2014 annual report

Transcription

2014 annual report

2014 ANNUAL
REPORT
ECONOMIC AND FINANCIAL REPORT
1
2014 ANNUAL
REPORT
3
TABLE
OF CONTENTS
00
Letter from the Chairman Board of Directors Executive Committee Risk Committee Audit Committee Remuneration
and Appointments Committee The economy in 2014 The outlook for 2015
6
10
10
11
11
01
11
12
18
02
4
2014 ANNUAL REPORT
ECONOMIC AND
FINANCIAL REPORT
Key figures Banca March Group Analysis of the consolidated
balance sheet Customer funds Loans to customers Capital markets Investments in affiliated companies Consolidated income statement 22
24
30
32
34
36
37
38
MAIN BANK
BUSINESS AREAS
Wealth Management
Retail and Private Banking Large companies Subsidiaries March A.M.
March JLT
March Vida
360 CORPORATE
Consulnor
Banco Inversis
42
44
51
56
56
58
59
60
61
62
03
HOLDINGS OF
CORPORACIÓN
FINANCIERA ALBA
Investment portfolio
Affiliated companies
Listed companies
ACS
Acerinox
BME
Indra
Ebro Foods
Viscofan
Clínica Baviera
Non-listed companies
Mecalux
Panasa
Pepe Jeans
Ros Roca
Flex
Ocibar
EnCampus
TABLE OF CONTENTS
66
67
67
67
68
68
69
69
70
70
71
71
71
72
72
73
73
73
3
00
INTRODUCTION
Letter from the Chairman
4
2014 ANNUAL REPORT
6
Board of Directors
10
Executive Committee
10
Risk Committee
11
Audit Committee
11
Remuneration
and Appointments Committee
11
The economy in 2014
12
The outlook for 2015
18
5
LETTER
FROM THE
CHAIRMAN
F
or the first time since the beginning of the
crisis, the Spanish economy showed clear signs
of recovery in 2014 following a complex process of
adjustments and reforms. Real GDP grew by 1.4%
last year, with six consecutive quarters of expansion
since June 2013. Growth for 2015 is expected to be
around 3%, driven not only by exports but also by
domestic demand, both through consumer spending
and business investment. Two new factors have
recently become catalysts of progress: fuel prices
have fallen, which is allowing an acceleration of the
recovery of heavily energy-dependent economies
like Spain, and the Euro has depreciated in 2014,
making Spanish companies more competitive
abroad.
This improved situation is reflected in the
unemployment rate, which according to the Spanish
labour force survey (EPA) dropped from a 26.9%
high in March 2013 to 23.7% in December 2014.
However, despite this change of trend, there
are still macroeconomic imbalances which are
encumbering the economic upturn. Long-term and
youth unemployment are at unacceptable levels,
so it is necessary to promote employment of those
groups by offering incentives to companies and
providing training to make them more employable.
The deficit and public debt are still too high, which
means tax revenue reforms need to be stepped up,
but public spending and investment reforms also
6
2014 ANNUAL REPORT
need to be intensified, in such a way as to support
economic growth whilst also aiming to balance the
government budget within a reasonable period.
There are still geopolitical risks on the economic
horizon, such as the situation in Greece, the conflict
in Eastern Ukraine and instability in the Middle
East. Another short-term source of uncertainty
is the intense elections calendar in 2015, both in
Spain and in other major nearby countries including
the United Kingdom, France and Portugal. In the
case of Spain, maintaining political stability and
guaranteeing governability is important.
The positive trend held firm in the early months of
2015, as demonstrated by indicators such as price
stability, the increase in real estate transactions,
the drop in default rates and the improved flow of
credit in the financial sector.
With regard to Banca March, our robust financial
ratios continue to demonstrate the strength of our
unique business model: we have one of the highest
levels of solvency in the sector and the lowest NPL
rate, 4.5% in December 2014, with a coverage ratio
of 82.9%.
Banca March has emerged from the crisis stronger,
thanks to its own particular way of doing business,
which is based on personal relationships, mutual
LETTER FROM THE CHAIRMAN
7
trust, co-investment of customers and shareholders
in the same assets, wealth preservation and longterm sustained profitability. This commitment to
creating sustainable value is an essential part of
Banca March, the only completely family-owned
Spanish bank.
In March 2015, Banca March received notification
from Moody’s rating agency that its rating is under
review for a possible upgrade. The bank currently
has a Baaa3/P-3 debt and deposit rating and a
financial strength rating of D+. Banca March is one
of just seven Spanish banks that are currently rated
as investment grade.
The business registered an outstanding performance
in 2014 in all strategic areas. In Private Banking and
Wealth Management the business volume grew by
18.8% and the number of customers increased by
25.1%.
March Asset Management, the Group’s asset
management subsidiary, closed last year with a
32.5% increase in assets under management. March
Asset Management is the third largest Spanish asset
manager by volume of AuM in SICAVs, with 2,644
million Euros at December 2014, representing a
8
2014 ANNUAL REPORT
year on year increase of 39.6%. As for the number
of SICAV, the AM house had 137 at the end of 2014,
up 23% on the end of 2013.
specialist areas such as Capital Markets, and
through our subsidiaries 360 CORPORATE and
March JLT.
At the end of 2014, Banco Inversis, which is whollyowned by Banca March, began its new venture
specialising in offering services to institutional
clients. Banco Inversis has the objective of
strengthening its range of services for both Spanish
and international financial institutions, and boosting
its capital markets division.
Banca March is undergoing a process of
transformation in order to meet the demands
of 21st Century customers, who need a dynamic,
flexible bank with cutting-edge technology.
Our objective is to consolidate our position as a
leading Private Banking and Corporate Advisory
provider, spearheading the concept of responsible
management in Spain, whilst continuing to gain
market share in the Balearic Islands. We have a
strong position in high net worth management and
we want to expand that business model and offer
that expertise to all private Banking customers.
In Corporate Banking, we are undertaking a
transformation process in the advisory services
offered to medium-sized and family companies,
providing a range of products with more added
value beyond strict financing: disintermediation of
balance sheets, mergers and acquisitions and risk
hedging. This unique model allows us to establish
long-term links with our customers through
At the end of last year, Banca March carried out
a strategic revision of its brand, which was an
important milestone in this transformation. The new
logo, an “M” made up of 3 triangles, represents an
alignment of the interests of customers, employees
and shareholders, the three pillars of Banca March’s
business philosophy, and symbolises joint growth.
The bank is investing heavily in technology and
human resources, seeking to establish a corporate
culture which underpins growth. Likewise, quality
rating systems are being implemented in all the
business areas which will serve as a reference
for ongoing improvements and the search for
excellence in customer service.
million Euros in 2014, a 6.3% increase on the 226.9
million Euros reported in 2013. 2014 saw intense
investment activity, with highlights including the
acquisition of shares in Bolsas y Mercados and
Viscofan and the increases in our positions in Indra
systems and Ebro foods. Corporacion financiera
Alba has a fairly positive outlook for its affiliated
companies in 2015, thanks to the new backdrop of
economic recovery in Spain and low financing costs
which, together with the significant international
expansion efforts carried out over recent years,
should translate into a guaranteed improvement in
results.
Finally, I wish to express my thanks to the members
of the Banca March team; I truly believe that their
hard work and dedication will help us to continue
to consolidate our unique business model and
allow our customers, employees and shareholders
to continue to grow together.
Carlos March Delgado
Chairman
Corporación Financiera Alba, the Group’s investment
company, obtained a consolidated net profit of 241.3
LETTER FROM THE CHAIRMAN
9
BOARD OF
DIRECTORS
EXECUTIVE
COMMITTEE
RISKS
COMMITTEE
AUDIT
COMMITTEE*
Chairman
Mr. Carlos March Delgado (proprietary)
Chairman
Mr. Juan March de la Lastra
Chairman
Mr. Juan March de la Lastra
Chairman
Mr. Luis Javier Rodríguez García
Vice-chairman
Mr. Juan March de la Lastra (proprietary)
Members
Mr. José Nieto de la Cierva
Mr. Juan March Juan
Mr. Moisés Israel Abecasis
Mr. Santos Martínez-Conde Gutiérrez-Barquín
Mr. Ignacio Muñoz Pidal
Members
Vice-chairman
Mr. Antonio Matas Segura
CEO
Mr. José Nieto de la Cierva (executive)
Directors
Mr. Juan March Delgado (proprietary)
Mr. Juan March Juan (proprietary)
Mr. Juan Carlos Villalonga March (proprietary)
Mr. Javier Vilardell March (proprietary)
Mr. Jorge Bergareche Busquet (executive)
Mr. Albert Esteve Cruella (independent)
Mr. Moisés Israel Abecasis (independent)
Mr. Santos Martínez-Conde Gutiérrez-Barquín (executive)
Mr. Antonio Matas Segura (external)
Mr. Ignacio Muñoz Pidal (independent)
Mr. Luis Javier Rodríguez García (independent)
Company secretary
Mr. José Ignacio Benjumea Alarcón (executive)
Secretary
Mr. José Ignacio Benjumea Alarcón
Secretary
Members
Secretary
* As of 30 April 2015
REMUNERATION
AND APPOINTMENTS
COMMITTEE
Chairman
Members
Mr. Albert Esteve Cruella
Mr. Moisés Israel Abecasis
Secretary
10
2014 ANNUAL REPORT
STRUCTURE OF BOARD AND COMMITTEES
11
2014.
GLOBAL GROWTH
REMAINED BELOW HISTORIC
AVERAGE
The global economy closed 2014 with growth of
3.3%, making it the third consecutive year with
growth below the average over recent decades.
It is worth highlighting that 2014 saw increased
disparity between the economic cycles of the main
economic blocs.
Among the developed economies, the US economy
accelerated and its GDP for 2014 was up 2.4%
year-on-year, whilst in the Eurozone growth
remained weak – around 0.8% – and Japan went
through a recession. In the emerging world, China’s
economy continued to head towards a soft landing
and forecasts in India improved after a change of
government, whilst Brazil and Russia performed
worse.
Globally, moderate growth and low use of
productive capacity – reflected in many economies
through still high unemployment rates – slowed
down inflation. Likewise, the drop in crude oil
prices during the second half of the year led to a
substantial reduction in energy costs, which drove
the CPI down. In the United States, the CPI grew by
1.6% year on year, whilst in the Eurozone inflation
was very low, with an average of 0.4% in 2014,
fuelling fears of deflation in the region. In the large
emerging economies (the BRICs - Brazil, Russia,
India and China) inflation was around 4.2%, but with
major imbalances once again: in China the CPI fell to
2%, whilst in Brazil it stood at 6.3% and in Russia it
increased to 7.8% due to the sharp depreciation of
the rouble.
RISE IN GDP. LEADING ECONOMIES
INFLATION TRENDS
Against this backdrop of moderate growth and low
inflation, monetary policy remains accommodative.
The ECB implemented a series of stimulus
measures: it cut official interest rates to a new low
(0.05%), pushed deposit rates in negative territory,
offered new targeted longer-term refinancing
operations (TLTROs) and finally implemented an
asset purchase programme. The Bank of Japan also
continued with stimulus measures, expanding its
balance sheet by between 60 and 80 trillion yen
per year.
The Federal Reserve was able to end the QE3
stimulus programme launched in 2012 thanks to
an upturn in economic activity in the United States.
However, official rates remained at record lows and
10.0
5.0
8.0
4.0
2013
3.0
2014
2.0
2015 p
1.0
6.0
4.0
2.0
0.0
0.0
-1.0
-2.0
-2.0
World
Developed
Emerging
USA
Eurozone
Spain
Source: IMF and Banca March
12
2014 ANNUAL REPORT
2007
2008
2009
BRIC inflation (YoY)
2010
2011
2012
2013
2014
US and Eurozone inflation (CPI YoY)
Source: Bloomberg and Banca March
THE ECONOMY IN 2014
13
the Fed continues to reinvest principal payments
upon maturity, meaning its monetary policy remains
expansionary.
As for the large emerging economies, Russia
suffered capital flight due to geopolitical tension,
leading the Central Bank to intervene in the market
by using its dollar reserves and raising official rates
- from 5.5% to 17% - to halt the rouble’s slide. The
Central Bank of Brazil, faced with rising inflation,
raised official rates by 175 bps to 11.7%. In Asia, lower
inflationary pressure allowed for less restrictive
monetary policy in both China and India.
The year was also marked by the increase in
geopolitical tensions, with several ongoing issues
generating increased market uncertainty, including
armed conflicts like the one between Russia and
Ukraine, and the turbulence in the Middle East, with
the uprising of the Sunni militia Islamic State (IS).
In Europe, political headlines centred around the
referendum on independence for Scotland, which
resulted in a victory for the “no” campaign. This
increase in nationalist tension was also evident
in the European Parliament elections, where
Eurosceptic parties increased their presence.
In spite of the political tensions at the heart of
the Eurozone, further steps were taken in 2014 to
deepen the financial integration of the Monetary
Union. Since November, the single supervisory
Mechanism (SSM) came into operation, through
which the ECB will supervise the Eurozone’s 128
largest financial institutions. The single Resolution
Mechanism (SRM), a common fund to finance
restructuring and provide liquidity for European
financial institutions, was also created.
The fixed income markets performed well,
supported by low inflation and expansionary
monetary policies, with European markets doing
especially well. The best-rated bonds (the US and
Germany) continued to enjoy strong support and
10-year yields dropped to 0.5% for German bunds
and 2.2% for US treasury bonds. However, what
stood out the most was the drop in peripheral
sovereign credit spreads. In Spain, 10-year yields
dropped by 250 bps over the year to 1.6% and the
Spanish sovereign bond index gained 16.7%.
10 YEAR BOND YIELDS
Dec.13
Dec.14
USA
3.0%
2.2%
Germany
1.9%
0.5%
Spain
4.1%
1.6%
Italy
4.1%
1.9%
3 MONTH INTEREST RATESS
Dec.13
Dec.14
0.2%
0.2%
1.9%
0.5%
USA
(3 month Libor)
Eurozone
(3 month Euribor)
Equities also performed well, especially in
developed economies. Gains were bolstered by
profit growth: the MSCI World rate gained 2.1% with
an estimated increase in profits of 5%. By countries,
the US market outperformed the Japanese market
(11.4% vs. 7.1%), and European markets also closed
up: the Eurostoxx 600 rose by 4.3% and the Ibex35
increased by 3.7%. The exception to this strong
performance were, for the second year running,
the emerging markets: the MSCI Emerging markets
Index fell 4.6%.
In the commodities market the performance of oil
prices was key; the barrel of Brent crude plummeted
by 48% in the second half of the year due to a drop
in global demand and increased supply. This is added
to the fact that the main OPEC members (including
Saudi Arabia and Kuwait) supported these lower
prices as a method of discouraging investment in
alternative prospecting (fracking, among others).
The ensuing price war to maintain market share
quickly impacted the markets (see graphs).
Gold prices fell over the year by 1.7% to $1,274 per
ounce. Base metals performed worse, especially
copper, which dropped by 14% due to a decreased
demand from China.
In the forex market, the disparity between countries’
economic cycles was reflected in the monetary
policies they implemented, which impacted the
performance of their currencies. The main trends
were a weak Euro and weak currencies in the
emerging markets with greatest imbalances and/
or political risks, while the dollar recovered its
strength in the global markets thanks to increased
economic activity in the US.
The year 2014 closed with the Euro-Dollar rate at
1.21 EUR/USD, after the greenback rose 12%. The
Euro also depreciated (6.5%) against the Pound
Sterling to 0.77 EUR/GBP.
2014 ANNUAL REPORT
The Spanish economy picked up and over the year
the country’s GDP grew by 1.4% year on year. The
quarter-on-quarter trend was also positive, with a
sharper increase in activity in the second half of
the year.
OIL PRICES
160
140
120
100
80
60
40
20
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Brent crude prices
14
The worst-performing emerging currencies were
the Eastern European currencies, headed by the
rouble, which depreciated 46% against the dollar.
Asian currencies held firmer: the Indian Rupiah and
the Chinese Yuan fell just 2% and 2.4% against the
dollar, respectively.
2011
2012
2013
2014
THE ECONOMY IN 2014
15
This improvement in activity was driven by a greater
contribution by domestic demand, which for the
first time since 2007 contributed decimals to GDP
growth of the GDP (see graphs). This improvement
in the domestic economy is reflected in retail sales,
which closed the year up 1%, the first increase in the
last seven years.
This major improvement in economic activity
allowed for some unbalances to begin to adjust.
The labour market established a change of trend by
not destroying jobs. The unemployment rate was
down 2bp to 23.7% at the end of 2014 and more
importantly, and additional 433,900 persons were
in employment, with a year-on-year increase in the
number of people employed of 2.5%. However, the
still very high unemployment rate will continue to
hamper the economy.
The property sector showed the first signs of
stabilisation. Although the high number of homes
for sale will take years to be absorbed, the main
part of the drop in prices is now behind us. After
falling 37% from record highs, property prices
registered their first year-on-year increases since
2008 in Q2 2014.
The restructuring of the financial sector, the
measures taken by the ECB and the economic
upturn itself helped slow the increase in default
rates in the financial sector.
Public accounts are another issue that is yet to be
resolved for the Spanish economy. During the year,
and largely as a reflection of improved tax revenue,
the tax deficit was reduced to 5.5% of GDP, in line
with the government’s targets.
Finally, inflation was impacted by the high
unemployment rate and the drop in oil prices. The
CPI showed a strong downward trend, closing the
year with an average year-on-year drop of 0.2%,
compared with the 1.5% increase registered in 2013.
There were mixed data from the foreign trade
sector. Stronger domestic demand considerably
reduced the current account surplus; in 2014
Spain had a current account deficit of 0.1% of
GDP, compared to a surplus of 1.5% in 2013. The
outstanding performance of the tourism sector is
worth highlighting: the number of international
tourist arrivals hit a new annual record at 65 million,
representing a 7.1% year-on-year increase.
QUARTERLY GDP AND ECONOMIC CONFIDENCE
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
-1.5
-2.0
Mar-01
Dec-02
Sep-04
Jun-06
Quarterly GDP
Mar-08
Dec-09
Sep-11
Economic confidence
Jun-13
Mar-15
120
115
110
105
100
95
90
85
80
75
70
INFLATION
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
GDP COMPONENTS.
-1.0%
-2.0%
8.0
6.0
4.0
2.0
0.0
-2.0
-4.0
-6.0
-8.0
-10.0
Jan-05 Nov-05 Sep-06 Jul-07 May-08 Mar-09 Jan-10 Nov-10 Sep-11
CPI
2005
2006
2007
Domestic Demand
16
2014 ANNUAL REPORT
2008
2009
2010
2011
Foreign Demand
2012
2013
Core CPI
Jul-12
May-13 Mar-14
2014
THE ECONOMY IN 2014
17
THE OUTLOOK FOR 2015:
IMPROVED ACTIVITY
AND MEASURES TO
AVOID DEFLATION
The outlook for 2015 points to an acceleration in
global growth to a rate of 3.5%, which is in line with
the historic average. The factors underpinning this
positive forecast are an expansionary monetary
policy and the drop in energy costs, which will
encourage consumer spending.
The US economy is expected to lead this
improvement in economic activity, with growth
of 3.5%. In the Eurozone, the growth rate will be
modest, although the pace will gradually increase.
The depreciation of the Euro will favour the foreign
sector, whilst a less restrictive tax policy will
support domestic demand.
On the domestic scene, having begun its recovery,
Spain will see an acceleration of its growth rate to
around 3% in 2015. That said, the main challenge for
the economy will be to create more jobs in order
to reduce the high unemployment rate and also to
bring about an adjustment in the public accounts.
The emerging economies will record weaker
growth than in previous decades, but the worst
of their economic slowdown will be behind them.
By regions, Asia will continue to be the fastestgrowing area, led by its two great economies: China
and India. In Latin America, lower commodity prices
will slow growth, and geopolitical risks and the
foreseeable recession in Russia are negative factors
for Eastern Europe.
18
2014 ANNUAL REPORT
The major drop in crude oil prices will keep global
inflation under control. The base effect of lower
energy costs will remain at least until the middle
of the year. As a result, the main risk for developed
economies with less dynamic growth (the Eurozone
and Japan) is a situation of deflation. However, we
believe that this will be avoided thanks to the
stimulus measures implemented by Central Banks
and improved global growth.
This core scenario is not free of danger. One of the
main risks in 2015 is exogenous to fundamental
economics and is centred on the busy elections
calendar in Europe. Likewise, geopolitical risks
will remain present, through the ongoing armed
conflicts. We also foresee greater uncertainty
derived from disparity in monetary policies: less
stimulus measures by the Fed, while the ECB and
the Bank of Japan will continue to seek to avoid
deflation. The effect of these monetary policies
on the real economy and the financial markets
could be worse than expected, above all due to the
normalisation of interest rates by the Fed.
THE OUTLOOK FOR 2015
19
01
ECONOMIC
AND FINANCIAL REPORT
20
2014 ANNUAL REPORT
Key figures
22
Banca March Group
24
Analysis of the consolidated balance sheet
30
Customer funds
32
Loans to customers
34
Capital markets
36
Investments in affiliated companies
37
Consolidated income statement
38
21
KEY
FIGURES
BANCA MARCH GROUP
BANCA MARCH, S.A.
In millions of Euros
2014
2013* CHANGE
KEY BUSINESS FIGURES
Shareholders’ equity
2014
2013* CHANGE
874.9
757.8
117.1
KEY BUSINESS FIGURES
3,793.5
3,486.8
306.7
14,976.5
13,446.7
1,529.8
Customer deposits
9,519.5
9,031.3
488.2
Loans to customers
6,870.5
7,323.4
-452.9
Loans to customers
6,805.6
7,074.2
-268.6
2,260.3
2,067.9
192.4
11,899.7
11,334.4
565.3
15,459.2
15,398.7
60.5
Net interest income
157.7
134.9
22.8
Gross income
307.2
251.6
55.6
84.0
2.4
81.6
1,306
1,307
No. of branches
209
214
No. of ATMs
489
480
Customer deposits and Off-BalanceSheet AuM
Total assets
Total assets
RESULTS
RESULTS
Net interest income
209.8
177.3
32.5
Gross income
617.9
452.7
165.2
Operating income
319.4
145.2
174.2
Consolidated pre-tax income
327.9
230.6
97.3
NUMBER OF EMPLOYEES AND POINTS OF SALE
Profit attributable to the Group
114.9
51.2
63.7
No. of employees
CAPITAL ADEQUACY AND FINANCIAL STRENGHT (%)
Total capital ratio
19.7
22.3
4.5
5.5
82.9
76.1
1,535
1,503
No. of branches
209
214
No. of ATMs
489
480
NPL ratio
NPL coverage ratio
Operating income
NUMBER OF EMPLOYEES AND POINTS OF SALE
No. of employees
*The implementation of the IFRIC 21 interpretation on levies, the accounting principle for outflows imposed on banks by the Deposit
Insurance Scheme was modified in 2014. This caused retroactive adjustments in the figures from 2013.
22
2014 ANNUAL REPORT
23
BANCA MARCH
GROUP
TOTAL BRANCHES
209
COMMERCIAL NETWORK
The structure of Banca March Group reflects
the development of two activities: banking and
investment in industrial holdings. Banca March,
S.A., the parent company, has been operating
in the banking sector since 1926, specialising in
wealth management, private banking and corporate
banking with a particular focus on family businesses
and entrepreneurs, as well as high net worth
individuals.
The Banca March Group also operates in the
insurance sector through March Unipsa Correduría
de Seguros, S.A. and March Vida, S.A. de Seguros
y Reaseguros, and the asset management sector
through March Gestión de Fondos, S.G.I.I.C.,
S.A., March Gestión de Pensiones, S.G.F.P., S.A.,
Artá Capital S.G.E.C.R., S.A. and Inversis Gestión
S.G.I.I.C.. It sells financial products and services
for private banking clients through Consulnor and
offers corporate financial advisory services 360
CORPORATE.
Last year saw the completion of the sale process of
the retail private banking business of Banco Inversis,
S.A. to Andorra Banc Agrícol Reig, S.A. for 179.8
million Euros. At 31 December 2014, the Bank holds
100% of the shares of Banco Inversis, S.A. which,
once it has split from the retail private banking
business, will carry out institutional business only.
Elsewhere, on 12 July 2013, the Bank agreed to sell
50% of Banco Inversis, S.A. to Sociedade Comercial
Orey Antunes, S.A. following the fulfilment of
24
2014 ANNUAL REPORT
a series of expected prior conditions The Bank
expects this sale to go through during 2015.
31/12/201431/12/2013
Retail and Private Banking 196
Wealth management 7
Large Companies 4
International Branches 2
201
7
4
2
Total branches
214
209
GEOGRAPHICAL NETWORK
The Group has a commercial network of 209
branches, two of which are located in London and
Luxembourg. Seven centres are specialist wealth
management branches, located in the Basque
Country, the Levante region, Madrid, Catalonia, the
Balearic Islands, the Canary Islands and Aragon,
plus the Luxembourg office. Banca March has four
specialist corporate banking centres located in
Palma de Mallorca, Madrid, Barcelona and Valencia,
as well as the specialist Banca March Private
Banking branches and the Consulnor offices. This
commercial network allows us to offer tailored
advisory services to our customers. In 2014, two new
Retail and Private Banking branches were opened in
Catalonia, specifically, in Lleida and Girona.
31/12/201431/12/2013
The Balearic Islands
The Canary Islands Catalonia
Valencia
Madrid
Andalusia
Zaragoza
Bilbao
London
Luxembourg
Total branches 118
120
37
37
11
9
1114
1414
1214
22
22
11
11
209
London
Luxembourg
214
Bilbao San Sebastián
Zaragoza
Vitoria
Lleida
Girona
La Rioja
Lanzarote
La Palma
Tenerife
Fuerteventura
Gran Canaria
Cádiz
Valencia
Málaga
Alicante
Tarragona
Barcelona
Ibiza
Formentera
Menorca
Mallorca
ECONOMIC
GRUPO BANCA
MARCH AND FINANCIAL REPORT
25
Investment in industrial holdings was undertaken
through Corporación Financiera Alba, S.A which
is controlled by Banca March with a direct 28.9%
stake.
Control by Banca March, S.A. is exercised by
Juan, Carlos, Gloria and Leonor March Delgado,
who together own 100% of the share capital,
without any of them, whether on the basis of their
shareholdings or any kind of agreement, doing this
individually.
MARCH JLT
CORREDURÍA
DE SEGUROS
75.0%
MARCH
DE
INVERSIONES
100%
MARCH
GESTIÓN
DE PENSIONES
100%
MARCH
CANARIAS
100%
MARCH
GESTIÓN
DE FONDOS
(MARCH A.M.)
100%
IGALCA
100%
MARCH
VIDA
100%
360
CORPORATE
72.0%
MARCH
INMUEBLES
100%
CONSULNOR
47.2%
MARCH
PATRIMONIOS
100%
Fully consolidated
holdings
2014 ANNUAL REPORT
BANCO
INVERSIS
100%
INMOBILIARIA
MARHIGAL
75.0%
Banca March, S.A. together with its shareholders
control 66.7% of Corporación Financiera Alba, S.A.
26
CORPORACIÓN
FINANCIERA
ALBA
28.9%
ACS
13.9%
ACERINOX
23.1%
EBRO
FOODS
10.0%
CLÍNICA
BAVIERA
20.0%
INDRA
SISTEMAS
12.5%
BME
8.3%
VISCOFAN
6.8%
ANTEVENIO
14.5%
ROS ROCA
17.4%
OCIBAR
21.7%
PEPE JEANS
12.0%
MECALUX
24.4%
PANASA
26.5%
FLEX
19.7%
EN CAMPUS
32.7%
SIRESA
CAMPUS
17.4%
Holdings accounted
for using the equity
method
Financial assets
measured at
fair value
Non-current
assets held
for sale
27
The investments of Corporación Financiera Alba,
S.A. focus on the management of real estate rental
assets and on owning stable, long-term holdings
in sector leading companies, among which the
following stakes are noteworthy: 13.9% in ACS,
Actividades de Construcción y Servicios, S.A., 23.1%
in Acerinox, S.A., 12.5% in Indra Sistemas, S.A., 10%
in Ebro foods, S.A. and 8.3% in Bolsas y Mercados
Españoles, S.A.
Likewise, through Deyá Capital, a development
capital vehicle, the Group offers its customers
opportunities to acquire holdings in co-investment
projects. At December 31, 2014 the Group has
various holdings for this purpose in important nonlisted companies: Mecalux, S.A., Pepe Jeans, S.A.,
Ros Roca Environment, S.L., Ocibar, S.A., Panasa,
Flex, S.A., student housing manager EnCampus, S.A.
and Siresa Campus, S.A.
At 31 December 2014 total assets on the
consolidated balance sheet are up 0.4% to
15,459.2 million Euros. Loans and discounts stand
at 9,385.9 million Euros, 5.2% higher than the
previous financial year, while managed funds have
risen to 14,976.5 million Euros, an 11.4% increase
in comparison to the previous financial year. The
Group’s equity stands at 1,718.8 million Euros.
During the 2014 financial year the group has
registered a substantial increase in net interest
income, which rose by 32.5 million Euros to 209.8
million Euros, reflecting an 18.3% increase in
comparison with the previous financial year. At
the same time the asset management, insurance
and specialist financial product business generated
128.9 million Euros in fees, representing a 21%
increase in comparison with the previous financial
year. Capital gains obtained through the sale of 2.4%
of Actividades de Construcción y Servicios, S.A. for
the sum of 95.9 million Euros must be added to
the result of the operating activity, which therefore
rises to 319.4 million Euros. The profit attributable
to the Group for the 2014 financial year amounted
to 114.9 million Euros.
As of 31 December 2014, for the purposes of
calculating the capital ratio, the Banca March Group
proportionally includes 28.9% of Corporación
Financiera Alba. In compliance with the regulations
in force on 31 December 2014, the total Group capital
ratio is 19.7%. Capital requirements amounted to
652.3 million Euros, bringing Banca March’s capital
surplus to 952.3 million Euros.
The NPL ratio (credit risk and OBS exposure) stood
at 4.5% at the end of 2014, significantly lower than
the sector average. The NPL coverage ratio stood
at 82.9%.
NPL RATIO
AND NPL COVERAGE RATIO
31/12/1431/12/13
NPL ratio
NPL coverage ratio
CAPITAL EQUITY RATIO
30
22.3%
19.7%
20
82.9%
76.1%
NPL COVERAGE RATIO
10
100
8
90
6
5.3%
8%
8%
8%
2012
2013
2014
5
80
5.5%
4.5%
4
15
10
5.5%
NPL RATIO
27.1%
25
4.5%
82.9%
76.1%
70
60
2
50
0
Capital equity ratio
79.2%
0
2012
2013
NPL ratio
2014
2012
2013
2014
NPL coverage ratio
Minimum required
under regulations
CAPITAL EQUITY RATIO
2014
%
CET1
1,596.719.6
Tier 1 Capital
1,564.6
Tier 2 Capital
40.0
Tier Total
1,604.6
Surplus CET 1
944.5
Surplus Tier Total
952.3
Capital requirements
652.3
28
2014 ANNUAL REPORT
19.7
29
CONSOLIDATED BALANCE SHEET
ANALYSIS
OF THE CONSOLIDATED
BALANCE SHEET
-73.3
Trading portfolio
190.1
330.4 -140.3 - 42.5
284.4
252.1
32.3
100.0
Available-for-sale financial assets 1,759.8
1,903.8
-143.9
-7.6
Debt securities 1,580.1
1,812.4
-232.3
-12.8
Other equity securities
179.8
91.3
88.4
96.8
Loans and discounts
9,385.9
8,924.6
461.3
5.2
Deposits with credit institutions
2,545.4
1,636.1
909.3
55.6
Loans to customers
6,840.5
7,288.5
-448.0
-6.1
Investment portfolio held to maturity 105.5
71.9
33.6
46.7
Hedging derivatives 208.2
173.5
34.8
- 20.0
391.4
410.2
-18.8
-4.6
2,260.3
2,067.9
192.4
9.3
0.6
0.6
0.0
-4.5
328.7
329.7
-1.0
-0.3
7.6
23.3
-15.8
-67.6
326.9
225.2
101.7
45.1
42.1
57.1
-15.0
- 26.2
Reinsurance assets Tangible assets Intangible assets Tax assets TOTAL
Trading portfolio In millions of Euros
10
20
3,181
3,225
2,724
2,620
6,841
7,289
2,713
2,265
2014
2013
Financial liabilities at amortised cost Deposits with central banks
194.8
115.3
79.4
68.9
10,234.5
10,687.3
-452.7
-4.2
0.0
639.1
-639.1
-100.0
812.7
951.8
-139.1
-14.6
8,743.6
8,348.5
395.1
4.7
Credit institution deposits
1,483
Customer deposits
3,794
3,487
Debts represented by tradable securities 557.5
489.1
68.4
14.0
9,302
8,838
Other financial liabilities 120.8
258.8
-138.1
-53.3
22.8
20.8
2.0
9.5
1,055.0
938.3
116.7
12.4
10
0
60.5 0.4
1,550
Hedging derivatives Liabilities under insurance contracts 5
5
0
15
15,459.215,398.7
BREAKDOWN OF LIABILITIES
15
%
-460.7
Other assets 20
Absolute
628.4
BREAKDOWN OF ASSETS
31/12/2013*
167.7
Other financial assets at fair value through P&L Customer deposits were up 4.7% to 8,743.6 million
Euros. Equity stood at 3,793.5 million Euros on 31
December 2014.
31/12/2014
Change
Cash and balances with central banks
Non-current assets held for sale On 31 December 2014, consolidated balance sheet
assets stood at 15,459.2 million Euros, 0.4% more
than the previous year. Loans to customers were
6,840.5 million Euros, down by 6.1% year-on-year.
813
1,591
2014
2013
Other assets
Investments in affiliate companies
Other liabilities
Loans to customers
Interbank
Customer deposits
Interbank
Provisions
51.6 37.9 13.736.1
Tax liabilities 64.6
68.8
-4.2
-6.1
Other liabilities 42.5
43.6
-1.1
-2.5
Valuation adjustments -16.3
-45.8
29.5
-64.4
1,718.8
1,666.5
52.3
3.1
2,091.0
1,866.1
224.9
12.0
Minority interests TOTAL
15,459.215,398.7
60.5 0.4
* The implementation of the IFRIC 21 interpretation on levies, the accounting principle for outflows imposed on banks by the Deposit
30
2014 ANNUAL REPORT
31
CUSTOMER
FUNDS
CUSTOMER FUNDS
Change
31/12/2014
31/12/2013
Absolute
%
9,741.4
9,229.1
512.3
5.6
9,516.1
9,021.0
495.1
5.5
2,947.4
2,393.5
553.9
23.1
Time deposits
5,116.6
5,423.7
-307.1
-5.7
Reverse repurchase agreements
454.3
323.2
131.1
40.6
Insurance-based saving plans
997.8
880.6
117.2
13.3
225.3
208.1
17.2
8.3
557.5
489.1
68.4
14.0
555.9
483.6
72.3
15.0
55.9
183.6
-127.7
-69.6
500.0
300.0
200.0
66.7
1.6
5.5
-3.9
-70.9
OBS ASSETS UNDER MANAGEMENT
4,677.6
3,728.5
949.1
25.5
Investment funds and private equity
1,099.6
1,034.0
65.6
6.3
3,262.7
2,405.1
857.6
35.7
315.3
289.4
25.9
8.9
TOTAL CUSTOMER FUNDS MANAGED
14,976.5
13,446.7
1,529.8
11.4
The Group manages off-balance-sheet funds
(investment funds and private equity , SICAV
and private equity, pension plans) through Grupo
Artá Capital, S.G.E.C.R., March Gestión de Fondos,
S.G.I.I.C. (March A.M.) and March Gestión de
Pensiones E.G.F.P.
MANAGED FUNDS
CUSTOMER FUNDS
On-balance sheet balances Demand accounts
Valuation adjustments
MARKETABLE DEBT SECURITIES
On-balance sheet balances
Commercial paper and trade bills
Mortgage-backed securities
As of 31 December 2014, customer funds managed
by the Group stood at 14,976.5 million Euros, an
increase of 1,529.8 million Euros compared to the
previous financial year. Increases in absolute terms
correspond both to clients’ bank balances, which
amount to 9,741.4 million Euros with an increase of
512.3 million Euros or 5.6% versus the previous year,
and to off-balance sheet assets under management
(AuM) which amount to 4,677.6 million Euros, up
by 949.1 million Euros or 25.5%.
During 2014 the Bank registered the “XII Commercial
Paper Programme” for a nominal amount of 1 billion
Euros. This corporate paper is represented by book
entries and issued at a discount, with no restrictions
on free transferal. The notes have a nominal unit
value of 1,000 Euros. The maturities of the paper
range from 3 working days to 364 calendar days.
The nominal interest rate is agreed by the issuer
and the holder of each note, and is set individually
for each note or group of notes. The paper is traded
on Spain’s AIAF corporate debt market.
SICAV and private equity
Pension plans
15
4,678
3,729
12
558
489
9
6
3
0
9,741
9,229
2014
2013
Off-balance
sheet assests
32
2014 ANNUAL REPORT
Marketable debt
securities
Customer
deposits
33
LOANS
TO CUSTOMERS
On 31 December 2014 the balance of loans to
customers managed by the Group was 6,870.5
million Euros.
During 2014, the balance of mortgage loans declined
by 263 million Euros, to 3,810.8 million Euros at 31
December 2014, due to the reduction in the Group’s
exposure to the property development sector. On
the other hand, other secured loans, primarily with
cash and securities as collateral, increased by 217.4
million Euros to 428.9 million Euros at the end of
2014. The balance of other term loans remains at
2,064.5 million Euros.
At 31 December 2014, gross impaired assets were
down 89.6 million Euros to 299.3 million Euros.
The NPL ratio (credit risk and OBS exposures) was
4.5% at the end of 2014, significantly lower than
the sector average. The NPL coverage ratio stood
at 82.9%.
LOANS TO CUSTOMERS
Change
31/12/2014
31/12/2013
Absolute
%
6,810.8
7,227.4
-416.6
-5.8
184.9
100.3
84.6
8.3
Secured loans
4,239.7
4,285.3
-45.6
-1.1
Mortgage
3,810.8
4,073.8
-263.0
-6.5
428,9
211,5
217,4
102,8
2,064.5
2,604.8
-540.3
-20.7
Demand and miscellaneous debtors
157.9
140.6
17.3
12.3
Financial leasing
147.2
78.9
68.3
86.6
16.6
17.5
-0.9
-5.1
299.3
388.9
-89.6
-23.0
9.2
8.9
0.3
3.4
-248.8
-301.8
53.0
-17.6
6,870.5
7,323.4
-452.9
-6.2
CREDIT ARRANGEMENTS
Trading portfolio
Other collateral
Other term loans
GROSS LOANS MANAGED
Other financial assets
8
6
368
299
148
5
2,064
7
267
389
79
2,605
4
Impaired assets
Less: impairment losses
Total managed loans
of which: securitised assets excluded
from the balance sheet
3
30.1
34.9
2
1
4,240
0
2014
34
2014 ANNUAL REPORT
4,285
2013
Other loans
Impaired assets
Financial leasing
Other term loans
Secured loans
35
CAPITAL
MARKETS
As of 31 December 2014 the balance of available
liquid assets rose by 64%, totalling 3,889.2 million
Euros. Available liquid assets of Banca March
include interbank balances plus liquid assets held
INVESTMENTS
IN AFFILIATED COMPANIES
in portfolio, in addition to the balance available on
the European Central Bank facility, which is a credit
line obtained by pledging certain assets to the Bank
of Spain.
The Group continues to follow its strategy of
holding stable, long-term positions in well-run
sector leaders with a strong international presence.
Details of the investment portfolio as of 31
December 2014 and 2013 are as follows:
INVESTMENTS IN AFFILIATED
COMPANIES
31/12/2014
Group’s voting rights Cost
31/12/2013
Group’s voting
rights
Cost
CONSOLIDATED COSTS VALUE:
AVAILABLE LIQUIDITY ASSETS
31/12/2014
31/12/2013
Change
Absolute
%
ACS, Actividades de construcción
y servicios, S.A.
13.9%
737.6
16.3%
931.5
Acerinox, S.A.
23.1%
678.7
23.5%
618.9
Indra Sistemas, S.A.
12.5%
209.4
11.3%
277.3
Antevenio, S.A.
0.0%
0.0
18.7%
2.0
Cash 83.2
105.2
-22.0
-20.9
Viscofan, S.A.
6.8%
132.6
0.0%
0.0
Central banks (assets)
84.5
523.2
-438.7
-83.8
Ebro Foods, S.A.
10.0%
249.5
8.2%
191.2
0.0
-639.1
639.1
-100.0
Clínica Baviera, S.A.
20.0%
27.9
20.0%
37.2
1,153.7
796.1
357.6
44.9
Consulnor, S.A.
47.2%
10.0
47.2%
9.8
2,545.4
1,636.1
909.3
55.6
Bolsas y Mercados, S.A.
8.3%
214.6
0.0%
0.0
-812.7
-951.8
139.1
-14.6
Central banks (liabilities)
Marketable securities
Financial Institutions (Assets)
Financial Institutions (Liabilities) TOTAL2,260.3 2,067.9
TOTAL NET LIQUID ASSETS
Available on Bank of Spain’s credit line
TOTAL AVAILABLE LIQUIDITY
36
2014 ANNUAL REPORT
3,054.1
1,469.7
1,584.4
107.8
835.1
901.4
-66.3
-7.4
3,889.2
2,371.1 1,518.1 64.0
Through Deyá Capital, a development capital
vehicle, the Group holds a portfolio of investments
in leading non-listed companies, in which our clients
have co-invested: Mecalux, S.A., Pepe Jeans, S.A.,
Ros Roca Environment, S.L., Ocibar, S.A., Panasa,
Flex, S.A., student housing manager EnCampus, S.A.
and Siresa Campus, S.A.
37
CONSOLIDATED
INCOME STATEMENT
NET PROFIT ATTRIBUTABLE
TO THE BANCA MARCH GROUP
31/12/2014
31/12/2013*
NET INTEREST INCOME
Change
Absolute
%
209.8
177.3
32.5
18.3
4.5
2.4
2.1
89.1
for using the equity method
150.4
149.4
1.0
0.7
Net fees 128.9 106.5
22.4
21.0
Gains on financial transactions (net)
130.6
21.1
109.5
519.0
22.4
14.8
7.6
51.2
Other operating income 194.6
460.2
-265.6
-57.7
Other operating expenses 223.3
479.0
-255.7
-53.4
GROSS INCOME 617.9
452.7
165.2
36.5
Administrative expenses 187.4
177.0
10.4
5.9
Depreciation and amortisation 19.1 19.2
-0.1 -0.5
Provisions
19.3
Revaluation (impairment) of financial assets 72.7
105.6
-32.9
-31.2
319.4
145.2
174.2
120.0
70.4
0.0
70.4
-
97.3
118.9
-21.6
-18.2
-18.4
-33.6
15.2
-45.2
327.9
230.6
97.3
42.2
55.9
28.8
27.1
94.1
272.0
201.8
70.2
34.8
10.8
0.6
10.2
1590.1
282.8
202.4
80.4
39.7
Profit or loss attributable to minority interests
167.9
151.2
16.7
11.1
Profit or loss attributable to the parent company 114.9
51.2
63.7
124.3
Return on equity investments
Results from affiliated companies accounted
Profit attributable to the Group on 31 December
2014 stood at 114.9 million Euros. All income
increased substantially over the year thanks to
increases in net interest, fees and gains on financial
transactions. Income was also boosted by lower
loan loss provisions thanks to the quality of debt
and the results of restructuring the balance sheet,
and by the capital gains generated through the
sale of 2.4% of Actividades de Construcción y
Servicios, S.A.
Net interest income rose by 32.5 million Euros to
209.8 million Euros. Net fees generated through
collection and payment services - basically through
drafts, credit and debit cards and payment orders
- and fees generated through bank guarantees and
securities-related services and sales of insurance,
investment funds and pensions, and specialised
financial products, increased by 21%, reaching 128.9
million Euros.
Results from companies accounted for using the
equity method stood at 150.4 million Euros on
31 December 2014. Likewise gains on financial
transactions, mainly from trading activity and the
sale of available-for-sale portfolio securities, as well
as the increase in value of other financial assets,
at fair value through profit and loss, stands at
130.6 million Euros. Gains on foreign exchange
amounted to 22.4 million Euros. As a result, gross
income at 31 December 2014 was up 36.5% to 617.9
million Euros.
Personnel and other general administration costs
rose to 187.4 million Euros on 31 December 2014,
up 5.9% compared to the previous year. The lower
loan loss provisions due to the quality of debt
and the results of restructuring the balance sheet
allowed for a reduction of 32.9 million of Euros to
72.7 million Euros. Operating income stood at 319.4
million Euros on 31 December.
In 2014, the Group recorded 70.4 million Euros
under impairment of equity investments. The Group
also sold 2.4% of its stake in ACS, Actividades de
Construcción y Servicios, S.A. for 234.9 million
Euros, with capital gains of 95.9 million Euros. Both
amounts have been registered as “Gains (loss) on
the disposal of assets not classified as non-current
assets held for sale.”
Gains on foreign exchange (net) OPERATING INCOME
Revaluation (impairment) on other assets
not classified as non-current assets held for sale
Gains (losses) of non-current assets for
sale, not classified as discontinued operations
PROFIT BEFORE TAXES Tax on profit PROFIT FOR THE FINANCIAL YEAR FROM
Profit from discontinued operations
FEES COLLECTED
200
120
209,8
150
128,9
600
106,5
80
60
100
700
100
177,3
CONSOLIDATED PROFIT FOR THE YEAR GROSS INCOME
140
250
13.7242.4
Gains (losses) on the disposal of assets
CONTINUING OPERATIONS
NET INTEREST INCOME
5.6
617,9
500
452,7
400
40
50
0
0
2014
38
300
20
2013
2014 ANNUAL REPORT
0
2014
2013
2014
2013
39
02
MAIN BUSINESS
AREAS
Wealth management
42
Retail and Private Banking
44
Large companies
51
Subsidiaries
56
March A.M.
56
March JLT
58
March Vida
59
360 CORPORATE
60
Consulnor
61
62
Banco Inversis
40
2014 ANNUAL REPORT
LA ECONOMÍA EN 2014
41
WEALTH
MANAGEMENT
and the number of clients rose by 20% compared
to the previous year.
The biggest milestone in 2014 was the opening
of the new office in Logroño. Since Banca March
entered Consulnor’s capital, the Logroño office
has doubled its assets under management and the
number of customers. For that reason, and to
continue promoting growth and provide better
customer service, a change of office was necessary
to ensure access to adequate facilities for the new
situation.
Grupo March continues to be the third largest
Spanish bank by assets under management in
SICAVs, according to Inverco Ranking. on 31
December 2014 March Gestión had 129 SICAVs and
AuM of over 2,600 million Euros.
Wealth management is the area which specialises in
providing services for family business owners, and
high-net worth individuals and families who require
personalised monitoring of both their savings and
their investments over the medium and long term.
Our main goal is to help our customers preserve
and increase their wealth, as well as passing it on to
future generations.
Our competitive edge is based on the fact that we
have been working with the same business model
since 1926 and we are the only private family bank
in Spain. We offer vast experience and robust
solvency thanks to prudent, excellent management
and a relationship of mutual trust with our
clients, investing with them as proof of our strong
commitment.
We offer a wide range of products and services,
including discretional management, pension
and retirement planning products, financing,
structured products, investment funds and all the
traditional banking products. We also believe in
open architecture to allow for independent, flexible
advisory services, and we therefore also sell other
international financial institutions’ products. We
offer a comprehensive advisory service, not only
from a financial perspective, but also in terms of
business and asset-planning and insurance.
2014 was a year of strong management results.
Peripheral and high yield bonds, equities and the
dollar all contributed to a strong performance.
42
2014 ANNUAL REPORT
Prudence, austerity and careful management of
reputation risk have been allowed us to emerge
stronger from the crisis. Our robust results are
due both to the considerable growth in off-balance
sheet funds, with a 30% increase in 2013, mainly in
funds and SICAV, and to the 20% increase in the
number of customers versus 2013.
With regard to the performance of co-investment
products, the main landmark of the year was the
divestment of the company Alcudia, which owned
buildings and branches leased to the bank BBVA
through sale and leaseback transactions, via the
sale of these buildings to the SOCIMI (REIT) Merlin
Properties. This deal allowed investors to double
their initial investment in 5 years.
At December 2014, EnCampus - a project created at
the end of 2012 to create a portfolio of university
residences in Spain by acquiring existing residences
and building new ones - had invested 75% of its
equity, with 75% of its investment concentrated
in Madrid, Barcelona, the Basque Country and
Valencia. Some residences have been refurbished
and others are in the process of being refurbished.
2014 also saw the inauguration of the La Salle
residence in Barcelona and the Santa Maria del
Estudiante residence in Madrid.
In 2014 the Mezzanine debt fund managed by
Oquendo Capital invested in Ingesport, a group that
manages municipal sports centres under the brand
name Go Fit.
Looking forward to 2015, the Wealth Management
area’s objectives include further expanding its
customer base and consolidating the brand,
especially in Catalonia, where the company still has
huge growth potential, and in the Basque Country
through Consulnor, as well as reinforcing and
optimising the Luxembourg office.
As of 31 December, the Wealth Management division
had over 6,376 million Euros under management,
up 17% year on year.
Wealth Management in all regions performed
extremely well in terms of attracting new
business volume and new clients. This growth was
distributed as follows: the Basque Country (130%,
with constant growth since its recent opening in
2012), the Balearic Islands (22%), the Levante region
(18%), Catalonia (15%), Aragon (15%), Madrid (14%)
and the Canary Islands (5%).
In 2014, we continued to boost the workforce at
our Luxembourg office. One of the main objectives
of the Wealth Management division was to broaden
the range of value-added services offered through
this branch.
Also, in the month of November we opened a new
office in Las Palmas de Gran Canaria, in order to
better serve our clients.
The assets managed by Consulnor grew by more
than 20% last year, exceeding 1,200 million Euros,
MAIN BUSINESS AREAS
43
RETAIL AND
PRIVATE BANKING
BRANCH AND ATM NETWORK
CUSTOMER EVENTS
Banca March continued to transform its retail
network in 2014. This transformation is based on
a model that opts for a smaller number of offices
with more physical space and more employees. This
model is in keeping with our philosophy of longterm relationship banking, focused on counselling
the client, rather than just traditional transaction
banking.
Our aim is to provide better service to our
customers by ensuring our employees are highly
specialised and that their workspaces are optimal,
relocating and inaugurating offices in city centres
and high potential areas.
The opening in 2014 of two branches in Girona and
Lleida, Catalonia, are worth mentioning, as are the
closure/relocation/redeployment of seven others,
taking the number of exclusive Retail and Private
Banking branches from 196 to 201.
In 2014, Banca March had 489 ATMs, of which more
than 59% were located in busy public places to
make life easier and provide better quality service
to our customers and the general public: shopping
centres, department stores, leisure areas, hospitals,
hotels and airports, among others.
70.00
60.8
254
231
217
200
201
50.00
196
40.00
150
100
28.8
46.7
42.3
85
50
30.00
20.00
68
66
43
39
0
10.00
0.00
2010
2011
2012
2013
4.0
60.00
54.5
3.7
3.5
3.5
3.3
44
1 or 2 employee branches
2014 ANNUAL REPORT
Volume/Branch
Banca March’s family background means it has
close links to family businesses, and as a result
these events include a whole series of exclusive
meetings for these companies. Examples of these
are the meetings held in collaboration with Unilco, a
consultancy firm specialising in the family business,
and the 6th Conference on Family Business hosted
by Banca March’s Family Business Chair at the
University of the Balearic Islands.
Lunches and breakfasts.
Conferences and presentations.
Entertainment events.
Exclusive meetings for European residents, held
in English and German.
2010
2011
The most popular events are the now traditional
Investment forums. At these forums, experts
from March Asset Management, together with
representatives from other prestigious AM houses,
offer their points of view regarding the market
situation and hold debates on the best investment
opportunities.
The presentation of the 2014 Annual Strategy
report is also one of the most important events
3.2
2014
3.0
International
-
-
-
-
PRODUCT DEVELOPMENT AND SALES
4.0
Average number of employees per branch
250
of the year. During this presentation, our Market
strategy department and March A. M. give an indepth view of the investment outlook, offer an
overview of the macroeconomic scenario, and
analyse the distribution of assets and asset classes,
as well as highlighting recommended funds, among
other topics.
We host these events, which are held in various
geographical areas and attract over 2,500
attendees, throughout the year. Their popularity led
to a substantial increase in the number of events in
2014 compared to the previous year, from 52 to 85.
STREAMLINING THE BRANCH NETWORK
300
The Private Banking division carries out a range of
events for the bank’s clients and potential clients,
in which specialists and managers from Grupo
March participate. This is something that sets us
apart from the rest and is truly appreciated by the
attendees. These events include, among others, the
following:
2012
2013
2014 was the year Banca March launched its
new corporate image. This new image shows
our commitment to customers, shareholders,
professionals and society. It is a way of showcasing
the values that are already present in our products
through the new logo. We offer a way to invest in
our ideas and our projects. That is why, in addition
to the range of traditional financial products, we
are focusing our efforts on products that allow our
clients to share our vision.
2014
MAIN BUSINESS AREAS
45
One of the best ambassadors for this message is
March Asset Management. The asset management
arm grows every year and offers a wide range of
investment alternatives.
• SICAV
We offer co-investment opportunities through
our Torrenova, Bellver and Lluc Institutional
SICAVs, which the company has managed for
over 20 years to serve as an investment vehicle
both for the March family and Banca March
customers. Another example of co-investment is
the private equity company Deyá Capital, which
invests in non-listed companies in the so-called
capital development sector.
• Portfolio Management Service
The portfolios are comprised of Banca March
funds representing the various asset classes
(money market, fixed income, equities and
balanced) and geographic areas (Spain, Europe,
Global, etc.).
• Profiled funds
Currently, the fund portfolio features: March
Patrimonio Defensivo, F.I., March Cartera
Conservadora, F.L., March Cartera Moderada, F.L.
and March Cartera Decidida, F.L.
Given the affinity of interests and Banca March’s
special understanding of family-owned companies,
we highlight the global equity fund which invests
exclusively in a selection of the best listed family
businesses worldwide: The Family Businesses Fund.
This fund invests in listed companies where more
than 25% of the capital belongs to a single family,
at least one member of the family is involved in
the management of the company and there is
an interest in transferring ownership to the next
generation.
Just like Torrenova and March Vini Catena, a sector
fund investing in the wine sector value chain, the
family Businesses fund is registered for sale in
Spain, Italy, Austria and Luxembourg.
March Vida is Banca March’s insurance company,
which allows us to further expand our range of
products.
• Unit Linked life insurance plans with various
possibilities:
- March Vida Multifondos, UL is a savings
insurance plan focused on investment,
with a small additional death coverage,
through which contributions are invested in
investment funds and where the policyholder
fully accepts the investment risks.
- The Structured Deposit Unit Linked plans,
which invest in Banca March’s structured
deposits, through which the customer can
combine the underlying assets or products
and maturities that fit their needs.
CARDS
During this financial year the implementation of
contactless technology was completed for the cards
in circulation and for the VISA and MASTERCARD
brands. This payment system allows purchases to
be made just by placing the card near the point of
sale terminal in stores. This new payment system
saves time as it is much quicker and easier than
conventional payment.
Contactless technology is supported by NFC (Near
Field Communication) and to function it requires
contactless cards, contactless card readers and a
contactless cash register.
All Banca March point of sale terminals have
already been adapted to NFC technology. This is a
step forward in the value proposition of our cards,
which is why they have all been adapted to this
next-generation technology.
At the same time, processes were also implemented
to modernise circuits and improve the efficiency of
the card business.
An agreement was also signed with REDSYS in 2014
for the development of the future IUPAY BANCA
MARCH digital wallet. This will allow customers
to store their credit and debit cards in their mobile
phones and use these for both online and over the
counter payments.
BANK INSURANCE AND PENSIONS
Bank insurance and pensions performed well in
2014. Revenue increased by 5.1% compared to
2013, despite the absence of sales of the deposits
Unit Linked plan, the drop in net interest income
and the decline in pension plan fees, driven by a
modification of the law. The corporate banking and
private banking segments led this growth.
2014 saw the launch of development and sales
of specific products for the corporate banking
segment (credit insurance, Industrial Multi-risk IM,
group health, vehicle fleets and civil liability, among
others).
REVENUE DISTRIBUTION
€ 5.3 MM
10.6%
Revenue reached 18.7 million Euros, for which the
breakdown is as follows: 6.2 million in risk products,
7.2 million in savings products and 5.3 million in
pension fund products.
The distribution of revenues by customer segments
shows a clear increase in Large Companies, up
40.3% on 2013, and in Retail and Private Banking,
up 8.4% year-on-year.
Of total revenue, 65.2% is generated by the retail
banking segment, 32.8% by Retail and Private
Banking and 2% by Large Companies.
REVENUE DISTRIBUTION BY SEGMENTS
€ 6.2 MM
5.5%
2.0%
32.8%
65.2%
€ 7.2 MM
1.2%
Risk
46
2014 ANNUAL REPORT
Savings
Pensions and Retirement
Retail
Private
Companies
MAIN BUSINESS AREAS
47
The distribution of Industrial Multi-risk (IM) led
to growth in Large Companies. Complementary
insurance products for individuals, with more
than 2,800 new contracts in 2014, accounted for
a substantial part of the business activity of the
Retail Banking segment.
Savings and Pension funds balances both increased
by more than 15%. The collapse of the net interest
income on savings products was offset by strong
sales of the structured Deposits Unit Linked plan
and Pension Plus, which allowed us to close the
year at 1.2% above 2013 (a decline was forecast).
In Pension funds, we closed the year with a 16%
increase in volumes and a 10.6% increase in
revenues, despite the drop in fees that started in
October and thanks to the success of the campaign
to attract plans carried out at the end of the year.
VOLUMES
%
Savings (balances)
923.6
15.0
Pension funds (balances)
338.2
16.0
FEES
%
Risk
6.25.5
Savings
7.21.2
Pension funds
5.3
10.6
TOTAL FEES 18,7
5,1
48
2014 ANNUAL REPORT
Training, especially focused on promoting new
company products, both on-site and through the
E-learning platform, was a priority in 2014. Via
this platform, we offered the continuous training
that we are required to provide under the current
Mediation Law, with different programmes for
managers in private banking and corporate banking
focusing on the most relevant products for their
customer segment.
In 2015 our aim is to achieve growth through our
sales actions, with ongoing advice to both our
internal and external customers.
Our top priority this year is to increase the insured
client ratio and reinforce the bank’s relationship
with these clients, as well as creating after-sales
and claims circuits that set us apart from the rest
of the market in terms of quality and customer care
The distribution of our products, through new
models prioritising customer advisory, will be
vital to continue the growth of the area, as will
the constant specific training of managers of the
different segments and the retail network.
In 2015 we will expand the range of Bankassurance
and Pension products, with new savings and Unit
Linked varieties, and updating life risk and civil
liability products.
MULTI-CHANNEL BANKING
This area continues to seek to provide the most
efficient multi-channel combination possible
depending on the needs of each customer segment
at any given time.
Online Banking
In 2014 we continued to move forward in the
continuous improvement of our application,
completing our product catalogue and incorporating
new features such as a demo of Remote Banking
to facilitate the migration of our customers,
segmented advertising that has allowed the
development of multiple online campaigns directed
at the appropriate customer profile, and payment
of card charges in instalments.
In order to improve the rate of use, the operation and
the uptake of products through different channels,
a number of joint measures were implemented
with the network. Branches were provided with
new retail tools such as the demo of the Remote
Banking service and the mobile app, in order to
familiarise customers with the service. Also, a pilot
program was carried out thanks to which eighteen
branches were equipped with iPads with access to
Remote and Mobile Banking, both test and real
versions, plus access to the bank’s social networks,
in order to train and migrate their customers.
Mobile App
Our mobile app is the answer to our customers’
mobility needs. This channel has registered dramatic
growth from 5.2% of Remote Banking operations to
9.3%.
Contact Centre
Our Contact Centre began a transformation process
in 2014, going from only providing user support for
online Banking to providing specialist knowledge
and value for all banking areas. The participation in
various campaigns to attract new business and the
generation of leads in Private Banking and Large
Businesses are worth mentioning.
Corporate website
Taking advantage of the internal release of the
new brand image and renewed internal culture, we
inaugurated a new, more agile technology platform,
which is absolutely aligned with our values and
brand, offering valuable multimedia content in a
more attractive, dynamic format.
Our website is a window to our customers, a
communication channel which registered annual
growth of 25.4%, from 194,382 visits in December
of 2013 to 243,837 visits in December 2014.
MAIN BUSINESS AREAS
49
LARGE COMPANIES
Social Networks
In 2014 we established our presence on the social
networks, which involved taking our strategy one
step further. Now we don’t just monitor social
networks, we create specialised content that
supports the positioning of our brand as experts in
advisory services.
- LinkedIn is the main platform for the development
of personal and professional relationships, where
we use a “one to one” strategy that allows our
managers to position themselves as experts and
reach highly segmented customer target. Our
profile already has 3,932 contacts, compared to
2,121 at the end of 2013, an increase of 85.4%.
50
2014 ANNUAL REPORT
- In 2014 we opened up our YouTube channel,
which had been private until 2013. We publish
videos monthly with our market views and
investment strategies, interviews with our
representatives and experts, events of interest
and relevant facts about our company. In just
one year, our videos have been watched 38,146
times.
- In January 2014 we joined Twitter. This social
network allows us to share financial and
institutional content of interest to our customers
(we have 505 followers). This is the most
bidirectional network, which gives us the most
insight into what is being said about us and our
competition.
Agility when taking decisions and the ability to
adapt to each customer’s circumstances are of
fundamental importance in the Large Companies
division. To achieve this, the area has a portfolio
of products and services which, in addition to
financing solutions, transaction banking and cash
management, provide comprehensive corporate
advisory services through the Capital Markets Unit,
360 CORPORATE and March JLT insurance brokers.
2014 was a step closer to the end of the crisis
The sustained quarter-on-quarter growth of
the economy, with an annual GDP increase of
approximately 2% was due, to a large degree, to
the strong performance of the foreign sector, the
drop in Spain’s Sovereign bond spread against the
German bund and a slight but positive reduction in
the unemployment rate. This macro scenario lays
the foundations for progress along the long road
that lies ahead; 2015 is set to be a year in which
the achievements of 2014 are consolidated and
enhanced.
Highlights in the financial sector include the launch
of the ECB’s single supervisory mechanism and the
robust results obtained by all Spanish financial
institutions in the last stress tests. The restructuring
of the financial system in Spain is now complete,
and is reflected by strong, increasing competition
between the banks to reactivate the flow of credit
MAIN BUSINESS AREAS
51
to the private sector, especially for medium and
large enterprises. However, effective demand for
credit remains low.
All of these factors, added to the widespread
deleveraging of the economy and all economic
players, have led to downward pressure on
companies’ financing costs, with a consequent
reduction in banks’ intermediation margins. This
reduction will be reflected and exacerbated in the
banking sector’s 2015 accounts. In addition, nonbank financing sources are on the rise. In fact, 2014
was a record year for corporate bond issues in the
capital markets.
In this difficult context, the Large Companies
division registered a year-on-year improvement in
its results once again, with increases in all margins.
Net interest income grew by 14.3% (supported
by the lower cost of funds and by restraint in
the reduction of the investment margin). What
is particularly noteworthy is the contribution of
fees, which grew by 16.6%, with a composition that
makes them sustainable to a great extent in the
immediate future.
The overall profit contributed by the area grew
to 50%, buoyed by the strong performance of
net interest income, the increase in fees, the
streamlining of costs and the reduction of NPLs.
The NPL ratio in this segment is under 1%, the best
in the sector.
All of the specialised units that make up the Large
Business area contributed in conjunction to this
improvement in results. Very few banks are able
to provide family businesses with advice in the
fields of capital market financing, corporate finance
(360 CORPORATE) and comprehensive industrial
insurance (March JLT) in the mid-level client
segment.
In 2015 we plan to further develop this advisory
model for medium-size companies through our
specialised business areas and strengthen our
physical network to allow us to serve a wider market.
To this end, we have created the Large Company
Expansion Unit, implemented to undertake an
ambitious expansion throughout the Spanish
regions which are not covered by the Madrid,
Levante and Catalonia-Aragon units. Throughout
2014 and in 2015 too, we have continued to hire
new professionals, an increasing number of whom
come from within the bank’s existing talent.
We also continue to make technological
improvements to our banking products which help
with the day-to-day financial management of
our customers. We continue to incorporate new
functions into products such as confirming and
factoring, which go much further than managing
payments and collections and their financing. The
Treasury distribution table has created a portfolio
of products that are constantly adapting to changes
in the forex markets, interest rates and commodities
markets and, most importantly, it has done so in
direct, daily contact with customers. This allows
us to be more flexible, agile and useful. One of our
main challenges for 2015 is to continue to improve
and progress in this way.
CAPITAL MARKET
In 2013 Banca March strengthened the March
Capital Markets (MCM) area by incorporating
professionals with extensive experience in
structured financial markets.
Banca March participated in 13 transactions
in 2014 totalling over 2,000 million Euros in
financing. Banca March’s participation stood at over
€200 million.
This area’s main aim is to seek solutions to the
structured financing needs of Banca March clients,
whether in banking or as alternative investors.
The aforementioned transactions took various
different formats, including corporate transactions
(Gamesa, Ferrer, Aspro Ocio…), capital markets
transactions (Almirall, Antolín, Europastry…),
acquisition-related transactions (Flos, Goldcar…)
and structured transactions (Tree).
In order to achieve this, the Capital Markets team
operates in the following activity areas:
Syndicated Loans
This encompasses all corporate financing, acquisition
financing and structured financing transactions in
which two or more financial institutions participate.
2014
2014
2014
2014
2014
Syndicated
Loan
Syndicated
Loan
Syndicated
RCF
Syndicated
Loan
Syndicated
Loan
LEAD
ARRANGER
ARRANGER
ARRANGER
ARRANGER
MANDATED
LEAD
ARRANGER
€ 205 M
€ 180 M
€ 350 M
€ 285 M
$ 350 M
2014
2014
2014
2014
2014
Syndicated Loan
& Syndicated RCF
Syndicated
Loan
Syndicated
Loan
Syndicated
Loan
Syndicated Loan
(inc. Term Loan B)
CO MANAGER
PARTICIPANT
MANDATED
LEAD
ARRANGER
MANDATED
LEAD
ARRANGER
MANDATED
LEAD
ARRANGER
$ 1,000 M
€ 4,512 M
€ 6.5 M
€ 450 M
GRUPO
ANTOLIN
€ 200 M
SINDICADO
€ 200 MM
RCF
55.7
48.8 6.9
40.4 8.4
50
40
30
20
31.2
23.4 7.8
9.2
10
0
25
20
14.9
15
10
9.6
11.0
1.4
23.0
19.7 3.3
4.8
3.9
5
2012 2013 2014
2014 ANNUAL REPORT
35
29.2
30
25
19.5
20
15
10
12.8
7.7
5.0
13.5
0.8
9.7
5.9
5
0
2010 2011
52
PROFIT CONTRIBUTION
60
FEES
NET INTEREST INCOME
0
2010 2011
2012 2013 2014
2010 2011
2012 2013 2014
MAIN BUSINESS AREAS
53
Private Capital Markets
This involves long-term financing transactions
carried out between middle market companies, i.e.
those with average annual revenues of between
100 million and 1,500 million Euros and institutional
investors.
credit rating and yield level on the financing granted.
Banca March is the financing bank and the originator
credit company and manager of the credit risk to be
underwritten by the Mutua Madrileña.
Banca March advises its clients on the process of
identifying opportunities, drafting and coordinating
all the documentation required for analysis by
potential financiers, and optimising and performing
the entire process of selecting the optimum
alternative financing for the client.
Banca March is firmly committed to this
strategy, which is a bid to bring credit origination
–involving relationships with companies– and
credit distribution –which involves relationships
with investors– closer together. Its objective is to
spearhead a dynamic, demanding market in which
the quality of a company’s service, management
and reputation are essential for success.
Banca March reached an agreement in 2014
with Mutua Madrileña to work together to offer
financing for Spanish companies with a certain
Asset & Capital Finance
This encompasses all structured asset financing
transactions
through
non-banking
capital
instruments. Activity in film production and
shipbuilding and investments in R&D and innovation
are particularly noteworthy.
Banca March 2014 participated again in the
structuring of financing for a film production
with a top level international producer, which
allowed Spain to host the most of the filming and
consequently attract a large part of the investment
in the project.
Banca March also developed a new Tax Lease model
for the naval sector, once the new regulations are
approved by the European Commission. In 2014
Banca March successfully signed contracts worth
€100 million in one of the first transactions closed
in Spain under the new tax lease legal framework.
Regulated Capital Markets
This covers financing transactions on regulated
markets, both domestically and on a European level,
by institutions with and without public ratings.
In 2014 Banca March took part in bond issuances by
Almirall (Bookrunner) and Grupo Antolín (Co-Lead).
Banca March has also created an initiative to
seek short term funding for companies. It led the
creation of commercial paper programmes, taking
advantage of the flexibility of Spain’s Alternative
54
2014 ANNUAL REPORT
Fixed Income Market (MARF), through which
qualified institutional investors provide financing
for these companies.
Four new issuers have thereby accessed the MARF
(Elecnor, Tubacex, Europac and Barceló) since April
2014. These company’s issuance programme limits
stood at 400 million Euros, and Banca March is
sole Lead Arranger, acting as the advisory and
structuring body (Registered Advisor) as well as the
distributor (Bookrunner) on all issuances carried
out under these commercial paper programmes.
At the end of 2014, issuances had been undertaken
for over 200 million Euros in the market and the
product proved highly successful, with three of
the issuers increasing the overall limit of their
promissory note programmes.
HIGH YIELD
BONDS/
TERM LOAN B
2014
High Yield Bonds
JOINT
BOOKRUNNER
CO-LEAD
GRUPO
ANTOLIN
€ 325 M
SENIOR NOTES
COMMERCIAL
PAPER
€ 400 M
SENIOR SECURED
NOTES
2014
2014
2014
2014
MARF Commercial
paper Programme
MARF Commercial
paper Programme
MARF Commercial
paper Programme
MARF Commercial
paper Programme
SOLE LEAD
ARRANGER
SOLE LEAD
ARRANGER
SOLE LEAD
ARRANGER
SOLE LEAD
ARRANGER
GRUPO
TUBACEX
€ 200 M
These programmes aim to allow the issuers to
optimise financing costs and diversify financing
sources.
There was also great demand for the commercial
paper issued among the bank’s clients, as they
represent an alternative to investment products
which have seen declining returns over the year,
such as deposits and government bonds, . The risk
involved is also very controlled given the maturity
terms of the instruments and the issuers’ credit
rating.
2014
High Yield Bonds
MARF Commercial paper
ASSET
& CAPITAL
FINANCE
€ 75 M
€ 50 M
€ 75 M
2013/2014
2014
2014
2014
Cinema
Tax
Equity
Financing 442
Financing 442
Financing 442
6 SHIPS
1 SHIP
1 SHIP
COPRODUCCIÓN
EEUU-ESPAÑA
€ 120 M
PRODUCTION BUDGET
€ 46 M
INVESTMENT COST
€ 12 M
INVESTMENT COST
€ 22 M
INVESTMENT COST
MAIN BUSINESS AREAS
55
SUBSIDIARIES
The firm was recognised as Best Spanish Asset
Management Company in the European funds
Trophy awards organised by Fundclass and
the European newspapers La stampa, Le Jeudi,
Tageblatt, El País and LCI. Also, the March A.M.
fund portfolios finished among the best in the
sector once again this year, ranking second in the
conservative category and third in the aggressive
category, according to Expansión and Allfunds
Bank. finally, the British publication Citywire
awarded its AA classification to our head of fixed
income francisco Herrero, a recognition that places
him among the best fixed income managers.
BENCHMARK- BEATING FUNDS
DATA AS OF 19.01.15
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Performance at 1 year
Performance at 3 years Performance at 5 years
MARCH ASSET MANAGEMENT
March A.M has registered robust growth in line with
Banca March in recent years. The investment strategy
performed well again this year, although it is true that
the second half of the year was tougher for the value
investing philosophy. That being said, the investment
funds, SICAVs and pension plans all registered very
positive performances and received numerous awards
at the national and international level.
In terms of asset volumes, total assets under
management grew by 32.6% (15% in funds, 39%
in SICAV, 15% in pension plans and 55% in our
Luxembourg SICAV). Over the last five years, March
AM’s AuM grew 470% vs sector growth of 18%.
In a complex landscape characterised by the situation
of the financial markets, the economic crisis and the
restructuring of the Spanish financial sector, the
figures reported by March A.M. are validation of its
business model specialising in asset management
and focusing on global equities, Eurozone fixed
income and asset allocation. Thanks to its value
investment philosophy, select range of products and
highly experienced professionals, we have once again
fulfilled our commitment to our customers: “Value
creation and wealth preservation.”
It is important to emphasise that being part of Spain’s
only private family bank, highly specialised in mid
and high net worth clients, generates substantial
synergies in terms both of reputation (solvency,
solidity, reliability, etc.) and of customer focus.
All of this is perfectly reflected in the brand’s new
logo, in which the three triangles that form the “M”
represent the alignment of interests between clients,
employees and shareholders.
2008 2009 2010 2011 2012 20132014
March A.M. AuM1.137 1.504 1.628
During 2014, March A.M. focused its efforts on
improving customer confidence and perfecting its
research methodology, the companies covered and
the regular monitoring and risk control reports. The
company made major efforts in terms of getting
closer to its clients, holding various meetings in
different cities to share our view of the financial
markets and of investment opportunities and risks.
Sector AuM
192.301
188.538
164.179
1.723
151.720
2.223 4.032 5.344
147.344
2014 ANNUAL REPORT
226.293
Source: Inverco and March A.M. Data as of December 2014 Millions of Euros Sector includes funds and SICAVs
ASSETS UNDER MANAGEMENT (AuM)
Source: Inverco and March A.M. 2008 = 100. Data as of December 2014
250
5
226.293
We have broadened the international distribution
capacity of our SICAV in Luxembourg (March
International) by signing several distribution
agreements in Germany and Austria. As a result, last
year almost a third of our new fund subscriptions
came from other European markets. The Spanish
SICAVs registered a steady increase in AuM, largely
due to the factors described above. March A.M.
was therefore the 3rd largest Spanish AM house
by assets under management in this type of fund,
which is so characteristic of private banking.
4 192.301
5.344 200
188.538
168.447
164.179
151.720
3
147.344
150
4.032
100
2
2.223
1
1.504
1.628
50
1.723
1.137
0
0
2008
2009
2010
2011
March A.M. AuM
56
168.447
2012
2013
2014
Sector AuM
MAIN BUSINESS AREAS
57
MARCH JLT
The trend of excessive competition and reduction
of prices in the industrial risks segment, in which
March JLT operates, continued in 2014. The sector
as a whole contracted by 0.8%, a very moderate
decrease when compared with last year’s 3% drop.
In this complex environment, March JLT consolidated
its commitment to specialisation with a 10% growth
in business volume, although revenues remained
stable year on year. This is primarily due to reduced
margins on large accounts due to excessive supply
in the market. The 9% growth in international
business is noteworthy, compared with a 5% drop
in domestic business.
The most significant transactions include the
company’s participation in the insurance for the
consortium that was awarded the contract for the
metro in Lima, Peru (the biggest infrastructure
project of the year), a highway in Colombia and
several energy projects in Mexico, Morocco and
Saudi Arabia. These contracts allowed for 35%
growth in the new energy department, which began
operations in 2013.
By specialist area, the 54% growth in the maritime
business, with significant participation in several
shipbuilding projects, also deserves a special
mention, as does the 21% growth registered by the
financial lines area, with the company participating
58
2014 ANNUAL REPORT
MARCH VIDA
in the most important REIT (SOCIMI) projects in the
market.
2014 also saw the launch of the new reinsurance
subsidiary, JLT March Re. The initial stages of this
new endeavour far exceeded expectations, and
meant the incorporation of a group of highly
experienced professionals. In the coming years, the
reinsurance area, which complements the range
of specialised brokerage services, should help the
growth and stability of the business with the aim of
becoming one of the leaders in the market.
To consolidate the company’s presence in key
business centres across the country, the acquisition
of Camarena, S.A., in Valencia - the first independent
broker in the region, with a strong foothold in
businesses in the area – was completed in late
December. This transaction will strengthen our
presence in Valencia and boost our size to allow us
to serve larger companies.
In short, 2014 was a difficult year for revenue
generation, but the company has continued its
strategy of specialising and focusing on medium
and large companies with international operations,
which should allow us to maximise profitability
when there is an improvement in the general
economic situation and the insurance market in
particular.
At the end of 2014 the March Vida portfolio had
75,000 policies, with managed technical reserves
of over 1,000 million Euros.
The premium income in 2014 was over 180 million
Euros. Unit Linked products performed especially
well, with 100 million, with the top Unit Linked
product being the structured deposit format, with
more than 60 million. Life annuities exceeded 40
million and savings and retirement savings products
stood at over 30 million.
The company plans to continue to expand its range
of products in 2015, with a special focus on Private
Banking and Wealth Management products. 2015
will be also the last year for preparation before the
new European Solvency II insurance regulations
come into force on 1 January, 2016.
As for life-risk products, the company continued to
actively market both products linked to financial
transactions and free products. Among the free
products, the March Vida Exclusive Protection,
aimed at private banking customers, deserves a
special mention.
The results for the year 2014 were satisfactory, in
line with recent years. Notably, 2014 was a key year
in the preparation for the company’s adaptation to
the solvency II regulations.
For the first time, a full calculation was carried out
of the capital requirement under the new European
regulations, and the first and the first system of
governance and own risk and solvency assessment
(ORSA) reports were undertaken.
MAIN BUSINESS AREAS
59
360 CORPORATE
360 CORPORATE is the Banca March subsidiary
specialising in financial advisory services. The
specialist services provided by 360 CORPORATE
are fully complementary and harness synergies with
the other activities undertaken by Banca March.
These services include:
Mergers and acquisitions
This covers advisory services for companies
regarding acquisitions, sales, mergers, spin-offs,
LBOs, MBOs takeover bids, etc., both domestically
and internationally.
Debt
Including restructuring or refinancing and seeking
long and short-term financing, both banking and
non-banking.
Capital Markets
This covers consultancy on IPOs, investor
presentations and capital structure analysis.
Other services
Including valuations of businesses or companies,
business plan design, creation of executive
incentive plans and analysis of strategic options for
businesses.
60
2014 ANNUAL REPORT
CONSULNOR
360 CORPORATE is one of the leading financial
advisory firms in the Spanish market, having
completed almost 50 transactions with family
companies, listed companies and private
equity funds.
In 2014, despite the ongoing difficult market
environment for mergers and acquisitions, 360
CORPORATE successfully completed a broad
range of corporate transactions, making it a leading
consulting firm in middle-market transactions
in Spain.
The transactions completed include advising
Cinven on the acquisition of Gas natural fenosa
Telecomunicaciones (“UFINET”), the sale of the
frozen food chain La sirena, the sale of Laude
schools and the sale of a Gamesa photovoltaic
plant for a combined total of 650 million Euros.
360 CORPORATE also advised Viscofan on the sale
of its subsidiary IAN, a canned vegetable producer
whose main brand is Carretilla, a 55.8 million Euros
deal that was closed in March 2015.
Banca March’s entry into the capital of Consulnor
- an independent company founded in 1972 which
specialises in financial services for private banking
clients - resulted in one of the leading companies in
the private banking sector with one of the sector’s
strongest teams in the management of high net
worth clients, market strategy and generation of
innovative products.
The highlights of 2014 were:
Consulnor is mainly located in the Basque Country
and also has branches in La Rioja, Madrid and
Catalonia.
• The average return on client portfolios grew
by 7%.
• Growth in business volume and number of
key clients. Business volume grew by 21.5%,
including the business generated for the bank by
Consulnor clients. The figure as of 31 December
2014 was 1,373 million Euros. The increase in the
number of key clients was 24%.
As a result of this agreement, clients of Consulnor
Banca March have access to a wide range of
services, supported by the bank’s solvency.
Following this transaction, Banca March became
one of the leading Spanish companies in private
banking, with the largest number of SICAVs under
management. The agreement also meant a
significant increase in balances from off-balance
sheet AuM, as well as an expansion of the client
base in the Basque Country, where there is a strong
network of family companies and a high level of
wealth generation.
MAIN BUSINESS AREAS
61
BANCO INVERSIS
Since its inception in 2000, Banco Inversis has
provided other financial institutions with solutions
for their financial asset investment services. Until
November 2014, the company also had a retail
banking business line.
In 2013 there was a change in the company’s
shareholder structure, following a competitive
process open to a number of investors which
highlighted the strategic attractiveness of
the business, and which concluded with the
acquisition of 100% of the capital by Banca March.
Banca March also agreed to sell the retail business
through a spin-off transaction which was closed in
late november 2014 as well as providing banking
62
2014 ANNUAL REPORT
and securities services to the acquiring entity as
an institutional client. It was decided that 50% of
Banco Inversis’ capital would later be sold to Orey
Group, a transaction which is yet to go through.
Given the above, the year 2014 was dominated by
a major focus of efforts on the aforementioned
spin-off of the retail business and the adaptation of
systems for the provision of these services.
Nonetheless, 2014 was once again a year of growth,
both in terms of the income statement and of the
volume of securities held by the Group, including
domestic and international investment funds and
pension funds, which amounted to 48,715 million
Euros, representing an increase of 10.2% over the
previous year. Profit after taxes in 2014 stood at
10.15 million.
Following this transaction, Banco Inversis has a
strong, stable shareholder structure which is fully
focused on the institutional business both in Spain
and abroad with a strong dedication to service
through a technology platform which is undergoing
a continuous process of innovation and adaptation
to the needs of its customers.
MAIN BUSINESS AREAS
63
03
HOLDINGS OF
CORPORACIÓN
FINANCIERA ALBA
Investment portfolio
66
Affiliated companies
67
67
Listed companies
ACS
67
Acerinox
68
BME
68
Indra
69
Ebro Foods
69
Viscofan
70
Clínica Baviera
70
71
Non-listed companies
Mecalux
71
Panasa
71
Pepe Jeans
72
Ros Roca
72
Flex
73
Ocibar
73
EnCampus
73
64
2014 ANNUAL REPORT
65
INVESTMENT
PORTFOLIO
AFFILIATED
COMPANIES
Alba’s affiliated companies as of 31 December 2014(1):
LISTED COMPANIES
ACS
ACS is one of the world’s largest groups in
construction (mainly civil engineering), through
turnkey projects and infrastructure concessions,
with a heavy presence in Europe, the US, Australia,
Asia and the Middle East. In 2014, according to
various specialist publications, ACS once again
led global rankings for the largest international
construction contractors and major transport
infrastructure concession groups. It also has a strong
presence in urban services and waste treatment,
mainly in Spain but with increasing operations in
other European countries.
CORPORACIÓN FINANCIERA ALBA(2)
ACERINOX
23.1%
ACS
13.9%
BME
8.3%
EBRO
FOODS
10.0%
HOCHTIEF
61.4%
INDRA
SISTEMAS
12.5%
VISCOFAN
6.8%
MECALUX(3)
15.6%
FLEX
19.7%
CLÍNICA
BAVIERA
20.0%
ANTEVENIO
14.5%
PANASA
26.5%
ROS ROCA
17.4%
MECALUX(3)
8.8%
DEYÁ
CAPITAL S.C.R.
100%
PEPE JEANS
12.0%
OCIBAR
21.7%
EN CAMPUS
32.7%
SIRESA
CAMPUS
17.4%
Consolidated sales for ACS in 2014 totalled
34,881 million Euros, 0.8% lower than the
previous year. Domestic sales grew by 6.4% due
to the consolidation of Clece, while international
sales declined by 2.1%. ACS posted net profit of
717 million Euros, up 2.2% on 2013 due to lower
financial costs and the positive contribution of
discontinued operations.
ACS shares gained 15.8% in 2014 to reach 28.97
Euros per share at the end of the year, with a
market capitalisation of 9,116 million Euros.
At the end of 2014 Alba was ACS’s largest
shareholder with a stake of 13.9%. During the first
quarter of 2015, Alba sold 1.47% of ACS for 147
million Euros, with a gross capital gain of 72 million
Euros, reducing its equity interest in this company
to 12.4%.
www.grupoacs.com
(1) Other affiliated companies: Artá Capital S.G.E.C.R., S.A.U. (81.01%) and Corporación Empresarial de Extremadura, S.A.
(1.01%).
(2)Holdings through Alba Participaciones, S.A.U., Balboa Participaciones, S.A.U. and Deyá Capital, S.C.R., all of which are
wholly-owned by Corporación Financiera Alba, S.A.
(3)Corporación Financiera Alba’s stake in Mecalux totals 24.4%, 8.8% directly and 15.6% through Deyá Capital.
66
2014 ANNUAL REPORT
HOLDINGS OF CORPORACIÓN FINANCIERA ALBA
67
ACERINOX
Acerinox is one of the world’s leading stainless steel
manufacturers, with production plants in Spain, the
USA, South Africa and Malaysia.
During the financial year 2014, Acerinox sales
rose 10.4% to 4,380 million Euros. The net profit
attributable to the group was 136 million Euros
compared to 22 million last year.
Its market capitalisation stood at 3,273 million
Euros at year-end.
INDRA
Acerinox shares gained 35.2% in 2014, reaching
12.50 Euros per share.
On 31 December 2014 Alba was the largest
shareholder in the company, with a 23.1% stake.
www.acerinox.com
BOLSAS Y MERCADOS ESPAÑOLES
Bolsas y Mercados Españoles (BME) is the operator
of all stock markets and financial systems in Spain
and the leading platform for transactions involving
shares of listed Spanish companies. The company
unites the stock exchanges of Madrid, Barcelona,
Bilbao and Valencia.
68
2014 ANNUAL REPORT
Sales stood at 2,938 million Euros, up 0.8% on the
previous year. However, the company posted a net
loss of 92 million Euros in 2014, compared to profit
of 116 million Euros the year before.
Indra shares stood at 8.07 Euros per share on 31
December 2014, placing the company’s market cap
at 1,325 million Euros.
At the end of 2014, Alba had a 12.5% stake in Indra,
and was its second largest shareholder.
www.indracompany.com
EBRO FOODS
In 2014 Alba acquired a stake of 8.28% in BME for
a total amount of 217 million Euros, becoming its
largest shareholder.
In 2014, its revenues increased by 11.3% to 342
million Euros. Net profit stood at 165 million Euros,
the best annual result since 2008.
BME shares climbed 16.2% in 2014 to 32.14 Euros
per share, with a market capitalisation of 2,687
million Euros at the end of the financial year.
Indra is the Spanish leader in information technology
and security and defence systems, and one of the
main companies in its sector in Europe and Latin
America. It offers high value-added solutions and
services for the following sectors: security and
defence, transport and traffic, energy and industry,
financial services, health and public administrations,
telecoms and media.
Ebro Foods is a multinational food company that
operates in the rice and pasta segments. It has a
retail or industrial presence, through an extensive
network of subsidiaries and brands, in more than 25
countries in Europe, north America, Asia and Africa,
which has allowed it to position itself as a world
leader in the rice sector and the second largest
global pasta manufacturer.
Ebro Foods’ sales rose by 8.4% in 2014 to 2,121
million Euros, while net profit increased by 10%
year-on-year to 146 million Euros.
On December 31, Ebro Foods’ market cap stood at
2,109 million Euros and its shares were trading at
13.71 Euros.
In early 2014, Alba acquired an additional 1.8% in
Ebro foods, increasing its stake in the company to
its current 10%.
www.ebrofoods.es
www.bolsasymercados.es
69
VISCOFAN
Viscofan is the world leader in artificial casing
for meat products, and is the only producer that
manufactures all artificial casing types: cellulose,
collagen, fibrous and plastic.
NON-LISTED COMPANIES
On 31 December 2014 Alba was the top shareholder
in the company with a stake of 6.8%.
Viscofan sales increased by 4.1% in 2014, reaching
687 million Euros. Likewise, net profit reached a
record high of 106 million Euros, up 4.9% on 2013.
Viscofan shares rose 6.6% in 2014 to 44.06 Euros
per share, while its market capitalisation was 2,054
million Euros at year-end.
70
2014 ANNUAL REPORT
At December 31, 2014, Alba had a 24.4% stake in
Mecalux, 8.8% directly and 15.6% through Deyá
Capital.
www.viscofan.com
PANASA
company’s market capitalisation on 31 December,
2014 was 138 million Euros.
In 2014 Alba maintained its 20% stake in Clínica
Baviera, and remains one of its largest shareholders.
Thanks to the strong performance of the domestic
business, consolidated sales rose 3.3% to 83 million
Euros. The net profit attributable to the group was
4 million Euros, compared to 5 million last year.
Following substantial gains of 174.5% in 2013,
Clínica Baviera shares dropped by 18.8% in 2014,
closing the year at 8.49 Euros per share. The
Mecalux is one of the world’s leading storage
systems companies. It designs, manufactures, sells
and provides services related to metal shelves,
automatic warehousing and other warehousing
solutions, with state of the art technology.
www.mecalux.es
CLÍNICA BAVIERA
Clínica Baviera is Spain’s leading provider of eye
care services for the correction of problems such
as near-sightedness, farsightedness, astigmatism,
presbyopia and cataracts, and has a strong presence
in Spain, Germany, Austria and Italy.
MECALUX
Panasa (Panaderías Navarras) is one of the leading
manufacturers of fresh and frozen bread, pastries
and cakes in Spain. Through Berlys, it provides its
products to over 24,000 clients including bakeries,
hotels, restaurants, major retail outlets and other
food shops, thanks to its extensive distribution
network which spans the entire Iberian Peninsula,
as well as a network of more than 190 exclusive
bakeries located in Navarra and the Basque Country.
On 31 December 2014 Alba’s stake in Panasa,
through Deyá Capital, was 26.5%.
www.berlys.es
www.clinicabaviera.com
71
FLEX
PEPE JEANS
Pepe Jeans designs and sells of clothes and other
fashion items, with Pepe Jeans London and Hackett
being the Group’s flagship brands. Pepe Jeans is
also the exclusive agent for Tommy Hilfiger and
Calvin Klein on the Iberian Peninsula.
At the beginning of 2015, Deyá Capital SCR and
other shareholders reached an agreement to sell
their stakes in Pepe Jeans. The sale is expected to be
completed during the first half of the year, subject
to approval by the relevant authorities.
On 31 December, 2014, Alba’s stake in the company,
through Deyá Capital, was 12%.
Flex is one of Europe’s leading bed companies.
It manufactures and sells mattresses, pillows,
adjustable beds and other accessories.
The Group has a network of over 105 stores under
the Noctalia, Plumax and And So To Bed brands (UK
and Middle East).
Thanks to a strong portfolio of brands it is the
leader in sleep equipment in Spain, Portugal and
the United Kingdom (luxury segment), and is wellpositioned in the USA, Chile, Brazil and Cuba.
On 31 December 2014 Alba had a 19.7% stake in
Flex through Deyá Capital.
www.flex.es
OCIBAR
www.pepejeans.com
OCIBAR develops and operates marinas under
concession agreements. It currently has various
active concessions in the Balearic Islands, the
largest being Port Adriano (Calvià, Mallorca) and
Ibiza Magna.
In late 2014, Alba had a 21.7% stake in OCIBAR
through Deyá Capital.
www.ocibar.com
ROS ROCA ENVIRONMENT
Ros Roca Environment specialises in the manufacture
and sale of special vehicles for waste collection and
street cleaning. It is currently one of the world’s
leading companies in this sector, exporting to over
70 countries. Ros Roca is headquartered in Tarrega
(Lleida) and has major subsidiaries and other
production centres in the UK, France, Germany,
Brazil, Mexico, Chile and Malaysia.
72
2014 ANNUAL REPORT
On 31 December, 2014, Alba had a 17.4% stake in
Ros Roca Environment through Deyá Capital.
ENCAMPUS
EnCampus buys, develops and manages university
residences, with the objective of creating the largest
portfolio of university student residences in Spain.
On 31 December 2014, Alba’s stake in EnCampus,
through Deyá Capital, was 32.7%.
www.rosrocaenvironment.com
73
Published by:
Banca March
Communications and Institutional Relations Department
Avda. Alexandre Rosselló, 8
07002 Palma de Mallorca Tel. +34 971 779 127
E-mail: [email protected]
Design and layout:
Illa de Publicitat i Màrqueting, s.l.
www.illapublicitat.com
Photography:
Image bank
Printing:
Ingrama, s.l.
D.L.: PM-876-1988
Av. Alexandre Rosselló, 8
07002 Palma de Mallorca
Tel. 900 111 000
(+34) 971 779 111
www.bancamarch.es

2014 annual report

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