FY 2012 Financial Results

Transcription

1 FY 2012 Financial Results Barcelona, 1 st February 2013

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 FY 2012 has been prepared mainly on the basis of estimates. 2

3 Dealing with a healing sector Economic environment Eurozone: macro stabilisation Spain: execution of broad economic agenda to improve competitiveness An eventful year for the Spanish financial sector Euro area institutional reforms Roadmap for further European integration (banking union, Euro is here to stay") Extraordinary provisioning requirements to address RE developer exposure RDL 2/2012 & RDL 18/2012 Stress-tests to quantify maximum capital requirements for Spanish banks IMF FSAP, Top-down and bottom up stress-test Improved transparency & credibility Acceleration of sector consolidation MoU Banking Resolution Act Public capital injections Restructuring plans Transfer of assets to Sareb 87% of RDL s already booked 5.7bn capital surplus under bottom-up adverse scenario Outperformance in asset quality metrics M&A to develop the franchise: BCIV and BdV acquisitions Contribution to SAREB Growing the franchise in a challenging sector and macroeconomic environment 3

4 FY 2012 Highlights Acquisitions complement organic growth and reinforce franchise leadership Liquidity reinforcement has been the key objective of the year Capital strength reinforced and underlined by stress tests Asset quality impacted by acquisitions and weak macro fundamentals Good operating performance in a low interest environment A further year of increased market shares and advances in strategic goals: Above 15% market share in key retail products BCIV integration process proceeding as planned (CajaSol+CAN integrated) BdV closing expected end of Feb (1 st Jan accounting integration) Total available liquidity of 53.1 bn Issuance of 1bn 3yr Sr. unsecured on improved market conditions in Q1 13 Allows for repayment of 9 bn to ECB 1 Core capital BIS II at 11.0% Core Tier1 EBA at 10.4% Asset quality stabilises post BCIV integration - coverage maintained at 60% Non-RE book remains stable while RE Developers deteriorate Clean-up of real estate exposure continues with record asset disposals Interest income headwinds gradually offset by improved funding conditions Strict cost control but restructuring effort in full sway Extraordinaries partially offset heavy provisioning schedule (1) Of which 4.5bn correspond to BdV 4

5 FY 2012: Activity and Financial Results Update on acquisitions Commercial activity Financial results analysis Asset quality Liquidity Solvency Final remarks 5

6 Update on acquisitions Execution of M&A transactions is being carried out according to plan 3 Aug 20 Oct 27 Nov 15 Dec Feb Mar Apr Jul 9 months Merger registration Operational integration CAN systems integration CajaSol systems integration Caja Canarias systems integration Caja Burgos systems integration 8 months 1 Acquisition agreement Closing I.T. integration Execution of BCIV IT integrations on track: CAN and CajaSol completed. Final IT integration expected by April 13. BdV acquisition to be managed in parallel with BCIV s: Closing expected at the end of February (1st January accounting integration) Pre-merger integration committees already in place Strict management of the incorporated franchises: Remapping of sales organization to fit client presence Application of CABK standards from day one, focusing on profitability and implementation of credit monitoring and recovery procedures BCIV integration: 83.4% of 4,400 planned activities have been completed Apr % 43.4% 24.4% 39.1% 60.4% 58.9% 66.2% 63.3% 70.9% 68.2% 77.0% 83.4% 74.5% 81.1% Planned 92.2% Real Jul-12 Aug-12 Sep-12 Oct-12 Dec-12 Jan-13 Mar-13 (1) Estimate of calendar assuming BdV transaction is authorized at expected milestones by all the relevant authorities 6

7 Update on acquisitions Update on BCIV Financial Impacts Cost synergies being executed ahead of schedule 2012 cost synergies 91% above initial target Measures taken imply 40% achievement of 540 M cost savings target 757 M gross restructuring costs already booked 1 191% of target E 2014E Reorganisation of branch network accelerated BCIV branch network optimisation to speed up following IT integrations, so as to minimise impact on clients: Reorganization of CAN network started in 4Q 12 Reduction in branch network Sept 12 6,631 Dec 12 6,342 Mar 13 E ~6,000 Further fair value adjustments on additional granularity Additional fair value adjustments on BCIV loan book and foreclosed assets due to the more granular information obtained post IT integrations Initial Fair Value adjustments 3,288 M Additional adjustments 700 M ( 450 M loan book, 250 M Foreclosed assets) Total Fair Value adjustments 3,988 M ( 3,668 M loan book, 882 M Foreclosed assets -562 M other) (1) Of which 512 M have been booked against reserves and 62 M have been included as CapEx for the period 7

8 FY 2012: Activity and Financial Results Update on acquisitions Commercial activity Financial results analysis Asset quality Liquidity Solvency Final remarks 8

9 Commercial activity Acquisitions complement business footprint and contribute to market share gains Acquisitions further extend leading market shares in retail banking Market share by business volume 1 In % Contribution of BCIV and BdV in core regions Market share by business volume In % 6.2% 5.4% 8.1% 7.9% 39.6% 10.4% 11.5% 6.9% 7.8% 30.6% Navarra 8.3x Canarias 2.9x 28.0% 39.6% 7.4% 9.6% 12.6% 17.9% Andalucía 2.2x 17.8% 28.0% 17.8% 10.0% 14.6% Business volume market share C. Valenciana C. León 2.1x 2.5x 12.6% 11.5% > 10% share > 7% share < 7% share CABK stand-alone (1) Market shares as of September 2012 include loans and deposits of CABK+BCIV+BdV. Sources: Bank of Spain, FRS, INVERCO, ICEA, CECA and Factoring Spanish Association. Latest data available for

10 Commercial activity Leading retail product market shares further reinforced by acquisitions Tactical management of customer funds accompanied by gradual deleveraging Business volume: Loan book and customer funds In Billion Euros Undisputed leadership in most retail products 3 15% YTD Business volume +19.8% YTD 1 st 1 st Main banking relationship Payroll deposits 22.2% 20.0% +5.6% +4.2% Dec-11 Dec-12 Inorganic +24.5% Organic 2-4.7% 1 st 1 st 3 rd 1 st Pension deposits Saving insurance Factoring & Confirming Pension Plans 19.9% 18.3% 18.1% 16.4% +6.1% +0.8% +2.7% +1.7% Sector 1 Organic 2 1 st Loans 14.7% +4.1% Customer funds Loans -3.9% -3.0% -7.1% -6.9% 1 st 3 rd 1 st Deposits Mutual funds Credit cards turnover % 14.0% 20.7% +4.0% +1.8% +3.0% (1) Source: la Caixa Research Department estimates. Customer funds include: deposits, CP, insurance saving products, mutual funds and pensions plans. Sector loans exclude the transfer of assets to SAREB. (2) Deducting BCIV figures at 30/6/12- includes changes under CABK management (3) Including BdV (4) Includes sight and time deposits Sources: Bank of Spain, INVERCO, ICEA, FRS, Social Security and AEF 10

11 Commercial activity Tactical management of customer funds in anticipation of improved funding environment Total customer funds breakdown In Billion Euros I. Customer funds on balance sheet Demand deposits Time deposits 31 st Dec YTD 21.3% 23.0% 20.8% Organic 1 YTD (%) (2.6%) (4.2%) Total customer funds bn (+19.6%) Organic Non- organic -3.0% +22.6% Debt securities Subordinated liabilities % 12.4% Proactive and tactical management of product mix focused on P&L impact: Institutional issuance Insurance Other funds II. Off-balance sheet funds Mutual funds Pension plans % 18.6% (1.8%) 12.5% 16.1% 23.5% (4.5%) Pricing policy adapted to each customer segment Pure price competition avoided Clean-up of low value-added deposits continues as they mature (BCIV) Other managed resources (5.0%) Total customer funds % (3.0%) (1) Deducting BCIV data at 30/6/12- includes changes under CABK management (2) Primarily includes mandatory convertible bonds, regional govt.securities, and Caja de Pensiones y Ahorros de Barcelona sub debt. 11

12 Commercial activity Gradual deleveraging of loan book in line with macro and sector trends Loan-book breakdown In Billion Euros, gross 31 st Dec. YTD Organic 1 YTD (%) I. Loan to individuals Residential mortgages home purchases % 25.8% (2.2%) Loan book bn (+20.1%) Organic Non- organic -6.9% +27.0% Other % II. Loan to businesses Non RE businesses % 11.7% (13.1%) RE developer book still a main contributor to decline Real Estate developers Servihabitat & other RE subsidiaries % (46.4%) Additional impact from continuing clean-up of BCIV loan book Loans to individuals & businesses III. Public sector % 16.6% (1.5%) Weak credit demand from SMEs and corporates Total loans % (6.9%) (1) Deducting BCIV data at 30/6/12- includes changes under CABK management (2) Servihabitat reduced its loan balance with CaixaBank by 1.35 bn through the issuance of a medium term bond 12

13 FY 2012: Activity and Financial Results Update on acquisitions Commercial activity Financial results analysis Asset quality Liquidity Solvency Final remarks 13

14 Financial results analysis Good operating performance despite historically low interest rate environment Consolidated income statement (BCIV consolidated from 1 st July 12) In Million Euros Net interest income Net fees Income from investments 1 Gains on financial assets Other operating revenue & exp. Gross income Total operating expenses Pre-impairment income Impairment losses Profit/loss on disposal of assets and others 2 Pre-tax income Taxes 3 Profit for the period Minority interest Profit attributable to the Group FY12 FY11 yoy(%) 3,872 3, ,701 1, (100) 777 (112.8) 6,737 6, (3,566) (3,342) 6.7 3,171 3, (3,942) (2,557) (62) 1,159 (105.4) 291 (106) 229 1,053 (78.3) (1) 230 1,053 (78.2) Consistent delivery of strong preimpairment income: NII supported by BCIV contribution and momentum Fee line underlines core business strength Other income impacted by insurance extraordinaries Strict cost control but restructuring effort in full sway Demanding provisioning schedule in line with stated targets Extraordinaries partially offset heavy provisioning schedule 1. Includes dividends and income from associates. 2. In 2012 includes the sale & lease-back of branches ( 204 M), reinsurance agreement covering the life-risk insurance portfolio ( 524 M) and other extraordinary results ( -19 M). In 2011 includes the capital gain for the sale of 50% of SegurCaixa Adeslas ( 609 M), the sale of 80% of the Hospital Group ( 77 M) and other ( -139 M) 3. Note that income from investments is reported net of tax. 14

15 Financial results analysis NII supported by BCIV contribution and rates momentum while funding environment improves Net interest income peaks as lower index rates make an impact: In Million Euros +22.2% FY12: 3,872 Customer spread stable due to lower retail funding costs FY11: 3,170 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q ,059 1,027 Loans and credits Customer spread Improved funding conditions largely offsetting lower asset yields Customer funds In % Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q % Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 NIM Total assets Total liabilities 15

16 Financial results analysis Inertia from mortgage book partially offset by spread repricing and positive funding trends New production spreads continue to grow Front book credit spreads (%) Renewal of time deposits at lower rates leads to reduced back book costs Front book time deposits spreads (%) Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Loan rates (Back vs. front book) Time deposit rates (Back vs. front book) Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Back book Front book Back book Front book 16

17 Financial results analysis Recurring fee items continue to reflect underlying core business strength Net fees In Million Euros Net fees breakdown In Million Euros FY12 yoy (%) FY11: 1, % FY12: 1, Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1.9% Banking fees 1 Mutual funds Insurance and pension plans Net fees Positive trends in fees: 1, ,701 Strong growth in transactional banking Non-recurrent distribution fees impacted by lower issuance from regional governments Commissions in mutual funds affected by market and sale of depositary business Good performance in pensions and insurance 10.4 (4.3) (1) Includes fixed income distribution of 50M (-64%) 17

18 Financial results analysis Growing contribution from investments while changes in consolidation scope impact other revenue Income from investments supported by higher contribution from associate companies In Million Euros Income from associates 1 Dividends FY % FY % -39.6% 2011 income from associates impacted by impairments reported by intl banking stakes 2012 dividends affected by TEF dividend cut Other operating revenue affected by changes in scope and non-recurring items In Million Euros FY12 FY11 Income from the insurance business Excess provisions in the insurance business 320 Deposit guarantee fund contribution (278) (118) Other income/operating expenses (7) 96 Other operating income (expense) (100) 777 Lower income from insurance activity: Deconsolidation of Adeslas in June 2011 (- 238 M) Lower contribution from life-risk premia (sale to Berkshire Hathaway): - 45 M in 4Q and c. 150 M to 50 M ( e) (1) Income from associates correspond mainly to the stakes in REP, International Banking and the non-life insurance business (2) Includes dividends corresponding to stakes in TEF and BME 18

19 Financial results analysis Strict cost control but restructuring effort in full sway Cost reduction: -0.1% (like-for-like) and -3.5% on a recurrent cost basis 1 In Million Euros -0.1% Total operating costs In Million Euros +6.7% Like-for-like (3,125) (3,121) Recurrent basis (3,017) BCIV recurring expenses (471) BCIV restructuring costs (78) BCIV cost synergies ,342 3, Depreciation General 2011 CABK reorganization expenses (110) 2,263 2,426 Personnel Adeslas deconsolidation (107) FY11 FY12-3.5% Cost cutting initiatives more than compensate for BCIV contribution to expenses (1) BCIV cost synergies are included for cost comparison on a recurrent basis 19

20 Financial results analysis Demanding provisioning schedule back in line with RDL charge guidance Impairment losses In Million Euros RDL 2/2012 RDL 18/2012 2,436 1,200 Booked in 1Q12 ( 1.8 bn of generic provision released) 0.9 bn pending for 1H13 Other credit provisions 1,970 Other provisions Impairment losses 5,749 BCIV Fair Value adjustment 2 In Million Euros Loan Book 3,668 TOTAL impairments: 10,299 M Foreclosed assets 882 Adjustments 4,550 87% of RDL requirements already booked- 900M pending for 1H 2013 (1) Includes provisions for early retirement and other contingent risks (2) Only includes gross fair value adjustments on credit book and foreclosed assets 20

21 Financial results analysis Extraordinaries partially offset heavy provisioning schedule Main extraordinary profits generated in 4Q12: Reinsurance agreement covering the life-risk insurance portfolio Reinsurance agreement with Berkshire Hathaway Life Insurance Company covering the individual life-risk portfolio Limited to the underwritten portfolio as of December 31 st 2012 Berkshire Hathaway has paid a reinsurance commission of 600 M Gross capital gain: 524 M Sale and leaseback transaction Sale of 439 branches to a Spanish subsidiary of Mexico s Inmobiliaria Carso Aggregate price of M 25 yr lease agreement with the seller to continue occupying the buildings sold in the transaction Gross capital gain: 204 M 21

22 FY 2012: Activity and Financial Results Update on acquisitions Commercial activity Financial results analysis Asset quality Liquidity Solvency Final remarks 22

23 Asset quality Asset quality stabilises after BCIV integration but still affected by weak macro trends NPLs and NPL ratio NPL coverage NPL ratio sector Nov 12 NPL coverage ratio 60% 61% 60% 60% 60% 8.62% , NPL (in Billion Euros) Credit provisions (in Billion Euros) Q11 1Q12 2Q12 3Q12 4Q12 4Q11 1Q12 2Q12 3Q12 4Q12 NPL decreases in absolute terms as CABK risk management is implemented across BCIV platform Higher ratio results from lower asset base Asset quality gap with the sector increased by 47 bps 1 Provisioning coverage maintained at 60% (1) Difference between Q4 and Q3 23

24 Asset quality Significant improvement in quarterly evolution of NPLs Loan book and NPL 1 ratio by segments In Billion Euros 31 st Dec NPL ratio 31 st Dec 30 th Sept 2 Loans to individuals % 3.50% Residential mortgages - home purchase Other % 5.65% 2.77% 5.47% NPL inflows still mostly attributable to RE Developers Loans to businesses Corporate and SMEs % 5.96% 16.55% 5.67% Stability returns to retail book Real Estate developers Servihabitat & other RE subs % 0.00% 40.91% 0.00% Non-RE business segments evidence crisis fatigue Public sector % 0.75% Total loans % 8.42% Ex- Real Estate developers % 3.83% (1) Includes contingent liabilities (2) Note Q3 figures are restated (3) Includes loans to Servihabitat and other RE subsidiaries of Caja de Ahorros y Pensiones de Barcelona, CABK s major shareholder 24

25 Asset quality Clean-up of real estate exposure continues Clean-up of real estate exposure continues at fast pace RE developer loans breakdown evolution (in Billion Euros) NPL Substandard Performing RE developer loans YTD + 4.6bn % Q11 1Q12 1H12 3Q12 4Q12 Organic 1 Non- organic - 5.2bn + 9.8bn Provisions (in Billion Euros) Coverage NPL % Substandard % Performing % Provisions for RE developer loans % Return to RDL 18/12 real estate provisioning path ( 150 M per month) Coverage of problematic loans at 53% 30% coverage of total developer loans above bottom-up base case scenario of 25% EL 33% coverage considering pending 0.9 bn of RDL 18/12- close to adverse scenario of 37.6% EL (1) Deducting BCIV data at 30/6/12- includes changes under CABK management 25

26 Asset quality Foreclosed assets increase as developer loans migrate to housing stock Building Center 1 Repossessed real estate assets evolution In Million Euros Repossessed real estate assets breakdown As of December 2012 In Million Euros % coverage 36% 36% 39% 44% 45% 5,088 RE assets from loans to construction and RE development Net amount 3,806 Coverage 47% 4,350 Finished building 2,361 34% 1,140 1,574 1,975 Buildings under construction Land RE assets from mortgage loans to households 191 1,254 1,051 54% 61% 38% Other repossessed assets % Dec'11 Mar'12 Jun'12 Sep'12 Dec'12 Total (net) 5,088 45% Foreclosed assets YTD + 3.9bn Organic 2 Non- organic +2.2bn +1.7bn (1) The real estate holding company of CaixaBank, S.A. (2) Deducting BCIV data at 30/6/12- includes changes under CABK management 26

27 Asset quality Commercial activity increasingly focused towards renting properties Increased commercial activity during 2012 la Caixa Group commercial activity In Million Euros BuildingCenter is now main contributor to Group sales Sales distribution x2 1, unit disposal2 : 11,830 89% 85% 68% 887 Sales 52% % 32% Rental assets 11% 15% Commitments 1H11 2H11 1H12 2H12 Servihabitat portfolio has been reduced by ~30% in one year (1) Total disposals of 3.1bn and 20,291 units, at debt equivalent amounts & including disposals from developers (2) Sales and rental assets. 13,171 units considering commitments. 27

28 FY 2012: Activity and Financial Results Update on acquisitions Commercial activity Financial results analysis Asset quality Liquidity Solvency Final remarks 28

29 Liquidity Liquidity remains a cornerstone of balance sheet strength Proactive reinforcement of liquidity In Billion Euros A closing funding gap has led to a progressive reduction of the LTD ratio 2 7.7% 15.2% As a % of total assets 133% -6pp % 127% 128% 127% 17.5 Balance sheet liquidity 1 Dec'11 Mar'12 Jun'12 Sep'12 Dec' Unused ECB discount facility Manageable exposure to wholesale funding Wholesale maturities as of Dec 31 st bn 8.2 bn 6.6 bn Dec'11 Dec'12 ECB LTRO: 28.3 bn with 4 bn kept in deposit bn of ECB funding to be repaid in Jan Jan. 13: issuance of 1bn 3yr senior unsecured at MS bps as capital debt markets improve (1) Includes cash, interbank deposits, accounts at central banks and unencumbered sovereign debt (2) Defined as: gross loans ( 223,449 M) net of loan provisions ( 11,962 M) (total loan provisions excluding those corresponding to contingent guarantees) and excluding pass-through funding from multilateral agencies ( 7,179 M) / retail funds (deposits, retail issuances) ( 160,621 M) (3) 4.5 bn from CaixaBank bn from Banco de Valencia 29

30 FY 2012: Activity and Financial Results Update on acquisitions Commercial activity Financial results analysis Asset quality Liquidity Solvency Final remarks 30

31 Solvency Leading capital ratios despite BCIV acquisition and liability management exercises BIS II Core Capital evolution In % 12.5% %% +168bps Organic -101bps RDL impact +51bps -22bps Extraordinary Liability transactions management -252bps 11.0% BCIV integration 1 EBA Core Tier1 for CaixaBank (Dec 31 st ): 10.4% 2 Core Capital RWAs Dec' bn bn Dec' bn bn EBA Capital reinforced to 10.4% in Q4 after 50% conversion of Series 1/11 MCB (1) Includes the impact of the additional fair value adjustments registered in 4Q12 ( 700 M) (2) Main difference between EBA and BIS II is due to temporary deferral in recognition of 750 M MCB 31

32 FY 2012: Activity and Financial Results Update on acquisitions Commercial activity Financial results analysis Asset quality Liquidity Solvency Final remarks 32

33 Final remarks Growing the franchise in a challenging sector and macroeconomic environment Acquisitions complement organic growth and reinforce market leadership: Another year of increased market shares and advancing in our strategic goals: above 15% market share in key retail products and 3 M new customers Execution of M&A transactions is being carried out according to plan Targets of annual cost synergies confirmed: BCIV cost savings of 270 M for 2013, 540 M from 2014 BdV annual cost synergies of 85 M expected from 2014 Liquidity reinforcement has been a key objective for the year: total available liquidity of 53.1 bn Leading capital ratios despite BCIV acquisition and liability management exercises: BIS II Core Capital at 11% (EBA CT1 at 10.4%) Asset quality stabilises but still impacted by weak macro fundamentals: Asset quality stabilises post-bciv integration and coverage maintained at 60% Good operating performance in a low interest rate environment: Resilient pre-impairment income demonstrates capacity to generate recurring profits Extraordinaries partially offset heavy provisioning schedule 2013: the key year for execution 33

34 Appendices 34

35 Appendices BCIV acquisition details of the purchase price allocation Información a Mercado 3T12 Fair value Adjustments (In Million Euros) Total Fair Value adjustments 3,988 Total Fair Value adjustments (gross of taxes) 3,988 Loan portfolio Foreclosed assets Financial instruments 1 Total adjustments Pre-adjusted at BCIV BV (30th June) (218) Fair Value adjustments (gross of taxes) 3,770 3,668 3,218 3,988 Fair Value adjustments (net of taxes) 2,725 3,288 Purchase Price Allocation (In Million Euros) BCIV Book value as of 30 th June ,024 Intangible assets 139 In 3Q12 presentation Final adjustments Fair Value adjustments (net of taxes) (2,725) Adjusted Book value as of 30 th June (562) Price of the transaction 778 Goodwill 1,340 (1) Primarily fair value adjustments in fixed income portfolio, equity portfolio, derivatives portfolio and wholesale liabilities. 35

36 Appendices Listed portfolio as of 31 st December 2012 Ownership Market Value (in Million Euros) Number of shares Utilities: Telefónica 5.6% 2, ,684,272 Repsol YPF 12.5% 2, ,509,448 BME 5.0% 77 4,189,139 International Banking: GF Inbursa 20.0% 3,042 1,333,405,590 Erste Bank 9.9% ,195,848 BEA 16.4% 1, ,746,530 Banco BPI 46.2% ,462,536 Boursorama 20.7% 91 18,208,059 TOTAL: 10,791 36

37 Appendices Ratings Credit Ratings Long term Short term Outlook Mortgage Covered Bonds Moody s Investors Service Baa3 P-3 negative A3 BBB- A-3 negative AA- (1) BBB F2 negative - (1) Negative Outlook 37

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