FY 2013 Financial Results Barcelona, 31 st January 2014
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 2013 has been prepared mainly on the basis of estimates. 2
2013 Highlights 2013: Delivering on Execution Macro trends & sector restructuring have improved market confidence.. Spanish economy has entered an inflection zone -Key challenge: employment creation Banking system restructuring has continued Strengthened supervisory procedures: Eurozone Banking Union Year 0.however, persistent headwinds will continue to require further attention Low rate environment Strong deleveraging pressures Cost of risk inertia Excess installed capacity Regulatory pressure: BIS III, AQR, stress test A key year for execution: 2013 1.Franchise value enhancement 2.Implementing restructuring plans 3.Increasing free-float and liquidity 4.Bolstering financial strength Setting a solid foundation for a gradual recovery of profitability 3
2013 Highlights 2013: Delivering on Execution 1. Managing for growth: consolidation of Spanish retail leadership Successful I.T. integrations of BCIV and BdV in record time: 5 in 9 months Acquisitions reinforce footprint, advance growth targets and consolidate existing retail leadership Distribution network continues to perform with strong market share gains (retail funds +3.8% yoy organically) 2. Completion of rightsizing plans and early delivery of synergies Agreement to adjust headcount by 2,600 employees was signed and booked in 1Q13 968 branches closed in a year: 24% reduction of branch network since 2007 Cost targets increased in 2Q: 436 M achieved in 2013 (vs. 423 M revised target) 3. Increasing free float and liquidity 8% reduction in la Caixa fully diluted stake via a 900 M ABO and a 750 M 4yr. exchangeable: now 56% Transaction increases CABK s free float, institutional shareholder base and liquidity 4
2013 Highlights 2013: Delivering on Execution Optimising capital has been the key priority Strong capital generation: Core Capital Basel 2.5 at 12.9% 1, +190 bps in 12 months Early delivery of Basel 3 fully-loaded targets: Core Equity Tier 1 at 11.7% 4. Further bolstering of financial strength Strengthening funding and liquidity profile throughout the year LTD falls to 110% (128% Dec 12) reflecting the reduction in commercial gap ECB funding significantly reduced: 13 bn as of January 14 (from 34bn max.) 5.3 bn issued in wholesale funding markets Improving trends in asset quality supported by better macro conditions Gradual reversal of NPL formation trends: NPLs down by 0.5 bn in last two quarters High provisioning efforts continue: 7.5 bn of total impairments in 2013 Accelerated disposal of foreclosed assets: 2.2 bn of sales & rentals Delivering solid operating results with a focus on management of spreads and costcutting NII recovery as time deposit costs fall (new production at 129 bps, -95 bps yoy) Recurring like-for-like costs fall by 6.4% yoy Extraordinary capital gains partially offset high provisions (1) Despite prepayment of 977 M of BCIV FROB capital in April 5
FY 2013: Activity and Financial Results Commercial activity Financial results analysis Asset quality Liquidity Solvency Final remarks 6
Commercial activity Distribution network continues to produce market share gains Successful execution of marketing campaigns, focused on capturing client income flows: Compared to 2012 campaign Retail strength results in the highest customer penetration among peers Customer penetration, % Income flow capture 1 736,105 Insurance (life-risk and others) 445M premia Pension plans 1,970M gross inflows Consumer finance 153,335 customers// 920 M x1.8 x1.2 x1.2 x1.4 26.1 27.4 20.4 21.0 21.6 21.0 21.0 16.0 9.8 4.0 15.5 14.1 11.0 13.5 8.6 4.7 Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Gift and deposit campaign 474M deposits x1.9 1.8 2007 2008 2009 2010 2011 2012 2013 1. Includes payrolls, pensions, and self-employed earnings Source: Bank of Spain Peers: Santander, BBVA, Bankia, Sabadell and Popular Source: FRS Inmark 7
Commercial activity Growth extended to other business areas and products 1st * 28 bn AuM 748,333 investors +22.4% AuM Leading market shares in key retail products Market share, % 1st 1st 48 bn AuM 6,650 M Premia and contributions 2.5 bn Premia +9% AuM +5% Premia 2007 market share growth Payroll deposits Pension deposits Business volume (1) Demand deposits 14.4% 12.5% 9.4% 11.5% 21.6% 19.9% 14.6% 14.8% +7.2% +7.4% +5.2% +3.3% Time deposits 9.4% 14.0% +4.6% 1st 22.5 bn turnover 12.6 M credit cards +19% turnover Deposits (2) Consumer loan Loans (2) 9.8% 9.8% 9.1% 14.0% 14.8% 15.1% +4.2% +5.0% +6.0% 1st 28.0 bn turnover 245,130 POS terminals +17% turnover Mutual funds Pension plans (3) 5.6% 11.2% 14.1% 18.0% +8.5% +6.8% 1.2 bn assets 880 M new business in 2013 +40% assets Saving insurance Credit cards turnover POS terminal turnover 14.1% 17.6% 17.8% 19.9% 20.7% 24.0% +5.8% +3.1% +6.2% (*) Ranking by number of investors, #3 by AuM (1) Loans + deposits (2) Other Resident Sectors according to Bank of Spain (3) Includes pension plans ( PPIs ) and insured pension plans ( PPAs ) 2013: Latest data available Source: Bank of Spain, INVERCO, ICEA and FRS Inmark 8
Commercial activity Market-renowned innovation in servicing client needs Multi-channel approach and technological innovation are integral parts of our culture Reputation and excellence in retail banking have been recognised by market awards 5.8 billion transactions in 2013 vs. 4.9 billion in 2012: +20% Channel distribution, in % Automated: 28% ATMs: 11% Internet: 52% Branches: 9% The world's most innovative bank in 2011 and 2013 Sustained increase in the number of transactions carried out via electronic channels Branches focused on value creation by offering clients a continuously improving portfolio of financial services 1 st Internet Mobile banking 9.2M customers 1 st banking 3.8M customers Awards recognise market leadership in Spain and technology innovation while highlighting solvency, quality of service and social engagement 9
Commercial activity Increase in retail funds coupled with deleveraging continue to reduce funding gap Trends lead to a significant reduction in LTD ratio to 110% Business volume: Loan book and customer funds In Billion Euros YTD Total Organic 1 Sector 4 Retail funds 2 +6.9% +3.8% +3.2% Loans 3-5.6% -11.1% -9.3% 514.0 510.8 Business volume -0.6% YTD High loan-book deleveraging continues Dec-12 Dec-13 Inorganic Organic 1 +4.6% -5.2% Organic evolution of retail funds reflects strength of asset gathering franchise Funding gap rapidly falling: LTD ratio at 110% (-18 pps in 12 months) Lower deposit rates lead to a gradual migration to other long-term fee-generating products (1) Deducting BdV figures as of 31/12/12 includes changes under CABK management (2) Retail funds defined as: deposits, CP, retail debt securities (including sub. debt), mutual funds, pension plans and other retail off-balance sheet products. (3) Excluding the impact of the conversion of certain bank financing into bonds (4) Sector figures estimated by la Caixa Research Department 10
Commercial activity Increased volumes of retail funds despite lower pricing in time deposits Total customer funds breakdown In Billion Euros I. Customer funds on balance sheet Demand deposits 31 st Dec. 247.6 80.4 YTD 4.0% 16.3% Organic 1 YTD (%) (0.3%) Retail funds + 16.7bn (+6.9%) Organic 1 Inorganic +3.8% +3.1% Time deposits Debt securities 2 Subordinated liabilities 2 Institutional issuance 81.2 3.1 3.6 44.4 6.1% (65.1%) (17.1%) (8.3%) 1.7% Successful management of retail fund volumes : +3.8% yoy organic Insurance Other funds II. Off-balance sheet funds Mutual funds Pension plans Other managed resources 3 Total customer funds Retail funds Wholesale funds 30.8 4.1 56.0 28.0 16.8 11.2 303.6 259.2 44.4 10.4% 41.0% 5.9% 22.4% 6.6% (21.4%) 4.4% 6.9% (8.3%) 4.9% 0.6% 3.8% (15.4%) Increased volumes of demand deposits supported by higher income flows from clients (payrolls & pensions campaigns) Significant reduction in spreads of new deposit production Insurance, pension plans and mutual funds continue to benefit from deposit migration as clients seek alternative investments (1) Deducting BdV data at 31/12/12- includes changes under CABK management (2) Balances are reduced as CP converts into deposits and BCIV MCB converts into shares (3) Primarily includes regional govt. securities, and Caja de Ahorros y Pensiones de Barcelona sub debt. Balance is reduced due to the conversion of Repsol preferred shares and the reduction of regional govt. securities 11
Commercial activity Significant deleveraging continues with emphasis on RE developer book Loan-book breakdown In Billion Euros, gross I. Loan to individuals 31 st Dec. 117.7 YTD (1.2%) Organic 1 YTD (%) (6.4%) Loan book 2-5.6% Organic 1 Inorganic -11.1% +5.5% Residential mortgages home purchases 87.5 (0.2%) Other II. Loan to businesses Non -RE businesses Real Estate developers 3 la Caixa RE subsidiaries Loans to individuals & businesses III. Public sector Total loans 30.2 79.3 58.6 20.0 0.7 197.0 10.2 207.2 NOTE: Excluding the impact of the conversion of certain bank financing into bonds (4.1%) (12.5%) (19.3%) (5.3%) (26.0%) (60.7%) (6.1%) (22.7%) (25.3%) (7.1%) (12.8%) (5.6%) (11.1%) Reduction of the loan book continues: Strong decline in the Real Estate developer loan book: - 7.9 bn (organic) Loans to la Caixa RE subsidiaries have been substantially reduced Business loans impacted by continuing low credit demand for investment projects: o Large corporates continue to access wholesale funding markets o Improved macro trends should lead to a gradual increase in credit demand throughout 2014 (1) Deducting BdV data at 31/12/12- includes changes under CABK management (2) Excluding the impact of the conversion of bank financing into bonds (3) Dec 13 figures affected by a reclassification of 1.7 bn loans from RE developer to Non-RE developer book 12
FY 2013: Activity and Financial Results Commercial activity Financial results analysis Asset quality Liquidity Solvency Final remarks 13
Financial results analysis Improving operating results still offset by high impairment charges Consolidated income statement (BdV consolidated from 1 st January) In Million Euros 2013 2012 yoy(%) qoq(%) Solid operating performance, offset by high provisioning : Net interest income Net fees Income from investments 1 3,955 1,760 446 3,872 1,701 809 2.1 3.5 (44.9) 4.3 2.3 Solid core business: NII & fees up yoy and qoq Income from investments affected by lower TEF dividends and estimated YPF charge ( 184 M) 1 Gains on financial assets 679 455 48.9 (51.3) Trading income driven by higher extraordinaries Other operating revenue & exp. 2 Gross income (208) 6,632 (100) 6,737 108.3 (1.6) 18.4 (17.7) Other income impacted by sale of life-risk insurance portfolio in 4Q12 Recurring operating expenses Extraordinary operating expenses Pre-impairment income (3,947) (839) 1,846 (3,518) (48) 3,171 12.2 (41.8) (4.9) (36.9) Total costs affected by restructuring & acquisitions. Like-for-Like trends show strong cost-cutting as synergies feed in Impairment losses Profit/loss on disposal of assets and others 3 Pre-tax income (4,329) 1,770 (713) (3,942) 709 (62) 9.8 149.7 53.6 358.6 Recurrent high provisioning charges continue. Significant one-off items: pending RDL 18/12 (1Q) and refinanced loans (1H) Taxes Profit for the period 1,208 495 291 229 116.6 (12.2) Bottom line supported by our capacity to generate extraordinary profits Minority interest Profit attributable to the Group (8) (1) 503 230 118.9 (10.0) Taxes affected by the exemption of income from investments and badwill (1) Includes dividends and income from associates. Income from associates include a provisional estimate of the impact in REP of the potential compensation agreement for the nationalised 51% equity stake in YPF (net negative impact of 184 M). Such provisional estimate has been calculated for CaixaBank's results presentation and does not intend either to pre-judge the final result of the negotiations or its accounting in REP s books. In the event that REP accounts for a significantly different impact to the one estimated, CaixaBank will include the necessary adjustment in its annual accounts, which are to be submitted on the 27 th February. (2) 2013 includes 99 M income from the insurance business, -303 M deposit guarantee fund contribution and -4M other. 2012 includes 185 M income from the insurance business, -278 M deposit guarantee fund contribution and -7 M other (3) 2013 includes mainly: (+) 2.3bn BdV badwill, (+) 255 M from the transaction of Servihabitat Servicing business, (+) 79 M from the sale of the insurance business of BCIV and BdV and (+) 59 M capital gain of the partial disposal of Inbursa, (-) 665 M impairments on foreclosed assets 14
Financial results analysis NII improvement supported by lower deposit costs Stable loan yields and improved time deposit costs Strong NII evolution driven by lower funding costs, more than offsetting deleveraging and slowing drive customer spread up 11 bps QoQ In % negative index resets: 3.64 3.57 3.50 3.43 NII evolution - In Million Euros 3.21 3.07 3.00 3.02 1.70 1.64 1.69 1.59 1.55 1.45 1.37 1.28 +2.1% 2012: 3,872 2013: 3,955 1.94 1.93 1.81 1.84 1.66 1.62 1.63 1.74 883 903 1,059 1,027 992 967 977 1,019 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Loans and credits Customer funds Customer spread NIM continues to increase reflecting improved retail and wholesale funding conditions In % 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 3.08 3.08 2.95 2.91 2.74 2.63 2.63 2.63 +4.3% 1.77 1.74 1.72 1.71 1.64 1.52 1.50 1.44 1.31 1.34 1.23 1.20 1.10 1.11 1.13 1.19 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Total assets Total liabilities NIM 15
Financial results analysis Strict management of time deposit costs has been critical throughout the year Strict pricing discipline leads to a continued reduction in costs of new time deposits Time deposits and retail CP - Back vs. front book (bps) 254 258 244 235 224-30 bps -78 bps -71 bps -98 bps 180 173 218 137 129 4Q12 1Q13 2Q13 3Q13 4Q13-89 bps New deposits already at 129 bps, -95 bps in 12 months Higher impact on 4Q back book supported by significant maturities in the quarter 2014 NII will continue to be significantly impacted by improved time deposit costs o 68% of 81.2 bn time deposit base mature in 2014, with average cost of 2.1% Back book Front book 16
Financial results analysis Improved trends in the evolution of credit back book Reversal in decline of loan book yields Loan book yields - Back vs. front book (bps) 465 472 430 424 426 +87 bps +103 bps +158 bps +172 bps +124 bps 343 321 307 300 302 Worst is over on negative index resets Rate changes in the repricing process of the mortgage book 0.44 2012 2013 2014 0.10-0.54-0.80-0.95-1.15-0.53-0.19-0.05 0.03 0.07 0.09 4Q12 1Q13 2Q13 3Q13 4Q13 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 Back book Front book Source: implicit market rates (31/12/13) of Euribor 12 month forward Back book yields supported by the gradual reduction of negative index resets on mortgages and higher yields of recent production Higher front book yields in 2Q/3Q arising mostly from loan mix Negative resets on mortgages reached a trough in 1Q13. Full 2013 NII impact of ~- 650 M Positive repricing expected from 2Q onwards: o However, 176 M from carried-over resets to impact 2014 17
Financial results analysis Trends in fees driven by positive performance in insurance and off-balance sheet products Net fees In Million Euros Net fees breakdown In Million Euros 2013 yoy (%) qoq (%) +3.5% Banking fees Mutual funds 1,324 176 (2.2) 17.4 0.3 8.9 2013: 1,760 2012: 1,701 413 426 429 433 446 444 430 440 Insurance and pension plans Net fees 260 1,760 31.8 3.5 7.6 2.3 Resilient banking fees despite the loss of one-off items Strong performance in pensions, insurance and mutual funds: 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 +2.3% o Migration from time deposits to offbalance sheet products o Positive market performance o Higher market shares 18
Financial results analysis Cost discipline reflected in recurring like-for-like evolution, with higher contribution of synergies Recurring costs reduced by 6.4% on a like-for-like basis In Million Euros 2012 2013 Delivering on cost synergies: 3,566 648 Perimeter adjust and extraord. 1 4,214 648-6.4% 3,947 2 839 Extraord. 4,786 436 M incorporated in FY13 figures (vs. revised target of 423 M) Higher contribution of synergies in 4Q as employee departures were concentrated at the end of 3Q: Recurrent costs 4.9% qoq Total oper. costs Proforma Recurring costs Recurring costs inc. synergies Total oper. costs ~ 220 M of additional cost synergies to be incorporated in 2014 cost base, in line with targets ( 654 M expected) (1) Like-for-like adjustments include mainly 481 M of operating expenses of 6 months of BCIV and 172 M of 12 months of BdV (2) Including 436 M of cost synergies in FY13 19
Financial results analysis Effective delivery of synergies and restructuring actions Fulfillment of rightsizing targets: number of branches -24% since 2007 968 branches closed in 2013, 190 in 4Q13 ~60% of branches in BCIV and BdV regions closed 5,480 Dec'07 2,099 1 7,579 Dec'07 Proforma -24% 171 openings Acquisitions -2,020 closings 5,730 Dec'13 Employee departures in line with expected calendar Target: 5,700 Strict implementation of restructuring plans has guaranteed the delivery of the announced savings: Cost saving targets - In Million Euros 436 423 2013 2014e 2015e + 157 M 279 654 682 Employee base to be reduced by 20% since 2007 Agreement to be fully executed by YE2014 26,063 12,486 38,549-6,601 1 Acquisitions Net departures -20% 31,948 31,000 Booked Revised Target Original Target Dec'07 Dec'07 Proforma Dec'13 Dec'14e 20 (1) Includes headcount and branches of Morgan Stanley Private Banking, Caixa Girona, Bankpyme, Banca Cívica and Banco de Valencia at the moment of the corresponding acquisition
Financial results analysis Capital gains have partially compensated for high provisioning charges Strong provisioning efforts have continued throughout the year. In Million Euros Pending RDL 18/2012 902 Provisions for refinanced loans 540 Less: transfer from RE generic (165) Other credit provisions 2,764 Other provisions 1 288 Impairment losses 4,329 Impairments for foreclosed assets 2 665 Capital gains have been an offsetting factor Major capital gains in 2013 4 2,682 M Fair Value Adjustments 3 2,507 TOTAL impairments: 7,501 M (1) Includes provisions for contingencies and losses on financial investments (2) Includes 310 M from the transfer of the generic RE provision (3) 1bn related to BCIV and 1.5 bn to BdV loan book (gross) after accounting for APS (4) Includes 255M of partial sale of RE servicing business to TPG, 79M of the sale of BCIV non-life insurance to Mutua Madrileña, 59M of the sale of 11% stake of Inbursa and 2,289M of badwill generated in BdV acquisition 21
FY 2013: Activity and Financial Results Commercial activity Financial results analysis Asset quality Liquidity Solvency Final remarks 22
Asset quality NPL decline confirms gradual improvement in underlying credit trends NPLs (in Billion Euros) 20.2 BdV Refinanced loans 22.5 2.0 25.9 3.3 25.7 25.4 Gradual reversal in net NPL formation trend: o Stock of NPLs falls 511 M in last two quarters NPL ratio increases due to denominator effect (deleveraging) 20.5 22.6 11.66% NPL ratio 6.83% Ex RE developers 4Q12 1Q13 2Q13 3Q13 4Q13 ~80% NPLs backed by collateral NPL Coverage ratio (in %) 77% 66% 63% 65% 61% 4Q12 1Q13 2Q13 3Q13 4Q13 15.5 bn of credit provisions NPL coverage at 61% affected by: o Reallocation of 310 M of RE developer generic provision to foreclosed assets o 775 M of write-offs in the quarter 23
Asset quality Slight increase in NPL ratio attributable to denominator effect (deleveraging) QoQ changes in NPLs by segments and evolution of NPL ratios NPL ratios NPLs qoq var. ( M) 31 st Dec 13 30 th Sep 13 31 st Dec 12 Loans to individuals (364) 5.52% 5.72% 3.57% Key drivers of YTD NPL ratio evolution: Residential mortgages - home purchase (171) 4.41% 4.54% 2.80% YTD change: +303bps Other (193) 8.73% 9.11% 5.72% Banco de Valencia +23bps Loans to businesses (51) 23.06% 21.59% 17.24% Refinanced loans +151bps Corporate and SMEs Real Estate developers Public sector +283 (334) +42 10.94% 59.39% 1.84% 10.29% 51.53% 1.39% 5.96% 44.22% 0.74% Deleveraging (lower denominator) NPL formation +122bps +7bps Total loans 1 (338) 11.66% 11.40% 8.63% Ex- Real Estate developers (4) 6.83% 6.69% 3.98% RE Developer NPLs decline due to continued clean-up NPLs ex RE developers broadly flat (1) Includes contingent liabilities 24
Asset quality RE developer loans breakdown evolution In Billion Euros Significant clean-up of real estate developer loan exposure NPL 11.9 20.0 12.5 12.6 12.2 Substandard Performing 3.1 RE developer loans YTD - 7.0 bn 27.0 26.5 2.8-7.0 bn (-26.0%) 25.0 2.6 2.6 12.0 11.2 9.8 8.9 11.9 1.1 7.0 Dec'12 Mar'13 Jun'13 Sep'13 Dec'13 Organic Non-organic 23.7-15.6% qoq - 7.9 bn + 0.9 bn Coverage 56% ( 6.6 bn) 33% ( 0.3 bn) Strong decline in RE developers book: 7 bn in 12 months Detailed portfolio review resulting in: 1. Reclassification from substandard to NPLs 2. Assignment of remaining RE developer generic provision ( 1.9 bn at Q3): o/w 310 M allocated to foreclosed assets 3. 1.7 bn loan reclassification to non-re 7 bn of total provisions for RE developer book: o Coverage of RE problematic loans at 54% o Coverage of total developer loans at 35% 25
Asset quality Reduction in net foreclosures driven by reinforcement of coverage levels Building Center 1 repossessed real estate Assets for sale As of December 2013. Net amount in Million Euros % coverage Net amount Coverage 45% 48% 49% 49% 54% RE assets from loans to construction and RE development 4,466 56% Finished buildings 2,601 46% 5,088 5,753 6,160 6,327 6,169 Buildings under construction Land RE assets from mortgage loans to households 261 1,604 1,234 60% 65% 46% Other repossessed assets 469 51% Total (net) 6,169 54% Rental portfolio (net) 1,850 Dec'12 Mar'13 Jun'13 Sep'13 Dec'13 Coverage increased from 49% to 54% due to 509 M of impairments 2 in Q4 Land already covered at 65% (1) The real estate holding company of CaixaBank, S.A. (2) Including the reclassification of 310 M from the RE developers generic provision 26
Asset quality Acceleration in the pace of disposals consistent with cleaning up approach Building Center commercial activity In Million Euros Building Center commercial activity In number of units 2500 2000 Sales 1 Rentals 1,074 1,106 2,180 20000 18000 16000 Sales 1 Rentals 8,721 9,665 18,386 14000 1500 12000 10000 1000 500 995 143 8000 6000 4000 2000 6,966 870 0 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 2011 2012 2013 2011 2012 2013 Disposals continue to accelerate: commercial activity +119% yoy Rentals represent 51% of disposals: o Total rental portfolio of 1.9 bn NBV o 88% occupancy ratio (1) For peer comparison purposes: total disposals of 5.3 bn and 29,132 units, at loan-equivalent amounts & including developer disposals, respectively 27
FY 2013: Activity and Financial Results Commercial activity Financial results analysis Asset quality Liquidity Solvency Final remarks 28
Liquidity Balance sheet liquidity continues to increase as funding gap contracts Total available liquidity - In Billion Euros 53.1 + 7.7bn 60.8 17.5 29.2 35.6 31.6 Balance sheet liquidity 1 Unused ECB discount facility Significant reduction in ECB funding: o 18.6 bn 2 prepaid in 2013 o/w 6 bn in 4Q o Additional 2.5 bn prepaid in Jan 14 ECB funding 34.1-62% Dec'12 13.0 Jan'14 Sovereign bond banking book of 28.9bn with 2.3 year duration Dec'12 Dec'13 15.2% 17.9% As a % of total assets LTD ratio reduced to 110%, -18pps in 12 months: LTD ratio evolution 3 128% 125% 117% 118% 110% Dec'12 Mar'13 Jun'13 Sep'13 Dec'13 (1) Includes cash, interbank deposits, accounts at central banks and unencumbered sovereign debt (2) 12.8 bn from CABK + 5.8 bn from BdV (3) Defined as: gross loans ( 207,231 M) net of loan provisions ( 14,976 M) (total loan provisions excluding those corresponding to contingent guarantees) and excluding pass-through funding from multilateral agencies ( 7,218 M) / retail funds (deposits, retail issuances) ( 168,374 M) 29
Liquidity Significant presence in wholesale markets throughout 2013 5.3bn issued in 2013 to take advantage of a gradual normalization in wholesale costs: CaixaBank as issuer: CaixaBank shares as underlying: Covered Bonds Senior Unsecured Subordinated debt Mandatorily Exchangeable Bond into Repsol shares 1 bn 3 bn 750 M 594 M + Exchangeable Bond issued by la Caixa ABO by la Caixa 750 M 900 M Successful management of timing and costs Diversification of capital and funding bases Wholesale maturities can be comfortably managed: CABK wholesale maturities as of 31st December 2013 in 2014: in 2015: in 2016: 8.3bn 6.7bn 7.2bn 30
FY 2013: Activity and Financial Results Commercial activity Financial results analysis Asset quality Liquidity Solvency Final remarks 31
Solvency Exceeding our capital targets BIS-2.5 Core Capital evolution In % 11.0% +193bps Organic +110bps BdV +69bps Inbursa -72bps FROB Prepayment -47bps RDL 18/2012-56bps Other nonrecurrent items 1 12.9% Core Capital BIS 3 - FL (Dec 13) 11.7% Dec'12 Dec'13 Core Capital RWA 17.7 bn 161.2 bn 16.7 bn 129.1 bn Strong capital generation (+190 bps Core Capital) Uplift in B3 FL CET1 ratio to 11.7% due to regulatory framework and capital optimization measures, including partial sale of GFI in 2Q and REP exchangeable bond in 4Q B3 phase-in CET1 ratio stands at 11.0% (excluding 1.9 bn outstanding mandatory convertible bonds temporarily eligible as AT1) (1) Includes the impact of restructuring costs, provisioning charges related to refinanced loan book, the booking of 700 M of net FV adjustments attributable to the BCIV acquisition and other non-recurrent adjustments 32
Solvency And well positioned from every regulatory angle BIS 2.5 BIS 3 - FL Capital ratios CET1 Total 12.9% 14.5% 11.7% 14.6% LR phase-in LR fully loaded = 5.5% = 5.3% Estimated according to final arrangements of Basel Committee (Jan 14) Leverage ratio Bail-in ratios Loss Absorption Capacity = 9.2% Preliminary estimate (consolidated basis) Further regulatory challenges include: Leverage ratio (LR) stands well above minimum requirement (3%) Loss Absorption Capacity (LAC): Equity, hybrids and subordinated debt already above 8% level required in draft BRRD 1 for bail-in purposes (1) Bank Recovery and Resolution Directive 33
FY 2013: Activity and Financial Results Commercial activity Financial results analysis Asset quality Liquidity Solvency Final remarks 34
Final remarks Final remarks 2013: a key year for execution Franchise growth: consolidation of Spanish retail leadership Execution of rightsizing plans with early delivery of synergies Increasing free float & liquidity Reinforcing financial strength with solvency as the key priority 2014: transitioning to better profitability Sustained market share gains Improved perspectives for NII - expect mid single digit annual growth: o Reduction in time deposit spreads o Move towards positive index resets in our mortgage book o Lower wholesale funding costs Strict cost control to continue: organic increase in personnel cost offset by synergies CoR still high but better macro trends should lead to a gradual reduction Other potential levers: o Potential to generate income synergies (13.6 M customers) o Consolidation: opportunities to reinforce competitive position & achieve further cost savings o Higher returns from equity portfolio 35
Appendices 36
Appendices Total refinanced loans 31 st December Bn Performing Substandard NPL Total Public Sector 0.7 0 0 0.7 Corporates (ex-re) 2.8 1.3 2.4 6.5 RE Developers 1.6 0.7 5.1 7.4 Retail 5.8 1.3 3.6 10.7 Total 10.9 3.3 11.1 25.3 Of which: Total Non-RE 9.3 2.6 6.0 17.9 Existing provisions - 0.6 5.1 5.7 37
Appendices Listed portfolio as of 31 st December 2013 Ownership Market Value (in Million Euros) Number of shares Industrials: Telefónica 5.4% 2,895 244,598,190 Repsol YPF 12.0% 2,867 156,509,448 BME 1 5.0% 116 4,189,139 International Banking: GF Inbursa 9.0% 1,228 600,763,993 Erste Bank 9.1% 993 39,195,848 BEA 16.5% 1,161 378,013,906 Banco BPI 46.2% 781 642,462,536 Boursorama 20.7% 148 18,208,059 TOTAL: 10,189 (1) Total stake in BME was sold on January 16th 2014 38
Appendices Only domestic- focus financial institution with investment grade ratings from all agencies Credit Ratings Long term Short term Outlook Mortgage Covered Bonds Moody s Investors Service Baa3 P-3 negative A3 BBB- A-3 stable AA - BBB F2 negative - A (low) R-1 (low) negative - 39
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