CaixaBank - the leading force in Spanish retail banking February 2012 Fixed Income presentation
2
Important note
The purpose of this presentation is purely informative. In particular, regarding the data provided by third parties, neither CaixaBank, S.A. (“CaixaBank”) as a legal entity, nor any of its administrators, directors or employees, is obliged, either explicitly or implicitly, to vouch that these contents are exact, accurate, comprehensive or complete, nor to keep them updated, nor to correct them in the case that any deficiency, error or omission were to be detected. Moreover, in reproducing these contents in any medium, CaixaBank may introduce any changes it deems suitable, may omit partially or completely any of the elementsof this document, and in the case of any deviation between such a version and this one, assumes no liability for any discrepancy.
This document has at no time been submitted to the Comisión Nacional del Mercado de Valores (CNMV – the Spanish Stock Markets regulatory body) for approval or scrutiny. In all cases its contents are regulated by the Spanish law applicable at time of writing, and it is not addressed to any person or legal entity located in any other jurisdiction. For this reason it may not necessarily comply with the prevailing norms or legal requisites as required in other jurisdictions.
This presentation on no account should be construed as a service of financial analysis or advice, nor does it aim to offer any kind of financial product or service. In particular, it is expressly remarked here that no information herein contained should be taken as a guarantee of future performance or results.
Without prejudice to legal requirements, or to any limitations imposed by CaixaBank that may be applicable, permission is hereby expressly refused for any type of use or exploitation of the contents of this presentation, and for any use of the signs, trademarks and logotypes which it contains. This prohibition extends to any kind of reproduction, distribution, transmission to third parties, public communication or conversion into any other medium, for commercial purposes, without the previous express permission of CaixaBank and/or other respective proprietary title holders. Any failure to observe this restriction may constitute a legal infraction which may be sanctioned by the prevailing laws in such cases.
Growing the franchise in a challenging sector and macroeconomic environment
2012- Further advances on the path to stability
An eventful year for the Spanish financial sector
Extraordinary provisioning requirements to address RE developer exposure
RDL 2/2012 & RDL 18/2012
Stress-tests to quantify maximum capital requirements for Spanish banks
IMF FSAP, Top-down and bottom up stress-test
Improved transparency & credibility
Acceleration of sector consolidation
MoU
Banking Resolution Act
Public capital injections
Restructuring plans
Transfer of assets to Sareb
87% of RDL’s already booked
€5.7bn capital surplus under bottom-up adverse scenario
Outperformance in asset quality metrics
M&A to develop the franchise: BCIV and BdV acquisitions
Contribution to SAREB
Economic environment
Eurozone: macro stabilisation
Spain: execution of broad economic agenda to improve competitiveness
Euro area institutional reforms
Roadmap for further European integration (banking union, Euro is “here to stay")
3
FY 2012 Highlights
4
(1) Of which €4.5bn correspond to BdV
A further year of increased market shares and advances in strategic goals:
Above 15% market share in key retail products
BCIV integration process proceeding as planned (CajaSol+CAN integrated)
BdV closing expected end of Feb (1st Jan accounting integration)
Total available liquidity of €53.1 bn
Issuance of €1bn 3yr Sr. unsecured on improved market conditions in Q1’13
Allows for repayment of €9 bn to ECB1
Asset quality stabilises post BCIV integration - coverage maintained at 60%
Non-RE book remains stable while RE Developers deteriorate
Clean-up of real estate exposure continues with record asset disposals
Interest income headwinds gradually offset by improved funding conditions
Strict cost control but restructuring effort in full sway
Extraordinaries partially offset heavy provisioning schedule
Core capital BIS II at 11.0%
Core Tier1 EBA at 10.4%
Acquisitions complement organic growth and reinforce franchise leadership
Liquidity reinforcement has been the key objective of the year
Capital strength reinforced and underlined by stress tests
Asset quality impacted by acquisitions and weak macro fundamentals
Good operating performance in a low interest environment
5
Execution of BCIV IT integrations on track: • CAN and CajaSol completed. Final IT integration expected
by April’13.
BdV acquisition to be managed in parallel with BCIV’s: • Closing expected at the end of February (1st January
accounting integration)
• Pre-merger integration committees already in place
Strict management of the incorporated franchises: • Remapping of sales organization to fit client presence
• Application of CABK standards from day one, focusing on profitability and implementation of credit monitoring and recovery procedures
3 Aug 20 Oct 27 Nov
• Merger registration
• Operational integration
• CAN systems integration
• CajaSol systems integration
• Caja Canarias systems integration
• Caja Burgos systems integration
• Acquisition agreement
• I.T. integration
• Closing
15 Dec Feb Mar Apr Jul
8 months1
9 months
(1) Estimate of calendar assuming BdV transaction is authorized at expected milestones by all the relevant authorities
Execution of M&A transactions is being carried out according to plan
BCIV integration: 83.4% of 4,400 planned activities have been completed
Update on acquisitions
Update on BCIV Financial Impacts
(1) Of which €512 M have been booked against reserves and €62 M have been included as CapEx for the period
6
Update on acquisitions
Cost synergies being executed ahead of
schedule
Reorganisation of branch network
accelerated
Further fair value adjustments on
additional granularity
2012 cost synergies 91% above initial target
Measures taken imply 40% achievement of €540 M cost savings target
€757 M gross restructuring costs already booked1
BCIV branch network optimisation to speed up following IT integrations, so as to minimise impact on clients:
Reorganization of CAN network started in 4Q’12
Additional fair value adjustments on BCIV loan book and foreclosed assets due to the more granular information obtained post IT integrations
191% of target
Reduction in branch network
6,631 Sept’12
6,342 Dec’12
~6,000 Mar’13 E
Initial Fair Value adjustments
€3,288 M
Additional adjustments
€700 M (€450 M loan book, €250 M
Foreclosed assets)
Total Fair Value adjustments
€3,988 M (€3,668 M loan book, €882 M
Foreclosed assets €-562 M other)
Commercial activity
Acquisitions complement business footprint and contribute to market share gains
7
Acquisitions further extend leading market
shares in retail banking
Market share by business volume1
In %
> 10% share > 7% share < 7% share
30.6%
17.8%
39.6%
7.9%
11.5%
17.9% 12.6%
9.6%
7.8%
28.0%
6.2%
6.9%
10.0%
7.4%
5.4% 8.1%
10.4%
14.6% Business volume
market share
Sources: Bank of Spain, FRS, INVERCO, ICEA, CECA and Factoring Spanish Association. Latest data available for 2012
Contribution of BCIV and BdV in core regions
Market share by business volume
In %
Navarra
Andalucía
C. Valenciana
C. León
39.6%
17.8%
11.5%
12.6%
Canarias 28.0%
8.3x
2.9x
2.2x
2.1x
2.5x
(1) Market shares as of September 2012 include loans and deposits of CABK+BCIV+BdV.
CABK stand-alone
Commercial activity
Leading retail product market shares further reinforced by acquisitions
8
Tactical management of customer funds accompanied by gradual deleveraging
Undisputed leadership in most retail products3
Business volume: Loan book and customer funds In Billion Euros
427.3 512.0
Inorganic +24.5%
Business volume
+19.8% YTD
Organic2 -4.7%
Customer funds
Loans
Sector1 Organic2
-3.9% -3.0%
-7.1% -6.9%
(1) Source: “la Caixa” Research Department estimates. Customer funds include: deposits, CP, insurance saving products, mutual funds and pensions plans. Sector loans exclude the transfer of assets to SAREB.
(2) Deducting BCIV figures at 30/6/12- includes changes under CABK management
(3) Including BdV (4) Includes sight and time deposits Sources: Bank of Spain, INVERCO, ICEA, FRS, Social Security and AEF
15%
1st
1st
1st
1st
3rd
1st
1st
1st
3rd
1st
YTD
+5.6%
+4.2%
+6.1%
+0.8%
+2.7%
+1.7%
+4.1%
+4.0%
+1.8%
+3.0%
4
Asset quality
Asset quality stabilises after BCIV integration but still affected by weak macro trends
NPLs and NPL ratio NPL coverage
12.1 NPL (in Billion Euros)
Credit provisions (in Billion Euros)
NPL coverage ratio
8.62%
60%
9
NPL decreases in absolute terms as CABK risk management is implemented across BCIV platform
Higher ratio results from lower asset base
Asset quality gap with the sector increased by 47 bps1
Provisioning coverage maintained at 60%
NPL ratio
sector Nov’12
(1) Difference between Q4 and Q3
Gradual deleveraging of loan book in line with macro and sector trends
(1) Deducting BCIV data at 30/6/12- includes changes under CABK management (2) Servihabitat reduced its loan balance with CaixaBank by €1.35 bn through the issuance of a medium term bond
RE developer book still a main contributor to decline
Additional impact from continuing “clean-up” of BCIV loan book
Weak credit demand from SMEs and corporates
10
Loan-book breakdown In Billion Euros, gross
I. Loan to individuals
Residential mortgages – home purchases
Other
II. Loan to businesses
Non RE businesses
Real Estate developers
Servihabitat & other RE subsidiaries
Loans to individuals & businesses
III. Public sector
Total loans
119.6
87.7
31.9
90.7
62.0
27.0
1.72
210.3
13.1
223.4
27.7%
25.8%
32.9%
11.8%
11.7%
20.3%
(46.4%)
20.3%
16.6%
20.1%
YTD 31st Dec.
(2.2%)
Organic1 YTD (%)
(13.1%)
(6.9%)
(1.5%)
Loan book
+€37.4bn (+20.1%)
Organic
Non- organic
-6.9%
+27.0%
Asset quality
Significant improvement in quarterly evolution of NPLs
11 (1) Includes contingent liabilities (2) Note Q3 figures are restated (3) Includes loans to Servihabitat and other RE subsidiaries of Caja de Ahorros y Pensiones de Barcelona, CABK’s major shareholder
NPL inflows still mostly attributable to RE Developers
Stability returns to retail book
Non-RE business segments evidence crisis fatigue
Loan book and NPL1 ratio by segments In Billion Euros
Loans to individuals
Residential mortgages - home purchase
Other
Loans to businesses
Corporate and SMEs
Real Estate developers
Servihabitat & other RE subs.3
Public sector
Total loans
119.6
87.7
31.9
90.7
62.0
27.0
1.7
13.1
223.4
NPL ratio
31st Dec
3.50%
2.77%
5.47%
16.55%
5.67%
40.91%
0.00%
0.75%
8.42%
3.56%
2.80%
5.65%
17.24%
5.96%
44.22%
0.00%
0.74%
8.62%
31st Dec 30th Sept2
Ex- Real Estate developers 196.4 3.97% 3.83%
Asset quality
Clean-up of real estate exposure continues
12
(1) Deducting BCIV data at 30/6/12- includes changes under CABK management
Clean-up of real estate exposure continues at fast pace
RE developer loans breakdown evolution
(in Billion Euros)
20.7
Performing
Substandard
NPL
22.4 21.7
27.0 29.9
-10%
RE developer loans
YTD +€4.6bn
Organic1
Non- organic
-€5.2bn
+€9.8bn
Provisions (in Billion Euros)
Coverage
NPL 4.7 39.1%
Substandard 1.1 34.9%
Performing 2.2 18.9%
Provisions for RE developer loans
8.0 29.7%
Return to RDL 18/12 real estate provisioning path (€150 M per month)
Coverage of problematic loans at 53%
30% coverage of total developer loans above “bottom-up” base case scenario of 25% EL
33% coverage considering pending €0.9 bn of RDL 18/12- close to adverse scenario of 37.6% EL
Asset quality
Foreclosed assets increase as developer loans migrate to housing stock
(1) The real estate holding company of CaixaBank, S.A. (2) Deducting BCIV data at 30/6/12- includes changes under CABK management
13
RE assets from loans to construction and RE development
Finished building
Buildings under construction
Land
RE assets from mortgage loans to households
Other repossessed assets
Total (net)
3,806
2,361
191
1,254
1,051
231
5,088
47%
34%
54%
61%
38%
47%
45%
Net amount
Coverage
Building Center1
Repossessed real estate assets evolution
In Million Euros
Repossessed real estate assets breakdown
As of December 2012
In Million Euros
Foreclosed assets
YTD +€3.9bn
Organic2
Non- organic
+2.2bn
+1.7bn
% coverage
36% 45% 44% 39% 36%
Asset quality
Commercial activity increasingly focused towards renting properties
(1) Total disposals of €3.1bn and 20,291 units, at debt equivalent amounts & including disposals from developers (2) Sales and rental assets. 13,171 units considering commitments.
Commitments
14
Servihabitat portfolio has been reduced by ~30% in one year
Increased commercial activity during 2012 “la Caixa” Group commercial activity
In Million Euros
BuildingCenter is now main contributor to Group sales
Sales distribution
796
Rental assets
Sales
2012 unit disposal2:
11,830 1,5821
x2
192 163
1H11 2H11 1H12 2H12
EBA Capital reinforced to 10.4% in Q4 after 50% conversion of Series 1/11 MCB
Solvency
Leading capital ratios despite BCIV acquisition and liability management exercises
BIS II Core Capital evolution In %
Core Capital
RWAs
17.2 bn
137.4 bn
17.7 bn
161.2 bn
12.5%%%
+168bps -101bps -252bps
11.0% Organic
BCIV integration1
RDL impact
EBA Core Tier1 for CaixaBank
(Dec 31st):
10.4%2
(1) Includes the impact of the additional fair value adjustments registered in 4Q12 (€700 M) (2) Main difference between EBA and BIS II is due to temporary deferral in recognition of €750 M MCB
15
-22bps
Liability management
+51bps
Extraordinary transactions
Liquidity
Liquidity remains a cornerstone of balance sheet strength
(1) Includes cash, interbank deposits, accounts at central banks and unencumbered sovereign debt (2) Defined as: gross loans (€223,449 M) net of loan provisions (€11,962 M) (total loan provisions excluding those corresponding to contingent guarantees) and excluding
pass-through funding from multilateral agencies (€7,179 M) / retail funds (deposits, retail issuances) (€160,621 M) (3) €4.5 bn from CaixaBank + €4.5 bn from Banco de Valencia
16
Proactive reinforcement of liquidity In Billion Euros
A closing funding gap has led to a progressive reduction of the LTD ratio2
• ECB LTRO: €28.3 bn with €4 bn kept in deposit
• €9bn of ECB funding to be repaid in Jan.’133
Unused ECB discount facility
Balance sheet liquidity1
20.9
53.1
As a % of total assets
7.7% 15.2%
127% 128%
127% 129%
133%
Dec'12 Sep'12 Jun'12 Mar'12 Dec'11
-6pp
Manageable exposure to wholesale funding
Wholesale maturities as of Dec 31st
€7.3 bn
2013
€8.2 bn
2014
€6.6 bn
2015
Jan.’13: issuance of €1bn 3yr senior unsecured at MS + 285 bps as capital debt markets improve
(1) Deducting BCIV data at 30/6/12- includes changes under CABK management (2) Primarily includes mandatory convertible bonds, regional govt.securities, and Caja de Pensiones y Ahorros de Barcelona sub debt.
Commercial activity
Tactical management of customer funds in anticipation of improved funding environment
Total customer funds breakdown In Billion Euros
I. Customer funds on balance sheet
Demand deposits
Time deposits
Debt securities
Subordinated liabilities
Institutional issuance
Insurance
Other funds
II. Off-balance sheet funds
Mutual funds
Pension plans
Other managed resources2
Total customer funds
238.1
69.2
76.8
8.8
5.8
46.6
27.9
2.9
50.5
21.0
17.6
11.9
288.6
21.3%
23.0%
20.8%
46.3%
12.4%
20.2%
18.6%
(1.8%)
12.5%
16.1%
23.5%
(5.0%)
19.6%
YTD 31st Dec.
(2.6%)
Organic1 YTD (%)
(4.5%)
(3.0%)
17
Proactive and tactical management of product mix focused on P&L impact:
• Pricing policy adapted to each customer segment
• Pure price competition avoided
• Clean-up of low value-added deposits continues as they mature (BCIV)
(4.2%)
Total customer funds
+€47.4bn (+19.6%)
Organic
Non- organic
-3.0%
+22.6%
18
Encumbered vs Unencumbered Assets (as of December 2012)
LOANS PORTFOLIO TOTAL RMBS/ABS SENIOR DEBT
USED COLLATERAL UNUSED
MORTGAGES PORTFOLIO (ex - sec) 142,766 95,401 47,365 0
PUBLIC SECTOR PORTFOLIO (ex - sec) 11,756 10,000 1,756 0.0
OTHER LOANS PORTFOLIO (ex - sec) 37,479 37,479
SECURITISATION (*) 9,547 9,547
LOANS TO CUSTOMERS 201,547 105,401 49,121 9,547 37,479
ENCUMBERED ASSETS 8,540
INSURANCE COMPANIES ASSETS 29,129
REST OF ASSETS 108,868 108,868
TOTAL ASSETS 348,084 105,401 49,121 9,547 146,347(*) It includes all securitized loans
PUBLIC ISSUANCE RETAINED/ECB COLLATERAL TOTAL ISSUED
MORTGAGE COVERED BONDS 42.109 34.212 76.321
PUBLIC SECTOR COVERED BONDS 1.298 5.702 7.000
RMBS/ABS 1.359 8.188 9.547
SENIOR DEBT (except GGB) 5.149 0.426 5.575
GOVERNMENT GUARANTEED BONDS 1.705 6.320 8.025
TOTAL ISSUED 51.620 54.848 106.467
As of 31st Dec
COVERED BONDS
19
CaixaBank Covered Bond Issuing Capabilities (as of December 2012 )
Mortgages Public Sector
Total Collateral for Covered Bonds 142,766 11,756 Elligible Portfolio 100,110 11,756
Cédulas
Hipotecarias
Cédulas
Territoriales
Used Collateral 95,401 10,000 Covered Bond Issued Amount 76,321 7,000
Over Collaterization 187% 168%
Available Collateral 4,709 1,756
REMAINING ISSUING CAPACITY (*) 3,767 1,229 Mn €
(*) Issuing Capacity= 80% of Collateral Available for C. Hipotecarias and 70% for C. Territoriales
Data in Million €
4,996 Available Issuing Capacity
83,3€ bn
89,3 € bn
111,8 bn
154,5 € bn
≈ 5 € bn Remaining Issuing
Capacity
42,7€ bn
Outstanding CBs
Max. CB Issuance
Elegible vs non-elegible
Total Collateral (Mortgages+Public
Sector)
83,3€ bn
89,3 € bn
111,8 bn
154,5 € bn
≈ 5 € bn Remaining Issuing
Capacity
42,7€ bn
Outstanding CBs
Max. CB Issuance
Elegible vs non-elegible
Total Collateral (Mortgages+Public
Sector)
Mortgage Covered Bonds – OC Evolution
Solid levels of Over Collaterization Two remarkable facts in 2012:
•Q2: Generation of additional collateral for the ECB credit facility to anticipate any potential deterioration in markets
•Q3: Integration of Banca Cívica
Legal OC
131%
20
21
Public Sector Covered Bond Issuance
IssueIssued Amount
(€M)Issue Date Maturity Coupon
Total 1,000
500 24/05/2012 24/05/2018
500 24/05/2012 24/05/2019
3ª Emisión de Cédulas
Territoriales
4ª Emisión de Cédulas
Territoriales
4.90%
5.20%
New retained Covered Bond Issuance
Mortgage Covered Bond Issuance
Issue Issued Amount
(€M)
Issue Date MaturityCoupon
Total 24,500
16ª Emisión de Cédulas
Hipotecarias 500 26/07/2012 26/07/2020 €6m + 4.70%
15ª Emisión de Cédulas
Hipotecarias 3,000 17/07/2012 17/07/2028 €6m + 4.25%
14ª Emisión de Cédulas
Hipotecarias 750 17/07/2012 17/07/2027 €6m + 4.25%
€6m + 3.80%
€6m + 3.80%
1,000 24/05/2012 24/05/2018
1,000 24/05/2012 24/05/2019
2,000 24/05/2012 24/05/2020
500 07/06/2012 07/06/2021
2,000 07/06/2012 07/06/2022
07/06/2023 4,000 07/06/2012
3,500 07/06/2012 07/06/2024
07/06/2025
5ª Emisión de Cédulas
Hipotecarias
6ª Emisión de Cédulas
Hipotecarias
7ª Emisión de Cédulas
Hipotecarias
8ª Emisión de Cédulas
Hipotecarias
9ª Emisión de Cédulas
Hipotecarias
10ª Emisión de Cédulas
Hipotecarias
€6m + 3.85%
€6m + 3.85%
11ª Emisión de Cédulas
Hipotecarias
4ª Emisión de Cédulas
Hipotecarias
12ª Emisión de Cédulas
Hipotecarias 4,250 19/06/2012 19/06/2026
1,000 07/06/2012 €6m + 3.75%
€6m + 3.75%
4.90%
5.20%
5.30%
13ª Emisión de Cédulas
Hipotecarias 1,000 03/07/2012 03/07/2017 €6m + 4.00%
Loan Portfolio Optimization (RMBS amortization exercise)
22
Fund
Outstanding
Balance
Amount Ellegible
for CHs Issuance
Total: 14,302.52 12,177.15
Amortizatin
Date Description
Fund
Outstanding
Balance
Amount Ellegible
for CHs Issuance
18.6.125,736 5,558
29.6.12467 459
29.6.12862 773
13.7.12687 592
13.7.12412 410
13.7.123,273 2,062
13.7.12343 225
16.7.12497 485
16.7.12502 341
25.7.12204 197
25.7.12596 365
30.7.1262.30 62
30.7.12343.63 341
30.7.12134.84 132
30.7.12183.46 176
FonCaixa Hipotecario 11 F.T.A
(ES0337805008 / 016 / 024)
FonCaixa FTGencat 7 F.T.A
(ES0337663001 / 019 / 027 / 035)
FonCaixa Hipotecario 2 F.T.A
(ES0338203005 / 013)
FTPYME 2 F.T.A
(ES0337774006 / 014 / 022 / 030 / 048)
FonCaixa ICO-FTVPO 1 F.T.A
(ES0337680005 / 013 / 021 / 039 / 047)
Foncaixa Empresa 1 F.T.A
(ES0337662003 /011/029/037/045/056/060)
FonCaixa Hipotecario 4 F.T.A
(ES0338182001 / 019/ 013)
FonCaixa Hipotecario 5 F.T.A
(ES0338198007 / 15)
FonCaixa Hipotecario 6 F.T.A
(ES0338199005 / 013)
FonCaixa Hipotecario 8 F.T.A
(ES0337805008 / 016 / 024)
FonCaixa Hipotecario 9 F.T.A
(ES0337982005 / 013 / 021)
FonCaixa Hipotecario 10 F.T.A
(ES0337679007 / 015 / 023 / 031)
FPPYME Andaluz F.T.A
(ES0364815003 / 011 / 029 / 037)
FonCaixa Hipotecario 7 F.T.A
(ES0337969002 / 010)
FonCaixa Hipotecario 3 F.T.A
(ES0338177001 / 019 / 013)
23
(1) Includes Multiname Covered Issuances
Data in Million € Source: CaixaBank
Covered Bond Issues: Maturity Profile (1)
4,778
6,947
5,226
6,053
4,043
3,137
2,621
329
3,309
1,387
500
0
0
0450
193 9020
1,018
418
1,316
29
1,729
2,2342,532
3,500 541
2,031
4,000
3,500
2,353
4,2501,750
0
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
31
20
37
20
38
20
48
Public Issues Retained Issues
24
(1) Data in Million €, excluding retained issues Source: CaixaBank
Institutional Caixabank’s Issues: Maturity Profile 1
7,375
8,040
6,680
7,196
4,023
3,137 2,806
329
3,309
1,426
500
2,475
610 450193 90 2020
--
1,000.00
2,000.00
3,000.00
4,000.00
5,000.00
6,000.00
7,000.00
8,000.00
9,000.00
Senior Debt (includes GGB) Covered Bonds Subordinated debt/Preferred Stock Other
INSTITUTIONAL DEBT OUTSTANDING1: 48.834 € Mn
25 25
CaixaBank’s Public Issues 2013
Demonstrated access to international debt capital markets, managing cost and market timing
Sources: Bloomberg
Stats:
Book/Orders 5000/320
Non Spanish Allocation 82%
Real Money Accounts 81%
Issuer RatingDeal
Size (€ Mn)
Maturity
(years)Spread Coupon Stats
M/S&P/F Book / orders
Banco Popular Ba1/BB/BB+ 750 2.5 MS+362 4.00% 1300/176
CaixaBank Baa3/BBB-/BBB 1,000 3 MS+285 3.25% 5000/320
BBVA Baa3/BBB-/BBB+ 1,500 5 MS+295 3.75% 5400/381
Santander Baa2/BBB/BBB+ 1,000 7 MS+275 4.00% 1200/200
Issuer RatingDeal
Size (€ Mn)
Maturity
(years)Spread Coupon Stats
M/S&P/F Book / orders
Bankinter A3/-/A- 500 3.5 MS+220 2.75% 3000
Kutxa Aa3/-/AA- 750 4 MS+220 3.00% 3750/200
Santander Aa3/-/- 2,000 5 MS+195 2.875% 2600/186
Bankinter A3/-/A- 500 5 MS+220 3.125% 700
Sabadell A3/-/- 1,000 5 MS+250 3.375% 3300
Popular Aa3/-/- 500 6 MS+270 3.75% 1100/100
BBVA Aa3/-/- 1,000 10 MS+215 3.875% 3000/160
Spanish Senior Unsecured Issues in 2013
Spanish Covered Bond Issues in 2013
Overview
Balance per LTV-band
Specific Loan and Borrower
characteristics
Main Country regional
Distribution
Cover Pool Information (ex-securitizations) – Residential Assets, as of December 2012
WA Seasoning
(in months)
26
Total Mortgage Loans (ex securitization) (€ k) 99,447,671
Number of loans 1,248,850
Average Loan balance (€) 79,631
Number of Borrowers 1,118,817
Number of properties 1,212,711
WA Seasoning in months 74 6.2 yrs
WA Remaining term in months 267 22.2 yrs
Expected WA life of the portfolio in years 12 yrs
Avg LTV (%) 45.80%
WA LTV (%) 57.90%
Floating Rate loan Interest Rate type: 99.33%
WA Interest Rate (Floating Rate loans) 2.79%
WA Interest Rate (Fixed Rate loans) 5.18%
19.3%
12.9%
17.3%
22.0%
18.1%
3.4% 3.1%2.1%
0.9% 0.3% 0.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
90% of the loans with LTV < 80%
88.7%
9.0%1.3% 1.1%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
First Home Second Home Not Owner occupied Other
4%
6%
8%
14%
68%
< 12
≥12-<24
≥24-<36
≥36-<60
≥60
Overview
Balance per LTV-band
Main Country regional Distribution
Cover Pool Information (ex-securitizations) – Commercial Assets as of December 2012
Loan Maturity
27
Total Mortgage Loans (ex securitization) (€ k) 43,318,523
Number of loans 214,800
Average Loan balance (€) 201,669
Number of Borrowers 104,365
Number of properties 259,462
WA Seasoning in months 62 5.1 yrs
WA Remaining term in months 180 15 yrs
Average LTV (%) 42.76%
WA LTV (%) 57.41%
Floating Rate loan Interest Rate type: 96.4%
WA Interest Rate (Floating Rate loans) 3.2%
WA Interest Rate (Fixed Rate loans) 5.4%
23%
15%
17%
19%
13%
3%2% 2%
3%
1%2%
0%
5%
10%
15%
20%
25%89% of the loans with LTV < 80%
17%
17%
16%
19%
24%
8%
≤ 5
>5 - ≤10
>10 - ≤15
>15 - ≤25
>25 - ≤50
>50
Overview
Loan Maturity
28
Loans in arrears
Cover Pool Information (ex-securitizations) – Public Sector Assets as of December 2012
Total Mortgage Loans (ex securitization) (€ k) 11,755,923
Number of loans 6,821
Average Loan balance (€) 1,723,490
Number of Borrowers 1,896
Average exposure to borrowers (€ ) 6,200,381
WA Remaining term in months 88 7.3 yrs
WA Seasoning in months (1)
39 3.2 yrs
Floating Rate loan Interest Rate type: 90.53%
WA Interest Rate (Floating Rate loans) 2.88%
WA Interest Rate (Fixed Rate loans) 4.46%
<2m 1.00%
≥ 2m - <6m 0.78%
≥ 6m - <12m 0.36%
≥12m 0.51%
15%
7%
7%
16%
55%
< 12
≥12-<24
≥24-<36
≥36-<60
≥60 € k %
< 12 1,803,542 15%
≥12-<24 873,438 7%
≥24-<36 803,379 7%
≥36-<60 1,852,589 16%
≥60 6,422,975 55%
Total: 11,755,923
(1) Negative Outlook 29
Moody’s Investors Service Baa3
BBB-
BBB
P-3
A-3
F2
negative
negative
Long term
Short term
Outlook
A3
AA-
-
Credit Ratings
Mortgage Covered Bonds
Ratings
(1) negative
Appendices
Listed portfolio as of 31st December 2012
Ownership Market Value
(in Million Euros)
Number of shares
Utilities:
Telefónica 5.6% 2,575 252,684,272
Repsol YPF 12.5% 2,400 156,509,448
BME 5.0% 77 4,189,139
International Banking:
GF Inbursa 20.0% 3,042 1,333,405,590
Erste Bank 9.9% 942 39,195,848
BEA 16.4% 1,058 364,746,530
Banco BPI 46.2% 606 642,462,536
Boursorama 20.7% 91 18,208,059
TOTAL: 10,791
30
31
Growing the franchise in a challenging sector and macroeconomic environment
Final remarks
Acquisitions complement organic growth and reinforce market leadership:
Another year of increased market shares and advancing in our strategic goals: above 15% market share in key retail products and 3 M new customers
Execution of M&A transactions is being carried out according to plan
Targets of annual cost synergies confirmed:
• BCIV cost savings of €270 M for 2013, €540 M from 2014
• BdV annual cost synergies of €85 M expected from 2014
Liquidity reinforcement has been a key objective for the year: total available liquidity of €53.1 bn
Leading capital ratios despite BCIV acquisition and liability management exercises:
BIS II Core Capital at 11% (EBA CT1 at 10.4%)
Asset quality stabilises but still impacted by weak macro fundamentals:
Asset quality stabilises post-BCIV integration and coverage maintained at 60%
Good operating performance in a low interest rate environment:
Resilient pre-impairment income demonstrates capacity to generate recurring profits
Extraordinaries partially offset heavy provisioning schedule
2013: the key year for execution
APENDIX
32
33
Financial Sector Reform
Additional Provisions & Capital Buffers (1st and 2nd Stages)
Exitings
provisions
+
60% + 20%
Problematic
Assets 50% + 15%
(€176.000Mn)
Exitings
provisions
as of Jan
2012
Land
(€ 25 bn)0%
Building under
Construction
(€ 16 bn)
0%
Funished
Buildings
( € 60 bn)
0%
Personal
Guarantee
& 2nd mortgage
(€ 20.7 bn)
0%
unchanged
35% 0%+
2nd DecreeMay 2012
Generic Provisions Generic Provisions
1st DecreeFeb 2012
Generic Provisions
35%
28%
25% unchanged
unchanged
7%
7%
7%
7%
2nd DecreeMay 2012
1st DecreeFeb 2012
14%
52%
Capital
Buffer
Specific
Provisions
as of Jan
2012
Performing
Assets
(€121,7.000Mn)
Land
(€73 bn)
Building under
Construction
(€ 15 bn)
Funished
Buildings
( € 88 bn)
52%
29%
34
Financial Sector Reform
Creation of the SAREB (“Bad bank”)
PURPOSE:
TRANSFER VALUE:
SCHEDULE:
Segregation of the troubled assets of banks requiring public support for its recapitalization and transfer to an assets management company
o Haircut (on gross carrying amount) : - Loans: 46 % (aprox.) - Foreclosed assets: 63% (aprox.)
Asset Type Haircut
2. Foreclosed Assets 63.10%
New housing 54.20%
Developments in progress 63.20%
Land 79.50%
Asset Type Haircut
1. Loans 45.60%
1.1. Finished housing 32.40%
1.2. Unfinished projects 40.30%
1.3. Urban Land 53.60%
1.4. Other Land 56.60%
1.5. Other with collateral 33.80%
1.6. Other without collateral 67.60%
OCTOBER 2012
Approval RD
Start of review of
assets to be
transferred
Segregation and transfer of Assets
(Group 1 - nationalized entities)
NOVEMBER 2012
Segregation and transfer of Assets
(Group 2)
DECEMBER 2012 ….. JUNE 2013
Presentation of SAREB
Financial results analysis
Consolidated income statement (BCIV consolidated from 1st July ‘12)
Consistent delivery of strong pre-
impairment income:
• NII supported by BCIV contribution and momentum
• Fee line underlines core business strength
• Other income impacted by insurance extraordinaries
• Strict cost control but restructuring effort in full sway
Demanding provisioning schedule
in line with stated targets
Extraordinaries partially offset heavy provisioning schedule
35
Good operating performance despite historically low interest rate environment
FY11
Net interest income
Net fees
Income from investments1
Gains on financial assets
Other operating revenue & exp.
Gross income
Total operating expenses
Pre-impairment income
Impairment losses
Profit/loss on disposal of assets and others 2
Pre-tax income
Taxes 3
Profit for the period
Profit attributable to the Group
3,170
1,562
659
343
777
6,511
(3,342)
3,169
(2,557)
547
1,159
(106)
1,053
yoy(%)
22.2
8.9
22.8
32.4
(112.8)
3.5
6.7
0.1
54.2
29.7
(105.4)
(78.3)
FY12
3,872
1,701
809
455
(100)
6,737
(3,566)
3,171
(3,942)
709
(62)
291
229
(1)
230 1,053 (78.2)
1. Includes dividends and income from associates. 2. In 2012 includes the sale & lease-back of branches (€204 M), reinsurance agreement covering the life-risk insurance portfolio (€524 M) and other extraordinary results (€-19
M). In 2011 includes the capital gain for the sale of 50% of SegurCaixa Adeslas (€609 M), the sale of 80% of the Hospital Group (€77 M) and other (€-139 M) 3. Note that income from investments is reported net of tax.
In Million Euros
Minority interest
Financial results analysis
NII supported by BCIV contribution and rates momentum while funding environment improves
FY11: 3,170
FY12: 3,872
+22.2%
Improved funding conditions largely offsetting lower asset yields In %
Net interest income peaks as lower index rates make an impact: In Million Euros
36
Customer funds
Customer spread stable due to lower retail funding costs
Loans and credits Customer spread
+20.8%
37
Inertia from mortgage book partially offset by spread repricing and positive funding trends
Loan rates (Back vs. front book) Time deposit rates (Back vs. front book)
New production spreads continue to grow Front book credit spreads (%)
Renewal of time deposits at lower rates leads to reduced back book costs Front book time deposits spreads (%)
Financial results analysis
Financial results analysis
Recurring fee items continue to reflect underlying core business strength
Net fees In Million Euros
Net fees breakdown In Million Euros
(1) Includes fixed income distribution of €50M (-64%)
FY11: 1,562
FY12: 1,701
+8.9%
Positive trends in fees:
Strong growth in transactional banking
Non-recurrent distribution fees impacted by lower issuance from regional governments
Commissions in mutual funds affected by market and sale of depositary business
Good performance in pensions and insurance
Banking fees1
Mutual funds
Insurance and pension plans
Net fees
yoy (%) FY12
1,354
150
197
1,701
10.4
(4.3)
9.8
8.9
38
1.9%
FY12 FY11
Income from the insurance business 185 479
Excess provisions in the insurance business 320
Deposit guarantee fund contribution (278) (118)
Other income/operating expenses (7) 96
Other operating income (expense) (100) 777
Lower income from insurance activity:
Deconsolidation of Adeslas in June 2011 (-€238 M)
Lower contribution from life-risk premia (sale to Berkshire Hathaway): -€45 M in 4Q and c. €150 M to €50 M (2013-2017e)
39
Growing contribution from investments while changes in consolidation scope impact other revenue
Financial results analysis
Income from investments supported by higher contribution from associate companies
Other operating revenue affected by changes in scope and non-recurring items
Income from associates1
Dividends2
+22.8%
659
809
+106.3%
-39.6%
In Million Euros
In Million Euros
2011 income from associates impacted by impairments reported by intl’ banking stakes
2012 dividends affected by TEF dividend cut
(1) Income from associates correspond mainly to the stakes in REP, International Banking and the non-life insurance business (2) Includes dividends corresponding to stakes in TEF and BME
Financial results analysis
Strict cost control but restructuring effort in full sway
40
+
Cost reduction: -0.1% (like-for-like) and -3.5% on a recurrent cost basis1
In Million Euros
2012
BCIV recurring expenses (471)
BCIV restructuring costs (78)
BCIV cost synergies1 104
2011
CABK reorganization expenses
(110)
Adeslas deconsolidation (107)
Cost cutting initiatives more than compensate for BCIV contribution to expenses
Depreciation
General
Personnel
+6.7%
3,342 3,566
Total operating costs In Million Euros
(1) BCIV cost synergies are included for cost comparison on a recurrent basis
(3,125) (3,121)
-0.1%
(3,017)
Like-for-like Recurrent basis
-3.5%
Financial results analysis
Demanding provisioning schedule back in line with RDL charge guidance
41 (1) Includes provisions for early retirement and other contingent risks (2) Only includes gross fair value adjustments on credit book and foreclosed assets
TOTAL impairments:
€10,299 M
87% of RDL requirements already booked- €900M pending for 1H 2013
Impairment losses
In Million Euros
Booked in 1Q12 (€1.8 bn of generic provision released)
€0.9 bn pending for 1H13
RDL 2/2012
RDL 18/2012
Other credit provisions
Other provisions1
Impairment losses
2,436
1,200
1,970
143
5,749
BCIV Fair Value adjustment2
In Million Euros
Loan Book
Foreclosed assets
Adjustments
3,668
882
4,550
Financial results analysis
Extraordinaries partially offset heavy provisioning schedule
42
Main extraordinary profits generated in 4Q12:
Reinsurance agreement covering
the life-risk insurance portfolio
Sale and leaseback transaction
Gross capital gain:
€524 M
Gross capital gain:
€204 M
Reinsurance agreement with Berkshire Hathaway Life Insurance Company covering the individual life-risk portfolio
Limited to the underwritten portfolio as of December 31st 2012
Berkshire Hathaway has paid a reinsurance commission of €600 M
Sale of 439 branches to a Spanish subsidiary of Mexico’s Inmobiliaria Carso
Aggregate price of €428.2 M
25 yr lease agreement with the seller to continue occupying the buildings sold in the transaction
Av. Diagonal, 621 08028 Barcelona
www.CaixaBank.com
+34 93 411 75 03
Institutional Investors & Analysts Contact
contact us, please call or write to us at the following email address and telephone number: We are at your entire disposal for any questions or suggestions you may wish to make. To