management report and annual accounts of the

Servei d’Estudis
MANAGEMENT REPORT AND
ANNUAL ACCOUNTS OF THE
CAIXA D’ESTALVIS
C
S
S DE
CATALUNYA, TARRAGONA I
MANRESA GROUP
– 2010 –
(for the six-month period ended 31
December 2010)
MANAGEMENT REPORT OF THE
CAIXA D’ESTALVIS DE
CATALUNYA, TARRAGONA I
MANRESA GROUP
- 2010 -
1
Economic backdrop
The world economy grew significantly in 2010 (5.0%, according to International Monetary
Fund estimates), outstripping the decline of 0.6% recorded in 2009, the first since World War
II. The more favourable performance of the international economy responded to the strong
growth of emerging countries (estimated growth of 7.1%) and to the positive effects of this
factor and the tax and monetary incentive on the advanced economies (GDP increase of
3.0%).
In the developed economies, the US (2.8%), Japan (4.0%) and Germany (3.5%) lead the
recovery. However, the UK (1.3%) and the other economies in the euro zone displayed
contained growth which, as a whole, grew 1.7%. Business activity slowed in Ireland, Spain
and above all Greece, which showed diverging recovery paths according to the structural
impact of the crisis and each country’s ability to respond competitively.
The year was also characterised by various sovereign debt crises which were related to
the region’s asymmetries. The crisis in Greece came to a head in May and soon spread to
other peripheral economies. The European Union (EU) and the International Monetary Fund
(IMF) soon launched a coordinated bailout package, the EU rolled out funding instruments
and the European Central Bank (ECB) introduced additional détente measures.
These actions, together with the results of the first stress tests at the end of July helped
ease, but not eliminate, the pressure as demonstrated in November with the crisis in Ireland
and the new risk premium maximums in the other peripheral economies. A new bailout
package mitigated the effects once again, but at the end of 2010 sovereign debt yields were
still under considerable pressure in the medium term.
The various periods of tension in the euro zone have seriously affected the common
currency, prevailing over the weak dollar given the Federal Reserve’s monetary expansion
policy and the large tax imbalances in the US. Accordingly, the euro depreciated 13% in the
first half of 2010, since performance was tied to the crisis in Greece, and by 5% in the last
quarter of the year, as a result of the turbulence in Ireland. This is in sharp contrast to the
5% rise between June and September during a period of greater stability in government debt
markets. Additional evidence of the asymmetry perceived in the markets as a result of the
sovereign debt crisis is the uneven performance of equities in 2010 (gains of 13% in the
S&P-500 and a 6% drop in the Eurostoxx-50), especially in the banking industry (a 17%
increase and 24% decrease, respectively).
In 2010 the Spanish economy showed a general sluggishness in the recovery phase, with
quarterly changes in GDP of 0.1%, 0.3%, 0.0% and 0.2%. The first half of the year was
characterised by higher private consumption thanks to purchases being brought forward
relating to factors of a transitional nature (completion of the “Plan 2000E” programme to
assist automobile purchases and the VAT hike), which contrasted with the drop in household
spending in the third quarter and the scant progress in the fourth, resulting in a 1.2%
increase in private consumption in the year.
Overall GDP declined 0.1% in 2010 as a result of the positive contribution of the export
market which was greater than the draining of domestic demand, with export growth
outstripping imports (10.3% vs. 5.4%). This positive performance in exports did not strongly
reflect on the investment in capital goods, which grew moderately (1.8%). Lastly,
investment in construction continued to decline at a fast pace (down 11.1%), dragged down
by the non-residential segment, which was impacted by the tax adjustment, just as with the
public consumption component (-0.7%).
Against this backdrop, job destruction continued for the third consecutive year, with
employment down 2.3% and unemployment rising to 20.1%. This factor forced consumer
prices downwards, although the increase in indirect taxes (VAT in July and taxes on tobacco
in December) and the rise in energy prices drove inflation up to 3.0% in December (vs. 0.8%
in the same period in 2009).
3
Lastly, in 2010 the housing market was characterised by two significant events. On one
hand, the process of accumulating stock for sale ended, once the number of completed
properties approached the demand for new houses. On the other hand, the changes in the
related taxation (increase of reduced-rate VAT for first home purchases in July and the
partial elimination of tax rebates for first home purchases in income tax in January 2011),
which affected an unpredictable performance of demand and prices.
In the financial services industry, this adverse economic backdrop gave rise to a general
decline in financial business, a strong decrease in the margins of traditional businesses, the
need to continue reining in operating expenses, high levels of non-performing loans and, as
a result, significant declines on the income statement with possible effects on the capital
ratios.
The CatalunyaCaixa Group in 2010
The CatalunyaCaixa Group comprises CatalunyaCaixa, as the Parent, and its investees,
which perform complementary activities in areas which include, inter alia, finance, insurance,
real estate, services, pensions and lending.
CatalunyaCaixa was formed as a result of a merger carried out on 1 July 2010 among
Caixa Catalunya, Caixa Tarragona and Caixa Manresa resulting in a new organisational
structure and new governing bodies. This merger process was instrumented within the
framework of the Fund for Orderly Bank Restructuring (FROB), included in Royal Decree
9/2009, and on the basis of the economic situation which arose as a result of the
international financial crisis and the strategies to handle this crisis.
This involved preparing an Integration Plan, approved by the Bank of Spain, which
focused its commercial strategy on retail banking and in which emphasis was placed on
solvency, risk management, liquidity, and profitability and real estate operations. A profound
rationalisation of the commercial network and the work force was also envisaged, which
progressed at a good pace during the first six months of existence of the new entity and
which will be completed in the first months of 2011.
Accordingly, on 28 July 2010, the issue, subscription and payment of 1,250 million euros
in preference shares exchangeable for non-voting equity units was made effective by the
FROB.
Balance sheet
The consolidated assets of the CatalunyaCaixa Group at the end of 2010 amounted to
76,585 million euros with a structure consisting of a strong component of operations with
customers. Customer loan financing, on the asset side of the balance sheet, represents more
than 70% of the total, whereas customer funds, formed by customer deposits, marketable debt
securities and subordinated liabilities, on the liability side, represent more than 80%. At 31
December, CatalunyaCaixa was ranked fourth among Spanish savings banks by assets.
The balance of loans to customers on the asset side of the consolidated balance sheet,
without taking into account valuation adjustments and provisions for impairment losses on
assets, amounted to 54,000 million euros, slightly less than the portfolio at the end of June.
Secured loans exceeded 39,000 million euros and is easily the type with the most significant
weight, more than 73% of the portfolio, while all personal loans and credit accounts exceed
22%. Accordingly, doubtful assets maintained the same levels as at the beginning of the sixmonth period as a result of the effective preventative management implemented and the
positive result of the control systems established. This has allowed the company to
outperform the industry by more than half a point.
At 2010 year-end, customer funds captured by CatalunyaCaixa, based on group data,
amounted to 71,000 million euros, up 10.7% compared to the first half of the year. The
performance in these six-months of existence of CatalunyaCaixa has been more favourable
in the case of on-balance-sheet funds, since the types of off-balance-sheet funds, basically
comprising investment funds, insurance products and pension funds, against a backdrop of
4
low interest rates and financial instability in the markets, behaved negatively. On-balancesheet customer funds therefore amounted to 62,607 million euros, with a six-monthly growth
rate of 13.2%, a favourable performance despite the fact it includes the convertible
preference shares subscribed by the FROB. Among customer deposits, which represent
almost 70% of the total on-balance-sheet funds, the favourable performance of the
borrowing activities through term deposits is notable. The other large heading under
borrowing activities on the balance sheet, marketable debt securities, which channels a large
part of the lending activities for large investors, dropped 5.7% and ended the year at 16,004
million euros. Lastly, off-balance-sheet funds amounted to 8,300 million euros, more than
50% of which relate to investment funds. Pension plans is the only type of off-balance-sheet
fund that showed a favourable, albeit moderate, performance.
With regard to the securities portfolio, the balance at 2010 year-end, excluding securities
held for trading, totals over 6,300 million euros and represents 8.3% of the balance sheet.
Of this portfolio, 77% relates to fixed-income securities, which are mostly government debt
securities. The most notable equity instruments, under "Available-for-sale financial assets",
are the 1.62% stake in Gas Natural SDG and the 1.63% stake in of Repsol YPF, S.A. (this
ownership interest in the gas company was sold at the beginning of 2011 in good economic
conditions). Lastly, "Equity" had a book value of 579 million euros. Noteworthy here are
insurance, real estate development and investment fund and special-purpose vehicle
management companies, as well as various portfolio companies and companies providing
services composing the CatalunyaCaixa Group. The 20% ownership interest in Cedinsa
Concessionària and, through Volja Plus, 7.76% of Applus Servicios Tecnológicos are
noteworthy of mention as jointly controlled entities.
With regard to Group companies, an agreement was entered into in September with
Mapfre, S.A., having previously been signed in the first half of the year by the Caixa
d’Estalvis de Catalunya, Tarragona i Manresa, to jointly develop the insurance and pension
plan businesses of CatalunyaCaixa, which involved the sale to the Mapfre insurance group of
50% plus a share of the CatalunyaCaixa insurance subsidiaries (Ascat Vida, S.A.; Ascat
Seguros Generales, S.A.; Caixa Tarragona Vida, S.A., and Caixa Manresa Vida, S.A.).
At 2010 year-end, the total capital amounted to 5,198 million euros with a capital ratio of
10.7%, an excess of 1,311 million euros on the minimum required at that date by the Bank
of Spain.
Earnings
During these six months of existence, net interest income generated by the
CatalunyaCaixa Group totalled 306.6 million euros, as the result of high finance income of
over 1,100 million euros and finance expenses exceeding 800 million euros. Three quarters
of the finance interest and interest income accrued during the period relate to the loan
portfolio, whereas the interest earned on debt interest is another large source of finance
income for the entity, with more than 20% of the total. On the expenses front, more than
90% of the total interest accrued relates to interest paid to the entity's customers, to pay
both deposits and issuances made.
The contribution of fees and commissions during the six-month period to the income
statement was significant, basically as a result of the income generated by collection and
payment services (78.1 million euros), investment services and supplementary activities
(20.8 million euros) and marketing of non-banking financial products (27.3 million euros). In
total, once the commissions paid by the entity were stripped out, for the most part, as a
result of its customers credit card billings, the CatalunyaCaixa Group's net fees and
commissions totalled 170.0 million euros which, together with the income earned by equity
instruments (18.9 million euros) and the share of results of entities accounted for using the
equity method (-1.1 million euros), allowed the Group to obtain a basic margin of 494.3
million euros.
On the other hand, the gains on financial transactions and exchange differences
moderately contributed to the entity's gross income, which amounted to 542.9 million euros.
5
Operating expenses, which include extraordinary items arising from the merger, amount
to 481.1 million euros and consist of 279.8 million euros in staff costs, 158.2 million euros in
general administrative expenses and 43.1 million euros relating to the depreciation and
amortisation charges on property, plant and equipment and intangible assets. Profit from
operations, formed by the gross income once structural operating expenses were discounted,
amounted to 61.8 million euros.
Lastly, total provisions charged to income and extraordinary items amounted to 10.3
million euros. All of the aforementioned includes the profit before tax (PBT) generated from 1
July 2010 to 31 December 2010 amounting to 11.9 million euros, which was greatly affected
by the high volume of expenses in connection with the merger process and the integration
plan being carried out.
Branch network and headcount
Throughout the six-month period, CatalunyaCaixa was immersed in a commercial
streamlining process, throughout which the branch network of the three merged entities
indicated in the Integration Plan was reorganised and optimised. The network was completed
in 2010 with 1,378 branches with 179 branches fewer (89 in Catalonia and 90 in the other
autonomous communities) than prior to the merger becoming effective on 1 July. At 31
December 2010, the branch network consisted of 1,050 branches in Catalonia, 327 in the
rest of Spain and one in France.
In parallel to the integration process and branch closures, the workforce of
CatalunyaCaixa was restructured, which entailed implementing an early retirement policy
and voluntary redundancies agreed upon with the trade unions. At 2010 year-end, the
CatalunyaCaixa Group's workforce amounted to 8,259 employees, with 837 employees
leaving over the six-month period.
Risk management
In order to ensure that the Group has sufficient liquidity at all times to meet its payment
commitments, the CatalunyaCaixa Group's liquidity risk, inherent to the banking business
and the financial instruments, is managed by the short-term unit of the Treasury and Capital
Markets Department of CatalunyaCaixa for operating liquidity, and by the Entity's
management through the Asset-Liability Committee for structural liquidity. CatalunyaCaixa
has issue programmes within structural liquidity which guarantee the liquidity of each period
and maintain the dependence on the short-term market at acceptable levels. In addition, in
order to handle potential liquidity pressures, the CatalunyaCaixa Group has various
guarantees with the European Central Bank which allows it to obtain additional liquidity.
The CatalunyaCaixa Group has adapted its organisational structure in order to guarantee
effective integral management and control of all its risks, especially credit, market and
operational risks. The risk function implemented in CatalunyaCaixa is separated into
acceptance and recovery functions (Risk Acceptance and Recovery Unit) and into
measurement, monitoring and control functions (Global Risk Management and Control Unit),
whereby both are independent from the business areas.
In order to manage credit risk, the CatalunyaCaixa Group has individual scoring and
rating models for all business segments and criteria and policies for classifying operations
and customers when entering into contracts with customers. With the exception of the
mortgage loans granted to households, consumer loans and non-Group developers, Caixa
Catalunya's credit risk is not significantly concentrated.
The CatalunyaCaixa Board of Directors, which is ultimately responsible for global risk
management, approves the general risk management policies, qualification models and risk
acceptance, control and monitoring tools, as well as the mitigation procedures.
Interest rate risk affects the interest-bearing assets and liabilities on the balance sheet as
a result of a change in the structure of the market yield curve. This risk is managed and
controlled by the Asset Liability Committee, which is in charge of implementing the
procedures that ensure that the risk management and control policies set by the
6
CatalunyaCaixa Board of Directors are complied with at all times, with a view to limiting the
interest rate risks as much as possible and achieving a balance between return and risk.
With regard to trading risk, the positions in financial instruments, both assets and
derivatives, held by CatalunyaCaixa for trading are managed by the Treasury and Capital
Markets Department and are subject to changes in certain risk factors (interest rate,
exchange rate, prices on equity and goods, etc.). Controls are carried out daily based on the
value-at-risk limit related to this activity established by the Board of Directors.
Operational risk management is strategic at CatalunyaCaixa as it directly affects value
creation through earnings and indirectly affects the Entity's reputation and the confidence
placed in it by social agents, regulators, customers and the general public. The management
model used provides a series of actions aimed at systematising the identification,
assessment, monitoring, measurement and mitigation of the risk for the entire organisation
with the aid of specialised tools and methodologies.
Management of the Company's equity is a fundamental part of CatalunyaCaixa's daily
business activity which affects the Entity's investment decisions and its viability analyses of
transactions. The Group’s solvency is controlled and managed within the framework of the
solvency policies approved by CatalunyaCaixa's Board of Directors. Adequate control and
monitoring systems were established to ensure compliance of these polices.
Related-party transactions
In accordance with CNMV Circular 1/2008 and Royal Decree 1362/2007, of 19 October,
this management report does not include the related party disclosures stipulated in Article
15 of the aforementioned legislation, as they are disclosed in the notes to the consolidated
financial statements of the CatalunyaCaixa Group for the six-month period ended 31
December 2010.
Environment
The entities forming part of the CatalunyaCaixa Group do not have any environmental
liability, expenses, assets, provisions or contingencies in the pursuit of their business
activities that might be material with respect to its equity, financial position or results.
However, CatalunyaCaixa has had an active policy of promoting the environment and, in
general, streamlining consumption and resources for some time now, as well as a controlled
waste management policy, which complements the important activity of protecting and
conserving natural areas and fauna, carried out through social work projects.
Social work projects
With almost 50 million euros in resources used, CatalunyaCaixa's social work projects
have carried out an exhaustive task of promoting culture, preserving the environment,
fostering social responsibility, promoting knowledge and working in the nutritional and health
field. The welfare projects are aimed at proximity and territoriality, driven by the work of the
Caixa Tarragona and Caixa Manresa foundations.
On the cultural front, the temporary exhibitions at La Pedrera offered the usual high level
of quality and interest with the exhibitions “Maillol”, “Fortuny: el mago de Venecia” and
“Mariscal en La Pedrera”, which received more than 270,000 visitors, supplemented by other
smaller exhibitions. The Espai Gaudí and the Pedrera Apartment, which form part of a
permanent exhibition in the building, were visited as a whole by almost 950,000 people. In
Tarragona, the Foundation's exhibition hall displayed three exhibitions with 27,000 visitors,
and in Manresa, the Plana de l'Om hall had four additional exhibitions with almost 20,000
visitors. Món Sant Benet, the other large and emblematic cultural space, received over
110,000 visitors, who participated in the medieval and modern visits organised or who
discovered the work of the Alícia Foundation (Nutrition and Science), located in this area and
which works to improve nutrition in the fields of health and education. Various cultural and
musical activities were also carried out in the CX Auditori Tarragona with participation high
7
turnout. We should also note the Gaudí exhibition bus which travelled through various
Spanish towns and was visited by more than 65,000 people.
There are many noteworthy social responsibility projects that help workforce integration
and act as the economic driving force in the region. This is the case of the creation of the
first Special Work Centre in Alt Urgell and the formation of the first multiproduct forest
treatment plant of Catalonia. These are initiatives that were added to well-established
projects, such as the CX Espais, which generated activity for more than 29,000 members. In
the field of dependence, 3,580 people were trained in courses for non-professional citizens in
agreements with the Government of Catalonia. Turning to public health and residential
centres, more than 4,300 patients were cared for in nine hospitals specialising in
neurodegenerative diseases, which offered subsidised and private rooms in a day hospital,
day centre, residential homes and long-term healthcare. The "Tú Ayudas" programme
channelled more than 1.5 million euros to 556 entities to carry out social, educational and
cultural projects in the region of Tarragona, distributed in accordance with a decision made
directly by CatalunyaCaixa customers. The "Viure i Conviure” programme is noteworthy of
mention among the intergenerational programmes, which included 360 arrangements
distributed throughout Spain in 2010.
In environmental protection, CatalunyaCaixa's social work project has become the first
private forest owner of Catalonia and manages 5.21% of the Catalonian territory. The task of
CX MónNatura Pirineus, at Planes de Son, which received more than 13,000 visitors, together
with projects such as habitat and species conservation, is noteworthy of mention.
Apart for the aforementioned cultural activities of the Alícia Foundation, we would also
note the "Young people and Science" programme, with 100 participants in the third edition,
and the Supernova programme of the Caixa Tarragona Foundation with the participation of
almost 9,000 students. In addition, within the cycle of experimental workshops "Research!",
various activities were carried out in cooperation with the Science Park of Barcelona. Lastly,
the programme assisting students who begin their university studies, launched to promote
academic effort and excellence, granted 500 scholarships for the 2010-2011 academic year.
Outlook for 2011
The international economic situation for 2011 would appear to indicate that global GDP
will grow significantly (almost 4.4%, according to the IMF's latest estimates), although
slightly less than in 2010. This growth would be the result of a slowdown of a similar
magnitude in emerging and developed economies (with growth rates of 6.5% and 2.5%,
respectively) and would be highly affected by the application of more restrictive policies
taking into consideration the strong rise in inflation (oil prices exceeded US$100/barrel at the
beginning of 2011) and weak fundamentals in the developed economies undergoing tax
adjustments, especially in the euro zone where the persistent turbulence in the sovereign
risk of certain countries in the region is adding to the situation. The recovery of the Spanish
economy in this general framework will continue to be fragile. The GDP and employment
forecasts will be moderate and also highly affected by the moderate progress in private
consumption and productive investment and by the positive contribution of foreign demand,
in the face of the new adjustments in construction and public consumption. Additionally, the
forecast rise in prices and the increase of the 12-month Euribor are two factors that will
directly affect households and decrease their purchasing power.
Within the framework of the legislative reforms in the finance industry and in accordance
with the established legal possibilities, at its meeting of 15 February 2011 CatalunyaCaixa's
Board of Directors, resolved to form a single entity to shore up its capital. The entity will be
able to capture funds from either public or private investors. In this regard, CatalunyaCaixa
will search for the business structuring formula and corporate governance model that best
ensures maintaining and strengthening the welfare projects and preserving the retail banking
business model. This process forms part of the new global regulatory environment, known as
Basel III, and the recent Royal Decree to reinforce the financial sector, approved on 18
February, which calls for a capitalisation process to increase solvency levels at all Spanish
financial entities and reforms the FROB to facilitate adaptation to the new capital
requirements.
8
Noteworthy of mention among the Company's financing activities in 2011 is the sale on
19 January of 1.63% of the Repsol YPF, S.A. shares that CatalunyaCaixa held through
Repinves, S.A., which generated capital gains of 117.1 million euros. The sale of the shares,
envisaged in the Entity's business plan, represented a considerable increase in liquidity, and
at the same time bolstered the CatalunyaCaixa Group's solvency, with an improvement of
0.32 points in core capital, which will place the Group in a stronger position to face the
challenges of 2011.
Accordingly, in the institutional area, the First Deputy Chairman of CatalunyaCaixa, Manel
Rosell, assumed the functions of Chairman after Fernando Casado tendered his resignation at
the Board of Directors meeting on 15 February 2011.
9
ANNUAL CORPORATE GOVERNANCE REPORT FOR
SPANISH SAVINGS BANKS THAT ISSUE SECURITIES LISTED
ON OFFICIAL SECURITIES MARKETS
For a better understanding of the model and its subsequent preparation, please read the
instructions provided at the end before filling it out.
A
STRUCTURE AND FUNCTIONING OF THE GOVERNING BODIES
A.1. GENERAL ASSEMBLY
A.1.1. Identify the members of the General Assembly and indicate the class to
which each member belongs:
See Addendum
A.1.2. Provide details on the composition of the General Assembly by class of
member:
Member class
Number of
general
assembly
b
LOCAL AUTHORITIES
DEPOSITORS
FOUNDING PERSONS AND
ENTITIES
EMPLOYEES
FOUNDING CORPORATIONS AND
ENTITIES
Total
% of total
24
15.000
60
0
37.500
0.000
20
56
12.500
35.000
160
100.000
A.1.3. Detail the functions and duties of the General Assembly.
The General Assembly is the supreme governing and decision-making body of
CatalunyaCaixa. General Assembly members are referred to as General Directors, and are
responsible for protecting the savings bank's assets, safeguarding the interests of depositors
and customers alike, and achieving the entity’s social objectives, while also issuing
instructions and rules to steer the entity’s actions.
Without prejudice to the general powers of governance, the following duties are expressly
and exclusively vested in the General Assembly:
-Appointing and removing members of the Board of Directors and members of the Control
Committee.
-Ratifying the appointment of the Managing Director.
-Assessing the merits of removing and revoking the appointment of members of the
governing bodies before the end of their term of office, and adopting the corresponding
resolutions.
-Assessing the merits of removing the Managing Director and, where applicable, ratifying
such removal.
-Approving and amending the Articles of Association and the Regulations on the election and
appointment of members of the governing bodies.
-Defining the general outline for the savings bank's annual action plan.
-Granting discharge to the Board of Directors, and approving the annual report, balance
sheet, income statement, statement of changes in equity during the year, cash flow
10
statement, and the proposed appropriation of earnings, which must be earmarked for the
entity’s corporate purpose.
-Agreeing to issue all manner of securities.
-Approving management of the Social Work Programme (Obra Social), the corresponding
annual budgets and payment of such budgets.
-Appointing the entity's external auditors.
-Agreeing to liquidate and wind up the savings entity, or any other decision affecting its
nature or personality.
The extraordinary General Assembly meeting of the entity held on 16 November 2010
agreed to amend Article 15 of the Articles of Association to bring the duties of the General
Assembly in line with the new drafting of Legislative Decree 1/2008 applicable throughout
Catalonia, as introduced by Decree Law 5/2010 likewise applicable throughout Catalonia.
This amendment was approved on 22 February 2011 by the Department for Economy and
Knowledge attached to the Government of Catalonia. The amendment vested the General
Assembly with the following additional duties:
-Deciding on how to fulfil the corporate purpose of the savings bank in its capacity as a
lending institution.
-Agreeing to make changes to the institutional structure, to transform the savings bank into
a special foundation, and to absorb or merge with other entities.
A.1.4. Indicate whether there are regulations governing the General Assembly. If
so, detail the content of the same:
YES
NO
X
See Addendum
A.1.5. Explain the rules governing the system of electing, appointing, accepting
and removing General Assembly members.
The procedure regulating the election and appointment of members of governing bodies is
governed by Legislative Decree 1/2008 of 11 March and applicable throughout Catalonia, and
similarly Decree 164/2008 of 26 August and likewise applicable throughout Catalonia.
Of the 160 General Assembly members, the 60 members representing depositors are
chosen as delegates selected by a draw before notary from among those clients that meet
the requirements prescribed by Article 11 of the Articles of Association. The 56
representatives of the founding corporations and entities (Diputación Provincial de Barcelona
–the Provincial Government of Barcelona-, Diputación Provincial de Tarragona –the Provincial
Government of Tarragona- and the cultural, scientific, charitable, civic, economic and
employers' foundations, associations and corporations operating in the home area of Caixa
d'Estalvis de Manresa) are appointed directly by each corporation or entity. A total of 24
General Assembly members represent the County Councils and other local authorities, and
are appointed directly by the corresponding authority. Lastly, the 20 representatives of the
employees group are chosen directly by the entity from among its permanent staff, in
accordance with the terms of the corresponding regulations.
General Assembly members must meet the following conditions and requirements: they
must be natural persons of legal age and residing in the area where CatalunyaCaixa
operates; they may not be legally incompatible or subject to the incompatibilities and
incapacities set forth in Article 12 of the Articles of Association, and must similarly be of
sound business and professional standing and repute.
General Assembly members are appointed for a six-year term, although they may remain
in office if they continue to meet the aforementioned requirements, provided their total term
of office does not exceed twelve years. Within each represented group, half of the General
Assembly members are reappointed alternatively every three years, in line with the
weighting of these groups within the General Assembly.
General Assembly members may not be removed from office until such time as their term
of office on the governing body expires, without prejudice to the grounds for dismissal
envisaged in Article 14 of the Articles of Association.
11
Appointment to office is accepted through a letter of acceptance, in which the delegate
must warrant that he or she does not fall within any of the incompatibilities or incapacities
stipulated in Article 12 of the Articles of Association.
At the end of their appointed term, General Assembly members will step down, without
prejudice to the possibility of re-election envisaged in the savings bank's Articles of
Association. Furthermore, General Assembly members may be removed if they voluntarily
step down, resign, pass away or do not have the required legal capacity; if they fail to meet
any of the eligibility requirements; if they fall within any of the incompatibilities or causes of
non-eligibility governed by the Articles of Association or applicable law; if they repeatedly fail
to attend General Assembly meetings; following a resolution to remove them adopted, with
just cause, by the General Assembly; if they repeatedly breach their pecuniary obligations
towards the savings bank; and, in relation to members appointed on behalf of employees, if
they retire or cease to be employees for any other reason, or if they are formally disciplined
by the entity for very serious employment-related infractions.
A.1.6. Explain the rules governing the constitution of the General Assembly and
the required attendance quorum.
In order to be validly constituted, the General Assembly will require the majority of its
members to be present at first call. It will be validly constituted at second call regardless of
the number of members in attendance.
In order to discuss business and carry resolutions at the General Assembly on the
revocation and removal of members of the governing bodies, amendments to the Articles of
Association and Regulations and the liquidation or merger of the entity, two thirds of official
members must be in attendance at first call, while at second call half plus one of official
members must be in attendance.
With a view to bringing the Articles of Association in line with the new drafting of
Legislative Decree 1/2008, as introduced by Decree Law 5/2010, those in attendance at the
extraordinary General Assembly meeting of the savings bank held on 16 November 2010
agreed to amend the Articles of Association to extend the aforementioned special attendance
quorum to cover resolutions on how to fulfil the saving bank's corporate purpose in its
capacity as a lending institution, and likewise resolutions concerning changes to the
institutional structure, transformation of the entity into a special foundation and absorptions
and mergers with other entities. This amendment was approved on 22 February 2011 by the
Department for Economy and Knowledge attached to the Government of Catalonia.
Presiding over the General Assembly is the savings bank's Chairman, with the secretary
being the Secretary to the Board of Directors, both of whom may be replaced by any persons
designated to stand in for them in accordance with the Articles of Association.
A.1.7. Explain the rules governing the adoption of resolutions at the General
Assembly.
Each member is entitled to one vote. No member may be represented by another
member or by any third party, whether natural person or body corporate. The Chairman of
the General Assembly will have the casting vote.
Resolutions will be carried at the General Assembly by the simple majority vote of those
in attendance, save for: (i) amendments to Articles 10.1.2., 10.1.3., 18.3., 21.1.2., 21.1.3.,
28.1., 28.2., 29.2.2., 29.3., 30.2.2., 30.11., 31.4., 32.2., 37.1.2. and 41.3(c) and (d) of the
Articles of Association, and; (ii) resolutions on the business described in sections 1.1., and
1.3. to 1.8. (inclusive) and 1.11 of Article 15, which will require the affirmative vote of three
quarters of those in attendance, provided these represent at least half plus one of the official
members, such that one quarter plus one of those in attendance will have the corresponding
right of veto.
With a view to bringing the Articles of Association in line with the new drafting of
Legislative Decree 1/2008, as introduced by Decree Law 5/2010, those in attendance at the
extraordinary General Assembly meeting of the entity held on 16 November 2010 agreed to
amend the Articles of Association to extend the aforementioned special voting requirements
12
to cover resolutions on how to fulfil the savings bank's corporate purpose in its capacity as a
lending institution, and likewise resolutions concerning changes to the institutional structure,
transformation of the entity into a special foundation and absorptions and mergers with other
entities. This amendment was approved on 22 February 2011 by the Department for
Economy and Knowledge attached to the Government of Catalonia.
Validly adopted resolutions are binding on all General Assembly members, including those
voting against and absentees, without prejudice to the right of members to vote against the
majority and have their dissenting vote officially recorded. Members absent for justified
reasons, and those who vote against a resolution, or vote against the majority and have
their dissenting vote recorded, will incur no liability in relation to the corresponding
resolutions. Validly adopted resolutions will similarly be binding on those members of the
Board of Directors that are not General Assembly members.
A.1.8. Explain the rules governing the convening of General Assembly meetings
and describe the cases in which General Assembly members may request a General
Assembly meeting be convened.
General Assembly meetings must be convened by the Board of Directors at least fifteen
calendar days in advance and published, at least 10 days prior to the meeting, in a widely
circulated newspaper for the local area in which CatalunyaCaixa operates. The notice of
meeting must also be published in the "Diari Oficial de la Generalitat de Catalunya" and in
the "Boletín Oficial del Estado". The notice must be communicated to all General Assembly
members, and must specify the date, time, venue and agenda for the meeting, along with
the date, time and venue for the meeting at second call. In the event of merger, the notice
must be made at least one month in advance.
General Assemblies may be ordinary or extraordinary.
Ordinary General Assembly meetings are convened once a year within the first six
calendar months to grant discharge to the Board of Directors, to approve the annual report,
balance sheet, income statement, statement of changes in equity, cash flow statement and
appropriation of earnings for the year, and likewise to approve the management of Social
Work, the budget earmarked for Social Work, and all other items and business included on
the agenda.
Extraordinary General Assembly meetings are convened by the Board of Directors
whenever deemed in the savings bank's interests, and must be convened following a request
to such effect made by at least one third of General Assembly members, or at least one third
of the members of the Board of Directors, or following a resolution adopted by the Control
Committee. The request must include the agenda for the General Assembly meeting. The
corresponding notice will then be issued within the maximum term of 15 calendar days
running from the date on which the request is presented.
Following the changes made to Legislative Decree 1/2008 by Decree Law 5/2010, the
requirement to publish the notice in a widely circulated newspaper has now been replaced by
the requirement to publish the notice in the most widely circulated newspapers in Catalonia
at least 15 days ahead of the meeting. The Articles of Association have been amended to
reflect this change, with the corresponding amendment approved on 22 February 2011 by
the Department of Economy and Knowledge of the Government of Catalonia.
A.1.9. Indicate the attendance figures for General Assembly meetings held during
the year:
Attendance records
Date of General
Assembly
27/07/10
16/11/10
% attending in
person
87.270
92.500
% postal votes
0.000
0.000
Total
87
93
A.1.10. Indicate the resolutions adopted at General Assembly meetings held during
the year.
13
The following resolutions were adopted at the extraordinary General Assembly meeting of
Caixa d’Estalvis de Catalunya, Tarragona i Manresa convened by the Board of Directors on 27
July 2010 in accordance with the Articles of Association:
With a view to increasing the savings bank's capital, pursuant to Additional Provision Two
of Act 13/1985, as subsequently consolidated by Article 9 of Royal Decree Law 9/2009 of 26
June, governing bank restructuring and strengthening of capital requirements for lending
institutions, within the context of the merger process affecting Caixa d'Estalvis de Catalunya,
Caixa d'Estalvis de Tarragona and Caixa d'Estalvis de Manresa, and in accordance with their
joint integration plan as approved by the Bank of Spain on 25 March 2010: to delegate to the
entity’s Board of Directors the power to issue shares preferential (participaciones
preferentes) convertible into non-voting equity units (cuotas participativas) for a maximum
sum of 1,250 million euros, which will be fully subscribed by the Fondo de Reestructuración
Ordenada Bancaria (FROB), and, in order to convert such interests as and when required, to
issue any equity units that may prove necessary for the conversion.
To vest powers in the Board of Directors, enabling it to:
-Issue financial instruments for securing external funds, including subordinated debt, debt
instruments, or other fixed income securities, provided that the outstanding balance in
circulation never exceeds the cap of 60,000 million euros, or the equivalent value in other
currencies.
As part of the powers conferred under the preceding paragraph, the Board of Directors
may delegate to the Executive Committee, and to the company's Managing Director,
Assistant Managing Director, and Finance and Management Control Officers, the
aforementioned power to issue financial instruments, with the Board dictating any terms and
conditions it deems fit.
To delegate, without distinction, upon the Managing Director, Assistant Managing Director
or the Finance and Management Control Director, the power to issue financial instruments,
and to establish the specific amount, maturity, characteristics and financial terms and
conditions of each placement launched on the market, provided that these placements are
effected under current existing securities facilities, or any that may be approved by the
Board of Directors. The officers in question must report on their actions to the Board of
Directors, or to the Executive Committee, as appropriate.
-To post any security or guarantee that may be required in relation to placements or
placement facilities for preference shares or fixed income securities, as launched by
subsidiary companies of Caixa d'Estalvis de Catalunya, Tarragona i Manresa up to the
outstanding balance in circulation of 5,000 million euros.
As part of the power conferred under the preceding paragraph, the Board of Directors
may delegate to the Executive Committee the power to post security in relation to the
placements or placement facilities effected by subsidiary companies of Caixa d'Estalvis de
Catalunya, Tarragona i Manresa, with the Board determining the terms and conditions it
deems appropriate.
Resolution whereby CatalunyaCaixa, in its capacity as parent entity, is to register, along
with its subsidiary and investee companies, for the consolidated tax system envisaged under
the Spanish Corporate Income Tax Act.
Approval of amendments to the Articles of Association for the purpose of implementing
special voting requirements for certain resolutions amounting to three quarters of those in
attendance at General Assemblies and also at Board meetings, such amendment due to the
fact that the entity resulting from the merger is to be classified as a "joint business under
common control".
Lastly, it was agreed to maintain all commitments in relation to the savings bank's
permanent establishment in France, to appoint the external auditors and to delegate powers
upon the Chairman, the Secretary and the Managing Director, authorising them, without
distinction, to execute and enforce the resolutions adopted at the General Assembly.
14
The following resolutions were adopted at a second extraordinary General Assembly
meeting held on 16 November 2010, which was also convened by the Board of Directors in
accordance with the Articles of Association:
Constitution of the Assembly, after completing the process of electing and appointing the
new General Assembly members to replace those who held office during the transitional
process; and appointment of the members of the Board of Directors and Control Committee.
Amendments to the Articles of Association and the Regulations governing the procedure
for electing and appointing members to the entity’s governing bodies, such amendments
resulting from the entry into force of Royal Decree Law 10/2010 of 13 July, and Decree Law
5/2010 of 3 August of the Government of Catalonia.
The aforementioned extraordinary General Assembly meeting approved the following
amendments to the Articles of Association and Regulations governing the procedure for
electing and appointing members of the governing bodies, which were subsequently
approved on 22 February 2011 by the Department of Economy and Knowledge attached to
the Government of Catalonia, and filed with the Register of Catalonian Savings Banks:
1) Amendments to the following articles of the Articles of Association, as a result of the
entry into force of Royal Decree Law 10/2010, of 13 July, and Decree Law 5/2010, of 3
August of the Government of Catalonia: arts. 1-4 (to record the registered name of the
savings bank); art. 6, last paragraph (to list the additional bodies envisaged by regulations);
art. 8-1 (to establish the possibility of remuneration for members of the Board of Directors
and Control Committee); art. 10-1-1.1 y 10-1-1.3 (to reflect the new weighting of depositors
and local authorities, increasing, from 60 to 66, the number of General Assembly members
appointed by depositors, and reducing, from 24 to 18, the number of members appointed by
local authorities); art. 11-2 (to detail the requirements of business and professional standing
and repute); art. 12-1-1.1. a 1.8 (to regulate incompatibilities); art. 15-1-1.7 a 1.14 (to list
the new duties of the General Assembly); art. 16 (to govern the process of publishing the
notice of the General Assembly); art. 18-1 and 3 (to regulate different voting requirements
for carrying resolutions); art. 21-1 and 2 (to determine the weighting of the Board of
Directors acting on behalf of the different principal sectors, increasing, from 8 to 9, those
Board members representing depositors, while reducing, from 3 to 2, those Board members
representing local authorities); art. 22-4 (to detail the know-how and track record of the
members of the Board of Directors); art. 27-1 (to modify a cross-reference to another
article); art. 32 (to govern the Appointments and Remuneration Committee); art. 34-2,
second paragraph (to determine the training required of the Managing Director); art. 37, first
paragraph (to determine the knowledge and experience required of Control Committee
members); Repealing Provision (to repeal transitional provisions one to seven, which will be
rendered null and void following the end of the transitional period); new Transitional
Provision One (to govern the first renewal of the governing bodies); new Transitional
Provision Two (to govern the procedure for removing 6 General Assembly members
representing local authorities and for appointing 6 General Assembly members to act on
behalf of depositors, as well as the removal of a Board member representing local
authorities, and the appointment of a Board member representing depositors); new
Transitional Provision Three (to regulate a specific aspect of the rotation of County Councils);
and new Transitional Provision Four (to establish the procedure for interpreting merger
agreements).
2) Amendments to the following articles of the Regulations governing the procedure for
electing and appointing members of the governing bodies, which also reflect the need to
adapt to the aforementioned legislation, which has only recently entered into force over the
last few months: arts. 2-1 and 2 (to create 6 new depositor constituencies, which climb from
60 to 66); art. 4.1. (to reduce by six the number of General Assembly members acting on
behalf of local authorities or County Councils, which fall from 24 to 18) art. 5-5 (to add a
new paragraph on the voting system); art. 6.2.b) (to adjust the number of General Assembly
members that can propose candidates for the Board of Directors: total General Assembly
members for the same sector of no less than 34 for depositors; 24 for founding corporations;
10 for local authorities and County Councils; 11 for employees; and 6 for entities,
foundations and associations operating in the local base area of Caixa d'Estalvis de
Manresa); Appendix - Depositor constituencies (to detail the districts or municipalities for
each electoral constituency).
15
The General Assembly likewise ratified the appointment of the members of the entity's
Board of Directors and Control Committee.
A.1.11. Detail the information provided to General Assembly members on occasion
of General Assembly meetings. Provide details of the systems in place for accessing
the information.
Within the 15 calendar days leading up to the scheduled date of the general meeting,
General Assembly members are entitled to visit the entity’s registered office to consult the
annual report, balance sheet, income statement, statement of changes in equity for the year,
cash flow statement and also the proposed appropriation of earnings and the budget
provisionally earmarked for Social Work Projects. They may also consult the Control
Committee report, the audit report, the general outline of the action plan and, in general,
documents concerning the other items on the agenda.
Interested General Meeting members may consult this documentation by approaching the
entity's Department of the Secretary's Office and Governing Bodies. Since the last General
Assembly Meeting held in November 2010, members may consult the information online by
visiting the savings bank's website.
A.1.12. Provide details of the internal systems in place to monitor compliance with
the resolutions adopted at the General Assembly.
The Control Committee, the governing body comprising General Assembly members, is
responsible for ensuring that the Board of Directors' performance mirrors the general
guidelines laid down by the General Assembly and the entity’s corporate purposes. In
furtherance of this oversight function, the Control Committee monitors the functioning and
actions of the savings bank's governing bodies; examines the external audit reports and any
recommendations made by the auditors; reviews the annual report, balance sheet, income
statement, statement of changes in equity and cash flow statement for the fiscal year; draws
up a number of different periodic reports on the entity's business to be sent to the
Department of the Economy and Knowledge attached to the Government of Catalonia; and
puts before the General Assembly a report on its business at least once a year; requests the
Chairman to convene an extraordinary General Assembly meeting when it deems one
necessary; oversees the election processes for filling the General Assembly and Board of
Directors, along with the Department of the Economy and Knowledge of the Government of
Catalonia; studies the reports of the Social Work Committee; and advises the Board to annul
any resolutions that violate prevailing legal provisions and, when necessary, directly advises
the Department of the Economy and Knowledge to suspend such resolutions.
A.1.13. Indicate the address and mode of accessing corporate governance content
on your website.
http://www.catalunyacaixa.com
Compulsory information pursuant to Act 26/2003 of 17 July and Order 354/2004 of 17
February is available from the entity's website, under the section titled "Investors
information" (accessed through the "About us" heading on the home page).
16
A.2. Board of Directors
A.2.1. Complete the following table with board members’ details:
Name
Position on the Board
FERNANDO CASADO JUAN
CHAIRMAN
Group represented
FOUNDING
CORPORATIONS AND
ENTITIES
MANEL ROSELL MARTÍ
FIRST VICE-CHAIRMAN FOUNDING
CORPORATIONS AND
ENTITIES
JOAN ALBERT ABELLÓ
SECOND VICEFOUNDING
HIERRO
CHAIRMAN
CORPORATIONS AND
ENTITIES
JOSEP MARIA FARRÉS
THIRD VICEDEPOSITORS
PENELA
CHAIRMAN
FRANCISCO LONGO
FOURTH VICELOCAL AUTHORITIES
MARTÍNEZ
CHAIRMAN
ANTONI LLARDÉN
MEMBER
FOUNDING
CARRATALÀ
CORPORATIONS AND
ENTITIES
CARMEN PASTOR SOLERNOU MEMBER
DEPOSITORS
EDWARD HUGH
MEMBER
DEPOSITORS
FERRAN LAGUARTA BERTRAN MEMBER
DEPOSITORS
FRANCISCO ÚBEDA LÓPEZ
MEMBER
EMPLOYEES
JAUME ROQUET SÁNCHEZ
MEMBER
DEPOSITORS
JAVIER SÁNCHEZ LÓPEZ
MEMBER
DEPOSITORS
JOAN ÀNGEL LLIBERIA
MEMBER
LOCAL AUTHORITIES
ESTEVE
JOAN ECHÁNIZ SANS
MEMBER
FOUNDING
CORPORATIONS AND
ENTITIES
JORDI CAMPINS PUNTER
MEMBER
EMPLOYEES
JORGE ANTONIO GARCÍA
MEMBER
EMPLOYEES
RODRÍGUEZ
JOSEP ALABERN VALENTÍ
MEMBER
LOCAL AUTHORITIES
JOSEP GUASCH LUJÁN
MEMBER
FOUNDING
CORPORATIONS AND
ENTITIES
JOSEP MOLINS CODINA
MEMBER
FOUNDING
CORPORATIONS AND
ENTITIES
JUAN ANTONIO MATAS
MEMBER
DEPOSITORS
ARNALOT
ESTEBAN DÍAZ SÁNCHEZ
MEMBER AND
DEPOSITORS
SECRETARY
Total number
21
Detail the composition of the Board of Directors, based on the groups to which members
belong:
REPRESENTED GROUP
LOCAL AUTHORITIES
DEPOSITORS
FOUNDING PERSONS OR
ENTITIES
EMPLOYEES
FOUNDING CORPORATIONS
AND ENTITIES
Number of Board % of total
members
3
14.286
8
38.095
0
0.000
3
7
17
14.286
33.333
Total
21
100.000
Indicate any board members who left during the period:
Name
MARIA DEL CARME ALAMO GENDRE
JOSEP ALONSO ROCA
JORDI ANDREU CORBATON
JAUME ANTICH BALADA
JUAN ARNAL ALBESA
JOSEP M BADIA SALA
JORDI BERTRAN CASTELLVÍ
JUAN BORONAT GUTIERREZ
JOAN CARLES BORONAT RODRIGUEZ
BENET BOTIFOLL ALMENDROS
JOSEP BURGAYA RIERA
JOSEP CAMPRUBI DUOCASTELLA
SARA CARDONA RASO
IGNASI CARNICER BARRUFET
JUAN CARRERA PEDROL
JOSE CATOT JAMILA
ANGEL CUNILLERA ZARATE
FRANCESC XAVIER FARRIOL ROIGES
ESTANIS FELIP MONSONIS
GABRIEL FERRATE PASCUAL
ROGELI FLETAS ANGLADA
MANUEL FUSTER PITARCH
ROGER GARCIA NOGUERA
GENIS GARRIGA BACARDI
CRISTÒFOL GIMENO IGLESIAS
AMELIO GOMEZ TOQUERO
JOAN GÜELL JUAN
LUIS ANTONIO GUERRERO SALA
FRANCESC IGLESIAS SALA
JOSEP ISERN SAUN
FLORENTI JORGE MACHADO
RAMON LLANAS SANMIQUEL
CARME LLOBERA CARBONELL
GEMMA LOPEZ CANOSA
MIGUEL ANGEL LOPEZ MALLOL
ADEKINDA MASFERRER MASCORT
MANUEL MATOSES FORTEA
FRANCESC MAURI CASAS
JOSEP NOLLA SALVADO
JOAQUIM PALA PALOU
JOAN MANEL PLA RIBAS
PAU RICOMA VALLHONRAT
MONTSERRAT ROBUSTE CLARAVALLS
ANTONIA M SANCHEZ MORENO
NARCIS SERRA SERRA
M ANTONIA TRULLAS POVEDANO
JOSE MARIA VALLES JOVE
FRANCISCO JOSE VILLEGAS HERRERO
MATIES VIVES MARCH
LAURA VIVES TAPIAS
Leaving date
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
16/11/10
Where applicable, indicate the Board Members who are not general directors
Name
EDWARD HUGH
FERRAN LAGUARTA BERTRAN
18
A.2.2. Briefly describe the duties of the Board of Directors, distinguishing between
duties pertaining to the Board itself and those delegated by the General Assembly:
Duties pertaining to the Board
Those envisaged in the Articles of Association:
-Monitoring full compliance with the Articles of Association.
-Convening the General Assembly.
-Putting before the General Assembly, for approval by the latter, the annual report, balance
sheet, income statement, statement of changes in equity, cash flow statement, and the
appropriation of earnings, which must be earmarked for the entity's corporate purposes.
-Submitting proposals to the General Assembly on the appointment and removal or
revocation of members of the entity's governing bodies.
-Delegating any of its duties it deems appropriate to an Executive Committee, a Social Work
Committee and any other committees, and appointing the members thereof, in accordance
with terms of the Articles of Association.
-Submitting to the General Assembly the proposals expressly envisaged in the Articles of
Association and any others it considers necessary or advisable in the interests of the savings
bank's good governance and administration.
-Executing and enforcing the resolutions of the General Assembly.
-Providing the Control Committee with any background or supporting information it may
require in furtherance of its duties.
-Initiating, coordinating and pursuing the corresponding procedures for electing and
appointing General Assembly members.
-Appointing and removing the General Manager.
-Appointing the committees or commissioning the reports deemed necessary in order to
investigate specific matters.
-Delegating, or otherwise vesting any powers and/or authority it deems appropriate, upon
any committee, the Chairman's Office, or the Managing Director, whether on a permanent
basis or for specific cases or business.
-Administering and managing the entity's Social Work, without prejudice to the power to
delegate these duties to the Social Work Committee. In all cases, the Board is responsible for
creating or dissolving its own or joint charitable and/or community projects, and for creating,
merging and/or dissolving foundations.
- Agreeing upon strategic investments and disposals.
- Agreeing to invest funds and approving any regulations, agreements, instruments or any
other acts or documents required for such purpose.
- Deciding to carry out any acts of administration, disposal, encumbrance or ownership.
-Proposing amendments to the Articles of Association and the Regulations governing the
election and appointment of members of the governing bodies, including the merger, winding
up or liquidation of the entity.
-In the event of exceptional or unforeseeable circumstances, adopting the decisions and
implementing the provisions it deems necessary in order to ensure the sound management
and administration of the entity, and also of the interests placed in its special care.
- Approving the entity’s annual budget and business plan.
- Proposing the appointment of the entity’s external auditor to the General Assembly, and
commissioning and monitoring any audit processes and reports deemed necessary.
-In general, agreeing to effect any such acts and implementing any such rules as may prove
necessary in order to accomplish the entity’s purpose and goals.
Duties delegated by the General Assembly
Delegated duties are those expressly specified in the resolutions adopted at the
extraordinary General Assembly held on 27 July 2010:
In relation to the placement of preferential shares convertible into non-voting equity units
(cuotas participativas): delegation of the broadest powers to determine, in relation to any
terms and conditions not addressed by the General Assembly, the conversion process and
the placement of cuotas participativas, and to carry out any such related business as may
prove necessary in order to execute the resolution to issue preference shares convertible and
non-voting equity units.
19
In relation to the issuance of securities:
to effect placements or placement facilities for any kind of fixed income securities,
thereby establishing any terms and conditions it deems appropriate, insofar as the
outstanding balance in circulation never exceeds the cap of 60,000 million euros, or the
equivalent value in other currencies.
To delegate this power to the Executive Committee subject to the conditions described
above.
To delegate, without distinction, upon the Managing Director, Assistant Managing Director
or the Finance and Management Control Director, the power to issue financial instruments,
and to establish the specific amount, maturity, characteristics and financial terms and
conditions of each placement launched on the market, provided that these placements are
effected under current existing securities facilities, or any that may be approved by the
Board of Directors. The officers in question must report on their actions to the Board of
Directors, or to the Executive Committee, as appropriate.
To post any security or guarantee that may be required in relation to placements or
placement facilities for preferential shares and fixed income securities launched by subsidiary
companies up to the circulation cap of 5,000 million euros. To delegate this power to the
Executive Committee subject to the conditions described above.
Detail the non-delegable duties of the Board of Directors:
The following duties may not be delegated:
- Convening the General Assembly.
-Putting before the General Assembly, for approval by the latter, the annual report, balance
sheet, income statement, statement of changes in equity, cash flow statement, and the
appropriation of earnings, which must be earmarked for the entity’s corporate purposes.
-Submitting proposals to the General Assembly on the appointment and removal or
revocation of members of the entity’s governing bodies.
-Submitting to the General Assembly the proposals expressly envisaged in the Articles of
Association and any others it considers necessary or advisable in the interests of the entity’s
good governance and administration.
-Providing the Control Committee with any background or supporting information it may
require in furtherance of its duties.
-Initiating, coordinating and pursuing the corresponding procedures for electing and
appointing General Assembly members.
-Appointing and removing the General Manager.
-Appointing the committees or commissioning the reports deemed necessary in order to
investigate specific matters.
-Administering and managing the savings bank's Social Work, without prejudice to the power
to delegate these duties to the Social Work Committee. In all cases, the Board is responsible
for creating or dissolving its own or joint charitable and/or community projects, and for
creating, merging and/or dissolving foundations.
- Agreeing upon strategic investment and disposals, agreeing to invest funds, and approving
the business and documents required for such purposes.
-Proposing amendments to the Articles of Association and the Regulations governing the
election and appointment of members of the governing bodies, including the merger, winding
up or liquidation of the entity.
- Approving the bank's annual budget and business plan.
- Proposing the appointment of the entity's external auditor to the General Assembly,
following a proposal to such effect from the Control Committee, and commissioning and
monitoring any audit processes and reports deemed necessary.
- Determining the remuneration of the Chairman, which must be communicated to the
Catalonian Protectorate and included in the entity's Annual Corporate Governance Report.
20
A.2.3. Detail the duties that the Articles of Association attribute to members of the
Board of Directors.
Duties of the Board Chairman: to officially represent the savings bank in its dealings with
third-party authorities, entities and bodies; convening and chairing the meetings of those
bodies of which he or she is the chairperson; to determine the affairs to be discussed and to
steer proceedings; to sign on behalf of the entity; to monitor compliance with applicable law;
to represent the entity officially towards third parties, and to comply with and ensure
compliance with the resolutions carried by the governing bodies.
The duty of the Vice-Chairmen is to stand in for the Board Chairman in the established
order should the latter be absent.
The Secretary to the Board certifies the resolutions adopted by the Board, subject to the
approval of the Chairman.
In general, Board members are responsible for discussing and voting on, as a collegiate
body, all proposals put before it, and for addressing any other business that falls within the
competence of the Board of Directors.
A.2.4. Indicate any powers delegated to Board members and the Managing
Director:
Board members
Name
Brief description
Managing Director
Name
ADOLF TODÓ ROVIRA
Brief description
THE MANAGING DIRECTOR EXERCISES, IN
ACCORDANCE WITH ANY OVERRIDING
STATEMENT OR INSTRUCTION OF THE BOARD
OF DIRECTORS, THE DUTIES CONFERRED
UPON HIM BY THE ARTICLES OF ASSOCIATION
(ART. 34.6) AND THOSE DUTIES DELEGATED
UNDER THE POWERS OF ATTORNEY GRANTED
BY THE ENTITY'S BOARD OF DIRECTORS, AS
SUBSEQUENTLY NOTARISED IN PUBLIC
INSTRUMENT ON 6 JULY 2010 BEFORE JOSÉ
MARQUEÑO DE LLANO, NOTARY OF
BARCELONA, UNDER NUMBER 1,288 OF HIS
PROTOCOL, AND DULY FILED WITH THE
COMPANIES HOUSE OF BARCELONA UNDER
VOLUME 41,978, FOLIO 33, SHEET B400372,
ENTRY 2.
A.2.5. Detail the rules and regulations in place governing the election,
appointment, acceptance, re-election, dismissal and removal of Board members.
List the competent bodies and the procedures to be followed and the criteria to be
observed in each process.
Board members shall hold office for six years. Within each sector, half of the members
are replaced alternately every three years, in accordance with the proportions of
representation on the Board of Directors.
Board members are appointed by the General Assembly, from among the members of
each represented sector, upon a proposal from the majority of the sector in question, from
the Board of Directors, or from 25% of General Assembly members. As an exception to this
rule, up to three Board members can be appointed (one on behalf of local authorities, and
two on behalf of depositors) from among people that are not General Assembly members,
but who do meet the prescribed standards of professional standing.
21
The General Assembly meeting held on 16 November 2010 amended the entity's Articles
of Association by reducing, from three to two, the number of Board members that need not
be General Assembly members and who must invariably be appointed on behalf of
depositors.
At the time the incumbent members are elected, the same number of alternate members
will be elected for each sector, with the sole purpose of standing in for incumbent members if
these are removed from office or have their powers revoked before the end of their term of
office. Alternate members shall stand in for incumbent members until the end of their
mandate. If the General Assembly fails to determine the order in which alternate members
are to stand in, the Board of Directors shall determine the alternate member who is to
replace the incumbent member.
Proposed appointments of incumbent and alternate members are put before the General
Assembly, which is the body responsible for appointing members of the Board of Directors
and the Control Committee. Appointments are made when the governing bodies are reelected during the first six calendar months of the year in question at the ordinary General
Assembly meeting, or at the immediately following extraordinary General Assembly.
Board members are subject to the requirements and incompatibilities stipulated in Articles
11 and 12 of the Articles of Association for members of the General Assembly, with the
exception of Art. 11.1.4 and 11.1.5, governing Board members that are not also General
Assembly members, although these Board members must still be depositors at the time of
their appointment.
Furthermore, Board members must be aged under 75 at the time of appointment, and
may not sit on the Boards of Directors, Control Committees or General Assemblies of other
savings banks, deposit, lending or financial institutions in general, or insurance companies,
unless they hold such office on the entity’s behalf. Similarly, Board members may not be
involved in the management of more than eight companies or cooperatives. No entity
represented at the General Assembly may have members sitting on the Board of Directors
and the Control Committee at the same time, with the exception of founding institutions.
Appointments to office are typically accepted verbally at the time the appointed person
attends his or her first Board meeting, with the acceptance expressly recorded in the
minutes.
Once their term of office comes to an end, Board members may be re-elected for the
term immediately following on from the first, provided they continue to meet the same
conditions, requirements and formalities as for their first appointment. Under no
circumstances may terms of office exceed 12 years, irrespective of the represented sector.
Board members will be removed from office in the following cases: those envisaged for
General Assembly members; if they fall within any of the causes of incompatibility
specifically established for Board members; and unjustified failure to attend more than a
quarter of Board meetings held during the year, unless the General Assembly believes that
the absence was justified.
Board members appointed on behalf of employees will be removed from office if they
retire or otherwise leave the employ of the savings bank on a permanent basis, or if they are
formally disciplined by the entity for having committed employment-related infractions
classified as very serious. In the latter case, the Board member may be removed from office
provisionally during the corresponding disciplinary proceedings should the Board of Directors
deem this advisable.
Board members will likewise be removed if they fail to pay any debt towards the entity
after receiving an express request for payment.
A.2.6. Are special majorities other than those envisaged at law required for certain
resolutions?
YES X
NO
22
Describe how resolutions are adopted by the Board of Directors and specify, at
least, the minimum attendance quorum and the type of majority for adopting
resolutions
Adoption of resolutions
Description of the resolution
GENERAL
Quorum
51.00 MAJORITY OF
OFFICIAL
MEMBERS
PROPOSALS ON THE REMOVAL AND 66.66 DISMISSAL OF MEMBERS OF THE
ATTENDANCE OF
GOVERNING BODIES
TWO THIRDS OF
OFFICIAL
MEMBERS.
APPOINTMENT OR REMOVAL OF
66.66 THE MANAGING DIRECTOR
ATTENDANCE OF
TWO THIRDS OF
OFFICIAL
MEMBERS
PROPOSED AMENDMENTS TO THE
ARTICLES OF ASSOCIATION AND
REGULATIONS, AND THE MERGER,
WINDING UP OR LIQUIDATION OF
THE ENTITY
AGREEMENTS ON STRATEGIC
INVESTMENTS OR DISPOSALS
APPROVING THE ANNUAL BUDGET
APPROVING THE BUSINESS PLAN
Type of majority
MAJORITY OF THOSE
IN ATTENDANCE
MAJORITY OF
OFFICIAL MEMBERS
THREE QUARTERS OF
THOSE IN
ATTENDANCE FOR
REMOVALS, VOTES
FOR MUST ALSO BE
CAST BY HALF PLUS
ONE OF MEMBERS
THREE QUARTERS OF
66.66 ATTENDANCE OF THOSE IN
TWO THIRDS OF ATTENDANCE, SUCH
THAT ONE QUARTER
OFFICIAL
PLUS ONE OF THOSE
MEMBERS
IN ATTENDANCE WILL
HAVE THE
CORRESPONDING
RIGHT OF VETO
THREE QUARTERS OF
51.00 THOSE IN
MAJORITY OF
ATTENDANCE, SUCH
OFFICIAL
THAT ONE QUARTER
MEMBERS
PLUS ONE OF THOSE
IN ATTENDANCE WILL
HAVE THE
CORRESPONDING
RIGHT OF VETO
THREE QUARTERS OF
51.00 THOSE IN
MAJORITY OF
ATTENDANCE, SUCH
OFFICIAL
THAT ONE QUARTER
MEMBERS
PLUS ONE OF THOSE
IN ATTENDANCE WILL
HAVE THE
CORRESPONDING
RIGHT OF VETO
THREE QUARTERS OF
51.00 THOSE IN
MAJORITY OF
ATTENDANCE, SUCH
OFFICIAL
THAT ONE QUARTER
MEMBERS
PLUS ONE OF THOSE
IN ATTENDANCE WILL
HAVE THE
CORRESPONDING
RIGHT OF VETO
23
A.2.7. Provide details of the internal systems in place to ensure compliance with
the resolutions adopted by the Board.
Once the resolutions have been adopted, the proposals are communicated to the
corresponding operational areas of the entity for implementation.
Resolutions of the Board are recorded in the minutes, which are then passed on to the
Control Committee for oversight and control.
A.2.8. Indicate whether there are internal regulations governing the Board of
Directors. If so, describe their contents:
YES
NO
X
See Addendum
A.2.9. Explain the rules governing the convening of Board meetings.
The Board of Directors meets whenever deemed necessary to ensure the smooth and
healthy running of the entity, and, at the very least, once every two months. In reality, the
Board of Directors meets 16 times a year on average, and whenever prevailing
circumstances dictate.
The Chairman, or whoever may be standing in for him/her, is responsible for convening
Board meetings on his/her own initiative, upon a request to such effect received from at
least one third of official Board members, or when requested to do so by the Control
Committee. In order to be valid, the request must contain the agenda for the notice of
meeting, which must be published within the maximum term of eight days running from the
date of the request. The Managing Director may also propose that a meeting be held.
The notice must be received at least 48 hours ahead of the meeting, unless the meeting
in question is exceptionally urgent, in which case this timeframe will be shortened to 12
hours. The notice must be made in writing and contain the agenda.
Despite the above, the Board will be deemed validly convened as a universal Board
meeting able to address any issue falling within its competence if, with all members in
attendance, including the Managing Director, all members unanimously agree to hold a
meeting.
A.2.10. Indicate the occasions on which members of the Board may ask for a Board
Meeting to be convened.
The convening of Board Meetings may be requested by at least one third of official board
members.
A.2.11. Indicate the number of Board meetings held during the year and how many
meetings were held in the absence of its chairman.
Number of Board meetings
Number of Board meetings held in the absence of its
chairman
8
0
A.2.12. Detail the information provided to Board Members in connection with Board
meetings. Indicate the systems in place for accessing this information.
Motions on all lending agreements include background and supporting information, the
financial situation of the counterparty institution and the current state of its accounts in
relation to CatalunyaCaixa, specific information on the agreement and its financial viability,
and full details of the motion to be adopted, save for those aspects that cannot be
formulated in words and which are left to the sound judgment of the General Management.
Other motions also include background information and the financial and/or legal details
required for approval.
All motions are included in a protocol, a copy of which is provided to each Board member
and which can be examined half an hour before the meeting commences.
24
Prior to this, at the time the notice of meeting is published, some of the motions to be
voted on and associated information will be sent out. In particular, and in the special case of
preparing the Financial Statements, and approving the Annual Corporate Governance Report
and any other complicated, must be sent forty-eight hours ahead of the meeting.
With a view to protecting the confidentiality of the business discussed at Board meetings,
following the end of the meeting, all documents disclosed to Board members are kept at the
Department of the Secretary's Office and Governing Bodies, where Board members may
subsequently examine them.
A.2.13. Identify the Executive Chairman and, where applicable, Executive Deputy
Chairman or Chairmen, and the Managing Director and related positions:
Name
ADOLF TODÓ ROVIRA
JAUME MASANA RIBALTA
Position
MANAGING DIRECTOR
ASSISTANT MANAGING
DIRECTOR
A.2.14. Indicate whether there are any specific requirements other than those
pertaining to members of the Board, in order for a person to be appointed
Chairman of the Board.
YES
X
NO
Describe the requirements
The candidate must be a General Assembly member appointed by the provincial
government of either Barcelona or Tarragona. Under no circumstances may the positions of
chairman and second vice-chairman be held at the same time by Board members who are
General Assembly members designated by the same provincial government.
A.2.15. Indicate whether the Chairman of the Board has a casting vote.
YES
X
NO
Business in relation to which a casting vote may be used
The Chairman will enjoy the casting vote for all business in the event of tied voting.
A.2.16. Indicate whether the consolidated and non-consolidated annual financial
statements submitted for preparation by the Board are certified previously:
YES
NO
X
Identify, where applicable, the person/s who have certified the savings bank's individual
and consolidated financial statements prior to their preparation by the Board.
Name
Position
25
A.2.17. Explain the mechanisms, if any, established by the Board of Directors to
prevent the individual and consolidated financial statements it prepares from being
submitted at the General Assembly with a qualified Audit Report.
YES X
NO
Explanation of the mechanisms
The Board of Directors, as the body responsible for drawing up the consolidated and
non-consolidated financial statements of Caixa d'Estalvis de Catalunya, Tarragona i
Manresa, is authorised to adopt the necessary measures and checks to ensure that the
entity is aware of the external auditor's opinion of the financial statements over the entire
yearly process.
In turn, the Control Committee has the power, among others, to oversee the work
performed by the entity’s accounting and auditing bodies, analyse the external audit
reports and any recommendations made by the auditors, review the balance sheet, income
statement and the other financial statements for each fiscal year, and make any
observations it deems pertinent.
In furtherance of its duties, the Control Committee holds meetings over the year with
the external auditors in order to keep up to date with the audit process, and to assess and
anticipate any potential situations that could lead to a qualified audit report.
The Control Committee pays particular care to ensure that:
-The financial statements express a true and fair view of the assets, financial situation,
business results, changes in equity and cash flows of both the entity and its group, and
likewise that they contain all the information required for their proper interpretation and
understanding.
-The financial statements and the management report correctly reflect, in as concise and
straightforward a manner as possible, the financial, legal, tax and other risks stemming
from the business of the savings bank and its group, including details on how such risks are
managed and hedged.
-The financial statements are prepared in strict accordance with the accounting standards
applied by lending institutions pursuant to International Financial Reporting Standards
(IFRS), as adopted by the European Union for consolidated business groups. Moreover,
such standards have been applied uniformly over the current and immediately preceding
fiscal years, so as to prevent the auditor from issuing a qualified opinion.
-The annual audit process is suitably planned, enabling the entity to anticipate and, when
necessary, correct any accounting entry, which, in the eyes of the external auditor, could
lead to a qualified audit report.
Nevertheless, in the event of inconsistency between the criteria applied by the external
auditor and that of the Board, and if the latter believes that its criteria should be upheld, it
will provide full details of the nature and scope of the inconsistency in the financial
statements.
A.2.18. Detail the measures taken to ensure that the information disclosed to the
security markets is disclosed in a fair and balance manner.
A.2.19. Indicate and explain, where applicable, the mechanisms implemented by
the savings bank to preserve the independence of the auditor, financial analysts,
investment banks and credit risk ratings agencies.
YES
X
NO
Explanation of the mechanisms
The entity is not involved in the management, and does not sit on the governing bodies of
any companies or bodies corporate that supply audit, financial analysis, investment or
credit rating services.
26
The Control Committee, when acting as Audit Committee, is responsible for proposing the
external auditor and its terms of engagement before the Board of Directors, in accordance
with the approved policies on relations with the external auditor. Similarly, the Control
Committee constantly monitors any situations that could jeopardise the independence of
the external auditor of Caixa d’Estalvis de Catalunya, Tarragona i Manresa.
A.2.20. Indicate whether the audit firm performs other non-audit work for the
savings bank and/or its group. If so, state the total fees received for such work
and the percentage these represent of the total fees invoiced to the savings bank
and/or its group.
YES
NO
Fees charged for other non-audit work (in
€'000)
Fees charged for non-audit work/total
fees charged by the audit firm (expressed
as %)
Savings bank
0
Group
Total
0
0.000
0
0.000
A.2.21.Indicate the number of consecutive years during which the current audit
firm has been auditing the financial statements of the Savings Bank and/or its
Group. Likewise, indicate how many years the current firm has been auditing the
financial statements as a percentage of the total number of years over which the
financial statements have been audited:
Savings bank
Group
Savings bank
Group
Number of consecutive years
Number of years audited by the current audit firm
Number of years over which the savings bank has
been audited (expressed as %)
A.2.22. Is there an Executive Committee? If so, identify its members:
YES
X
NO
EXECUTIVE COMMITTEE
Name
FERNANDO CASADO JUAN
ALBERT ABELLÓ HIERRO
JORDI CAMPINS PUNTER
ESTEBAN DÍAZ SÁNCHEZ
JUAN ECHÁNIZ SANS
JOSEP MARIA FARRÉS PENELA
EDWARD HUGH
FERRAN LAGUARTA BERTRAN
FRANCISCO LONGO MARTÍNEZ
JOSEP MOLINS CODINA
JAUME ROQUET SÁNCHEZ
MANEL ROSELL MARTÍ
ADOLF TODÓ ROVIRA
Position
CHAIRMAN
SECOND VICE-CHAIRMAN
MEMBER
MEMBER
MEMBER
THIRD VICE-CHAIRMAN
MEMBER
MEMBER
FOURTH VICE-CHAIRMAN
MEMBER
MEMBER
FIRST VICE-CHAIRMAN
SECRETARY
A.2.23. Indicate the delegated duties and those stipulated in the Articles of
Association vested in the Executive Committee.
Pursuant to Article 29.8 of the Articles of Association, the Executive Committee shall
enjoy all the powers delegated by the Board of Directors, including the following:
27
-Complying and enforcing compliance with the provisions of the Articles of Association, the
Regulations and Board resolutions.
-Studying proposals on fund investment, intermediation, and other operations put forward by
the Managing Director.
-Advising the Board on those investments and transactions it considers most in the entity’s
interests, and proceeding with those for which it has delegated powers.
-Resolving urgent matters, and reporting to the Board on how the matter was resolved.
-Extending or refusing, within the limits and conditions established by the Board, any loans
or other transactions that may be requested to the savings, and delegating this power to the
Managing Director, subject to the limits and conditions it deems appropriate.
-Reporting to the Board of Directors on all business entrusted to it by the latter, and
concluding any other business that the Board may have delegated.
-Preparing the annual report, balance sheet, income statement, statement of changes in
equity, cash flow statement, and the appropriation of earnings, which must be earmarked for
the entity’s corporate purpose.
-Carrying out all acts of administration, disposal, encumbrance and ownership, subject to the
limits prescribed by the Board.
-Analysing and reporting on the proposals that any committee member or the Managing
Director may put before it, in order to resolve them or, if applicable, submit them to the
Board.
-Signing, subject to the restrictions imposed by the Board, any legally admissible contracts
and reaching agreement and settlement during arbitration proceedings at law or at equity,
agreeing to any terms or conditions deemed pertinent.
-Accepting inheritances, legacies and donations; when accepting non-probate inheritances,
the entity must always avail itself of the benefit of inventory.
-Authorising the posting of security, subject to the limits prescribed by the Board of
Directors, in order to secure the obligations of savings bank customers towards all manner of
natural persons and legal entities.
-Opening, operating and closing savings accounts, current accounts, credit accounts and
other forms of account held with the entity.
-Opening agencies and branches and, for such purpose, authorising the acquisition of
property and proposed construction work.
-Inspecting all the services and ensuring that all deficiencies detected are duly rectified.
-Monitoring the situation and solvency of existing risks.
The Board of Directors approved the following currently applicable financial limits on the
aforementioned powers at a Board meeting held on 5 July 2010:
-Granting of loans, credit facilities, financing of operations abroad and discounting of bills: up
to 60,000,000 euros per transaction for transactions secured with real property, and up to
30,000,000 euros for transactions secured with non real property.
- Posting of security: up to 60,000,000 euros per security or security facility for transactions
secured with real property, and up to 30,000,000 euros per security or security facility for
transactions secured with personal property.
- Leasing and factoring transactions: up to 60,000,000 euros per transaction.
- Approval of risk transactions (granting of loans, guarantees and sureties) to members of
the Board of Directors and the Control Committee, the Managing Director and related-party
natural persons or bodies corporate, subject to authorisation by the Department of the
Economy and Knowledge attached to the Government of Catalonia.
- Acquisition, disposal and encumbrance of real and personal property: up to 20,000,000
euros per transaction. However, in relation to assets obtained through court proceedings
pursued against debtors, or those acquired in lieu of debt, there is no monetary limit on
transfers of real or personal property through any instrument.
- Investment and disposal of equities will be subject to the following limits: listed equities, up
to 45,000,000 euros and non-listed equities: up to 6,000,000 euros.
Effecting placements or placement facilities for any kind of fixed income securities,
thereby establishing any terms and conditions it deems appropriate, insofar as the
outstanding balance in circulation never exceeds the cap of 60,000 million euros, or the
equivalent value in other currencies.
28
Posting any security or guarantee that may be required in relation to placements or
placement facilities for preference shares and fixed income securities launched by subsidiary
companies up to the circulation cap of 5,000 million euros.
A.2.24. If an Executive Committee exists, describe the extent of the delegated
duties and powers and the independence it enjoys when discharging its own duties
and adopting resolutions relating to the administration and management of the
savings bank.
The Executive Committee enjoys full autonomy, subject to the limitations on the
aforementioned powers prescribed by the Articles of Association and the Board of Directors.
This notwithstanding, the Executive Committee enjoys the broadest powers to put any
business or motions deemed in the entity’s interest before the Board of Directors for
approval.
The Board of Directors is periodically informed of the resolutions adopted by the Executive
Committee.
A.2.25. Indicate, as appropriate, whether the composition of the Executive
Committee reflects the participation within the Board of different members based
on the groups they represent.
YES X
NO
If not, explain the composition of your executive committee.
A.2.26. Is there an Audit Committee or have its functions been entrusted to the
Control Committee? If so, list its members:
AUDIT COMMITTEE
Name
Position
A.2.27. Describe any supporting duties that the Audit Committee may carry out for
the Board of Directors.
In its capacity as “Audit Committee”, as envisaged under applicable law, the Control
Committee is responsible for reporting to the General Assembly on any issues relating to its
competence; proposing the appointment of external auditors to the Board of Directors, which
will then put the matter before the General Assembly; overseeing the entity’s internal audit
services and familiarising itself with the internal financial information processes and control
systems; maintaining contact with the external audit team in order to receive information on
any issues that may jeopardise their independence, other issues relating to the financial
audit process, or other communications envisaged at law and technical audit standards.
A.2.28. List the members of the Remuneration Committee:
REMUNERATION COMMITTEE
Name
FERNANDO CASADO JUAN
ALBERT ABELLÓ HIERRO
JOSEP MARIA FARRÉS PENELA
Position
CHAIRMAN
SECOND VICE-CHAIRMAN
THIRD VICE-CHAIRMAN
A.2.29. Describe the support duties that the Remuneration Committee carries out
for the Board of Directors.
The Remuneration Committee reports to the Board of Directors or the Executive
Committee on the general remuneration policy and incentives for Board members and the
entity’s management team.
29
At the savings bank’s extraordinary General Assembly held on 16 November 2010, it was
agreed to amend Article 32 of the Articles of Association in order to bring the duties of the
Appointments and Remuneration Committee in line with the new drafting of Legislative
Decree 1/2008, introduced by Decree Law 5/2010. This amendment was subsequently
approved on 22 February 2011 by the Department of the Economy and Knowledge of the
Government of Catalonia.
As a result of the modification, the committee now has a number of new duties:
a/ overseeing compliance with the aforementioned general remuneration and incentive
policy, which also extends to members of the Control Committee.
b/ Ensuring compliance with applicable legal requirements for sitting on the Board of
Directors and the Control Committee, including the requirements demanded of the Managing
Director, and receiving communications on conflicts of interest.
A.2.30. List the members of the Investment Committee:
INVESTMENT COMMITTEE
Name
FERNANDO CASADO JUAN
MANEL ROSELL MARTÍ
JOSEP MARIA FARRÉS PENELA
Position
CHAIRMAN
FIRST VICE-CHAIRMAN
THIRD VICE-CHAIRMAN
A.2.31. Describe the support duties that the Investment Committee carries out for
the Board of Directors.
-The Investment Committee reports to the Board of Directors or the Executive Committee on
strategic and stable investments and disposals, encompassing not only those performed by
the entity directly, but also and those carried out through subsidiary companies.
Strategic investments and disposals mean acquisitions or sales of any significant stake in
any listed company, or interests in business projects with influence over the management or
the governing bodies, insofar as the entity’s total stake exceeds the threshold of 3% of
qualifying equity.
-It similarly reports to the Board on the financial viability of the aforementioned investments
and their suitability given the entity’s budgets and strategic plans.
-It also draws up an annual report on all such investments carried out over the period.
A.2.32. Specify whether there are any regulations governing the board committees.
Include details of where these can be consulted, and describe any amendments
have been made during the year. Also, indicate whether an annual report on the
activities of each committee has been prepared voluntarily.
A.2.33. Are there specific bodies vested with the power to make decisions
regarding the acquisition of business holdings? If so, please specify:
YES
X
Body or bodies vested with the power to
make decisions regarding the acquisition
of business holdings.
Board of Directors
NO
Observations
IN ACCORDANCE WITH THE ARTICLES OF
ASSOCIATION
A.2.34. Where applicable, indicate the procedural or reporting requirements
established in order to reach agreements involving the acquisition of business
holdings.
At a meeting held on 14 September 2010, the Board of Directors of Caixa d'Estalvis de
Catalunya, Tarragona i Manresa created an Internal Control system covering investment and
30
disposal transactions with subsidiary and investee companies. This system effectively means
that all corporate investment or disposal transactions that exceed two million euros must be
previously authorised by the savings bank's Board of Directors, although this authorisation
may be delegated to the Executive Committee for transactions of up to twenty million euros
in the case of non-listed companies and 45 million euros for listed companies.
A.2.35. Indicate the number of meetings held by the following governing bodies
over the year:
Number of meetings of the Remuneration
Committee
Number of Investment Committee meetings
Number of Executive or Management
Committee meetings
A.2.36. Indicate, if so, any other delegate or support bodies created by the savings
bank:
SOCIAL WORK COMMITTEE
Name
FERNANDO CASADO JUAN
CARMEN PASTOR SOLERNOU
JAVIER SÁNCHEZ LÓPEZ
JORGE ANTONIO GARCÍA
RODRÍGUEZ
JOSEP ALABERN VALENTÍ
JOSEP GUASCH LUJÁN
JOSEP MARIA FARRÉS PENELA
JOSEP MOLINS CODINA
JUAN ANTONIO MATAS ARNALOT
MANEL ROSELL MARTÍ
ADOLF TODÓ ROVIRA
Position
CHAIRMAN
MEMBER
MEMBER
MEMBER
MEMBER
MEMBER
MEMBER
MEMBER
MEMBER
MEMBER
SECRETARY
Explain the rules governing the system of electing, appointing, accepting, and revoking
positions on each of the governing bodies and detail the duties of these bodies.
The Board of Directors designates a Social Work Committee, comprising 10 members
appointed by the Board of Directors from among its ranks, and representing the following
sectors: one member from the Local Authorities and County Councils sector, four Board
members belonging to the Founding Corporations and Entities, four Board members from the
Depositors sector, and one Board member from the Employees sector.
The Chairman and First Vice-Chairman of the Board of Directors also sit on the Social
Work Committee, without this entailing any proportional increase in the sector they
represent. The Chairman to the Board of Directors also acts as Chairman of the Social Work
Committee.
The savings bank's Managing Director also sits on the committee with full speaking and
voting rights.
The duty of the Social Work Committee is to put proposals before the Board of Directors
on new community projects and initiatives and on the budgets of ongoing projects. It is also
responsible for managing these projects and ensuring their financial rationality, while also
guaranteeing that they cater to the general interests of the territory in question.
The foundations already created, or those to be created for the purpose of managing and
overseeing community work will be purely instrumental in nature, and will act in accordance
with the guidelines, and under the supervision and control of the Board of Directors or the
Social Work Committee. The foundations will be accountable to the latter and must disclose
their resolutions within the maximum term of three months.
31
Members of the Social Work Committee are appointed at the Board meeting held
immediately following their renewal to replace those members that have stepped down on
reaching the end of their term of office.
Appointments can be accepted by letter of acceptance, or by verbal acceptance at the
committee meeting itself, which must be included in the minutes.
Members of the Social Work Committee will hold office for as long as they remain Board
members, and insofar as they are not removed from office by the committee.
A.3. Control Committee
A.3.1. Complete the following table on the members of the Control Committee:
CONTROL COMMITTEE
Name
ANTONIO VISA TORRES
ANTÒNIA MARIA SÁNCHEZ
MORENO
Position
CHAIRMAN
SECRETARY
BÀRBARA MARTÍ ERFURT
JAVIER MORUECO
TORRECILLAS
JOSEP ANDREU FIGUERAS
MEMBER
MEMBER
JOSEP VÍCTOR VALLS
GAVALDA
MANUEL FUSTER PITARCH
MIQUEL RUBIROLA TORRENT
MEMBER
RAQUEL PUIG PÉREZ
VALENTÍ MARTÍNEZ
ESPINOSA
MEMBER
MEMBER
Represented group
DEPOSITORS
FOUNDING
CORPORATIONS AND
ENTITIES
DEPOSITORS
DEPOSITORS
MEMBER
FOUNDING
CORPORATIONS AND
ENTITIES
DEPOSITORS
MEMBER
MEMBER
LOCAL AUTHORITIES
FOUNDING
CORPORATIONS AND
ENTITIES
EMPLOYEES
FOUNDING
CORPORATIONS AND
ENTITIES
Number of members
10
Represented group
Number of
committee
representatives
1
4
0
LOCAL AUTHORITIES
DEPOSITORS
FOUNDING PERSONS OR
ENTITIES
EMPLOYEES
FOUNDING CORPORATIONS
AND ENTITIES
Total
% of total
10.000
40.000
0.000
1
4
10.000
40.000
10
100.000
A.3.2. Does the Control Committee perform the duties of the Audit Committee?
YES
X
NO
32
List the duties of the Control Committee:
Duties
In accordance with its supervisory duties envisaged at law, the Control Committee is
responsible for the following:
-Ensuring that the acts and business of the Board of Directors reflect the general lines of
action prescribed by the General Assembly and the savings bank's corporate purpose.
-Overseeing the functioning and business of the savings bank's governing bodies.
-Examining external audit reports and receiving recommendations from the auditors.
-Reviewing the annual report, balance sheet, income statement, statement of changes in
equity and the cash flow statement for each fiscal year, and making any comments it
deems appropriate.
-Drawing up the reports prescribed by applicable regulations, which are then sent to the
Department for the Economy and Knowledge of the Government of Catalonia, and reporting
to the General Assembly on its business at least once a year.
-Requesting the Chairman to convene an extraordinary General Assembly when deemed
necessary.
-Controlling the electoral processes for forming the General Assembly and Board of
Directors, along with the regional Department for the Economy and Knowledge. In similar
fashion, the outgoing Control Committee controls the election process for forming the
incoming Control Committee.
-Examining the reports of the Social Work Committee and issuing its opinion on them.
-Requesting that the Board of Directors to annul any resolutions that violate applicable law
and, when necessary, directly requesting the regional Department for the Economy and
Knowledge of the Government of Catalonia to suspend such offending resolutions.
In its capacity as Audit Committee, the duties of the Control Committee are as detailed
in section A.2.27.
A.3.3. Describe the rules governing the organisation and functioning of the Control
Committee and the duties assigned to it.
The Control Committee shall appoint a Chairman and Secretary from among its members.
If the Chairman or Secretary is absent for any reason, they will be replaced by the oldest and
youngest committee member, respectively, of those in attendance at the meeting in
question.
In accordance with the duties of the Control Committee described above, the committee's
main responsibility is ensuring that the Board of Directors acts accordingly by monitoring its
resolutions and analysing its composition and structure.
In addition to those detailed in section A.3.2 above, the Control Committee, after
conferring with the Board of Directors if time permits, shall immediately report to the
regional Department for the Economy and Knowledge on any irregularities it may have
detected, thus enabling the latter to proceed accordingly. This duty is without prejudice to
the powers of the committee to request an extraordinary General Assembly meeting and its
obligation to report directly to the Bank of Spain or the corresponding state-level body on
any issues concerning its duties.
In its capacity as Audit Committee, the Control Committee also exercises the functions
detailed in section A.2.27.
A.3.4. Explain the system in place, if any, to ensure that the Control Committee is
aware of the resolutions adopted by the different governing bodies, so that it can
perform its duties of oversight and veto.
Discussions and resolutions carried by the Board of Directors are communicated to the
Chairman of the Control Committee.
At each committee meeting, Control Committee members are afforded access to the
unabridged minutes of the meetings of the Board of Directors and the Executive Committee,
thus allowing the Control Committee to oversee the decisions adopted and monitor the
33
resolutions carried in furtherance of its supervisory role and its duty to annul offending
resolutions and disclose irregularities.
A.3.5. Indicate the number of Control Committee meetings held during the year.
Number of Control Committee meetings
7
A.3.6. Identify the information provided to committee members ahead of or at
Control Committee meetings. Describe the systems in place for accessing this
information.
Committee members have access to the full minutes of the meetings of the Board of
Directors, Executive Committee and Social Work Committee, thus enabling it to oversee all
decisions and resolutions adopted. Moreover, the Managing Director always explains the
most important resolutions to committee members.
Furthermore, in furtherance of its duties as Audit Committee, the committee may request
information from the external auditors on any matters that fall within their remit. The
external auditors shall then report back directly to the Control Committee.
Committee members are provided with the corresponding records, which likewise contain
the full minutes of the meetings of the Board of Directors, Executive Committee and Social
Work Committee.
In addition, the Chairman of the Control Committee is sent the minutes of the meetings of
the Board of Directors, Executive Committee and Social Work Committee as soon as they are
prepared.
With a view to protecting the confidentiality of the business discussed at Board meetings,
and once the meeting in question has finished, all records are kept at the Department of the
Secretary's Office and Governing Bodies, where Board members may subsequently examine
them.
A.3.7. Explain the rules governing the election, appointment, acceptance and
revocation of members of the Control Committee.
The Control Committee comprises 10 members chosen by the General Assembly from
among its ranks, provided that such members are not in turn members of the Board of
Directors.
The same number of alternate members is chosen in the same proportion for the sole
purpose of standing in for the regular members if these are removed from office or have
their powers revoked before the end of their term of office. Alternate members shall stand in
for incumbent members until the end of their mandate.
The various sectors of the General Assembly are represented on the Control Committee
as follows: one member from the Local Authorities and County Councils sector, four
members belonging to the Founding Corporations and Entities sector, four members from the
Depositors sector, and one member from the Employees sector.
The Control Committee shall appoint a Chairman and Secretary from among its members.
If absent, these will be replaced, respectively, by the oldest and youngest members in
attendance at the meeting.
The procedure for proposing appointments to the Control Committee (incumbent and
alternate members), and for removing and re-electing them, is the same as for members of
the Board of Directors. Likewise, members of the Control Committee must satisfy the same
conditions and requirements as those demanded of Board members and will be subject to
the same incompatibilities. Moreover, authorities or entities that have representatives sitting
on the Board of Directors may not also have representatives sitting on the Control
Committee, with the exception of Founding Corporations and Entities. When acting as Audit
Committee, the Control Committee must meet the membership requirements stipulated in
Additional Provision 18 of the Spanish Securities Market Act.
34
Appointments to office are typically accepted verbally at the time the appointed person
attends his or her first committee meeting, with the acceptance expressly recorded in the
minutes.
Term of office, grounds for removal and the procedure for covering vacancies are the
same as for members of the Board of Directors.
A.3.8. Provide details of the internal systems in place to monitor compliance with
the resolutions adopted by the Control Committee.
The Control Committee prepares a half-yearly report detailing its work over the six-month
period leading up to the date of the report, and sends this to the regional Department for the
Economy and Knowledge attached to the Government of Catalonia. This report details the
number and dates of the committee meetings held, the party convening the meeting and the
associated agenda, the aim being to ensure compliance with the general lines of action
approved by the General Assembly, including any possible departures from these, or any
matters relating to the economic and financial management of the savings bank which, due
to their importance, must be heard by the committee.
The committee reports to the General Assembly on its business once a year.
A.3.9. Explain the rules governing the convening of Control Committee meetings.
In order to discharge its entrusted duties, the Control Committee must meet whenever
convened by its Chairman, upon its own initiative or following a request to such effect from
at least one third of its members, and in all cases at least once every three months. In
furtherance of its duties, it may request from the Board of Directors or Managing Director
any background details or information it deems necessary.
The notice of meeting must be sent out in writing at least 48 hours in advance, and must
explain the reason for the meeting. If the business in question is exceptionally urgent (in the
opinion of the committee's Chairman), the notice may be sent out just 12 hours in advance.
Notwithstanding the above, a universal committee meeting capable of addressing any
business that falls within its competence may be validly held when all committee members
are in attendance and unanimously agree to hold such a meeting.
A.3.10. Indicate the circumstances in which committee members may ask for the
Control Committee to be convened to address any business they consider salient.
Following a request from one third of committee members.
A.3.11. Explain the rules governing the adoption of resolutions by the Control
Committee, indicating, at the very least, the rules relating to the constitution of
meetings and attendance quorum:
Adoption of resolutions
Description of the resolution
GENERAL
Quorum
51.00 - THE
CONTROL
COMMITTEE
WILL BE
DEEMED
VALIDLY
CONVENED
WHEN THE
ABSOLUTE
MAJORITY OF
ITS OFFICIAL
MEMBERS ARE
IN ATTENDANCE
35
Type of majority
51.00 - IN ORDER TO
CARRY RESOLUTIONS,
THE MAJORITY OF ITS
DE FACTO MEMBERS
MUST VOTE IN
FAVOUR. IN THE
EVENT OF A TIE, THE
CHAIRMAN WILL HAVE
THE CASTING VOTE.
REQUESTING THE CHAIRMAN TO
CONVENE AN EXTRAORDINARY
GENERAL ASSEMBLY MEETING
REQUESTING THE BOARD OF
DIRECTORS TO ANNUL
RESOLUTIONS THAT VIOLATE
PREVAILING RULES AND
REGULATIONS.
REPORTING TO THE REGIONAL
DEPARTMENT FOR THE ECONOMY
AND KNOWLEDGE ATTACHED TO
THE GOVERNMENT OF CATALONIA
OF ANY IRREGULARITIES IT MAY
DETECT IN THE BUSINESS OF THE
BOARD OF DIRECTORS
51.00 - THE
CONTROL
COMMITTEE
WILL BE
DEEMED
VALIDLY
CONVENED
WHEN THE
ABSOLUTE
MAJORITY OF
ITS OFFICIAL
MEMBERS ARE
IN ATTENDANCE
51.00 - THE
CONTROL
COMMITTEE
WILL BE
DEEMED
VALIDLY
CONVENED
WHEN THE
ABSOLUTE
MAJORITY OF
ITS OFFICIAL
MEMBERS ARE
IN ATTENDANCE
51.00 - THE
CONTROL
COMMITTEE
WILL BE
DEEMED
VALIDLY
CONVENED
WHEN THE
ABSOLUTE
MAJORITY OF
ITS OFFICIAL
MEMBERS ARE
IN ATTENDANCE
36
51.00 - AFFIRMATIVE
VOTE OF THE
ABSOLUTE MAJORITY
OF OFFICIAL
COMMITTEE MEMBERS.
51.00 - AFFIRMATIVE
VOTE OF THE
ABSOLUTE MAJORITY
OF OFFICIAL
COMMITTEE MEMBERS.
51.00 - AFFIRMATIVE
VOTE OF THE
ABSOLUTE MAJORITY
OF OFFICIAL
COMMITTEE MEMBERS.
B
LENDING, SURETY AND SECURITY TRANSACTIONS
B.1.
Provide details of any lending, surety or security transactions carried out
with the savings bank directly or indirectly, or through its foundations or affiliated
or investee entities, in favour of Board members or their first degree family
members, or with companies or entities that they control, as defined under Article
4 of Spanish Securities Market Act 24 of 28 July 1988. Indicate the applicable terms
and conditions, including the financial conditions.
Name of the
Board member
JOAN ÀNGEL
LLIBERIA
ESTEVE
Type of
Corporate name
transaction
of the savings
bank, foundation
or affiliated or
investee entity
MORTGAGE
CAIXA
LOAN
D'ESTALVIS DE
(CORPORATE)
CATALUNYA,
TARRAGONA I
MANRESA
CARMEN
PASTOR
SOLERNOU
CAIXA
D'ESTALVIS DE
CATALUNYA,
TARRAGONA I
MANRESA
CREDIT
ACCOUNT
JOAN MANEL
PLA RIBAS
CAIXA
D'ESTALVIS DE
CATALUNYA,
TARRAGONA I
MANRESA
FUNDING OF
IMPORTS
(CORPORATE)
JUAN ARNAL
ALBESA
CAIXA
D'ESTALVIS DE
CATALUNYA,
TARRAGONA I
MANRESA
SURETY
(CORPORATE)
Amount (in
thousand euro)
Terms and
conditions
74 TERM: 10
YEARS,
FLOATING
INTEREST RATE
AT 7.25%,
SECURED BY
MORTGAGE
6 TERM: 1 YEAR,
INTEREST AT
6.5%,
RENEWABLE
QUARTERLY,
PERSONAL
GUARANTEE
57 TERM: 4
MONTHS,
INTEREST AT
4.50%,
PERSONAL
GUARANTEE
83 TERM: 3
MONTHS,
PARTIALLY
SECURED BY
PLEDGE
B.2.
Provide details of any lending, surety or security transactions carried out
with the savings bank directly or indirectly, or through its foundations or affiliated
or investee entities, in favour of Control Committee members or their first degree
family members, or with companies or entities that they control, as defined under
Article 4 of Spanish Securities Market Act 24 of 28 July 1988. Indicate the
applicable terms and conditions, including the financial conditions.
37
Name of
committee
member
SEBASTIÀ
CATLLÀ CALVET
Type of
Corporate name
transaction
of the savings
bank, foundation
or affiliated or
investee entity
DISCOUNTING
CAIXA
(CORPORATE)
D'ESTALVIS DE
CATALUNYA,
TARRAGONA I
MANRESA
SEBASTIÀ
CATLLÀ CALVET
CAIXA
D'ESTALVIS DE
CATALUNYA,
TARRAGONA I
MANRESA
PERSONAL LOAN
(CORPORATE)
SEBASTIÀ
CATLLÀ CALVET
CAIXA
D'ESTALVIS DE
CATALUNYA,
TARRAGONA I
MANRESA
CREDIT
ACCOUNT
JUAN MARIA
PAGÀ ORTIGA
CAIXA
D'ESTALVIS DE
CATALUNYA,
TARRAGONA I
MANRESA
PERSONAL LOAN
(CORPORATE)
Amount (in
thousand euro)
Terms and
conditions
171 TERM: 1 YEAR,
INTEREST AT
QUART.
EURIBOR OF
3.75 % + 1.5%
MIN., SECURED
WITH PERSONAL
GUARANTEE
150 TERM: 5 YEAR,
INTEREST AT
5.75%,
SECURED WITH
PERSONAL
GUARANTEE
60 TERM: 1 YEAR,
INTEREST AT
QUART.
EURIBOR +
0.85% MIN.,
4.5% MAX. 15%
PERSONAL
GUARANTEE
6 TERM: 3 YEARS,
INTEREST AT
6.91%,
SECURED WITH
PERSONAL
GUARANTEE
B.3.
Provide details of any lending, surety or security transactions carried out
with the savings bank either directly, indirectly or through its foundations, or
attached or investee entities, in favour of political groups represented on local
authorities and autonomous legislative assemblies that have been involved in the
savings bank's electoral process.
Name of the
political group
Corporate name
of the savings
bank, foundation
or affiliated or
investee entity
CAIXA
PARTIT DELS
SOCIALISTES DE D'ESTALVIS DE
CATALUNYA,
CATALUNYA
TARRAGONA I
MANRESA
PARTIT DELS
CAIXA
SOCIALISTES DE D'ESTALVIS DE
CATALUNYA
CATALUNYA,
TARRAGONA I
MANRESA
INICIATIVA PER
CATALUNYA
VERDS ESQUERRA
UNIDA I
ALTERNATIVA
CAIXA
D'ESTALVIS DE
CATALUNYA,
TARRAGONA I
MANRESA
Type of
transaction
CREDIT
ACCOUNT
MORTGAGE
LOAN
CREDIT
ACCOUNT
38
Amount (in
thousand euro)
Terms and
conditions
1,690 TERM: 1 YEAR,
INTEREST AT
5.5%, SECURED
WITH PERSONAL
GUARANTEE
70 TERM: 15
YEARS,
INTEREST AT
5.00%,
SECURED WITH
MORTGAGE
908 TERM: 1 YEAR,
INTEREST AT
5.5%, SECURED
WITH PERSONAL
GUARANTEE
B.4. Indicate, where applicable, the current status of loans extended to political
groups represented on local authorities and autonomous legislative assemblies
that have participated in the savings bank's electoral process.
The outstanding balance at 31/12/10 of loans extended to political groups and
autonomous legislative assemblies represented on local authorities amounted to 10,023,000
euros. None of the counterparties are in default.
List of loans (in thousand euros):
Convergència Democràtica de Catalunya: 1,513
Fundació President Josep Irla - ERC: 53
Iniciativa per Catalunya - Verds: 1,308
Iniciativa per Catalunya - Verds Esquerra Unida i Alternativa: 908
Partit dels Socialistes de Catalunya: 3,454
Unió Democràtica de Catalunya: 2,787
C
Provide details of any loans held with public institutions, including regional
government bodies, that have designated general directors:
Name of the public institution: BARCELONA TOWN COUNCIL
Type of transaction
Amount (in
thousand euro)
FACTORING
1,658
Name of the designated general directors
FRANCISCO LONGO MARTÍNEZ
JOSEP MARIA CAMÓS CABECERÁN
MANUEL MEDEIROS PÉREZ
MARIA ELISA CASANOVA DOMÈNECH
Name of the public institution: CALAF TOWN COUNCIL
Type of transaction
CREDIT ACCOUNT
Amount (in
thousand euro)
560
Name of the designated general director
M ANTONIA TRULLAS POVEDANO
Name of the public institution: CERDANYOLA TOWN COUNCIL
Type of transaction
Amount (in
thousand euro)
FACTORING
151
LOANS TO LOCAL AUTHORITIES
1,803
Name of the designated general director
PENDING APPOINTMENT
Name of the public institution: L'HOSPITALET DE LLOBREGAT TOWN COUNCIL
Type of transaction
Amount (in
thousand euro)
LOANS TO LOCAL AUTHORITIES
34,132
Name of the designated general director
ANTONI LLARDÈN CARRATALÀ
Name of the public institution: MONTCADA I REIXACH LOCAL COUNCIL
Type of transaction
Amount (in
thousand euro)
FACTORING
151
39
Name of the designated general director
CESAR ARRIZABALAGA ZABALA
Name of the public institution: PERELLÓ TOWN COUNCIL
Type of transaction
Amount (in
thousand euro)
CREDIT ACCOUNT
60
Name of the designated general director
GENOVEVA MARGALEF VALIENTE
Name of the public institution: REUS TOWN COUNCIL
Type of transaction
LOAN
Amount (in
thousand euro)
5,000
Name of the designated general director
ÀNGEL CUNILLERA ZÁRATE
Name of the public institution: SANT JOAN DE VILATORRADA LOCAL COUNCIL
Type of transaction
Amount (in
thousand euro)
SURETY
1
Name of the designated general director
EZEQUIEL MARTÍNEZ MULERO
Name of the public institution: SANT VICENÇ DELS HORTS LOCAL COUNCIL
Type of transaction
Amount (in
thousand euro)
LOANS TO LOCAL AUTHORITIES
378
Name of the designated general director
JOSEFA LÓPEZ LÓPEZ
Name of the public institution: SITGES TOWN COUNCIL
Type of transaction
Amount (in
thousand euro)
LOANS TO LOCAL AUTHORITIES
829
Name of the designated general director
JORDI BAIJET VIDAL
Name of the public institution: VACARISSES LOCAL COUNCIL
Type of transaction
Amount (in
thousand euro)
SURETY
20
FACTORING
3
Name of the designated general director
JOAN CARLES CIRERA IZQUIERDO
Name of the public institution: ESPARRAGUERA LOCAL COUNCIL
Type of transaction
Amount (in
thousand euro)
LOANS TO LOCAL AUTHORITIES
590
Name of the designated general director
JOSEP RÀFOLS ESTEVE
40
Name of the public institution: IGUALADA TOWN COUNCIL
Type of transaction
Amount (in
thousand euro)
FACTORING
29
Name of the designated general director
JOAQUIM SOLÉ VILANOVA
Name of the public institution: MADRID TOWN COUNCIL
Type of transaction
Amount (in
thousand euro)
FACTORING
31,300
Name of the designated general director
JAVIER BASSO ROVIRALTA
Name of the public institution: TARRAGONA TOWN COUNCIL
Type of transaction
Amount (in
thousand euro)
FLOATING RATE LOAN
4,781
Name of the designated general directors
ALBERT ABELLÓ HIERRO
ÀNGEL CUNILLERA ZÁRATE
EUDALD TORRES ROBERT
JAVIER VILLAMAYOR CAAMAÑO
JOAN CARRERA PEDROL
JOSÉ MANUEL DE LA VEGA CARRERA
JOSEP ANDREU FIGUERAS
JOSEP GUASCH LUJÁN
JOSEP MARIA VALLÈS JOVÉ
LLUÍS ARAGONÉS DELGADO DE TORRES
M DEL PILAR JUÀREZ ROMERO
ROBERT VENDRELL AUBACH
41
D
RELATED-PARTY AND INTRAGROUP TRANSACTIONS
D.1. List any significant transactions between the savings bank and its Board
members:
Name
Type of transaction
Amount (in
thousand euro)
D.2. List any significant transactions between the savings bank and members of its
Control Committee:
Name
Type of transaction
Amount (in
thousand euro)
D.3. List any significant transactions between the savings bank and its executives:
Name
Type of transaction
Amount (in
thousand euro)
D.4. List any significant transactions between the savings bank and executives or
directors of other companies or entities belonging to the same business group as
the savings bank:
Name
Corporate name of the
group entity
Type of
transaction
Amount (in
thousand euro)
D.5List any significant intragroup transactions:
Corporate name of the group
Brief description of the
entity
transaction
GESCAT GESTIÓ DE SOL
CREDIT ACCOUNT
42
Amount (in
thousand euro)
820,000
E
GROUP BUSINESS STRUCTURE
E.1. Describe the Group's business structure, indicating the role played by each of
the entities as an integral part of the services provided to customers.
Group business structure
The CatalunyaCaixa group brings together a host of financial and non-financial companies,
engaged primarily in banking, insurance and pension schemes, investment funds, property
development and management and operational services.
Services provided to customers
Name of group entity
ACTIVOS MACORP S.L.
Specific services provided
ASSET HOLDING
Name of group entity
ALCALÁ 120 PROMOC. Y GEST.INMOB. S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
ALCONRU SOCIEDADE DE CONSTRUÇAO E PROMOÇAO IMOBILIARIA, S.A.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
ALGARVETUR, S.L. (ANTES PRASATUR, S.L.)
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
APROSA PROCAM, S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
AREA TRES PROCAM, S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
ASCAT MEDIACION OPERADOR DE BANCA SEGUROS VINCULADO S.L
Specific services provided
INSURANCE BROKER
Name of group entity
BCN ECOMANRESA SICAV, S.A.
Specific services provided
FINANCIAL INTERMEDIATION
43
Name of group entity
C.S.V. - COORDENAÇAO DA SEGURANÇA DE VILAMOURA, LDA.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
CAIXA CATALUNYA ADMINISTRACIÓ I GESTIÓ DE SERVEIS S.A.
Specific services provided
SERVICE PROVIDER
Name of group entity
CAIXA CATALUNYA GESTIÓ S.A.
Specific services provided
MANAGEMENT OF COLLECTIVE INVESTMENT SCHEMES
Name of group entity
CAIXA CATALUNYA INTERNATIONAL FINANCE B.V.
Specific services provided
FINANCIAL INTERMEDIATION
Name of group entity
CAIXA CATALUNYA PREFERENTS S.A.
Specific services provided
FINANCIAL INTERMEDIATION
Name of group entity
CAIXA MANRESA ASSEGURANCES GENERALS, S.A.
Specific services provided
INSURANCE BROKER
Name of group entity
CAIXA MANRESA IMMOBILIÀRIA SOCIAL, S.L.
Specific services provided
PROPERTY RENTAL
Name of group entity
CAIXA MANRESA ONCASA IMMOBILIÀRIA, S.L.
Specific services provided
ASSET HOLDING
Name of group entity
CAIXA TARRAGONA GESTIÓ SGIIC S.A.
Specific services provided
COLLECTIVE INVESTMENT MANAGEMENT
Name of group entity
CAIXAMANRESA GENERALS COMPANYIA D'ASSEGURANCES, S.A.
Specific services provided
INSURANCE BROKER
44
Name of group entity
CAIXAMANRESA PREFERENTS, S.A.
Specific services provided
FINANCIAL INTERMEDIATION
Name of group entity
CASIGAR INVERSIONES 2008
Specific services provided
SECURITY INVESTMENT
Name of group entity
CENTRE LÚDIC DIAGONAL S.A.
Specific services provided
LEISURE AND SPORTS CENTRE AND PARKING FACILITIES
Name of group entity
CETACTIUS, S.L.
Specific services provided
ASSET HOLDING
Name of group entity
CLUB GOLF HACIENDA EL ALAMO, S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
CONJUNT RESIDENCIAL FREIXA, S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
CORPORACIÓN BÉTICA INMOBILIARIA, S.A.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
ESPANHOLITA SGPS, S.A.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
EXPANSIÓ INTERCOMARCAL, S.L.
Specific services provided
SECURITY INVESTMENT
Name of group entity
FAZENDA DAS ÁGUAS - ADMINISTRAÇAO DE PROPRIEDADES UNIPESSOAL, LDA.
Specific services provided
PROPERTY DEVELOPMENT
45
Name of group entity
FODECOR, S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
GARVECAT, SGPS, S.A. (ABANS GARVEPRASA, SGPS, S.A.)
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
GESCAT GESTIO DE SOL S.L.
Specific services provided
ASSET HOLDING
Name of group entity
GESCAT LLEVANT S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
GESCAT LLOGUERS S.L
Specific services provided
ASSET HOLDING
Name of group entity
GESCAT SINEVA, S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
GESCAT VIVIENDAS EN COMERCIALIZACION S.L.
Specific services provided
ASSET HOLDING
Name of group entity
GESTIÓ D'ACTIUS TITULITZATS S.A.
Specific services provided
SECURITISATION FUND MANAGEMENT
Name of group entity
INFORMACIÓ I TECNOLOGIA DE CATALUNYA, S.L.
Specific services provided
IT SERVICES PROVIDER
Name of group entity
INPAU S.A.
Specific services provided
PROPERTY DEVELOPMENT
46
Name of group entity
INVERCARTERA CAPITAL SCR S.A.
Specific services provided
SECURITY INVESTMENT
Name of group entity
INVERCARTERA ENERGIA S.L.
Specific services provided
SECURITY INVESTMENT
Name of group entity
INVERCARTERA FOTOVOLTAICA S.L.
Specific services provided
POWER GENERATION
Name of group entity
INVERCARTERA INTERNACIONAL S.L.
Specific services provided
SECURITY INVESTMENT
Name of group entity
INVERCARTERA S.A.
Specific services provided
SECURITY INVESTMENT
Name of group entity
IRIDION SOLUCIONS IMMOBILIÀRIES, S.L.
Specific services provided
ASSET HOLDING
Name of group entity
JALE PROCAM, S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
JARDIM DE AZINHEIRA, S.A.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
LUSOTUR EMPREENDIMENTOS IMOBILIARIOS E TURISTICOS, S.A.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
LUSOTUR II-IMÓVEIS, S.A.
Specific services provided
PROPERTY DEVELOPMENT
47
Name of group entity
MANRESA GESTIÒ ACTIVA 1 SICAV, SA
Specific services provided
FINANCIAL INTERMEDIATION
Name of group entity
MARINA DE VILAMOURA, S.A.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
MARINA JARDIM - SOCIEDADE DE DESENVOLVIMENTO IMOBILIÁRIO, S.A.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
METROPOLITAN PROCAM, S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
NOIDIRI, S.L.
Specific services provided
ASSET HOLDING
Name of group entity
PARQUE FOTOVOLTAICO PUEBLA DE MONTALBAN 1 S.L.
Specific services provided
POWER GENERATION
Name of group entity
PARQUE FOTOVOLTAICO PUEBLA DE MONTALBAN 2 S.L.
Specific services provided
POWER GENERATION
Name of group entity
PARQUE FOTOVOLTAICO PUEBLA DE MONTALBAN 3 S.L.
Specific services provided
POWER GENERATION
Name of group entity
PARQUE FOTOVOLTAICO PUEBLA DE MONTALBAN 4 S.L.
Specific services provided
POWER GENERATION
Name of group entity
PARQUE FOTOVOLTAICO PUEBLA DE MONTALBAN 5 S.L.
Specific services provided
POWER GENERATION
48
Name of group entity
PARQUE FOTOVOLTAICO PUEBLA DE MONTALBAN 6 S.L.
Specific services provided
POWER GENERATION
Name of group entity
PARQUE FOTOVOLTAICO PUEBLA DE MONTALBAN 7 S.L.
Specific services provided
POWER GENERATION
Name of group entity
PÓRTICO PROCAM, S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
PROCAM S.A.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
PROCAMVASA, S.A.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
PROMOCIONES Y CONSTRUCCIONES CERBAT S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
PRONORTE UNO PROCAM S.A.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
PROVIURE BARCELONA S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
PROVIURE CIUTAT DE LLEIDA S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
PROVIURE PARC D'HABITATGES S.L.U
Specific services provided
PROPERTY RENTAL
49
Name of group entity
PROVIURE S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
PUERTO CIUDAD LAS PALMAS, S.A.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
S.B.D. NORD, S.L.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
SATICEM GESTIÓ, S.L.
Specific services provided
ASSET HOLDING
Name of group entity
SATICEM HOLDING, S.L.
Specific services provided
ASSET HOLDING
Name of group entity
SATICEM IMMOBILIARIA, S.L.
Specific services provided
SECURITY INVESTMENT
Name of group entity
SATICEM IMMOBLES EN ARRENDAMENT, S.L.
Specific services provided
ASSET HOLDING
Name of group entity
SERVIMANRESA ACTIUS EN LLOGUER, S.L.
Specific services provided
ASSET HOLDING
Name of group entity
SOCIDOMUS ALGARVE - SOCIEDADE IMOBILIÁRIA, S.A.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
TARRACO INVERSELECT, S.L.
Specific services provided
SECURITY INVESTMENT
50
Name of group entity
TRAMIBAGES, S.L.
Specific services provided
SERVICE PROVIDER
Name of group entity
URBISVULGO INVESTIMENTOS IMOBILIÁRIOS E TURÍSTICOS, S.A.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
VILAMOURATÉNIS - EMPREENDIMENTOS DESPORTIVOS E TURÍSTICOS, LDA.
Specific services provided
PROPERTY DEVELOPMENT
Name of group entity
VIVIENDAS EN PROPIEDAD, S.L.
Specific services provided
PROPERTY DEVELOPMENT
E.2. Specify how the branch network is distributed geographically:
Spanish autonomous
community
Andalusia
Aragon
Canary Islands
Cantabria
Castile-La Mancha
Castile and Leon
Catalonia
Extremadura
Galicia
Balearic Islands
La Rioja
Madrid
Murcia
Navarre
Basque Country
Principality of Asturias
Valencian Community
Branches outside Spain
Total
Number of
branches
39
10
7
1
6
10
1,050
3
7
10
2
118
13
5
12
2
82
1
1,378
E.3. Where applicable, identify members of governing bodies who hold
administrative or managerial posts in entities that belong to the savings bank’s
business group:
Name of governing body
member
Corporate name of the group
entity
51
Position
F
RISK CONTROL SYSTEMS
F.1. Explain, where applicable, the risk control systems in place to cover the
savings bank’s activities.
The Board of Directors is ultimately responsible for the CatalunyaCaixa risk management
model, although the Board may delegate this duty to the Executive Committee. The Board of
Directors approves, among other things, aspects relating to the credit rating tools or models
employed and the associated processes in place, risk identification and measurement
approaches for credit risk, market risk, operational risk, structural interest rate risk and
balance sheet risk, along with the corresponding procedures for reviewing and controlling
risk management policies and processes. In this regard, the first Board meeting of the new
entity, as held on 5 July 2010, approved the Retail Credit Risk Control Policies, the Risk
Policies Associated with Financial Market Business, the Manual on Operational Risk
Management Policies and the Policies for Managing and Monitoring Liquidity.
With the aim of ensuring effective risk management and control, risk function at banklevel is divided into risk acceptance and recovery functions (Risk Admission and Recovery
Department) and risk measurement, oversight and control functions (Global Risk Control and
Management Department). These functions are, in turn, totally independent from the
business units, thus guaranteeing the full independence of the different areas.
The following structure embodies this approach to risk control:
The Risk Control and Oversight Division, along with four other departments, reports to the
Global Risk Control and Management Department. In turn, the Risk Control and Oversight
Division controls three other departments, which are charged with the following duties:
-The Risk Solvency and Control Department is responsible for controlling the group's
solvency, preparing and monitoring the Capital Adjustment Plan, and applying and
controlling external risk rules and regulations.
-The Corporate and Public Sector Rating Department handles economic and financial analysis
and evaluates the credit rating of corporate and public sector clients.
-The Credit Risk Oversight Department anticipates potentially problematic situations,
identifying those groups or individual customers most likely to default and defining global
strategies to neutralise or minimise losses for the savings bank.
It is worth noting that the Risk Oversight function is detached from the risk management
functions, meaning that the Risk Acceptance and Recovery Department controls risk
management, including the functions of recovery and debt restructuring but not oversight.
The aim of this organisational structure is to segregate risk approval and recovery from risk
control and oversight, thus mirroring best practices and recommendations and ensuring a
correct separation of duties.
In addition to the foregoing functions, the Control Division is actively involved in the RiskPegged Remuneration Policy, identifying those groups with the greatest impact on risk
management, reviewing and ratifying the structure of remuneration models, monitoring how
these models are applied, and preparing a report containing the main conclusions on
compliance with the aforementioned policy. Finally, the report is put before the
Remuneration Committee.
The following departments and functions report directly to the Global Risk Control and
Management Department:
-Internal Validation. The Internal Validation Department is responsible for verifying and
validating that the advanced internal risk management models work correctly, and for fully
implementing them within the savings bank's managerial structure (use test).
-Credit Risk Models not only designs and implements internal risk models, but also defines
how these are used and applicable rules and regulations. It likewise estimates the different
risk parameters, focusing on both managerial and regulatory aspects.
- Market and Balance Sheet Risk is responsible for defining and configuring the market risk,
balance sheet risk and wholesale credit risks management models.
52
-Operational Risk is charged with defining and implementing the group's operational risk
management cycle. The department measures existing levels of operational risk.
With a view to overseeing each of the areas described above, the savings bank has set up
a Risk Control Committee, whose objectives encompass the global management of the risks
inherent in the savings bank's activities (credit, market, operational), analysing the group's
risk position (credit rating models, internal validation, risk oversight), and establishing
procedures that affect the risk management process.
The committee, which meets fortnightly, comprises the Managing Director, the Assistant
Managing Director, the Head of Risk Acceptance and Recovery and the Head of Global Risk
Control and Management. A host of other executives may also take part in meetings,
depending on the specific business to be discussed.
In turn, the Risk Acceptance and Recoveries Department controls two subordinate
divisions:
The main duty of the Risk Acceptance Division is to establish the risk acceptance policy by
applying standards of quality and heading any initiative that may affect the risk acceptance
process. Under the control of this division are a group of five territorial centres, plus three
departments charged with overseeing, coordinating and concluding those transactions which,
due to their unique characteristics or accumulation of risks, are not handled by the territorial
centres:
-Personal and Small Enterprise Risk analyses and makes proposals on household and small
enterprise lending transactions, taking over from the point the territorial centres reach their
maximum accumulated risk, or when there are qualitative constraints dictating that the
transaction must be processed centrally.
-Developer Risk analyses and makes proposals on lending transactions within the field of
property development.
-Company, Institutional and Corporate Risk analyses and makes proposals on lending
transactions within the realm of companies, institutions and project financing.
-Five territorial risk centres, which handle the decentralised functions of the foregoing
departments, but up to a cap of accumulated risk per client or group.
The Restructurings and Recoveries Division is chiefly responsible for proposing and
applying restructuring and recovery policies, both for natural persons and bodies corporate,
while also defining the guidelines to be followed, based on the nature of the risk and the
customer profile. This particular division controls four decentralised territorial centres and
four departments, the duties of which are as follows:
-Natural Person and Small Enterprise Recovery, which designs recovery procedures and
solutions, manages recovery business and coordinates the territorial centres.
-Legal entity Restructurings and Recoveries anticipates and prevents potentially problematic
risk-related situations and recovers debts from legal entity with accepted risk by
customer/group of over 6 million euros.
-Contentious pursues and controls legal proceedings, ensuring the viability of the processes
to increase debt recovery efficiency.
-Branches detects and identifies branch-related situations, ensuring that they recover as
much debt as possible.
-Five Restructurings and Recoveries Territorial Centres, which apply the restructurings and
recoveries policy throughout their territory, resolving the proposals presented by the network
and directly rolling out restructuring and recovery solutions.
The Restructurings and Recoveries Division also controls a team of Default Recovery
Managers, with one head for every Commercial Territorial Department. This team is
responsible for recovery and rolling out restructuring and recovery initiatives throughout the
network.
The Internal Audit Department is attached to the Managing Director. It is chiefly
responsible for continuously examining and assessing the risk management model of the
CatalunyaCaixa Group. It is intended to provide independent and objective advice and was
created to add value and improve the savings bank's operations, thus helping it to attain its
objectives while providing a systematic and disciplined approach to evaluate and improve the
53
efficiency of risk management, control and governance processes. The Internal Audit
function monitors all the control systems in place throughout the group, while also providing
a sufficient degree of specialisation through advanced risk management.
To ensure full risk control and oversight and treatment of the different facets of the
savings bank's business, CatalunyaCaixa also has a number of different committees in place,
comprising the members of the different divisions described above. These committees are as
follows:
Board of directors
Strategic Development Management Committee
Risk Control Committee
Solvency Committee
Wholesale Risk Committee
Operational Risk Committee
Corporate and Public Sector Rating Committee
Risk Committee
Auctions Committee
Assets and Liabilities Committee
Audit Committee
Products and Pricing Committee
Liquidity Committee
Duties and Functions Committee
Asset Acquisition Committee
Commercial Planning Committee
Risk management within the CatalunyaCaixa Group is structured under a global
management system. The aim is to carry out advanced risk management, thus affording the
savings bank the best possible information on the credit quality of its customers and enabling
it to measure and monitor risk constantly, dynamically and effectively. As well as having
comprehensive mechanisms in place to control and calculate First pillar capital requirements
(credit, market and operational risks), the savings bank manages the risks it has identified
and those to which it may be exposed, and calculates an economic capital fund under Second
pillar. With this aim in mind, the savings bank's approach continues to measure and control
the different risks:
1. Credit Risk Models
CatalunyaCaixa has a number of different management procedures and tools, one of the
most important being its credit quality assessment models.
CatalunyaCaixa has classified its credit risk exposure into internal segments, and rates
this through scoring systems for natural persons, and rating systems for company, property
development, corporate and public sector segments.
Under these scoring models, the decision on whether to grant and/or reject credit
depends on the credit quality of the customer. The system employs a double approach
combining reactive concessional models and proactive performance-based models.
CatalunyaCaixa has statistical models in place to cover the companies segments, and also
expert models based on the savings bank's internal experiences for the Developers and
Developments segments. The entity also has expert models based on the Standard & Poor's
approach for Corporate and Public Sector segments.
These models must be applied in order to complete the transaction acceptance process
and in addition to this requirement, transactions with legal entities are conditional on the risk
assessment associated with the customer's credit quality (rating). This allows the entity to
improve its risk management and build up the customer profile it considers appropriate.
1.1 Probability of Default (PD)
Use of these credit quality rating models enables CatalunyaCaixa to gauge the probability
of default (PD) for each customer it assesses. Probability of default can be defined as the
likelihood that a customer will fall into default within the term of 12 months running from the
assessment.
54
This risk parameter is calculated from the score or rating that the credit quality model has
awarded the customer. In order to arrive at this score, information is compiled from different
sources, embracing not only the customer's performance with the savings bank but also
information relating to financial statements and qualitative information if company models
are used.
Each PD value is assigned a score or rating on the master rating scale. This scale, which
is the same for all CatalunyaCaixa models, allows the entity to benchmark customers, even
when these have been assessed under different models.
The savings bank's chosen approach to obtaining the PD associated with each score
mirrors the guidelines laid down by the Solvency Circular, meaning that apart from
considering the delinquency rate of the merged entities' historical portfolio, the savings bank
also factors in macro-economic variables, enabling it to incorporate the entire economic cycle
into its calculations.
1.2 Exposure (EAD)
Through analysing exposure, the entity can model changes in the use of credit risk
transactions subject to a specific limit. This allows it to predict the amount of the debt at the
time the default occurs.
The information analysed for the purpose of estimating EAD is based on historical
defaults, with regard paid to the number of transactions that have fallen into default over the
months leading up to the default in question.
1.3 Severity (LGD)
By backtesting historical defaults at CatalunyaCaixa, the savings bank is able to model
the outcome of recovery processes, taking into account those costs effectively incurred upon
completion of the corresponding legal and out-of-court debt recovery proceedings.
Once the outstanding debt, costs incurred and the final recovered sum have been
determined, the entity is able to calculate both the recovery rate and its inverse, namely
LGD. The process of estimating loss severity involves an analysis of the recovery processes
and the outcome thereof, based on aspects such as the type of product, the security
associated with the transaction and the customer's ownership.
CatalunyaCaixa, following the guidelines laid down by the Bank of Spain Oversight
Department in Validation Document number 1, has the necessary approach in place to obtain
a forward-looking estimate of Downturn LGD and Long Run LGD. The latter factors in the
impact that the economic cycle has on the capacity and efficiency of the savings bank's
recovery processes.
1.4 Estimating Expected Loss
All the processes conducted by CatalunyaCaixa in order to gauge default probability,
exposure and severity enable the entity to quantify the expected loss of the credit portfolio,
this understood as the average amount that it expects to lose on a one-year time horizon.
CatalunyaCaixa has an Expected Loss system in place to manage credit risk on a daily
basis. This system enables it to carry out initial benchmarking with loan consumption and
define the scope of activity when managing the credit quality of the portfolio.
The Bank of Spain, after conducting exhaustive and continuous analyses of the
approaches to calculating the various risk factors involved in expected loss, and the savings
bank's implementation of rating models within its risk management system, approved the
internal models for use as advanced models pursuant to applicable law and regulations on
solvency.
As the savings bank is currently undergoing a process of integration, a roll-out process
has been established for applying Advanced Models to portfolios from the former Caixa
Manresa and Caixa Tarragona. CatalunyaCaixa will therefore apply an IRB approach to the
entire portfolio of natural person loans, and to most Company segments.
55
1.5 Estimating Economic Capital
The aim of the Capital Self-Assessment Report is to determine internal capital
requirements following a strategic approach. The purpose of this approach is to obtain a
bank-level capital figure (top-down), which is then distributed to the savings bank's most
significant business units. The approach used by CatalunyaCaixa involves two
complementary aspects, the first quantitative, encompassing all the most significant risks to
which the entity is potentially exposed and which require capital coverage, and the second
qualitative based on correct management of all risks. The risk quantification approach uses
MonteCarlo simulations embracing credit risk, market risk, operational risk and balance sheet
risk to estimate the expected and unexpected losses stemming from the savings bank's
activities. While expected losses can be hedged against with provisions, unexpected losses
(which are very unlikely to occur) must be hedged with capital (bank equity). This
quantification process is complemented with deterministic approaches for those risks that the
entity does not primarily focus on.
Likewise, CatalunyaCaixa plans future capital sources and needs to ensure adequacy
between expected risk profiles and bank capital. The entity undertakes this strategic capital
planning on a three-year horizon. The savings bank also establishes different stress
scenarios for the coming years.
All the aforementioned activities are conducted in strict accordance with the solvency
policies and objectives set by the Board of Directors, and are similarly monitored so that the
appropriate corrections can be made in the event of departures from these policies and
objectives.
1.6 Credit Risk Oversight
To ensure that credit risk is suitably managed, the entity monitors its performance,
allowing it to detect and manage the risks held with companies presenting potentially
problematic symptoms.
This oversight function is fully independent both functionally and organisationally from the
credit granting divisions.
With this in mind, CatalunyaCaixa has implemented a Risk Assessment System (RAS)
capable of anticipating possible deteriorations in the credit quality of legal entity customers
through an automated process of managing customer alerts and a calculation algorithm that
reflects the global relationship with the customer. This tool is related to the score assigned
by the Rating system, which the algorithm treats as a material variable. There is also an
application in place throughout the entity that displays an agenda for each commercial
manager with the companies at risk of high and very high alerts, as well as a list of those
alerts that have given rise to the three most recent customer assessments. New transactions
and renewals of existing dealings may be blocked, based on the findings of the RAS system.
2. Operational Risk
2.1 Operational Risk Management
Operational risk means the probability of incurring losses due to human error or
inefficiency, process or system errors or external factors. Operational risk management is
tagged as strategic for CatalunyaCaixa Group as it directly affects value creation through
earnings, while indirectly affecting the savings bank's reputation and the confidence placed in
it by stakeholders, regulators, customers and the general public. One way of managing
operational risk is through clear, well-structured and reader-friendly regulatory manuals,
which are available to all employees through the G.I.R.O. qualitative management tool.
Furthermore, various savings bank departments have duties relating to risk adjustment,
oversight and control. In order to manage and mitigate operational risk, the Audit
Department of the CatalunyaCaixa Group has a raft of powerful IT applications in place
which, through a system of alerts, allow the group to manage and monitor operational riskrelated incidents. The main duties of this department are to prevent and detect departures
from operational standards throughout the different management centres, which it achieves
through periodic audits conducted on site and remotely.
56
In relation to operational risk, Bank of Spain Circular 3/2008 includes a host of proposals
aimed at creating a management model that meets a series of quality standards, based on
the principles of capital adequacy, oversight and transparency. In this regard,
CatalunyaCaixa has implemented a global operational risk management model to help each
business area understand, prevent and mitigate operational losses, and to reduce the
group's overall risk profile.
The management model comprises a series of actions aimed at systemising the
identification, assessment, monitoring, mitigation and measurement of risk across the entire
organisation, with the support of specialised tools and approaches and within the framework
of global risk management.
For each block of the management model, the following specific lines of business have
been defined:
2.2 Identification and assessment
These tasks cover the entire group and require it to prepare a detailed map of processes,
risks and controls for each centre and for the main subsidiaries subject to a periodic selfassessment process, which offers qualitative information on risk factors and the control
environment.
2.3 Oversight
The entity keeps a historical database of operational events, which extends to certain
group subsidiaries. There are also a number of event capture, classification and management
procedures in place to ensure that the database has sufficient future inputs, while also
centralising the savings bank's response mechanisms. This event capture takes place
automatically in over 99% of cases.
2.4 Mitigation
If the self-assessments or event capture indicate an unacceptable level of risk exposure,
the different divisions or departments must devise an action plan aimed at enhancing the
control system.
2.5 Measurement
CatalunyaCaixa has implemented statistical modelling processes for both qualitative and
quantitative information. The aim here is to be able to estimate internally the maximum
losses the entity may incur should the most adverse downturns occur, thus ensuring the
adequacy of the savings bank's capital.
2.6 Management framework
The Operational Risk Management function is structured as follows:
Risk Control Committee and Operational Risk Committee: reviews information every three
months.
Operational Risk Department: primarily responsible for defining and implementing the
operational risk management cycle of the CatalunyaCaixa Group: identification, assessment,
oversight, mitigation and quantification.
Network of Coordinators and Validators
The network of Operational Risk Coordinators and Validators plays a pivotal role in
ensuring proper implementation of the management cycle throughout the business and
support divisions and departments. There are roughly 85 of each, all subject to the following
general rules and principles:
57
•For all applicable purposes, they belong to the business or support departments or
divisions to which they are attached, and are functionally controlled by the Operational Risk
Department.
•The main requirement of Coordinators is that they must possess in-depth knowledge of
the processes, operational risks and controls of the department or division to which they
belong. The title of Validator tends to be held by the head of the centre.
•The Operational Risk Department provides Coordinators and Validators with the tools,
approaches and training required to discharge their duties, and also provides them with
continuous assistance and support.
3. Market Risk
Market risk can be defined as a loss arising from the unfavourable performance or
behaviour of the different kinds of risk: interest rate risk, price risk, exchange rate risk,
volatility risk and spread risk for the fixed income portfolio. In order to identify and quantify
loss exposure stemming from market risk, the savings bank employs the Value-at-Risk (VaR)
concept, which allows it to calculate the maximum loss for a given time horizon within a
statistical confidence interval due to fluctuations in market prices that affect the risk
exposure of cash transactions.
CatalunyaCaixa uses the Historical Simulation procedure to calculate the market risk
assumed by those business units that hold trading positions. The defined confidence interval
stands at 99% on a one-day horizon and a historical depth of two years for the risk factors to
which the savings bank's cash business is exposed.
Following this approach, the entity’s VaR calculation software determines the worst
theoretical loss with the chosen confidence level and time horizon that could be incurred by
subjecting current positions to the daily fluctuations in risk factors reported over the previous
two years.
So as to confirm the utility of the market risk model, CatalunyaCaixa conducts backtesting
to benchmark daily results with the VaR figure calculated from the same position. It then
verifies how often daily losses exceed the VaR figure. The model's validity can be confirmed
by checking whether the number of overlimits exceeds the number projected a priori for the
chosen confidence interval.
Underpinning the market risk control system is a daily process of measuring, monitoring
and controlling a fully-comprehensive system of limits previously approved by the savings
bank's Board of Directors, which includes VaR figures, the market value of the positions and
the sensitivity to interest rate fluctuations relating to all activities of the Treasury and Capital
Markets Division, which are exposed to market risk. The Wholesale Risks Committee is
authorised to establish specific limits for each management unit.
4. Balance Sheet-Embedded Structural Interest Rate Risk
This is essentially the exposure of an entity’s net interest income and the economic value
of its capital to fluctuations in interest rates. As part of its process of managing balance
sheet-embedded structural interest rate risk, CatalunyaCaixa has included among its main
objectives the need to cushion NII against interest rate fluctuations and protect the economic
value of its capital.
The Assets and Liabilities Committee (ALCO) is entrusted with rolling out the necessary
procedures to ensure compliance at all times with the interest rate risk control and
management policies prescribed by the Board of Directors. The committee also approves
limits on exposure to interest rate risk, expressed in terms of changes in the savings bank's
equity and over a twelve-month horizon.
With a view to cushioning and protecting the balance sheet against interest rate
fluctuations, the entity acquires financial derivatives under cash flow macro-hedges and fair
value macro-hedges, respectively.
58
Under instructions from the ALCO, the task of managing the balance sheet is coordinated
between the divisions directly responsible for managing assets and liabilities.
Functions are organised within CatalunyaCaixa in such a way as to ensure an efficient
separation of duties between information generating centres, decision makers, managers,
controllers and recorders from top to bottom and vice-versa.
Attached to the Global Risk Control and Management Department, Market and Balance
Sheet Risk is responsible for identifying, measuring, controlling, monitoring and reporting the
savings bank's balance sheet risk, with the following duties being of particular note:
a) Calculating the sensitivity of bank equity and the sensitivity of the net interest income in
accordance with the guidelines established in the official documents to be reported
periodically to the Bank of Spain.
b) Verifying that hedge transactions meet the requirements for registration as such.
c) Assessing, monitoring, controlling and reporting to the ALCO on compliance with the limits
and policies established by the committee.
d) Monitoring hedge efficiency, determining any inefficiencies identified in each period and
gauging their impact.
e) Validating the structural interest rate risk measurement approaches employed for
managing this particular risk.
Structural interest rate risk reflected on the balance sheet is associated with the trading
portfolio, given that all entity transactions that generate positions in currencies are managed
jointly with the other trading positions.
5. Liquidity Risk
Liquidity can be defined as the capacity of a financial institution to secure funds to meet
its existing obligations, regardless of when they were assumed. In turn, liquidity risk arises
when the institution is no longer able to honour its contractual obligations, with the
inevitable knock-on effect on its image and financial stability.
Liquidity is managed and controlled through continuous risk oversight mechanisms and
liquidity indicators. The Treasury and Capital Markets Division manages the savings bank's
daily positions. The accuracy of the resulting information is verified through follow-ups on
retail activity and through the global accounts matching process conducted monthly.
The entity also oversees contingency plans to guard against liquidity crises. These plans
contain instructions on how to proceed in the event that certain parameters are altered. One
of the objectives of the liquidity policy is to define how to proceed in the event of illiquidity,
whether this is due to internal savings bank-related reasons (should lending outstrip budget,
unforeseeable drop in investment-eligible borrowing from customers, impossibility of
renewing sources of funding, restrictions placed on external lines of credit, etc.), or
unforeseeable external causes affecting liquidity (credit crunch), the overriding aim being
that these events do not affect the smooth daily functioning of the entity.
As discussed above, on 5 July 2010 the Board of Directors approved the Liquidity
Contingency Plan and the Policies for Managing and Controlling Liquidity, which describe the
organisational procedures to be followed in the event of liquidity pressure or if the savings
bank's sources of funding dry up.
A Liquidity Committee has been set up to control, monitor and mitigate liquidity risk. The
committee comprises: the Assistant Managing Director, the Finance and Management Control
Department, the Treasury and Capital Markets Division, the Planning and Management
Control Division, the Risk Control and Management Division, and the Treasury and Balance
Management Front Office Department. The Liquidity Committee meets monthly (or more
often if deemed necessary) to address: monthly changes in liquidity, the current position of
sources of financing and calendar of maturities, the future financing plan, projections on the
entity's liquidity position in 12 months and five years, projections as part of a stress scenario
and limits on daily oversight. The committee also proposes corrective measures to remedy
any departures from agreed budgets.
59
6. Counterparty Risk
Counterparty risk can be defined as the risk of incurring losses should a counterparty fail
to honour its payment obligations under money market and derivative transactions.
The savings bank establishes maximum counterparty risk exposure levels based on the
short- and long-term credit ratings awarded by official ratings agencies (Moody's, Fitch and
S&P), while also taking into account the equity and other financial and market variables of
the counterparties with which the entity wishes to do business.
These caps are approved by the Board of Directors, although the Wholesale Risk
Committee is authorised, depending on prevailing credit market conditions, to apply more
restrictive limits or eliminate them if deemed necessary, based on the savings bank's internal
analysis of available information for each counterparty.
In order to establish caps for all counterparties covered by the internal rating models of
CatalunyaCaixa, the Wholesale Risk Committee relies on the reports provided by the
Corporate and Public Sector Rating Department.
Similarly, CatalunyaCaixa adopts risk mitigation tactics by signing security contracts and
remuneration agreements with all counterparties with which the entity is involved in
significant derivative activity. This minimises counterparty risk exposure as, in the event of
default, the savings bank has cash security equivalent to its exposure under the contracted
derivatives.
7. Issuer Risk
Issuer risk means the risk of possible losses should an issuer of fixed income securities or
securitised assets default.
The entity follows the same approach as for counterparty risk by establishing maximum
investment limits, this time for issuer risk.
These caps are approved by the Board of Directors, although the Wholesale Risk
Committee is authorised to impose more stringent limits or otherwise eliminate them if
deemed necessary.
8. Concentration Risk
The savings bank has a periodic portfolio control process in place, allowing it to evaluate
and monitor any concentrations of risk that could be considered significant, whether with
external customers or with the group's own companies, with special emphasis placed in the
latter case on monitoring multigroup companies and changes in shareholder or operating
agreements.
Concentration risk is managed by establishing controls at the time the risk is accepted
and, a posteriori, in relation to both the volume and the percentage of concentration over
capital, and by economic group, sector of activity, or other material factors that could lead to
an alert.
These controls, while also complying with prevailing legislation, are a result of the internal
limit controls established in the Risk Control Policies approved by the Board of Directors.
9. Country Risk
CatalunyaCaixa limits its counterparty risk and issuer risk exposure to entities and/or
companies whose country belongs to group 1, as defined in Bank of Spain Circular 4/2004,
provided that none of the ratings awarded to such countries is Baa1/BBB+ or less.
Only certain operations involving letters of credit or isolated guarantee or counter
guarantee transactions for a very limited amount and term may be arranged with entities
belonging to countries with a lower credit rating.
10. Settlement Risk
60
Encompasses all buying and selling of currencies, irrespective of term. The limit for
settlement risk is set at double the risk accepted for the shortest term of counterparty risk.
11. Internal validation
CatalunyaCaixa has its own Internal Validation Department in accordance with the
requirements imposed by Bank of Spain Circular 3/2008 and Bank of Spain “Validation
Document no. 2”. The department ensures the quality, effectiveness and adequacy of the
internal models employed within the entity, both for management purposes and in order to
calculate regulatory capital. The department is now fully involved in the process of making
changes to the advanced risk management systems by issuing its own opinion before the
changes are implemented.
The main duties of the department are essentially the core elements of an advanced risk
management system: approaches, documentation, data employed, quantitative aspects and
qualitative aspects (use tests), among others.
2010 saw completion of the Fourth Cycle of Internal Validation, both for credit risk and
economic capital (Second pillar), in accordance with the Strategic Internal Validation Plan
2010-2012 prepared by the savings bank. This cycle required the entity to conduct various
tests covering both quantitative and qualitative aspects. The results are set forth in a
number of different Validation Reports, one for each of the models currently in place within
the savings bank. Opinion reports have also been prepared to record the assessment of
Internal Validation in relation to any material changes made to the models, both for credit
risk and risk integration (economic capital). The validation reports are sent to the Bank of
Spain, Internal Auditing and the validated units.
As regards validation of credit risk, tests have focused primarily on verifying that the
models are able to discriminate sufficiently, that the PD curve is sufficiently accurate, and
that the risk parameters (PD, EAD and LGD) remain stable. The entity also analyses the
performance of its portfolio under stress conditions (stress testing). Another significant part
of the battery of tests is to confirm that the models are correctly used in daily risk
management processes (use tests).
In relation to validation of the economic capital model, efforts have focused on model
inputs, the approach or structure and how it is used.
F.2. List the risks covered by the system, and explain why the risk control systems
adopted are suited to the entity's profile, with regard to the savings bank's capital
structure.
The previous section discusses at length the various risks that are managed and
controlled from the different departments that make up the Risk Acceptance and Recoveries
Department, and from the Global Risk Control and Management Department. These
departments undergo an internal audit process. Similarly, and in relation to the advanced
credit rating models, the Internal Validation Department carries out the control functions
described above.
The Solvency Committee, which represents the Managing Director, Assistant Managing
Director and three other divisions, conducts a monthly follow-up on the different capital
ratios and likewise assesses the financial impact of CatalunyaCaixa's most significant
business activities, whether in terms of the amount and composition of the equity or assets,
or in terms of capital requirements. It also monitors solvency and profitability objectives
and, where necessary, proposes the corresponding corrective measures.
61
Explained below in more detail are the main duties of the committee:
-Monitoring the consolidated solvency data, analysing all the risks to which the savings bank
is exposed. This oversight involves analysing the limit control processes in place, in line with
established objectives.
-Detailed analysis of changes in RWA and equity.
-Capital planning and impact of various scenarios by outlook.
-Reviewing objectives and policies and adopting, where necessary, corrective measures
which, a posteriori, will be reported to the Executive Committee or Board of Directors.
-Analysing economic capital data (Second pillar) in a central scenario and in other more
adverse scenarios.
Oversight rests with the Risk Control and Oversight Division, attached to the Global Risk
Control and Management Department.
Periodic reports are made to the governing bodies to explain how capital adequacy and
the total risk assumed match up (the risks as described in the previous section), and to
detail compliance with the risk management policies and procedures in place.
Similarly, CatalunyaCaixa draws up its Capital Self-Assessment Report for the purposes of
Second pillar. In 2010, the entity, following on from the approach adopted in 2009,
conducted a double self-assessment, with the second being an update of the report furnished
at the start of the year to incorporate the changes resulting from the merger process.
During the different self-assessments, the savings bank quantifies the level of economic
capital needed for strategic purposes, along with capital requirements for all risks tagged as
material. This calculation includes not only First pillar risks (credit, operational and market),
but also economic capital requirements for other risks, such as liquidity, structural interest
rate, concentration and property risk. The calculation is carried out on a three-year time
horizon, and capital sources are also planned in tandem on a three-year horizon.
In addition to the risks covered by the economic capital measurement model during the
capital self-assessment process, the entity also identifies other material risks that are
currently subject to qualitative treatment, on the understanding that this kind of treatment is
sufficient (technological risk, compliance risk, business risk and reputation risk).
The savings bank is currently working on a new Capital Self-Assessment Report with
updated information for 31 December 2010.
F.3. In the event that any of the risks affecting the savings bank and/or its group
materialised over the period, explain the causes and state whether the control
systems in place worked adequately.
F.4. Indicate if there is any committee or other governing body responsible for
establishing and supervising these control systems. If so, explain their duties.
F.5. Identify and describe the processes for complying with the different
regulations affecting the savings bank and/or its group.
62
G
ANNUAL REPORT PREPARED BY THE SAVINGS BANK'S INVESTMENT COMMITTEE
PURSUANT TO ARTICLE 20 TER OF ACT 31 OF 2 AUGUST 1985 (LEY 31/1985), ON THE
BASIC REGULATIONS FOR GOVERNING BODIES OF SPANISH SAVINGS BANKS
G.1. Complete the following table on acquisitions or sales of significant
shareholdings in listed companies carried out by the savings bank during the
financial year, either directly or through any of its group companies.
Amount (in
thousand euro)
Investment
or disposal
Transaction
completion date
Entity acquired or sold
Direct or indirect
holding held by
the savings bank
after the
transaction
Date on which
the Investment
Committee
issued its report
and opinion on
the financial
viability of the
transaction and
its compliance
with the savings
bank's budgets
and strategic
plans
G.2. Complete the following table on investments and disposals in business
projects by the savings bank over the year , whether directly or through group
companies, insofar as such investments or disposals include part or full managerial
control or seats on the governing bodies.
Amount (in
thousand euro)
Investment
or disposal
Transaction
completion date
Entity acquired or sold
209,521 Disposal
28/09/10
31,668 Disposal
28/09/10
19,591 Disposal
28/09/10
21,255 Disposal
28/09/10
ASCAT
VIDA
DE
SEGUROS
Y
REASEGUROS
ASCAT
SEGUROS
GENERALES
SA
DE
SEGUROS
Y
REASEGUROS
CAIXA MANRESA VIDA
S.A.
COMPANYIA
D'ASSEGURANCES
CAIXA
TARRAGONA
VIDA
S.A.
D'ASSEGURANCES
I
REASSEGURANCES
63
Date on which
the Investment
Committee
issued its report
and opinion on
the financial
viability of the
transaction and
its compliance
with the savings
bank's budgets
and strategic
plans
49.99 FAVOURABLE
REPORT ISSUED
ON 02/03/10
49.99 FAVOURABLE
REPORT ISSUED
ON 02/03/10
Direct or indirect
holding held by
the savings bank
after the
transaction
49.99 FAVOURABLE
REPORT ISSUED
ON 15/04/10
49.99 FAVOURABLE
REPORT ISSUED
ON 22/03/10
1,700 Disposal
28/09/10
CAIXA MANRESA
2,600 Disposal
28/09/10
CAIXA TARRAGONA
49.99 FAVOURABLE
REPORT ISSUED
ON
15/04/10,
PERTAINING TO
THE
GENERAL
INSURANCE
BRANCH
OF
CAIXA MANRESA
49.99 FAVOURABLE
REPORT ISSUED
ON
22/03/10,
PERTAINING TO
THE
GENERAL
INSURANCE
BRANCH
OF
CAIXA
TARRAGONA
G.3. Indicate the number of reports issued by the Investment Committee during
the year.
Number of reports issued
1
G.4. Indicate the date on which the Investment Committee's Annual Report was
approved.
Report date
H
08/02/11
REMUNERATION
H.1. Indicate, in aggregate form, the total remuneration paid to key executive
personnel and to members of the Board of Directors in their capacity as directors:
Remuneration
Salaries and other similar remuneration
Obligations contracted for pension schemes or
payments of life insurance premiums
Amount (in
thousand euro)
1,867
2,655
H.2. Complete the following tables showing, in aggregate form, total attendance
allowances and other similar remuneration:
a) Board of Directors:
Remuneration
Attendance allowances and similar
remuneration
Amount (in
thousand euro)
1,151
b) Control Committee:
Remuneration
Attendance allowances and similar
remuneration
64
Amount (in
thousand euro)
244
c) Remuneration Committee:
Remuneration
Amount (in
thousand euro)
23
Attendance allowances and similar
remuneration
d) Investment Committee:
Remuneration
Amount (in
thousand euro)
4
Attendance allowances and similar
remuneration
H.3. Indicate, in aggregate form, the total remuneration paid to members of the
savings bank's governing bodies and to its executive officers when representing
the bank on listed companies or other entities in which the entity holds a
significant presence or holding:
Remuneration paid (in thousand euro)
35
H.4. Indicate, in aggregate form, any indemnity or “golden parachute” clauses for
cases of dismissal, resignation or retirement of key executive officers and members
of the Board of Directors in their capacity as Board members. Indicate whether
these contracts must be disclosed to, or approved by, the governing bodies of the
savings bank or its group:
Number of beneficiaries
Board of Directors
General Assembly
Body authorising the clauses
YES
NO
Is the General Assembly informed of the clauses?
I
EQUITY UNITS (Cuotas participativas)
I.1. Complete, if applicable, the
participativas) in the savings bank:
Date of latest modification
following
table
on
Total volume (in thousand
euro)
0.00
equity
units
(cuotas
Number of units
0
If there are different types of units, list them in the table below:
Type
Number of units
Nominal unit amount
I.2. Indicate the direct and indirect holders of equity units (cuotas participativas)
that represent 2% or more of the total volume of outstanding shares of your
institution at the close of the financial year, excluding Board members:
Name or corporate
name of the unit
holder
Number of direct units
65
Number of indirect
units (*)
% of total
volume
(*) through:
Name or corporate name of the
direct unit holder
Number of direct units held
% of total volume
Total:
Indicate the most relevant movements affecting the equity unit structure during the year:
Name or corporate name of
shareholder
Transactio
n date
Description of transaction
I.3. Complete the following tables on the entity's Board members that hold equity
units in the savings bank:
Name
Number of direct units
held
Number of indirect
units held (*)
(*) held through:
Name or corporate name of the direct unit holder
% of total
volume
Number of direct units held
Total:
% of total volume of equity units held by the Board of Directors
0.000
I.4. Complete the following tables on the treasury shares of the savings bank:
At year-end:
Number of direct shares held
Number of indirect shares
held
(*) through:
Name of the direct shareholder
% of total volume of shares
Number of direct shares
Total:
Results obtained in the year from transactions with treasury interest
(in thousand euro)
0
I.5. Detail the conditions and timeframe/s in which the General Assembly may
authorise the Board of Directors to acquire or transfer the treasury shares
indicated above.
66
J
DEGREE OF COMPLIANCE WITH GOOD GOVERNANCE RECOMMENDATIONS
If, at the time this report was drafted, there are no generally accepted good governance
recommendations specifically tailored to the legal nature and personality of Spanish savings
banks, describe the corporate governance practices that the savings bank is legally obliged
to comply with, plus any additional practices that the savings bank it has taken on.
In the event that, at the time this report is prepared, there are generally accepted good
governance recommendations specifically tailored to the legal nature and personality of
Spanish savings banks, indicate the degree to which the savings bank complies with existing
corporate governance recommendations and, where appropriate, the degree to which it has
not implemented these recommendations.
In the event that the savings bank does not comply with any of these recommendations,
explain the recommendations, rules, practices and criteria it applies.
As of the date of this report, the corporate governance document for Spanish savings
banks that issue securities traded on official securities markets has yet to be prepared, such
document as envisaged under Provision One 1.i) of Ministry of Economy Order 354 of 17
February 2004, governing the annual corporate governance report and other information of
Spanish savings banks that issue securities traded on official securities markets.
This notwithstanding, CatalunyaCaixa does generally apply good governance practices,
some of the most significant being as follows:
Governing bodies
In accordance with Article 7 of the Articles of Association, members of the governing
bodies, regardless of the sector they represent, must act at all times in the sole interests of
the savings bank, its depositors, and in furtherance of its social purpose, irrespective of any
other interests that may affect them.
Similarly, membership of governing bodies is honorary and unpaid, and does not entitle
members to any remuneration other than the attendance and travel allowances established
by the entity itself, in accordance with the rules prescribed by the protectorate attached to
the regional Department for the Economy and Knowledge of the Government of Catalonia.
Pursuant to Act 14 of 27 July 2006 of the Government of Catalonia, the position of
chairman is paid, with due regard paid to the parameters stipulated under Article 1.3 of
Order 70/2007 of the regional Department for the Economy and Knowledge, and the fact
that the chairman's duties are not executive in nature, and that his or her services are not
provided on an exclusive basis. The chairman's remuneration for the second half of 2010
amounted to 80,800 euros, which is compatible with payment of the corresponding
attendance and travel allowances. Over the transitional period of the governing bodies (1
July - 16 November 2010), and in accordance with the terms of the Merger Agreement
between Caixa d’Estalvis de Catalunya, Caixa d’Estalvis de Tarragona and Caixa d’Estalvis de
Manresa, the First Vice-Chairman received 12,500 euros in remuneration, this being the
same remuneration received as Chairman of his entity of origin, which is also compatible
with payment of the corresponding attendance and travel allowances.
Social Work Projects
The Social Work of Caixa Catalunya, Tarragona i Manresa is channelled through Fundació
Caixa Catalunya, Tarragona i Manresa, Fundació Caixa Tarragona and Fundació Caixa
Manresa, and embraces cultural, environmental, social and knowledge. Social Work proceeds
in accordance with the guidelines and under the oversight and control of the Board of
Directors and the Social Work Committee, the latter being attached to the Board. The
aforementioned foundations are governed by a board of trustees. The governing body of the
foundations meets at least once a year and is chaired, in the case of Fundació Caixa
Catalunya, Tarragona i Manresa, by the Chairman of CatalunyaCaixa. For Fundació Caixa
Manresa and Fundació Caixa Tarragona, chairmanship rests with the First and Second ViceChairmen, respectively, of CatalunyaCaixa. The Managing Director of CatalunyaCaixa always
67
sits on the foundations' boards of trustees as Vice-Chairman. Members of the foundations'
board of trustees are subject to the same criteria and limits regarding performance and
conduct as members of the Social Work Committee, and are not paid any kind of
remuneration.
In relation to the funds earmarked for Social Work, the governing bodies of Caixa
Catalunya, Tarragona i Manresa decide yearly on how to distribute the funds. Prior to the
decision, they take into account prevailing social needs and the ability of the public sector to
meet the most important of these not covered by public funds. The earmarked funds are
partly managed by the foundations, which channel all Social Work activities. In this regard,
Social Work rolls out its own initiatives through the foundations and collaborates with nonprofit entities.
In line with this approach, Social Work awards financial aid to the projects of other
entities through public invitations open to non-profit organisations, the aim being to make
the actions of Caixa Catalunya, Tarragona i Manresa more transparent, and to collaborate
with the various initiatives under way in different regions. The bidding terms are published
online. After receiving the projects, it sets up an Appraisal Committee attached to the Board
of Trustees of the corresponding foundation. This committee then selects the best projects
received under the invitation. Once the aid has been approved, full details are published on
the corporate website and in the Social Work Activities Report.
The following core criteria govern the concession of funds: suitability of the proposed
activity to the subject-matter of the invitation; guaranteed management control and
accountability; coherence between budget and results; and the relevance of the proposal and
the resulting public benefit. These criteria mirror the long-standing and traditional
commitment of Caixa Catalunya, Tarragona i Manresa to forge a better society by fostering
positive and sustainable social actions, both from an economic and environmental
standpoint.
At the start of every year, the savings bank earmarks funds for Social Work in accordance
with the corresponding decision of the Board of Directors. These funds remain in an account
to which the Social Work budget is charged at 31 December.
At the time of the merger among Caixa Catalunya, Caixa Tarragona and Caixa Manresa,
the decision was reached not to calculate and pay the three individual budgets, but to
consolidate them: 25.0 million euros in Social Work programmes for Caixa Catalunya, 6.5
million euros for Caixa Manresa and 5.0 million euros for Caixa Tarragona. At 31 December
2010, this combined Social Work budget required Caixa Catalunya, Tarragona i Manresa to
pay funds amounting to 33.8 million euros. This amount, along with the 15.7 million euros
paid from the entity’s own earnings, meant that total funds dedicated to Social Work
programmes stood at 49.5 million euros. More specifically, the equivalent of 20.9% was
earmarked for social welfare and healthcare, 38.6% for culture and leisure time, 19.9% for
education and research, and the remaining 20.5% for natural and artistic heritage.
Transparency and confidentiality
CatalunyaCaixa provides its customers, in a clear and understandable manner, with all
information concerning the products and services they procure, including the interest rates,
fees and commissions applied in each case, and the policies demanded by existing
regulations on markets in financial instruments (MIFID). In accordance with Bank of Spain
regulations, this information is also made available to the public at all branches and via the
savings bank's website.
In relation to customer information, special importance is attached to the brochures,
leaflets and advertising posters published in accordance with the rules on transparency
imposed by the competent regulatory bodies (Bank of Spain and the CNMV).
In this regard, all advertising sent to customers is subject to stringent standards of
transparency and quality and, prior to publication, must invariably be authorised by the
corresponding oversight bodies.
CatalunyaCaixa requests authorisation from the Financial Policy and Insurance
Department of the regional Department for the Economy and Knowledge of the Government
68
of Catalonia, and also from the Spanish Autocontrol association. Any consultation or query
deemed necessary ahead of the publication stage (depending on the nature of the
product/service to be advertised) may be raised these same departments, or the Bank of
Spain, the Spanish CNMV or the Spanish General Directorate for Insurance.
In this regard, CatalunyaCaixa is attached to Autocontrol, an advertising self-regulation
association that seeks to ensure that advertising remains a useful instrument in the financial
process, while safeguarding the rights of consumers and users and combating unfair
competition. The association has a Code of Advertising Conduct that associated entities must
observe, with compliance monitored through an independent control body.
Ethical relations with suppliers
CatalunyaCaixa's commitment to society also encompasses ethical and transparent
relations with suppliers.
Likewise, CatalunyaCaixa prioritises consumables and recyclable goods, insofar as these
meet pre-determined standards of quality.
When it comes to environmentally responsible purchasing, CatalunyaCaixa typically meets
its paper needs through ISO 14001 and FSC-certified suppliers (environmental management
and certification of forest of origin, respectively). These suppliers adhere to an environmental
management programme that encompasses all stages of the product's life, thus cutting back
on water consumption and ensuring cellulose production through sustainable forest
management.
In accordance with the principle of transparency, all paper and consumables are acquired
through invitations to bid. These competitive processes or auctions are open to all suppliers
that meet a number of pre-determined requirements reflecting the values of CatalunyaCaixa
and effectively guarantee, in addition to equal opportunities and information for all suppliers,
the best possible purchase price for the entity.
Prevention of money laundering
By virtue of its social commitment to help prevent the financial system from being used
for money laundering obtained from unlawful activities, and in compliance with applicable
law, CatalunyaCaixa operates financially in accordance with best banking practices,
establishing, among other things, preventive measures aimed at analysing and controlling
transactions, identifying and determining customers' business and training employees.
The savings bank has a Money Laundering and Funding of Terrorism Prevention Manual,
which can be found at www.catalunyacaixa.com / About us / Investors Information /
Prevention of money laundering and the financing of terrorism, along with software tools to
detect suspicious transactions, and an annual training plan for employees.
CatalunyaCaixa has created the Internal Control Body as the most senior body entrusted
with the fight against money laundering, and comprising qualified representatives on the
subject from various different areas of the CatalunyaCaixa Group. Its main duties are to
define the policy of CatalunyaCaixa towards money laundering, to champion the
development and implementation of money laundering procedures, and to analyse and
communicate any transactions deemed suspicious in accordance with applicable law to the
Executive Office of the Spanish Commission for the Prevention of Money Laundering and
Monetary Violations.
CatalunyaCaixa submits its anti-money laundering procedures on a yearly basis to the
scrutiny of the Internal Control Body, and to an external expert, as provided for under Act 10
of 28 April 2010, on the prevention of money laundering and the funding of terrorism.
Internal Code of Conduct
On 5 July 2010, the Board of Directors of CatalunyaCaixa ratified the entity's adherence
to the Internal Code of Conduct relating to the securities market, in accordance with the
CECA Sectorwide Model (Spanish Association of Savings Banks).
69
The same Board meeting approved the new Internal Code of Conduct Control Body
(ICCCB), which was authorised to implement the controls required to comply with the terms
of the Internal Code of Conduct.
K
OTHER INFORMATION OF INTEREST
If you consider that there are any material principles or aspects related to the corporate
governance practices followed by your organisation that have not been addressed in this
report, indicate and explain below.
This Annual Corporate Governance Report contains information on CatalunyaCaixa, the
surviving entity following the merger process that took place on 1 July 2010 among the
savings banks Caixa Catalunya, Caixa Tarragona and Caixa Manresa.
There are no specific regulations governing the General Assembly or the Board of
Directors, given that their duties and functioning are detailed in the Articles of Association.
Governing bodies over the transitional period
In accordance with a resolution adopted on 17 May 2010 at the General Assembly of the
three entities party to the merger, the structure of the governing bodies over the transitional
period (from the creation of the new entity up until the forming of the new governing bodies)
embraces all the governing bodies of each merged entity. Thus, from 1 July up to 16
November 2010, membership of the General Assembly extended to all the General Meeting
members that previously belonged to the three assemblies (377 in total). The same
approach was followed for the other governing bodies - Board of Directors (54 members),
Executive Committee (21 members), Social Work Committee (21 members) and Control
Committee (18 members) - except for the Remuneration and Investment Committees,
membership of which remained at three.
During the transitional period, the following individuals representing savings bank
employees were removed from the General Assembly following their departure from the
entity: Manuel Estruga Bartrolí, José Gisbert Llangostera, Alfred Nebot Nebot, José Antonio
Nuño Cuenca, Juan María Porta Josa, Pablo Ros García, Sergio Vich Sáez, Aurelio Angel Moya
Labarta and Carlos Hijos Mateu.
Mr. Hijos was also removed from the Control Committee and replaced by Luis Martínez
Campos.
The transitional period concluded with the General Assembly meeting of 16 November
2010, at which the definitive governing bodies were officially formalised in accordance with
section A of this Annual Corporate Governance Report.
The savings bank's Managing Director acts as Secretary at the meetings of the
Remuneration and Investment Committees, under the same provisions of the Articles of
Association governing his attendance at Board meetings.
Explanatory notes:
Section A
Amendment to the Articles of Association
The extraordinary General Assembly meeting held on 16 November 2010 agreed to
amend the Articles of Association to bring them in line with the new drafting of Legislative
Decree 1/2008, as introduced by Decree Law 5/2010. This amendment was approved on 22
February 2011 by the Department for Economy and Knowledge attached to the Government
of Catalonia.
The most salient aspects of the amendments made to the Articles of Association are
explained in various sections of this report under section A (Structure and Functioning of the
Governing Bodies).
70
Resignation of the Chairman of the Board of Directors
At the Board meeting of Caixa d'Estalvis de Catalunya, Tarragona i Manresa held on 15
February 2011, Mr. Fernando Casado Juan tendered his resignation as Chairman of the Board
of Directors, Board member and Managing Director of the entity.
Sections B1, B2
The corresponding sections relating to lending, surety and security transactions effected
by members (and related parties) of the Board of Directors (B1) and of the Control
Committee (B2) list the transactions effected by Board and Control Committee members
during the transitional period, which spanned 01/07/10 to 16/11/10, and also those effected
by the Board and Control Committee members elected at the General Assembly held on the
latter date.
Section C
This section details the lending transactions entered into with public institutions, including
regional government bodies, which have designated members to the General Assembly not
only over the transitional period, which spanned 01/07/10 to 16/11/10, but also to the
definitive post-merger General Assembly formed on the latter date. For such purposes,
please note that while Antoni Llardén Carratalà previously served as General Assembly
member on behalf of L'Hospitalet de Llobregat Town Council up until 16 November 2010, he
now acts on behalf of the Provincial Government of Barcelona.
In relation to the information contained within Section C of the Annual Corporate
Governance Report, following the close of the fiscal year, Abrera Municipal Council appointed
Jesús Morales Suazo as its representative at the General Assembly of Caixa d'Estalvis de
Catalunya, Tarragona i Manresa.
Section H1
The information contained in Section H1 pertains to the members of the CatalunyaCaixa
Board of Directors, which comprises the Managing Director, the Assistant Managing Director
and a further 11 directors. The obligations assumed under pension schemes or payments of
life insurance premiums remain in effect for 12 months.
Section H2
The figures on attendance allowances and similar remuneration described in Section H2 a)
include:
a) Remuneration payable to the Chairman as specified in Section J.
b) Allowances for attending meetings of the governing bodies (including its delegate
committees) payable to members of the transitional Board of Directors, in accordance with
the merger agreement, which comprised 54 members holding office from 1 July to 16
November 2010.
c) Allowances for attending meetings of the governing bodies (including its delegate
committees) payable to members of the definitive post-merger Board of Directors, which
comprises 21 members holding office from 16 November 2010 onward.
As this report is an appendix to the Management Report, and for the purpose of any
possible comparison with the figures set forth in the Annual Report, please note that the
remuneration pertaining exclusively to allowances payable to Board members (€250,000),
plus the (€835,000) as way of remuneration payable to the 50 former Board members, plus
the remuneration of the Chairman (€80,800 + €12,500), is equal to the total remuneration
indicated in Section H2 a) of this report (€1,151,000), plus the remuneration stipulated in
Section H2 c), Remuneration Committee (€23,000), plus that detailed in Section H2 d)
Investment Committee (€4,000).
The figures on attendance allowances and similar remuneration described in Section H2 b)
above include:
71
a) Allowances for attending meetings of the governing bodies payable to members of the
transitional Control Committee, in accordance with the merger agreement, which comprised
18 members holding office from 1 July to 16 November 2010.
b) Allowances for attending meetings of the governing bodies payable to members of the
definitive post-merger Control Committee, which comprises 10 members holding office from
16 November 2010 onward.
This Annual Corporate Governance Report was approved by the savings bank's Board of
Directors at a meeting held on 22/03/11.
List any directors that voted against, or abstained from voting on the approval of this
report.
Abstentions / vote against
Name of director
72
ADDENDA TO APPENDIX I
A.1. GENERAL ASSEMBLY
A.1.1. GENERAL ASSEMBLY MEMBERS
GENERAL ASSEMBLY MEMBERS
Name of General Assembly
member
A. RAQUEL EGEA MARTÍNEZ
ABEL PIÉ LACUEVA
ALBERT ABELLÓ HIERRO
ALBERT ZARAGOZA TEIXIDÓ
ANA MARIA AGON ANGRILL
ANA MARIA BAYERRI MARGALEF
ÀNGEL CUNILLERA ZÁRATE
ÀNGEL FERNÁNDEZ MARTÍNEZ
ANGEL LÓPEZ BARANGA
ANGEL MIRET SERRA
ANGEL RIUS VILAPLANA
ANTONI GIL BERTRAN
ANTONI LLARDEN CARRATALÀ
ANTONI MONTSENY DOMÈNECH
ANTÒNIA MARIA SÁNCHEZ
MORENO
ANTONIO VISA TORRES
ARTURO ISERN COSTA
BÀRBARA MARTÍ ERFURT
BENITA PIQUÉ MENAPLATA
BERNAT VALLS FUSTER
CARLES MIRÓ LINARES
CARLOS OMAR AVILÉS REYES
CARLOTA MAGRIÑÀ NIN
CARMEN PASTOR SOLERNOU
DAVID GÓMEZ VILLAR
DOLORES SOTOMAYOR GARCÍA
ELVIRA CECILIA MORILLO
ENRIQUE MARIA BARBERÁ RAMOS
ESTER BOIXADERA BAULENAS
ESTEBAN DÍAZ SÁNCHEZ
EUDALD TORRES ROBERT
EVA NAVARRETE IZQUIERDO
FERNANDO CASADO JUAN
FERNANDO GARCIA BAENA
Represented group
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
LOCAL AUTHORITIES
DEPOSITORS
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
DEPOSITORS
DEPOSITORS
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
DEPOSITORS
EMPLOYEES
EMPLOYEES
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
73
Date of
appointment
FERNANDO RAJA BORRAS
FERRAN FIGUEROLA SICART
FLORENTI JORGE MACHADO
FRANCESC IGLESIAS SALA
FRANCESC MAURI CASAS
FRANCESC SÁNCHEZ ARCHS
FRANCISCO GARCÍA PRIETO
FRANCISCO JAVIER BENIMELI
RIPOLL
FRANCISCO JAVIER ROJANO
AGUIRRE
FRANCISCO LONGO MARTÍNEZ
FRANCISCO SANZ GARCÍA
FRANCISCO ÚBEDA LÓPEZ
GABRIEL LUCAS MUELAS
GAIETÀ JOVÉ GALCERAN
IGNASI CUADROS VILA
IGNASI TORRAS GARCIA
INDALECIA AMORÓS CUNILLERA
JAUME ROQUET SÁNCHEZ
JAVIER SÁNCHEZ LÓPEZ
JAVIER BASSO ROVIRALTA
JAVIER MORUECO TORRECILLAS
JAVIER VILLAMAYOR CAAMAÑO
JOAN
JOAN
JOAN
JOAN
ÀNGEL LLIBERIA ESTEVE
BOSCH PONS
CARLES CIRERA IZQUIERDO
CARRERA PEDROL
JOAN COLS TORRABADELLA
JOAN TÀPIA NIETO
JOAQUIM ADRIÀ HERRERAS
JOAQUIM LLACH MASCARÓ
JOAQUIM SOLÉ VILANOVA
JORDI BERTRAN CASTELLVÍ
JORDI CAMPINS PUNTER
JORGE ANTONIO GARCÍA
RODRÍGUEZ
JORGE DURO GRAU
JORGE ESCUDERO CARBONELL
JORGE PIÑOL SUÑER
JOSÉ LUIS DE GRADO RODRÍGUEZ
JOSÉ MANUEL ARTIGUES PEDROLA
JOSÉ MANUEL DE LA VEGA
CARRERA
JOSÉ MORATONA ORRIT
JOSEP ALTAYO MORRAL
JOSEP ALABERN VALENTÍ
JOSEP ANDREU FIGUERAS
LOCAL AUTHORITIES
FOUNDING CORPORATIONS
AND ENTITIES
EMPLOYEES
FOUNDING CORPORATIONS
AND ENTITIES
EMPLOYEES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
EMPLOYEES
EMPLOYEES
LOCAL AUTHORITIES
EMPLOYEES
EMPLOYEES
DEPOSITORS
EMPLOYEES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
DEPOSITORS
DEPOSITORS
LOCAL AUTHORITIES
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
LOCAL AUTHORITIES
LOCAL AUTHORITIES
LOCAL AUTHORITIES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
LOCAL AUTHORITIES
FOUNDING CORPORATIONS
AND ENTITIES
EMPLOYEES
EMPLOYEES
DEPOSITORS
DEPOSITORS
DEPOSITORS
EMPLOYEES
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
LOCAL AUTHORITIES
FOUNDING CORPORATIONS
AND ENTITIES
74
JOSEP AZUARA GONZÁLEZ
JOSEP BUENO ESCALERO
JOSEP CANAL CODINA
JOSEP FORASTÉ SALTÓ
JOSEP GUASCH LUJÁN
JOSEP M. PLANAS VILELLA
JOSEP
JOSEP
JOSEP
JOSEP
M. SANTÓ SALVAT
MARIA CAMÓS CABECERÁN
MARIA FARRÉS PENELA
MARIA VALLÈS JOVÉ
JOSEP MOLINS CODINA
JOSEP RÀFOLS ESTEVE
JOSEP SISCART CONTRERAS
JOSEP VÍCTOR VALLS GAVALDA
JOSEPA BORRELL VALLS
JUAN ANTONIO MATAS ARNALOT
JUAN BOADA GRANADA
JUAN ECHÁNIZ SANS
LLUÍS ARAGONÉS DELGADO DE
TORRES
LLUÍS PIQUÉ SANCHO
LUIS MARTRET BERNADAS
LUIS MIGUEL PULIDO MELLADO
M DEL PILAR JUÀREZ ROMERO
M. DOLORS BONJORN CABA
M. EUGENIA CUENCA VALERO
M. TERESA VILALTA FERRER
MANEL ROSELL MARTÍ
MANUEL FUSTER PITARCH
MANUEL MEDEIROS PÉREZ
MANUEL RICHARD GONZÁLEZ
MANUEL SORIANO SABORIDO
MARC FERRER ESTEVE
MARGARITA CARME ANGLADA
MARIA ÀNGELS MASSOT FELIS
MARIA ELISA CASANOVA
DOMÈNECH
MARIA INMACULADA CAMPRODÓN
YLLA
MARIA JESÚS ESTUPIÑA ALBACAR
MARIA LOURDES TEIXIDOR CALMO
MARIA MONTSERRAT DELGADO
PÉREZ
MARIA PILAR SALAMERO PERIS
MARTA BADIA CANUDAS
MAURICI PRECIADO MAYDEU
MIGUEL ANGEL GARCIA SOLSONA
MIGUEL BORGES CIRERA
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
LOCAL AUTHORITIES
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
LOCAL AUTHORITIES
DEPOSITORS
DEPOSITORS
DEPOSITORS
DEPOSITORS
EMPLOYEES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
LOCAL AUTHORITIES
LOCAL AUTHORITIES
DEPOSITORS
DEPOSITORS
DEPOSITORS
DEPOSITORS
DEPOSITORS
LOCAL AUTHORITIES
DEPOSITORS
DEPOSITORS
DEPOSITORS
EMPLOYEES
DEPOSITORS
DEPOSITORS
EMPLOYEES
LOCAL AUTHORITIES
DEPOSITORS
75
MIQUEL RUBIROLA TORRENT
MIQUEL SUBIRATS PEÑA
MONTSERRAT BORRAS FRANCH
MONTSERRAT VILARRASA ANDREU
NOEMÍ MASSAGUÉ COMAS
NORMA GUTIÉRREZ GUERRA
NÚRIA BOZZO DURAN
NÚRIA CASALS CARRASCO
ORIOL CARBÓ SERIÑANA
PALOMA NAVARRETE VARELA
PENDING APPOINTMENT
PENDING APPOINTMENT
PENDING APPOINTMENT
PENDING APPOINTMENT
PENDING APPOINTMENT
PENDING APPOINTMENT
PENDING APPOINTMENT
PILAR GARCÍA GONZÁLEZ
RAFAEL DELGADO ABAD
RAFAEL HINOJOSA LUCENA
RAMON GUI ROCA
RAMON LLANAS SANMIQUEL
RAQUEL CABALLERO RAMÍREZ
RAQUEL PUIG PÉREZ
RICARD FERNÁNDEZ ONTIVEROS
ROBERT VENDRELL AUBACH
ROSA AGULLÓ GASULL
ROSA MARÍA CANO SÁNCHEZ
ROSA MARIA MORATONA
RODRÍGUEZ
ROSER PRAT CARDONA
SALVADOR ORTIZ GÓMEZ
SEBASTIÀ CATLLÀ CALVET
SÍLVIA MORALES RAGASOL
TOMAS BARRACHINA PICÓ
VALENTÍ MARTÍNEZ ESPINOSA
VÍCTOR ALABART GARRE
XAVIER LÓPEZ GARCIA
XAVIER OLLER JOAN
A.1.4. Where
Regulations:
applicable,
describe
FOUNDING CORPORATIONS
AND ENTITIES
LOCAL AUTHORITIES
DEPOSITORS
DEPOSITORS
EMPLOYEES
EMPLOYEES
FOUNDING CORPORATIONS
AND ENTITIES
EMPLOYEES
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
LOCAL AUTHORITIES
LOCAL AUTHORITIES
LOCAL AUTHORITIES
LOCAL AUTHORITIES
LOCAL AUTHORITIES
LOCAL AUTHORITIES
LOCAL AUTHORITIES
DEPOSITORS
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
EMPLOYEES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
DEPOSITORS
LOCAL AUTHORITIES
DEPOSITORS
DEPOSITORS
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
EMPLOYEES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
FOUNDING CORPORATIONS
AND ENTITIES
DEPOSITORS
the
contents
Description
76
of
your
General
Assembly
ANNUAL ACCOUNTS OF THE
CAIXA D’ESTALVIS DE
CATALUNYA, TARRAGONA I
MANRESA GROUP*
- 2010 -
* Translation of a report and accounts originally issued in Catalan language. In the event of
discrepancy, the Catalan language version prevails.
77
Financial statements
Consolidated balance sheets ....................................................................................................................... 80
Consolidated income statement ..................................................................................................................83
Consolidated statement of changes in recognised income and expense ......................................... 84
Consolidated statements of changes in equity ........................................................................................ 85
Consolidated cash flow statements.…………………………………………………………………………….. .86
Notes
1. Introduction, basis of preparation of the consolidated financial statements and other
information .............................................................................................................................................. 87
2. Accounting principles and measurement criteria ............................................................................ 93
3. Risk management ................................................................................................................................ 134
4. Recognition of the merger ................................................................................................................. 145
5. Distribution of CatalunyaCaixa’s profit ............................................................................................ 149
6. Significant movements in investments ........................................................................................... 149
7. Business segment reporting .............................................................................................................. 150
8. Remuneration of the Board of Directors and Senior Management of CatalunyaCaixa ......... 150
9. Cash and balances at central banks ................................................................................................ 153
10. Held for trading .................................................................................................................................... 153
11. Other financial assets at fair value through profit or loss ........................................................... 155
12. Available-for-sale financial assets and adjustments to financial assets through macro-hedge ...... 156
13. Loans and receivables ......................................................................................................................... 158
14. Held-to-maturity investments ........................................................................................................... 161
15. Hedging derivatives (assets and liabilities) .................................................................................... 162
16. Non-current assets held for sale ...................................................................................................... 163
17. Equity investments .............................................................................................................................. 164
18. Property and equipment ..................................................................................................................... 167
19. Intangible assets .................................................................................................................................. 168
20. Other assets .......................................................................................................................................... 168
21. Financial liabilities at amortised cost ............................................................................................... 169
22. Provisions (except for tax provisions) ............................................................................................. 174
23. Other liabilities ..................................................................................................................................... 174
24. Minority interests ................................................................................................................................. 174
25. Valuation adjustments in equity ....................................................................................................... 175
26. Equity ..................................................................................................................................................... 176
27. Tax matters ........................................................................................................................................... 177
28. Social Work Projects............................................................................................................................ 180
29. Contingent risks and liabilities and other information ................................................................. 180
30. Geographical breakdown of branches ............................................................................................. 183
31. Interest and similar income ............................................................................................................... 183
32. Interest and similar expense ............................................................................................................. 184
33. Income from equity instruments ...................................................................................................... 185
34. Share of income of entities accounted for using the equity method ........................................ 185
35. Fee and Commission income ............................................................................................................. 186
36. Fee and commission expense............................................................................................................ 187
37. Gains/(losses) from financial assets and liabilities ....................................................................... 187
38. Exchange differences .......................................................................................................................... 188
39. Other operating income ...................................................................................................................... 188
40. Other operating expenses .................................................................................................................. 188
41. General administrative expenses ..................................................................................................... 189
42. Gains/(losses) on derecognition of non-current assets held for sale not classified as
discontinued operations...................................................................................................................... 191
43. Related party transactions ................................................................................................................. 191
44. Customer service ................................................................................................................................. 192
79
Translation of consolidated financial statements originally issued in Catalan and prepared in accordance with
IFRSs as adopted by the European Union. In the event of a discrepancy, the Catalan-language version prevails.
Caixa d’Estalvis de Catalunya, Tarragona i Manresa Group
Consolidated balance sheets at 31 December 2010 (Notes 1 to 7)
2010
ASSETS (Thousands of euros)
Cash and balances at central banks (Note 9)
424,931
Financial assets held for trading (Note 10)
Due from banks
903,769
184,144
719,625
135,193
- Customer loans
- Debt securities
- Equity instruments
- Trading derivatives
Memorandum item: Loaned or advanced as collateral
Other financial assets at fair value through profit or loss (Note 11)
- Due from banks
- Customer loans
- Debt securities
- Equity instruments
Memorandum item: loaned or advanced as collateral
Available-for-sale financial assets (Note 12)
- Debt securities
- Equity instruments
Memorandum item: Loaned or advanced as collateral
Loans and receivables (Note 13)
39,267
39,267
4,651,591
3,768,233
883,358
2,505,067
58,566,121
- Due from banks
1,689,912
- Customer loans
- Debt securities
Memorandum item: Loaned or advanced as collateral
51,704,267
5,171,942
474,718
Held-to-maturity investments (Note 15)
Memorandum item: Loaned or advanced as collateral
1,135,085
1,038,301
Adjustments to financial assets through macro-hedge (Note 12)
(45,316)
Hedging derivatives (Note 14)
943,011
Non-current assets held for sale (Note 16)
752,204
Equity investments (Note 17)
- Associates
- Jointly-controlled entities
579,309
364,532
214,777
-
Pension-linked insurance contracts
-
Reinsurance assets
Property and equipment (Note 18)
- Property, plant and equipment
- Own use
- Other assets under operating lease
- Assigned to Social Work Projects Fund
- Investment properties
Memorandum item: Acquired under finance lease
2,649,760
1,233,700
1,018,385
215,315
1,416,060
29,444
Intangible assets (Note 19)
- Goodwill
- Other intangible assets
10,167
10,167
Tax assets
- Current
- Deferred (Note 27.6)
1,531,108
608,397
922,711
Other assets (Note 20)
4,443,761
- Inventories
4,382,271
61,490
- Other
TOTAL ASSETS
76,584,768
Notes 1 to 44 in the accompanying notes to the financial statements are an integral part of the consolidated
balance sheet at 31 December 2010.
80
EQUITY AND LIABILITIES (Thousands of euros)
LIABILITIES
2010
Financial liabilities held for trading (Note 10)
- Central bank deposits
- Deposits from banks
- Customer deposits
- Marketable debt securities
- Trading derivatives
- Short positions
- Other financial liabilities
Other financial liabilities at fair value through profit or loss
- Central bank deposits
- Deposits from banks
- Customer deposits
- Marketable debt securities
- Subordinated liabilities
- Other financial liabilities
Financial liabilities at amortised cost (Note 21)
- Central bank deposits
- Deposits from banks
- Customer deposits
- Marketable debt securities
- Subordinated liabilities
- Other financial liabilities
908,968
908,968
71,359,164
3,353,077
4,852,771
42,358,340
17,013,359
3,277,683
503,934
Adjustments to financial liabilities through macro-hedge (Note 3)
509,223
Hedging derivatives (Note 15)
355,750
Liabilities associated with non-current assets held for sale
Liabilities under insurance contracts
-
Provisions
- Provisions for pensions and similar obligations (Note 22)
- Provisions for taxes and other legal contingencies (Note 27)
- Provisions for risks and contingent liabilities (Note 22)
Other provisions (Note 22)
433,693
168,899
27,324
56,353
181,117
Tax liabilities
- Current
- Deferred (Note 27.6)
483,563
15,701
467,862
Social Work Project Fund (Note 28)
273,182
Other liabilities (Note 23)
154,808
Capital repayable on demand
74,478,351
TOTAL LIABILITIES
81
EQUITY
2010
Capital and reserves (Note 26)
-Endowment fund or capital
- Issued capital/other Social Work funds
- Less: Unpaid and uncalled
- Share premium
- Reserves
- Accumulated reserves (losses)
- Reserves (losses) of entities accounted for using the equity method
- Other equity instruments
- Compound financial instruments
- Participating stock and associated funds
- Other equity instruments
- Less: Own securities
- Income attributable to equity holders of the parent
- Less: dividends and remuneration
2,115,777
2,449,415
2,449,415
(351,758)
(215,556)
(136,202)
18,120
(18,221)
(8,513)
(706)
(9,002)
-
Valuation adjustments (Note 25)
- Available-for-sale financial assets
- Cash flow hedges
- Hedges of net investments in foreign operations
- Exchange differences
- Non-current assets held for sale
- Entities accounted for using the equity method
- Other valuation adjustments
8,861
8,861
Minority interests (Note 24)
- Valuation adjustments
Other
TOTAL EQUITY
2,106,417
TOTAL EQUITY AND LIABILITIES
76,584,768
Memorandum item
Contingent risks (Note 29)
2,424,363
Contingent liabilities (Note 29.3)
10,954,880
Notes 1 to 44 in the accompanying notes to the consolidated financial statements are an integral part of the
balance sheet at 31 December 2010.
82
Translation of consolidated financial statements originally issued in Catalan and prepared in accordance with
IFRSs as adopted by the European Union. In the event of a discrepancy, the Catalan-language version prevails.
Caixa d’Estalvis de Catalunya, Tarragona i Manresa Group
Consolidated income statement for the six-month period ended 31 December 2010 (Notes 1 to 7).
(Thousands of euros)
2010
Interest and similar income (Note 31)
1,115,720
Interest and similar expenses (Note 32)
809,142
INTEREST MARGIN
306,578
Income from equity instruments (Note 33)
18,895
Income of entities accounted for using the equity method (Note 34)
- Associates
- Jointly-controlled entities
(1,077)
6,848
(7,925)
Fee and commission income (Note 35)
193,653
Fee and commission expenses (Note 36)
23,697
Gains/(losses) on financial assets and liabilities (net) (Note 37)
- Held for trading
- Other financial assets at fair value through profit or loss
- Other financial instruments not at fair value through profit or loss
- Other
22,151
(440)
(1,344)
14,950
8,985
Exchange differences (net) (Note 38)
4,943
Other operating income (Note 39)
276,862
Other operating expenses (Note 40)
255,332
GROSS MARGIN
542,976
Administrative expenses (Note 41)
- Personnel expenses
- Other general administrative expenses
438,068
279,783
158,285
Depreciation and amortisation (Notes 18 and 19)
43,108
Provisions (net) (Notes 22 and 27)
(186)
Impairment losses on financial assets (net)
6,989
3,311
3,678
- Loans and receivables (Note 13)
- Other financial instruments not at fair value through profit or loss (Notes 12 and 14)
NET OPERATING MARGIN
54,997
Impairment losses on other assets (net)
- Goodwill and other intangible assets (Notes 17.2 and 19)
- Other assets (Notes 17 and 20)
23,299
23,299
Gains/(losses) on derecognition of assets not classified non-current assets held
for sale (Note 18)
Loss on business combinations
2,696
-
Gains/(losses) on derecognition of non-current assets held for sale not
classified as discontinued operations (Notes 16 and 42)
(22,510)
PROFIT BEFORE TAX
11,884
Income tax (Note 27.4)
(5,936)
Compulsory allocation to Social Work funds and projects
PROFIT FROM CONTINUING OPERATIONS
17,820
Profit/(loss) from discontinued operations (net)
CONSOLIDATED PROFIT FOR THE YEAR
17,820
Profit/(loss) attributed to minority interests (Note 24)
(300)
18,120
PROFIT ATTRIBUTED TO THE GROUP
Notes 1 to 44 of the accompanying consolidated financial statements are an integral part of the consolidated
income statement for the six-month period ended 31 December 2010.
83
Translation of consolidated financial statements originally issued in Catalan and prepared in accordance with
IFRSs as adopted by the European Union. In the event of a discrepancy, the Catalan-language version prevails.
Caixa d’Estalvis de Catalunya, Tarragona i Manresa Group
Consolidated statement of changes in recognised income and expense for the six-month period ended 31
December 2010 (Notes 1 to 7).
Thousands of euros
2010
A) PROFIT FOR THE YEAR
17,820
B) OTHER RECOGNISED INCOME (EXPENSES)
(34,770)
1. Available-for-sale financial assets
a) Valuation gains/losses
b) Amounts transferred to profit or loss
c) Other reclassifications
(11,358)
1,313
10,801
(1,870)
2. Cash flow hedges
a) Valuation gains/losses
b) Amounts transferred to profit or loss
c) Amounts transferred to the initial carrying amount of hedged items
d) Other reclassifications
(36,296)
(32,171)
4,391
266
3. Hedges of net investments in foreign operations
a) Valuation gains/losses
b) Amounts transferred to profit or loss
c) Other reclassifications
(1,086)
(3,620)
2,534
4. Exchange differences
a) Valuation gains/losses
b) Amounts transferred to profit or loss
c) Other reclassifications
-
5. Non-current assets held for sale
a) Translation gains/losses
b) Amounts transferred to profit or loss
c) Other reclassifications
6. Actuarial gains/losses on pension plans
-
7. Entities accounted for using the equity method
a) Valuation gains/losses
b) Amounts transferred to profit or loss
c) Other reclassifications
(930)
(930)
8. Other recognised income and expenses
-
9. Income tax
14,900
TOTAL RECOGNISED INCOME/(EXPENSES) (A+B)
a) Attributable to the parent
b) Attributable to minority interests
(16,950)
(16,650)
(300)
Notes 1 to 44 of the accompanying consolidated financial statements are an integral part of the consolidated
statement of recognised income and expense for the six-month period ended 31 December 2010.
84
Translation of consolidated financial statements originally issued in Catalan and prepared in accordance with
IFRSs as adopted by the European Union. In the event of a discrepancy, the Catalan-language version prevails.
Caixa d’Estalvis de Catalunya, Tarragona i Manresa Group
Consolidated statements of changes in equity for the six-month period ended 31 December 2010 (Notes 1
to 7).
Equity attributable to equity holders of the parent
Capital and reserves
(Thousands of euros)
Balance at 1 July
2010
Adjustments for
changes in accounting
policies
Adjustments for errors
Restated opening
balance
Total recognised
income/(expenses)
Other changes in
equity
Increase/(decreases)
in capital/endowment
fund
Conversion of financial
liabilities into equity
Gains on other
equity instruments
Reclassification from/to
financial liabilities
Distribution of
dividends/
remuneration of equity
holders
Own securities
transactions (net)
Transfers between
equity accounts
Increase/(decreases)
due to business
combinations
Discretionary allocations
to Social Work funds
and projects
Equity-based payments
Other increases/
(decreases) in equity
Balance at 31
December 2010
Endowment
fund or
capital
2,449,415
2,449,415
Income
attributable to
the
parent
Reserves
(356,448)
(356,448)
Valuation
adjustments
Minority
interests
Total
equity
-
16,549
20,883
2,130,399
-
-
-
-
-
16,549
20,883
2,130,399
-
-
-
4,690
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,690
-
-
-
-
-
-
-
-
18,120
-
(34,770)
-
(300)
(16,950)
(11,722)
(7,032)
(11,722)
(7,032)
-
-
-
-
-
-
-
-
-
-
-
-
2,449,415
(351,758)
18,120
(18,221)
8,861
2,106,417
Notes 1 to 44 of the accompanying consolidated financial statements are an integral part of the consolidated
statement of changes in equity for the six-month period ended 31 December 2010.
85
Translation of consolidated financial statements originally issued in Catalan and prepared in accordance with
IFRSs as adopted by the European Union. In the event of a discrepancy, the Catalan-language version prevails.
Caixa d’Estalvis de Catalunya, Tarragona i Manresa Group
Consolidated cash flow statements for the six-month period ended 31 December 2010 (Notes 1 to 7)
2010
Thousands of euros
1. Cash flows from operating activities
(2,102,959)
Profit for the year
17,820
Adjustments to obtain cash flows from operating activities
Depreciation of property and equipment
Other adjustments
Net (increase)/decrease in operating assets
228,546
43,108
185,438
544,263
Held for trading
Other financial assets at fair value through profit or loss
Available-for-sale financial assets
Loans and receivables
Other operating assets
Net (increase)/decrease in operating liabilities
Held for trading
Other financial liabilities at fair value through profit or loss
Financial liabilities at amortised cost
Other operating liabilities
Collection/payment of income tax
(377,740)
(1,719)
861,998
(1,360,803)
1,422,527
(1,799,126)
(158,065)
(10,554)
(1,702,842)
72,335
(5,936)
2. Cash flows from investing activities
296,922
Payments:
Property and equipment
Intangible assets
Equity investments
Subsidiaries and other business units
Non-current assets held for sale and associated liabilities
Held-to-maturity investments
Other payments related to investing activities
1,279
1,279
-
Collections:
Property and equipment
Intangible assets
Holdings
Subsidiaries and other business units
Non-current assets held for sale and associated liabilities
Held-to-maturity investment portfolio
Other collections related to investing activities
298,201
8,238
286,335
3,538
-
3. Cash flows from financing activities
2,230,968
Payments:
Dividends
Subordinated debt
Redemption of own equity instruments
Acquisition of own equity instruments
Other payments related to financing activities
-
Collections:
Subordinated debt
Issue of own equity instruments
Disposal of own equity instruments
Other collections related to financing activities
2,230,968
1,280,336
927,825
22,807
4. Effect of exchange rate changes
-
5. Net increase/decrease in cash and cash equivalents
424,931
6. Cash and cash equivalents at 1 July 2010
-
7. Cash and cash equivalents at end of year
424,931
Cash and cash equivalents at end of year
Cash
Cash equivalents at central banks
Other financial assets
Less: overdrafts and equivalents at end of year
Total cash and cash equivalents at end of year
269,475
155,456
424,931
Notes 1 to 44 of the accompanying consolidated financial statements are an integral part of the
consolidated cash flow statement for the six-month period ended 31 December 2010.
86
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE
SIX-MONTH PERIOD ENDED 31 DECEMBER 2010
1. Introduction, basis of preparation of the consolidated financial
statements and other information
1.1.
Introduction
Caixa d’Estalvis de Catalunya, Tarragona i Manresa (hereinafter CatalunyaCaixa) is a nonprofit entity classified as a general popular savings bank. Public domain information concerning
CatalunyaCaixa, which began its activities on 1 July 2010, can be consulted both on
CatalunyaCaixa’s official website (www.catalunyacaixa.com) and at its registered offices (plaza
Antoni Maura, 6, Barcelona). The entity is a legal entity whose prime objective as a financial
entity of public utility, which is at the service of its accountholders and of the economic
development of the geographical region in which it operates, is to provide all the financial
services which society may need as well as to participate in Social Work projects.
CatalunyaCaixa resulted from a merger among Caixa d’Estalvis de Catalunya, Caixa d’Estalvis
de Tarragona, and Caixa d’Estalvis de Manresa once approval was obtained from each of their
respective General Assemblies on 17 May 2010, with resolution of the terms and conditions laid
down.
The CatalunyaCaixa Group is comprised of CatalunyaCaixa and its investees, which handle
complementary activities in the areas of finance, insurance, real estate, services, pensions,
lending, and others. The statutory activities of the main entities of the CatalunyaCaixa Group
are detailed in Note 2.1.
The management and use of customer funds raised and administered by savings banks are
governed by specific legal regulations which, inter alia, establish that net profit for the year
must be allocated to Reserves and the Social Work Projects Fund.
1.2.
Basis of presentation of the consolidated financial statements
The consolidated financial statements of the CatalunyaCaixa Group for the six-month period
ended 31 December 2010 were authorised for issue by the Directors of CatalunyaCaixa at a
board meeting held on 22 March 2011.
The Group’s consolidated financial statements have been prepared in accordance with the
Commercial Code, International Financial Reporting Standards (hereinafter IFRS) adopted by
the European Union through EU Regulations, in accordance with Regulation 1606/2002 of the
European Parliament and of the Council of 19 July 2002. Furthermore, the Bank of Spain issued
Circular 4/2004 of 22 December on public and confidential financial reporting standards and
financial statement models, adapting the accounting standards for Spanish credit institutions to
the IFRS adopted by the European Union.
These financial statements have been prepared from the accounting records of
CatalunyaCaixa and the other entities integrated into the Group, the necessary adjustments and
reclassifications have been made to standardise the most significant measurement and
recognition principles between the integrated companies and CatalunyaCaixa.
Note 2.1.4 of these financial statements include CatalunyaCaixa’s balance sheet, income
statement, statement of recognised income and expense, statement of changes in equity and
cash flow statement for the six-month period ended 31 December 2010.
87
Standards and interpretations issued by the IASB taking effect during 2010
Revised IFRS 3 "Business combinations" and amendment to IAS 27 "Separate and
Consolidated Financial Statements".
These modifications imply significant changes with respect to certain aspects of accounting
for business combinations. They mainly place greater emphasis on the use of fair value. For
example, during step acquisitions, the acquiring entity must remeasure to fair value its
previously held equity interest on the date that control is obtained, while in situations in which
the sale of shares in a subsidiary in which a minority interest is retained, the investment is
remeasured to fair value with a balancing entry recognized on the income statement.
ƒ
Due to the adoption of revised IFRS 3 and amendment to IAS 27, several International
Financial Reporting Standards have also been modified, namely IAS 28 "Investments in
Associates" and IAS 31 "Interests in joint ventures". To guarantee uniformity within this
regulatory framework, in situations in which there has been a significant loss of influence or
joint control, the investment made will be remeasured to fair value with a balancing entry on
the income statement.
ƒ
Amendments to IAS 39: “Eligible hedged items”
The amendment clarifies specific aspects regarding hedge accounting: a) the cases in which
inflation can be considered a hedge item and (b) those in which options purchased may be used
as hedging instruments.
ƒ
IFRIC 15: “Agreements for the construction of real estate”
This provides guidance on how to determine whether an agreement for the construction of
real estate is within the scope of IAS 11 "Construction Contracts," or IAS 18, "Revenue" and,
accordingly, when revenue from the construction should be recognised.
ƒ
Adoption of the interpretation of IFRIC 16 - “Hedges of a Net Investment in a Foreign
Operation”
This indicates that only the foreign exchange differences arising from a difference between
the functional currency of the parent company and that of its foreign operation can be classified
as a hedged risk. It also clarifies which entity within a group can hold a hedging instrument in a
hedge of a net investment in a foreign operation, and how an entity should determine the
amounts to be reclassified from equity to profit or loss for both the hedging instrument and the
hedged item when the entity disposes of the investment.
ƒ
IFRIC 17: “Distribution of non-cash assets to owners"
This interpretation provides guidance on accounting for arrangements whereby an entity
distributes non-cash assets to shareholders either as a distribution of reserves or as dividends,
and stipulates that any difference must be recognised on the income statement.
ƒ
IFRIC 18: “Transfer of assets from customers”
This clarifies the requirements for agreements in which an entity receives from a customer
an item of property, plant, and equipment that the entity must then use either to connect the
customer to a network or to provide the customer with ongoing access to a supply of goods or
services (such as a supply of electricity, gas or water).
Amendments to IFRS 2: “Share-based payment”
The amendments to IFRS 2 also incorporate guidance regarding aspects previously included
in IFRIC 8 and IFRIC 11. As a result, these have been withdrawn. It states that an entity that
receives goods or services in a share-based payment arrangement must account for those
goods or services no matter which entity in the group settles the transaction, and no matter
whether the transaction is settled in shares or cash.
ƒ Adoption of the interpretation of IFRIC 12 -“Service Concession Arrangements” and the
modification of IFRS 1, IFRIC 14, and IAS 29.
88
This establishes how concessionaires must apply existing IFRSs when accounting for the
rights and obligations assumed in this type of arrangement.
IASB Standards and interpretations which no longer apply.
ƒ
At the date these consolidated financial statements were prepared for issue, the following
standards, interpretations, and amendments thereof were published by the IASB but have not
been applied because the date of mandatory application is subsequent to the consolidated
balance sheet date, or because they have not been endorsed by the European Union:
The Group has evaluated the related effects, and has decided not to exercise its right to
early application, as it considers them immaterial.
Amendment to IAS: “Financial Instruments: presentation”
The amendment addresses the accounting for rights issues (rights, options or warrants)
which are denominated in a currency other than the functional currency of the issuer. The
amendment requires that, provided certain conditions are met, such rights issues are classified
as equity regardless of the currency in which the exercise price is denominated, when the
requirements set forth are met.
IFRIC 19: "Extinguishing Financial Liabilities with Equity Instruments"
This provides guidance on the accounting treatment for when a creditor agrees to accept the
entity’s shares or other equity instruments to settle the financial liability fully or partially.
Standards,
amendments, and
interpretations
Approved for use in the EU
Revision of IAS 24
Amendment to IFRS 14
Title
Related party disclosures
Prepayments of a minimum funding requirement
Statutory
application for
years starting
1 January 2011
1 January 2011
Not approved for use in the EU
IFRS 9
Amendment to IFRS 7
ƒ
Financial instruments: Recognition and measurement 1 January 2013
Financial instruments: Disclosures
1 July 2011
Revised IAS 24: "Related party disclosures"
Two new concepts are introduced: a) providing an exemption from disclosure requirements
for transactions between entities controlled, jointly controlled or significantly influenced by the
State (State-controlled entities, and b) amending the definitions of a related party and of a
related party transaction to clarify the intended meaning and remove some inconsistencies.
ƒ
Amendments to IFRIC 14: - "Prepayments of a minimum funding requirement"
The amendment addresses circumstances in which an entity cannot recognise certain
voluntary early payments as assets.
ƒ
IFRS 9: “Financial Instruments: Recognition and measurement”
IFRS 9 will eventually replace the recognition and remeasurement rules laid down in IAS 39.
The new rules include very significant departures from existing rules, including approval of a
new classification model based on just two categories: those measured at amortised cost, and
those measured at fair value, the elimination of current categories "Held-to-maturity
investments" and "available-for-sale financial assets", impairment testing for assets carried at
amortised cost only, and the prohibition of bifurcation of embedded derivatives in financial
agreements.
89
ƒ
Amendment to IFRS 7: “Financial Instruments: Disclosure"
This modification implies an increase in the amount of information to be disclosed in financial
statements regarding the transfer of financial assets.
1.3.
Responsibility for information and estimates
The information contained in these consolidated financial statements is the responsibility of
the Directors of CatalunyaCaixa.
In the preparation of the consolidated financial statements of the CatalunyaCaixa Group for
the six-month period ended 31 December 2010, estimates made by the Directors of the
CatalunyaCaixa Group have occasionally been used to quantify certain assets, liabilities, income,
expenses and commitments contained therein. These estimates refer primarily to:
ƒ
Impairment losses on certain assets (Notes 12, 13, 14, 16, 17, 18, 19, and 20)
ƒ
The actuarial assumptions used for calculating liabilities and commitments for postemployment benefits and other long-term commitments with employees (Notes 2.13 and 41).
ƒ
The useful life of property and equipment and intangible assets (Notes 2.15 and 2.16)
ƒ
The fair value of certain unlisted assets and liabilities (Notes 10, 12, 13, 14, 15, 16 and
21).
ƒ
The measurement of consolidation goodwill (Note 2.16).
ƒ
The measurement of specific allowances (Notes 12, 13, 14, 16, 22, and 27).
Although these estimates have been based on the best information on the issues analysed
available at 31 December 2010, it is possible that future events will require significant revisions
to be made thereto (either up or down) in coming years. If so, revisions would be prospectively
made in accordance with Regulation 19 of Bank of Spain Circular 4/2004 and IAS 8, and the
effects of the modified estimate would be recognised in the corresponding consolidated income
statement for the affected years.
1.4.
Ownership interests in credit entities
At 31 December 2010, CatalunyaCaixa Group did not directly or indirectly hold any
significant interests, i.e., 5% or more of capital or voting rights, in any other Spanish or foreign
credit entity.
1.5.
Environmental impact
Given the activity in which the CatalunyaCaixa Group engages, its integrated entities have no
environmental liabilities, expenses, assets, provisions or contingencies that could have a
significant effect on the Group’s equity, financial situation or results. Therefore, these notes to
the consolidated financial statements do not include any specific disclosure on environmental
issues.
1.6.
Minimum capital requirements
1.6.1.
Minimum Equity Ratio
Law 13/1992, of June 1, and Bank of Spain Circular 3/2008 regulate the minimum equity
that Spanish credit entities must possess at both the individual and separate levels, and the
manner for calculating eligible equity.
At 31 December 2010, the eligible capital of the Group exceeded the minimum requirements
under these regulations. Note 1.11 of “Subsequent events” details the new regulations which
have come into effect during 2011 as well as their effect on the CatalunyaCaixa Group.
90
1.6.2.
Minimum Cash Reserve Requirement
During 2010 and throughout the six-month period ended 31 December 2010, the
CatalunyaCaixa Group complied with the minimum cash reserve ratio required under applicable
Spanish regulations based on Regulation 1745/2003 of 12 September 2003.
1.7.
Deposit Guarantee Fund
CatalunyaCaixa is a member of the Savings Bank Deposit Guarantee Fund.
During the six-month period ended 31 December 2010, the expenses for contributions made
by the CatalunyaCaixa Group to this agency totalled 13,721 thousand euros, which were
recognized under “Other operating expenses” on the accompanying consolidated income
statement (see Note 40).
Article 3 of Royal Decree 18/1982 dated 24 September, on Savings Banks and Credit
Cooperative Deposit Guarantee Funds, and as per the wording set forth in the Seventh Additional
Provision of Law 12/1995 of 28 December on urgent budgetary, tax, and finance measures, and
Article 3 of Royal Decree 2606/1996 of 20 December, on the Credit Institution Deposit Guarantee
Fund, establish the annual contribution to be made by Savings Banks to the Deposit Guarantee
Fund is 0.2% of the deposits guaranteed. The Ministry of Economics and Finance may agree to
decrease said contributions, when the equity in the Deposit Guarantee Fund equals the amount
needed to comply with related requirements.
Ministerial Order EHA/3515/2009 of 29 December 2009, published in the 2009 Official State
Gazette on 31 December 2009, raised the calculation base for annual contributions of Savings
Banks to the Deposit Guarantee Fund to 0.1%; this estimation was based on Articles 3 and 4 of
Royal Decree 2606/1996, dated 20 December, on the Savings Bank Deposit Guarantee Fund.
1.8.
Agency agreements
The CatalunyaCaixa Group did not have any “agency agreements”, as defined in Article 22 of
Royal Decree 1245/1995, in force at year-end 2010 nor at any time during the six-month period
ended at that date.
1.9. Disclosures required under Law 2/1981, of 25 March, on mortgage regulations,
and under Royal Decree 716/2009, of 24 April, enacting certain legislative aspects.
The members of the Board of Directors of CatalunyaCaixa hereby expressly state that the
Entity has in place dedicated policies and procedures governing activities falling under the
umbrella of mortgage-backed security issuance which guarantee strict compliance with
applicable legislation.
The table below depicts the face value of the mortgage market securities issued by
CatalunyaCaixa and outstanding at 31 December 2010, broken down by class of security and
with an indication of the level of public issuance (without including directly-attributable
transaction costs):
Thousands of euros
2010
Covered bonds
Of which: publicly issued
Mortgage-backed securities
Of which: publicly issued
11,974,700
3,888,700
11,912,751
11,912,751
The table below presents the nominal value of all mortgage loans and credits extended by
the CatalunyaCaixa Group and an indication of those eligible for calculating the limit on covered
bond issuance under prevailing legislation:
91
Thousands of euros
2010
Nominal value of the portfolio of mortgage loans and credits
outstanding
39,726,105
Nominal value of all mortgage loans and credits eligible under
article 12 of Royal Decree 716/2009, of 24 April, for the
purposes of calculating the covered bond issuance limit
19,714,203
The following table provides information on the credit quality of the mortgage loans and
credits of the CatalunyaCaixa Group eligible for securing covered bond issues at 31 December
2010:
Thousands of euros
Mortgage loans
Transactions with
Transactions with
Transactions with
Transactions with
Other collateral
Transactions with
Transactions with
Transactions with
LTV
LTV
LTV
LTV
2010
of
of
of
of
< 40%
40%-80%
60%-80%
> 80%
LTV of < 40%
LTV of 40%-80%
LTV of > 60%
Total
14,803,851
3,116,730
4,595,732
7,080,885
10,504
4,910,352
1,580,036
2,169,511
1,160,805
19,714,203
The remaining information required by the abovementioned Law is described in detail in the
notes to the financial statements of CatalunyaCaixa.
1.10. Information regarding delayed payments to suppliers
In compliance with Law 15/2010, dated 5 July, modifying Law 3/2004 dated 29 December,
which lays down measures against late payment in commercial transactions, developed under
the Resolution handed down by the Spanish Accounting and Audit Institute, dated 24 November
2010 on information to be included in financial statements regarding late payment to suppliers
in commercial transactions, it should be noted that at year-end 2010, the CatalunyaCaixa Group
has no payments outstanding to suppliers which are past their legal payment deadline.
1.11. Subsequent events
On 19 January 2011, CatalunyaCaixa sold 1.63% of its shares in Repsol YPF, SA, held
through Repinves, SA, generating capital gains for the Entity amounting to 117,128 thousand
euros (see Note 12).
The sale of these shares was estimated in the Business Plan, represented an increased
liquidity of approximately 448,116 thousand euros, increasing the solvency of the
CatalunyaCaixa Group, with a 32 basis point improvement in Core Capital.
On 19 February 2011, Royal Decree 2/11 was passed in order to strengthen the financial
system. This law’s objectives are twofold: to boost the solvency of financial institutions as well
as to stimulate the channelling of credit towards the real economy. To this end, it establishes a
general core capital requirement of 8% of risk-weighted assets. This requirement rises to 10%
for entities which depend on the wholesale finance markets to fund more than 20% of their
assets and which have not placed at least 20% of their capital or voting rights with thirdparties, excluding the Fund for Orderly Bank Restructuring (FROB). The Bank of Spain may also
demand compliance with a higher core capital threshold if the entity does not reach the abovelisted minimum in stress tests carried out on the overall system in a worst-case scenario.
92
Entities which at 10 March had not attained said core capital requirements had fifteen
working days to notify the Bank of Spain their strategies and timelines for guaranteeing
compliance with these new requirements.
Strategies, which could involve raising funds from third parties or the launch of an IPO,
require approval from the Bank of Spain, which reserves the right to solicit modifications. If the
strategy implemented includes raising funds from third parties, alternative measures should also
have to be included in the event that the funds do not materialise. These alternative measures
may include requesting financial support from the FROB.
If the entity considers that there are no other viable options for raising capital, and therefore
is forced to solicit public aid, it will be expected to indicate this in its strategy for complying with
minimum capital requirements presented to the Bank of Spain, with the additional necessary
resources provided by the FROB. The entities or consolidated groups of entities in this position
will have one month from the time they present their strategies for complying with capital
requirements to the Bank of Spain to present the recapitalization plan referred to in Article 9 of
Royal Decree-Law 9/2009, dated 26 June, regarding bank restructuring and reinforced credit
institution solvency. Should the planned measures include a request of financial support from
the FROB (either immediate or subject to conditions), the Bank of Spain will inform the Fund so
that the requested amount may be set aside, on the condition that the necessary procedures
and requirements are met.
The combined measures set in motion to guarantee compliance with the new capital
requirements must be executed prior to 30 September 2011. This month, the Bank of Spain will
assess the degree of compliance achieved based on data for the first six months. If any entity
shows indications that it will be unable to comply with the plan according to the established
deadline, this must be reported to the Bank of Spain twenty days prior to that deadline. If any
bureaucratic steps remain pending when the assessment takes place, yet the essential elements
of the recapitalisation strategy presented to the Bank of Spain have been met, the latter has the
power to grant an additional period of no more than three months for completing the
recapitalisation, on a case by case basis. In the case of an IPO, the Bank of Spain may extend
the execution deadline exceptionally until the first quarter of 2012. The entities requesting this
stay must, at a minimum, present a board or general assembly resolution authorising the
entity’s public market listing, a detailed timeline for the offering, and have mandated one or
more underwriters to manage the IPO.
As part of this strategy, during the meeting held on 15 February 2011, CatalunyaCaixa's
Board of Directors decided to commence procedures aimed at strengthening its capitalisation,
through the creation a bank and setting about restructuring and other plans necessary under
the new regulatory framework. On 10 March 2011, the Bank of Spain established the minimum
core capital ratio with which the CatalunyaCaixa Group is expected to comply: 10% of its riskweighted assets. An additional capital requirement of 1,718 million euros is needed to obtain
this ratio.
2. Accounting principles and measurement criteria
The accounting policies and measurement bases applied in preparing the Group’s
consolidated financial statements for the six-month period ended 31 December 2010 were as
follows:
2.1. Consolidation
2.1.1.
Subsidiaries
Those entities over which the CatalunyaCaixa Group exercises control are considered
subsidiaries. This control is normally, though not exclusively, evidenced by the direct or indirect
ownership of 50% or more of the voting rights of the subsidiary or, even if this percentage is
lower or zero, through
h other circumstances or agreements which grant the CatalunyaCaixa Group de facto control.
In accordance with IAS 27, control is understood to be the power to govern the financial and
operating policies of an enterprise in order to obtain profits from its activities.
93
Subsidiaries’ consolidated financial statements are fully consolidated with those of
CatalunyaCaixa in accordance with IAS 27. Consequently, all significant balances deriving from
transactions between entities consolidated by this method have been eliminated during the
consolidation process. In addition, third-party interests in:
ƒ
ƒ
the Group’s equity is shown under “Minority interests” on the consolidated balance sheet
(see Note 24).
consolidated profit for the year is recognised in “Profit attributed to minority interests”
on the consolidated income statement (see Note 24).
The profits or losses of subsidiaries which have been acquired during the year are only
consolidated for the period from the date of acquisition to year end, inclusive. The profits or
losses of subsidiaries which have been sold during the year are only consolidated for the period
from the beginning of the year to the disposal date.
The most significant acquisitions and disposals of subsidiaries during the six-month period
ended 31 December 2010, are disclosed in Note 6.
The following table contains relevant unaudited information on these companies:
94
2010
Thousands of euros
Company
Activity
Catalunya
Caixa’s
direct or
indirect
stake
Investment
cost
(net)
Assets
Liabilities
Equity
Profit/
(loss) after Dividends
tax
received
Procam, SA
Real estate
development
100%
396,874
776,812
690,003
236,477
(149,668)
-
Gescat, Gestió de Sòl, SL2 24
Holding
company
100%
272,410
2,205,710
2,573,913
144,618
(512,821)
-
Invercartera, SA2 24
Investment in
securities
100%
135,764
145,256
19,309
133,036
(7,089)
-
Gescat, Viviendas en
Comercialización, SA2 24
Holding
company
100%
111,410
1,443,625
1,538,058
26,162
(120,595)
-
Garvecat, SGPS, SA3
Real estate
development
100%
107,042
449,544
228,067
219,408
Gescat Llevant, SL2 24
Real estate
development
100%
73,822
399,178
387,435
24,369
Invercartera Energia, SL2 24
Investment in
securities
100%
67,768
75,744
4,299
68,998
Algarvetur, SL2
Real estate
development
100%
47,136
169,901
182,798
(2,864)
(10,033)
-
Corporación Bética Inmobiliaria,
SA2
Real estate
development
100%
47,136
115,730
129,451
(11,487)
(2,234)
-
Invercartera Capital, SCR, SA2
Investment in
securities
100%
41,633
41,024
1,587
39,411
Inpau, SA2 24
Real estate
development
100%
37,839
78,323
54,446
26,456
(2,579)
-
Saticem Immobiliària, SL4 24
Investment in
securities
100%
31,733
60,563
43,430
19,502
(2,369)
-
Club de Golf Hacienda el Álamo,
SL5 24
Real estate
development
97.87%
25,205
20,258
1,734
25,942
(7,418)
-
Alcalá 120, Prom y Gest Inmob.
SL6 24
Real estate
development
100%
24,904
109,141
152,009
(20,639)
(22,229)
-
Caixa Catalunya Gestió, SA2 24
Investment fund
management
100%
23,818
53,357
7,230
39,928
Activos Macorp, SL2 24
Holding
company
100%
18,210
205,403
235,355
(1,070)
(28,882)
-
Gescat Lloguers, SL2 24
Holding
company
100%
14,800
161,891
149,740
12,449
(298)
-
Tarraco Inverselect, SL7 24
Investment in
securities
100%
13,392
18,947
(394)
19,211
130
-
Puerto Ciudad Las Palmas, SA8
Real estate
development
95%
13,098
65,691
54,114
12,603
(1,026)
-
Saticem Gestió, SL4 24
Holding
company
100%
12,600
140,586
139,202
7,211
(5,827)
-
Gescat Sineva, SL2
Real estate
development
100%
11,972
30,504
97,381
(61,751)
(5,126)
-
Expansió Intercomarcal, SL9 24
Investment in
securities
100%
10,194
6,785
8,172
2,532
(3,919)
-
Caixa Manresa Assegurances
Generals, SA4 24
Dormant
100%
9,020
4,505
5
4,522
(22)
-
Saticem Holding, SL4 24
Holding
companies
100%
7,331
7,839
715
7,018
106
-
Invercartera Internacional, SL2
Investment in
securities
100%
7.105
8,126
15
8,051
60
-
Saticem Immobles en
Arrendament, SL4 24
Holding
company
100%
7,100
91,149
89,342
2,658
2 24
24
24
24
95
2,069
(12,626)
2,447
26
6,199
(851)
-
-
-
-
2 01 0
Thusands of euros
Catalunya
Caixa’s direct
Company
Activity
or indirect
nvestment cost
stake
(net)
Assets
Liabilities
Equity1
Profit/(loss)
Dividends
after tax
received
Cerbat, SL2 24
Real estate
development
100%
6,835
31,238
9,016
22,273
(51)
-
Casigar Inversiones 2008, SL2 24
Investment in
securities
100%
5,561
40,861
36,010
5,792
(941)
-
ServiManresa Actius en Lloguer,
SL4 24
Holding
company
85%
4,842
5,639
-
5,640
(1)
-
Área Tres Procam, SL10
Real estate
development
50%
4,750
9,318
4,790
6,735
(2,207)
-
Pronorte Uno Procam, SA6 24
Real estate
development
100%
3,795
76,880
102,250
(13,807)
(11,563)
-
Proviure, SL2 24
Real estate
development
100%
3,230
31,276
32,278
(279)
(723)
-
BCN EcoManresa Sicav, SA4
Financial
brokerage
100%
2,604
2,594
4
2,593
(3)
-
Manresa Gestió Activa 1 Sicav,
SA4
Financial
brokerage
100%
2,400
2,367
5
2,369
(7)
-
Caixa Manresa Immobiliària
Social, SL4 24
Rental of
buildings
100%
2,100
3,755
2,157
1,783
(185)
-
Caixa Catalunya International
Finance BV11
Financial
brokerage
100%
2,000
12,028
10,040
2,001
(13)
-
Caixa Manresa Immobiliària
OnCasa, SL4 24
Holding
company
100%
2,000
6,584
5,273
1,435
(124)
-
Jale Procam, SL12
Real estate
development
50%
1,953
15,211
30,775
(9,284)
(6,280)
-
Ascat Mediació, SL2 24
Insurance
brokerage
100%
1,614
20,195
11,876
5,525
2,794
-
Procamvasa, SA13
Real estate
development
51%
1,570
11,045
5,547
6,221
(723)
-
S.B.D. Nord, SL10 24
Real estate
development
75%
1,013
7,629
5,967
1,761
(99)
-
Caixa Tarragona Gestió, SA2 24
Fund
management
100%
902
4,434
162
4,180
92
-
Gestió d’Actius Titulitzats, SA2 24
Securitisation
fund
management
100%
902
4,315
916
2,376
1,023
-
Pórtico Procam, SL6
Real estate
development
100%
748
19,549
33,589
(12,062)
(1,978)
-
Proviure Barcelona, SL2 24
Real estate
development
100%
680
3,566
3,760
(139)
(55)
-
Proviure Ciutat de Lleida, SL2 24
Real estate
development
100%
530
1,605
1,182
455
(32)
-
Viviendas en Propiedad, SL14 24
Real estate
development
80%
406
57
117
(59)
(1)
-
Aprosa Procam, SL15
Real estate
development
50%
300
47,002
45,196
1,772
34
-
Invercartera Fotovoltaica, SL2 24
Power
generation
100%
300
1,833
26
1,763
44
-
Proviure Parc d’Habitatges, SL2
Rental of homes
100%
210
17.946
17,991
(382)
337
-
Inform. i Tecn. de Catalunya,
SL16
Computer
services
50%
156
2,900
1,804
1,084
12
-
Caixa Catalunya Adm i Gest.
Serveis, SL2 24
Services
100%
152
72,494
67,475
3,681
1,338
-
Iridion Solucions Immobiliàries,
SL17 24
Holding
company
100%
63
320,292
354,767
(11,985)
(22,490)
-
Caixa Manresa Preferents, SA4
Financial
brokerage
100%
61
30,080
30,017
58
24
24
96
5
-
Thousands of euros
2010
Catalunya
Caixa’s direct
Company
Activity
Cost of
or indirect
shareholding
stake
(net)
Assets
Liabilities
Equity1
Profit/(loss)
Dividends
after tax
received
Caixa Catalunya Preferents,
SA18 24
Financial
brokerage
100%
60
480,213
480,061
111
Centre Lúdic Diagonal, SA18 24
Sports and
leisure centre
and car park
Real estate
development
100%
60
493
1,132
149
(788)
-
85%
51
51
-
52
(1)
-
Parque Fotov. Puebla
Montalbán, SL20 24
Power
generation
100%
22
58
82
(27)
3
-
Fodecor, SL21
Real estate
development
60%
5
2,106
1,584
496
26
-
Cetactius, SL17 24
Holding
company
100%
3
60,812
62,201
(711)
(678)
-
Noidiri, SL17 24
Holding
company
100%
3
20,626
22,676
(1,011)
(1,039)
-
Conjunt Residencial Freixa, SL22
Real estate
development
100%
-
4,094
4,818
(714)
(10)
-
Tramibages, SL4 24
Services
100%
-
524
245
293
(14)
-
Metropolitan Procam, SL19 24
24
41
1
Does not include after-tax income
Registered office: c/ Roure, 6-8 Pol. Industrial Mas Mateu,
El Prat de Llobregat
3
Registered office: Rúa das Cássias, Edif. Los Arcos,
Vilamoura, Portugal
4
Registered office: Passeig Pere III 24, Manresa
5
Registered office: Avda. Hacienda del Álamo, s/n, Fuente
Álamo, Murcia
6
Registered office: Arbea Campus Empresarial, building 1,
Ctra. Fuencarral a Alcobendas M-603 Km. 3,8.
Alcobendas
7
Registered office: c/ Higini Anglès, 5, Barcelona
8
Registered office: Muelle de Santa Catalina s/n, Centro
Comercial El Muelle, Las Palmas de Gran Canaria
9
Registered office: c/ Rambla Nova 120-122, Tarragona
10
Registered office: c/ Estrella, 157, Sabadell
11
Registered office: Prins Bernhardplein, 200 1097,
JB-Amsterdam The Netherlands
2
12
Registered office: c/ Virgen de los Milagros, 48, Puerto
de Santa María, Cadiz
13
Registered office: pasaje Doctor Serra, 2, Valencia
14
Registered office: Avda. Ventisquero de la Condesa, 46,
Madrid
15
Registered office: c/ Vilamarí, 75, Barcelona
16
Registered office: Avda. Diagonal, 615, Barcelona
17
Registered office: Pça. Imperial Tarraco 6, Tarragona
18
Registered office: Pça. Antoni Maura, 6, Barcelona
19
Registered office: Parque Empresarial Natea Business
Avda. de la Industria, 4, Alcobendas, Madrid
20
Registered office: c/ María de Molina, 39. Madrid
21
Registered office: Rbla. Catalunya, 53, Barcelona
22
Registered office: c/ del Toro 5, Tarragona
23
Registered office: Avda. Roma, 6, Tarragona
24
Company belonging to fiscal consolidation group (see
Note 27)
The CatalunyaCaixa Group has also recognised on its consolidated balance sheets and
income statements the various asset securitisation funds set up since 1 January 2004 (see Note
29.5), as it considers that no effective risk transfer has taken place.
2.1.2.
Jointly-controlled entities
A jointly-controlled entity is governed by a contractual agreement through which two or
more entities (“venturers”) carry out operations or hold assets in such a way that any strategic
financial or operating decision affecting them requires the unanimous consent of all venturers.
These operations or assets are not integrated into financial structures other than those of the
venturers.
A jointly-controlled entity can also be an investment in an entity that is not a subsidiary but
which is controlled jointly by two or more unrelated enterprises.
In accordance applicable legislation, the CatalunyaCaixa Group has elected to consolidate the
financial statements of investees classified as jointly-controlled entities using the equity
method.
97
-
Information on the most significant acquisitions in 2010 of jointly-controlled entities and new
equity investments in entities that were so-classified at the beginning of the year, and on the
disposals of equity holdings in entities considered jointly-controlled entities is disclosed in Note
17.2.
This Note also provides a breakdown of the effect on the main captions and margins of the
consolidated income statement and consolidated balance sheet had the proportional
consolidation method been applied to these investments.
The following table contains relevant unaudited information on these companies:
98
Thousands of euros
2010
Catalunya
Caixa’s direct
Company
Activity
or indirect
Investment cost
stake
(net)
Assets
Liabilities
Equity1
Profit/(loss)
Dividends
after tax
received
Unión Sanyres, SL
Senior citizen
residences
33.36%
Centros Residenciales Sanyres
Sur, SL2
Real estate
development
33.36%
34,367
213,315
127,817
85,541
Cedinsa Concessionària, SA3
Road
infrastructure
20%
32,809
197,822
33,432
164,297
93
-
Olivos Naturales, SL4
Rural estate
management
34.35%
23,757
127,920
79,136
48,219
565
-
Espais Catalunya Mediterráneo,
SA5
Investment in
securities
35.89%
14,621
80,090
21,675
58,311
104
-
Cedinsa Eix Llobregat
Concessionària, SA3
Road
infrastructure
20%
14,500
294,362
257,681
36,588
93
-
Torca Procam Polska SP. Zoo6
Real estate
development
50%
13,265
132,562
149,247
(125)
(16,560)
-
CEM Monestir, SL7 54
Hotel operation
90.10%
13,245
25,739
17,503
8,979
(743)
-
Volja Plus, SL8
Investment in
securities
56.66%
11,759
115,828
95,323
20,466
Vertix Procam, SL9
Real estate
development
50%
11,063
313,265
359,150
(30,779)
(15,106)
-
Cedinsa Eix Transversal
Concèssionaria, SA3
Road
infrastructure
20%
10,040
149,863
101,352
48,896
(385)
-
Arrahona Garraf, SL10
Real estate
development
50%
9,500
51,022
34,213
17,447
(638)
-
Desarrollos Catalanes del
Viento, SL11
Power
generation
40%
8,635
46,100
24,367
21,515
218
-
Sanyres Sur, SL2
Real estate
development
33.36%
7,991
57,370
95,724
(32,781)
(5,573)
-
Millennium Procam, SL8
Real estate
development
66.67%
6,667
20,833
23,269
(1,254)
(1.182)
-
Espacios Catalunya Inv.
Immob. SL12
Real estate
development
51%
6,229
44,562
44,701
(1,233)
1,094
-
Garraf Mediterrània, SA13
Real estate
development
33.33%
6,038
92,775
77,912
17,074
(2,211)
-
Promocions Terres Cavades,
SA14
Real estate
development
39.39%
5,919
14,797
-
14,816
(19)
-
Kuars Centre, SL15
Real estate
development
40%
5,867
49,719
34,886
15,330
(497)
-
Elecdey Asturias, SL5
Power
generation
50%
5,393
2,628
2,511
156
(39)
-
Cedinsa Ter Concessionària,
SA3
Road
infrastructure
20%
4,822
312,076
287,816
23,890
370
-
Ecamed Barcelona, SL5
Real estate
development
35.89%
4,308
57,371
53,591
3,785
(5)
-
Ocycandey 2006, SL16
Power
generation
39.80%
4,259
6,198
1
6,197
-
-
Sanidad y Residencias 21, SA2
Senior citizen
residences
33.36%
4,158
17,074
49,136
(31,342)
(720)
-
Harmonia Badalona, SL17
Real estate
development
45%
4,074
31,943
24,592
7,548
(197)
-
Nou Mapro, SA18
Real estate
development
50%
3,853
39,706
39,335
3,849
(3,478)
-
Gestal Fomento y Gestión, SL19
Real estate
development
45.15%
3,687
20,444
13,632
7,074
(262)
-
2
99
59,012
133,825
10,062
124,763
(1,000)
-
(43)
-
39
-
Thousands of euros
2010
CatalunyaCaixa’s
Company
Activity
Investment
direct or indirect
cost
stake
(net)
Assets
Liabilities
Equity1
Profit/(loss)
Dividends
after tax
received
Mankel System, SL
Investment in
securities
35.89%
3,231
25,507
16,813
8,882
(188)
-
Meridional Solar, SL20
Investment in
securities
50%
3,002
4,954
369
4,639
(54)
-
Parque Eólico Los Pedreros,
SL21
Power
generation
40%
2,803
51,579
42,223
10,219
(863)
-
Galze Urbà, SL22
Real estate
development
50%
2,800
15,103
14,511
1,211
(619)
-
Eugesa Procam, SL23
Real estate
development
55%
2,750
39,155
38,368
4,166
(3,379)
-
Promar 21, SL2
Real estate
development
33.36%
2,646
11,664
6,671
4,680
313
-
Cruilla Centre, SL13
Real estate
development
49.07%
2,568
17,829
15,677
2,572
(420)
-
Iniciativas Eólicas Castellanas,
SA24
Power
generation
38.81%
2,445
42,959
35,059
7,526
374
-
IER-1, SL25
Investment in
securities
21.04%
2,237
14,142
3,199
10,571
372
-
Cedinsa d’Aro Concessionària,
SA3
Road
infrastructure
20%
2,200
81,323
70,002
10,945
376
-
Residencial Ortoll, SL26
Real estate
development
35%
2,100
24,914
20,407
4,648
(141)
-
Inmobiliaria Monteboadilla,
SL27
Real estate
development
51%
2,075
20,533
15,756
757
Factor Habast, SL13
Real estate
development
50%
2,040
18,349
14,814
3,825
(290)
-
Tage Centre Promocions
Immobiliàries , SL28
Real estate
development
50%
1,960
18,458
18,730
34
(306)
-
L’Era de Vic, SL29
Real estate
development
30%
1,921
6,289
5,168
1,168
(47)
-
Comapa Centre, SL30
Real estate
development
40%
1,760
9,245
5,441
3,912
(108)
-
Alma Hotel Management
GmbH31
Hotel operation
35.89%
1,713
1,664
1,860
462
(658)
-
Ecamed Pamplona, SL32
Real estate
development
35.89%
1,616
23,206
18,882
4,433
(109)
-
Nova Terrassa-3, SL33
Real estate
development
51%
1,530
51,949
59,314
(3,687)
(3,678)
-
Centre Immunológic de
Catalunya, SA35
Health services
28.37%
1,500
4,011
2,112
1,768
131
-
Euro Lendert, SL34
Real estate
development
50%
1,500
48,557
47,445
1,273
(161)
-
Alma Gestión de Hoteles, SL5
Hotel operation
35.89%
1,462
9,526
10,078
344
(896)
-
Rimau Promocentre, SL15
Real estate
development
39.92%
1,387
6,047
4,308
2,076
(337)
-
Sando Olesana, SL36
Real estate
development
28.36%
1,340
10,471
9,899
756
(184)
-
Sardenya Centre, SL37
Real estate
development
50%
1,311
10,066
8,550
1,745
(229)
-
Nova Egara-Procam, SL33
Real estate
development
51%
1,275
5,946
8,158
(1,787)
(425)
-
Promociones Mies del Valle,
SL38
Real estate
development
51%
1,020
10,966
10,467
856
(357)
-
Connex Garraf, SL13
Real estate
development
33.33%
1,000
8,946
6,818
2,277
(149)
-
5
100
4,020
-
Thousands of euros
2010
CatalunyaCaixa’s
Company
Activity
Investment
direct or indirect
cost
stake
(net)
Assets
Liabilities
Equity1
Profit/(loss)
Dividends
after tax
received
Vertix Procam Patrimonial, SL9
Real estate
development
50%
923
4,919
3,243
1,794
Alzambra Sanyres, SL2
Real estate
development
33.36%
860
557
629
(73)
Torca Procam, SA39
Real estate
development
50%
750
17,343
16,462
917
(36)
-
Immocentre 3000, SL40
Real estate
development
40%
721
2,665
1,365
1,326
(26)
-
Cantaber Generación Eólica,
SL41
Power
generation
25%
649
2,679
167
2,517
(5)
-
Producciones Energéticas
Asturianas, SL42
Power
generation
25%
646
2,505
(19)
2,532
(8)
-
Tein Centro Tecnológico de
Plástico, SL43
40%
640
3,704
6,387
(2,072)
(611)
-
Parque Eólico Coll del Moro,
SL4
Services for
plastics
industry
Power
generation
40%
620
48,746
48,738
8
-
-
Parque Eólico de Torre
Madrina, SL5
Power
generation
40%
620
65,700
65,692
7
1
-
Volumètric Centre, SL44
Real estate
development
40%
601
3,883
2,471
1,441
Baring Private Equity Partners
España, SA45
Fund
management
45%
465
3,249
1,892
Parc Eòlic de Vilalba dels Arcs,
SL11
Power
generation
40%
464
44,302
Proviure CZF, SL8
Real estate
development
50%
430
Sanyres European Care I, SL2
Senior citizen
residences
33.36%
Sanyres Margarethenhof, SL2
Senior citizen
residences
Espais Cerdanyola, SL12
(118)
1
-
(29)
-
893
464
-
43,717
3
582
-
10,891
10,548
419
(76)
-
375
774
3,606
(2,479)
(353)
-
33.36%
367
1,946
5,020
(3,048)
(26)
-
Real estate
development
50%
363
8,887
12,261
(3,360)
(14)
-
Habitat Zentrum, SL46
Real estate
development
50%
300
26,035
39,821
(7,963)
(5,823)
-
Torca Habitatges, SL39
Real estate
development
40%
300
6,860
6,222
688
(50)
-
Provicat Sant Andreu, SA47
Real estate
development
50%
150
8,393
5,462
2,770
161
-
Euroespai 2000, SL48
Real estate
development
35%
147
8,806
7,646
1,310
(150)
-
Volja Lux, SARL49
Investment in
securities
40.67%
104
161,077
161,075
35
(33)
-
Visoren Centre, SL50
Real estate
development
40%
60
3,579
3,274
281
24
-
Cedinsa Solar, SL3
Power
generation
20%
42
182
79
149
(46)
-
Grupo Lar Centre, SL51
Real estate
development
40%
40
69
7
74
(12)
-
Nova Terrassa-30, SL33
Real estate
development
51%
2
408
332
89
(13)
-
Parque Fotov. Puebla
Montalbán Mater, SL52
Power
generation
50%
2
3
0
3
-
-
Parque Fotov. Puebla
Montalbán 15, SL52
Power
generation
50%
2
8
8
1
(1)
-
Baring Consejeros, SL45
Investment in
securities
45%
2
3
0
3
-
-
101
Thousands of euros
2010
CatalunyaCaixa’s
Company
Activity
Parc Eòlic de Molinars, SL53
Power
generation
Investment
direct or indirect
cost
stake
(net)
36%
Assets
1
216
Liabilities
213
Equity1
3
Profit/(loss)
Dividends
after tax
received
-
Under the terms of the agreements signed with certain companies, and regardless of whether the stake held is higher
than 50%, any strategic financial or operational decision requires the unanimous of all shareholders. Therefore, these
subsidiaries are not considered jointly-controlled entities, and have been recognised according to IAS 31.
Exceptionally, Repinves, SA, of which 32.40% of the voting rights are held, is not considered a jointly-controlled entity,
as the only management decision the Group makes is the maintenance, purchase or sale of the Repsol-YPF, SA shares in its
portfolio.
1
Does not include after-tax income
Registered office: Avda. Gran Capitán, 2, Cordoba
3
Registered office: c/ Tarragona 141-157, Barcelona
4
Registered office: c/ Basauri 6, Edif. Duero, Madrid
5
Registered office: c/ Balmes, 155, Barcelona
6
Registered office: c/ Gliwicha, 228, Katowicw,
Poland
7
Registered office: Passeig Pere III 24, Manresa
8
Registered office: c/ Roure 6-8, Pol. Ind. Mas
Mateu, El Prat de Llobregat
9
Registered office: Rda. General Mitre 12, Interior
Barcelona
10
Registered office: c/ Gracia 33, Sabadell
11
Registered office: c/ Juan Gris 2-4-6, Torre Cerdà,
Torre Centre, Barcelona
12
Registered office: Avda. Diagonal, 67, Barcelona
13
Registered office: Rbla. Arnau de Vilanova 2,
Vilanova i la Geltrú
14
Registered office: Avda. Roma, 6, Tarragona
15
Registered office: Avda. Diagonal, 640, Barcelona
16
Registered office: Barrio Rubo, s/n, Piélagos,
Cantabria
17
Registered office: Rbla. Catalunya, 86, Barcelona
18
Registered office: Ronda Zamenhof, 24, Sabadell
19
Registered office: c/ Font Vella 78, Terrassa
20
Registered office: c/ General Pardiñas 92, Madrid
21
Registered office: c/ Cid 2, Miranda de Ebro
22
Registered office: c/ Arnau de Vilanova 2, Vilanova
i la Geltrú
23
Registered office: c/ Major 182, Salt
24
Registered office: c/ Condestable 4, Burgos
25
Registered office: Pça. Antoni Maura 6, Barcelona
26
Registered office: Passeig Manuel Girona 62, Barcelona
27
Registered office: c/ Virgen de la Alegría 5, Madrid
28
Registered office: c/ Amposta 14-16, Sant Cugat del
Vallès
29
Registered office: Ctra. C-17 Km 49.446, Tona
2
2.1.3.
30
Registered office: Pça. Europa 2-4, L'Hospitalet de
Llobregat
31
Registered office: Brahmsstrasse 10, Berlin, Germany
32
Registered office: c/ Beloso 411, Pamplona
33
Registered office: c/ Major 12, Terrassa
34
Registered office: ctra. Alcalá de Henares a Camarma de
Esteruelas, km 4.9, Madrid
35
Registered office: c/ Alta Ribagorça 12, Pol. Mas Blau II,
Mas Mateu II, El Prat de Llobregat
36
Registered office: Passatge de la Lanzadora 26, Premià de
Dalt
37
Registered office: c/ Muntaner 383, Barcelona
38
Registered office: Avda. San Juan del Canal 37,
Soto de la Marina
39
Registered office: c/ Pompeu Fabra 55-63, Badalona
40
Registered office: c/ Serra Xic 1-3, Barcelona
41
Registered office: c/ Candín 12, Carbayín, Asturias
42
Registered office: c/ Branavera Boal, Asturias
43
Registered office: c/ Sepúlveda 32, Barcelona
44
Registered office: c/ Palau 8-10, Mataró
45
Registered office: c/ Hermosilla 11, Madrid
46
Registered office: Pz. Gala Placídia, Barcelona
47
Registered office: c/ Vilamarí 75, Barcelona
48
Registered office: c/ Pere Cabrera 16, Lleida
49
Registered office: 5, Rue Guillaume J. Kroll L-1882
Luxembourg
50
Registered office: c/ General Mitre 126, Barcelona
51
Registered office: Paseo de la Castellana 130, Madrid
52
Registered office: c/ María de Molina 39, Madrid
53
Registered office: c/ General Almirante – Torre Ctro.,
Barcelona
54
Company belonging to fiscal consolidation group
(Note 27)
Associates
An associate is considered an entity over which the CatalunyaCaixa Group exercises
significant influence but not control or joint control. This influence usually takes the form of a
direct or indirect shareholding of 20% or more of the entity’s voting rights.
In the consolidated financial statements, associates are accounted for using the equity
method, as defined in IAS 28.
102
-
If, as a result of losses, an associate has negative equity, the investment would be carried at
zero in the Group’s consolidated balance sheet, unless the Group is required to provide financial
backing, in which case a provision would be recognised.
Note 17.1 contains information for 2010 on the most significant acquisitions of associates
and new equity investments in entities that were of this nature at the beginning of the year, and
on disposals of investments in associates.
The following table contains relevant unaudited information on the companies included under
“Equity investments – Associates”
103
Thousands of euros
2010
CatalunyaCaixa’s
Company
Activity
Investment
direct or indirect
cost
stake
(net)
Assets
Liabilities
Equity1
Profit/(loss)
Dividends
after tax
received
50%
57,106
2,711,686
2,489,533
202,265
19,888
-
Power
generation
29.25%
39,973
33,458
29,567
(1,116)
5,007
1,082
Hujoceramic, SL4
Investment in
securities
25.03%
8,136
82,475
42,725
38,697
1,053
-
Ascat Seguros
Generales, SA 2
Non-life
insurance
49.99%
5,999
41,488
24,962
16,035
491
-
ACA, SA 5
Financial
brokerage
25.00%
5,561
54,742
34,264
20,405
73
-
Grupo Navec Servicios
Industriales, SL6
Investment in
securities
21.63%
5,131
106,590
68,444
32,390
5,756
-
Caixa Manresa Vida, SA7
Insurance and
pension fund
management
50%
5,058
79,409
64,807
13,861
741
-
Comomin de Tuberías, SL8
Industrial
maintenance
21.63%
4,360
9,702
2,822
5,786
1,094
1,722
Harmonia Pla de Ponent, SL9
Real estate
development
22.33%
3,077
39,991
32,130
8,246
(385)
-
RTZ Operativa Inmobiliaria
2006, SL10
Real estate
development
19%
2,837
51,129
45,141
6,744
(756)
-
Ambit d’Equipaments, SA11
Real estate
development
35%
2,730
29,600
24,451
6,290
(1,141)
-
Caixa Tarragona Vida, SA12
Insurance and
pension fund
management
49.98%
2,554
9,658
2,752
6,233
673
-
Hidrodata, SA3
Power
generation
29.25%
2,529
57,587
48,357
6,882
2,348
5,000
Hidroeléctrica del Noguera, SL3
Power
generation
29.25%
1,946
13,601
9,386
2,350
1,865
-
Viviendas Casado, SL13
Real estate
development
35%
1,893
80,315
58,877
22,592
(1,154)
-
Solwindet Las Lomas, SL3
Power
generation
29.25%
1,822
11,216
8,267
3,045
(96)
-
Siresa Barcelonesa, SA14
Student hall of
residence
25%
786
9,740
5,798
4,056
(114)
46
Innova 31 SCR, SA15
Venture capital
management
25%
750
2,133
111
2,071
(49)
-
Siresa Domus, SA14
Student hall of
residence
20%
520
9,831
7,127
2,603
European Biofuels 012, SL16
Power
generation
43.74%
503
957
326
647
(16)
-
Capasatus, SL17
Real estate
development
50%
500
3,933
2,953
1,033
(53)
-
Promotora del Rec dels Quatre
Pobles, SA 18
Power
generation
25%
225
4,394
2,780
1,431
Ianua Domus, SL19
Real estate
development
35%
210
489
3,185
(2,645)
(51)
-
Santa Eulalia Parc, SL17
Real estate
development
10%
200
13,675
11,848
1,836
(9)
-
Siresa Europea, SA14
Student hall of
residence
25%
195
3,690
2,595
952
143
11
Cotinavec Portugal, ULDA20
Civil
engineering
works
21.63%
26
446
199
(616)
863
-
Ascat Vida, SA de Seguros y
Reaseguros 2
Insurance and
pension fund
management
Establecimientos Industriales y
Servicios, SL3
104
101
183
-
63
Thousands of euros
2010
Company
Activity
EISSL Eólica, SL3
Power
generation
SCI Magnan Saint Philippe21
Real estate
development
Catalunya
Caixa’s direct
or indirect
stake
Investment
cost
(net)
Liabilities
Equity1
29.25%
4
449
509
-
25%
-
1,780
949
815
1
12
2
13
Does not include after-tax income
Registered office: c/ Roure, 6-8 Pol. Industrial Mas
El Prat de Llobregat
3
Registered office: c/ Muntaner 536, Barcelona
4
Registered office: c/ Manuel Escobedo 13, Onda,
Castelló
5
Registered office: Avda. Meridiana 27, Barcelona
6
Registered office: Ctra. Reus-Torredembarra, s/n,
de Mafumet, Tarragona
7
Registered office: Passeig Pere III 24, Manresa
8
Registered office: Avda. Jesús Madero s/n, Edificio
Goleta, Entrepl. 8, Algeciras
9
Registered office: Rbla. Catalunya 86, Barcelona
10
Registered office: c/ Argent 2, Pol. Industrial Sant
Francesc, Castellbisbal
11
Registered office: Rbla. Arnau de Vilanova 2,
Vilanova i la Geltrú
2.1.4.
Assets
Profit/
(loss)
after tax
Dividends
received
(60)
-
16
-
Registered office: c/ Higini Anglès 5, Tarragona
Registered office: Avda. Masnou 37, L’Hospitalet
de Llobregat
14
Registered office: c/ Roger de Llúria 118, Barcelona
15
Registered office: c/ Jordi Girona 31, Barcelona
16
Registered office: Avda. Diagonal 399, Barcelona
17
Registered office: Avda. Diagonal 474, Barcelona
18
Registered office: Molí de la Trobada, s/n, MontferrerCastellbó, Lleida
19
Registered office: c/ Josep Foncuberta 145, Caldes de
Montbui
20
Registered office: Zona Industrial Ligeira 2, Lote 184 C,
7520-309 Sines, Portugal
21
Registered office: 31 Rue Pouchet, Paris
Financial statements of CatalunyaCaixa
CatalunyaCaixa is the parent entity of the CatalunyaCaixa Group. Its condensed interim
financial statements for the six-month period ended 31 December 2010 are as follows:
105
CatalunyaCaixa Balance sheet at 31 December 2010
Thousands of euros
Assets
2010
Net Equity and Liabilities
Cash and balances at central banks
424,576
Held for trading
907,999
Held for trading
Other financial liabilities at fair value
through profit or loss
39,267
Financial liabilities at amortised cost
Other financial assets at fair value
through profit or loss
Available-for-sale financial assets
Loans and receivables
Held-to-maturity investments
Adjustments to financial assets through
macro-hedge
Hedging derivatives
Non-current assets held for sale
Equity investments
Pension-linked
insurance contracts
Property and equipment
Intangible assets
Tax assets
Other assets
4,527,538
Adjustments to financial liabilities through
macro-hedge
64,055,545
1,135,085
(45,316)
946,835
750,862
641,953
1,927,595
8,345
1,874,520
74,595
Hedging derivatives
Liabilities associated with noncurrent assets held for sale
Provisions
Tax liabilities
Social Work welfare projects
Other liabilities
Capital repayable on demand
Total Liabilities
Equity
Valuation adjustments
Total Equity
Total Assets
77,269,399
Memorandum accounts
14,951,616
Total Equity and Liabilities
106
2010
909,190
-
70,813,596
509,223
354,660
1,385,744
426,340
273,182
126,048
-
74,797,983
2,472,977
(1,561)
2,471,416
77,269,399
CatalunyaCaixa. Income statement for the 6-month period ended 31 December 2010
Thousands of euros
2010
Interest and similar income
1,114,883
Interest and similar expense
795,197
INTEREST MARGIN
319,686
Income from equity instruments
23,948
Fee and commission income
181,861
Fee and commission expense
18,107
Gains/(losses) on financial assets and liabilities (net)
26,911
Exchange differences (net)
4,948
Other operating income
21,573
Other operating expenses
32,596
GROSS MARGIN
528,224
Administrative expenses
400,082
Depreciation and amortisation
36,538
Provisions (net)
445
Impairment losses on financial assets (net)
4,056
NET OPERATING MARGIN
87,103
Impairment losses on other assets (net)
24,218
Gains/(losses) on derecognition of assets not classified as non-current assets
held for sale
(2,367)
Loss on business combinations
-
Gains/(losses) on derecognition of non-current assets held for sale not
classified as discontinued operations
(5,638)
PROFIT BEFORE TAX
54,880
Income tax
31,318
Compulsory allocation to Social Work funds and projects
PROFIT FROM CONTINUING OPERATIONS
23,562
Profit/(loss) from discontinued operations (net)
PROFIT FOR THE YEAR
23,562
107
CatalunyaCaixa. Statements of changes in equity (statements of recognised income
and expense) for the six-month period ended 31 December 2010
Thousands of euros
2010
PROFIT FOR THE YEAR
23,562
B) OTHER RECOGNISED INCOME (EXPENSES)
(26,182)
1. Available-for-sale financial assets
a) Valuation gains/losses
b) Amounts transferred to profit or loss
c) Other reclassifications
(1,222)
9,579
10,801
-
2. Cash flow hedges
a) Valuation gains/losses
b) Amounts transferred to profit or loss
c) Amounts transferred to the initial carrying amount of hedged items
d) Other reclassifications
(36,181)
(31,790)
4,391
-
3. Hedges of net investments in foreign operations
a) Valuation gains/losses
b) Amounts transferred to profit or loss
c) Other reclassifications
-
4. Exchange differences
a) Translation gains/losses
b) Amounts transferred to profit or loss
c) Other reclassifications
-
5. Non-current assets held for sale
a) Translation gains/losses
b) Amounts transferred to profit or loss
c) Other reclassifications
-
6. Actuarial gains/losses on pension plans
-
7. Other recognised income and expenses
-
8. Corporate income tax
11,221
TOTAL RECOGNISED INCOME/(EXPENSES) (A+B)
108
(2,620)
CatalunyaCaixa. Statements of changes in equity (Consolidated statement of
changes in equity) for the six-month period ended 31 December 2010
Thousands of euros
Equity attributable to equity holders of the
parent
Capital and reserves
Endowment
fund or
capital
Balance at 1 July 2010
Adjustments due to changes in
accounting policy
Adjustments for errors
Restated opening balance
Total recognised
income/(expenses)
Other changes in equity
Increase/(decrease)
endowment fund or capital
Conversion of financial liabilities
into equity
Gains on other equity
instruments
Reclassification from/to financial
liabilities
Distribution of dividends/
Remuneration to equity holders
Own securities operations (net)
Transfers between
equity items (net)
Increases/(decreases) due to
business combinations
Discretionary allocations to
Social Work funds and projects
Equity-based payments
Other increases/
(decreases) in equity
Balance at 31 December
2010
Reserves
Profit for
the year
Valuation
adjustme
nts
Total
equity
2,449,415
-
-
24,621
2,474,036
2,449,415
-
-
24,621
2,474,036
-
-
23,562
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,449,415
-
23,562
109
(26,182)
(1,561)
(2,620)
2,471.416
CatalunyaCaixa. Cash flow statement for the six-month period ended 31 December
2010
Thousands of euros
2010
1. Cash flows from operating activities
(1,943,304)
Profit for the year 2010
23,562
Adjustments to obtain cash flows from operating activities
Depreciation of property and equipment
Other adjustments
23,244
36,538
(13,294)
Net (increase)/decrease in operating assets
(1,532,326)
Held for trading
Other financial assets at fair value through profit or loss
Available-for-sale financial assets
Loans and receivables
Other operating assets
Net (increase)/decrease in operating liabilities
(369,508)
(1,720)
790,616
(1,570,529)
(381,185)
(3,553,754)
Held for trading
Other financial liabilities at fair value through profit or loss
Financial liabilities at amortised cost
Other operating liabilities
Collection/payment of income tax
(206,304)
(10,554)
(2,572,749)
(764,147)
31,318
2. Cash flows from investing activities
175,219
Payments:
Property and equipment
Intangible assets
Equity investments
Subsidiaries and other business units
Non-current assets held for sale and associated liabilities
Held-to-maturity investments
Other payments related to investing activities
119,444
111,300
8,144
-
Collections:
Property and equipment
Intangible assets
Equity investments
Subsidiaries and other business units
Non-current assets held for sale and associated liabilities
Held-to-maturity investments
Other collections related to investing activities
294,663
8,328
286,335
-
3. Cash flows from financing activities
2,187,715
Payments:
Dividends
Subordinated debt
Redemption of own equity instruments
Acquisition of own equity instruments
Other collections related to financing activities
-
Collections:
Subordinated debt
Issue of own equity instruments
Disposal of own equity instruments
Other payments related to financing activities
2,187,715
1,259,943
927,772
-
4. Effect of exchange rate changes
4,948
5. Net increase/decrease in cash and cash equivalents
6. Cash and cash equivalents at 1 July 2010
7. Cash and cash equivalents at end of year
Cash and cash equivalents at end of year
Cash
Cash equivalents at central banks
Other financial assets
Less: overdrafts and equivalent at end of year
Total cash and equivalents at end of year
424,578
424,576
269,121
155,455
424,576
110
2.2.
Financial instruments
A financial instrument is a contract that simultaneously generates a financial asset in one
entity and a financial liability or equity instrument in another entity.
An equity instrument is a contract that evidences or reflects a residual interest in the assets
of the issuer after deducting all of its liabilities.
2.2.1.
Initial recognition of financial instruments
Financial instruments are initially recognised on the consolidated balance sheet when the
CatalunyaCaixa Group becomes party to the contractual provisions of the instrument. In
particular, debt instruments, such as loans and receivables, are recorded from the date on
which the legal right or obligation to receive or pay cash, respectively, is generated. Financial
derivatives are generally recognised from the trade date.
So-called regular way purchases or sales of a financial asset, i.e., a contract for the purchase
or sale of a financial asset that requires delivery of the asset within the timeframe generally
established by regulation or convention in the market place concerned and that cannot be
settled net (e.g. stock exchange contracts or foreign exchange futures trading contracts), are
recorded from the date on which the rewards, risks, rights and duties intrinsic to all owners are
transferred to the purchaser. Depending on the type of financial asset bought or sold, this date
may be the trade date or the settlement or delivery date. In particular, spot market transactions
and those performed with debt instruments traded on secondary Spanish securities markets are
recognised on their settlement date, while transactions in equity instruments traded on
secondary securities markets are recognised on their trade date.
2.2.2.
Derecognition of financial instruments
A financial asset is derecognised from the consolidated balance sheet in any of the following
circumstances:
ƒ
When the contractual rights over the associated cash flows have expired.
ƒ When the financial asset and the risks and rewards of the financial asset are substantially
transferred or, even if there is no substantial transfer or retaining of the latter, when control of
the financial asset is relinquished (see Note 2.7).
A financial liability, on the other hand, is derecognised from the balance sheet when its
associated obligations are extinguished or when it is re-acquired by the CatalunyaCaixa Group
with the intention of replacing or cancelling it.
2.2.3.
Fair value and amortised cost of financial instruments
Financial assets are recognised in the accompanying balance sheet at fair value with the
exception of loans and receivables, held-to-maturity investments, equity instruments whose fair
value cannot be reliably estimated and financial derivatives with any of these instruments as
underlyings and which are settled via delivery of these underlyings. The Group’s financial
liabilities are recognised in the accompanying balance sheet at fair value with the exception of
financial liabilities at amortised cost, equity having the substance of a financial liability and
financial derivatives whose underlying assets are equity instruments whose fair value cannot be
reliably estimated.
Subsequent notes indicate for all portfolios of financial assets and financial liabilities
designated at fair value how this fair value is determined, including all relevant information on
how it is calculated.
The fair value of a financial instrument at a specified date is the amount for which it could be
delivered, if an asset, or settled, if a liability, in a transaction carried out between
knowledgeable, willing parties on an arm’s-length basis. The most objective, common
benchmark for the fair value of a financial instrument is the price that would be paid on an
organised, transparent and deep market (“quote price” or “market price”).
111
If a market price does not exist for a given financial instrument, its fair value is estimated by
reference to the price established in recent transactions involving similar instruments and, in
the absence thereof, by reference to measurement models which have been sufficiently tested
by the international financial community, taking into account the specific features of the
instrument to be measured and, most particularly, the various types of risk associated with the
instrument.
The fair value of financial derivatives traded in organised, transparent and deep markets and
included in financial assets and liabilities held for trading is equated with their daily quoted price
and if, due to exceptional reasons, their quoted price cannot be determined at a given date,
they are measured using methods similar to those used to measure derivatives not traded in
regulated markets.
The fair value of derivatives not traded in organised markets or derivatives traded in
organised markets lacking depth or transparency is determined using methods recognised by
the financial markets (namely “net present value” (NPV), option pricing models, etc.).
Financial instruments have therefore been classified into the following three levels according
to how their fair value is measured:
ƒ
Level 1: Quoted prices on an active market.
ƒ Level 2: Quoted prices in active markets for similar instruments or using valuation
techniques for which all significant inputs are observable, either directly or indirectly.
ƒ Level 3: Valuation techniques in which any significant input is not based on observable
market data.
An input is considered to be significant when it is important to calculating fair value taken as
a whole.
For derivatives not listed on active markets, the fair value is calculated on a daily basis, using a
specific application to obtain the fair value of the simplest products: interest rate swaps, caps,
floors, exchange rate options, bond options, plain vanilla index options, equity shares, CDS, etc.
In order to value the complex products which the programme cannot handle adequately,
calculators developed by the Market Risk Department are used.
The following criteria are taken into account in preparing these calculators:
ƒ The valuation of financial products is carried out based on observable market data taken
from Bloomberg and Reuters, thereby minimising the amount of subjective data and
parameters. For parameters which are not directly observed, approximations and estimations
are made using other observable data and parameters.
ƒ In order to measure each of the financial instruments, techniques providing realistic price
estimations are used. These techniques should be those used normally on the market to
measure each of the instruments.
There are four methodologies used to prepare these calculators for valuing derivative
financial instruments:
ƒ Closed formulas: these are used for products which can be broken down into one or more
sub-products which can be valued using a Black-Scholes-type method or similar (Black-76,
Garman-Kolhagen, etc.). This section also includes interest rate swaps which are determined
using valuation methods such as implicit forward rates and cash flows, or quant types.
ƒ Binomial trees: are used in products in which the final payment does not depend on the
performance of the quoted price of the underlying. These methodologies are especially indicated
for products with some sort of cancellation option, be they American or Bermuda types.
ƒ Montecarlo Method: this method generates multiple scenarios under the absence of
arbitration hypothesis, calculating the value of the derivative based on the likelihood of
receiving payment. This methodology is used especially for exotic equity funds.
112
ƒ Libor Market Model (LMM): this is a Montecarlo interest rate simulation model. Due to its
complexity and particularities, this method is dealt with separately. This methodology is used
for products with interest rates in which the payment of coupons depends on the trend of the
underlying (long term performance).
The amortised cost of a financial asset or financial liability is the amount at which the
financial asset or financial liability is measured at initial recognition minus principal and interest
repayments, plus or minus the cumulative amortisation in the income statement, using the
effective interest method, of any difference between that initial amount and the maturity
amount. In the case of financial assets, amortised cost also recognises any reduction for
impairment or uncollectibility.
The effective interest rate is the rate that exactly discounts estimated future cash payments
or receipts through the expected life of the financial instrument to the net carrying amount of
the financial asset or financial liability. For fixed rate financial instruments, the effective interest
rate coincides with the contractual interest rate established on the acquisition date, adjusted,
where applicable, for the premiums and initial discounts, fees and transaction costs that should
be included in the calculation of the effective interest rate. In the case of floating-rate financial
instruments, the effective interest rate is calculated in the same manner as for fixed-rate
transactions and is recalculated each time the instrument’s contractual interest rate is reset,
taking into account any changes in the expected future cash flows of the latter.
2.2.4.
Classification and measurement of financial assets and liabilities
For measurement purposes, financial instruments are divided into the following categories:
ƒ Financial assets and liabilities at fair value through profit or loss. This category is
made up of financial instruments classified as held for trading, plus other financial assets and
liabilities designated at fair value through profit or loss.
• Financial assets held for trading are those acquired for the purpose of selling them in
the short term or those which are part of a portfolio of identified financial instruments that
are managed together, and for which there is evidence of a recent actual pattern of shortterm profit taking, and derivatives, except for derivatives that are financial guarantee
contracts or are designated and effective hedging instruments.
• Financial liabilities held for trading are those issued for the purpose of repurchasing
them in the short term or those which are part of a portfolio of identified financial
instruments that are managed together, and for which there is evidence of a recent actual
pattern of short-term profit taking, in addition to short positions arising from sales of assets
temporarily purchased under non-optional reverse repurchase agreements or of borrowed
securities, and derivatives, except for derivatives that are financial guarantee contracts or
are designated and effective hedging instruments.
• Other financial assets or liabilities at fair value through profit or loss are hybrid
financial instruments comprising an embedded derivative and a host contract which,
although not included in financial assets and liabilities held for trading, must be measured
entirely at fair value when it is not possible to segregate the embedded derivative from the
host contract as required under Bank of Spain Circular 4/2004 and IFRS.
Financial instruments classified at fair value through profit or loss are initially recognised at
fair value. Subsequent changes in their fair value are recognised under “Gains/(losses) on
financial assets and liabilities (net)” on the consolidated income statement, except for changes
in fair value due to accrued returns on financial instruments other than trading derivatives,
which are recognised under “Interest and similar income”, “Interest and similar expense” or
“Income from equity instruments” on the consolidated income statement, depending on their
substance. The income and charges associated with debt instruments included in this category
are calculated using the effective interest method.
Gains on derivatives sold to customers are accrued until maturity.
ƒ Held-to-maturity investments. This category includes debt securities with fixed maturity
and with fixed or determinable cash flows that the CatalunyaCaixa Group has the intention and
ability to hold to maturity.
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The debt securities included in this category are initially measured at fair value, adjusted for
transaction costs directly attributed to the purchase of the financial asset, which are charged to
the consolidated income statement using the effective interest method defined by Bank of Spain
Circular 4/2004 and the IFRS. They are subsequently measured at amortised cost, calculated
using the effective interest rate method.
The interest accrued on these securities is recognised under “Interest and similar income” on
the consolidated income statement. Exchange differences on securities denominated in
currencies other than the euro are recognised as explained in Note 2.4. Any impairment losses
on these securities are recognised as explained in Note 2.8.
ƒ Loans and receivables. This category includes unlisted debt securities, financing granted to
third parties through the ordinary lending activities carried out by the CatalunyaCaixa Group
and receivables from purchasers of goods and users of services provided by the Group.
These financial assets are initially measured at fair value, adjusted by the amount of fees
and commissions and transaction costs directly attributable to the acquisition of the financial
asset, which are recognised on the consolidated income statement using the effective interest
method until maturity. They are subsequently measured at amortised cost.
Assets acquired at a discount are measured at the cash amount paid. The difference between
their repayment value and the amount paid is recognised using the effective interest method as
finance income on the consolidated income statement during the remaining term to maturity.
The CatalunyaCaixa Group generally intends to hold granted loans and advances until final
maturity and therefore, they are presented on the consolidated balance sheet at amortised cost.
The interest accrued by these securities is calculated used the effective interest method and
recorded under the “Interest and similar income” heading of the consolidated income statement.
Exchange differences on securities denominated in currencies other than the euro are
recognised as explained in Note 2.4. Any impairment losses on these instruments are
recognised as explained in Note 2.8. The accounting treatment of debt securities included in fair
value hedging transactions is described in Note 2.3.
ƒ Available-for-sale financial assets. This category includes debt securities and equity
instruments not classified in other categories.
Debt instruments are always measured at fair value adjusted by the transaction costs
directly attributable to the acquisition of the financial asset, which are recognised in the
consolidated income statement by the effective interest method through maturity in line with
Bank of Spain Circular 4/2004 and under IFRS, except where the financial assets do not have a
fixed maturity, in which case they are charged to the income statement as impaired or when
derecognised. Available-for-sale financial assets are also measured at fair value subsequent to
initial recognition.
Nonetheless, equity instruments whose fair value cannot be determined in a sufficiently
objective manner are measured at cost in the accompanying consolidated financial statements,
net of any impairment loss, calculated using the criteria explained in Note 2.8.
Changes in the fair value of available-for-sale financial assets due to accrued interest or
dividends are recognised through a balancing entry under “Interest and similar income”
(calculated using the effective interest method) and “Income from equity instruments”,
respectively, in the consolidated income statement. Any impairment losses on these securities
are recognised as indicated in Note 2.8. Exchange differences on financial assets denominated
in currencies other than the euro are recognised as explained in Note 2.4. Changes in the fair
value of financial assets hedged in fair value hedges are recognised as indicated in Note 2.3.
All other changes in the fair value of financial assets classified as available-for-sale from the
time of acquisition are recognised through a balancing entry under “Equity - Valuation
adjustments - Available-for-sale financial assets” until the financial asset is derecognised. The
balance recognised in equity is then taken to ”Gains/(losses) on financial assets and liabilities
(net)”.
114
ƒ
Equity investments. See Note 2.1.
ƒ Financial liabilities at amortised cost. This category of financial instruments includes
financial liabilities not included in any of the previous categories.
Liabilities issued by investees that have the legal form of capital but do not meet the
conditions for classification as equity, i.e., essentially preference shares issued by investees that
do not carry voting rights but do entitle holders to dividend payments in the event of certain
circumstances, are classified in this category.
These liabilities are initially measured at fair value adjusted by transaction costs directly
attributable to issue. They are subsequently measured at amortised cost, calculated using the
effective interest method.
The interest accrued on these securities is recorded in “Interest and similar expense” in the
consolidated income statement. Exchange differences on securities denominated in currencies
other than the euro are recognised as explained in Note 2.4. Changes in the fair value of
financial liabilities hedged in fair value hedges are measured as described in Note 2.3.
Embedded derivatives included in hybrid financial liabilities in this category are separated
from these host contracts and treated independently for accounting purposes if the economic
characteristics and risks of the embedded derivative are not closely related to those of the host
contract, and measured in the same manner as derivatives held for trading.
Nonetheless, liabilities designated as hedged items in fair value hedges are measured at fair
value in the consolidated income statement. Financial instruments classified as non-current
assets held for sale are recognised on the consolidated financial statements based on criteria
explained in Note 2.21.
2.3.
Hedge accounting and risk management
The CatalunyaCaixa Group uses financial derivatives as part of its strategy to reduce its
exposure to interest rate and foreign exchange rate risks, among others (see Note 3). When
these transactions meet the requirements laid down in IAS 39 and Bank of Spain Circular
4/2004, they qualify for hedge accounting.
When the Group designates a transaction as a hedge, it does so from the inception of the
transaction or of the instrument included in the hedge, and the transaction is duly documented.
The hedge accounting documentation duly identifies the hedged instrument or instruments and
the hedging instrument or instruments, the substance of the risk to be hedged, and the criteria
or methods used by the CatalunyaCaixa Group to assess the effectiveness of the hedge over its
entire life, taking into account the risk sought to be hedged.
The Group applies hedge accounting for hedges that are highly effective. A hedge is
considered to be highly effective if, at inception and during its expected term, the changes in
fair value or in the cash flows that are attributed to the hedged risk are almost entirely offset by
changes in the fair value or in the cash flows, as appropriate, of the hedging instrument or
instruments.
To measure the effectiveness of hedges, the Group analyses whether, from the beginning to
the end of the term defined for the hedge, it may be expected, prospectively, that the changes
in fair value or in the cash flows of the hedged item that are attributable to the hedged risk will
be almost entirely offset by changes in the fair value or in the cash flows, as appropriate, of the
hedging instrument or instruments and, retrospectively, that the results of the hedge will be
within a range of 80% to 125% of the results of the hedged item.
Hedging transactions entered into by the CatalunyaCaixa Group are classified into the
following categories:
ƒ Fair value hedges. These hedges the exposure to changes in the fair value of financial
assets and liabilities or of unrecognised firm commitments, or of an identified portion of such
assets, liabilities or firm commitments that is attributable to a particular risk, provided that they
affect the consolidated income statement.
115
In fair value hedges, gains or losses arising on both the hedging instrument and the hedged
items attributable to the type of risk being hedged are recognised directly under “Gains/(losses)
on financial assets and liabilities (net)” in the consolidated income statement.
Hedge accounting is discontinued when the hedging instrument expires or is sold, when the
hedge no longer meets the requirements for consideration as such, or when its designation as a
hedge is revoked.
When, in accordance with the above paragraph, fair value hedge accounting is discontinued,
in the case of hedged items measured at amortised cost, the valuation adjustments accrued
under prior hedge accounting as described above are amortised to profit or loss until the hedged
instrument expires. The adjustment is based on a recalculated effective interest rate at the date
hedge accounting is discontinued.
Fair value micro hedges designed as hedges for accounting purposes by the entity can be
classified as follows:
ƒ
Non-hybrid hedged items
ƒ Hedges of fixed-rate loans: These loans are hedged using swaps, in which CatalunyaCaixa
receives a floating interest rate, generally linked to 3-month Euribor, plus a spread, in
exchange paying fixed interest on each of the loans.
ƒ Hedges of loans with floating interest with a cap: The interest rate on these loans is
capped with a cap with a strike price equivalent to the maximum rate on the loan.
ƒ Hedges of own issues with caps or floors: here own issues are hedged by arranging
interest rate caps and floors.
ƒ Hedges of own issues with exotic derivatives: these consist of swaps in which
CatalunyaCaixa collects the same exotic coupon as it must pay under the issue; in exchange
CatalunyaCaixa pays a floating rate, generally 6-month Euribor plus a spread.
ƒ Hedges of own issues with irregular cash flows: these consist of swaps in which
CatalunyaCaixa receives the same cash flows it must pay under the issue; in exchange
CatalunyaCaixa pays 3-month Euribor plus a spread on a constant notional value throughout
the life of the swap.
ƒ Hedges of fixed-rate deposits: these deposits are hedged with a swap in which
CatalunyaCaixa receives fixed rate and pays a floating rate through maturity.
ƒ
Separable hybrid hedged items
Hedges of structured customer deposits: these are structured deposits in which the
customer receives a floating coupon linked to the performance of a basket of shares or
benchmark equity indexes. These structured deposits are hedged using equity swaps in
which CatalunyaCaixa collects the exactly the same coupon as it will have to pay the
customer; in exchange CatalunyaCaixa pays a floating rate, generally 6-month Euribor
plus/minus a spread.
ƒ Cash flow hedges: these hedges exposure to variability in cash flows that is attributable to
a particular risk associated with a recognised financial asset or liability or with a highly probable
forecast transaction, and could affect the consolidated income statement.
In cash flow hedges, the gains or losses arising on the portion of the hedging instruments
determined to be an effective hedge are recognised temporarily under “Valuation adjustments –
Cash flow hedges” in equity. Financial instruments hedged in this type of hedge transaction are
recognised in line with the criteria detailed above. Gains and losses are not recognised in the
consolidated income statement until the gains or losses on the hedged item are recognised in
profit or loss or until the date of maturity of the hedged item.
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The gains or losses on the ineffective portion of the hedging instruments are recognised
directly under “Gains/(losses) on financial assets and liabilities (net)” in the consolidated income
statement.
When a cash flow hedge is discontinued, the accumulated gains or losses on the hedging
instrument recognised under “Valuation adjustments – Cash flow hedges" in equity are
maintained under this heading until the related cash flows occur, subsequent to which, the gains
or losses are released to profit and loss or included in the initial cost or other carrying amount of
the asset or liability.
The CatalunyaCaixa Group hedges its exposure to interest rate risk in relation to a certain
amount of interest rate-sensitive financial assets or liabilities which form part of its portfolio of
held for trading instruments without formally designating them as specific hedging instruments
for hedge accounting purposes. These hedges, which are known as macro-hedges, can be fair
value hedges or cash flow hedges (see Note 3.3). In fair value macro-hedges, the gains or
losses arising on the hedged items which are attributable to interest rate risk are recognised
directly on the consolidated income statement under “Changes in fair value of hedged items in
portfolio hedges of interest rate risk”, under assets or liabilities, based on the substance of the
hedged item. In cash flow macro-hedges, the hedged items are recognised using the
measurement criteria described in Note 2.2, without any adjustments for the fact that they are
considered hedged instruments, while the derivatives are recognised at fair value and the
portion of the gains or losses on the hedging instruments that is determined to be an effective
hedge are recognised temporarily in equity under “Valuation adjustments”.
2.4.
Transactions in foreign currency
2.4.1.
Functional currency
The functional currency of the CatalunyaCaixa Group is the euro. Therefore, all balances and
transactions in currencies other than the euro are regarded as denominated in foreign currency.
The breakdown of the equivalent values in thousands of euros of the main balance sheet
asset and liability balances denominated in foreign currency, taking into account their substance
and the most significant currencies in which they are denominated, is as follows:
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2010
Assets Liabilities
Equivalent in thousands of euros
Balances in US dollars
Cash and balances at central banks/central bank
deposits and deposits from banks
Customer loans
Debt securities
Customer deposits
Other
Balances in Swiss francs
Cash and balances at central banks/central bank
deposits and deposits from banks
Customer loans
Customer deposits
Other
Balances in pounds sterling
Cash and balances at central banks/central bank
deposits and deposits from banks
Customer loans
Debt securities
Customer deposits
Other
Balances in Japanese yen
177,625
23,424
151,723
6,642
1,216
166,908
9,501
197,977
999
1,766
195,916
295
991
8
32,425
13,266
2,102
23,620
5,932
771
12
13,040
214
734,183
4,620
Cash and balances at central banks/central bank
deposits and deposits from banks
Customer loans
Debt securities
Customer deposits
Other
4,252
729,784
147
4,611
9
Balances in other currencies
26,761
17,693
20,167
1,855
4,090
649
2
17,608
83
1,173,135
214,203
Cash and balances at central banks/central bank
deposits and deposits from banks
Customer loans
Debt securities
Customer deposits
Other
Total balances denominated in foreign
currencies
2.4.2.
181,789
Criteria for translation of foreign currency balances
Foreign currency transactions carried out by the CatalunyaCaixa Group are initially
recognised in the consolidated financial statements at their euro equivalent, which is calculated
using the spot exchange rates in force on the date of each transaction. The CatalunyaCaixa
Group subsequently translates the foreign currency amounts into euros using the following
exchange rates:
ƒ
Monetary items are translated at the average closing spot exchange rate.
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ƒ
Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated using the exchange rate at the date of acquisition.
ƒ
Non-monetary items measured at fair value are translated at the exchange rate
prevailing on the date on which their fair value was determined.
ƒ
Income and expenses are translated at the average exchange rates for the period.
ƒ
Forward foreign currency purchase and sale contracts outstanding are translated to
euros at the exchange rates prevailing at year-end in the forward currency market for
the corresponding term.
2.4.3.
Exchange rate source
The exchange rates used to translate foreign currency balances into euros for preparation of
the consolidated financial statements, taking into account the criteria above, are those
published by the European Central Bank on the date indicated.
2.4.4.
Recognition of exchange differences
The exchange differences resulting from the translation of foreign currency balances into the
functional currency are generally recognised at their net amount under “Exchange differences
(net)” in the consolidated income statement, except for differences in financial instruments at
fair value through profit and loss, which are recognised on the consolidated income statement
without distinguishing them from other changes in fair value.
However, exchange differences arising on non-monetary items the fair value of which is
adjusted through equity are recognised in equity under “Valuation adjustments – Exchange
differences” in the consolidated balance sheet until they are realised.
2.4.5.
Exchange rate risk exposure
The Treasury and Capital Markets Division consolidates and manages the entire foreign
currency risk position generated by the branch network and the trading businesses. The
procedure involves transferring the overall customer-generated position to the Treasury and
Capital Markets Division, where it is handled on aggregate, together with the department’s own
open position (see Note 3.4.2).
2.5.
Recognition of income and expenses
The most significant criteria used to recognise income and expenses are summarised below.
2.5.1.
Interest income, interest expense, dividends and similar items
Interest income, interest expense and similar items are generally recognised on an accruals
basis using the effective interest method described in Section 2.2.3. Dividends received from
non-Group entities, jointly-controlled entities or associates are recognised as income when the
right to receive them is established.
2.5.2.
Commissions, fees and similar items
Fee and commission income and expenses and similar items that are not used as part of the
effective interest rate calculations and/or are not part of the acquisition cost of financial assets
or liabilities, other than those classified at fair value through profit and loss are recognised in
the income statement using different criteria depending on their nature. The most significant of
these are:
ƒ
Those linked to the purchase of financial assets and liabilities measured at fair value
through profit or loss, which are recognised in the income statement when they are
paid.
ƒ
Those generated by transactions or services lasting over time, which are recorded in the
income statement for the life of these transactions or services.
119
Those related to services provided in a single act, which are accrued when the single act
is executed.
ƒ
Fees and commissions paid or received for financial services, regardless of their contractual
denomination, are accrued in the consolidated income statement according to whether they are
classified as financial or non-financial fees.
Financial fees, including loan and credit origination fees, are part of the effective income or
cost of a financial transaction and are recognised under the same heading as finance income or
costs, namely “Interest and similar income” and “Interest expense and similar expense”. These
fees and commissions, except when they offset direct costs related to the transaction, are
recognised on the consolidated income statement over the life of the transaction as an
adjustment to the effective return on or cost of the transaction. If the commitment expires
without the financing being drawn down, they are recognised in the consolidated income
statement on the date of expiry.
Related direct costs are deemed those which would not have arisen if the transaction had not
been arranged. The sum of fees received that can be recognised as income in the consolidated
income statement to offset the related direct costs, if there is no analytical accounting
procedure for calculating this sum, cannot be greater than 0.4% of the principal of the financial
instrument, up to a maximum of 400 euros. The full sum can be recognised when it is no
greater than 90 euros.
Non-financial fees and commissions are those arising from the provision of services carried
out over a period of time or from services provided in a single act.
2.5.3.
Non-financial income and expenses
These are recognised for accounting purposes on an accruals basis.
2.5.4.
Deferred collections and payments
These are recorded for accounting purposes at the amount resulting from discounting
expected cash flows using the effective interest method.
2.6.
Offsetting
Financial assets and liabilities are offset, i.e. recognised on the consolidated balance sheet at
their net amount, only if the entities have a contractually or legally enforceable right to set off
the amounts of such instruments and intend either to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
2.7.
Transfers of financial assets
The accounting treatment of the transfer of financial assets depends on the degree to which
the associated risks and benefits are transferred:
ƒ If the risks and rewards are substantially transferred to a third party the financial asset
transferred is derecognised from the balance sheet and, at the same time, any rights or
obligations retained or created by the transfer are recognised. This case typically applies to
unconditional sales, sales with repurchase agreements at fair value at the repurchase date,
sales of financial assets where the seller holds a call or issues a put option heavily out of the
money, asset securitisations where the originator retains no subordinated finance and offers no
kind of credit enhancement to the new holders, and similar disposals.
ƒ If the risks and rewards associated with the transferred financial asset are substantially
retained, the financial asset continues to be recognised on the balance sheet and is measured
using the same criteria as before the transfer. This case typically applies to sales of financial
assets with agreements to repurchase at a fixed price or for the sale price plus interest,
securities loan contracts where the borrower must return the securities or equivalent assets,
financial asset securitisations which retain subordinated financing, or any other type of credit
enhancement that substantially absorbs the expected credit losses for the securitised assets and
other similar disposals. On the contrary, the following items are recognised and not offset:
120
ƒ
An associated financial liability at an amount equal to the consideration received,
subsequently measured at amortised cost, to the extent that it is not classified as a
financial liability at fair value through profit or loss. So as not to constitute a present
obligation, on calculating the value of this financial liability, the transferor must
deduct any financial instruments (such as securitisation bonds and loans) it holds
which represent financing for the transferee to which the financial assets have been
transferred, to the extent that these instruments specifically finance the transferred
assets.
ƒ
Both the income from the financial asset that has been transferred but not
derecognised from the balance sheet and the charges associated with the new
financial liability.
ƒ Nevertheless, if the CatalunyaCaixa Group purchases bonds issued pursuant to these
securitisations, they are deducted from the financial liability recognised under “Marketable debt
securities”.
ƒ It may also be that the risks and rewards are neither substantially retained nor substantially
transferred. This case typically applies to sales of financial assets where the seller holds a call
option or issues a put option that is neither heavily in nor out of the money, securitisations
where the originator takes on subordinated finance or other types of credit enhancement by
virtue of which the originator significantly reduces exposure to the transferred asset or other
similar cases. In these circumstances the following cases can be distinguished:
ƒ
If the transferring entity does not retain control of the transferred financial asset: the
transferred asset is derecognised and any right or obligation retained or generated as
a result of the transfer is recognised separately.
ƒ
If the transferring entity retains control of the transferred financial asset: the asset
continues to be recognised on the balance sheet at a value equal to its continuing
exposure to possible changes in value and a financial liability associated with the
transferred asset is recognised. The net amount of the transferred asset and
associated liability will be the amortised cost of the rights and obligations retained, if
the transferred asset is measured at amortised cost, or the fair value of the rights and
obligations retained if the transferred asset is measured at fair value.
In line with the above, financial assets are only derecognised from the consolidated balance
sheet when the related cash flows are extinguished or when the risks and rewards inherent to
ownership of the asset have been transferred substantially to third parties.
Note 29.5 summarises the circumstances of the main asset transfers undertaken during the
six-month period ended 31 December 2010 that did not lead to the derecognition of these
assets from the consolidated balance sheet.
2.8.
Impairment of financial assets
A financial asset is considered to be impaired and its carrying amount is duly adjusted when
there is objective evidence that events have taken place producing:
ƒ A negative impact on the future cash flows estimated at the time the transaction was
formalised in the case of debt instruments (loans and debt securities).
ƒ
When its carrying amount may not be fully recovered in the case of equity instruments.
As a general rule, the carrying amount of impaired financial instruments is adjusted with a
charge to the consolidated income statement for the period in which impairment becomes
evident, and the reversal, if any, of previously recognised impairment losses is recognised in the
consolidated income statement in the period in which the impairment is eliminated or reduced,
except for equity instruments classified as available for sale, for which impairment reversals are
recognised under “Valuation adjustments” in equity.
121
When the recovery of any recognised amount is considered remote, the amount is written off
from the consolidated balance sheet, without prejudice to any actions that may be initiated to
seek collection until all contractual rights have been definitively extinguished as a result of
expiry of the statute-of-limitations, a waiver or any other cause.
The criteria used by the CatalunyaCaixa Group to determine impairment losses in each
financial instrument category, together with the method used to calculate the hedges
recognised in connection with this impairment are described below.
2.8.1.
Debt instruments carried at amortised cost
The amount of an impairment loss incurred on a debt instrument carried at amortised cost is
equal to the positive difference between its carrying amount and the present value of its
estimated future cash flows. However, the market value of listed debt instruments is considered
a reasonable estimation of the present value of expected future cash flows.
To estimate the future cash flows of debt instruments, the following factors are taken into
account:
ƒ All amounts expected to be obtained during the remaining life of the instrument, including
those that could be generated by any of its guarantees, as applicable (after deducting the
necessary costs of foreclosure and subsequent sale). Impairment loss takes into account the
calculation of the possibility of collecting accrued, past due and uncollected interest.
ƒ
The different types of risk associated with each instrument.
ƒ
The circumstances under which collection is likely to occur.
These cash flows are then discounted at the instrument’s effective interest rate (if the
contractual rate is fixed) or at the effective contractual interest rate on the reset date (when the
rate is floating).
In the specific case of impairment losses resulting from the materialisation of insolvency risk
(credit risk), a debt instrument is considered impaired due to insolvency when:
ƒ There is evidence of deterioration in the debtor’s ability to pay, either because it is in
arrears or for other reasons.
ƒ When “country risk” materialises, which is understood as the risk that affects debtors
resident in a specific country as a result of circumstances other than the customary
commercial risk.
Impairment losses on these assets are assessed as follows:
ƒ Individually, for all significant debt instruments and for instruments which, without being
material, are not susceptible to being classified in homogeneous groups of instruments with
similar risk characteristics: instrument type, debtor industry and geographical location, type
of guarantee or collateral, age of past-due amounts, etc.
ƒ Collectively: transactions are classified on the basis of the substance of the payment
obligations, the conditions of the country of residence of the debtor, the status of the
transaction and type of guarantees or collateral, the age of past-due amounts, etc. For each
of these risk groups, the impairment losses (“identified losses”) are established that have to
be recognised in the consolidated financial statements of the consolidated entities.
In addition to identified losses, an overall impairment loss is recognised on risks classified as
standard and therefore, not specifically identified. This loss is quantified using the statistical
parameters established by the Bank of Spain on the basis of its past experience and the
information available to it on the Spanish banking sector, modified as circumstances dictate.
Debt instruments and contingent risks that do not meet criteria for individual classification as
doubtful but which display weaknesses that could lead to impairment losses for the
122
CatalunyaCaixa Group in excess of its loan-loss provisions due to intensification of risks under
close surveillance are classified as substandard risk (see Note 13.3).
The recognition of interest income in the income statement is discontinued for all debt
instruments that are individually classified as impaired, either because they are more than three
months past due or because objective signs of impairment are observed.
2.8.2.
Other debt instruments
The amount of impairment losses on debt securities included in the available-for-sale
financial asset portfolio is the positive difference between their acquisition cost (net of any
principal repayment or amortisation) and their fair value, less any impairment loss previously
recognised in the consolidated income statement.
The procedure for calculating impairment losses arising from insolvency of the issuer of the
debt instruments classified as available for sale is the same as that used for debt instruments
carried at amortised cost, which is explained in Note 2.8.1.
When a decline in the fair value of an available-for-sale financial asset has been recognised
directly in equity and there is objective evidence that the asset is impaired, the cumulative loss
that had been recognised directly in equity under “Valuation adjustments – Available-for-sale
financial assets” is removed from equity and recognised in profit or loss. If all or part of the
impairment losses is subsequently reversed, the reversal is recognised in the consolidated
income statement in the period in which the reversal occurs.
Similarly, losses recognised in equity arising on the measurement of debt instruments
classified as “non-current assets held for sale” are considered realised, and they are accordingly
recognised in profit or loss when the classification takes place.
The recognition of interest income in the consolidated income statement is discontinued for
all debt instruments that are individually classified as impaired due when they are past due for
more than three months or because objective signs of impairment are observed.
2.8.3.
Equity instruments classified as available for sale and measured at fair value
An impairment loss on equity instruments included within available-for-sale financial assets
is the positive difference between their acquisition cost (net of all principal repayments) and
their fair value, less any impairment loss previously recognised in the consolidated income
statement.
The criteria for recognising impairment losses on equity instruments classified as available
for sale are similar to those used for “Other debt instruments” explained in Note 2.8.2, with the
exception that any reversal of these losses is recognised in consolidated equity under “Valuation
adjustments – Available-for-sale financial assets”.
2.8.4.
Equity instruments measured at cost
Impairment losses are recognised in the consolidated income statement in the period in
which they arise by directly reducing the cost of the instrument. These losses can only be
reversed subsequently if the assets are sold.
2.8.5.
Equity investments
Impairment losses on equity investments in jointly-controlled entities and associates which,
for the purposes of these consolidated financial statements are not considered “financial
instruments”, are estimated and recognised using generally accepted measurement methods.
These losses can be reversed if the objective events triggering them cease to exist.
2.9.
Financial guarantees and related provisions
“Financial guarantees” are defined as contracts that require the issuer to make specified
payments to reimburse the holder for a loss it incurs because a specified debtor fails to make
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payment when due in accordance with the original or modified terms of a debt instrument,
irrespective of their legal form (bonds, financial guarantees, credit derivatives, etc.).
Regardless of the guarantor, instrumentation or other circumstances, financial guarantee
contracts are reviewed periodically to determine credit risk exposure and, if appropriate, to
consider whether a provision is required. Credit risk is determined using similar criteria to those
for quantifying impairment losses of debt instruments carried at amortised cost, which are
explained in Note 2.8.1.
The provisions recognised for these arrangements are recognised under “Provisions –
Provisions for risks and contingent liabilities” on the liability side of the consolidated balance
sheet. The recognition and reversal of this provision are recognised with a charge or credit to
“Provisions (net)” in the accompanying consolidated income statement (see Note 22).
When a provision is recognised for financial guarantees, fees pending accrual recognised
under “Other liabilities - Accruals and deferred income” on the liability side of the consolidated
balance sheet are reclassified to the corresponding provision.
2.10. Leases
2.10.1.
Operating leases
In operating leases, ownership of the leased asset and substantially all risks and rewards
incidental to ownership are retained by the lessor.
When the CatalunyaCaixa Group acts as lessor in operating leases, it recognises the
acquisition cost of the leased assets under “Property and equipment”, either as “Investment
properties” or “Other assets under operating leases”, depending on the substance of the leased
assets. These assets are depreciated in line with the policies adopted for similar items of plant
and equipment for own use, and the income from lease agreements is recognised on a straightline basis under “Other operating income” in the consolidated income statement.
When the Group acts as lessee in operating leases, lease expenses, factoring in any
incentives granted by the lessor, where applicable, are charged on a straight-line basis to
“Other general administrative expenses” in the consolidated income statement.
In disposal transactions and sales involving the subsequent leasing of property, plant, and
equipment, leases will be considered to be operating leases in the following cases:
ƒ
The sale price is based on independent appraisals carried out by external companies.
ƒ
The duration of the contracts is 20 years, with no foreseeable renewals.
ƒ There is a purchase option at 10, 15, and 20 years. The option price is without a premium,
and the purchase/sale price is to be established on the basis of the weighted average of two
appraisals arranged by each party.
ƒ
There are no restrictions on the lessee.
The total minimum payments arising from the non-cancellable operating leases are explained
in Note 41.
2.10.2.
Finance leases
Finance leases are leases that transfer substantially all the risks and rewards incidental to
ownership of the leased asset to the lessee.
When the consolidated entities act as lessors of an asset in a finance lease, the sum of the
present values of the lease payments receivable from the lessee, plus the guaranteed residual
value (which is generally the exercise price of the lessee’s purchase option at the end of the
lease term), is recognised as a loan to third parties and is therefore, included under “Loans and
receivables” on the consolidated balance sheet based on the substance of the lessee.
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When the consolidated entities act as lessees, they present the cost of the leased assets in
the consolidated balance sheet, based on the substance of the leased asset, and,
simultaneously, recognise a liability for the same amount (which is the lower of the fair value of
the leased asset and the sum of the present value of the lease payments due to the lessor plus,
if appropriate, the exercise price of the purchase option). These assets are depreciated following
the same criteria as applied to items of plant and equipment for own use (see Note 2.15.1).
In both cases, the financial income and expenses arising under finance lease agreements are
credited to “Interest and similar income” or debited to “Interest and similar expenses”,
respectively, in the consolidated income statement, with accrual calculated using the effective
interest method in accordance with IAS 39.
2.11. Assets under management
Third-party assets managed by the CatalunyaCaixa Group are carried off-balance sheet. The
fees and commissions generated by this activity are included under “Fee and commission
income” in the consolidated income statement. Information regarding the third-party assets
under management at 31 December 2010 is disclosed in Note 29.4.
2.12. Investment funds and pension funds managed by the CatalunyaCaixa Group
The mutual funds and pension funds managed by the CatalunyaCaixa Group are not
presented on the face of the Group’s consolidated balance sheet since the related assets are
owned by third parties. The fees and commissions generated during the year for the various
services rendered to these funds, namely depositary and asset management fees, etc., are
included under “Fee and commission income” in the consolidated income statement.
2.13. Personnel expenses
2.13.1. Post-employment
retirements
obligations:
pensions,
employee
benefits
and
early
In accordance with prevailing regulations and collective bargaining agreements,
CatalunyaCaixa must supplement permanent or severe disability benefits and social security
benefits to pensioners, widows and orphans, for all employees hired before a specific date. Certain
additional guarantees apply to the entire workforce, regardless of the date on which members
joined the staff.
The entity continues to recognise as an expense the insurance premiums paid on the policies
written with Ascat Vida, SA, Estalvida d’Assegurances i Reassegurances, SA and Caixa Manresa
Vida, SA to cover the liabilities accrued during the year and accrued contributions to the pension
plan under the above labour agreement and other expenses accrued under other agreements (see
Note 41.1).
2.13.2. Death and disability
CatalunyaCaixa’s obligations to cover the contingencies of employee death and disability for
the period in which they are employed, are met by insurance policies taken out with Ascat Vida,
SA, Estalvida d’Assegurances y Reassegurances, SA, and Caixa Manresa Vida, SA, and are
recognised on the consolidated income statement at the amount of the mentioned insurance
policies accrued each year.
The amount accrued under these insurance policies during the six-month period ended 31
December 2010, included under “Personnel expenses” on the consolidated income statement,
was 3,069 thousand euros.
2.13.3. Termination benefits
In accordance with IFRS and Bank of Spain Circular 4/2004, when the CatalunyaCaixa Group
undertakes to demonstrably terminate its link with its employees before the normal retirement
date or to pay compensation as part of an offer to encourage voluntary redundancy, it must
recognise a provision for such planned severance payments. These measures are directed at
employees affected by office closures, the restructuring of the Central Services Department,
125
subsidiaries, or Foundations who do not voluntarily accept the vacancies offered and have to
accept voluntary redundancy. Any of the employees of the three entities may also request to
avail themselves of these measures. The alternatives are as follows:
ƒ Cancellation of employment contract with a lump sum severance package: three tranches
were established, based on the employee’s length of service (up to 3 years, from 3-12 years,
and over 12 years). In all cases, the fixed gross salary used as a basis for calculation these
severance packages will be based on the gross fixed salary at year-end 2009, or the same at
the time the contract was terminated, if higher. A separate section has been set aside for
employees serving for over 20 years.
ƒ Termination of contract through deferred compensation: this option offers deferred
compensation, which consists of payment of a monthly gross amount which, including
unemployment payments, adds up 90% of the fixed net monthly salary. When unemployment
benefits have expired, the employee will continue to receive 90% of his/her salary until 36
months have transpired from the date the work contract was terminated.
ƒ Contract suspensions: As an alternative measure, employees may choose to suspend their
work contracts for a four-year period. During this time, they will receive a yearly amount which
is equivalent to 25% of their 2009 fixed gross salary, or the fixed gross salary at the time the
contract is suspended, if higher. If, during the four-year period, or afterwards, the new entity
does not offer the possibility of reincorporation, the work contract will be considered terminated,
and the employee will have the right to a gross severance payment based on years of service.
CatalunyaCaixa has reached a framework agreement by virtue of which the employees may
voluntarily opt for the proposed early retirement and paid leave schemes (see Note 22).
The CatalunyaCaixa Group has agreements in place with its Senior Management to pay
specific compensation in the event that their employment contracts are terminated prematurely.
At 31 December 2010, the Group had not recognised any provision in this connection, given
that the triggering event has not taken place.
2.13.4. Employee credit facilities
Under IFRS and Bank of Spain Circular 4/2004, credit facilities made available to employees
at below market rates by the CatalunyaCaixa Group are considered to be monetary benefits.
These benefits are calculated as the difference between market rates and those agreed between
the Group entities and the employee, and are recognised under “Personnel expenses – Wages
and salaries”, with a balancing entry to “Interest and similar income” in the consolidated income
statement.
2.14. Corporate income tax
The expense for Spanish income tax is recognised on the consolidated income statement in
accordance with the Spanish General Chart of Accounts enacted by Royal Decree 1514/2007 of
16 November and the implementing standard.
Income tax expense for the year is calculated as the sum of tax payable on taxable income
for the year, adjusted for any changes arising during the year in the assets and liabilities
recognised as a result of temporary differences and tax credits and tax losses carried forward
(see Note 27).
The CatalunyaCaixa Group considers a temporary difference exists when there is a difference
between the carrying amount of an asset and its tax base. The tax base of an asset or liability is
taken to be the amount attributed to that asset or liability for tax purposes. A taxable
temporary difference is one that will generate a future obligation for the Group towards the
relevant taxation authority. A deductible temporary difference is one that will generate a future
right for the Group to a refund or a deduction towards the relevant taxation authorities.
Unused tax credits and tax losses are amounts that, having performed the activity or
generated the gain or loss giving entitlement to them, are not applied for tax purposes in the
related tax return until the conditions for doing so established in prevailing tax regulations are
126
met, and are recognised as assets so long as the Group considers it probable future taxable
profit will be available against they can be utilised.
Current tax assets and liabilities are those considered recoverable from or payable to the
authorities, respectively, within a term not exceeding twelve months from the date of
recognition. On the other hand, deferred tax assets and liabilities are those considered
recoverable from or payable to the authorities, respectively, in subsequent years.
Deferred tax liabilities are recognised for all taxable temporary differences.
The CatalunyaCaixa Group only records deferred tax assets arising from deductible
temporary differences, tax credits, allowances or loss carry forwards if the following conditions
are met:
ƒ
It is considered probable that the Group will obtain sufficient future taxable income to be
able to offset them.
ƒ
In the case of deferred tax assets for the carryforward of unused tax losses, the tax losses
result from identifiable causes which are unlikely to recur.
No deferred tax assets or liabilities are recognised if they arise from the initial recognition of
an asset or liability (except in the case of a business combination) that at the time of
recognition affects neither accounting profit nor taxable income.
Recognised deferred tax assets and liabilities are reassessed at each balance sheet date and
their carrying amounts are adjusted to reflect the findings of the analyses performed.
2.15. Property and equipment
2.15.1. Property and equipment for own use
Property and equipment for own use includes assets, either owned or acquired under finance
leases, held by the CatalunyaCaixa Group for administrative purposes other than those of Social
Work Projects, or for the production or supply of goods, that are expected to be used for more
than one period. Among other items, this category includes assets received by the Group as full
or partial satisfaction for financial assets representing receivables from third parties, which are
intended to be held for continuing use. Property and equipment for own use is recognised in the
consolidated balance sheet at acquisition cost, less:
ƒ
The corresponding accumulated depreciation.
ƒ
Where applicable, estimated impairment losses resulting from comparing the carrying
amount of each item with its recoverable amount.
For this purpose, the acquisition cost of foreclosed property which are included in the
property and equipment of the CatalunyaCaixa Group for its own use, is the carrying amount of
the financial assets settled through foreclosure.
Depreciation is calculated using the straight-line method, on the basis of the acquisition cost
of the assets less their residual value. As an exception, land is not depreciated since it is
considered to have an indefinite life.
The annual depreciation charge is recognised under “Depreciation and amortisation –
Property and equipment” in the consolidated income statement and is calculated basically using
the depreciation rates set out below, which are based on the years of estimated useful life of the
various assets average:
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Annual
Buildings
Fixtures
Fittings
General
Equipment
Electronic equipment
2%
10 %
6–8%
9 – 12 %
15 – 33 %
At each reporting date, the CatalunyaCaixa Group analyses whether there are any internal or
external indications of impairment (i.e. that its carrying amount exceeds its recoverable
amount). If this is the case, the carrying amount of the asset is reduced to its recoverable
amount and future depreciation charges are adjusted in proportion to the revised carrying
amount and to the new remaining useful life, if the useful life has to be re-estimated. Any
reduction in the carrying amount of property and equipment for own use is recognised with a
charge to “Impairment losses on other assets (net)” in the consolidated income statement.
Similarly, if there is an indication of a recovery in the value of an item of property and
equipment, the CatalunyaCaixa Group recognises the reversal of the impairment loss recognised
in prior periods also under “Impairment losses on other assets (net)”, adjusting the future
depreciation charges accordingly. Under no circumstances may the reversal of an impairment
loss on an asset increase its carrying amount above the amount at which it would have been
measured if no impairment losses had been recognised in prior years.
Upkeep and maintenance expenses on property and equipment for own use are charged
against “Other general administrative expenses” in the consolidated income statement in the
year in which they are incurred. The acquisition or production cost recognised for items of
property and equipment that require more than a year to ready for use (qualifying assets)
includes borrowing costs accrued prior to bringing them into use that have been charged by the
supplier or correspond to loans or other third-party financing directly attributable to acquisition,
production or construction. Capitalisation of borrowing costs is suspended during extended
periods in which active development is interrupted and ceases when substantially all the
activities necessary to prepare the qualifying asset for its intended use or sale are complete.
2.15.2. Investment properties
“Investment properties” on the consolidated balance sheet recognise net value of land,
buildings and other structures held for rental purposes or in order to obtain capital gains in the
event of sale, through potential increases in their market value.
The criteria used to determine the acquisition cost of investment properties, the
corresponding depreciation rates, estimated useful life, and potential impairment losses are the
same as those described above for property and equipment for own use (see Note 2.15.1).
2.15.3. Other assets under operating lease
“Other assets under operating lease” on the consolidated balance sheet recognise the net
value of property and equipment other than land and property held under operating leases.
The criteria used to determine the acquisition cost of leased assets, the corresponding
depreciation rates, estimated useful life, and potential impairment losses are the same as those
described above for property and equipment for own use (see Note 2.15.1).
2.15.4. Assigned to Social Work Projects Fund
“Property and equipment – Assigned to Social Work Projects Fund” in the balance sheet
reflects the net value of the property and equipment assigned to CatalunyaCaixa’s Social Work
Projects.
The criteria used to determine the acquisition cost recognised for assets assigned to Social
Work Projects, the corresponding depreciation charges, estimated useful lives and potential
impairment losses are the same as those for property and equipment for own use (see Note
128
2.15.1), with the sole exception that the corresponding depreciation charges or impairment
losses, or recovery thereof as warranted, are not charged/credited to the consolidated income
statement, but are rather recognised under “Social Work Project Fund” on the consolidated
balance sheet.
2.16. Intangible assets
Intangible assets are identifiable non-monetary assets without physical substance which
arise as a result of a legal transaction or which are developed internally by the CatalunyaCaixa
Group. However, only intangible assets whose cost can be estimated objectively and from which
it is considered probable that future economic benefits will be generated are recognised.
Intangible assets are recognised initially at acquisition or production cost and are
subsequently measured at cost less, where applicable, any accumulated amortisation and any
accumulated impairment losses.
All of the CatalunyaCaixa Group’s intangible assets currently have a finite useful life and any
impairment loss in their carrying amount is recognised under “Impairment losses on other
assets – Goodwill and other intangible assets” in the consolidated income statement. The
criteria for recognising impairment losses on these assets and, where applicable, reversal of
losses recognised in previous years, are similar to those used for property and equipment for
own use (see Note 2.15.1). The maximum amortisation period is six years.
2.16.1.
Goodwill
When the acquirer's interest in the net fair value of the identifiable assets, liabilities and
contingent liabilities, adjusted at the date of first-time consolidation, of acquired subsidiaries
and entities carried under the equity method is less than the cost of the business combination,
the difference is recognised as follows:
1.
If the excess can be assigned to specific assets of the companies acquired, by
increasing the value of the assets (or reducing the value of the liabilities), whose fair
values were higher (lower) than the carrying amounts at which they had been
recognised in the acquired entities’ balance sheets.
2.
Where differences can be assigned to specific intangible assets, they are explicitly
recognised on the consolidated balance sheet provided their fair value at the
acquisition date can be measured reliably.
3.
The remaining surplus is recognised as goodwill and assigned to one or more specific
cash-generating units.
Goodwill is only recognised when it has been acquired for consideration and accordingly
represents advance payments made by the acquirer for future economic profits generated by
the assets of the acquired that are not individually and separately identifiable and recognisable.
Goodwill acquired is measured at acquisition cost and at the end of each reporting period is
reviewed for impairment (i.e. a reduction in its recoverable amount to below its carrying
amount). Any impairment is written down with a charge to “Impairment losses on other assets
(net) – Goodwill and other intangible assets” in the consolidated income statement.
Goodwill impairment cannot be subsequently reversed.
2.16.2.
Negative goodwill
When the acquirer's interest in the net fair value of the identifiable assets, liabilities and
contingent liabilities, adjusted at the date of first-time consolidation, of acquired subsidiaries
and entities carried under the equity method exceeds the cost of the business combination, the
difference is recognised as follows:
ƒ
If the negative goodwill is attributable to specific assets and liabilities of the companies
acquired, increasing the value of the liabilities (or reducing the value of the assets)
whose fair values were higher (lower) than the carrying amounts at which they had
been recognised in the acquired entities’ consolidated balance sheets.
129
ƒ
2.16.3.
Remaining amounts are recognised under “Other gains” on the consolidated income
statement for the year that the acquisition of the investment in the consolidated entity
took place or the consolidated entity was consolidated using the equity method.
Other intangible assets
Intangible assets other than goodwill are recognised in the consolidated balance sheet at
acquisition or production cost, net of accumulated amortisation and any impairment losses.
The maximum amortisation period is six years.
2.17. Inventories
This heading, included under “Other assets” in the consolidated balance sheet, includes nonfinancial assets that consolidated entities:
ƒ
hold for sale in the ordinary course of their business,
ƒ
hold in the process of production, construction or development for such sale, or
ƒ
plan to consume in the process of production or provision of services.
Inventories therefore include the land and properties other than investment properties held
for sale or for inclusion in a property development.
Inventories are measured at the lower of cost, which includes all disbursements for
acquisition and transformation and the direct and indirect costs incurred to bring them to their
present condition and location, and their “net realisable value”. Net realisable value is defined as
the appraisal value (with the appraisal conducted within less than one year from the balance
sheet date) less the costs required to complete production and conclude their sale, which are
estimated at no less than 10%.
Appraisals are performed by independent experts, all of which are registered with the Bank
of Spain’s appraisal register. These appraisers estimate the properties’ market value by
comparing them with prevailing bids for similar properties.
Any write-downs of inventories to net realisable value and any subsequent reversals of writedowns are recognised under “Impairment losses on other assets (net) – Other assets” in the
consolidated income statement for the year in which the impairment or reversal occurs.
The carrying amount of inventories is derecognised and recognised as an expense in the
consolidated income statement under “Other operating expenses – Cost of sales” when the sale
relates to activities that form part of the CatalunyaCaixa Group’s ordinary business, or under
“Other operating expenses” in all other cases, in the period in which the proceeds from the sales
are recognised.
2.18. Provisions and contingent liabilities
The consolidated financial statements distinguish between:
ƒ
Provisions: amounts covering present obligations at the date of the balance sheet arising
from past events which could give rise to a loss for the CatalunyaCaixa Group, considered
likely to occur and certain in terms of substance but uncertain in terms of amount and/or
timing.
ƒ
Contingent liabilities: possible obligations that arise from past events whose existence will
be confirmed only by the occurrence or non-occurrence of one or more future events
beyond the control of the CatalunyaCaixa Group.
The consolidated financial statements include all the material provisions with respect to
which it is considered more likely than not that the obligation will have to be settled. Contingent
liabilities are not recognised in the consolidated financial statements (see Note 29.1).
130
Provisions are estimated taking into account the best available information on the
consequences of the event generating them and are recalculated at the end of each financial
year. They are used to meet the specific obligations for which they were originally recognised
and are totally or partially reversed when the aforementioned obligations cease to exist or
diminish.
The provisions deemed necessary based on the above criteria are recognised by debiting or
crediting the “Provisions (net)” caption of the consolidated income statement.
Provisions are classified on the basis of the obligations covered:
ƒ
Pension funds and other similar obligations include all provisions covering post-employment
benefits, including commitments made to employees in early retirement and similar
obligations (see Note 2.13).
ƒ
Tax provisions include provisions made to cover tax contingencies.
ƒ
Provisions for risks and contingent liabilities: includes provisions made to cover contingent
risks, which are understood to be transactions in which the Group guarantees third-party
obligations arising from financial guarantees extended or other types of contract, and
contingent liabilities, taken to be irrevocable commitments that could lead to the recognition
of financial assets.
ƒ
Provisions for litigation and similar items.
ƒ
“Other provisions” mainly include a fund to pay for the impairment arising in foreclosed
property received from the dation of payment of debts by CatalunyaCaixa and group
companies, as well as a fund to cover investment and pension risk.
At the end of the six-month period ended 31 December 2010, certain lawsuits and claims
against the CatalunyaCaixa Group, arising in the ordinary course of business, were in progress.
The CatalunyaCaixa Group’s legal advisers and Directors consider that the outcome of such
lawsuits and claims will not have a material effect on the consolidated financial statements for
the years in which they are settled.
2.19. Consolidated statement of changes in equity
Under IFRS certain categories of assets and liabilities are recognised at fair value with a
charge to equity. These balancing entries or “Valuation adjustments” are included under the
Group’s equity, net of tax effects. This information is subsequently disclosed in two financial
statements: the statement of recognised income and expenses and the statement of total
changes in equity. These statements present the changes arising in this heading during the
year, as well as profit or loss for the year and, where appropriate, restatements made due to
changes in accounting principles or errors in prior years. There follows an explanation of the
main characteristics of the information disclosed in both parts of the statement:
ƒ
Consolidated statement of recognised income and expenses
This part of the statement of changes in equity presents income and expenses recognised by
the Group as a result of its activity during the year, distinguishing between those items
recognised through profit and loss on the consolidated income statement for the year, and the
other income and expenses which, in accordance with prevailing accounting standards, are
recognised directly in equity.
This financial statement therefore presents:
ƒ The profit or loss for the year.
ƒ The net income or expense temporarily recognised in equity as valuation adjustments.
ƒ Net income and expense recognised in equity definitively.
131
ƒ Income tax accrued on the above-mentioned items, with the exception of valuation
adjustments resulting from investments in associates or jointly-controlled entities accounted
for using the equity method which are presented net.
ƒ Total recognised income and expense.
Changes in recognised income and expense recognised in equity as valuation adjustments
are broken down into:
ƒ Valuation gains/(losses): income, net of expense, arising during the year, recognised
directly in equity. Amounts recognised during the year in this heading are retained in this
heading, even if they are transferred to profit or loss in the same year, included in the initial
measurement of other assets or liabilities, or are reclassified to another heading.
ƒ Amounts transferred to the profit or loss: valuation gains and losses previously
recognised in equity, even in the same year, which are taken to profit or loss.
ƒ Amount included in the initial value of hedged items: valuation gains and losses
previously recognised in equity, even in the same year, which are recognised in the initial
value of the assets and liabilities as a result of cash flow hedges.
ƒ Other reclassifications: transfers made during the year between valuation adjustments
headings in accordance with the criteria established in prevailing accounting standards.
These items are presented gross and the corresponding tax effect is recognised under
“Income tax” in this statement.
ƒ
Consolidated statement of changes in equity
This section of the consolidated statement of changes in equity presents all changes in
equity, including restatements to reflect changes in accounting principles and the correction of
errors. This statement therefore presents a reconciliation of the opening carrying amount of all
items comprising equity to the closing carrying amount, grouping movements into the following
headings according to their substance:
ƒ Restatements to changes in accounting policy and correction of errors: includes changes
in equity due to the retroactive adjustment to financial statement balances because of
changes in accounting principles or to correct errors.
ƒ Recognised income and expense: comprises an aggregate of all the aforementioned items
recognised in the statement of recognised income and expense.
ƒ Other changes in equity: the remaining items recognised in equity such as capital
increases or decreases, distribution of profits, own equity transactions, equity-based
payments, transfers between equity accounts, and any other increase or decrease in equity.
2.20. Consolidated cash flow statements
The following terms are used in the consolidated statements of cash flow:
ƒ
Cash flows: inflows and outflows of cash and cash equivalents, which are short-term, highly
liquid investments that are subject to an insignificant risk of changes in value.
ƒ
Operating activities: the ordinary business activities of the CatalunyaCaixa Group entities
and other activities that are not investing or financing activities.
ƒ
Investment activities: the acquisition and disposal of long-term assets and other
investments not included in cash and cash equivalents.
ƒ
Financing activities: activities that result in changes in the size and composition of
consolidated equity and liabilities that are not operating activities.
132
2.21. Non-current assets held for sale and associated liabilities
“Non-current assets held for sale” on the consolidated balance sheet includes the carrying
amount of items – individual items, disposal groups or items forming part of a business unit
earmarked for disposal ("discontinued operations") – the sale of which in their present condition
is highly likely to be completed within one year from the date of the consolidated financial
statements.
In the case of real estate assets, as long as they are classified as held for sale, depreciable
fixed assets and amortisable tangible assets are not depreciated/amortised.
Investments in associates or jointly-controlled entities that meet the requirements set forth
in the paragraph above are also considered as non-current assets held for sale.
Therefore, the recovery of the carrying amount of these items, which can be financial or nonfinancial, is likely to be realised through the sale transaction and not through continuing use.
In particular, real estate assets or other non–current assets foreclosed by the
CatalunyaCaixa Group in full or partial satisfaction of non-performing loans are classified as
non–current assets held for sale, unless the subsidiaries have opted to keep them in use or are
holding them for rental.
Similarly, “Liabilities associated with non-current assets held for sale” includes the liabilities
associated with the disposal groups or discontinued operations of the CatalunyaCaixa Group.
Assets foreclosed in lieu of repayment of debt, independently of the legal form utilised, are
recognised at the at the lower of the carrying amount of the applied financial assets, or at
amortised cost, taking into consideration estimated impairment, in any case at least 10%, and
the current market value of the asset received, less the estimated sale cost, which must not be
less than 10% of its appraisal value. The net amount of each concept is considered the initial
cost of the received asset.
The length of time that an asset foreclosed in lieu of repayment of debt remains on the
balance sheet will be considered an indication of impairment. Unless offers are received for a
higher amount, they will not be less than the amount arising from increasing the above 10% to
the following:
Time since acquisition
More than 12 years
More than 24 years
% coverage
20%
30%
Appraisals are performed by independent experts, all of which are registered with the Bank
of Spain’s appraisal register. These appraisers estimate the properties’ market value by
comparing them with prevailing bids for similar properties.
If the carrying amount exceeds the fair value of the assets, net of costs to sell, the carrying
amount is reduced by the excess with a charge to “Impairment losses on other assets (net) –
Non-current assets held for sale” in the consolidated income statement. If their fair value
subsequently increases, the impairment losses previously recognised are reversed, increasing
the carrying amount of the assets up to the limit prior to impairment, recognising a balancing
entry under “Impairment losses on other assets (net) - Non-current assets held for sale” in the
consolidated income statement.
2.22. Social Work Projects
The Social Work Project Fund is recognised under “Social Work Project Fund” in the
consolidated balance sheet.
Endowments to this fund are treated as distribution of the CatalunyaCaixa Group’s profit.
133
The expenses generated by Social Work Projects are charged to the Social Work Project Fund
in the balance sheet and are not recognised in the consolidated income statement.
The property and equipment and liabilities assigned to Social Work Projects are recognised in
separate, specific captions of the consolidated balance sheet.
Social Work Projects that take the form of activities that form the core business of the
CatalunyaCaixa Group are recognised by deducting the corresponding amounts from the Social
Work Project Fund and simultaneously crediting them to the income statement on an arm’s
length basis in accordance with normal market conditions for this type of activity.
3. Risk management
In light of the exceptional circumstances in the international financial markets, European
governments committed to implement the measures required to resolve bank funding issues
and the attendant ramifications for the real economy in order to ensure the stability of the
international financial system. The main objectives of these measures were: to ensure financial
entities had sufficient liquidity to be able to operate; to facilitate access to financing from
financing entities; to establish if required, mechanisms that permit additional capital to be
provided to financial entities to ensure the economy can continue to operate; to guarantee that
accounting standards are sufficiently flexible so that the exception circumstances in the markets
can be taken into account; and to strengthen and improve coordination mechanisms between
European states.
As part of this general picture, the following measures were approved in Spain:
Liquidity:
ƒ Royal Decree-Law 6/2008 of 10 October creating the Fund for the Acquisition of Financial
Assets (hereinafter FAFA) and the Order of the Ministry of the Treasury EHA/3118/2008 of 31
October which implements this royal decree. The purpose of the FAFA, which falls under the
remit of the Ministry of the Treasury, and which has an initial limit of 30 billion euros that can
be increased to 50 billion euros, is to purchase, at the expense of the Treasury and under
market conditions, through auctions, purchase of high quality financial assets issued by credit
entities and securitisation funds and backed by credit granted to individuals, corporations and
non-financial institutions.
ƒ Royal Decree-Law 7/2008 of 13 October on Urgent Economic Measures in relation to the
Joint Action Plan for Euro zone countries and the Order EHA/3364/2008 of 21 November, which
implements Article 1 of this Royal Decree and includes the granting of state guarantees to all
credit institutions resident in Spain as of 14 October 2008 in connection with promissory notes,
bonds and debentures, provided they comply with the following requirements: they must be
individual transactions or part of issue programmes, non-subordinated debt or debt which is not
secured with any other type of guarantees, in each case admitted to the official secondary
market in Spain. While the maturity of the financial instruments would be in principle between
three months and three years, guarantees could be extended to instruments with a maturity of
up to five years, with a favourable prior report of the Bank of Spain. The finance transactions
will carry fixed or floating rate interest, establishing special requirements for floating-rate
issues; repayment must be in a single instalment; and issues cannot include options or other
financial instruments and have to be for a nominal amount of no less than 10 million euros. The
guarantees were available until 30 June 2010.
At 31 December 2010, the CatalunyaCaixa Group had liabilities foreclosed by the Treasury
Department through the FAFA auction amounting to 330 million euros, with 5,515 million euros
backed by the State guarantee (see Note 21.4.1).
134
Solvency:
ƒ
Royal Decree-Law 9/2009 on bank restructuring and reinforced credit institution
solvency approves the Bank Restructuring Fund (FROB).
The fund is entitled to acquire preference shares convertible into participating shares issued
by credit entities that need to shore up their capital with sole purpose of pursuing a merger with
another entity. These processes must necessarily result in efficiency improvements,
rationalisation of administrative and management structures and a resizing of productive
capacity, among other things, all with a view to improving the resulting entities’ future
prospects.
On 18 February 2011, Royal Decree 2/11 was approved, which is designed to bolster the
bank solvency and channel credit towards the real economy (see Note 1.11),
At year-end 2010, CatalunyaCaixa issued preference shares which are convertible into
participating shares, subscribed by the FROB for 1,250 million euros (see Note 21.5).
Additionally, as indicated in Note 1.11, CatalunyaCaixa’s Board of Directors has taken the steps
necessary to adapt to the new guidelines and therefore ensure that the entity's transactions
may be conducted smoothly throughout the upcoming years.
3.1.
Liquidity risk
CatalunyaCaixa manages the liquidity risk inherent to its business and financial instruments
to ensure that it has sufficient liquidity at all times to meet the payment commitments assumed
to settle its liabilities on their respective maturity dates without compromising CatalunyaCaixa’s
capacity to take advantage of strategic market opportunities quickly.
The entity manages liquidity risk from a dual perspective: operating liquidity, managed by
the short-term unit of the Treasury and Capital Markets Division, and structural liquidity,
managed by the entity’s management through the Assets and Liabilities Committee.
Structural liquidity and in particular, hedging of the Institution's financing needs, is managed
by issue programs which guarantee liquidity in the short and long term and keep short–term
market dependence at acceptable volume levels, which minimizes the risks of daily liquidity
management.
In order to cover possible liquidity issues, the CatalunyaCaixa Group has deposited several
guarantees with the European Central Bank, providing it with additional liquidity of 7,325,984
thousand euros at 31 December 2010.
The following table provides a breakdown by maturity of the balances of certain balance
sheet headings at 31 December 2010, assuming normal market conditions:
135
Demand
deposits
Thousands of euros
Up to 1
month
From 1 to 3
months
From 3 to
12 months
From 1 to 5
years
More than 5
years
No set
maturity
Total
ASSETS
Cash and deposits at central banks
424,931
-
-
-
-
-
-
424,931
Held for trading
-
25,296
59,888
90,884
-
8,076
-
184,144
Other financial assets at fair value
through profit and loss
-
-
-
-
39,267
-
-
39,267
Available-for-sale financial assets
-
-
31,835
243,639
939,616
2,553,143
-
3,768,233
Due from banks
1,429,157
191,252
10,247
27,274
661
31,295
26
1,689,912
Customers loans
1,576,977
813,614
938,466
2,988,148
6,471,685
38,183,836
731,541
51,704,267
Equity securities
-
-
-
124,662
4,064,131
983,149
-
5,171,942
14,013
10,968
326,272
182,746
156,859
444,227
-
1,135,085
3,445,078
1,041,130
1,366,708
3,657,353
11,672,219
42,203,726
731,567
64,117,781
1,070,948
2,131,346
2,319,302
360,580
1,477,868
758,896
86,908
8,205,848
Loans and receivables
Held-to-maturity investments
Total at 31 December 2010
LIABILITIES
Financial liabilities at amortised
cost
Bank and central bank deposits
Money-market operations with
counterparties
-
2,066,473
-
-
-
-
-
2,066,473
9,816,409
2,573,906
1,921,370
8,645,241
13,459,482
4,605,021
54,799
41,076,228
Marketable debt securities
-
421,743
280,603
2,052,550
9,009,868
4,464,234
-
16,228,998
Subordinated debt
-
-
-
-
1,718,692
975,436
583,567
3,277,695
Other financial liabilities
-
-
-
-
-
-
-
-
Total at 31 December 2010
10,887,357
7,193,468
4,521,275 11,058,371
25,665,910
10,803,587
725,274
70,855,242
Assets less liabilities at 31
December 2010
(7,442,279) (6,152,338) (3,154,567) (7,401,018) (13,993,691) 31,400,139
Customer deposits
6,293 (6,737,461)
The following table shows a breakdown the CatalunyaCaixa Group’s financing needs and
sources at 31 December 2010:
Thousands of euros
2010
Clients totally covered by the DGF
17,593,866
Clients not totally covered by the DGF
Customer deposits
Bond and covered bonds
15,252,467
32,846,333
6,888,884
Regional bonds
665,000
Senior debt
4,183,090
Government-backed issues
Subordinated, preference and convertible
5,515,000
1,362,900
Other medium and long-term financial liabilities
Securitisations sold to third parties
Other financing with residual maturities of more than 1 year
Long term finance transactions
345,000
3,053,213
371,912
22,384,999
Equity
2,106,417
Stable sources of financing
57,337,749
136
In the previous table, “Customer deposits” includes the portion corresponding to “Customer
debt” and “Retail Credit Entities”, excluding valuation adjustments, current wholesale
transactions (mainly repos), repurchased covered bonds, or the current wholesale portion in
detail.
Thousands of euros
2010
Receivable from customers
Loans to Group companies and associates
Securitised loans
Special provisions
Assets awarded in payment of debt
39,982,137
751,553
13,196,936
(2,303,380)
3,785,259
Total customer loans
55,412,505
Equity investments
579,309
55,991,814
Financing needs
Following is information at 31 December 2010, relative to remaining maturities of wholesale
issues, liquid asset portfolios, and the CatalunyaCaixa Group’s issuing capacity:
Thousands of euros
2011
Bonds and covered bonds
Regional bonds
Senior debt
2012
2013
>2013
176,000
743,000
798,000
5,172,000
-
140,000
-
525,000
1,713,000
1,353,000
376,000
730,000
273,500
2,961,500
148,000
2,132,000
Subordinated, preference, and convertible
-
-
100,000
1,349,000
Other medium- and long-term financial liabilities
-
155,000
134,000
55,000
422,000
363,000
306,000
1,774,000
40,000
-
25,000
306,000
2,624,500
5,715,500
1,887,000
12,043,000
Government-backed issues
Securitisations sold to third parties
Other financing with residual maturity of over a year
Stable sources of financing
Thousands of euros
2010
Liquid assets (nominal value)
11,168,000
Liquid assets (market value and ECB cut-off)
including: debt with Central Public Administration
Thousands of euros
2010
Issuing capacity of covered bonds
Issuing capacity of regional bonds
3.2.
7,988,393
85,656
3,801,451
320,721
Credit risk
The CatalunyaCaixa Group has adapted its structure to ensure effective integrated
management of the risks, particularly credit, market and operational risks. To effectively
manage and control risk, as well as to ascertain the profile of CatalunyaCaixa’s real exposure to
these classes of risk, the Entity’s risk section is segregated into two areas: admission and
137
recovery (Risk Admission and Recovery Management) and the functions related to risk
determination, follow up, and control (Risk Control and Overall Management). These functions
are independent from the business areas, thereby guaranteeing their independence.
Credit risk represents the losses that CatalunyaCaixa would assume if a customer or
counterparty were to breach their contractual payment obligations. This risk is therefore
inherent to banking. The Board of Directors has final say on the management of the entity's
risk, and therefore, must approve its general risk management policies, scoring models, risk
acceptance, control, follow up tools, as well as its mitigation procedures. In order to cover all
the above mentioned aspects, the Board of Directors delegates certain tasks and responsibilities
to different bodies and committees.
In July, CatalunyaCaixa’s Board of Directors approved its Retail Credit Risk Policies,
establishing the bases of the abovementioned risk, defining the desired degree of risk exposure
as well as the entity’s risk profile. With these policies, CatalunyaCaixa manages risk
concentration by individual counterparties as well as groups of companies, by taking into
account factors such as activities, their geographical location, and other economic
characteristics they have in common.
CatalunyaCaixa’s credit risk supervision and control measures are developed by a Risk
Control and Follow-up Area, which is responsible for the monthly supervision of limits
established by the above-mentioned policies, as well as for evaluating their impact on the
capital requirements of the different activities taking place in the entity’s day-to-day activity.
The unit has associated responsibilities related to the supervision of portfolio and client credit
quality, as well as the identification of portfolios and clients being evaluated, the definition of
strategies to be followed, and providing valid information to support the entity in its
management of risk. This final function is carried out using available tools designed for early
detection of situations considered potentially problematic, identifying groups or individual clients
which are most likely to default on payment, while defining overall strategies to neutralise (or
minimise) loss for the entity. The ultimate goal of risk analysis is to prevent default.
With the exception of risks held with domestic economies in Spain with mortgage security
(25,789,610 thousand euros at 31 December 2010), and consumer loans (2,020,271 thousand
euros at 31 December 2010), and developers (9,998,786 thousand euros at 31 December
2010,) CatalunyaCaixa does not have any significant risk concentration. The average nonperforming loan ratios in these three risk groups over the last five years stands at 3.22%,
4.34% and 6.57%, respectively.
CatalunyaCaixa also has scoring models for private individuals and rating models for all
corporate segments which take into account the various transaction and debtor characteristics.
These models are based on past experience and best market practices, and are used to
segregate the transactions that can be assumed by CatalunyaCaixa from those that cannot, due
to their credit risk. The transaction/client segregation criteria and policies applicable under this
system are approved by CatalunyaCaixa’s governing bodies
The CatalunyaCaixa Group classifies its financial assets subject to credit risk internally based
on transaction characteristics. To mitigate the credit risk inherent to derivative trading, a
collateral management system is used. A collateral agreement between two entities secures
exposures originated between them (the derivatives’ market value) by setting up a series of
guarantees or delivering certain assets to the creditor counterparty. At present, virtually all of
the derivative trading activity with other financial institutions is conducted under the umbrella of
these collateral agreements. In all instances, the guarantee is limited to cash deposits
denominated in euros.
The main aims of the collateral management system are to:
ƒ
Increase protection in the event of potential defaults.
ƒ
Increase counterparty transactions by reducing credit line consumption.
ƒ
Create access to longer term derivative transactions.
ƒ
Create scope to offer better prices on transactions backed by a collateral guarantee.
138
ƒ
Reduce economic and regulatory capital consumption as a result of derivative trading.
The table below indicates the change in CatalunyaCaixa’s impaired financial assets during the
six-month period ended 31 December 2010. These assets have been derecognised because the
likelihood of recovery is considered remote, although the entity has not terminated actions to
recover the amounts due:
Thousands of euros
2010
Balance of financial assets whose recovery is considered
remote at 1 July 2010
1,090,843
Additions
Charged to impairment losses
Directly charged to the income statement
Past due and uncollected
Other items
411,862
323,074
11,214
65,341
12,233
Derecognitions
Cash recovery of principal
Cash recovery of past due and uncollected products
Pardoned
Others
49,112
17,393
5,875
25,078
766
Net change due to exchange differences
(196)
Balance of financial assets whose recovery is considered
remote at 31 December 2010
1,453,397
The following is a breakdown of assets on the 2010 balance sheet:
Thousands of euros
2010
Total customer loans excluding Public Administration (business in Spain)
Total net customer loans excluding Public Administration (business in
Spain)
Total assets (all business)
52,559,323
50,255,943
76,822,147
The following tables indicate accumulated data regarding financing granted by the
CatalunyaCaixa Group for property construction and development, as well as their
corresponding hedges at 31 December 2010:
Gross
amount
Surplus
over value
of
collateral
Loans recognised by Group
credit entities
12,119,746
2,525,102
1,042,941
Of which: doubtful receivables
Of which: substandard
1,721,104
1,748,479
1,006,623
1,518,479
690,940
352,001
Thousands of euros
Memorandum item:
Total general provisions
Defaulted loans
Specific
loan loss
allowance
172,347
206,310
The table below shows a breakdown of the financing related to real estate construction and
development, corresponding to transactions carried out by the CatalunyaCaixa Group at 31
December 2010:
139
Thousands of euros
2010
With no mortgage guarantee
With mortgage guarantee
Finished buildings
Home mortgages
Other
Buildings under construction
Home mortgages
Other
Land
Urbanised land
Other
Total
1,861,139
10,258,607
4,332,590
3,908,691
423,899
3,718,449
2,052,762
1,665,687
2,207,568
1,629,263
578,305
12,119,746
Following is a breakdown of the financing granted by the CatalunyaCaixa Group for the
acquisition of homes at 31 December 2010:
Gross amount
Thousands of euros
Mortgage loans
Not backed by mortgage guarantee
Backed by mortgage guarantee
Of which:
Doubtful
26,167,062
980,180
25,186,882
874,430
21,700
852,730
Additionally, the following is a breakdown of mortgage loans with guarantee granted at 31
December 2010 expressed as a percentage of the latest available appraisal values (LTV) for
transactions recognised by the CatalunyaCaixa Group:
Thousands of euros
Less than
50%
Gross amount
of which: doubtful
5,976,656
48,960
Between 50%
and 80%
12,682,071
240,895
Between 80%
and 100%
5,181,976
372,879
Over 100%
1,346,179
189,996
The following is a breakdown of foreclosed property related to CatalunyaCaixa’s real estate
construction and development financing during 2010, according to its nature:
2010
Net carrying
value
Thousands of euros
Real estate assets from loans to finance real estate
construction and development companies
Finished buildings
Home mortgages
Other
Buildings under construction
Home mortgages
Other
Land
Urbanised land
Other land
Real estate assets from mortgage loans for home
acquisition
Other real estate assets
Equity instruments, equity investments and financing
granted to non-consolidated companies holding
assets
TOTAL
140
Coverage
3,116,396
807,116
726,536
80,580
1,399,245
295,890
243,187
52,703
172,357
168,223
4,134
2,136,923
1,581,326
555,597
52,393
50,864
1,529
1,050,962
777,534
273,428
665,187
299,109
3,676
1,359
3,785,259
1,699,713
Additionally, there are 28,807 thousand euros related to non-current assets held for sale
which are not related to foreclosed property.
3.3.
Balance sheet risk
3.3.1.
Interest rate risk
Interest rate risk arises of the CatalunyaCaixa Group when changes in the structure of the
market interest rate curve affect rate-sensitive balance sheet assets and liabilities, affecting
their economic value and associated interest income.
The analysis, measurement and control of the interest rate risk assumed by the
CatalunyaCaixa Group entails sensitivity and scenario analysis and establishes the limits
required to avoid exposure to risk levels that could have a material impact on CatalunyaCaixa.
These analysis techniques and procedures are revised as required to ensure their correct
function. Moreover, all individual transactions material to the CatalunyaCaixa Group are
analysed both individually and globally together with the rest of the CatalunyaCaixa Group’s
transactions, in order to ensure control of interest rate risk and other market risks to which the
CatalunyaCaixa Group is exposed as a result of its issues or acquisitions.
The Assets and Liabilities Committee manages and monitors the CatalunyaCaixa Group’s
balance sheet interest rate risk. This committee is in charge of implementing procedures to
ensure compliance at all times with the interest rate risk control and management policies
established by the Board of Directors. The purpose of these policies is to limit interest rate risk
as far as possible and achieve balanced returns.
Hedging is used for the individual and global management of interest rate risk for all
significant financial instruments that could generate exposure to significant interest rate risk. In
practice, hedging results in the reduction of this type of risk.
The table below illustrates CatalunyaCaixa’s exposure to interest rate risk at 31 December
2010, and indicates the carrying amount of the financial assets and liabilities subject to this risk,
classified by the estimated term until the next interest rate reset (in transactions where the rate
is reset periodically in line with the contractual terms) or maturity (in fixed-rate transactions):
At 31 December 2010
Thousands of euros
Up to 1
month
From 1 to 3
months
3 months
to 1 year
From 1 to
2 years
From 3
to 4
years
From 2 to
3 years
More
than 5
years
From 4 to
5 years
Total
Financial assets
Cash and deposits at central
banks and credit entities
Fixed rate
1,267,818
-
-
-
-
17,801
371,343
650,792
306,611
244,669
2,561,035
2,090,497
202,865
100,302
19,124
-
-
-
1,267,818
-
-
1,978,427
3,569,643
648,000
405,000
860,290
6,887,113
Debt securities
Fixed rate
Floating rate
Customers loans
Fixed rate
Floating rate
Total
447,281
592,894
1,313,181
430,035
548,600
110,722
90,903
564,033
4,097,649
5,399,681
9,693,616
8,122,318
11,177,052
31,784,196
33,951,034
1,638,346
2,475,294
273,116
1,085,509
899,092
1,657,814
141,039
636,942
37,770
3,440,520
48,295,558
64,117,781
2,487,720
2,999,145
796,745
257,707
202,627
388,243
999,695
92,608
8,224,490
7,293,618
450,489
13,248,248
4,446,051
3,445,199
1,603,240
1,172,914
2,536,100
34,195,859
605,981
1,127,569
659,721
806,229
2,510,739
1,054,297
680,145
1,820,949
9,265,630
368,565
130,834
100,071
434,223
26,276
-
-
3,573,819
4,633,788
-
-
2,118,693
5,261,927
569,101
2,351,377
588,719
705,393
11,595,210
Financial liabilities
Bank and central bank
deposits
Fixed rate
Customer deposits
Fixed rate
Floating rate
Marketable debt securities
Fixed rate
Floating rate
Subordinated debt
Fixed rate
Floating rate
Total
-
500,000
500,000
-
-
-
1,250,000
-
2,250,000
35,000
10,790,884
511,047
5,719,084
406,292
17,829,770
11,206,137
6,753,942
5,397,157
4,691,473
8,728,869
952,339
71,117,316
141
In terms of CatalunyaCaixa’s exposure to structural interest rate risk (excluding the portion
that corresponds to the Treasury Division), it is estimated that a one hundred basis point
variation in Euribor would have an effect in the same direction on the equity of CatalunyaCaixa
of 242,982 thousand euros, and a variation in the opposite direction in the income statement of
12,821 thousand euros at 31 December 2010.
3.3.2 Hedges against portfolio interest rate risk
A hedge is a financial tool through which one or more financial instruments, called hedging
instruments, are designated to hedge a specific, identifiable risk that could affect profit or loss
as a result of variations in the fair value or cash flows of one or more specific items, called
hedged items. To hedge interest rate risk, CatalunyaCaixa holds the following accounting
hedges, applying the criteria established for each type (see Note 2.3):
ƒ
Micro-hedges against fair value interest rate risk: in these accounting hedges, the
hedged item and hedging instrument are clearly identified; the hedged item may be an
asset or a liability. They are characterised for hedging the option risk components inherent
in certain assets and liabilities with the purpose of hedging against changes in market
interest rates. The hedging instruments most commonly used are caps, floors and interest
rate swaps, which swap exotic coupons (identical to the cost of the liability hedged) for
floating coupons.
For accounting and management control purposes, CatalunyaCaixa has two different macrohedges against interest rate risk on financial instrument portfolios:
ƒ
Macro-hedges against cash flow interest rate risk: the management objective
underlying this accounting hedge is to reduce the volatility of the interest margin in the
event of interest rate fluctuations within a one-year time horizon. Therefore, this macrohedge covers future cash flows on the basis of the net exposure of a portfolio comprising a
group of highly probable assets and liabilities with exposures similar to interest rate risk
exposure. The hedging instruments currently used for this purpose are interest rate swaps.
ƒ
Macro-hedges against fair value interest rate risk: the management objective
underlying this accounting hedge is to preserve the economic value of the assets and
liabilities hedged. The hedging instruments used for this purpose are interest rate swaps
and any other financial instrument that may help mitigate interest rate risk.
CatalunyaCaixa analyses the effectiveness of the transactions hedging fair value interest rate
risk from the inception of the hedge transaction and during all periods for which it is classified
as such.
3.4.
Trading risk
The market value of the positions in the financial instruments held by CatalunyaCaixa and
managed by the Treasury Division for trading are subject to varying risk factors: interest rates,
exchange rates, changing equity and commodity prices, as well as volatility.
The Board of Directors establishes the Value–at–Risk (VaR) figure associated with this
activity, which is controlled on a daily basis, and is defined as the maximum loss due to price
variations that the trading business could incur employing a one-day time horizon and a
statistical confidence level of 99%.
Additionally, depending on the types of instruments contracted, complementary risk
measures are defined in order to control risk more efficiently. The Board of Directors also
defines maximum limits for these measures, which are observed daily.
3.4.1.
Interest rate risk
Financial and derivative instruments with market values which are affected by fluctuating
interest rates are subject to a maximum sensitivity level, which is defined as the variation of
market value due to a 1 basis point increase in all the interest rate curve maturities.
142
3.4.2.
Exchange rate risk
Exchange rate risk management is the task of the Treasury and Capital Markets division,
which incorporates and manages all exchange rate positions generated within the network, in
addition to managing trading activity. The defined procedure for aggregating the exchange rate
position requires the daily transfer of all transactions carried out in the network to a single
position in the Treasury and Market Capitals division, which is consolidated with the position
generated by the division itself.
The currency position is defined by all transactions involving the sale or purchase of foreign
currency: spots, outrights, currency swaps, currency options and currency futures. The open
position is the accumulation of cash flows in each currency generated by each of the related
instruments, and is subject to a maximum limit.
3.4.3.
Other price risks
Price risk affects equity and commodity trading positions, either through assets or derivative
instruments.
Risk limits are set in terms of a maximum position for these instruments, defined as the
market value for securities and the delta-equivalent position for derivatives.
For accounting purposes, CatalunyaCaixa arranges micro fair value hedges to hedge against
price risk, following applicable accounting criteria for these instruments (see Note 2.3); these
instruments primarily hedge structured customer deposits. In these accounting hedges, the
hedged item and hedging instrument are clearly defined and the objective is to hedge against
variations in the fair value of derivatives embedded in hybrid financial instruments triggered by
changes in equity prices. The hedging instrument used is a market transaction that is identical
to the derivative embedded in the hybrid financial instruments in question.
3.5.
Operational risk
Operational risk is taken to mean the probability of losses due to human error or inefficiency,
process, or system errors or external factors. Operational risk management is strategic at
CatalunyaCaixa as it directly affects value creation through earnings and indirectly affects the
Entity’s reputation and the confidence placed in it by social agents, regulators, customers and
the general public.
CatalunyaCaixa has implemented a global operational risk management model using
advanced tools and methodologies to promote the comprehension, prevention and mitigation of
operating losses and reduce the entity’s overall risk profile.
The management model comprises a serie of actions aimed at systematising the
identification, assessment, monitoring, measuring and mitigation of risk across the entire
organisation, with the support of specialised tools and methodologies, against the backdrop of
global risk management.
3.6.
Capital and solvency management
Group solvency control and management is governed by the solvency policies approved by
the Board of Directors. In order to guarantee compliance with these policies, the appropriate
control and supervisory systems have been established. Management created the Solvency
Committee to conduct monthly reviews of the performance of different ratios, as well as to
measure the economic impact of significant occurrences each day, be they noteworthy due to
their quantity and capital mix, or capital requirements.
The solvency targets relating to the generation of capital as the numerator in the calculation
of solvency ratios are as follows:
ƒ Operation with enough capital to ensure compliance with legal and rating agency
requirements while enabling the setting of more ambitious strategic targets over a longer term
horizon.
143
ƒ Maintaining an adequate capital mix, comprising mainly stable, high-quality capital (Core
Capital), with a high component of Tier I capital, while preserving the ability to generate Tier II
capital as necessary.
ƒ Predication of capital growth on self-funding, namely the ability to generate capital internally
on a recurring basis through profits for the year which necessarily must shore up the entity’s
capital structure, while tapping the market for additional funding at reasonable costs.
In terms of the solvency ratio denominator, the targets in terms of risk-weighted assets are
the following:
ƒ Risk identification to ensure balanced growth and prevent excessive risk concentration, with
cut-offs, enabling selection of desirable portfolio allocations in accordance with optimal credit
scoring criteria. The Risk Admission Policies and Procedures as well as the Restructuring and
Recovery Policies are also basic solvency pillars, and therefore, guarantee the objectives of
quality and profitable credit transactions, thereby sidestepping speculative investments.
ƒ Efficient optimisation of risk-weighted asset management to ensure that capital consumption
is considered, alongside other risk-reward related inputs, as a key variable in Group investment
analysis and decision-making.
ƒ Capital management from an economic point of view aims to maximise value creation for the
Group and its business units.
In order to meet its solvency targets, the Group has developed a series of capital
management policies and processes. The guiding principles are as follows:
ƒ The Group has established oversight and control units which analyse compliance with the
Bank of Spain regulations on capital adequacy, equipped with alarms which ensure compliance
with applicable regulations and that decisions taken by the entity’s different divisions and
business units adhere to the targets set to ensure minimum capital requirements are met.
ƒ Rigorous control of the customers and segments entailing the greatest risk exposure for the
entity, and the formulation of specific action plans to mitigate risk exposure.
ƒ The impact on the Group’s eligible capital and the consumption-risk-return balance is a key
input in its strategic and commercial planning process and operational analysis and oversight.
ƒ In order to correctly manage capital, the Group must draw up budgets and assess its future
capital requirements, anticipating the evolution of the economic cycle. Both regulatory and
economic capital projections are based on budget information (balance sheet, income
statement, etc.) and macroeconomic scenarios. The necessary measures required to deliver
capital targets (such as issues, securitisations, purchase of protection, etc.) are planned based
on these estimates.
From the regulatory standpoint, CatalunyaCaixa is subject to Bank of Spain Circular 3/2008
which regulates the minimum equity Spanish credit entities must possess at both the individual
and consolidated levels. Rule eight of Bank of Spain Circular 3/2008 establishes which elements
of capital are eligible for minimum capital computation purposes. The aforementioned standard
establishes that capital be classified as core capital and Tier II capital, which differ from the
capital calculated in accordance with EU-IFRS, since it includes certain items and includes the
obligation to deduct other items not considered in the EU-IFRS. Additionally, the methods of
consolidating and measuring investees for the purposes of calculating minimum Group capital
requirements differ from those used to prepare these consolidated financial statements. These
discrepancies lead to differences in the calculation of capital under one set of standards or
another.
Circular 3/2008, as well as its subsequent modifications (Circular 9/2010, dated 22
December) adapts and transposes the entire international solvency review process initiated by
the Basel Committee into Spanish law. Apart from internal measures taken by the majority of
governments to bolster the capitalization of their financial systems, the Basel III Committee on
Banking Supervision has approved a series of measures designed to boost Entities’ solvency.
144
The CatalunyaCaixa Group is focused on achieving the degree of capitalisation required by these
rules.
The minimum capital requirements established by calculating the Group’s exposure to credit,
dilution, counterparty, market and operational risk. Capital requirements are calculated using
internal models for credit risk (the Entity is immersed in the roll-out phase of the application of
advanced models for integrated portfolios), and the standard method for market and
operational risk. Furthermore, the Group is subject to compliance with the abovementioned risk
concentration limits, as well as compliance with obligations regarding internal corporate
governance, capital self-evaluation and obligations regarding public market disclosures.
In terms of economic capital, when quantifying the self-assessment of its capital
requirements, the methodology used by CatalunyaCaixa comprises two complementary aspects,
the first quantitative, taking all the most significant risks to which the Entity is potentially
exposed and deemed to require coverage in the form of capital, and the second qualitative,
based on correct management of all risk factors. This analysis is complemented with stress
testing, which quantifies the estimated impact that a series of events or shocks might have on
the entity’s earnings and solvency.
Finally, based on the final of the three Basel pillars, the CatalunyaCaixa Group publishes an
annual Capital Adequacy Report in compliance with the market reporting disclosure
requirements laid down in Bank of Spain Circular 3/2008.
Therefore, the CatalunyaCaixa Group considers the capital and capital requirements a key
part of the Group’s management, affecting both the Entity’s investment decisions and the
analysis of the feasibility of its operations.
The table below depicts the Group’s Tier I and Tier II capital at 31 December 2010,
calculated in accordance with Bank of Spain Circular 3/2008:
2010
Thousands of euros
Amount
Core capital
Tier I capital
Total capital
Required capital
Capital surplus
3,149,587
3,613,237
5,198,206
3,887,632
1,310,574
%
6.48%
7.44%
10.70%
-
During the six-month period ended 31 December 2010, the eligible capital of the Group and
of the Group entities which are individually subject to the minimum capital requirement
obligation, exceeded the minimum amounts established in these regulations.
4. Recognition of the merger
As mentioned in Note 1, CatalunyaCaixa is the result of the merger among Caixa d’Estalvis
de Catalunya, Caixa d’Estalvis de Tarragona, and Caixa d’Estalvis de Manresa.
Due to the idiosyncratic nature of savings banks and the configuration of the merger as a
jointly-controlled entity, IFRS 3 accounting standards were no longer applicable to the newlyformed CatalunyaCaixa. It was considered that the best way to give a fair view of the newlycreated savings bank, which resulted from a merger for which there was no exchange ratio or
exchange of consideration, would be to treat it as a jointly-controlled entity. Therefore, all the
assets and liabilities contributed must be recognised at fair value in order to present a fair view
of its equity.
Therefore, taking the above accounting criteria into consideration:
145
ƒ The assets and liabilities arising from the merger, such as commitments with employees
arising from the labour agreement were recognised.
ƒ All the assets and liabilities contributed by the three entities were recognised at fair value,
based on the most recent available information. Those which were not recognised at fair value
for the pre-existing savings banks, which include “Loans and advances” and “Property, plant,
and equipment,” were re-valued, and therefore, had an impact on the new entity’s equity. From
that date, the differences arising with respect to the original carrying value generated additional
income and expenses.
Consequently, the new entity’s financial statements do not include goodwill arising from the
transaction, and the initial equity reflects a balancing entry for the fair value of the net assets
received from the three entities. At 30 June 2010, the accumulated gain or loss of Caixa
Catalunya, Caixa Tarragona, and Caixa Manresa formed part of the new Entity’s initial equity.
The difference between the amounts recognised for the three merged entities and the fair
value for which the entity’s assets and liabilities were recognised is explained below. It is worth
mentioning that these reclassifications represent the difference between the allocations of
CatalunyaCaixa’s different accounting portfolios with respect to the pre-existing entities.
(thousands of euros)
Balance at 1 July 2010
Aggregate
merged
balances
ASSETS
Cash and balances with central banks
Held for trading
Other financial assets at fair value through profit or
loss
Fair value of
the new
Entity
Differences
927,825
927,825
-
1,279,668
1,281,509
1,841
(A)
79,591
40,987
(38,604)
(B)
4,465,318
3,827,111
(638,207)
(C)
56,572,561
59,936,81
3,364,254
(D)
5,389,480
1,138,623
(4,250,857)
(E)
66,682
66,682
-
Hedging derivatives
1,123,853
1,123,853
-
Non-current assets held for sale
3,257,075
3,756,936
263,189
251,668
Available-for-sale financial assets
Loans and receivables
Held-to-maturity investments
Adjustments to financial assets through macro-hedge
Equity investments
Pension-linked insurance contracts
Property and equipment
Intangible assets
Tax assets
Other assets
TOTAL ASSETS
499,861
(F)
(11,521)
(G)
-
-
-
2,434,728
2,544,446
109,718
26,764
17,352
(9,412)
681,974
1,780,964
1,098,990
5,305,697
3,963,298
(1,342,399)
81,874,405
80,719,069
(1,155,336)
(A) This includes a positive reclassification of 2,149 thousand euros for a transfer from
“Available-for-sale financial assets” and a negative reclassification of 308 thousand
euros for a transfer to the same.
(B) This includes a negative reclassification of 28,486 thousand euros from “Loans and
receivables” and a negative reclassification of 10,118 thousand euros for a transfer to
“Available-for-sale financial assets.”
(C) This mainly includes three positive reclassifications of 308, 10,118, and 351,377
thousand euros for transfers from “Financial assets held for trading,” ”Other financial
assets at fair value through profit or loss,” and “Held-to-maturity investments,”
respectively, and four negative reclassifications of 2,149, 518,071, 225,050, and
7,725 thousand euros for transfers to “Financial assets held for trading,” “Loans and
146
(H)
(I)
(J)
(
(K)
receivables,” “Held-to-maturity investments,” and “Equity investments,” respectively.
Restated fair value represented a negative impact of 247,015 thousand euros.
(D) Includes positive reclassifications of 28,486, 518,071, and 3,850,532 thousand euros
related to transfers from ”Other financial assets at fair value through profit or loss,”
“Available-for-sale financial assets,” and “Held-to-maturity investments, respectively.
This also includes the restatement to fair value of credit at a negative 1,032,835
thousand euros.
(E) Includes a reclassification of 351,377 thousand euros for a transfer from “Availablefor-sale financial assets” and two negative adjustments of 225,050 and 3,850,532
thousand euros for transfers to “Available-for-sale financial assets”, and “Loans and
receivables”, respectively. Also, this includes a negative adjustment of 517,714
thousand euros corresponding to the restatement to fair value of the portfolio, as well
as the amortisation of 9,943 thousand euros of securities issued by Caixa d’Estalvis
de Manresa which were acquired by Caixa d’Estalvis de Catalunya.
(F) This mainly includes the restatement of the value of shares in insurance companies
in the process of being sold, for 586,427 thousand euros, as well as the effect of the
negative restatement to fair value of real estate amounting to 86,566 thousand euros.
(G) Includes the negative adjustment of 19,246 thousand euros for the restatement to
fair value of jointly-controlled entities and associates, and a reclassification related to
the transfer of 7,725 thousand euros to “Available for sale financial assets”.
(H) Includes the revaluation of assets owned by Social Work welfare projects, as well as
other property used by the branch network and headquarters.
(I) This includes a 9,412 thousand euro impairment related to software which fell into
disuse.
(J) Temporary differences mainly arising from credit write-downs, real estate assets, and
some fixed-rate portfolios.
(K) This mainly includes the restated value of real estate belonging to group companies at
a negative amount of 1,340,775 thousand euros.
147
(thousands of euros)
Balance at 1 July 2010
EQUITY AND LIABILITIES
Trading portfolio
Other financial liabilities at fair value through profit or
loss
Aggregated
merged
balances
Fair value of
the new
Entity
1,067,033
1,067,033
Differences
-
10,554
10,554
72,587,680
71,726,281
Adjustments to financial liabilities through macrohedge
631,077
631,077
-
Hedging derivatives
336,135
336,135
-
2,671,497
2,671,497
-
Financial liabilities at amortised cost
Liabilities associated with non-current assets held for
sale
(861,399)
(L)
Provisions
415,868
869,154
453,286
Tax liabilities
301,439
788,357
486,918
(M)
(
(N)
Social Work welfare projects
218,825
286,921
68,096
(O)
Other liabilities
140,661
140,661
-
-
-
-
78,380,769
78,588,670
207,901
Capital and reserves
3,597,612
2,092,967
Valuation adjustments
(124,859)
16,549
141,408
20,883
20,883
-
3,493,636
2,130,399
(1,363,237)
81,874,405
80,719,069
(1,155,336)
Capital repayable on demand
TOTAL LIABILITIES
Minority interests
TOTAL EQUITY
TOTAL EQUITY AND LIABILITIES
(1,504,645)
(L) Mainly includes the restatement to fair value of own issues.
(M) This includes recognition of a provision amounting to 69,628 thousand euros related
to the effect of restating to fair value associates and jointly-controlled entities with
negative equity, as well as two provisions totalling 299,516 and 84,142 thousand
euros set up to cover the commitments arising from the labour agreement related to
the merger, as well as a provision for mutual fund risk.
(N) Temporary differences mainly arising from the restatement to fair value of own issues
and shareholdings in insurance companies in the process of being sold.
(O) Increase in the Social Work Project Fund due to the revaluation of related properties.
(P) This corresponds to the net amount of adjustments made in the valuations of all the
assets and liabilities.
(Q) The reclassification of “Valuation adjustments – Available-for-sale financial assets” to
“Equity.”
The pro forma income statement resulting from aggregating the CatalunyaCaixa Group’s
income statement for the six-month period ended 31 December 2010, and each of the three
entities participating in the merger (Caixa d’Estalvis de Catalunya, Caixa d’Estalvis de
Tarragona, and Caixa d’Estalvis de Manresa) for the period from 1 January to 30 June 2010.
148
(P)
(Q)
(thousands of euros)
2010
INTEREST MARGIN
767,853
Net commissions
Share of income of entities accounted for using the equity method
338,980
(12,051)
Income from equity instruments
39,526
Other income (expenses)
57,514
GROSS MARGIN
1,191,822
Sundry expenses
939,654
Provisions (net)
6,927
Impairment losses on financial assets (net)
100,726
NET OPERATING MARGIN
144,515
Impairment losses on other assets (net)
46,035
109 166
(45,208)
Other income (expenses)
PROFIT BEFORE TAX
53,272
Income tax
(55,163)
Compulsory allocation to Social Work funds and projects
-
PROFIT FROM CONTINUING OPERATIONS
108,435
Profit/(loss) from discontinued operations (net)
-
CONSOLIDATED PROFIT FOR THE YEAR
108,435
731
Profit attributed to minority interests
PROFIT ATTRIBUTED TO THE GROUP
109,166
The main adjustments arising from the restatement to fair value of the new entity with a
charge to reserves relate to the restatement to fair value of Loans and receivables and property.
Accordingly, a portion of the charge recognised under “Reserves” would have had an impact on
the 2010 income statement had the merger not taken place.
5. Distribution of CatalunyaCaixa’s profit
The Board of Directors of CatalunyaCaixa will propose the following distribution of profit for
the six month period ended 31 December 2010 for approval by the General Assembly:
Thousands of euros
2010
Social Work Projects
Reserves
11,642
11,920
Total
23,562
The profits of the remaining Group entities for the six month period ended 31 December
2010 will be distributed in the manner determined by their shareholders.
6. Significant movements in investments
Significant movements during 2010 include the capital increases of Invercartera Capital,
SCR, SA, Activos Macorp, SL, Gescat Gestió de Sòl, SL and Gescat Viviendas en
Comercialización, SL, Gescat Lloguers, SL, ServiManresa Actius en Lloguer, SL, Cedinsa
Concessionària, SA, Unión Sanyres, SL, Espais Catalunya Mediterráneo, SA, Rimau
Promocentre, SL, Harmonia Badalona, SL, and CEM Monestir, SL, which also merged with
Monestir SB-XXI, SL. The investment fund managers Caixa Catalunya Gestió and CEM Inversión
merged, as did Ascat Mediació Operador Bancassegurances, SL and Caixa Manresa Operador
Banca Assegurances Vinculades, SL. Construcciones de Tuberías Industriales, S.L. absorbed
General de Mantenimiento Técnico, SL, Europea de Mantenimiento Industrial, SA, Emicat
Servicios Técnicos, SL y TRADEHI, SL; the name of the new company is Grupo Navec Servicios
Industriales, SL. Gescat Sineva, SL decreased its capital, with one of its partners leaving:
149
therefore, Procam, SA now controls 100%. A portion of the Group’s insurance business was sold
to Mapfre, SA, and therefore, the investment in Ascat Vida, SA de Seguros, Ascat Seguros
Generales, SA, Caixa Tarragona Vida, SA de Seguros y Reaseguros, and Caixa Manresa Vida, SA
Compañía de Seguros went from 100% to 50%. 12% of Promocions Terres Cavades, SA was
also sold, and, as part of the restructuring of the CatalunyaCaixa Group, TP Best 4000, SL was
dissolved.
Notes 2.1.1, 2.1.2, 2.1.3, and 17 contain information on these companies.
7. Business segment reporting
The following table provides the disclosure by business segment required under IAS 8:
Thousands of euros
2010
Financial
Financial assets
Other assets
Total Assets
Financial liabilities
Other liabilities
Equity
Total liabilities and equity
Interest income
Gross income
Operating profit (loss)
Profit/(loss) for the year
(net)
Real estate
Adjustments1
Other
Total
67,047,497
4,295,968
1,060,745
6,098,975
8,083
1,067
(1,497,866)
(429,701)
66,618,459
9,966,309
71,343,465
7,159,720
9,150
(1,927,567)
76,584,768
5,939
97
3,114
(1,463,400)
(250,269)
(213,898)
73,133,105
1,345,246
2,106,417
9,150
(1,927,567)
76,584,768
67,247,080
1,496,349
2,600,036
71,343,465
7,343,486
99,069
(282,835)
7,159,720
397,053
606,836
155,481
(118,556)
(103,886)
(143,296)
24
(34)
(117)
28,057
40,060
42,929
306,578
542,976
54,997
711,788
(923,056)
(809)
230,197
18,120
1
Includes elimination of equity, intra-group transactions, collection of dividends and other consolidation
adjustments.
8. Remuneration of the Board of Directors and Senior Management of
CatalunyaCaixa
An entity’s key management is defined as those individuals with the authority and
responsibility to plan, direct and control the activities of the entity, whether directly or
indirectly, including members of the Board of Directors, or equivalent body, and management
staff.
8.1.
Board of directors remuneration
In accordance with the provisions of Law 14/2006 of 27 July of the Government of Catalonia,
amending the savings bank law in Catalonia, the articles of CatalunyaCaixa establish that the
position of Chairman will henceforth be compensated in line with the criteria set forth in section
3, article 1 of Order 70/2007 issued by the Department of Finance, and in consideration of the
fact that the Chairman performs non-executive functions and is not dedicated exclusively to the
post. During the six-month period ended 31 December 2010, the remuneration paid to the
chairman totalled 80,840 euros, compatible with collection of the corresponding attendance
fees. During the transition period between 1 July and 16 November 2010, in compliance with
the merger agreement among Caixa d'Estalvis de Catalunya, Caixa d'Estalvis de Tarragona, and
Caixa d'Estalvis de Manresa, the first Vice Chairman was paid 12,494 euros, equivalent to his
remuneration during his time as chairman of the prior entity, and also compatible with the
collection of the corresponding attendance fees.
150
All remuneration paid to the rest of the Board of Directors corresponds exclusively to
meeting attendance fees.
The following table details the remuneration paid to members of the Board of Directors of
CatalunyaCaixa, exclusively in their capacity as Directors of CatalunyaCaixa, for the six-month
period ended 31 December 2010:
Diets
Thousands of euros
2010
Mr. Albert Abelló Hierro
Mr. Josep Alabern Valentí
Mr. Jordi Campins Puntero
Mr. Fernando Casado Juan
Mr. Esteve Díaz Sánchez
Mr. Joan Echániz Sans
Mr. Josep Maria Farrés Penela
Mr. Jorge Antonio García Rodríguez
Mr. Josep Guasch Luján
Mr. Edward Hugh
Mr. Ferran Laguarta Bertran
Mr. Antoni Llardén Carratalà
Mr. Joan Angel Lliberia Esteve
Mr. Francisco Longo Martínez
Mr. Juan Antonio Matas Arnalot
Mr. Josep Molins Codina
Ms. Carmen Pastor Solernou
Mr. Jaume Roquet Sánchez
Mr. Manel Rosell Martí
Mr. Javier Sánchez López
Mr. Francisco Úbeda López
Total
10
5
8
10
8
36
12
5
3
8
8
18
5
8
7
29
7
9
42
7
5
250
Additionally, during the six-month period ended 31 December 2010, 835 thousand euros
were paid to the 50 former members of CatalunyaCaixa’s Board of Directors, not mentioned in
the above table.
CatalunyaCaixa has taken out a collective policy to provide civil liability coverage to the
members of the Board, the Control Committee, and to the Senior Management of
CatalunyaCaixa. In 2010, premiums paid in this regard amounted to 134 thousand euros. Prior
to the merger, Caixa d’Estalvis de Catalunya, Caixa d’Estalvis de Tarragona, and Caixa d’Estalvis
de Manresa increased their respective collective civil liability insurance policies to cover potential
claims which might arise resulting from previous events, which amount to 589, 54, and 33
thousand euros, respectively.
CatalunyaCaixa has no pension commitments for former or current members of the Board of
Directors or the Control Committee in their capacity as Directors.
However, it has taken out an accident insurance policy for all members of the governing
bodies for the duration of their tenure, the premiums of which amounted to 18 thousand euros
for the six month period ended 31 December 2010. The insured principal in the event of death
or disability is 150 thousand euros per beneficiary for the same period.
All loans, guarantees or sureties extended to members of the Board of Directors, members of
the Control Committee, the General Manager or to their spouses, ascendants, descendants and
eligible relatives, or to entities in which the above listed have a majority shareholding, whether
individually or jointly, and in which they act as chair, board member, administrator, manager,
general manager or similar, must be authorised by the Board of Directors of CatalunyaCaixa and
reported to the Department of Finance of the Government of Catalonia, which must give its
express consent thereto.
151
In accordance with the requirements of Articles 229 and 230 of the Corporate Enterprises
Act, the members of the Board of Directors hold no significant equity investments in companies
whose activity is: (i) banking, financing, or loans, (ii) insurance, (iii) collective investment fund
management, or (iv) securities trading, nor do they hold administration or management
positions in any company of this type.
In conformity with Article 114.2 of Securities Market Law, during the six-month period ended
31 December 2010, the entity’s directors have not carried out on their own behalf or through
third parties any transactions with the entity or other companies other than those pertaining to
said companies’ normal course of business, nor has it conducted any transactions which were
not at arm’s length. In addition, pursuant to Article 229 of the Corporate Enterprises Act, the
following situations represented conflicts of interest for the Board of Directors at the six-month
period ended 31 December 2010:
ƒ Mr. Antoni Llardén Carratalà abstained with regard to the lending operations with Enagás SA
during the Board of Directors’ meeting held on 16 November 2010, due to his professional
relationship with that company.
ƒ Mr. Joan Echániz Sans abstained with regard to the lending operations with the Provincial
Government of Barcelona during the Board of Directors’ meeting held on 21 December 2010,
due to his professional relationship with that entity. During a portion of the second half of 2010,
a person related to this director held a management position in the Amro Bank, N.V. Sucursal
en España
ƒ Mr. Manel Rosell Martí abstained with regards to transactions with Eva Española, SL, during
the Board of Directors’ meeting held on 21 December 2010 due to his professional relationship
with that company.
8.2.
Senior Management remuneration
For the preparation of these financial statements, 13 individuals have been considered key
Senior Management staff at year-end 2010.
The table below details the remuneration paid by CatalunyaCaixa to its Senior Management,
as defined in the paragraph above:
Thousands of
euros
Senior Management
1
Short term
remuneration
2010
Postemployment
benefits1
2010
Total
2010
1,867
2,655
4,522
Post-employment benefits correspond to a twelve-month period.
The members of Senior Management do not receive remuneration for attending meetings of
the Board of Directors or executive committees.
In relation to the information disclosed above, Senior Management is considered to be the
group of individuals who perform, de facto and de jure, management duties reporting directly to
the governing bodies, executive committees or members of the Executive Board or general
managers, comprising the officers whose powers of attorney are not restricted to specific areas
or matters of the Entity’s business activity.
152
9. Cash and balances at central banks
The detail of this consolidated balance sheet heading at 31 December 2010 is the following:
Thousands of euros
2010
Cash
Balances at Bank of Spain
Balances at other central banks
269,476
149,997
5,121
Valuation adjustments
337
Total
424,931
During the six-month period ended 31 December 2010, the effective average interest rate on
the debt instruments in this portfolio was 0.94%.
10. Held for trading
10.1. Breakdown of financial assets held for trading
The following table provides a breakdown of financial assets classified as held for trading at 31
December 2010, classified by the geographical location of the risk exposure, counterparty class and
instrument type, according to how fair value was determined (see Note 2.2.3):
Thousands of euros
2010
By geographic region
Spain
Other European Union nations
Rest of the world
554,515
316,754
32,500
Total
903,769
By counterparty
Credit entities
Resident public authorities
Other resident sectors
422,899
174,595
306,275
Other non-resident sectors
-
Total
903,769
By instrument
Debt securities
Spanish government debt
Treasury bills
Treasury bonds and debentures
184,144
178,825
170,761
8,064
Other book entry debt securities
Foreign government debt
Issued by financial entities
Other fixed-income securities
Equity instruments
Trading derivatives
5,307
12
719,625
Total
903,769
The fair values of the financial instruments included in this category at 31 December 2010,
classified by hierarchy level, are as follows:
153
Thousands of euros
Level 1
Level 2
Level 3
2010
184,132
719,625
12
Total
903,769
During the six-month period ended 31 December 2010, the effective average interest rate on
the debt instruments classified in the held for trading portfolio was 1.38%.
10.2. Breakdown of financial liabilities held for trading
The following table provides a breakdown of the financial liabilities classified as held for
trading at 31 December 2010, classified by the geographical location of the risk exposure,
counterparty class and instrument type, additionally detailing how fair value was determined
(see Note 2.2.3):
Thousands of euros
2010
By geographic region
Spain
Other European Union nations
Rest of the world
504,936
337,769
66,263
Total
908.968
By counterparty
Credit entities
686,873
Other resident sectors
222,095
Total
908,968
By instrument
Trading portfolio
908,968
Total
908,968
The method for calculating the fair value of all financial liabilities held for trading in 2010 was
level 2.
10.3. Trading derivatives
The detail, by type of product, of the fair value and notional amounts (amount used as the
basis for calculating future payments and collections) of trading derivatives at 31 December
2010 is as follows:
154
2010
Assets
Liabilities
Thousands of euros
Fair value
Outstanding foreign currency
purchases and sales
Purchases against euros
Purchases against currency
Sales against euros
Financial futures on securities and
interest rates
Purchases
Sales
Stock options
Purchased
Written
Interest rate options
Purchased
Written
Currency options
Purchased
Written
Other transactions on interest rates
Interest rate swaps
Notional
138,327
65
3,214
1,120
115,504
25,536
708,713
-
328,900
-
-
114,626
49,609
-
323,259
-
202,331
3,867,782
100,266
-
7,138,805
-
104,891
7,059,021
7,598
-
113,130
-
7,584
114,107
537,592
9,557,046
561,382
12,194,985
4
-
1,160
-
4,895
35
135,442
5,000
50
5,969
10,000
157,700
719,625
17,855,413
908,968
24,260,148
Credit default swaps
Total
Fair value
18,506
Other financial derivatives
Purchased
Purchased
Written
Notional
The notional amounts of the contracts arranged do not reflect the actual risk assumed by the
CatalunyaCaixa Group since the net positions in these financial instruments are the result of
offsetting and/or combining them.
11. Other financial assets at fair value through profit or loss
The following table provides a breakdown of financial assets included in this category at 31
December 2010, classified by the geographical location of the risk exposure, counterparty class
and instrument type, and an indication of how their fair value was determined (see Note 2.2.3):
155
Thousands of euros
2010
By geographical region
Spain
Other European Union nations
28,547
10,230
Valuation adjustments
490
Total
39,267
By counterparty
Credit entities
Other non resident sectors
28,547
10,230
Valuation adjustments
490
Total
39,267
By instrument
Debt securities
Foreign government debt
Other fixed-income securities
10,230
28,547
Valuation adjustments
490
Total
39,267
These assets had a fair value of 39,267 thousand euros at 31 December 2010, based on
level 1 input.
During the six-month period ended 31 December 2010, the effective average interest rate on
the debt instruments classified in this portfolio was 4.45%.
12. Available-for-sale financial assets and adjustments to financial
assets through macro-hedge
The following table provides a breakdown of financial assets included in this category at 31
December 2010, classified by the geographical location of the risk exposure, counterparty class
and instrument type, and an indication of how their fair value was determined (see Note 2.2.3):
156
Thousands of euros
2010
By geographical region
Spain
Other European Union nations
Rest of the world
4,365,890
214,021
76,337
Impairment losses
(4,657)
Total available-for-sale financial assets
Adjustments to financial assets through macro-hedge
Total
4,651,591
(45,316)
4,606,275
By counterparty
Credit entities
Resident public authorities
600,133
2,599,676
Other resident sectors
1,265,262
191,177
Other non-resident sectors
Impairment losses
(4,657)
Available-for-sale financial assets
Adjustments to financial assets through macro-hedge
Total
4,651,591
(45,316)
4,606,275
By instrument
Debt securities
3,772,890
Spanish government debt
Treasury bills
Treasury bonds and debentures
Other securities
Issued by financial entities
Other fixed-income securities
Equity instruments
Shares of listed Spanish companies
Shares of unlisted Spanish companies
Shares of unlisted foreign companies
Mutual fund units held
2,594,423
73,233
2,447,084
74,106
562,347
616,120
883,358
633,286
169,234
1,113
71,359
Other
8,366
Impairment losses
(4,657)
Total available-for-sale financial assets
Adjustments to financial assets through macro-hedge
Total
4,651,591
(45,316)
4,606,275
The adjustments to financial assets through macro-hedge correspond to the changes in fair
value of available-for-sale financial assets attributable to the interest rate risk related to the fair
value macro-hedge (see note 3.3.2).
The fair values of the financial instruments included in this category at 31 December 2010,
classified by hierarchy level, are as follows:
157
Thousands of euros
Level 1
Level 2
Level 3
2010
4,359,580
212,951
33,744
Total
4,606,275
All of the impairment losses correspond to the allowance for specific and inherent losses.
During the six-month period ended 31 December 2010 the effective average interest rate on
the debt instruments classified in this portfolio was 3.54%.
The most significant investments at 31 December 2010 in companies not considered
investees is as follows:
Thousands of euros
Company
Repsol-YPF, SA1
Gas Natural, SA
2010
Ownership
interest
1.63 %
1.62 %
Total
1
Cost
Market
value
Net gain
Deferred
tax
liabilities
331,117
177,278
414,268
171,170
58,206
(4,276)
24,945
(1,832)
508,395
585,438
53,930
23,113
The shareholding in Repsol-YPF is held through the Group’s investment in Repinves, in which it has a
32.4% ownership interest, and which has been classified as an “Available-for-sale financial asset” as this is
a holding vehicle whose sole object is to hold shares of Repsol-YPF, SA. (Note 1.11)
13. Loans and receivables
13.1. Breakdown
The following table provides a breakdown of the financial assets included in this category at
31 December 2010, classified by the geographical location of the risk exposure, counterparty
and instrument type:
158
Thousands of euros
2010
By geographical region
Spain
Other European Union nations
Rest of the world
59,919,956
680,161
244,495
Impairment losses
Valuation adjustments
(2,341,142)
62,651
Total
58,566,121
By counterparty
Credit entities
1,727,262
Resident public authorities
Other resident sectors
1,402,923
56,919,434
Other non-resident sectors
794,993
Impairment losses
(2,341,142)
Valuation adjustments
62,651
Total
58,566,121
By instrument
Credit institutions
Mutual accounts
Time deposits
Assets acquired under repurchase agreements
Other accounts
Other financial assets
Customer loans
Trade credit
Secured loans
Financial leases
Assets purchased under resale agreements
Other loans
Other financial assets
Debt securities
1,727,262
219,348
491,342
72,876
891,727
51,969
53,945,408
916,932
39,726,105
931,201
14,782
12,282,161
74,227
5,171,942
Impairment losses
Valuation adjustments
(2,341,142)
62,651
Total
58,566,121
During the six-month period ended 31 December 2010, the effective average interest rate on
loans and receivables was 3.12%.
“Debt securities” mainly includes unlisted debt securities and securities listed on inactive
markets, mainly multi-issuer covered bonds, in which CatalunyaCaixa is one of the issuers.
The main “Valuation adjustments” correspond to fees collected and not accrued and to
interest accrued and not collected to the sum of (151,372) and 214,447 thousand euros,
respectively, at 31 December 2010.
At 31 December 2010, securitised loans issued subsequent to 1 January 2004 where risk had
not been substantially transferred and which are therefore still recognised on the balance sheet
amounted to 13,196,936 thousand euros (see Note 29.5).
The balance of assets the terms of which were renegotiated during the six-month period
ended 31 December 2010 is 354,459 thousand euros.
The breakdown of "Other financial assets" at 31 December 2010 is as follows:
159
Thousands of euros
2010
Cheques drawn on credit entities
51,969
Financial guarantee fees (see Note 2.9)
29,343
Cash guarantees extended
Other items
10,917
33,967
Total
126,196
13.2. Impaired and past due assets
The balance of loans and receivables considered impaired due to credit risk at 31 December
2010 is as follows:
Doubtful assets at 31 December 2010
Up to 6
months
From 6 to
9 months
From 9 to
12 months
General treatment
228,246
83,833
61,904
1,025,712
1,399,695
Secured transactions
Thousands of euros
More than 12
years
Total
592,505
193,719
172,935
1,386,385
2,345,544
Finished habitual residence
Rural estate management and
finished offices, premises and
multiuse warehouses
196,980
69,699
60,991
556,982
884,652
31,967
7,060
8,297
58,802
106,126
Finished residences (other)
Property, plots and remaining real
estate assets
197,114
52,795
70,754
343,647
664,310
166,444
64,165
32,893
426,954
690,456
820,751
277,552
234,839
2,412,097
3,745,239
Total
During 2010, doubtful assets classified as transactions with unappreciable risk amounted to
32,242 thousand euros, while those classified as partially collateralised loans totalled 16,137
thousand euros.
At 31 December 2010, the effective portions of guarantees for doubtful assets totalled
1,910,788.
In order to calculate the value of the guarantees, the weighted averages stipulated in
Circular 3/2010 for the effective percentage depending on the type of asset used as collateral
were taken into account.
The balance of past due assets not classified as impaired at year-end 2010 was 127,085
thousand euros.
13.3. Credit risk allowances
The change in the balance of impairment losses during the six-month period ended 31
December 2010 recorded on credit risk hedges on loans and receivables and accumulated total
losses at the beginning and end of the year are as follows:
160
Thousands of euros
Balance at 1 July 2010
Specific
allowances
2,502,388
Charged to profit or loss
487,536
Amounts reversed
Amounts used
Other movements
Balance at 31 December 2010
(463,863)
(333,341)
(23,925)
2,168,795
General
allowances
Total
164,079
2,666,467
-
487,536
8,268
172,347
(463,863)
(333,341)
(15,657)
2,341,142
During the six-month period ended 31 December 2010, 20,364 thousand euros of written-off
assets were recovered.
At 31 December 2010, the CatalunyaCaixa Group had recognised 1,974,154 thousand euros
as substandard assets, recognising impairment losses of 294,324 thousand euros, classified
under “Impairment losses on financial assets (net) – Loans and receivables”.
13.4. Fair value
The fair value of the assets recognised under this heading are not expected to differ greatly
from their carrying value at year-end 2010.
14. Held-to-maturity investments
The following table provides a breakdown of the financial assets included in this category at
31 December 2010, classified by the geographical location of the risk exposure, counterparty
and instrument type:
2010
Thousands of euros
By geographical region
Spain
Other European Union nations
Rest of the world
878,743
228,532
29,334
Impairment losses
(1,524)
Total
1,135,085
By counterparty
Credit entities
Other resident sectors
176,883
777,488
Other non-resident sectors
182,238
Impairment losses
(1,524)
Total
1,135,085
By instrument
Debt securities
Issued by financial entities
Other fixed-income securities
176,883
959,726
Impairment losses
(1,524)
Total
1,135,085
During the six-month period ended 31 December 2010 the effective average interest rate on
the debt instruments classified in this portfolio was 5.45%.
161
At year-end 2010, the financial assets included in this category had a fair value of 1,121,995
thousand euros and a carrying value of 1,135,085 thousand euros.
15. Hedging derivatives (assets and liabilities)
The detail, by type of product, of the fair value and notional amounts of the derivatives
designated as fair value hedges at 31 December 2010 is as follows:
2010
Fair value
Fair value hedges
Micro-hedges
Macro-hedges
Liabilities
Assets
Thousands of euros
Notional
Fair value
837,836 12,956,784
92,679
745,157
4,321,129
8,635,655
Notional
268,104
8,255,316
101,405
166,699
2,575,596
5,679,720
Cash flow hedges
Micro-hedges
Macro-hedges
105,175 41,417,940
14,892
5,189,304
90,283 36,228,636
87,646 28,778,468
1,947
85,699 28,778,468
Total
943,011 54,374,724
355,750 37,033,784
Derivative assets designated as hedging instruments had a fair value of 937,502 thousand
euros and 8,918 thousand euros at 31 December 2010, based on level 2 and 3 inputs,
respectively. Meanwhile, liability balances had a fair value of 354,073 thousand euros based on
level 2 inputs, and 1,677 thousand euros based on level 3 inputs.
The breakdown of hedging instruments designated for fair value hedges at 31 December
2010 is the following:
2010
Liabilities
Assets
Thousands of euros
Fair value
Notional
Fair value
Notional
Outstanding currency
purchases/sales
Purchases against euros
2,242
1,953
-
-
-
-
2,242
1,953
8,347
2,488,141
-
-
-
-
46,069
2,134,916
27,079
718,762
-
-
-
-
27,832
320,631
800,168
9,747,928
191,961
5,797,816
837,836 12,956,784
268,104
8,255,316
Sales against euros
Stock options
Purchased
Written
Interest rate options
Purchased
Written
Other transactions
on interest rates
Interest rate swaps
Total
At 31 December 2010 a notional balance of 5,189,304 thousand euros in interest rate swaps
was held to hedge cash flows generated by positions securitised after 1 January 2004.
162
In 2010, the Group recognised an asset of 85,699 thousand euros and a liability of 90,283
thousand euros in relation to interest rate swaps written to provide a cash flow macro hedge,
with a notional value of 65,007,104 thousand euros.
The notional amounts of the contracts arranged do not reflect the actual risk assumed by the
CatalunyaCaixa Group since the net positions in these financial instruments are the result of
offsetting and/or combining them.
16. Non-current assets held for sale
At 31 December 2010, this heading recognises 752,204 thousand euros corresponding to
properties foreclosed in connection with non-performing loans held for sale and not as part of
the Group’s ordinary course of business (see Note 2.21). The corresponding provision at yearend 2010 amounted to 212,283 thousand euros.
On 1 July 2010, investments relating to insurance investees were classified under “Noncurrent assets held for sale”.
After their sale, the unsold portion was reclassified under “Equity investments – Associates”
(see Note 17.1).
On 5 March 2010, Caixa Catalunya signed an agreement with Mapfre, SA to jointly run the
entity’s insurance and pension plan businesses. On 28 April, Caixa Tarragona and Caixa
Manresa signed similar agreements with the same company. Under the terms of this
agreement, Mapfre will acquire 50% plus one share of CatalunyaCaixa’s insurance companies
(Ascat Vida, SA de Seguros, Ascat Seguros Generales, SA, Caixa Tarragona Vida, SA de Seguros
y Reaseguros, and Caixa Manresa Vida, SA Compañía de Seguros).
The transaction’s guaranteed price will be paid in instalments until 2015. In addition, the
agreement contemplates potential subsequent payments contingent upon meeting established
business targets.
As stipulated in the agreements signed with Mapfre, sales and purchase options have been
issued by both companies, and may be executed should CatalunyaCaixa or Mapfre undergo a
change in control, or if noncompliance with the contracts signed between the companies is
determined.
The changes in this heading on the accompanying balance sheet are as follows:
Thousands of euros
2010
Balance at 1 July 2010
Additions
Transfers to investment properties
Disposals resulting from the sale of real estate
Transfers to equity investments
Disposals due to the sale of insurance companies
Transfers to provisions
Adjustment of impaired assets
Balance at 31 December 2010
1,512,648
46,465
(37,928)
(34,404)
(232,556)
(541,719)
44,107
(4,409)
752,204
During the six-month period ended 31 December 2010, the Group sold assets classified as
“Non-current assets held for sale,” generating losses of 5,638 thousand euros.
163
17. Equity investments
17.1. Associates
“Equity investments – Associates” on the consolidated balance sheet at 31 December 2010
amounts to 364,532 thousand euros.
A list of these investments is provided in Note 2.1.3.
The movement in this consolidated balance sheet heading is the following:
Thousands of euros
Carrying amount
Balance at 1 July 2010
Acquisitions and incorporations
Capital increases
Capital decreases
Sales and dissolutions
Change in group composition
Equity accounting
Balance at 31 December 2010
61,648
(782)
130,467
(3,166)
188,167
Goodwill
Balance at 1 July 2010
Acquisitions
Sale of equity investments
Change in group composition
Impairment
Balance at 31 December 2010
14,525
161,840
176,365
Balance at 1 July 2010
76,173
Balance at 31 December 2010
364,532
The most significant movements during the six-month period ended 31 December 2010 were
the following:
Thousands of euros
2010
Company
Type of transaction
Ascat Vida, SA
Ascat Seguros Generales
Caixa Manresa Vida, SA
Caixa Tarragona Vida, SA
Change
Change
Change
Change
in
in
in
in
group
group
group
group
composition
composition
composition
composition
Investment
cost
241,274
22,000
19,369
9,664
The year of incorporation and net balance of outstanding goodwill, included in investment
cost, are provided below:
164
Thousands of euros
2010
Year
Subsidiary
Net goodwill
2005
2006
2008
2008
2008
2008
2010
2010
2010
2010
Grupo Navec Servicios Industriales, SL
Hujoceramic, SL
Establecimientos Industriales y Servicios, SL
Hidroeléctrica del Noguera, SL
Solwindet Las Lomas, SL
Comomin Tuberías, SL
Ascat Vida, SA
Ascat Seguros Generales
Caixa Tarragona Vida, SA
Caixa Manresa Vida, SA
Total
5,650
2,430
1,268
1,597
937
2,643
130,691
13,729
5,845
11,575
176,365
The goodwill recognised for the insurance companies arose as a result of their restated fair
value resulting from loss of control, as required by IFRS 3.
17.2. Jointly-controlled entities
A list of investments carried under “Equity investments – Jointly-controlled entities" at 31
December 2010 is provided in Note 2.1.2.
The movement in this consolidated balance sheet heading was the following:
Thousands of euros
Carrying amount
Balance at 1 July 2010
Acquisitions and incorporations
Capital increases
Capital decreases
Sales and dissolutions
Changes in group composition
Equity accounting
Balance at 31 December 2010
167,278
4,308
30,631
15,101
(12,251)
205,067
Goodwill
Balance at 1 July 2010
Acquisitions
Sales
Other
Impairment
Balance at 31 December 2010
10,218
1,492
11,710
Impairment
Balance at 1 July 2010
(2,000)
Balance at 31 December 2010
(2,000)
Balance at 1 July 2010
175,496
Balance at 31 December 2010
214,777
The most significant movements during the six-month period ended 31 December 2010 were
the following:
165
Thousands of euros
2010
Type of transaction
Company
Unión Sanyres, SL
Centros Residenciales Sanyres Sur, SL
Espais Catalunya Mediterráneo, SA
Promocions Terres Cavades, SA
Ecamed Barcelona, SL
Cedinsa Concessionària, SA
CEM Monestir, SL
Promar 21, SL
Rimau Promocentre, SL
Harmonia Badalona, SL
Capital increase
Change in group composition
Capital increase
Change in group composition
Acquisition
Capital increase
Capital increase
Change in group composition
Capital increase
Capital increase
Investment
cost
18,443
8,609
8,062
5,829
5,801
2,500
1,152
663
339
135
The year of incorporation and net balance of goodwill are as follows:
Thousands of euros
2010
Year Subsidiary
2007
2008
2008
2008
2009
2010
2010
Goodwill
Ocycandey 2006, SL
Parque Eólico Coll del Moro, SL
Parque Eólico de Torre Madrina, SL
Parque Eólico de Vilalba dels Arcs, SL
Olivos Naturales, SL
Elecdey Asturias, SL
Ecamed Barcelona, SL
Total
1,881
617
617
463
3,963
2,676
1,493
11,710
In accordance with point 38 of IAS 31, the CatalunyaCaixa Group has elected to consolidate
the financial statements of investees classified as jointly-controlled entities using the equity
method.
The effect on consolidated assets, liabilities, equity and income of consolidating investments
in jointly-controlled entities by proportional consolidation would be as follows:
Thousands of euros
2010
Financial assets
Real estate assets
Other assets
565,983
2,410,645
162,282
Total assets
3,138,910
Financial liabilities
Other liabilities
2,951,694
187,216
Total liabilities and equity
3,138,910
Interest income
Gross income
Operating profit (loss)
(33,264)
36,004
(61,595)
Profit (loss) before tax
(65,099)
Corporate income tax
(7,613)
Profit attributed to the Group
-
166
18. Property and equipment
The movement in this heading of the consolidated balance sheet during the six-month period
ended 31 December 2010 was as follows:
CatalunyaCaixa
Comm. Proj.
property,
Investment
plan &
properties
equipment
Thousands of euros
Own use
Revalued cost
Balance at 1 July 2010
Additions
Increases due to transfers
Derecognitions and decreases
Decreases due to transfers
Balance at 31 December 2010
Accumulated depreciation
Balance at 1 July 2010
Additions
Increases due to transfers
Derecognitions and decreases
Balance at 31 December 2010
1,625,470
705,603
8,320
5,342
(63,509)1
(34,033)
51,295
28,691
(8,328)
-
290,181
964
(14)
-
Consolidated
Total
Total
2,682,254
60,579
34,033
(71,851)
(34,033)
3,228,976
204,460
34,039
(88,463)
(34,039)
1,541,590
777,261
291,131
2,670,978
3,344,973
592,313
14,630
71,292
678,235
684,272
32,280
2,344
(30,472)
38,407
2,344
(30,967)
24,763
(30,220)
3,754
2,344
(250)
3,763
(2)
586,856
20,478
75,053
682,387
694,056
Foreclosed assets depreciation fund
Balance at 1 July 2010
-
-
-
-
258
Additions
-
-
-
-
899
Balance at 31 December 2010
Balance at 1 July 2010
-
-
-
-
1,157
1,033,157
690,973
218,889
2,004,019
2,544,446
Balance at 31 December 2010
954,734
756,783
216,078
1,988,595
2,649,760
1
Impairment losses amounting to 23,299 thousand euros are recognised under “Impairment losses on
other assets (net)– Other assets”
Additionally, CatalunyaCaixa’s real estate investments include property investments of different Group
subsidiaries amounting to a net value of 659,277 thousand euros.
18.1. Property and equipment for own use
The breakdown by class of item of this consolidated balance sheet heading at 31 December
2010 is as follows:
Accumulated
depreciation
Balance
Thousands of euros
Cost
Land and buildings for own use
Fixtures, vehicles and other facilities
Computer equipment and facilities
Other
864,121
526,390
203,940
14,714
83,084
332,734
171,604
3,358
781,037
193,656
32,336
11,356
1,609,165
590,780
1,018,385
Balance at 31 December 2010
167
18.2. Investment properties
The additions to this item during the six-month period ended 31 December 2010 correspond
mainly to foreclosed properties in lieu of loan repayment which are being held for rental.
During the six-month period ended 31 December 2010 rental from investment properties
owned by the CatalunyaCaixa Group amounted to 10,442 thousand euros.
During the six-month period ended 31 December 2010, the Group sold assets classified as
“Investment properties” for 8,328 thousand euros, generating losses of 713 thousand euros,
recognised under “Gains/(losses) on the derecognition of assets not classified as non-current
held for sale”.
18.3. Fair value of property and equipment
Management estimates that the appraisal value of property and equipment (land and
buildings for own use and real estate investments) at 31 December 2010 is not significantly
different from the corresponding carrying amounts and that these amounts will be recovered in
the ordinary course of the Group’s business activities.
19. Intangible assets
The detail of this consolidated balance sheet heading at 31 December 2010 is the following:
Thousands of euros
2010
Balance at 1 July 2010
Additions
Write–downs
Amortisation
17,352
1,279
(8,464)
Balance at 31 December 2010
10,167
Intangible assets mainly comprise software programmes and other applications developed by
non-group entities.
20. Other assets
The detail of this consolidated balance sheet heading at 31 December 2010 is the following:
Thousands of euros
2010
Inventories
Prepayments and accrued income
Other assets
4,382,271
20,521
40,969
Total
4,443,761
20.1. Inventories
The Group’s most significant inventories for the six month period ended 31 December 2010
were as follows:
168
Thousands of euros
Land
Works in progress
Buildings
Total
Cost
Impairment
Balance
3,578,519
352,128
2,327,056
(1,286,438)
(84,545)
(504,449)
2,292,081
267,583
1,822,607
6,257,703
(1,875,432)
4,382,271
20.2. Prepayments and accrued income
The detail of this consolidated balance sheet heading at 31 December 2010 is the following:
Thousands of euros
2010
Fees and commission income
Other accruals
17,697
2,824
Total
20,521
20.3. Other assets
At 31 December 2010, "Other assets" amounted to 40,969 thousand euros. A portion of this
caption relates to dividends pending collection from Gas Natural y Repsol YPF, SA for 5,244
thousand euros and 10,429 thousand euros, respectively, at 31 December 2010 recognised
under “Income from equity instruments – Other equity instruments” and to other collections
pending.
21. Financial liabilities at amortised cost
Note 3.1 details by maturity the items making up this consolidated balance sheet heading.
21.1. Central bank deposits
At year-end 2010 this heading corresponded to deposits from the Bank of Spain in the
amount of 3,353,077 thousand. These deposits are guaranteed by financial instrument pledges.
The effective average interest rate was 1.01% during the six-month period ended 31 December
2010.
21.2. Deposits from banks
The breakdown, by type of deposit, of this consolidated balance sheet heading, is as follows:
Thousands of euros
2010
Demand deposits
11,109
Other loans
Time deposits
Other accounts
Repurchase agreements
4,863,265
4,384,930
232,263
246,072
Valuation adjustments
(21,603)
Total
4,852,771
Virtually all demand deposits correspond to the mutual account with the Spanish
Confederation of Savings Banks.
169
During the six-month period ended 31 December 2010 the effective average interest rate on
the debt instruments classified under this heading was 1.80%.
21.3. Customer deposits
The breakdown, by geographical origin, substance and counterparty, of this heading in the
accompanying consolidated balance sheets at 31 December 2010 is as follows:
Thousands of euros
2010
By geographical region
Spain
Other European Union nations
Rest of the world
39,453,928
2,403,214
822,478
Valuation adjustments
(321,280)
42,358,340
Total
By counterparty
Resident public authorities
Other resident sectors
Other non resident sectors
1,362,577
40,434,564
882,479
Valuation adjustments
(321,280)
Total
42,358,340
By instrument
Current accounts
Savings accounts
Time deposits
Repurchase agreements
Other accounts
9,464,629
773,377
28,484,056
3,907,206
50,352
Valuation adjustments
(321,280)
Total
42,358,340
During the six-month period ended 31 December 2010 the effective average interest rate on
the debt instruments classified under this heading was 2.34%.
21.4. Marketable debt securities
The detail of this consolidated balance sheet heading at 31 December 2010 is the following:
Thousands of euros
2010
Issued bonds and debentures
Promissory notes
Covered bonds
12,381,373
568,558
3,838,413
Valuation adjustments
225,015
Total
17,013,359
21.4.1. Issued bonds and debentures
At 31 December 2010, issued bonds and debentures issued comprised 8,998,949 thousand
euros of debentures, 124,975 thousand euros of regional bonds, 3,247,416 thousand euros of
bonds issued by the asset securitisation funds that remained outstanding (see Note 29.5) and
10,033 thousand euros issued under the Euro Medium Term Note programme by Caixa
Catalunya International Finance BV. The return on issued bonds and debentures was 2.11%
during the six-month period ended 31 December 2010.
170
The movement in “Issued bonds and debentures” during the six-month period ended 31
December 2010 was as follows:
Thousands of euros
2010
Balance at 1 July 2010
Issues
Repayments
13,285,166
121,263
(1,025,056)
Balance at 31 December 2010
12,381,373
The table below details, by maturity, the balance of this heading at year-end 2010:
Thousands of euros
2010
1 year
From 1 to 3 years
From 3 to 5 years
From 5 to 10 years
More than 10 years
1,938,469
4,659,302
2,374,931
967,112
2,441,559
Total
12,381,373
21.4.2. Promissory notes
Issue details of outstanding promissory notes at 31 December 2010 are as follows:
Thousands of euros
Date issued
2006
2010
2010
2010
2010
2010
Face value
Amount
1,500,000
2,100,000
900,000
2,100,000
10,000
11,471
43,178
81,662
422,369
9,878
Total
Avg.
interest
rate
0.89%
1.00%
1.52%
1.41%
1.31%
568,558
The movement in promissory notes during the six-month period ended 31 December 2010
was as follows:
Thousands of euros
2010
Balance at 1 July 2010
Drawn down
Repayments
768,272
1,535,300
(1,735,014)
Balance at 31 December 2010
568,558
All these financial instruments are denominated in euros and fall due in 2011.
21.4.3. Covered bonds
This heading comprises secured mortgage bonds issued for the sum of 3,838,413 thousand
euros during 2010. Their cost for the six-month period ended 31 December 2010 was 1.51%
and they are secured with mortgage portfolios.
171
There was no movement in “Covered bonds” during the six months ended 31 December
2010.
The table below details, by maturity, the balance of this heading at year-end 2010:
Thousands of euros
2010
From 1 to 3 years
From 5 to 10 years
438,137
3,400,276
Total
3,838,413
21.5. Subordinated debt
The detail of this consolidated balance sheet heading at 31 December 2010 is the following:
Subordinated debt:
Thousands of euros
Balance
outstanding
Issue
Repayment
September 1988
June 1992
January 1998
June 2000
November 2000
May 2001
November 2001
February 2002
February 2002
April 2002
November 2002
November 2002
July 2003
October 2003
November 2004
April 2006
October 2008
Perpetual
Perpetual
January 2013
May 2015
October 2015
April 2016
October 2016
January 2017
February 2012
April 2012
November 2017
November 2012
July 2018
May 2015
February 2020
April 2016
December 2018
Total
Amount of issue
12,020
90,151
90,152
9,000
15,024
21,035
12,020
15,000
18,000
12,000
25,000
20,000
20,000
199,999
300,000
100,000
500,000
Interest rate
Floating
Floating
Floating
Floating
Floating
Floating
Floating
Floating
Floating
Floating
Floating
Floating
Floating
3 to 6%
3.50 to 5.25%
Floating
Floating
1,459,401
31-12-2010
12,020
90,151
90,152
9,000
15,024
21,035
12,020
15,000
11,260
8,172
25,000
19,787
20,000
199,999
300,000
93,719
500,000
1,442,339
As authorised by the Bank of Spain, these issues compute entirely as Tier II core capital.
Non-convertible preference shares
Thousands of euros
Balance
outstanding
Issue
November 1999
January 2001
February 2005
Total
Repayment Amount of issue
Perpetual
Perpetual
Perpetual
300,000
180,000
30,000
510,000
172
Interest rate
Floating
Floating
Floating
31/12/2010
300,000
180,000
30,000
510,000
Caixa Catalunya Preferents, SA completed its first issue in November 1999, raising 300
million euros (face value) and a second issue in January 2001, raising 180 million euros (face
value). The preference shares carry a variable dividend linked to 3-month Euribor, plus a
preferential and non-accumulative spread of 0.10 points.
In February 2005, Caixa Manresa Preferents, SA issued 30 million euros of preference
shares. The preference shares are perpetual and the issue has an early redemption option from
year five. Annual remuneration is linked to 12-month Euribor plus a spread of 0.5%, payable
monthly.
Caixa Catalunya Preferents, SA, and Caixa Manresa Preferents, SA are wholly-owned
subsidiaries of CatalunyaCaixa.
These issues compute as core capital.
Preference shares subscribed by the Fund for Orderly Bank Restructuring (FROB)
Thousands of euros
Balance
outstanding
Issue
Repayment
Amount of issue
July 2010
July 20151
1,250,000
Total
1
1,250,000
Interest rate
7.75%2
31-12-2010
1,250,000
1,250,000
The Entity may request the FROB a 2-year extension of the conversion deadline any time after the date
of issue, which will require authorisation from the FROB and the Bank of Spain.
2
Annual increase of 15 additional basis points (0.15%). From the fifth year onwards, the increase will be
100 basis points (1%).
On 28 July 2010, 1,250,000 thousand euros worth of preference shares convertible into
participating shares were issued, subscribed, and paid in by the FROB. This amount computes
as core capital.
According to Royal Degree Law 9/2009, of 26 June, if there is evidence of financial weakness
which might place the entity in a precarious position, an action plan must be sent to the Bank of
Spain explaining the actions foreseen to resolve its difficulties.
As stipulated by Royal Decree Law 9/2009, dated 26 June, the entity has made a
commitment to repurchase the subscribed securities as soon as it is in a position to do so under
the terms expressed in the integration plan.
If, after five years have passed since the disbursement and the preference shares have not
been repurchased by the Entity, or if before five years have elapsed the Bank of Spain considers
it improbable that the repurchase of preference shares will take place within the specified time,
the FROB may request that they be converted into participating shares.
Quarterly reports must be sent to the Bank of Spain demonstrating the degree of compliance
with the measures included in the approved integration plan. Depending on the content of these
reports, the Bank of Spain may require that certain measures be implemented to ensure that
the integration plan is correctly carried out.
21.6. Fair value
The fair value of financial liabilities at amortised cost has been estimated using generally
accepted market valuation techniques (taking into consideration the scope of the placement and
the opportunities for buy backs or repayment) and does not differ significantly from the
corresponding carrying amounts at 31 December 2010.
173
22. Provisions (except for tax provisions)
The movement in and nature of the provisions recognised under this item in the
accompanying consolidated balance sheets, excluding tax provisions, at 31 December 2010,
were as follows:
Provision for
pensions and
other similar
obligations
Provision for
risk and
contingent
liabilities
Provision
for
litigation
and
similar
Other
provisions
Balance at 1 July 2010
498,188
56,634
4,314
282,828
Charged to profit or loss
Amounts reversed
Amount used
Other
1,446
(196)
(154,160)
(176,379)
Balance at 31 December 2010
168,899
Thousands of euros
(281)
56,353
93
4,407
57
(996)
(105,179)
176,710
The “Provisions for risks and contingent liabilities” correspond to impairment losses on
contingent liabilities.
“Provision for pensions and similar obligations” includes a provision to cover the cost of
including personnel to the early retirement and paid leave schemes, amounting to 149,156
thousand euros (see Note 2.13.3).
“Other” includes the derecognition of liabilities associated with “Pension-linked insurance
contracts” resulting from the loss of control of the insurance companies (see Note 14).
23. Other liabilities
The detail of this consolidated balance sheet heading at 31 December 2010 is the following:
Thousands of euros
2010
Accruals and deferred income
Other liabilities
135,269
19,539
154,808
Total
23.1. Accruals and deferred income
The detail of this consolidated balance sheet heading at 31 December 2010 is the following:
Thousands of euros
2010
General expenses
Other accruals
73,426
61,843
Total
135,269
23.2. Other liabilities
At 31 December 2010 "Other liabilities" amounted to 19,539 thousand euros and basically
comprised transfers received pending application.
24. Minority interests
174
The breakdown by consolidated entity, of “Minority interests” in the consolidated balance
sheets and “Profit/(loss) attributed to minority interests” in the consolidated income statements
for the six-month period ended 31 December 2010 is as follows:
2010
Thousands of euros
Profit/(loss)
attributed to
minority
interest
Minority
interest
Procamvasa, SA
Área Tres Procam, SL
Aprosa Procam, SL
Servimanresa Actius en Lloguer, SL
Puerto Ciudad Las Palmas, SA
Infor. i Tecn. de Catalunya, SL
Other entities (with amounts below 500 thousand
euros)
Total
2,695
2,264
903
846
579
548
(91)
(65)
17
(51)
6
1,026
8,861
(116)
(300)
The changes during the six-month period ended 31 December 2010 in “Minority interests”
were as follows:
2010
Thousands of euros
Procamvasa, SA
Área Tres Procam, SL
Aprosa Procam, SL
Servimanresa Actius en Lloguer, SL
Puerto Ciudad Las Palmas, SA
Infor. i Tecn. de Catalunya, SL
Club de Golf Hacienda del Álamo, SL
Promocions Terres Cavades, SA
TP Best 4000, SL
Other companies (with amounts
below 500 thousand euros)
Total
Profit/
(loss) for
Distribution
the year
Balance at
of prior
attributed
year’s
1/7/10
to
profits
minority
interests
Change in
capital
Consolidation
adjustments
Closing
balance
3,048
3,368
886
559
542
553
6,468
4,812
-
(91)
(65)
17
(51)
6
(24)
(77)
-
(262)
(1,039)
846
71
(135)
(6,468)
(4,735)
2,695
2,264
903
846
579
548
394
-
647
20,883
-
(15)
(300)
-
(11,722)
632
8,861
25. Valuation adjustments in equity
Following are the movements during the six-month period ended 31 December 2010 on the
consolidated balance sheet:
Thousands of euros
Availablefor-sale
financial
assets
Cash flow
hedges
-
24,621
Balance at 1 July 2010
Measurement gains/(losses)
Amounts transferred to profit or loss
Other reclassifications
Income tax
Balance at 31 December 2010
25.1. Available-for-sale financial assets
1,313
(10,801)
(1,871)
2,846
(8,513)
175
(32,171)
(4,391)
266
10,969
(706)
Exchange
differences
(3,620)
2,534
1,086
-
Entities
accounted for
under equity
method
Total
(8,072)
16,549
(930)
-
(34,478)
(15,192)
(1)
14,901
(9,002) (18,221)
This heading recognises the amount, net of the tax effect, of changes in the fair value of
assets classified as available-for-sale which, as indicated in Note 2, must be classified as an
integral part of equity. These differences are recognised in profit or loss when the assets which
gave rise to them are sold.
The most significant items comprising this balance are detailed in Note 12.
25.2. Cash flow hedges
This heading recognises the amount, net of the tax effect, of the changes in the fair value of
the effective portion of hedging instruments designated as cash flow hedges (see Note 2.3).
The most significant items comprising this balance are detailed in Note 15.
25.3. Exchange differences
This heading recognises the net amount of exchange differences arising on non-monetary
items whose fair value is adjusted against equity and originating on the translation to euros of
the balances held in currencies other than the euro (see Note 2.4).
26. Equity
As a result of the merger, CatalunyaCaixa started life with a 9 thousand euro endowment
fund. The goodwill corresponding to the reserves of the three wound up entities amounted to
2,449,406 thousand euros.
The breakdown by items of this consolidated balance sheet heading is:
Thousands of euros
2010
Accumulated reserves
(215,556)
Reserves of entities accounted for using the equity method
(136,202)
Total
(351,758)
The changes in the CatalunyaCaixa Group’s reserves during the six-month period ended 31
December 2010 are set forth below:
Thousands of euros
Total
Balance at 1 July 2010
Transfers between reserves and
consolidation adjustments
(356,448)
Balance at 31 December 2010
4,690
(351,758)
In order to maintain control of the reserves of CatalunyaCaixa and subsidiaries, the reserves
of the three wound up entities were segregated from those of the subsidiaries.
26.1. Reserves of fully consolidated entities
The breakdown of “Equity – Reserves” in the consolidated balance sheets at 31 December
2010 corresponding to the portion arising from the consolidation process itself, by entities that
are fully consolidated in the accompanying financial statements.
26.2. Reserves of entities accounted for using the equity method
176
The breakdown of “Equity – Reserves” of the consolidated balance sheet at 31 December
2010, corresponding to the portion arising from the consolidation process itself, by entities
accounted for using the equity method in the accompanying financial statements.
27. Tax matters
27.1. Tax consolidation
Along with the subsidiaries in which it has at least a 75% ownership interest, as of its
incorporation, CatalunyaCaixa files a consolidated income tax return under the provisions of
Royal Decree 4/2004, dated 5 March, enacting the revised text of the Spanish Corporation Tax
Law.
However, CatalunyaCaixa and its subsidiaries file taxes under a special VAT tax regime for its
tax group, according to Law 37/1992, of 28 December.
In compliance with business law and Bank of Spain regulations, income tax on accounting
profit was expensed on an accruals basis in the consolidated income statement.
As a result of differences between accounting and tax standards, income tax on accounting
profit does not coincide with the amount payable to the tax authorities. To this end it necessary
to recognise deferred income tax assets for the excess of tax paid over tax due, and deferred
income tax liabilities for the excess of tax due over tax paid.
27.2. Years open for review
The CatalunyaCaixa Group is open to inspection of the principal taxes to which it is liable
since its date of incorporation, while the three pre-existing savings banks are open to inspection
as of 2006.
In 2003, the inspection of the consolidated tax group headed by the now extinct Caixa
d’Estalvis de Catalunya was completed. The tax inspection of the consolidated tax group by the
tax authorities for income tax, VAT, personal income tax withholdings and payments on account
(employees and professionals) and tax on investment income for 1998, 1999 and 2000 came to
an end. The inspection of these taxes and periods, except for Ascat Vida, SA de Seguros y
Reaseguros (which also included 1997 income tax for Caixa d’Estalvis de Catalunya and the
following subsidiaries: Ascat Vida, SA, Caixa Catalunya Gestió, SGIIC, SA, Leasing Catalunya
EFC, SA, Caixa Catalunya Pensions, EGFP, SA, Factorcat, EFC, SA, and Invercatalunya
Tecnologia, SL).
The CatalunyaCaixa Group has tax assessments signed in disagreement amounting to 27
million euros for which the corresponding provision has been made.
The remaining investees have the previous four years or all years since their start of activity
open for inspection for all applicable taxes.
Due to the varying interpretations to which applicable tax legislation lends itself, the results
of the ongoing tax inspection and of potential inspections in the future of the remaining years
open to inspection, may give rise to tax liabilities which cannot be objectively quantified at
present. Nonetheless, the CatalunyaCaixa Group considers the likelihood that these items will
generate significant liabilities in addition to those already provisioned is remote.
27.3. Deductions for reinvestment of extraordinary profits
The deduction for reinvestment of extraordinary gains to be applied for the tax periods
ended 2010 and years prior related to the three original savings banks will be included in the
2011 financial statements, in conformity with the deduction made on the Income tax return
filed.
In conformity with Article 42 of Legislative Royal Decree 4/2004, of 5 March, which enacts
the Revised Text of the Spanish Corporation Law, the consolidated tax group applied deductions
to the following income:
177
Year
2005
2006
2007
2008
2009
First 6 months of 2010
Income
(thousands of
euros)
702
22,131
111,321
81,592
9,528
500,902
Year of
reinvestment
2005
2005/2006
2007
2008
2009
2010
Due to a shortfall in taxable income, the CatalunyaCaixa tax group has a deduction for
reinvestment of extraordinary income pending application. The reinvestment was partially
materialised in real estate leased by the CatalunyaCaixa Group, an activity which has been
developed and increased during 2010, through the creation of the corresponding structure with
the human and material resources necessary to carry it out.
27.4. Reconciliation of accounting profit to taxable income
The reconciliation of the income tax expense for the year recognised in the consolidated
income statements for the six-month period ended 31 December 2010 and pre-tax accounting
profit for the same years using the tax rate in force in Spain is as follows:
Thousands of euros
2010
Profit before tax
11,884
Non-taxable income/expenses
Dividends
Share of income of entities accounted for using the equity method
(11,895)
1,077
Taxable income
(5,934)
Tax rate (30%)
(1,780)
Less:
(4,156)
Allocation to Social Work Projects
(3,492)
Deductions and others
(664)
Income tax
(5,936)
Profit/(loss) after tax
5,948
27.5. Taxes recognised in equity
In addition to the income tax expense recognised in the consolidated income statement,
during the six-month period ended 31 December 2010, the CatalunyaCaixa Group recognised
certain valuation adjustments, net of the corresponding tax effects, in equity, recognising these
effects as deferred tax liabilities:
178
Thousands of euros
2010
Unrealised capital gains on available-for-sale securities
Cash flow hedges
Losses of entities accounted for using the equity method
2,837
1,432
3,540
Total
7,809
The most significant items comprising deferred taxes in connection with unrealised capital
gains on available-for-sale securities are described in note 12.
27.6. Deferred taxes
Pursuant to current tax legislation in Spain and the countries in which the CatalunyaCaixa
Group operates, during the six-month period ended 31 December 2010 there are certain
temporary differences which must be taken into account when quantifying the related income
tax expense. Deferred taxes recognised on the consolidated balance sheet at 31 December
2010 are as follows:
Thousands of euros
Deferred tax assets arising on:
2010
Timing differences in recognising income and expenses for
accounting and tax purposes
Impairment losses recognised on financial debt instruments
Fee reclassification
Pension plan
Impairment of property, plant and equipment
225,329
5,983
6,300
453,114
219,039
Impairment losses of fixed-income securities
44,747
Provisions related to labour agreement
Equity valuation adjustments
Other provisions
669
32,470
Total
922,711
Thousands of euros
2010
Deferred tax liabilities arising on:
Fixed asset revaluation
Equities
Equity valuation adjustments
Other
182,843
10,936
231,259
42,824
Total
467,862
27.7. Provisions for taxes and other legal contingencies
“Provisions – Provisions for taxes and other legal contingencies” in the consolidated balance
sheet at 31 December 2010 amounted to 27,324 thousand euros. This heading includes
provisions for tax assessments signed in disagreement and other provisions for contingencies
with other public bodies.
Tax
provision
Thousands of euros
Balance at 1 July 2010
27,190
Charged to profit or loss
134
Balance at 31 December 2010
179
27,324
28. Social Work Projects
The table below provides the breakdown of the asset and liability entries in the consolidated
balance sheets relating to CatalunyaCaixa’s Social Work Projects:
Thousands of euros
2010
Assets
Property and equipment – Assigned to Social Work
Project Fund (Note 18)
Fixtures and fittings
Properties
215,315
45,368
169,947
Total
215,315
Liabilities
Social Work Project Fund
Endowment/Revaluation reserves
Maintenance expenses
Other liabilities
273,182
282,907
(17,684)
7,959
Total
273,182
The movement in the “Social Work Project Fund” during the six-month period ended 31
December 2010 was as follows:
Thousands of euros
2010
Balance at 1 July 2010
Distribution from prior year’s profit
Maintenance expenses
Other movements
286,921
(17,684)
3,945
Balance at 31 December 2010
273,182
29. Contingent risks and liabilities and other information
29.1. Contingent risks
Financial guarantees are defined as amounts that must be paid on behalf of third parties if
they are not paid by the party who is initially required to do so, under commitments undertaken
in the ordinary course of business.
The breakdown of the maximum risk assumed by the CatalunyaCaixa Group in connection
with these financial guarantees at 31 December 2010 is as follows:
Thousands of euros
2010
Guarantees and other sureties provided
Financial guarantees
Other guarantees and sureties
Assets pledged in guarantee of third party
obligations
Irrevocable documentary credits
Confirmed documentary credits
Total
2,359,914
205,914
2,154,000
3,060
59,820
1,569
2,424,363
A significant part of these amounts will mature without producing payment obligations for
the CatalunyaCaixa Group. Hence, the aggregate balance of these commitments cannot be
180
considered an actual future requirement on the part of the CatalunyaCaixa Group to extend
financing or liquidity to third parties.
The income obtained on guarantee instruments is recorded on the consolidated income
statement for the six-month period ended 31 December 2010 under “Fees and commission
income” and “Interest and similar income” (in amounts corresponding to the discounted value of
the fees) and is calculated by applying the contractual interest rate of the guarantee to the
nominal value of the guarantee.
The provisions required to cover these guarantees were calculated using the same criteria
used to calculate the impairment of financial assets at amortised cost, and were recognised
under “Provisions – Provisions for risks and contingent liabilities” in the consolidated balance
sheets (see Note 22).
29.2. Pledged assets
At 31 December 2010 assets owned by the CatalunyaCaixa Group secured transactions
arranged by the latter or third parties, as well as diverse liabilities and contingent liabilities. At
31 December 2010 the breakdown of financial assets pledged to secure these liabilities or
contingent liabilities and similar was as follows:
Thousands of euros
2010
Customer loans
88,373
Debt securities1
14,745,095
Total
1
14,833,468
Includes bonds issued by securitisation funds.
At 31 December 2010, 13,776,892 thousand euros, were held in pledged government
debentures, with a maximum guaranteed limit of 10,675,984 thousand euros, granted by the
Bank of Spain.
29.3. Contingent liabilities
At 31 December 2010, the limits on financing contracts extended and the amounts drawn
down there under, for which the CatalunyaCaixa Group had assumed a credit commitment
greater than the amount recognised on the asset side of the corresponding balance sheet, were
as follows:
Thousands of euros
2010
Contingent liabilities
Immediately drawable
Credit entities
Public sector
Other resident sectors
9,879,004
2,644,158
22,670
191,112
2,410,367
Other non-resident sectors
20,009
Conditionally drawable
Other resident sectors
7,234,846
7,234,846
Other commitments
1,075,876
Total
10,954,880
29.4. Third-party funds managed and marketed by the CatalunyaCaixa Group and
securities depository
The breakdown of off-balance-sheet funds managed by the CatalunyaCaixa Group at 31
December 2010 is as follows:
181
Thousands of euros
2010
Mutual funds
Discretionary portfolio management
Marketed but not managed by the Group
Pension funds
Insurance contracts
Investment funds
4,204,629
126,714
3,960,302
1,506,204
2,232,482
221,616
Total
8,291,645
29.5. Asset securitisations
During the six-month period ended 31 December 2010, the CatalunyaCaixa Group, and in
previous years the three preexisting savings banks, converted a portion of its loan and
receivables portfolios into debt securities by transferring the assets to various securitisation
funds set up for this purpose. According to the terms of these asset transfers, the group has
retained substantially all the risks and rewards inherent to ownership of the securitised assets
(i.e. the credit risk on the transferred assets). Details of the balances recognised on the
consolidated balance sheets at 31 December 2010 are as follows:
Thousands of euros
2010
Assets securitised before 1 January 2004
611,693
Hipocat 3, Fondo de Titulización Hipotecaria
Hipocat 4, Fondo de Titulización de Activos
Hipocat 5, Fondo de Titulización de Activos
Hipocat 6, Fondo de Titulización de Activos
TDA 11, Fondo de Titulización Hipotecaria
TDA 13 – Mixto, Fondo de Titulización de Activos
AyT, FTGencat 1, Fondo de Titulización de Activos
Assets securitised after 1 January 2004 (Notes 13.1)
36,445
69,094
172,167
254,938
40,173
17,868
21,008
13,196,936
Hipocat 7, Fondo de Titulización de Activos
Hipocat 8, Fondo de Titulización de Activos
Hipocat 9, Fondo de Titulización de Activos
Gat FTGencat 2005, Fondo de Titulización de Activos
Hipocat 10, Fondo de Titulización de Activos
Gat FTGencat 2006, Fondo de Titulización de Activos
Hipocat 11, Fondo de Titulización de Activos
Gat FTGencat 2007, Fondo de Titulización de Activos
Hipocat 14, Fondo de Titulización de Activos
Hipocat 15, Fondo de Titulización de Activos
Hipocat 16, Fondo de Titulización de Activos
Financat 1, Fondo de Titulización de Activos
MBSCat 1, Fondo de Titulización de Activos
Gat FTGencat 2008, Fondo de Titulización de Activos
Pymecat 2 FTpyme, Fondo de Titulización de Activos
Hipocat 17, Fondo de Titulización de Activos
Gat ICO- FTVPO 1, Fondo de Titulización de Activos
Hipocat 18, Fondo de Titulización de Activos
MBSCat 2, Fondo de Titulización de Activos
Hipocat 19, Fondo de Titulización de Activos
Gat FTGencat 2009, Fondo de Titulización de Activos
Pymecat 3 FTpyme, Fondo de Titulización de Activos
Hipocat 20, Fondo de Titulización de Activos
TDA -19 – Mixto, Fondo de Titulización de Activos
TDA -22 – Mixto, Fondo de Titulización de Activos
TDA -23 – Mixto, Fondo de Titulización de Activos
TDA -1 – Mixto, Fondo de Titulización de Activos
Gc FTGencat Caixa Tarragona 1, Fondo de Titulización de Activos
Total
520,641
673,089
509,126
47,183
796,453
123,553
836,532
180,012
515,007
940,784
748,092
368,314
790,852
204,937
277,966
880,247
231,554
690,775
489,426
678,950
474,474
631,604
860,644
72,160
25,166
142,441
304,361
182,593
13,808,629
182
It is not necessary to recognise financial assets and liabilities, other than derivatives,
securitised before 1 January 2004 and previously derecognised under then prevailing legislation,
unless they were recognised in connection with a subsequent transaction or event.
At 31 December 2010, the bonds of the securitisations arranged before 1 January 2004 sold
on the market and those not sold on the market amounted to 552,013 thousand euros and
59,680 thousand euros, respectively. At 31 December 2010 the bonds corresponding to the
securitisations arranged after 1 January 2004 sold on the market and those not sold on the
market amounted to 3,053,213 thousand euros and 10,143,723 thousand euros, respectively.
29.6. Reclassification of financial instruments
During the six-month period ended 31 December 2010 the CatalunyaCaixa Group did not
make any reclassifications among portfolios of financial instruments.
30. Geographical breakdown of branches
All branches of the CatalunyaCaixa network offer the full range of products and services to their
customers. The geographical breakdown of branches at 31 December 2010 is the following:
2010
Catalonia
Madrid
Community of Valencia
Andalusia
Murcia
Basque Country
Aragon
Balearic Islands
Castile and Leon
Canary Islands
Galicia
Castile-La Mancha
Navarre
Extremadura
Asturias
La Rioja
Cantabria
1,050
118
82
39
13
12
10
10
10
7
7
6
5
3
2
2
1
France
1
Total
1,378
31. Interest and similar income
This heading in the accompanying consolidated income statements includes the interest
accrued in the year on all financial assets, except for derivatives, with implicit or explicit
returns. These returns are calculated by applying the effective interest method, regardless of
whether or not they are carried at fair value, together with the adjustments to income arising
from accounting hedges. Interest income is recognised gross, i.e., without deducting any
applicable tax withholdings at source.
The most significant interest and similar income accrued during the six-month period ended
31 December 2010 by origin is as follows:
183
Thousands of euros
2010
Balances with central banks
Due from banks
Customer loans
Debt securities
Doubtful assets
2,697
8,331
836,775
232,104
39,566
Adjustment to income due to hedging transactions
Other interest income
(11,581)
7,828
Total
1,115,720
The table below breaks down the amounts recognised under “Interest and similar income” in
the consolidated income statements for the six-month period ended 31 December 2010 by the
portfolio of financial instruments in which they are classified:
Thousands of euros
2010
Cash and balances at central banks
2,697
Other financial assets at fair value through profit or loss
Held for trading
Other financial assets at fair value through profit or loss
Available-for-sale financial assets
Loans and receivables
Held-to-maturity investments
Other interest income
Total
4,130
2,923
1,207
81,954
987,797
31,314
7,828
1,115,720
32. Interest and similar expense
This consolidated income statement heading includes the interest accrued in the year on
financial liabilities with implicit or explicit returns, including the interest arising from payments
in kind, obtained by applying the effective interest method, regardless of whether or not these
liabilities are carried at fair value, together with the cost adjustments arising from accounting
hedges and the cost for interest attributable to existing pension funds.
The breakdown of this consolidated income statement heading for the six-month period
ended 31 December 2010 is as follows:
Thousands of euros
2010
Central bank deposits
Deposits from banks
Customer deposits
Marketable debt securities
Subordinated debt
Adjustment to expenses due to hedging transactions
Other expenses
25,335
46,746
591,479
220,136
70,801
(145,998)
643
Total
809,142
The table below provides details of amounts recognised under “Interest and similar expense”
in the consolidated income statements for the six-month period ended 31 December 2010,
classified according to the portfolio of financial instruments in which they are recognised:
184
Thousands of euros
2010
Financial liabilities at amortised cost
Other costs
808,499
643
Total
809,142
33. Income from equity instruments
This heading of the consolidated income statement includes the dividends and returns on
equity instruments corresponding to income generated by non-Group companies after the
investment was acquired.
The breakdown of this heading on the consolidated income statement for the six-month
period ended 31 December 2010 corresponds in its entirety to “Available for sale financial
assets.”
34. Share of income of entities accounted for using the equity method
The breakdown, by company, of this consolidated income statement heading for the sixmonth period ended 31 December 2010 is as follows:
185
Thousands of euros
2010
Associates
6,848
Ascat Vida, SA
Grupo Navec Servicios Industriales, SL
Hidrodata, SA
Hidroeléctrica del Noguera, SL
Hujoceramic, SL
Comomin de Tuberias, SL
Àmbit d’Equipaments, SA
Viviendas Casado, SL
Other entities
(with profit/(losses) < 200 thousand euros)
Jointly-controlled entities
5,141
873
687
546
264
237
(400)
(404)
(96)
(7,925)
Inmobiliaria Monteboadilla, SL
Espais Catalunya Inv. Inmobiliaria, SL
Parque Eólico de Vilalba dels Arcs, SL
Baring Private Equity Partners Espanya, SA
Cruilla Centro, SL
Nou Mapro, SL
Alma Hotelmanagement, GmbH
Sanidad y Residencias 21, SA
Tein Centro Tecnológico del Plástico, SL
Arrahona Garraf, SL
Alma Gestión de Hoteles, SL
Unión Sanyres, SL
Parque Eólico Los Pedreros, SL
Vertix Procam, SL
Galze Urbà, SL
Nova Terrassa 3, SL
Garraf Mediterráneo, SA
Torca Procam Polska SP. ZOO
Gescat Sineva, SL
CEM Monestir, SL
Sanyres Sur, SL
Other entities
(with profit/(losses) < 200 thousand euros)
Total
2,192
558
233
209
(206)
(215)
(236)
(240)
(244)
(319)
(321)
(334)
(345)
(423)
(428)
(579)
(737)
(857)
(1,242)
(1,294)
(1,859)
(1,238)
(1,077)
35. Fee and Commission income
The most significant components of fee and commission income recognised for the six-month
period ended 31 December 2010, by type of service generating this income, as well as the
consolidated income statement headings under which they were recognised, are as follows:
186
Thousands of euros
2010
Interest and similar income (Nota 31)
Financial fees included in the effective interest rate
31,935
Total
31,935
Fee and commission income
Contingent liabilities
Contingent commitments
Payment and collection services
Investment services and complementary activities
Exchange of foreign currencies and banknotes
Marketing and sale of non-banking financial products
Account maintenance and administration
Early loan repayment
Other fees and commissions
9,270
2,461
78,138
20,762
878
27,269
16,168
3,499
35,208
Total
193,653
Other operating income (Nota 39)
Financial fees used to offset direct costs
2,744
Total
2,744
36. Fee and commission expense
The table below details fee and commission expense accrued during the six-month period
ended 31 December 2010, classified by the main services generating these expenses:
Thousands of euros
2010
Assigned to other entities and correspondents
Credit card billing
Securities transactions
Other fees and commissions
Total
9,484
11,923
740
1,550
23,697
37. Gains/(losses) from financial assets and liabilities
This consolidated income statement heading recognises valuation adjustments on financial
instruments, except for those attributable to interest accrued by applying the effective interest
method to exchange rate differences, valuation adjustments on available-for-sale assets, and
the gains or losses obtained on their acquisition or sale.
The breakdown, by portfolio of origin, of the balance of “Gains/(losses) on financial assets
and liabilities” for the six-month period ended 31 December 2010 in the accompanying
consolidated income statements is as follows:
187
Thousands of euros
2010
Financial assets at fair value through profit or loss
Held for trading
Other financial assets at fair value through profit or loss
Available-for-sale financial assets
Loans and receivables
Held-to-maturity investments
Financial liabilities at amortised cost
Eligible hedges not included in interest income/expense
Micro-hedges
Hedged items
Hedging derivatives
Macro-hedges
Hedged items
Hedging derivatives
(1,784)
(440)
(1,344)
10,029
4,925
(4)
7,152
1,833
17,479
(16,020)
181,595
(181,221)
Total
22,151
“Eligible hedges not included in interest income/expense” includes the change in the fair
value of the hedging instruments and hedged instruments designated as part of fair value
hedges (see Note 2.2).
At the six-month period ended 31 December 2010 own bonds with a nominal value of 15,187
thousand euros have been repurchased, generating gains of 4,002 thousand euros.
38. Exchange differences
In 2010 the Group recognised net exchange gains of 4,943 thousand euros. These balances
correspond essentially to forward rate agreements and spot transactions.
39. Other operating income
The breakdown of this consolidated income statement heading for the six-month period
ended 31 December 2010 is as follows:
Thousands of euros
Insurance activities
Net premiums
Reinsurance income
2010
1
164,721
164,317
404
Sale and income from provision of non-financial services
Real estate
Other services
Other
Insurance brokerage
Income from investment properties (Note 18.2)
Financial fees compensating direct costs (Note 36)
Other income
Total
74,565
47,906
26,659
37,576
6,539
22,128
2,744
6,165
276,862
1
Corresponds to income from insurance activities until the effective sale of the insurance
companies (see Note 16).
40. Other operating expenses
The breakdown of this consolidated income statement heading for the six-month period
ended 31 December 2010 is as follows:
188
Thousands of euros
2010
Insurance business
164,737
Claims paid and other insurance-related expenses
Direct insurance
Ceded reinsurance
Net provisions for insurance contract liabilities
Uncollected premiums
Mathematical provisions
Unearned premiums and unexpired risks
Claims provisions
Cost of sales
Real estate
Other
Contribution to Deposit Guarantee Fund (Nota 1.7)
263,505
264,715
(1,210)
(98,768)
(64)
(95,826)
(2,373)
(505)
60,296
60,296
30,299
13,721
Expenses associated with investment properties and with
non-current assets held for sale (Notes 18.2 and 16)
Other items
Total
8,309
8,269
255,332
1
Corresponds to insurance-related expenses until the effective sale of the insurance
companies (see Note 16).
41. General administrative expenses
41.1. Personnel expenses
The breakdown of “Personnel expenses” for the six-month period ended 31 December 2010
in the consolidated income statements is as follows:
Thousands of euros
2010
Wages and salaries
Social Security charges
Contributions to external pension funds
Termination benefits
Training expenses
Other operating expenses
Total
216,461
44,856
12,176
3,505
1,634
1,151
279,783
Contributions to external pension funds include the expense recorded in the consolidated
income statement for contributions to defined contribution pension plans, which totalled 7,827
thousand euros for the six-month period ended 31 December 2010.
CatalunyaCaixa’s average headcount during the six-month period ended 31 December 2010
is shown in the table below:
189
2010
Men
Women
Total
Professional category I
Levels I to II
Levels III to V
Levels VI to VII
Levels VIII to X
Levels XI to XIII
Professional category II
4,526
121
1,971
1,406
415
613
13
3,675
19
510
1,041
807
1,298
15
8,201
140
2,481
2,447
1,222
1,911
28
Total
4,539
3,690
8,229
Levels I to VI include managers and higher-level skilled workers, based on the old
occupational classification system, and Levels VII to XIII include first- and second-category
skilled workers and auxiliary workers.
This consolidated income statement heading includes the expense for the post-employment
commitments explained in Note 2.13.1.
During the six-month period ended 31 December 2010 there was a balance for payments in
kind related to employee loans granted at below market rates of 2,942 thousand euros.
The average headcount of investees (group entities) is 715 for the six-month period ended
31 December 2010, of which 290 and 425 were women and men, respectively.
41.2. Other general administrative expenses
The breakdown of this consolidated income statement heading at the six-month period
ended 31 December 2010 is as follows:
Thousands of euros
2010
IT
Communications
Advertising
Buildings and facilities
Contributions and other taxes
Rentals
Outsourced administrative services
Technical reports
Other administrative expenses
Total
19,670
10,692
25,976
20,515
11,929
16,580
18,626
12,047
22,250
158,285
“Rentals” includes lease expenses arising from sale and leaseback transactions. Total future
minimum payments related to these contracts, broken down by maturity are as follows:
Thousands of euros
2010
1 year
From 1 to 5 years
More than 5 years
8,692
33,207
93,295
Total
135,194
For the six-month period ended 31 December 2010, “Technical reports” includes fees and
expenses for services provided by the auditor which break down as follows:
190
Other related
Auditor
parties of the
(Deloitte SL)
auditors
Thousands of euros
Audit services
Other verification services
1,412
280
40
-
Total audit services and other
Advisory services
Other services
1,692
20
40
190
20
190
Total services
Total fees paid to Deloitte, SL and its related companies account for less than 1% of
revenue.
42. Gains/(losses) on derecognition of non-current assets held for
sale not classified as discontinued operations
The breakdown of this consolidated income statement heading at the six-month period ended
31 December 2010 includes 1,123 and (23,633) thousand euros, respectively, related to profit
and loss on the sale of property and equipment.
43. Related party transactions
As supplementary information to that disclosed in Note 8 on balances and transactions
entered into with the members of the Board of Directors and the Senior Management of
CatalunyaCaixa, the table below indicates the balances recognised in the consolidated balance
sheets at 31 December 2010 and the consolidated income statements for the 6-month period
ended 31 December 2010 that arise from transactions with associates, jointly-controlled entities
and other related parties:
191
2010
Thousands of euros
Associates and
jointly-controlled
entities
Directors and key
management and
other related
parties
BALANCE SHEET
Assets
Customer loans
Held for trading
Other financial assets
751,553
357,474
296
68,228
-
Liabilities
Customer deposits
493,977
43,725
INCOME STATEMENT
Expenses
Interest and similar expenses
3,463
438
Income
Interest and similar income
Fees and commission income
5,304
2,301
1,023
28
Other
Post-employment obligations
Contingent liabilities
Commitments
Financial derivatives
393,172
199,413
9,737
22,054
-
44. Customer service
The total number of claims handled by the Customer Care Service during the 6-month period
ended 31 December 2010 was 600, including those related to investees that, given their lines of
business, are also subject to the above legislation. Of this total, 432 claims were accepted and
resolved, 9 were processed and were pending resolution at year-end, 3 were pending additional
information at year-end and 156 were dismissed, primarily on account of errors in presentation,
because they had been processed through other means or had been passed on to the
ombudsman, in accordance with prevailing regulations. In all, 591 cases were resolved during
the year (432 processed, 159 rejected and 3 pending), 61% of which were dismissed and 12%
upheld either totally or partially. In the remaining 27% of cases, either no ruling was made or
the claimant withdrew his or her complaint.
Details of the complaints received during the six-month period ended 31 December 2010 is
as follows:
Company
Compensation
paid
(thousands of
euros)
Complaints received
Complaints resolved
CatalunyaCaixa
Ascat Vida
Ascat Mediación
General insurance
545
5
3
47
536
5
3
47
50
-
Total
600
591
50
192
The nature of complaints filed at 31 December 2010 was as follows:
Type of complaints
Number
Financing products
Services
Drawdown products
Savings/investment products
Cards and POS terminals
ATM network
Insurance
Branch network
Distance banking
Unfounded
172
86
56
60
23
1
72
20
100
10
Total
600
The total number of cases received by the Ombudsman for Catalonian Savings Banks in 2010
totalled 191, including those from investees. During the year, 60% of cases were dismissed,
10% were totally or partially upheld, and the remaining 30% were unfounded. The average
length of time taken to resolve cases was 5 days.
A summary of complaints submitted to the Ombudsman for Catalonian Savings Banks during
the six-month period ended 31 December 2010 is as follows:
Complaints
received
Company
CatalunyaCaixa
Ascat Vida
Caixa Catalunya Gestió
ASCAT, Seguros Generales
159
12
4
16
Total
191
The nature of complaints lodged during the six-month period ended 31 December 2010 were
as follows:
Type of complaints
Number
Asset transactions
Liability transactions
Insurance and pension funds
Other products
Payment and collection services
Investment services
Total
48
15
28
32
32
36
191
ADDENDA
Translation of a report and accounts originally issued in Catalan language. These annual
accounts are prepared in accordance with IFRSs as adopted by the European Union. In the
event of discrepancy, the Catalan language version prevails.
193
AUDITING REPORT
195