la Caixa Group Institutional Presentation

Transcription

1 la Caixa Group Institutional Presentation Financial Year 2008

2 Disclaimer The data, opinions, assessments and projections, and the contents of this presentation as a whole, are published here for purely informational purposes. Neither Caja de Ahorros y Pensiones de Barcelona ( la Caixa ) as an entity, nor any of its administrators, directors or employees, is obliged, either explicitly or implicitly, to vouch for the fact 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, la Caixa may introduce any changes it deems suitable, may omit partially or completely any of the elements of this document, and in the 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. 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. la Caixa disclaims any liability in the supposed case that any element of this presentation is taken into account as the basis for an investment decision. In particular, it is expressly remarked here that no information herein contained should be taken as a guarantee of future performance or results. Without prejudice to legal requirements, or to any limitations imposed by la Caixa 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, without the previous express permission of la Caixa and/or other respective proprietary title holders. Any failure to observe this restriction may constitute a legal infraction 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 la Caixa Group for 2008 has been prepared mainly on the basis of estimates, and cannot under any circumstances be used to make forecasts regarding the results of Criteria CaixaCorp, a subsidiary of the la Caixa Group, for the same period. Figures as of

3 Contents 1. Executive Summary 2. Governing Bodies 3. Banking Business: Great commercial strength 4. Equity Portfolio 5. Financial performance of the year Financial Strengths 7. Welfare Projects Page Closing Summary 42 Figures as of

4 Contents 1. Executive Summary 2. Governing Bodies 3. Banking Business: Great commercial strength 4. Equity Portfolio 5. Financial performance of the year Financial Strengths 7. Welfare Projects 8. Closing Summary Figures as of

5 1 (i) Executive Summary la Caixa Group today A strong institution in Spain Leader in retail banking in Spain Third ranking financial group in Spain in business and profits with more than 100 years of history. Market shares around 10%. Number one savings bank in Spain and Europe. Recurring income 2008: 2,052 million. Profit attributable to the la Caixa Group 1,802 million. Model of universal banking: focus on individuals and SMEs. Large and growing base of customers (10.7 million). Business volume 414,507 million. Multi-channel management: largest network of branches (5,530), ATMs and leader in on-line banking. Trust, high quality service to customers, and efficient management. Largest investment portfolio in Spain High financial strength Under Criteria CaixaCorp s management, a listed company (IBEX 35). High quality investments in the services and financial sectors. Active management of value, risk and liquidity. Market value of the la Caixa Group listed investments 14,691 million. Diversified credit investment with strong asset quality and guarantees. Excellent liquidity level of 22,262 million (8.5% of the Group assets). Excellent capital ratios (Core Capital 8.8%) and very good ratings (AA rank). Social commitment 25% of recurring profit allocated to Welfare Projects. Budget for 2009: 500 million. Social, environment and science, cultural and education and research programmes. Develop the Triple Bottom Line: la Caixa Group Financial Bottom Line: efficient, profitable and solvent growth. Strategy Social Bottom Line: creating value for the society. Sustainable Bottom Line: Socially responsible conduct, Ethics and Corporate Reputation. Figures as of Circular 6/08-5

6 1 (ii) Executive Summary 2008: Financial strengths consolidation Good evolution of the commercial business and the income in a complex economical environment. Consolidated financial strength: asset quality, liquidity and solvency. Year-on-year (in million euros) 2008 variation Growth absolute in % Total assets 260,827 12, % Banking Business Volume: 414,507 26, % - Gross customer loans 176,100 14, % - Total customer funds 238,407 12, % Recurring income after tax 2, % Recurring income attributed to the Group 2, % Efficiency Recurring efficiency i ratio 45.2% (0.9) Profitability Recurring ROE 14.8% (4.6) Financial Strength Ratings Asset Quality Non-performing loans ratio 2.48% 1.93 Allowance coverage 66% (215) Allowance coverage with mortgage guarantee 129% (207) "la Caixa" Liquidity 22,262 (2,884) (11.5%) Solvency - BIS II Core Capital 8.8% (1.3) Tier I 10.1% (1.7) Tier Total 11.0% (2.7) Excess capital over minimum i required ,260 Ratings are confirmed in the AA rank Figures as of Circular 6/08-6

7 1 (iii) Executive Summary 2008: Financial strengths consolidation la Caixa 2008: Great quality of the recurring profits. The Profit attributable to the Group 2008 includes allowances for future business risks. Million euros Maintenance of recurring income... +2,0% The Group attributed with lower extraordinary income income, and conservative allowances +2,0% 2,011 2, Extraordinary income Write downs Allowance coverage ,488-27,6% 1,802 Non recurring Figures as of Circular 6/08-7

8 Contents 1. Executive Summary 2. Governing Bodies 3. Banking Business: Great commercial strength 4. Equity Portfolio 5. Financial performance of the year Financial Strengths 7. Welfare Projects 8. Closing Summary Figures as of

9 2 (i) Governing bodies la Caixa Governing bodies: duties and composition la Caixa Governing bodies: duties and composition 13% Financial institution that promotes social and welfare goals; it is privately managed and independent of any other company or institution. No shareholders. The government, administration, representation and control of la Caixa are in the hands of the General Assembly, the Board of Directors and the Control Committee. The governing bodies represent Depositors, Founding and Community- Interest institutions, Local authorities and Employees. The General Assembly: It is the institution s highest governing and decision - making body 160 members The board of Directors: It decides upon the steps required to carry out the aims and objectives 21 members 21% % % The control Committee: Management team is exclusively made 1 up of financial experts. It oversees the correct 3 management of the business by 2 the Board of Directors 9 members 3 Deposit Holders Local Government Corporations Figures as of 2008 Founder and Community - 9 Interest Entities Employees

10 Contents 1. Executive Summary 2. Governing Bodies 3. Banking Business: Great commercial strength 4. Equity Portfolio 5. Financial performance of the year Financial Strengths 7. Welfare Projects 8. Closing Summary Figures as of

11 3 (i) Banking Business: Great Commercial Strength Management Model: Key factor for the strategy s success Management model: Values Trust Quality Social commitment Principles Of action Organizational Proactivity Good treatment Community-oriented aims Permanent innovation Efficiency Challenge-based management New competences and habits Decentralization and commercial autonomy Self-assessment Integrated management Management model Customer oriented Risk management Close to the territory Personalized treatment Multi-channel management Flexibility and adaptability Personal and professional growth of the employees Figures as of

12 3 (ii) Banking Business: Great Commercial Strength Business model la Caixa business model: Strong customers base: 10.7 million in permanent growth Core Business: Families and SME s Segmentation: Focuses commercial activity Corporate (*) () Large States Development of a network specialized for businesses 2008 Business Private 2008 Banking (*) Acquisition and integration of Morgan Stanley s Division in Spain SME s (*) Personnel Banking Retail banking Companies Turnover (*) )Segment ranks in million Individuals resources and assets managed Figures as of

13 3 (iii) Banking Business: Great Commercial Strength Banking Business Careful segmentation of customer groups to offer a complete and personalized range of products and services of universal banking through different channels. Leader in multi-channel management Year Change Customers 10,721, , % Employees 27,818 1, % Branches 5, % Bankcards issued 10,344, , % Atms 8, % Internet banking Total customers 5,544, , % Operative customers 2,667, , % Operations 1,490,195, ,687, % Figures as of

14 3 (iv) Banking Business: Great commercial strengths Market shares la Caixa in 2008: Leader in the market with increasing market shares Customers 10.7 million penetration: 21.0% (+0.6) Customer funds Deposits 10.6 (+0.4) Investment funds 6.9 (+1.4) Individual Pension Plans 14.1 (+2.7) Savings insurance 12.1 (-0.2) Multi-channel management Customer Total loans 9.6 Branches 12.2 (+0.1) loans Mortgage loans 11.0 ATM s 13.1 (+0.1) Online banking 28.7 (+1.8) Banking Salary payments 13.9 Card turnover 17.6 ( = ) services Pensioni payments 12.6 (+0.3) (=) (+0.4) (+0.2) Market shares in Spain (%). December 2008 except deposits and customer loans (September 2008) Figures as of

15 3 (v) Banking Business: Great commercial strengths Business Volume The success of a growing customer-oriented strategy through an adequate business segmentation Gross customer loans 176,100 Customer funds 238, ( milion euros) ,769 90, % 5.4% x 2 last 4 years CAGR: Compound annual growth rate x 1.6 last 4 years BUSINESS VOLUME Year-on-year variation 2008 (million euros) Absolute % Loans 176,100 14, % of which: Mortgage loans 117,924 4, % Customers Funds 238,407 12, % of which: On balance-sheet 209,899 11, % TOTAL 414,507 26, % 6.9% Figures as of

16 3 (vi) Banking Business: Great commercial strengths Distribution network & customer base to become the Spanish financial i institution with a broad and growing customer base leader in number of branches. (number of branches) (millions) in 4 years millions in 4 years Rest of Spain 5,6 Rest of Spain Catalonia and Balearic Islands Catalonia and Balearic Islands Figures as of

17 3 (vii) Banking Business: Great Commercial Strength Geographic distribution of the branch network Wide capillarity of the branch network in order to assure proximity to the client Specialized branch network developed during 2008 Red Retail network universal Centros Specialized t especializados branches Banca Corporate corporativa Business Banca empresa Banca Private banking privada Oficinas Total Spain en Espa ñ a Oficinas International internacionales Branches (*) , , Total Branches oficinas 5, País Vasco Cantabria Asturias Galicia La Rioja Castilla y León Comunidad de Madrid Castilla- La Mancha Extremadura Andalucía Navarra Aragón Cataluña Baleares Comunidad Valenciana Murcia Market share 12.2% Canarias 162 Ceuta 4 Melilla 2 (*) International Branches: Operating branches: Warsaw and Bucharest. Representative Branches: Porto, Lisbon, Brussels, Paris, Milan, London, Frankfurt, Stuttgart, Casablanca and Beijing Figures as of

18 3 (viii) Banking Business: Great commercial strengths The Target: to equalize business market shares to branch market share Strong growth in business volume : Continuous reduction of the differential between the market share in business volume and in branches. Maturing new branches are the base for strong growth (6 years evolution) Market shares 9.6 (in %) Loans Deposits Branches Figures as of

19 3 (ix) Banking Business: Great Commercial Strength Insurance and bankcard business Leader in life insurance savings (market share 12.1%) In November 2007 acquisition of 50% of the Insurance Group SegurCaixa Holding.... and bankcard turnover (market share 17.6%) 3.2 million customers Asset management more than 28,731 million Life provisions 16,873 millions 10.3 million bankcards issued 171,631 POS % % Customer (million) Bankcards turnover (million) Figures as of

20 3 (x) Banking Business: Great Commercial Strength All channels: Efficiency and innovation An innovative strategy tailored to customers needs in order to maximize branch sales activities. All channels (branches, ATMs, Internet, mobile telephone, etc.) complement each other and operate efficiently with ongoing commitment t to technological l innovation. INTERNET BANKING- Línia Oberta - ATMs: 5,5 million customers (of which -2.7 million active +15.6%). Leader with 28.7% market share. The most extensive network in the Spanish financial system. Leader in on-line corporate banking services. 1,490 8,011 8, , ,922 7,142 7, Number of transactions (mlilions) Total customers (millions) Banking Mobile: 1 million customers (+780,000) with a market share of 70% Figures as of

21 3 (xi) Banking Business: Great Commercial Strength Valuation of the quality of banking service of la Caixa Brand reputation: la Caixa is the financial brand with the highest reputation: recognition, perception of leadership and communication 2008 Monitor Empresarial de Reputación Corporativa Ranking Score 1st 1,000 2nd 988 3rd 987 Quality of service: Institution with lowest complaints ratio (per 1,000 million of business volume). Bank of Spain 3Q 2008 Main Competitors Own surveys to manage quality of service (from 0 to 10) Individual customers satisfaction 8.3 (255,203 surveys) 7.9 Corporate and business satisfaction 8.1 (7,452 surveys) Clients Clients: la Caixa leads the rankings in number of customers, increased share and distance FRS/INMARK Individuals 2008 Micro companies 2008 Ranking Penetration Ranking Penetration 1st 21% 1st 23.7% Figures as of

22 Contents 1. Executive Summary 2. Governing Bodies 3. Banking Business: Great commercial strength 4. Equity Portfolio 5. Financial performance of the year Financial Strengths 7. Welfare Projects 8. Closing Summary Figures as of

23 4 (i) Equity Portfolio Equity portfolio Managed by Criteria CaixaCorp Equity portfolio to diversify income with profitability % Listed on IBEX 35 Services Finance Listed Gas Natural 37.5% Abertis 25.0% Agbar 44.1% Rpsol YPF 12.7% Telefónica 5.0% BME 5.0% Unlisted Port Aventura 100.0% 0% Hotel Caribe Resort 60.0% Listed Banco BPI Inbursa Boursorama BEA Erste Group Bank Unlisted CaiFor VidaCaixa SegurCaixa AgenCaixa CaixaRenting Finconsum InverCaixa GestiCaixa 29.4% 20.0% 20.9% 99% 9.9% 4.9% 100% 100% 100% 100% 100% 100% 100% 100% Market value of la Caixa listed portfolio as of 31 st December 2008: 14,691 million with unrealized capital gains of 1,026 million principal Investments: 20.0% GF Inbursa 16.4% Agbar (Takeover Bid) 4.4% Banco BPI 3.9% Abertis (% directly and indirectly owned by Criteria CaixaCorp) Figures as of

24 4 (ii) Equity Portfolio Equity portfolio Managed by Criteria CaixaCorp Equity portfolio: Active management of value, risk and liquidity AN INSTINCT FOR INVESTMENT IN HOW? Business that are comprehensible, well managed, with a good track record and diversified + MANAGEMENT Prudently with careful monitoring waiting for opportunities with solid professional motives Presence on the board Capturing synergies in financial businesses Active investment management Attractive dividends policy Figures as of

25 Contents 1. Executive Summary 2. Governing Bodies 3. Banking Business: Great commercial strength 4. Equity Portfolio 5. Financial performance of the year Financial Strengths 7. Welfare Projects 8. Closing Summary Figures as of

26 5 (i) Financial performance of the year 2008 Great quality of recurring income (en milions d euros) January-December change (million euros) as a % Interest income 12,401 9, Interest expense (8,893) 893) (6,565) Net Interest income 3,508 (3,317) 5.8 Dividends Share of results of equity accounted entities Net fee and commission income (0.6) Income from insurance activities and financial operations Other products/expenses Gross income 6,752 6, Operating expenses (3,050) (2,836) 7.5 Depreciation and amortization (479) (405) 18,1 Income before allowance coverage 3,223 2, Impairment losses (617) (565) 9.2 Operating income 2,606 2, Other results and allowances Income before tax 2,616 2, Income tax (299) (273) Income after tax 2,317 2, Profit attributable to minority interests Recurring Income 2,052 2, Extraordinary income Extraordinary expenses (260) (50) Allowance coverage for future risks (250) (100) Net Extraordinary Income (250) 477 Income attributed to the "la Caixa" Group 1,802 2,488 (27.6) Figures as of Circular 6/08-26

27 5 (ii) Financial performance of the year 2008 Great quality of the recurring income million euros Net interest income Income on investments Fees 3,317 3, Dividends 286 1, ,257 (0.6%) 1,250 Values (10.3%) Funds and insurance I. Funds (20.1%) Insurance +8.0% (9.9%) Equity acc Banking +4.5% Increase of the banking business volume along with an efficient management of margins. Increase of the income on investments and the pay-out The intense commercial action allows to increase banking services commissions and to compensate the lower income from commissions for other services Figures as of Circular 6/08-27

28 5 (iii) Financial performance of the year 2008 Great quality of the recurring income million euros Gross income Operating expenses Recurring efficiency ratio Contained increase of the Improved efficiency operating expenses (*) Change (0,6%) 2008: ,148 6,752 3,241 Amortization 3, % 47.9% 46.1% 42.9% 45.2% 41.4% , Operating expenses 3, CBE4/04 CBE6/08 (Personal and general expenses / Gross income) The commercial management allows a sound increase of the Group income (*) +5.2% with uniform scope of consolidation (without Morgan Stanley and 50% more from SegurCaixa Holding) One of the strategic pillars of la Caixa : Improved efficiency with improved productivity Figures as of Circular 6/08-28

29 5 (iv) Financial performance of the year 2008 Great quality of the Recurring income million euros Income before allowance coverage +10.9% 3,223 2, Gross Income (total income): +9.8% Operating expenses: +8.9% Recurring allowances Allowances for credit losses (622) (578) Specific (1,004) (304) Generic 382 (274) Increase of loans (140) (274) Reversal (*) () 522 Other allowances 5 13 Total Allowances (617) (565) * In 2008 reversal of the generic provision for credit losses according to CBE 6/08 Generic provision for credit losses evolution Generic provision as of 31/12/07 Generic allowance Reversal 2, (522) Generic provision as of 31/12/08 Figures as of Circular 6/ ,890

30 5 (v) Financial performance of the year 2008 Great quality of the Recurring income million euros Total coverage registered in 2008 Recurring NPL allowances (617) Extraordinary allowances (414) Substandard credit risk (191) Equity portfolio (180) Early retirement payments (43) Allowance coverage for future risks (357) Total (1,388) (1,031) (357) For 2009 and MM Extraordinary allowance for the future risks + 1,890 MM Generic provision for credit losses Figures as of Circular 6/08-30

31 5 (vi) Financial performance of the year 2008 Great quality of the Recurring income million euros Operating income Recurring income after tax Recurring income attributed to the Group 2,606 2,342 2,317 2,052 2,011 2, Taxes: (273) (299) Minority interests (*): (114) (265) (*) Part of the income attributable to Criteria s minority shareholders (Full Year 2008, in 2007 only after IPO in October) Figures as of Circular 6/08-31

32 5 (vii) Financial performance of the year 2008 Profitable Growth: High levels of profitability (in %) Recurring ROE, as a % (Recurring attributed income / Average own funds) ROA, as a % (Net recurring income / Average total assets) RORWA, as a % (Net recurring income / Risk-weighted assets) (million euros) Recurrent Income attributed to the Group 14.8 (*) 2,052 2, = (*) Impacted by the increase of own funds because of Criteria s IPO Figures as of Circular 6/08-32

33 Índex Contents 1. Executive Summary 2. Governing Bodies 3. Banking Business: Great commercial strength 4. Equity Portfolio 5. Financial performance of the year Financial Strengths 7. Welfare Projects 8. Closing Summary Figures as of

34 6 (i) Financial Strengths Loan portfolio: High asset quality High quality of the loan portfolio Diversified Risk with adequate collateral Individuals Mortgage 53% Real state 12% developers 66% 89% mortgage credits with LTV < 80% 82% to finance first residences Other 8% 27% Businesses 34% Other guaranties Average LTV 49% Figures as of

35 6 (ii) Financial Strengths NPL controlled with strict risk management Strict risk management and provisioning. Strict management of non performing loans. Better NPL Ratio than the sector.. 1,32% * NPL Ratio and NPL Coverage Ratio (in %) 0,92% * la Caixa Non-performing loans ratio Sector Non-performing loans ratio (*) 0,45% la Caixa NPL Coverage Ratio la Caixa allowance coverage with mortgage guarantee (*) Private residents in Spain as of December 2008 provisional i * Provision for credit losses (million euros) Specific Provision Generic Provision Total Provision ,136 1,890 3,026 38% 62% 100% Figures as of

36 6 (iii) Financial Strengths Secure growth: Liquidity Excellent levels of liquidity guaranteeing business growth and client financial needs million euros Excellent levels of liquidity With a good financing structure Institutional maturities 09 Total Liquidity 22,262 ECB facility Balance sheet liquidity 7,139 15, % Group Assets Customer liabilities (74%) Institutional Issues (19%) Bank deposits (7%) Maturities 2009: 3,170 January issuances 09: 4,900 State guaranty Subordinated debt FAAF 2,000 2, % liquid at the moment providing stability covered Figures as of

37 6 (iv) Financial strengths Solvent Growth: secure and guaranteed for the future Recurring profit finances organic growth, with excellent capital figures Recurring profit finances organic growth Solvency Ratios Basel II 10.1% % (1.7) Self financing 8.8% Core Capital Tier 1 Ratio BIS (*) 31/12/2008 Ratio Millions 8.8% 12, % 14, % 15,802 Organic Growth Purchases Exceed Capital Risk Weighted Assets 4, ,272 Dec Subtotal t recurring Dec (*) () The Subordinated Debt issued in January 2009 for an amount of 2,500 MM increases Tier 2 by 1.6 b.p. Figures as of

38 6 (v) Financial Strengths 2008: long term ratings confirmed In October 2008 confirmed the long term rating AA- : la Caixa ratings in the AA rank Robust Spanish retail banking franchise; Strong management and successful strategy; Excellent liquidity and sound capitalization; Contained loan book profile. Good evolution of the banking business with expectations of strengthening commercial dynamism and containing costs. Market risk of the equity portfolio. The outlook has been revised from stable to negative: 33% probability of a revision of the rating in the next 12 to18 months if asset quality deterioration accelerates or if the economic environment has a greater-than-anticipated impact. Revision of the outlook back to stable if good asset quality, profitability and solvency are maintained. AA+/Aa1 (+outlook) AA+/Aa1 AA+/Aa1 (-outlook) AA/Aa2 (+outlook) AA/Aa2 AA/Aa2 (-outlook) AA-/Aa3 (+outlook) AA-/Aa3 AA-/Aa3 (-outlook) A+/A1 (+outlook) A+/A In July 2008 confirmed the long term rating Aa1 with stable outlook and the Bank financial strength rating B. Standard & Poor s In June 2008 confirmed the long term rating AA- with stable outlook. Moody s Fitch Figures as of

39 Índex Contents 1. Executive Summary 2. Governing Bodies 3. Banking Business: Great commercial strength 4. Equity Portfolio 5. Financial performance of the year Financial Strengths 7. Welfare Projects 8. Closing Summary Figures as of

40 7 (i) Welfare Projects Efficient and adapted management of the resources for the Welfare Projects 25% of the recurring income of the Group allocated to the Welfare Projects budget: 500 million euros (+7.5%). Programmes: Social Environment and Science Cultural (62%) Education and Research (EUR million) (16%) (16%) (6%) Expenditure Expenditure Budget Figures as of

41 7 (ii) Welfare Projects Efficient and adapted management of the resources for the Welfare Projects Programs Social Budget 2009 (million euros) 310 Main new projects Poverty. Caixa for childhood. Labor support. Incorpora. Help for life (terminally ill patients). Environment and Science 81 Conservation of Natural Spaces Cultural 79 New CaixaForum Education and Research 30 Scholarships (graduate studies, biomedical studies) 500 Figures as of

42 Índex Contents 1. Executive Summary 2. Governing Bodies 3. Banking Business: Great commercial strength 4. Equity Portfolio 5. Financial performance of the year Financial Strengths 7. Welfare Projects 8. Closing Summary Figures as of

43 8. Closing Summary la Caixa Group A reference Institution Leadership in retail banking in Spain Best equity portfolio Robust, confident and management to ensure success in future Sound risk profile Social Commitment Figures as of

44 Figures as of