CaixaBank Group: Institutional Presentation. First Half PDF Free Download

CaixaBank Group: Institutional Presentation First Half 2011

Disclaimer The purpose of this presentation is purely informative. In particular, regarding the data provided by third parties, neither CaixaBank, S.A. (CaixaBank) 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, CaixaBank 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. 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 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 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 CaixaBank Group for 1H11 has been prepared mainly on the basis of estimates. 2

Contents 1. General Description 2. Great commercial activity 3. Diversification 4. Financial evolution 1S11 5. Risk profile 6. Financial strength: liquidity, solvency and ratings 7. Corporate responsibility 8. Strategic Plan 2011-2014 9. Fundamental aspects Closing Summary Page 4 7 18 22 28 31 35 37 41 3

1. General description CaixaBank at a glance 1 A flagship institution 3rd financial group in Spain by total assets Assets: 273.4 bn Business volume: 437bn ( 188.9bn loans + 248.1bn customer funds) Ranked 1st in retail banking in Spain 10.5 million customers serviced by a segmented business model Multi-channel platform: branches (5,247); ATMs (7,993); online and mobile banking Excellence in customer service and highly-rated brand Diversification of markets and income Market diversification: focused on growth markets Income diversification: stakes in Repsol and Telefonica Sound Risk profile Diversified and good quality loan portfolio NPL Ratio: 4.30%; Coverage ratio 67% (139% with mortgage guarantees) Generic provision of 1,835 million, remains unused Robust financial metrics Comfortable liquidity position: 21.6 bn Solid base of capital: core capital of 11.3% (BIS II) (1) Figures as of June 30, 2011 4

1. General description CaixaBank core business of la Caixa Group Welfare Projects 100 % 81,5 % CaixaBank Group Banking and insurance Business International Banking Caja de Ahorros y Pensiones de Barcelona (CAPB) General Assembly and Criteria CaixaCorp s Annual General Meeting approved, in April and May 2001 respectively, the reorganization of la Caixa Group. The process was completed by June 30, 2011. In the reorganisaton process, CAPB has transferred its banking business to Criteria CaixaCorp, which has become the banking group CaixaBank (through which CAPB carries out its financial activity, indirectly), and Criteria CaixaCorp has transferred some of its industrial stakes to a new institution belonging to CAPB named CaixaHolding. Within the frame of the new structure, the Internal Relations protocol between CAPB and CaixaBank develops the basic principles that should govern the relations between both companies, the fields of activity of CaixaBank, the intercompany services and the flows of information. This reorganization will allow la Caixa Group to remain leader in all the business sectors in which it is currently active while at the same time retaining its firm commitment to its Welfare Projects, and to access capital to take advantage of opportunities of growth. 5

1. General description Corporate governance Board of Directors and Committers Management 11% Other externs 11% Independents 28% "la CAPB Caixa" 1 50% Audit and Control Committee 2 of 3 independents Executive Committee 4 CAPB of 7 members Appointments and Remuneration Committee 2 of 3 independents (1) Caja de Ahorros y Pensiones de Barcelona 6

2. Great commercial activity A different and unique business model Values Leadership Trust Social commitment Action Principles Organizational Proactivity Good treatment Community-oriented aims Innovation Efficiency Challenge-based management New competences and habits Self-assessment Integrated management Management model Customer oriented Personalized treatment Risk management Multi-channel management Personal and professional growth of the employees Close to the territory Flexibility and adaptability 8

2. Great commercial activity A different and unique business model Challenge-driven management based on la Caixa Corporate Values Qualitative and quantitative commitments set by the commercial network New skills and new commercial habits To improve efficiency and commercial management Commercial Plans Commercial Plan for the year established by the branches Proactivity To boost knowledge, experience and action Self-assessment Ongoing improvements in professional practices Global Management: Business Unit To gain customer funds, investments and liquidity. Risk and profitability management Safe, efficient, profitable and solvent growth 9

2. Great commercial activity Customer oriented strategy GROWTH MANAGEMENT MODEL: CHALLENGES EXCELLENCE AND QUALITY SOLVENCY CUSTOMER oriented EFFICIENCY RISK MANAGEMENT INNOVATION PROFITABILITY 10

2. Great commercial activity New Bank la The Caixa : leading Leading retail franchise retail in franchise Spain in Spain Segmented business model Market shares and ranking position 2008 A specialized network (acquisition of M Stanley-Spain) 2009 Specialized managers 0.1 10.5 million customers Wealth Corporate Banking Banking 10 200 Private Business Banking Banking 0.5 9 Personal Banking SME Banking 2008 A specialized network 1 2009 Specialized managers 1 o 2 o Payroll deposits Pension deposits Mortgages Bankcard turnover Retailers bankcard turnover (POS) Savings Insurance Loans resident private sector Health Insurance Pension plans Commercial loans Deposits resident private sector Demand deposits 16.0% 13.7% 11.0% 17.6% 21.0% 15.3% 10.7% 24.1% 16.2% 10.0% 10.0% 12.1% Individuals (assets managed range, million ) Retail banking (the main pillar) Companies (turnover range, million ) 3 o Investment funds 12.2% Factoring 14.6% Confirming 15.1% Last information available 11

2. Great commercial activity 1 Balanced business New growth Bank la in an Caixa : environment Leading of retail slow down franchise Increase in Spain of market shares 248,058 232,224 June -10 June -11 Customer funds 188,916 182,698 +6.8% +15,834 +3.4% +5.3% +22,052 414,922 436,974 Million euros +6,218 June-10 June -11 Loans June-10 June-11 Business Volume 12

2. Great commercial activity CaixaBank market leader: Sustained growth on market key retail product and services shares Market shares in % Individuals customers penetration Payroll deposits Pension deposits Pension plans Mutual funds 185bp 136bp 362bp 673bp 70bp Deposits 1 Loans 1 Factoring Confirming 20bp 169bp 1.022bp 407bp 9,8% 9,9% 10,0% 10,0% 10,0% 10,1% 16.5% As a 1rst entity 06 07 08 09 10 11* 1. Resident private sector * Last data available 13

2. Great commercial activity Wide capillarity of the branch network Specialized branch network: to focus the commercial activity Wide capillarity of the branch network Retail nework 5,106 Specialized branches 128 197 75 258 49 182 717 27 55 92 1,734 242 (Branches: 84 business, 32 private banking, 2 corporate banking and 10 institutional banking) International branches Total branches 13 5,247 155 85 4 641 130 2 130 459 Branches in Spain: 5,234 Market Share 12.6% 14

2. Great commercial activity CaixaBank: Leader in multi-channel management An innovative strategy tailored to customers needs: in order to maximize branch sale activities. All channels (branches, ATMs, Internet, mobile phone, etc.) complement each other and operate efficiently with ongoing commitment to quality and technological innovation Leader in self-service systems 59% of the operations through Internet and ATMs Internet banking Million Customers 6.7 Share 30.2% Operative customers 3.4 ATM s (number) 7,993 13.2% Mobile banking 2.1 Operations Branches 10% ATMs 13% Change + 104 +5% - 6-3% - 1 0% 1H 11 1H 10 1H 11 1H10 1H 11 1H 10 206 212 1H2011 vs. 1H2010 Million operations 263 264 2,008 2,112 Internet 46% + 132 +15% 1H11 1H 10 858 990 Automatic 31% -21-3.0% 1H11 1H 10 653 674 15 15

2. Great commercial activity Reinforced by a premium brand reputation Quality of service Brand reputation la Caixa : the financial brand with the best reputation In 2010, reduction in the number of complaints: 32% Leading institution in recommendations and customer retention for individuals and businesses (FRS Inmark 2010) The first institution for 40% of business clients 1 The most highly rated online service in all segments (individuals and businesses) (Aqmetrix) Notes (1) Survey of 1,700 companies that are customers of la Caixa 16

2. Great commercial activity The insurance business is a perfect complement to the banking business A top insurance group with the widest distribution network 6 million customers 35.3 bn assets under management 6.2 bn premiums 1 in 2010 (+24%) Diversified product offering (life, pension plans, health, household, auto ) CAGR 2006-2010: 27.5% bn 31.8 1Q10 Insurance business: Sustained increase in AUMs 32.4 1H10 +9.0% YoY 33.1 3Q10 34.0 FY10 +3.8% Impressive top-line growth in all business segments 35.3 1H11 Strong distribution capacity 5,247 la Caixa branches 629 own agents 462 external agents 946 brokers 190 Adeslas offices Strategic agreement to develop the non-life insurance business with Mutua Madrileña (sale of 50% of this business in the first half of 2011) Premiums, million 1H10 1H11 % Life and Contrib. to pension plans 2,330 2,567 10% Health 2 142 778 448% Household 99 124 25% Auto 59 78 32% TOTAL 2,630 3,547 +35% (1) Includes premiums and contributions to pensions plans (2) 1H10 only includes one month of Adeslas premiums Source: ICEA and Inverco Figures as of June 30th 2011 17

3. Diversification. International Banking Focused on growth markets International banking* 20.7% 149 M 10.1% 1,381 M 13 Representative offices: 5 Europe 1 : Business Volume 4 : 720MM 8 Other countries 2 : Intermediated flows 4 : 4.0bn 3 International branches 3 Loan portfolio 4 : 370MM 20.0% 2,353 M 30.1% 302 M 15.7% 919 M Bank investments Market value: 5.1bn 13 Representative Offices 3 International Branches Bank investments 90% of our international presence in emerging markets (1) Frankfurt, London, Milano, Paris, Stuttgart (2) Beijing, Dubai, Istanbul, New Delhi and Shanghai. Algiers, Cairo and Singapore pending receipt of regulatory approval (3) Warsaw (June 2007), Bucharest (November 2007), Casablanca (July 2009) (4) Figures as of Dec. 31st 2010: Business volume includes credit granted and funds raised. Intermediated flows include all products in which a representation office plays value- added role (e.g. export letters of credit) * Market value as of June 30st 2011 19

3. Diversification. International Banking + Control/Synergies/Risk Controlling Acquisitions Development of a partnership model Investing in winners Well-managed banks with solid competitive positions Strong local partners with common views Retail focus / low reliance on wholesale funding High solvency levels & sound credit quality Partnership model Investment profile Long term horizon Influential positions Investment at fair value - no control premium paid - Financial positions Control/Synergies/Risk Building strong international alliances Long-term strategic agreements Sharing best practices Exporting know-how where appropriate Development of joint businesses and projects o Search for cost & revenue synergies 20

Repsol and Telefonica provide revenue diversification and a substantial capital cushion 3. Diversification of income Income diversification: two international leaders in defensive sectors Financial flexibility: very liquid stakes Capital buffer: plus ~122 bps 1 of unrealized after-tax capital gains 5.4% 1 Value: solid fundamentals, excellent track record and high dividend yield Profitability: attractive return Low regulatory capital consumption Tax-efficient ( 5%) 12.8% 1 Geographical diversification: ~65% generated outside Spain Market value 1 : 7.5 bn (1) As of June 30th 2011 21

4. Financial evolution 1H11 Liquidity, solvency and asset quality have been key themes for 1H 11 Liquidity 21.6bn Pre-funding in wholesale markets in anticipation of market instability ( 5.9 bn; mainly issued in the first 4 months of 2011) Significant increase in time deposits in 2Q11 (+ 6.6 bn) LTD ratio improvement (124% vs 130% in Dec 10) Solvency 11.3% Core capital Mandatory convertible bond 1.5 bn: +103 bps Organic capital generation: +48 bps Sale of 50% of the non-life insurance business: +44 bps Asset quality 67% NPL coverage Extraordinary income used to bolster provisioning levels More conservative approach to developers book Balance sheet strength endorsed by rating agencies post-reorganisation 23

4. Financial evolution 1H11 Capacity to generate pre-impairment income is maintained Consolidated income statement, million 1H11 1H10 yoy(%) Net interest income 1,543 1,860 (17.0) Net fees 772 679 13.7 Income from investments 686 507 35.3 Gains on financial assets 76 139 (44.8) Other operating products & expenses 340 225 51.3 Gross income 3,417 3,410 0.2 Total operating expenses (1,658) (1,674) (1.0) Pre-impairment income 1,759 1,736 1.3 Impairment losses (1,029) (868) 18.7 Profit/loss on disposal of assets and others Pre-tax income (11) 719 (6) 862 79.4 (16.7) Net recurring profit 702 758 (7.4) Extraordinary income Extraordinary write downs 463 (332) 94 (102) Profit attributable to the Group 833 750 +11.0 Extraordinary income prudently used to bolster balance sheet 24

4. Financial evolution 1H11 Great capacity to generate recurring income with good management of margins Net interest income Net fees Million euros Income from investments 1,860-17% +13.7% +35.1% 1,543 679 772 507 686 Banking +11,5% Dividendos Dividends Insurance and pension Investment funds Others +15,3% +23,1% +22,1% Dividendos Dividends P.equiv Equity Method P.equiv Equity Method 1H10 1H11 1H10 1H11 1H10 1H11 Passing on the fall in interest rates to the mortgage payments Active management of margins Increase in cost of funding due to increase in liquidity (deposit and wholesale funding) Positive evolution of retail spread (1.47% in 2Q vs 1.45% 1Q) Increase of business Management and quality of service Increased activity in personal and private banking and in business banking Positive performance of the investments: dividends and equity method (Repsol as associate since 1/1/2011) 25

4. Financial evolution 1H11 Generation of recurring income and strict policy of cost control Increase in income Gross Income +0.2% 3,410 3,417 Pre-impairment income Million euros +1.3% 1,736 1,759 Pre-impairment income growth +1.3% Expenses reduction 1H10 1H11 Operating expenses 1.674-1.0% 1.658 Cost-to-income ratio 45.7% Amortisation General -17.5 % - 8.5% 1H10 1H11 Personnel +5.3 % 1H10 1H11 26

4. Financial evolution 1H11 Great capacity to generate recurring profits which allow to record a significant amount of impairments to increase balance sheet strength million euros 1H11 1H10 Change % Pre-impairment income 1,759 1,736 1.3% Impairment losses on financial and other assets (1,029) (868) 18.7% Profit/loss on the disposal of assets and others (11) (6) 79.4% Income taxes and minority interests (17) (104) (84.5%) Recurring profit -7.4% 758 702 Specific impairments Recurring Extraordinary Total impairments 1H11 1,029 361 1,390 Recurring Profit attributable to the Group 702 758 (7.4%) Extraordinary income 463 94 ( 450 million net capital gain from the sale of 50% of non-life insurance business) Extraordinary write downs (332) (102) Addittional allowances 361 million gross / 253 million net, and reorganisation expenses Total profit attributable to the Group 833 502 11.0% 1H10 750 +11.0% 1H11 Profit Attributable to the Group 833 Generic provision unused Profit Attributable to the Group: 833 Million 1H10 1H11 27

5. Risk profile Strict risk management June 2011 NPL ratio Sound asset quality Difersification of risk With sound processes and advanced management tools 4.30% CaixaBank NPL: 8,531 M (June 2011) Business oriented to families and SME s Families 50% and SME s 25% of the loan portfolio Sector 6.5% (May 2011) Good guarantees 65% of the portfolio with mortgage guarantee Focus on financing primary residences in big cities 89% of the mortgage portfolio financing primary residences 1H11 Prudent LTV policy 89% loan portfolio has an LTV < 80% Best coverage among peers 67% coverage(139% with mortgage guarantee) 5.689 M provisions 1.835 M No use made of the generic provision (100% alfa) 29

5. Risk profile Loan book and NPL by segments bn 30 June 2011 NPL ratio % 31 Dec 2010 NPL ratio % Loans to individuals 94.1 1.68% 1.65% Residential mortgages 70.0 1.37% 1.40% Other 24.1 2.58% 2.38% Families continue to service mortgage debt (residential mortgages) Loans to businesses 84.1 8.13% 6.49% Non RE businesses 56.3 3.33% 2.64% Real estate developers 24.5 20.23% 15.52% Increase in total NPL ratio primarily explained by real estate developers Servihabitat and other 3.3 0.00% 0.00% la Caixa subsidiaries 1 Public sector 10.7 0.46% 0.28% Total loans 188.9 4.30% 2 3.65% 2 (1) Mainly Servihabitat, the real estate holding company of la Caixa, and other subdidiaries of la Caixa Group (2) Includes contingent liabilities 30

6. Financial strength. Liquidity and funding 21,633 million Liquidity (Million euros) Excellent liquidity position...... Good funding structure.. Wholesale activity 19,638 21,633 Net interbanking deposits Outstanding maturities series 24,765 7.9% Group Assets Wholesale funding 21% 8% 2,385 2,561 6,426 7,259 jul-dic 2011 2012 2013 2014?2015 31/12/2010 30/06/2011 100% Immediately accessible 71% Customer funds Maturities 1H11 : -4,065 Issuances 1H11: 5,874 Covered bonds 5,324 Public sector covered bonds 200 Unsecured bonds 350 No resorting to the ECB 13.4 Bn available Funding total 194.5 Bn Ratio loans /deposits 124% Total issuances 43,4 Bn 32

6. Financial strength. Solvency Solid solvency ratios further reinforced by placement of mandatory convertible bonds Core Capital evolution +1.9% 11.3 % Core Capital: Self financing growth through profits and extraordinary operations 8.9% +0.5% Self financing Profit & RWA s Solvency ratios BIS II June 2011 Extraordinary reorganization Group Operations - Repsol associated - Convertible - VidaCaixa Adeslas 2010 1H11 Core Capital Minimum requirement Capital surplus RWA Ratio 11.3% 8% Millon Var. 1H11 16,643 +2.4 11,807 4,836 147,584-1.9% Additional ~122 bps 1 of unrealized after-tax capital gains in Telefónica & Repsol (1) As of June 30th 2011 33

6. Financial strength. Ratings Good ratings Rating Agency LONG TERM SHORT TERM Outlook Aa2 P-1 negative A+ A-1 stable A+ F1 stable 1 st July 2011 Robust Spanish retail banking franchise; The agencies highlight the great commercial and financial strenght of CaixaBank Excellent liquidity and solvency; Strong management and successful strategy; Contained risk profile; Good evolution of the banking business. 34

7. Corporate Responsibility Commitment to the interest groups Corporate Responsibility consists in acting according to our corporate values, beyond the legal requirements. la Caixa has received for the 5th consecutive year the A+ qualification from the GRI (Global Reporting Initiative), for the quality and transparency of the Social Responsibility Report 2010. CORPORATE VALUES Leadership Trust Social Commitment GOOD CORPORATE GOVERNANCE PRACTICES Responsible and transparent management The Corporate Reputation reinforces la Caixa position Commitment to the interest groups CUSTOMERS EMPLOYEES SHAREHOLDERS SOCIETY 36

8. Strategic Plan 2011-2014 9 strategic challenges and projects to achieve them (1/3) Market share of business volume 1 Strengthen leadership in retail banking 10% 15% (2010) (challenge) Retail Banking Project: specialized attention Insurance Project: cross-selling Loans to businesses/total loans 2 Diversify operations towards business banking 28% 35% (2010) (challenge) Specialized model: reference for businesses and professionals Generating closer ties with customers that are seen as a whole Management of returns adjusted to risk 3 Balance out territorial presence Weight of the expansion area/total 55% ~65% (2010) (challenge) Branch Management Project: optimisation of the branch network and its commercial potential Best practices 38

8. Strategic Plan 2011-2014 9 strategic challenges and projects to achieve them (2/3) 4 Grow internationally International Project: take advantage of opportunities for profitable growth and bring about synergies Develop the staff skills 5 Maintain financial strength Capital and Profitability Management Project Assigning capital according profitability Diversifying maturities, markets, fixed income investors 6 Improving profitability Profitability management adjusted to risk Have a large range of products to strengthen ties with customers 39

8. Strategic Plan 2011-2014 9 strategic challenges and projects to achieve them (3/3) 7 Greater efficiency and structural flexibility Activity Value Analysis Project: All functions generate value. Boosting electronic channels. Quality: Be the reference in quality. 8 Develop and motivate talent Talent Project: Professional development and transparent and pro-active internal communication Promote employees initiative, commitment and leadership 9 Publicize the goals of The Group Publicize the mission, vision and values of the Group, its reality and its goals, the differential factors of its model and its contribution to society through the Welfare Projects. 40

9. Closing summary CaixaBank Group A reference Institution Leadership in retail banking in Spain Diversification of income Sound risk profile Financial Strength 42

CaixaBank Group: Institutional Presentation. First Half 2011