management report and annual accounts of the

Transcription

MANAGEMENT REPORT AND
ANNUAL ACCOUNTS OF THE
CAIXA CATALUNYA GROUP
- 2008 -
MANAGEMENT REPORT OF THE
- 2008 -
Economic backdrop
The international economy has deteriorated significantly during 2008 as a result of the worsening
financial crisis and its impact on the general economy. The crisis has hit developed nations the hardest,
with many of their economies entering a recession during the second half of the year, while emerging
economies have also experienced a notable downturn as a result of capital flows stopping and the drop in
world trade.
Financial distortions have accentuated during the year, reaching a peak in September with the
bankruptcy of the investment bank Lehman Brothers. Global markets ground to a halt and at this point, a
series of rescue packages were developed to resuscitate the financial sector in the US and Europe. The
recession and increase in unemployment has given rise to an increase in defaults on loan repayments,
worsening the problems of liquidity and solvency of financial institutions. Risk premiums in the interbank
markets reached a high in October, coinciding with the most critical phase of the financial crisis. Although
the extraordinary measures taken to normalise market operations and restore confidence have led to risk
premiums gradually falling, they still remained abnormally high at year end.
Against the backdrop of a financial and economic crisis, the sharp decrease in raw material prices as a
result of a drop in global demand has resulted in a rapid drop in inflation rates. In this context, monetary
authorities have reacted decisively by making historic interest rate cuts. The US Federal Reserve has
carried out a series of reductions in the intervention rate from 4.25% at the start of the year to the current
rate of 0.0%-0.25%, while the European Central Bank did not start cutting rates until October, whereby the
intervention rate fell from 4.25% in September to 2.50% at year end.
This more adverse situation has led to a widespread decrease in the main floating-rate security
indexes of reference in the market due to the high degree of uncertainty and overall downturn in company
profits. The Ibex-35 Index has fallen by approximately 40% during the year, while the EURO STOXX Index
has contracted by 44%.
In addition, the Spanish real-estate market has experienced a significant downturn during the year in
terms of both its activity (with decreases of approximately 40% in the number of dwelling being
constructed) and prices (which started to fall during the second quarter in the case of freeholdings). The
notable decline in the prospects of an increase in prices due to worsening employment levels and the
minimum prices reached due to poor consumer confidence underlie this change.
Earnings
Caixa Catalunya’s results in 2008 reflect this economic downturn and its commitment to tackle the
challenges faced by adopting highly prudent criteria. The Group’s profit is therefore down by 60.3% on that
generated in 2007 and stands at 193.7 million euros. This drop in results is set in the context of a
satisfactory rise in the interest margin and net commissions, contrasted by high levels of provisions in
order to start 2009 with the maximum level of generic provisions established by the Bank of Spain,
following prudent criteria and taking into consideration the possible effects of the current economic crisis.
The interest margin has risen by 4.9% to 897.4 million euros. This increase has been possible despite
a certain reduction in assets managed, which were down 6.7% at the end of 2008, because of the strategic
decision made to gradually abandon wholesale operations that offer the Group a lower margin. The
improved interest margin and a lower volume of assets has given rise to a significant increase of up to 10
basis points in this margin as a percentage of average total assets during the year.
Net commissions have also risen sharply by 8.5%, despite the drop in mutual fund activity. Gains on
financial assets and exchange gains have also risen, reaching 69.5 million euros at year end.
In contrast, the results of entities accounted for using the equity method has declined from income of
25.1 million euros in 2007 to losses of 66.0 million euros at year end. A major part of this balance is due to
real-estate companies, which have been affected by the downturn in this sector. The gross margin has
therefore fall slightly by 2.0% compared to 2007.
Other noteworthy captions include administrative expenses, with clear restrictions being made during
the year permitting a rise of only 3% by year end. This moderate rise is partly due to completing the
expansion of the branch network during the first few months of the 2008, and also to the cost cutting plans
implemented during the year.
3
Impairment losses on financial assets amounted to 771.0 million euros and are up 119.9%. In this
regard, it should be emphasised that the Group has adopted stringent prudent criteria and therefore,
generic provisions stand at the maximum limit established by the Bank of Spain, i.e. 125% of weighted
risk.
Gains on the sale of non-current assets not classified as discontinued operations amount to 515.4
million, euros a considerable part of which comprises the gain on the sale of Abertis, SA. In 2007, gains of
306.2 million euros were most noteworthy, which were classified as gains on the sale of assets not
classified as non-current assets held for sale, arising from the sale of Riofisa, SA. This has given rise to
profit before tax of 204.8 million euros.
Balance sheet
Assets have amounted to 63,627 million euros, down 6.7% on 2007. This reduction is basically
explained by the lower volume of trading and operations with credit institutions, while items most closely
related with customer operations have increased in relative terms.
Customer loans on the balance sheet have amounted to 51,638 million euros, 0.3% less that at the
2007 year end. Lending remains focused on secured loans, which advanced 3.6% to 34,925 million euros.
Meanwhile, trade loan and finance lease operations fell. By sectors, public sector and private sector nonresident loans remained strong, with increases of 30%, while private sector resident loans dropped slightly
by 1.8%. The volume of securitised loans, which are recognised off the balance sheet in accordance with
prevailing accounting standards, rose to 676 million euros.
Customer funds on the balance sheet fell by 4.5% to 48,195 million euros. A considerable part of this
decrease is due to the lower volume of marketable debt securities, which has dropped by 14.1% during the
year, reflecting both lower financing requirements due to the progressive decline in loans to customers,
and the difficulties faced in placing new fixed-rate issues on markets. In contrast, customer deposits,
representing the majority of customer funds, have increased slightly by 1.1% during the year to 26,548
million euros. This caption includes term savings products which have risen especially rapidly during 2008.
Meanwhile, subordinated liabilities have increased by 21.2% subsequent to the launch of a new issue and
the withdrawal of two existing issues, whereby the final balance has risen by 290 million euros. The most
significant movements in off-balance sheet items have been the 25.5% reduction in mutual funds and
customer portfolios, and the 18.2% decline in pension plans, which on the whole, reflect the problems
faced in the financial markets during 2008.
The most significant items in the investment portfolio classified under available-for-sale assets are the
1.63% stake in Repsol-YPF, the 3.03% stake in Gas Natural SDG, and the 0.18% stake in Abertis.
Investments in jointly-controlled entities comprise the 20% stake in Cedinsa Concesionaria and the 7.76%
stake in Applus Servicios Tecnológicos through Volja Plus.
Expansion and workforce
Throughout 2008, the branch network has been expanded by 11 branches (due to the combination of
12 openings in growth areas and the closure of one branch in Catalonia), which completes the expansion
plan designed at the end of 2005 to boost the Entity's presence in the autonomous regions regarded as
priority growth markets. The Caixa Catalunya branch network currently consists of 1,203 branches. As a
result of completing this expansion plan, Caixa Catalunya has achieved a considerable presence outside
its autonomous region of origin, with a total of 451 branches (450 in other autonomous regions and one in
France) accounting for 37.5% of the entire branch network.
This expansion plan has also involved increasing the workforce, which includes employees of whollyowned subsidiaries, to 7,094 employees at the end of 2008, 33 more than in 2007.
Risk management
With the exception of the mortgage loans granted to Spanish households and consumer loans, Caixa
Catalunya’s risk is not significantly concentrated.
In June 2008, the Bank of Spain approved the Entity’s advanced credit risk model and its use in
calculating capital requirements. Structures have been adapted to the approach of the new Capital
Adequacy Framework for remaining operational and market risks.
Price risk is affected by equity and commodity trading positions. A daily control is set up for this type of
risk, which forms part of the communication between the Risks Division and the Treasury and Market
Capitals Division regarding positions assumed in its trading activity.
4
Liquidity risk is managed from a dual perspective: operating liquidity, managed by the Treasury and
Capital Markets Division, and structural liquidity, managed by the Entity’s Management through the Assets
and Liabilities Committee. In June 2008, the Board of Directors approved the Entity’s Liquidity Control and
Management Policies which facilitate identifying short- and medium-term liquidity problems.
Market interest rate risk is mainly associated with the acquisition of fixed-rate securities included in the
available-for-sale, held-for-trading and held-to-maturity portfolios and with Caixa Catalunya’s loans and
receivables portfolio and its fixed-rate financing. Structural balance sheet interest rate risk is when
changes in the structure of the market rate curve affect rate sensitive assets and liabilities with differing
maturities and therefore, impact on their economic value and associated interest margin.
Operational risk management is strategic at Caixa Catalunya 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. During 2008, Caixa Catalunya has continued to work
on an advanced model capable of meeting the expectations of supervisory bodies and the challenges
faced in the Entity’s operations.
Caixa Catalunya actively manages all price, credit, liquidity and cash flow risks associated with its
activities.
Related operations
In accordance with Circular 1/2008 of the Spanish National Securities Market Commission and Royal
Decree 1362/2007 of 19 October, this management report does not disclose information on related parties
stipulated in Article 15 of the aforementioned Royal Decree, as this information is disclosed in the notes to
the Caixa Catalunya Group’s consolidated annual accounts at 31 December 2008.
Environment
In addition to the considerable work carried out through the Community Projects described below and
as part of Caixa Catalunya’s commitment to Corporate Social Responsibility and continued efforts in the
area of environmental sustainability, measures have been taken over time to reduce energy consumption
and use of natural resources in day-to-day operations. During 2008, an internal release has been
distributed to fortify the workforce’s commitment to creating a more environmentally responsible entity and
specific steps have been taken in this area, the most noteworthy being to develop the green
correspondence service.
Community Projects
Caixa Catalunya’s Board of Directors agreed in its meeting on 17 June to start legal procedures to
integrate the Territori i Paisatge, Un Sol Món and Viure i Conviure Foundations into the Caixa Catalunya
Foundation. By creating a single foundation, Caixa Catalunya's Community Projects program can reorientate and focus its activities in a more dynamic and flexible manner and, overall, better adapt its work
to areas which are considered priorities. In this regard, Caixa Catalunya’s Community Projects program is
currently focused on five specialised areas of activity (culture, landscape and the environment, social care,
social inclusion, and R&D&I), which have been selected based on society's needs and cover practically all
new social requirements.
Within the area of culture, three major exhibitions have been arranged: “Zoran Music: From Dachau to
th
th
Venice”, “Ukiyo-e: Japanese Prints of the 18 and 19 Centuries” and “Ródtxenko: The Construction of the
Future”. In addition, the program of travelling exhibitions “Atapuerca and Human Evolution” (which has
visited Cordoba, Valladolid and Huesca) and “Trapped in the Ice” (which has been presented in Barcelona,
Zaragoza, Castellón, Alicante and Logroño) has continued.
In the area of landscape and the environment, environmental educational activities have continued in
the Entity’s own spaces, for example, the “Climate Change: Questions and Answers" exhibition has visited
Valencia, Murcia and Seville during the year. Meanwhile, environmental conservation projects have
included forest improvement and management work on the Alinyà Mountain, the creation of a self-guided
route around the Puerto de Arnes, and work to restore the Fraguerau Gorge. 24 areas are owned
extending to 7,834 hectares, while a further 114 areas of exceptional natural value are under stewardship,
covering a surface area of 144 thousand hectares.
5
Social inclusion activities during 2008 have included the granting of 186 microcredits, the total balance
of which stands at 4.9 million at 31 December. The cooperation program to promote microfinancing in
Mediterranean, Sub-Saharan African and Latin American countries has also continued with actions to
provide direct support to the microfinance institutions in these countries. During 2008 the 2008 Social
Inclusion Report has also been published and new entities have been incorporated into the Social
Inclusion Housing Network made up of non-profitmaking organisations that manage sheltered
accommodation for groups of people at risk of social exclusion. Finally, the programs aimed at helping
disadvantaged people join the job market and fund job creation should also be mentioned, as well as the
continuation of the Capital Inclusion Program providing financing and support to social companies which
work to eliminate all types of exclusion.
In the area of social care, work has continued to develop the network of facilities specialising in the
care of people with serious cognitive and mental disorders. This program is conducted in close
collaboration with the Department of Health and Department of Social Action and Citizenship of the
Generalitat de Catalunya and local health authorities and offers 700 places. During the year, awareness
programs have been conducted to promote healthy lifestyles among young people in relation to cannabis
usage, alcohol consumption prevention, and eating disorders, while the “Virtual Safety” road safety project
has concluded. The work performed in the Caixa Catalunya Sant Jordi Clubs should also be highlighted.
These Clubs comprise meeting places for older people to share experiences and grown as individuals,
encouraging their overall development as active members of the society in which they live. Currently, the
Entity has 47 Clubs in Catalonia, which have organised 1,885 activities during 2008, attended by
approximately 120,000 people.
The scope of activities in the area of R&D&I has been widened to strengthen research, technological
development, innovation and technological modernisation. The most noteworthy activities have been the
first Caixa Catalunya Young People and Science Program, through which 50 scientifically-talented boys
and girls have taken part in the E2C3 program (Caixa Catalunya Science Summer Workshops). Another
important area of work has been the collaboration with the Barcelona Science Park and has basically
involved the expansion of facilities, support to the specialised scientific services unit, promotional activities
geared towards the scientific community, and support to activities to promote science culture.
Caixa Catalunya has contributed funds of 66.4 million euros through its Community Projects which,
combined with the foundations’ own funds, meant that a total of 82.1 million euros has been distributed by
the Community Projects as follows: 13.0 million euros for social inclusion, 12.5 million euros for culture,
10.8 million for social care, 7.2 million euros for landscape and the environment, and 1.7 million euros for
R&D&I programs. Of the remainder, 11.6 million euros were devoted to granting aid to other entities and
institutions to undertake social initiatives and 25.3 million euros to acquire and maintain the Community
Projects’ own property.
2009 guidance
At a macroeconomic level, all forecasts for 2009 indicate a deep recession in the Spanish and Catalan
economies, especially during the first part of the year. This could give rise to stagnation or even a slight
contraction in the amount of financing extended to businesses and households, while the rate of savings is
forecast to improve somewhat, possibly resulting in an increase in measures to capture customer funds.
Consequently, it is forecast that customer funds will rise by approximately 7% during 2009, with
balance sheet items being of particularly note, especially demand and term deposits. In addition to more
traditional savings products, it is forecast that funds will be attracted through the issuance of fixed-rate
securities, which Caixa Catalunya plans to launch through the program of guarantees issued by the
Spanish government.
The rate of growth of loans and receivables is forecast to be low, both in terms of mortgage loans and
business sector financing, due to the sharp fall in investments in both production and construction.
No material non-recurring capital gains are forecast, while net profit is forecast to level off. Low interest
rates will have a negative impact on the interest margin due to the reduced differential between the interest
rates on sources of financing offered and market interest rates. The decrease in the interest margin will
impact on the gross margin, since it is not forecast that significant increases in net commissions or trading
income will be achieved. It is estimated that operating expenses will be curbed to a certain extent now that
the expansion process started in previous years has finalised.
Specific provisions for loan losses are expected to be increased to cover the forecast rise in arrears.
Part of these provisions will be charged to the generic provisions made, which at the 2008 year end, were
at the maximum level stipulated by the Bank of Spain.
6
CAIXA CATALUNYA’S ANNUAL CORPORATE GOVERNANCE REPORT
A
A.1.
STRUCTURE AND OPERATION OF THE GOVERNING BODIES
GENERAL ASSEMBLY
A.1.1. Identify the members of the General Assembly and indicate the group to which each
General Board Member belongs:
See Addenda.
A.1.2. Indicate the composition of the General Assembly broken down into member groups:
Group to which the member
belongs
MUNICIPAL CORPORATIONS
ACCOUNTHOLDERS
FOUNDING INSTITUTIONS OR
PERSONS
EMPLOYEES
FOUNDING CORPORATION
Total
A.1.3.
Number of
General Board
Members
26
60
0
20
55
161
% of total
16.149
37.267
0.000
12.422
34.161
100.000
Describe the functions of the General Assembly:
The General Assembly is the highest governing body of Caixa Catalunya. Its members are called
General Board Members and their role is to ensure the integrity of the Institution’s assets, safeguard
the interests of its ACCOUNTHOLDERS and customers, meet the corporate aims of the Institution
and set down guidelines for action.
In addition to general governing powers, the General Assembly has the special and exclusive
authority to:
- Appoint members of the Board of Directors and the Control Committee.
- Confirm the appointment of the Director General.
- Evaluate the reasons for removal and recall of members of the governing bodies and make decisions
in this regard, before the end of the latter’s term.
- Study the reasons for termination of office of the Director General and ratify this, if required.
- Approve and modify the Articles and Regulations of the electoral system for members of the
governing bodies.
- Wind up and dissolve the Institution, and authorize its merger with others, or any other decision
affecting its nature.
- Define the general lines of the Institution’s annual plan of action.
- Approve the management of the Board of Directors, the Annual Report, Balance Sheet and Profit
and Loss Account, and use the latter for the ends of the Institution.
- Approve the management of Social Work, their annual budgets and settlement of the latter.
- Appoint the external auditors of the Institution.
- Deal with any matter submitted for the consideration of the governing bodies with the authority to do
so.
A.1.4. Indicate whether the General Assembly is subject to any regulations. If this is the case,
describe the contents of this regulation:
YES
NO
See Addenda.
7
X
A.1.5. Indicate the rules of the system for the election, appointment, acceptance and recall of
General Board Members:
The procedure regulating the elections and appointment of members of the governing bodies is
governed by Catalan Legislative Decree 1/2008 dated 11 March and Catalan Decree 164/2008 dated
26 August.
Of the 160 members of the General Assembly, 60 General Board Members representing
ACCOUNTHOLDERS are elected from delegates appointed by competition before a notary from
among the customers meeting the conditions established in Article 25 of the Institution’s Articles of
Association. The 55 representatives of the FOUNDING CORPORATION (the Diputació – Provincial
Government of Barcelona) are designated directly by the latter. Of the General Board Members, 25
represent the District Councils and other Local Corporations, appointed directly by the corporations
with this right. Lastly, the 20 Employee representatives are voted directly by the Institution from among
staff of the same with open-ended contracts, as established in the corresponding regulation.
General Board Members must meet the following conditions and requisites: be an individual of
legal age and address in the area of activity of Caixa Catalunya; not be legally incapacitated or
affected by the incompatibilities indicated in Article 26 of the Institution’s Articles, and meet the
requirements for respect of trading and professional activity.
General Board Members are elected for six years, but may carry on if they meet the necessary
requirements, so long as the total duration of the term does not exceed 12 years. Half of the General
Board Members of each representative group are renewed every three years, taking into account the
proportionality between them in the General Assembly.
The appointment of General Board Members is irrevocable until the end of the term for which the
members of the governing bodies were appointed, except in the cases of termination of the latter
indicated in Article 28 of the Institution’s Articles.
Acceptance of the position is by letter of acceptance in which the Board Member states that none
of the incompatibilities indicated in Article 26 of the Institution’s Articles apply to him/her.
At the end of the term for which they were appointed, General Board Members cease in office,
without prejudice to the possibility of their re-election as established in the Articles. Moreover, Board
Members may also cease in office through: resignation or death; legal incapacity; inability to meet any
of the requirements for eligibility; application of any of the causes of incompatibility or ineligibility
regulated in the Articles or in legal regulations; continued absence; agreement to remove such
member adopted with good reason by the General Assembly; repeated breach of monetary
obligations with the Institution and, for Board Members representing staff, through retirement or
ceasing to form part of the workforce for any other reason, or definitive sanction in the Institution's
disciplinary proceedings.
A.1.6. Indicate the regulations for the constitution and quorum of attendance of the General
Assembly:
To be considered valid, the General Assembly must be attended by the majority of members at
the first meeting. Constitution of the second meeting is deemed valid regardless of the number of
members in attendance.
To debate and adopt agreements on the removal or recall of members of the governing bodies,
amend the Articles and Regulations, or for the liquidation or merger of the Institution with others, two
thirds of the members with voting rights must attend the first meeting, and half plus one of the
members with voting rights must attend the second.
The General Assembly is presided over by the Chairman of the Institution and the Chairman of
the Board acts as Secretary, or these positions are held by those designated in the Articles to
substitute them.
A.1.7. Explain the system used by the General Assembly for adopting agreements:
Each Board Member has one vote. A Board Member cannot be represented by another Board
Member or any other party, whether an individual or a company. The Chairman of the General
Assembly has the casting vote.
General Assembly agreements are reached by a simple majority of votes cast by those present,
except for the cases of removal or recall of members of the governing bodies, modification of the
Articles and Regulations, or for the liquidation or merger of the Institution with others, in which case
8
the favourable vote of two thirds of those present is required, so long as these represent at least half
plus one of its voting members. The favourable vote of at least half plus one of the voting members of
the Assembly is required to terminate the office of the Director General.
All General Board Members, including dissidents and absent members, are subject to any valid
agreements adopted, without prejudice to their right to dissenting vote. Those who vote against or
members with dissenting votes, together with those who were absent without just cause, are exempt
from liability for the agreements adopted.
A.1.8. Explain the rules for calling General Assemblies and describe the events in which
General Board Members can call the General Assembly:
General Assemblies must be called by the Board of Directors at least fifteen calendar days in
advance and the notice must be published at least ten days before the meeting in a widely-distributed
newspaper in the geographical area in which Caixa Catalunya operates. It must also be published in
the Official Gazette of the Generalitat of Catalonia and the Official State Gazette. General Board
Members must be informed of the meeting, along with the date, time, venue of the meeting and
agenda, or the date, time and venue in the event of second meetings.
General Assemblies may be ordinary or extraordinary.
The Ordinary General Assembly is called once a year in the first semester of each calendar year
to approve the Annual Report, Balance Sheet and Profit and Loss Accounts of the previous year, the
proposal for application of surpluses and allocation of funds to Social Work, and any matters or
proposals on the agenda.
The Extraordinary General Assembly is called by the Board of Directors whenever it is deemed to
be in the interest of the company and at the request of one third of the members of the General
Assembly or one third of the members of the Board of Directors or with the agreement of the Control
Committee. The request must include the agenda to be dealt with at the Assembly.
A.1.9. Indicate the data on attendance of General Assemblies held during the year:
Attendance details
Date of General
Assembly
12-03-2008
24-11-2008
% of actual
% distance voters
attendance
91.930
0.000
90.680
0.000
Total
92
91
A.1.10. Detail the agreements adopted during the year by the General Assemblies:
The Ordinary General Assembly of Caixa Catalunya, called by the Board of Directors in
accordance with the Articles, was held on March 12, 2008, and attended by 148 General Board
Members. The following agreements were adopted:
Approval of the appointment of the General Manager, approval of the Management Report and of
the Individual and Consolidated Annual Accounts of 2007, distribution of the surplus, the management
of the Board of Directors, the Social Work Annual Report and budget settlement for 2007, and the
budget for 2008. The main lines of the Institution’s Plan of Action for 2008 were also approved, the
Board was authorized to agree the issue of financial instruments to attract third party funds, and the
external auditors for 2008 were appointed. It was also agreed to remove point 39.16 from the Articles.
On 24 November 2008, a Caixa Catalunya Extraordinary General Assembly was held after being
called under the terms of the Articles by the Board of Directors. It was attended by 146 general
members and its purpose was to amend the Articles to comply with new legislation on Catalan savings
banks resulting from the requirements of Decree 164/2008, introduced by the Government of
Catalonia on 26 August 2008. Pursuant to the Decree, town and city councils will increase their
representation on the Caixa Catalunya General Assembly in the local corporations group up to 70%
with county councils holding the remaining 30%. A change was also made to the rule for the
distribution of general members representing accountholders so that the areas with the greatest
number of accountholders will have greater representation. Other points passed concern the system
of conflicts of interest for general members.
9
A.1.11. Indicate the information supplied to General Board Members for General Assemblies.
Detail the systems in place to facilitate access to this information:
During the fifteen calendar days before the Assembly, General Board Members may study the
Report, Balance Sheet, Income Statement, the accounting and the budget of the Social Work scheme,
the Control Committee report and reports on the audits conducted, together with documentation
relating to other business on the agenda at the headquarters of the Institution.
The corresponding protocols are made available for study at the offices of the Secretary
Department and the governing bodies for the Board members who so request.
A.1.12. Describe the internal systems set up to ensure compliance with the agreements
adopted by the General Assembly:
The Control Committee is a governing body formed by Board Members of the General Assembly.
Its purpose is to ensure that the Board of Directors is managed in accordance with the general lines of
action indicated by the General Assembly and the corporate aims of the Institution. As part of its
supervisory function, the Control Committee: oversees the operation and activity of the Institution's
intervening bodies; is aware of external audit reports and the recommendations of the auditors;
checks each year's balance sheet and income statement; is aware of the reports of the Community
Projects Commission; prepares diverse periodical reports on the activity of the Institution to be
submitted to the Department of Economy and Finance of the Generalitat of Catalonia and submits a
report on its activity to the General Assembly at least once a year; requires the Chairman to call an
extraordinary General Assembly when it deems appropriate; controls the electoral processes of the
Assembly and the Board of Directors in conjunction with the Department of Economy and Finance of
the Generalitat of Catalonia, and proposes the cancellation of agreements violating current regulations
to the Board of Directors and, where necessary, proposes the suspension of these agreements
directly to the Department of Economy and Finance.
A.1.13. Indicate the address and means of access to corporate government information on
your website:
http://www.caixacatalunya.es/caixacat/cat/ccpublic/particulars/ccc/ccc_ccc.htm
The report on corporate governance is available at the website of Caixa Catalunya
(www.caixacatalunya.es), in the ‘Getting to Know Caixa Catalunya’ section, under the ‘Information for
Investors’ heading.
A.2.
Board of Directors
A.2.1. Complete the following table with the names of the Board Members:
Position on the Board
Name
NARCÍS SERRA SERRA
CHAIRMAN
JOAN GÜELL JUAN
FIRST VICE-CHAIRMAN
ANTONI LLARDÉN CARRATALÀ SECOND
VICE-CHAIRMAN
JOAN MANEL PLA RIBAS
SECRETARY
ANTONIA MARÍA SÁNCHEZ BOARD MEMBER
MORENO
CARME LLOBERA CARBONELL BOARD MEMBER
ESTANIS FELIP MONSONÍS
BOARD MEMBER
FRANCESC IGLESIES SALA
BOARD MEMBER
FRANCISCO JOSÉ VILLEGAS BOARD MEMBER
HERRERO
GEMMA LÓPEZ CANOSA
BOARD MEMBER
GENÍS GARRIGA BACARDÍ
BOARD MEMBER
JOAN ECHÁNIZ SANS
BOARD MEMBER
JORDI BERTRAN CASTELLVÍ
BOARD MEMBER
JOSEP ALONSO ROCA
BOARD MEMBER
JOSEP BURGAYA RIERA
BOARD MEMBER
JOSEP ISERN SAUN
BOARD MEMBER
JOSEP MOLINS CODINA
BOARD MEMBER
MANUEL MATOSES FORTEA
BOARD MEMBER
MATIES VIVES MARCH
BOARD MEMBER
10
Group represented
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
EMPLOYEES
EMPLOYEES
ACCOUNTHOLDERS
ACCOUNTHOLDERS
MONTSERRAT ROBUSTÉ
CLARAVALLS
SARA CARDONA RASO
BOARD MEMBER
ACCOUNTHOLDERS
BOARD MEMBER
EMPLOYEES
Total
21
Indicate the composition of the Board of Directors, broken down into member groups:
belongs
ACCOUNTHOLDERS
PERSONS
EMPLOYEES
Total
Number of Board
members
3
8
0
% of total
14.286
38.095
0.000
3
7
21
14.286
33.333
100.000
Indicate which members left the Board of Directors during the year:
Name
Leaving date
Where applicable, indicate the Board Members who are not General Board Members:
Name
A.2.2. Briefly describe the functions of the Board of Directors, differentiating between its own
functions and those delegated to it by the General Assembly:
Own functions:
The Board’s own functions are those determined in the Articles of the Institution:
- Ensure strict compliance with the Articles.
- Calling of the General Assembly.
- Submit the Report, Annual Balance Sheet, Profit and Loss Account, and proposed application to the
Institution’s aims to the General Assembly for approval, where appropriate.
- Submitting proposals to the General Assembly for the appointment and removal or recall of members
of the governing bodies.
- Delegate part of the functions it deems appropriate to an executive committee, Community Projects
committee or other committees, and to appoint the members of the latter, in accordance with the
Articles.
- Submitting to the General Assembly proposals that are expressly provided for in the Articles and
those deemed necessary or appropriate for the correct management and administration of the
Institution.
- Implement and demand the implementation of General Assembly agreements.
- Providing the Control Committee with the necessary information and background for performance of
its duty.
- Agreeing on the initiation of procedures for appointing General Board Members.
- Appointing and removing the Director General.
- Appointing committees and commissioning the reports it considers appropriate for a more in-depth
study of specific issues.
- Delegate the necessary authority to any committee, the Chairman or the Director General, either
permanently or for specific cases or instances.
- Administrating and managing the Institution's Social Work scheme, without prejudice to the
delegation of these functions to the Social Work Committee. In all events, the Board is responsible for
creating and abolishing or dissolving charity and/or community projects, whether the Institution's own
or those conducted in collaboration with others, and for setting up, merging and/or dissolving
foundations.
- Agree on the investment of funds, in accordance with the Articles, and to approve regulations,
agreements, deeds and other records and documents required to implement the latter.
11
- Proposing the reform of the Articles and regulation of the electoral system for members of governing
bodies, and the merger, dissolution or liquidation of the Institution.
- Adopt the decisions and conditions deemed necessary for the correct management and
administration of the Institution and the interests entrusted to its special care and attention, whenever
exceptional or unexpected situations occur.
- Proposing the appointment of External Auditors to the General Assembly, and commissioning and
being aware of those audits and reports deemed necessary.
Functions delegated by the General Assembly:
The delegated functions are the direct result of agreements made at the Ordinary General
Assembly held on 12.03.08:
Authorization was granted to the Board of Directors to agree the issue of financial instruments to
attract other funds, subordinated debt, debentures and any other securities. The Assembly approved
the granting of authorization to the Board of Directors for the latter to agree issues or programs of
issues of company debt, warrants, treasury bonds or bank commercial papers, mortgage bonds or
participations, mortgage transfer documents, subordinated debt, debentures and any other type of
fixed-income security, under the terms and conditions it deems convenient and in accordance with
applicable legislation, so long as the outstanding balance does not exceed the sum of 50,000 million
Euros or its equivalent exchange rate value at any one time.
Authorisation so that the Board itself can also delegate this authority to the Executive Committee
under the conditions referred to above.
Authorization was granted to the to Board to delegate the authority to the Director General or
Assistant Directors General to reach agreements on issues by determining the particular amounts,
terms, characteristics and financial conditions of each issue launched on the market, within the
framework of the securities-issue programs currently in force, or those approved by the Board of
Directors. The Director General and Assistant Directors General must report on their actions to the
Board of Directors and the Executive Committee, whichever is applicable. The powers referred to in
this paragraph may be delegated to the General Manager and to the Assistant General Managers
without distinction by the Executive Committee as long as the Board of Directors has expressly
authorised the same.
Authorization to grant whatever guarantees are deemed appropriate for issues or programs of
preferential participations and fixed-income securities launched on the market by subsidiaries of Caixa
Catalunya, up to an outstanding active balance of 2,500 million euros. And finally the Board was also
authorised to delegate this authority to the Executive Committee.
List the functions of the Board of Directors that cannot be delegated:
Of the functions mentioned above, the following may not be delegated:
- Calling of the General Assembly.
- Submitting the Report, Annual Balance Sheet, Profit and Loss Account, and proposed application to
the Institution’s aims to the General Assembly for approval, where appropriate.
- Submitting proposals to the General Assembly for the appointment and removal or recall of members
of the governing bodies.
- Submitting to the General Assembly proposals that are expressly provided for in the Articles and
those deemed necessary or appropriate for the correct management and administration of the
Institution.
- Providing the Control Committee with the necessary information and background for performance of
its duty.
- Agreeing on the initiation of procedures for appointing General Board Members.
- Appointing and removing the Director General.
- Appointing committees and commissioning the reports it considers appropriate for a more in-depth
study of specific issues.
- Administrating and managing the Institution's Social Work scheme, without prejudice to the
delegation of these functions to the Social Work Committee. In all events, the Board is responsible for
creating and abolishing or dissolving charity and/or community projects, whether the Institution's own
or those conducted in collaboration with others, and for setting up, merging and/or dissolving
foundations.
- Proposing the reform of the Articles and regulation of the electoral system for members of governing
bodies, and the merger, dissolution or liquidation of the Institution.
- Proposing the appointment of External Auditors to the General Assembly, and commissioning and
being aware of those audits and reports deemed necessary.
12
- Establishing the allowance of members of the governing bodies within the limits fixed by the
Department of Economy and Finance of the Generalitat of Catalonia.
A.2.3. Describe the functions of the members of the Board of Directors, as indicated in the
Institution’s Articles:
The functions of the Chairman of the Board are to: call and chair the meetings of bodies over
which he presides; determine which issues need to be debated and conduct meetings; sign using the
official signature of the Institution; ensure that applicable legal requirements are met; represent the
Institution formally before external bodies, and adhere to and ensure adherence to agreements
adopted by the governing bodies.
The function of the first and second Vice-chairman is to substitute, in this order, the Chairman of
the Board in his absence.
The Secretary of the Board certifies agreements adopted by the latter with the conformity of the
Chairman.
The Board Members are generally required to debate and vote as a group on all proposals put
forward and to formulate questions and requests regarding matters related to the authority of the
Board of Directors.
A.2.4. Indicate the authorities delegated to Board Members and to the Director General, where
applicable:
Board members
Brief description
Name
Director General
Name
ADOLF TODÓ ROVIRA
Brief description
THE DIRECTOR GENERAL CARRIES OUT THE
FUNCTIONS ACKNOWLEDGED AS THOSE OF HIS
POSITION IN THE ARTICLES OF THE INSTITUTION
(ARTICLE 46.6) AND IN ACCORDANCE WITH TOP
MANAGEMENT AND THE INSTRUCTIONS OF THE
BOARD OF DIRECTORS. 46.6)
A.2.5. Indicate the rules of the system for electing, appointing, accepting, re-electing,
evaluating, terminating and recalling Board Members. Describe the competent bodies,
procedures to be followed and the criteria applied in each of the procedures:
The term on the Board of Directors for members is six years. Renewals are carried out by halves
in each sector every three years, taking into account the proportionality of representation on the
Board.
The members of the Board of Directors are appointed by the General Assembly from among the
members of each representative sector following a proposal from the majority of the respective sector,
the Board of Directors, or 25% of the members of the Assembly. As an exception to this rule, up to two
members of the Board of Directors can be appointed – one representing the Local Corporations and
one representing account holders – from among individuals who are not members of the Assembly but
meet the relevant professional requirements.
In addition to the appointment of these Board Members, the same number of substitute members
are appointed for each sector, with the sole purpose of substituting Board Members for the time
remaining of their term in the event of termination or recall.
Vacancies arising on the Board during the term of the latter are covered by the substitute
members appointed previously from the respective group. Provisional appointments cannot be made.
The nominations for Board Members and their substitutes are submitted to the General Assembly,
which is the body authorized to appoint members of the Board of Directors and the Control
13
Committee. Appointments are held during renewal of the governing bodies, which takes place in the
first semester of the year, at the Ordinary General Assembly or at the Extraordinary General Assembly
continuing on from the latter.
The members of the Board of Directors are affected by the same requirements and
incompatibilities indicated in Articles 25 and 26 for the members of the General Assembly, except for
those in Articles 25.1.4 and 25.1.5 of these Articles of Association with regard to members of the
Board of Directors who are not members of the Assembly, yet who must still be account holders at the
time of their appointment.
Furthermore, the members of the Board of Directors must be aged under 75 when they are
elected and may not belong to the Board of Directors, the Control Commission or the General
Assembly of any other savings bank, deposit bank, loan entity, financial entity in general, or insurance
company. Additionally, no entity represented in the General Assembly may simultaneously have
members on the Board of Directors or the Control Committee, except the Founding Corporation.
Positions are usually accepted verbally when the appointed member is incorporated into the first
Board meeting that he/she is required to attend, and acceptance of the position is recorded in the
minutes of the meeting.
At the end of their term, members may be re-elected so long as they meet the conditions and
requisites, and complete the procedures established at their first appointment. The total term cannot
exceed 12 years, regardless of the sector that the member represents.
Members of the Board of Directors cease office in the following events: those established by
General Board Members; should any of the specific incompatibility clauses for members become
applicable to them, or for unexcused absence from more than one quarter of meetings during the
year, except where the General Assembly considers there to be a good reason for said absence.
Members appointed as staff representatives renounce their position on the Board if they retire or
cease to form part of the workforce for any other reason, or in the event of a definitive sanction in the
Institution's disciplinary proceedings for a very serious charge. In this case, while the regulatory
procedure is being dealt with, the member may provisionally cease office, with the approval of the
Board of Directors.
Any member who fails to pay a debt held with the Institution will lose his/her position as a Board
Member after such debt has been expressly demanded.
A.2.6. Are reinforced majorities other than the legal majorities required for any type of
decision?
YES
X
NO
Explain the system for the adoption of agreements by the Board of Directors, indicating at
least the minimum quorum for attendance and the type of majority required to adopt
agreements:
Adoption of agreements
Description of agreement
GENERAL
Quorum
51.00
–
ABSOLUTE
MAJORITY
OF
MEMBERS WITH
VOTING RIGHTS
PROPOSALS FOR THE
66.66
–
APPOINTMENT AND RECALL OF
ATTENDANCE OF
MEMBERS OF GOVERNMENT
TWO THIRDS OF
BODIES
MEMBERS WITH
VOTING RIGHTS.
APPOINTMENT OR TERMINATION OF 66.66
–
DIRECTOR GENERAL
ATTENDANCE OF
TWO THIRDS OF
MEMBERS WITH
VOTING RIGHTS.
14
Type of majority
MAJORITY OF THOSE
PRESENT
THREE
FIFTHS
OF
MEMBERS
WITH
VOTING RIGHTS.
THREE
FIFTHS
OF
MEMBERS
WITH
VOTING RIGHTS.
PROPOSALS TO MODIFY THE
ARTICLES AND REGULATION, AND
FOR THE MERGER, DISSOLUTION
AND LIQUIDATION OF THE
INSTITUTION
75.00 – THREE THREE
FIFTHS
OF
QUARTERS
OF MEMBERS
WITH
MEMBERS WITH VOTING RIGHTS.
VOTING RIGHTS.
A.2.7. Describe the internal systems set up to ensure compliance with agreements adopted by
the Board:
Once agreements have been adopted, the proposals are signed by the Director General and
communicated to the corresponding operating divisions of the Institution, which report on compliance
therewith, without prejudice to the internal control procedures put in place by the General Controller.
The agreements of the Board are recorded in the meeting minutes, which are passed on in their
entirety to the Control Committee to enable the latter to carry out its supervisory function.
A.2.8. State whether the Board of Directors governed by any regulation. If so, indicate the
content of this regulation:
YES
NO
X
See Addenda.
A.2.9. Explain the rules for calling Board meetings:
The Board of Directors meets whenever necessary for the good of the Institution and at least
once every two months. On average, the Board of Directors meets 16 times a year and whenever the
circumstances so dictate.
Meetings are called by the Chairman or whoever is carrying out the functions of the latter at the
time, in accordance with the Articles, on his/her own initiative, on the request of at least one third of
the voting members of the Board or at the behest of the Control Committee. The Executive Committee
and the Community Projects Committee may also request that a meeting be held if the minimum legal
quorum of the Board of Directors is reached. To obtain a positive response, the request must include
the agenda of the meeting, which should take place within a maximum of eight days of the request.
The Director General may also propose meetings.
Notice must be received at least forty-eight hours before the meeting, except in the event of
exceptional urgency, in which case the term is reduced to twelve hours. Notice must be given in
writing and include the meeting agenda.
Nonetheless, the Board will be considered to be called and constituted as a valid Universal Board
that may deal with any matter for which it is authorized if all of its members and the Director General
are present, and those attending unanimously agree to meet.
A.2.10. Indicate the events in which members of the Board may call Board meetings:
The Board of Directors may meet at the request of at least one third of the members of the Board.
A.2.11. Indicate the number of meetings held by the Board of Directors over the year. Where
applicable, indicate the number of times that the Board has met without its Chairman:
Number of Board meetings
Number of Board meetings without the Chairman
17
0
A.2.12. Indicate the information supplied to General Board Members for Board meetings. Detail
the systems in place to facilitate access to this information:
Proposals for all agreements include the background, the financial status of the organization with
which the operation is planned, and a comparison between the position of its accounts and those of
Caixa Catalunya, details of the operations and their economic feasibility, and the proposal to be
adopted in all its detail, except in extreme situations where these cannot be described and are thus
left to the consideration of the General Management.
15
The corresponding protocols are made available for study by the Board Members who so request.
To maintain the confidentiality of matters debated during Board meetings, at the end of the latter,
the protocols are safeguarded at the Secretariat General and Governing Bodies, where members may
study them afterwards.
A.2.13. Indicate the names of the Chairman and Executive Vice-chairmen, where applicable,
and the Director General or similar:
Position
GENERAL MANAGER
ASSISTANT DIRECTORGENERAL
FINANCIAL MANAGER
RESOURCES
AND
MANAGEMENT
CONTROL MANAGER
HUMAN RESOURCES AND
LEGAL SERVICES MANAGER
SALES MANAGER
Name
ADOLF TODÓ ROVIRA
JAUME MASANA RIBALTA
LLUIS GASULL MOROS
ANDREU PLAZA LOPEZ
MARIA GLORIA AUSIO ARUMI
FRANCISCO JOSÉ TARREGA
ROBERTOS
OSCAR PUIG LOVERDOS
MARKETING, INNOVATION
AND REMOTE CHANNELS
MANAGER
PRIVATE BANKING AND
ASSET
MANAGEMENT
MANAGER
PROPERTY MANAGER
RISK MANAGER
MERCEDES GRAU MONJO
EDUARDO MENDILUCE FRADERA
RICARD CLIMENT MECA
A.2.14. Indicate whether there are specific requirements for being appointed Chairman of the
Board, other than those for Board Members:
YES
X
NO
Description of requirements
Being a representative of the FOUNDING CORPORATION (Provincial Government of Barcelona).
A.2.15. Indicate whether the Chairman of the Board has the casting vote:
YES
X
NO
Matters in which the casting vote may be used
In any matter, in the event of a draw, the vote of the person chairing the meeting is decisive.
A.2.16. Indicate whether the individual and consolidated annual accounts submitted to the
Board for preparation are certified beforehand:
YES
NO
X
Indicate, if applicable, the names of those who certified the individual and consolidated
annual accounts of the Institution for their preparation by the Board:
Position
Name
A.2.17. Indicate whether mechanisms are put in place by the Board of Directors to prevent the
individual and consolidated accounts prepared by the latter from being submitted to the
General Assembly with reservations in the audit report:
YES
NO
X
Explanation of mechanisms
16
A.2.18. Describe the measures adopted to ensure that information is passed on to securities
markets in a fair and balanced way:
A.2.19. Indicate and explain which, if any, mechanisms the Bank has set up to maintain the
independence of auditors, financial analysts, investment banks and credit scoring agencies? If
so, which?
YES
X
NO
Explanation of mechanisms
There are no established mechanisms, however, the Bank does not participate in the management or
governing bodies of any of the companies or legal entities which supply of auditing, financial analysis or
credit scoring services.
A.2.20. Does the auditing firm carry out services for the Bank and/or its group, other than
auditing? If so, declare the sum of fees paid for these services and the percentage of the fees
invoiced to the Bank and/or its group.
YES
NO
Group
Bank
Sum of services other than auditing (thousands
of Euros)
Sum of services other than auditing/total
invoiced by the auditing firm (%)
Total
0
0
0.000
0.000
0
A.2.21. Indicate the number of consecutive years that the current auditing firm has audited the
annual accounts of the Bank and/or its Group. Indicate the number of years audited by the
latter as a percentage of the years in which the annual accounts have been audited:
Bank
Group
Bank
Group
Number of consecutive years
No. of years audited by the current auditing firm
No. of years for which the company has been audited (%)
A.2.22. Is there an Executive Committee? If so, indicate the names of its members:
YES
X
NO
EXECUTIVE COMMITTEE
Name
Position
NARCÍS SERRA SERRA
CHAIRMAN
ANTONI LLARDÉN CARRATALÀ
BOARD MEMBER
FRANCISCO JOSÉ VILLEGAS
BOARD MEMBER
HERRERO
JOAN ECHÁNIZ SANS
BOARD MEMBER
JOAN GÜELL JUAN
BOARD MEMBER
BOARD MEMBER
JOSEP ALONSO ROCA
BOARD MEMBER
JOSEP MOLINS CODINA
BOARD MEMBER
MONTSERRAT ROBUSTÉ
BOARD MEMBER
CLARAVALLS
ADOLF TODÓ ROVIRA
SECRETARY
A.2.23. Indicate the delegated functions and those set down in the Articles carried out by the
Executive Committee:
According to article 43.8 of the Articles, the powers of the Executive Committee are all those
delegated to it by the Board of Directors, which include:
17
- Complying with the Articles, regulations and agreements made by the Board and ensuring that
these are met.
- Studying the Director General’s proposals on fund investment, brokering, and other operations.
- Proposing the investments and operations it considers most appropriate to the interests of the
Institution, and making decisions on those within its scope.
- Resolving urgent matters and reporting on the resolution of the latter to the Board.
- Granting or refusing loans, credits and other operations requested of the Institution within the
limits and conditions established by the Board, and delegating this task to the Director General within
the limits and conditions considered appropriate.
- Reporting to the Board on all matters commissioned to it by the latter and resolving those
delegated to it by said Board.
- Drafting the Report, Annual Balance Sheet, and Income Statement, and putting forward
proposals for their application to the aims of the Bank.
- Deciding on the performance of all administrative activities, taxes and domains, within the limits
established by the Board.
- Studying and reporting on the proposals that the Director General or any member of the
Committee puts to it to resolve or, if necessary, submitting these to the Board.
- Concluding, within the limits set by the Board, all manner of contracts permitted by law, and
reaching agreements and submitting to arbitration in law and in equity, agreeing any provisions and
conditions it considers convenient.
- Accepting inheritances, legacies and donations. As regards the acceptance of inheritances, the
Institution is subject to the benefit of inventory system.
- Authorizing guarantees within the limits indicated by the Board of Directors to underwrite
customers of the Institution with regards all public or private institutions.
- Opening, activating and cancelling savings, current, and credit accounts, and other types of
account on behalf of the Institution.
- Adopting resolutions on the inauguration of offices and branches, and approving real-estate
purchases and resolving construction proposals for this purpose.
The Board of Directors approved the current financial limits of the powers described above at its
meeting held on 15 July 2008 with the following breakdown:
- Award of loans, credits, financing operations abroad and discounted drafts: secured up to the
limit of 60,000,000 euros per transaction and unsecured up to the limit of 30,000,000 euros per
transaction.
- Award of guarantees: secured up to 60,000,000 euros per guarantee or line of guarantee and
unsecured up to 30,000,000 euros per guarantee or line of guarantee.
- Leasing and factoring operations up to 60,000,000 euros per operation.
- Acquisition and disposal of real estate not set aside for agencies and branches, nor built by the
Caixa itself, in joint freehold nor obtained by virtue of legal proceedings taken against third parties, nor
acquired by the Caixa through adjudication or auction: up to a limit of 20,000,000 euros per operation.
A.2.24. If there is an Executive Committee, explain the degree of delegation and autonomy it
has for carrying out its functions as regards adopting agreements on the administration and
management of the Company:
The degree of autonomy stems from the limits of the powers indicated above as set by the
Articles and by the Board of Directors. Nonetheless, the Executive Committee has the authority to
make proposals on the matters of major interest submitted to the Board of Directors for approval.
The Board of Directors is regularly informed of the agreements adopted by the Executive
Committee.
A.2.25. Does the composition of the Executive Committee reflect the participation on the Board
of the different members, according to the Group they represent?
YES
X
NO
If not, indicate the composition of the Executive Committee
A.2.26. Is there an Audit Committee, or are the functions of the latter carried out by the Control
Committee? In the first instance, indicate the names of its members:
18
AUDIT COMMITTEE
Position
Name
A.2.27. Describe, where applicable, the functions carried out by the Audit Committee in
support of the Board of Directors:
In its role as “Audit Committee”, set down in current legislation, the Control Committee must:
propose the appointment of external auditors to the Board of Directors in order to submit the latter to
the General Assembly; supervise the Institution’s internal auditing services and be aware of the
financial information processes and internal control systems, and establish relations with the external
auditors to guarantee their independence and find out audit reports and the recommendations thereof.
A.2.28. List the members of the Remuneration Committee:
REMUNERATION COMMITTEE:
Name
NARCÍS SERRA SERRA
JOAN GÜELL JUAN
Position
CHAIRMAN
BOARD MEMBER
BOARD MEMBER
A.2.29. Describe the functions carried out by the Remuneration Committee in support of the
Board of Directors:
It reports to the Board of Directors or Executive Committee on the allowances of members of the
governing bodies and the general remuneration policy for management figures of the Institution.
A.2.30. List the members of the Investments Committee:
INVESTMENT COMMITTEE
Position
CHAIRMAN
BOARD MEMBER
BOARD MEMBER
Name
NARCÍS SERRA SERRA
JOSEP BURGAYA RIERA
JOSEP ALONSO ROCA
A.2.31. Describe the functions carried out by the Investments Committee in support of the
Board of Directors:
- It reports to the Board of Directors or Executive Committee on strategic or stable investments or
disinvestments, made both directly by the Institution and through its subsidiaries.
A strategic operation is considered to be the purchase or sale of any significant shareholding in a
listed company or participation in business projects with a management presence when the latter
borders the limit of 3% of the Institution’s computable net worth.
- It reports to the Board on the financial feasibility of the above investments and their
correspondence with the budgets and strategic plans of the Institution.
- To draw up an annual report on the investments of this nature made during the financial year.
A.2.32. Indicate, where appropriate, whether Board committees are governed by regulations,
the venue at which they are available for consultation, and the modifications made thereto over
the year. Indicate also whether an annual report has been voluntarily prepared on the activities
of each committee:
A.2.33. Are there any specific bodies with the authority to make decisions regarding business
shareholding operations? If so, indicate which:
YES
X
NO
19
Body/bodies with authority to make
decisions on business shareholding
operations
Board of Directors
Observations
IN ACCORDANCE WITH THE INSTITUTION’S
ARTICLES
A.2.34. Where applicable, indicate the procedural or informative requirements necessary to
reach agreements on business shareholding operations:
There are no special procedures in place for reaching agreements on business shareholding
operations, but any agreements adopted are always well documented and explained in full detail to
the members of the Board of Directors in as many sessions as are necessary or simply convenient,
following analysis and prior study by the Executive Committee.
A.2.35. Indicate the number of meetings held during the year by the following:
Number of meetings of the Remuneration
Committee
Number of meetings of the Investments Committee
Number of meetings of the Executive Committee or
delegate committee
A.2.36. List any other delegate or support committees set up by the Bank, where applicable:
COMMUNITY PROJECTS COMMITTEE
Position
CHAIRMAN
BOARD MEMBER
BOARD MEMBER
BOARD MEMBER
BOARD MEMBER
BOARD MEMBER
BOARD MEMBER
BOARD MEMBER
BOARD MEMBER
SECRETARY
Name
NARCÍS SERRA SERRA
CARME LLOBERA CARBONELL
GEMMA LÓPEZ CANOSA
JOAN GÜELL JUAN
MATIES VIVES MARCH
JOAN ECHÁNIZ SANS
JOSEP ISERN SAUN
ADOLF TODÓ ROVIRA
Describe the rules of the system for the election, appointment, acceptance and recall of
members of each of the bodies and indicate the functions of these boodies:
The Board of Directors sets up a Community Projects Committee made up of nine members
appointed by the Board from among its members, with the following representation: one member from
the LOCAL CORPORATIONS and COUNTY COUNCILS sector, three from the FOUNDING
CORPORATION sector, four from the ACCOUNTHOLDERS sector, and one member from the STAFF
sector.
The Chairman and First Vice-chairman of the Board of Directors also form part of the Community
Projects Committee, without this affecting the presence of their representative sector on the latter. The
Chairman of the Board of Directors also chairs the Community Projects Committee.
The purpose of the Community Projects Committee is to submit new projects of this nature and
the budgets of existing projects along with their management and administration for the approval of
the Board of Administrators, using the criteria of economic rationality and top service to the general
interests of the area in which they are carried out.
The foundations created for the administration and management of community projects are
instrumental and act in accordance with the guidelines and under the supervision and control of the
Board of Directors or Community Projects Committee, reporting to the latter with their agreements
within a maximum of 3 months.
Members of the Community Projects Committee are appointed at the meeting of the Board of
Directors following renewal in order to fill positions that have been left vacant due to members
reaching the end of their term. If any of the members should terminate office early, the Board of
Directors appoints one of the members of the Board from the same representational group through coopting to cover the vacancy for the remaining period.
20
Acceptance of the position may be carried out in a variety of ways, such as presence and
acceptance at the committee meeting itself or by written acceptance.
Members of the Community Projects Committee maintain their position while they are members of
the Board of Directors and are not removed from the Committee.
A.3.
Control Committee
A.3.1. Complete the table below with the names of the members of the Control Committee:
CONTROL COMMITTEE
Name
JOAN MARIA PAGÀ ORTIGA
ANTONI MONTSENY
DOMÈNECH
JOSEP BUENO ESCALERO
Position
CHAIRMAN
SECRETARY
CARLES HIJOS MATEU
AMALIA SABATÉ SIMÓ
JOAN CARLES MAS BASSA
BOARD MEMBER
BOARD MEMBER
BOARD MEMBER
DAVID MONTAÑÉS CLEMENTE
BOARD MEMBER
Group represented
ACCOUNTHOLDERS
FOUNDING
CORPORATION
FOUNDING
CORPORATION
EMPLOYEES
ACCOUNTHOLDERS
MUNICIPAL
CORPORATIONS
ACCOUNTHOLDERS
BOARD MEMBER
Number of members
7
belongs
ACCOUNTHOLDERS
PERSONS
EMPLOYEES
Total
Number of
commissioners
% of total
1
3
0
14.286
42.857
0.000
1
2
7
14.286
28.571
100.000
A.3.2. Has the Control Committee taken on the role of the Audit Committee?
YES
X
NO
Describe the functions of the Control Committee:
Functions
The purpose of the Control Committee is to ensure that the Board of Directors is managed in accordance
with the general lines of action indicated by the General Assembly and for the aims of the Institution
itself.
Within the framework of the supervisory function assigned by law to the Control Committee, it is
responsible for:
- Ensuring that the Board of Directors is managed in accordance with the general lines of action
indicated by the General Assembly and for the aims of the Institution.
- Overseeing the operation and activity of the Institution’s intervening bodies.
- Being aware of external audit reports and the recommendations of auditors.
- Checking each year’s Balance Sheet and Income Statement, and making any comments it deems
convenient.
21
- Preparing the reports established by regulations, which are submitted to the Department of Economy
and Finance of the Generalitat of Catalonia, and submitting the report on its activity to the General
Assembly at least once a year.
- Requiring the Chairman to call an Extraordinary General Assembly when it deems this appropriate.
- Controlling the electoral processes of the Assembly and the Board of Directors in conjunction with the
Department of Economy and Finance. The retiring Control Committee also controls the electoral process
for the renewed Control Committee.
- Being aware of the reports of the Community Projects Committee and providing its opinion on the latter.
- Proposing the cancellation of agreements violating current regulations to the Board of Directors and,
where necessary, proposing the suspension of these agreements directly to the Department of Economy
and Finance of the Generalitat of Catalonia.
A.3.3. Describe the organization, operating rules, and responsibilities of the Control
Committee:
In addition to those indicated in A.3.2, the Control Committee, after hearing the Board of Directors
if the case permits, must immediately inform the Department of Economy and Finance of any
irregularities detected in the exercise of its functions, to enable the latter to adopt the appropriate
measures, without prejudice to its own authority to request a General Assembly and its obligation to
inform the Bank of Spain or other relevant national organization directly on matters related to its
competence.
In its role as “Audit Committee”, set down in current legislation, the Control Committee must also:
propose the appointment of external auditors to the Board of Directors in order to submit such
appointment to the General Assembly; supervise the Institution’s internal auditing services and be
aware of the financial information processes and internal control systems, and establish relations with
the external auditors to guarantee their independence and find out audit reports and the
recommendations thereof.
A.3.4. Describe the system in place, where applicable, to allow the Control Committee to find
out the agreements adopted by administrative bodies in order to carry out its auditing and veto
tasks:
The Control Committee has access to the full minutes of meetings of the Board of Directors and
Executive Committee, in order to oversee decisions and monitor the agreements adopted, as part of
its auditing and veto tasks.
A.3.5. Indicate the number of meetings held by the Control Committee during the year:
Number of meetings of the Control Committee
15
A.3.6. Indicate the information provided to commissioners for Control Committee meetings.
Detail the systems in place to facilitate access to this information:
Commissioners have access to the full minutes of meetings of the Board of Directors and
Executive Committee, in order to oversee decisions and monitor the agreements adopted. The
Director General always explains the most significant agreements to the commissioners.
Moreover, for the exercise of its Audit Committee tasks, the General Comptroller and External
Auditors report directly to the Control Committee on matters of its authority as required.
The corresponding protocols containing the full minutes of the meetings of the Board of Directors
and Executive Committee, are made available for analysis by the commissioners.
To maintain the confidentiality of matters debated during Board meetings, at the end of the latter,
the protocols are safeguarded at the Secretariat General and Governing Bodies, where members may
study them afterwards.
22
A.3.7. Explain the rules of the system for the election, appointment, acceptance and recall of
Control Committee members:
The Control Committee consists of seven members elected by the General Assembly from among
its members who are not on the Board of Directors.
The Control Committee represents the sectors of the General Assembly as follows: one member
from the LOCAL CORPORATIONS AND COUNTY COUNCILS sector, two from the FOUNDING
CORPORATION sector, three from the ACCOUNTHOLDERS sector, and one member from the
STAFF sector.
The Committee chooses a Chairman and a Secretary from among its members. In the event of
absence, the latter are substituted by the oldest and the youngest member, respectively, at the
meeting. The Chairman is appointed by the Committee from among the members representing the
ACCOUNTHOLDERS group.
The procedure for submitting nominations for the appointment of members of the Committee
(position-holders and their substitutes), and for the cease in office or renovation is the same as that in
place for members of the Board of Directors. Members of the Control Committee must meet the same
conditions and requirements as members of the Board of Directors, and they also have the same
incompatibilities.
Representatives of corporations or institutions with representatives on the Board of Directors,
except for the FOUNDING CORPORATION, may not be elected members of the Control Committee.
Positions are usually accepted verbally, when the nominated member is incorporated into the first
Committee meeting that he/she is required to attend, and acceptance is recorded in the minutes of the
meeting.
The term of the position, causes of termination and the procedure for filling vacancies are the
same as for members of the Board of Directors.
A.3.8. Describe the internal systems set up to ensure compliance with the agreements adopted
by the Control Committee:
Every six months, the Control Committee issues a report on the activities performed over the six
months prior to the date of the report, which is sent to the Department of Economy and Finance of the
Generalitat of Catalonia. This report indicates the number of meetings held, the initiative for the
meeting and the matters dealt with related to the general lines of the plan of action approved by the
General Assembly, along with deviations and any other matter relating to the financial and economic
management of the Institution whose significance dictates that it must be dealt with by the Committee.
Once a year, it submits a report on its activity to the General Assembly.
A.3.9. Explain the rules for calling Control Committee meetings:
In compliance with its functions, the Control Committee must meet whenever called by its
Chairman, on its own initiative or at the request of a third of its members and at least once a quarter.
On average, it meets around fifteen times a year. As part of its functions, it can ask the Board of
Directors and the Director General for the background and information it considers necessary.
Notice of the meeting must be made at least forty-eight hours in advance, in writing, and should
indicate the purpose of the meeting. In exceptional situations where the urgency of the matters to be
dealt with so requires, in the opinion of the Chairman of the Committee, notice may be given just
twelve hours in advance.
Nonetheless, the Committee is considered to be called and constituted as a valid Universal
Committee that may deal with any matter for which it is authorized if all of its members are present
and those attending unanimously agree to meet.
A.3.10. Indicate the events in which Commissioners may request a Control Committee meeting
to deal with matters they consider relevant:
On the request of one third of its members.
23
A.3.11. Describe the system for the adoption of agreements by the Control Committee,
indicating at least the rules for the constitution and quorum for attendance:
Adoption of agreements
Description of agreement
GENERAL
REQUIRING THE CHAIRMAN TO CALL
AN
EXTRAORDINARY
GENERAL
ASSEMBLY
PROPOSING THE CANCELLATION
OF AGREEMENTS INFRINGING
CURRENT REGULATIONS TO THE
BOARD OF DIRECTORS.
REPORTING TO THE DEPARTMENT
OF ECONOMY AND FINANCES OF
THE GENERALITAT OF CATALONIA
ON IRREGULARITIES DETECTED IN
THE EXERCISE OF THE FUNCTIONS
OF THE BOARD OF DIRECTORS.
B
Quorum
51.00 – THE
CONTROL
COMMITTEE IS
CONSIDERED
TO BE VALIDLY
CONSTITUTED
WHEN
ATTENDED BY
THE
ABSOLUTE
MAJORITY OF
VOTING
MEMBERS.
51.00 – THE
CONTROL
COMMITTEE IS
CONSIDERED
TO BE VALIDLY
CONSTITUTED
WHEN
ATTENDED BY
THE
ABSOLUTE
MAJORITY OF
VOTING
MEMBERS.
51.00 – THE
CONTROL
COMMITTEE IS
CONSIDERED
TO BE VALIDLY
CONSTITUTED
WHEN
ATTENDED BY
THE
ABSOLUTE
MAJORITY OF
VOTING
MEMBERS.
51.00 – THE
CONTROL
COMMITTEE IS
CONSIDERED
TO BE VALIDLY
CONSTITUTED
WHEN
ATTENDED BY
THE
ABSOLUTE
MAJORITY OF
VOTING
MEMBERS.
Type of majority
51.00 – THE MAJORITY
OF ITS MEMBERS
MUST VOTE THE SAME
WAY FOR
AGREEMENTS TO BE
DEEMED VALID. THE
CHAIR OF THE
MEETING HAS THE
DECIDING VOTE IN
THE EVENT OF A
DRAW.
51.00 – THE
FAVOURABLE VOTE
OF THE ABSOLUTE
MAJORITY OF ITS
VOTING MEMBERS.
51.00 – THE
FAVOURABLE VOTE OF
THE ABSOLUTE
MAJORITY OF ITS
VOTING MEMBERS.
51.00 – THE
FAVOURABLE VOTE OF
THE ABSOLUTE
MAJORITY OF ITS
VOTING MEMBERS.
CREDIT, BOND AND SECURITY OPERATIONS
B.1. Describe any credit, bond or security operations carried out directly, indirectly, or through
adhered or equipped companies or investees, with members of the Board of Directors, first-degree
relatives or companies or institutions controlled by the latter, according to Article 4 of Law 24/1988
(July 28) on the Securities Market. Indicate the conditions, including the financial conditions, of
these operations:
24
Name of Board
Member
Business name of
Nature of the
the Bank or
operation
adhered or
equipped
institution or
investee
FRANCISCO
CAIXA
CREDIT
JOSÉ VILLEGAS CATALUNYA
ACCOUNT (TO
HERRERO
COMPANY)
Amount
(thousands of
Euros)
Conditions
190 TERM: 1 YEAR;
INTEREST: EUR 3
M. + 2.7%
PERSONAL
GUARANTEE
FRANCISCO
CAIXA
JOSÉ VILLEGAS CATALUNYA
HERRERO
LEASING (TO
COMPANY)
10 TERM: 1 YEAR;
INTEREST: EUR 3
M. + 2.6 %
PERSONAL
GUARANTEE
JOAN MANEL PLA CAIXA
RIBAS
CATALUNYA
GUARANTEE
RIBAS
CATALUNYA
DISCOUNT
CLASSIFICATION
(TO COMPANY)
RIBAS
CATALUNYA
CREDIT
ACCOUNT (TO
COMPANY)
3 TERM:
INDEFINITE;
QUARTERLY
COMMISSION: 2
%
PERSONAL
GUARANTEE
103 TERM: 1 YEAR;
INTEREST: EUR
3 M. + 1.25%
PERSONAL
GUARANTEE
25 TERM: 1 YEAR;
EUR 3 M. + 1.5%
PERSONAL
GUARANTEE
RIBAS
CATALUNYA
FOREIGN
TRADE
FINANCING
(TO COMPANY)
32 TERM: 1 YEAR;
INTEREST:
LIBOR/EURIBO
R + 1.8%
PERSONAL
GUARANTEE
NARCÍS
SERRA
SERRA CAIXA
CATALUNYA
CREDIT
ACCOUNT (TO
FOUNDATION)
50 TERM: 10
MONTHS;
INTEREST
: EUR 3 M.
+ 1.3%
PERSONAL
GUARANTEE
NARCÍS
SERRA
SERRA CAIXA
CATALUNYA
PERSONAL LOAN
(TO FOUNDATION)
250 TERM: 4 YEARS;
INTEREST: EUR 3
M. + 1.5%
PERSONAL
GUARANTEE
adhered or equipped companies or investees, with members of the Control Committee, first-degree
relatives or companies or institutions controlled by the latter, according to Article 4 of Law 24/1988
(July 28) on the Securities Market. Indicate the conditions, including the financial conditions, of
these operations:
25
Name of the
Commissioner
DAVID
MONTAÑÉS
CLEMENTE
Business name of
Nature of the
the Bank or
operation
adhered or
equipped
institution or
investee
CAIXA
LOAN (TO
CATALUNYA
RELATIVE)
JOSEP
BUENO CAIXA
ESCALERO
CATALUNYA
DISCOUNT
CLASSIFICATION
(FAMILY
BUSINESS)
JOSEP
BUENO CAIXA
ESCALERO
CATALUNYA
CREDIT
ACCOUNT
(FAMILY
BUSINESS)
JOAN
CARLES CAIXA
MAS BASSA
CATALUNYA
DEBT
FACTORING
COMPANY)
LOAN (TO
COMPANY)
JOSEP
BUENO CAIXA
ESCALERO
CATALUNYA
Amount
(thousands of
Euros)
Conditions
86
TERM: 15 YEARS;
INTEREST EUR 1
YEAR + 0.9%
MORTGAGE
GUARANTEE
132
TERM: 1 YEAR;
INTEREST: EUR
3 M + 1.75%
PERSONAL
GUARANTEE
TERM: 1 YEAR
INTEREST: EUR 3
M +1.9%
PERSONAL
GUARANTEE
SEE NOTE IN
SECTION K
5
4
(TO
420
TERM: 33 YEARS;
INTEREST: EUR
BOE
+
0.8;
MORTGAGE
GUARANTEE
adhered or equipped companies or investees, with parliamentary forces with representation on
local corporations and autonomous legislative assemblies that have participated in the electoral
process of the Savings Bank:
Name of political
party
CONVERGÈNCIA
DEMOCRÀTICA
DE CATALUNYA
UNIÓ
DEMOCRÀTICA
DE CATALUNYA
INICIATIVA PER
CATALUNYA
VERDS
NOUS
HORITZONS
PRIVATE
FOUNDATION
Nature of the
Business name of
the Bank or
operation
adhered or
equipped
institution or
investee
CAIXA
CREDIT
CATALUNYA
ACCOUNT
Amount
(thousands of
Euros)
Conditions
900
TERM: 2 YEARS;
INTEREST: 4.99%
CAIXA
CATALUNYA
MORTGAGE
LOAN
1,200
TERM: 18 YEARS;
INTEREST: 7.32%
CAIXA
CATALUNYA
CREDIT
ACCOUNT
300
TERM: 1 YEAR,
INTEREST: 5.08%
CAIXA
CATALUNYA
CREDIT
ACCOUNT
300
TERM: 1 YEAR,
INTEREST: 5.08%
B.4. Indicate the current position of credits granted to parliamentary forces with representation on
local corporations and autonomous legislative assemblies that have participated in the electoral
process of the Savings Bank:
As of 31/12/2008, the outstanding balance of credits granted to parliamentary forces and autonomous
legislative assemblies with representation in local corporations amounts to 7,757 thousand Euros and
none of the operations are in arrears.
Breakdown of credits (in thousands of Euros):
Convergència Democrática de Catalunya: 2,441
26
Fundació President Josep Irla - ERC: 58
Iniciativa per Catalunya - Verds: 246
Partit dels Socialistes de Catalunya: 1,766
PSC-PSC-PSOE-CPC: 202
Uniò Democrática de Catalunya: 3,044
C
Describe the credit operations held with public institutions, including regional bodies, that have
designated General Board Members:
Name of the public institution: BADALONA TOWN COUNCIL
Nature of the operation
LOCAL CORPS. COUNCIL AGREEMENT
FACTORING (DEBTOR)
FLOATING-RATE LOAN
Amount
(thousands of
Euros)
11,621
2
2,066
Names of General Board Members designated
FRANCISCA TERUEL LAGUNAS
Name of the public institution: BARCELONA TOWN COUNCIL
FACTORING (DEBTOR)
Amount
(thousands of
Euros)
168
EUGENI FORRADELLAS BOMBARDÓ
CARLES MARTÍ JUFRESA
RICARD MARTÍNEZ MONTEAGUDO
ASSUMPTA ESCARP GIBERT
Name of the public institution: L'HOSPITALET DE LLOBREGAT TOWN COUNCIL
Amount
(thousands of
Euros)
20,753
Name of the public institution: LLEIDA TOWN COUNCIL
FACTORING (DEBTOR)
Amount
(thousands of
Euros)
958
MONTSERRAT MÍNGUEZ GARCIA
Name of the public institution: MATARÓ TOWN COUNCIL
FACTORING (DEBTOR)
27
Amount
(thousands of
Euros)
16,042
82
JAUME GRAUPERA VILANOVA
Name of the public institution: SABADELL TOWN COUNCIL
Amount
(thousands of
Euros)
19,883
JOAN BOSCH PONS
Name of the public institution: SANTA COLOMA DE GRAMENET TOWN COUNCIL
LOCAL CORPS. GENERALITAT LOCAL AGREEMENT
FACTORING (DEBTOR)
Amount
(thousands of
Euros)
7,926
1,905
384
Name of the public institution: TERRASSA TOWN COUNCIL
LOCAL CORPS. GENERALITAT LOCAL AGREEMENT
Amount
(thousands of
Euros)
19,670
9,647
JORDI LABÒRIA MARTORELL
Name of the public institution: MADRID TOWN COUNCIL
FACTORING (DEBTOR)
Amount
(thousands of
Euros)
134
JAVIER BASSO ROVIRALTA
Name of the public institution: LA SEGARRA COUNTY COUNCIL
GUARANTEE
Amount
(thousands of
Euros)
68
SALVADOR BORDES BALCELLS
Name of the public institution: L’ALTA RIBAGORÇA COUNTY COUNCIL
FACTORING (DEBTOR)
Amount
(thousands of
Euros)
92
JOAN PERELADA RAMON
28
Name of the public institution: GIRONÉS COUNTY COUNCIL
FACTORING (DEBTOR)
Amount
(thousands of
Euros)
172
DAVID MASCORT SUBIRANAS
Name of the public institution: PALLARS SOBIRÀ COUNTY COUNCIL
FACTORING (DEBTOR)
Amount
(thousands of
Euros)
11
ÀNGEL GUIU ABELLA
Name of the public institution: EL PLA DE L'ESTANY COUNTY COUNCIL
FACTORING (DEBTOR)
Amount
(thousands of
Euros)
49
JORDI XARGAY CONGOST
Name of the public institution: BARCELONA DIPUTACIÓ (PROVINCIAL COUNCIL)
GUARANTEE LINE
FLOATING-RATE LOAN
Amount
(thousands of
Euros)
14
9,017
ALBERTO FERNÁNDEZ DÍAZ
AMADEO JUAN PRAT
ÀNGEL FERNÀNDEZ MARTÍNEZ
ÀNGEL MIRET SERRA
ANTONI MONTSENY DOMÈNECH
ANTONIA MARÍA SÁNCHEZ MORENO
CARLES SAMPONS SALGADO
CELESTINO ANDRÉS SÁNCHEZ RAMOS
EDUARD GISBERT AMAT
EMILI MEDAN ANÉ
FERRAN MARTÍNEZ RAMOS
FRANCESC SÁNCHEZ ARCHS
FRANCISCO GARCIA PRIETO
HELENA ARRIBAS ESTEVE
JAUME CIURANA LLEVADOT
JAUME RABEYA CASELLAS
JESÚS CODERA DUASO
JOAN CARLES DEL RIO PIN
JOAN ECHÁNIZ SANS
JOAN LAGUNAS RIERA
JOAN PUIGDOLLERS FARGAS
JOAN RECASENS GUINOT
29
JOAN SABATÉ BORRAS
JORDI AYMAMÍ ROCA
JORDI MOLTÓ BIARNÉS
JOSEP AZUARA GONZÁLEZ
JOSEP CANAL CODINA
JOSEP LLUÍS MORLANES GALINDO
JOSEP MARIGÓ COSTA
JOSEP MAYORAL ANTIGAS
JOSEP MOLINS CODINA
JOSEP RAMONEDA MOLINS
JUAN JOSÉ FERNÁNDEZ MARTÍN
LLUÍS SACREST VILLEGAS
MAITE VILALTA FERRER
MARCEL ESTEVE ROBERT
MARIÀ NICOLÀS ROS
MATIES VIVES MARCH
MIQUEL AGUILÀ BARRIL
MIQUEL ARISA COMA
NARCÍS SERRA SERRA
NÚRIA BOZZO DURAN
ORIOL CARBÓ SERIÑANA
ANDREU FRANCISCO ROGER
PERE PRAT BOIX
RAMON CAMPS ROCA
RAMON RIERA MACIÀ
SANTIAGO CAYUELA TOMÁS
SIXTE MORAL REIXACH
XAVIER GARCIA ALBIOL
D
LINKED OPERATIONS AND INTRA-GROUP OPERATIONS
D.1. List any significant operations carried out by the Institution with the members of the Board of
Directors:
Name
Amount
(thousands of
Euros)
D.2. List any significant operations carried out by the Institution with the members of the Control
Committee:
Name
Amount
(thousands of
Euros)
D.3. List any significant operations carried out by the Institution with its management staff:
Name
Amount
(thousands of
Euros)
D.4. List any significant operations carried out by the Institution with the administrators and
management staff of companies and institutions or the Institution’s Group:
Name
Business name of the
Group institution
30
Nature of the
operation
Amount
(thousands of
Euros)
D.5. List any significant intra-group operations:
Business name of the Group
institution
E
Brief description of the
operation
Amount
(thousands of
Euros)
GROUP BUSINESS STRUCTURE
E.1. Describe the Group’s business structure, indicating the role of each organization in the series
of services offered to customers:
Group business structure
The Caixa Catalunya Group is made up of a series of financial and non-financial companies whose most
significant activities are life insurance and pension, investment funds, real estate development and
operating services.
Services offered to customers
Name of group institution
CAIXA CATALUNYA
Role in the services offered
SAVINGS BANK
ASCAT MEDIACION OPERADOR DE BANCA SEGUROS VINCULADO S.L.
INSURANCE BROKERAGE
ASCAT SEGUROS GENERALES S.A.
GENERAL INSURANCE (NON-LIFE)
ASCAT VIDA S.A.
LIFE INSURANCE AND PENSION-FUND MANAGEMENT
CAIXA CATALUNYA ADMINISTRACIÓ I GESTIÓ DE SERVEIS S.A.
SERVICES COMPANY
CAIXA CATALUNYA GESTIÓ S.A.
MANAGEMENT AND ADMINISTRATION OF GROUP INVESTMENT INSTITUTIONS
CAIXA CATALUNYA INTERNAC. FINANCE LTD.
FINANCE
31
CAIXA CATALUNYA ONLINE S.L.
INTERNET SERVICES
CAIXA CATALUNYA PREFERENTS S.A.
FINANCE
CAIXA CATALUNYA SERVEIS EMPRESES S.L.
SERVICES COMPANY
CAIXA CATALUNYA TEL-ENTRADA S.L.
INTERNET PORTAL
CENTRE LÚDIC DIAGONAL S.A.
REAL-ESTATE DEVELOPMENT
GESTIÓ D'ACTIUS TITULITZATS S.A.
SECURITISATION FUND MANAGEMENT
INVERCARTERA CAPITAL SCR S.A.
HOLDING COMPANY
INVERCARTERA ENERGIA S.L.
HOLDING COMPANY
INVERCARTERA INTERACIONAL S.L.
HOLDING COMPANY
INVERCARTERA S.A.
HOLDING COMPANY
PROCAM S.A.
32
REAL-ESTATE DEVELOPMENT
ACTIVOS MACORP S.L.
MANAGEMENT OF DEVELOPMENTS UNDER CONSTRUCTION
GESCAT VIVIENDAS EN COMERCIALIZACION S.L.
FINISHED REAL ESTATE ASSET MANAGEMENT
GESCAT GESTIO DE SOL S.L.
LAND MANAGEMENT
E.2. Indicate the geographical distribution of branches:
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
Asturias
Valencia
Branches outside Spain
Total
Number of
branches
72
11
26
2
9
12
752
4
10
16
2
126
23
5
17
2
113
1
1,203
E.3. Indicate, where applicable, the names of members of the governing bodies with administrative
or management positions in organizations forming part of the Bank’s group:
Name of member of governing
body
F
Business name of the Group
institution
Position
RISK-CONTROL SYSTEMS
F.1. Describe, where applicable, the risk-control systems in place for the activities of the
Institution:
Caixa Catalunya’s risk management model is ultimately the responsibility of the Board of Directors,
which can delegate responsibility to the Executive Committee and the Management Committee. Among
other aspects, the governing bodies approve matters related to the credit-rating tools or models used and
the processes implemented for this purpose, the methods for identifying and measuring credit, market,
33
operational, structural interest rate and balance sheet risk, and the appropriate mechanisms for reviewing
and controlling the policies and procedures for risk management.
Caixa Catalunya has been working towards the introduction of the New Basel Capital Accord using
advanced models for all Pillar 1 risk types. Strategic Plans have included initiatives that covered all the
necessary developments to the Risk Platforms to ensure complete adaptation to the NBCA requirements
as regards the most advanced methodologies for the different types of credit, market and operational risk.
These methodologies enable the Institution to calculate its equity requirements in accordance with its risk
profile. In June 2008 the Bank of Spain authorised the institution’s advanced credit risk management
model and its use in calculating capital requirements. The other operational and market risk structures
have also been adapted to the approach of the new Solvency Circular.
In 2008 monitoring dossiers for portfolios subject to advanced models have been updated and the
internal validation cycle 2007-2008 has been carried out for each risk, which has ended with the delivery of
their Validation Reports.
In order to comply with the provisions of the NBCA and the Bank of Spain’s Circular 3/2008, Caixa
Catalunya has modified its internal risk management structure in order to ensure effective risk control and
management. This entails a decentralised risk management model with three independent areas which
round off the basic risk function cycle through acceptance, control and monitoring and recovery of the risks
inherent in financial activity. They report to the same management body, Risk Management, and hence
their policies are aligned. This in turn is added to by internal audit and internal validation functions acting
separately from the previous ones.
The hierarchical structure is as follows:
Board of Directors
Management Committee
General Management
Dept. Internal Audits
Assistant General Manager
Risk Management
Dept. Internal Validation
Three areas report to Risk Management:
The Risk Acceptance area, the Risk Control area and the Monitoring and Recovery area.
The main function of the Risk Acceptance area is to lay down risk acceptance policy by applying quality
standards and leading any initiatives which affect the design of risk rating. The following departments with
their functions and missions report to this area:
Private Individuals and Small Enterprises Risk analyses and puts forward loan operations for
households and small enterprises.
Developer Risk analyses and puts forward loan operations for property development.
Company Risk analyses and puts forward loan operations for companies, institutions and project
financing.
The main function of the Risk Control Area is to develop and implement the New Basel Capital Accord
(Basel II) and to control the institution’s risk and solvency policies. This Area covers the following functions
divided into different departments:
The mission of Credit Risk is to map out platforms and processes which enable the application of
internal models for risk management together with uses and regulations.
The mission of Market and Balance Sheet Risk is to map out a management model for market risk,
balance sheet risk and wholesale credit risk.
The mission of Operational Risk is to map out and implement the Caixa Catalunya Group’s qualitative
operational risk management cycle. It quantifies Operational Risk.
The mission of Solvency and Global Risk is to monitor the Group’s solvency, draw up and monitor the
Capital Adjustment Plan and apply and control external risk regulations.
The mission of Corporate Rating and the Public Sector is economic and financial analysis of
counterparties for the Corporate and Public Sector segments.
34
The main function of the Monitoring and Recovery Area is to put forward and apply monitoring and
recovery policies for natural and artificial persons by laying down guidelines for action based on the type of
risk and customer profile. This Area covers the following functions:
The mission of Risk Monitoring is to monitor, prevent and recover credit risks awarded to companies
through dynamic analysis of the economic and asset position of customers.
The mission of Recovery is to recover bad debts.
The mission of Legal Disputes is to drive and monitor developments in legal proceedings and maintain
process quality in order to enhance debt recovery.
The mission of Bankruptcy is to detect and identify instances of bankruptcy and ensure maximum
recovery of the sums involved.
The Internal Validation Department reports directly to Risk Management and is tasked with checking
that internal credit, market and operational risk models approved by the Supervisor are working properly
and are fully implemented in the institution’s management (use test).
The role of the Internal Auditing department in Caixa Catalunya’s risk-management model is based on
the chief aim of examining and evaluating the Institution’s risk management model continuously,
independently and objectively. This ensures there are sufficient resources to cover all responsibilities and
the correct application of internal models from the branch network and the departments involved in award
operations.
In addition Caixa Catalunya has a number of Committees whose members include staff from the Areas
referred to above. The list of Committees operating in the institution is given below:
Management Committee
Expanded Management Committee featuring representation of the sales network and central
departments designed to be a cross-cutting chain for the entire organisation.
Solvency Committee
Arrears Committee
Market Crisis Committee
Assets and Liabilities Committee
Audits Committee
Risk Committees:
Acceptance Area Risk Committees
Branch Risk Committees
Liquidity Committee
Operational Risk Committee
Assets Acquisition Committee
Treasury Front Office Committee
Operations Structuring Committee
Investment Committee
Securitisations Committee
Refinancing Committee
Wholesale Risk Committee
Risk management in the Caixa Catalunya group is dealt with under the concept of a Global RiskManagement System. The aim is to carry out advanced management of the latter to generate better
information on customer credit ratings and to be able to measure and follow its evolution constantly,
dynamically and effectively. To that end, and in addition to having exhaustive mechanisms for control and
calculation of capital requirements for Basel Pillar I credit, market and operational risks, risks which the
institution has identified and to which it might be exposed are managed and an economic capital figure is
calculated.
1. Credit risk
This is defined as the probability that a customer cannot meet his/her credit commitments with the
Group under the agreed conditions.
Caixa Catalunya has different procedures and management tools to do this:
35
Credit-rating assessment systems
Caixa Catalunya classifies its credit exposure into internal segments and rates them using scoring tools
in the case of individuals and rating in the case of business segments, real-estate development,
corporations, and the public sector.
The scoring models have been used by the Institution since September 2000 and have linked the
decision to grant and/or deny credit based on customer credit ratings since December 2002. It offers a
dual approach based on reactive granting and proactive behaviour models. The corporate rating models
have been in place since October 2003 and include statistical models covering customers and noncustomers, and expert models based on the Institution’s internal experience. The use of these models is
absolutely essential for the approval and monitoring of operations. In addition to this requirement, during
2007 the granting of operations to companies has been linked to a risk assessment representing the
expected loss of the operation. This measure takes into account the customer’s creditworthiness and what
guarantees the operations offers. This thus represents a new step forward which will allow Caixa
Catalunya to improve its risk management and achieve the risk profile that the Institution regards as
appropriate.
This year the implementation of two new expert credit quality rating model methods for the Corporate
and Public Sector segments has been completed. These models are based on the expert judgement
method unlike the other models which are statistical. A new department, reporting functionally to the Risk
Control Area, brings together specialist analysts for these segments. This year the process of achieving
Bank of Spain approval for these models has also begun.
In 2008 a Mortgages model has been introduced specifically for the non-national residents segment.
1.1 Probability of Default (PD)
The use of lending quality assessment models allows Caixa Catalunya to ascertain the probability
of default (PD) for each customer assessed. This probability of default is defined as the likelihood that
a customer will go into arrears within 12 months following the credit rating.
This risk parameter is obtained from the rating that the credit quality model gives to the customer.
To get this rating, information from various sources is used, such as the customer’s banking
behaviour, information on financial statements in the case of companies, and information of a
qualitative nature.
Each PD value is given a score on the master scale. This scale, which is used by all Caixa
Catalunya models, enables comparisons to be made between customers, even if they have been
assessed by different models.
The methodology used to obtain the PD associated with each score follows the Solvency Circular
guidelines in the sense that as well as taking into account the arrears of Caixa Catalunya’s past
portfolio, it also includes macroeconomic variables that allow it to gauge a complete economic cycle in
the estimations it makes.
During 2008, the methodology used by the Institution was adapted to the requirements established
by the Bank of Spain in the context of the approval process. Compliance with these requirements has
been satisfactory, according to the Supervisor.
1.2 Exposure (EAD)
Exposure analysis allows the Institution to model the evolution of the level of use of credit risk
operations subject to a loan limit. This allows us to estimate how much the debt will be at the time the
default takes place.
The information used to estimate the EAD is based on the history of defaults with the Institution,
taking into account the usage levels of operations that have gone into arrears in the months prior to
the default.
As with the PD, in 2008 the internal methodology for calculating the EAD parameter was adjusted
to the observations made by the Supervisor and the outcome was given a positive rating. In 2008 the
internal segment has been used to obtain the differentiated risk conversion factors for Credit
Accounts.
36
1.3 Severity (LGD)
Based on Caixa Catalunya’s credit default history, the outcome of recovery processes is modelled
taking into account all costs incurred by the institution once judicial and extrajudicial debt recovery
processes have been completed.
Once the overdue debt, the costs incurred and the final amount recovered are known, it is possible
to determine both the recovery rate and its counterpart, Severity. To estimate the loss severity we
need to analyse the processes of recovery and their results in terms of aspects such as product type,
the guarantees associated with the operation and the ownership of the client.
In 2007, in accordance with the guidelines established by the Supervisor in Validation Document
1, Caixa Catalunya developed the necessary methodology to produce Downturn LGD and Long Run
LGD estimates. The latter takes into consideration the influence of the economic cycle on the capacity
and efficiency of the Institutions’ recovery processes.
In 2008 LGD has been segmented by internal segments. Also this year the calculation method for
LGD Best Estimate has been mapped out.
1.4 Estimated Expected Loss
The processes carried out by Caixa Catalunya to determine the probability of default, exposure
and severity quantify the expected loss of the credit portfolio, which is understood to mean the
average amount expected to be lost over the time horizon of one year.
In 2004, the Institution completed the process of implementing expected loss in order to use it in
the Bank’s daily risk management. This allowed the Institution to make initial comparisons with the use
of funds and to define the area of action in the management of portfolio credit quality.
In the context of the process of approval of internal models during 2006 and 2007, the Bank of
Spain conducted exhaustive analyses of the methods for calculating the different risk factors that
make up expected loss and the implementation of rating models in the Institution’s risk management
practices. This process finished in June 2008, when formal approval for the models was obtained from
the Bank of Spain for their use under the new Solvency regulations.
1.5 Estimated Economic Capital
The Caixa Catalunya Group has taken part in the pilot scheme for drawing up a Capital SelfAssessment Report in determining internal capital needs based on a strategic approach. This
approach seeks to obtain a capital figure at General Management level and then subsequently
distribute it to the most significant business units into which the institution is organised.
There are two complementary aspects to the methodology used by Caixa Catalunya. One is
quantitative and brings together the most significant risks to which the institution may be exposed and
which need to be covered with capital, while the other is qualitative and is based on adequate
management of risks which are not quantified as it is held that active management is sufficient to
delimit them.
The risk quantification methodology uses a correlated Monte Carlo simulation which covers credit,
market, operational and balance sheet risk in order to forecast expected and unexpected banking
losses. While expected losses are covered with reserves, unexpected ones (which are very unlikely to
occur) have to be covered with capital (equity). This quantification is supplemented by determinist
methods for the other types of risk.
In addition Caixa Catalunya plans future capital sources and needs in order to ensure an adequate
relation between the risk profile and anticipated equity. This strategic capital planning is done in line
with a timescale of 3 years.
Different stress scenarios are also established for the coming years in order to identify events that
may have a negative effect on the institution’s solvency.
All the above is conducted following the solvency policies and objectives established by the Board
of Directors and they are monitored in order to take the appropriate corrective measures in the event
of any kind of deviation.
37
1.6. Credit-risk monitoring policy
To guarantee correct credit-risk management, credit behaviour is monitored in order to detect, be
aware of and manage risks taken on with companies showing signs that could develop into potential
problems.
Monitoring is carried out in absolute functional and organizational independence of the lending
divisions.
Caixa Catalunya has developed a Risk Assessment System (RAS) capable of anticipating
potential drops in customer credit ratings with an automatic customer alert management process and
a calculation algorithm that takes into account the Institution’s global relationship with the customer.
This tool is related to the score granted by the Rating System, regarding it as one of the important
variables in this algorithm.
In 2006 and 2007 an adjustment process took place with the aim of adapting the ratings given as
closely as possible to the risk profile of the portfolio of companies and the total implementation of the
SVR model in the Credit Risk Department, incorporating this rating in the different management tools.
During 2008, implementation started across the whole organization by creating a new transaction
which showed the agenda of each commercial executive with companies with high and very high risk
alerts, as well as the list of alerts which gave rise to the past three ratings of the customer. Similarly, a
specific unit was set up to monitor developers with an ongoing risk of more than 10 million euros.
In 2009 we are planning to establish a blocking mechanism to formalizing/renewing new SVR
operations.
2. Operational Risk
2.1 Operational risk management
Operational risk is taken to mean the probability of losses due to personal inefficiency or errors in
processes, systems or external factors. Operational-risk management is a strategic element for the
Caixa Catalunya Group as it has a direct effect on the generation of value through results and an
indirect effect on reputation and the confidence of social agents, regulators, customers and general
public in the Institution.
Therefore, it is important to maintain a high degree of awareness in internal control management
as it forms part of the institutional culture of the Group. One way of explaining it is by clear regulatory
manuals that are properly structured, simple to use and available to the whole organization through
the qualitative management tool GIRO.
A number of departments in the Institution are also responsible for adjusting and monitoring risks
and controls over the latter. The Auditing Department of Caixa Catalunya has powerful software tools
for operating-risk management and mitigation, which use a system of alerts to manage and monitor
incidences related to the Institution's operating risk. The main tasks of this Department are to prevent
and detect operating deviations at the various management centres during the regular on-site and
remote audits.
The Circular 3/2008 includes a series of proposals for operational risk involving the design of a
management model that meets a series of quality standards based on the pillars of sufficiency of the
Institution’s own resources, supervision and the transparency of the Accord. At the end of 2003, Caixa
Catalunya began to implement a global operational risk management model using state-of-the-art
tools and methodologies to promote the comprehension, prevention and mitigation of operational
losses and the global profile of the Institution in each business area.
In 2008, Caixa Catalunya continued working on an advanced model for the management of
operational risk at the Institution that would meet both the expectations of supervisory organizations –
established in Basel II – and the challenges posed by the Institution’s operations in its area of
business.
Also during this period, the process of validating the model was conducted by Internal Auditing,
Internal Validation and the Bank of Spain itself. The Internal Auditing department has prepared two
specific reports which join the four existing reports made in previous years. Meanwhile, the Internal
Validation department has prepared its second report based on the model. The model fulfils all the
requirements established by the Supervisor and in this respect the Bank of Spain has issued a
38
positive rating of the management system designed, highlighting the organization’s high level of
involvement.
The management model consists of a series of actions aimed at systemizing the identification,
assessment, monitoring, measuring and mitigation of risk across the whole organization, with the
support of specialist tools and methodologies, in the framework of global risk management.
Specific lines of work have been defined for each area of the management model. These are:
2.2 Identification and evaluation
These tasks cover the entire Group and include the drafting of a detailed map of processes, risks
and controls for each department and the main subsidiaries, for which a regular self-assessment
procedure has been set up in order to produce qualitative information on risk factors and the control
context.
2.3 Monitoring
A historical database is maintained on operational events, which contains data from 1999
onwards, and includes some of the Group’s subsidiaries. Procedures for the capture, classification
and management of events have also been introduced to systematize the future input of data into the
database and to centralize the response mechanisms of the Institution. Event capture is automatic in
more than 99% of cases.
In order to obtain data from other national and international financial institutions for their integration
in calculating the capital for Operational Risk using an AMA model, Caixa Catalunya has become a
member of the ORX (Operational Risk Exchange) Consortium.
2.4 Measuring
Caixa Catalunya carried out statistical modelling on both quantitative and qualitative data. In
addition to meeting the requirements of the Solvency Circular for advanced approaches, the Institution
hopes to establish internal calculations of the maximum losses that it could suffer in the most adverse
situations, in order to guarantee sufficient equity and hence, the continuity of the Institution.
2.5 Specialized tools
The operational risk management tools support the cycle of identifying, assessing, monitoring,
measuring and mitigation/prevention:
G.I.R.O. (Integral Operational-Risk Management): This tool forms part of the Intranet environment
and permits the storage and management of the risks map and self-assessments, key risk indicators
and materialized loss events. It also has a reports module for the circulation of information on the
results of self-assessments and trends in the internal events database at all levels.
HEROE: Specialist tool for the measurement and allocation of capital with four sources: internal
database, external databases, self-assessments of the control environment, and scenario analysis.
2.6 Management framework
The Operational Risk Department, which reports to the Risk Control Area, must ensure that the
management cycle of all the above tasks is carried out correctly. In addition, an Operational Risk
Committee has been set up to devise corrective actions and solutions to mitigate the main risks.
3. Market Risk
This is a loss generated by adverse behaviour in different categories of risk: interest rates, prices,
exchange rates, volatility, and the spread of the fixed-income portfolio. To identify and quantify the level of
loss due to market risk, the Value-at-Risk (VaR) concept is used, which allows us to obtain the current
level of exposure of Treasury activity within a specific timeframe and a statistical confidence interval.
Ever since it was introduced in 2001, Caixa Catalunya has been using Historical Simulation
methodology to calculate the Market Risk assumed by the business units that hold negotiating or trading
39
positions. The set confidence interval is 99% in a timeframe of one day and a historical depth of 2 years for
the series of risk factors to which the Institution’s treasury activities are exposed.
According to this methodology the computer system that calculates the VaR determines the worst
theoretical loss with the confidence level and the timescale chosen obtained from submitting the positions
currently held to the daily variations of the risk factors recorded during the previous two years.
In order to contrast the usefulness of the market risk model, Caixa Catalunya carries out a backtesting
process which consists of comparing the daily result with the VaR figure obtained from the same position,
and checking how many times the daily result exceeds the VaR figure. The model’s validity is confirmed by
checking whether the number of excesses is higher than the number anticipated a priori for the chosen
confidence interval.
The system of controlling market risk is based on a process of daily measuring, monitoring and control
of an integral system of limits previously approved by the Board of Caixa Catalunya, which includes VaR
figures, the market value of positions, sensitivity to variations in interest rates and stop loss levels relating
to all the activities carried out by the Treasury Department that are subject to market risk.
4. Structural Balance Sheet Interest Rate Risk
This refers to the exposure of the intermediation margin and economic value of the capital of an
institution to variations in interest rates. In its structural balance sheet interest rate risk management, one
of Caixa Catalunya’s main objectives is to provide the Intermediation Margin with stability against
variations in interest rates and protect the economic value of its capital.
The Assets and Liabilities Committee (COAP) is responsible for putting into practice the procedures
that guarantee compliance at all times with the control and interest rate risk management policies
established by the Board of Directors, and this is where the limits to exposure to this risk are set in terms of
variations in the Institution’s asset value and variations in the intermediation margin, looking at a timescale
of 12 months.
With the aim of giving the intermediation margin stability and protecting the economic value of the
balance sheet against interest rate movements, financial derivatives are contracted which form part of the
macro-coverage of cashflow and reasonable value, respectively.
Under the COAP’s mandate, management of the balance sheet is carried out in a coordinated way
between the departments directly responsible for assets and liabilities management.
The operational structure is designed to ensure efficient segregation of roles between the informationgenerating centres, decision-makers, managers, controllers and recorders from the first level of Caixa
Catalunya’s organizational structure.
Reporting to the Risk Management in the Risks Control Area, Market Risk and Balance Sheet Risk is
responsible for identifying, measuring, monitoring, following up and reporting on the Institution’s balance
sheet risk, with an emphasis on the following functions:
a) Calculating the sensitivity of asset value and the sensitivity of the intermediation margin according
to the guidelines established in the official statements to be reported regularly to the Bank of Spain.
b) Analysing that hedging operations comply with the requirements necessary to be recorded as such.
c) Evaluating, following up, monitoring and reporting to the COAP on compliance with the limits and
policies set by the COAP.
d) Monitoring the efficiency of coverage; identifying the inefficiencies reached in each time period and
their impact.
e) Validating the methodologies for measuring structural interest rate risk used for its management.
The structural balance sheet interest rate risk can be found in the negotiation portfolio, given that all
Caixa Catalunya’s operations that generate currency positions are managed jointly with the other
negotiating positions.
5. Liquidity Risk
Liquidity is defined as the capacity of a financial institution to obtain funds to handle the obligations it
has previously taken on, within any timescale. A liquidity risk arises when an institution cannot fulfil its
contractual obligations, which has an adverse affect on its image and financial stability.
Caixa Catalunya manages liquidity risk from the dual perspective of operating liquidity, managed by the
Treasury and Capital Markets division, and structural liquidity, managed by the Bank’s Management
through the Committee of Assets and Liabilities.
40
On 17 June 2008, the Board of Directors of Caixa Catalunya approved the Liquidity Management and
Monitoring Policies for the Institution, which facilitate the identification of potential liquidity problems in the
short and medium term, using certain benchmark parameters to constantly monitor due dates in the
balance sheet structure. Likewise, these policies define who is responsible for identifying and then
categorizing any liquidity offsets, and the framework for communication and action in order to rapidly and
effectively deal with any crises.
The operating limits and the signs described in the Liquidity Management and Monitoring Policies to
assess the liquidity risk are controlled every day by the Balance Sheet Management Unit. This unit is made
up of technicians from the Front-Office Treasury and Balance Sheet Management department, who are
responsible for identifying and notifying the Liquidity Committee in the first instance about any alerts as
described in the Plan.
The Liquidity Contingency Plan envisages certain contingency situations in which the Treasury and
Capital Markets Department will inform the COAP and the Senior Management, convening a Liquidity
Committee with the relevant seniority and analysing the causes and proposing the appropriate corrective
measures.
6. Counterpart Risk
Counterpart risk is understood as the possible losses that may be incurred by Caixa Catalunya as a
result of the non-payment of a counterpart in monetary and derivatives market operations.
The Institution sets maximum limits for exposure to counterpart risk based on the Short and Long Term
ratings given by the ratings agencies (Moody’s, FITCH and S&P), while also taking into consideration the
equity and other financial variables of the counterpart market with which it wants to operate.
These maximum limits are approved by the Board of Directors, and the Risk Management department
is authorized to apply more restrictive limits or withdraw them completely in the cases it deems necessary.
Caixa Catalunya also uses risk mitigation techniques by signing collateral contracts and compensation
agreements with all the counterparts where there is a significant derivatives operation. In this way the
counterpart risk taken on is minimized, given that in the case of a breach there is a cash guarantee in
place equivalent to the corresponding exposure to the derivatives contracted.
7. Issuer Risk
Issuer Risk is understood as the risk of possible losses that might be incurred by Caixa Catalunya due
to non-payment by an issuer of fixed-income instruments or asset-backed securities.
The Institution uses a methodology similar to that used for counterpart risk in setting maximum
investment limits with regard to issuer risk.
These maximum limits are approved by the Board of Directors, and the Risk Management department
is authorized to apply more restrictive limits or withdraw them completely in the cases it deems necessary.
8. Concentration risk
The Institution carries out a periodical portfolio control to evaluate and monitor risk concentrations that
could become significant. Concentration risk management is done by establishing controls at the initial
phase of conceding the risk and, later on, controls over both the volume and percentage of concentration
on equity, at economic group level, sectors of activity, etc. As well as complying with the Supervisor’s
regulations, these controls also abide by the internal policies for controlling limits approved by the Board of
Directors.
9. Country risk
Caixa Catalunya limits its exposure to Counterparty Risk and Issuing Risk with institutions and/or
companies whose country falls in the first two groups described in the CBE 4/2004 to ensure there are no
risks with countries with a speculative rating.
41
Only certain operations relating to letters of credit and very specific guarantee and counter-guarantee
operations for very restricted amounts and periods can be formalized with entities belonging to countries
with a lower credit rating.
10. Settlement Risk
Includes all types of currency trading, regardless of their contract term. The limit for Liquidation Risk is
quantified as double that granted for the shortest counterpart risk term.
11. Internal Validation
During the year, the independence of the Internal Validation department was increased in line with the
requirements of the “Solvency Circular” and the “Validation Document No. 2” guide from the Bank of Spain.
On the one hand, the different validation units of the different risks have been unified into one single
department, and on the other, the department now reports directly to the Head of Risk Management. The
aim of this is to give the unit greater importance and standing within the Institution. Its mission is to
supervise the quality, effectiveness and suitability of the internal models used by the Institution in terms of
both calculating and managing regulatory capital.
The main areas covered by this department are the essential elements of any advanced risk
management system: methodologies, documentation, data used, quantitative and qualitative aspects (use
testing), amongst others.
In 2008 the Second Internal Validation Cycle was carried out for both Credit Risk and Operational Risk,
following the Annual Internal Validation Plan established at the end of 2007. This cycle entailed conducting
different tests that covered both qualitative and quantitative aspects. The results have been recorded in
various Validation Reports, one for each of the models currently used by the Institution. With regard to
Market Risk, during the first quarter the First Internal Validation Cycle was completed. The recipients of the
Validation Reports were the Bank of Spain, Internal Auditing and the departments validated. The most
noteworthy aspects were sent to the Senior Management.
Regarding to Credit Risk validation, the tests were mainly based on verifying that the models had
sufficient discrimination capacity, the adequate predictive capacity of the PD curve, and the stability of risk
parameters (PD, EAD and LGD), as well as analysing the behaviour of the portfolio in extreme economic
situations (stresstesting). Another significant element of the tests was aimed at checking the correct use of
the models in daily risk management (use testing).
With regard to Operational Risk validation, this cycle centred mainly on assessing the adequacy of
internal controls, hypothetical risk scenarios and control factors, implementing the model in the
management system and reviewing the methodology.
With regard to Market Risk validation, work focused on the model’s field of application, an assessment
of the measurement system, operational tests and the technological environment.
The third validation cycle on Credit Risk and Operational Risk is currently underway, as is the second
validation cycle for Market Risk.
F.2. List the risks covered by the system and explain how the risk-control systems adopted fit the
profile of the Institution, taking into consideration the structure of its equity:
The risks managed by the Departments that make up the Risk Management Division have been
analysed in detail in the previous section. The departments that report to the Risk Management Division –
acceptance, monitoring, follow-up and recovery of risks – are subject to a process of internal validation and
auditing.
In 2008 the Solvency Committee was set up, which monitors the objectives and policies for solvency,
profitability and use of capital and, if necessary, proposes any corrective measures. Ordinary meetings are
held every quarter and discuss information relating to computable equity and consumption, solvency
coefficients and forecasts of future solvency scenarios.
The governing bodies are also regularly informed as to the ratio between capital adequacy and total
assumed risk (based on the risks described in the previous section), as well as the level of observance of
the policies and procedures in place for managing risk.
Within the framework of Pillar 2, using benchmark data from June 2008, Caixa Catalunya has also
undertaken a self-assessment of internal capital in which it quantified, in terms of economic capital for
strategic purposes, the capital requirements for all the risks identified as significant. As well as the Pillar 1
risks (credit, operational and market), this calculation included in the economic capital requirements for
42
other risks such as liquidity, structural balance, concentration, etc. The calculation was made using a
timescale of three years and at the same time sources of capital were also forecast for a three-year
horizon.
As a complementary factor to these risks covered by the economic capital quantification model in the
process of self-assessment of internal capital, the Institution also identified other significant risks which it
has dealt with qualitatively as it considers they are protected. The results of this self-assessment process
are set forth in the Capital Self-Assessment Report. We are currently working on a new Capital SelfAssessment Report using benchmark data from 31 December 2008.
The qualitative risks mentioned earlier include technological risk, regulatory compliance risk, business
risk, reputation risk, etc.
F.3. If any of the risks affecting the Bank and/or its group have materialized, indicate the
circumstances causing the latter and whether the control systems in place were successful:
F.4. Indicate whether there is a committee or other governing body in charge of setting up and
overseeing these control mechanisms and describe the functions of the latter:
F.5. Describe the process for compliance with the various regulations affecting the Bank and/or its
Group:
G
ANNUAL REPORT PREPARED BY THE INSTITUTION’S INVESTMENTS COMMITTEE, REFERRED TO
IN ARTICLE 20 TER OF LAW 31/1985 (AUGUST 2), ON THE REGULATION OF BASIC RULES FOR
GOVERNING BODIES OF SAVINGS BANKS
G.1. Complete the following table on the purchase or sale of significant shareholdings in listed
companies carried out by the Savings Bank during the year, either directly or by companies in its
group:
Amount
(thousands of
Euros)
Investment or
disinvestment
738,332 Disinvestment
Date of execution
of the operation
27-03-2008
Company subject to
investment or
disinvestment
ABERTIS
INFRASTRUCTURAS
SA
Direct or indirect
shareholding of
the Bank after the
operation
Date of issue of
the report and
ruling of the
Investments
Committee on the
financial
feasibility and
compliance with
the budgets and
strategic plans of
the Bank
0.18 Issue date 26-032008 Resolution:
Favourable.
G.2. Complete the following table on the investments and disinvestments in business projects with
a presence in the management or governing bodies, carried out by the Savings Bank during the
year, either directly or by companies in its group:
43
Amount
(thousands of
Euros)
Investment or
disinvestment
Date of execution
of the operation
Company subject to
investment or
disinvestment
Direct or indirect
shareholding of
the Bank after the
operation
21-08-2008
FRANCE TELECOM
ESPAÑA SA
0.00
15,224 Investment
12-06-2008
P.E. COLL DEL MORO
40.00
27-08-2008
0.00
01-08-2008
HERENCIA
MERIDIONAL SOLAR
SL
DARLINGTON BV
0.00
Date of issue of
the report and
ruling of the
Investments
Committee on the
financial
feasibility and
compliance with
the budgets and
strategic plans of
the Bank
Issue date 17-062008 Resolution:
Favourable.
Favourable
Favourable
Favourable.
G.3. Indicate the number of reports issued by the Investments Committee during the year:
Number of reports issued
7
G.4. Indicate the date on which the Annual Report of the Investments Committee was approved:
Date of report
H
03-02-2009
REMUNERATION
H.1. Indicate the total remuneration paid to key management figures and to members of the Board
of Directors for their role as management staff:
Remuneration
Pay and similar remuneration
Commitments for pensions
insurance premiums
or
payment
of
life
Amount
(thousands of
Euros)
3,815
1,705
H.2. Complete the tables below with the total allowances for attendance and similar remuneration:
a) Board of Directors:
Remuneration
Allowances for attendance and similar remuneration
Amount
(thousands of
Euros)
1,191
b) Control Committee:
Remuneration
44
Amount
(thousands of
Euros)
201
c) Remuneration Committee:
Remuneration
Amount
(thousands of
Euros)
15
d) Investments Committee:
Remuneration
Amount
(thousands of
Euros)
27
H.3. Indicate the total remuneration paid to members of the governing bodies and management
staff for representation of the Bank in listed companies or in other organizations in which it has a
significant presence or representation:
Remuneration (thousands of Euros)
0
H.4. Indicate, if applicable to the Bank or its group, any guarantee or protection clause for cases of
dismissal, resignation or retirement for key management staff or members of the Board of
Directors in their managerial capacity. Indicate whether these contracts must be communicated or
approved by the bodies of the Bank or its group:
Number of beneficiaries
Board of Directors
General Assembly
Body authorizing the clauses
YES
NO
Is the General Assembly informed of the clauses?
I
SHARES
I.1. Complete, if applicable, the following table on participations in the Savings Bank:
Date of last modification
Total volume (thousands of
Euros)
0.00
Number of shares
0
If there are different types of share, list them in the table below:
Type
Number of shares
Unit nominal amount
I.2. Indicate the direct and indirect holders of participations accounting for a percentage equal to or
greater than 2% of the total volume of outstanding shares of your Bank at the end of the financial
year, excluding Members of the Board:
Name or business name
of shareholder
Number of direct shares
Number of indirect
shares (*)
% of total volume
(*) Through:
Name or business name of direct
shareholder
Total:
45
% of total volume
Indicate the most relevant movements in participation-volume structure during the year:
Name or business name of
shareholder
Date of
operation
Description of operation
I.3. Complete the following tables with the members of the Board of Directors of the Company
who have participations in the Savings Bank:
Name
Number of indirect
shares (*)
% of total volume
(*) Through:
Name or business name of direct shareholder
Total:
% of the total volume of participations held by the Board of
Directors
0.000
I.4. Complete the following tables on the treasury stock of participations in the Savings Bank:
At the close of the financial year:
Number of indirect shares
% of total volume of shares
(*) Through:
Business name of the direct shareholder
Total:
Results obtained during the year from treasury stock operations
(thousands of Euros)
0
I.5. Describe the terms and conditions for authorizing the General Assembly to conduct the
purchase or transfer of the participations indicated in the above section:
J
COMPLIANCE WITH GOOD GOVERNMENT RECOMMENDATIONS
If at the time this report was drafted there are no generally accepted good government
recommendations taking into account the legal nature of savings banks, describe the corporate
government policies that the Institution must comply with by law, and any additional policies
introduced by the Bank.
If at the time this report was drafted, the Bank has generally-accepted good government
recommendations taking into account the legal nature of savings banks, indicate the Institution’s
compliance with the existing corporate government recommendations or its failure to comply with
these recommendations, where applicable.
If any of the recommendations are not followed, explain the recommendations, rules, practices
or criteria applying to the Institution.
At the time of writing this report, the document had not been drafted on the corporate government of
Savings Banks issuing values admitted for trading on official securities markets, indicated in Clause One 1.
i) of Order ECO/354/2004 (February 17) of the Ministry of Economy, the Corporate Government Annual
Report and other information on savings banks that issue securities admitted for trading on official
securities markets.
46
Nonetheless, Caixa Catalunya has generally followed good government practices, the most significant
of which are detailed below.
Governing bodies
In accordance with Article 21 of its Articles, the members of the governing bodies, regardless of the
sector they represent, shall carry out their functions in all events to the exclusive benefit of the interests of
Caixa Catalunya, its ACCOUNTHOLDERS and compliance with its corporate purpose, with absolute
independence of any other interest that may affect said members.
Moreover, members of the governing bodies perform their duties in an honorary capacity, free of
charge, and do not receive remuneration in this regard other than allowances for attendance and travel,
within the limits of the protectorate of the Department of Economy and Finance of the Generalitat of
Catalonia.
In accordance with Law 14/2006 of 27 July 2006 of the Generalitat of Catalonia to reform the Savings
Bank Law of Catalonia, the Extraordinary General Assembly of Caixa Catalunya adapted its Articles of
Association on 2 November 2006 to establish the position of Chairman as a remunerative one. In view of
the parameters that need to be considered in accordance with Section 3 of Article 1 of Order 70/2007 from
the Department of the Economy and Finance, given that the functions of the chairman are not executive
and that it is not a full-time position, in its session on 18 December 2007, the Board of Directors
established remuneration for the chairman of 175,000 euros per year, which is compatible with the amount
of the allowances to which he is entitled.
With regard to the remuneration received by the members of the governing bodies and management
staff arising from their representation of Caixa Catalunya in listed companies or companies in which the
Institution has a significant presence or representation, it should be noted that this participation is not in a
personal capacity, except in some of the Group’s subsidiaries and Cedinsa Concesionaria S.A., Volja Plus
S.L. and the Spanish Confederation of Savings Banks – as the articles of this organization require – but
rather on behalf of Caixa Catalunya. As a result, this remuneration is always paid to the Bank, not to the
individual.
There are no entries from Group subsidiaries for salaries, allowances or other types of remuneration to
any member of the governing bodies or managerial staff for representing the parent institution in their
duties.
Adhesion to the United Nations Global Compact
Caixa Catalunya completed its membership of the United Nations Global Compact on April 4, 2005,
following the unanimous agreement of the Board of Directors at the meeting held on March 15 of the same
year, as part of the strategy, culture and daily actions of the Institution and its responsibility towards its
customers, employees, suppliers and society in general.
The Global Compact is an optional, international, ethical commitment initiative designed to bring
together companies, organizations, workers and representatives of civil society to conciliate the interests,
purposes and needs of business activity with the values and demands of society. The ultimate aim is to
eliminate the harmful effects of current economic dynamics and promote increased social welfare and
human dignity.
The Global Compact is based on ten Principles by which it encourages its members to support and
respect internationally-acknowledged human rights, to prevent involvement in abuse and situations in
which these rights are ignored, to support freedom of association, eliminate all manner of forced labour
and to completely abolish child labour. Members of the pact also undertake to use cautionary criteria with
respect to environmental problems by adopting initiatives to promote greater environmental responsibility
and to favour the development and diffusion of technologies that respect the environment. Lastly,
companies must work to prevent and take responsibility in the fight against corruption in all its forms, so
that we can create a fairer and more charitable society that is more committed to the heritage of the
environment.
In order to retain their status as active members of the Global Compact, all signatory companies are
obliged to present an annual report (Communication On Progress) containing a reaffirmation of their
commitment and explaining the advances they have made in each of the 10 Principles. Since it joined the
Global Compact, Caixa Catalunya has regularly presented its progress reports by means of one of the two
47
procedures recommended by this organization: inclusion in the Annual Corporate Social Responsibility
Report or drawing up an ad hoc document. In either case, the information is available on the Global
Compact, website, www.unglobalcompact.org and on the Institution’s website, www.caixacatalunya.com.
In 2008, Caixa Catalunya signed two global initiatives related to sustainable development, instigated by
the European Savings Banks Group: the ESBG Charter for Responsible Business and the ESBG
Resolution Towards a Greener Savings and Retail Banking Sector (documents available at www.esbg.eu).
Social Work
Caixa Catalunya’s Social Work is implemented through the Caixa Catalunya Foundation and
encompasses the five main lines of action in which the Institution is involved (culture, social care, social
inclusion, the environment and R+D+i). The Social Work Programme is implemented in accordance with
the directives, supervision and control of the Board of Directors and the Social Work Committee, the entity
designated by the Board of Directors. The Foundation is also governed by a Trust comprising nine
members, including all the directors on the Social Work Committee. The Foundation’s governing body,
which meets at least every quarter, is chaired by the Chairman of Caixa Catalunya; other trustees include
the General Manager, who serves as vice-chairman, and the Institutional Advisor. In their actions, the
members of the Foundation’s Trust are bound by the same criteria and restrictions that apply to the
members of the Social Work Committee and do not receive any kind of remuneration for their services.
As regards resources allocated to Social Work, each year, the Governing Bodies of Caixa Catalunya
decide on the priority areas of action. Prior to this, the demands of society are taken into account, along
with the capacity of the public sector to deal with the most important needs that are not otherwise covered.
The dedicated resources are managed partly by the Foundation, which represents the instrument though
which all the Social Work activities are carried out. In this respect, Social Work is carried out through its
own programmes run by the Foundation itself and also in collaboration with not-for-profit organizations.
In line with the above, the economic aid granted by Social Work to projects carried out by other
organizations is awarded through public competitions aimed at non-profit organizations, in order to
increase Caixa Catalunya’s transparency in this field and to collaborate with the initiatives of different
areas. The Foundation has posted the rules for calls for project grants on the Internet and once the
projects have been submitted they are put before an Assessment Committee designated by the
Foundation’s Trust, whose mission is to select the best projects in the fields of solidarity, social care,
culture and the environment. Once the aid has been approved, it is published in detail on the corporate
website and in the report on Social Work activities, published each year.
The basic criteria used for allocating the above aid is the degree to which the activity matches the
purpose of the competition, the guarantee of management control and accounting, a coherent relationship
between the budget and the results, the relevance of the proposal and the public benefit it will bring. These
criteria are consistent with Caixa Catalunya’s commitment to its founding aim of contributing to a better
society, promoting positive and sustainable social action from both an economic and environmental
perspective.
The Social Work activities of Caixa Catalunya are detailed in the Activities Report published each year
by Social Work. The Corporate Social Responsibility Report also refers to many of the activities carried out
under the umbrella of Social Work.
In 2008, the resources dedicated by Caixa Catalunya to its Social Work programmes came to 66.4
million euros, representing 13.8% of the Institution’s profits after tax in the previous financial year. This
amount, together with 15.7 million euros of its own revenue, means that the total resources available for
Social Work came to 82.1 million euros. It is worth highlighting the investment of 27.1 million euros (33%)
in real estate and our own Social Work projects which included, amongst other things, the renovation of
the La Pedrera Auditorium, the renovation of the Sant Jordi Clubs and the new Sant Jordi Haemodialysis
and Applied Research Centre at the Hospital Clínic. Overall, 28.2% of the total funds were dedicated to
social welfare and healthcare; 36.4% to culture and leisure; 10.9% to education and research, and the
remaining 24.5% to natural and artistic heritage.
Transparency and confidentiality
Caixa Catalunya provides its customers with clear and comprehensible information on the products
and services they contract, and on the interest rates and fees applied to each of these. In accordance with
Bank of Spain regulations, this information is available to the public at all branches and on the Institution’s
website.
This customer-communication heading places special importance on advertisements in the form of
leaflets and posters, which are produced according to the transparency regulations established by
competent regulatory bodies (Bank of Spain and the CNMV – National Securities Market Commission).
48
Advertising directed towards customers is subject to criteria of maximum transparency and quality, and is
always submitted pre-publishing for the authorization of bodies ensuring compliance with these principles
(the Department of Economy and Finance of the Generalitat of Catalonia, the Bank of Spain, the Spanish
Securities Market Commission, the Directorate-General of Insurance, etc.).
Caixa Catalunya is also a member of Autocontrol, a self-regulating advertising organization established
with the aims of converting advertising into a useful economic tool and of guaranteeing fair competition and
the rights of users and consumers. The organization has its own Code of Advertising Conduct for member
organizations, and guarantees compliance with this through its independent control body.
As a result of the new Regulation governing the Protection of Personal Data going into effect, the
clauses of contracts have been updated to comply with this new legislation. We are also developing
internal regulations for the treatment of non-automated files that reflect the specific aspects of the new
Regulation, which will be completed within the moratorium period (April 2009 at the latest). The Security
Document has been updated to adapt to the new model proposed by the Spanish Data Protection Agency
(APD). In 2008 a study was started to modify the registration of files on the Data Protection Agency
Register; the aim is to achieve a logical declaration that allows improved data maintenance and reduces
the number of files registered.
Ethical relationships with suppliers
Caixa Catalunya's commitment to society includes establishing ethical and transparent relationships
with its suppliers.
The Institution also prefers the use of consumables and recyclable material wherever these meet the
set quality standards.
Caixa Catalunya’s environmentally-friendly purchasing criteria extends to purchasing the paper it
requires from suppliers with the ISO 14001 and EMAS (EU Eco-Management and Audit Scheme) quality
certificates. These suppliers subscribe to an environmental-management program that analyses all phases
and stages of the life of a product to reduce water consumption and manufacture cellulose in line with
sustainable forest management.
In accordance with the principle of transparency, since the end of 2003 all purchases of paper and
consumables have been done by electronic auction through an Internet portal. This auction is open to all
suppliers who meet the established requirements and in accordance with the values of Caixa Catalunya.
The process ensures equality of opportunity and information for all suppliers and optimal purchasing
prices.
Meanwhile, Caixa Catalunya has added a clause in the contracts of its suppliers informing them that
the Institution is a member of the UN Global Compact, and thus committed to upholding its 10 Principles,
and requiring suppliers to declare that they are aware of this situation and that their business pledges to
behave in consonance with these 10 Principles.
Prevention of Money Laundering
As part of its social commitment to prevent and try to prohibit use of the financial system for the
laundering of money from criminal activities, and in compliance with the legislation in this regard, Caixa
Catalunya carries out its financial operations in accordance with good banking practice and has
introduced, among other procedures, preventive measures for the examination and control of operations,
the identification and awareness of customer activity, and employee training programs.
In this respect there is a Money Laundering Prevention Manual available which can be found at
www.caixacatalunya.es/Conozca Caixa Catalunya/Información Corporativa/Prevención blanqueo de
capitales, software tools for detecting suspicious transactions and a training manual for staff members.
Caixa Catalunya has set up a Money Laundering Prevention Committee as its top-level body for the
prevention of money laundering. The committee is made up of qualified representatives from different
fields of the Caixa Catalunya Group connected with this issue. Its main tasks are to establish the policy of
Caixa Catalunya in this area, promote the development and implementation of money-laundering
prevention procedures and to analyze and report any suspicious operations to SEPBLAC (the Executive
Service of the Commission for the Prevention of Money Laundering and Financial Crime) in accordance
with legal requirements.
49
Every year Caixa Catalunya submits its procedures and Internal Control and Communications Bodies
on the prevention of money laundering to an expert external audit in compliance with Law 19/1993 of 28
December 1993 on specific measures for preventing money laundering.
Internal Regulation of Conduct
On 14 October 2008, the Board of Directors of the Caixa de Catalunya approved its adhesion to the
Securities’ Markets Code of Conduct drawn up by the CECA, which modified the existing Code of Conduct
that had been approved on 17 July 2007. These modifications to the Code of Conduct come in response to
the enforcement of Law 47/2007 and Royal Decree 217/2008 transposing the Markets in Financial
Instruments Directive to Spanish law.
Its contents can be found at www.caixacatalunya.es/Conozca Caixa Catalunya/Información
Corporativa/Reglamento Interno de Conducta.
K
OTHER USEFUL INFORMATION
If you consider that any principles or aspects relevant to the practice of corporate governance
as applied by your Institution has not been discussed in this report, use this section to describe
them and explain their contents.
General Assembly
Noteworthy changes in 2008 were the resignation of Mr. Antoni Fogué Moya, and the death of Mr.
Lorenzo Albardías Marfil (both representatives of the Founding Corporation), no replacements having been
appointed by the end of the financial year.
Replacements have not yet been appointed for Mr. Antoni Soy Casals and Mr. Ferran Mascarell
Canalda, board members representing the Local Corporations sector, who resigned in 2006.
It is also worth mentioning that for the first time, in compliance with State Law 62/2003 and the
Generalitat’s Decree 311/2004, the Madrid City Council appointed a representative in March 2006, who
joined the 12 representatives from Catalan town councils, thus increasing the group of County Councils to
12. As a result, the Assembly is temporarily made up of one extra board member, which was anticipated
and authorized by the temporary provision of the Generalitat’s Decree 311/2004, i.e. 161 members until
the next partial renewal, when the group of 7 County Councils will be replaced by a new group of 6.
There are no specific regulations on the General Assembly, as its authority and mode of operation are
detailed in the Articles of the Institution.
Board of Directors
There are no specific regulations on the Board of Directors, as its authority and mode of operation are
detailed in the Articles of the Institution.
Social Work Committee
Mr. Joan Echániz Sans (representative of the Founding Corporation) and Mr. Josep Isern Saun
(representative of the Depositors) were appointed as new members of the Social Work Committee at the
Board of Directors meeting held on 16 December 2008.
Operation of the Governing Bodies
The meetings of the Remuneration and Investments Committees are attended by the Director General
of the Institution, under the conditions established in the Articles for attendance of the latter at meetings of
the Board of Directors in his capacity as Secretary.
Section B2
The operation in section B2, where the type of operation is Debtor Factoring and the Conditions box is
empty, is due to the fact that the company’s position is as a debtor and therefore the conditions of the
transaction do not apply to the company but rather to the lessor.
Section B4
Includes Jurídica Manresana S.A. loan subrogation.
50
Section H.1
The criteria used for calculating section H.1 were based on the actual composition of the Board of
Directors during the period in question, and not on its composition as at 31/12/08.
In addition, during 2008 the working relationship between the company and some of its senior
executives came to an end, which generated a cost of 7,617 thousand euros and pension contributions of
577 thousand euros.
This Annual Report on Corporate Government was approved by the Board of Directors of the
company at the meeting held on 24-02-2009.
List the members of the Board who voted against or abstained from approval of this report:
Name of Board Member
Abstention/vote against
51
ADDENDA TO ANNEX I
A.1. GENERAL ASSEMBLY
A.1.1. DIRECTORS
GENERAL BOARD MEMBERS
Name of General Board Member
ADRIANA SÁNCHEZ DANÈS
ALBERTO FERNÁNDEZ DÍAZ
ALFRED NEBOT NEBOT
AMADEO JUAN PRAT
AMALIA SABATÉ SIMÓ
ANA CARMEN BELILLAS ESTADA
ANDREU FRANCISCO ROGER
ÀNGEL FERNÀNDEZ MARTÍNEZ
ÀNGEL GUIU ABELLA
ÀNGEL MIRET SERRA
ANNA PEDRÓ CARULLA
ANTONI MONTSENY DOMÈNECH
ANTONIA MARÍA SÁNCHEZ MORENO
ANTONIO BALMÓN AREVALO
ANTONIO CARRASCO SANCHEZMONCAYO
ASSUMPTA ESCARP GIBERT
BERNAT VÁZQUEZ MALDONADO
CARLES HIJOS MATEU
CARLES MARTÍ JUFRESA
CARLES SAMPONS SALGADO
CARME LLOBERA CARBONELL
CELESTINO ANDRÉS SÁNCHEZ
RAMOS
DAVID MASCORT SUBIRANAS
DAVID MONTAÑÉS CLEMENTE
DOLORES GÓMEZ FERNÁNDEZ
EDUARD GISBERT AMAT
EMILI MEDAN ANÉ
EMILIA SANDRA NAVÍO MALO
ENRIC SENDRA GUBIANES
ERNEST CASADESÚS ANFRONS
ESTHER ROVIRA TARRASÓN
EUGENI FORRADELLAS BOMBARDÓ
FÉLIX CABALLERO MATEO
FERNANDO MELÉNDEZ CAÑIZARES
FERRAN MARTÍNEZ RAMOS
FINA ORRIT GARCIA
FRANCESC ANTONI REQUENA
CONTRERAS
FRANCESC SÁNCHEZ ARCHS
FRANCISCA TERUEL LAGUNAS
FRANCISCO GARCIA PRIETO
FRANCISCO JOSÉ VILLEGAS
HERRERO
FRANCISCO ÚBEDA LÓPEZ
GEMMA LÓPEZ CANOSA
HELENA ARRIBAS ESTEVE
JAIME GRAUS ALBARRACÍN
JAUME CIURANA LLEVADOT
Group represented
ACCOUNTHOLDERS
EMPLOYEES
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
EMPLOYEES
ACCOUNTHOLDERS
EMPLOYEES
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
EMPLOYEES
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
EMPLOYEES
ACCOUNTHOLDERS
EMPLOYEES
ACCOUNTHOLDERS
52
Date of
appointment
JAUME GRAUPERA VILANOVA
JAUME RABEYA CASELLAS
JAVIER BASSO ROVIRALTA
JESÚS CODERA DUASO
JOAN BOSCH PONS
JOAN BOADA GRANADA
JOAN CARLES DEL RIO PIN
JOAN COSTA PLANS
JOAN ECHÁNIZ SANS
JOAN GÜELL JUAN
JOAN LAGUNAS RIERA
JOAN MARIA PAGÀ ORTIGA
JOAN MARIA PORTA JOSA
JOAN ORRIT ARMENGOL
JOAN PERELADA RAMON
JOAN PUIGDOLLERS FARGAS
JOAN RECASENS GUINOT
JOAN SABATÉ BORRAS
JOAN VENDRELL VILA
JOAN VICH ADZET
JOAN VIDAL SELGA
JOAN VILADROSA VIDAL
JORDI AYMAMÍ ROCA
JORDI LABÒRIA MARTORELL
JORDI MOLTÓ BIARNÉS
JORDI PÉREZ SUÑER
JORDI TUBELLA COLOMINAS
JORDI XARGAY CONGOST
JOSÉ ALBERTO GARCÍA ENRICI
JOSÉ ANTONIO NUÑO CUENCA
JOSEP ALONSO ROCA
JOSEP AZUARA GONZÁLEZ
JOSEP BURGAYA RIERA
JOSEP CANAL CODINA
JOSEP CORDOMÍ LLADÓ
JOSEP GISBERT LLANGOSTERA
JOSEP ISERN SAUN
JOSEP LLUÍS MORLANES GALINDO
JOSEP MARIA GRÀCIA LLUCH
JOSEP MARIA LLORENS RULL
JOSEP MARIGÓ COSTA
JOSEP MAYORAL ANTIGAS
JOSEP MOLINS CODINA
JOSEP RAMONEDA MOLINS
JUAN JOSÉ FERNÁNDEZ MARTÍN
JUAN VICENTE BERNAL CARRIÓN
JUANA GUIJOSA PIBERNAT
JULIA DAURA SÁNCHEZ
LÍDIA PARCERISA GONZÁLEZ
LLUÍS PALLARÈS PORTA
LLUÍS SACREST VILLEGAS
LUIS MARTÍNEZ CAMPOS
MAITE VILALTA FERRER
MANEL ESTRUGA BARTROLÍ
MANUEL JESÚS PUJANA
FERNÁNDEZ
MANUEL MATOSES FORTEA
EMPLOYEES
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
EMPLOYEES
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
EMPLOYEES
ACCOUNTHOLDERS
EMPLOYEES
EMPLOYEES
ACCOUNTHOLDERS
EMPLOYEES
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
EMPLOYEES
EMPLOYEES
ACCOUNTHOLDERS
ACCOUNTHOLDERS
53
MARCEL ESTEVE ROBERT
MARIA ÀNGELS MAYAYO ABADÍA
MARÍA DEL CARMEN VENTURA
BORRELL
MARIA ELENA BENEDICO GRACIA
MARÍA JOSÉ MARGALEF
VALLDEPÉREZ
MARIA MERCÈ TOR PALAU
MARIÀ NICOLÀS ROS
MARÍA TERESA MATEO SAMPEDRO
MARTA BORONAT SÁNCHEZ
MATIES VIVES MARCH
MERCEDES DE LA SERNA TORROBA
MIQUEL AGUILÀ BARRIL
MIQUEL ARISA COMA
MIREIA GALLARDO ALBIOL
MONTSERRAT BALLÚS COLL
MONTSERRAT MÍNGUEZ GARCIA
MONTSERRAT ROBUSTÉ
CLARAVALLS
NARCÍS SERRA SERRA
NORMA GUTIÉRREZ GUERRA
NÚRIA BOZZO DURAN
ORIOL CARBÓ SERIÑANA
ÓSCAR CASTILLO FERNÁNDEZ
PABLO ROS GARCIA
PENDING APPOINTMENT
PENDING APPOINTMENT
PENDING APPOINTMENT
PENDING APPOINTMENT
PERE PRAT BOIX
PERE ROS PIJOAN
RAFAEL ESPINOSA GARCÍA
RAMON AYTÉS GALLARDET
RAMON BASOMBA GIRALT
RAMON BONET OLIVART
RAMON CAMPS ROCA
RAMON RIERA MACIÀ
RAMON SOLÉ REGUES
RAQUEL PUIG PÉREZ
RAUL DEL PALACIO SAN MIGUEL
RICARD MARTÍNEZ MONTEAGUDO
RUTH CÁRDENAS MORERA
SALVADOR BORDES BALCELLS
SALVADOR CARBONELL FILELLA
SANTIAGO CAYUELA TOMÁS
SARA CARDONA RASO
SERGIO VICH SÁEZ
SILVIA FREIXAS MIQUEL
SÍLVIA GRANELL LÓPEZ
SIXTE MORAL REIXACH
SONIA CASANOVAS CUELLAR
VÍCTOR VILAR VILAR
XAVIER GARCIA ALBIOL
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
EMPLOYEES
ACCOUNTHOLDERS
EMPLOYEES
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
EMPLOYEES
EMPLOYEES
ACCOUNTHOLDERS
ACCOUNTHOLDERS
EMPLOYEES
EMPLOYEES
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
ACCOUNTHOLDERS
A.1.4. Where applicable, describe the contents of the regulation of the Assembly:
Description
A.2. Board of Directors
A.2.8. Where applicable, describe the contents of the regulation of the Board of Directors:
54
ANNUAL ACCOUNTS OF THE
- 2008 -
Financial statements
Consolidated balance sheets ....................................................................................................................................58
Consolidated income statements ..............................................................................................................................61
Consolidated statements of recognised income and expenses ...............................................................................62
Consolidated statements of total changes in equity..................................................................................................63
Consolidated cash flow statements...........................................................................................................................66
Notes
1.
Introduction, basis of preparation of the consolidated annual accounts and other information ......................66
2.
Accounting principles and measurement criteria ............................................................................................74
3.
Risk management ...........................................................................................................................................108
4.
Distribution of Caixa Catalunya profit .............................................................................................................117
5.
Significant movements in investments ...........................................................................................................117
6.
Business segment reporting ...........................................................................................................................118
7.
Remuneration of the Board of Directors and Senior Management of Caixa Catalunya................................118
8.
Cash and balances with central banks...........................................................................................................120
9.
Financial assets and liabilities held for trading...............................................................................................120
10. Other financial assets at fair value through profit or loss ...............................................................................124
11. Available-for-sale financial assets ..................................................................................................................124
12. Loans and receivables....................................................................................................................................126
13. Held-to-maturity investments..........................................................................................................................129
14. Hedging derivatives (assets and liabilities) ....................................................................................................130
15. Non-current assets held for sale.....................................................................................................................131
16. Equity investments..........................................................................................................................................131
17. Reinsurance assets ........................................................................................................................................135
18. Property and equipment .................................................................................................................................136
19. Intangible assets .............................................................................................................................................137
20. Other assets....................................................................................................................................................137
21. Financial liabilities at amortised cost ..............................................................................................................138
22. Liabilities under insurance contracts ..............................................................................................................142
23. Provisions (except for Provisions for taxes) ...................................................................................................142
24. Other liabilities ................................................................................................................................................143
25. Minority interests.............................................................................................................................................143
26. Valuation adjustments ....................................................................................................................................144
27. Reserves .........................................................................................................................................................145
28. Tax matters .....................................................................................................................................................147
29. Community Projects........................................................................................................................................150
30. Contingent risks and contingent liabilities and other information...................................................................151
31. Geographical breakdown of branches............................................................................................................154
32. Interest and similar income.............................................................................................................................154
33. Interest and similar expenses.........................................................................................................................155
34. Income from equity instruments .....................................................................................................................155
35. Income of entities accounted for using the equity method.............................................................................156
36. Fee and commission income..........................................................................................................................157
37. Fee and commission expense........................................................................................................................157
38. Gains/(losses) from financial assets and liabilities.........................................................................................157
39. Exchange differences .....................................................................................................................................158
40. Other operating income ..................................................................................................................................158
41. Other operating expenses ..............................................................................................................................159
42. Administrative expenses.................................................................................................................................159
43. Gains/(losses) on sale of non-current assets held for sale not classified as discontinued operations .........161
44. Related party transactions ..............................................................................................................................161
45. Customer service ............................................................................................................................................162
Caixa Catalunya Group
Consolidated balance sheets at 31 December 2008 and 2007 (Notes 1 to 6)
2008
2007*
Cash and balances with central banks (Note 8)
1,790,213
801,594
Financial assets held for trading (Note 9)
- Due from banks
- Customer loans
- Debt securities
- Other equity instruments
- Trading derivatives
Memorandum item: loaned or advanced as collateral
1,079,804
268,547
811,257
166,023
1,767,228
1,251,501
23,773
491,954
565,119
56,319
56,319
-
55,971
55,971
-
Available-for-sale financial assets (Note 11)
- Debt securities
2,773,341
1,975,987
797,354
246,253
6,973,524
4,831,347
2,142,177
-
Loans and receivables (Note 12)
- Due from banks
- Customer loans
- Debt securities
50,663,811
599,239
50,011,118
53,454
606,170
55,183,842
4,628,222
50,555,620
3,934,528
Held-to-maturity investments (Note 13)
2,288,605
150,998
-
ASSETS (Thousands of euros)
Other financial assets at fair value through profit or loss (Note 10)
- Due from banks
- Customer loans
- Debt securities
Changes in the fair value of hedged items in portfolio hedges of interest rate risk
Hedging derivatives (Note 14)
25,491
422,502
Non-current assets held for sale (Note 15)
Equity investments (Note 16)
- Associates
- Jointly-controlled entities
Pension-linked insurance contracts
Reinsurance assets (Note 17)
Property and equipment (Note 18)
- Property, plant and equipment
- Own use
- Other assets under operating leases
- Assigned to Community Projects Fund
- Investment properties
Memorandum item: acquired under finance lease
Intangible assets (Note 19)
- Goodwill
- Other intangible assets
Tax assets
- Current
- Deferred (Note 28.5)
Other assets (Note 20)
- Inventories
- Other
TOTAL ASSETS
(3,522)
256,735
18,941
373
240,610
66,119
174,491
285,546
19,391
266,155
-
-
18,920
15,675
1,275,747
1,118,926
1,003,063
115,863
156,821
-
1,145,419
1,084,914
977,924
106,990
60,505
-
51,276
51,276
49,682
49,682
421,096
21,873
399,223
348,949
36,816
312,133
2,500,373
2,411,284
89,089
63,627,049
1,320,399
1,260,334
60,065
68,201,415
* Presented for comparison purposes only.
Notes 1 to 45 of the accompanying consolidated annual accounts are an integral part of the consolidated balance sheet as at
31 December 2008.
58
EQUITY AND LIABILITIES (Thousands of euros)
LIABILITIES
Financial liabilities held for trading (Note 9)
- 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
- Customer deposits
- Subordinated debt
Financial liabilities at amortised cost (Note 21)
- Customer deposits
- Subordinated debt
2008
2007*
771,577
771,577
-
1,302,859
466,281
836,578
-
-
-
56,517,771
5,873,081
3,364,604
26,828,263
18,125,173
1,680,507
646,143
59,884,048
4,162,455
6,432,040
26,449,983
21,005,386
1,386,399
447,785
Changes in fair value of hedged items in portfolio hedges of interest rate risk
242,941
(150,199)
Hedging derivatives (Note 14)
169,056
333,760
-
-
Liabilities associated with non-current assets held for sale
Liabilities under insurance contracts (Note 22)
2,288,566
2,192,703
Provisions
- Provision for pension and similar obligations (Note 23)
- Provisions for taxes and other legal contingencies (Note 28)
- Provisions for risks and contingent liabilities (Note 23)
- Other provisions (Note 23)
327,691
206,254
22,437
53,565
45,435
302,310
211,656
23,132
42,178
25,344
Tax liabilities
- Current
- Deferred (Note 28.5)
168,109
12,648
155,461
500,158
1,221
498,937
Community Project Fund (Note 29)
162,963
147,532
Other liabilities (Note 24)
212,809
184,279
Capital repayable on demand
TOTAL LIABILITIES
59
-
-
60,861,483
64,697,450
EQUITY
Equity
- Endowment fund or capital
- Issued
- Less: Unpaid and uncalled
- Share premium
- Reserves (Note 27)
- Accumulated reserves (losses)
- Reserves (losses) of entities accounted for using the equity method
- Compound financial instruments
- Participating stock and associated funds
- Less: Own securities
- Income attributable to equity holders of the parent
- Less: dividends and remuneration
Valuation adjustments (Note 26)
- 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
Minority interests (Note 25)
- Valuation adjustments
- Other
TOTAL EQUITY
TOTAL EQUITY AND LIABILITIES
Memorandum item
Contingent risks (Note 30)
Contingent liabilities (Note 30)
2008
2007*
2,732,345
2,538,677
2,559,741
(21,064)
193,668
-
2,618,970
2,131,051
2,145,606
(14,555)
487,919
-
9,752
24,198
(2,311)
10
(12,145)
-
831,854
823,252
10,209
(1,607)
-
23,469
23,469
53,141
53,141
2,765,566
3,503,965
63,627,049
68,201,415
3,126,426
3,595,636
11,331,888
13,507,276
Notes 1 to 45 of the accompanying consolidated annual accounts are an integral part of the consolidated balance sheet as at
31 December 2008.
60
Consolidated income statements for the years ended 31 December 2008 and 2007 (Notes 1 to 6)
(Thousands of euros)
2008
2007*
Interest and similar income (Note 32)
3,343,308
2,936,211
Interest and similar expenses (Note 33)
2,445,952
2,080,784
897,356
855,427
INTEREST MARGIN
Income from equity instruments (Note 34)
45,097
53,415
Income of entities accounted for using the equity method (Note 35)
- Associates
- Jointly-controlled entities
(66,020)
2,943
(68,963)
25,142
3,444
21,698
Fee and commission income (Note 36)
395,355
371,982
44,930
49,014
48,937
(54,505)
709
99,459
3,274
(35,928)
(54,064)
(1,608)
9,877
9,867
20,514
30,363
Other operating income (Note 40)
1,137,349
1,078,678
Other operating expenses (Note 41)
1,125,366
995,556
GROSS MARGIN
1,308,292
1,334,509
666,386
450,286
216,100
646,960
416,327
230,633
59,894
53,304
Fee and commission expenses (Note 37)
Gains/(losses) on financial assets and liabilities (net) (Note 38)
- Held for trading
- Other financial assets at fair value through profit or loss
- Financial instruments not at fair value through profit and loss
- Other
Exchange differences (net) (Note 39)
Administrative expenses (Note 42)
- Personnel expenses
- Other general administrative expenses
Depreciation and amortisation (notes 18 and 19)
8,264
Provisions (net) (Notes 23 and 28)
Impairment losses on financial assets (net)
- Loans and receivables (Note 12)
- Other financial instruments not at fair value through profit and loss (Notes 11 and 13)
NET OPERATING MARGIN
350,655
334,479
16,176
(197,284)
285,008
110,386
110,386
Impairment losses on other assets (net)
- Goodwill and other tangible assets
- Other assets (Note 20)
Gains/(losses) on sale of non-current assets held for sale (Note 16.1)
(2,910)
-
Loss on business combinations
(1,418)
771,032
722,326
48,706
(5,759)
(5,759)
306,207
-
Gains/(losses) on sale of assets not classified as non-current assets held for sale
not classified as discontinued operations (Notes 11 and 43)
515,446
PROFIT BEFORE TAX
204,866
593,855
Income tax (Note 28.3)
19,666
100,763
Compulsory allocation to community funds and projects
PROFIT/(LOSS) FROM ORDINARY ACTIVITY
Profit/(loss) from discontinued operations (net)
CONSOLIDATED PROFIT FOR THE YEAR
Profit/(loss) attributed to minority interests (Note 25)
-
-
185,200
493,092
-
-
185,200
493,092
(8,468)
PROFIT ATTRIBUTED TO THE PARENT
(3,119)
193,668
5,173
487,919
Notes 1 to 45 of the accompanying consolidated annual accounts are an integral part of the consolidated income statement for
2008.
61
Consolidated statements of recognised income and expenses (consolidated statements of changes in equity) for the years
ended 31 December 2008 and 2007 (Notes 1 to 6).
Thousands of euros
A) PROFIT FOR THE YEAR
B) OTHER RECOGNISED INCOME/(EXPENSES)
1. Available-for-sale financial assets
a) Valuation gains/losses
b) Amounts transferred to profit and loss
c) Other reclassifications
2. Cash flow hedges
c) Amounts transferred to the initial carrying amount of hedged items
d) Other reclassifications
2008
2007*
185,200
493,092
(822,102)
37,074
(1,141,506)
(531,008)
610,498
-
39,595
29,251
(10,344)
-
(17,930)
(44,050)
(26,015)
105
14,578
4,411
(10,167)
-
-
3. Exchange differences
(2,850)
(14,890)
12,040
a) Translation gains/losses
-
5. Non-current assets held for sale
-
6. Actuarial gains/losses on pension plans
(12,145)
(12,145)
7. Entities accounted for using the equity method
-
8. Other recognised income and expenses
352,329
9. Income tax
TOTAL RECOGNISED INCOME/(EXPENSES) (A+B)
a) Attributable to the parent
b) Attributable to minority interests
(1,210)
(1,210)
(15,889)
(636,902)
530,166
(628,434)
(8,468)
524,993
5,173
Notes 1 to 45 of the accompanying annual accounts are an integral part of the consolidated statement of recognised income and
expenses (consolidated statement of changes in equity) for 2008.
62
Consolidated Statement of Total Changes in Equity for years ended 31 December 2008 and 2007 (Notes 1 to 6).
Net equity attributable to the parent
Equity
2008
(Thousands of euros)
Balance at 31 December 2007
Adjustments due to changes in
accounting policy
Adjustments to correct errors
Adjusted opening balance
Total recognised
income/(expenses)
Other changes in equity
Increases/(decreases) in
capital/endowment fund
Conversion of financial liabilities
into capital
Revaluation gains on equity
instruments
Reclassification from/to financial
liabilities
Distribution of dividends/Equity
holders’ remuneration
Own securities operations (net)
Transfers between equity items
Increases/(decreases) due to
business combinations
Discretionary allocations to
community funds and projects
Equity-based payments
Rest of increases/(decreases) in
equity
Endowme
nt fund or
capital
Reserves
Income
attributable
to the parent
-
2,131,050
487,919
831,854
53,141
3,503,964
-
2,131,050
487,919
831,854
53,141
3,503,964
-
-
193,668
(822,102)
(8,468)
(636,902)
-
407,627
(21,204)
(101,496)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
407,627
-
-
-
-
-
-
-
2,538,677
63
(487,919)
(412,919)
-
Valuation
adjustments
-
-
Minority
interests
(21,204)
Total
equity
(26,496)
-
-
-
-
-
-
-
-
193,668
9,752
23,469
2,765,566
(75,000)
-
(75,000)
-
Equity
2007*
(thousands of euros)
Endowment
fund or
capital
Balance at 31 December
2006
Adjustments due to
changes in accounting
policy
Adjustments to correct
errors
Total recognised
income/(expenses)
Increases/(decreases) in
Conversion of financial
liabilities into capital
Revaluation gains on equity
instruments
Reclassification from/to
financial liabilities
Distribution of
dividends/Equity holders’
remuneration
Own securities operations
(net)
Transfers between equity
items
Increases/(decreases) due
to business combinations
community funds and
projects
Equity-based payments
Rest of increases
/(decreases) in equity
Balance at 31 December
2007
Reserves
Income
attributable
to the
parent
Minority
interests
Total
equity
794,780
46,021
3,040,531
-
-
-
794,780
46,021
3,040,531
-
1,850,045
-
-
-
1,850,045
349,685
-
-
487,919
-
281,005
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
281,005
-
1,947
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,131,050
487,919
831,854
53,141
3,503,964
64
349,685
Valuation
adjustments
(349,685)
(279,685)
-
(70,000)
-
37,074
-
5,173
530,166
1,947
(66,733)
3,267
-
(70,000)
-
Consolidated cash flow statements for the years ended 31 December 2008 and 2007 (Notes 1 to 6)
Thousands of euros
1. Cash flows from operating activities
2008
2007
*
133,582
(201,138)
Profit for the year
185,200
493,092
Adjustments for cash flows from operating activities
Depreciation of property and equipment
Other adjustments
483,394
59,894
423,500
41,204
53,304
(12,100)
Net (increase)/decrease in operating assets
(3,306,332)
(666,910)
348
(480,526)
(3,797,705)
1,638,461
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
Financial liabilities at amortised cost
Other operating liabilities
888,959
(1,959,737)
(150,789)
3,259,581
(467,302)
207,206
(3,861,010)
52,762
(531,282)
(3,660,385)
330,657
(649,361)
882,414
(180,291)
Collection/payment of income tax
19,666
100,763
2. Cash flows from investing activities
566,911
202,949
Payments:
Property and equipment
Intangible assets
Equity investments
Subsidiaries and other business units
Non-current assets and associated liabilities held for sale
Held-to-maturity investments
Other payments related with investing activities
180,801
139,555
1,594
21,084
18,568
-
269,955
158,650
25,292
86,013
-
Collections:
Intangible assets
Equity investments
747,712
6,317
741,395
-
472,904
8,086
464,818
-
267,612
(20,796)
Payments:
Dividends
Subordinated debt
Redemption of own securities instruments
Acquisition of own securities instruments
232,388
205,892
26,496
20,796
18,540
2,256
Collections:
Subordinated debt
Issue of own securities instruments
Disposal of own securities instruments
Other payments related with financing activities
500,000
500,000
-
-
3. Cash flows from financing activities
4. Effect of exchange rate changes
5. Net increase/decrease in cash and cash equivalent
6. Cash and cash equivalents at beginning of year
7. Cash and cash equivalents at end of year
20,514
30,363
988,619
11,378
801,594
790,216
1,790,213
801,594
270,951
1,519,262
1,790,213
253,798
547,796
801,594
Components of 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
Notes 1 to 45 of the accompanying consolidated annual accounts are an integral part of the consolidated cash flow statement for
2008.
65
NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEAR ENDED
31 DECEMBER 2008
1. Introduction, basis of preparation of the consolidated annual accounts and
other information
1.1.
Introduction
Caixa d'Estalvis de Catalunya (hereinafter Caixa Catalunya) is a non-profit institution classified as a general
popular savings bank. The Articles of Association and other public domain information concerning Caixa Catalunya,
which began its activities on 26 October 1926, can be consulted both on Caixa Catalunya’s official website
(www.caixacatalunya.es) 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 community work projects.
The Caixa Catalunya Group is made up of Caixa Catalunya and investees, which handle complementary
operations in the areas of finance, insurance, real estate, services, pensions, lending, etc. The statutory activities
of the main entities of the Caixa Catalunya 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
Community Projects Fund.
The consolidated annual accounts of the Caixa Catalunya Group (hereinafter also “the Group”) for 2007 were
approved at the General Assembly of Caixa Catalunya held on 12 March 2008.
1.2.
Basis of presentation of the consolidated annual accounts and comparative information
The consolidated annual accounts of the Caixa Catalunya Group for 2008 were prepared by the Board of
Directors of Caixa Catalunya on 24 February 2009. These consolidated annual accounts and those of the Group’s
investees will be presented for approval at the parent’s General Assembly and the corresponding subsidiaries’
general shareholders meetings. The Directors expect that they will be approved without modification.
The consolidated annual accounts have been prepared in accordance with 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, modified by Circular 6/2008 of 26 November, on public and
confidential financial reporting standards and financial statement models, adapting IFRS adopted by the European
Union to Spanish credit entities.
The consolidated annual accounts have been prepared taking into consideration all statutory accounting
principles and standards and measurement criteria with a significant effect on consolidated annual accounts, so
as to give a true and fair view of the consolidated equity and financial position at 31 December 2008 and of the
results of operations, of the changes in consolidated equity and of the consolidated cash flows generated for the
year then ended. These consolidated annual accounts are based on the accounting records of the Caixa
Catalunya Group.
Note 2 summarises the most significant accounting principles and policies and valuation criteria used in the
preparation of the consolidated annual accounts of the Caixa Catalunya Group for 2008.
All statutory accounting principles and criteria with a significant effect on the preparation of the consolidated
annual accounts were applied.
New standards, revised standards and amendments adopted in 2008
In accordance with the date in which they came into force, the Group has adopted the following IFRS,
amendments and interpretations published during 2008.

IFRIC 11 IFRS 2 – Group and Treasury Share Transactions (as from 1 January 2008).
Amendments to IAS 39 and IFRS 7 – Reclassification of financial assets (as from 1 July 2008).
The Group has not adopted early the other standards endorsed by the European Union permitting early
adoption at 1 January 2008.
66
At the date of preparing these consolidated annual accounts, the most significant standards and
interpretations published by the IASB (even if they are still not in force because they will take effect subsequent to
the date of the consolidated annual accounts or because they have still not been adopted by the European Union)
are as follows:
Statutory application for
years starting
Standards and modifications to standards:
IFRS 8
Operating segments
Revision of IAS 23
Borrowing costs
Revision of IAS 1
Financial statement presentation
Review of IFRS 3 (1)
Business combinations
Amendment to IAS 27 (1)
Consolidated and separate financial statements
Amendment to IFRS 2
Vesting conditions and cancellations
Puttable financial instruments and obligations arising on
Amendment to IAS 32 and IAS 1
liquidation
Cost of an investment in separate financial statements of
Amendment to IFRS 1 and IAS 27
an entity
Amendment to IAS 39 (1)
Eligible hedged items
1 January 2009
1 January 2009
1 January 2009
1 July 2009
1 July 2009
1 January 2009
1 January 2009
1 January 2009
1 July 2009
Interpretations:
IFRIC 12 (1)
IFRIC 13
IFRIC 14
IFRIC 15 (1)
IFRIC 16 (1)
IFRIC 17 (1)
Service concession arrangements
Customer royalty programmes
IAS 19 – The limit on a defined benefit asset, minimum
funding requirements and their interaction
Agreements for the construction of real estate
Hedges of a net investment in a foreign operation
Distribution of non-cash assets to owners
(3)
1 January 2009 (2)
1 January 2009 (2)
1 January 2009
1 October 2008
1 July 2009
(1)
Standards and interpretations not adopted by the European Union at the date of preparing the consolidated
annual accounts.
(2)
Date of statutory application in accordance with approval in the Official Journal of the European Union.
(3)
This interpretation is pending endorsement by the European Union.
IFRS 8 (operating segments). This standard replaces IAS 14. The main novelty of the new standard is the
requirement of an entity to adopt a “management approach” to financial reporting for segments of a business
enterprise. Generally the information to be reported will be that used by management to evaluate segment
performance and allocate resources between segments.
The Directors have not evaluated whether applying this standard will require redefining the approach to
reporting financial information by segment taken to date.
Revision of IFRS 3 (business combinations) and amendment to IAS 27 (consolidated and separate financial
statements). The modified standards were issued as a result of the project to converge the international standards
on business combinations with generally accepted accounting principles in the United States of America. The
revised IFRS 3 and amendments to IAS 27 involve very significant changes to the accounting treatment of
business combinations which, in general, place greater emphasis on the use of fair value. The Directors have not
yet assessed what impact the application of these revised and amended standards could have on future business
combinations and the respective effects on the consolidated annual accounts. Since these standards must be
applied prospectively, in general the Directors do not expect that realised business combinations will be
significantly modified.
The Directors have assessed the possible impacts of applying the remaining standards in the future and
consider that when they take effect, they will not have a significant impact on the consolidated annual accounts.
All statutory accounting principles and criteria with a significant effect on the preparation of the consolidated
annual accounts were applied.
1.3.
Responsibility for information and estimates
The information contained herein is the responsibility of the Directors of Caixa Catalunya.
67
In the preparation of the consolidated annual accounts of the Caixa Catalunya Group for 2008, estimates
made by the Directors of the Caixa Catalunya Group have occasionally been used to quantify certain assets,
liabilities, income, expenses and commitments contained therein. These estimates refer primarily to:

Impairment losses on certain assets (Notes 11, 12, 13, 14, 15 and 16).
The assumptions used for actuarial calculations of liabilities and commitments for post-employment benefits
and other long-term commitments with employees (Notes 2.13, and 42).

The useful life of property and equipment and intangible assets (Notes 2.15 and 2.16).
The fair value of certain unlisted assets and liabilities (Notes 9, 11, 12, 13, 14 and 18).

The fair value of goodwill (Note 2.16.1).

The valuation of specific allowances (Notes 23 and 28.6).
Although these estimates have been based on the best information on the issues analysed available at 31
December 2008, 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.
Comparative information and information for 2007
The information for 2007 disclosed in these notes to the consolidated annual accounts is presented for
comparative purposes only and therefore, does not constitute the consolidated annual accounts for 2007.
The models of the consolidated balance sheet, consolidated income statement, consolidated statement of
recognised income and expenses, consolidated statement of total changes in equity and consolidated statement
of cash flows presented in these consolidated annual accounts are in line with the models contained in Bank of
Spain Circular 4/2004, modified in 2008 by Bank of Spain Circular 6/2008, and differ in terms of the basis of
presentation of certain items and margins from those presented in the consolidated annual accounts as at and for
the year ended 31 December 2007.
As a result of this change, which has no impact on equity or the result, the consolidated financial statements
for 2007, presented for comparative purposes in these consolidated annual accounts, have been modified from
those presented in the previous year to adapt them to the formats established by Bank of Spain Circular 4/2004,
modified by bank of Spain Circular 6/2008.
A reconciliation of the consolidated balance sheet at 31 December 2007 which formed an integral part of the
consolidated annual accounts at that date and the consolidated balance sheet presented for comparative
purposes in these consolidated annual accounts at 31 December 2008 have been modified to bring them into line
with the aforementioned model, is as follows:
68
Structure of assets on the consolidated balance sheet in
accordance with Bank of Spain Circular 6/2008
Thousands of euros
Thousands of euros
ASSETS
Cash and balances with central banks
Held for trading
Other financial assets at fair value
through profit and loss
Available-for-sale financial
assets
2007
801,594
i k derivatives
Hedging
Non-current assets held for sale
Equity investments
Pension-linked
insurance contracts
Reinsurance assets
Intangible assets
Tax assets
Other assets
1,767,228
Held for trading
55,971
Available-for-sale financial
assets
6,973,524
55,183,842
-
Changes in fair value of hedged items
in portfolio hedges of interest rate
ASSETS
801,594
1,767,069
55,971
6,973,524
55,184,001
(3,522)
256,735
Hedging derivatives
373
285,546
Equity investments
(3,522)
256,735
373
285,546
Pension-linked
insurance contracts
15,675
Reinsurance assets
1,145,419
Intangible assets
49,682
348,949
Tax assets
1,320,399
Prepayments and accrued income
Other assets
TOTAL ASSETS
2007
TOTAL ASSETS
68,201,415
15,675
1,145,419
49,682
348,949
18,713
1,301,686
68,201,415
Structure of liabilities on the consolidated balance
sheet in accordance with Bank of Spain Circular
6/2008
Thousands of euros
Thousands of euros
EQUITY AND LIABILITIES
Held for trading
Other financial liabilities at fair value
Hedging derivatives
Liabilities associated with non-current
assets held for sale
2007
EQUITY AND LIABILITIES
1,302,859
Held for trading
Other financial liabilities at fair value
-
Financial liabilities at fair value
through equity
59,884,048
(150,199)
333,760
-
59,910,371
(150,199)
Hedging derivatives
268,543
Provisions
302,310
2,192,703
-
Changes in fair value of hedged
items in portfolio hedges of
Liabilities associated with noncurrent assets held for sale
Liabilities under insurance contracts
Liabilities under insurance contracts
2007
1,299,899
2,192,703
Tax liabilities
500,158
Provisions
302,310
Community Projects Fund
147,532
Tax liabilities
500,158
Other liabilities
184,279
181,708
Other liabilities
191,957
-
Equity having the substance of a
financial liability
TOTAL LIABILITIES
Equity
Valuation adjustments
Minority interests
TOTAL EQUITY
TOTAL LIABILITIES
64,697,450
Minority interests
2,618,970
831,854
53,141
Equity
3,503,965
TOTAL EQUITY
68,201,415
69
64,697,450
53,141
831,854
2,618,970
3,503,965
68,201,415
A reconciliation of the consolidated income statement for the year ended 31 December 2007 which formed an
integral part of the consolidated annual accounts for 2007 and the consolidated income statement for the same
period prepared in accordance with the model established by Bank of Spain Circular 4/2004, modified Bank of
Spain by Circular 6/2008, presented for comparative purposes in the consolidated annual accounts for 2008, is as
follows:
Structure of the consolidated income statement in
Structure of the consolidated income statement in
Thousands of euros
Thousands of euros
2007
2007
Interest and similar income
2,936,211
2,829,532
Interest and similar expenses
Remuneration of repayable capital
payable on demand
2,080,784
2,042,306
INTEREST MARGIN
Income from equity instruments
Share of income of entities accounted
for using the equity method
Fee and commission income
Fee and commission expense
Gains/(losses) on financial assets and
liabilities (net)
Exchange differences (net)
Other operating income
Other operating expenses
GROSS MARGIN
Administrative expenses
- Personnel expenses
- Other general administrative expenses
Depreciation and amortisation
Provisions (net)
855,427
NET INTEREST INCOME
53,415
840,641
53,415
Share of income of entities accounted
for using the equity method
25,142
371,982
371,982
49,014
Insurance business
Gains/(losses) on financial assets and
liabilities (net)
63,782
49,014
(35,928)
30,363
1,078,678
ORDINARY INCOME
995,556
1,334,509
30,363
1,246,968
342,548
Cost of sales
268,720
416,327
Personnel expenses
36,506
416,327
Other general administrative expenses
(1,418)
(35,928)
Sale and income from provision of nonfinancial services
646,960
230,633
53,304
25,142
230,633
53,304
7,921
Impairment losses on financial assets
(net)
350,655
649,117
285,008
Impairment losses (net)
344,896
Impairment losses on other assets
(net)
Gains/(losses) on sale of non-current
assets held for sale
Gains/(losses) on sale of non-current
assets held for sale not classified as
discontinued operations
PROFIT BEFORE TAX
Income tax
Compulsory allocation to community
funds and projects
PROFIT FOR THE YEAR FROM
CONTINUED OPERATIONS
Profit/(loss) from discontinued operations
(net)
CONSOLIDATED PROFIT FOR THE
YEAR
Profit attributable to the parent
Profit attributable to minority interests
Provisions (net)
(5,759)
(1,418)
Financial income on non-financial
activities
Financial expenses from nonfinancial activities
306,207
-
(3,119)
323,451
Other losses
19,203
593,855
PROFIT BEFORE TAX
100,763
Income tax
Compulsory allocation to community
funds and projects
PROFIT/(LOSS)
ACTIVITY
493,092
FROM
ORDINARY
Profit/(loss) from discontinued operations
(net)
-
29,450
Other gains
593,855
-
13,418
100,763
493,092
-
493,092
CONSOLIDATED PROFIT FOR THE
YEAR
493,092
487,919
5,173
Profit attributable to the parent
Attributed to minority interests
487,919
5,173
The principal differences between the consolidated financial statement models established in Bank of Spain
Circular 4/2004, modified by Bank of Spain Circular 6/2008, used to prepare these consolidated annual accounts
and those used to prepare the consolidated annual accounts for 2007 are as follows:
70
1. Consolidated balance sheet. Compared to the balance sheet comprising an integral part of the
consolidated annual accounts at 31 December 2007, the balance sheet model presented in these
consolidated annual accounts:
a) Includes under assets, “Property and equipment– Property, plant and equipment”, which groups
“Property, plant and equipment – Own use”, “Property, plant and equipment – Other assets under operating
lease”, and “Property, plant and equipment – Assigned to Community Projects” included under assets on
the consolidated balance sheet presented in the consolidated annual accounts for 2007.
b) Includes under assets, “Other assets”, which groups “Prepayments and accrued income” and “other
assets” included under assets on the consolidated balance sheet presented in the Group’s consolidated
annual accounts for 2007.
c) Does not include the liabilities "Financial liabilities at fair value through equity (net)” (which was zero in
the balance sheet included in the Group’s consolidated annual accounts at 31 December 2007) or “Equity
having the substance of a financial liability”, the balance of which is recognised under “Financial liabilities at
amortised cost” under liabilities in the consolidated balance sheet.
d) Separately presents “Community Projects Fund”, which was included under “Other liabilities” on the
consolidated balance sheet included in the consolidated annual accounts at 31 December 2007.
e) Includes under liabilities, “Other liabilities” which groups “Accrued expenses and deferred income” and
“Other liabilities” recognised under liabilities on the consolidated balance sheet included in the annual
accounts at 31 December 2007 (excluding the part corresponding to the abovementioned Community
Projects Fund).
f)
Includes a new caption under liabilities entitled “Capital repayable on demand”.
g) Eliminates "Participating stock and associated funds" under consolidated equity, which is now
recognised as “Other equity instruments” under consolidated equity.
h) Eliminates the adjustments to the value of consolidated equity “Financial liabilities at fair value through
equity”, the balance of which has been transferred to the new caption “Other valuation adjustments”. A new
caption is also included in the adjustments to the value of consolidated equity entitled “Entities accounted
for using the equity method” in which the valuation adjustments arising from recognising investments in
associates and jointly-controlled entities using the equity method are recognised separately.
i) "Other financial assets” under loans and receivables on the assets side of the balance sheet is
eliminated and the items therein are transferred to “Due from banks” and “Customer loans” under the same
caption on the assets side of the balance sheet taking into account the sector to which each item belongs.
j) The breakdown by substance of assets recognised under “Non-current assets held for sale” on the
assets side of the balance sheet is eliminated.
k) “Provisions – Provisions for taxes” is renamed “Provisions – Provisions for taxes and other legal
contingencies”, whereby this caption will include not only tax contingencies but also legal contingencies,
which were recognised in the previous model under “Provisions – Other provisions”.
l) Lastly, certain equity items have also changed name without giving rise to substantial changes (e.g.
“Profit attributable to equity holders of the parent” has been changed to “Profit attributable to the parent”).
2. Consolidated income statement. Compared to the income statement comprising an integral part of
the consolidated annual accounts at 31 December 2007, the income statement model presented in
these consolidated annual accounts:
a) Does not include the “Net interest income” and introduces a new margin entitles “Interest margin”
comprising the difference between "Interest and similar income" and “Interest and similar expenses” and
“Remuneration of capital repayable on demand” (the latter of which did not exist on the consolidated
income statement forming an integral part of the Group’ consolidated annual accounts as at and for the
year ended 31 December 2007).
b) The results of the Group’s insurance business are no longer aggregated and are recognised according
to their substance under various consolidated income statement captions with a subsequent impact on
each of the margins and captions therein.
71
Specifically, income from insurance and reinsurance contracts is recognised under “Other operating
income” in the consolidated income statement, while claims paid and other insurance-related expenses,
premiums paid to third parties for reinsurance, and provisions made to cover insurance-related risks
accrued by the insurance business are included under “Other operating expenses” in the consolidated
income statement. Financial income and expenses from the insurance and reinsurance business is
included under “Interest margin”, “Interest and similar income”, and “Interest and similar expenses”.
c) Includes a new margin entitled “Gross margin”. “Ordinary income" is eliminated. This new “Gross
margin” is similar to the former “Ordinary income", basically except for the fact that it includes other
operating income and expenses, which were not included under ordinary income, and the effect of
including the financial income and expenses from non-financing activity in accordance with their substance.
d) Eliminates “Sales and income from non-financial services” and “Cost of sales” in the consolidated
income statement, which are now basically recognised under “Other operating income” and “other
operating expenses” in the consolidated income statement.
e) “Personnel expenses” and “Other general administrative expenses” are now included under
“Administration expenses”.
f) “Impairment losses (net)" are now presented under two captions: “Impairment losses on financial
assets (net)”, including the net impairment losses on financial assets other than equity instruments
classified as “Equity investments”, and “Impairment losses on other assets (net)”, including the net
impairment losses on equity instruments classified as “Equity investments” and other non-financial assets.
g) Eliminates “Financial income on non-financial activities” and “Financial expenses from non-financial
activities”, which are basically now recognised under “Interest and similar income” and “Interest and similar
expenses” in the consolidated income statement.
h) Eliminates the "Operating income” and includes “Net operating margin”. These two margins differ in
that the second includes the Group’s financial income and expenses from non-financial activities, net
impairment losses on financial instruments and net provisions.
i)
Does not include “Other gains” and “Other losses”.
j) Includes three new captions: “Gains/(losses) on sale of assets not classified as non-current assets held
for sale”, “Loss on business combinations” and “Gains/(losses) on sale of non-current assets held for sale
not classified as discontinued operations”, which primarily comprise items which formed part of the two
abovementioned eliminated captions. “Gains/(losses) on sale of non-current assets held for sale not
classified as discontinued operations” comprises, inter alia, net impairment losses on these assets which
prevailing legislation does not establish should be recognised under a different caption, and the gains and
losses on the sale of equity instruments, which the Board of Directors of Caixa Catalunya was responsible
for deciding to sell due to their special characteristics.
The other gains and losses that were recognised under the two eliminated captions not included in the
three newly-created captions have been classified on the consolidated income statement according to their
substance.
k) Gains and losses on financial operations involving financial instruments at cost, amortised cost or
available for sale which differ from the adjustments to fair value hedges which hedge these items, are now
recognised as “Other financial instruments not at fair value through profit and loss” under “Gains/(losses)
on financial assets and liabilities (net)” in the consolidated income statement.
3. Consolidated statement of income and recognised expenses and full-format consolidated
statement of total changes in equity. The consolidated statement of changes in equity and details of
changes in equity disclosed in the notes to the annual accounts as at and for the year ended 31
December 2007 are replaced by the model statement of recognised income and expenses and
statement of total changes in equity included in these annual accounts for 2008, which basically
include the following significant differences:
a) Both the consolidated statement of total changes in equity and the consolidated statement of
recognised income and expenses are presented in the consolidated annual accounts as two separate
statements, while no disclosures on the information therein being given in the notes to the financial
statements.
b) The consolidated statement of recognised income and expense does not separately include “Other
financial liabilities at fair value”, which are included under “Other recognised income and expenses”.
72
c) The consolidated statement of recognised income and expenses includes “Actuarial gains/(losses) on
pension plans” under which changes in equity resulting from recognition of these actuarial gains and losses
are recognised; “Entities accounted for using the equity method” including variations resulting from
adjustments to the value of consolidated equity due to recognising investments in associates and jointlycontrolled entities using the equity method; and “Other recognised income and expenses” which includes
items recognised as valuation adjustments to consolidated equity that are not recognised under any
specific captions of this statement.
d) The consolidated statement of recognised income and expenses includes “Income tax” under which the
tax effect of items taken directly to equity is recognised, with the exception of “Entities accounted for using
the equity method”, which are presented net of the corresponding tax effect, whereby the gross amounts of
items comprising each caption charged to valuation adjustments to consolidated equity are presented.
In the consolidated statement of changes in equity model included in the consolidated annual accounts for
2007, each item recognised as a valuation adjustment is presented net of the tax effect.
4. Consolidated cash flow statements. Details of cash and cash equivalents are provided at the end of
the model included in these consolidated annual accounts, which were not included in the
consolidated cash flow statement presented in the consolidated annual accounts at 31 December
2007. Certain details of specific operating assets and liabilities, adjustments to profit and loss, and
cash flows from financing activities are eliminated, while the wording and disclosures of certain
captions comprising cash flows from investing activities are modified.
1.5.
Ownership interests in credit entities
At 31 December 2008 the Caixa Catalunya 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.
1.6.
Environmental impact
Given the nature of their principal activity, the entities comprising the Caixa Catalunya Group have no
liabilities, expenses, assets, provisions or contingencies of an environmental nature that could be significant in
relation to the Group's equity, financial situation, or results. Therefore, these notes to the consolidated annual
accounts do not include any specific disclosure on environmental issues.
1.7.
Minimum capital requirements
1.7.1. Minimum Equity Ratio
At 31 December 2008 and 2007, and throughout these two years, the Caixa Catalunya Group met the
minimum levels of this requirement as established in applicable Spanish regulations based on Regulation
1745/2003 of 12 September 2003.
1.7.2. Minimum Cash Reserve Requirement
At 31 December 2008 and 2007, and throughout these two years, the Caixa Catalunya Group met the
minimum levels of this requirement as established in applicable Spanish regulations based on Regulation
1745/2003 of 12 September 2003.
1.8.
Deposit Guarantee Fund
Caixa Catalunya is a member of the Savings Bank Deposit Guarantee Fund.
During 2008 and 2007, the expense for contributions made by the Caixa Catalunya Group to this body
amounted to 9,498 thousand euros and 7,284 thousand euros, and was charged against “Other operating
expenses” in the accompanying consolidated income statement (see Note 41).
1.9.
Subsequent events
Between 31 December 2008 and the date on which these consolidated financial statements were prepared no
significant subsequent events arose.
73
2. Accounting principles and measurement criteria
The accounting principles and measurement criteria applied in preparing the Group’s consolidated annual
accounts for 2008 were as follows:
2.1.
Consolidation
2.1.1. Subsidiaries
Those entities over which the Caixa Catalunya 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 other circumstances or
agreements which grant the Caixa Catalunya 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.
Subsidiaries consolidated annual accounts are fully consolidated with those of Caixa Catalunya 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:

the Group’s equity is shown under “Minority interests” on the consolidated balance sheet (see Note 25).

consolidated profit for the year is recognised in “Profit attributed to minority interests” on the consolidated
income statement (see Note 25).
The profit or losses of subsidiaries which have been acquired during the year are only consolidated insofar as
they relate to the period from the date of acquisition to year end, inclusive. The profit or losses of subsidiaries
which have been sold during the year are only consolidated insofar as they relate to the period from the beginning
of the year to the disposal date.
The most significant acquisitions and disposals of subsidiaries during 2008 are disclosed in Note 5.
The following table contains relevant information on group entities at 31 December 2008:
74
Thousands of euros
2008
Company
Business
Caixa
Catalunya’s
direct or
indirect
stake
Dividends
Investment
cost
(net)
distributed
Profit/(loss)
Assets
Liabilities
1
Equity
after tax
during
2008
Promotora Catalunya
2
Mediterránea, SA
Real-estate
development
100%
203,875
1,137,512
917,054
253,020
(32,562)
40,499
Ascat Vida, SA de Seguros y
3
Reaseguros
Insurance and
pension fund
management
100%
114,211
2,685,427 2,515,145
144,976
25,306
30,739
Investment in
securities
100%
110,707
122,779
4,341
123,314
(4,876)
-
Land
development
100%
103,210
1,073,959
974,516
103,210
(3,767)
-
Real-estate
development
100%
73,672
428,286
360,960
62,391
4,936
-
Investment in
securities
100%
53,768
60,499
1,652
57,007
1,840
690
Real-estate
development
100%
37,839
54,622
13,429
36,651
4,542
-
100%
31,637
30,307
5
32,075
(1,773)
4,680
Alcalá 120, Promociones y
7
Gestión Inmobiliaria, SL
Investment in
securities
Real-estate
development
100%
26,072
299,449
287,098
28,834
(16,483)
-
Club de Golf Hacienda del Álamo,
5
SL
Real-estate
development
97.87%
25,205
26,844
691
26,926
(773)
-
100%
23,217
43,529
5,464
26,491
11,574
16,768
Invercartera, SA
4
2
Gescat, Gestión de Suelo, SL
Armilar Procam, SL
5
Invercartera Energía, SL
Inpau, SA
6
2
6
Invercartera Capital SCR, SA
Caixa Catalunya Gestión, Gestora Investment fund
de Instituciones de Inversión
management
3
Colectiva, SA
Ascat Seguros
3
Generales, SA
Non-life
insurance
100%
12,000
40,771
27,108
11,958
1,705
-
Gescat, Viviendas en
2
Comercialización, SL
Real-estate
development
100%
8,010
144,527
137,917
8,010
(1,400)
-
Real-estate
development
51%
7,663
14,850
2
14,845
3
-
Investment in
securities
Real-estate
development
Real-estate
development
100%
7,105
8,699
2
7,954
743
801
100%
6,835
23,270
14,047
7,045
2,178
-
50%
6,275
42,760
31,321
12,302
(863)
-
Real-estate
development
100%
5,810
138,230
132,443
5,810
(23)
-
Investment in
real estate
100%
5,561
41,618
37,069
5,499
(950)
-
Internet
information
leisure offers
100%
5,415
3,972
251
3,380
341
-
Real-estate
development
50%
4,907
152,892
165,277
10,989
(23,374)
-
Real-estate
development
50%
4,750
15,950
7,764
9,594
(1,408)
-
Audiovisual
productions
100%
4,340
571
601
373
(403)
-
Real-estate
development
Investment in
securities
100%
3,230
31,247
30,314
1,794
(861)
-
100%
3,145
3,149
4
3,070
75
-
Promocions Terres Cavades, SA
8
Invercartera Internacional, SL 4
.9
Cerbat, SL
TP Best 4000, SL
8
2
Activos Macorp, SL
4
Casigar Inversiones 2008, SL
Caixa Catalunya Tel.Entrada, SL
Seif Procam, SL
10
11
Area Tres Procam, SL
The Gaudins Projects, SL
Proviure, SA
4
12
Car 2000 Inversiones Mobiliarias,
3
SA
6
75
Thousands of euros
2008
Company
Business
Financial
brokerage
Caixa Catalunya International
13
Finance BV
Caixa
Catalunya’s
direct or
indirect
stake
Dividends
Investment
cost
(net)
distributed
Profit/(loss)
Assets
Liabilities
1
Equity
after tax
during
2008
100%
2,000
12,546
10,157
2,000
389
601
Jale Procam, SL
14
Real-estate
development
50%
1,953
21,951
19,698
2,638
(385)
-
Procamvasa, SA
15
Real-estate
development
50%
1,570
14,439
6,389
8,247
(197)
-
Insurance
brokerage
Energy
generation
Real-estate
development
100%
1,539
18,944
11,564
1,334
6,046
5,614
100%
1,346
19,136
17,518
1,282
336
-
75%
1,013
6,210
4,833
1,748
(371)
-
Gestión de Activos Titulizados,
Securitization
Sociedad Gestora de Fondos de fund
4
Titulización, SA
100%
902
4,511
840
1,263
2,408
1,741
Real-estate
development
50%
812
28,746
30,205
3,505
(4,964)
-
Real-estate
development
51%
720
74,499
83,919
175
(9,595)
-
Real-estate
development
100%
680
4,727
4,238
559
(70)
-
2
Real-estate
development
100%
530
4,911
4,660
458
(207)
-
18
Real-estate
development
80%
406
70
117
(47)
-
-
Real-estate
development
50%
300
40,931
39,283
818
830
-
Investment in
securities
100%
300
8,596
4,107
294
4,195
-
Home rental
100%
210
13,411
12,545
180
686
-
74.88%
180
3,460
3,616
(81)
(75)
-
50%
156
3,194
2,152
897
145
-
3, 23
Ascat Mediació Operador
Bancassegurances Vinculat, SL
4, 24
Bargas Solar,
S.B.D. Nord, SL
11
Premier Procam, SA
Pórtico Procam, SL
16
17
Proviure Barcelona, SL
2
Proviure Ciutat de Lleida, SL
Viviendas en Propiedad, SL
Aprosa Procam, SL
19
Invercartera Fotovoltaica, SL
4
Proviure Parc d?Habitatges, SL
12
Ecoparque Besaya, SL 10
Real-estate
development
Información i Tecnologia
18
Catalunya, SL
Computing
services
Caixa Catalunya Administración y
4
Gestión de Servicios, SA
Services
100%
152
37,690
29,381
1,682
6,627
8,740
Sports and
leisure centre
and car park
Financial
brokerage
100%
60
1,809
1,644
137
28
-
100%
60
480,223
480,085
73
65
81
Financial
services
100%
60
2,181
862
72
1,247
727
85%
51
54
-
59
(5)
-
Centre Lúdic Diagonal, SA
6
Caixa Catalunya Preferents, SA
Caixa Catalunya Servicios
4
Empresa, SL
Metropolitan Procam, SL
7
6
Real-estate
development
Parque Fotovoltaico Puebla
4, 25
Montalbán
Energy
generation
100%
22
57
71
12
(26)
-
MRD Registro y
20
Documentación, SL
Services
100%
17
2,028
468
111
1,449
2,340
60%
5
2,216
1,385
1,008
(177)
-
Internet services
100%
3
1
0
2
(1)
-
Financial
brokerage
100%
1
9,337
9,066
134
137
313
Fodecor, SA
21
Caixa Catalunya On Line, SL
Real-estate
development
6
Caixa Catalunya International
22
Finance Limited
76
1
Does not include after-tax income
15
Registered office: pasaje Doctor Serra, 2, Valencia
2
Registered office: passeig de Gràcia, 49, Barcelona
16
Registered office: c/ Velázquez, 150, Madrid
3
Registered office: c/ Provença, 398-404, Barcelona
17
Registered office: paseo de la Castellana, 123, Madrid
4
Registered office: c/ Fontanella, 5-7, Barcelona
18
Registered office: avda. Ventisquero de la Condesa, 46, Madrid
5
Registered office: passeig del Ferrocarril, 337, Castelldefels
19
Registered office: avda. Diagonal, 615, Barcelona
6
Registered office: plaça Antoni Maura, 6, Barcelona
20
Registered office: avda. Icària, 148-150, Barcelona
7
Registered office: avda. Indústria, 4, Barcelona
21
Registered office: Rbla. Catalunya, 53, Barcelona
8
Registered office: avda. Roma, 6, Tarragona
22
Registered office: Ugland House South Church Street, Box
9
Registered office: Mª Aurèlia Campany, 2, Lleida
23
Formerly Ascat Correduría de Seguros, SL. Change of business
10
Registered office: Bausa, 13-15, Madrid
11
Registered office: c/ Estrella, 157, Barcelona
12
13
Registered office: c/ Prins Bernhardplein, 200 1097 JB,
Amsterdam, Holland
14
309, George Town, Cayman Islands
name in 2007.
24
Group made up of 25 limited companies with the same business
25
Group made up of 7 limited companies with the same business
name, plus a number from 1 to 25.
name, plus a number from 1 to 7.
Registered office: c/ Virgen de los Milagros, 48, Puerto
de Santa María, Cadiz
The Caixa Catalunya 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 30.5), 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
(“participants”) 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 participants. These operations or assets are not integrated
into financial structures other than those of the participants.
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 with the first transitional provision of Bank of Spain Circular 4/2004, Section L) Joint ventures,
the Caixa Catalunya Group has opted to consolidate the consolidated annual accounts of investees classified as
jointly-controlled entities using the equity method (see Note 2.1.3).
Information on the most significant acquisitions in 2008 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 16.2.
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 key information on these entities:
77
Thousands of euros
2008
Company
Business
2
Garveprasa, SGPS, SA
Prasa y Procam, SL
Prasatur, SL
3
4
Unión Sanyres, SL
5
Corporación Bética
3
Immobiliaria, SA
Caixa
Catalunya’s
direct or
indirect stake
Investment
cost
(net)
Profit/(loss)
Assets
Liabilities
1
Equity
after tax
Dividends
distributed
during
2008
Real-estate
development
50%
125,129
472,019
240,366
233,358
(1,705)
6,000
Real-estate
development
50%
66,925
329,906
196,504
136,104
(2,702)
-
Real-estate
development
50%
23,064
152,325
152,672
2,023
(2,370)
-
Senior citizen
residences
Real-estate
development
25%
40,568
161,755
(23)
161,919
(141)
-
50%
18,871
122,423
129,563
(5,805)
(1,335)
-
25%
25,758
223,321
126,175
100,476
(3,330)
-
50%
21,515
352,191
335,545
46,960
(30,314)
2,076
2,500
Centros Residenciales Sanyres Real-estate
4
Sur, SL
development
6
Real-estate
Vertix Procam, SL
development
Riofisa Procam, SL
7
Real-estate
development
50%
18,991
167,462
123,263
38,963
5,236
Ávenis Procam, SL
8
Real-estate
development
50%
15,000
155,577
152,395
25,640
(22,458)
-
Torca Procam Polska SP.
9
ZOO
Real-estate
development
50%
13,265
125,788
129,306
1,330
(4,848)
-
Espais Catalunya Inversions
10
Inmobiliàries, SL
Real-estate
development
51%
11,094
286,670
276,040
7,884
2,746
-
Espais Catalunya
10
Mediterrània, SA
Investment in
securities
33%
10,659
29,800
9
30,535
(744)
-
Road
infrastructure
20%
10,584
56,736
4,551
52,520
(335)
-
Investment in
securities
47.37%
9,832
92,943
72,521
20,289
133
-
Real-estate
development
33.33%
3,333
26,180
23,596
9,455
(6,871)
-
Real-estate
development
25%
5,989
74,585
82,961
617
(8,993)
-
Real-estate
development
50%
5,630
56,280
58,294
7,607
(9,623)
-
Puerto Ciudad Las Palmas,
14
SA
Real-estate
development
47.5%
5,514
73,830
60,135
14,096
(401)
-
Cedinsa Ter Concesionaria,
11
SA
Road
infrastructure
20%
4,500
88,306
66,756
22,032
(482)
-
Cedinsa EixTransversal
11
Concesionaria, SA
Road
infrastructure
20%
4,310
32,594
11,442
21,015
137
-
39.80%
4,259
6,191
2
6,219
(30)
-
Real-estate
development
50%
4,227
155,692
146,483
12,719
(3,510)
-
Real-estate
development
50%
3,853
62,107
56,374
8,307
(2,574)
1,295
Real-estate
development
50.07%
3,755
191,665
190,381
8,065
(6,781)
268
Senior citizen
residences
25%
3,117
32,954
46,134
(11,015)
(2,165)
-
Cedinsa Concesionaria, SA
Volja Plus, SL
11
12
Millennium Procam, SL
Sanyres Sur, SL
7
4
Adendia Procam, SL
Ocycandey 2006, SL
13
15
Energy
generation
Promociones MRA Procam,
16
SA
Nou Mapro, SA
17
Pronorte Uno Procam, SA
Sanidad y Residencias
5
21, SA
18
78
Thousands of euros
2008
Company
Business
Meridional Solar, SL
Mankel System, SL
19
10
Parque Eólico Los Pedreros,
20
SL
Eugesa Procam, SL
21
Caixa
Catalunya’s
direct or
indirect stake
Investment
cost
(net)
Dividends
distributed
during
2008
Profit/(loss)
Assets
Liabilities
1
Equity
after tax
Investment in
securities
50%
3,002
13,555
7,816
6,344
(605)
-
Investment in
securities
33%
2,971
24,418
17,032
7,882
(496)
-
Energy
generation
40%
2,803
48,585
39,459
8,152
974
-
Real-estate
development
55%
2,750
36,611
33,312
5,554
(2,255)
-
38.81%
2,445
43,578
37,894
6,012
(328)
-
Iniciativas Eólicas Castellanas,
22
SA
Energy
generation
Cedinsa d’Aro
11
Concesionaria, SA
Road
infrastructure
20%
2,200
79,919
69,305
10,969
(355)
-
Inmobiliaria Monte Boadilla,
23
SL
Real-estate
development
51%
2,075
43,542
37,890
4,767
885
-
Real-estate
development
26.43%
1,983
11,108
7,227
3,731
150
-
Real-estate
development
51%
1,530
63,401
61,251
3,136
(986)
-
31.9%
1,500
2,714
1,846
1,003
(135)
-
Real-estate
development
50%
1,500
24,265
44,514
2,093
(22,342)
-
Energy
generation
20%
1,394
42,360
31,985
6,629
3,746
399
Hotel
management
33%
1,344
5,000
3,244
2,621
(865)
-
Real-estate
development
51%
1,275
7,825
7,306
2,469
(1,950)
-
Real-estate
development
50%
1,250
23,842
22,873
2,498
(1,529)
-
Parque Eólico Coll del Moro,
12
SL
Energy
generation
40%
1,242
4,713
4,705
8
-
-
Parque Eólico de Torre
12
Madrina, SL
Energy
generation
40%
1,242
4,593
4,586
7
-
-
Promociones Mies del Valle,
29
SL
Real-estate
development
51%
1,020
10,840
9,206
1,678
(44)
-
Privilege Inversiones SIMCAV,
30
SA
Investment in
securities
29%
992
3,426
4
3,338
84
-
Real-estate
development
50%
750
17,663
16,627
926
110
-
Alma Hotelmanagement
32
GmbH
Hotel
management
33%
705
3,284
2,352
1,378
(446)
-
4
Real-estate
development
25%
645
493
516
(19)
(4)
-
Tein Centro Tecnológico del
33
Plástico, SL
Industrial
services
40%
640
5,798
6,497
(50)
(649)
-
Parque Eólico de Vilalba dels
12
Arcs, SL
Energy
generation
40%
621
1,960
1,957
3
Badalona Building Waterfront,
10
SL
Real-estate
development
50%
559
45,463
45,042
442
(21)
Baring Private Equity Partners
34
España, SA
Securitised
fund
management
Real-estate
development
45%
465
2,250
1,633
(239)
856
447
50%
430
2,848
2,107
824
(83)
-
Promar 21, SL
4
Nova Terrassa-3, SL
24
Centro Inmunológico de
25
Catalunya, SA
Euro Lendert, SL
Health services
26
Elecdey Carcelén, SL
27
Alma Gestión de Hoteles, SL
Nova Egara-Procam, SL
Vicsan-Procam, SL
Torca Procam, SA
24
28
31
Alzambra Sanyres, SL
Proviure CZF, SL
10
35
79
-
-
Thousands of euros
2008
Company
Business
Espais Cerdanyola, SL
Miyuki 2000, SL
10
243
231
-
Real-estate
development
50%
325
43,977
36,406
2,715
4,856
-
Energy
generation
40%
318
22,346
21,659
791
(104)
-
Real-estate
development
50%
150
26,130
22,827
2,942
1,167
Investment in
securities
50%
100
135
7
130
(2)
-
Investment in
securities
34%
87
122,031
121,776
255
-
-
Energy
generation
20%
42
141
(27)
164
4
-
Real-estate
development
51%
31
85
4
72
9
-
Energy
generation
50%
2
4
1
3
-
-
Investment in
securities
33%
3
6
-
7
(1)
-
Real-estate
development
51%
2
459
365
93
1
-
Energy
generation
50%
2
313
367
3
(57)
-
Energy
generation
50%
2
36
35
3
5
Senior citizen
residences
25%
1
784
2,923
5
Senior citizen
residences
25%
1
1,208
Real-estate
development
33%
1
Energy
generation
36%
1
36
19
7
39
Nova Terrassa-30, SL
24
Bargas Solar Mater, SL
40
Parque Fotovoltaico Puebla de
19
Montalbán 15, SL
Sanyres European Care I, SL
Sanyres Margarethenhof, SL
Ecamed Pamplona, SL
41
Parque Eólico de Molinars,
12
SL
after tax
81,673
Parque Fotovoltaico Puebla
19
de Montalbán
Tolosa 161, SL
1
Equity
82,147
38
Viviendas Mirp, SL
Liabilities
363
Generadora Energética
37
Solar, SL
Cedinsa Solar, SL
Profit/(loss)
Assets
Dividends
distributed
during
2008
50%
Desarrollos Catalanes del
12
Viento, SL
Volja Lux, SARL
Investment
cost
(net)
Real-estate
development
10
Provicat Sant Andreu, SA
Caixa
Catalunya’s
direct or
indirect stake
361
(2)
-
(1,444)
(695)
-
3,686
(1,499)
(979)
-
4,270
4,284
3
(17)
-
4
1
3
-
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.
80
-
1
Registered office: rúa das Cássias, Edificio Los Arcos,
Vilamoura, Portugal
3
Registered office: c/ San Álvaro, 2, Córdoba
4
Registered office: avda. Grande Capitán, 2, Cordoba
5
Registered office: c/ Alcalde Guzman, s/n, Córdoba
6
Registered office: rda. General Mitre, 12, Barcelona
7
Registered office: avda. Europa, 22, Parque Empresarial
La Moraleja, Alcobendas, Madrid
8
Registered office: pg. del Ferrocarril, 337, Castelldefels
9
Registered office: Ul. Gliwicha, 228-40-861, Katowice, Poland
10
Registered office: c/ Balmes, 155, Barcelona
11
Registered office: c/ Tarragona, 141-157, bloque B, Barcelona
12
Registered office: c/ Fontanella, 5-7, Barcelona
13
Registered office: c/ O'Donnell, 4, Madrid
14
Registered office: muelle de Sta. Catalina, s/n, Centro
Comercial el Muelle, Las Palmas
15
Registered office: Barrio Rubo, s/n, Pielagos, Cantabria
16
Registered office: avda. Sancho el Fuerte, 18, Pamplona
17
Registered office: rda. Zamenhof, 24, Sabadell
18
Registered office: c/ Príncipe Vergara, 43, Madrid
19
Registered office: c/ General Pardiñas, 92, Madrid
20
Registered office: c/ Amistad, 23, Barcelona
21
Registered office: c/ Major, 182, Salt, Girona
22
Registered office: c/ Condestable, 4, Burgos
2
23
Registered office: c/ Virgen de la Alegría, 5, Madrid
Registered office: c/ Major, 17, Terrassa
25
Registered office: c/ Alta Ribagorça, 12, Pol. Mas Blau II,
El Prat de Llobregat
26
Registered office: ctra. Alcalá de Henares a Camarma de
Esteruelas, km 4.9, Madrid
27
Registered office: Muela de la Peña Negra, Polígono 13,
Carcelén, Albacete
28
Registered office: pça. de la Font, 5, Torredembarra,
Tarragona
29
Registered office: avda. San Juan del Canal, 37,
Soto de la Marina, Cantabria
30
Registered office: C/ Provença, 398-404, Barcelona
31
Registered office: c/ Fluvià, 64, Badalona
32
Registered office: Brahmsstrasse, 10, 14193 Berlin, Germany
33
Registered office: c/ Sepúlveda, 32, Barcelona
34
Registered office: c/ Hermosilla, 11, Madrid
35
36
Registered office: c/ Vilamarí, 75, Barcelona
37
Registered office: c/ Muntaner, 536, Barcelona
38
Registered office: 51 Avenue J-F. Kennedy, L-1855
Luxembourg
39
Registered office: c/ Navas de Tolosa, 161, Terrassa,
Barcelona
40
Registered office: c/ María de Molina, 39. Madrid.
41
Registered office: c/ Beloso, 11. Pamplona.
24
2.1.3. Associates
An associate is an entity over which the Caixa Catalunya 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 annual accounts, associates are accounted for using the equity method, as defined in IAS
28.
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 16.1 contains information for 2008 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 key information on these entities:
81
2008
Thousands of euros
Company
Business
Caixa
Catalunya’s
Investment
direct or
indirect
cost
stake
(net)
Dividends
distributed
Profit/(loss)
Assets
Liabilities
1
after tax
Equity
during
2008
Energy
generation
29.25%
40,825
36,728
31,136
5,429
163
-
Industrial
maintenance
23.41%
2,451
12,534
5,904
2,841
3,789
-
Energy
generation
29.25%
2,529
66,729
51,845
12,262
2,622
-
Investment in
securities
25.03%
8,136
89,142
53,797
30,809
4,536
125
Energy
generation
29.25%
1,946
16,065
13,383
689
1,993
-
Civil
engineering
works
Industrial
maintenance
23.41%
5,131
75,448
50,410
22,503
2,535
-
23.41%
4,762
18,448
5,068
11,953
1,427
3,346
Energy
generation
21.94%
3,069
12,835
9,976
2,660
199
-
Europea de Mantenimiento
8
Industrial, SA
Industrial
maintenance
23.41%
2,704
5,589
3,877
2,075
(363)
503
General Mantenimiento Técnico,
9
SL
Investment in
real estate
23.41%
1,806
8,334
2,979
4,843
512
818
Student hall of
residence
25%
786
10,244
6,582
3,057
605
207
Venture capital
management
27.78%
750
2,317
138
2,072
107
-
Real-estate
development
21.42%
678
448
0
448
-
-
Energy
generation
40%
503
826
(14)
1,090
(250)
-
Student hall of
residence
20%
460
2,429
125
2,299
5
-
Energy
generation
25%
225
5,018
3,892
918
208
90
Student hall of
residence
25%
195
3,929
2,806
811
312
73
23.41%
29
260
134
126
-
-
23.41%
15
1,749
1,253
347
149
-
Real-estate
development
25%
-
2,965
2,029
-
936
305
Advisory
services
20%
-
372,035
245,320
107,231
19,484
5,467
Establecimientos Industriales y
2
Servicios, SL
Comomin de Tuberías, SL
Hidrodata, SA
3
2
Hujoceramic, SL
4
Hidroeléctrica del Noguera, SL
2
Construcciones de Tuberías
5
Industriales, SA
Tradehi, SL
6
Solwindet Las Lomas, SL
Siresa Barcelonesa, SA
Innova 31 SCR, SA
Costa Ferma, SA
7
10
11
12
13
European Biofuels 012, SL
Siresa Domus, SA
10
Promotora del Rec dels Quatre
14
Pobles, SA
Siresa Europea, SA
10
Cotinavec Portugal, ULDA
15
Europea de Mantenimiento
16
Industrial de Cataluña, SL
SCI Magnan Saint Philippe
Applus Energy, SL
17
18
Civil
engineering
k
Industrial
maintenance
1
10
Registered office: c/ Roger de Llúria, 118, Barcelona
2
Registered office: c/ Passeig de Gràcia, 70, Barcelona
11
Registered office: c/ Jordi Girona, 31, Barcelona
3
Registered office: avda. Jesús Sánchez Madero, s/n, Algeciras,
12
Registered office: avda. Roma, 6, Tarragona
Cadiz
13
Registered office: avda. Diagonal, 399, Barcelona
4
Registered office: avda. Manuel Escobedo, 13, Onda, Castellón
14
Registered office: Molí de la Trobada, s/n, Montferrer-Castellón, Lleida
5
Registered office: ctra. Reus-Torredembarra, s/n,
15
Registered office: rúa Castilho, 5, Lisbon, Portugal
La Pobla de Mafumet, Tarragona
16
6
Registered office: pol. Ind. Silvota, 47, Posada, Asturias
7
Registered office: avda. Madric, 1, Granada
17
8
Registered office: ctra. Cartagena-Madrid, Cartagena, Murcia
18
9
Registered office: avda. Roma, 10-12, Barcelona
Registered office: zona Industrial UA-1, Parcela 6, La Pobla
de Mafumet, Tarragona
Registered office: c/ Pouche, 31, París, France
Registered office: crta acceso facultad de Medicina, s/n, Bellaterra,
Cerdanyola del Vallès, Barcelona
82
2.1.4. Financial statements of Caixa Catalunya
Caixa Catalunya is the parent entity of the Caixa Catalunya Group. Its summarised financial statements for
2008 and 2007 are as follows:
Caixa Catalunya. Balance sheets at 31 December 2008 and 2007
Thousands of euros
Assets
Financial assets held for trading
Other financial assets at
fair value through profit or loss
risk
Hedging derivatives
Equity investments
Pension-linked insurance contracts
Intangible assets
Tax assets
Other assets
2008
2007
1,790,195
1,081,919
801,585
1,769,892
56,319
55,971
1,093,170
51,982,465
2,288,605
5,165,850
55,108,600
-
Net Equity and Liabilities
Financial liabilities held for trading
840,539
1,366,237
Financial liabilities at
amortised cost
in portfolio hedges of interest rate risk
-
-
56,605,225
59,616,026
242,941
(150,199)
162,713
341,162
-
-
(3,522)
425,752
254,882
693,725
373
537,502
212,832
1,220,635
48,420
347,949
73,057
2007
Other financial liabilities at
fair value through profit or loss
Hedging derivatives
25,492
2008
230,157
1,097,437
47,605
323,384
63,386
Liabilities associated with noncurrent assets for sale
Provisions
286,384
Tax liabilities
Other liabilities
162,963
151,638
101,077
147,532
481,934
118,440
-
-
58,553,480
62,206,797
Equity
19,154
2,767,901
805,810
2,440,495
Total Equity
2,787,055
3,246,305
61,340,535
65,453,102
Total Liabilities
Total Assets
61,340,535
65,453,102
Memorandum accounts
15,958,982
18,988,159
83
Total Equity and Liabilities
285,665
Caixa Catalunya. Income statements for the years ended 2008 and 2007
Thousands of euros
2008
2007
3,326,201
2,852,546
2,504,807
2,102,093
NET INTEREST MARGIN
821,394
750,453
155,966
172,929
365,451
338,413
42,263
47,978
Gains/(losses) on financial assets and liabilities (net)
49,660
(41,903)
20,499
30,397
25,888
28,124
15,299
12,062
1,381,296
1,218,373
627,263
600,254
57,661
50,834
GROSS MARGIN
Administrative expenses
8,498
Provisions (net)
(1,129)
Impairment losses on financial assets (net)
735,014
349,789
(47,140)
218,625
6,593
Impairment losses on other assets (net)
Gains/(losses) on sale of assets not classified as non-current assets held for sale
(4,146)
-
(1,456)
315,453
-
Gains/(losses) on sale of non-current assets held for sale not classified as discontinued
operations (Notes 11 and 43)
515,445
PROFIT BEFORE TAX
457,566
532,415
55,160
50,177
Income tax
Compulsory allocation to community funds and projects
PROFIT FROM ORDINARY ACTIVITY
Profit/(loss) from discontinued operations (net)
PROFIT FOR THE YEAR
84
(3,119)
-
-
402,406
482,238
-
-
402,406
482,238
Caixa Catalunya. Statements of changes in equity (statements of recognised income and expense) for
years ended 31 December 2008 and 2007
Thousands of euros
A) PROFIT FOR THE YEAR
B) OTHER RECOGNISED INCOME (EXPENSES)
2008
2007
402,406
482,238
(786,656)
49,423
(1,108,214)
(494,056)
(614,158)
-
57,923
61,518
(3,595)
-
(17,889)
8,126
(26,015)
-
13,892
24,059
(10,167)
-
2,309
2,309
-
(1,210)
(1,210)
-
-
-
6. Actuarial gains/losses on pension plans
-
-
7. Other recognised income and expenses
-
2. Cash flow hedges
c) Amounts transferred to the initial carrying amount of hedged items
d) Other reclassifications
337,138
8. Income tax
(384,250)
TOTAL RECOGNISED INCOME/(EXPENSES) (A+B)
85
(21,182)
531,661
Caixa Catalunya. Statements of changes in equity (full-format statements of equity) for
years ended 31 December 2008 and 2007
Thousands of euros
Equity
2008
accounting policy
Total recognised
income/(expenses)
Increase/(Decreases) of
Conversion of financial liabilities to
capital
Revaluation gains on other equity
instruments
Reclassification to/from other
financial liabilities
Distribution of dividends/
Remuneration to equity holders
Operations with own equity
instruments (net)
Increases/(decreases) due to
business combinations
community funds and projects
Equity-based settlements
Rest of increases/(decreases) in
equity
Endow
ment
fund or
capital
Reserves
Income
for the
year
Valuation
adjustme
nts
-
1,958,257
482,238
805,810
3,246,305
-
1,958,257
482,238
805,810
3,246,305
-
-
402,406
(786,656
)
(384,250)
-
407,238
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
407,238
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,365,495
402,406
19,154
2,787,055
86
(482,238)
(407,238)
(75,000)
-
-
-
Total equity
(75,000)
(75,000)
-
Equity
2007
Endowment
fund or
capital
Reserves
Income
for the
year
Valuation
adjustments
Total
equity
accounting policy
-
1,697,831
323,963
756,387
2,778,181
-
1,697,831
323,963
756,387
2,778,181
Total recognised income/(expenses)
-
-
482,238
49,423
531,661
Increase/(Decreases) of
Conversion of financial liabilities to
capital
Revaluation gains on other equity
instruments
Reclassification to/from other financial
liabilities
Distribution of dividends/
Remuneration to equity holders
Operations with own equity instruments
(net)
Increases/(decreases) due to business
combinations
Discretionary allocations to community
funds and projects
Equity-based settlements
Rest of increases/(decreases) in equity
-
260,426
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
260,426
-
6,463
-
-
-
-
-
-
-
1,958,257
87
(323,963)
(253,963)
(70,000)
482,238
-
805,810
(63,537)
(70,000)
3,246,305
Caixa Catalunya. Statements of cash flows for the years ended 31 December 2008 and 2007
Thousands of euros
2008
1. Cash flows from operating activities
2007
211,965
(242,441)
Income for the year
402,406
482,238
Adjustments for cash flows from operating activities
Depreciation of property and equipment
Other adjustments
240,780
57,661
183,119
85,704
50,834
34,870
Net (increase)/decrease in operating assets
(3,207,384)
1,933,806
Held for trading
Other financial assets at fair value through profit or loss
Other operating assets
Net (increase)/decrease in operating liabilities
(667,474)
348
(439,416)
(2,403,926)
303,084
(3,693,765)
(1,957,299)
(150,789)
3,195,318
773,914
72,662
1,073,246
(525,698)
(3,304,889)
136,822
(643,374)
1,898,695
(182,075)
Held for trading
Other operating liabilities
Collection/payment of income tax
55,160
50,177
2. Cash flows from investing activities
462,058
246,201
Payments:
Property, plant and equipment
Intangible assets
Equity investments
280,236
123,198
815
156,223
-
170,351
118,289
26,822
25,240
-
Collections:
Property, plant and equipment
Intangible assets
Equity investments
742,294
3,559
738,735
-
416,552
408,104
8,448
-
294,088
22,770
Payments:
Dividends
Subordinated debt
Redemption of own securities instruments
Acquisition of own securities instruments
205,912
205,912
-
-
Collections:
Subordinated debt
Issue of own securities instruments
Disposal of own securities instruments
Other payments related with financing activities
500,000
500,000
-
22,770
22,770
-
3. Cash flows from financing activities
4. Effect of exchange rate changes
5. Net increase/Decrease in cash and cash equivalent
6. Cash and cash equivalents at beginning of year
7. Cash and cash equivalent at end of year
Cash and cash equivalents at end of year
Cash
Cash equivalents at central banks
Less: overdrafts and equivalent at end of year
Total cash and equivalent at end of year
88
20,499
30,397
988,610
11,387
801,585
1,790,195
790,198
801,585
270,933
1,519,262
1,790,195
253,789
547,796
801,585
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 Caixa Catalunya
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 time frame 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:

When the contractual rights over the associated cash flows have expired.
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
extinguish or when it is re-acquired by the Caixa Catalunya Group with the intention of replacing or cancelling it.
2.2.3. Fair value and amortised cost of financial instruments
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’slength 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”).
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 organised 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:
Level 1: Prices quoted on an active market.
Level 2: Prices quoted on active markets for similar instruments or by reference to measurement techniques in
which all significant inputs are directly or indirectly based on data from observable markets.
89
Level 3: Valuation techniques in which a significant input is not based on data from observable markets.
An input is considered to be significant when it is important to calculating fair value taken as a whole.
Amortised cost is understood to be the acquisition cost of a financial asset or liability, plus or minus, as
appropriate, repayments of the principal or interest, for the portion systematically recognised in the consolidated
income statement, using the effective interest method, of the difference between the initial cost and the maturity
amount of such financial instruments. In the case of financial assets, amortised cost also includes any valuation
adjustments for impairment.
The effective interest rate is the discount rate that exactly matches the net carrying amount of a financial
instrument to all its estimated cash flows of all kinds through its remaining life. For fixed-rate financial instruments,
the effective interest rate is that of the contractual interest rate established on the acquisition date, adjusted where
applicable, for premiums and initial discounts, fees, and transaction costs which, in accordance with Bank of Spain
Circular 4/2004, should be included in the calculation of the effective interest rate. In the case of floating-rate
financial investments, the effective interest rate is calculated in the same manner as for fixed-rate transactions and
is recalculated each time the contractual interest rate of the transaction 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:
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 which are recognised at fair
value through profit or loss.
• Financial assets held for trading are those acquired for the purpose of realising 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, and also derivative instruments that do
not fulfil the definition of a financial guarantee contract and are not designated as hedging instruments.
• Financial liabilities held for trading are those issued for the purpose of realising 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 which do not fulfil the definition of a financial guarantee contract and
instruments not designated as 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 measured at fair value.
Subsequent changes in their fair value are recognised under “Gains/(losses) on financial assets and liabilities” 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 expenses” or “Income from equity instruments” on the consolidated income statement, depending on their
substance. The income and expenses associated with debt instruments included in this category are calculated
using the effective interest method.
However, financial derivatives whose fair value cannot be objectively determined are measured in these
consolidated annual accounts at cost. These are mainly interest rate swaps contracted in connection with the
asset securitisation fund set up before 1 January 2004, due to the subjectivity and volatility of the assumptions
used in their calculation.
Proceeds from derivatives sold to customers are accrued until maturity.
Held-to-maturity investments. This category includes debt securities with fixed maturity and with fixed or
determinable cash flows that the Caixa Catalunya Group has the intention and ability to hold to maturity.
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.
90
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.
Loans and receivables. This category includes unlisted debt securities, financing granted to third parties
through ordinary lending activities carried out by the Caixa Catalunya Group and receivables from purchasers of
goods and users of services.
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, in accordance with Bank of
Spain Circular 4/2004. 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 Caixa Catalunya 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 on these transactions is calculated used the effective interest method and recognised
under “Interest and similar income” in the consolidated income statement. Exchange differences on instruments
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.
Available-for-sale financial assets. This caption includes debt securities and equity instruments not
classified in other categories.
Debt instruments are always initially measured at fair value adjusted by the 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 in line with Bank by Spain Circular 4/2004 and under IFRS,
except where the financial assets do not have a fixed maturity, in which case they are recognised in profit and loss
when impaired. 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 annual accounts, 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. Variations in the
fair value of financial assets hedged in fair value hedging transactions 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)”.
Equity investments. See Note 2.1.
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 qualification
as equity, i.e., essentially preference shares issued by investees that do not entitle the holders to voting rights or
dividends 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.
Interest borne on financial liabilities at amortised cost is recognised under “Interest and similar expenses” on
the consolidated income statement. Exchange differences on securities denominated in currencies other than the
91
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 contracts
and treated independently for accounting purposes if the characteristics and economic risks of the embedded
derivative are not closely connected to those of the host contract, and measured in the same manner as the
derivatives held for trading.
Nonetheless, liabilities designated as hedged items in fair value hedges are carried at fair value in the
consolidated income statement. Furthermore, financial instruments that must be considered non-current assets
held for sale, in accordance with regulation thirty-four of Bank of Spain Circular 4/2004, are recognised in the
consolidated financial statements in line with the criteria laid out in Note 2.22.
2.3.
Hedge accounting and risk management
The Caixa Catalunya 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
of 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 Caixa Catalunya 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 life, 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 Caixa Catalunya Group are classified into the following categories:
Fair value hedges: these hedge 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.
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 recognised on the consolidated income statement until the hedged instrument expires, and
the effective interest rate is applied as recalculated on the date on which the hedging was discontinued.
Cash flow hedges: these hedge the changes in cash flows that are attributed to a particular risk associated
with a financial asset or liability or with a highly probable forecast transaction, provided that it will affect the
consolidated income statement.
In cash flow hedges, the gains or losses arising on the portion of the hedging instruments qualifying as an
effective hedge are recognised temporarily under “Equity – Valuation adjustments – Cash flow hedges”. Financial
instruments hedged in this type of hedging transaction are recognised using the methods described in Note 2.2,
without any changes for the fact that they are considered to be hedged instruments.
In cash flow hedges, the gains or losses arising on the portion of the hedging instruments qualifying as 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
92
and losses are not recognised on the consolidated income statement until the gains or losses on the hedged item
are recognised on the consolidated income statement or until the date of maturity of the hedged item.
The gains or losses on the portion of the hedging instruments qualifying as an ineffective hedge 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 caption until the
related cash flows occur. Subsequent to which, the gains or losses are released to profit and loss or the cost of
the asset or liability is adjusted.
The Caixa Catalunya Group hedges against the interest rate risk of a certain amount of interest rate-sensitive
financial assets or liabilities which form part of the portfolio of held for trading instruments but are not identified as
specific hedging instruments. 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 changes for the fact that they are considered to be
hedged instruments, while the derivatives are recorded at fair value, and the gains or losses arising on the portion
of the hedging instruments qualifying as an effective hedge are recognised temporarily in equity under “Valuation
adjustments”.
2.4.
Foreign currency transactions
2.4.1. Functional currency
The functional currency of the Caixa Catalunya 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 asset and liability balances held on
the balance sheet in foreign currency, taking into account the substance of these items and the most significant
currencies in which they are denominated, is as follows:
93
Equivalent in thousands of euros
Assets
2008
Liabilities
Assets
2007
Liabilities
Balances in US Dollars
Banks and central bank deposits
Customer loans
Debt securities
Customer deposits
Marketable debt securities
Other
294,560
48,140
237,509
8,911
292,373
163,424
119,092
9,857
294,229
50,398
179,509
17,850
46,472
2,151,691
705,166
101,479
1,328,660
16,386
Balances in Swiss Francs
Customer loans
Customer deposits
Other
233,232
1,066
232,166
-
851
825
26
246,839
49,901
196,528
410
1,264
1,249
15
Balances in Pounds Sterling
Customer loans
Debt securities
Customer deposits
Other
40,444
11,061
22,786
6,573
24
14,187
13,814
373
51,563
18,298
23,969
8,911
385
35,811
22,093
13,494
224
Balances in other currencies
Customer loans
Debt securities
Customer deposits
Other
738,462
14,617
715,764
4,588
3,493
24,607
4,001
19,307
1,299
369,470
8,505
349,296
7,469
4,200
135,840
110,932
23,730
1,178
1,306,698
332,018
962,101
2,324,606
Total balances denominated in foreign currencies
2.4.2. Criteria for translation of foreign currency balances
The translation of foreign currency balances into euros is carried out in two consecutive steps:

Translation of foreign currency balances into the functional currency of the entities and branches.

Translation into euros of balances held in the functional currencies of entities whose functional currency
is not the euro.
Translation of foreign currency to the functional currency: foreign currency transactions carried out by
consolidated entities or those accounted for using the equity method are initially recorded in their respective
financial statements at their functional currency equivalent, applying the exchange rates in force on the dates of
the transactions. Subsequently, the consolidated entities translate the foreign currency monetary amounts into
their functional currencies using the prevailing year-end exchange rate.
Foreign currency transactions carried out by the Caixa Catalunya 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 Caixa Catalunya Group subsequently translates the foreign currency
amounts into euros using the following exchange rate:

Monetary items are translated at the average exchange rates on the spot currency market prevailing at
the appropriate year ends.

Non-monetary items measured at historic cost are translated into the functional currency at the exchange
rate on the day of purchase.

Non-monetary items measured at fair value are translated at the exchange rate prevailing on the date on
which their fair value was determined.

Income and expenses are translated at the average exchange rates for the period.

Forward foreign currency purchase and sale contracts outstanding are translated to euros at the yearend exchange rates on the forward currency market.
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2.4.3. Exchange rates used
The exchange rates used to translate foreign currency balances into euros for preparation of the consolidated
annual accounts, 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 in non-monetary items the fair value of which is adjusted through equity are
recognised in equity under “Valuation adjustments – Exchange differences” on 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 3.4.1).
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 expenses 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 arises.
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:

Those linked to the purchase of financial assets and liabilities measured at fair value through profit and
loss, which are recognised in the income statement when they are paid.

Those arising from transactions or services lasting over time, which are recorded in the income
statement over the life of the transaction or service.

Those related to services provided in a single act, which are accrued when the single act is executed.
Fee and commission expenses or received for financial services, regardless of their contractual denomination,
are accrued in the income statement according to whether they are classified as financial or non-financial fees.
Financial fees such as loan and credit origination fees, are part of the effective income or cost of a financial
transaction and are recognised under the same caption as financial income or expenses, i.e. as “Interest and
similar income” and “Interest and similar expenses”. 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 income or cost of the transaction. If the commitment expires without
the financing being drawn down, they are recognised on the consolidated income statement on the date of expiry.
Related direct costs are taken to be those which would not have arisen if the transaction had not been
arranged. The sum of paid fees that can be recorded as income on the consolidated income statement to offset
the related direct costs, if there is no analytical accounting to calculate 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
greater than 90 euros.
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Non-financial fees and commissions are those arising from the provision of services carried out over a period
of time or to 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 recognised 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:
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.
If the risks and rewards associated with the 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 improvement
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:

An associated financial liability at a value equal to the payment received, subsequently measured at
amortised cost, to the extent that it is not classified as a financial liability at fair value through profit and
loss. In order that it does not 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.

Both the income from the financial asset that has been transferred but not derecognised from the
balance sheet and expenses from the new financial liability.

Nevertheless, if the Caixa Catalunya Group purchases bonds issued pursuant to these securitisations,
they are deducted from the financial liability recognised under “Marketable debt securities”.
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:

If the seller 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.

If the seller retains control of the transferred financial asset: the asset continues to be recognised on
the balance sheet at a value equal to its 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.
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In line with the above, financial assets are only derecognised from the consolidated balance sheet or when the
implied risks and rewards associated with ownership of the asset have been transferred substantially to third
parties.
Note 30.5 summarises the circumstances of the main asset transfers undertaken in 2008 and prior years 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 to reflect the impact of
this impairment when there is objective evidence that events have taken place producing:
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).

When its carrying amount may not be fully recovered.
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 on the consolidated income statement for 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.
When the recovery of any recognised amount is considered unlikely, the amount is written off from the
consolidated balance sheet, without prejudice to any actions that may be initiated to seek collection until their
contractual rights are definitively extinguished as a result of to expiry of the statute-of-limitations period, a waiver
or any other cause.
The criteria used by the Caixa Catalunya Group to determine impairment losses in each of the categories of
financial instruments, together with the method used to calculate the hedges recognised on 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:
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 for allocation and
subsequent sale). Impairment loss takes into account the calculation of the possibility of collecting accrued,
past due and uncollected interest.
The different types of risk associated with each instrument.

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:
There is evidence of deterioration in the debtor’s ability to pay, either because it is in arrears or for other
reasons.
When “country risk” materialises, which is understood as the risk that affects debtors resident in a country
as a result of circumstances other than the usual commercial risk.
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Impairment losses on these assets are assessed as follows:
Individually, for all significant debt instruments and for instruments which, although not material, are not
susceptible to being classified in homogeneous groups of instruments with similar risk characteristics:
instrument type, debtor’s industry and geographical location, type of guarantee or collateral, age of past-due
amounts, etc.
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. The impairment losses (“identified losses”) are established for
each risk group that have to be recognised in the consolidated annual accounts 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 warrant.
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 Caixa Catalunya Group in excess of the
hedge due to intensification of risks under close surveillance are classified as substandard risk (see Note 12.3).
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 there is objective evidence that the negative differences arising on measurement of these assets are
due to impairment, they are not recognised under the equity item “Valuation adjustments – Available-for-sale
financial assets” and are recognised for the cumulative impairment considered until then in the consolidated
income statement. If all or part of the impairment losses are subsequently reversed, the reversed amount is
recognised on the consolidated income statement for the period in which the reversal occurs.
Similarly, negative differences occurring in the measurement of debt instruments classified in equity as “noncurrent assets held for sale” are considered realised, and they are accordingly recognised on the consolidated
income statement when classified as “non-current assets held for sale”.
The recognition of interest income on the consolidated income statement is discontinued for all debt
instruments that are individually classified as impaired 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 under 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 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 equity under “Valuation adjustments – Available-for-sale financial assets”.
2.8.4. Equity instruments carried at cost
Impairment losses are recognised on the consolidated income statement for the period in which they arise as a
direct deduction of the cost of the instrument. These losses can only be reversed subsequently if the assets are
sold.
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2.8.5. Equity investments
Impairment losses on equity investments in jointly-controlled entities and associates which, for the purposes of
these consolidated annual accounts 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 disappear.
2.9.
Financial guarantees and 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 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 guarantees 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 provisions and recoveries thereof
are recognised with a charge or credit to “Provisions (net)” in the accompanying consolidated income statement
(see Note 23).
When a provision is recognised for financial guarantees, commissions pending accrual recognised under
“Accrued expenses 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 remain with the lessor.
When the Caixa Catalunya 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 property, plant and equipment for own use, and the income from lease contracts is recognised
on a straight-line basis under “Other operating income” in the consolidated income statement.
When the Group acts as lessee in operating leases, lease expenses including any incentives granted by the
lessor, where applicable, are charged on a straight-line basis to “Other general administrative expenses” on the
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.
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 payable to the lessor plus, if appropriate, the exercise price of the purchase option). The depreciation
policy for these assets is consistent with that for property, plant and equipment for the Group’s own use (see Note
2.15.1).
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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 Caixa Catalunya Group are carried off-balance sheet. 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 2008 is disclosed in Note 30.4.
2.12. Mutual funds and pension funds managed by the Caixa Catalunya Group
The mutual funds and pension funds managed by the Caixa Catalunya Group are not presented on the face of
the Group’s consolidated balance sheet since the related assets are owned by third parties (see Note 30.4).
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” on the consolidated income
statement (see Note 36).
2.13. Personnel expenses
2.13.1. Post-employment obligations: pensions, employee benefits and early retirements
In accordance with current regulations and collective bargaining agreements, Caixa Catalunya 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. On 27 December 2000 a labour agreement was entered into enabling current
employees with guaranteed defined benefits to choose either to contribute accruals for past services to a defined
contribution pension plan, or to maintain these services under the insurance policy. Contributions to the pre-existing
defined contribution system were also increased.
Pursuant to the savings banks employee statute, employees who did not expressly opt for the pension plan
reserve their right or future right to the supplementary social security system, in addition to those of any other
regulation or practice that may be of application.
This agreement was effected in 2001 with almost all current staff members opting to transfer to the pension plan
(which forms part of the Fondo Caixa Catalunya XV, Fondo de Pensiones – pension fund – managed by the group
entity, Ascat Vida, SA, de Seguros y Reaseguros, hereinafter Ascat Vida, SA). For employees opting to join the plan,
the previous calculation system for pension commitments was unwound, as were additional guarantees and accruals
of past services. The full sum of these commitments was transferred to the pension plan and insurance policies held
with the group entity, Ascat Vida, SA. Pursuant to the above agreement and the corresponding restructuring plan, the
transfer of funds will take place over ten years, accruing interest at a rate of 4.5%. Current policies were adapted to
Royal Decree 1588/1999 on pension obligation externalisation.
The Entity recognises pension plan contributions accrued under the above labour agreement as an expense.
The insurance policy taken out with employees for pension obligations is recognised under “Provisions for pension
and other commitments” on the liability side of the consolidated balance sheet (see Note 23).
On 31 December 2004, Caixa Catalunya agreed with its unions to establish a partial retirement scheme for a
defined group of employees, setting up a special provision to meet future commitments for wages, salaries and social
security contributions, defined pension plan contributions, etc., up to the age of retirement agreed in each case with
employees who joined the various programmes contemplated in the above agreement.
2.13.2. Death and disability
Caixa Catalunya’s obligations to cover the contingencies of employee death and disability for the period in
which they are employed, met by insurance policies taken out with Ascat Vida, SA, are recognised on the
consolidated income statement for a sum equal to the increase in the associated mathematical reserve.
The amount accrued under these insurance policies in 2008, included under “Personnel expenses” in the
consolidated income statement, was 3,969 thousand euros (4,535 thousand euros in 2007).
2.13.3. Termination benefits
In accordance with IFRS and Bank of Spain Circular 4/2004, when the Caixa Catalunya Group undertakes to
demonstrably terminate its link with its employees before the normal retirement date or to pay compensation as
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part of an offer to encourage voluntary redundancy, it must recognise a provision for such planned severance
payments. Since there is no such commitment, there are no provisions in this connection in the consolidated
balance sheet.
The Caixa Catalunya 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 2008 the
Group had not recognised any provision for this item, given that the triggering event has not taken place.
2.13.4. Credit facilities to employees
Under IFRS and Bank of Spain Circular 4/2004, credit facilities made available to employees at below market
rates are considered to be monetary benefits. They 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 under “Interest and similar income” in the consolidated income
statement.
2.14. 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.
The current income tax expense is calculated as the tax payable on taxable income for the year, adjusted for
the changes arising during the year in the assets and liabilities recognised as a result of temporary differences, tax
credits and allowances, and tax loss carryforwards (see Note 28).
The Caixa Catalunya 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 to make a payment to the relevant taxation authorities. A deductible temporary difference
is one that will generate a future right for the Group to a refund or to make lower payment to the relevant taxation
authorities.
Tax credits, allowances and loss carryforwards are amounts that, after performance of the activity or
obtainment of the profit or loss giving entitlement to them, are not used for tax purposes in the related tax return
until the conditions for doing so established in prevailing tax regulations are met, provided that the Group
considers it probable that they will be used in future periods.
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 they were recognised. 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 Caixa Catalunya Group only recognises deferred tax assets arising from deductible temporary differences,
tax credits, allowances or loss carryforwards if the following conditions are met:

It is considered probable that the Group will obtain sufficient future taxable income to be able to offset
them.

in the case of deferred tax assets arising from loss carryforwards, 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.
Deferred tax assets and liabilities recognised are reassessed at each balance sheet date in order to ascertain
whether they still exist, and the appropriate adjustments are made on the basis of the findings of the analyses
performed.
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2.15. Property and equipment
2.15.1. Property, plant and equipment for own use
Property, plant and equipment for own use includes assets, either owned or acquired under finance leases,
held by the Caixa Catalunya Group for administrative purposes other than those of Community 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 plant and equipment for
own use is recognised on the consolidated balance sheet at acquisition cost, adjusted for valuation adjustments in
accordance with the first transitional provision of Bank of Spain Circular 4/2004 as indicated in Note 18, less:

The corresponding accumulated depreciation.

Where applicable, estimated impairment losses resulting from comparing the net value of each item with
the corresponding recoverable amount.
For this purpose, the acquisition cost of foreclosed property which are included in the property, plant and
equipment of the Caixa Catalunya 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 property, plant and equipment depreciation charge is recognised under “Depreciation and
amortisation – Property, plant and equipment” on 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:
Annual (%)
Buildings
Fixtures
Fittings
General
Equipment
Electronic equipment
2%
10 %
6–8%
9 – 12 %
15 – 33 %
At each reporting date, the Caixa Catalunya Group analyses whether there are any internal or external
indications of impairment (i.e. 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 reestimated. Any reduction in the carrying amount of property, plant and equipment for own use is recognised with a
charge to “Impairment losses (net) – Property, plant and equipment” in the consolidated income statement.
Similarly, if there is an indication of a recovery in the value of an item of property, plant and equipment, the
Caixa Catalunya Group recognises the reversal of the impairment loss recognised in prior periods also under
“Impairment losses (net) – Property, plant and equipment”, 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 stated if no impairment losses had been recognised in prior years.
Upkeep and maintenance expenses on property, plant and equipment for own use are charged against “Other
general administrative expenses” on the consolidated income statement in the year in which they are incurred.
Property, plant and equipment that requires more that a year to make it available for use is included in the
acquisition price or production costs or financial expenses accrued prior to bringing it 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 these financial expenses is suspended during the years in which
development of the asset is interrupted and finishes when all the activities required to bring the asset to the
condition necessary for it to be capable of operating are substantially completed.
2.15.2. Investment properties
“Investment properties” on the consolidated balance sheet include the net carrying amount 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.
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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,
plant 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 include the net carrying amount of
property, plant 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, plant
and equipment for own use (see Note 2.15.1).
2.15.4. Assigned to Community Projects
The “Property, plant and equipment – Assigned to Community Projects” caption of the balance sheet reflects
the net carrying amount of the property, plant and equipment assigned to Caixa Catalunya’s Community Projects.
The criteria used to ascertain the acquisition cost of assets assigned to Community Projects, the
corresponding depreciation charges, estimates useful life and potential impairment losses are the same as those
for property, plant and equipment for own use (see Note 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 “Community Projects” 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 Caixa Catalunya 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 any accumulated amortisation and any accumulated impairment losses.
All of the Caixa Catalunya 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, recovery of losses recognised in previous years, are similar to those used for property, plant
and equipment for own use (see Note 2.15.1).
2.16.1. Goodwill
Positive differences between the cost of investments in consolidated entities and entities accounted for using
the equity method and their acquired carrying amount, adjusted on first-time consolidation, are recognised as
follows:
1.
If the excess can be assigned to specific assets of the entities acquired, by increasing the value of the
assets (or reducing the value of the liabilities), the fair values of which 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 cashgenerating units.
Goodwill is only recognised when it has been acquired for consideration and accordingly represents advance
payments made by the acquirer for future economic benefits generated by the assets of the acquiree that are not
individually and separately identifiable and recognisable.
Goodwill acquired on or after 1 January 2004 is measured at acquisition cost, whereas that acquired earlier is
recognised at the carrying amount at 31 December 2003, calculated in accordance with the standards applied
previously by the Group (Bank of Spain Circular 4/1991, June 14). In both cases, at the end of each reporting
period, any goodwill is reviewed for impairment (i.e. a reduction in its recoverable amount to below its carrying
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amount). Any impairment is written down with a charge to “Impairment losses of other assets – Goodwill and other
intangible assets” in the consolidated income statement.
Goodwill impairment cannot be subsequently reversed.
2.16.2. Negative goodwill
Negative differences between the cost of investments in consolidated entities and entities accounted for using
the equity method and their acquired carrying amount, adjusted on first-time consolidation, are recognised as
follows:

If the negative goodwill is attributable to specific assets and liabilities of the entities 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.

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.
2.16.3. Other intangible assets
Intangible assets other than goodwill are recorded on the consolidated balance sheet at their acquisition or
production cost, net of their accumulated amortisation and any possible impairment losses.
The maximum amortisation period is six years and write-downs are recognised where necessary.
2.17. Inventories
This caption included under “Other assets” on the consolidated balance sheet includes non-financial assets
that consolidated entities:

hold for sale in the ordinary course of their business,

hold in the process of production, construction or development for such sale, or

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 estimated selling price of inventories in the
ordinary course of business, less estimated production costs and costs to sell.
Any write-downs of inventories to net realisable value and any subsequent reversals of write-downs below the
carrying amount are recognised under “Impairment losses on other assets – Other assets” on the consolidated
income statement for the year in which the write-down or reversal occurs.
The carrying amount of inventories is derecognised and recognised as an expense on the consolidated
income statement under “Cost of sales” when the sale relates to activities that form part of the Caixa Catalunya
Group’s ordinary activity, or under “Other operating expenses” in all other cases, in the period in which the sales
proceeds are recognised.
2.18. Insurance transactions
In accordance with generally accepted accounting principles in the insurance sector, consolidated insurance
entities recognise premiums written as income and charge claims against their income statement when the claims
are finally settled. This means that, at each balance sheet date, they have to accrue all amounts credited to their
income statements but unearned and all costs incurred but not recognised on the income statement.
The most significant accruals by consolidated entities on insurance directly written by them are recognised
under the following technical provisions:

Unearned premiums: provision reflecting the premium charged in a year that is attributable to future
years, less transfers to the equalisation reserve.
104

Unexpired risks: these supplement the unearned premium provision if this is thought to be inadequate
to cover the valuation of the risks and expenses for the unexpired period of the cover at the closing date.

Claims: this provision reflects the estimated value of obligations on past claims outstanding at year end,
including claims pending settlement or payment and undeclared claims, after deducting any prepayments
and adjusting for internal and external costs of claim handling, as well as any additional provisions that
may be necessary to cover discrepancies in the valuation of claims that take a long time to settle.

Life insurance: in life insurance where the period of coverage is a year or less, the unearned premium
provision reflects premiums paid in the year attributable to future years. Where this is insufficient, an
additional provision for unexpired risks is calculated reflecting the valuation of risks and expenses
forecast for the future period at the balance sheet date.
In life insurance where the coverage period is longer than a year, the mathematical provision is
calculated as the difference between the present actuarial value of future obligations of consolidated
entities active in the sector and those of the policyholder or insured party. The basis for the calculation is
taken as the inventory premium (premium plus handling charge) accrued over the year.

Life insurance when the investment risk is borne by the policyholders: this provision is determined
on the basis of the measurement of the assets specifically related to the contract.

Share in profits: this provision covers the share of profits accruing to policyholders, insured parties or
beneficiaries of insurance policies and the share of premiums to be repaid to policyholders or insured
parties as a result of factors affecting the insured risk, where these have not been individually assigned.
Technical provisions for accepted reinsurance are calculated using similar criteria to those applied to direct
insurance, generally based on information provided by the ceding insurer.
Technical provisions on insurance and accepted reinsurance are recognised on the consolidated balance
sheet under “Liabilities under insurance contracts” (see Note 22).
Technical provisions for ceded reinsurance are calculated by applying the same criteria as for direct insurance
to the reinsurance contracts taken out and are shown on the consolidated balance sheet under “Reinsurance
assets” (see Note 17).
In accordance with IFRS 4, the Caixa Catalunya Group has carried out a liability sufficiency test on its
insurance contract liabilities. In line with this procedure, the Group has concluded that the liabilities recognised are
sufficient on the date of preparation of the annual accounts to meet future contractual obligations.
2.19. Provisions and contingent liabilities
The consolidated annual accounts distinguish between:

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 Caixa Catalunya Group, considered likely to occur and certain in terms
of substance but uncertain in terms of its amount and/or timing.

Contingent liabilities: possible obligations that arise from past events, the existence of which will be confirmed
only by the occurrence or non-occurrence of one or more future events beyond the control of the Caixa
Catalunya Group.
The consolidated annual accounts 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 annual accounts and disclosure is only provided pursuant to the requirements of Bank of Spain
Circular 4/2004 (see Note 30.1).
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.
105
Provisions are classified on the basis of the obligations covered:

Provision for pensions and similar obligations: includes all provisions covering post-employment benefits,
including commitments made to employees in early retirement and similar obligations (see Note 2.13).

Provisions for taxes: includes provisions made to cover tax contingencies.

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.

Provisions for litigation and similar items.

Other provisions: Includes all remaining provisions made by the Caixa Catalunya Group.
At the 2008 year end, certain lawsuits and claims against the Caixa Catalunya Group were in progress arising
from the ordinary course of their operations. The 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.
2.20. Consolidated statement of changes in equity
Bank of Spain Circular 4/2004 establishes that certain assets and liabilities must be recognised with a
balancing entry under 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 in this caption arising during the year, plus the gains or losses arising during the year and, where
appropriate, the adjustments made due to changes in accounting principles or errors in prior years.

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:
The profit or loss for the year.
Net income and expenses temporarily recognised as valuation adjustments in equity.
Net income and expenses definitively recognised in equity.
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.
Total recognised income and expenses.
Changes in recognised income and expenses recognised in equity as valuation adjustments are broken down
as:
Valuation gains/(losses): income, net of expenses incurred during the year, recognised directly in equity.
Amounts recognised under this caption during the year are retained in this caption, even if they are
transferred to profit and loss, at the initial value of other assets or liabilities, or are reclassified to another
caption.
Amounts transferred to profit and loss: consisting of valuation gains and losses previously recognised in
equity, even in the same year, which are taken to profit and loss.
Amount transferred to the initial carrying amount of hedged items: comprising the valuation gains and
losses previously recognised in equity, even in the same year, which are recognised at the initial carrying
amount of the assets and liabilities as a result of cash flow hedges.
106
Other reclassifications: consisting of transfers made during the year between valuation adjustments in
accordance with criteria established by prevailing accounting standards.
These items are presented gross and the corresponding tax effect is recognised under “Income tax” in this
statement.
Of the 2008 profit for the year of 185,200 thousand euros, 636,513 thousand euros is deducted and
transferred to “Valuation adjustments” in equity. This amount mainly corresponds to the sale of Abertis, SA (see
Note 11) and the part of the revaluation of the derivatives forming the cash flow macro-hedge which offset the
hedged flows accrued during the year. On the other hand, the increase in the fair value of items recognised
directly in equity led to a downwards adjustment of 170,699 thousand euros, net of the related tax effect,
specifically in relation to the fair value of the entities classified as held for sale and the fair value of cash flow
hedges. Published profit for the year is reduced by a further 14,890 thousand euros due to exchange differences
on non-monetary items. Accordingly, total 2008 income and expenses amounted to 636,902 thousand euros.

Consolidated statement of total changes in equity
This part of the consolidated statement of changes in equity presents all changes in equity, including those
due to changes in accounting principles and correct 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
in the following items according to their substance:
Adjustments due to changes in accounting principles 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.
Recognised income and expenses: comprises an aggregate of all the aforementioned items recognised in
the statement of recognised income and expenses.
Other changes in equity: includes the remaining items recognised in equity such as capital increases or
decreases, distribution of results, own securities transactions, equity-based payments, transfers between
equity items, and any other increase or decrease in equity.
2.21. Consolidated cash flow statements
The following terms are used in the consolidated cash flow statements:

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.

Operating activities: the typical activities of the Caixa Catalunya Group and other activities that are not
investing or financing activities.

Investing activities: the acquisition, sale or placement by other means of long-term assets and other
investments not included in cash and cash equivalents.

Financing activities: activities that result in changes in the size and composition of consolidated equity and
liabilities that are not operating activities.
2.22. Non-current assets held for sale and related 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 annual accounts.
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 non-financial, 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 Caixa Catalunya Group in full or
partial satisfaction of payment obligations are classified as non-current assets held for sale, unless the
consolidated entities have opted to keep them in use.
107
Similarly, “Liabilities associated with non-current assets held for sale” includes the liabilities associated with the
disposal groups or discontinued operations of the Caixa Catalunya Group.
Generally, assets classified as non-current assets held for sale are measured at the lower of their carrying
amount at the time they are so classified and their fair value less estimated costs to sell. While depreciable
property, plant and equipment and amortisable intangible assets remain in this category, they are not depreciated
or amortised.
If the carrying amount exceeds the fair value of the assets, net of costs to sell, the carrying amount is adjusted
by the excess with a charge to “Impairment losses (net) – Non-current assets held for sale” in the consolidated
income statement. If their fair value is subsequently recovered, 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 (net) - Non-current assets held for sale” in the consolidated income statement.
2.23. Community Projects
The Community Projects Fund is recognised under “Community Projects Fund” in the consolidated balance
sheet.
Transfers to this fund are treated as distribution of the Caixa Catalunya Group’s profit.
The expenses generated by Community Projects are charged to the Community Projects Fund balance sheet
caption and are not recognised in the consolidated income statement.
The property, plant and equipment and liabilities assigned to Community Projects are recognised in separate,
specific captions of the consolidated balance sheet.
Community Projects realised through activities of the Caixa Catalunya Group are recognised by deducting the
corresponding amounts from the Community Projects Fund and simultaneously crediting them to the income
statement in accordance with normal market conditions for this type of activity.
3. Risk management
The entities making up the Caixa Catalunya Group manage their specific risks individually. Given its
importance to the Group, there now follows an explanation of the management of Caixa Catalunya’s own risks.
3.1.
Liquidity risk
Caixa Catalunya manages the liquidity risk inherent to its activity 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 Caixa Catalunya’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, in particular meeting the entity’s financing needs, is managed by issue programs which
guarantee liquidity over the various time horizons and keep short-term market dependence at acceptable volume
levels, minimising the risks involved in daily liquidity management.
In order to cover possible liquidity issues, the Caixa Catalunya Group has deposited several guarantees with
the European Central Bank, providing it with additional liquidity of 3,117,457 thousand euros at 31 December
2008.
In light of the exception circumstances in the international financial markets, primarily during the second half of
2008, European governments committed to implement the measures required to resolve the problems with bank
credit and their impacts on the general 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.
In this context, during the last quarter of 2008, Spain approved the following measures:
108
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, to which the Ministry of the Treasury is adhered and which has an initial limit of
30 thousand million euros that can be increased to 50 thousand million euros, is to acquire at a cost to the
Treasury and under market conditions, through auctions, financial instruments issued by Spanish credit
institutions and asset securitisation funds received in the form of loans by individuals, entities and non-financial
entities.
Royal Decree-Law 7/2008 of 13 October on Urgent Economic Measures in relation to the Joint Action Plan for
Eurozone countries and the Order of the Ministry of the Treasury EHA/3364/2008 of 21 November, which
implements Article 1 of this royal decree and establishes the following measures:
The emission of guarantees by the State securing issues of promissory notes, bonds and debentures by
credit entities resident in Spain since 14 October 2008 which fulfil the following requirements: they are
individual transactions or form part of issue programs; they are not subordinated debt or debt secured through
other types of guarantee; they are issued for trading on official secondary markets in Spain; they have a
maturity of between three months and three years, although this term can be extended to five years on
presenting a report from the Bank of Spain; the interest rate is fixed or floating, with special requirements
established 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 that 10 million euros.
Guarantees will be issued until 31 December 2009 and the total maximum amount of guarantees to be issued
during 2008 is 100,000 million euros.
Exceptional authorisation until 31 December 2009 for the Ministry of the Treasury to acquire securities
comprising preference shares and participating shares, issued by requesting credit entities resident in Spain
that need to redress their equity.
The Caixa Catalunya s Directors consider that the measures described above will result in a suitable
environment in which to conduct operations during 2009 and will avoid any problem with liquidity or profitability for
the Entity. During 2008, Caixa Catalunya attended the public auction of the FAFA and was awarded 345,979
thousand euros by the Treasury.
The following table offers a breakdown by maturity of the balances of specific captions of the balance sheet at
31 December 2008 and 31 December 2007, in a scenario of normal market conditions:
109
Thousands of euros
ASSETS
Cash and balances with central
banks
Financial assets held for trading
Demand
deposits
From 1 to
Up to 1
month
3 months
From 3 to
12 months
From 1 to
5 years
Over 5
years
Without
maturity
Total
1,789,340
-
5,630
11,457
190,527
51,682
9,251
-
1,789,340
268,547
-
-
-
-
-
56,319
-
56,319
Due from banks
Customer loans
-
-
-
-
182,416
214,937
30,988
428,341
395,043
1,788,910
30
47,449
877,439
52,913
1,920
1,419,261
20,626
19,012
3,490,234
328,071
4,567
7,523,875
535,505
12,362
37,283,939
1,378,773
36,007
408,187
-
516,360
52,791,845
2,315,918
Total at 31 December 2008
3,973,323
983,431
1,453,264
4,027,844
8,298,045
38,955,581
475,182
58,166,670
2,244,836
3,496,170
2,709,645
4,685,020 10,206,332
37,740,730
118,165
61,200,898
LIABILITIES
Financial liabilities at amortised
cost
Central
bank
deposits
and
deposits from banks
Customer deposits
302,914
3,437,998
687,995
2,594,546
1,009,976
666,844
-
8,700,273
10,934,165
1,754,734
2,774,452
8,996,892
2,982,155
4,400,356
-
31,842,754
Subordinated debt
Other financial liabilities
-
925,111
1,094,250
2,003,430
5,380,669
3,935,931
-
13,339,391
-
-
-
-
90,152
-
999,999
-
570,151
-
1,660,302
-
11,237,079
6,117,843
4,556,697
13,594,868
9,462,952
10,003,130
570,151
55,542,720
12,436,799
8,542,866
7,105,305
10,431,516
8,685,396
10,924,154
570,151
58,696,187
Assets less liabilities at 31
December 2008
(7,263,756)
(5,134,412) (3,103,433)
(9,567,024) (1,164,907)
28,952,451
(94,969)
2,623,950
Assets less liabilities at 31
December 2007
(10,191,963)
(5,046,696) (4,395,660)
(5,746,496) 1,520,936
26,816,576
(451,986)
2,504,711
3.2.
Credit risk
Caixa Catalunya has adapted its structure to ensure effective integrated management of the risks regulated in
the New Basel Capital Accord, particularly credit, market and operational risks. Along these lines, it is developing
and introducing advanced methods for the measurement of these three types of risk. The ultimate aim is to
ascertain Caixa Catalunya s real exposure profile for these types of risk, once it has passed the demanding
validation process established by the Bank of Spain.
Credit risk represents the losses that Caixa Catalunya would assume if a customer or counterparty were to
breach their contractual payment obligations. This risk is inherent to the traditional banking products of the entities
(loans, advances, financial guarantees granted, etc.), and to any other type of financial asset (fixed-rate securities,
derivatives, etc.).
Credit risk affects financial assets that are recognised at amortised cost in the financial statements as well as
assets carried at fair value. Caixa Catalunya applies the same credit risk control procedures and policies to both,
regardless of the accounting criteria used to recognise these financial assets in the consolidated financial
statements.
Caixa Catalunya s credit control risk policies, methods and procedures are approved by the Board of Directors.
Caixa Catalunya s Control Committee and Internal Audit Department are responsible for guaranteeing adequate
compliance with the aforementioned risk control policies, methods and procedures, and for ensuring that they are
sufficient, implemented effectively and revised on a regular basis.
The credit risk control activities of Caixa Catalunya are carried out by its Risks Division, which reports directly
to Control Management. This unit is responsible for putting into practice the policies, methods and procedures for
110
credit risk control approved by the Board of Directors. The unit also conducts control of counterparty risk by
establishing, among other items, the credit quality parameters to assign to operations performed by Caixa
Catalunya, and credit risk hedging needs, in accordance with its internal policies and applicable regulations.
The Risks Division is also responsible for applying Caixa Catalunya s risk concentration limits, which are
approved by the Board of Directors.
Caixa Catalunya has policies and procedures in place to manage the concentration of credit risk by individual
counterparties and by groups of companies. Caixa Catalunya manages risk concentration limits by taking into
account factors such as counterparty activities, their geographical location and other economic characteristics
they have in common.
With the exception of risks held with domestic economies in Spain with mortgage security (21,749,622
thousand euros and 21,442,196 thousand euros at 31 December 2008 and 2007, respectively) and consumer
loans (2,011,818 thousand euros and 2,079,526 thousand euros at 31 December 2008 and 2007, respectively)
Caixa Catalunya does not have any significant risk concentrations. The average non-performing loan ratios in
these two risk groups over the last five years were 1.66% and 2.62%, respectively.
Caixa Catalunya 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 Caixa
Catalunya from those that cannot, due to their credit risk. The segregation criteria applicable under this system are
approved by Caixa Catalunya s Governing Bodies, which have set up review procedures to ensure that this
system is always up to date.
Caixa Catalunya internally classifies its financial assets subject to credit risk based on transaction
characteristics. Among other factors, it takes into account the counterparties with which the transactions and
associated guarantees are contracted.
The table below indicates the change in Caixa Catalunya s impaired financial assets in 2008 and 2007, which
have been derecognised because the likelihood of recovery is considered remote, although the entity has not
terminated actions to recover the amounts due:
2008
Thousands of euros
Balances of financial assets the recovery of which is considered
remote at 1 January
406,058
258,044
38,336
30,229
8,107
-
159,080
136,807
7,660
14,613
(22,215)
(13,566)
(1,899)
(6,750)
(10,984)
(9,610)
(589)
(785)
221
(82)
Additions
Charged to impairment losses
Past due and uncollected
Other concepts1
Reductions
Cash recovery of principal
Cash recovery of past due and uncollected products
Forgiveness
Net variation for exchange differences
Balances of financial assets the recovery of which is considered
remote at 31 December
1
2007
422,400
406,058
This balance arises as a result of the consolidation of Leasing Catalunya E.F.C, SA, and Factorcat E.F.C, SA at 1 June, 2007.
To reduce the credit risk inherent to derivative trading, a collateral management system was introduced in
2004. A collateral agreement between two entities secures outstanding debts between the two parties by setting
up a series of guarantees or issuing certain assets for the creditor counterparty.
The carrying value represents the maximum limit of exposure to credit risk. However, in respect of the trading
portfolio, there are collateral agreements and credit derivatives to reduce this.
The main aims of the collateral management system are to:
Reduce economic and regulatory capital consumption in derivative transactions.
Increase counterparty transactions by reducing credit line consumption.
Create access to longer term derivative transactions.
111
Create scope to offer better prices on transactions backed by a collateral guarantee.
Increase protection in the event of potential defaults.
3.3.
Market risk
3.3.1. Interest rate risk
Interest rate risk arises 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 margin.
The analysis, measurement and control of the interest rate risk assumed by Caixa Catalunya entails sensitivity
and scenario analysis and establish the limits required to avoid exposure to risk levels that could have a material
impact on Caixa Catalunya. These analysis techniques and procedures are revised as required to ensure their
correct function. Moreover, all individual transactions material to Caixa Catalunya are analysed both individually
and globally together with the rest of Caixa Catalunya s transactions, in order to ensure control of interest rate risk
and other market risks to which Caixa Catalunya is exposed as a result of their issue or purchase.
The Assets and Liabilities Committee manages and monitors balance sheet interest rate risk in Caixa
Catalunya. 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 involves the
complete reduction of this type of risk (see Note 13).
The table below reveals Caixa Catalunya s exposure to interest rate risk at 31 December 2008 and 2007, and
indicates the carrying value of the financial assets and liabilities affected by this risk, classified by their estimated
term until revision of the interest rate (in transactions where the rate is reset periodically in line with the contractual
terms) or maturity (in fixed-rate transactions):
At 31 December 2008
Thousands of euros
Up to 1
month
From 1
to 3
months
From 3
months to
1 year
From 1
to 2
years
From 2
to 3
years
From 3
to 4
years
From 4
to 5
years
Over 5
years
Total
Financial assets
Due from banks and central
banks
Fixed rate
Floating rate
2,298,900
-
-
6,800
-
-
-
-
-
-
2,305,700
-
Debt securities
Fixed rate
Floating rate
5,700
2,146,425
11,500
613,500
190,500
-
4,100
-
5,600
-
200
-
29,700
-
61,900
-
309,200
2,759,925
Customer loans
Fixed rate
Floating rate
301,600
6,900,400
117,200
7,825,200
354,200
36,762,945
107,100
26,600
51,400
51,700
48,300
31,100
32,800
37,000
74,000
70,300
1,086,600
51,705,245
11,653,025
8,567,400
37,314,445
137,800
108,700
79,600
99,500
206,200
58,166,670
2,334,100
-
2,759,900
-
2,705,573
-
459,300
-
213,100
-
122,900
-
105,400
-
-
8,700,273
-
8,062,354
5,142,300
3,393,700
-
8,622,200
-
2,734,700
-
1,836,500
-
659,500
-
467,000
-
924,500
-
26,700,454
5,142,300
11,684,691
-
969,300
-
685,400
-
-
-
-
-
-
13,339,391
-
90,102
27,313,547
480,000
500,000
8,102,900
90,200
500,000
12,603,373
3,194,000
2,049,600
782,400
572,400
-
660,302
1,000,000
55,542,720
Total
Financial liabilities
Central bank deposits and
deposits from banks
Fixed rate
Floating rate
Customer deposits
Fixed rate
Floating rate
Debt securities
Fixed rate
Floating rate
Subordinated debt
Fixed rate
Floating rate
Total
112
924,500
At 31 December 2007
Thousands of euros
Up to 1
month
From 1 to
3 months
From 3
months to
1 year
From 1
to 2
years
From 2
to 3
years
From 3
to 4
years
From 4
to 5
years
Over 5
years
Total
Financial assets
Due from banks and central
banks
Fixed rate
Floating rate
3,695,083
-
887,900
-
708,500
-
-
-
-
-
-
5,291,483
-
Debt securities
Fixed rate
Floating rate
8,300
1,253,900
38,200
1,832,383
416,500
-
20,000
-
55,100
-
53,000
-
80,100
-
717,200
-
1,388,400
3,086,283
Customer loans
Fixed rate
Floating rate
370,600
7,436,000
416,900
10,745,500
639,200
30,807,032
299,300
55,000
191,300
13,300
113,900
50,800
59,800
37,800
90,400
107,900
2,181,400
49,253,332
12,763,883
13,920,883
32,571,232
374,300
259,700
217,700
177,700
915,500
61,200,898
Central bank deposits and
deposits from banks
Fixed rate
Floating rate
3,456,864
-
3,514,200
-
2,144,345
-
555,300
-
98,600
-
102,700
-
81,800
-
50,000
-
10,003,809
-
Customer deposits
Fixed rate
Floating rate
9,473,848
5,782,600
3,079,000
-
7,383,500
-
2,581,300
-
2,029,500
-
668,900
-
498,200
-
991,300
-
26,705,548
5,782,600
11,951,328
-
971,700
-
1,896,500
-
14,400
-
-
-
-
-
14,833,928
-
570,102
120,000
390,000
90,200
200,000
-
-
-
-
-
660,302
710,000
31,354,742
7,954,900
11,714,545
3,151,000
2,128,100
771,600
580,000
1,041,300
58,696,187
Total
Debt securities
Fixed rate
Floating rate
Subordinated debt
Fixed rate
Floating rate
Total
In terms of Caixa Catalunya’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 Caixa Catalunya of 72,344 thousand euros at 31 December 2008 (93,377
thousand euros at 31 December 2007) and a variation in the opposite direction in the income statement of 15,354
thousand euros (25,517 thousand euros at 31 December 2007).
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 impact on the income statement 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,
Caixa Catalunya holds the following hedges, applying the criteria established for each type (see Note 2.3):
Micro-hedge 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.
At 31 December 2008 and 2007, for accounting and management control purposes, Caixa Catalunya has two
different macro-hedges against interest rate risk on financial instrument portfolios:
113
Macro-hedge 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 macro-hedge 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.
The table below breaks down the cash flows hedged by macro-hedges by estimated timing:
Thousands of euros
Up to 1 month
From 1 to 3 months
From 3 to 6 months
From 6 months to 1
year
Over 1 year
Total
2008
2007
661,032
10,698,140
24,229,582
4,999,255
18,560,184
28,959,007
10,312,188
(4,022,578)
12,638,627
(4,408,821)
41,878,364
60,748,252
Macro-hedge 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.
Caixa Catalunya analyses the effectiveness of the transactions hedging fair value interest rate risk for a
specific amount of financial assets from the beginning of the hedge transaction and during the periods in which it
is classified as such. The Dollar Offset method is used to measure the efficiency of hedges, which calculates the
ratio between the change in the market value of the hedged item and the change in the market value of the hedge
instrument over a specific period, for example one year. If this ratio is between 80% and 125%, the hedge is
considered to be effective.
3.4.
Other market risks
3.4.1. 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 branch 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 currency trading: spots, outrights, currency
swaps, currency options and currency futures. The open position is the rest of the accumulation of cash flows in
each currency, generated by each of the related instruments.
The exchange position is affected by the exchange risk limit approved by the Board of Directors, which sets a
maximum daily limit on the open position and which the Risks Division communicates to the Treasury and Market
Capitals Division so that all units generating exchange risk know the available limits they can assume.
3.4.2. Other price risks
Price risk is affected by equity and commodity trading positions. A daily control is set up for this type of risk,
which is communicated by the Risks Division to the Treasury and Market Capitals Division together with the
positions assumed in its trading activity.
The Board of Directors also establishes a daily limit for price risk, for both equity trading and commodities,
which is controlled on a daily basis by the Risks Division. The volume of all traded instruments with equities and
commodities as underlyings (futures, options and equity swaps) is included in the price risk position.
In addition to setting a price risk limit for the maximum position, the daily control procedure also calculates
market risk using Value-at-Risk (VaR) to measure the risk specific to equity and commodities positions within the
global position comprising market risk. This generates a VaR figure for different risk factors, including VaR for
price risk, which determines the likely maximum loss due to price variations that the trading activity could incur
employing a one-day time horizon and a statistical confidence level of 99% for equity and commodity activities.
The results in 2008 were as follows: maximum 1,114 thousand euros and an average value of 490 thousand
euros.
114
For accounting purposes, Caixa Catalunya holds fair value micro-hedges to hedge against price risk, following
applicable accounting criteria for these instruments (See Note 2.3). These instruments primarily hedge 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 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 Caixa Catalunya 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.
In 2004, Caixa Catalunya 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. This model is currently being validated by the Bank of Spain.
The management model comprises a series 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, in the framework of global risk management.
3.6.
Capital management
Capital management within the Group can be carried out at regulatory and economic levels.
At the regulatory level, capital management is based on analysing the capital base and solvency ratios (core
capital, TIER, etc.) according to criteria set by the Bank for International Settlements (BIS) and the Bank of Spain.
The aim is to make the capital structure as cost efficient as possible and comply with the requirements of the
regulators, rating agencies and investments. Active capital management includes securitisations, asset disposals,
capital and hybrid issues (preference shares and subordinated debt).
Capital management from an economic point of view aims to maximise value creation for the Group and its
business units.
In order to correctly manage capital, the Group must draw up budgets and assess its future requirements,
anticipating different moments in the cycle. Both regulatory and economic capital projections are based on budget
information (balance sheet, income statement, etc.) and macroeconomic scenarios. Based on these estimates the
necessary measures needed to obtain capital targets (issues, securitisations, etc.) can be planned.
Bank of Spain Circular 3/2008 of 22 May to credit entities on determination and control of minimum capital,
regulates the minimum capital that Spanish credit entities must possess, both individually and as a consolidated
group, and the manner in which this capital is to be determined, the different processes for the self-evaluation of
capital that entities must follow, and the information that entities must make publically available on the market.
This Circular is the final phase in relation to credit entities of legislation on capital adequacy and soundlybased supervision of financial entities required under Law 36/2007 of 16 November, modifying Law 13/1985 of 25
May, on the investment ratio, capital and disclosure requirements of financial intermediaries and other financial
system standards, which are also considered in Royal Decree 216/2008 of 15 February on the capital of financial
entities. This standard also finalises the process of adapting Spanish regulations to the European directives
2006/48/EC of the European Parliament and of the Council of 14 June 2006 and 2006/49/EC of the European
Parliament and the Council of 14 June 2006. These two directives have considerably amended minimum capital
requirements of credit entities and their consolidated groups, pursuant to the accord adopted by the Basel
Committee on Banking Supervision (“Basel II”).
During 2008, the initial stage of the Group’s adaptation to the requirements established by the new regulations
which started several years ago has therefore been completed. However, this process cannot be considered as
finalised because, although the Group complies strictly with this Circular at 31 December 2008, it is involved in
several processes to improve the methods applied to calculate capital adequacy requirements to mitigate credit
risk. Specifically, it is currently developing internal capital requirements to mitigate exposure to credit risk. This
process of change has led to the Group significantly modifying the methodology followed to calculate capital
requirements.
115
The strategic objectives established by the Group’s Management in relation to capital management are as
follows:
Comply at all times, both at individual and consolidated level, with the regulations on minimum capital
requirements.
Aim to achieve maximum efficiency in the management of capital to ensure that capital consumption is
considered alongside other variables associated with profitability and risk, as a key variable in the analysis
underlying investment decisions taken by the Group.

Increase the weight of core capital relative to the Group’s total capital.
In order to fulfil these objectives, the Group has developed a series of capital management policies and
processes, the main points of which are as follows:
The Group has established dependant supervision and control units which continuously analyse compliance
with the Bank of Spain regulations on capital adequacy, and have alarms which ensure compliance with
applicable regulations at all times and that decisions taken by the Entity’s different areas and units adhere to the
objectives established to ensure minimum capital requirements are met. Contingency plans are in place to ensure
compliance with the limits established in the applicable regulations.
The impact of the Group’s eligible capital and the consumption-profitability-risk relationship is considered to be
a key factor in the Group’s strategic and commercial planning and analysis and supervision of its operations. The
Group has developed manuals establishing the parameters that have to serve as a guide during the Group’s
decision-making process regarding minimum capital requirements or which affect the aforementioned
requirements.
The Entity therefore considers the capital and capital requirements established by the aforementioned
regulations as a key part of the Group’s management, affecting both the Entity’s investment decisions and the
analysis of the feasibility of operations, the strategy for distributing Investees’ profits and issues by the Entity and
the Group, etc.
Bank of Spain Circular 3/2008 of 22 May establishes which elements are eligible to be classified as capital in
order to comply with the minimum requirements established in this standard. 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 consolidation and measurement criteria of investees following
applicable standards, which must be applied to calculate the group's minimum capital requirements, differ from
those used to prepare these consolidated annual accounts. This therefore leads to differences in the calculation of
capital under one set of standards or another.
The Group manages its capital in accordance with the conceptual definitions established in the Bank of Spain
Circular 3/2008. In this regard, the Group considers eligible capital to be the items defined in the eighth rule of the
Bank of Spain Circular 3/2008.
The minimum capital requirements established in this Circular are calculated based on the Group’s exposure
to: credit and dilution risk (according to the assets, liabilities and other memorandum accounts exposed to such
risks and considering their amounts, characteristics, counterparties, guarantees, etc.), counterparty, position and
settlement risk to which the financial assets and financial liabilities held for trading are exposed, to exchange risk
and the risk of positions in gold (based on the net global position in foreign currencies and the net position in
gold), and operational risk. Furthermore, the Group is subject to compliance with the risk concentration limits
established in the aforementioned Circular, as well as compliance with obligations regarding internal corporate
governance, capital self-evaluation, interest rate risk determination, and obligations regarding information to be
made publically available on the market, also established in the Circular described above. In order to ensure
compliance with these objectives, the Group manages these risks in an integrated manner in accordance with the
aforementioned policies. Details of the Group’s capital at 31 December 2008 and 2007, classified as core capital
and Tier II capital and calculated in accordance with Bank of Spain Circular 3/2008 of 22 May, are as follows. As
explained above, this capital is considered for consolidation purposes as “capital for management”.
116
2008
2007
Thousands of euros
Amount
Core capital
Core capital (Tier I)
Total capital
Unpaid and uncalled capital
Capital surplus
%
2,290,708
2,604,486
4,167,040
3,287,995
879,045
5.6%
6.3%
10.1%
-
Amount
%
2,192,456
2,540,540
4,399,438
3,684,383
715,055
4.8%
5.5%
9.6%
-
The regulations on capital requirements prevailing at 31 December 2007 were those established in the Bank of
Spain Circular 5/1993, based on Basel I. 2007 amounts have been retroactively recalculated for comparative
purposes only.
At 31 December 2008 and 2007 and during these years, 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. Distribution of Caixa Catalunya profit
The proposed distribution of the net profit of Caixa Catalunya in 2008, which will be submitted by the Board of
Directors to the General Assembly for approval, is as follows:
Thousands of euros
2008
2007
Community Projects
Reserves
50,000
352,406
75,000
407,238
Total
402,406
482,238
The 2008 profits of the remaining group entities will be distributed in the manner determined by their
shareholders.
5. Significant movements in investments
The most significant investments in 2008 include the incorporation of Activos Macorp,SL, Gescat, Gestión de
Suelo, SL, Gescat, Viviendas en Comercialización, SL (investment in real-estate assets), and Casigar Inversiones
2008, SA, (investments in renewable energies), and increases in the investments in Alcalá 120, Promociones y
Gestión Inmobiliaria, SL, Cerbat, SL, and Armilar Procam, SL (real-estate developments). The investments in
Herencia Solar Meridional, SL and Abenojar Solar Meridional, SL (solar farms) have also been disposed of.
The most significant investments and disposals undertaken by the Caixa Catalunya Group in 2007 include
investments in Invercartera Fotovoltaica, SL (which invests in solar farms), Volja Plus, SL (with a 7.76% indirect
stake in Applus Servicios Tecnológicos, SL), and Unió Sanyres, SL (investment in and management of senior
citizen residences), the sale of 20% of Riofisa, SA, and the dissolution without liquidation of Leasing Catalunya,
EFC, SA, and Factorcat, EFC, SA, consolidating their assets and liabilities within Caixa Catalunya.
Notes 2.1.1, 16 and 19.1 contain information regarding these entities.
117
6. Business segment reporting
The following table provides the disclosure by business segment required under IAS 14:
Thousands of euros
2008
Financial
Insurance
Real estate
Adjustments
Other
Total
1
Financial assets
Other assets
57,595,454
3,599,050
2,682,891
43,306
679,832
1,763,475
9,505
16,040
(1,867,596)
(894,908)
59,100,086
4,526,963
Total assets
61,194,504
2,726,197
2,443,307
25,545
(2,762,504)
63,627,049
Other liabilities
Equity
57,464,718
987,168
2,742,618
7,691
2,534,561
183,945
2,033,519
5,327
404,461
20,083
141
5,321
(1,824,666)
(367,059)
(570,779)
57,701,345
3,160,138
2,765,566
Total liabilities and equity
61,194,504
2,726,197
2,443,307
25,545
(2,762,504)
63,627,049
837,628
1,227,456
121,821
73,944
(70,787)
11,966
74
1,643
8,620
(6,717)
897,356
1,308,292
(238,558)
38,581
(12,587)
275
15,005
(197,284)
193,741
27,011
(79,194)
136
43,506
185,200
Interest margin
Gross margin
Net operating margin
Profit for the year
1
Includes elimination of equity, intra-group transactions, collection of dividends and other consolidation adjustments.
Thousands of euros
2007
Financial
Insurance
Real estate
Other
Adjustments 1
Total
Financial assets
Other assets
63,158,553
2,301,700
2,616,427
40,670
601,121
1,591,842
34,187
41,702
(1,374,916) 65,035,372
(809,871) 3,166,043
Total assets
65,460,253
2,657,097
2,192,963
75,889
(2,184,787) 68,201,415
Other liabilities
Equity
60,858,746
1,150,235
3,451,272
9,017
2,451,044
197,036
1,763,243
2,595
427,125
62,208
54
13,627
(1,364,600) 61,328,614
(235,092) 3,368,836
(585,095) 3,503,965
65,460,253
2,657,097
2,192,963
75,889
(2,184,787) 68,201,415
773,141
1,269,720
110,678
76,131
14,022
90,865
580
6,764
(42,994)
(108,971)
855,427
1,334,509
Net operating income
247,139
66,116
76,002
(93,481)
(10,768)
285,008
Profit for the year
488,023
43,897
52,547
(99,154)
493,092
Interest margin
Gross margin
7,717
1
Includes elimination of equity, intra-group transactions, collection of dividends and other consolidation adjustments.
7. Remuneration of the Board of Directors and Senior Management of Caixa
Catalunya
IFRS and Bank of Spain Circular 4/2004 define an entity’s key management 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.
118
7.1.
Remuneration of Directors
In accordance with the provisions of Law 14/2006 of 27 July of the Generalitat de Catalunya, amending the
savings bank law in Catalonia, the Extraordinary General Assembly of Caixa Catalunya changed its articles on 2
November 2006, establishing that the Chairman would henceforth receive remuneration. In line with the criteria
set forth in section 3, article 1 of Order 70/2007 issued by the Department of Economics and Finance, and in
consideration of the fact that the Chairman performs non-executive functions and is not dedicated exclusively to
this position, the Board of Directors, in its session of 18 December 2007, set remuneration for the Chairman at
175,000 euros per annum, compatible with collection of the corresponding attendance fees.
All remuneration sums paid to the Board of Directors and steering committees correspond exclusively to
attendance fees, within the maximum limits set by the Generalitat de Catalunya.
The table below details the remuneration paid to members of the Board of Directors of Caixa Catalunya,
exclusively in their role as Directors of Caixa Catalunya, for 2008 and 2007:
Per diems
Thousands of euros
Mr. Josep Alonso Roca
Mr. Jordi Bertran Castellví
Mr. Josep Burgaya Riera
Ms. Sara Cardona Raso
Mr. Joan Echániz Sans
Mr. Estanis Felip Monsonís
Mr. Genís Garriga Bacardí (a)
Mr. Joan Güell Juan
Mr. Francesc Iglesies Sala
Mr. Josep Isern Saun
Mr. Antoni Llardén Carratalà
Ms. Carme Llobera Carbonell
Ms. Gemma López Canosa
Mr. Manuel Matoses Fortea
Mr. Josep Molins Codina
Mr. Joan Manel Pla Ribas
Ms. Montserrat Robusté Claravall
Mr. Pablo Ros García (b)
Ms. Antonia M. Sánchez Moreno
Mr. Narcís Serra Serra
Mr. Francisco José Villegas Herrero
Mr. Maties Vives March
Total
(a)
(b)
2008
2007
75
32
40
29
70
40
34
82
31
34
53
38
36
30
69
69
71
30
85
70
40
56
22
26
21
52
28
22
59
15
24
36
27
25
19
51
52
49
4
21
62
52
27
1,058
750
Joined the Board of Directors in 2007
Stepped down from the Board of Directors in 2007
Caixa Catalunya has taken out a collective policy to provide civil liability insurance to the members of the
Board, the Control Committee and the Senior Management of Caixa Catalunya. In 2008 and 2007, premiums paid
in this regard amounted to 250 thousand euros and 134 thousand euros, respectively.
Caixa Catalunya has no pension commitments for former or current members of the Board of Directors or the
Control Committee for their status as Directors.
7.2.
Senior Management remuneration
For the preparation of these annual accounts, 10 individuals were considered key members of Senior
Management at 31 December 2008, one individual more than at 31 December 2007, when nine individuals were
considered as Senior Management.
The table below details the remuneration paid by the Caixa Catalunya Group to the Senior Management of
Caixa Catalunya, as defined in the paragraph above:
119
Thousands of
euros
Senior
Management
Short term
remuneration
2008
2007
3,815
Post-employment
benefits
2008
2007
3,210
1,705
664
Total
2008
2007
5,520
3,874
The members of Senior Management do not receive remuneration for attending meetings of the Board of
Directors or steering committees.
In relation to the information disclosed above, Senior Management is considered to be the group of individuals
who perform de facto or de jure, management duties reporting directly to the management bodies, executive
committees or members of the Executive Board or general managers, comprising the supervisory staff whose
area of representation is not restricted to specific areas or matters of the Entity’s activity.
Furthermore, during 2008 certain senior managers have left the Entity, resulting in a cost of 7,617 thousand
euros and net pension contributions of 577 thousand euros.
8. Cash and balances with central banks
Details of this caption of the consolidated balance sheets at 31 December 2008 and 2007 are as follows:
Thousands of euros
2008
Cash
Balances with Bank of Spain
Balances with other central banks
Total
2007
270,951
1,511,132
7,275
253,798
525,676
20,956
855
1,164
1,790,213
801,594
9. Financial assets and liabilities held for trading
9.1.
Breakdown of financial assets held for trading
The following table provides a breakdown of financial assets classified as held for trading at 31 December 2008
and 2007, classified by the geographical location of the risk, counterparty class, instrument type and according to
determination of the fair value (see Note 2.2.3):
120
Thousands of euros
2008
By geographical region 1
Spain
Other countries of the European Union
Rest of the world
681,922
363,935
33,947
1,145,298
500,854
121,076
1,079,804
1,767,228
5,371
209,480
49,191
4,505
811,257
195,282
528,851
256,209
294,932
491,954
1,079,804
1,767,228
268,547
209,480
207,312
2,090
78
5,371
53,696
811,257
1,251,501
528,851
335,627
193,143
81
193,530
529,120
23,773
491,954
1,079,804
1,767,228
Total
By counterparty
Credit entities
Resident public authorities
Other resident sectors
Other non-resident sectors
Trading derivatives
Total
By instrument
Debt securities
Spanish government debt
Treasury bills
State bonds and debentures
Other book entry debt securities
Foreign government debt
Issued by financial entities
Other fixed-rate securities
Equity instruments
Trading derivatives
Total
1
2007
Trading derivatives have been classified according to the currency in which they were acquired.
The fair values of the financial instruments included in this category at 31 December 2008 and 2007 are as
follows:
Thousands of
euros
2008
Level 1
Level 2
Level 3
246,156
815,648
-
1,267,288
499,940
-
1,079,804
1,767,228
Total
2007
The average effective interest rate of the debt instruments classified in this portfolio at 31 December 2008 was
2.87% (3.92% at 31 December 2007).
9.2.
Breakdown of financial liabilities held for trading
The following table indicates the breakdown of financial liabilities classified as held for trading at 31 December
2008 and 2007, grouped by the geographical location of the risk, counterparty and instrument type:
121
Thousands of euros
2008
By geographical region 1
Spain
Rest of the world
388,308
324,489
58,780
345,252
871,901
85,706
Total
771,577
1,302,859
By counterparty
Credit entities
Trading derivatives
771,577
203,531
633,047
466,281
Total
771,577
1,302,859
By instrument
Short security positions
Trading derivatives
771,577
836,578
466,281
Total
771,577
1,302,859
1
2007
Trading derivatives have been classified according to the currency in which they were acquired.
The method for calculating the fair value of all financial liabilities held for trading in 2008 is that used for level 2
(Note 2.2.3).
All short positions at 31 December 2007 correspond to overdrafts.
3.81% (3.49% at 31 December 2007).
9.3.
Trading derivatives
Details 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 2008 and 2007 are as follows:
122
2008
Thousands of
euros
Assets
Fair value
Unmatured foreign
currency
purchases and
sales
Purchases against
euros
Purchases against
currency
Sales against euros
Financial futures
on shares and
interest rates
Bought
Written
Share options
Bought
Written
Interest rate
options
Bought
Written
Currency options
Bought
Written
2007
Liabilities
Notional
Fair value
Assets
Notional
Fair value
Liabilities
Notional
Fair value
Notional
8,045
181,279
40,659
408,437
5,801
1,298,356
47,871
1,068,897
45,536
81,055
201,469
719,970
36,486
8,393
199,644
237,534
46,245
47,961
816,104
922,234
44,492
1,678
877,621
66,003
-
60,400
-
-
238,000
-
675,200
-
22
139,495
47,944
-
63,533
-
106,231
63,533
20,421
-
108,367
-
20,570
126,607
123,171
-
10,539,736
-
124,084
10,502,159
58,591
-
9,789,890
-
63,934
9,569,438
34,965
-
443,941
-
34,965
443,941
20,870
-
439,580
-
20,479
417,221
-
-
-
-
-
-
-
-
452,342
-
13,185,391
-
403,990
-
12,781,123
-
288,254
-
12,623,314
-
263,658
-
16,564,563
-
-
-
-
-
-
-
18
42,957
-
-
-
-
-
15,622
-
-
14,545
17,803
396
196,185
10,000
1
16,768
4,000
203,593
3,652
159
382,831
10,000
599
2,960
86,396
430,263
811,257
25,601,904
771,577
25,081,964
491,954
27,081,498
466,281
29,404,006
Other interest rate
transactions
Forward rate
agreements
Interest rate swaps
Other
Other financial
derivatives
Bought
Futures on
commodities
Bought
Written
Credit Default
Swaps
Bought
Written
Total
The notional amounts of the contracts arranged do not reflect the actual risk taken by the Caixa Catalunya
Group, since the net positions taken in these financial instruments are the result of offsetting and/or combining
them.
123
10. 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 2008
and 2007, classified by the geographical location of the risk, counterparty class and instrument type and according
to determination of the fair value (see Note 2.2.3):
2008
Thousands of euros
2007
By geographic region
Spain
56,319
55,971
Total
56,319
55,971
By counterparty
Credit entities
28,659
27,660
27,936
28,035
Total
56,319
55,971
56,319
56,319
55,971
55,971
56,319
55,971
By instrument
Debt securities
Listed bonds and debentures
Total
These assets have a Level 1 fair value of 56,319 thousand euros and 55,971 thousand euros at 31 December
2008 and 2007.
3.55% (3.95% at 31 December 2007).
The following table provides a breakdown of financial assets included in this category at 31 December 2008
and 2007, classified by the geographical location of the risk, counterparty class and instrument type and according
to determination of the fair value (see Note 2.2.3):
Thousands of euros
By geographical region
Spain
Rest of the world
Impairment losses
2008
2007
1,842,969
771,083
196,374
5,266,538
1,585,597
137,429
(37,746)
661
(16,352)
312
Total
2,773,341
6,973,524
By counterparty
Credit entities
969,777
236,582
1,081,524
522,543
1,049,480
410,208
4,294,879
1,234,997
Impairment losses
(37,746)
661
Total
2,773,341
124
(16,352)
312
6,973,524
By instrument
Debt securities (see Note 9.1)
Spanish government debt
Treasury bills
State bonds and debentures
Foreign government debt
Equity instruments
Shares of listed Spanish companies
Shares of unlisted Spanish companies
Shares of listed foreign companies
Shares of unlisted foreign companies
Mutual fund units held
Other
2,004,900
236,581
236,581
182,676
940,782
644,861
805,526
286,216
488,341
1,086
108
29,610
165
Impairment losses
(37,746)
661
Total
2,773,341
4,847,387
410,208
20,001
390,207
227,692
1,022,637
3,186,850
2,142,177
1,350,089
698,939
1,052
108
91,989
(16,352)
312
6,973,524
The fair values of the financial instruments included in this category at 31 December 2008 and 2007, by level,
are as follows:
Thousands of
euros
Level 1
Level 2
Level 3
2008
1,875,212
889,819
8,310
2007
3,066,772
3,906,752
-
Total
2,773,341
6,973,524
All of the impairment losses correspond to the allowance for inherent losses.
5.41% (5.45% at 31 December 2007).
The most significant investments at 31 December 2008 and 2007 in entities not considered holdings are as
follows:
125
2008
Thousands of euros
Company
Repsol-YPF, SA1
Gas Natural, SA
Abertis, SA
Ownership
share
1.63 %
3.03 %
0.18 %
Cost
Market
value
Net gain
Deferred
taxes
261,976
214,021
7,587
300,022
261,380
15,593
26,632
33,151
5,604
11,414
14,208
2,402
483,584
576,995
65,387
28,024
2007
Thousands of euros
Company
Repsol-YPF, SA1
Abertis, SA
Gas Natural, SA
France Telecom
España, SA2
Ownership
share
Cost
Market
value
1.63 %
5.69 %
3.03 %
261,976
233,909
214,021
484,406
800,905
542,271
155,701
396,897
229,775
66,729
170,099
98,475
0.72 %
6,006
51,964
32,171
13,787
715,912
1,879,546
814,544
349,090
Total
Net gain
Deferred taxes
1
Repsol-YPF is classified under shares in unlisted Spanish companies because the holding is held through Repinves, a
company in which it has a 32.4% stake, but which has been classified as an “Available-for-sale financial assets“ because it is an
instrumental company that acts exclusively as a holding company for shares of Repsol-YPF, SA.
2
As a result of the merger between Retevisión Móvil, SA and other companies, the Caixa Catalunya Group now owns shares of
France Telecom España, SA.
In 2008, 0.72% of France Telecom España, SA and 5.51% of Abertis, SA was sold generating surpluses of
46,782 thousand euros and 512,039 thousand euros, respectively, recorded under “Gains/(losses) on sale of noncurrent assets held for sale not classified as discontinued operations” in the accompanying consolidated income
statement for 2008 (see Notes 38 and 43).
On 1 January 2008, the Caixa Catalunya Group decided to reclassify certain fixed-rate financial instruments
included under “Available-for-sale financial assets” to “Held-to-maturity investments” in accordance with Bank of
Spain Circular 6/2008 (see Note 13).
12. Loans and receivables
12.1. Breakdown
The following table provides a breakdown of the financial assets included in this category at 31 December
2008 and 2007, classified by the geographical location of the risk, counterparty and instrument type:
126
Thousands of euros
2008
2007
Spain
Rest of the world
51,338,513
813,393
163,218
52,325,318
3,467,090
311,526
Impairment losses
(1,755,777)
104,464
(1,049,299)
129,207
Total
50,663,811
55,183,842
By counterparty
Credit entities
682,017
1,424,224
47,885,645
2,323,238
4,584,682
1,044,374
48,752,932
1,721,946
Impairment losses
(1,755,777)
104,464
(1,049,299)
129,207
Total
50,663,811
55,183,842
By instrument
Due from banks
Mutual accounts
Time deposit accounts
Assets purchased under resale agreement
Other accounts
Customer loans
Commercial loans
Secured loans
Finance leases
Assets purchased under resale agreement
Other loans
Debt securities
623,509
106,346
341,482
34,470
75,952
65,259
51,638,161
1,971,437
34,924,604
1,415,835
11,322
13,272,002
42,961
53,454
4,584,682
90,998
418,086
3,926,054
76,378
73,166
51,519,252
2,745,132
33,725,374
1,549,374
15,705
13,441,917
41,750
-
Impairment losses
(1,755,777)
104,464
(1,049,299)
129,207
Total
50,663,811
55,183,842
5.87% (4.95% at 31 December 2007).
The main valuation adjustments correspond to fees collected and not accrued and to interest accrued and not
collected to the sum of (207,778) thousand euros and 311,848 thousand euros, respectively, at 31 December
2008 ((226,620) thousand euros and 353,266 thousand euros, respectively, at 31 December 2007).
At 31 December 2008 and 2007 secured loans where risk had not been transferred and which are therefore
still recognised on the balance sheet after 1 January 2004, amounted to 13,547,564 thousand euros and
7,593,453 thousand euros, respectively (see Note 30.5).
The breakdown of "Other financial assets" at 31 December 2008 and 2007 is as follows:
127
Thousands of euros
2008
2007
Cheques drawn on credit entities
Financial guarantee fees (see Note 2.9)
Cash guarantees extended
Other
65,259
32,536
10,371
54
73,166
34,380
5,013
2,357
108,220
114,916
Total
12.2. Impaired and past due assets
The balance of loans and receivables considered impaired due to credit risk at 31 December 2008 and 2007 is
as follows:
Doubtful assets at 31 December 2008
Thousands of euros
Up to 6
months
Unsecured transactions 1
Secured transactions
1,341,495
20,306
Total
1,361,801
1
From 6 to
12 months
From 12 to
18 months
From 18 to
24 months
Over 24
months
586,894
184,957
190,436
183,071
57,368
77,759
29,477
37,084
2,205,670
503,177
771,851
373,507
135,127
66,561
2,708,847
Total
Includes risks with mortgage security with exposure exceeding 80% of the appraisal value, as well as other loans.
Thousands of euros
Up to 3
years
From 3 to 4 From 4 to 5
years
years
From 5 to 6
years
Over 6
years
Mortgage loans on completed
383,104
1,433
1,136
567
27
386,267
Total
383,104
1,433
1,136
567
27
386,267
Total
Doubtful assets at 31 December 2007
Thousands of euros
Up to 6
months
From 6 to 12
months
From 12 to
18 months
From 18 to
24 months
Over 24
months
Total
Unsecured transactions
Secured transactions
284,890
15,443
97,592
71,341
9,548
37,906
6,742
12,777
17,652
9,708
416,424
147,175
Total
300,333
168,933
47,454
19,519
27,360
563,599
Thousands of euros
Up to 3
years
From 3 to 4 From 4 to 5
years
years
From 5 to 6
years
Over 6
years
Total
Mortgage loans on completed
houses
130,345
1,266
739
326
7
132,683
Total
130,345
1,266
739
326
7
132,683
Doubtful assets totalled 3,095,114 thousand euros and 696,282 thousand euros at 31 December 2008 and
2007, respectively.
12.3. Credit risk hedges
The change in the balance of impairment losses in 2008 and 2007 recorded on credit risk hedges on loans
and receivables and accumulated total losses at the beginning and end of the year are as follows:
128
Thousands of euros
Specific
allowances
Allowance for coverage
of inherent losses
Total
156,672
685,309
841,981
269,782
(38,898)
(137,137)
94
117,251
(3,774)
-
387,033
(42,672)
(137,137)
94
250,513
798,786
Charged against income
Amounts reversed
Amounts used
Other
848,454
(58,767)
(30,532)
(820)
52,387
(104,281)
37
Amounts reversed
Amounts used
Other
1,008,848
1,049,299
900,841
(163,048)
(30,532)
(783)
746,929
1,755,777
In 2008 and 2007, 15,467 thousand euros and 10,200 thousand euros, respectively, of derecognised assets
were recovered.
At 31 December 2008 and 2007 the Caixa Catalunya Group had recorded 988,136 thousand euros and
846,188 thousand euros of substandard assets, respectively, recognising impairment losses of 127,227 thousand
euros and 84,786 thousand euros, respectively, classified under “Impairment losses – Specific allowances”.
12.4. Fair value
In relation to the fair value of loans and receivables, the provision held by the Entity is estimated to be
sufficient to cover the credit risk associated with these assets.
13. Held-to-maturity investments
The following table provides a breakdown of the financial assets included in this category at 31 December
2008 and 2007, classified by the geographical location of the risk, counterparty and instrument type:
2008
Thousands of euros
2007
Spain
Rest of the world
2,037,267
244,511
34,139
Impairment losses
(27,312)
Total
-
2,288,605
-
388,029
1,767,904
159,984
-
By counterparty
Credit entities
Impairment losses
(27,312)
Total
-
2,288,605
-
388,029
1,927,888
-
By instrument
Debt securities
Impairment losses
(27,312)
Total
2,288,605
129
-
5.41%.
On 1 January 2008, the Caixa Catalunya Group reclassified certain debt instruments under “Available-for-sale
financial assets” to “Held-to-maturity investments” to bring their classification into line with the management
objective established in standard 22 of Bank of Spain Circular 6/2008.
The financial assets included in this category have a fair value of 1,993,984 thousand euros and a carrying
value of 2,315,917 thousand euros.
Doubtful assets totalled 21,033 thousand euros at 31 December 2008.
14. Hedging derivatives (assets and liabilities)
Details, by type of product and according to how their fair value has been calculated (see Note 2.2.3), of the
fair value and notional amounts of the derivatives designated as fair value hedges at 31 December 2008 and 2007
are as follows:
2008
Assets
Thousands of euros
Share options
Bought
1
Written
Interest rate options
Bought
Written
1
Fair
value
2007
Liabilities
Fair
value
Notional
Assets
Fair
value
Notional
24,446
Liabilities
Fair
value
Notional
Notional
4,541
-
1,083,954
-
2,080,603
50,170
-
785,921
-
65,217
1,947,145
17,298
845,344
-
-
-
-
5,963
220,725
-
-
32,326
444,618
-
-
9,866
300,000
8,372
101,582
-
-
-
-
-
-
-
-
8,335
101,582
-
-
-
-
390.931
7.403.133
99.194
934.971
133.569
2.204.050
238.011
3.524.322
421.142
9.434.013
164.301
3.561.774
189.702
3.210.696
313.094
5.771.467
Currency options
Bought
Written
1
Other interest rate
transactions
Interest rate swaps
Total
1
A significant proportion of this balance corresponds to guarantees extended by Caixa Catalunya to the participants of the
guaranteed investment and pension funds.
In addition, Ascat Vida has written several derivatives to hedge the cash flows from certain guaranteed savings
products.
At 31 December 2008 and 2007, the Group had recognised an asset of 1,360 thousand euros and 67,033
thousand euros and a liability of 4,755 thousand euros and 20,666 thousand euros in relation to interest rate
swaps written to provide a cash flow macro-hedge, with a notional value of 23,203,800 thousand euros and
62,597,400 thousand euros.
The notional amounts of the contracts arranged do not reflect the actual risk taken by the Caixa Catalunya
Group, since the net positions taken in these financial instruments are the result of offsetting and/or combining
them.
130
2008
2007
Assets
Liabilities
Thousands of euros
Fair value
Fair value hedges
Micro-hedges
Macro-hedges
Cash flow hedges
Micro-hedges
Macro-hedges
Total
Notional
421,142
40,895
380,247
9,434,013
2,190,573
7,243,440
1,360
1,360
8,939,100
8,939,100
422,502
18,373,113
Fair value
164,301
84,818
79,483
Notional
3,561,775
2,966,775
595,000
Liabilities
Assets
Fair
value
189,702
64,187
125,515
Notional
Fair value
Notional
3,210,696
1,436,381
1,774,315
313,094
88,496
224,598
5,771,467
2,366,467
3,405,000
4,755 14,264,700
4,755 14,264,700
67,033 36,641,000
67,033 36,641,000
20,666
20,666
25,956,400
25,956,400
169,056 17,826,475
256,735 39,851,696
333,760
31,727,867
This caption of the balance sheet comprises assets awarded mainly from securitisation funds. During 2008
and 2007 this caption amounted to 19,938 thousand euros and 4,859 thousand euros, with provisions of 997
thousand euros and 4,486 thousand euros being made in 2008 and 2007, respectively.
16. Equity investments
16.1. Associates
“Equity investments – Associates” in the consolidated balance sheets at 31 December 2008 and 2007
amounts to 66,119 thousand euros and 19,391 thousand euros, respectively.
A list of these investments is provided in Note 2.1.3.
The changes in the balance of this caption in the accompanying consolidated balance sheets are as follows:
Thousands of euros
Carrying amount
Acquisitions and incorporations
Capital increases
Sales and dissolutions
Equity accounting
82,497
288
(72,947)
1,011
10,849
Capital increases
Reductions
Equity accounting
49,170
172
(238)
(4)
(9,874)
50,075
Goodwill
Sales
Other
21,608
(12,826)
(240)
8,542
Acquisitions
7,502
16,044
Net balance at 31 December 2007
19,391
66,119
131
The most significant transactions in 2008 and 2007 were as follows:
Thousands of euros
Type of
transaction
Company
Establecimientos Industriales y Servicios, SL
Hidrodata, SA
Comomin de Tuberias, SL
Riofisa, SA
2008
2007
Investment cost
Investment cost
Acquisition
Acquisition
Acquisition
Acquisition
Sale
40,825
2,529
2,451
1,946
-
(93,372)
In 2007, 20% of Riofisa, SA was sold generating a capital gain of 313,901 thousand euros, recognised under
“Gains/(losses) on non-current financial assets not classified as discontinued operations” in the accompanying
The year of incorporation and net balance of outstanding goodwill, integrated within investment cost, are
provided below:
Thousands of euros
Year Subsidiary
2005
2005
2006
2006
2006
2008
2008
2008
2008
Construcciones de Tuberías Industriales, SA
Afisa Inversiones, SL
Hujoceramic, SL
Europea de Mantenimiento Industrial, SA
Tradehi, SL
Establecimientos Industriales y Servicios, SL
Solwindet Las Lomas, SL
Comomin Tuberías, SL
Total
2008
2007
Goodwill
Goodwill
3,132
670
2,429
1,756
555
4,422
1,597
240
1,243
3,132
670
2,430
1,756
555
-
16,044
8,543
16.2. Jointly controlled entities
A list of investments carried under “Equity investments – Jointly-controlled entities" at 31 December 2008 and
2007 is provided in Note 2.1.2.
The changes in the balance of this caption in the accompanying consolidated balance sheets are as follows:
132
Thousands of euros
Carrying amount
Capital increases
Equity accounting
229,742
19,521
39,589
(793)
(24,160)
263,899
Capital increases
Changes in compositon of Group
Equity accounting
4,186
14,657
(1,904)
(31,782)
(78,126)
170,930
Goodwill
Acquisitions
5,375
1,881
7,256
Acquisitions
Sales
3,098
(1,793)
8,561
Impairment
Recoveries
(11,000)
6,000
(5,000)
(5,000)
266,155
174,491
At 31 December 2007 the Group reversed a 6,000 thousand euro impairment allowance taken in relation to its
investment in Centros Residenciales Sanyres Sur, SL.
The most significant transactions in 2008 and 2007 were as follows:
133
Thousands of euros
Company
Type of transaction
Cedinsa Concesionaria, SA
Espais Catalunya Mediterrània, SA
Cedinsa Ter Concesionaria, SA
Cedinsa Eix Transversal Concesionaria, SA
Parque Eólico Coll del Moro, SL
Parque Eólico de Torre Madrina, SL
Iniciativas Eólicas Catellanas, SA
Ocycandey 2006, SL
Alma Gestión de Hoteles, SL
Centros Residenciales Sanyres Sur, SL
Med Básico, SL
Darlington BV
Cerbat, SL
Club de Golf Hacienda del Álamo, SL
Armilar Procam, SL
Prasa y Procam, SL
Unión Sanyres, SL
Torca Procam Polska SP. ZOO
Vertix Procam, SL
Volja Plus, SL
Avenis Procam, SL
Sanidad y Residencias 21, SA
Nou Mapro, SA
Cedinsa d’Aro Concesionaria, SA
2008
2007
Investment cost
Investment cost
Capital increase
Capital increase
Capital increase
Capital increase
Acquisition
Acquisition
Acquisition
Capital increase
Capital increase
Capital increase
Acquisition
Reduction
Sale
Sale
Change in compositon of
Group
Capital increase
Group
Group
Capital increase
Incorporation
Capital increase
Capital increase
Acquisition
Capital increase
Acquisition
Capital increase
Capital increase
3,843
3,300
2,250
1,800
1,242
1,242
1,222
1,210
990
(1,482)
(2,676)
(4,035)
(6,329)
3,747
2,510
3,049
-
(12,670)
1,533
-
(19,955)
-
-
41,935
40,568
13,259
12,006
9,832
5,000
3,295
2,381
1,650
The year of incorporation and net balance of goodwill are as follows:
Thousands of euros
2008
2007
Goodwill
Goodwill
Badalona Building Waterfront, SL
Darlington BV
Darlington BV
Med Basic, SL
Centro Inmunológico de Catalunya, SA
Tein Centro Tecnológico del Plástico, SL
Ocycandey 2006, SL
Parque Eólico Coll del Moro, SL
Parque Eólico de Torre Madrina, SL
Parque Eólico de Vilalba dels Arcs, SL
2,266
964
352
1,881
1,239
1,239
620
2,266
897
459
437
964
352
1,881
-
Total
8,561
7,256
Year Subsidiary
2004
2004
2005
2005
2005
2005
2007
2008
2008
2008
In accordance with point 38 of IAS 31, the Caixa Catalunya Group as has elected to consolidate the
consolidated annual accounts of investees classified as jointly-controlled entities using the equity method.
134
The effect on consolidated assets, liabilities, equity and income of consolidating investments in jointlycontrolled entities by proportional consolidation would be as follows:
Thousands of euros
2008
2007
Financial assets
Other assets
137,379
1,402,263
53,578
1,665,231
Total assets
1,539,642
1,718,809
Other liabilities
Equity
1,496,825
42,817
-
1,715,259
3,550
-
1,539,642
1,718,809
Interest margin
Gross margin
Net operating margin
(69,496)
100,182
47,344
(44,371)
63,394
13,951
Profit before tax
(22,954)
13,987
Income tax
(22,954)
13,987
Attributable to the parent
-
-
17. Reinsurance assets
The breakdown of this caption of the accompanying consolidated balance sheets at 31 December 2008 and
2007 is as follows:
Thousands of euros
2008
2007
Unearned premiums
Life insurance
Claims outstanding
Other technical provisions
8,839
2,732
7,029
320
7,632
1,623
6,420
-
18,920
15,675
Total
135
18. Property and equipment
Movement in this caption of the consolidated balance sheets in 2008 and 2007 have been as follows:
Caixa Catalunya
Thousands of euros
Investment
properties
Own use
Comm. Proj.
P,P&E
Consolidated
Total
Total
Revalued cost
Additions
Increases due to transfers
Removal or reductions
Reductions due to transfers
1,228,415
99,860
18,546
(6,064)
(20,230)
1,320,527
61,185
1,684
(205)
62,664
146,426
14,180
360
(360)
160,606
1,436,026
114,040
20,590
(6,269)
(20,590)
1,543,797
1,451,390
155,615
20,670
(6,306)
(20,590)
1,600,779
Additions
Increases due to transfers
Reductions due to transfers
68,540
14,508
(31,815)
(10,093)
1,361,667
112,730
(20,198)
(4,415)
150,781
14,516
(3,848)
171,274
195,786
14,508
(55,861)
(14,508)
1,683,722
232,084
14,508
(88,063)
(16,935)
1,742,373
Accumulated depreciation
Additions
353,055
39,856
(4,665)
388,246
3,945
464
89
4,498
48,711
4,905
53,616
405,711
45,225
(4,576)
446,360
413,332
45,968
(3,940)
455,360
Additions
44,065
(29,643)
402,668
551
(41)
5,008
5,620
(3,825)
55,411
50,236
(33,509)
463,087
51,089
(39,823)
466,626
932,281
58,166
106,990
1,097,437
1,145,419
958,999
145,773
115,863
1,220,635
1,275,747
18.1. Property, plant and equipment for own use
The breakdown by type of items comprising this caption on the consolidated balance sheet at 31 December
2008 and 2007 is as follows:
1
Accumulated
amortisation
and
depreciation
Net
balance
Thousands of euros
Cost
Land and buildings for own use
Fixtures, vehicles and other facilities
Computer equipment and facilities
Other
736,096
448,735
144,691
45,592
61,942
228,039
103,183
4,026
674,154
220,696
41,508
41,566
1,375,114
397,190
977,924
771,324
472,290
144,085
21,330
65,233
234,313
106,405
15
706,091
237,977
37,680
21,315
1,409,029
405,966
1,003,063
Land and buildings for own use
Fixtures, vehicles and other facilities
Computer equipment and facilities
Other
1
See revaluations in Note 28.5.
18.2. Investment properties
In 2008 and 2007, income from the Caixa Catalunya Group’s investment properties amounted to 2,572
thousand euros and 2,443 thousand euros, respectively, while the associated operating expenses amounted to
368 thousand euros and 335 thousand euros respectively (see Notes 40 and 41). Most investment property
additions were at the end of 2008.
136
18.3. Fair value of property, plant and equipment
The appraisal value of property, plant and equipment (land and buildings for own use and investment
properties) at 31 December 2008 was 1,045,073 thousand euros (823,544 thousand euros at 31 December 2007)
while net value was 789,792 thousand euros (777,034 thousand euros at 31 December 2007).
Market values were obtained from appraisals carried out mainly in 2008.
19. Intangible assets
Thousands of euros
2008
2007
Opening balance
Additions
Amortisation
Other
49,682
15,779
(14,425)
240
36,631
25,150
(12,099)
-
Closing balance
51,276
49,682
Intangible assets mainly comprise software programs and other applications developed by entities outside the
Caixa Catalunya Group.
20. Other assets
Details of these captions of the consolidated balance sheets at 31 December 2008 and 2007 are as follows:
Thousands of euros
2008
2007
Inventories
Other assets
2,411,284
45,474
43,615
1,260,334
18,713
41,352
Total
2,500,373
1,320,399
20.1. Inventories
The Group’s most significant inventories at the 2008 and 2007 year ends are as follows:
2008
Thousands of euros
Buildings acquired
Land
Works in progress
Constructed buildings
Advances to suppliers
Total
2007
142,101
1,529,584
532,594
177,251
29,754
72
868,777
214,659
76,187
100,639
2,411,284
1,260,334
The increase in inventories during 2008 is mainly due to the acquisition of completed property developments,
property developments in progress, and plots of land from real-estate developers outside the Group.
During 2008, impaired assets amounting to 110,386 thousand euros have been written down.
137
20.2. Prepayments and accrued income
At 31 December 2008 and 2007 these captions in the accompanying consolidated balance sheets are as
follows:
Thousands of euros
2008
2007
Fees and commissions
Other accruals
23,954
21,520
14,827
3,886
Total
45,474
18,713
20.3. Other assets
At 31 December 2008 and 2007 "Other assets" amounted to 43,615 thousand euros and 41,352 thousand
euros, respectively. A portion of this caption relates to dividends pending collection from Repinves and Gas
Natural for 10,436 thousand euros and 6,504 thousand euros, respectively, at 31 December 2008 recognised
under “Income from equity instruments – Other equity instruments” and to other collections pending. At 31
December 2007 this caption amounted to 9,933 thousand euros and comprised a dividend pending collection from
Repinves.
21. Financial liabilities at amortised cost
Note 3.1 details by maturity the items making up this caption of the consolidated balance sheets.
21.1. Central bank deposits
At 31 December 2008 and 2007 this caption comprises deposits from the Bank of Spain amounting to
5,873,081 thousand euros and 4,162,455 thousand euros, which are guaranteed by financial instrument pledges.
The rate on these deposits is 4.81% and 4.66% at 31 December 2008 and 2007 (see Note 30.2)
21.2. Due from banks
The breakdown, by type of deposit, of this caption of the consolidated balance sheets, is as follows:
Thousands of euros
2008
Demand deposits
Other loans
Time deposit accounts
Other accounts
Repurchase agreements
Total
2007
28,845
7
3,238,757
2,858,276
106,184
274,297
6,398,106
3,595,318
119,950
2,682,838
97,002
33,927
3,364,604
6,432,040
Virtually all demand deposits correspond to the mutual account with the Spanish Confederation of Savings
Banks.
The average effective interest rate of the debt instruments classified under this caption at 31 December 2008
is 4.42% (4.03% at 31 December 2007).
Assets acquired under repurchase agreements are offset by reverse repos, as described in Note 12.
138
21.3. Customer deposits
The breakdown, by geographic origin, substance and counterparty, of this caption in the accompanying
consolidated balance sheets at 31 December 2008 and 2007 is as follows:
Thousands of euros
2008
Spain
Rest of the world
2007
25,799,795
681,726
66,137
24,845,142
1,132,515
286,671
280,605
185,655
Total
26,828,263
26,449,983
By counterparty
1,828,049
23,961,349
758,260
1,728,989
24,122,246
413,093
280,605
185,655
Total
26,828,263
26,449,983
By instrument
Current accounts
Savings accounts
Time deposits
Repurchase agreements
Other accounts
9,463,867
183,672
16,156,694
640,848
102,577
11,339,019
208,420
13,745,792
810,551
160,546
280,605
185,655
26,828,263
26,449,983
Total
The average effective interest rate of the debt instruments classified under this caption at 31 December 2008
was 4.11% (3.26% at 31 December 2007).
Time deposits include balances held for securitisation, which amount to 4,056,780 thousand euros and
4,842,085 thousand euros at 31 December 2008 and 2007, respectively. It also includes deposits held by the
investees Caixa Catalunya International Finance Limited and Caixa Catalunya International Finance BV
corresponding to their issues in Euro Medium-term Notes (Eurobonds) to Caixa Catalunya. The outstanding
balance totalled 18,973 thousand euros and 866,890 thousand euros at 31 December 2008 and 2007,
respectively.
Pursuant to its restructuring plan, the Caixa Catalunya Group held 38,977 thousand euros and 60,739
thousand euros, respectively, under “Financial liabilities at amortised cost – Customer deposits” on the liability
side of the balance sheets at 31 December 2008 and 2007, which are pending transfer to the pension plan (see
Note 2.13.1).
21.4. Marketable debt securities
Thousands of euros
2008
Issued bonds and debentures
Promissory notes
Secured mortgage bonds
Total
139
2007
9,962,120
2,578,992
5,321,402
12,968,483
4,022,335
3,800,245
262,659
214,323
18,125,173
21,005,386
21.4.1. Issued bonds and debentures
At 31 December 2008 issued bonds and debentures comprised simple bonds and debentures amounting to
5,418,308 thousand euros and regional bonds of 179,964 thousand euros. At 31 December 2007 issued bonds
and debentures comprised simple bonds and debentures amounting to 5,719,001 thousand euros, regional bonds
of 109,978 thousand euros, and US Dollar denominated bonds equivalent to 1,323,512 thousand euros. The
return on issued bonds and debentures was 4.98% and 4.41% at 31 December 2008 and 2007, respectively.
Movement in the “Issued bonds and debentures” caption in 2008 and 2007 is as follows:
Thousands of euros
2008
Opening balance
Issues
Repayments
Closing balance
2007
12,968,483
965,727
(3,972,090)
11,558,725
3,177,818
(1,768,060)
9,962,120
12,968,483
The table below details, by maturity, the balance of this caption at 31 December 2008 and 2007:
Thousands of euros
2008
Up to 1 year
From 1 to 5 years
Over 5 years
Total
2007
4,956,473
7,686,440
779,550
2,578,144
4,226,097
2,703,899
9,962,120
12,968,483
21.4.2. Promissory notes
Issue details of outstanding promissory notes at 31 December 2008 and 2007 are as follows:
Thousands of euros
2008
Amount
Interest rate
rate
Amount
Interest rate
rate
2,700,000
1,500,000
3,000,000
160,000
5,000,000
29,129
364,710
159,275
2,025,878
4.07%
4.81%
4.52%
4.79%
4.86%
263,184
103,417
3,514,591
141,143
-
3.74%
3.99%
4.22%
4.83%
-
12,360,000
2,578,992
Date issued
Face value
27-04-2006
06-11-2006
13-02-2007
17-07-2007
14-02-2008
Total
2007
4,022,335
The variation in promissory notes in 2008 and 2007 is as follows:
Thousands of euros
2008
Opening balance
Drawn down
Repayments
Closing balance
4,022,335
8,032,020
(9,475,363)
2,927,828
10,944,789
(9,850,282)
2,578,992
4,022,335
All these financial instruments are denominated in euros and fall due in 2009.
140
2007
21.4.3. Secured mortgage bonds
This caption comprises secured mortgage bonds issued for the sum of 5,321,402 thousand euros and
3,800,245 thousand euros at 31 December 2008 and 2007, respectively. The rate on mortgage bonds issued is
5.10% and 4.29% at 31 December 2008 and 2007, respectively.
The table below details, by maturity, the balance of this caption at 31 December 2008 and 2007:
Thousands of euros
2008
2007
Up to 1 year
From 1 to 5 years
From 5 to 10 years
149,970
1,821,157
3,350,275
300,000
149,970
3,350,275
Total
5,321,402
3,800,245
21.5. Subordinated liabilities
Details, by issue and rate, of this caption of the consolidated balance sheets at 31 December 2008 and 2007
are as follows:
Thousands of euros
Unredeemed amount
Issue
Redemption Face value
25-06-92
01-01-98
24-03-00
02-10-00
20-10-03
Perpetual
01-01-13
01-07-10
01-02-11
19-05-15
90,151
90,152
120,000
90,000
199,999
16-11-04
23-10-08
20-02-20
18-12-18
300,000
500,000
Subtotal 1
Other subordinated
Total
1
2
Interest rate
2008
2007
Floating
Floating
From 4.25 to 7%
From 5.25 to 7%
From 3 to 6%
From 3.50 to
5,25%
Floating 2
90,151
90,152
199,999
90,151
90,152
120,000
90,000
199,999
300,000
500,000
300,000
-
1,180,302
890,302
480,000
480,000
1,660,302
1,370,302
These issues compute as Tier II capital up to a limit of 50% of core capital (see Note 1.7.1).
Until 18 December 2009, the issue accrued interest at a fixed rate of 7.00% per annum. Between 18 December 2009 and 18
December 2013, the issue accrued nominal interest at a variable rate linked to three-month Euribor, plus a spread of 2.00%.
“Other subordinated liabilities” comprise two non-voting preference share issues issued by Caixa Catalunya
Preferentes, SA.
In November 1999 Caixa Catalunya Preferential Issuance Limited issued 300 million euros of perpetual preference
shares. The dividend is variable and linked to 3-month Euribor, plus a preferential and non-accumulative spread of
0.10 points.
In January 2001, the same company issued a further 180 million euro of perpetual preference shares. Again, the
dividend is variable and linked to 3-month Euribor, plus a preferential and non-accumulative spread of 0.10 points.
Caixa Catalunya Preferentes, SA, is a wholly-owned subsidiary of Caixa Catalunya. The issues are backed by an
irrevocable joint and several guarantee from Caixa Catalunya.
As authorised by the Bank of Spain, these issues compute entirely as core capital of the consolidated Caixa
Catalunya Group (see Note 1.7.1).
At 31 December 2008 and 2007, valuation adjustments on subordinated liabilities amounted to 20,205
thousand euros and 16,097 thousand euros, respectively.
141
The effective average interest rate on debt instruments classified under this caption was 4.53% in 2008 (4.15%
during 2007).
21.6. Fair value
The fair value of financial liabilities carried at amortised cost has been estimated using measurement
techniques generally accepted on the market. These liabilities had a fair value of 56,308,071 thousand euros, and
a carrying value of 56,517,771 thousand euros at 31 December 2008 (59,300,694 thousand euros and 59,854,394
thousand euros, respectively, at 31 December 2007).
22. Liabilities under insurance contracts
The breakdown of this caption of the accompanying consolidated balance sheets at 31 December 2008 and
2007 is as follows:
Thousands of euros
2008
2007
Technical provisions for direct insurance
Unearned premiums and unexpired risks
Life insurance
Mathematical provisions
Claims outstanding
Profit sharing and returns
Life insurance where the investment risk is borne
by the policyholders
Other technical provisions
Total
13,373
2,198,508
15,214
2,183,294
69,377
3
10,467
2,077,638
15,655
2,061,983
89,325
521
7,029
276
14,726
26
2,288,566
2,192,703
23. Provisions (excluding tax provisions)
The movement and purpose of the provisions recognised under this caption of the consolidated balance
sheets at 31 December 2008 and 2007, except for Provisions for taxes, are as follows:
Provision for
pensions
and similar
obligations
Provisions for
risks and
contingent
liabilities
Provision
for litigation
and similar
236,987
37,787
5,467
15,285
Amounts reversed
Amount used
Other
9
(4)
(12,031)
(13,305)
500
(1,758)
-
1,868
(3,911)
7,893
211,656
42,178
4,209
21,135
Amounts reversed
Amount used
Other
803
(10,644)
4,439
21,843
(10,456)
-
206,254
53,565
Thousands of euros
4,422
(31)
-
(6)
4,203
Other
provisions
(4,725)
24,822
41,232
The “Provision for pensions and similar obligations” includes employee pension commitments covered with
insurance policies in the sum of 174,659 thousand euros and 169,418 thousand euros at 31 December 2008 and
2007, respectively.
142
This section also includes a provision of 31,504 thousand euros and 42,147 thousand euros at 31 December
2008 and 2007, respectively, generated by the labour agreement on the establishment of a partial retirement
system (see Note 2.13.1).
The “Provisions for risks and contingent liabilities” caption corresponds to impairment losses on contingent
liabilities.
24. Other liabilities
Details of this caption of the balance sheets at 31 December 2008 and 2007 are as follows:
Thousands of euros
2008
2007
Deferred income and accrued expenses
Other liabilities
193,885
18,924
154,046
30,233
Total
212,809
184,279
24.1. Deferred income and accrued expenses
At 31 December 2008 and 2007 this caption of the accompanying consolidated balance sheets is as follows:
Thousands of euros
2008
2007
General expenses
Other deferred income and accrued expenses
36,354
157,531
87,974
66,072
Total
193,885
154,046
Deferred income and accrued expenses
24.2. Other liabilities
At 31 December 2008 and 2007 "Other liabilities" amounted to 18,924 thousand euros and 30,233 thousand
euros, respectively, and basically comprised transfers received pending application.
25. Minority interests
The breakdown by consolidated entity, of “Minority interests” in the consolidated balance sheets and “Profit
attributed to minority interests” of the consolidated income statements of 2008 and 2007 is as follows:
2008
Thousands of euros
TP Best 4000, SL
Área Tres Procam, SL
Procamvasa, SA
Jale Procam, SL
Aprosa Procam, SL
Club de Golf Hacienda del Álamo, SL
Informació i Tecnologia Catalunya, SL
Other entities
(amounts < 500 thousand euros)
Total
2007
Attributed to
minority
interests
Minority
interests
Minority
interests
6,484
5,720
4,093
3,873
1,124
811
554
521
2
(431)
(704)
(96)
(193)
415
(17)
73
289
(7,517)
32,737 1
4,951
23,469
(8,468)
53,141
5,173
1
6,486
6,173
1,297
3,970
1,700
313
465
Attributed to
minority
interests
2
(21)
27
333
(233)
12
102
At 31 December 2007 this item comprised the minority interest of Alcalá 120, Promociones y Gestión Inmobiliaria, S.L.
amounting to 24,796 thousand euros. At 31 December 2008 Caixa Catalunya controlled 100% of this company.
143
Movement in “Minority interests” during 2008 and 2007 has been as follows:
2008
Thousands of euros
Opening
balance
Alcalá 120, Promociones y Gestión
Inmobiliaria, SL
TP Best 4000, SL
Seif Procam, SL
Procamvasa, SA
Premier Procam, SA
Jale Procam, SL
Other entities
Total
24,796
6,486
6,173
4,917
3,970
2,282
1,700
1,297
1,520
53,141
Result for
Allocation
the year
of prior
Change in
attributed
year’s
capital
to minority
result
interests
(10)
(24)
(1,702)
(29)
(52)
(5)
-
2
(431)
(5,495)
(96)
(1,752)
(193)
(704)
619
(1,203)
3,500
201
(8,468)
3,500
Consolidati
on
adjustment
s
Closing
balance
1
(24,796)
6
2
1,971
28
(481)
(378)
147
(23,501)
6,484
5,720
(309)
3,873
(3)
1,124
4,093
2,487
23,469
1
At 31 December 2007 this item comprised the minority interest of Alcalá 120, Promociones y Gestión Inmobiliaria, S.L.
amounting to 24,796 thousand euros. At 31 December 2008 Caixa Catalunya controlled 100% of this company.
2007
Thousands of euros
Opening
balance
Allocation
of prior
year’s
result
21,286
6,483
2,971
2,992
3,656
2,872
1,524
1,139
(6,213)
(12)
21
(658)
68
(392)
12
131
3,876
2
(21)
1,715
333
(138)
(233)
27
3,098
(1,070)
(388)
46,021
(8,113)
Company
Alcalá 120, Promociones y Gestión
Inmobiliaria, SL
TP Best 4000, SL
Seif Procam, SL
Procamvasa, SA
Premier Procam, SA
Jale Procam, SL
Other entities
Total
Result for
the year
Change in
attributed
capital
to minority
interests
5,173
Consolidatio
n
adjustments
Closing
balance
9,114
3,200
1,141
403
-
(3,267)
13
2
(273)
(87)
(60)
(6)
-
24,796
6,486
6,173
4,917
3,970
2,282
1,700
1,297
-
(120)
1,520
13,858
(3,798)
53,141
26. Valuation adjustments
26.1. Available-for-sale financial assets
This caption of the accompanying consolidated balance sheets includes the amount, net of the tax effect, of
changes in the fair value of the assets classified as available-for-sale which, as indicated in Note 2, must be
classified as an integral part of the Group’s equity. These differences are recognised on the consolidated income
statement when the assets which gave rise to them are sold.
The most significant entries in this caption are detailed in Note 11.
144
26.2. Cash flow hedges
This caption of the accompanying consolidated balance sheets includes the amount, net of the tax effect, of
the changes in the fair value of the effective portion of financial derivatives designated as cash flow hedges (see
Note 2.3).
The most significant entries in this caption are detailed in Note 14.
26.3. Exchange differences
This caption of the consolidated balance sheets includes the net amount of exchange differences arising on
non-monetary items whose fair value is adjusted against equity arising on the translation to euros of the balances
held in currencies other than the euro (see Note 2.4).
27. Reserves
The breakdown by items of the balance of this caption in the consolidated balance sheets is:
Thousands of euros
2008
2007
Revaluation reserves Royal Decree Law 7/1996
Fixed asset reserves
Other reserves
Reserves of the fully consolidated entities
Reserves of entities accounted for using the equity method
278,336
2,200,538
80,867
(21,064)
283,022
1,793,366
69,218
(14,555)
Total
2,538,677
2,131,051
Movement in the reserves of the Caixa Catalunya Group in 2008 and 2006 is as follows:
Thousands of euros
Balance at 1 January 2007
Distribution of prior year’s profit
Transfers between reserve
accounts and consolidation
adjustments
Revaluation
reserves
RDL 7/1996
Fixed asset
reserves
Other
reserves
Reserves of
consolidated
entities
Total
76,233
284,955
1,443,255
45,602
1,850,045
-
-
253,963
25,722
279,685
96,148
(16,661)
(76,233)
(1,933)
1,321
-
283,022
1,793,366
54,663
2,131,051
Distribution of prior year’s profit
Transfers between reserve
accounts and consolidation
adjustments
-
-
407,238
5,681
412,919
-
-
(4,686)
278,336
(66)
2,200,538
(541)
59,803
(5,293)
2,538,677
In accordance with Royal Decree 7/1996, of 7 June, revaluation reserves will automatically qualify for
unrestricted reserves after 10 years. Accordingly, this condition was met on 1 January 2007.
27.1. Reserves of fully consolidated entities
The breakdown of “Equity – Reserves” of the consolidated balance sheets at 31 December 2008 and 2007,
corresponding to the portion arising from the consolidation process itself, by entities that are fully consolidated in
the accompanying annual accounts, is as follows:
145
Thousands of euros
2008
2007
Ascat Vida, SA
Procam, SA
Armilar Procam, SA
Invercartera, SA
Caixa Catalunya Gestión, SA
Caixa Catalunya Administración y Gestión de empresas, SA
Inpau, SA
Procamvasa, SA
Alcalá 120 Promociones y Gestión Inmobiliaria, SL
Invercartera Internacional, SL
Premier Procam, SA
Invercartera Energía, SL
Fodecor, SL
Club Golf Hacienda El Alamo, SL
Other entities (with reserves of < 500 thousand euros)
The Gaudins Projects, SL
Ascat Mediació Operador Bancassegurances, SL
Caixa Catalunya Tel.Entrada, SL
Proviure, SL
Hipocat 11, FTA
Cerbat, SL
Hipocat 12, FTA
Hipocat 10, FTA
Pórtico Procam, SL
Jale Procam, SL
Hipocat 9, FTA
Hipocat 8, FTA
Gat FT Gencat 2007, FTA
Gat FT Gencat 2006, FTA
Other entities (with reserves of < -500 thousand euros)
35,911
30,229
8,089
7,452
4,528
3,891
3,321
2,602
1,319
1,263
937
627
600
573
2,207
(3,730)
(2,707)
(2,035)
(1,910)
(1,638)
(1,274)
(1,256)
(1,196)
(1,189)
(790)
(735)
(706)
(704)
(694)
(2,118)
8,051
58,896
5,855
2,889
2,777
2,631
2,216
(4,219)
1,477
1,608
549
283
(947)
(3,289)
(668)
(2,359)
(582)
(1,530)
(116)
(20)
(987)
(998)
(879)
(1,420)
Total
80,867
69,218
In accordance with IFRS 3 and coinciding with taking control of Armilar Procam, SA and Alcalá 120
Promociones y Gestión Inmobiliaria, SL, assets and liabilities have been revalued and the net effect of the part
already controlled by the Caixa Catalunya Group has been recognised with a credit to reserves.
27.2. Reserves of entities accounted for using the equity method
The breakdown of “Equity – Reserves” of the consolidated balance sheets at 31 December 2008 and 2007,
corresponding to the portion arising from the consolidation process itself, by entities accounted for using the equity
method in the accompanying annual accounts, is as follows:
146
Thousands of euros
2008
Construcciones de Tuberías Industriales, SL
Puerto ciudad Las Palmas, SA
Hujoceramic, SL
Corporación Bética Inmobiliaria, SA
Vertix Procam, SL
Miyuki 200, SL
Prasatur, SL
Promociones MRA Procam, SA
Sanidad y residencias 21, SA
Prasa y Procam, SL
Other entities (with reserves of < 500 thousand euros)
Unión Sanyres, SL
Espais Catalunya Inversions Immobiliàries, SL
Garveprasa, SGPS; SA
Avenis Procam, SL
Sanyres Sur, SL
Adendia Procam, SL
Tradehi, SL
Torca Procam Polska SP. Zoo
Meridional Solar, SL
Other entities (with reserves of < -500 thousand euros)
Total
2007
4,361
2,867
2,005
2,004
1,392
1,032
1,019
1,007
541
539
1,357
(8,248)
(7,975)
(7,100)
(2,327)
(2,106)
(1,887)
(1,408)
(1,230)
(670)
(598)
(580)
(5,059)
879
399
743
2,158
1,817
1,031
1,170
1,175
211
702
(1,771)
(6,984)
(5,890)
(571)
(435)
(532)
(783)
(1,352)
(524)
(41)
(2,183)
(3,774)
(21,064)
(14,555)
28. Tax matters
28.1. Tax consolidation
In accordance with prevailing legislation, the consolidated tax group includes Caixa Catalunya as the parent
and, as investees, the Spanish entities so-qualifying under consolidation tax regulations. The tax group therefore
consists of Caixa Catalunya and other group entities in which it has a shareholding of 75% or more.
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
match the amount payable to the tax authorities. This makes 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.
28.2. Years open for review
At 31 December 2008, the periods 2004 and beyond were open for review of the main taxes applicable to the
Caixa Catalunya Group by the tax authorities.
In 2003, the tax inspection of the consolidated tax group by the tax authorities for income tax, VAT, personal
income tax withholdings and payments of 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 income tax for 1997), extended to Caixa Catalunya and the
following entities: Ascat Vida, SA, Caixa Catalunya Gestión, SGIIC, SA, Leasing Catalunya EFC, SA, Caixa
Catalunya Pensiones, EGFP, SA, Factorcat, EFC, SA and Invercatalunya Tecnología, SL.
In 2007, the tax authorities started an inspection of Caixa Catalunya and Ascat Vida, SA de Seguros y
Reaseguros of fiscal years from 2002 to 2004 in relation to income tax, and from August 2003 to December 2004
for VAT and personal income tax withholdings and payments on account (employees and professionals), tax on
investment income, and non-residents income tax.
The authorities also started inspections of Ascat Mediació Operador Bancassegurances Vinculat, SL in
relation to its income tax assessments for 2002 to 2004 and VAT filings from August 2003 to December 2004.
147
In 2008, the tax assessments resulting from the inspection started by the tax authorities in 2007 of taxes for
2002, 2003 and 2004 has been signed. These assessments did not give rise to any tax liabilities for the Caixa
Catalunya Group.
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 which can be made of applicable tax legislation, 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
certain tax liabilities which cannot be objectively quantified at present. Nonetheless, the Caixa Catalunya Group
considers it unlikely that these items will generate significant liabilities in addition to those already provisioned.
28.3. Reconciliation of accounting profit to taxable income
Details of “Income tax” on the consolidated income statement for 2008 and 2007 are provided below:
Thousands of euros
2008
2007
Income tax expense for the year
Adjustment of income tax from prior years
12,658
7,008
102,849
(2,086)
Total income tax expense
19,666
100,763
The reconciliation of the income tax expense for the year recognised in the consolidated income statements
for 2008 and 2007 to the pre-tax profit for the same years using the tax rate in force in Spain is as follows:
Thousands of euros
2008
Pre-tax profit
2007
204,866
593,855
Profit taxed at prevailing tax rate (30% in 2008 and
32.5% in 2007)
Effect of permanent differences:
Generated during in the consolidation process
Allocation to Community Projects
Other
61,460
193,003
30,078
(15,000)
(23,282)
(7,011)
(24,375)
8,317
Deductions and rebates generated by:
Double taxation on dividends
Other
(30,685)
(9,913)
(44,122)
(22,963)
Income tax expense for the year
12,658
102,849
Change in deferred tax assets and liabilities:
Impairment losses
Other
(300)
66,633
24,606
(15,083)
(71,003)
(146,351)
7,988
(33,979)
Income tax payments and withholdings
Income tax expense
Over recent years, Caixa Catalunya has benefited from a deduction due to reinvestment of extraordinary gains
under Article 42 of Royal Decree Law 4/2004, which breaks down as follows:
Thousands of
euros
Year
2003
2004
2005
2006
2007
2008
Gain
Year of
reinvestme
nt
7,173
386
336
12,790
143,372
76,329
2003
2004
2005
2005 & 2006
2007
2008
148
28.4. Taxes recognised in equity
In addition to the income tax expense recognised in the consolidated income statement, in 2008 and 2007 the
Caixa Catalunya Group recognised certain valuation adjustments, net of the tax effect, in equity and also
recognised this effect as deferred tax liabilities:
Thousands of euros
2008
Unrealised capital gains on available-for-sale securities
Cash flow hedges
Losses of entities accounted for using the equity method
Exchange differences
Total
2007
10,370
(990)
(5,205)
4
352,822
4,375
(689)
4,179
356,508
The most significant items comprising deferred taxes in connection with unrealised capital gains on availablefor-sale securities are described in note 11.
28.5.
Deferred taxes
Pursuant to current tax legislation in Spain and countries in which the Caixa Catalunya Group operates, in
2008 and 2007 there are certain temporary differences which must be taken into account when quantifying the
related income tax expense. The deferred tax assets/liabilities recognised in the consolidated balance sheets at
31 December 2008 and 2007 arose from the following items:
Thousands of euros
Deferred tax assets arising on:
2008
2007
Timing differences in recognising income and expenses for
accounting and tax purposes
Impairment losses recognised on financial debt instruments
Fee reclassification
Pension plan
Other provisions
199,175
10,046
11,633
178,369
196,100
12,052
16,020
87,961
Total
399,223
312,133
Thousands of euros
Deferred tax assets arising on:
2008
2007
Property revaluation
Equity valuation adjustments
Other
Total
134,320
8,209
12,932
135,195
352,822
10,920
155,461
498,937
In 1996, Caixa Catalunya revalued its property and equipment as per Royal Decree Law 7/1996 of 7 June.
During the revaluation, the maximum coefficients authorised by the Royal Decree Law were applied. The
revaluation resulted in a surplus of 79,586 thousand euros for Caixa Catalunya and of 14,828 thousand euros for
Community Projects, hence generating a total increase in property and equipment of 94,414 thousand euros.
At 1 January 2007, 10 years from the revaluation date, the amounts recognised in the “Revaluation reserves
Royal Decree-Law 7/1996, of 7 June” and “Revaluation reserves Royal Decree-Law 7/1996, 7 June – Community
Projects” captions were transferred to unrestricted reserves. The increase in value resulting from the revaluation
will be depreciated over the remaining tax periods of the useful lives of the revalued assets. This revaluation
increased depreciations in 2008 and 2007 by 723 thousand euros and 790 thousand euros, respectively.
In 2005, upon first-time application of IFRS and Bank of Spain Circular 4/2004, Caixa Catalunya revalued its
properties by 447,140 thousand euros. This gain, net of the tax effect, has been recognised under “Revaluation of
property and equipment” and “First-time application property reserve” captions. The increase in value resulting
from the revaluations will be depreciated over the tax periods of the estimated useful lives of the revalued items.
This revaluation increased depreciation in 2008 and 2007 by 2,862 thousand euros and 2,864 thousand euros,
respectively.
149
In 2001, pursuant to the labour agreement of 27 December, 2000 (see Notes 2.13 and 23), almost the entire
amount redeemed from insurance policies contributed to the pension fund became tax deductible within the
established limits. Thus, the corresponding deferred tax asset (for the part corresponding to premiums paid) was
recognised. Pursuant to tax law, this asset can be allocated in ten parts for calculating income tax from 2001
onwards.
28.6.
Provisions for taxes and other legal contingencies
“Provisions – Provisions for taxes” in the consolidated balance sheets at 31 December 2008 and 2007 was
22,437 thousand euros and 23,132 thousand euros, respectively. This caption includes provisions for tax
assessments signed in disagreement and other provisions for contingencies with other public bodies.
Provisions
for taxes
Thousands of euros
23,044
Amounts reversed
Amount used
977
(517)
(372)
23,132
Amounts reversed
Amount used
880
(1,575)
22,437
29. Community Projects
Details of the consolidated balance sheet captions that include the assets and liabilities of Caixa Catalunya’s
Community Projects, together with the respective balances at 31 December 2008 and 2007 are provided below:
Thousands of euros
2008
2007
Assets
Property and equipment – Assigned to Community
Projects (Note 18)
Fixtures and fittings
Properties
115,863
35,454
80,409
106,990
29,682
77,308
Total
115,863
106,990
Liabilities
Provision/Revaluation reserves
Maintenance expenses
Other liabilities
162,963
209,039
(57,528)
11,452
147,532
190,396
(56,357)
13,493
162,963
147,532
Total
Changes in " Community Projects Fund” in 2008 and 2007 were as follows:
Thousands of euros
2008
2007
Opening balance
Application of prior year’s surplus
Maintenance expenses
Other
147,532
75,000
(57,528)
(2,041)
133,175
70,000
(56,357)
714
Closing balance
162,963
147,532
150
30. Contingent risks and contingent liabilities and other information
30.1. Contingent risks
Financial guarantees are understood to be 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, in response to the commitments undertaken in the course of
their ordinary activity.
Details of the maximum risk assumed by the Caixa Catalunya Group in connection with these financial
guarantees at 31 December 2008 and 2007 are as follows:
Thousands of euros
2008
Guarantees and other sureties provided
Financial guarantees
Other guarantees and sureties
Irrevocable documentary credits
Confirmed documentary credits
Total
2007
3,042,508
400,142
2,642,366
82,966
952
3,490,406
173,890
3,316,516
103,178
2,052
3,126,426
3,595,636
A significant part of these amounts will mature without producing payment obligations for the Caixa Catalunya
Group. Hence, the total balance of these commitments cannot be considered a real future need for financing third
parties by the Caixa Catalunya Group.
The income obtained on guarantee instruments is recorded on the consolidated income statement for 2008
and 2007 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 criteria used to calculate the
impairment of financial assets at amortised cost, and were recognised in the “Provisions – Provisions for risks and
contingent liabilities” caption of the consolidated balance sheets (see Note 23).
30.2. Pledged assets
At 31 December 2008 and 2007 assets owned by the Caixa Catalunya Group secured transactions entered
into by the latter or third parties, as well as diverse liabilities and contingent liabilities. At 31 December 2008 and
2007 the breakdown of financial assets issued to securitise these liabilities or contingent liabilities and similar was
as follows:
Thousands of euros
2008
2007
Customer loans
Debt securities
Other equity instruments
152,000
9,629,655
-
50,000
5,489,087
14,100
Total
9,781,655
5,553,187
At 31 December 2008 and 2007 9,751,655 thousand euros and 5,207,045 thousand euros, respectively, of
government debt was pledged to guarantee up to a maximum limit of 8,917,457 thousand euros and 4,999,801
thousand euros, respectively, extended by the European Central Bank.
30.3. Contingent liabilities
At 31 December 2008 and 2007 the limits on financing contracts extended and the amounts drawn down
thereunder, for which the Caixa Catalunya Group had assumed a credit commitment greater than the amount
recognised on the asset side of the corresponding balance sheet, were as follows:
151
Thousands of euros
2008
Contingent liabilities
Immediately drawable
Credit entities
Public sector
2007
10,327,880
3,034,869
45,949
70,233
2,876,911
41,776
12,371,359
3,740,797
24,568
308,515
3,326,187
81,527
Conditionally drawable
7,293,011
7,293,011
8,630,562
8,630,562
Other commitments
1,004,008
1,135,918
11,331,888
13,507,277
Total
30.4. Third-party funds managed and marketed by the Caixa Catalunya Group and securities depository
The breakdown of off-balance-sheet funds managed by the Caixa Catalunya Group at 31 December 2008 and
2007 is as follows:
Thousands of euros
2008
2007
Mutual funds
Pension funds
Discretional portfolio management
Sold but not managed by the Group
3,065,316
1,249,138
719
266
4,116,794
1,527,533
5,909
717
4,315,439
5,650,953
Total
30.5. Asset securitisations
In 2008 and 2007, as in previous years, the Caixa Catalunya Group converted a portion of its homogenous
loan and receivables portfolios into debt securities by transferring the assets to various securitisation funds set up
for this purpose, the participants of which substantially assume the risks and rewards inherent to the securitised
assets (i.e. essentially transferring the associated underlying credit risk). Details of securitised assets outstanding
at 31 December 2008 and 2007 are as follows:
152
Thousands of euros
2008
2007
Assets securitised before 1 January 2004
675,821
785,078
Hipocat 2 Fondo Titulización Hipotecaria
Hipocat 3 Fondo Titulización Hipotecaria
Hipocat 4 Fondo Titulización Activos
Ayt FTGencat I Fta
57,222
87,885
212,414
6,904
311,396
29,227
71,011
98,066
235,493
9,871
341,410
13,547,564
7,593,453
Gat Ftgencat 2005
Gat Ftgencat 2006
Gat Ftgencat 2007
Financat 1 Fondo Titulización Activos
MBSCat 1 Fondo Titulización Activos
Gat FTGencat 2008 Fondo Titulización Activos
Pymecat 2 FtpymeFondo Titulización Activos
637,663
850,096
671,655
92,758
1,141,080
243,927
1,353,714
327,334
1,438,590
942,220
1,152,061
772,039
928,418
1,039,326
373,821
484,724
1,098,138
700,680
941,161
740,357
130,349
1,265,303
321,715
1,506,450
391,988
1,595,450
-
Total
14,223,385
8,378,531
Assets securitised after 1 January 2004 (Notes 12.1 and
21.3.1)
In accordance with transitional provision one of Bank of Spain Circular 4/2004, 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 2008 the bonds of the securitisations established before 1 January 2004 sold on the market
and those not sold on the market have amounted to 567,917 thousand euros and 97,122 thousand euros,
respectively. Furthermore, at 31 December 2008 the bonds of the securitisations established after 1 January
2004 sold on the market and those not sold on the market have amounted to 4,536,046 thousand euros and
9,490,784 thousand euros, respectively.
30.6.
Reclassification of financial instruments
During 2008 the Caixa Catalunya Group has not reclassified any financial instruments between portfolios,
except for the movement between Available-for-sale financial assets and Held-to-maturity investments (see
Notes 11 and 13).
153
31. Geographical breakdown of branches
All branches of the Caixa Catalunya network offer the full range of products and services to their customers. The
geographical distribution of branches at 31 December 2008 and 2007 is as follows:
Catalonia
Madrid
Community of Valencia
Andalusia
Canary Islands
Murcia
Balearic Islands
Basque Country
Aragón
Castile and Leon
Castile-La Mancha
Galicia
Navarre
Extremadura
La Rioja
Asturias
Cantabria
France
Total
2008
2007
752
126
113
72
26
23
17
16
12
11
10
9
5
4
2
2
2
1
753
125
113
71
26
23
15
14
11
11
8
8
5
4
2
1
1
1
1,203
1,192
32. Interest and similar income
This item in the accompanying consolidated income statements includes the interest accrued in the year on
financial assets with implicit or explicit returns obtained by applying the effective interest method, except
derivatives, and 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 in 2008 and 2007 by origin is as follows:
Thousands of euros
2008
2007
Balances with central banks
Due from banks
Customer loans
Debt securities
Doubtful assets
Adjustment to income due to hedging transactions
Other returns
24,755
91,313
2,839,433
284,544
71,722
28,866
2,675
18,198
254,933
2,352,071
272,923
23,149
11,274
3,663
Total
3,343,308
2,936,211
The table below provides details of amounts recognised under “Interest and similar income” in the 2008 and
2007 consolidated income statements, classified by the portfolio of financial instruments in which they are
recognised:
154
Thousands of euros
2008
Financial assets at fair value through profit
and loss
Held for trading
Other financial assets at fair value through
profit or loss
Other returns
Total
2007
24,755
18,198
19,465
17,493
116,304
110,775
1,972
156,597
3,139,673
143
2,675
5,529
63,470
2,734,576
3,663
3,343,308
2,936,211
33. Interest and similar expenses
This caption in the accompanying consolidated income statements 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, together with the cost adjustments arising from accounting hedges and the
cost for interest attributable to existing pension funds.
The breakdown of this caption in the consolidated income statements for 2008 and 2007 is as follows:
Thousands of euros
2008
Central bank deposits
Due from banks
Customer deposits
Subordinated debt
Adjustment to expenses due to hedging transactions
Other expenses
225,150
221,481
874,878
1,016,161
63,232
45,044
6
26,191
408,906
707,219
904,007
40,847
(6,494)
108
2,445,952
2,080,784
Total
2007
The table below provides details of amounts recognised under “Interest and similar expenses” in the
consolidated income statements for 2008 and 2007, classified according to the portfolio of financial instruments in
which they are recognised:
Thousands of euros
Other costs
Total
2008
2007
2,445,946
6
2,080,676
108
2,445,952
2,080,784
34. Income from equity instruments
This caption of the consolidated income statement includes the dividends and returns on equity instruments
corresponding to income generated by entities other than the Caixa Catalunya Group after the investment was
acquired.
The breakdown of this caption of the consolidated income statements for 2008 and 2007, by portfolio, is as
follows:
155
Thousands of euros
2008
Held for trading
Total
2007
505
44,592
786
52,629
45,097
53,415
35. Income of entities accounted for using the equity method
The breakdown, by company, of this caption of the consolidated income statement for 2008 and 2007 is as
follows:
Thousands of euros
2008
2007
Associates
2,943
3,444
Hujoceramic, SL
Hidrodata, SA
Hidroeléctrica del Noguera
Comomin de tuberias, SL
Tradehi, SL
Construcciones Tuberías Industriales, SA
Riofisa, SA
Other entities
(with income/(losses) < 300 thousand euros)
1,135
770
435
344
334
(531)
-
1,263
747
558
495
456
381
Jointly controlled entities
(68,963)
21,698
Riofisa Procam, SL
Miyuki 2000, SL
Provicat Sant Andreu, SA
Espais Catalunya Inversions immobiliàries, SL
Elecdey Carcelen, SA
Inmobiliaria Monteboadilla, SL
Parque Eólico los Pedreros, SL
Baring Private Equity Partners España, SA
Nova Terrasa-3, SL
Sanidad y residencias 21, SA
Vicsan-Procam, SL
Garveprasa SGPS, SA
Nova Egara-Procam, SL
Cerbat, SL
Eugesa Procam, SL
Nou Mapro, SA
Prasa y Procam, SL
Promociones MRA Procam, SA
Sanyres Sur, SL
Millennium Procam, SL
Torca Procam Polska SP.Zoo
Corporación Bética Inmobiliaria, SA
Prasatur, SL
Armilar Procam, SL
Adendia Procam, SL
Euro Lendert, SL
Avenis Procam, SL
Vertix Procam, SL
Other entities
(with income/(losses) < 300 thousand euros)
2,618
2,428
1,471
1,401
749
451
390
385
(503)
(541)
(765)
(845)
(853)
(995)
(1,049)
(1,240)
(1,287)
(1,351)
(1,755)
(2,248)
(2,290)
(2,424)
(3,395)
(3,667)
(4,185)
(4,901)
(5,335)
(11,171)
(11,229)
(15,157)
3,002
3,860
(1,244)
1,458
314
(548)
6,581
(499)
1,242
3,804
(2,220)
2,440
(3,154)
(3,168)
11,823
(1,123)
(1,627)
1,616
(1,670)
(859)
(66,020)
25,142
Total
156
36. Fee and commission income
The most significant fee and commission income recognised in 2008 and 2007, by type of service generating
this income, as well as the consolidated income statement captions under which they were recognised, are as
follows:
Thousands of euros
2008
2007
Interest and similar income (Note 32)
Financial fees included in the effective interest rate
71,857
73,763
Total
71,857
73,763
26,689
10,096
192,703
27,774
4,181
174,862
9,609
1,621
10,360
1,963
41,463
20,731
11,434
81,009
55,941
19,302
18,259
59,340
395,355
371,982
Other operating income (Note 40)
Financial fees used to offset direct costs
12,734
18,287
Total
12,734
18,287
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
Total
37. Fee and commission expense
The table below details fee and commission expense accrued in 2008 and 2007, classified by the main
services generating these expenses:
Thousands of euros
2008
Assigned to other entities and correspondents
Credit card billing
Securities transactions
Other fees and commissions
Total
2007
8,441
31,104
2,441
2,944
6,842
34,088
2,615
5,469
44,930
49,014
38. Gains/(losses) from financial assets and liabilities
This caption of the consolidated income statement recognises valuation adjustments on financial instruments,
except for those attributable to interest accrued by applying the effective interest method to exchange rate
variations and valuation adjustments for available-for-sale assets, and the income obtained on their acquisition or
sale.
The breakdown, by portfolio of origin, of the balance of “Gains/(losses) on financial assets and liabilities” in the
accompanying consolidated income statements is as follows:
157
Thousands of euros
2008
2007
Financial assets at fair value through profit or loss
Held for trading
Other financial instruments at fair value through
profit or loss
Other
Micro-hedges
Hedged items
Hedging derivatives
Macro-hedges
Hedged items
Hedging derivatives
(53,796)
(54,505)
(55,672)
(54,064)
709
98,459
1,000
3,274
(1,608)
10,727
(850)
9,867
Total
(21,185)
16,189
(126,692)
131,922
(363,993)
372,263
30,163
(25,526)
48,937
(35,928)
The “Other” caption includes the change in the fair value of fair value hedges and in items hedged by fair value
hedges (see Note 2.3).
In 2008 own bonds with a nominal of 674,922 thousand euros have been repurchased, generating gains of
63,111 thousand euros.
During 2008 0.72% of France Telecom España, SA has also been sold at a profit of 46,782 thousand euros
(see note 11).
At 31 December 2008 and 2007 “Exchange differences (net)” amounted to 20,514 thousand euros and
30,363 thousand euros, respectively. These balances correspond essentially to forward rate agreements and spot
transactions.
40. Other operating income
Details of this caption in the consolidated income statements for 2008 and 2007 are as follows:
Thousands of euros
2008
2007
Insurance business
Net premiums
Reinsurance income
Sale and income from provision of non-financial services
Real estate
Ticket sales
Other services
Other
Insurance brokerage
Income from investment properties (Note 18.2)
Financial fees compensating direct costs (Note 36)
Other products
927,668
922,028
5,640
168,231
165,412
817
2,002
41,450
7,887
2,572
12,734
18,257
693,383
687,966
5,417
330,449
324,953
765
4,731
54,847
12,099
2,443
18,287
22,017
1,137,349
1,078,678
Total
158
41. Other operating expenses
Details of this caption of the consolidated income statements for 2008 and 2007 are as follows:
Thousands of euros
2008
2007
Insurance business
970,851
713,833
Claims paid and other insurance-related expenses
Direct insurance
Ceded reinsurance
Net provisions for insurance contract liabilities
Uncollected premiums
Mathematical provisions
Claims provisions
Cost of sales
Real estate
894,811
901,941
(7,130)
76,040
(13)
96,290
1,319
(21,556)
138,893
138,893
741,182
745,709
(4,527)
(27,348)
35
(12,364)
5,445
(20,464)
268,720
268,720
15,622
9,498
368
5,756
13,003
7,284
335
5,384
1,125,366
995,556
Other
Contribution to Deposit Guarantee Fund (Note 1.8)
Investment property operating expenses (Note 18.2)
Other
Total
42. Administrative expenses
42.1. Personnel expenses
“Personnel expenses” in the consolidated income statements for 2008 and 2007 are as follows:
Thousands of euros
2008
Wages and salaries
Social security
Transfers to external pension funds
Termination benefits
Training expenses
Other personnel expenses
Total
2007
348,606
70,386
18,712
2,749
7,424
2,409
320,740
65,490
17,832
913
8,440
2,912
450,286
416,327
Contributions to external pension funds include the expense recorded on the consolidated income statement
for contributions to defined contribution pension plans, which totalled 14,743 thousand euros and 13,295 thousand
euros at 31 December 2008 and 2007, respectively.
Caixa Catalunya’s average headcount in 2008 and 2007 has been as follows:
159
2008
Men
Women
2007
Total
Men
Women
Total
Professional
Levels I to II
Levels III to V
Levels VI to VII
Levels VIII to X
Levels XI to XIII
Professional
3,900
71
1,594
1,189
420
626
11
2,839
7
227
552
734
1,319
1
6,739
78
1,821
1,741
1,154
1,945
12
3,851
70
1,501
1,157
439
684
14
2,626
5
211
450
689
1,271
1
6,477
75
1,712
1,607
1,128
1,955
15
Total
3,911
2,840
6,751
3,865
2,627
6,492
Levels I to VI include managers and higher-level skilled workers, and Levels VII to XIII include first- and
second-category skilled workers and auxiliary workers.
This caption on the consolidated income statement contains the item for post-employment commitments
explained in Note 2.13.1.
In 2008 and 2007, there was a balance for payments in kind related to employee loans granted at below
market rates of 10,791 thousand euros and 10,131 thousand euros, respectively.
The average headcount of investees (group entities) is 742 and 695 employees in 2008 and 2007, 322 and
420 of whom were women and men, respectively (315 and 380 in 2007).
42.2. Other general administrative expenses
Details of this caption of the consolidated income statements for 2008 and 2007 are as follows:
Thousands of euros
2008
2007
IT
Communications
Advertising
Buildings and facilities
Taxes other than income tax
Rental
Outsourced administrative services
Technical reports
Other administrative expenses
24,934
18,895
15,971
29,504
10,979
24,006
45,368
15,555
30,888
30,316
17,989
25,747
29,024
9,708
22,612
37,623
20,627
36,987
216,100
230,633
Total
In 2008 the ”Technical reports” caption includes 1,564 thousand euros for the fees and expenses of Deloitte,
SL, in connection with the audit of the consolidated and individual annual accounts of each of the Spanish group
entities and the limited review of the summarised consolidated financial statements for the period ended 30 June
2008.
Deloitte, SL has also invoiced 477 thousand euros, basically for issuing reports required by regulatory bodies
mainly in relation to the Caixa Catalunya Group’s adaptation to the New Basel Capital Accord (BIS II), as well as
241 thousand euros in fees for consultancy provided by Deloitte, SL’s lines of service and related entities at 31
December 2008.
Total fees paid to Deloitte, SL and its related companies account for less than 1% of turnover.
160
43. Gains/(losses) on sale of non-current assets held for sale not classified as
discontinued operations
Details of these captions of the consolidated income statements for 2008 and 2007 are as follows:
Thousands of euros
2008
2007
Gains
Losses
Gains
Losses
On sale of property, plant
On sale of equity
3,555
512,039
148
-
1,799
-
4,918
-
Total
515,594
148
1,799
4,918
During 2008 the investment in Abertis, SA has been sold at a profit of 512,039 thousand euros (see note 11).
44. Related party transactions
As supplementary information to that disclosed in Note 7 on balances and transactions entered into with the
members of the Board and Senior Management of Caixa Catalunya, the table below indicates the balances
recognised in the consolidated balance sheets at 31 December 2008 and 2007 and in the 2008 and 2007
consolidated income statements that arise from transactions with associates, jointly-controlled entities and other
related parties:
2008
Thousands of euros
BALANCE SHEET
Assets
Customer loans
Securities portfolio
Associates and
jointlycontrolled
entities
2007
Directors and
key
management
and other
related parties
Associates and
jointlycontrolled
entities
Directors and
key
management
and other
related parties
1,060,969
202,792
428
19,070
-
1,300,096
262,472
602
25,561
-
56,859
13,727
36,702
3,317
INCOME STATEMENT
Expenses
Interest and similar charges
1,381
913
1,193
102
Income
Fees and commissions
61,867
952
1,189
24
50,511
1,560
878
-
417,507
-
6,026
5,142
-
626,295
-
14,681
10
-
Liabilities
Customer deposits
OTHER
Post-employment obligations
Commitments
Financial derivatives
Caixa Catalunya has no pension commitments for former or current members of the Governing Bodies for their
status as such. However, it has taken out an accident insurance policy for all members of the Governing Bodies
for the duration of their service, the premiums of which amount to 19 thousand euros in 2008 and 2007. The
insured principal in the event of death or disability is 150 thousand euros per person in 2008 and 2007.
As regards the remuneration of members of the Governing Bodies and management for participating on behalf
of the Caixa Catalunya Group in listed companies or companies in which the Entity has a significant presence or
representation, this participation is not personal, except in the case of representation with the Spanish
161
Confederation of Savings Banks, Cedinsa Concesionaria, SA and Volja Plus, SL, but rather on behalf of Caixa
Catalunya. Accordingly, this remuneration is always paid to the Entity and not to the appointed individual.
All loans, guarantees or sureties extended to members of the Board, members of the Control Committee, the
General Manager or to their spouses, ascendants, descendants and entitled family members, or to entities in
which the above listed have a majority shareholding, whether individually or jointly, and in which they act as
chairperson, board member, administrator, manager, general manager or similar, must be authorised by the
Board of Directors of Caixa Catalunya and notified to the Department of Economics and Finance of the Generalitat
de Catalunya, which must give its express consent thereto.
45. Customer service
Caixa Catalunya’s customer service department was set up in 1989, long before it was made compulsory by
the Bank of Spain in 2004. In 2004, Caixa Catalunya introduced the modifications required under Law 44/2002, of
22 November, on measures for the reform of the financial system, Royal Decree 303/2004 of February, enacting
regulations to establish ombudsmen for the protection of financial services clients, and Order ECO/734/2004, of
11 March, on customer service departments and ombudsmen for financial entities. Accordingly, this service was
consolidated and standardised in 2005.
The total number of claims handled by the Customer Care Service in 2008 was 939, including those related to
investees that, given their lines of business, are also subject to the above legislation. Of this total, 706 claims were
admitted for consideration and resolved, 13 were processed and were pending resolution at year end, four were
pending additional information at year end and 216 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, 721 cases were resolved during the year (706 processed and
resolved in 2008, plus 15 held over from 2007), 70% of which were dismissed and 27% upheld either totally or
partially. In the remaining 3% of cases, either no ruling was made or the claimant withdrew his or her complaint.
Details of the complaints received in 2008 are as follows:
Company
Complaints received
Complaints resolved
Compensation
paid
(thousands of
euros)
Caixa Catalunya
Caixa Catalunya Gestión
Ascat Vida
Ascat Mediación
Ascat Seguros Generales
823
13
52
9
42
652
11
18
5
35
148
1
6
Total
939
721
155
The types of complaints made in 2008 were:
Type of complaints
Number
Financing products
Services
Drawdown products
Savings/investment products
Cards and POS terminals
ATM network
Insurance
Branch network
Distance banking
Unfounded
216
172
136
145
62
38
78
44
31
17
Total
939
162
The total number of cases received by the Ombudsman for Catalan Savings Banks in 2008 totalled 274,
including those from investees. During the year, 61% of cases were dismissed, 25% were totally or partially
upheld, 2% were withdrawn by the claimant, and the remaining 12% were unfounded. The average length of time
taken to resolve cases was 34 days.
A summary of complaints submitted to the Ombudsman for Catalan Savings Banks in 2008 is as follows:
Complaints
received
Company
Caixa Catalunya
Ascat Vida
Caixa Catalunya Gestión
Ascat Seguros Generales
197
65
3
9
Total
274
The types of complaints made in 2008 were:
Type of complaints
Number
Asset transactions
Liability transactions
Insurance and pension funds
Other products
Payment and collection services
Investment services
Unfounded
Inadmissible
Total
52
52
76
31
26
13
12
12
274
163
AUDITING REPORT
- 2008 -