00 Llibre INGLES Caixa 07.qxd

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00 Llibre INGLES Caixa 07.qxd
Annual Report 2007
Annual Report 2007
**
MANAGED CUSTOMER
FUNDS
MANAGED CUSTOMER
FUNDS
DISTRIBUTION OF RESOURCES
INVESTED IN COMMUNITY PROJECTS
Excluding valuation adjustments. In %
Excluding valuation adjustments. In %
In million of euros
3.6
5.1
10.1
2.4
11.8
29.4
46.8
10.6
24.0
63.8
37.1
11.5
12.5
9.2
1.5
Customer funds
Commercial loans to the resident private sector
Property and maintenance
Marketable debt securities
Secured loans to the resident private sector
Fundació Caixa Catalunya
Subordinated debt and preferential shares
Securitized loans (off the balance sheet)
Fundació Territori i Paisatge
Insurance products
Other loans
Fundació Un Sol Món
Fundació Viure i Conviure
Investment and pension funds
Other
VOLUME OF MANAGED BUSINESS
EFFICIENCY RATIO
In million of euros
In %
47.9
108,374
42.6
94,453
5.3 p.p.
+14.7%
2006
2007
2006
2007
Main Indicators of the
Caixa Catalunya Group
MAIN INDICATORS OF THE
PROFIT AND LOSS ACCOUNT
MAIN INDICATORS OF THE PROFIT
AND LOSS ACCOUNT
Variation rate for the year. In %
Total average assets. In %
39.5
1.27
0.98
0.89
24.5
23.9
0.74
–4.4
Net interest income
Net interest income
Operating income
Operating income
Income before tax
Income before tax
Income attributable to the Group
Income attributable to the Group
DISTRIBUTION OF BRANCH
NETWORK
LÍNIA TOTAL CONTRACTS
1,535,468
1
8
1 14
5
2
11
10
France 1
1,361,407
+12.8%
753
125
8
4
71
113
15
23
26
2006
2007
Annual Report 2007
Annual Report 2007
CONTENTS
Governing Bodies and Management Team 4
Letter from the Chairman 11
Caixa Catalunya Group in 2007 13
Financial Activity 15
Risk Management 23
Community Projects 27
Corporate Social Responsibility 33
Corporate Governing Bodies 43
_ Governing Bodies and Management Team
5
BOARD OF DIRECTORS
Narcís Serra Serra1
First Vice-chairman
Joan Güell Juan2
Second Vice-chairman
Antoni Llardén Carratalà3
Secretary
Joan Manel Pla Ribas2
Members
Josep Alonso Roca4
Jordi Bertran Castellví1
Josep Burgaya Riera3
Sara Cardona Raso4
Joan Echániz Sans1
Estanis Felip Monsonís3
Genís Garriga Bacardí4
Francesc Iglesies Sala1
Josep Isern Saun2
Carme Llobera Carbonell2
Gemma López Canosa2
Manuel Matoses Fortea2
Josep Molins Codina1
Montserrat Robusté Claravalls2
Antonia María Sánchez Moreno1
Francisco José Villegas Herrero2
Maties Vives March1
General Manager
1. Founding corporation.
‘07
Caixa Catalunya
Chairman
Annual Report 2007
As of 31 December 2007
Josep Maria Loza Xuriach
2. Accountholders.
3. Local corporations.
4. Personnel.
7
CONTROL COMMITTEE
Chairman
Joan Maria Pagà Ortiga2
Secretary
Antoni Montseny Domènech1
Members
Josep Bueno Escalero1
Carles Hijos Mateu4
Joan Carles Mas Bassa3
David Montañés Clemente2
Amàlia Sabaté Simó2
Annual Report 2007
As of 31 December 2007
Caixa Catalunya
‘07
1. Founding corporation.
2. Accountholders.
3. Local corporations.
4. Personnel.
9
MANAGEMENT TEAM
Josep Maria Loza Xuriach
Deputy General Business Management
Josep Maria Alentorn Torras
(Asst. General Manager)
Business Management
Commercial Division
Commercial and Marketing Strategy Division
Corporate Business and Business Division
Loan Division
Andreu Plaza López (Asst. Manager)
Jordi Calsina Jodas (Deputy Manager)
Jaume Sambola Pijuan (Deputy Manager)
Ramon Rué Monné (Dept. Manager)
Joan Arnau Murtró (Deputy Manager)
Financial and Investment Management
Lluís Gasull Moros
(Asst. General Manager)
Maties Torrellas Jovani (Dept. Manager)
Francesc Xavier Auguets Pratsobrerroca
(Department Manager)
Eduard Aznar Berruezo (Dept. Manager)
Treasury and Capital Markets Division
Insurance, Account Managers
and Shareholding Business Divisions
Real Estate Group
Resources Management
Glòria Ausió Arumí
(Deputy General Manager)
Human Resources Division
Infrastructure and Organization Division
Elionora Solé Romeu (Dept. Manager)
Francesc Xavier Boldú Selles
(Department Manager)
Ignasi Martín Morales (Dept. Manager)
Banking Services and Operations Division
Control Management
Risk Division
Ignacio Alegre de Miquel
(Asst. Manager/ General Administrator)
Ricard Climent Meca (Deputy Manager)
General Secretary
Josep Querol Segura
(Deputy General Manager)
Communication and Image Division
Josep Maria Montseny Costa-Jussà
(Deputy General Manager)
Miquel Perdiguer Andrés (Deputy Manager)
Manuel Ledesma Garcia (Deputy Manager)
Community Projects Division
Legal Advisory
Strategic Planning Management
Francesc Xavier Masip Pous
(Deputy General Manager)
Institutional Advisor
Ramon Maria Llevadot Roig
‘07
Caixa Catalunya
General Manager
Annual Report 2007
As of 31 December 2007
_ Letter from the Chairman
11
The evolution of the world economic context in 2007 highlighted the relevance of the
financial markets for the world economy and the growing links between countries and
regions. The uncertainty over the ultimate repercussions of the financial turbulence
has not disappeared altogether though the balance for 2007 has proved positive for
the Spanish and European economies, whose solid foundations enabled them to
exceed their potential growth rates.
In this context and from the specific point of view of Caixa Catalunya and its group,
2007 was a fairly positive year, as revealed by the 39.5% increase in attributable
income and the 9.3% increase if we disregard the extraordinary headings of the last
two years (income from financial operations due to the sale of Retevisión Móvil, other
income for the sale of Riofisa and extraordinary provisions).
The ambitious expansion plan for 2006-2007 was completed over the past year,
which extended the branch network to almost 1,200 (40% of which are located outside Catalonia), with a workforce of over 7,000.
Many cultural, welfare, environmental protection and charity activities have been carried out in society, including a new initiative designed to promote research, development and innovation.
NARCÍS SERRA SERRA
Chairman
‘07
Caixa Catalunya
In Europe, the ECB raised the intervention rate twice in the first half of the year, bringing it up to 4.0%. This was in a context of solid economic growth, albeit with uncertain forecasts and renewed inflationary tensions caused by maximum oil and food raw
material prices. In Spain, the inflationary risks became clear as 2007 went by. The year
closed with an inflation rate of 4.2% and a harmonized difference of 1.2 points above
euro area figures.
Annual Report 2007
In financing, the US subprime mortgage crisis caused difficulties on credit markets
and liquidity trends worldwide. Nonetheless, the European mortgage market, which
has a radically different set of features, maintained its dynamism. In Spain, with the
real-estate sector experiencing a change in cycle, mortgage lending slowed down
compared to the phenomenal growth rates of recent years and the sector overall
recorded growth rates of around 15%.
_ Caixa Catalunya Group in 2007
13
The Caixa Catalunya group ended the year by amply meeting the goals of its 20052007 strategic plan, the priorities of which were the growth of its financial business,
increased profits and commercial expansion.
Significant progress was also made in the homologation of the internal risk management models, which will allow Caixa Catalunya to be included in a very restricted group
of financial institutions that will have access to the advanced models of the New Capital
Accord of Basel (Basel II) for all risk types (credit risk, market risk and operational risk).
Almost 80 million euros were invested in Community Projects, which represents a
year-on-year increase of 16% in social activity expenditure.
The most significant actions in this respect were the purchase of Els Cingles de l’Avenc
in Tavertet (Osona), which increases the area of land protected by the Fundació Territori
i Paisatge to 144 thousand hectares. In social welfare, the Fundació Viure i Conviure inaugurated the Sant Jordi Day Hospital in the Pere Virgili Healthcare Park in
Barcelona, one of a series of social healthcare centers for sufferers of Alzheimer’s,
Parkinson’s and other cognitive disorders. The Fundació Un Sol Món signed 12 agreements in the framework of its international cooperation program, which have benefited
23,500 families from nine countries in Africa, Latin America and Asia. La Pedrera building continues to be a haven of culture, both for its three new temporary exhibitions and
for the permanent exhibitions of the Espai Gaudí and Pis de la Pedrera.
JOSEP M. LOZA XURIACH
General Manager
‘07
Caixa Catalunya
Business turnover increased considerably beyond the figure of 100,000 million euros
(specifically, 108,374 million), a 14,7% increase, displaying greater dynamism in
financing. For example, managed customer loans are up 17.5%, with a particularly significant increase in business loans. This reflects the good position reached in this market area and has offset the slowdown in mortgage lending. The attraction of customer
funds recorded two-digit growth rates, with 13.5% in balance-sheet terms and 12.3%
in total managed resources.
Annual Report 2007
Analysis of the income statement reveals dynamic financial activity, with an increase
in net interest income of almost 25% and in basic income of 17.5%. The extraordinary
income of 2007, generated by the sale of the real-estate company Riofisa, has reinforced the Organization’s solvency position by allowing prudential provisions to be
made to cover a potential increase in arrears and to boost equity, which now stands
at approximately 4,800 million euros, up 14.3% on last year’s figures. This has
enabled Caixa Catalunya to keep its solvency ratio above 10%.
_ Financial Activity
EQUITY
ASSETS
CUSTOMERS
PROFITS
GROWTH
16
1. ECONOMIC CONTEXT
US economic growth slowed down to rates of around 2%, stabilized by the readjustment of the real-estate sector and credit market turbulence.
Oil prices continued with their bullish trend, ending 2007 at values of almost 100 dollars to the barrel.
Prices of raw food materials soared on world markets.
The euro appreciated almost 10% against the dollar, with a year-end rate of 1.46 dollars to the euro.
‘07
The subprime mortgage crisis reduced liquidity and brought tension to interbank
markets.
Caixa Catalunya
Annual Report 2007
New inflationary tensions due to the rise in energy and food products, with year-end
inflation rates of 4% in the US and 3% in the Euro area.
The European Central Bank formalized two quarter point hikes in the intervention rate,
placing it at 4%, while the Federal Reserve cut theirs from 5.25 to 4.25%.
2. CAIXA CATALUNYA GROUP
2.1. Structure of the balance sheet
The consolidated assets of the Group stand at 68,201 million euros, thanks to the
excellent growth of operations with individuals, companies and institutions.
Customer loans account for 74.1% of assets, while customer funds amount to 74.9%
of liabilities, including insurance contract liabilities.
A lower trading portfolio balance, which falls to 53.0 and 33.4% in terms of assets
and liabilities, respectively.
17
Purchase of 7.76% of Applus Serveis Tecnològics in a joint operation with other corporate and institutional partners.
BALANCE SHEET
In millions of euros
Balance
Annual change
31-12-2007 Amount
%
Structure
%
ASSETS
Cash and balances with central banks
Trading portfolio
Other financial assets at fair value through profit or loss
Available-for-sale financial assets
Loans and advances
802
1,767
1.4
1.2
–1,990 –53.0
11
2.6
56
–151
–72.9
0.1
6,974
3,283
89.0
10.2
55,184
–802
–1.4
80.9
50,514
7,776
18.2
74.1
Pro-memoria:
Loans and advances to customers
Derivative financial instruments
257
105
69.4
0.4
Shareholdings
286
–43 –13.0
0.4
Insurance contracts and reinsurance assets
16
7
90.0
0.0
Property and equipment and intangible assets
1,195
120
11.2
1.8
Other assets
1,666
108
6.9
2.4
68,201
650
1.0
100.0
Annual change
Structure
TOTAL ASSETS
In millions of euros
Balance
31-12-2007 Amount
%
%
LIABILITIES AND EQUITY
Trading portfolio
Financial liabilities at amortised cost
1,300
–652 –33.4
1.9
59,430
890
1.5
87.1
Customer deposits
26,514
1,645
6.6
38.9
Bonds and other marketable debt securities
21,006
4,595
28.0
30.8
906
–19
–2.0
1.3
269
129
93.1
0.4
2,193
12
0.6
3.2
–4
Pro-memoria:
Subordinated debt
Derivative financial instruments
Insurance liabilities
Equity instruments classified as debt
Other liabilities
480
1,026
–0.9
0.7
–189 –15.6
1.5
15.5
0.1
EQUITY
Minority interests
Valuation adjustments
Shareholders’ equity
TOTAL EQUITY AND LIABILITIES
53
7
832
37
4.7
1.2
2,619
419
19.1
3.8
68,201
650
1.0
100.0
_ Financial Activity / Annual Report 2007
The other significant holdings are 1.63% of Repsol-YPF, 5.69% of Abertis
Infraestructuras and 3.03% of Gas Natural SDG.
18
The consolidated managed business is 108,374 million euros, 51.8% of which is from
customer funds and the remaining 48.2% from credit investments.
2.2. Customer funds
Managed customer funds increased by 12.3%.
Marketable debt securities displayed the greatest dynamism with an increase of
27.2%, obtained through issues of promissory notes, mortgage bonds and bonds and
debentures.
Annual Report 2007
Customer deposits continue to be the main savings heading on the balance sheet,
with a total of 26,264 million euros, up 6.3% on last year’s figures.
CUSTOMER FUNDS*
Balance
Caixa Catalunya
‘07
In millions of euros
Annual change
31-12-2007 Amount
Structure
%
%
Customer deposits
26,264
1,555
6.3
46.8
Bonds and other marketable debt securities
20,791
4,440
27.2
37.1
1.6
Subordinated debt
Insurance and insured plans
Equity instruments classified as debt
BALANCE SHEET FUNDS
890
0
0.0
2,025
3
0.1
3.6
480
–4
–0.9
0.9
50,450
5,994
13.5
89.9
Investment funds
4,117
67
1.6
7.3
Pension plans
1,528
93
6.5
2.7
EXTERNAL CATEGORIES
5,645
159
2.9
10.1
56,095
6,153
12.3
100.0
FUNDS MANAGED BY THE GROUP
* Excluding valuation adjustments
External categories account for 10.1% of all customer funds.
19
Pension plans increase by 6.5%, while investment funds display a weaker dynamism,
with a 1.6% increase.
2.3. Customer loans
Solid growth of secured loans, which have increased by 15.6%, although this heading slowed down gradually as the year went on.
LOANS AND ADVANCES TO CUSTOMERS*
Balance
In millions of euros
Public sector
Annual change
31-12-2007 Amount
%
Structure
%
1,047
139
15.3
2.0
49,752
7,516
17.8
95.2
2,692
225
9.1
5.1
Secured loans
33,368
4,496
15.6
63.8
Personal loans and credit lines
11,095
2,541
29.7
21.2
2,597
254
10.9
5.0
679
229
50.9
1.3
ON-BALANCE SHEET CUSTOMER LOANS
51,478
7,884
18.1
98.5
Less: valuation adjustment for impairment of assets
(1,049)
(207) (24.6)
(2.0)
ON-BALANCE SHEET CUSTOMER LOANS (NET)
50,428
7,676
18.0
96.5
802
-116
-12.6
1.5
52,279
7,768
17.5
100.0
Private resident sector
Commercial loans
Other loans
Non-resident
Off-balance sheet securitised loans
LOANS MANAGED BY THE GROUP
* Excluding valuation adjustments
The dynamism of business financing explains the 29.7% increase in personal loans
and credit accounts.
Significant growth in commercial loans (9.1%) and public sector financing (15.3%).
_ Financial Activity / Annual Report 2007
Customer loans increase by 17.5%, up 52,279 million euros.
20
802 million euros corresponding to the securitized portfolio and recorded off the balance sheet, in line with current accounting regulations.
The total rate of arrears is 1.07%.
Non-performing portfolio cover now stands at over 150%, after the previsions for the
year have been made.
Annual Report 2007
2.4. Income statement
Positive behavior of net interest income, which is up 24.5%, reflecting
the increase in financial activity and a
balanced evolution of financial income
and expenses.
INCOME ATTRIBUTABLE TO THE
GROUP OF 487.9 MILLION EUROS,
UP 39.5% ON LAST YEAR
CONSOLIDATED INCOME STATEMENT
Balance
‘07
In millions of euros
31-12-2007
Annual change
Amount
%
Average
Total
Assets
Caixa Catalunya
(ATA) %
Finance revenue
Finance costs
Net interest income excluding dividends
Income from equity instruments
Net interest income
Share of profit of companies accounted for by the equity method
2,829.5
907.6
47.2
4.26
(2,042.3)
(750.8)
(58.1)
(3.08)
787.2
156.9
24.9
1.19
53.4
8.8
19.7
0.08
840.6
165.6
24.5
1.27
25.1
–11.2
–30.9
0.04
0.49
323.0
22.8
7.6
1,188.8
177.2
17.5
1.79
Insurance activity
63.8
24.1
60.6
0.10
Net trading income and exchange rate differences
–5.6
–137.1 –104.2
–0.01
Net fees and commission income
Basic income
Ordinary income
Income from non-financial activities (net)
Administration and amortisation expenses
Other products and operating expenses
Total operating income
1,247.0
64.2
5.4
1.88
73.8
–26.1
–26.1
0.11
(700.3)
(59.7)
(9.3)
(1.06)
28.6
–8.0
–21.8
0.04
649.1
–29.6
–4.4
0.98
Impairment losses on assets
(344.9)
(127.7)
(58.8)
(0.52)
Other provisions and income
289.6
271.9
(100)
0.44
Profit before tax
593.9
114.6
23.9
0.89
(–18.1) (–15.2)
(0.15)
Income tax expense
Profit (loss) for the year
Profit attributable to minority interests
PROFIT ATTRIBUTABLE TO THE GROUP
(100.8)
493.1
132.7
36.8
0.74
5.2
–5.6
–51.8
0.01
487.9
138.2
39.5
0.74
21
Reduction of 30.9% in the results of equity-accounted companies, partly due to the
absence of results from Riofisa, which was equity accounted.
More moderate increase in net fees (7.6%), which increased below business turnover.
Lower increase in ordinary income (5.4%), which incorporated surpluses for the sale
of Retevisión Móvil (Amena) in 2006, under the “Income from financial operations”
heading.
OPERATING EXPENSES
Balance
Annual change
On ATA
31-12-2007
Amount
%
%
Staff expenses
416.3
26.8
6.9
0.63
General expenses
230.6
25.4
12.4
0.35
53.3
7.5
16.3
0.08
700.3
59.7
9.3
1.06
In millions of euros
Depreciation
TOTAL
The 2006-2007 expansion plan, which included extending the network of 155 branches, accelerated the growth of operating expenses, which rose by 9.3%.
New relative reduction in operating expenses to 1.06% of ATA.
Income from non-financial services, basically the contribution from the real-estate
company Procam, fell 26.1%.
A 4.4% drop in operating income and a 5.3 point reduction in efficiency due to the
absence of extraordinary surpluses in financial operations and a lower increase in
income from the provision of non-financial services.
_ Financial Activity / Annual Report 2007
Basic income increased to 1,188.8 million euros, up 17.5%.
22
Increase of 0.3 points in basic efficiency.
IMPAIRMENT LOSSES ON ASSETS
Amount
In millions of euros
31-12-2007
Available-for-sale financial assets
Loans and advances
Shareholdings
Annual Report 2007
Caixa Catalunya
On ATA
%
%
16.2
16.3
n.s.
0.02
334.5
131.3
64.6
0.50
–5.8
–16.8
n.s.
–0.01
Goodwill
0.0
–3.1
–100.0
0.00
Other assets
0.0
0.0
0.0
0.00
344.9
127.7
58.8
0.52
TOTAL
‘07
Annual change
Amount
Losses due to asset impairment increase by 58.8%, although in ordinary terms this
figure is 12.6%, given an extraordinary contribution of 100 million euros, due to criteria of prudence and encouraged by the results obtained from the sale of Riofisa.
Income before tax stands at 593.9 million euros, up 23.9%.
Overlooking the more extraordinary headings of the last two years (income from financial operations resulting from the sale of Retevisión Móvil, other income from the sale
of Riofisa and the extraordinary provision for asset impairment), net attributable
income has increased by 9.3%.
Provision of 407.2 million euros to reserves in the distribution of individual income for
2007.
COMPUTABLE EQUITY
In millions of euros
4,780
4,181
2006
2007
23
2.5. Equity
Progress made in the process of homologating the internal credit risk and operational
risk models which, together with market risk, must allow Caixa Catalunya to calculate
the requirements for own resources using advanced methodology in the framework of
the New Basel II Capital Accord.
2.6. Credit rating
Caixa Catalunya’s rating by three credit risk rating agencies (Fitch Rating España,
Moody’s Investors Service España and Dominion Bond Rating Service).
Fitch Rating España, SA
Long-term rating
Short-term rating
Individual rating
Support rating
A
F1
B
3
Moody’s Investors Service España, SA
Long-term rating
Short-term rating
Financial strength rating
A1
P-1
C+
Dominion Bond Rating Service
Long-term rating
Short-term rating
A (High)
R-1 (Middle)
2.7. Group shareholdings
Excellent contribution from shareholdings in Group companies, which also complement the Organization’s range of products.
Insurance companies
Fund management of 3,921 million euros for Ascat Vida, 2,393 of which are for life
assurance and the remaining 1,528 for pension plans.
_ Financial Activity / Annual Report 2007
Almost 4,800 million euros in equity, representing an increase of 14.3%, brought
about by the positive dynamics of results.
24
Ascat Mediació (formerly Ascat Corredoria d’Assegurances) obtains a volume of brokered premiums of 138.4 million euros.
Ascat Assegurances Generals obtains a volume of managed non-life premiums of
16.7 million euros in its first year in business.
The combined income of the insurance companies before tax is 66.5 million euros,
up 37.2%.
Real estate companies
Management of land with a potential of over 9 million square meters.
Annual Report 2007
Real estate investment of 4,469 million euros, up 17%.
Caixa Catalunya
‘07
Consolidated pre-tax income of 42.2 million euros for Procam, 56.1% less as a result
of the slowdown in real estate activity.
Management companies
Equity managed in investment funds by Caixa Catalunya Gestió levels off at 3,800 million euros.
Gestió d’Actius Titulitzats manages equity in excess of 8,800 million euros in securitization funds, up 46.9%.
The income before tax of the management companies stands at 29.7 million euros,
up 12.2%.
Financial services companies
Transfer of the financial portfolio of the subsidiaries Liscat and Factorcat to Caixa
Catalunya and constitution of Caixa Catalunya Serveis Empresa, set up to provide the
technical, sales and operating support needed to sell leasing, factoring, confirming
and forfeiting products.
Transfer volume of 3,230 million euros in factoring, up 32.2%, and a gross investment
of 566 million in leasing, up 14.7%.
25
Portfolio companies
Investments in the region of 143 million euros from the four portfolio companies, basically in venture capital and innovative sectors, the features of which indicate a high
growth potential.
Combined pre-tax income of 9.5 million euros, which compares favorably to the positive but minimal income of 2006.
Other companies
Restructuring of the activities of Caixa Catalunya Administració i Gestió de Serveis
(formerly Caixa Catalunya Consulting), in order to promote the Group’s provision of
services, with a pre-tax income of 12.3 million euros.
Turnover of over 25 million euros from ITC, the IT services company, with a pre-tax
income of 0.3 million.
MOST SIGNIFICANT SUBSIDIARIES AND SHAREHOLDINGS OF THE
CAIXA CATALUNYA GROUP
Direct or indirect participation
Direct or indirect participation
Insurance companies
Ascat Vida
100%
Life insurance and pension fund management
Ascat Mediació
Insurance brokerage
100%
Ascat Asseguraces Generals
Non-life insurance
100%
Real Estate companies
Procam
Real estate development
Management companies
Caixa Catalunya Gestió
Investment fund management company
Gestión de Activos Titulitzats
Securitisation fund management
Other
Caixa Catalunya On-Line
Internet services
ITC
IT services
100%
50%
Caixa Catalunya Tel.Entrada
Internet information leisure offers
100%
Caixa Catalunya AGS
Services
100%
100%
100%
Portafolio companies
Invercartera
Portafolio company
Invercartera Energia
Portafolio company
100%
100%
Invercartera Capital SCR
Portafolio company
100%
Invercartera Internacional
Portafolio company
100%
Financial services
Caixa Catalunya Serveis Empresa
Services
100%
Financial intermediation
Caixa Catalunya Preferents
Financial
100%
Caixa Catalunya Internac. Finance Ltd. 100%
Financial
100%
_ Financial Activity / Annual Report 2007
Considerable investments in wind farms and renewable energy.
_ Risk Management
MANAGEMENT
INTERNAL
VALIDATION
CREDIT
RISK
28
A Global Risk Management Model approached from the most advanced angle of the
New Capital Accord of Basel (Basel II), forming part of the select group of Spanish
financial institutions being evaluated by the Bank of Spain.
The formal report is expected for the first half of 2008, but the supervisor’s assessment has been positive throughout the process.
1. GLOBAL CREDIT RISK MANAGEMENT
Annual Report 2007
Development of credit quality rating models and methodologies for estimating risk
parameters in accordance with the advanced methodology of Basel II.
Caixa Catalunya
‘07
Internal credit quality rating models. Scoring model for the awarding of personal loans and mortgage loans and behavioural scoring model for individuals. Of
the more than two million private customers processed, 87% have been rated
with behavioural scoring. A total of 12% of the mortgage portfolio has been given a
positive rating by behavioural scoring. This figure rises to 17% in personal loans.
Rating models covering all business segments are available for companies. Once
implementation of the two new models (for the corporate and public sector segments) is complete, 93% of the portfolio with outstanding risk will have passed
through the model.
Risk parameters. Use of databases containing over 10 years of history to obtain
estimates of credit risk parameters adjusted to the economic cycle, allowing the
Organization to quantify the expected loss of the credit portfolio.
Expected loss. Application of the concept of expected loss to all branches as an
objective, and implementation of a model linking the decision on company asset operations to this.
Ongoing evaluation of risk management tools and their contrasted use by the
Internal Validation group, regardless of the development and implementation of
the models.
29
Continued monitoring of awarded risk:
• Monitoring group: establishes the policies for the management and recovery of risk
awarded to companies.
• Recovery group: designs and manages policies for recovering debts from indivi-
• Bankruptcy group: manages business insolvencies by defining the recovery policy
and strategy for action.
Regulatory capital. Supervisor presentation of the parallel runs for regulatory capital requirements, through the application of internal models, and comparison with the
requirements for application of the current regulations. The results obtained confirm
the Group’s high solvency levels.
Economic capital. Calculation of individual economic capital requirements, which
includes all material risks that could compromise the solvency of the Organization
(credit, operational, market liquidity, structural interest rate, reputational, business or
concentration risk).
2. CREDIT RISK IN TREASURY AND CAPITALS MARKET DIVISION
ACTIVITIES
Counterparty risk. Control and monitoring of this risk with an integrated real-time
system, in line with the market value of positions. Almost 50% of counterparty risk for
instruments lies in deposit operations mainly with terms of less than 6 months, and
over 75% of exposure is for operations with a term of less than 2 years. Credit quality is considered optimum since 92.5% of this risk has rating A1 or higher.
Issuer risk. Increase of almost 4,800 million euros in issuer risk consumption. Of
this increase, 70% is from the issue of securitizations held in portfolio. 50% of risk
consumption is concentrated in terms of over 20 years, from the investment in mortgage-backed securities (MBS). 67% of the issuer risk portfolio has ratings Aaa
to Aa3.
_ Risk Management / Annual Report 2007
duals and the procedures for the judicial recovery of debts.
30
Liquidity risk. The permitted liquidity risk limits are set at double those for the
shortest counterparty risk term, while the consumption established for instruments in
which this risk could occur is identified with the countervalue in euros of the trading
currency.
Cross-border risk. No provision for cross-border risk was made to the allowance at
the close of the year, in line with exposures with a higher solvency level.
Annual Report 2007
Credit risk mitigation techniques: collateral system. Promotion of credit risk
mitigation techniques by means of a collateral policy. Active collateral agreements with
32 credit institutions, 27 of which are ISDA contracts (derivative trading) and 5 ISMA
contracts (debt repos).
Caixa Catalunya
‘07
3. MARKET RISK MANAGEMENT
Limits are established and approved by the Board of Directors for the management of
market risk deriving from the activity of the Treasury and Capital Markets division, on
the following points:
• Value at risk (VaR), probable maximum loss for the different risk types.
• Sensitivity to interest rate movements.
• Market value of fixed-income, equity and commodity positions.
• Position for exchange risk in different currencies.
• Stop losses for business units.
Value-at-Risk (VaR) methodology. Use of historical simulation methodology to calculate value at risk (VaR).
Use of the Kondor+ and Kvar+ applications, which can simulate sudden market movements.
Daily calculation of VaR limits, with a confidence level of 99% for a time horizon of one
day.
31
Sensitivity measuring. Quantification of the change in market value of open positions in the event of a parallel bullish movement of a basic point in interest-rate curves.
• Maximum positive sensitivity: 52.0 thousand euros.
• Maximum negative sensitivity: -284.1 thousand euros.
• Average sensitivity: -116.2 thousand euros.
4. OPERATING RISK MANAGEMENT
Consolidation of the internal management model (Advanced Measurement Approach
– AMA) systematizing the identification, evaluation, monitoring, measuring and mitigation of the Organization’s risk. Implementation of this model to obtain:
• Cultural change: extending the operational risk culture to the whole Organization.
• Direct mitigation: reduction in losses by studying them to determine their reasons
and carrying out adequate prevention.
• Creation of value: effects of improved management.
• Regulatory compliance and calculation of regulatory capital.
Development of tasks required to comply with Basel II:
• Up-to-date maintenance of the Organization’s map of risks and controls.
• Internal database data entry with figures on operational events from 1999 onwards.
• Exchange of information on operational risk losses with other organizations in the
sector as a member of the ORX (Operational Risk eXchanging) association.
_ Risk Management / Annual Report 2007
Variation in VaR per spread for the total treasury amount between a maximum of 7,738
thousand euros and a minimum of 4,138 thousand, with an average of 5,817 thousand, and of VaR for other risks between a maximum of 2,420 thousand euros and a
minimum of 624 thousand, with an average of 1,416 thousand euros.
32
• Coverage of the need for information on all of the Organization’s levels, for manage-
ment purposes.
• Progress in the statistical modeling of data sources to estimate the maximum losses
of the Organization and the regulatory capital for operational risk.
• Ensuring independence of the operational risk department for the internal validation
position.
Annual Report 2007
Coverage of the validation process for the model produced by Internal Auditing,
Internal Validation and the Bank of Spain. Positive assessment by the Bank of Spain
of the management system designed and the Organization’s excellent involvement.
Caixa Catalunya
‘07
5. MANAGEMENT OF STRUCTURAL BALANCE-SHEET RISK
Interest rate risk
Development of a measuring system and limits for interest rate risk, including macro
hedging of cash flows and fair value defined in the respective technical regulations.
Limits set and approved by the Board of Directors for the management of on-balancesheet interest rate risk, excluding positions deriving from Treasury and Capital Markets
division activity, on the following points:
• Variation in net interest income over a time horizon of 12 months.
• Variation in the financial value of the Organization.
Application of parallel curve movements defined from the percentiles 1 and 99%
of the year-on-year variations of the 12-month Euribor for an observation period of
5 years.
Liquidity risk
Management of the global liquidity risk of the balance sheet from the point of view of
operating liquidity, carried out by the Treasury and Capital Markets Division, and of
structural liquidity, carried out by the management of the Organization through the
33
Committee of Assets and Liabilities, by monitoring different measurements. These
include:
• Liquidity gap: classification of assets and liabilities by maturity.
• Interbank position.
• Liquidity gap in stress scenarios.
Liquidity Contingency Plan, approved by the Board of Directors, with the following
aims:
• To identify potential liquidity problems in the short and medium term, using specific
benchmark parameters for continuous balance-sheet monitoring.
• To establish a framework of communication, action and coordination among depart-
ments and units, defining their level of participation and the skills required in order to
overcome crises quickly and efficiently.
_ Risk Management / Annual Report 2007
• Structural position: defined as the balance between credits and stable equity.
_ Community Projects
EXHIBITIONS
ENVIRONMENT
SOLIDARITY
SOCIAL WELFARE
RESEARCH
36
Annual Report 2007
The activities of Caixa Catalunya’s Community Projects are based around five areas
of activity: culture, the environment, social integration, caring for the elderly and
R&D&I. Their aim is to produce innovative, efficient and sustainable programs to deal
with needs that are not sufficiently met otherwise.
In 2007, the funds invested in Community Projects amounted to 79.6 million euros,
which were distributed thus: 12.5 million to culture, through the Caixa Catalunya foundation; 11.5 to social integration, through the Un Sol Món foundation; 10.6 to social
welfare, through the Viure i Conviure foundation; 9.2 to the environment, through the
Territori i Paisatge foundation, and 0.9 million to R&D&I programs. Of the remainder,
10.9 million were allocated to support other organizations and institutions in carrying
out social activities and 24.0 were allocated to fixed-asset investments and the maintenance of Caixa Catalunya’s own Community Projects. These investments included
the construction of day hospitals and health and welfare centers to care for people
with Alzheimer’s and other dementias, and maintenance of the Pedrera building, the
headquarters of Caixa Catalunya’s Community Projects.
Caixa Catalunya’s provision for Community Projects in 2008 will be 75.0 million
euros, 15.6% of the individual net profits of the year.
‘07
Caixa Catalunya
1. CULTURE-FUNDACIÓ CAIXA CATALUNYA
With the aim of helping to promote and disseminate the arts, culture and heritage, a
diverse program is organized that includes exhibitions, cultural activities and collaborations with other institutions and organizations across Spain.
1.1. Exhibitions
Organization of three temporary exhibitions at La Pedrera: Music and the Third Reich,
on the importance of music in ideological conflicts in the Third Reich; Nicolas de Staël,
retrospective exhibition of the Saint-Petersburg-born French painter who created new
forms of artistic expression in which space and color were the domnant features, and
Passion and business: art in 17th and 18th century Venice, which explained the main
characteristics of Venetian painting and its contribution to European art. These exhibitions, together with the permanent exhibitions of the Espai Gaudí, Pis de La Pedrera
37
and El Terrat, and the small exhibitions in the Entresòl space were visited by over 1.3
million people, while almost 270 thou1.3 MILLION VISITORS TO LA
sand more visited the travelling exhibiPEDRERA
tions in 26 Spanish cities.
A wide variety of musical, dance, literary and science activities, carried out by Caixa
Catalunya alone and in collaboration with others, attended by 23,946 people.
Highlights included the 2nd Contemporary Music Festival, which paid homage
this year to Frederic Mompou; the
poetry cycle In verse, which focused 23,946 PEOPLE ATTENDED THE
on the Brazilian oral tradition and
Celtic music, and the cycle of six con- CULTURAL ACTIVITIES AND 12,088
ferences Beyond climate change. SCHOOLCHILDREN CARRIED OUT
The challenges in International Polar
ACTIVITIES WITH THE EDUCATIOYear, by renowned international researchers.
NAL SERVICES
1.3. Educational services and sponsorship
Range of educational workshops and activities for young students who visit
the Pedrera building and its exhibitions, complemented by an interactive website
www.lapedreraeducacio.org. In 2007, a total of 12,088 schoolchildren took part.
Support to 109 sponsorship projects and the signing of 21 collaboration agreements
with other organizations for carrying out cultural activities.
2. ENVIRONMENT-FUNDACIÓ TERRITORI I PAISATGE
Environmental activities focused on protecting areas of important ecological
value, either through direct purchases or the management of third-party land, and
by launching awareness-raising programs and educating society on the environment.
_ Community Projects / Annual Report 2007
1.2. Cultural services and activities
38
2.1. Purchase, management and custody of land
Conservation of 24 pieces of own land and 86 of that of third parties, amounting to
over 144 thousand hectares.
Purchase of Els Cingles de l’Avenc in Tavertet (Osona), the thousand-year-old olive
trees of Arión and Salines de la Tancada (Montsià).
Annual Report 2007
Increase in the total area of third-party
land under protection thanks to the signing of 12 new agreements in Catalonia
and the Community of Valencia.
Caixa Catalunya
‘07
4.5% OF LAND IN CATALONIA PROTECTED BY CAIXA CATALUNYA’S
COMMUNITY PROJECTS
2.2. Environmental education
Environmental education and awareness with the Les Planes de Son Nature and
Sustainable Development Center in the Pyrenees, an example of bioclimatic architecture that respects the environment and is equipped with energy-efficient facilities. In 2007, the range of educational
INAUGURATION OF A WEATHER
activities was extended with a weather
station and the center received over STATION AT LES PLANES DE SON
18,000 visitors.
Guided nature walks, exhibitions, publications and the production of school materials,
with almost 11,000 participants of all ages.
2.3. Support to organizations
Aid to 159 conservation and environmental-awareness projects and protection of
emblematic species.
3. SOCIAL INTEGRATION-FUNDACIÓ UN SOL MÓN
The aim here is to carry out projects to help groups in situations of social exclusion
and to support initiatives that combine care for the most vulnerable with efficacy, busi-
39
ness efficiency and job creation. Another aspect of the activity is financial and technical support to development cooperation programs in poor countries.
Caixa Catalunya’s Community Projects, pioneering in Spain for its introduction of
microcredits, concluded 250 financing operations in 2007 with individuals who have
a business idea that could generate an income but do not have the guarantees or
security needed to obtain credit through the traditional financing system. Since it
began, the program has funded 1,259 operations for a total of 11.5 million euros.
Twelve new operations concluded in
FINANCIAL AND TECHNICAL SUPthe framework of the international
cooperation program to promote micro- PORT TO SIX SOCIAL INTEGRAfinancing, which have benefited a total TION COMPANIES
of 23,500 families from Morocco,
Senegal, Mozambique, El Salvador, Ecuador, Nicaragua, Paraguay, Colombia and
Palestine.
3.2. Social integration and investment capital program
New integration capital program that offers financing, management support and innovative working tools to help labor insertion companies. In 2007, support was given to
Ravaltext, Fundació Nova Terra, L’Olivera, Teixidors, Frescoop SCCL and Roba Amiga,
which created 225 jobs.
A total of 26 new projects in the 2007 Aid to labor integration projects for groups at
risk of social exclusion competition and a further 39 for the integration of disabled
people.
3.3. Labor integration of youths and adolescents
A total of 175 grants awarded in the framework of the charity grants program for the
training and social and labor integration of youths and adolescents in a situation of or
at risk of social exclusion.
_ Community Projects / Annual Report 2007
3.1. Microcredits and microfinancing
40
3.4. Social housing
Inclusion Housing Network, with 406
supervised housing initiatives benefiting 1,600 people with a high risk of
social marginalization.
406 FLATS IN THE INCLUSION
HOUSING NETWORK, BENEFITING
A TOTAL OF 1,600 PEOPLE
Annual Report 2007
4. SOCIAL WELFARE – FUNDACIÓ VIURE I CONVIURE
Caixa Catalunya
‘07
Activities designed to improve quality of life for the elderly, the dependent, immigrants
and young people. They are divided into six areas: Health, Welfare and Residential
Resources, Dependence, Social Involvement, Raising Awareness among Society,
Intergenerational Relations and an Aid and Sponsorship Program.
4.1. Health, Welfare and Residential Resources
Inauguration of the Sant Jordi Day Hospital in the Pere Virgili Healthcare Park in
Barcelona, which has extended the healthcare resources network.
A total of 8 residential and healthcare centers for sufferers of Alzheimer’s, Parkinson’s, Huntington’s and
other cognitive disorders.
INAUGURATION OF THE NEW SANT JORDI
DAY HOSPITAL IN THE PERE VIRGILI
HEALTHCARE PARK IN BARCELONA
The social healthcare services and
Llar Sant Jordi residential center in Barcelona have benefited 875 people.
4.2. Sant Jordi Clubs
Network of 47 centers for the integral development of the elderly as active members
of the society in which they live.
Organization of cultural, artistic and leisure activities, civic and educational activities
and health awareness activities, with over 69,000 participants.
41
4.3. Intergenerational relations and aid competition
10TH ANNIVERSARY OF THE VIURE
I CONVIURE PROGRAM, WHICH IS
PRESENT IN 27 SPANISH TOWNS
AND CITIES
A total of 17 social welfare projects in the competition for aid and a further 11 subsidized through the collaboration agreement with the Catalan Government.
5. R&D&I
New area of action for 2007, organized to help develop R&D&I in Spain.
Programs focusing on three basic aspects: the relationship between universities and
companies, the promotion of excellence in post-graduate programs and the detection
of research talent.
Highlights include close collaboration with Parc Científic de Barcelona to set up specialized scientific facilities and services, the promotion of communication activities to
the scientific community and the general public, and the launch of a Master’s in
Leadership and Science Management, in addition to the design of the Youths and
Science program, organized to foster talent and encourage interest in research
among secondary-school pupils.
_ Community Projects / Annual Report 2007
On its tenth anniversary, the Viure i
Conviure program encouraged experiences of lone elderly adults and young
university students living together in
27 cities across Catalonia, the Community of Valencia, Madrid, the Balearic
Islands, Extremadura and Aragon.
_ Corporate Social Responsibility
TRUST
PROXIMITY
ECOLOGY
COMMITMENT
TRAINING
44
Ever since its foundation, Caixa Catalunya has had a socially responsible orientation,
clearly demonstrated by the maintenance and development of genuine community
projects, which have evolved with the changing needs of society, and by offering proximity and connecting people to the economic growth of the region with the financial
services that it provides.
Annual Report 2007
The year 2007 was the last year of the 2005-2007 Strategic Plan, throughout
which Caixa Catalunya has continued to make progress in the various aspects of
social responsibility, within the framework of a mission, vision and corporate values
that emphasize the social nature of the Organization and its orientation towards
people.
Caixa Catalunya
‘07
Thus, in 2007, the Organization’s Mission was modified to give it a more socially
responsible approach.
MISSIÓN
VISIÓN
“Caixa Catalunya aims to respond to the real
“To be an innovative, growing financial group and
needs of customers by providing financial solu-
a leader in customer advisory services that earns
tions and establishing long-term personalized rela-
customers’ trust; a group driven by a deep social
tionships to help build a better society through its
commitment and the professionalism and enthusi-
Community Projects and a sustainable approach
asm of our people.”
in its activities.”
The corporate values are shared by the subsidiaries and passed on to all employees
when they join, through their initial training, conventions and dissemination through the
corporate intranet.
Corporate values
1. Teamwork
“All of Caixa Catalunya’s staff are motivated and committed to building our future.
We believe in participation and the sum of individual contributions. This inspires us
to work professionally with mutual respect and the integration of diversity.”
2. Trust
“We believe in our abilities and the importance of challenges to build on them. We
foster a stimulating, open environment favoring ongoing learning and dialogue. We
wish to relate to our peers, our customers and society by means of transparent, consistent and ethical actions.”
3. Dynamism
“We believe that anticipation and innovation will drive us to be better. We strive to
anticipate change through imagination and initiative, which help us to be agile and
flexible.”
4. Strength
“We face the future with a manner of operating and competitive organizational
resources and assets that will enable us to generate results and grow while remaining a solvent organization.”
These values inspire our guidelines on ethical behavior, based on respect for the people who form part of the Caixa Catalunya group and on respect for society and the
environment.
Notable actions in the field of social responsibility in 2007:
• Preparation of the 2006 Corporate Social Responsibility Report in accordance with
the Global Reporting Initiative (G3) guidelines for preparing sustainability reports,
which was awarded the highest possible rating (A+).
• Presentation of the annual progress communication to the United Nations Global
Compact, integrated into the Corporate Social Responsibility Report.
• Participation in CECA workshops and reports to the European Commission on
Caixa Catalunya’s membership of the European Alliance for Corporate Social
Responsibility.
• Second EFQM Framework RSC self-assessment, with a comparative diagnosis determining strong points, progress and lines of continuity.
• Member participation in the Corporate Social Responsibility Industry Committee,
launched by CECA.
_ Corporate Social
Responsibility / Annual Report 2007
45
46
• Participation in corporate social responsibility forums.
• Information for employees – on the corporate intranet – and customers and
the general public – on the corporate website – regarding the Organization’s
stance on corporate social responsibility and the main initiatives carried out in
this area.
• Presence in the MERCO (Spanish Monitor of Corporate Reputation) index.
Annual Report 2007
Ongoing reflection on the configuration
of the main parties involved in the Organization’s social and financial results in
terms of groups of customers, employees, society and suppliers.
Caixa Catalunya
‘07
FIRST FINANCIAL INSTITUTION IN
EUROPE TO OBTAIN THE MAXIMUM G3 QUALIFICATION
1. SOCIETY
Contribution to building a better society, the essence of Caixa Catalunya’s activity,
split into different areas of activity:
• Strictly social action, carried out mainly through Community Projects.
• Financial action, concerned with addressing the financial needs of society and promoting projects with a major impact on society:
– Financing to develop economic activity in different sectors, such as cattle farming,
fishing, farming, forestry, industrial and transport and infrastructures, as well as in
small and medium-sized companies
FINANCING OF PROJECTS WITH
and housing.
– Financing to promote links betwe- A MAJOR IMPACT ON SOCIETY
en business and research through agreements signed with Fundació Catalana per
a la Recerca i la Innovació (FCRI) and Societat Catalana d’Inversió en Empreses
de Base Tecnològica (INVERTEC).
• Performance of socio-economic research and analysis of the social context with studies and, particularly, free publications on the world, Spanish and Catalan economic
47
2. CUSTOMERS
Response to the real needs of customers by offering financial solutions and establishing long-term relationships with them.
Customer relationship based on a commercial model of customized contact and
advice, product development, proximity to customers and other relations programs.
Adaptation of Organization processes to the requirements of the MiFID, a regulation
that seeks to protect investors as far as possible with the highest possible degree of
transparency in financial instrument transactions and free market competition.
2.1. Customized relations and advice
Strategy of providing global, customized solutions for over three million customers.
Focus on the financial needs of all customers, whether individuals, companies, young
people, senior citizens or foreign customers.
Delivery of product files containing the main features of the chosen product to customers.
Information on interest rates, fees and charges available at branches and on the
Internet.
Criteria of transparency and utmost quality in advertising, with the signing of the code
of conduct of the Association for Self-Regulation in Commercial Communication (selfmonitoring).
Promotion of multi-branch commercial staff in order to provide comprehensive service
and develop a closer relationship with customers.
_ Corporate Social
Responsibility / Annual Report 2007
situations, as well as the Estudis Caixa Catalunya collection, which covers specialist topics on economics, demography, society, aging and dependence, health and
climate change.
48
420 managers specializing in personal banking, foreign customers, SMEs and micro-enterprises, medium-sized and large companies, private banking and corporate
banking.
Creation of a new insurance company to improve customer service, based on multirisk home insurance.
Ascat Vida’s subscription to the UNESPA Guide to Good Practices in Transparency
and Advertising in order to increase transparency in the contracting, advice-giving and
advertising of insurance products.
Annual Report 2007
2.2. Development of products and services
Caixa Catalunya
‘07
Flexible Savings Plan (PIAS), life insurance product that allows capital to be systematically built up and which offers tax benefits for savings.
Lifetime mortgage, product to complement the income of the elderly through a normal
home mortgage, allowing them to receive a constant income every month.
Total Plus Program, system whereby customers obtain points for using their credit
and debit cards, among others, that can be exchanged for a participation in charity
projects or to buy fair trade or socially responsible gifts.
New range of liability products to encourage family saving.
Range of hedging products to minimize the effects of adverse market changes.
Charitable Deposit, which assigns part of its return to social or ecological projects.
Collaboration agreements with financial institutions in different countries (such as
Senegal and Ecuador) to improve services for immigrants.
Promotion of products and services in different languages, adapted to the individual
needs of customers.
49
Loans made more flexible with the incorporation of options to tailor the range to the
needs of individual customers.
LIFETIME MORTGAGE, FLEXIBLE
SAVINGS PLAN AND A WHOLE
RANGE
OF
NEW
PRODUCTS
TAILORED TO CUSTOMER NEEDS
Range of specific investment and pension funds that meet the corporate social responsibility requirements of respect for
the environment and human rights, and which assign part of the management fees
to NGOs.
Improvements to the on-line personal loans application and pay-in circuit.
Improvements to the Línia Total internet security system and subscription to an antiphishing service.
ISO 9001:2000 quality certification for the Design and Development of Strategic
Sales and Marketing Actions and Financial Products.
Support to the Internet Quality Agency, which guarantees compliance with a standard
of conduct on the Internet.
ISO 9000:2000 certification of Ascat Vida for the marketing and management of
occupational pension plans.
2.3. Customer proximity
A network of almost 1,200 branches, 57 of which are located in towns with less than
5,000 inhabitants.
Major expansion of the network to 75 branches and presence in 48 towns and cities
across Spain for the first time.
_ Corporate Social
Responsibility / Annual Report 2007
Formalization of agreements with the
Official Spanish Credit Institute and
other agencies to address the financing needs of small and medium-sized
enterprises.
50
Seven Catalan towns in which Caixa Catalunya is the only financial institution.
Gradual implementation of the new branch model, designed for closer customer contact, with fewer architectural barriers and a more modern appearance.
Extension of the network of ATMs to 1,583 machines, located in branch offices and
areas with high pedestrian traffic.
Annual Report 2007
Improved accessibility, functionality and
features of the Línia Total (remote banking) service, with over 1.5 million contracts.
Caixa Catalunya
‘07
FIRST BRANCH OPENED IN 48
TOWNS AND CITIES ACROSS
SPAIN
Security measures at branches constantly updated, including electronic devices, push
buttons for triggering alarm signals, protected safes with locking and delayed autoopening and counters with an appropriate level of protection and adequate cash dispensers.
2.4. Programs based on customer relations
Consolidation of relational programs addressed to young people, minors and companies.
Information and offers for users of university cards and Jove Total cards issued by
Caixa Catalunya.
Regular internet mailings of Informatiu Empresa, containing financial and economic
information and articles of interest for companies and retail establishments.
Newborn Attraction Program, with a 15 euro gift deposit for opening a Future Plan
passbook.
Gifts to girls and boys aged 3, 6 and 12 years as they reach key stages of their education.
51
2.5. Quality and Customer Service
Personalized customer service handling customer opinions, claims and complaints
with a 24-hour customer service hotline and access to the corporate website and
e-mail address.
Information to customers on where to turn should they wish to take a complaint further if it is rejected.
Internal communication for producing criteria concerning behavioral manners and customer service improvements.
Very good results in a CECA survey of customer satisfaction with branches, with
scores of over 8 in most of the areas studied.
3. HUMAN RESOURCES
Over 7,400 professionals working with the Caixa Catalunya group and the Community
Projects foundations.
Creation of over 500 jobs.
Series of social benefits for employees, updated according to the evolution of socioeconomic needs and the needs of individuals.
Generation of quality, stable employment, focusing on the incorporation of young people into work.
Labor relations based on respect for
individuals and the fostering of social
dialogue.
OVER 7,400 PROFESSIONALS AND
OVER 500 JOBS CREATED
Access to extensive information on company-employee relations for all employees
through the corporate intranet.
_ Corporate Social
Responsibility / Annual Report 2007
Customer service department for dealing with claims and complaints from customers.
52
3.1. Human resources policy and model
The basic aims of the human resources strategy are:
• To cover staff needs generated by the Strategic Plan.
• To guarantee the effective introduction of staff management policies.
• To develop the skills model and, specifically, the Performance Management System.
• To ensure the integration of new employees.
• To design and introduce specific training plans for strategic figures.
Annual Report 2007
• To promote the development of management skills.
Caixa Catalunya
‘07
Ethical conduct in giving advice to customers, negotiation with internal and external
customers, the professional development of employees, leadership, decision-making,
interpersonal relationships and communication.
Skills-based staff management model to make it more just, universal, transparent and
motivating.
Definition of the essential skills for each position, necessary for successful execution
of the corresponding tasks, with two assessment systems (Performance Management
and Knowledge Self-Assessment).
3.2. Personal dialogue
Support for systems and mechanisms of dialogue as a gravitational center for the
management model of labor relations.
New channels of dialogue: Mixed Agreement Interpreting Committee, Equality Committee and Sector Monitoring Committee.
Internal quality survey to evaluate the services provided by central services to the
sales network.
53
3.3. Development of the human resources policy
Recruitment policy that ensures compliance with the legal requirements and that staff
needs are met for each position, allowing individual career development.
Staff recruitment
Recruitment and promotion processes ensuring that staff requirements are met by
guaranteeing the best possible match between individuals and their functions, identifying and incorporating the best professionals and promoting professional development.
Preference for internal promotions as the best way of holding on to employees,
involvement in the project and commitment to the Organization.
External recruitment to identify and incorporate the best professionals, ensuring they
are right for the job and addressing the current and future requirements of the organization.
Diversity and opportunity
Development and professional promotion of all employees regardless of gender.
Continuous rejuvenation of the workforce, with over 20% of employees under the age
of 30.
Progressive incorporation of women, representing over 40% of the workforce, and
increased participation in positions of responsibility (35% increase).
Diagnosis of equality and preparation of an internal Equality Plan to begin social dialogue.
_ Corporate Social
Responsibility / Annual Report 2007
Signing of an agreement with employee representatives to make employment conditions (benefit packages, financing and pension funds) uniform across the different
subsidiaries.
54
Training and development
Strong focus on training, which includes training for the integration of new recruits and
training for the whole sales network, as well as training to match staff to their position,
aimed at management staff and technicians with the potential for professional promotion.
Training program revised annually and available to all employees through the CC Aula
virtual learning platform.
Annual Report 2007
New Potential Development training program, focusing on high-level training in knowledge, strategy, languages and skills development.
Caixa Catalunya
‘07
Prioritizing of training requirements and identification of the specific needs of employees with two skills appraisal systems.
Individual employee access to their
“Personal Development Plan” from their
position. This plan indicates the training
staff need to expand on their personal
skills profile, improve their professional
development and voluntarily complement their training.
DECISIVE FOCUS ON TRAINING
WITH A STRONG EMPHASIS ON
VIRTUAL
LEARNING
THROUGH
CC AULA
Use of multi-channel learning methodology that combines on-site and on-line training.
Implementation of the CC Aula platform across the Organization and increase in the
on-line training courses available.
An average of 66 hours of training per employee/year.
Training for professional qualifications (EFA and CEFA) for employees that provide
specialist advice.
“Renaissance” program for retired employees or partial retirement agreements.
55
Remuneration system
Involvement of 100% of the workforce in achieving incentives for business objectives.
Other financial incentives based on an awards system, including those given for contributions to the development of strategies.
Occupational health and safety
Commitment to uphold and constantly improve the working conditions of employees.
OSHAS 18001 certification for the financial activity of Caixa Catalunya and its holding Procam.
Occupational risk prevention management system and establishment of ongoing training on the subject for all employees.
Promotion of initiatives regarding methods and procedures for effective occupational
risk prevention by the Occupational Health and Safety Committee.
Regular medical check-ups for all employees.
Diverse information available to all staff through the corporate intranet.
Revision and implementation of emergency plans in the Company’s main buildings.
4. ENVIRONMENT
Besides the important activity of the Territori i Paisatge foundation (included in the
section on Community Projects), Caixa Catalunya’s commitment to sustainable development is revealed through actions designed to minimize the already minor environmental impact of its financial activity and to support companies involved in renewable
energies and protecting the environment.
_ Corporate Social
Responsibility / Annual Report 2007
Variable remuneration established in line with the extent to which the Organization’s
most important strategic objectives are achieved.
56
4.1. Environmental management
Project to implement an environmental management system based on ISO 14001 at
the Technology Center of El Prat de Llobregat.
Renewal of the UNE-EN-ISO 14001:
1996 requirement for branches
certified in 2000.
PROJECT TO IMPLEMENT ISO 14001 AT
THE TECHNOLOGY CENTER OF EL
PRAT DE LLOBREGAT
Annual Report 2007
Waste from recyclable materials sent to authorized waste management companies.
Caixa Catalunya
‘07
Reduced energy consumption through the continuous renewal of IT equipment,
replacement of cooling equipment, the installation of multi-purpose equipment and the
replacement of lighting when facilities are renovated.
Implementation of new functionalities in the corporate Intranet to reduce the consumption of paper.
Campaigns to encourage customers to use the Environmentally-Friendly Correspondence service.
4.2. Support for companies involved in the protection of the environment
and renewable energies
Strategy designed to organize and guarantee financing operations for the performance of projects with a positive environmental impact that meet the requirements of
economic feasibility and cost-efficiency.
Selection of financing projects with a real impact on society and the existence of a
favorable legal framework, particularly wind and solar energy projects, and others concerning the environment or infrastructures.
Financing for the installation of energy projects with an output of around 1,390 MW
which, depending on the type of electricity production plant replaced, could stop
around 1,360 thousand tons of CO2 from being pumped into the atmosphere every
year.
57
5. SUPPLIERS
Establishment of transparent and ethical relations with suppliers to ensure long-term
stability.
Incorporation of a clause in purchasing contracts to inform of the commitment to the
ten principles of the Global Compact.
Purchase of paper from suppliers that have the UNE-EN-ISO 14001:2004 and
EMAS certificates in accordance with criteria of environmentally responsible purchasing.
Purchasing from companies that develop socially responsible policies through the
Community Projects foundations.
Transparency in all purchases of paper
and consumables through an electronic auction open to all suppliers that
meet the requirements established in
line with the values of the Organization.
Diversification of suppliers to ensure
that none supplies over 10% of the
Organization’s total purchases.
INCORPORATION OF A CLAUSE
I N PURCHASI NG CONTRACTS
INFORMING SUPPLIERS OF THE
COMMITMENT TO THE 10 PRINCIPLES OF THE GLOBAL COMPACT
Application of the quality system, in line with ISO9001:2000, for evaluating and
selecting Procam suppliers.
_ Corporate Social
Responsibility / Annual Report 2007
Outstanding financing to the sum of 708 million euros for projects to improve the environment and promote renewable energies.
_ Corporate Governing Bodies
ASSEMBLY
GOVERNING
BODIES
BOARD OF
DIRECTORS
60
Caixa Catalunya is a non-profit charity and social institution independent of any company, institution or corporation. As a savings bank, a financial institution, it is regulated by Legislative Degree 1/1994 (6th April) and laws modifying the latter, other applicable legal regulations, its Articles and Regulations and by the agreements of its governing bodies.
Annual Report 2007
The corporate purpose of Caixa Catalunya is: to promote general provision and saving in all authorized categories; to attract, safeguard, administrate and invest funds in
secure, profitable assets in the general interest; to promote social and economic
development within its scope of action, in accordance with the underlying principles
of social responsibility and good corporate governance, and to perform community
and charity work.
Caixa Catalunya
‘07
1. GOVERNING BODIES
The governance, administration, representation and control of Caixa Catalunya correspond to the General Assembly, the Board of Directors and the Control Committee,
in accordance with the legislation and bylaws.
The governing bodies act in accordance with the precepts of a professional association, regardless of the origin of their representatives, and carry out their duties at all
times to the exclusive benefit of the interests of Caixa Catalunya, its investors and its
Community Projects programs.
The Governing Bodies perform their duties in an honorary capacity, free of charge,
and may not receive remuneration in this regard other than allowances for attendance
and travel, in accordance with the rules set down by the protectorate of the
Department of Economy and Finance of the Catalan Government.
The office of Chairman is remunerated. He does not carry out this position exclusively and the incompatibilities are those set down in the Articles for other members of the
Board of Directors. In no event may the Chairman dismiss executive figures in companies whose business is in direct competition with that carried out by Caixa Catalunya
or its subsidiaries.
61
The General Assembly is the highest governing body of Caixa Catalunya and is composed of 160 members.
The Assembly is made up of representatives of the Founding Corporation, which has
55 general board members; account holders, which have 60 general board members;
local corporations, which have 25 general board members, and staff of the
Organization, which have 20 general board members. In compliance with State Law
62/2004 and Decree 311/2004 of the Catalan Government, the Assembly will temporarily be composed of 161 members, 26 of whom represent local corporations, due
to the appointment of a representative of Madrid City Council.
In 2007 an Ordinary General Assembly was held in which all the points on the agenda were passed by a comfortable majority, which fundamentally related to the closure
of the financial year.
In accordance with the current text of Article 21 of the revised text of the Savings
Bank Law, all general board members are elected for a six-year period. Half of each
representative group in the Assembly is renewed every three years, taking into
account the proportionality between these groups.
Agreements are taken by simple majority of votes of attendees, except for specific
cases envisaged in the Articles of Association.
1.2. Board of Directors
This is a delegated body of the General Assembly and is charged with the governance, management, administration and representation of Caixa Catalunya. In 2007,
16 meetings were held.
It is composed of 21 board members appointed from among the members of each
sector represented: 8 from the account holders group, 7 from the founding corporation, 3 from local corporations and district councils and 3 from staff.
_ Corporate Governing Bodies / Annual Report 2007
1.1. General Assembly
62
Members are appointed by the General Assembly from among members from each
sector that must be represented, on the proposal of the majority of that sector, the
Board of Directors, or a quarter of the members of the Assembly. There is also the
possibility of appointing up to two members of the Board of Directors, one to represent local corporations and the other to represent account holders, from among individuals who are not members of the Assembly but who meet the applicable professional requirements.
Annual Report 2007
Agreements are adopted by the majority vote of attendees, except for specific cases
envisaged in the Articles of Association.
Caixa Catalunya
‘07
Of the members appointed by the founding corporation, the Board appoints a
Director, who is also Chairman of the Organization. This is not an executive position.
Likewise, it appoints two vice-chairmen, the first from among members of the account
holders group and the second from the members from local corporations.
The General Manager attends the meetings of the Board of Directors and is also
Secretary of the delegated committees.
At present, four committees have been delegated by the Board of Directors for
dealing with specific issues: the Executive Committee, the Community Projects
Committee, the Investments Committee and the Remuneration Committee.
1.3. Control Committee
The aim of this committee is to ensure that the management of the Board of Directors
complies with the general lines of action established by the General Assembly and the
aims of the Institution itself. Furthermore, it has the role of Audit Committee, in accordance with the Law on Measures for the Reform of the Financial System of 2002.
It is composed of 7 members, elected by the General Assembly from among its members who do not sit on the Board of Directors and who will represent the sectors in
the Assembly. The Chairman, elected by the Committee from among its members, is
a member from the account holders group.
In 2007, this Committee met on 15 occasions.
2. Management
The organizational structure of the Organization groups the main lines of activity into
management areas, which all report to the Director General. As of 31 December, this
structure was as follows:
GENERAL MANAGER
STRATEGIC
PLANNING
MANAGEMENT
DEPUTY
GENERAL
BUSINESS
MANAGEMENT
FINANCIAL AND
INVESTMENT
MANAGEMENT
GENERAL
SECRETARY
RESOURCES
MANAGEMENT
CONTROL
MANAGEMENT
BUSINESS
MANAGEMENT
The committees and management and control bodies that operate under this organizational structure in the Organization are:
• Management Committee. Debates and decides on general aspects of the Organization’s management on a weekly basis. There is also an extended committee, the
Divisions Committee, which meets monthly and is attended by all division managers.
• Assets and Liabilities Committee. Approves investment strategies and sets
down the policies of management, hedging, measurement and control of the structural market risks of the balance sheet. It also establishes risk limits and revises
structural interest risk levels on a monthly basis so that it can take corrective action if
necessary.
_ Corporate Governing Bodies / Annual Report 2007
63
64
• Price and Product Committee. Approves the features of the products marketed
by the Organization and presents price proposals for assets and liabilities and sets
fees. It meets at least once a month.
• Audit Committee. Analyzes the audits in which risk situations or a significant deterioration has been observed, and proposes corrective action to amend the irregular
situation. This committee meets on a monthly basis.
Annual Report 2007
• Money Laundering Prevention Committee. Debates and proposes the
Organization’s policy for preventing money laundering and analyses significant possible money laundering operations reported to it. It meets at least twice a month.
• Control Body for the Internal Regulation of Conduct on Securities
Markets. Ensures compliance with the Internal Regulation of Conduct, in accordance with the legislation in force on transparency and the activity of financial institutions on securities markets. It meets at least three times a year.
• Liquidity committee. Analyzes the market situation, defines the activities to be carried out, supervises actions in progress and evaluates the time horizon of the
Organization. It is called under certain circumstances set down in the Liquidity
Contingency Plan.
Caixa Catalunya
‘07
3. SHAREHOLDING ACTIONS
The Director General must submit all subsidiary operations to the Board of Directors
for prior consideration, as set down in the regulations. The Institution’s representatives
on the boards of the companies in which it has a minority shareholding must also
observe this procedure.
Moreover, all strategic operations, investments and disinvestments of subsidiaries or
companies in which it has a majority shareholding require the prior authorization of the
Board, which must obtain the favorable decision of the Investment Committee if the
investment or disinvestment is around the limit of 3% of the equity.
The general administrative system for shareholdings in Group companies – except
where, by law, there has to be a governing body linked to a professional body or in the
case of the real estate companies of the Procam Group, where the participation in
their capital is shared with the developer – corresponds to a sole administrator, which
is generally the Organization itself, usually represented by the person responsible for
the division of Caixa Catalunya concerned.
In the case of financial shareholdings, the policy usually used is to exercise the political rights resulting from the shareholding directly by appointing one of the Institution’s
top management figures as a representative.
Hence, a number of management figures carry out several functions in subsidiaries
and the main shareholdings on behalf of the Institution; however, they do not receive
remuneration for this.
All operations performed with companies with a majority interest of members of the
Board of Directors and the Control Committee and General Management must be
authorized by the Board and reported to the Department of Economy and Finance of
the Catalan Government, which must give its express authorization to them. The Caixa
Catalunya Group currently has no significant operations with companies controlled by
general board members or the Director General.
4. REMUNERATION RECEIVED BY THE MEMBERS OF GOVERNING
BODIES AND MANAGEMENT STAFF
The remuneration received by the members of the Board and the delegate commissions and the Control Committee amounted to 1,062 thousand euros. The Director
General and the Assistant Directors-General do not receive remuneration for attending meetings of the governing bodies.
Caixa Catalunya has no pension commitments for former or current Directors 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 term. In 2007, the premiums of this
policy amounted to 19 thousand euros.
The total remuneration received by the 9 members of the Management Committee in
2007 for salaries and similar remuneration was 3,210 thousand euros, while the pension
commitments or payment of life assurance premiums amounted to 664 thousand euros.
_ Corporate Governing Bodies / Annual Report 2007
65
66
The representation in quoted companies or in companies in which the Institution has
a significant presence or representation is not at a personal level but in representation
of Caixa Catalunya. For this reason, remuneration deriving from this participation are
always paid to the Organization and not to the individual appointed.
Annual Report 2007
Therefore, there are no entries from subsidiaries for salaries, allowances or other types
of remuneration to any member of the governing bodies or management staff for representing the parent Organization in their duties. Likewise, the members of the governing bodies and the management staff of the Organization have not received remuneration for representing the Organization in listed companies or other companies in
which the Organization has a significant presence or representation.
Caixa Catalunya
‘07
5. CREDIT, LOAN AND GUARANTEE OPERATIONS
All loans, guarantees or securities awarded to members of the Board, members of the
Control Committee, the Director General or to the spouses, ascendants, descendants
or collaterals in the second degree of the latter, or to companies in which the above
have a significant shareholding, must be authorized by the Board of Directors of Caixa
Catalunya and reported to the Department of Economy and Finance of the Catalan
Government which, in turn, must authorize this process.
These authorizations are also required so that the individuals in the above paragraph
may transfer to Caixa Catalunya the assets and securities, either their own or issued
by the Organization, in which they have a shareholding or exercise their duty.
In 2007, 19 loan or guarantee operations were carried out in accordance with market conditions, for the sum of 8,341 thousand euros, as at 31 December, with members of the Board and members of the Control Committee and first-degree relatives
and companies or institutions with which the above hold a relationship that falls
under any of the situations envisaged by the framework law governing the securities
market.
Moreover, 3 loan or guarantee operations were concluded (with the prior approval of
the Board) for a total of 2,802 thousand euros, as of 31 December, with political
groups represented in local corporations and parliamentary assemblies that parti-
67
Finally, credit operations concluded with public institutions, including territorial bodies,
that have appointed general board members amount to 130,617 thousand euros as
of 31 December.
_ Corporate Governing Bodies / Annual Report 2007
cipate in the electoral process of the renewal of the governing bodies of Caixa
Catalunya.
Registered office: Plaça d’Antoni Maura, 6.
08003 BARCELONA
Tax identification number: G 08169815
Banking Control Council identification number: 2013
Tel.: 934 845 000
Fax: 934 845 141
E-mail: [email protected]
Website: www.caixacatalunya.es
Design: H2O Comunicació Integral
Photos: Lourdes Segade
Print: Serper, SA.
Annual Report 2007
Annual Report 2007
**