fixed Rate loans) 5.2% Portfolio Breakdown Unindexed LTV Ranges Distributions Total Loan Balance (ex sec) k 0-40% 20,092,494 21% >40%- 50% 13,660,157 14% >50%- 60% 18,041,580 19% >60%- 70% 21,650,692 22% >70%- 80% 14,650,520 15% >80%- 85% 3,284,265 3% >85%- 90% 2,646,682 3% >90%- 95% 1,523,886 2% >95%- 100% 607,630 1% >100%- 105% 242,919 0% >105% 554,639 1% 96,955,463 % 25% 20% 15% 10% 5% 0% 91% of the loans with LTV < 80% 22% 21% 19% 15% 14% 3% 3% Seasoning 2% 91% of the pool with LTV <80% 1% 0% 1% < 12 2% Seasoning (months) k % < 12 2,349,643 2% 12-<24 4% 12-<24 3,498,145 4% 24-<36 4,948,111 5% 36-<60 13,726,614 14% 60 72,432,951 75% Total: 96,955, <36 36-<60 5% 14% 60 75% 29

30 RESIDENTIAL ASSETS CaixaBank Mortgage Covered Bond Programme Mar 14 Covered Bonds Property type k % First Home 86,888,018 90% Second Home 7,895,600 8% Not Owner occupied 1,183,315 1% Other 988,529 1% Total: 96,955,463 Loan Purpose k % Adquisition 61,401,368 63% Re-mortgage 18,315,836 19% Equity release 4,392,507 5% Rehabilitation 5,946,495 6% New construction 4,368,648 5% Other 2,530,609 3% Total: 96,955,463 Regional Distribution k % Catalonia 27,436,413 28% Andalusia 16,966,634 17% Madrid 12,556,064 13% Valencia 7,491,989 8% Canary Islands 6,258,440 6% Balearic Islands 3,736,575 4% Castile León 3,647,956 4% Castile La Mancha 3,110,070 3% Navarra 3,099,644 3% Basque Country 2,655,955 3% Murcia 2,522,662 3% Galicia 2,016,662 2% Aragon 1,629,788 2% Cantabria 870,612 1% Extremadura 845,679 1% Asturias 766,977 1% Others/ No info 759,206 1% La Rioja 491,137 1% Ceuta 74,378 0% Melilla 18,621 0% Total: 96,955, % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 70% 60% 50% 40% 30% 20% 10% 0% 90% 8% First Home Second Home Not Owner occupied 63% 19% 1% 1% First home loans represent 90% of the residential pool Other 5% 6% 5% 3% Adquisition Re-mortgage Equity release Rehabilitation New construction Other Acquisitions have led to a more diversified regional distribution of the assets 30

31 COMMERCIAL ASSETS CaixaBank Mortgage Covered Bond Programme Mar 14 Cover Pool Description Main figures Covered Bonds Total Mortgage Loans (ex securitization) ( k) 37,296,576 WA LTV (%) 56.7% Number of loans 205,104 Floating Rate loan Interest Rate type: 96.9% Average Loan balance ( ) 181,842 WA Interest Rate (Floating Rate loans) 2.9% Number of Borrowers 94,386 WA Interest Rate (Fixed Rate loans) 5.1% Number of properties 252,939 WA Seasoning in months yrs WA Remaining term in months yrs Portfolio Breakdown Unindexed LTV Ranges Distribution Total Loan Balance (ex sec) k % 30% 25% 26% 0-40% 9,789,802 26% >40%- 50% 5,761,418 15% >50%- 60% 6,276,441 17% >60%- 70% 6,005,539 16% >70%- 80% 3,739,441 10% >80%- 85% 924,360 2% >85%- 90% 1,231,874 3% >90%- 95% 740,100 2% >95%- 100% 1,126,557 3% >100%- 105% 575,206 2% >105% 1,125,838 3% Total: 37,296,576 20% 15% 10% 5% 0% 30% 25% 15% 17% 16% 10% 2% 3% 28% 2% 3% 2% 3% 26% Property Type k % Offices 1,358,835 4% Commercial stores 5,433,730 15% Industrial 3,465,290 9% Hotel 1,749,130 5% Flats & Houses 10,482,708 28% Land 5,135,442 14% Others 9,671,442 26% Total: 37,296,576 20% 15% 10% 5% 0% 15% 14% 9% 4% 5% Offices Commercial stores Industrial Hotel Flats & Houses Land Others 31

32 COMMERCIAL ASSETS CaixaBank Mortgage Covered Bond Programme Mar 14 Portfolio Breakdown Covered Bonds Loan Maturity (yrs) k % 5 6,807,747 18% 5 18% >5-10 8,300,429 22% > ,176,187 19% > ,068,072 24% > ,944,041 16% > % Total: 37,296,576 >5-10 > % 22% > % Regional Distribution k % Andalusia 7,572,736 20% > % Catalonia 7,572,246 20% Madrid 6,089,523 16% Canary Islands 3,596,409 10% Valencia 2,618,907 7% Castile León 1,339,734 4% Balearic Islands 1,330,260 4% Castile La Mancha 1,246,475 3% Basque Country 1,151,032 3% Navarra 1,029,890 3% Others/ No info 835,855 2% Murcia 783,833 2% Aragon 597,815 2% Galicia 595,633 2% Extremadura 296,909 1% Cantabria 260,884 1% La Rioja 196,209 1% Asturias 158,810 0% Ceuta 16,470 0% Melilla 6,947 0% Total: 37,296, % >50 0% 32

33 CaixaBank Public Sector Covered Bond Programme Mar 14 Covered Bonds Remaining Issuing Capacity Maturity Profile Mortgages Public Sector Total Collateral for Covered Bonds 11,619 Elligible Portfolio 11,619 Total Collateral for Covered Bonds 145,758 11,659 Elligible Portfolio 101,130 11,659 Cédulas Cédulas Territoriales Cédulas Hipotecarias Territoriales Used Collateral 10,000 Used Covered Collateral Bond Issued Amount 99,199 7,000 9,571 Covered Bond Issued Amount Over Collaterization 79, % 6,700 Over Collaterization (**) 184% 174% Available Collateral Available Collateral 1,932 1,619 2,087 REMAINING ISSUING REMAINING CAPACITY ISSUING (*) CAPACITY 1,545 (*) 1,134 1,461 Mn (*) Issuing Capacity= 80% of Collateral Available for C. Hipotecarias and 70% for C. Territoriales (**) Data Due to in million the early amortisation of 3 Bn of retained cedulas on April 15th, OC ratio is currently higher Data in Million Public Sector Total Collateral (Mortgages+Public Sector) Elegible vs nonelegible Max. CB Issuance Outstanding CBs In Billion ,1 bn 86,1 bn 113 bn 157 bn x 70% 3,006 Available Issuing Capacity Total Collateral Max. CB Issuance Outstanding CBs vs Remaining Issuing Capacity bn I s s 3 bn u Remaining e Issuing d Capacity REMAINING ISSUING CAPACITY: 1,1 Bn ,000 2,500 Total Covered Bonds -> 7,000 Bn Public -> 350 Bn Retained -> 6,650 Bn 2,000 1,500 1, Public Issues Retained Issues

34 CaixaBank Public Sector Covered Bond Programme Mar 14 Covered Bonds Cover Pool Description Main figures Total Loans (ex securitization) ( k) 11,619,414 Floating Rate loan Interest Rate type: 90.8% Number of loans 6,600 WA Interest Rate (Floating Rate loans) 2.07% Average Loan balance ( ) 1,760,517 WA Interest Rate (Fixed Rate loans) 4.02% Number of Borrowers 1,785 Average exposure to borrowers ( ) 6,509,476 WA Remaining term in months yrs WA Seasoning in months yrs Portfolio Breakdown Loan Maturity k % Loans Maturity < 12 2,366,766 20% 12-<24 654,134 6% 24-<36 1,226,435 11% 36-<60 1,913,546 16% 60 5,458,533 47% Total: 11,619,414 < <24 6% 20% 24-<36 11% Loans in Arrears % 36-<60 16% <2m 0.08% 2m - <6m 0.13% 6m - <12m 0.95% 12m 1.59% 60 47% 34

35 Final remarks Final remarks 1. Strong asset-gathering growth Retail funds up 2.1% YTD despite falling deposit rates, with 4.4% YTD increase in off-balance sheet products 2. Results on a gradual path to normality Solid recovery in recurrent pre-impairment income, +22.5% yoy to 829 M o NII flat and customer spread up 17 bps yoy. Deposit front book now at 110 bps (-70 bps yoy) o Commissions up 1.8% yoy supported by off -balance sheet products drive o Cost performance in line with expectations (-7.8% yoy) Recurrent CoR at 115 bps is still high but improving 3. Positive trends in asset quality now well established NPL stock falls for third consecutive quarter (- 1.4 bn YTD), with NPL ratio finally declining (11.4% vs. 11.7% in 4Q13) 4. Improved best in class liquidity and solvency Ample liquidity facilitates LTRO prepayment: 6.5 bn of LTRO repaid in 1Q14. 9 bn outstanding on clear downward trajectory CET1 B3 FL now at 12.1% (+40 bps YTD). CET B3 phase-in up to 12.4% (+120 bps YTD) 35

36 Appendices Total refinanced loans 31 st March Bn Performing Substandard NPL Total Public Sector Corporates (ex-re) RE Developers Retail Total Of which: Total Non-RE Existing provisions

37 Appendices Listed portfolio as of 31 st March 2014 Industrials: Ownership Market Value (in Million Euros) Number of shares Telefónica 5.4% 2, ,598,190 Repsol YPF 11.8% 2, ,509,448 International Banking: GF Inbursa 9.0% 1, ,763,993 Erste Bank 9.1% ,195,848 BEA 17.0% 1, ,883,785 Banco BPI 46.2% 1, ,462,536 Boursorama 20.7% ,208,059 TOTAL: 10,367 37

38 Only domestic- focus financial institution with investment grade ratings from all agencies Appendices Credit Ratings Long term Short term Outlook Mortgage Covered Bonds Moody s Investors Service Baa3 P-3 stable 1 A1 BBB- A-3 stable AA - BBB F2 negative - A (low) R-1 (low) negative - (1) As of 4 th April 2014 Moody s raised its rating outlook for CaixaBank to stable from negative 38

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