SIGNIFICANT EVENT. CaixaBank will transfer to Criteria all of the shares it owns in the following banking entities:

Transcription

1 SIGNIFICANT EVENT CaixaBank, S.A. (CaixaBank) hereby announces that today it entered into a swap agreement (the Swap Agreement) with its controlling shareholder, Criteria Caixa, S.A.U. (Criteria) under which: (i) CaixaBank will transfer to Criteria all of the shares it owns in the following banking entities: - Grupo Financiero Inbursa, S.A.B. de C.V. (GFI), representing 9.01% of GFI s share capital, and - The Bank of East Asia, Limited (BEA), representing 17.24% of BEA s share capital; and (ii) Simultaneously, Criteria will transfer to CaixaBank: - shares in CaixaBank owned by Criteria, representing 9.9% of CaixaBank s share capital; and - a cash amount of 642 Million Euros. The cash amount to be received by CaixaBank shall be reduced by the amount of BEA and GFI dividends received by CaixaBank and increased by the amount of CaixaBank dividends that Criteria receives (for the 9.9% of CaixaBank s share capital referred to above) before the closing date of the swap. CaixaBank s Board of Directors intends to propose to the next general shareholder meeting the redemption of a quantity of treasury shares representing not less than the shares received under the Swap Agreement (9.9%) and not more than 10% of CaixaBank share capital held by CaixaBank as treasury shares at that point in time. The shares of GFI, BEA and CaixaBank have been valued based on the weighted average price by quotation volume of each of such shares during the last month prior to 2 December 2015 (inclusive) and applying the arithmetic mean of the Euro/ Hong Kong Dollar and the Euro/ Mexican Peso official exchange rates published by the European Central Bank during the last month prior to the said date (inclusive). According to this methodology, GFI shares have been valued at 1,102 million Euros (1.83 Euros per share), BEA shares have been valued at 1,549 million Euros (3.40 Euros per share) and CaixaBank shares have been valued at 2,009 million Euros (3.48 Euros per share), with the difference in value of (642 million Euros), corresponding to the cash payment that Criteria will make to CaixaBank; as mentioned above.

2 Since the Swap Agreement is a transaction with a related party, the provisions in the internal protocol governing the relations between la Caixa Banking Foundation, Criteria s parent company, and CaixaBank as well as other corporate governance practices customary for transactions of this type have been followed. To this end, CaixaBank s Board of Directors, with the abstention of the proprietary directors and Mr. Arthur K. C. Li (due to his condition of director of BEA), appointed an ad hoc commission of independent directors (the Commission) to assess the suitability of the transaction. For this purpose, the Commission designated the investment banks Citi and UBS as financial advisers to evaluate the transaction and to each issue a fairness opinion, as well as the law firm Clifford Chance as legal adviser. The Commission has prepared a report addressed to CaixaBank s Audit and Control Committee analysing the transaction in its entirity, which the Audit and Control Committee has assumed as its own and has issued a favourable opinion on the transaction to CaixaBank s Board of Directors. Accordingly, CaixaBank s Board of Directors, with the absence in the deliberations and vote of the proprietary directors and Mr. Arthur K. C. Li (due to his condition of director of BEA), has approved the subscription of the Swap Agreement. The Board of Trustees of la Caixa Banking Foundation and Criteria s Board of Directors have also approved the subscription of the Swap Agreement. Citi and UBS have each issued a fairness opinion concluding that the consideration that CaixaBank will receive under the Swap Agreement, taking into account what CaixaBank will transfer in exchange to Criteria, is fair from a financial point of view. After the acquisition of the treasury shares from Criteria, the net assets of CaixaBank will decrease by 2,009 million Euros. This decrease in net assets will not imply a decrease of the CET1 fully loaded ratio, which would increase up to 11.7% (pro-forma Q3 2015) due to the release of regulatory capital resulting from the transfer of the shares in GFI and BEA. With this transaction, CaixaBank reduces the capital consumption for its non-controlled equity stakes down to 8.1% of total capital, achieving, one year ahead of schedule, one of the goals of its Strategic Plan, which consisted in reducing such weight to below 10% before the end of The transaction is not expected to have a material impact on the P&L Closing of the swap is subject to: (i) the amendment of the current shareholder agreements subscribed by CaixaBank in connection with its stakes in BEA and GFI in order for Criteria to subrogate into such agreements and for CaixaBank to continue being the preferred banking partner of BEA and GFI; (ii) the obtention of all of the regulatory authorisations required in Hong Kong and Mexico; (iii) the approval of GFI s Board of Directors for the acquisition of GFI shares by Criteria and (iv) the authorisation of the European Central Bank for the acquisition of CaixaBank shares and for the expected proposal of its Board of Directors to the next general shareholder meeting for their subsequent redemption. It is estimated that closing of the swap will take place during the first quarter of 2016.

3 Additional information on the transaction is attached as an annex to this Significant Event. Barcelona, on the 3 rd of December, 2015

4 Disposal of non-controlled stakes: BEA and GFI 3 rd of December, 2015

5 Transaction details Asset swap agreement between CaixaBank and Criteria Caixa; in which CaixaBank: o swaps 9.0% stake in GF Inbursa and 17.2% stake in BEA totalling 2,651M at fair value 1 o in exchange for 2,009 M in CaixaBank shares (9.9% of CABK) M in cash from Criteria The Board of Directors intends to propose redemption of the treasury shares received in the swap settlement to the next AGM Closing of asset swap expected by 1Q16; treasury share redemption expected by 2Q16 Agreed transaction 9.0% 17.2% 9.9% 642 M (1) Fair value established according to 1 month VWAP of GFI, BEA and CABK and 1 month average of daily ECB currency fixings, using 2 nd December 2015 as the reference date 2

6 Delivering on a key commitment of the Strategic Plan well ahead of schedule Transaction rationale Capital consumption of non-controlled stakes reduced to c.8% ( 1.7 Bn) thus fulfilling strategic commitment of <10% ahead of 2016 deadline FL CET1 ratio maintained within 11-12% target: capital released from the sale to be neutralised by expected share redemption 1 Capital allocated to non-controlled stakes, as % of total capital charge 2 Strategic Plan ~24% ~16% <10% 8% June Ambition 2016 Sep-15 PF post- transaction (1) Board of Directors intends to propose redemption of the treasury shares received in the swap settlement to the next AGM (2) Capital allocation defined as the capital consumption of the investment portfolio over total capital charge 3

7 Transaction rationale Results in a purer play institution with more predictable earnings TBVPS accretive (+3%) Positive financial impact EPS neutral from 2016e 1 Treasury share redemption 2 neutralises EPS impact while fulfilling commitment to keep CET1 ratio within the 11-12% target range Solvency metrics improved due to regulatory capital release: PF Q3 FL CET1 at 11.7% Provides increased exposure to CABK equity story as the leading retail bancassurer in Spain Focus on banking presence in the Eurozone A step in the right direction with low execution risk Reduces volatility of earnings and valuation reserves related to non-controlled stakes Increases CABK free-float by c. 5 pp as Criteria stake falls from 56.8% 3 to 52% (54.0% 3 to 48.9% fully diluted 4 ) Sale of stakes to Criteria eliminates execution risk and market impacts Allows CaixaBank to continue strategic relationship and commercial cooperation with both GFI and BEA without capital consumption (1) Based on BBG consensus as of December 2 nd 2015 (2) Board of Directors intends to propose redemption of the treasury shares received in the swap settlement to the next AGM (3) As of December 2 nd 2015 (4) Fully diluted stake in 2017 (related to the November M Criteria exchangeable into CaixaBank shares) 4

8 Financial impacts Details of financial impacts Sep-15 Sep-15 PF post transaction Capital consumption of the stakes >16% 8% Solvency CET1 FL Total capital FL 11.6% 14.8% 11.7% 14.9% CET1 phased-in 12.8% 12.2% Balance sheet Tangible book value per share Book value per share Profitability No impact expected in 2015 EPS neutral: revenue-loss of 205 M in 2016e and 225 M in 2017e offset by expected reduction in share count 1 Higher quality earnings in a more pure play institution with increased focus on core/strategic business (1) Based on pro-rata share of the BEA and GFI BBG consensus earnings for 2016 and 2017 as of 2 nd Dec

9 Timeline and approvals Timeline and required approvals Expected calendar Dec 15 Transaction agreement Amendment of agreements related to BEA/GFI 1 Required regulatory and other approvals BEA share transaction: Mandatory Provident Fund Scheme Authority 1Q16 Regulatory and other approvals Closing and registration of the asset swap transaction GFI share transaction: Secretaría de Hacienda y Crédito Público (SHCP) of the Mexican Government; Mexican Competition Authority; GFI Board of Directors 2Q16 AGM vote for proposed treasury share redemption Treasury share acquisition and later redemption: ECB Treasury share redemption (1) Amendment of current agreements related to GFI and BEA in order for Criteria to assume the shareholder role and CaixaBank to continue as banking partner 6