Informe Anual 2008 Annual Report...Informe Anual 2008 Annual Report Comparative financial data for...

Informe Anual 2008 Annual Report

Info

rme

Anua

l 200

8 An

nual

Rep

ort

Comparative financial data for past 5 years

Crèdit Andorrà Group

2008 2007 2006 2005 2004

Key balance sheet figures(amounts shown in thousand euros)

Cash and at banks 1,717,016 1,235,135 1,113,092 1,164,827 1,181,454Loans to customers 2,902,788 2,750,436 2,443,606 1,942,398 1,111,770Customer deposits 4,879,467 3,821,540 3,258,707 2,879,458 2,060,498Securities and other instruments

on deposit with third parties (*) 3,933,301 6,461,448 7,003,841 6,499,132 4,125,570

Ratios (%)

Equity / Deposits 13.33 14.24 16.37 17.42 22.85Equity / Loans 22.41 19.79 21.83 25.82 42.35Loans / Deposits 59.49 71.97 75.51 67.75 55.97Profits / Average capital + Reserves 14.74 25.31 25.47 22.31 18.57Profits / Average total assets 1.57 2.79 2.83 2.84 2.75Solvency 20.37 18.84 20.94 19.92 32.08Liquidity 70.08 60.46 57.22 66.71 97.66Operating costs less Tax /

Ordinary margin 31.26 22.00 23.05 26.06 23.47

Other figures

Number of employees 468 412 401 411 281Number of branches (Crèdit Andorrà SA) 21 21 24 24 17

(*) See note 18 of Annual Report.

Contents

Comparative financial data for past 5 years

Introduction

Letter from the Board of Directors 74

Financial statementsCrèdit Andorrà Group

Consolidated balance sheets 78Consolidated off-balance-sheet records 81Consolidated profit and loss account 82Consolidated statement of source and application of funds 84Notes on the consolidated financial statements 86Auditors’ report 127

CSR Report 129Summary of the activities of the Crèdit Andorrà Foundation 136

Branch network 142

Financial statements74

Introduction

During 2008, the international financial crisis has spread throughout the main markets and has had a negative impact on the world economy and, consequently, on all sectors and economic players, especially financial institutions.

The bursting of the speculative real estate bubble in the United States acted as a trigger for the crisis, which worsened with a lack of regulation over subprime mortgages and with the high debt incurred by the financial sector. The current financial and economic situation has resulted in shrinking demand and therefore in a slowdown in the economy and deterioration of the job market, consumption and investment.

This has led us to an unprecedented level of instability in the financial markets, with rocketing volatility and an aversion to risk. In 2008, the main stock market indexes fell by around 40%, figures similar to those in 1929 and 1987.

Businesses have failed, banks have been nationalised and central banks have intervened in the main economies, adopting policies to counteract the lack of liquidity and to reopen interbank financial markets. Governments have improved deposit guarantee funds, have injected public capital into banks, have approved state guarantees and have created funds for the temporary acquisition of financial assets. But in spite of all the measures applied, the financial crisis has got worse, spreading to previously unaffected countries and market segments and raising doubts as to its intensity and duration.

World growth for 2009 has been estimated at below 1%. Growth in GDP in America and Europe is expected to be negative. The only places showing positive signs are emerging countries, principally China, with an estimated growth rate of 6.5% for 2009.

The Andorran economy has also been affected by this environment. Symptoms of a slowdown continued to appear in 2008 and the main indicators suggest a reduction in the pace of activity in all the traditional sectors that have been the pillars of the Andorran economy, such as the financial sector, trade, tourism and construction.

The consolidated balance sheet of the Crèdit Andorrà Group at December 31, 2008 places total volume of business at 11,715 million euros, with a notable migration of third party off-balance-sheet resources managed, these falling by 38%, towards deposits, less risky products and therefore with less margin, which totalled 4,879.5 million euros, 27.7% more than the previous year. This increase in our deposit position and monetary market funds, as a defensive and prudent measure due to the worsening of the crisis in the financial markets, has placed us in a favourable position in terms of liquidity.

On the other hand, although the granting of loans has significantly slowed up because of the fall in demand and because a more conservative policy has been applied in assessing risk, leading to a more restrictive approach in granting loans, in 2008 loans to customers actually rose by 5.5%, achieving the figure of 2,902 million euros.

Within this context, the ordinary margin was 183.3 million euros and the operating margin, 90 million euros. Great efforts have been made to rein in expenditure, which has allowed us to keep a good efficiency ratio of 31.26%. Consequently, the consolidated net profit for the Crèdit Andorrà Group stands at 85 million euros.

Our solvency and liquidity ratios, at 20.37% and 70.08%, continue to be far above the legal minimums established, which are 10% and 40%, respectively. These indicate, on the one hand, a comfortable position in the interbank market and, on the other hand, that customers are tending to move towards balance-sheet assets.

Although this trend has a direct effect on the profitability of the business, it’s important to note that we have managed to keep our market share in terms of volume of business and have improved this share in terms of net profits.

Regarding the objectives of the 2007-2010 strategic plan, particularly significant is our internationalisation process and, specifically, our expansion plan in Latin America and the implementation of the new IT platform. Additionally, and in order to tackle the current economic situation, the special step has been taken to complement this strategic plan with the start-up of a profit improvement plan.

75Financial statements

Introduction

Regarding the first objective, in 2008 we have continued with our international expansion in order to guarantee our Group’s growth and competitive edge. The Banco Crèdit Andorrà (Panamá) has been set up, starting its operations on November 17, 2008 and since then has offered customers financial services and overall advice. On December 18, 2008 the licence was secured to open a representative branch in Uruguay, which will make our Group available in the Mercosur zone.

In the area of insurance, we have started our internationalisation towards Spain, which has taken the form of a majority investment (76%) in the holding ERM, a consultancy firm and insurance broker based in Barcelona.

These business projects are already a reality and complement our international presence in Switzerland (Geneva) via a private asset management firm called Private Investment Management; in Luxembourg via two investment companies, Crediinvest SICAV and the recently created Investcrèdit SICAV, and in Spain (Madrid) via the Invest Funds Valira Capital Asset Management.

With regard to the second objective, the strategic plan aims to strengthen the Bank in technological terms, allowing us to tackle, both quickly and reliably, the future changes, international projects and constant technological innovation of the industry. This new platform is expected to be in operation as from January 1, 2010.

And, thirdly, a contingency plan has also been started up to minimise the impact of the current economic situation on our profits. This plan includes initiatives such as bad debt management, optimising banking fees and reducing expenditure.

In spite of the complexity of the economic situation, we have also achieved significant recognition in 2008. We have been awarded The Banker prize for the “Bank of the Year of Andorra 2008”, and Crediinvest, our asset management company, has obtained ISO 9001:2000 certification, as well as the renewal of its GIPS certificate (Global Investment Performance Standards) and the adoption of the principles established in the MIFID. On the other hand, Fitch Ratings has maintained its classification for our company and, once again, we have therefore renewed our Long-term rating of “A”, our Short-term rating of “F1”, our “B” Individual rating and our Support “3” rating, with a stable outlook. This is particularly relevant given the current state of the international financial system. According to Fitch, these ratings continue to be “a reflection of the leading position of company in the Andorran market, of conservative management and solid profitability” and they confirm “the healthy quality of the bank’s assets, its significant liquidity and strong capitalisation”.

With regard to our institutional commitment to corporate social responsibility towards our community and the environment, we are working to improve the wellbeing and quality of life of our community, principally through the Crèdit Andorrà Foundation. In general terms, the Group’s overall investment in 2008 accounted for 1.67% of its profits. 24% was allocated to education, 38% to culture, 20% to social programmes, 5% to environmental collaboration and, finally, 13% to collaboration for economic development and the international promotion of Andorra.

As the leading financial group in Andorra, our challenge is to continue as a sustainable, benchmark company within the international financial sector, and to ensure that this adds quality and growth to the Andorran economy. We want to guarantee the sector’s traditional values, such as ethics, caution and professional rigour, all deeply rooted in our business culture, and to ensure, now more than ever, that our commitment to our customers and to our country prevails, with the will to continue being the bank they trust.

The Board of Directors


Year ended December 31, 2008

Chairman of the Board of Directors

Antoni Pintat Santolària

Vice-chairman

Jaume Casal Mor

Chief Executive Officer / Secretary

Josep Peralba Duró

Member of the Board

Rosa Pintat Santolària

Member of the Board

Maria Reig Moles

Member of the Board

Josep Vidal Martí

Financial statementsCrèdit Andorrà Group


Consolidated balance sheets as at December 31, 2008 and 2007


ASSETS

Euros (thousands) 2008 2007 (*)

Cash and deposits with OECD central banks 31,496 19,349

Deposits with Andorran National Institute of Finance (ANIF) 46,245 46,245 (Notes 4 and 19)

Financial intermediaries (Notes 4 and 5) 1,677,766 1,210,077 Financial intermediaries at sight 134,706 73,481 Due from banks on time deposit 1,550,814 1,142,305 Provision for insolvencies –7,754 –5,709

Loan investments (Notes 4 and 5) 2,882,289 2,732,012 Customer loans and credits 2,694,799 2,602,980 Overdrafts on customer accounts 178,391 112,353 Bills discounted 29,598 35,103 Provision for insolvencies –20,499 –18,424

Securities portfolio (Notes 4 and 6) 888,364 528,632 Bonds and other fixed-income securities 816,360 418,895 Provision for insolvencies –2,654 –2,344 Provision for market fluctuations — –5,563

Investments in Group companies 22,118 18,747

Other investments 24,827 25,182 Provision for market fluctuations — —

Shares and other equity securities 14,844 14,948 Provision for market fluctuations –2,143 –2,109

Investment funds 15,012 60,876

Intangible assets and expenses to be amortized 133,679 149,678 (Notes 2.4 and 7)

Goodwill 195,668 195,668 Intangible assets and expenses to be written off 52,225 43,889 Accumulated depreciation –114,214 –89,879

Fixed assets (Note 7) 247,229 111,545 Fixed assets 360,154 218,686 Accumulated depreciation –112,925 –105,191 Provision for depreciation — –1,950

Accrued income and prepaid expenses (Note 12) 69,389 80,277 Accrued income 62,129 79,563 Prepaid expenses 7,260 714

Other assets 41,523 32,313 Operations in course 37,430 27,759 Stock 583 552 Options purchased 3,510 4,002

Total assets 6,017,980 4,910,128

(*) Shown solely for purposes of comparison.Notes 1 to 22 herewith form an integral part of the consolidated financial statements.


LIABILITIES


Andorran National Institute of Finance (ANIF) 61,020 63,217

Creditors (Note 4) 4,885,100 3,943,713 Banks and lending institutions 5,633 122,173 Customer deposits 4,879,467 3,821,540

Bonds issued (Note 4) 83,504 16,312

Provision for risks and contingencies (Note 8) 2,742 2,918Provision for pensions and similar obligations — — Provision for contingent liabilities 392 912 Other provisions 2,350 2,006

Provision for general banking risks (Note 11) 53,281 64,620

Subordinated liabilities (Note 11) 150,000 150,000

Accrual accounts (Note 12) 52,268 37,656 Accrued expenses 51,165 36,431 Deferred income 1,103 1,225

Other liabilities 43,869 37,458 Operations in course 26,549 19,526 Options issued 2,498 2,885 Suppliers and other creditors 14,822 15,047

Minority interest 801 —

Share capital (Note 11) 70,000 70,000

Reserves (Note 11) 565,390 448,233 Legal reserve 7,000 7,000 Guarantee reserve 33,063 33,063 Voluntary reserve 377,850 361,196 Revaluation reserve 115,562 13,934 Consolidation reserve 31,915 33,040

Income (Notes 10 and 11) 50,005 76,001 Income for year 85,005 128,001 Income from previous years awaiting allocation — — Dividends paid out in advance –35,000 –52,000

Total liabilities 6,017,980 4,910,128



Consolidated off-balance-sheet records as at December 31, 2008 and 2007



Contingent liabilities 256,549 264,555 Guarantees given 253,685 260,694 Documentary letters of credit issued or received

with notification to customers 2,864 3,861

Commitments and contingent risks 488,298 621,825 Operating commitments and risks 449,147 582,608 Actuarial commitments and risks 12,227 13,399 Other contingent commitments and risks 26,924 25,818

Forward operations (Note 14) 3,749,051 6,420,742 Forward foreign exchange transactions 2,785,041 3,970,074 Forward transactions on other financial instruments 959,971 2,435,150 Other forwards transactions 4,039 15,518

Customer securities held in custody (Note 18) 4,618,022 6,833,293 Securities held in custody by third parties 3,933,301 6,461,448 Securities held in own custody 684,721 371,845

Other off-balance-sheet records exclusively

for management control (Note 18) 775,296 1,109,961 Guarantees and commitments obtained 404,973 495,656 Other off-balance-sheet records 370,323 614,305



Consolidated profit and loss account for years ended

December 31, 2008 and 2007



Interest and related income 247,784 200,362 ANIF and financial intermediaries at sight 3,341 3,693 On loan investments 222,589 179,326 On bonds and other fixed-income securities 21,854 17,343

Interest and related expenses –182,004 –132,804 ANIF and financial intermediaries –4,289 –9,576 On customer deposits –169,002 –115,728 On bonds –1,243 — On subordinated liabilities –7,470 –7,500 On internal pension fund — —

Income from equity securities 537 409 From other investments 339 338 From shares and other equity securities 198 71

Financial margin 66,317 67,967

Commissions, net (Note 12) 98,153 149,529 Commissions on services supplied 110,410 166,441 Commissions on services received –12,257 –16,912

Results of financial transactions 18,450 22,741 Net provision for market fluctuations (Note 6) –41 –2,274 Foreign exchange earnings 10,647 14,994 Income from securities transactions 3,483 5,541 Income from forward transactions 716 –408 Share in losses / profits of companies accounted for by equity method 3,620 4,829

Other 25 59

Other ordinary profit 360 438

Ordinary margin 183,280 240,675



Euros (milers) 2008 2007 (*)

Ordinary margin 183,280 240,675

Personnel costs –35,805 –31,945 Personnel, Board of Directors and indemnities –27,618 –23,960 Social Security –3,012 –2,850 Ordinary allocations to other insurance institutions (Notes 3.9 and 9) –2,313 –2,178 Other personnel costs –2,862 –2,957

General expenses (Note 12) –37,062 –41,875 Supplies –984 –1,325 External services –20,508 –19,682 Taxes –15,570 –20,868

Depreciation expenses, net –22,319 –21,032 Depreciation allowed on intangible and tangible fixed assets –22,319 –21,032

Provision for depreciation of fixed assets, net 1,950 — Allocation of provision for depreciation of fixed assets — — Recovery of provisions 1,950 — Operating margin 90,044 145,823

Provision for insolvencies, net (Notes 5 and 6) –9,258 –12,677 Allocations to provision for insolvencies –9,258 –12,677 Recovery of provisions for insolvencies — —

Provision for risks and contingencies, net (Note 8) –373 –953 Allocation to provision for risks and contingencies –886 –953 Recovery of provisions for risks and contingencies 513 —

Provision for general banking risks (Note 11) — –4,166

Ordinary profit 80,413 128,027

Extraordinary profit (Note 12) 4,933 –26 Recovery of provisions for general banking risks (Note 11) 11,351 2,169 Other extraordinary profit –6,418 –2,195

Profit for the year 85,346 128,001

Profit attributed to minority interest 341 — Group profit 85,005 128,001



Consolidated statement of source and application of funds for years ended

December 31, 2008 and 2007


SOURCE OF FUNDS


Funds generated by operations 100,076 162,081 Profit for the year 85,005 128,001 Net provision for insolvencies 9,258 12,677 Net provision for asset depreciationNet provision for market fluctuations 41 2,274 Allocations to other funds 373 953 Other –13,300 1,997 Depreciation of tangible and intangible fixed assets 22,319 21,032 (Profit) / Loss on sale of fixed assets –24 Profits from companies accounted for by equity method –3,620 –4,829

Positive change in liabilities over assets 22,702 39,373 Cash — 12,917 ANIF and financial intermediaries — 1,132 Other headings 22,702 25,324

Net increase in liabilities 1,125,119 566,827 Creditors - Customers 1,057,927 562,833 Subordinated liabilities Bonds issued 67,192 3,994

Net decrease in assets — — Securities portfolio less investments — —

Sale of permanent investments 301 37 Sale of investments 301 — Sale of fixed assets — 37

Total source of funds 1,248,198 768,318



APPLICATION OF FUNDS


Funds applied to operations –289 32,161 Applied from other funds — 25,324 Other –289 6,837

Positive change in assets over liabilities 588,470 235,927 ANIF and financial intermediaries 588,470 193,181 Other headings — 42,746

Net decrease in liabilities — — Creditors - Customers — —Bonds issued — —

Net increase in assets 526,393 396,643 Cash 12,147 — Loan investments - Customers 157,490 314,103 Securities portfolio less investments 356,756 82,540

Purchase of permanent investments 38,840 6,803 Purchase of investments 413 5,359 Purchase of tangible and intangible fixed assets 38,427 1,444

Funds applied to financing operations 94,784 96,784Supplementary dividend for previous year 35,000 35,000 Preliminary dividend for current year 50,000 52,000 Other equity amounts 9,784 9,784

Total application of funds 1,248,198 768,318


Notes on the consolidated financial statements at 31 December 2008 and 2007


Identity of the Bank and its activities

Crèdit Andorrà SA (hereinafter the Bank), authorised in 1949, is a limited company engaged in banking activities which it carries out as a commercial bank and as a private bank, and is subject to the rules and regulations governing financial institutions operating in Andorra.

The Bank’s registered offices are at Avinguda Meritxell, 80, Andorra la Vella, Principality of Andorra.

Crèdit Andorrà SA is the parent company in the Group and, together with its subsidiaries, set out in Note 2.3, it forms the Crèdit Andorrà Group (hereinafter the Group).

Bases of presentation and consolidation principles

2.1 Approval by the General Shareholders’ MeetingThe Group’s annual consolidated financial statements for the year ending December 31, 2007 were approved by the Bank’s General Shareholders’ Meeting on April 24, 2008.

The annual consolidated financial statements of the Group, of the Bank and of almost all the companies that form part of the Group for the year 2008 are pending approval by their respective General Shareholders’ Meetings. Nevertheless, the Bank’s Board of Directors believes they will be approved without any changes.

2.2 Presentation of the Accounting Plan of the Andorran Financial SystemThese consolidated financial statements have been drawn up by the Bank’s administrators based on the accounting records of the banks and companies that go to make up the Group, and have been prepared according to the Accounting Plan of the Andorran Financial System approved by the Government of Andorra on January 19, 2000, so that they show a true and fair view of the equity, financial position, consolidated results and resources obtained and applied by the Group.

The Andorran National Institute of Finance (ANIF) is the body charged with the supervision and control of those entities that go to make up the Andorran financial system, as well as the implementation and application of the Accounting Plan and those regulations applicable to these entities.

Note 3 summarises the accounting principles and policies and the most significant valuation criteria applied in preparing these financial statements.

No mandatory accounting principle or valuation criterion having a significant effect on these financial statements has been excluded during their preparation.

2.3 Consolidation principlesAccording to the Accounting Plan of the Andorran Financial System, there is a controlling relationship by a dominant entity over a dependent entity when the former, either directly by itself or indirectly through other persons or entities acting on its behalf or in agreement with the former:

• holds a majority of the voting rights or is able to make use of a majority of the voting rights of the latter pursuant to an agreement with other shareholders;

• has the right or has actually exercised the right to appoint or remove a majority of the members of the governing body;


Note 1

Note 2

• has appointed, exclusively with its votes, at least half plus one of the members of the governing body of the latter; or

• controls the governing body because at least half plus one of the members of the governing body of the latter are, directly or indirectly, board members or senior management of the former.

The same economic group is made up of those entities that, irrespective of their legal form, activity or company domicile, constitute:

• a decision-making unit, so that one of these entities exercises, directly or indirectly, the sole management of the other entities or the aforementioned management is exercised by one or more individuals acting in a systematic and coordinated manner; and

• an economic unit of risk, as its solvency, capacity to generate funds or future viability depends closely on any of its components.

In any case, the dominant entities and their dependent entities are understood as an economic group.

Multigroup entities are those not included in the economic group but which are managed by one or more entities of the group and which form part of its share capital, together with one or more other entities which are not related to it. Entities are understood to be managed jointly when, in addition to forming part of the capital, directly or indirectly, any of the following circumstances apply:

• joint management has been established in the company’s articles of association; or• there are pacts or agreements that allow shareholders to exercise their right to veto in the taking of

company decisions.

Associated entities are those not included in the economic group but which meet both the following requirements:

• one or more group entities form a part, directly or indirectly, of the entity’s share capital; and • a long-lasting relationship has been created that contributes to their activity.

These requirements are deemed to have been met when one or more group entities hold a direct or indirect share in the company’s capital of at least 20%, or 3% if it is quoted on a regulated market.

Consolidation methodsFull integration is applied when the entity to be consolidated carries out a non-differentiated activity (fundamentally entities within the financial system or instrumental and/or auxiliary entities) and when it belongs to the economic group.

According to the full integration method, the book value of investments and flows resulting from this situation is replaced with the assets and liabilities, and with the income and expenditure of the investee company, i.e. the items of the subsidiaries to be consolidated that form part of the group are included within or added to the balance sheet and to the profit and loss account of the parent company, replacing the book value of the investment with the assets and liabilities of the companies to be consolidated.

All significant balances from the balance sheet and the off-balance-sheet accounts, i.e. loans, debts and claims existing between Group entities, have been eliminated.

Income and expenditure related to significant transactions between consolidated entities have been eliminated and do not affect the Group’s results. Results produced by internal transactions have been eliminated and deferred until realised via third parties.


The difference between the book value of companies consolidated by the fully-integrated method and their equity at year-end is included in the consolidation reserves.

The accounts of the consolidated entities are governed by the same rules of classification, valuation, amortisation and supply.

The consolidation of the profit or loss generated by subsidiaries acquired in a financial year is carried out by taking only into consideration the results for the period between the date of acquisition and the date this period ends.

In the case of the fully-integrated consolidation method, in the consolidated profit or loss, the part corresponding to the group, according to the group’s percentage investment, is differentiated from the part corresponding to the minority, i.e. that which does not belong to the group. In the liabilities of the balance sheet, the heading “Minority interest” reflects the part that does not form part of the equity and that corresponds to minority shareholders.

The equity method is applied when the entity to be consolidated is an associated company, when it belongs to the economic group but carries out a differentiated activity or when it is a multigroup company with a differentiated activity.

In the equity consolidation method, the book value of the investment is replaced by the corresponding percentage of equity in the investee company, with adjustment to liabilities, if necessary, of the differences between the investment and the equity of the company consolidated via the equity method. As established by ANIF Memorandum 162/05, in subsequent consolidations any variations in equity (if negative, up to the difference between the equity of the previous consolidation and the book value of the investment) are presented within the section “Share in (losses) / profits of companies accounted for by equity method” of the profit and loss account of the financial statements for the part corresponding to the profit or loss of the investee company. In other cases, variations in equity have a balancing entry in liabilities under “Consolidation reserves”.

Consolidated entitiesThese consolidated financial statements include the following fully-owned companies, consolidated by the fully and proportionally integrated method (in thousand euros):


2008 Consolidation % Profits/ Dividends Domicile Activity method Auditor participation Equity Losses paid out

Crediinvest SA (*) Andorra Fund manager Fully KPMG 100% 1,036 2,300 2,738Crèdit Iniciatives SA (*) Andorra Risk capital Fully — 100% 13,932 60 —Patrigest Andorra Property Fully — 100% 2,046 30 —Crèdit Capital Immobiliari SAU (**) Andorra Property Fully — 100% 9,997 1,954 —Crèdit Andorrà Preference Ltd. Cayman Financial Fully — 100% 1 — —Valira Asset Management SL Spain

Investment advice Fully KPMG 60% 2,001 853 —

Crèdit Andorrà Panamà Holding SA Panamà Banking Fully KPMG 100% 5,026 –135 —

(*) Percentage direct and indirect participation.(**) Formerly CaixaBank SA.

Crediinvest SA is a fund management company, for which Crèdit Andorrà SA acts as a depository. This company and the fund come under the supervision and control of ANIF. The dividend obtained in 2008 was 838 thousand euros as supplementary dividend for 2007 and 1,900 thousand euros as dividend charged to the 2008 financial year.

Crèdit Iniciatives SA is a venture capital company.

Patrigest SA is a property asset management company.

Crèdit Capital Immobiliari SAU

On July 31, 2005, Crèdit Andorrà acquired 100% of the Andorran banking entity CaixaBank SA, an entity established on August 1, 1997 and whose corporate aim was to carry out banking business activities which, until that time, had been performed by the branches opened by Caixa d’Estalvis i Pensions de Barcelona (”la Caixa”) in the Principality of Andorra.

On July 26, 2007, the General Shareholders’ Meeting of the company approved certain agreements, among which was the change in company name to Crèdit Capital Immobiliari SAU, the modification of the corporate aim to manage assets of Crèdit Andorrà SA or of any other Group company, as well as withdrawing its licence and any other authorisation to operate as a bank.

On July 31, 2007, the ANIF entered in its register this modification in the company name of the entity CaixaBank SA to that of Crèdit Capital Immobiliari SAU.

On October 26, 2007, the corresponding application for the aforementioned changes was sent to the Government of Andorra. Subsequently, on December 6, 2007, the Government of Andorra authorised the change in company name, as well as the modification of the corporate aim.

At the start of 2008, the call option was exercised on property owned by Crèdit Capital Immobiliari SAU (formerly CaixaBank SA) based on that established in the original agreement (see Note 7.2).

On April 4, 2008, after the favourable report by ANIF on March 17, 2008, the Government of Andorra accepted the withdrawal of the banking licence.

On June 30, 2008, as a consequence of the change in corporate aim and given the unnecessary volume of voluntary reserves, as a result of the new activity, the contribution was returned to the sole shareholder, Crèdit Andorrà SA, totalling 141,732 thousand euros.


(*) Percentage direct and indirect participation.(**) Formerly CaixaBank SA.

2007 Consolidation % Profits/ DividendsDomicile Activity method Auditor participation Equity Losses paid out

Crediinvest SA (*) Andorra Fund manager Fully KPMG 100% 1,474 3,038 2,966Crèdit Iniciatives SA (*) Andorra Risk capital Fully — 100% 13,872 241 —Patrigest Andorra Property Fully — 100% 1,824 211 —Crèdit Capital Immobiliari SAU (**) Andorra Banking Fully E&Y 100% 149,775 4,392 10,841Crèdit Andorrà Preference Ltd. Cayman Financial Fully — 100% 1 — —Valira Asset Management SL Spain

Investment advice Proportionally KPMG 60% 1,400 389 —


Crèdit Andorrà Preference Ltd. is a 100% owned subsidiary of Crèdit Andorrà, established in December 2005 for the issue of preferred shares (see Note 11).

Valira Asset Management SL, established in January 2007 and with its head offices in Madrid (Spain), is a company with a complete structure for providing management and advisory services in the area of Hedge Fund investments. It currently has its own mechanisms to manage and control risks.

In September 2007, Crèdit Andorrà SA joined as a majority shareholder with a 60% share.

On December 12, 2007, Spain’s National Securities Commission authorised Valira Asset Management SL to establish a Mutual Fund Institutions Management Society under the name of Valira Capital Asset Management S.G.I.I.C., SA with the exclusive aim of carrying those activities allowed to be carried out by management companies, as established by Clause 40 of Spanish Law 35/2003, dated November 4.

Crèdit Andorrà Panamá Holding SA

In September 2008, La Superintendencia de Bancos de Panamá (the supervising authority in that country) authorised an international banking licence for Crèdit Andorrà.

Banco Crèdit Andorrà (Panamá) SA, a company 100% owned by Crèdit Andorrà Panamá Holding SA, was set up on November 17, 2008 and its main activity is asset management, offering clients a wide variety of financial services and global financial advice. The founding of Banco Crèdit Andorrà (Panamá) forms part of the expansion policy of Crèdit Andorrà Group through Latin America.

Continuing with its international expansion plan, on December 18, 2008 the Bank also obtained a licence from the Central Bank of Uruguay to open a representative office in Montevideo, which will allow the Group to promote itself in a market with potential such as the Mercosur zone, a trading block made up of Argentina, Brazil, Uruguay and Paraguay, countries working to promote the free exchange and movement of goods within the zone and to advance towards political and cultural integration.

Also as part of its development plan, the Bank has taken out investment commitments totalling 20,386 thousand euros, subject to certain regulatory authorisation and administrative procedures.

The Group entities consolidated by the equity method are mentioned in Notes 6.1 and 6.2.

2.4 Comparing the informationThe information contained in these 2008 financial statements that refers to 2007 is only presented for comparative purposes and therefore does not constitute the Group’s consolidated financial statements for 2007.

In order to make it easier to compare the information provided, the balances from transactions by CaixaBank (see Note 2.3), presented in the 2007 consolidated financial statements as consolidation differences, have been reclassified as goodwill.

The figures contained in these consolidated financial statements are expressed in thousands of euros.

Note 3


Note 3 Accounting principles and valuation guidelines

The accounting principles and policies and the valuation criteria established by the ANIF in the Accounting Plan of the Andorran Financial System have been applied in preparing these financial statements for 2008. These principles are as follows:

3.1 Going concern premiseIn preparing the consolidated accounts, it has been assumed that the management of the entities within the Group will continue in the future. The application of the accounting rules has therefore not been aimed at determining the net value of the consolidated equity for the purposes of total or partial transfer, nor the resulting amount in the case of an entity being dissolved.

3.2 Accrual accountingIncome and expenditure are recorded according to the accrual period, applying the financial method for those transactions with a liquidation date of more than twelve months. The only exception relates to interest on very doubtful loans, which is recorded as income only when collected.

In applying this principle, accrual accounts show income / expenditure accrued but not collected / paid, and income / expenditure collected / prepaid.

3.3 Recording principleFollowing banking practice, transactions are recorded on the date they take place, which may be different from the corresponding value date, taken as the basis for calculating income and expenditure for interest.

3.4 Conversion of foreign currenciesAssets and liabilities expressed in foreign currencies are converted to euros at the current exchange rate on the balance sheet date, as set by the Group of Andorran Banks (ABA in Catalan), except for foreign currency deposits at banks hedged by forward foreign currency contracts. These deposits are converted at the current exchange rate at the time they are taken out, and gains or losses under their corresponding forward foreign exchange contracts are recorded in the profit and loss account during the life of the contracts. Income and expenditure are converted at the current exchange rate on the date the transaction takes place.

Below are details of the key exchange rates set by the ABA at December 31, 2008:

US dollars 1.4127Swiss francs 1.4980Pounds sterling 0.9789Japanese yen 127.73Canadian dollars 1.7325

3.5 Provision for insolvenciesA. Specific provisionsThe determination of specific provisions is based on quantitative and qualitative regulatory guidelines and a detailed analysis of exposure to credit risk carried out by the entity itself, bearing in mind its experience of actual loan losses and other relevant factors.


B. General provisionsThe Group carries a general provision fund for insolvencies as follows:

• One percent of loan investment with customers and of bonds issued by non-bank entities.• 0.5% of loan investment with banks and lending institutions with a term greater than one banking day,

and bonds issued by bank entities.

The following are not recorded under general provisions: loan investments for the part covered by financial guarantee contracts, and loans secured by the pledge of listed securities (with the limit of the market value of these securities), loans, mortgage loans and bonds issued by the central administrations of OECD countries and Andorra or expressly guaranteed by these organisms.

C. Provision for country riskThe Group only operates with correspondent banks and lending institutions established in Andorra and in OECD countries. The securities portfolio is made up of issues made in Andorra and the OECD, except in the case of the odd issue traded in recognised financial markets. With regard to these bonds, no country risk provision is made, given that they are regularly traded with daily market quotations reflecting their real value.

3.6 Securities portfolioThe securities that go to make up the Group’s securities portfolio are presented, according to their classification, in line with the following criteria:

Fixed incomeThe fixed-income securities that form part of the Group’s portfolio are presented, according to their classification, in line with the following criteria:

a) Securities classified as part of the trading portfolio, which are bonds the Group expects to see before maturity in order to benefit from price variations in the short term, are brought into account at their market value. The profit or loss arising from the valuation of these bonds, without taking accrued interest into account, is recorded net in the profit and loss account under the heading “Results of financial transactions – Income from securities transactions” in the enclosed profit and loss account. Interest accrued after acquisition is recorded under “Interest and related income – Bonds and other fixed-income securities”.

b) Securities within the held-to-maturity portfolio are bonds that the Group has decided to keep until they mature, being capable of doing so. These securities are recorded at their adjusted cost price. The cost price is adjusted daily by the amount resulting from accruing the negative or positive difference between the reimbursement value and cost price during the remaining life of the security. The result of this accrual is recorded under “Interest and related income – On bonds and other fixed-income securities”.

On disposing of securities, any losses arising are carried to the profit and loss account as extraordinary profit or loss; in the case of profit, this accrues lineally throughout the remaining life of the security sold.

c) The rest of the securities are classified in the ordinary investment portfolio and are valued at their adjusted cost price. However, the difference is calculated between the market value and the adjusted cost price and provision is made, charged to the profit and loss account, to the market fluctuations fund equal to the sum of the negative differences less the sum of the positive differences up to the amount of the negative differences.


The market value of unlisted fixed-income securities, and listed fixed-income securities in the case where the current market situation does not allow prices to be calculated correctly, has been determined using either a model (e.g. an evaluation study carried out by an independent professional of renowned prestige) or by using other information obtained from the same market (prices indicated by brokers). Valuation using a model is largely based on the determination and recording of movements in market values related to credit risk. These movements are shown within the provision for market fluctuations mentioned above.

Transfers of securities from the trading portfolio to any other portfolio are carried out at market price, less the accrued interest, if applicable. Securities are transferred from the ordinary investment portfolio to the held-to-maturity portfolio at adjusted cost price or market value, whichever is lower, and any losses arising are written off, if necessary.

Permanent investmentsPermanent investments are initially recorded at cost and later adjusted to show the underlying book value of the Group’s investment in the equity of the subsidiary company.

Securities are transferred from the permanent investment portfolio to other portfolios at net book value.

Shares and investment fundsShares and parts of investment funds within the trading portfolio are recorded at market value.

Shares and parts of investment funds classified in the ordinary investment portfolio are shown at cost price or market value, whichever is lower, and negative valuation differences are recorded in a market fluctuations fund.

Market value is determined in accordance with the following criteria:

• Listed shares: share price on the last day of the year.• Unlisted shares: underlying book value, based on the last available balance sheet.• Parts of investment funds: values provided by the managing companies and/or depository entities of

the investment funds.

3.7 Intangible assets and amortisable expensesIntangible assets, basically corresponding to the cost of IT applications, and amortisable expenses are stated at cost and amortised over their useful life up to a maximum of 5 years.

Regarding the amortisation of goodwill resulting from the acquisition of CaixaBank SA, pursuant to that established in the Accounting Plan of the Andorran Financial System, with prior authorisation from the ANIF and given the exceptional nature of the transaction that created this goodwill as well as its permanent nature, the amortisation of goodwill is calculated over a period of 10 years, as well as covering 50% of the annual cost of this amortisation as a charge to reserves (see Note 11).

3.8 Fixed assetsFixed assets are recorded at cost, updated if necessary, less accumulated depreciation, which is spread over the economic life of each individual asset.

Provision for depreciation is made when a reversible loss of economic value in the fixed asset is apparent.


At June 12, 2008, and with the prior presentation of valuations carried out by an independent expert, the ANIF authorised Crèdit Andorrà SA to revalue certain fixed assets (basically property), working fixed assets by 30% and non-working fixed assets by 90% of the difference between the market value established in the valuation and the book value of the assets at December 31, 2006 (see Note 7.2).

Revaluation totalled 101,628 thousand euros, recorded with a balancing entry in a revaluation reserve, as established by the Accounting Plan of the Andorran Financial System.

Premises acquired or built before December 31, 1989 appear in the balance sheet at their estimated market value, as established by an independent expert in November 1989.

When there is a decrease in value, amounts recorded as revaluation reserve may be transferred directly to voluntary reserves.

Upkeep and maintenance costs for fixed assets that do not improve their use or lengthen their useful life are charged to the profit and loss account when they occur, under general expenses.

Individual fixed assets are depreciated using the straight-line method in accordance with the following terms:

Years

Buildings 50 to 30Installations 10 to 6Furniture 10 to 3IT equipment 5 to 3Vehicles 3

Property acquired through the partial or full foreclosure of loans is recorded under “Non-working fixed assets” at the book value of the loan foreclosed at the time of acquisition or at the estimated market value, whichever is lower.

Subsequently, assets acquired through foreclosure on unrepaid loans that are not applied to buildings / equipment for own use or that remain unsold within a period of 3 years are depreciated, as of the date of foreclosure, according to the following cumulative depreciation percentages:

Between 3 and 4 years 25%Between 4 and 5 years 50%Between 5 and 6 years 75%Over 6 years 100%

3.9 Provision for risks and contingenciesA. Specific provisions on contingent liabilitiesProvisions for contingent liabilities contain the amounts to cover contingent payments or contingencies of a specific nature.


B. Provision for pensions and similar obligationsObligations with all Crèdit Andorrà SA employees and their beneficiaries related to such contingencies as retirement, death and incapacity (defined contribution system) are currently outsourced to an independent Andorran foundation (Previfun), established in 1998, and are governed under the Regulation of Mutual Funds for Benefit and Aid to Crèdit Andorrà SA Employees, approved by the Ordinary General Shareholders’ Meeting of October 23, 2006.

3.10 Provision for general banking risksThe Group makes provision for general banking risks corresponding to funds allocated by the Bank for reasons of prudence, given the risks inherent in its banking activity, as well as the credit and liquidity risk associated with the portfolio of unlisted shares and with low market liquidity.

3.11 Financial derivativesThe Group uses these instruments, principally futures or forward currency contracts to hedge its balance positions in currencies other than the euro, recorded in off-balance-sheet accounts at the nominal exchange amount at maturity of the respective contracts (see Note 14).

Transactions undertaken in order to eliminate or significantly reduce exchange rate, interest rate or market risk in equity positions or other operations are considered to be hedging transactions. Any profit or loss generated by these hedging transactions is accrued symmetrically in the profit and loss account as income or expenditure for the item hedged.

Non-hedging operations, i.e. trading transactions undertaken in regulated markets, are stated at their listed value and fluctuations are recorded in the profit and loss accounts.

Any profit or loss from trading transactions undertaken outside these markets is not recognised in the profit and loss accounts until settled. However, the positions are valued on a monthly basis and, if necessary, provisions are made against profit for the potential net losses for each type of risk that has arisen from such valuations. The types of risk considered for these purposes include interest rate, market price and exchange rate risk.

3.12 Indirect tax on banking and financial servicesIn its meeting on May 14, 2002, the General Council of the Principality of Andorra approved the Law on Indirect Taxation on Banking and Financial Services. This Law came into force in 2002 and its object was to levy taxes on services provided by banking and financial entities. Subsequently, on July 10, 2002, the Government of Andorra approved the regulations related to the Law on Indirect Taxation on Banking and Financial Services.

The rate of tax is calculated according to a system that estimates the value of the services provided based on economic and financial data.

On February 21, 2005, the General Council of the Principality of Andorra approved the Law to Modify the Indirect Tax Rate on Banking and Financial Services, raising the rate from 7% to 12%, applicable as of April 1, 2005. Subsequently, on March 30, 2005, it approved the regulations to Modify the Law on Indirect Taxation on Banking and Financial Services.


Accrued expenditure for indirect tax on banking and financial services in 2008 (“indirect banking service tax” or ISI in Catalan) amounted to 12,830 thousand euros (18,624 thousand euros in 2007), and is recorded under the heading “General expenses – Taxes” in the profit and loss account (see Note 12.4). The net amount due, having deducted payments on account, is recorded under the heading “Other liabilities – Suppliers and other creditors” on the enclosed balance sheet. Should the Group be entitled to a tax refund, this is recorded under the heading “Accrued Income and prepaid expenses – Prepaid expenses”. This tax will be paid during the first quarter of the next year.

3.13 Unused lines of creditLines of credit granted to customers are recorded in the balance sheet at the amount provided, and the amounts available are recorded in off-balance-sheet accounts under the heading “Commitments and contingent risks – Operating commitments and risks”.

Note 4


Note 4 Maturity of financial assets and liabilities and breakdown by currency

4.1 Distribution of maturity of financial assets and liabilitiesThe residual maturity of certain assets and liabilities at December 31, 2008 and 2007 is as follows (in thousand euros):

2008 Due and Up to From 1 to From 3 From 1 More than doubtful 1 month 3 months months to 1 year to 5 years 5 years Total

AssetsANIF — 46,245 — — — — 46,245Financial intermediaries – sight, gross — 134,706 — — — — 134,706Financial intermediaries – forward, gross — 794,930 315,534 440,350 — — 1,550,814Loan investments, gross 62,160 200,621 154,737 810,730 915,830 758,710 2,902,788Bonds and other fixed- income securities

— — 19,265 108,350 65,557 623,188 816,360

Total 62,160 1,176,502 489,536 1,359,430 981,387 1,381,898 5,450,913

LiabilitiesANIF — 51,020 — 10,000 — — 61,020Banks and lending institutions — 5,633 — — — — 5,633Customer deposits — 1,992,295 1,148,675 1,659,385 10,543 68,569 4,879,467Bonds issued — — — 69,013 14,491 — 83,504

Total — 2,048,948 1,148,675 1,738,398 25,034 68,569 5,029,624

2007 Due and Up to From 1 to From 3 From 1 More than doubtful 1 month 3 months months to 1 year to 5 years 5 years Total

AssetsANIF — 46,245 — — — — 46,245Financial intermediaries – sight, gross — 73,481 — — — — 73,481Financial intermediaries – forward, gross

— 1,111,952 — 28,850 1,503 — 1,142,305

Loan investments, gross 25,956 63,107 228,607 800,324 885,887 746,555 2,750,436Bonds and other fixed- income securities — — 21,259 10,363 155,504 231,769 418,895

Total 25,956 1,294,785 249,866 839,537 1,042,894 978,324 4,431,362

LiabilitiesANIF — 63,217 — — — — 63,217Banks and lending institutions — 59,228 62,945 — — — 122,173Customer deposits — 2,144,947 1,240,529 357,654 14,292 64,118 3,821,540Bonds issued — — — 2,217 14,095 — 16,312

Total — 2,267,392 1,303,474 359,871 28,387 64,118 4,023,242

Interest rates on customer loans with a maturity of more than one year are indexed at the one-year interbank market interest rate. At December 31, 2008 and 2007 there were no amounts without a maturity date.


4.2 Currency breakdownDetails of the currency breakdown of certain assets and liabilities as at December 31, 2008 and 2007 (in thousand euros) are as follows:

2008 US Swiss Pounds Japanese Canadian Other Euros dollars francs sterling yen dollars currencies Total

Assets ANIF 46,245 — — — — — — 46,245

Financial intermediaries, at sight 105,012 14,045 1,665 5,101 1,437 1,780 5,666 134,706Banks and lending institutions 927,728 448,038 — 146,082 — 17,893 11,073 1,550,814Provision for insolvencies (–) –4,640 –2,240 — –730 — –89 –55 –7,754

Total financial intermediaries, net 1,028,100 459,843 1,665 150,453 1,437 19,584 16,684 1,677,766

Customer loans and credits 2,573,646 21,279 69,708 5,716 23,943 85 422 2,694,799Overdrafts on customer accounts 119,988 54,444 1,343 1,367 1,022 171 56 178,391Customer bills discounted 29,598 — — — — — — 29,598Provision for insolvencies (–) –18,349 –350 –1,108 –69 –616 –3 –4 –20,499

Total loan investments, net 2,704,883 75,373 69,943 7,014 24,349 253 474 2,882,289

Securities portfolio, net 874,515 13,849 — — — — — 888,364

Total 4,653,743 549,065 71,608 157,467 25,786 19,837 17,158 5,494,664

LiabilitiesANIF 61,020 — — — — — — 61,020Banks and lending institutions 3,975 951 — 2 705 — — 5,633Customer deposits 4,073,941 573,825 31,750 160,066 3,143 19,846 16,896 4,879,467Bonds issued 76,205 7,299 — — — — — 83,504

Total 4,215,141 582,075 31,750 160,068 3,848 19,846 16,896 5,029,624


2007 US Swiss Pounds Japanese Canadian Other Euros dollars francs sterling yen dollars currencies Total

Assets ANIF 46,245 — — — — — — 46,245

Financial intermediaries, at sight 44,553 17,734 1,218 3,629 3,975 644 1,728 73,481Banks and lending institutions 423,845 478,633 1,506 208,729 — 14,614 14,978 1,142,305Provision for insolvencies (–) –2,116 –2,393 –8 –1,044 — –73 –75 –5,709

Total financial intermediaries, net 466,282 493,974 2,716 211,314 3,975 15,185 16,631 1,210,077

Customer loans and credits 2,515,930 4,589 56,417 3,442 20,227 2,178 197 2,602,980Overdrafts on customer accounts 75,036 33,047 2,481 177 1,161 55 396 112,353Customer bills discounted 35,090 13 — — — — — 35,103Provision for insolvencies (–) –17,803 –60 –360 –40 –132 –22 –7 –18,424

Total loan investments, net 2,608,253 37,589 58,538 3,579 21,256 2,211 586 2,732,012

Securities portfolio, net 522,500 6,132 — — — — — 528,632

Total 3,643,280 537,695 61,254 214,893 25,231 17,396 17,217 4,516,966

LiabilitiesANIF 63,217 — — — — — — 63,217Banks and lending institutions 38,616 24,203 40,099 9 19,245 1 — 122,173Customer deposits 3,028,077 515,882 19,543 214,599 9,037 17,295 17,107 3,821,540Bonds issued 16,312 — — — — — — 16,312

Total 3,146,222 540,085 59,642 214,608 28,282 17,296 17,107 4,023,242


Loan investments and financial intermediaries

5.1 Analysis of loan investments and financial intermediariesThe evaluation of loan investments and financial intermediaries with regard to minimum legal requirements and internal criteria, according to the breakdown as at December 31, 2008 and 2007 (in thousand euros) is set out as follows:

2008 Insolvency NetNormal Past due Doubtful Total provision amount

Financial intermediaries, at sight 134,706 — — 134,706 — 134,706Due from banks on time deposit 1,550,814 — — 1,550,814 –7,754 1,543,060

Total financial intermediaries 1,685,520 — — 1,685,520 –7,754 1,677,766

Customer loans and credits 2,642,944 21,762 30,093 2,694,799 –16,672 2,678,127Overdrafts on customer accounts 171,581 1,586 5,224 178,391 –3,471 174,920Customer bills discounted 26,103 3,143 352 29,598 –356 29,242

Loan investments - Customers 2,840,628 26,491 35,669 2,902,788 –20,499 2,882,289

2007 Insolvency NetNormal Past due Doubtful Total provision amount

Financial intermediaries, at sight 73,481 — — 73,481 — 73,481Due from banks on time deposit 1,142,305 — — 1,142,305 –5,709 1,136,596

Total financial intermediaries 1,215,786 — — 1,215,786 –5,709 1,210,077

Customer loans and credits 2,585,035 2,492 15,453 2,602,980 –16,427 2,586,553Overdrafts on customer accounts 108,238 1,303 2,812 112,353 –1,658 110,695Customer bills discounted 31,207 3,844 52 35,103 –339 34,764

Loan investments - Customers 2,724,480 7,639 18,317 2,750,436 –18,424 2,732,012

Note 5


5.2 Provision for insolvenciesMovements in provision for insolvencies of forward financial intermediaries and loan investments during 2008 and 2007 (in thousand euros) were as follows:

2008 Opening Allocations/ Amounts Other Closing balance (Recoveries) applied movements balance

Financial intermediariesProvision banks on time deposit 5,709 2,095 — –50 7,754

Loan investmentsSpecific loan investment provisions 6,359 8,179 –4,969 152 9,721General loan investment provisions 12,065 –1,326 — 39 10,778

Total loan investment provisions 18,424 6,853 –4,969 191 20,499

Total provisions 24,133 8,948 –4,969 141 28,253

2007 Opening Allocations/ Amounts Other Closing balance (Recoveries) applied movements balance

Financial intermediariesProvision banks on time deposit 4,948 672 — 89 5,709

Loan investmentsSpecific loan investment provisions 3,487 9,547 –6,670 –5 6,359General loan investment provisions 10,293 1,797 — –25 12,065

Total loan investment provisions 13,780 11,344 –6,670 –30 18,424

Total provisions 18,728 12,016 –6,670 59 24,133

At December 31, 2008, the Group had an NPL coverage ratio of 57.47% for loans not secured by mortgage collateral and 118.64% for loans secured by mortgage collateral.

5.3 Collateral security for loan investmentCollateral security obtained for loan investments as at December 31, 2008 and 2007 (in thousand euros) is broken down as follows:

2008 Cash Total deposits Securities Mortgages secured Unsecured Total

Loan investments, grossCustomer loans and credits 61,410 207,971 1,655,366 1,924,747 770,052 2,694,799Overdrafts on customer accounts — — — — 178,391 178,391Customer bills discounted — — — — 29,598 29,598

Total security for loan investments 61,410 207,971 1,655,366 1,924,747 978,041 2,902,788


Note 6 2007 Cash Total deposits Securities Mortgages secured Unsecured Total

Loan investments, grossCustomer loans and credits 86,141 240,024 1,492,220 1,818,385 784,595 2,602,980Overdrafts on customer accounts — — — — 112,353 112,353Customer bills discounted — — — — 35,103 35,103

Total security for loan investments 86,141 240,024 1,492,220 1,818,385 932,051 2,750,436

At December 31, 2008, the heading “Customer loans and credits” included housing loans that, according to current legislation, were granted for a total of 744 thousand euros (947 thousand euros in 2007) (see Note 19.3).

“Overdrafts on customer accounts” includes overdrafts with the investment fund managed by the Group, totalling 99,846 thousand euros (43,678 thousand euros in 2007).

5.4 Loan investments to the public sectorBreakdown of loan investments to public sector entities as at December 31, 2008 and 2007 (in thousand euros):

2008 2007

Loan investments to the public sectorLoans secured by the state of Andorra 83,561 45,310Loans on counties in the Principality of Andorra 85,131 73,061Other Andorran public bodies and para-public entities 56,694 4,581

Total 225,386 122,952

The increase in “Other Andorran public bodies and para-public entities” is basically due to the reclassification of loans between the Bank and the para-public society, Centre de Tractament de Residus d’Andorra SA.

Given the strategic nature of waste management in the country and the importance of making use of the energy resulting from this waste, in its meeting on June 12, 2008, the General Council approved Law 8/2008, an extraordinary loan to finance the expense of acquiring a sufficient percentage of shares in order for the public administration to take control of the licensee company, Centre de Tractament de Residus d’Andorra SA.


Securities portfolio

6.1 Holdings in Group companiesThe Group has direct holdings in the following Andorran companies, consolidated according to the equity method (in thousand euros), at December 31, 2008 and 2007:

2008 % 2008 Dividends BookDomicile Activity holding Capital Equity Earnings paid out value

Crèdit Assegurances Andorra Insurance 100% 4,000 20,643 3,233 — 20,643 Patrigest Informació

Financera, SL (*) Andorra Services 100% 3 1,475 352 — 1,475

22,118

(*) Percentage direct or indirect holding.

2007 % 2007 Dividends BookDomicile Activity holding Capital Equity Earnings paid out value

Crèdit Assegurances Andorra Insurance 100% 4,000 17,410 5,496 — 17,410 Patrigest Informació

Financera, SL (*) Andorra Services 100% 3 1,036 336 — 1,036Crèdit Gestió SAU Andorra Investment

fund manager100% 301 301 11 — 301

18,747

(*) Percentage direct or indirect holding.

The corporate aim of Crèdit Assegurances SAU, parent company of the subgroup Crèdit Assegurances, is to carry out insurance actions and cover risks based on private contracts, including the branch of life assurance in any of its types. It comes under the legal provisions established in the Law governing the actions of insurance companies of the Principality of Andorra, dated May 11, 1989. Its sole shareholder is Crèdit Andorrà SA. The subgroup of Crèdit Assegurances includes the Spanish company ERM SA (76%) and the Andorran companies Vincles SA (100%), Actiu Assegurances SA (55%), Financera d’Assegurances SA (24.28%), Línia Asseguradora Andorrana SL (12.38%) and Consell Assegurador SL (19.43%).

This holding has been consolidated by the equity method as its insurance activity is deemed to be different from that of banking.

Patrigest Informació Financera SL provides services and advice, mostly to Group companies.

On June 30, 2008 the company Crèdit Gestió SAU was dissolved, formerly CaixaBank Gestió SA, a company that had been created to offer investment fund management services but which did not actually carry out any activity.

Note 6


6.2 Other investments and Qualified holdingsThe Group had the following direct “Other investments” and “Qualified holdings” as at December 31, 2008 and 2007 (in thousand euros):

2008 Net Consolidation % Dividends book

Domicile process Activity holding Capital Equity Earnings paid out value

Other investments (*)

Esports de NeuSoldeu-Incles SA (ENSISA) Andorra

Equity method

Snow-sports services 49.57% 23,385 38,635 — — 19,150

Other (**) Andorra Equity method Services

— 2,407 19,078 129 — 5,677

24,827

Qualified holdings (*)SEMTEE SA Andorra Services 17.05% 25,242 34,439 3,884 1,974 4,633Other — 156 14,989 –1,392 — 7,025

11,658

(*) Latest financial statements available.(**) Includes Seguriser SA, Administració i Serveis SL, SPI SA, SPA SA, Clige SA and Naturtec SA.

2007 Net Consolidation % Dividends book

Domicile process Activity holding Capital Equity Earnings paid out value

Other investments (*)

Esports de NeuSoldeu-Incles SA (ENSISA) Andorra

Equity method

Snow-sports services 49.57% 22,552 37,802 –2,125 — 18,737

Other (**) Andorra Equity method Services

— 2,407 18,973 193 — 6,445

25,182

Qualified holdings (*)SEMTEE SA Andorra Services 17,05% 25,242 34,439 3,884 1,974 4,633Other — 156 17,269 –1,595 — 7,025

11,658

(*) Latest financial statements available.(**) Includes Seguriser SA, Administració i Serveis SL, SPI SA, SPA SA, Clige SA and Naturtec SA.

“Other investments” are consolidated by the equity method (see Note 6.1).


Qualified holdings in a company are those in which the entity holds, directly or indirectly, at least 5% of its capital or of its voting rights, or in which the entity can appoint, directly or indirectly, at least 20% of the members of the Board of Directors of the company or in which the entity exercises significant influence. “Significant influence” is understood as participation in the financial and operational decisions of a company, although these may not be controlled, and this may be exercised in various ways, usually via representation on the governing body, with participation in the process of establishing policies, important transactions, changing directors or technological dependence. Significant influence can be secured via participation in ownership or via agreements. It is assumed that significant influence is exercised when the holding company holds, directly or indirectly, more than 20% of the voting rights or of the capital of the investee company, or 3% if listed on regulated markets.

Qualified holdings are recorded at cost price or market value, whichever is lowest.

Esports de Neu Soldeu-Incles SA (ENSISA) manages the Soldeu-El Tarter ski resort at Canillo (Andorra), and SEMTEE SA (Societat d’Economia Mixta Termolúdic Escaldes-Engordany) manages the Caldea spa centre at Escaldes (Andorra).

The holding in Seguriser SA (Seguretat i Serveis SA) was consolidated by the equity method, as established by Memorandum 145/02, dated November 20, 2002, of the Andorran National Institute of Finance.

In 2008, dividends brought into account from Other investments and Qualified holdings amounted to 363 thousand euros (2007: 338 thousand euros).

6.3 Investment fundsA breakdown of holdings in investment funds at December 31, 2008 and 2007 is as follows (in thousand euros):

2008 2007

Investment funds managed by:Group-related entities 8,353 56,592Entities not related to the Group 6,659 4,284

15,012 60,876


6.4 Portfolio evaluationThe book value of those securities classified in the valuation categories set out in 3.6 as at December 31, 2008 and 2007 is given below (in thousand euros):

2008 2007

Trading portfolio:Fixed income instruments 153 5,408Equity instruments — 215

Held-to-maturity portfolio 427,834 218,289Permanent investments 46,945 43,929Investment funds 15,012 60,876Ordinary investment portfolio:

Fixed-income instruments 388,373 195,198Equity instruments 14,844 14,733

Total 893,161 538,648

2008 2007

Listed securities 471,799 171,340Unlisted securities 421,362 367,308

893,161 538,648

Market fluctuation fund –2,143 –7,672Provision for insolvencies –2,654 –2,344

Total 888,364 528,632

The acquisition cost of instruments in the trading portfolio as at December 31, 2008 was 148 thousand euros (2007: 5,641 thousand euros), corresponding to listed securities.

The market value, as at December 31, 2008, of the held-to-maturity portfolio was 392,768 thousand euros (2007: 217,891 thousand euros), of which 81,806 thousand euros was for listed securities while the rest, 310,962 thousand euros, was securities valued as per a model or unlisted.

Pursuant to the Law governing mandatory investment ratios (see Note 19.3), as at December 31, 2008, the Group had subscribed 105,292 thousand euros to government bonds of the Principality of Andorra, issued on December 31, 2005. This bond issue matures on December 31, 2009, at the official one-year Euribor interest rate established on the first working day of each year. The amount subscribed by the Group is recorded under the heading “Securities portfolio – Bonds and other fixed-income securities” in the enclosed consolidated balance sheet, as an unlisted security within the held-to-maturity portfolio, and is not included in the calculation of the liquidity ratio.

The market value of the ordinary investment portfolio held in fixed-interest instruments as at December 31, 2008 was 388,840 thousand euros (2007: 189,635 thousand euros), of which 372,648 thousand euros was for listed securities while the rest, 16,192 thousand euros, was for unlisted securities, whose market value was estimated on the basis of the accounting principles and valuation criteria set out in Note 3.6.


The market value of the ordinary investment portfolio held in equity shares as at December 31, 2008 was 13,745 thousand euros (2007: 13,774 thousand euros).

6.5 Provision for market fluctuationMovements in provision for market fluctuation in 2008 and 2007 (in thousand euros) were as follows:

2008 Opening Amounts Other Closing balance Allocations applied movements balance

Securities portfolioBonds and other fixed-income instruments 5,563 — –5,563 — —Other holdings — — — — —Shares and other equity instruments 2,109 41 — –7 2,143Investment funds — — — — —

Total movements for year 7,672 41 –5,563 –7 2,143

2007 Opening Amounts Other Closing balance Allocations applied movements balance

Securities portfolioBonds and other fixed-income instruments — 2,274 — 3,289 5,563Other holdings — — — — —Shares and other equity instruments 2,109 — — — 2,109Investment funds — — — — —

Total movements for year 2,109 2,274 — 3,289 7,672

The Bank has a general provision fund for insolvencies whose details are as follows:

2008 Opening Allocations / Amounts Other Closing balance (Recoveries) applied movements balance

Securities portfolioBonds and other fixed-income instruments 2,344 310 — — 2,654

2007 Opening Allocations / Amounts Other Closing balance (Recoveries) applied movements balance

Securities portfolioBonds and other fixed-income instruments 1,686 660 — –2 2,344


Fixed assets

7.1 Intangible assets and amortisable expenses The movements in intangible assets and amortisable expenses for 2008 were as follows (in thousand euros):

Acquisition cost December 31, 2007 Additions Retirements Transfers/Other December 31, 2008

Goodwill 195,668 — — — 195,668IT applications 40,702 4,348 — — 45,050Amortisable expenses 3,187 3,991 –3 — 7,175

Total intangible assets 239,557 8,339 –3 — 247,893

Amortisation provision

GoodwillCharged to reserves –58,700 –9,784 — — –68,484Charged to profit and loss account — –9,783 — — –9,783

IT applications –29,646 –4,067 — — –33,713Amortisable expenses –1,533 –701 — — –2,234

Total goodwill –89,879 –24,335 — — –114,214

Total, net 149,678 –15,996 –3 — 133,679

During 2008, the banking business of the former CaixaBank SA was totally integrated within that of Crèdit Andorrà SA. As a direct consequence of this integration, the goodwill originating at the time of purchase has been transferred to the Bank (see Notes 2.3 and 2.4).

During the second quarter of 2008, the project was initiated to implement a new IT platform required to adapt the Bank even further to the changes and constant technological innovation in the industry.

Note 7


7.2 Fixed assetsThe movements in fixed assets for 2008 were as follows (in thousand euros):

Acquisition cost December 31, 2007 Additions Retirements Transfers / Other December 31, 2008

Working fixed assetsLand 19,497 2,589 — 30,118 52,204Buildings 49,529 15,104 — 9,494 74,127Installations 51,349 5,828 — 3,829 61,006Furniture 14,790 1,535 — — 16,325IT equipment 24,674 1,671 — — 26,345Vehicles 332 3 –4 — 331Fixed assets in progress — 4,829 — — 4,829

Subtotal 160,171 31,559 –4 43,441 235,167

Non-working fixed assetsLand 47,831 — — 49,155 96,986Buildings 4,913 7,993 — 9,032 21,938Art collection 5,771 292 — — 6,063

Subtotal 58,515 8,285 — 58,187 124,987

Total fixed assets 218,686 39,844 –4 101,628 360,154

Provision for depreciation Working fixed assetsBuildings –31,880 –1,687 — 1,164 –32,403Installations –36,821 –2,881 — 2,539 –37,163Furniture –13,861 –693 — — –14,554IT equipment –20,799 –2,005 — — –22,804Vehicles –220 –55 — — –275Other — — — — —

Subtotal –103,581 –7,321 — 3,703 –107,199

Non-working fixed assetsBuildings –1,535 –413 — –3,703 –5,651Other –75 — — — –75

Subtotal –1,610 –413 — –3,703 –5,726

Total provision for depreciation –105,191 –7,734 — — –112,925

Provisions for depreciation –1,950 — 1,950 — —

Total fixed assets, net 111,545 32,110 1,946 101,628 247,229

In 2008 and 2007, no interest or exchange rate differences in fixed assets were capitalised.


At the start of 2008, the purchase of CaixaBank SA (currently Crèdit Capital Immobiliari SA), was concluded, exercising the option held over this company’s property for a total of 22,500 thousand euros, a figure which explains most of the additions in fixed assets shown in the movements detailed above.

The additions in fixed assets in progress figure correspond primarily to acquisitions resulting from the implementation of the new IT platform.

The movements shown in “Transfers / Other” in the fixed assets in the above table include the revaluation of fixed assets for a sum of 101,628 thousand euros, exceptionally authorised by the ANIF on June 12, 2008 (see Note 3.8), as detailed below (in thousand euros):

Book value Percentage before revaluation Appraisal revaluation Revaluation

Working land 16,828 53,354 30% 10,958Working buildings: 14,890 105,351 30% 27,138

Revaluation buildings corresponding to land — — — 6,813Revaluation buildings corresponding to buildings — — — 20,325

Non-working land 27,656 89,630 90% 55,777Non-working buildings: 3,208 11,825 90% 7,755

Revaluation buildings corresponding to land — — — 5,725Revaluation buildings corresponding to buildings — — — 2,030

Total 62,582 260,160 — 101,628

With this revaluation it has become clear that there is no requirement for a provision fund for one of the revalued fixed assets. Consequently, the provision of 1,950 thousand euros has been recovered that was stated in the balance sheet at December 31, 2007.

As at December 31, 2008, there were no buildings not available for sale.

The totally depreciated fixed assets as at December 31, 2008 amounted to 87,630 thousand euros.

Land and buildings classified as non-working fixed assets largely comprise acquisitions made with the entity’s own funds, a total of 15,433 thousand euros being granted in rent to third parties.

Non-working assets include premises assigned in payment of debt.

Note 8


Provision for risks and contingencies

The movements in provision for risks and contingencies in 2008 and 2007 (in thousand euros) are given below:

2008 Opening Amounts Other Closing balance Allocation Recoveries applied movements balance

Provision for contingent liabilities 912 — –513 –7 — 392Other provisions 2,006 886 — –542 — 2,350

2,918 886 –513 –549 — 2,742

2007 Opening Amounts Other Closing balance Allocation Recoveries applied movements balance

Provision for pensions and similar amounts 25,324 — — — –25,324 —Provision for contingent liabilities 893 46 — –27 — 912Other provisions 1,608 907 — –509 — 2,006

27,825 953 — –536 –25,324 2,918

On January 1, 2007, the liability accrued for obligations to part of the active and retired employees of CaixaBank SA, recorded under the heading “Provision for pensions and similar obligations” in the balance sheet, was outsourced through insurance policies to Crèdit Assegurances SA. The total premium paid was 25,324 thousand euros.

“Other provisions” includes the necessary provisions resulting from early retirement commitments at December 31, 2008 and 2007.

Pension fund and other funds

Apart from the abovementioned point regarding commitments to part of the personnel of CaixaBank SA dated January 1, 2007, obligations with all Crèdit Andorrà SA employees and their beneficiaries related to such contingencies as retirement, death and incapacity are currently outsourced to an independent Andorran foundation (Previfun), established in 1998, and are governed under the Regulation of Mutual Funds for Benefit and Aid to Crèdit Andorrà SA Employees, approved by the Ordinary General Shareholders’ Meeting of October 23, 2006.

On October 23, 2006, Crèdit Andorrà SA and the abovementioned Foundation established the specific contributions, of a compulsory nature, which both the Bank and its employees would make every year, with contributions from the former totalling 2,313 thousand euros for 2008 (2007: 2,178 thousand euros).

Voluntary contributions to the Employees Fund (Previfun) amounted to 1,035 thousand euros (2007: 1,035 thousand euros).

Note 9

Note 8


Distribution of profits

The proposed distribution of profits of Crèdit Andorrà SA for the year 2008 to be presented for approval by the Board of Directors to the General Shareholders’ Meeting is as follows (in thousand euros):

2008 2007

Group profits for the year 85,005 128,001Profits awaiting application — —Amortisation of consolidation goodwill — 9,783Consolidation adjustments: — —

For dividends 2,762 13,807For other (net) –7,336 –12,621

Profit available for distribution from the Bank 80,431 138,970

Dividend payments –70,000 –102,000Transfer to legal reserve –7,000 —Transfer to reserves –2,931 –36,220Extraordinary contribution

to Fundació Crèdit Andorrà SA allocation fund –500 –750

Profits awaiting application — —

During 2008, Crèdit Andorrà SA distributed interim dividends of 35,000 thousand euros (2007: 52,000 thousand euros).

In compliance with Law 20/2007 on public limited companies and limited liability companies, 10% of profits from the year must be transferred to the legal reserve until this reaches 20% of the share capital.

The profit from the Group’s consolidated companies will be distributed in the manner agreed by their respective Shareholders’ Meetings.

Note 10


Movements in shareholders’ equity

In 2008 and 2007, the following movements (in thousand euros) took place in shareholders’ equity:

2008

Share capital

Legal reserve

Guarantee reserve

Revaluation reserve

Voluntary reserve

Consolidation reserve

Retained earnings carried forward Profit Total

Balance at beginning of year before distribution 70,000 7,000 33,063 13,934 361,196 33,040 — 76,001 594,234Supplementary dividend — — — — — — — –50,000 –50,000Application of 2007 profits / transfer to reserves — — — — 36,220 — — –36,220 —Consolidation adjustments — — — — — — — 1,186 1,186Amortisation of consolidation goodwill charged to 2007 profit (Notes 3.7 and 7.1) — — — — — — — 9,783 9,783Extraordinary contribution to Fundació Crèdit Andorrà SA allocation fund — — — — — — — –750 –750

Balance at beginning of year following distribution 70,000 7,000 33,063 13,934 397,416 33,040 — — 554,453

Profits for 2008 — — — — — — — 85,005 85,005 Interim dividend 2008 — — — — — — — –35,000 –35,000 Amortisation of consolidation goodwill charged to 2007 profit (consolidation adjustment) (Notes 3.7 and 7.1) — — — — –9,783 — — — –9,783Amortisation of goodwill charged to 2008 reserves (Notes 3.7 and 7.1) — — — — –9,783 — — — –9,783Consolidation reserves adjustment — — — — — –1,125 — — –1,125Revaluation fixed assets (Note 3.8) — — — 101,628 — — — — 101,628

Total 70,000 7,000 33,063 115,562 377,850 31,915 — 50,005 685,395

Note 11


2007

Share

capitalLegal

reserveGuarantee

reserveRevaluation

reserveVoluntary

reserveConsolidation

reserve

Retained earnings carried forward Profit Total

Balance at beginning of year before distribution 70,000 7,000 33,063 13,934 346,130 21,831 — 71,371 563,329Supplementary dividend — — — — — — — –35,000 –35,000Application of 2006 profits /transfer to reserves — — — — 34,632 — — –34,632 —Consolidation adjustments — — — — — — — –8,192 –8,192Amortisation of consolidation goodwill charged to 2006 profit (Notes 3.7 and 7.1) — — — — — — — 9,783

9,783Recalculation general provision banks adjustment) — — — — — — — –2,830 –2,830Extraordinary contribution to Fundació Crèdit Andorrà SA allocation fund — — — — — — — –500 –500

Balance at beginning of year following distribution

70,000 7,000 33,063 13,934 380,762 21,831 — — 526,590

Profits for 2007 — — — — — — — 128,001 128,001Interim dividend 2007 — — — — — — — –52,000 –52,000Amortisation of consolidation goodwill charged to 2006 profit (consolidation adjustment) (Notes 3.7 and 7.1) — — — — –9,783 — — — –9,783Amortisation of goodwill charged to 2007 reserves (Notes 3.7 and 7.1) — — — — –9,783 — — — –9,783Consolidation reserves adjustment — — — — — 11,209 — — 11,209

Total 70,000 7,000 33,063 13,934 361,196 33,040 — 76,001 594,234

Share capitalShare capital is represented by 790,000 “A” series shares and 210,000 “E” series shares, each of 70 euros, fully subscribed and paid up. Both series have the same economic and policy-making rights, the latter series being syndicated.

Legal reserveIn compliance with the Law on public limited companies and limited liability companies passed by the General Council on October 18, 2007, a legal reserve must be established of a minimum of 10% of the profit until 20% of the share capital has been reached. As at December 31, 2008 the company had not set up this reserve, although the proposed distribution of profits includes compliance with this Law.


Guarantee reserveIn accordance with Andorran legislation passed in 1995, Crèdit Andorrà SA has established a guarantee reserve for deposits and other operational obligations of 33,063 thousand euros (2007: 33,063 thousand euros). This reserve cannot be distributed (see Note 19.3).

Revaluation reserveThis reserve corresponds to two revaluations:

The first, totalling 13,934 thousand euros, corresponds to revaluations of buildings for own use acquired or built before December 31, 1989.

The second, totalling 101,628 thousand euros, corresponds to the revaluation authorised by the ANIF on June 12, 2008 of the land, building work and installations of working and non-working fixed assets (see Note 3.8).

Consolidation reservesThe consolidation reserves correspond to profits accrued in previous years by Group companies that form part of the consolidation scope, from the date of their acquisition or constitution up to December 31, 2007, that have not been distributed as dividends.

Subordinated liabilitiesOn October 26, 2005, the ANIF Board of Governors agreed to authorise the issue of preferred shares by Crèdit Andorrà SA Preference Ltd., to be accounted for as Tier 1 type regulatory capital of the Crèdit Andorrà SA Group.

In accordance with this ANIF authorisation, on December 22, 2005 Crèdit Andorrà Preference Ltd. carried out an issue of 100 million euros in preferred shares, without voting rights and with a specified annual dividend of 5% in the first three years following issue, thereafter varying annually with reference to the CMS 10-year rate plus 30 basis points, with a maximum of 8%, adjusted for the number of days during the year when the CMS 10-year rate is equal to or higher than the CMS 2-year rate.

On January 25, 2006, the ANIF Board of Governors agreed to authorise an increase in the preferred share issue by Crèdit Andorrà Preference Ltd. amounting to an additional 50 million euros, given that the other components of the equity of Crèdit Andorrà SA continued to account for around 70% of the Group’s total shareholder equity. These preferred shares are identical in nature to those of the first issue.

Crèdit Andorrà Preference Ltd. is a wholly-owned subsidiary of Crèdit Andorrà SA and the aforementioned issue has the joint, several and irrevocable guarantee of Crèdit Andorrà SA, as indicated in the corresponding prospectus for the issue.

This issue of a perpetual nature was fully taken up by third parties outside the Group and may be fully written off should the issuing company so decide, with authorisation from ANIF, six years after it has been paid up.

This year Fitch Ratings has maintained the A– rating for this preferred share issue.

Provision for general banking risksThe Group makes provision for general banking risks corresponding to the funds allocated by the Bank for reasons of prudence, given the risks inherent in its banking activity, as well as the credit and liquidity risk associated with the portfolio of unlisted shares or with low market liquidity. Consequently, the part related to the risks of unlisted securities (19,344 thousand euros) is not taken into account when determining the capital base for calculating the solvency ratio.


The movements in 2008 and 2007 were as follows:

2008 2007

Opening balance for the year 64,620 68,619Allocation to fund — 4,166Recoveries –11,351 –2,169Other 12 –5,996

Closing balance for the year 53,281 64,620

Other balance sheet and profit and loss account items

Other significant items in the balance sheet and profit and loss account for the years ended December 31, 2008 and 2007 (in thousand euros) are shown below:

12.1 Asset accrual accounts

2008 2007

Accrued interest 54,163 65,172Commissions 7,966 14,415Other 7,260 690

69,389 80,277

Includes the accrued interest yet to mature on accounts with financial intermediaries, the securities portfolio and the loan portfolio of the Group. It also contains the accrued management commissions pending payment related to the investment funds managed by the Group, which will be paid at the beginning of 2009.

12.2 Liability accrual accounts

2008 2007

Accrued expenses 51,165 36,431Interest 46,248 31,760Other 4,917 4,671

Before-due receipts 1,103 1,225

52,268 37,656

Includes the accrued interest yet to mature on accounts at sight and on time deposit held by customers, as well as accrued expenses not due that are associated with various concepts, principally general expenses and personnel costs.

Note 12


12.3 Commissions for servicesThe details of these items in the profit and loss account (in thousand euros) are as follows:

2008 2007

Commissions on services suppliedFor securities transactions 41,024 69,140For loan transactions 734 1,209Account administration and management 18,011 25,968For investment fund operations 37,446 54,916Other commissions 13,195 15,208

110,410 166,441

Commissions on services received –12,257 –16,912

12.4 General expenses and taxesThe details of these items in the profit and loss account (in thousand euros) are as follows:

2008 2007

General expensesSupplies –984 –1,325

–984 –1,325

External servicesResearch and development –165 –184Leases –1,044 –1,101Repairs and conservation (maintenance) –2,320 –2,490Services from independent professionals –5,967 –3,604Fund security and transport services –1,802 –1,676Insurance premiums –321 –439Advertising and public relations –2,133 –2,145Utilities –2,318 –2,110Other –4,438 –5,933

–20,508 –19,682

TaxesIndirect taxes on banking services (ISI) –12,830 –18,624Other taxes –2,740 –2,244

–15,570 –20,868

–37,062 –41,875


Note 13

12.5 Extraordinary profitThe details of these items in the profit and loss account (in thousand euros) are as follows:

2008 2007

Net profit (loss) from disposal of tangible and intangible assets — 24Recovery of provisions for general banking risks 11,351 2,169Extraordinary profit 511 551Extraordinary loss –6,929 –2,770

4,933 –26

Net foreign currency positions

At the end of 2008 and 2007, the Group held the following significant foreign currency positions (in thousand euros):

2008 Assets Liabilities Net position

Euros 5,159,781 5,183,963 –24,182US dollars 553,128 589,665 –36,537Swiss francs 160,658 161,539 –881Pounds sterling 71,836 32,409 39,427Japanese yen 35,354 13,315 22,039Canadian dollars 19,974 19,946 28Other currencies 17,249 17,143 106

6,017,980 6,017,980

2007 Assets Liabilities Net position

Euros 4,016,558 4,020,154 –3,596US dollars 551,694 547,291 4,403Swiss francs 62,014 61,422 592Pounds sterling 216,948 217,911 –963Japanese yen 28,291 28,621 –330Canadian dollars 17,410 17,410 —Other currencies 17,213 17,319 –106

4,910,128 4,910,128

Exchange rates applied at year-end were obtained from reliable market sources (see Note 3.4).

Note 15


Financial derivatives

14.1 Analysis of financial derivativesOn December 31, 2008 and 2007, the Group held the following positions in over-the-counter financial derivatives, not listed on regulated markets (face value in thousand euros).

2008 Less than From More than 1 year 1-5 years 5 years Total

Firm transactionsForeign exchange transactions 2,783,420 1,621 — 2,785,041Interest rate swaps 219,700 29,865 501,275 750,840Credit Default Swap 92,079 10,000 — 102,079Futures — — — —

Option transactionsOptions 1,639 7,732 101,720 111,091

3,096,838 49,218 602,995 3,749,051

2007 Less than From More than 1 year 1-5 years 5 years Total

Firm transactionsForeign exchange transactions 3,970,074 — — 3,970,074Interest rate swaps 1,612,876 22,500 508,715 2,144,091Credit Default Swap 100,000 20,000 120,000Futures — — — —

Option transactionsOptions 4,434 11,084 171,059 186,577

5,687,384 53,584 679,774 6,420,742

At year-end, these positions in financial derivatives were being used as hedge instruments for Group assets and liabilities or to offset open customer positions (see Notes 3.11 and 14.2).

On December 31, 2008 and 2007 there were no transactions undertaken in regulated markets.

14.2 Treatment of hedgesFinancial derivatives used to hedge specific market risks are individually assigned to those assets, liabilities or off-balance-sheet positions being hedged and are initially recorded at cost. Forward foreign currency contracts are later adjusted at market value, applying these fluctuations to the profit and loss account. Market fluctuations of these hedge positions are monitored and controlled using RiskMetrics and ALM II models (asset-liability management).

Pledged assets

On December 31, 2008, Crèdit Andorrà SA had on its books a total of 5,612 thousand euros (2007: 4,939 thousand euros) in guarantees required for futures transactions undertaken in regulated markets on account of third parties. It also had a total of 25,430 thousand euros on deposit with financial intermediaries as pledged assets to guarantee its own obligations (2007: 10,363 thousand euros).

Note 14

Note 15


Note 17

Transactions with entities or persons related to the Group or Group entities

Given that these financial statements are consolidated, there are no operations with entities or persons related to the Group or with Group entities that have not been consolidated by the fully-integrated method that account for more than 10% of equity as shown in the balance sheet and/or 5% of the result for the year in the profit and loss account.

2008

Shareholders Board of DirectorsGeneral

Management CompaniesOther related

parties

Shareholders Non-shareholders

Individuals — — — — — —Corporations — — — — — —

Balances

Assets — — — — — —Loan investments, banks and lending institutions

— — — — — —

Accrual accounts — — — — — —

Liabilities — — — — — —Financial intermediaries — — — — — —Time deposits — — — — — —Accrual accounts — — — — — —

Transactions with main shareholder — — — — — —Interest and income – assimilated — — — — — —Interest and income – liable to assimilation

— — — — — —

Other — — — — — —

Off-balance-sheet records — — — — — —

On December 31, 2008, there was no transaction with any shareholder or member of the Board of Directors and/or Executive Committee (non-shareholders) accounting for more than 10% of equity as shown in the balance sheet and/or 5% of the result for the year as shown in the profit and loss account.

All transactions with entities and persons related to the Group are carried out under market conditions.

Risk control and management

The management and control of risk has always been a priority objective of Crèdit Andorrà SA and, with this in mind, the Bank has developed the necessary infrastructure, internal methods and controls.

Policy and limits on risks are established and supervised by a committee called the Assets, Liabilities and Risks Committee (with functions equivalent to those of ALMCO, the Assets and Liabilities Management Committee). Among other functions, this committee approves risk policies that affect the management of assets and liabilities of the entity and management mandates. The committee also sets and revises the limits to balancing entries with banks and supranational entities and/or private entities. With the aim of avoiding a concentration of risk, it also establishes limits for issuers of financial instruments, whether within or outside the Crèdit Andorrà SA balance sheets.

Note 16


All steps taken by this committee bear in mind the rules of ANIF, the Andorran national body that regulates, controls and supervises the country’s financial activity and new regulatory trends, in compliance with the directives of the New Basle Capital Accord, which emphasises increasing awareness of risk and risk management.

For some years now, and without forgetting conventional methods of risk control, Crèdit Andorrà SA has also applied Value-at-Risk (VaR) methodology to all areas of risk management. VaR measures risk by means of statistical and stochastic techniques. VaR takes the form of a figure that summarises the maximum loss to be expected in the value of a portfolio over a fixed timescale and for a specific interval of confidence.

Management of market riskThe market VaR is calculated daily for a timescale of one day and with a confidence interval of 95% for the entity’s portfolios as a whole. A detailed report indicating the VaR, with various timescales and confidence intervals, is periodically sent to members of the Executive Committee and of the Assets, Liabilities and Risks Committee. These VaR measurements, along with others, provide a test of integrity and consistency. During this period, the average daily VaR for share portfolios, calculated with a 95% interval of confidence and a timescale of one day, was 147.60 thousand euros, with a maximum and minimum of 597.80 thousand euros and 61.20 thousand euros respectively, compared with the authorised risk limit of 200 thousand euros.

For the securities portfolios as a whole, the average daily VaR, calculated at a 95% level of confidence, was 1,400.20 thousand euros, with a maximum and minimum of 2,160.50 thousand euros and 520 thousand euros respectively, compared with the authorised risk limit of 5,000 thousand euros.

An analysis of this report is supported by Backtesting methods. In 2008, Backtesting showed that both gains and losses were more voluble than expected statistically, due to the situations of high stress occurring in the financial markets. The daily VaR for the share portfolios as a whole, with a 95% level of confidence, was consequently exceeded by 6.1% of all cases throughout 2008, compared with the expected 5%. For investment portfolios as a whole, the daily VaR was exceeded in 8.8% of all cases throughout the year, with a 95% level of confidence.

Management of credit riskAt the end of 2008, of the total exposure to credit risk, interbank deposits accounted for 32.5%, the securities portfolio 15.0% while customer loans accounted for the remaining 52.5%.

With regard to interbank deposits and the securities portfolio, Crèdit Andorrà SA also introduced the credit VaR as a management and control tool. This is calculated by applying the so-called “CreditManager” programme developed by J.P. Morgan. Crèdit Andorrà SA applies the credit VaR with a timescale of one year and a confidence level of 99%.

At year-end, the credit VaR for the securities portfolio and interbank deposits was 25,100.90 thousand euros, out of a total risk exposure of 2,337,109.70 thousand euros. This credit VaR is slightly above the risk limit of 22,000 thousand euros set by the Assets, Liabilities and Risks Committee. This excess is due to the increase in credit spread observed in the market. In other words, this credit VaR level would be equivalent to having a portfolio with an average rating of AA.

Regarding credit risk, special attention is given to balancing-entry risk and country risk. These risks are regularly monitored, always keeping within established limits.

Management of interest rate and foreign currency riskCrèdit Andorrà SA has traditionally paid particular attention to maintaining a very strict relationship between investment and how it is financed. For this reason, the Assets, Liabilities and Risks Committee has not set any ordinary limit for establishing open positions and, as a consequence, any gap that is not in line with the normal performance of daily operations must have prior authorisation.


Note 18

Note 19

These risks are monitored and controlled via the “ALM II” programme. Exposure to interest rate risk as a consequence of gaps between investment and financing is very limited. In fact, at the end of 2008, a displacement of 1% parallel to the interest rate curve of all currencies would have had an impact amounting to less than 5.3% of shareholders’ equity.

Liquidity risk, understood as risk arising from any difficulty the entity may have in meeting its payments or in obtaining funds for that purpose, is handled via the management tools mentioned above.

Foreign currency risk is also subject to daily monitoring, both with regard to at-sight transactions and those at term. At year-end, the open position in foreign currency risk, consolidated in euros, amounted to 2,816.30 thousand euros, compared with the established limit of 5 million euros.

Management of operational riskThe Basle Committee has defined operational risk as the risk of direct and indirect loss resulting from inadequate or failed internal processes, persons and systems or from external events.

Crèdit Andorrà SA continues to develop its organisational structure and to establish the capacities required to ensure adaptation to the Basle Capital Accord in terms of the measurement and management of operational risk.

(in million euros)

Daily VaR

0jan feb mar apr may jun jul aug sep oct nov dec

1

2

3

Other off-balance-sheet records

Details of the composition by type of security and other securities deposited and held in trust with third parties at year-end are set out below (in thousand euros):

2008 2007

Equity instruments 1,031,871 2,197,251Fixed income instruments 1,593,421 1,748,796Parts of investment funds not managed by the Group 860,503 2,019,016Other 447,506 496,386

3,933,301 6,461,448


Details of “Other off-balance-sheet records” at year-end (in thousand euros) were as follows:

2008 2007

Guarantees and obligations received 404,973 495,656Unlisted own shares and those held in trust 263,710 575,433Very doubtful loans 43,027 38,767Other 63,586 105

775,296 1,109,961

In compliance with explanatory memorandum 169/06 provided by the ANIF Accounting Plan of the Andorran Financial System, published on October 12, 2006, in Clause V. Other off-balance-sheet records with functions exclusively related to administrative control, bonds issued by the Government of Andorra are recorded under “Unlisted securities and treasury shares” and shares of Crèdit Andorrà SA, shown at face value, are recorded as “Those held in trust”.

Compliance with regulations

19.1 Law regulating the solvency and liquidity criteria of financial entitiesAt its session held on February 29, 1996, the General Council of the Principality of Andorra passed the Law regulating the solvency and liquidity criteria of financial entities (hereinafter “the Law”).

In accordance with this Law, Crèdit Andorrà SA must maintain specific ratios with regard to the quantitative measurement of the amounts of assets, liabilities and certain off-balance-sheet records of the Bank calculated according to accounting criteria, as well as qualitative options on the various components, the valuation of risk and other factors.

According to this Law, financial entities must maintain a solvency ratio, formulated according to the recommendations of the “Basel Committee on Banking Supervision”, with a minimum of 10% of the weighted risk of assets. Financial entities also have to maintain a minimum liquidity ratio of 40%.

The solvency and liquidity ratios as at December 31, 2008 and 2007 are set out below, with a comparison of the legal requirements mentioned above:

Bank’s current ratio Legal minimum ratio

2008 2007

Solvency ratio 20.37% 18.84% 10%Liquidity ratio 70.08% 60.46% 40%

It should be noted that the solvency ratio is calculated according to ANIF Memorandum no. 159/04 on Equity Requirements. This memorandum, which is technically binding, complements the Law regulating the solvency and liquidity criteria of financial entities of February 29, 1996 and is designed to foster greater security and stability in the Andorran financial system by incorporating the hedging of market risks.

The Law also limits the concentration of risks in favour of any one beneficiary to 20% of the Bank’s equity, as well as establishing that the concentration of any risk that individually exceeds 5% of the equity cannot go beyond the limit of 400% of this equity. Similarly, the balances or transactions maintained with members of the Board of Directors cannot go above 15% of the equity.

Note 19


In 2008, the Bank met the requirements set out in this Law. The highest concentration of risk in favour of any single beneficiary was 18.81% of the Bank’s equity. Total loans, discounts and other transactions creating individual credit risk in excess of 5% of the Bank’s equity did not go above 70.70%.

19.2 Law on international cooperation on crime and the fight against money or security laundering arising from international crimeOn July 24, 2001, the current Law on international cooperation on crime and the fight against money and security laundering arising from international crime came into force, replacing the previous Law, from 1995, protecting bank secrecy and preventing money or security laundering resulting from international crime.

In compliance with this Law, the Bank has established a number of internal control and reporting procedures aimed at protecting bank secrecy and at foreseeing and preventing money laundering operations and the financing of terrorism. Specific training programmes have also been carried out in this area.

At its session on December 11, 2008, the General Council of the Principality of Andorra passed a Law amending the Law on international cooperation on crime and the fight against money and security laundering arising from international crime. This amendment of Andorran legislation against laundering and against the financing of terrorism, which will come into force in the next few months, updates the current Law, adapting it to international standards in this area and harmonising it with the equivalent laws in Europe.

19.3 Law regulating mandatory investment ratiosAt its session on June 30, 1994, the General Council of the Principality of Andorra passed a Law regulating mandatory investment ratios. This Law obliges entities whose activities include receiving public deposits and which use these in granting loans and other investments to maintain an investment ratio in Andorran public funds.

Government bondsIn compliance with this ratio, as at December 31, 2008 and 2007, Crèdit Andorrà SA had subscribed 105,292 thousand euros to government bonds of the Principality of Andorra, issued on December 31, 2005 and maturing on December 31, 2009 at a one-year Euribor interest rate, established on the first working day of each year. This figure is recorded under the heading “Securities portfolio – Bonds and other fixed-income securities” of the enclosed balance sheet (see Note 6.4).

Housing funding programmeAlso included in calculations as public funds are loans granted as part of a programme classified as being of national and social interest, aimed at the preferential funding of housing and approved by the Government of Andorra on April 26, 1995. As at December 31, 2008 and 2007, the loans granted under this programme amounted to 744 and 947 thousand euros, respectively, and they are recorded under the heading “Loan investments – Customer loans and credits” on the balance sheet. These loans accrue a fixed annual interest of 6% (see Note 5.3).

Guarantee reservesIn its session on May 11, 1995, the General Council of the Principality of Andorra passed a Law regulating the guarantee reserves for deposits and other operational bonds to be maintained and deposited by entities operating in the financial system. This Law makes it compulsory for entities involved in the Andorran financial system to maintain, among their permanent resources, minimum reserves of equity to guarantee their operational obligations of up to 4% of the entities’ total investments, after deducting investments made using shareholders’ equity or funds from financial institutions.

In its session on March 26, 2003, the Government of Andorra passed a Decree regarding the conditions to be applied to deposits of guarantee reserves established by entities operating in the financial system, and the deposits that can be approved as public funds for the purposes of complying with the mandatory investment


ratio established for banking entities. In accordance with this Decree, the effective percentage applied in calculating guarantee reserves to be provided by banking entities is 1.25% of the volume of investments made by the entity for all concepts, after deducting investments made using shareholders’ equity or funds from financial institutions. The net base to which the previously fixed percentage is applied is established based on the figures from the individual balance sheet of the entity as at December 31, 2002. Consequently, the amount established by Crèdit Andorrà SA for this concept was 33,063 thousand euros.

In accordance with the aforementioned Law, entities operating in the Andorran financial system must mandatorily set up and maintain reserves invested in guarantee deposits with the ANIF. Specifically, the Crèdit Andorrà SA Group has investments totalling 46,245 thousand euros, with 33,063 thousand euros from Crèdit Andorrà SA, 12,972 thousand euros in compliance with the commitments undertaken from the banking entity CaixaBank SA and 210 thousand euros from the investment fund management company Crediinvest SA.

In 2008 and 2007, the balance and return from these deposits (in thousand euros) was as follows:

2008 Interest

Mandatory investment Deposit rate Period

Crèdit Andorrà SA 46,035 4.338% December 31, 2007 – January 31, 2008 4.265% January 31, 2008 – December 31, 2008

Crediinvest SA 210 4.338% December 31, 2007 – January 31, 2008 4.265% January 31, 2008 – December 31, 2008

46,245

2007 Interest

Mandatory investment Deposit rate Period

Crèdit Andorrà SA 33,063 3.630% December 29, 2006 – April 30, 20074.083% April 30, 2007 – December 31, 2007

Crèdit Capital Immobiliari SAU (*) 12,972 3.630% December 29, 2006 – April 30, 20074.083% April 30, 2007 – December 31, 2007

Crediinvest SA 210 3.630% December 29, 2006 – April 30, 20074.083% April 30, 2007 – December 31, 2007

46,245

(*) Formerly CaixaBank SA.

19.4 Law to Apply the Agreement between the Principality of Andorra and the European Union on taxation of returns on savings in the form of interest payments

At its session held on February 21, 2005, the General Council of the Principality of Andorra ratified the Agreement between the Principality of Andorra and the European Union on the establishment of measures equivalent to those provided for in Directive 2003/48/EC of the European Council on taxation of savings income in the form of interest payments. Also, at its session on June 13, 2005, it passed a Law to apply the abovementioned Agreement.


Note 21

Note 22

During the year, Crèdit Andorrà SA, in its role as payment agent, fulfilled all the obligations set out in the Agreement and the Law dealing with its application and duly paid the amount withheld as established in the abovementioned legislation.

Significant events following year-end

Based on the proposal by the Finance Ministry, in its session held on July 23, 2008, the government passed the General Accounting Plan. This General Accounting Plan applies to the preparation of financial statements of all companies, in accordance with that provided for in Law 30/2007 on company accounting, apart from banking entities and other entities operating within the financial system. This Decree entered into force on January 1, 2009 and must be applied to accounting years starting as from this date.

In its session held on June 12, 2008, the General Council passed Law 10/2008 regulating mutual funds under Andorran law. This Law aims to protect investors and ensure transparency, as well as ensuring that the mutual fund market operates satisfactorily. A period of one year from this Law coming into force has been established to carry out the necessary adaptations and to apply for the corresponding ANIF registration of mutual funds under Andorran law or under foreign law when managed or distributed in Andorra within the corresponding category. The Group expects to be adapted to the requirements of this new Law within the period of time provided.

Other matters of interest

Crèdit Andorrà SA established the Fundació Crèdit Andorrà SA, registered in the Principality of Andorra on December 15, 1987, for an indefinite period of time. The Foundation has its own legal identity, is of Andorran nationality and of a private nature.

This Foundation, which is a non-profit organisation, aims to contribute to improving the quality of economic, cultural and social life in Andorra by taking on, programming, funding and carrying out specific goals. Among these goals, of particular note is the granting of scholarships to deserving students in order to help them get the best possible education in any areas that may have an influence on the bettering of the economic, scientific, educational, cultural and services structure of the country.

In 2008, and always with the aim of adapting its work to the needs of the country, the activities carried out by Fundació Crèdit Andorrà SA focused on three major areas. These included its social work programme, particularly actions aimed at the elderly and organisations dealing with the disabled; education, particularly the granting of scholarships, and also cultural activities, dealing with pedagogical aspects and all those areas directly related to the country, its history and its natural environment.

On the coming into force of the new Law 11/2008, dated June 12, on Foundations, the entity expects to be ready to adapt its Articles of Association and to enter it in the Foundation Register by June 30, 2009.

English translation

These consolidated financial statements are a free translation of the consolidated financial statements originally issued in Catalan. In the event of a discrepancy, the Catalan language version prevails. These consolidated financial statements are presented in conformity with the accounting principles and valuation criteria established by the Accounting Plan of the Andorran Financial System. Certain accounting practices applied by the Group that conform with the Accounting Plan of the Andorran Financial System may not conform with generally accepted accounting principles in other countries.

Note 20


AUDITORS’ REPORT


Corporate Social Responsibility2008 Report

131CSR Report

Corporate responsibility and Crèdit Andorrà

Crèdit Andorrà was the first company in Andorra to integrate Corporate Social Responsibility (CSR) within the overall management of its Group. We have published a Corporate Social Responsibility report based on the GRI standards since 2003, and since 2004 we have been working in line with a corporate social responsibility action plan containing specific actions to be carried out both in terms of the environment and in society.

A comprehensive view of the year

The Corporate Social Responsibility Report contains a thorough review of the CSR actions carried out by Crèdit Andorrà throughout the year. The period covered by the Report runs from January 1 to December 31 2008, with the exception of figures under the heading of Environment, which cover the period from September 30, 2007 to September 30, 2008. Lastly, the figures under the heading of Human Resources refer only to the Group companies located in Andorra.

The following highlights the most relevant actions and provides a succinct but comprehensive view of how CSR is put into practice within the Group.

CSR Report132

Customers

Guaranteeing optimum quality in the products and services we offer allows us to be transparent in the information we provide our customers, as well as constantly meeting their needs and interests. In 2008 we were awarded ISO 9001:2000 certification, which endorses the quality of management in our Treasury and Capital Market department and our Market Administration and Control department. This ISO 9001:2000 certification is in addition to that already awarded to Crediinvest, the asset management firm in the Group, obtained in 2007. The GIPS (Global Investment Performance Standards) certification has also been renewed for Crediinvest and, lastly, this company has adopted the principles established in the MIFID (Markets in Financial Instruments Directive), in order to improve the quality of the service offered to our investing customers, who will secure real benefits in terms of information and protection of their interests.

Regarding socially responsible products, such as our Clau Visa Unicef (in collaboration with UNICEF), the CF Sustainability Investment Fund and the extension of the Carnet Jove to people aged up to 30, new additions in 2008 were the Crèditbaixa, Crèditsalut, the Pla Personal de Jubilació Garantit and Nòminamiga.

Crèdit Andorrà’s customer satisfaction focus is evident in the results in 2008 of the satisfaction surveys, which both in the case of corporate banking and also private banking have been classified as “very good”.

Main indicators Score (scale of 0 to 10)

Degree of overall satisfaction of Corporate Banking customers 7.3Degree of overall satisfaction of Private Banking customers 8.2

Number

Number of Clau Visa Unicef cards 790

Euros

Customer donations with the Clau Visa Unicef card 24,535Bank’s contribution with the Clau Visa Unicef card 29,240

Teamwork

Crèdit Andorrà’s development and progress over the last few years have been possible thanks to the efforts and dedication of all the professionals that go to make up our team. In order to provide the organisation with the human resources it needs to develop the Group’s strategy, we should particularly mention the work carried out by the Human Relations Department to ensure our employees are prepared for internationalisation in terms of their technical and language training. We should also note the chance given to all employees to internationalise their careers by choosing a position beyond our borders, with the incentive of a special salary and corporate benefit package for those people taking part.

133CSR Report

To achieve the challenge of internationalisation, Crèdit Andorrà has chosen a banking software platform, Avaloq, which was developed in Switzerland and is helping us to resolve our future needs. To ensure its successful implementation, particular personal and professional effort will be required from our whole team.

Main indicatorsNumber

Years Percentages of people Euros Hours

Crèdit Andorrà workforcePeople on the workforce — — 428 — —Disabled people on the workforce — — 3 — —

Employees aged between 31 and 45 — 56% — — —Employees of Andorran nationality — 54% — — —Women on the workforce (in terms of whole workforce) — 41% — — —Women in executive positions (in terms of all executive positions) — 19% — — —

Stability Staff with permanent contract — 100% — — —Voluntary resignations (in terms of whole workforce) — 3.03% — — —

Average permanence in company 14.43 — — — —

TrainingStaff that have received training — 100% — — —Expenditure on training in terms of payroll — 4.45% — — —Average investment in training per worker — — — 2,158.69 Average hours of training per worker — — — — 69Training to prevent money laundering and to combat the funding of terrorism — — — — —People trained — — 469 — —Total hours of training — — — — 717.50Total hours of training in preventing occupational hazards and environmental issues — — — 469.25

q Images of the after-work activities of Crèdit Andorrà employees.

CSR Report134

The Community

One characteristic that cannot be disassociated from either Crèdit Andorrà or the Crèdit Andorrà Foundation is their strong roots in the society of the Principality of Andorra. That’s why we support and coordinate our own programmes as well as collaborate with organisations that promote the overall development of society in this country. We continue to carry out initiatives in a range of areas: social welfare, education, culture, sports, the environment and economics.

In 2008, the Group’s overall investment was 1.67% of the total net profit.

The Environment

Having taken on the commitment to strike as great a balance as possible between carrying out our business and protecting and preserving the environment, year after year we invest in initiatives whose aim is to identify, control and minimise our environmental impact, as well as raising the awareness of citizens. This commitment to our surroundings has also thoroughly penetrated our branch network, implementing a number of actions for improvement aimed at making them more energy efficient.

In order to manage environmental aspects, since 2004 we have used an environmental management system (SGMA in Catalan) that has been awarded the ISO 14001:2004 certificate. Novel to 2008, the SGMA has started a new protocol in order to study the whole waste management process more thoroughly, from waste generation to its final treatment.

Collaboration with different environmental initiatives, such as the National Waste Plan of the Andorran Government and our sponsorship of the Elements programme, are examples of the Bank’s will to raise the awareness of the whole of society.

Main indicators (thousand euros)

Investment in and expenditure on the environment (expenditure on collaboration, building and maintenance work, training, audits and merchandising) 96,926.77

q Campaign to raise

awareness of the

environment

Consolidated total investment of the Group (percentage)

24 %38 %

13 %20 %5 %

Education

Culture

Society

Environment

Institutional

135CSR Report

Financial Results

The inclusion of sustainability criteria in Crèdit Andorrà’s financial management allows us to improve the Bank’s overall management and to ensure it is more transparent. The results and recognition achieved in 2008 endorse our leading position in Andorra’s financial sector. In fact, we have been chosen Bank of the Year of Andorra 2008, for the sixth time in the last seven years. Moreover, according to the Top 1000 ranking (*), which includes the most capitalised banks in the world, Crèdit Andorrà still holds its rank of 509, heading the list of banks from Andorra. Lastly, we have also renewed our Fitch Ratings, with a long-term rating of “A”, a short-term rating of “F1”, a “B” individual rating and a support “3” rating, with a stable outlook.

q From left to right, Mr. Stephen Timewell, editor of The Banker; Mr. Antoni Pintat,

Chairman of the Board of Directors of Crèdit Andorrà; Mr. Josep Peralba, CEO of

Crèdit Andorrà; and Mr. Michael Buerk, a BBC reporter.

Main indicators (thousand euros)

Profits 85,005Total resources managed 8,812Customer loans 2,902Operating costs 40,677Staff costs 35,805Investment in sponsorship and social activities 1,419Taxes 15,570

CSR Report136

Summary of the activities of the Crèdit Andorrà Foundation

The Crèdit Andorrà Foundation is our main platform in our work to benefit our community in social, educational and cultural terms, and this has been amply demonstrated throughout more than 20 years of activity, establishing the Foundation as the organisation with the most significant capacity and scope in the country.

Social programmes

The elderly

The number of elderly involved in the different activities organised as part of the L’espai initiative, the Foundation’s social centre for activities and training for senior citizens, is constantly growing and becoming more dynamic. The actions carried out are based on three broad areas. Firstly, L’espai computer centre, which has held courses in computing for beginners and users, as well as specialist workshops on the internet, digital photography, accounting and desktop publishing. In addition to courses in spoken and written Catalan, L’espai media library has also held different workshops (Drama, e-Credit, CASS portal, Photographic reporting, Introduction to first aid, Household handling of food and nutrition, among others), as well as talks on legal aspects of interest to senior citizens. Finally, L’espai volunteers centre, the home of the Association for Senior Citizen Volunteers (AVIM in Catalan), has held artistic workshops organised by the Association and has been used to organise other activities, such as cultural excursions and computing workshops aimed at patients from the Mental Health Services of the Hospital Nostra Senyora de Meritxell.

q L’espai holds training workshops for senior citizens.

137CSR Report

Illnesses with great impact on society

The commitment to society of the Crèdit Andorrà Foundation means that we pay particular attention to illnesses that have a great impact on society and that, in addition to concerning the sick person him or herself, also have marked repercussions on those around them. The activities promoted are often in collaboration with associations that dedicate their efforts to overcoming the difficulties encountered by sick people and their families in the fight against such diseases. Particularly of note has been the organisation of informative talks aimed at the whole population, including New techniques in diagnosing Alzheimer’s disease, Diet and quality of life, Living with fibromyalgia, Ele(mental) health and Parkinson’s disease today and future challenges, as well as offering workshops aimed the sick and their carers, such as Relaxation and breathing, designed for the relatives and carers of people suffering from Alzheimer’s, Performing arts, specifically aimed at those affected by multiple sclerosis, Methods of relaxation and energy, aimed at those affected by fibromyalgia or chronic fatigue syndrome, and Dynamic relaxation and wellbeing, especially designed for people affected by breast cancer.

Social collaboration

In addition to the two broad areas of work carried out directly by the Foundation in the area of society, we have also continued our work with institutions and organisations by taking part in organising other initiatives in this field. As well as supporting the 4th Seminar on spreading knowledge, organised by the Association of Scholarship Students of the Crèdit Andorrà Foundation, we have also maintained and consolidated other projects, such as our collaboration with the Andorran Society of Sciences, the Andorran Special Olympics Sports Federation (providing a new vehicle to transport the athletes) and our contribution to the National strategy for nutrition, sport and health (ENNES in Catalan), promoted by the Government of Andorra to encourage healthy habits and physical exercise among the population, a particularly noteworthy part of which was the first national sport for all day and the presentation of the talk Health and the elderly.

q Demonstration of wheelchair basketball on the national sport for all day.

CSR Report138

Educational Programmes

Study and research scholarships

In the area of support for carrying out specific studies, we have continued to promote the Foundation’s call for applications for scholarships for professional studies in hotel management and tourism, as well as postgraduate training. In 2008, new scholarship students were chosen, bringing the total to 162 young people who have benefitted from the Crèdit Andorrà Foundation’s scholarships since 1988, the year when this programme was started. We have also co-sponsored the two scholarships awarded each year by the Bilateral Fulbright Committee (created by the governments of the Principality of Andorra and the United States of America), aimed at young Andorrans who want to do postgraduate studies at a North American university. However, the Foundation has also initiated a third way to grant scholarships for further studies by signing a collaboration agreement with the Government of Andorra, aimed at young people from the country who wish to broaden their knowledge or dedicate themselves to research. Finally, we should also note the setting up, together with the Government of Andorra and the Barcelona Graduate School of Economics, of the International Calvó Armengol Award. This award, given every two years, is provided with 30,000 euros and is presented to an economist or social scientist under 40 years of age with outstanding work in the study of social interactions.

q Crèdit Andorrà is a

co-sponsor of the

Fulbright scholarships

q New scholarship students from the 2008 Crèdit Andorrà Foundation scholarship

awards, with Mr. Antoni Pintat, Chairman, Sr. Jaume Casal, Vice-Chairman,

Mr. Peralba, Chairman of the Delegate Committee of the Crèdit Andorrà Foundation.

Collaboration with the University of Andorra

For the fifth consecutive year, the Foundation continues to support different activities carried out by the University of Andorra. Among the training in which the Foundation has collaborated, of note is a new Cycle of Professional Improvement, organised by the School of Computing and Management and aimed at final-year students at the School, but also open to professionals in Andorra, as well as the Course in Andorran law and the Midwife training programme, which entails the award of two scholarships for people wishing to carry out these studies. The Foundation has also sponsored the continued education programme of Open Opera for the academic years of 2007-2008 and 2008-2009, offered by the University of Andorra and led by the Gran Teatre del Liceu de Barcelona. Finally, we should also mention the Foundation’s participation in the publication of Delictes patrimonials.

139CSR Report

Cultural Programmes

Music

The ONCA Foundation

The National Classical Orchestra of Andorra or ONCA Foundation, made up of the ministry of the Andorran Government responsible for culture and by the Crèdit Andorrà Foundation, had a highly positive 2008 and some of the most outstanding activities carried out have been the the different cycles and concerts. Among those presented by the National Classical Orchestra of Andorra in the Principality, performing either classical or chamber music, were the Saint Anthony Concert, Snow Concert, Spring Concert, Summer Concert, Italian Night, Concert in the Gardens of the Casa de la Vall, Saint Cecilia Concert and the Christmas Concert, as well as other performances at different festivals. Abroad we could hear the ONCA in Barcelona, at the different sessions of the show String Sounds, in the cycles Evenings at the Palau, Sundays at the Palau and Concerts in the Petit Palau, and at different private performances, as well as in Lisbon, Zaragoza (to celebrate the National Day of Andorra at the Expo), the Pau Casals Festival in Prades and the anniversary concert for the Teatre Auditori de Sant Cugat. Particularly of note regarding the activities of the Young National Chamber Orchestra of Andorra (JONCA in Catalan) are the Meritxell Concert and the work of the JONCA Soloists, who have performed in a dozen concerts, as a quartet, sextet and also octet. Finally, we should also note that, apart from promoting the concerts by the ONCA and the JONCA and other activities related to production, the ONCA Foundation has also promoted a CD of the Symphony no. 1 and Symphony no. 2 “Andorrana” by Sergio Rendine, performed by the ONCA, and that this composer has also been asked to create an opera which will be entitled El somni de Carlemany (Charlemagne’s dream).

q Bebo and Chucho Valdés at the International Narciso Yepes Festival.

CSR Report140

The Ordino Festivals Association

The Ordino Festivals Association, made up of the Comú of Ordino and the Crèdit Andorrà Foundation, has continued its usual activity throughout 2008. A notable consequence of this work is the organisation of the New Year’s Concert, with the participation of the Symphonic Orchestra of El Vallès, as well as the programming of the International Narciso Yepes Festival. The concerts presented as part of the Festival were Carmina Burana, performed by the National Classical Orchestra of Andorra (ONCA), together with the Chamber Choir of the Palau de la Música Catalana, Orfeó Català, and the Children’s Choir of the Orfeó Català, conducted by Marzio Conti; The best songs of Sanremo, performed by the Symphonic Orchestra of Sanremo, under the direction of Antonino Manuli; JONCA Soloists, presenting this formation as a string octet; Gospel Night, with the famous Campbell Brothers; and Rhythms of Cuban Jazz, with performances by pianists Bebo Valdés and Chucho Valdés.

The Friends of Organs Foundation

The Friends of Organs Foundation of the Valleys of Andorra, made up of the Archpriestship of Andorra and by the Crèdit Andorrà Foundation, was also very active in 2008, particularly with the ninth International Organ Cycle, including the concerts From orthodox chants to Russian operas, The splendour of Italian organ music, Music for organ and percussion, Let the fanfare sound! and Evocation and descriptivism in organ music. We should also mention the second Autumn Organ Cycle, organised by the Council of La Massana in collaboration with the Friends of Organs Foundation. To conclude this section, we should also note a new activity: Organ Recitals. Via live performances, this initiative allowed more than a thousand school children to discover the instrument and to get to know its music.

Carles Sabater Award

This award is given by the Catalan Cultural Centre of the Principality of Andorra, with the collaboration of the Crèdit Andorrà Foundation, which donates the prizes.

Theatre

The National Stage Foundation of Andorra (ENA)

In 2008, the trustees of the National Stage Foundation of Andorra (the Government of Andorra, the Comú of La Massana and the Crèdit Andorrà Foundation) continued to support this project, created the year before. Among all the work carried out, of particular note has been the programme established for 2008, for

141CSR Report

example with the premiere in Andorra of the plays Broken Coral and Dog Roses (in whose production the ENA has been involved), as well as the production and performance of A streetcar named desire. We should also mention the programming of the Les Fontetes Theatre in La Massana, with the presentation of the dramatised reading of the work When we didn’t used to know anything, the text that won the 2007 Theatre Award: 50th Anniversary Crèdit Andorrà, as well as the recital Music and word and the short film Count Yàcula. Another significant ENA activity in 2008 was its collaboration with the National Classical Orchestra of Andorra in presenting the production Andorra magic in eight days, as well as the distribution of Boris I (the king of Andorra) and the organisation of the 11th Exhibition of Young Theatre of Andorra.

q Performance of the play by Tennessee Williams, A streetcar named desire.

For more information, you can access the complete CSR and Activities Report of the Crèdit Andorrà Foundation

via the corporate website

www.creditandorra.ad

Cultural Collaboration

As on other occasions, the Crèdit Andorrà Foundation has taken part in different initiatives by various cultural organisations and institutions, such as the Foundation’s participation in the programme of acts for the National Day of Andorra at the Expo 2008 in Zaragoza, by means of an agreement signed with the National Commissariat of the Government of Andorra for the Expo, as well as collaborating with the Arts and Literature Circle, leading to the publication of the eighth volume in the collection “Quaderns d’Estudis Andorrans” (Books of Andorran Studies).

CSR Report142

Head Office

Andorra la VellaAv. Meritxell, 80Principat d’AndorraTel.: 88 86 00Fax: 88 86 01Swift: CRDA AD ADwww.creditandorra.ad

Administration Building

Sant Julià de LòriaC/ Isidre Valls, s/nTel.: 88 87 20Fax: 88 87 21

General Services

Escaldes-EngordanyAv. Fiter i Rossell, 22Cantonada vial ViladomatTel.: 88 89 50Fax: 88 89 51

Branches

Andorra la Vella

OFICINA SEU SOCIAL

Av. Meritxell, 80Tel.: 88 86 00 - Fax: 88 86 01

OFICINA ANDORRA LA VELLA

Av. Príncep Benlloch, 25Tel.: 88 81 00 - Fax: 88 81 01

OFICINA BAIXADA DEL MOLÍ

Av. Príncep Benlloch, 95Tel.: 88 86 60 - Fax: 88 86 61

OFICINA PLAÇA REBÉS

Plaça Rebés, 3Tel.: 88 83 60 - Fax: 88 83 61

OFICINA PRADA RAMON

C/ J. Maragall/Na Maria PlaTel.: 88 86 70 - Fax: 88 86 71

OFICINA PRAT DE LA CREU

C/ Prat de la Creu, 83Tel.: 88 81 60 - Fax: 88 81 61

OFICINA SANTA COLOMA

Av. d’Enclar, 53Tel.: 88 81 80 - Fax: 88 81 81

Canillo

OFICINA CANILLO

Plaça MajorTel.: 88 84 60 - Fax: 88 84 61

OFICINA SOLDEU

Carretera GeneralTel.: 88 84 90 - Fax: 88 84 91

Encamp

OFICINA ENCAMP I

Plaça del ConsellTel.: 88 84 00 - Fax: 88 84 01

OFICINA ENCAMP II

Av. Copríncep Episcopal, 67Tel.: 88 84 20 - Fax: 88 84 21

OFICINA PAS DE LA CASA

C/ Sant Jordi, 7Tel.: 88 84 40 - Fax: 88 84 41

Escaldes-Engordany

OFICINA ESCALDES

Av. Carlemany, 42Tel.: 88 82 00 - Fax: 88 82 01

OFICINA ENGORDANY

Av. del Pessebre, 27Tel.: 88 82 80 - Fax: 88 82 81

OFICINA FITER I ROSSELL

Av. Fiter i Rossell, 22Tel.: 88 82 60 - Fax: 88 82 61

La Massana

OFICINA LA MASSANA I

Av. Sant Antoni, 34Tel.: 88 85 00 - Fax: 88 85 01

OFICINA LA MASSANA II

Av. el Través, 1 Ed. TíffanisTel.: 88 85 70 - Fax: 88 85 71

OFICINA ARINSAL

Carretera General d’ArinsalTel.: 88 85 40 - Fax: 88 85 41

Ordino

OFICINA ORDINO

Carretera GeneralTel.: 88 85 50 - Fax: 88 85 51

Sant Julià de Lòria

OFICINA SANT JULIÀ I

Av. Verge de Canòlich, 17-19Tel.: 88 83 00 - Fax: 88 83 01

OFICINA SANT JULIÀ II

Av. Verge de Canòlich, 55Tel.: 88 83 40 - Fax: 88 83 41

Branch network of the Crèdit Andorrà Group

Av. Meritxell, 80 AD500 Andorra la VellaPrincipat d’Andorra

Disseny, maquetació i impressióDesign, page make-up and printingwww.cege.es

ISBN: 978-99920-60-01-8DL: B. 17855-2009

Resum comparatiu de dades financeres dels darrers cinc anys

Grup Crèdit Andorrà

2008 2007 2006 2005 2004

Dades més importants del Balanç(imports en milers d’euros)

Caixa i bancs 1.717.016 1.235.135 1.113.092 1.164.827 1.181.454Inversió creditícia 2.902.788 2.750.436 2.443.606 1.942.398 1.111.770Dipòsits de clients 4.879.467 3.821.540 3.258.707 2.879.458 2.060.498Dipòsits de valors i altres títols

en custòdia de tercers (*) 3.933.301 6.461.448 7.003.841 6.499.132 4.125.570

Ràtios (%)

Fons propis / Dipòsits de clients 13,33 14,24 16,37 17,42 22,85Fons propis / Inversió creditícia 22,41 19,79 21,83 25,82 42,35Inversió creditícia / Dipòsits de clients 59,49 71,97 75,51 67,75 55,97Resultats / Mitjana Capital + Reserves 14,74 25,31 25,47 22,31 18,57Resultats / Mitjana actius totals 1,57 2,79 2,83 2,84 2,75Solvència 20,37 18,84 20,94 19,92 32,08Liquiditat 70,08 60,46 57,22 66,71 97,66Despeses Explotació menys Tributs /

Marge Ordinari 31,26 22,00 23,05 26,06 23,47

Altres dades

Nombre d’empleats 468 412 401 411 281Nombre d’oficines (Crèdit Andorrà SA) 21 21 24 24 17

(*) Vegeu la nota 18 de l’informe anual.

Informe Anual 2008 Annual Report

Info

rme

Anua

l 200

8 An

nual

Rep

ort

Date post:	25-Aug-2021
Category:	Documents
Upload:	others
View:	2 times
Download:	0 times

Informe Anual 2008 Annual Report...Informe Anual 2008 Annual Report Comparative financial data for...

Documents