- CaixaBI

Transcription

- CaixaBI

Separate and Consolidated Operations
2013
Annual Report
This Annual Report 2013 is a translation of an original document entitled Relatório e Contas de 2013
approved by the Shareholders’ General Meeting in accordance with Portuguese law.
The Annual Report 2013 and the accompanying financial statements, reports and opinions on the
accounts are a translation of documents originally issued in Portuguese in accordance with generally
accepted accounting principles in Portugal. In the event of discrepancies, the Portuguese language
CaixaBI: Relatório e Contas 2013
version prevails.
2
Table of Contents
Board of Directors’ Report ......................................................................................................5
1.
Statutory bodies ..............................................................................................................6
2.
Organisational chart ........................................................................................................7
3.
Key consolidated financial indicators ...............................................................................8
4.
Overview of CaixaBI ........................................................................................................9
4.1. Awards and rankings........................................................................................................................................9
4.2. Highlights for the period .................................................................................................................................11
5.
Macroeconomic environment.........................................................................................14
5.1. International ...................................................................................................................................................14
5.2. Domestic ........................................................................................................................................................14
5.3. Financial markets ...........................................................................................................................................15
6.
Strategy and business model ........................................................................................17
6.1. Project finance ...............................................................................................................................................17
6.2. Structured finance ..........................................................................................................................................18
6.3. Corporate finance – advisory .........................................................................................................................20
6.4. Corporate finance – debt................................................................................................................................22
6.5. Equity capital market......................................................................................................................................24
6.6. Brokerage ......................................................................................................................................................25
6.7. Research........................................................................................................................................................26
6.8. Financing and structuring...............................................................................................................................27
6.9. Syndication and sales ....................................................................................................................................27
6.10. Venture capital ...............................................................................................................................................28
6.11. Outlook for 2014.............................................................................................................................................30
7.
Results ..........................................................................................................................32
8.
Human resources ..........................................................................................................34
9.
Qualified holdings..........................................................................................................35
10. Acknowledgments .........................................................................................................36
11. Proposal for the distribution of earnings.........................................................................37
1.
Consolidated and separate financial statements............................................................39
2.
Notes to the consolidated financial statements ..............................................................50
3.
Notes to the separate financial statements ..................................................................114
4.
Reports and opinions on the accounts.........................................................................174
Corporate governance report ..........................................................................................186
1
Assessment of compliance with good governance principles.......................................187
Financial statements, notes and opinions........................................................................38
3
2
Management guidelines, mission, objectives and corporate policies ...........................188
3
General operating principles........................................................................................190
4
Relevant transactions with related parties ...................................................................193
5.
Corporate model..........................................................................................................197
5.1. Statutory bodies ...........................................................................................................................................198
5.2. Specialised committees ...............................................................................................................................214
6.
Remuneration of Members of Statutory Bodies ...........................................................218
7.
Control system ............................................................................................................220
7.1. Internal control system .................................................................................................................................220
7.2. Control system on the protection of the company’s investments and assets ...............................................223
7.3. Control system on the safeguarding of customers’ assets held under CaixaBI’s custodian services...........224
8.
Disclosure of relevant information................................................................................225
8.1. Market relations representative ....................................................................................................................225
8.2. Disclosure of market information..................................................................................................................225
8.3. Summary table of compliance with information disclosure requirements on CaixaBI’s website...................226
8.4. CaixaBI’s equity stakes ................................................................................................................................226
8.5. Share capital and dividends policy ...............................................................................................................227
9.
Analysis of economic, social and environmental responsibility.....................................228
9.1. Economic .....................................................................................................................................................232
9.2. Social ...........................................................................................................................................................233
9.3. Environmental ..............................................................................................................................................235
Compliance with legal guidelines ...................................................................................236
4
Board of Directors’ Report
5
1. Statutory bodies
Shareholder´s General Meeting Board
Chairman
José Lourenço Soares
Secretaries
Salomão Jorge Barbosa Ribeiro
Ana Cristina Pinheiro Vieira Rodrigues de Andrade
Board of Directors
Chairman of the Board of Directors
Jorge Telmo Maria Freire Cardoso
Chairman of the Executive Committee
Joaquim Pedro Saldanha do Rosário e Souza
Members of the Executive Committee
Francisco José Pedreiro Rangel
Paulo Alexandre de Oliveira e Silva
Paulo Alexandre da Rocha Henriques
Members of the Board of Directors
José Pedro Cabral dos Santos
José Manuel Carreiras Carrilho
Supervisory Board
Chairman
Miguel José Pereira Athayde Marques
Members
Pedro António Pereira Rodrigues Felício
Maria Rosa Tobias Sá
Deputy
João Manuel Barata da Silva
Statutory Auditors
Permanent
Deputy
Carlos Luís Oliveira de Melo Loureiro
Deloitte & Associados, SROC represented by João Carlos Henriques Gomes Ferreira
6
2. Organisational chart
Board of Directors
Executive Committee
Business Units
Project Finance
Carlos Figueiredo
Structured Finance
João Beatriz
Equity Capital Markets
Ana Santos Martins
Corporate Finance - Debt
Paulo Serpa Pinto
Syndication and Sales
Leonor Canedo
Corporate Finance Advisory
Marco Lourenço
Brokerage
Valentim Martins
Financing and Structuring
Francisco Santos
Research Office
João Miguel Lourenço
Support Units
Information Systems
Ema Campos
Human and Administrative
Resources
António Carlos Alves
Strategic Planning and
Organisation
Rita Lourenço
Compliance
Ália Silva
Legal Affairs
Ana Andrade
Operations
Miguel Freire
Marketing and
Communication
António Gregório
Internal Audit
Fernando Oliveira
Accounting
João Gonçalves
7
3. Key consolidated financial indicators
Profit and loss indicators
1
2013
2012
Change
Net interest income
25,671
28,166
(8.9%)
Net commissions
54,339
58,551
(7.2%)
Income from financial assets
22,829
7,327
-
(212)
2,012
-
(thousand euros)
Other operating income
Net operating income
102,628
96,055
6.8%
Provisions and impairment
(39,350)
(30,567)
28.7%
Overheads
(25,017)
(23,387)
7.0%
(4,140)
(1,276)
-
Investment income (equity accounting)
Net income before taxes
34,121
40,824
(16.4%)
Tax
(5,965)
(12,410)
(51.9%)
0
(874)
(100.0%)
Net income
28.156
27.541
2.2%
Cost-to-income
24,1%
23,9%
0.2 p.p.
2013
2012
Loans portfolio (net)
587,492
646,647
Securities portfolio
699,313
634,778
Derivatives portfolio (assets)
522,843
861,503
(546,011)
(901,211)
112,066
129,042
2,008,571
2,373,829
314,835
292,027
ROE
9.3%
10.9%
ROA
1.3%
1.2%
Non-controlling interests
(thousand euros)
Derivatives portfolio (liabilities)
Customer resources
Net assets
Shareholders’ equity
1
The financial statements for 2012 have been restated and the investment in CGD Investimentos is now consolidated by the equity accounting
method.
Balance sheet indicators
8
4. Overview of CaixaBI
4.1. Awards and rankings
Caixa - Banco de Investimento, S.A. (CaixaBI or Bank), in its activity in 2013, furthered the
international affirmation strategy it has been implementing over the last few years. The Bank’s good
performance in terms of its core business has continued to merit the recognition of its customers and
partners and has been rewarded by international analysts’ distinctions, as shown in its leading
Best Investment Bank
in Portugal
in Portugal
in Portugal
International Finance
World Finance
Global Banking & Finance Review
Best Cross-border M&A Deal
in Portugal
Achievement Awards
EMEA Finance
EMEA Finance
positions in the main sector rankings.
9

CaixaBI topped the M&A ranking in Portugal, according to Bloomberg data for operations
completed in 2012 and 2013.
M&A Ranking - Portugal
Amount
Ranking
Advisor
1
CaixaBI
16,489
17
2
BES Investimento
16,280
19
3
Citi
14,286
7
4
Barclays
12,407
7
5
Rothschild
9,889
4
(€ million)
Transactions
Source: Bloomberg
* operations completed in 2012 and 2013

According to Dealogic data for 2013, CaixaBI/CGD led the domestic ranking as mandated lead
arranger (MLA) for project finance operations. According to Bloomberg, CaixaBI/CGD was the
globally best positioned Portuguese bank.

CaixaBI consolidated its leading position in the equity capital market in Portugal, coming second
in Portugal’s ECM League Table for 2013 and was the best positioned domestic financial
institution.
ECM League Table - Portugal
Amount
Ranking
Advisor
1
Goldman Sachs
861
2
2
CaixaBI
537
3
3
Mediobanca
339
1
4
JP Morgan
264
1
5
Société Générale
200
1
(€ million)
Transactions
Source: Dealogic
The Bank also came first in the Bloomberg ranking for bookrunners of euro-denominated
domestic bond issues.
Bookrunner Ranking* - Portugal
Percent
Amount
Ranking
Bookrunner
1
CaixaBI
10.8%
1,420
11
2
BES Investimento
9.8%
1,287
10
3
Deutsche Bank
8.9%
1,168
6
4
Société Générale
7.1%
924
5
5
Morgan Stanley
6.2%
813
2
(€ million)
Transactions
Source: Bloomberg; CaixaBI
* Considering only issuers outside the bookrunner group

According to CMVM data, CGD Group came second in the brokers’ ranking with an
accumulated market share of 13.9% and growth of 20.4% in the volume of trading over 2012.

CaixaBI also received Global Brands Magazine’s award for the Best Investment Banking
Brand in Portugal.

10
4.2. Highlights for the period
CaixaBI was involved in various emblematic deals during the course of the year, strengthening its lead
position in the investment banking area. The following are the main highlights by business area.
Project finance
CGD Group, through CaixaBI, was involved in global operations for an amount of around € 194
million, coming first in Dealogic’s MLA ranking as mandated lead arranger for project finance
operations in Portugal and was the best positioned Portuguese bank in all of its operating
geographies.
On an international level, reference should be made to the progressive geographic expansion of the
Bank’s activity in overseeing operations in Angola and Mozambique, in addition to joint coordination
with Banco Caixa Geral – Brasil, S.A. (BCG Brasil) on structuring and/or financial advisory services for
several projects in Brazil.
Structured finance
CaixaBI was involved in around forty corporate structured operations, with a successful involvement in
financial advisory and financial reorganisation operations for a global amount of around € 5.6 billion,
particularly including the structuring and organisation of finance for Tagus Holding, for the Exit
Mechanism for Non-controlling Interests in Brisa and its performance as mandated lead arranger for
Empark’s revolving credit facility.
Corporate finance – advisory
Notwithstanding the challenging economic environment and decline in M&A operations in 2013,
according to Bloomberg, CaixaBI continued to lead the Portuguese ranking as an advisor in M&A
operations, based on its involvement during the course of 2012 and 2013 in M&A completions worth
an aggregate amount of around € 16.5 billion.
CaixaBI’s operations, this year, particularly included its financial advisory services to Parpública for the
CTT - Correios de Portugal privatisation and to ZON for the merger between ZON Multimédia and
Optimus.
Reference should also be made to the financial advisory services to Parpública for the disposal of a
4.14% stake in EDP and to CGD for the disposal of a 6.11% equity stake in Portugal Telecom, the
Corporate finance - debt
CaixaBI continued to be the benchmark institution in the bonds and commercial paper sectors of
Portugal’s debt capital market and led the Bloomberg bookrunners ranking for euro-denominated
2
bonds issued by domestic entities .
2
Considering solely issuers outside the bookrunner’s group.
closing of the disposal operation on HPP Saúde and financial advisory services for the disposal of an
equity stake in Banco Terra, Mozambique.
11
CaixaBI led 13 of the 14 primary bond market issues, including one Spain based issuer. Reference
should be made to CaixaBI’s involvement as joint lead manager and bookrunner for the new 10 Year
Treasury Bonds issue, as the first syndicated placement of a new Portuguese Republic benchmark
issue since the inception of the Economic and Financial Assistance Programme, CGD’s issue of
covered bonds, which was the first access to the international covered bonds market by a Portuguese
bank since January 2010, Galp Energia’s inaugural eurobond issue which was the first unrated issue
made by a Portuguese corporate in the euromarket and the inaugural issue of Empark’s eurobond in
the high yield segment.
CaixaBI also organised and led fourteen new commercial paper programmes and completed thirty
nine extensions and/or revisions of the conditions of programmes which were opened in past years.
Equity capital market
CaixaBI consolidated its leading position in the equity capital market in Portugal as the best positioned
domestic financial institution in Dealogic’s ECM Portugal league table, in which it came second in the
ranking. Its advisory operations particularly included its involvement as the global coordinator and
bookrunner for the first initial public offering of a company on the domestic stock exchange since
2008, the CTT – Correios de Portugal's IPO and advisory services to CGD and Parpública for their
disposal of qualified investments, in Portugal Telecom and EDP, respectively, based on accelerated
bookbuilding processes in which the Bank also operated as joint bookrunner. CaixaBI also advised
Parpública in its listing of the referred to block of EDP shares on NYSE Euronext Lisbon.
Brokerage
Based on data published by CMVM, CGD Group came second in the brokers’ ranking, with an
accumulated market share of 13.9%, up 20.4% in trading over 2012. Contributory factors were
CaixaBI’s involvement in the CTT – Correios de Portugal IPO and as bookrunner in the accelerated
bookbuilding process on 4.14% of the capital of EDP and 6.11% of the capital of PT, in addition to the
growth of activity in the international customers’ segment. Reference should also be made to
involvement in the Belgium Post IPO and accelerated bookbuilding process on 12% of the capital of
the International Airlines Group and 12% of the capital of Mapfre.
Financing and structuring
CaixaBI’s performance as a Specialised Treasury Securities Trader enabled it to achieve second
place in IGCP’s global ranking. The Bank continued to operate as a liquidity provider on several
shares listed on NYSE Euronext Lisbon, with Euronext having awarded its maximum “A” rating on all
Matching Facility.
Syndication and sales
CaixaBI was joint lead manager in eight primary market issues of which special reference should be
made to the Portuguese Republic’s four and ten year Treasury Bond issues, CGD’s issue of covered
bonds and the inaugural issues of Galp Energia and Empark. It was also co-lead manager for a
Banque Populaire Caisse D’Épargne issue and was responsible for 222 commercial paper issues for
€ 3.3 billion.
securities and categories. Reference should also be made the Bank’s pioneering activity in the new
segment created by NYSE Euronext to stimulate the liquidity of retail investors in the form of the Retail
12
Venture capital
CaixaBI’s venture capital area is responsible for managing four venture capital funds, FCR Caixa
Empreender+, FCR Grupo CGD, Caixa Crescimento FCR, created in 2013 and specifically geared to
investments in SMEs and mid-caps and FCR Caixa Fundos, which was also created in 2013 and
specialises in the indirect operations area (funds of funds).
During the course of 2013, 121 investment projects were analysed and 21 approved (for around € 115
million). 28 investments (11 new and 17 increased investments) involving € 25 million and 20
disinvestments for a realisation amount of € 28 million were made.
13
5. Macroeconomic environment
5.1. International
In its update to the World Economic Outlook, published in January, the IMF estimated world economic
growth of around 3.0% in 2013, in comparison to 3.1% in 2012. This revision follows an acceleration of
economic activity in second half 2013 and was corroborated by the expected evolution of the main
developed economies and the improved perception of the risk attached to the more peripheral
eurozone countries, reflected in a reduction of credit spreads on such countries’ public debt bonds in
comparison to the German benchmark with an identical maturity.
The ECB also revised its economic estimates for the eurozone in 2013, now indicating a 0.4%
contraction of GDP for the year.
The disclosure of the main indicators for European Union countries indicates a positive evolution of
their respective economies, particularly second and third quarter GDP growth (following six
consecutive quarters of contraction) and the more positive performance of confidence and economic
sentiment indicators.
The most recent economic indicators for the US indicate a 4.1% growth of GDP in the third quarter,
based on the positive performance of exports, investment and private consumption.
5.2. Domestic
According to INE data, the domestic economy posted a 1.6% year-on-year increase in GDP in fourth
quarter 2013, up 0.5% over the third quarter of the year. This is the third consecutive quarter in which
the Portuguese economy has achieved a positive change, following ten consecutive quarters of
contraction.
This growth is largely due to the recovery of domestic demand which made a positive contribution to
th
the year-on-year change of GDP, which had not been the case since 4 quarter 2010, mainly
reflecting the behaviour of private consumption. There was an increase in the positive contribution of
net external demand owing to the acceleration of exports of goods and services.
December was up 0.2% year-on-year. The average rate of change of this index over the course of the
year was 0.3%.
The Bank of Portugal published its Winter Economic Bulletin indicating a 1.5% contraction of GDP in
th
th
2013 and growth of 0.8% in 2014, in line with estimates resulting from the 8 and 9 assessments of
the IMF, ECB and European Commission, in October.
The joint balance on the current and capital account is thought to have totalled a positive 2.5% of
GDP, in 2013, as a reflection of the increase of national exports of goods and services, reduction of
According to the INE, unemployment at the end of the fourth quarter was 15.3%, against 15.6% at the
end of the third quarter and 16.9% at the end of 2012 and the consumer price index, in Portugal, in
14
investment and increase in the internal savings rate, permitting a highly significant reduction of the
Portuguese economy’s external borrowing requirements.
GDP growth rate
4,0%
3,0%
GDP growth rate (yoy)
2,0%
1,0%
0,0%
-1,0%
-2,0%
-3,0%
-4,0%
PT
EZ
US
DE
Dec-13
Nov-13
Oct-13
Sep-13
Aug-13
Jul-13
Jun-13
May-13
Apr-13
Mar-13
Feb-13
Jan-13
Dec-12
Nov-12
Oct-12
Sep-12
Aug-12
Jul-12
Jun-12
May-12
Apr-12
Mar-12
Feb-12
Jan-12
Dec-11
-5,0%
JP
5.3. Financial markets
International financial markets, in 2013, continued to be negatively influenced by the instability in
Europe, fiscal and monetary policy uncertainties in the US and fears over the evolution of the Chinese
economy.
The euro began 2013 by appreciating against the US dollar from 1.30 to 1.37 at the start of February
followed by a sharp correction to 1.28 at the end of March. Between this date and the beginning of
July, the single European currency was listed in a band of between 1.28 and 1.32. The remaining
months were characterised by the euro’s gradual appreciation against the dollar, up to nearly 1.38 at
the end of December. The euro’s appreciation against the yen trended towards consistency,
notwithstanding periods of greater volatility, with an increase in its exchange rate from around 115 yen
to 145 yen over the course of the year. The euro started the year by appreciating from 0.81 to 0.87
against sterling at the start of February and latterly remaining within the 0.84 to 0.87 band, ending the
year at close to 0.84.
15
2013 came to a close with the debt markets of Italy, Portugal and Spain benefiting from the support of
ample liquidity in the system and the guaranteed maintenance of an expansionary monetary policy,
driving down borrowing costs. Notwithstanding having been penalised by government instability in Italy
over the third quarter, yields on Portuguese 10 year public debt were down by around 88 b.p. over the
year to around 6.1%, with a 150 b.p. narrowing of the respective spread between German debt to 420
b.p.
TBs vs. Bunds (10 year)
8,0%
Portugal vs Germany 10 years
7,0%
6,0%
5,0%
4,0%
3,0%
2,0%
1,0%
Dec-12
Jan-13
Mar-13
Mar-13
Apr-13
May-13
PT10Y
Jun-13
DE10Y
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Spread PT-DE 10Y
Regarding equity markets within the same period, the PSI 20 appreciated 16.0% over the end of 2012.
Equity markets
130
125
120
115
110
105
95
90
Dec-12
Jan-13
Mar-13
Mar-13
PSI20
Apr-13
May-13
IBEX
Jun-13
Jul-13
Aug-13
Euro Stoxx 50
Sep-13
Oct-13
Nov-13
S&P 500
Dec-13
100
16
6. Strategy and business model
As CGD Group’s specialised unit in investment banking, CaixaBI’s pursues its key strategic objectives,
acting in tandem with the Group’s commercial structures in maximising cross-selling opportunities with
commercial banking activity.
CaixaBI aims to create a dynamic international business platform, especially focusing on Portugal,
Spain, Brazil and Lusophone Africa, based on business areas with strong levels of sectorial
specialisation, endowed with services and solutions of growing quality and innovation providing for a
relevant offer of investment banking products.
Its income structure derives from commissions earned from advisory mandates, brokerage services
and financial income from its credit underwriting and assets and risk management activities.
Information on the main highlights of CaixaBI’s activity, over the course of 2013, in its diverse
business areas is given below.
6.1. Project finance
CGD Group, through CaixaBI, was involved in global operations for an amount of around € 194 billion,
coming first in Dealogic’s MLA ranking as mandated lead arranger for project finance operations in
Portugal and was the best positioned Portuguese bank on a global ranking level.
Particular reference should be made to the following CaixaBI operations completed, in 2013:

Indaqua Oliveira de Azeméis: financial closing of the water concession with CaixaBI providing
advisory, structuring and financing organisation services.
Indaqua Vila do Conde: completion of the economic-financial water concession rebalancing
process.

17
Particular reference should also be made to CaixaBI’s advisory services in the following projects:

Central Greece: completion of the road concession restructuring operation in Greece.

Parpública: completion of the transfer of a part of Elos’s contractual package to Parpública.

Itevelesa: completion of the refinancing of this Spanish group which operates in the vehicle
inspections sector.

Hixam II: completion of the refinancing of Isolux Group’s car parks’ portfolio.

Abengoa: advisory services for the tender concession on services for the operation,
maintenance and expansion of the system of flood control reservoirs in the Alto Tietê
hydrographic basin, in the State of São Paulo, in partnership with BCG-Brasil.

Rodovias Federais: CaixaBI, in partnership with BCG - Brasil, was the advisor to one of the
main Brazilian players, Odebrecht TransPort (an Odebrecht Organisation company), on diverse
tenders for a collection of federal roads in Brazil. These tenders resulted in the recent award of
the BR-163/MT concession, totalling 850km, to Odebrecht TransPort.
6.2. Structured finance
Leveraged & acquisition finance activity was generally very limited in 2013, on account of the adverse
macroeconomic scenario and current financing difficulties. Inversely, the Bank was highly dynamic in
its financial liabilities reorganisation activity, contributing towards easing companies’ growing
operational and liquidity difficulties and adjusting their financial structures to their effective cash flow
generating capacity.
CaixaBI was involved in around forty projects in this area, having successfully completed financial
advisory and financial reorganisation operations for approximately € 5.6 billion.
18
Reference should be made to the following operations, in 2013:

Empark: mandated lead arranger for the structuring and organisation of a revolving credit facility.

Tagus Holding: structuring and organisation of finance for Tagus Holding SARL (a company
55% owned by José de Mello Group and 45% by Arcus European Infrastructure Fund) for the Exit
Mechanism for Non-controlling Interests in Brisa.

Alteco/Mag Import: financial advisory services for the disposal of loans payable to CGD – Spain
Branch.
Other completions, with CaixaBI’s advisory services during the year were:

Lena and Abrantina Groups: advisory services for the structuring and organisation of the
financial liabilities’ reorganisation process.

Sogevinus: oversight and organisation, as agent bank, of the financial liabilities’ reorganisation
process.
Extrusal: advisory services for the structuring and organisation of the financial liabilities´
reorganisation process.

19
Additionally, CaixaBI also conducted analysis and negotiation tasks, in the context of CGD Group’s
involvement in various entities’ syndicated financial liabilities’ reorganisation processes.
Mention should also be made of the small and medium-sized enterprises segment, in which CaixaBI
managed a portfolio of approximately 70 commercial paper programmes for a nominal maximum
amount of around € 250 million, in 2013, together with the corresponding activity.
6.3. Corporate finance – advisory
M&A activity was down in 2013 in terms of the volume of announced transactions, both on a European
level and worldwide. Special reference should be made to the sharp deceleration of M&A activity in
the last quarter of the year, considering third quarter growth in the world and European markets at
11.6% and 8.4%, respectively.
Notwithstanding the challenging environment, CaixaBI’s advisory operations, with an aggregate value
of € 16.5 billion between 2012 and 2013, gave it first position in the Bloomberg M&A league table in
Reference should be made to the following M&S completions, in 2013, with CaixaBI’s advisory
operations:

ZON: financial advisory services to ZON for the merger operation incorporating Optimus into ZON
Multimédia.

Parpública: financial advisory services to Parpública for the CTT – Correios de Portugal
privatisation operation.
Portugal, in which the Bank has, over the years, retained a leading position.
20

Parpública: financial advisory services to Parpública for the disposal of an equity stake of 4.14% in
EDP.

CGD: financial advisory services to CGD, for the disposal of an equity stake of 6.11% in Portugal
Telecom.

Banco Terra: financial advisory services for the disposal of an equity stake in Banco Terra,
Mozambique.

Parparticipadas: financial advisory services to Parparticipadas for the disposal of an equity stake
in BPN Brasil.

Parparticipadas: financial advisory services to Parparticipadas for the disposal of an equity stake
in BPN IFI.

HPP Saúde: closing of the HPP Saúde disposal operation, signed at the end of 2012.
Reference should be also made to other project completions during the year in which CaixaBI acted
as an advisor:

Lena / Abiber: financial advisory services for the financial restructuring of the Lena and Abiber

Caixa Seguros e Saúde: various economic-financial assessments for Caixa Seguros e Saúde.

CGD: various economic-financial assessments for CGD, for impairment analyses on financial
investments.

Parcaixa: financial advisory services for the economic and financial assessment processes of
subsidiary companies Águas de Portugal and Caixa Leasing e Factoring.

SAG: financial advisory services for the economic and financial assessment processes on Unidas
(Brazil).
Groups.
21
6.4. Corporate finance – debt
CaixaBI continued to be the benchmark operator in the debt capital market in Portugal, particularly in
the bonds and commercial paper sectors, coming first in the Bloomberg ranking for bookrunners of
3
euro-denominated bonds issued by domestic entities .
Bond loans
CaixaBI’s operating priority, in 2013, continued to be on Portuguese public debt, namely in the
framework of its Specialised Treasury Securities Trader status, in which it once again came in a
leading position (second in the respective global ranking).
Reference should also be made to CaixaBI’s joint lead manager and bookrunner status in the € 3
billion issue of new 10 Year Treasury Bonds, as the first syndicated placement of a new Portuguese
Republic benchmark since the inception of the Economic and Financial Assistance Programme.
CaixaBI was also co-lead manager in the syndicated reopening of the € 2.5 billion Treasury Bonds
4.35% October 2017 issue.
CaixaBI led twelve private debt issues in 2013, including:

CGD: joint lead manager and bookrunner for the € 750 million covered bonds issue, the first
access to the international covered bonds market by a Portuguese bank since January 2010.

Galp: joint lead manager and bookrunner for Galp Energia’s inaugural € 500 million eurobond
issue, maturing in 2019. This was the first unrated issue by a Portuguese corporate in the
euromarket as well as one of the year’s largest unrated issues by an entity headquartered in
Southern Europe and the organisation and joint lead of a € 600 million bond loan with a maturity of

Empark: joint lead manager and bookrunner in Empark’s first access to the high yield European
market in a split (fixed and variable rate) issue, for € 385 million, with a maturity of 6 years.

3
PT: joint lead manager and bookrunner for PT’s € 1 billion eurobond issue, its largest since 2009.
Considering solely issuers outside the bookrunner’s group.
4 years.
22

REN: joint lead manager and bookrunner for two REN eurobond issues for € 300 million with a
maturity of 5 years and € 400 million with a maturity of 7 years.
Parpública, Sonae Sierra, Mota-Engil África, EDA and Violas/Cotesi: organisation and lead of
bond issues of € 170 million, € 75 million, € 75 million, € 50 million and € 10 million respectively.

23
Commercial paper
CaixaBI organised and led fourteen new commercial paper programmes for € 668 million, in 2013,
particularly:
Thirty nine extensions and/or revisions of the conditions of past year programmes were also made.
Other
Regarding structured assets finance activity, reference should be made, in 2013, to the processes of
the incorporation of modifications in two of CGD’s securitisation operations in past years - Nostrum
Mortgages No. 1 and Nostrum Mortgages No. 2, with the objective of maximising their efficiency in
light of the recent changes to the methodologies of rating agencies in addition to the ratings of several
of the counterparties involved in the same operations.
6.5. Equity capital market
CaixaBI consolidated its leading position in the Portuguese equity capital market and was the best
Mention should be made of the following operations advised by CaixaBI:

CTT: CaixaBI was the global coordinator and bookrunner for the CTT – Correios de Portugal
privatisation IPO, responsible for the disposal of 70% of its capital in a stock exchange operation.
This was the first corporate IPO in the national stock exchange since 2008.
This operation took the form of a public offering in the domestic market and an institutional offering
for domestic and international institutional investors. Both tranches generated a high level of
interest from investors and were significantly oversubscribed. The final price was at the top end of
the price band (€ 5.52), in an operation for approximately € 579 million.
placed domestic institution in Dealogic’s ECM Portugal league table, in which it came in second place.
24

Parpública: CaixaBI was Parpública’s advisor and joint bookrunner for the disposal of its 4.14%
equity stake in EDP. The disposal marked the completion of EDP’s reprivatisation process
beginning June 1997 and was one of the largest financial market operations in Portugal, in 2013.
The offering, for €356.1 million, was made in a highly positive market window of opportunity with
EDP’s closing price in the preceding session hitting a peak of the last 12 months. A favourable
discount was also achieved, much lower than the average discounts in similar operations, in 2012,
both in the Iberian Peninsula as in the total number of European countries, enabling the
Portuguese state to maximise its financial proceeds.
The operation comprised the integral sale of a block of 151,517,000 shares through an accelerated
bookbuilding process exclusively geared to domestic and international institutional investors. The
operation’s success was fuelled by strong demand from diverse European institutional investors
and was heavily oversubscribed. CaixaBI contributed to the quality of the order book as the
offering’s joint bookrunner. CaixaBI was also advisor to Parpública in the process for the listing of
the referred to block of EDP shares on NYSE Euronext Lisbon.

Portugal Telecom: reference should also be made to CGD’s disposal of its 6.11% equity stake in
Portugal Telecom, through an accelerated bookbuilding process for a total amount of € 190.6
million, as part of its disinvestment strategy on non-strategic assets. CaixaBI was involved in this
operation as a CGD advisor and joint bookrunner.
This highly successful operation was considerably oversubscribed with a favourable discount which
was much lower than average discounts on similar operations since the start of the 2013, both in
the Iberian Peninsula and the total EMEA region. The price achieved in the offering also
represented a premium of 7% over the weighted average price of Portugal Telecom shares in the 3
months preceding the offer.
The PSI 20, in 2013, achieved its best annual level of performance since 2009, with accumulated
gains of 16%, notwithstanding the fact that the index was down 1.7% at the end of the first half year.
This loss was cancelled out by expressive gains in subsequent months.
The year was marked by the CTT – Correios de Portugal initial public offering which was the first IPO
on the Lisbon stock exchange since 2008 and in which CaixaBI was involved as joint global
coordinator and joint bookrunner. Reference should also be made to Banif’s equity increase and other
market offers through accelerated bookbuilding processes, namely trading on relevant equity stakes in
EDP (€ 356.1 million), Galp Energia (€ 677.6 million), Jerónimo Martins (€ 522.3 million) and Portugal
Telecom (€ 190.6 million).
6.6. Brokerage
25
According to CMVM data, CGD Group came second in the brokerage ranking with an accumulated
market share of 13.9% and 20.4% growth in trading volumes over 2012. A contributory factor was
CaixaBI’s participation in CTT’s already referred to IPO and as bookrunner in the accelerated
bookbuilding process on 4.14% of the equity capital of EDP and 6.11% of the equity capital of PT.
Reference should also be made to the growth of CaixaBI’s activity in the international customers’
segment, with the development of its activity in the North American market in conjunction with a local
partner and a slight increase in the group of private customers, notably through CaixaBI’s electronic
platform. Mention should also be made of the participation, in collaboration with its ESN partners, in
the Belgium Post IPO, the accelerated bookbuilding process on 12% of the equity capital of
International Airlines Group (“IAG”) and the accelerated bookbuilding process on 12% of the equity
capital of Mapfre.
In collaboration with the research areas of CaixaBI, CGD Investimentos and ESN members, CaixaBI
was involved in the organisation of roadshows with companies, investors and analysts in Portugal,
Spain, France, Finland and the US, particularly: i) the ESN conference in Frankfurt with several
domestic customers and companies such as Jerónimo Martins and EDP Renováveis, ii) the reverse
roadshow with international customers which visited Portuguese companies and iii) the Northern
European roadshow with Galp Energia and Queiroz Galvão Exploração e Produção.
6.7. Research
CaixaBI’s equity research area aims to independently monitor the evolution of financial markets, with
the objective of assisting investors in their decision-making processes associated with the
management of the equity components of their financial assets’ portfolios.
Operating on a sell-side approach, the research area monitors listed companies on the main NYSE
Euronext Lisbon (PSI20) Index, as well as other Portuguese mid & small caps, selected on the basis
of their interest to investors.
CaixaBI is a member of the ESN (European Securities Network), which is a pan-European network of
investment banks and/or brokerage houses which cooperate in the most varied financial market areas,
ranging from corporate equities and debt, including brokerage (sales and trading) and equity research.
Collaboration in the research area is underpinned by a pan-European approach with a methodology
based on standard equity analyses to provide investors with local expertise and guaranteeing a tighter
The ESN’s equity research teams are divided up into various sectors, in line with the Footsie
methodology and including various Portuguese companies, which enables research reports on
European companies to be produced for domestic investors while simultaneously providing
information on domestic companies to a wide range of foreign investors through the same network,
without the need for a global structure. ESN membership therefore provides CaixaBI’s analysts with a
European and consequently broader outlook on the evolution of financial markets, which is all the
more important owing to the current level of globalisation of financial markets.
ESN was distinguished, in 2013, as the best equity research team in Europe, by the specialised
CFI.co magazine.
focus on each company’s situation.
26
6.8. Financing and structuring
Sovereign debt
Notwithstanding the constraints on market-making in sovereign debt in the secondary market (low
liquidity levels and high bid-offer spreads), the portfolio risk minimisation strategy enabled positive
results to be earned over the course of 2013.
CaixaBI came second in the global Specialised Treasury Securities Trader Ranking and third in the
IGCP Ranking in terms of market share. In terms of the qualitative market share component i.e.
liabilities turnover to assets turnover ratio, IGCP classified CaixaBI in first place, establishing its
performance as a benchmark for Specialised Treasury Securities Traders.
Liquidity providing
CaixaBI's activity as a liquidity provider maintained high performance levels and continued to operate
on a series of securities such as Cofina, Orey Antunes, Altri, Inapa, Ibersol and SAG Gest, listed on
NYSE Euronext Lisbon, with Euronext having attributed its maximum “A” rating to CaixaBI for all
securities and categories. Reference should also be made to the Bank’s pioneering activity in the new
segment created by NYSE Euronext to improve the liquidity of retail investors, in the form of the Retail
Matching Facility.
Market-making activity involved the Fundiestamo real estate fund and a Millenniumbcp deeply
subordinated perpetual tier 1 issue.
Proprietary trading
CaixaBI has concentrated its trading activity on futures and shares, backed by the development of
internal models which have been continuously assessed, perfected or discontinued, in line with market
conditions or performance.
Corporate risk management advisory services
2013 continued to be a year of political-economic instability in the eurozone, resulting in greater
uncertainty and debt market volatility, culminating in the ECB’s interest rate cuts to historical
minimums. In such a context, demand for interest rate hedges remained low, as a consequence of
both the decline of lending to companies and low level of interest rates, with CaixaBI’s activity
therefore being based on the of structuring tailor made structured options.
exports and external investment, and also the development of commodity hedge solutions.
6.9. Syndication and sales
After Portugal’s return to the markets, in January, with a € 2.5 billion tap issue over the 5 year, the
Republic once more took advantage of favourable market conditions in April and start of May with a 10
year issue for € 3 billion, which was warmly welcomed by international investors. Given the importance
of this issue in regaining the confidence of investors and access to international markets, IGCP
The demand for derivatives, therefore continued to concentrate on currency hedges associated with
27
promoted the operation with international investors and agents with CaixaBI having organised,
collaborated on and accompanied IGCP in roadshows in Italy and the United Kingdom in March.
Reference should be made to CaixaBI’s involvement in the following primary market issues in terms of
syndications and sales, in 2013.

PGB 4.35% 2017: joint lead manager for the 5 year Portuguese Republic tap issue, with a
placement of € 2.5 million.

PGB 5.65% 2024: joint lead manager in the placement of the € 3 billion 10 year Portuguese
Republic issue.

CGD 3.75% 2018, Covered bonds: joint lead manager for an operation with a final placement of
€ 750 million and a maturity of 5 years.

Galp 4.125% 2019: joint lead manager for Galp Energia’s inaugural € 500 million debt market
issue with a maturity of 5 years.

Portugal Telecom 4.625% 2020: joint lead manager in an operation with a final placement of € 1
billion.

Empark 6.75% 2019: joint lead manager for Empark’s high yield inaugural issue with two tranches,
€ 235 million at a fixed rate with a maturity of 6 years and € 150 million at a variable rate with a
maturity of 6 years.

REN 4.125% 2018: joint lead manager for an operation with a maturity of 5 years and final
placement of € 300 million.

REN 4.75% 2020: joint lead manager for a € 400 million issue with a maturity of 7 years.

Banque Populaire Caisse D’Épargne 1.325% 2017: co-lead manager for a € 500 million issue.
As regards the issue of short term sovereign debt, IGCP organised eleven Treasury Bills auctions, in
which CaixaBI divulged and secured proposals from investors.
In the commercial paper sphere, CaixaBI placed 222 issues over the course of the year, for a total
amount of € 3,312 million.
6.10. Venture capital
Given the current economic environment, the capitalisation of economic agents and reorganisation
and revitalisation of the business environment are increasingly a sine qua non for an effective
represents another option for funding requirements as part of a business consolidation and expansion
strategy, with the sector evolving towards the appearance of new operators and growth of existing
operators, with the corresponding increase of available funds and the widening and diversification of
supply in this market.
Caixa Group has contributed towards this trend in incentivising and participating in new initiatives,
both in new funds managed by new teams and in reorganising and widening funds under Caixa
Capital management, in order to continue to ensure direct and indirect supply to the whole of the
corporate life cycle.
response to the challenge of growth and competitiveness. In such a context, venture capital
28
FCR Caixa Fundos, with a capital of € 199 million, was accordingly created in October 2013 as a
result of the merger incorporating FCR Mezzanine in the Fundo de Desenvolvimento e Reorganização
Empresarial, working as an indirect operator. Additionally, Caixa Crescimento FCR, with a capital
objective of € 150 million was set up in June 2013 for corporate investments in SMEs and mid-caps.
Caixa Capital also manages FCR Empreender+, geared to financing companies at their set up stage,
which have been operating for less than three years or which make substantial innovations in their
respective business processes, predominantly industries based on knowledge and applied technology
and FCR Grupo CGD, which is a generalist fund participating in development capital operations for
companies with high growth and value potential in all sectors of economic activity.
Caixa Capital investment vehicles
FCR Grupo CGD
FCR Caixa
Empreender+
FCR Caixa Fundos
• Participants:
CGD (85.63%)
CaixaBI (8.45%)
Caixa Capital (5.92%)
• Participants:
CGD (100%)
• Participants:
CGD (100%)
• Formed in 1995
• Formed in 2009
• Formed in 2013
Caixa Crescimento
FCR
• Participants:
CGD (100%)
• Formed in 2013
Of the total amount of € 607 million in funds under management, the amount invested in fund
subsidiaries at the end of 2013 totalled € 311 million of which € 227.4 million in companies and € 83.6
million in funds, in conjunction with a series of commitments assumed and operations approved but
still not performed which could increase the amount invested by a further € 117.2 million.
121 investment opportunities were analysed in 2013 and 21 operations approved, for around € 115
million. 28 investments were completed (11 new and 17 increases in already existing participations)
for an amount of € 25 million and 20 disinvestment operations with a realisation price of € 28.3 million
were completed.
Caixa Capital also continued to promote the integration of domestic companies and investors in an
international context, through its wide range of partnerships with leading European operators in the
venture capital and private equity areas.
29
6.11. Outlook for 2014
There continue to be various risk factors for the main developed economies, in 2014. This may lead to
lower levels of overall global dynamism of activity and particularly include:

an eventual premature reduction of monetary stimuli to economic growth by the US Fed,

the need to adjust the US public accounts (deficit and debt),

continued low inflation levels in the developed economies,

the possibility of a slowdown in the rate of growth of the Chinese economy over the medium
term, and

a potential inversion of capital flows to the emerging economies with greater domestic
difficulties.
In an endeavour to stimulate economic growth, the central banks of the main economic blocs have
maintained expansionary monetary policies, with historically low reference rates likely to be
maintained over the medium term.
The Bank of Portugal, in its Winter Economic Bulletin, indicates a 0.8% growth of GDP in 2014, in line
th
th
with the estimates resulting from the 8 and 9 appraisals carried out in October by the IMF, ECB and
European Commission. The moderate GDP increase projected for 2014 is likely to be accompanied by
the gradual correction of domestic macroeconomic imbalances (fiscal deficit, external deficit and
leverage) and an improvement in Portuguese companies’ market shares of external markets.
Uncertainty over the evolution of the Spanish economy, in 2014, remains high. The IMF has forecast
economic growth of 0.6% for 2014, with unemployment rising to 26.7% of the working population. The
adverse macroeconomic environment is likely to continue to impose highly significant constraints on
investment decisions in Spain.
The IMF has forecast growth of 2.3% in 2014 and between 2.8% and 3.5% up to 2018 for the Brazilian
economy. These estimates reflect a certain economic slowdown as they represent a downwards
revision of growth in comparison to estimates at the start of 2013. A certain growth dynamic, however,
is likely to continue, fuelled by public investment, especially in infrastructures.
IMF estimates regarding GDP growth in Angola and Mozambique, in 2014, are for 6.3% and 8.5%,
respectively. These growth rates are likely to be sustained by the development of domestic
commodities.
Aware of the uncertainties regarding the evolution of regional and global economies, CaixaBI’s
objectives for 2014 include the consolidation of its image as Portugal’s leading investment bank, while
simultaneously expanding its presence in international markets, particularly those such as Brazil,
Angola and Mozambique in which the Group already has an important presence.
As regards the debt capital markets, the economic-financial environment in Portugal is likely to remain
challenging although there will continue to be windows of opportunity for market access by Portuguese
issuers, including a broader spectrum. CaixaBI will remain committed to the Portuguese market, in
infrastructure networks notably in the transport, energy and construction areas and exports of
30
which it aims to continue to operate as a benchmark institution in the bond issues and commercial
paper segments. With the objective of mitigating the constraints that activity in Portugal is likely to
continue to face, while simultaneously providing for the needs of the Bank’s customers in other
geographies in which CaixaBI already operates, continuity will also be given, in 2014, to the
internationalisation project, particularly in Brazil, Mozambique and Angola.
The recovery being witnessed in the domestic equity capital market with the appreciation of Portugal’s
PSI 20 Index and lower volatility levels, may help to whet investors’ appetite for domestic assets and
consequently for a gradual increase in opportunities on equity offers in Portugal. The continuation of
this more positive climate, through 2014, may enable new companies to enjoy access to the financial
markets and fund their operations via IPOs or other primary market offerings. The borrowing
requirements of several companies or their non-strategic assets disinvestment policies, in addition to
the possibility that the Portuguese state may also undertake a privatisation operation in the financial
market may create opportunities for market offerings.
M&A activity in Portugal will continue to be significantly conditioned, in 2014, by the adverse
environment, with public investment and domestic demand impacting economic agents’ investment
decisions. The dynamism of the Brazilian and Lusophone Africa markets will increasingly grow in
importance in this business area.
The specific current domestic environment for project finance activity will continue to condition the
appearance of new opportunities. The Bank has therefore focused on strengthening its international
presence, in close collaboration with other CGD Group companies, notably in Angola, Mozambique
and Brazil, which geographies continue to require essential infrastructures in which CaixaBI has
already accumulated vast expertise and may benefit from all of the know how acquired over the
course of the years.
As regards venture capital activity, Caixa Capital will continue to develop the indirect investment area
and its commitment to investment opportunities in SMEs eligible for its Fundo Caixa Crescimento,
providing continuity to the commercial activity initiated in 2013 and expanding it to cover other
economic agents. The focus in the international area will be geared to identifying partnership
investment opportunities with value adding international investors.
In short the outlook for 2014 is contingent upon: (i) the sustained recovery of the debt, equity and M&A
markets in Portugal and Spain; (ii) the impact of the austerity and fiscal consolidation measures on the
economic growth of both Iberian countries, namely in terms of economic agents’ investment decisions;
(iii) the continued dynamism and sustained growth of the Brazilian, Angolan and Mozambican
economies as well as business penetration by CaixaBI in these markets and its capacity to promote
cross-border transactions.
31
7. Results
2013 was a positive year for CaixaBI in terms of activity, reaching a leading position in most league
tables and participating in the largest operations occurring in Portugal.
The Bank’s furtherance of its internationalisation strategy to the Brazilian and Lusophone Africa
markets, increased focus on advisory services and brokerage activities, together with cost
containment efforts, allowed CaixaBI to achieve good results, in a year marked by a recessionary
macroeconomic context and high levels of investor risk aversion.
As regards advisory activity, participation in major operations contributed to the good performance of
net commissions of € 54.3 million for the year.
Results from financial operations and equity instruments were also highly positive at € 22.8 million.
CaixaBI’s net operating income totalled € 102.6 million, up by around 7% year-on-year.
Net Operating Income
+ 7%
0,2
(€ million)
22,8
54,3
102,6
96,1
Operating income
(2013)
Operating income
(2012)
Net interest income
Net commissions
Financial operations
and equity instruments
Other operating
results
25,7
32
The adverse economic environment affecting the Portuguese and Spanish economies could not but
have had a negative impact on results which continued to be affected by increases in impairment,
provisions and write-downs of financial assets for € 47.3 million in the year, down by around 8% over
the € 51.6 million posted in 2012.
Impairment, provisions and write-downs
- 8%
(€ million)
8,0
51,6
47,3
39,4
Impairments and provisions
Write-downs
Impairments, provisions
and write-offs
(2013)
Impairments, provisions
and write-offs
(2012)
CaixaBI’s cost-to-income ratio of 24.1% remained clearly lower than that of its peers.
CaixaBI’s overall good performance was reflected in its net income of € 28.2 million for the year, up by
around 2% over the 2012 figure of € 27.5 million and representing an average return on equity of
9.3%.
Net income
102,6
25,0
+ 2%
10,1
Operating Income
Impairments and
provisions
Overhead costs
Taxes and associated
companies
28,2
27,5
Net Income (2013)
Net Income (2012)
The Bank’s solvency ratio, measured on a separate basis, remained solid at 15.4%.
(€ million)
39,4
33
8. Human resources
4
The Bank had 189 workers on a consolidated basis at the end of 2013 of whom 104 in business
areas, 46 in operational support areas, 28 in management support areas and 11 on CaixaBI and
Caixa Capital Executive Committees and its Supervisory Board.
Distribution by functional areas
Business units
104
Operational support units
46
Management support units
28
55%
24%
15%
Supervisory Board 3 2%
CaixaBI´s Executive Committee
Caixa Capital´s Executive Committee
4
2%
4 2%
The Bank has continued to rejuvenate its staff, with workers under the age of 39 comprising 43% of its
human capital. Reference should also be made to the fact that around 75% of CaixaBI’s workers had
higher level academic qualifications at the end of 2013.
Distribution by age band
<29
23
15
12%
Higher
35-39
42
40-44
29
45-49
+ de 60
4
36
7
75%
23%
Secondary
41
22%
16%
34
50-59
142
8%
18%
Primary
6 3%
19%
4%
Considering only fully consolidated companies CaixaBI and Caixa Capital.
30-34
Distribution by academic qualifications
34
9. Qualified holdings
Gerbanca, SGPS, S.A.
81,018,430 shares
99.80% of voting rights
35
10. Acknowledgments
The Board of Directors is grateful for the endeavours and dedication of its workers, aware that their
commitment and professionalism are particularly important in periods of greater difficulties and are the
basic building blocks of the Bank’s reputation with its customers, for whose preference it is also
grateful.
The Board lastly wishes to express its appreciation to its Shareholder for all of its support, the
Supervisory Board and Auditors for their continuous contribution to the maintenance of excellence in
their provision of accounting and management information and the Bank of Portugal and CMVM for
their constant cooperation and trust.
36
11. Proposal for the distribution of earnings
The Board of Directors submits the following proposal to the Shareholders’ General Meeting Board for
distribution of € 647,598.74 in earnings for 2013:
Legal reserve (10% of net income for the year)
€64,759.87
Other reserves
€582,838.87
Lisbon, 28 February 2014
(Jorge Telmo Maria Freire Cardoso)
(Joaquim Pedro Saldanha do Rosário e Souza)
(Francisco José Pedreiro Rangel)
(Paulo Alexandre de Oliveira e Silva)
(Paulo Alexandre da Rocha Henriques)
(José Pedro Cabral dos Santos)
(José Manuel Carreiras Carrilho)
37
Financial statements, notes and opinions
38
1. Consolidated and separate financial statements
39
Statement of consolidated financial position
2012
pro forma
(euros)
ASSETS
Cash and claims on central banks
Cash balances with other credit institutions
Investments in credit institutions
Financial assets at fair value through profit or loss
Available for sale financial assets
Hedge derivatives with positive revaluation
Investments held to maturity
Loans and advances to customers
Non-current assets held for sale
Investment properties
Other tangible assets
Intangible assets
Investments in associated companies and jointly
controlled entities
Current tax assets
Deferred tax assets
Other assets
Total Assets
Notes
5
6
7
8
9
10
Amount before
impairment,
amortisation and
depreciation
1
Impairment and
depreciation
Net amounts
2
3=1-2
12
13
108,027,998
11,268,409
4,858,566
1,239,552
2,247,502
15,602,277
536,616,522
683,816,424
1,723,737
587,492,006
11,037,611
3,332,461
14,541,856
3,753,700
52,584,182
875,420,909
619,208,389
1,651,219
646,646,780
11,590,329
2,668,918
14
22,817,827
-
22,817,827
37,594,819
15
15
16
1,321,231
41,166,950
130,027,075
29,870,406
1,321,231
41,166,950
100,156,669
1,209,960
36,396,344
70,362,839
11
2,162,596,149
Certified Accountant
João Gonçalves
154,025,379
2,008,570,770
Notes
Net amounts
1,239,552
2,247,502
15,602,277
536,616,522
683,816,424
1,723,737
695,520,004
22,306,021
8,191,027
2,373,630,243
2012
pro forma
2013
LIABILITIES
Credit institutions’ and central banks’ resources
Customer resources and other loans
Debt securities
Financial liabilities at fair value through profit or loss
Hedge derivatives with negative revaluation
Non-current liabilities held for sale
Provisions for other risks
Current tax liabilities
Deferred tax liabilities
Other subordinated liabilities
Other liabilities
Total Liabilities
17
18
10
10
19
15
15
20
955,145,957
112,065,504
545,075,845
934,851
12,822,276
3,884
8,892,552
58,794,946
1,693,735,814
969,055,625
129,041,689
899,786,632
1,424,476
7,836,994
12,561,657
2,602,629
59,491,656
2,081,801,358
81,250,000
(13,683,302)
219,112,492
28,155,765
314,834,955
2,008,570,770
81,250,000
(19,587,542)
202,625,580
27,540,846
291,828,885
2,373,630,243
SHAREHOLDERS’ EQUITY
Capital
Share issue premium
Other equity instruments
Treasury shares
Fair value reserves
Other reserves and retained earnings
Net income for the period
Advance of dividends
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
21
22
22
22
23
Board of Directors
2013
40
Consolidated income statement
(euros)
2013
Notes
2012
pro forma
Interest and similar income
24
235,716,904
295,893,856
Interest and similar costs
24
(210,045,802)
(267,728,277)
Income from equity instruments
NET INTEREST INCOME
450,000
885,983
26,121,101
29,051,562
Income from services and commissions
25
57,317,311
72,418,932
Costs of services and commissions
25
(2,977,863)
(13,868,420)
Income from financial operations
26
22,379,212
6,440,915
27
(211,678)
2,012,451
102,628,083
96,055,439
NET OPERATING INCOME
Employee costs
28
(15,091,660)
(13,955,257)
Other administrative expenditure
29
(8,963,692)
(8,419,516)
(961,787)
(1,012,416)
Depreciation and amortisation
12 + 13
Provisions net of recoveries and cancellations
19
(6,581,714)
(2,699,411)
Credit impairment net of reversals and recoveries
30
(17,365,136)
(18,030,216)
Impairment on other assets, net of reversals and recoveries
30
(15.403.163)
(9,837,780)
Income from associated companies and jointly-controlled entities
14
(4.140.227)
(1,276,378)
34.120.703
40,824,466
(15,296,139)
INCOME BEFORE TAXES AND NON-CONTROLLING INTERESTS
Income tax:
Current
15
(7,856,744)
Deferred
15
1,891,807
2,886,498
(5,964,937)
(12,409,641)
28.155.765
28,414,825
CONSOLIDATED INCOME PRIOR TO NON-CONTROLLING INTERESTS
-
(873,978)
NET INCOME FOR THE PERIOD
28,155,765
27,540,846
Shares outstanding
81,250,000
81,250,000
Earnings per share
0.35
0.34
João Gonçalves
23
Board of Directors
41
Consolidated cash flow statements
(euros)
2013
2012
pro forma
Cash flows from operating activities
Interest and commissions received
295,219,480
369,274,676
(229,183,830)
(287,425,895)
Payments to employees and suppliers
(23,439,039)
(22,873,764)
Payment of income tax
(20,525,788)
17,439,800
Interest and commissions paid
Other income
Operating income prior to changes in operating assets
98,333
2,334,781
22.169.156
78,749,598
(Increases) decreases in operating assets
361,173,124
(79,526,128)
(50,752,262)
(108,918,663)
37,088,260
(19,237,695)
29,980,962
33,658,760
Other assets
(34,824,095)
28,698,089
342,665,988
(145,325,636)
Increases (decreases) in operating liabilities
Financial liabilities held for trading
(355,200,412)
166,100,372
Other credit institutions’ resources
(6,710,775)
(28,059,587)
Customer resources
Other liabilities
Net cash from operating activities
(17,276,672)
15,118,113
189,314
(32,941,472)
(378,998,545)
120,217,427
(14,163,401)
53,641,389
-
(38,340,087)
(1,095,101)
(2,259,204)
Net cash from investing activities
Acquisition of investment in CGD Investimentos
Acquisition of tangible and intangible assets
Dividends received
450,000
885,983
(645,101)
(39,713,308)
Cash flows from financing activities
-
-
Net cash from financing activities
-
-
Inclusion in consolidation perimeter - CGD Investimentos
-
-
(14.808.502)
13,928,081
Increase (decrease) net of cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Joao Gonçalves
18,295,556
4,367,475
3,487,054
18,295,556
Board of Directors
Payment of dividends
42
Statement of changes to consolidated shareholders’ equity
(euros)
Fair value
reserves
Capital
Balances at 31 December 2011
Retained
earnings
Reserves
Profit for the
period
Total
Non-controlling
interests
Total
81,250,000
(73,626,045)
138,911,327
54,843,086
193,754,413
8,552,996
3,884,634
213,815,997
Transfer to reserves and retained earnings
-
-
11,021,562
(2,468,566)
8,552,996
(8,552,996)
-
-
Changes to consolidation perimeter – liquidation of FCR Energias Renováveis
-
-
-
-
-
-
(4,758,612)
(4,758,612)
Consolidated comprehensive income for 2012
-
54,038,503
318,172
-
318,172
27,540,846
873,978
82,771,500
Balances at 31 December 2012 - pro forma
81,250,000
(19,587,542)
150,251,062
52,374,520
202,625,581
27,540,846
-
291,828,885
Distribution of profit for 2011:
-
-
29,070,468
(1,529,621)
27,540,846
(27,540,846)
-
-
-
5,904,239
(11,053,935)
-
(11,053,935)
28,155,765
-
23,006,070
81,250,000
(13,683,302)
168,267,595
50,844,897
219,112,492
28,155,765
-
314,834,954
João Gonçalves
Board of Directors
43
Statement of consolidated comprehensive income
(euros)
Consolidated net Income for the period
2013
2012
pro forma
28,155,765
27,540,846
Items which may latterly be classified to profit and loss
Changes in assets available for sale fair value reserves
Equity instruments
Investment units
Fiscal impact
Changes in foreign exchange reserve
Income / (expenditure) recognised directly in shareholders’ equity
Attributable to minority shareholders’ interests
Comprehensive income for the period
João Gonçalves
12,100,837
95,697,752
968,186
(9,269,482)
(3,510,255)
(5,251,341)
146,730
(489,083)
9,705,499
80,687,846
(3,801,259)
(26,649,342)
5,904,239
54,038,503
(11,053,935)
318,172
(5,149,695)
54,356,676
-
-
(5,149,695)
54,356,676
-
873,978
23,006,070
82,771,500
Board of Directors
Debt instruments
44
Statement of separate financial position
(euros)
ASSETS
Cash balances with other credit institutions
Financial assets held for trading
Other financial assets at fair value through profit or loss
Investments held to maturity
Assets with repurchase agreement
Hedge derivatives
Non-current assets held for sale
Intangible assets
Investments in subsidiaries, associated companies and jointly
controlled entities
Current tax assets
Deferred tax assets
Other assets
Total Assets
Notes
4
5
6
6
8
9
10
2012
Provisions,
Impairment and
depreciation
Net amount
2
3=1-2
11
12
124,567,465
11,147,642
4,667,870
1,237,734
1,884,971
531,382,786
5,083,735
665,850,843
4,877,994
570,952,539
1,723,737
10,994,139
3,180,933
14,540,841
3,226,943
869,524,094
5,896,816
599,797,409
45,474,273
651,243,761
1,651,219
11,546,806
2,455,005
13
53,226,375
12,234,507
40,991,868
53,226,375
14
14
15
13,716
39,166,950
123,574,608
26,900,489
13,716
39,166,950
96,674,119
34,330,290
66,055,490
7
2,153,534,039
João Gonçalves
179,517,973
1,974,016,067
2,358,969,320
2012
336,901,375
545,075,845
618,244,582
124,573,743
934,851
16,521,903
2,976,318
58,307,510
216,717,504
899,786,632
752,338,121
139,245,978
1,424,476
12,982,791
12,552,549
2,411,123
59,027,443
1,703,536,127
2,096,486,618
81,250,000
(5,960,733)
194,543,074
647,599
270,479,940
1,974,016,067
81,250,000
(13,310,371)
175,307,291
19,235,783
262,482,703
2,358,969,320
Notes
Net amount
1,237,734
1,884,971
531,382,786
5,083,735
665,850,843
4,877,994
695,520,004
1,723,737
22,141,780
7,848,804
2013
LIABILITIES
Central banks’ resources
Debt securities
Financial liabilities associated with transferred assets
Hedge derivatives
Non-current liabilities held for sale
Provisions
Other subordinated liabilities
Other liabilities
16
7
17
18
7
19
14
14
20
Total Liabilities
SHAREHOLDERS' EQUITY
Capital
Share issue premium
(Treasury shares)
Revaluation reserves
(Advances of dividends)
Total Shareholders’ Equity
Total Liabilities and Shareholders’ Equity
21
22
22
22
Board of Directors
2013
Amount before
provisions,
Impairment and
depreciation
1
45
Separate income statement
(euros)
2013
Notes
2012
23
235,456,416
295,581,038
23
(210,181,833)
(267,930,714)
25,274,582
27,650,323
NET INTEREST INCOME
24
450,000
1,098,653
25
50,196,192
64,114,487
25
(2,977,530)
(13,863,186)
Income from assets and liabilities at fair value through profit or loss (net)
26
13,832,008
(4,485,618)
Income from available for sale financial assets (net)
27
8,451,529
2,072,030
Income from currency revaluation (net)
28
145,511
147,040
Income from the disposal of other assets
29
(49,561)
2,701,155
30
NET OPERATING INCOME
(594,119)
1,511,380
94,728,613
80,946,265
Employee costs
31
(13,639,586)
(12,494,596)
General administrative expenditure
32
(8,279,918)
(7,832,225)
Depreciation and amortisation
11 + 12
(878,126)
(924,946)
19
(5,135,545)
(1,937,908)
Value adjustments associated with loans and advances to customers and amounts
receivable from other debtors (net of recoveries and cancellations)
19
(38,617,384)
(16,829,111)
Impairment on other financial assets net of reversals and recoveries
19
(14,491,061)
(8,429,525)
Impairment on other assets, net of reversals and recoveries
19
(13,081,753)
(614,892)
605,240
31,883,061
NET INCOME BEFORE TAXES
Income Taxes
Current
14
(7,574,176)
(14,884,633)
Deferred
14
7,616,535
2,237,354
NET INCOME
647,599
19,235,783
NET INCOME FOR THE PERIOD
647,599
19,235,783
Shares outstanding
81,250,000
81,250,000
Earnings per share
0.01
0.24
João Gonçalves
Board of Directors
46
Separate cash flow statement
(euros)
2013
2012
Cash flows from operating activities
Interest and commissions received
287,842,688
360,588,651
(229,358,327)
(287,610,845)
Payments to employees and suppliers
(21,343,033)
(20,646,691)
Payment of income taxes
(20,140,441)
(284,529)
18,765,151
1,834,053
16.716.358
72,930,319
Interest and commissions paid
Other income
Operating income prior to changes in operating assets
(Increases) decreases in operating assets
361,323,124
(79,526,128)
(50,334,396)
(126,925,563)
40,586,019
(19,411,481)
29,980,962
33,658,760
Other assets
(35,672,487)
29,881,597
345,883,222
(162,322,815)
Increases (decreases) in operating liabilities
(355,200,412)
166,100,372
(6,710,775)
(28,059,586)
Customer resources
Other liabilities
Net cash from operating activities
(14,963,871)
4,567,776
254,275
(31,580,366)
(376,620,783)
111,028,196
(14,021,204)
21,635,701
Acquisitions of investments in subsidiaries, associated companies and jointly controlled entities
Disposals of investments in subsidiaries, associated companies and jointly controlled entities
Dividends received
Increase (decrease) net of cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
João Gonçalves
(1,073,874)
(2,192,248)
-
(38,340,087)
-
31,538,736
450,000
1,098,653
(623,874)
(7,894,946)
(14,645,078)
13,740,754
17,767,783
4,027,029
3,122,706
17,767,783
Board of Directors
Acquisitions of tangible and intangible assets
47
Statement of changes to separate shareholders’ equity
(euros)
Notes
Revaluation
reserves
Capital
81,250,000
Legal reserve
Free reserve
Retained earnings
Profit for the
period
Total
Total
(78,290,723)
45,344,162
69,948,117
58,550,496
173,842,775
1,464,516
178,266,568
-
-
146,452
1,318,065
-
1,464,516
(1,464,516)
-
-
64,980,352
-
-
-
-
19,235,783
84,216,135
81,250,000
(13,310,371)
45,490,614
71,266,182
58,550,496
175,307,291
19,235,783
262,482,703
8
-
-
1,923,578
17,312,205
-
19,235,783
(19,235,783)
-
-
7,349,638
-
-
-
-
647,599
7,997,237
81,250,000
(5,960,733)
47,414,192
88,578,387
58,550,496
194,543,074
647,599
270,479,940
João Gonçalves
Board of Directors
48
Statements of separate comprehensive income
(euros)
2013
2012
647,599
19,235,783
12,100,837
95,697,752
Changes in assets available for sale fair value reserves
Debt instruments
Equity instruments
Investment units
Fiscal impact
Items which will not latterly be classified to profit and loss
968,186
(489,950)
(2,064,856)
(3,089,025)
146,730
(489,083)
11,150,898
91,629,694
(3,801,259)
(26,649,342)
7,349,639
64,980,352
-
-
Income / (expenditure) recognised directly in shareholders’ equity
7,349,639
64,980,352
Separate comprehensive income
7,997,237
84,216,135
João Gonçalves
Board of Directors
2. Notes to the consolidated financial statements
1. INTRODUCTORY NOTE
Caixa - Banco de Investimento, S.A. (“Bank”) was formed by a public deed of 12 November 1987, having absorbed all
assets and liabilities of the Portuguese branch of Manufacturers Hanover Trust Company, in conformity with the terms
of Ministerial Order no. 865-A/87 of 6 November, jointly issued by the Presidency of the Council of Ministers and
Ministry of Finance.
The Bank is Caixa Geral de Depósitos Group’s specialised investment banking business arm, which includes
activities such as debt capital markets, equity capital markets, corporate finance advisory, structured finance, project
finance, brokerage, research and venture capital operations. The Bank has offices in Lisbon and Porto and a branch
in Spain.
The Bank also has direct and indirect equity investments in several companies in which it has majority shareholdings.
These companies comprise Caixa – Banco de Investimento (Group).
As referred to in Note 21, the majority of the Bank’s share capital is owned by Caixa Geral de Depósitos Group
company Gerbanca, SGPS, S.A.
The consolidated financial statements, at 31 December 2013, were approved by the Board of Directors on 28
February 2014.
The Bank’s and its subsidiaries’ financial statements, at 31 December 2013, still require the approval of their
respective shareholders’ meetings. The Board of Directors considers, however, that the said financial statements will
be approved without significant changes.
2. ACCOUNTING POLICIES
2.1. Presentation bases
The consolidated financial statements, at 31 December 2013, were prepared on the basis of the
International Financial Reporting Standards (IFRS) as adopted in the European Union, under European
Parliament and Council Regulation (EC) 1606/2002 of 19 July and the dispositions of Decree Law
35/2005 of 17 February.
Consolidation principles
The consolidated financial statements include the accounts of the Bank and the entities directly and
indirectly controlled by the Group (Note 4).
In terms of associated companies, “subsidiaries” are companies over whose current management the
Bank wields effective control with the aim of obtaining economic benefit from their operations. Control
usually takes the form of more than 50% of share capital or voting rights. In addition, as a result of the
application of IAS 27 – “Consolidated and separate financial statements”, the Group has included venture
capital funds managed by the Group in which it is exposed to most of the risks and enjoys most of the
benefits associated with the respective activity, in its consolidation perimeter.
Subsidiaries’ accounts were consolidated by the global integration method. Transactions and significant
balances between the consolidated companies have been eliminated. Consolidation adjustments are also
made, when applicable, to ensure the consistency of the application of the Group’s accounting principles.
CaixaBI: Annual Repor 2013
2.2.
50
Consolidated profit derives from the net income of the Bank, its subsidiaries and jointly controlled entities,
in proportion to their respective effective equity investments, after consolidation adjustments, including
the elimination of dividends received and capital gains and losses generated between companies
included in the consolidation perimeter.
Change of accounting policy – Recognition of interests in jointly controlled entities
The Group changed the way it recognises interests in jointly controlled entities in 2013, which are now
recognised by the equity accounting method (Note 2.5), as permitted under the option of paragraph 38 of
IAS 31 - "Interests in jointly controlled entities".
It should be noted that, up to 31 December 2012, subsidiaries held in jointly controlled entities were
recognised in the consolidated financial statements by the proportional integration method. In accordance
with the referred to method such enterprises' assets, liabilities, income and expenditure were recognised
in the consolidated accounts in direct proportion to their equity capital percentage.
This decision enabled the impacts of the implementation of IFRS 11 - "Joint arrangements" in the Group's
financial statements to be anticipated. Its adoption, in the European Area, is mandatory for the economic
years starting on or after 1 January 2014.
Under paragraph 29 of IAS 8, the change of accounting policies requires the need to re-express the
financial statements for comparative periods, presented in accordance with the modifications to the
adopted methodology. The redefinition of the consolidation methodology on jointly controlled entities did
not have any effect on the composition of shareholders’ equity or the Group’s net income but did require
the reorganisation of diverse financial position and income statement aggregates, which are set out
below:
(euros)
FINANCIAL POSITION
Claims on other credit institutions
Hedge derivatives with a positive revaluation
Intangible assets
Investments in associated companies
Current tax assets
Deferred tax assets
Other assets
Hedge derivatives with a negative revaluation
Provisions for other risks
Other liabilities
2013
Effect of change
2012
pro forma
14,541,856
3,939,369
77,664,074
888,931,098
619,208,389
1,651,219
647,991,356
11,962,747
29,195,188
1,576,073
38,333,031
98,653,295
2,433,647,694
(185,669)
(25,079,893)
(13,510,188)
(1,344,576)
(372,418)
(26,526,270)
37,594,819
(366,114)
(1,936,686)
(28,290,456)
(60,017,451)
14,541,856
3,753,700
52,584,181
875,420,910
619,208,389
1,651,219
646,646,780
11,590,329
2,668,918
37,594,819
1,209,959
36,396,345
70,362,839
2,373,630,243
(969,055,625)
(129,041,689)
(899,786,632)
(1,424,476)
(10,552,625)
(13,181,845)
(2,602,629)
(116,173,288)
(2,141,818,809)
291,828,885
2,715,631
620,188
56,681,632
60,017,451
-
(969,055,625)
(129,041,689)
(899,786,632)
(1,424,476)
(7,836,994)
(12,561,657)
(2,602,629)
(59,491,656)
(2,081,801,358)
291,828,885
2.3.
51
(euros)
CONSOLIDATED NET INCOME
Net interest income, including equity instruments
Effect of change
2012
pro forma
299,888,321
(267,732,597)
885,983
33,041,707
(3,994,465)
4,320
(3,990,145)
295,893,856
(267,728,277)
885,983
29,051,562
Net operating income from financial operations
77,004,862
(13,738,360)
5,409,899
(129,369)
101,588,739
(4,585,930)
(130,060)
1,031,016
2,141,820
(5,533,300)
72,418,932
(13,868,420)
6,440,915
2,012,451
96,055,439
Income from associated companies
Staff costs
Other costs and income
(16,938,070)
(12,573,370)
(31,850,523)
(61,361,963)
(1,276,378)
2,982,813
4,153,854
270,699
6,130,988
(1,276,378)
(13,955,257)
(8,419,516)
(31,579,824)
(55,230,975)
(15,271,495)
3,459,541
(11,811,954)
28,414,822
(24,644)
(573,043)
(597,687)
-
(15,296,139)
2,886,498
(12,409,642)
28,414,822
Income tax:
Current
Deferred
2.4.
2013
Combinations of business activities and goodwill
Acquisitions of subsidiaries are recognised according to the purchase method. The cost of the
acquisitions comprises the aggregate fair value of the assets delivered and liabilities incurred or assumed
for achieving control over the acquired entity plus the costs directly attributable to the operation. On the
acquisition date, identifiable assets, liabilities and contingent liabilities satisfying the recognition
requirements of IFRS 3 - “Combinations of business activities” are recognised at their respective fair
value.
Goodwill comprises the positive difference between a subsidiary’s acquisition cost and the effective
percentage acquired by the Group in terms of the fair value of its respective assets, liabilities and
contingent liabilities. Goodwill is recognised as an asset and is not amortised. Impairment tests are,
however, performed at least once a year.
Up to 1 January 2004, as permitted by the accounting policies defined by the Bank of Portugal, goodwill
was fully deducted from shareholders’ equity in the year of the acquisition of the subsidiaries. As
permitted by IFRS 1, the Group did not make any changes to this entry, for which the goodwill generated
on operations occurring up to 1 January 2004 continues to be recognised in reserves.
Jointly controlled entities
“Jointly controlled entities” are those over which the Bank wields effective control and shares its
management.
Equity stakes in jointly controlled entities are included in the consolidated financial statements by the
equity accounting method. On the acquisition date, the amount of the equity investment is recognised in
the financial statement by the purchase method with the positive difference between the acquisition cost
adjusted to the fair value of the assets, liabilities and contingent liabilities in proportion to the Group’s
equity investment recognised as goodwill (Note 2.4). The amount of the equity stakes is latterly adjusted
in accordance with each subsidiary’s net income for the year. The change in the value of the equity
2.5.
52
stakes is recognised in the profit and loss statement in “Income from associated companies and jointly
controlled entities”.
The amount of the equity investment is tested for impairment at least once a year.
If the financial statements of the subsidiaries are denominated in a foreign currency, the effect of the
currency changes is recognised in the Group’s financial position in “Other reserves and retained
earnings” (Note 2.6).
Transactions, balances and dividends distributed among jointly controlled entities and other Group
companies are eliminated in the consolidation process, at the reference date, in proportion to the control
attributable to the Group. Consolidation adjustments are also made, when applicable, to ensure the
consistency of the application of the Group’s accounting principles.
2.6.
Translation of balances and transactions in foreign currency
The separate accounts of each Group entity included in the consolidation are prepared in accordance
with the currency used in the economic context in which they operate (referred to as the “operating
currency”). At 31 December 2013 and 2012, all Group companies used the euro as their operating
currency except for CaixaBI Brasil – Serviços de Assessoria Financeira, LTDA and CGD Investimentos
Corretora de Valores e Câmbio, S.A. which use the Brazilian Real.
Foreign currency transactions are recognised on the basis of the reference rates in force at the
transaction date. At each balance sheet date, monetary assets and liabilities denominated in foreign
currency are translated into euros on the basis of the foreign exchange rate in force. Non-monetary
assets, recognised at fair value, are translated on the basis of the exchange rate in force on the last
valuation date. Non-monetary assets, recognised at their historical cost, continue to be recognised at the
original exchange rate.
Exchange rate gains/losses assessed upon exchange translation are recognised in income for the year,
except for differences originated by non-monetary financial instruments, such as shares, which are
classified as available for sale and recognised in a specific shareholders’ equity account until disposal.
Financial instruments
a)
Financial assets
Financial assets are recognised at fair value at the agreement date, plus the costs directly
attributable to the transaction. Financial assets are initially recognised in one of the following
categories defined in IAS 39:
i)
This category includes:

Financial assets held for trading, which essentially include the acquisition of securities with
the objective of realising gains on the basis of short term market price fluctuations. This
category also includes derivatives, excluding derivatives complying with hedge accounting
requirements; and,

Financial assets recognised at fair value through profit or loss.
2.7.
53
The use of the “Fair value option” implies the irrevocable recognition, in this category, of the
financial instruments at the time of initial recognition and is restricted to situations in which the
application results in the production of more relevant financial information, i.e.:
a) If its application eliminates or significantly reduces an accounting mismatch that would
otherwise occur as a result of the inconsistent measurement of assets and liabilities or
recognition of gains and losses;
b) Groups of financial assets, financial liabilities or both which are managed and assessed on a
fair value basis, in accordance with formally documented risk and investment management
strategies; and when information on the Group is distributed internally to management
bodies;
c) It is also possible to classify financial instruments containing one or more embedded
derivatives in this category, unless:

The embedded derivatives do not significantly modify the cash flows which would,
otherwise, be required under the contract;

It is evident, with little or no analysis that the implicit derivatives should not be separated
out.
The Group recognises the equity instruments relating to venture capital operations in this
category whenever the instruments have associated derivatives, notably the right or contractual
obligation to dispose of the subsidiary companies under the terms of shareholders’ agreements
entered into on the date upon which the equity investments were made and the securities
classifiable in sub-paragraph b) above.
Financial assets classified in this category are recognised at fair value whose gains and losses
generated by their subsequent valuation are recognised in the income statement in the “Income
from financial operations” account. Interest is recognised in the appropriate “Interest and similar
income” accounts.
ii) Loans and accounts receivable
These are financial assets with fixed or determinable payments, not listed on an active market
and not included in any of the other previously referred to financial asset categories. This
category includes loans and advances to the Group’s customers, amounts receivable from other
financial institutions and from the provision of services or disposal of assets.
These assets are initially recognised at fair value, less any commissions included in the effective
rate, plus all incremental costs directly attributable to the transaction. The assets are
subsequently recognised in the balance sheet at their amortised cost minus impairment losses.
to be calculated and the interest split over the period of the operations. The effective rate is the
rate that, being used to discount the estimated future cash flows associated with the financial
instrument, enables its present value to be matched with the value of the financial instrument at
the date of initial recognition.
iii) Available for sale financial assets
This category includes variable-income securities not classified as assets at fair value through
profit or loss, including stable financial investments and investments without associated options
Interest is recognised on the basis of the effective rate method which enables the amortised cost
54
in the Group’s venture capital area and other financial instruments initially recognised herein and
not classifiable in the other categories of the above referred to IAS 39.
Available for sale financial assets are measured at fair value, with the exception of equity
instruments not listed on an active market and whose fair value cannot be reliably measured,
which continue to be recognised at cost. Revaluation gains or losses are recognised directly in
shareholders’ equity in the “Fair value reserve”. At the time of sale or if impairment is assessed,
accumulated fair value changes are transferred to income or costs for the year.
Interest on debt instruments classified in this category is assessed on the basis of the effective
tax method and recognised in the income statement.
Dividends on equity capital instruments classified in this category are recognised as income in
the income statement when the Group’s right to receive them has been established.
Reclassification of financial assets
With the entry into force of the change to IAS 39 on 13 October 2008, the Bank was in a position to
reclassify several of its financial assets classified as financial assets held for trading or available for
sale to other financial assets categories. No reclassifications to financial assets at fair value through
profit or loss, are, however, permitted.
Fair value
As referred to above, financial assets classified in financial assets recognised at fair value through
profit or loss and available for sale financial assets are recognised at their fair value.
The fair value of a financial instrument comprises the amount at which an asset or financial liability
can be sold or liquidated between independent, informed parties, interested in realising the
transaction under normal market conditions.
The fair value of financial assets is, for most assets, assessed by a CGD Group body which is
independent from the trading function, based on the following criteria:

Closing price at the balance sheet date, for instruments traded on active markets;

The following valuation methods and techniques are, inter alia, used for debt instruments not
traded on active markets (including unlisted securities or securities with low liquidity levels):
i)
Bid prices published by financial information services such as Bloomberg and Reuters,
including market prices available on recent transactions;
ii) Reference bid prices obtained from financial institutions operating as market-makers;
iii) Internal valuation models based on market data used to define a price for the financial
instrument, reflecting market interest rates and volatility, in addition to liquidity and the credit risk

Unlisted shareholders’ equity instruments held as part of venture capital operations are valued
on the basis of the following criteria:
i)
Prices charged by independent entities on materially relevant transactions during the last six
months;
ii) Multiples of comparable companies in terms of operating sector, dimension and profitability;
iii) Discounted cash flows;
iv) Settlement price comprising the subsidiary company’s net worth;
associated with the instrument.
55
v) Acquisition cost (only for investments made in the twelve months preceding the valuation).
If there is a right or contractual obligation to alienate the subsidiaries under the terms of
shareholders’ agreements entered into when the investments are made, the respective
accounting valuation may not exceed the current amount of the sales price.
A discount factor reflecting the securities’ lack of liquidity and/or counterparty credit risk in the
agreements entered into is, if justified, applied to the amounts obtained from the above referred
to valuation methodologies.

Other unlisted shareholders’ equity instruments whose fair value cannot be reliably measured
(e.g. owing to the lack of recent transactions) continue to be recognised at cost, minus any
impairment losses.
b)
Financial liabilities
Financial liabilities are recognised at the agreement date at their respective fair value, minus the
costs directly attributable to the transaction. Liabilities are classified in the following categories:
i)
Financial liabilities held for trading comprise the negative revaluation of derivatives recognised at
their fair value.
ii) Other financial liabilities
This category includes other credit institutions’ and customers’ resources and liabilities incurred
on payments of services or purchases of assets.
These financial liabilities are valued at their amortised cost.
Derivatives and hedge accounting
The Bank performs derivative operations as part of its activity to provide for its customers’
requirements and reduce its exposure to foreign exchange, interest rate and price fluctuations.
Derivatives are recognised at their fair value at the date of the agreement. They are also recognised
in off-balance sheet accounts at their respective notional value.
Derivatives are subsequently measured at their respective fair value. Fair value is assessed:

On the basis of prices obtained in active markets (e.g. futures trading in organised markets);
 On the basis of models incorporating valuation techniques accepted in the market, including
discounted cash flows and options valuation models.

Up to 31 December 2012, derivatives were revalued on the basis of expected discounted future
cash flows at a risk-free interest rate. In addition, the Bank deferred the initial margin obtained
for the period of these operations, with specific adjustments having been recognised in the
positive valuation of derivatives involving counterparties with added credit risk. During the course
of 2013, as a result of the adoption of IFRS 13 (Note 2.18), the Bank incorporated add-ons to
reflect its own credit risk based on a market discount curve it considers to reflect its globally
associated risk profile. Simultaneously, based on its current exposure, the Group adopted a
similar methodology to reflect counterparty credit risk in derivatives with positive fair value,
having as a result of this situation, discontinued the procedure of deferring the initial margin.
c)
56
Embedded derivatives
Derivatives embedded in other financial instruments are separated from the base agreement and
processed autonomously under IAS 39, whenever:

The embedded derivative’s economic characteristics and risks are not closely related with the
base agreement defined in IAS 39; and

The full amount of the combined financial instrument is not recognised at fair value, with fair
value changes being reflected in the income statement.
Hedge derivatives
These derivatives are designed to protect the Group from exposure to a specific risk attached to its
operations. Classification as hedge derivatives and use of the hedge accounting concept, as
described below, are subject to compliance with IAS 39 rules.
The Group, at 31 December 2013 and 2012, only used hedges on the changes in the fair value of
financial instruments recognised in the balance sheet as “Fair value hedges”.
The Group prepares formal documentation, for all hedge operations, at the beginning of the
operation, to include the following aspects:

Risk and strategy management objectives associated with the realisation of the hedge operation,
in accordance with the hedge policies defined by the Group;

Description of hedged risk(s);

Identification and description of hedged and hedge financial instruments;

Hedge operation effectiveness appraisal method and respective periodicity.
Hedge effectiveness tests are periodically performed and documented, using a comparison between
the change in fair value of the hedge instrument and hedged item (part attributable to hedged risk).
With the aim of enabling the use of hedge accounting under IAS 39, the ratio should be between a
range of 80% and 125%. Prospective effectiveness tests are also performed to demonstrate the
hedges’ expected future effectiveness.
Hedge derivatives are recognised at fair value, with the results being assessed daily and recognised
in income and costs for the year. If the hedge is seen to be effective, the Bank will also recognise
the change in fair value of the hedged item, attributable to the hedged risk, in income for the year.
The impact of such valuations is recognised in “Income from financial operations” accounts. For
derivatives, such as interest rate swaps, with an associated interest component, the periodisation of
interest for the period in progress and liquidated flows are recognised in “Interest and similar
income” and “Interest and similar costs" in the income statement.
Positive and negative revaluations of hedge derivatives are recognised in specific assets and
Valuations of hedged items are recognised in the accounts in which such assets and liabilities are
recognised.
Trading derivatives
Trading derivatives are all derivatives that are not associated with effective hedge operations in
accordance with IAS 39, including:
liabilities accounts.
57

Derivatives taken out to hedge assets or liabilities risks at fair value through profit or loss, thus
rendering hedge accounting unnecessary;

Derivatives taken out to hedge risk which do not comprise effective cover under IAS 39;

Derivatives taken out for trading purposes.
Trading derivatives are recognised at fair value, with the results being assessed daily and
recognised in income and costs for the year. The impact of such valuations is recognised in “Income
from financial operations” accounts. For derivatives, such as interest rate swaps, with an associated
interest component, the periodisation of interest for the period in progress and liquidated flows are
recognised in “Interest and similar income” and “Interest and similar costs" in the income statement.
Impairment of financial assets
Financial assets at amortised cost
The Group periodically analyses impairment on its financial assets recognised at amortised cost,
notably loans and advances to customers, loans and advances to credit institutions and other
assets.
Signs of impairment are identified on a separate basis on financial assets with a significant level of
exposure and on a collective basis as regards like-for-like assets, whose debtor balances are not
separately relevant.
The following events may comprise signs of impairment:

Failure to comply with contractual clauses, namely arrears of interest or capital;

Debtor or debt issuing entity’s significant financial difficulties;

Existence of a strong probability of a declaration of bankruptcy by the debtor or debt issuing
entity;

Granting of facilities to a debtor in financial difficulties which would not be granted under normal
circumstances;

Historical records of collections suggesting that the nominal value will never be fully recovered;

Data indicating a measurable reduction of the estimated value of the future cash flows of a group
of financial assets since original recognition, although such a reduction cannot be identified in
the Group’s separate financial assets.
Whenever signs of impairment on separately analysed assets are identified, the eventual
impairment loss comprises the difference between the book value at the time of analysis and current
value of projected future cash flows expected to be received (recoverable value).
Assets upon which specific analyses have not been performed have been included in a collective
impairment analysis and classified for this purpose into like-for-like groups with similar risk
characteristics. Separately analysed assets on which no objective signs of impairment have been
noted were also subject to collective impairment analyses, as referred to in the preceding
paragraph.
Owing to the non-existence of a relevant track record in terms of the Bank, impairment losses
calculated on the collective analysis were assessed on the basis of Caixa Geral de Depósitos Group
parameters for comparable types of credit.
d)
58
The amount of impairment assessed is recognised in costs for the year and separately in the
balance sheet as a deduction from the amount of the respective credit.
The Group, whenever applicable, writes off/down unrecoverable loans from assets through its use of
the respective accumulated impairment with the Board of Directors’ approval. Eventual recoveries of
credit written off/down from assets are recognised as a deduction from the impairment losses
balance recognised in the income statement.
As referred to in Note 2.7. a), available for sale financial assets are recognised at fair value, with fair
value changes being recognised in the “Fair value reserve” in shareholders’ equity.
Whenever any objective evidence of impairment exists, accumulated capital losses recognised in
reserves are transferred to costs for the year in the form of impairment losses and recognised in the
“Impairment of other assets, net of reversals and recoveries” account.
In addition to signs of impairment on financial assets recognised at amortised cost, IAS 39 also
provides for the following specific signs of impairment on equity instruments:

Information on significant changes having an adverse impact on the technological, market,
economic or legal environment in which the issuing entity operates, indicating that the cost of the
investment may not be recovered;

A prolonged or significant decline in market value at below cost.
The Bank, on each of its financial statement’s reference dates performs an analysis of the existence
of any impairment losses on available for sale financial assets, considering, for the said purpose, the
nature and specific, separate characteristics of the assets being valued. In addition to the results of
the analysis, the following events were considered to comprise objective evidence of impairment on
equity instruments:

Existence of unrealised capital losses of more than 50% of the respective acquisition cost;

Situations in which the fair value of the equity instrument remains below its respective
acquisition cost for a period of more than 24 months.
The existence of unrealised capital losses of more than 30% of the acquisition cost, for more than 9
months, was also considered to comprise objective signs of impairment.
Impairment losses on equity instruments cannot be reversed and any unrealised capital gains
originated after the recognition of impairment losses are, therefore, recognised in the “Fair value
reserve”. Impairment is always considered to exist if additional capital losses are assessed at a later
stage and recognised in income for the year.
Criteria identical to debt instruments are applied for the analysis of “tier 1” securities.
notably unlisted equity instruments whose fair value cannot be accurately measured. The
recoverable value, in this case, comprises the best estimate of the future flows receivable from the
asset, discounted at a rate which adequately reflects the risk associated with holding the asset.
The amount of the impairment loss is directly recognised in income for the year. Impairment losses
on such assets cannot be reversed.
The Group also periodically performs impairment analyses on financial assets recognised at cost,
59
2.8.
Except for assets acquired up to 1998, these are recognised at cost, minus depreciation and
accumulated impairment losses. The costs of repair, maintenance and other expenses associated with
their use are recognised as a cost for the year, in “Other administrative expenses”.
The Bank revalued its fixed assets in 1998, under Decree Law 31/98 of 11 February. As permitted under
IFRS 1, the book value, incorporating the effect of the referred to revaluation was considered as a cost in
the transition to the IFRS, as the proceeds, at the time in question, generally comprised cost, or
amortised cost, in accordance with the IFRS, adjusted to take changes to price indices into account.
Depreciation is calculated and recognised as a cost for the year, on a straight line basis, during the
asset’s estimated useful life, comprising the period in which it is expected to be available for use, i.e.:
Years of useful life
Property
10 - 50
Equipment:
Furniture and materials
Transport material
4 - 10
4
IT equipment
3-4
Interior installations
3 - 10
Security equipment
4 - 10
Machinery and tools
5 - 10
Land is not depreciated.
The works carried out by the Bank on its headquarters building over the period 2008-2009 are being
depreciated over a period of ten years.
According to IAS 36 - “Asset impairment”, an impairment loss is recognised in the income statement for
the period whenever the net book value of tangible assets exceeds their recoverable value. Impairment
losses can be reversed and also have an impact on income for the period if there is an increase in the
asset’s recoverable value in the following periods.
The Group periodically assesses the adequacy of the estimated useful life of its tangible assets.
Financial leases
Lease operations are recognised as follows:
As lessee
Leased assets are recognised at fair value in assets and liabilities, and amortised.
The instalments relating to lease agreements are split up in accordance with the respective financial
schedule, whose liability is reduced by the part corresponding to the payment of the capital. Interest paid
is recognised as a financial cost.
As lessor
Leased assets are recognised in the balance sheet as loans, repaid by capital instalments set out in the
financial agreements schedule. Interest included in the instalments is recognised as financial income.
2.9.
60
2.10. Intangible assets
This account essentially comprises the costs of the acquisition, development or preparation for use of
software used for the performance of the Group’s operations. Intangible assets are recognised at cost,
minus depreciation and accumulated impairment losses.
Depreciation is recognised as a cost, on a straight line basis, throughout the assets’ estimated useful life
for a period of between 3 - 6 years.
Expenses on software maintenance are recognised as a cost for the year in which they are incurred.
2.11. Income tax
All Group companies are taxed separately, with companies headquartered in Portugal being taxed under
the regime established in the Tax on the Income of Collective Bodies Code (“IRC Code”). The accounts
of the Bank’s branch are integrated with the accounts of its headquarters office for calculating global
income taxable under IRC, with the income generated by the branch also paying local tax in the
countries/territories of domicile. Local tax is deductible from IRC payable on global activities under the
terms of article 91 of the respective Tax Code and Double Taxation Agreements entered into with
Portugal.
Group companies, in 2012 and 2011, paid IRC and the corresponding municipal surcharge at an
aggregate tax rate of 26.5%.
A state surcharge was introduced by Law 12 – A/2010 of 30 June, payable by all taxpayers who, in 2010
and in future years, earn taxable income of more than € 2,000,000 subject to and not exempt from IRC.
The state surcharge will correspond to 2.5% of taxable profit, subject to and not exempt from IRC, on the
part of the taxable income of more than the referred to limit of € 2,000,000.
Law 64-B/2011 of 30 December (state budget law for 2012), temporarily increased the limits and rates of
the state surcharge on taxable profit subject to and not exempt from IRC above € 1,500,000. The state
surcharge for 2012, applicable to taxable profit above € 1,500,000 and up to € 10,000,00 was increased
to 3% with the tax applicable to taxable profit subject to and not exempt from IRC above € 10,000,000
now being 5%.
In turn, Law 66-B/2012 of 31 December (state budget law for 2013), reduced the referred to limit from
which the state surcharge of 5% is applicable from € 10,000,000 to € 7,500,000.
Given the temporal/transitory character of the new calculation rules on the state surcharge (only
applicable in 2012 and 2013), deferred taxes registered by the Bank in 2013 and 2012 did not take into
account the referred to increase provided for in the state budget laws for 2012/2013
Law 83/2013 of 9 December, however, derogated the temporal/transitional nature of the new rules on the
calculation of the state surcharge. In turn, the reform of the IRC (Law 2/2014 of 16 January) applicable for
In light of these changes, the rate used to calculate deferred taxes in 2013 remained unchanged at 29%
(Note 15).
In 2012, the Group was included in the special tax regime on groups of companies as a controlled entity
under article 69 of the IRC Code. As such, the Group’s taxable income starting 2012 is included in the
taxable income of the dominant entity, Caixa Geral de Depósitos, SA. The option for this regime leads the
cost of any applicable income tax to be recognised in the sphere of separate companies, whose
corresponding payments are made by the dominant entity.
taxation periods starting on or after 1 January 2014 reduced the rate of IRC to 23%.
61
Caixa Desenvolvimento, SGPS, S.A. (Caixa Desenvolvimento) is subject to the general regime of the
elimination of distributed profits of article 51 of the IRC Code, under which earned profit is exempt from
tax in cases in which (i) the company distributing the income is resident in Portugal or the European
Union and is subject to IRC (or an analogous tax), (ii) the income is from profits which have effectively
been taxed and (iii) the beneficiary of the dividends has, for at least one year, maintained an equity
investment in the company distributing the dividends of more than 10%.
Caixa Desenvolvimento also applied the deferred taxation regime, established in the IRC Code, on
capital gains and losses realised in 1999 and 2000 on its exchange or sale of investments or shares.
Based on the regime in force on 1 January 2002, the capital gains made in the referred to years on
investments disposed of by 31 December 2004 are being taxed over a ten year period, with the Group
having recognised the respective deferred tax liability.
Under article 32 of the Statute of Fiscal Benefits, the capital gains and losses made on Caixa Capital –
Sociedade de Capital de Risco, S.A.’s (Caixa Capital) and Caixa Desenvolvimento’s sale of equity
investments, provided that such investments are held for not less than one year, and the financial costs
paid on the acquisition, are not considered as taxable material. This regime does not apply to the capital
gains made and financial costs paid when the equity investments have been acquired (i) from entities
with which a special relationship exists, as defined in no. 4 of article 63 of the IRC Code, (ii) to entities
which are domiciled, headquartered or effectively managed in a territory with a more favourable tax
regime or (iii) to entities resident in Portuguese territory, subject to a special tax regime and when held for
a period of less than three years.
Under the terms of article 32-A of the Statute of Fiscal Benefits, Caixa Capital is also entitled to deduct
from its IRC taxable income and up to the amount thereof, as a fiscal benefit, an amount equal to the sum
of its IRC tax bills for the five years preceding the year of the respective benefit, provided that the amount
of the deduction is invested in companies with growth and appreciation potential. Amounts not deducted
under the previously referred to terms may be deducted at a later stage, subject to the same terms, on its
tax bill for the following five years.
Total income tax recognised in the income statement includes current and deferred taxes.
Current tax is calculated on the basis of taxable profit for the year, which is different from accounting
income owing to adjustments to taxable profit resulting from costs or income which are not relevant for
fiscal purposes or only considered in other periods.
Deferred tax comprises the impact on payable / recoverable tax in future years resulting from temporary
deductible or taxable differences between the balance sheet value of assets and liabilities and their fiscal
basis, used to assess taxable profit.
Deferred tax liabilities are normally recognised for all temporary taxable differences, whereas deferred tax
assets are only recognised up to the amount by which the existence of future taxable profit, permitting the
use of the corresponding deductible tax differences or fiscal losses, is probable. Deferred taxes are not,

Temporary differences resulting from goodwill;

Temporary differences originating from the initial recognition of assets and liabilities in transactions
which do not affect accounting income or taxable profit;

Temporary differences resulting from subsidiaries and associated companies, to the extent that the
Group is able to control their reversal and which is not likely to occur in the foreseeable future.
The principal situations originating temporary differences on a Group level comprise provisions and
impairment not accepted for fiscal purposes, revaluations of equity investments recognised as available
however, recognised in the following situations:
62
for sale financial assets, deferred commissions, statutory revaluations of tangible assets, capital gains on
the disposal of investments (see above) and fiscal benefits granted to venture capital activities.
Deferred taxes are calculated on the basis of the tax rates expected to be in force on the date of reversal
of the temporary differences, comprising the approved or substantially approved rates, at the date of the
balance sheet.
Tax on income (current or deferred) is recognised in income for the year, except for cases in which the
originating transactions have been recognised in other shareholders’ equity account headings (e.g.
revaluations of available for sale financial assets). In such cases, the corresponding tax is also
recognised as a charge to shareholder’s equity and does not affect income for the year.
2.12. Provisions and contingent liabilities
A provision is set up when there is a current (legal or constructive) obligation, resulting from past events,
involving the probable future expenditure of resources and when this may be reliably assessed. The
amount of the provision comprises the best estimate of the amount to be paid to liquidate the liability at
the date of the balance sheet.
When not probable, the future expenditure of resources is considered to be a contingent liability.
Contingent liabilities require no more than a disclosure procedure, unless the possibility of their payment
is remote.
This account reflects the provisions required for liabilities incurred on guarantees and other off-balance
sheet liabilities and is assessed on the basis of a risk assessment on the operations and respective
customers. It also includes other provisions for fiscal, legal and other contingencies.
2.13. Employee benefits
The Bank does not have any retirement pension liabilities to its employees, who are covered by the
national Social Security regime, owing to the fact that it is not a signatory to the Collective Wage
Bargaining Agreement for the Banking Sector.
However, with the objective of providing its employees with a retirement subsidy to the standard Social
Security regime, the Bank voluntarily makes supplementary contributions with the objective of providing
old age retirement and disability and survivors’ pensions to its employees in accordance with the terms of
the contract.
The Bank pays a percentage of 3.5% of each employee’s annual wages. In 2013 and 2012 pension costs
were € 330,857 and € 278,974, respectively (Note 28).
The contributions are paid in the form of mass membership of the Caixa Reforma Prudente pension fund
The Bank does not have any liabilities other than the above referred to contributions owing to the fact that
this is a defined contribution plan.
The other Group companies do not have pension liabilities.
Short term benefits, including productivity bonuses paid to employees, are recognised in “Employee
costs” for the respective period, on an accrual basis.
managed by CGD Pensões – Sociedade Gestora de Fundos de Pensões, S.A.
63
2.14. Commissions
As referred to in Note 2.7, commissions received on credit operations and other financial instruments, i.e.
commissions charged for originating operations, are included in amortised cost and recognised as costs
or income over the period of the operation.
Commissions for services performed are usually recognised as income for the period of performance of
the service or as a lump sum if resulting from single acts.
The estimate of the commissions the Bank expects to pay to other credit institutions for the syndicating of
credit operations in which it is involved as lead and in which CGD Group’s initial exposure is higher than
the defined objective, is recognised as accrued costs as a charge to “Costs of services and commissions”
for the year in which the Bank recognises the income relating to the corresponding commission.
2.15. Securities and other items held under custody
Securities and other items held under custody, notably customers' securities, are recognised in offbalance sheet account headings at their nominal value.
2.16. Cash and cash equivalents
For the purposes of the preparation of cash flow statements, the Group considers “Cash and cash
equivalents” to be the total amount of the “Cash and claims on central banks” and “Claims on other credit
institutions” accounts.
2.17. Critical accounting estimates and most relevant judgemental aspects in the application
of accounting policies
The main accounting polices applied by the Group are described in Note 2. In the application of the
above referred to accounting policies, the Bank’s and Group’s companies’ Boards of Directors must
perform estimates. The estimates with the greatest effect on the consolidated financial statements include
those set out below.
ASSESSMENT OF IMPAIRMENT LOSSES ON LOANS AND ACCOUNTS RECEIVABLE
Impairment losses on loans and receivables are assessed in accordance with the methodology defined in
Note 2.7. d). Accordingly, the assessment of impairment on separately analysed assets derives from the
Bank’s specific valuation based on its specific knowledge of its customers’ status and the guarantees
associated with the operations in question.
The assessment of impairment on collectively analysed assets was based on Caixa Geral de Depósitos
The Bank considers that the assessment of impairment on the basis of this methodology permits the
adequate recognition of the risk associated with its credit portfolio, based on the rules defined in IAS 39.
VALUATION OF FINANCIAL INSTRUMENTS NOT TRADED IN ACTIVE MARKETS
In accordance with IAS 39, the Group values all financial instruments at fair value, except for those
recognised at amortised cost. The valuation models and techniques described in Note 2.7. a) are used to
value financial instruments not traded on liquid markets, including equity instruments allocated to venture
capital operations. The valuations obtained comprise the best estimate of the fair value of the referred to
Group parameters for comparable types of credit.
64
instruments, at the date of the balance sheet. The assessment of fair value on equity instruments
allocated to venture capital operations, may, however, be subjective.
As referred to in Note 2.7. a), to guarantee adequate segregation between functions, the valuation of
most such financial instruments, except for equity instruments allocated to venture capital operations, is
assessed by a body that is independent from the trading function.
A summary of the sources used by the Group to assess the fair value of financial instruments is provided
in Note 32 – Disclosures on financial instruments, in the “Fair value" section.
ASSESSMENT OF IMPAIRMENT LOSSES ON AVAILABLE FOR SALE FINANCIAL ASSETS
As described in Note 2.7. d), capital losses deriving from the valuation of such assets are recognised as a
charge to the fair value reserve. Whenever objective evidence of impairment exists, the accumulated
capital losses recognised in the fair value reserve should be transferred to costs for the year.
For equity instruments, including those allocated to venture capital, an assessment of the existence of
impairment losses may be subjective. The Group assesses whether or not impairment exists on such
assets through a specific analysis at each balance sheet date, taking into consideration the definitions
provided in IAS 39 (see Note 2.7. d). As a general criterion, impairment is always assessed when it is
considered, that, owing to the size of the capital loss assessed, the full recovery of the amount invested
by the Group is highly improbable.
In the case of debt instruments classified in this category, including “tier I” securities classified as equity
instruments, the capital losses are transferred from the fair value reserve to income, whenever there is
any indication of the possible future occurrence of a failure to comply with contractually agreed cash
flows, notably on account of financial difficulties, defaults on other financial liabilities, or a significant
downgrade of the issuing entity’s rating.
ASSESSMENT OF TAX ON PROFIT
Tax on profit (current and deferred) is assessed by Group companies on the basis of the rules defined by
the current fiscal framework. In several cases, however, fiscal legislation may not be sufficiently clear and
objective and may give rise to different interpretations. The amounts recognised in such cases represent
the best understanding of the responsible Bank bodies and subsidiaries on the correctness of the
operations although this may be queried by the fiscal authorities.
IMPAIRMENT OF GOODWILL
As referred to in Note 2.4. above, the Group performs impairment analysis on balance sheet goodwill, at
least once a year. These analysis are performed on the basis of cash flow projections for each of the
units under analysis, discounted at appropriate rates. The projections incorporate a broad range of
assumptions on the evolution of the future activity of the units in question, which may or not occur in the
future. Such assumptions, however, reflect the Group’s best estimate at the date of the balance sheet.
65
2.18. Adoption of new standards (IAS/IFRS) or revision of already issued standards
The following standards, interpretations, amendments and revisions endorsed by the European Union
and mandatory for economic years beginning on or after 1 January 2013, were adopted for the first time,
in the year ended 31 December 2013:
Standard/Interpretation
Applicable in years
starting on or after
Amendment to IFRS 1 - First time adoption of
international financial reporting standards
This amendment exempts entities adopting IFRS for the first time from the
01-jan-13
(Government loans)
IAS 20 on government loans
Amendment to IFRS 7 – Financial
instruments: disclosures
(Financial assets and liabilities netting
retrospective application of the dispositions of IAS 39 and paragraph 10A of
This amendment requires additional disclosures regarding financial
01-jan-13
instruments, particularly those related to financial assets and liabilities
netting operations
operations)
This amendment comprises the following changes:
(i) items comprising Other Comprehensive Income and which will, in the
Amendment to IAS 1 – Presentation of
financial statements
01-jul-12
(Other comprehensive income)
future, be recognised in net income for the year are now presented
separately; and
(ii) the Statement of Comprehensive Income will also be known as the Net
Income and Other Comprehensive Income Statement
The revision of this standard comprised several changes, notably:
(i) recognition of actuarial and financial gains and losses deriving from
differences between the assumptions used to assess liabilities and effective
verification of the income expected from assets and liabilities as well as
deriving from the occurrence of changes to actuarial and financial
Revision of IAS 19 – Employee benefits
01-jan-13
assumptions during the year, as a charge to reserves (other comprehensive
income);
(ii) a single interest rate is now applied on the assessment of the present
value of liabilities and the expected return from the plan’s assets;
(iii) expenses recognised in the income statement solely comprise the
current service cost and net interest expenditure;
(iv) introduction of new disclosure requirements.
IFRS 13 – Fair value measurement
(new standard)
Improvement of international financial reporting
standards (cycle 2009-2011)
This standard replaces current guidelines on various IFRS standards on fair
01-jan-13
value measurement. This standard is applicable when another IFRS
standard requires or permits fair value measurements or disclosures.
01-jan-13
These improvements involve the revision of diverse standards, notably
IFRS 1 (repeated application of the standard), IAS 1 (comparative
information), IAS 16 (equipment in use), IAS 32 (fiscal effect of the
distribution of own equity instruments) and IAS 34 (segment information).
Information on the impacts of the adoption of IFRS 13 – “Fair value measurement” on derivatives at 31
December 2013 is set out in Note 10.
The recognition of equity stakes in jointly controlled entities in conjunction with the equity accounting
method was made for the first time in the preparation of the consolidated financial statements for the year
ended 31 December 2013. Up to 31 December 2012 the Group had applied the proportional
consolidation method (Note 2.3.).
comparison purposes (pro forma financial statements), were prepared and re-expressed in accordance
with the requirements of IFRS 11 – “Joint arrangements” for comparability purposes with 2013. The
reference date of the referred to change was 1 January 2012.
As provided for in IAS 1, the opening balance should be disclosed when the effects of the retrospective
application of the changes in accounting policies are materially relevant. Considering that (i) the Group
assumed joint control of the subsidiary in June 2012 and (ii) the change does not have an impact on the
Group’s shareholders’ equity (Note 2.3), the Board of Directors considers that the retrospective
application would not have any effect with reference to 1 January 2012 and has not, therefore, submitted
the opening balance.
The consolidated financial statements, at 31 December 2012 and for the year then ended presented for
66
The adoption of the remaining above referred to standards, interpretations, amendments and revision did
not produce any significant changes in the Group’s financial statements, at 31 December 2013.
New standards and interpretations, amended or revised, not adopted
The following standards, interpretations, amendments and revisions, with mandatory application in future
economic years, were, up to the date of the approval of these financial statements, endorsed by the
European Union:
Applicable in years
This standard defines the requirements for the presentation of Consolidated
Financial Statements by parent companies, replacing as regards such
IFRS 10 – Consolidated financial statements
01-jan-14
aspects, IAS 27 - Consolidated and separate financial statements and SIC
12 - Consolidation – special purpose entities. This standard also introduces
new rules on the definition of control and assessment of the consolidation
perimeter.
This standard replaces IAS 31 – Joint ventures and SIC 13 – Jointly
IFRS 11 – Joint arrangements
01-jan-14
controlled entities – non-monetary contributions by venturers and eliminates
the possibility of the use of the proportional consolidation method to account
for interests in jointly controlled entities.
IFRS 12 – Disclosure of interests in other
entities
IAS 27 – Separate financial statements (2011)
IAS 28 – Investments in associates and jointly
owned entities (2011)
01-jan-14
01-jan-14
- IFRS 12 - Disclosure of interests in other
liabilities netting operations)
This amendment restricts the scope of application of IAS 27 to separate
financial statements.
Investments in associates and the new standards adopted, particularly IFRS
11 – Joint arrangements.
This amendment introduces a dispensation on the consolidation of certain
01-jan-14
entities classifiable as investment entities. It also establishes rules for the
measurement of investments held by such investment entities.
entities (investment entities)
Amendment to IAS 32 – (Financial assets and
subsidiaries, joint arrangements, associates and non-consolidated entities.
This amendment guarantees the consistency between IAS 28 –
01-jan-14
Amendment to standards:
- IFRS 10 - Consolidated financial statements
This standard establishes a new set of disclosures on equity stakes in
01-jan-14
This amendment clarifies certain aspects of the standard related to the
application of financial assets and liabilities netting requirements.
This amendment eliminates the disclosure requirements on the recoverable
amount of a cash generating unit with goodwill or intangibles with an
Amendment to IAS 36 - Impairment
(disclosures on the recoverable amount of
indefinite useful life allocated to the periods in which an impairment loss or
01-jan-14
non-financial assets)
reversal of impairment was not recognised. It introduces additional
requirements for disclosures on assets in respect of which an impairment
loss or reversal was recognised and when the recoverable amount thereof
has been assessed on the basis of fair value minus sales costs.
Amendment to IAS 39 – Financial instruments:
recognition and measurement
(reformulation of derivatives and continuation
of hedge accounting)
This amendment permits, in certain circumstances, the continued use of
01-jan-14
hedge accounting when a derivative designated as a hedge instrument is
reformulated.
These standards, although having been endorsed by the European Union, were not adopted by the
Group for the year ended 31 December 2013, owing to the fact that their application was still not
expected.
mandatory. No significant impacts on the financial statements as a result of their application are
67
economic years, were not, up to the date of the approval of these financial statements endorsed by the
European Union:
IFRS 9 - Financial Instruments (2009) and latter
This standard is part of the IAS 39 revision project and establishes the requirements for the
amendments
classification and measurement of financial assets.
Amendments to standards:
The amendment to IFRS 9 is part of the IAS 39 revision project and establishes the
- IFRS 9 - Financial instruments (2013);
requirements for the application of hedge accounting rules. IFRS 7 was also revised as a result
- IFRS 7 - Financial instruments - disclosures
of this amendment.
Amendment to IAS 19 – Employee benefits
standards (cycle 2010 - 2012)
This amendment clarifies the circumstances in which employees’ contributions to post
employment benefit plans comprise a reduction of the cost of short term benefits.
These improvements involve the revision of diverse standards.
This amendment establishes the conditions regarding the opportunity of the recognition of a
IFRIC 21 – Payments to the state
liability related with the payment to the state of a contribution by an entity as a result of a certain
event (e.g. participation in a certain market), without the payment being offset by specified
goods or services.
These standards have not as yet been endorsed by the European Union and were therefore not applied
by the Group for the year ended 31 December 2013.
3. OPERATING SEGMENTS
The Board of Directors receives and analyses the Bank’s financial information every month, split up into business
segments representing its areas of activity by type of origination, designed, as a whole, to ensure a dynamic
investment banking business platform, i.e.:

Corporate finance - including debt and equity financial advisory and project finance activities.

Trading and sales - including trading and asset and liabilities treasury management operations.

Brokerage – including brokerage operations.

Commercial banking - including domestic and international transversal business origination.

Venture capital - CGD Group’s venture capital operations are performed by Caixa Capital - Sociedade de Capital
de Risco, S.A. (which, in addition to concentrating all operating activity also manages four venture capital funds)
and Caixa Desenvolvimento, SGPS, S.A. (principally geared to strategic operations with the highest potential
appreciation).
Other – other activities outside the scope of the above referred to categories.

68
The following tables summarises the information on the Group’s operating segments, at 31 December 2013 and 2012:
2013
(euros)
Corporate
Trading and
finance
sales
Brokerage
Commercial
Venture
banking
capital
Other
Total
10,925,062
220,870,688
26,139
3,742,581
109,172
43,262
235,716,904
(5,813,353)
(202,579,367)
(17,114)
(1,597,165)
-
(38,803)
(210,045,802)
450,000
-
-
-
-
-
450,000
5,561,709
18,291,321
9,025
2,145,416
109,172
4,458
26,121,101
Net interest income including income from
equity instruments
I.
36,456,175
3,427,548
6,134,960
4,182,431
7,094,880
21,316
57,317,311
(596,483)
(223,222)
(2,152,183)
-
(333)
(5,641)
(2,977,863)
7,991,087
14,465,378
51,705
(128,958)
-
-
22,379,212
(630,135)
(189,626)
(21,871)
(747,042)
645,653
731,341
(211,678)
43,220,644
17,480,078
4,012,611
3,306,432
7,740,200
747,016
76,506,982
48,782,353
35,771,399
4,021,637
5,451,848
7,849,373
751,475
102,628,083
(84,557)
-
-
2,842
-
(6,500,000)
(6,581,714)
(9,799,605)
(60,008)
(3,841)
(7,458,658)
-
(43,024)
(17,365,136)
(761,176)
(15,133,121)
(2,730)
558,735
(64,855)
(16)
(15,403,163)
III.
(10,645,337)
(15,193,129)
(6,572)
(6,897,081)
(64,855)
(6,543,040)
(39,350,013)
Total
38,137,015
20,578,270
4,015,065
(1,445,233)
7,784,517
(5,791,565)
63,278,070
II.
Credit impairment, net of reversals and
recoveries
Impairment of other assets, net of reversals
and recoveries
(35,122,305)
Consolidated net income
28,155,765
Financial assets at fair value through profit or
-
531,736,881
6
4,729,635
150,000
-
536,616,522
-
606,689,519
-
53,083,363
17,965,581
6,077,962
683,816,424
-
1,723,737
-
-
-
-
1,723,737
527,994,831
-
1,731,523
48,173,995
-
9,591,657
587,492,006
278,679,575
601,779,672
913,914
55,940,718
9,561,537
8,270,541
955,145,957
4,826,865
-
33,317,220
73,921,419
-
-
112,065,504
-
545,075,845
-
-
-
-
545,075,845
-
934,851
-
-
-
-
934,851
loss
Credit
institutions’
and
central
banks’
resources
Financial liabilities at fair value through profit
or loss
2012
Trading and
finance
sales
Brokerage
Commercial
Venture
banking
capital
Other
Total
15,659,110
272,475,347
29,763
7,520,882
139,424
69,331
295,893,856
(6,065,737)
(259,081,697)
(39,051)
(2,479,896)
-
(61,897)
(267,728,277)
483,335
194,410
-
-
-
208,238
885,983
10,076,708
13,588,060
(9,288)
5,040,986
139,424
215,672
29,051,562
Net interest income including income from
equity instruments
I.
39,838,852
13,447,465
4,572,589
6,220,993
8,308,147
30,885
72,418,932
(11,750,689)
(279,144)
(1,372,378)
(460,173)
(5,234)
(802)
(13,868,420)
(5,697,348)
4,143,767
45,959
(759,264)
8,707,802
-
6,440,915
(66,664)
(307,003)
(31,348)
-
745,459
1,672,007
2,012,451
22,324,150
17,005,085
3,214,822
5,001,556
17,756,174
1,702,090
67,003,877
32,400,858
30,593,145
3,205,534
10,042,543
17,895,598
1,917,763
96,055,439
20,085
-
-
266
-
(2,719,762)
(2,699,411)
(11,460,140)
(1,643,655)
(3,912)
(4,904,346)
-
(18,162)
(18,030,216)
(415,608)
(8,088,325)
(409)
(540,076)
(793,362)
-
(9,837,780)
III.
(11,855,664)
(9,731,979)
(4,321)
(5,444,156)
(793,362)
(2,737,924)
(30,567,407)
Total
20,545,194
20,861,165
3,201,213
4,598,386
17,102,236
(820,162)
65,488,033
II.
Credit
impairment,
net
of
reversals
and
recoveries
Impairment of other assets, net of reversals and
recoveries
(37,947,186)
27,540,846
(euros)
Corporate
69
2012
(euros)
Corporate
Trading and
finance
sales
Financial assets at fair value through profit or
Brokerage
Commercial
Venture
banking
capital
Other
Total
-
870,611,199
6
4,809,704
-
-
875,420,909
-
544,720,766
-
41,838,430
19,410,980
13,238,213
619,208,389
-
1,651,219
-
-
-
-
1,651,219
530,336,827
-
2,369,826
103,621,361
-
10,318,767
646,646,780
239,824,228
640,775,600
1,071,665
67,953,542
8,777,862
10,652,729
969,055,625
6,668,942
-
22,002,550
100,370,198
-
-
129,041,689
-
899,786,632
-
-
-
-
899,786,632
-
1,424,476
-
-
-
-
1,424,476
loss
Financial liabilities at fair value through profit or
loss
Interest and similar costs were split up over the various business lines on the basis of the average value of the
respective asset allocations to the said operating segments.
Income distribution and the principal balance sheet accounts by countries in which the Group performs its activities, in
2013 and 2012, is set out below:
2013
Portugal
Spain
Brazil
Total
229,459,997
6,105,591
151,316
235,716,904
(204,589,515)
(5,456,287)
-
(210,045,802)
450,000
-
-
450,000
25,320,482
649,303
151,316
26,121,101
53,749,784
3,541,286
26,241
57,317,311
(2,971,818)
(6,045)
-
(2,977,863)
22,558,612
(179,400)
-
22,379,212
2,064,078
(2,273,432)
(2,325)
(211,678)
75,400,656
1,082,409
23,916
76,506,982
100,721,138
1,731,713
175,232
102,628,083
(7,135,474)
553,759
-
(6,581,714)
9.980.473
(27,345,609)
-
(17,365,136)
(16,045,222)
642,059
-
(15,403,163)
(13,200,223)
(26,149,790)
-
(39,350,013)
87,520,916
(24,418,078)
175,232
Net interest income including income from equity instruments
I.
II.
Credit impairment, net of reversals and recoveries
Impairment of other assets, net of reversals and recoveries
III.
Total
63,278,070
(35,122,305)
28,155,765
536,616,522
-
-
536,616,522
683,816,424
-
-
683,816,424
1,723,737
-
-
1,723,737
401,378,350
186,113,656
-
587,492,006
723,997,327
231,148,630
-
955,145,957
112,065,504
-
-
112,065,504
545,075,845
-
-
545,075,845
934,851
-
-
934,851
(euros)
70
2012
Portugal
(euros)
I.
Brazil
Total
284,435,809
11,284,653
173,394
295,893,856
(259,038,388)
(8,689,889)
-
(267,728,277)
Net interest income including income from equity instruments
Spain
885,983
-
-
885,983
26,283,403
2,594,764
173,394
29,051,562
71,078,260
1,340,672
-
72,418,932
(13,855,483)
(12,937)
-
(13,868,420)
7,244,269
(803,355)
-
6,440,915
1,294,546
717,948
(43)
2,012,451
65,761,592
1,242,328
(43)
67,003,877
92,044,996
3,837,093
173,351
96,055,439
(1,177,418)
(1,521,993)
-
(2,699,411)
(8.339.147)
(9,696,315)
5,246
(18,030,216)
II.
Credit impairment, net of reversals and recoveries
(9,459,342)
(378,437)
-
(9,837,780)
III.
(18,975,907)
(11,596,745)
5,246
(30,567,407)
Total
73,069,089
(7,759,653)
178,597
65,488,032
(37,947,186)
27,540,846
875,241,509
179,400
-
875,420,909
619,208,389
-
-
619,208,389
1,651,219
-
-
1,651,219
437,958,630
208,688,150
-
646,646,780
748,505,400
220,550,225
-
969,055,625
129,041,689
-
-
129,041,689
899,786,632
-
-
899,786,632
1,424,476
-
-
1,424,476
The information set out in the preceding tables comprises the balance sheet and income statements of all Group
entities headquartered in Portugal (“Portugal” column), the Madrid branch (“Spain” column) and CaixaBI Brasil –
Serviços de Assessoria Financeira, Ltda. and CGD Investimentos Corretora de Valores e Câmbio, S.A. (“Brazil”
column). Each of the Group entities performs its activity mainly with customers or resident counterparties domiciled in
the same countries in which they are headquartered.
4. GROUP COMPANIES AND TRANSACTIONS IN PERIOD
The following is a summary of the financial data extracted from the provisional accounts of the entities included in the
consolidation perimeter in the last financial year, using the global integration method:
Headquarters
Currency
effective
Date
Assets
investment
Entity
Profit /
Shareholders’
(Loss)
equity
Caixa - Banco de Investimento, S.A.
Lisbon
Euros
100.00%
31-12-2013
1,974,016,067
647,599
Caixa Desenvolvimento, SGPS, S.A.
Lisbon
Euros
100.00%
31-12-2013
470,696
1,352
465,468
Caixa Capital - Sociedade de Capital de Risco, S.A.
Lisbon
Euros
100.00%
31-12-2013
46,514,843
3,815,921
45,841,135
100.00%
31-12-2013
5,689,474
254,086
5,662,651
1,746,523
77,998
1,738,289
202,790,946
(56,990,058)
38,688,697
62,251,641
(17,494,492)
11,876,442
CaixaBI Brasil - Serviços de Assessoria Financeira LTDA
CGD Investimentos Corretora de Valores e Câmbio, S.A.
São Paulo
São Paulo
Reais
Euros
Reais
Euros
50.00%
31-12-2013
270,479,940
In July 2010 the Bank acquired 50% of the capital of CGD – Participações em Instituições Financeiras, Ltda (CGD
Participações), for the amount of € 22,721 with the remaining 50% of the capital being held by Banco Caixa Geral
Brasil. This vehicle was set up to acquire 70% of the share capital of Banif Corretora de Valores e Câmbio, S.A. (Banif
CVC) for the amount of R$ 123.9 million (€ 45.8 million at 31 December 2012), as provided for in the agreement
entered into on 2 June 2010,
The definitive contract for the acquisition of Banif CVC was signed on 6 February 2012.
Percentage of
(euros)
71
The shareholders’ agreement of Banif CVC entered into on the same date provided for the following options:

Put option by Banif Banco de Investimento (Brasil), S.A. (Banif) over CGD Participações, at the exclusive
discretion of Banif, in the period between the 12
th
th
and 60 month from the date of the signing of the shares
sales/purchase contract of 2 June 2010. The price would vary on the basis of the net profit for the period up to the
date upon which the option was exercised.

Call option by CGD Participações over Banif at the exclusive discretion of CGD Participações starting from the
th
60 month from the date of the signing of the shares sales/purchase contract of 2 June 2010. The price would
vary on the basis of the net profit for the period up to the exercising of the option.
At 2 June 2012, Banif exercised its put option on the remaining investment of 30% of Banif CVC’s equity capital for a
global amount of R$ 56 million. During the course of the operation Banif CVC’s name was also changed to CGD
Investimentos Corretora de Valores e Câmbio, S.A. (CGD Investimentos).
At 31 October 2012, the merger based on the reverse incorporation of CGD Participações into CGD Investimentos
was approved at the extraordinary meeting of shareholders. The referred to incorporation took effect through the
integration of CGD Participações’ assets and liabilities in its subsidiary company which was extinguished, with CGD
Investimentos assuming all rights and obligations deriving from its activity up to the date of the registration of the
merger.
The provisional financial data extracted from the statutory accounts of CGD Investimentos includes the cancellation of
deferred tax assets of R$ 46,857,373, made in accordance with the rules of the supervisory authority of Brazil. CGD
Investimentos, however, retains the right to use this carry-back in the future.
Caixa Capital - Sociedade de Capital de Risco, S.A. (Caixa Capital) is headquartered in Lisbon and was formed on 31
December 1990 under Decree Law 17/86 of 5 February. The company’s corporate object is to support and promote
investment and technological innovation by making temporary equity investments in their respective share capital. It is
also authorised to provide assistance to the financial, technical, administrative and commercial management of its
subsidiary companies. It managed four venture capital funds at 31 December 2013.
In November 2011, the Bank set up the company CaixaBI Brasil – Serviços de Assessoria Financeira Ltda with the
corporate object of providing consultancy services to companies on capital restructuring, business strategy and
connected issues, as well as consultancy and services for mergers, acquisition and sale of companies and structuring
of bank finance to be provided by other entities. The company is 90% owned by the Bank and 10% by Caixa
Desenvolvimento SGPS, S.A.. The capital was paid up in April 2012.
Caixa Desenvolvimento, SGPS, S.A. formed in 1998, is headquartered in Portugal. Its corporate object is to manage
equity investments in other companies, as an indirect form of performing economic activities.
On 16 December 2011, the investors meeting of the Fundo de Capital de Risco Energias Renováveis – Caixa Capital
decided to liquidate the fund. The fund was dissolved in February 2012 with the liquidation proceeds having been
divided up among the investors in proportion to their paid up capital holdings.
This account heading comprises the following:
(euros)
Cash
Sight deposits with central banks
2013
2012
3,715
2,912
1,235,837
14,538,944
1,239,552
14,541,856
The sight deposits with central banks account heading includes deposits with the Bank of Portugal providing for the
demands of the “Minimum Reserve Requirements of the System of European Central Banks” (SEBC). Interest is paid
5. CASH AND CLAIMS ON CENTRAL BANKS
72
on these deposits which comprise 1% of the deposits and debt securities with a maturity of up to two years, excluding
deposits and public debt securities subject to SEBC minimum reserve requirements (the period for maintaining the
reserves beginning 18 January 2012 was the first in which the rate of 1% was applied, having been 2% up to the said
date).
6. CLAIMS ON OTHER CREDIT INSTITUTIONS
(euros)
2013
2012
In Portugal
1,032,495
2,690,886
Abroad
1,215,007
1,062,814
2,247,502
3,753,700
2013
2012
-
15,000,000
In Portugal
2,597,891
25,000,000
Abroad
1,715,283
2,017,524
11,232,152
10,616,062
Sight deposits
7. INVESTMENTS IN CREDIT INSTITUTIONS
(euros)
Short term loans
Abroad
Very short term investments
Term deposits
In Portugal
Abroad
Interest receivable
Impairment (Note 30)
56,951
66,396
15,602,277
52,699,982
-
(115,800)
15,602,277
52,584,182
At 31 December 2013 and 2012, the “Term deposits” account mainly comprised operations with CGD Group financial
institutions.
At 31 December 2012 “Loans” were made to Caixa Geral de Depósitos, S.A. – France Branch.
73
8. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
These accounts are made up as follows:
(euros)
Held for trading
2013
2012
Fair value
Fair value
through profit or
Total
Held for trading
through profit or
loss
Total
loss
Debt instruments
Issued by public entities:
Bonds
Issued by resident entities
525,678
-
525,678
2,377,327
2
2,377,329
-
-
-
-
-
-
1,069,213
4,729,636
5,798,849
574,745
4,630,305
5,205,050
-
354,100
354,100
6,410,459
1,266,509
7,676,968
1,594,891
5,083,735
6,678,627
9,362,532
5,896,816
15,259,347
5,708,663
150,000
5,858,663
130,576
-
130,576
Issued by non-resident entities
2,959,567
-
2,959,567
179,406
-
179,406
8,668,230
150,000
8,818,230
309,982
-
309,982
-
-
-
-
-
-
-
-
-
-
-
-
521,119,665
-
521,119,665
859,851,580
-
859,851,580
531,382,786
5,233,735
536,616,522
869,524,094
5,896,816
875,420,909
Issued by other entities:
Bonds and other securities:
Equity instruments
Investment units
Derivative instruments with a positive
fair value (Note 10)
9. AVAILABLE FOR SALE FINANCIAL ASSETS
(euros)
2013
2012
Debt instruments
Portuguese public debt
544,828,265
366,884,874
Issued by other entities
67,178,840
77,889,823
-
76,234,375
Public debt
7,189,456
31,902,406
619,196,561
552,911,478
153,127
153,127
16,739,777
15,135,428
Equity instruments
Shares
Gross amount
Historical cost
Fair value
Historical cost
29,700
29,700
16,922,604
15,318,255
(1,815,087)
(1,897,215)
15,107,517
13,421,040
43,630,696
47,140,951
Investment units
Gross amount
Gross amount
5,881,650
5,734,920
64,619,864
66,296,911
683,816,424
619,208,389
74
Information on the value of share and investment units, at 31 December 2013 and 2012 is set out below:
2013
(euros)
%
Acquisition
investment
cost
Impairment
2012
Fair value
Exchange rate
Book
%
Book
reserve
gains/losses
value
investment
value
(Note 30)
(Note 22)
Investment units
Fundo de Capital de Risco Grupo CGD
14,37%
52,168,743
-
(8,538,047)
-
43,630,696
14,37%
47,140,951
8,33%
7,773,721
-
1,073,008
-
8,846,729
8,33%
7,339,645
9,26%
3,748,822
(1,815,086)
4,306,998
(162,772)
6,077,962
9,26%
5,898,568
4,67%
153,127
-
-
-
153,127
4,67%
153,127
-
29,700
-
-
-
29,700
-
29,700
1
(1)
-
-
-
-
11,705,370
(1,815,087)
5,380,006
(162,772)
15,107,517
13,421,040
63,874,114
(1,815,087)
(3,158,041)
(162,772)
58,738,213
60,561,991
Shares
SEIEF - South Europe Infrastructure
Equity Finance
Corporación Interamericana para el
Financiamiento de Infraestructura
MTS Portugal, SGMR, S.A.
SWIFT SCRL
Other Less than €100,000
Information on movements in this account, at 2013 and 2012, is as follows:
(euros)
Balance at
Purchases /
31.12.2011
(Sales)
Change in
fair value
reserve
Exchange
Impairment
rate
Balance at
Purchases /
(Note 30)
gains/loss
31.12.2012
(Sales)
Change in
fair value
reserve
es
Exchange
rate
Balance at
gains/loss
31.12.2013
es
Investment units
Fundo de Capital de Risco
21,573,296
30,818,996
(5,251,341)
-
-
47,140,951
-
(3,510,255)
-
43,630,696
6,422,938
1,910,000
(993,293)
-
-
7,339,645
980,000
527,084
-
8,846,729
5,505,209
-
503,343
-
(109,984)
5,898,568
-
441,103
(261,710)
6,077,961
153,127
-
-
-
-
153,127
-
-
-
153,127
-
29,700
-
-
-
29,700
-
-
-
29,700
SICAR NovEnergia II
20,922,845
(11,907,582)
(9,015,263)
-
-
-
-
-
-
-
EDP Renováveis, S.A.
1,016,520
(892,250)
(124,270)
-
-
-
-
-
-
-
Pinewells, S.A.
1,066,341
(1,426,341)
360,000
-
-
-
-
-
-
-
51
(51)
-
-
-
-
-
-
-
-
1
-
-
(1)
-
-
-
-
-
-
12,081,275
1,939,700
(489,950)
-
(109,984)
13,421,040
980,000
968,186
(261,710)
15,107,517
33,654,571
32,758,696
(5,741,291)
-
(109,984)
60,561,991
980,000
(2,542,069)
(261,710)
58,738,213
Grupo CGD
Shares
SEIEF
-
South
Europe
Infrastructure Equity Finance
Corporación
Interamericana
para el Financiamiento de
Infraestructura
SWIFT SCRL
La Seda Barcelona
Other less than €100,000
The “Other equity instruments” account comprises non-voting preference shares issued by Caixa Geral Finance
Limited, giving a right to a quarterly preference dividend, at the Company’s discretion, equivalent to annual interest at
the Euribor rate plus a spread. Caixa Geral Finance may redeem the preference shares starting from the tenth year
from their issue (June 2014 and September 2015) with a 1% increase in spread if failing to do so. Their book values,
At 31 December 2013 and 2012, the unrealised capital losses on “Debt instruments” recognised in the fair value
reserve, totalled € 7,705,792 and € 19,514,469, respectively, of which € 7,241,547 and € 13,273,608, respectively, on
Portuguese public debt instruments.
The investment in Corporación Interamericana para el Financiamento de Infraestructura was made in 2001 for
US$ 4,000,000. In August 2008, the Bank acquired 1,000,000 shares for a total amount of US$ 1,170,000. Exposure
to foreign exchange risk is hedged by funding in US dollars with the change in fair value in 2013 and 2012 resulting
from the foreign exchange component being recognised in results.
at 31 December 2013 and 2012 were € 5,881,650 and € 5,734,920 respectively.
75
In February 2012 the Bank participated in the share capital increase of Fundo de Capital de Risco Grupo CGD –
Caixa Capital having subscribed for and paid up 600 investment units with a unit value of € 51,364.99, comprising
their fair value at 31 December 2011.
The following were the principal movements in equity capital instruments recognised in “Available for sale financial
assets”, in 2013 and 2012:
The Group realised stock exchange sales operations on EDP Renováveis, S.A. shares in 2012, generating capital
gains of € 52,587 (Note 26).
South Europe Infrastructure Equity Finance
The Bank participated in the South Europe Infrastructure Equity Finance (SEIEF) capital increases in 2013 and 2012,
investing amounts of € 980,000 and € 1,910,000 respectively. The Bank has undertaken to provide up to
€ 10,000,000 in equity funding at the fund’s request, whenever a new operation is realised.
SICAR NovEnergia II
In the sphere of the liquidation of the Fundo de Capital de Risco Energias Renováveis – Caixa Capital the investment
was sold to FCR Grupo CGD, with the Group making capital gains of € 9,015,263 (Note 26).
Pinewells, S.A.
In October 2011, the Group was involved in the increase in the share capital of Pinewells, S.A., having subscribed for
175,447 shares at a nominal value of € 3 each. As a result of this operation the Group’s percentage investment rose
to 22.65%. In the sphere of the liquidation of Fundo de Capital de Risco Energias Renováveis – Caixa Capital, the
investment was sold to FCR Grupo CGD with capital losses of € 360,000 (Note 26).
Reclassification of securities
The Bank reclassified securities from the “financial assets held for trading” category to the “available for sale financial
assets” category on 1 July 2008, in conformity with the change to IAS 39 approved on 13 October 2008. Owing to the
turbulence in the financial markets in 2008, the fact that the Bank does not expect to dispose of these securities over
the short term explains the reason for the transfer between categories.
Information on the impact of the reclassification of these securities, in income and fair value reserves accounts is set
(euros)
Fair value
Accrued interest
Book value
Fair value reserve
Capital gains/losses in income for period
Impact on income for period if the reclassification had not been made
2013
2012
3,416,850
5,923,598
-
5,199
3,416,850
5,928,797
(3,979,584)
(5,594,435)
47,040
-
115,530
271,424
The fiscal effect is not reflected in the amounts.
Collateralised debt securities with a nominal value of € 562,084,000 and € 448,630,000 respectively (Note 19) were
recognised in this account heading at 31 December 2013 and 2012.
out below:
76
10. DERIVATIVES
These operations were valued in conformity with the criteria set out in Note 2.7. c), at 31 December 2013 and 2012.
Information on the respective notional and balance sheet value, at the said dates, is set out below:
2013
Notional amount
(euros)
Trading
Hedge
derivatives
derivatives
Book value
Total
Assets held for
Liabilities held
Hedge
trading
for trading
derivatives
Total
(Note 8)
Derivatives
OTC
Swaps
Interest rate
8,008,997,696
12,951,207
8,021,948,903
477,404,303
(495,401,230)
788,887
(17,208,040)
Caps & Floors
1,278,861,198
-
1,278,861,198
13,945,112
(23,862,329)
-
(9,917,217)
650,231,517
-
650,231,517
29,770,250
(25,812,286)
-
3,957,964
9,938,090,410
12,951,207
9,951,041,617
521,119,665
(545,075,845)
788,887
(23,167,293)
Interest rate
8,779,755
-
8,779,755
-
-
-
-
Market value
10,535,591
-
10,535,591
-
-
-
-
9,957,405,757
12,951,207
9,970,356,964
521,119,665
(545,075,845)
788,887
(23,167,293)
Options
Interest rate
-
Stock exchange trading
Futures
2012
Notional amount
(euros)
Trading
Hedge
derivatives
derivatives
Book value
Total
Assets held for
Liabilities held
Hedge
trading
for trading
derivatives
Total
(Note 8)
Derivatives
OTC
Swaps
Interest rate
9,854,131,142
13,964,216
9,868,095,358
778,171,517
(822,053,457)
226,743
(43,655,198)
Caps & Floors
1,841,473,533
-
1,841,473,533
36,277,615
(36,295,848)
-
(18,233)
Options
Interest rate
-
-
647,452,100
-
647,452,100
45,402,449
(41,437,326)
-
3,965,123
12,343,056,775
13,964,216
12,357,020,991
859,851,580
(899,786,632)
226,743
(39,708,308)
Interest rate
14,276,127
-
14,276,127
-
-
-
-
Market value
6,167,000
-
6,167,000
-
-
-
-
12,363,499,902
13,964,216
12,377,464,118
859,851,580
(899,786,632)
226,743
(39,708,308)
Futures
The book value of assets classified as hedged items, at 31 December 2013 and 2012, totalled € 8,898,714 and
Additionally, at 31 December 2013 and 2012, the book value of liabilities classified as hedged items totalled
€ 6,734,558 and € 6,716,019 respectively, including € 85,453 and € 283,980 (Note 18), respectively, regarding value
adjustments.
€ 10,410,192 respectively, including € 833,109 and € 1,315,875 (Note 11), respectively, regarding value adjustments.
77
Information on the distribution of derivatives operations by periods to maturity (notional amounts), at 31 December
2013
(euros)
<= 3 months
> 3 months
> 6 months
> 1 year
<= 6 months
<= 1 year
<= 5 years
> 5 years
Total
Derivatives
OTC
Swaps
Interest rate
Trading
175,959,750
254,391,136
287,876,210
824,534,897
6,466,235,703
-
5,000,000
-
7,951,207
-
12,951,207
175,959,750
259,391,136
287,876,210
832,486,104
6,466,235,703
8,021,948,903
-
-
1,600,000
1,211,197,231
66,063,966
1,278,861,198
Hedge
8,008,997,696
Caps & Floors
Trading
Options
Interest rate
-
-
-
-
650,231,517
650,231,517
175,959,750
259,391,136
289,476,210
2,043,683,335
7,182,531,186
9,951,041,617
Futures
Interest rate
Trading
Market value
8,779,755
-
-
-
-
8,779,755
10,535,591
-
-
-
-
10,535,591
195,275,097
259,391,136
289,476,210
2,043,683,335
7,182,531,186
9,970,356,964
2012
(euros)
<= 3 months
> 3 months
> 6 months
> 1 year
<= 6 months
<= 1 year
<= 5 years
> 5 years
Total
Derivatives
OTC
Swaps
Interest rate
Trading
Hedge
290,199,379
446,882,791
365,057,141
1,797,337,929
6,954,653,903
-
-
-
13,964,216
-
9,854,131,142
13,964,216
290,199,379
446,882,791
365,057,141
1,811,302,145
6,954,653,903
9,868,095,358
-
13,260,000
545,000,000
945,080,291
338,133,242
1,841,473,533
Caps & Floors
Trading
Options
Interest rate
-
-
-
-
647,452,100
647,452,100
290,199,379
460,142,791
910,057,141
2,756,382,436
7,940,239,245
12,357,020,991
14,276,127
-
-
-
-
14,276,127
6,167,000
-
-
-
-
6,167,000
310,642,506
460,142,791
910,057,141
2,756,382,436
7,940,239,245
12,377,464,118
Futures
Trading
Market value
Interest rate
78
Information on the distribution of derivatives operations by counterparty type, at 31 December 2013 and 2012, is set
out below:
(euros)
2013
Notional amount
2012
Book value
Notional amount
Book value
Contracts on interest rate
Interest rate swaps
Financial institutions
4,133,969,623
(415,861,524)
5,049,052,310
Customers
3,887,979,280
398,653,484
4,819,043,048
(749,513,405)
705,858,208
8,021,948,903
(17,208,040)
9,868,095,358
(43,655,198)
645,775,349
(23,169,339)
928,484,948
(35,518,593)
Customers
633,085,848
13,252,122
912,988,585
35,500,360
1,278,861,198
(9,917,217)
1,841,473,533
(18,233)
350,231,017
(21,843,775)
347,451,600
(37,461,326)
General government
300,000,000
25,801,739
300,000,000
41,426,449
500
-
500
-
650,231,517
3,957,964
647,452,100
3,965,123
Caps & Floors
Options on interest rate
Customers
Futures
Stock exchange
19,315,346
-
20,443,127
-
9,970,356,964
(23,167,293)
12,377,464,118
(39,708,308)
As referred to in Note 2.7 c), up to 31 December 2012, derivatives were revalued on the basis of the current value of
expected cash flows, discounted at a risk-free interest rate. The Bank also deferred the initial margin throughout the
maturity of the operations, and recognised specific adjustments to the positive valuation of derivative operations with
counterparties of higher credit risk.
At 31 December 2012, the total value of the adjustments to the derivatives portfolio with positive value was
€ 78,110,911, of which € 27,080,839 relative to the deferral of the initial margin.
In 2013, with the entry into force of IFRS 13 (Note 2.18), the Bank posted an adjustment to reflect the risk on its own
credit, through the use of a market discount rate which the Bank globally considers adequate to its risk
profile. Simultaneously, the Bank started to use an analogous methodology to reflect the credit risk of counterparties
in derivatives with a positive fair value, and consequently the deferral of the initial margin ceased to be registered.
At 31 December 2013, the total amounts recognised by the Bank on “CVA” (credit value adjustment), in “Financial
assets held for trading” and “DVA” (debit value adjustment), in “Financial liabilities held for trading”, totalled
€ 95,439,244 and € 51,096,059, respectively.
11. LOANS AND ADVANCES TO CUSTOMERS
(euros)
2013
2012
365,283,599
399,789,603
Loans
Sight deposit overdrafts
1,749,915
2,378,978
Other credit
9,678,543
10,351,774
4,300,000
15,000,000
Securitised domestic credit
Commercial paper
Foreign loans
Loans
269,587,035
257,631,757
Current account
-
358,573
8
7
34,615
46,470
Other credit
Value adjustments related to hedged assets (Note 10)
832,109
1,315,875
651,465,824
686,873,037
Domestic credit
79
(euros)
2013
2012
1.223.955
3.301.282
(2,623,607)
(2,211,837)
Interest receivable
Deferred income
Commissions associated with amortised cost
Interest
Overdue credit and interest
(5,138)
(43,235)
650,061,034
687,919,247
45,458,970
39,830,202
695,520,004
727,749,449
(108,027,998)
(81,102,669)
587,492,006
646,646,780
Information on impairment movements, for 2013 and 2012, is set out in Note 30.
This account was broken down as follows, by periods to maturity at 31 December 2013 and 2012:
(euros)
Up to three months
Three months to one year
2013
2012
6,177,148
15,002,066
478,566
30,798,163
One to five years
171,502,123
150,670,731
More than five years
471,558,064
487,664,519
Current account overdrafts
1,749,923
2,737,558
651,465,824
686,873,037
2013
2012
100,299,136
73,727,470
Impairment, recognised at 31 December 2013 and 2012, was assessed as follows:
(euros)
Specific analysis
Collective analysis
7,728,862
7,375,199
108,027,998
81,102,669
The total nominal value of impaired credit at 31 December 2013 and 2012 was € 264,138,143 and € 170,177,515
respectively, including the amounts recognised in outstanding and overdue credit.
Sector distribution of loans and advances to customers (nominal value), excluding overdue credit, at 31 December
2013 and 2012, was as follows.
(euros)
Sector of activity
2013
2012
%
Amount
Amount
%
Manufacturing industry
Electricity, water and gas generation and distribution
102,285,091
15.7
110,332,694
16.1
9,343,441
1.4
9,823,629
1.4
717,205
0.1
846,160
0.1
Textiles industry
7,957,163
1.2
7,870,570
1.1
Chemicals and synthetic or artificial fibres manufacturing
8,779,791
1.3
8,896,047
1.3
236,837
0.0
315,784
0.0
-
0.0
20,075,530
2.9
Food, beverages and tobacco industries
Base metallurgical and metal products industries
Paper pulp, card and publishing and printing
Real estate activities
53,643,846
8.2
57,384,879
8.4
Other activities
78,102,544
12.0
88,035,779
12.8
Transport, warehousing and communications
189,315,066
29.1
199,279,128
29.0
Construction
125,580,327
19.3
94,908,052
13.8
3,062,974
0.5
2,089,051
0.3
Health and social security
16,076,177
2.5
16,695,791
2.4
Financial activities
10,846,734
1.7
11,346,734
1.7
960,000
0.1
2,388,581
0.3
Other activities and collective, social and personal services
33,096,135
5.1
43,807,468
6.4
Loans and advances to individual customers
11,462,492
1.8
12,777,162
1.9
651,465,824
100
686,873,037
100
Wholesale/retail
Hotels and restaurants
The Bank, in 2013, disposed of a credit operation for a global amount of € 1,932,888, whose book value was
€ 1,982,449, resulting in capital losses of € 49,561 (Note 26).
Properties, rentals and corporate services
80
12. OTHER TANGIBLE ASSETS
Information on movements in the “Other tangible assets” accounts for 2013 and 2012 is set out below
2013
Net amount at
Balance at 31.12.2012
(euros)
Gross amount
Acquisitions
Accumulated
Depreciation
Adjustments
31.12.2013
for period
depreciation
Property:
For own use
16,335,115
(5,121,633)
-
-
(492,937)
77,843
(77,843)
-
-
-
IT equipment
2,162,847
(2,073,713)
182,284
-
(132,071)
1,816,509
(1,790,655)
-
-
(11,871)
13,984
1,550,996
(1,352,605)
14,067
-
(61,552)
150,905
578,619
(555,702)
1,687
-
(12,575)
12,029
95,568
(95,568)
-
-
-
-
1,214
(412)
-
-
-
802
240,087
(240,087)
-
-
-
-
17,262
(17,262)
-
-
-
-
39,750
-
-
(39,750)
-
-
22,915,809
(11,325,481)
198,039
(39,750)
(711,007)
11,037,611
Other property
10,720,544
-
Equipment:
Machinery and tools
Transport material
Other equipment
Security equipment
139,347
Property leases:
IT equipment
Tangible assets in progress
2012
(euros)
Acquisitions
Accumulated
Gross amount
Depreciation for
Net amount at
period
31.12.2012
depreciation
Property:
For own use
16,335,115
(4,628,696)
-
(492,937)
11,213,481
77,843
(77,843)
-
-
-
IT Equipment
2,096,213
(1,943,894)
66,633
(129,819)
89,134
1,810,123
(1,778,784)
6,386
(11,871)
25,854
1,546,453
(1,279,654)
4,718
(73,126)
198,390
574,325
(529,110)
4,294
(26,592)
22,917
95,568
(81,653)
-
(13,916)
-
1,214
(412)
-
-
802
240,087
(240,087)
-
-
-
17,262
(11,508)
-
(5,754)
-
-
-
39,750
-
39,750
22,794,203
(10,571,641)
121,782
(754,015)
11,590,329
Other property
Equipment:
Machinery and tools
Transport material
Other equipment
Security equipment
Property leases:
IT equipment
Information on movements in the “Intangible assets” accounts, for the years 2013 and 2012, is set out below:
2013
Balance at 31.12.12
(euros)
Gross amount
Acquisitions
Accumulated
Transfers
depreciation
Depreciation for
Net amount at
period
31.12.2013
Automatic data processing systems
5,171,168
(4,631,129)
5,701
34,158
(250,781)
329,118
Intangible assets in progress
2,128,879
-
908,623
(34,158)
-
3,003,344
7,300,047
(4,631,129)
914,324
-
(250,781)
3,332,461
13. INTANGIBLE ASSETS
81
2012
(euros)
Automatic data processing systems
Gross amount
Acquisitions
Accumulated
Transfers
depreciation
Depreciation for
Net amount at
period
31.12.2012
4,901,329
(4,372,728)
257,722
12,116
(258,401)
540,039
261,296
-
1,879,700
(12,116)
-
2,128,879
5,162,625
(4,372,728)
2,137,422
-
(258,401)
2,668,918
Intangible assets in progress, at 31 December 2013 and 2012, mainly comprised expenses incurred on the acquisition
of the Bank’s new central software not yet in use at the said dates.
14. INVESTMENTS IN ASSOCIATED COMPANIES AND JOINTLY CONTROLLED ENTERPRISES
As referred to in greater detail in Note 4, during the course of 2012, the Bank took an equity stake in Banif Corretora
de Valores e Câmbio, S.A., in the meantime, renamed as CGD Investimentos Corretora de Valores e Câmbio, S.A.
(CGD Investimentos CVC).
The acquisition comprised the following stages:

purchase of 35% of the equity capital of Banif CVC by CGD Participações em Instituições Financeiras in April
2012, based on the conditions of the "Investment and purchase and sale of shares" agreement entered into
between the parties on 2 June 2010, and latter addenda, after obtaining the necessary administrative and legal
permits;

purchase of the remaining 15% of the share capital of this subsidiary company in June 2012, based on the
exercising of CGD Group’s purchase option under the respective contractual terms.
Information on the movement in the amount of the equity investment recognised in the Group’s financial statements in
2012 and 2013 is set out below:
(euros)
Equity investment
31 May 2012 (acquisition date)
Exchange rate gains/losses and other movements
38,384,507
486,690
Results of jointly controlled entities
(1,276,378)
31 December 2012
37,594,819
Exchange rate gains/losses and other movements
Results of jointly controlled entities
(10,636,765)
(4,140,227)
22,817,827
At 31 December 2013 and 2012, the book value of CGD Investimentos CVC’s investment included € 16,879,607 and
As referred to in Note 4, the provisional accounts of CGD Investimentos reflect the cancellation of R$ 46,857,373 in
deferred tax assets. However, in 2012, at the time of the recognition of the equity investment, the Group considered
an adjustment of R$ 31,390,000 to the statutory accounts for a deferred tax asset on the incorporation of CGD
Participações into CGD Investimentos.
€ 25,705,345, respectively, regarding the goodwill recognised on the acquisition, expressed in brazilian reais.
82
15. INCOME TAX
Tax assets and liabilities balances, at 31 December 2013 and 2012, were:
(euros)
2013
2012
1,321,231
1,209,960
1,321,231
1,209,960
(3,884)
(12,561,657)
1,317,347
(11,351,697)
Current tax assets
Income tax rebate
Current year
Income tax payable
Deferred tax assets
41,166,950
36,396,344
(8,892,552)
(2,602,629)
32,274,398
33,793,715
The following table provides details and information on deferred tax movements in 2013 and 2012:
2013
(euros)
Balance at
Income changes
31.12.2012
Shareholders’
Balance at
equity changes
31.12.2013
Commissions
2,667,056
(2,455,323)
-
Valuation of available for sale financial assets
4,259,280
-
(3,345,069)
914,211
24,721,015
4,067,030
-
28,788,046
Impairment and provisions not accepted for fiscal purposes
Fiscal benefits - venture capital (Note 2.11)
211,733
2,000,001
-
-
2,000,001
Impairment of available for sale financial assets
275,094
254,564
-
529,658
Deferral of capital gains tax on the disposal of financial investments (Note 2.11)
(19,034)
19,034
-
-
(175,752)
6,502
-
(169,250)
Fixed asset revaluations not accepted for fiscal purposes
Exchange rate gains/losses on the translation of financial statements
66,055
-
(66,055)
-
33,793,715
1,891,806
(3,411,124)
32,274,398
2012
Commissions
Income changes
31.12.2011
Shareholders’
Balance at
equity changes
31.12.2012
5,192,320
(2,525,264)
-
30,970,251
-
(26,710,971)
4,259,280
Impairment and provisions not accepted for fiscal purposes
19,390,321
5,330,694
-
24,721,015
2,000,001
Fiscal benefits - venture capital (Note 2.11)
2,667,056
2,000,001
-
-
280,516
(5,422)
-
275,094
Deferral of capital gains tax on the disposal of financial investments (Note 2.11)
(99,022)
79,987
-
(19,034)
(182,253)
6,502
-
(175,752)
-
-
66,055
66,055
57,552,134
2,886,498
(26,644,917)
33,793,715
Exchange rate gains/losses on the translation of financial statements
The Group does not recognise deferred tax assets whenever the existence of future taxable income allowing their
respective use is not probable. Therefore, taking into account future taxable profit projections and the limit defined by
article 92 of the IRC Code, the Board of Directors considers that the deferred tax assets are fully recoverable.
(euros)
Balance at
83
Information on tax on profit recognised in the income statement and the tax burden, measured by the ratio between
the appropriation for tax on profit and net profit for the year before tax is set out below:
(euros)
2013
2012
With an impact in income for period
Current tax
IRC for current year
9,385,518
14,544,672
Banking sector contribution
614,031
623,959
Adjustments for past years
(2,142,805)
127,508
7,856,744
15,296,139
(1,891,807)
(2,886,498)
5,964,937
12,409,641
34,120,703
40,824,466
17,48%
30,40%
(3,345,069)
(26,710,971)
Deferred tax
Recognition and reversal of temporary differences
Total tax in income statement
Income before tax and non-controlling interests
Fiscal burden
With an impact in reserves
Deferred tax – fair value reserve
Current tax
Total tax in reserves
Total tax in shareholders’ equity
(456,190)
61,629
(3,801,259)
(26,649,342)
2,163,678
(14,239,700)
Current taxes reflected in reserves for the amounts of € 456,190 and € 61,628, in 2013 and 2012, respectively, refer
to tax associated with the revaluation of debt securities sold in 2013 and 2012 and classified as available for sale
financial assets that were taken into account for the purposes of assessing taxable income in previous years. The
deferred taxes recognised in the same account refer to the revaluation during the year of equity investments and debt
securities which are also classified as available for sale financial assets, whose fiscal effects will only be produced at
the time of disposal of such assets.
In conformity with current legislation, tax returns are subject to review and correction by the tax authorities for a period
of four years. The Bank’s tax returns for 2013 to 2012 are therefore still subject to review and to the possibility of
correction.
The Board of Directors considers that any correction is unlikely to have a significant impact on the financial
statements, at 31 December 2013.
The following is an analysis of the reconciliation between the nominal and effective tax rates in 2013 and 2012.
2013
Rate
Income before tax and non-controlling interests
Tax assessment based on nominal rate
State surcharge
Elimination of double taxation
Fiscal benefits
Capital gains on investments - tax regime applicable to Caixa Capital and
Caixa Desenvolvimento
Fiscal regime for FCR- Energias Renováveis
Rate
Amount
34,120,703
40,824,466
26.50%
9,041,986
26.50%
4.02%
1,373,302
5.28%
Total tax
Total loss allocated by EIG
2012
Amount
10,415,288
10,818,483
2,155,373
12,973,857
(0.63%)
(214,915)
(0.55%)
(225,915)
0.15%
51,384
(0.53%)
(215,137)
(0.00%)
(1,529)
(0.00%)
(1,530)
(4.08%)
(1,392,051)
(4.41%)
(1,799,086)
0.00%
-
(5.60%)
(2,285,545)
(6.88%)
(2,347,341)
0.91%
370,150
1.80%
614,031
1.53%
623,959
Fiscal capital gains
0.00%
-
1.12%
455,332
Provisions and impairment not relevant for fiscal purposes
1.29%
440,278
5.45%
2,223,487
Separate source-based taxation
0.51%
175,410
0.44%
181,254
Recognition of deferred taxes
0.00%
-
0.00%
-
(4.94%)
(1,686,615)
0.31%
127,508
Other
(0.26%)
(89,003)
(0.05%)
(18,693)
17.48%
5,964,937
30.40%
12,409,641
Income from associated companies
(euros)
84
With the publication of Law 55 - A/2010, of 31 December, the Bank was covered by the banking sector contribution
regime. The banking sector contribution is levied on:
a)
The liabilities assessed and approved by the taxpayers minus tier 1 and tier 2 own funds and the deposits
covered by the Deposit Guarantee Fund. The following are deducted from liabilities:
b)

Elements which, according to the applicable accounting standards are recognised as shareholders’ equity;

Liabilities associated with the recognition of responsibilities for defined benefits plans;

Liabilities for provisions;

Liabilities resulting from the revaluation of derivatives;

Deferred income, not considering income related to liabilities and;

Liabilities for assets not derecognised in securitisation operations.
The off-balance sheet notional amount of derivatives, calculated by the taxpayers, except for financial hedge
derivatives or derivatives whose risk positions balance each other out.
The rates applicable to the bases defined in the preceding sub-paragraphs a) and b) are 0.05% and 0.00015%,
respectively, based on the amount assessed. The rates already approved for 2014 are 0.07% and 0.0003%,
respectively.
The Bank has recognised the banking sector contribution in the “Current year tax” account in the income statement.
16. OTHER ASSETS
(euros)
Other cash balances
2013
2012
39,155,971
6,669,698
Debtors - futures trading operations
6,277,495
6,769,299
Supplementary capital payments
1,299,600
-
28,234,766
24,519,872
Debtors and other investments
Miscellaneous debtors
Balances pending settlement (Note 32)
Other
Other assets
3,897,581
5,904,744
39,709,442
37,193,915
128,346
48,846
46,565
68,144
4,967
7,540
Income receivable
Other Income receivable
Insurance
Operational lease instalments
Other deferred expenses
-
3,812
414,117
461,247
419,084
472,599
43,749,301
35,092,522
Prepayments and accrued income
Securities operations pending settlement
Other lending operations pending settlement
141,461
591,148
43,890,762
35,683,670
6,676,905
6,458,254
130,027,075
86,595,126
(29,870,406)
(16,232,287)
100,156,669
70,362,839
Deferred expenses
85
At 31 December 2013, the “Other cash balances” account referred to an amount deposited with Clearstream Banking
for the settlement of stock exchange operations.
At 31 December 2013 and 2012, the “Debtors - futures trading operations and options” account corresponded to
futures margin accounts.
In December 2013, Caixa Capital subscribed for and paid up an investment of € 1,449,600 in Reflexos Púrpura, S.A.,
of which € 150,000 in share subscriptions comprising 30% of its share capital and € 1,299,600 in supplementary
capital payments. The Company, in the sphere of this operation, provided the promoter with a call option at a price
guaranteeing a fixed annual return on the amount of the investment. The Company has a put option on the full
th
amount of the investment after the 5 year of operation.
At 31 December 2013 and 2012, the balance on the “Miscellaneous debtors – balances pending settlement” account
included € 16,228,705 relative to a swap contracted for by the Bank which was “crystallised” in 2012.
The “Miscellaneous debtors - other” account at 31 December 2013 and 2012 includes € 1,276,039 and € 1,130,459,
respectively, for amounts receivable from customers for the invoicing of services provided by the Bank.
The “Other deferred expenses” account heading, at 31 December 2013 and 2012, includes € 125,286 and € 256,797,
respectively, in respect of the amounts invested in Agrupamento Complementar de Empresas TREM II – Aluguer de
Material Circulante, ACE (TREM II).
The “Securities operations pending settlement” account, at 31 December 2013 and 2012, comprises the value of the
operations for the sale of securities at the end of the year and settled in the first few days of the following year.
At 31 December 2013 and 2012, the “Overdue credit and interest” account heading included overdue loans of
€ 3,551,441, originated in Caixa Valores and deriving from securities trading operations in 1992 by a group of
customers. Impairment for the same amount has been allocated to this credit.
Caixa Valores took legal action against the group of customers in September 1994, accusing them of responsibility for
realising the referred to operations and claiming an amount of € 6,003,180 plus interest accruing since June 1993. As
the action is still in progress, the Bank has not recorded any asset related with this situation.
Information on “Impairment” at 31 December 2013 and 2012 is set out below:
(euros)
2013
2012
Caixa Valores
3,551,441
3,551,441
3,303,289
3,897,294
22,998,099
8,782,776
Debtors
Overdue interest on interest rate swaps
Other
17,577
776
29,870,406
16,232,287
Impairment on overdue invoices and bad and doubtful debts, at 31 December 2013 and 2012, is recognised in the
“Impairment of credit” account (Note 11).
86
17. OTHER CREDIT INSTITUTIONS’ AND CENTRAL BANKS’ RESOURCES
(euros)
2013
2012
Term deposits
334,500,000
215,000,000
Very short term deposits
336,582,409
414,227,982
Term deposits
281,049,879
318,000,000
Sight deposits
130,220
11,807,596
Credit institutions’ resources in Portugal
Credit institutions’ resources abroad
Sight deposits
Interest payable
67,216
4,921
952,329,724
959,040,499
2,816,233
10,015,126
955,145,957
969,055,625
Information on the periods to maturity of other credit institutions’ resources is set out below:
(euros)
Sight deposits and overdrafts
2012
2011
197,436
11,812,517
Up to three months
637,132,288
732,227,982
From three months to three years
315,000,000
215,000,000
More than three years
-
-
952,329,724
959,040,499
“Central banks’ resources”, at 31 December 2013, comprised term deposits with the Bank of Portugal, as collateral for
European Central Bank funding. These deposits are collateralised by a pledge on securities with a nominal value of
€ 554,714,000 and € 441,260,000 at 31 December 2013 and 2012, respectively (Note 19), with interest at the rate
fixed by the European Central Bank .
18. OTHER CREDIT INSTITUTIONS’ RESOURCES
This account heading comprises the following
(euros)
2013
2012
Sight
36,449,766
36,188,076
Term
73,462,844
90,802,680
109,912,610
126,990,756
Value adjustments related to hedged liabilities (Note 10)
Interest payable on deposits
85,453
283,980
109,998,063
127,274,736
2,067,441
1,766,953
112,065,504
129,041,689
The following information is provided on deposits, at 31 December 2013 and 2012, in accordance with their respective
period to maturity:
(euros)
2013
2012
Repayable on demand
36,449,766
36,188,076
Up to three months
58,047,925
76,812,400
10,953,825
3,750,000
-
5,000,000
One to five years
4,461,094
5,240,280
109,912,610
126,990,756
Deposits
87
19. PROVISIONS AND CONTINGENT LIABILITIES
Provisions
Information on “Provisions for other risks” movements, in 2013 and 2012, is set out below:
2013
(euros)
Net provisions in income
Use
statement
For other risks and liabilities:
Guarantees and commitments
Other risks
985.749
81.714
(311.385)
756.079
6.851.245
6.500.000
(1.285.048)
12.066.197
7.836.994
6.581.714
(1.596.433)
12.822.276
2012
(euros)
Net provisions in income
statement
For other risks and liabilities:
Guarantees and commitments
1,006,100
(20,351)
985,749
Other risks
4,131,483
2,719,762
6,851,245
5,137,583
2,699,411
7,836,994
Provisions for guarantees provided and commitments assumed are calculated on the basis of the estimated losses
associated with operations in progress, in accordance with an individual analysis and with parameters computed on a
Caixa Geral de Depósitos Group level.
Provisions for other risks and liabilities correspond to the Group’s best estimate of amounts to be spent on the
resolution of legal and fiscal contingencies and any other losses.
The Bank was notified, in December 2012, of a charge brought by the CMVM alleging a violation of its market defence
obligation. The Bank exercised its right to a hearing and defence in which it rejected the charge, accordingly not
setting up any provision for 2012. The process was closed in 2013, with a fine of € 150,000 levied on the Group,
recognised in “Other operating income” (Note 27).
Contingent liabilities and commitments
Contingent liabilities associated with banking are recognised in off-balance sheet accounts as follows:
(euros)
2013
2012
20,072,767
31,629,059
562,084,000
448,630,000
582,156,767
480,259,059
Revocable lines of credit
7,199,968
27,941,814
Securities subscriptions
3,031,679
3,311,679
Potential liability to Investors’ Indemnity System
3,532,036
3,532,036
Contingent liabilities:
Guarantees and sureties
Asset-backed guarantees
Available for sale financial assets (Note 9)
Term liabilities to Deposit Guarantee Fund
162,182
162,182
13,925,865
34,947,711
5,205,499,365
5,785,648,237
Liabilities for the provision of services:
Deposit and custody of securities
Amounts under Bank management
357,546,406
381,351,020
5,563,045,771
6,166,999,257
Commitments:
88
The “Assets-backed guarantee” account heading, at 31 December 2013 and 2012, comprises the nominal value of
debt securities pledged by the Bank (Note 9), in respect of the following situations
(euros)
Pledge on securities in the sphere of the “ECB assets pool” (Note 17)
2013
2012
554,714,000
441,260,000
Investors’ Indemnity System (SII)
4,430,000
4,430,000
Caixa Geral de Depósitos, S.A. – Euronext
2,500,000
2,500,000
Deposit Guarantee Fund
440,000
440,000
562,084,000
448,630,000
The object of the Deposit Guarantee Fund is to guarantee customers’ deposits in conformity with the limits defined by
the General Credit Institutions Regime. To this effect, regular annual contributions are made to the Fund. Part of the
said contributions has been assumed through an irrevocable commitment to realise the respective contributions when
requested by the Fund. These amounts are not recognised in costs. The total value of commitments assumed since
1996 totals € 162,182.
The balance on the “Amounts under Bank management” account, at 31 December 2013 and 2012, comprises the
value of the following venture capital funds managed by Caixa Capital, excluding outstanding capital:
(euros)
Fund
FCR Grupo CGD – Caixa Capital
2013
Value of fund
2012
Net income
Value of fund
Net income
303,703,865
(24,434,128)
328,137,994
(36,553,459)
40,329,513
(1,996,811)
12,969,120
(1,351,592)
FCR Empreender +
8,534,511
(2,364,985)
10,899,496
(2,080,011)
FCR Caixa Crescimento
4,978,517
(21,483)
-
-
-
-
29,344,410
7,249
FCR Caixa Fundos (Ex - FCR FDR)
FCR Mezzanine
357,546,406
381,351,020
At 16 October 2013, the Fundo de Capital de Risco Mezzanine – Caixa Capital (“FCR Mezzanine”) was incorporated
into the Fundo de Capital de Risco Desenvolvimento e Reorganização Empresarial, FCR (“FCR FDR”), with a postmerger name change to Fundo de Capital de Risco Caixa Fundos (“FCR Caixa Fundos”).
20. OTHER LIABILITIES
(euros)
2013
2012
Creditors and other resources
General government
Deduction of tax at source
4,114,793
4,888,804
Social security contributions
230,484
248,998
Value added tax
554,394
196,151
Other
Creditors - futures and options operations
Deferred interest and dividends
22
25
-
3,833
215,895
215,895
132,620
186,172
Creditors – securities operations
Suppliers of leased assets
-
4,145
252,899
381,771
1,393,477
1,263,907
6,894,584
7,389,701
Additional remuneration
2,994,000
2,994,000
Holiday and holiday subsidies
1,680,991
855,933
Other suppliers
Other
Costs payable
Other costs payable
Pension fund
303,045
263,378
Other
698,650
1,431,289
5,676,686
5,544,600
Miscellaneous creditors
89
(euros)
2013
2012
1,049,096
1,344,700
Deferred income
Agencying commissions
Commissions on guarantees provided and other contingent liabilities
2,722
3,875
1,051,818
1,348,575
43,008,096
34,714,434
1,779,191
10,101,438
Other accruals and deferred income accounts
Lending operations pending settlement
Commissions payable - syndicated credit operations
Other
384,571
392,908
45,171,858
45,208,780
58,794,946
59,491,656
The balance of the “Creditors - securities operations” account, at 31 December 2013 and 2012, refers to the current
accounts of brokerage operations customers.
The “Securities operations pending settlement” account, at 31 December 2013 and 2012, comprises the value of
securities purchase operations at the end of the year and settled in the first few days of the following year.
The “Commissions payable - syndicating of loan operations” account heading, at 31 December 2013 and 2012,
comprises amounts charged to customers for the structuring of syndicated loan operations in which CGD Group
supplies all or a significant part of the loan with the latter objective of placing it with other credit institutions. As
described in Note 2.14, the Bank recognises the part of the commissions received in proportion to the total amount of
credit the Group intends to syndicate in this account.
21. SUBSCRIBED CAPITAL
Subscribed capital comprises 81,250,000 shares with a nominal value of one euro each.
Information on the Bank’s equity structure, at 31 December 2013 and 2012 is set out below:
Other
No. shares
%
81,018,063
99.71%
231,937
0.29%
81,250,000
100.0%
22. RESERVES, RETAINED EARNINGS AND PROFIT FOR YEAR
The composition of the reserves and retained earnings accounts, at 31 December 2013 and 2012, was as follows:
(euros)
2013
2012
Debt instruments
(5,884,572)
(17,985,410)
Shares and investment units (Note 9)
(3,158,041)
(615,972)
(6,503,336)
(6,650,066)
(15,545,949)
(25,251,448)
Current tax
948,435
1,404,625
Deferred tax
914,212
4,259,281
(13,683,302)
(19,587,542)
Legal reserve
47,656,414
46,905,303
Free reserve
126,921,174
98,689,182
Fair value reserves
Fiscal effect
Legal revaluation reserve
Retained earnings
4,338,403
4,338,403
50,844,898
52,374,519
Unrealised gains
90
(euros)
Reserves associated with exchange rate gains/losses
2013
2012
(10,648,397)
252,118
Fiscal effect - deferred tax
Profit for period
-
66,055
219,112,492
202,625,580
28,155,765
27,540,846
233,584,955
210,578,885
Legal reserve
In conformity with Decree Law 298/92 of 31 December, changed by Decree Law 201/2002 of 26 September, the Bank
is required to set up a legal reserve fund until equalling its share capital or the sum of free reserves and retained
earnings, if higher, annually transferring an amount of not less than 10% of net profits to the reserve.
The reserve may only be used to cover accrued losses or share capital increases. The above referred to amount
comprises the full amount of the legal reserve registered by the Group. The value of the Bank’s legal reserve, at 31
December 2013 and 2012, totalled € 47,414,192 and € 45,490,613 respectively.
Legal revaluation reserve
The Bank revalued its fixed assets in 1998, under Decree Law 31/98 of 11 February. The increase of € 4,338,403, in
the net value of fixed assets was recognised in the “Revaluation reserves” account in the separate accounts.
Revaluation reserves may only be used to cover accrued losses or for share capital increases.
Fair value reserves
The fair value reserve recognises unrealised capital gains and losses on available for sale financial assets, net of the
corresponding fiscal effect.
Dividends
No dividends were paid in 2012 or 2013.
Profit for year
Information on the Bank’s consolidated net income, for 2013 and 2012, is set out below:
(euros)
Bank’s separate net income (statutory accounts)
2013
2012
647,599
19,235,783
3,815,921
3,922,094
Subsidiaries’ contribution to results (statutory accounts):
Caixa Capital
Caixa Desenvolvimento
FCR Energias Renováveis – Caixa Capital
CaixaBI Brasil – Serviços de Assessoria Financeira, Ltda.
1,352
(40,574)
-
(154,835)
77,998
87,365
3,895,271
3,814,050
Cancellation of impairment on the Bank’s separate accounts
12,234,507
-
Equity accounting
(4,140,227)
(1,276,378)
Cancellation of dividends paid to the Bank by Caixa Desenvolvimento
-
(212,670)
Cancellation of gain on reduction of capital of Caixa Desenvolvimento
-
(1,172,467)
14,062,316
(1,393,452)
1,445,399
2,162,316
-
6,376,866
Impact of conversion of separate accounts to IFRS:
Impairment on lending
Valuation of subsidiaries by Caixa Capital
Liquidation of FCR Energias Renováveis
Other changes
10,900
6,798
28,155,765
27,540,846
CGD Investimentos
91
According to the accounting policies applicable to the sector, Caixa Capital and the Renewable Energies Venture
Capital Fund recognise the valuation of all of their investments in the income statement. In the case of investments
classified in “Available for sale financial assets” in the Group’s consolidated accounts these valuations are recognised
in the fair value reserve and latterly transferred to income in the case of sale or recognition of impairment.
The “Impairment on lending” entry refers to the impact on net income for the period of the difference between the
loans provision recognised in the separate accounts, which incorporates the requirements of the Bank of Portugal’s
Official Notice 3/95, and the impairment on lending recognised in the consolidated accounts and assessed in
accordance with the requirements of IAS 39.
23. NON-CONTROLLING INTERESTS
The proportion of losses determined by FCR Energias Renováveis attributable to minority shareholders in 2012
totalled € 873,978.
24. INTEREST AND INCOME AND INTEREST AND SIMILAR CHARGES
(euros)
2013
2012
Interest on loans and advances to credit institutions in Portugal
437,123
664,112
Interest on investments in credit institutions abroad
221,919
761,474
Interest on domestic credit
9,200,782
12,749,045
Interest on foreign credit
4,204,282
7,998,476
Interest and similar income:
Interest on financial assets held for trading:
Securities
Derivative instruments – swaps
Interest rate guarantee contracts
369,587
2,759,369
202,580,191
248,925,785
556,812
558,079
Interest on other financial assets at fair value through profit or loss
Securities
Interest on available for sale financial assets
Interest on hedge derivatives
138,400
276,023
17,091,553
20,163,209
248,646
328,632
4,759
49,734
Interest on debtors and other investments
Debtors
Shareholders’ loans
Interest on cash balances
Other interest
Commissions received associated with amortised cost
-
-
10,274
19,967
204,489
159,302
235,268,817
295,413,207
448,087
480,649
235,716,904
295,893,856
Interest and similar costs:
General government
Other resident entities
Other non-resident entities
-
21,991
1,419,813
2,063,770
2,625
-
1,422,438
2,085,761
Interest on central banks’ resources
1,948,204
2,282,121
Interest on credit institutions’ resources in Portugal
7,034,689
16,636,136
658
5,265
199,052,740
245,952,654
553,413
653,202
Interest on credit institutions’ resources abroad
Interest on financial liabilities held for trading
Swaps
Other interest and similar costs
33,660
113,138
208,623,364
265,642,516
210,045,802
267,728,277
Interest on deposits
92
25. INCOME AND COSTS FROM SERVICES AND COMMISSIONS
(euros)
2013
2012
11,305,678
16,980,712
7,112,212
8,331,317
For services provided
Organisation of operations
Management of venture capital funds (Caixa Capital)
Other
For operations on behalf of third parties
For guarantees provided
For commitments to third parties
Other
463,568
516,993
21,216,747
16,897,989
137,939
157,085
6,510,088
4,352,626
46,903
109,825
10,524,176
25,072,385
57,317,311
72,418,932
32,817
1,685,596
2,343,882
1,571,823
For banking services provided by third parties
For operations performed by third parties
Commissions for operations on financial instruments
For guarantees received
Other
15,125
48,608
2,490
256,396
583,549
10,305,997
2,977,863
13,868,420
The “Income from services and commissions – other” account for 2013 and 2012, essentially includes financial
advisory commissions. In 2012, the “Costs of services and commissions – for banking services provided by third
parties” account included € 1,635,414 relating to commissions to be passed on to other credit institutions in future
syndications in accordance with the policy described in Note 2.14.
26. INCOME FROM FINANCIAL OPERATIONS
(euros)
2013
2012
145,511
147,040
(49,561)
-
Foreign exchange income
Revaluation of foreign exchange position
Income from the disposal of loans and advances to customers
Loans and advances to customers (Note 11)
income from assets and liabilities held for trading
Equity instruments
Debt instruments
489,752
(122,208)
1,154,409
17,001,281
Derivatives
Futures
Interest rate swaps
Options
(474,965)
(511,207)
21,974,269
(20,808,346)
64,285
127,979
(9,954,223)
(34,530)
13,253,527
(4,347,031)
552,439
(136,909)
552,439
(136,909)
8,451,529
2,217,416
Debt instruments
Income from available for sale financial assets
Debt instruments
Equity instruments
-
8,562,421
8,451,529
10,779,837
311,283
63,682
(285,240)
(65,359)
Income from hedge operations
Interest rate swaps
Income from other financial operations
Value adjustments on hedged assets and liabilities
Income from other financial assets at fair value through profit or loss
93
(euros)
2013
2012
Other
(276)
(345)
(285,516)
(65,704)
22,379,212
6,440,915
Information on income from equity instruments classified as available for sale financial assets, in 2012, is set out
below (Note 9):
(euros)
SICAR NovEnergia II
9,015,263
52,587
9,067,850
Losses on available for sale financial assets
Pinewells, S.A.
(360,000)
Caixa Geral Finance Limited
(145,385)
La Seda Barcelona
(44)
(505,429)
8,562,421
27. OTHER OPERATING INCOME
(euros)
2013
2012
Staff on loan - CGD Group
Reimbursement of expenses
Provision of miscellaneous services
Recovery of overdue interest and credit
366,900
813,984
1,021,010
255,058
495,032
528,587
5,974
-
Income from non-financial assets:
Other
161
-
1,196,860
1,727,297
3,085,937
3,324,926
Other operating costs
Tax
Indirect taxes
Stamp duty
Charges
Tax on road transport
57,610
46
5,025
83,543
284
280
247,948
452,129
310,867
535,998
2,107,539
294,485
Other tax
Cancellation of interest on loans and advances to customers for prior years
Contributions to Resolution Fund
254,143
-
TREM II
131,511
138,243
112,557
274,108
Donations and subscriptions
28,483
26,432
Contributions to Deposit Guarantee Fund
18,219
17,500
Other
Other operating income (net)
334,296
25,709
2,986,748
776,477
3,297,615
1,312,475
(211,678)
2,012,451
The Resolution Fund was created by Decree Law 31-A/2012 of 10 February, which introduced a resolution regime in
the General Credit Institutions and Financial Companies Regime approved by Decree Law 298/92 of 31 December.
Direct taxes
94
The measures provided for in the new regime aim, as the case may be, to recover or prepare the orderly liquidation of
credit institutions and certain investment companies in a difficult financial situation, and provide for three intervention
stages by the Bank of Portugal, in the form of corrective intervention, provisional administration and resolution.
The Resolution Fund’s main mission therefore consists of providing financial support to the application of the
resolution mechanisms adopted by the Bank of Portugal.
In 2013, the Bank recognised the initial and the periodic contribution to the Resolution Fund of € 62,639 and
€ 191,504 respectively.
28. EMPLOYEE COSTS
(euros)
Remuneration paid to the Board of Directors and inspection bodies
Remuneration paid to employees
2013
2012
1,131,166
1,008,905
10,827,843
10,144,910
11,959,009
11,153,815
Mandatory social costs:
Costs of remuneration
2,321,456
1,974,890
Pension liabilities (Note 2.13)
330,857
278,974
Other mandatory social costs
26,682
99,156
2,678,995
2,353,020
Other employee costs
453,656
448,422
15,091,660
13,955,257
Following the occurrence of legislative changes in 2013, the cost of the preceding year’s holiday subsidies for the
amount of € 839,991 was recognised.
The average number of staff employed by the Bank and its subsidiaries’ in 2013 and 2012, excluding the Board of
Directors and inspection bodies, was 183 and 182, respectively, distributed as follows:
2013
2012
Senior management
85
86
Technical and line management
77
75
Administrative and auxiliary staff
21
21
183
182
2012
2011
29. OTHER ADMINISTRATIVE EXPENSES
(euros)
Specialised services
4,666,738
4,157,317
Communications
468,642
480,865
Travel and expenses
820,970
820,204
Rents and leases
905,105
924,623
1,053,129
976,121
Advertising and publications
414,840
416,060
Water, power and fuel
142,782
153,683
Consumables
98,541
94,604
Publications
55,043
60,036
Staff training
53,578
75,950
Insurance
23,401
41,372
218,192
162,789
Maintenance and repair
Other third party services
Other third party supplies
42,731
55,892
8,963,692
8,419,516
95
Information on the minimum payments of operational leases on transport and IT equipment, at 31 December 2013
and 2012, is set out below:
(euros)
2012
2011
Up to 1 year
622,215
645,977
From 1 to 5 years
531,200
760,825
30. IMPAIRMENT
Information on impairment movements, in 2013 and 2012, is set out below:
2013
(euros)
Investments in credit institutions (Note 7)
Balance at
Net provisions in
31.12.2012
income statement
Exchange rate
Use
Transfers
gains/losses
Balance at
Other
31.12.2013
115,800
-
-
-
(115,800)
-
-
81,102,669
17,365,136
(12,100)
-
9,572,293
-
108,027,998
Debtors and other investments (Note 16)
16,232,287
15,403,163
(917,797)
-
(847,246)
-
29,870,406
Available for sale assets (Note 9)
Equity instruments
1,897,215
-
-
(82,129)
-
-
1,815,087
99,347,971
32,768,299
(929,897)
(82,129)
8,609,247
-
139,713,491
2012
(euros)
Investments in credit institutions (Note 7)
Balance at
Net provisions in
31.12.2011
income statement
Exchange rate
Use
Transfers
gains/losses
Balance at
Other
31.12.2012
120,600
-
-
-
(4,800)
-
115,800
68,180,997
18,030,216
(5,728,236)
-
619,692
-
81,102,669
8,532,316
9,867,529
-
-
(614,892)
(1,552,665)
16,232,287
Debt instruments
3,961,150
(29,750)
(3,931,400)
-
-
-
-
Equity instruments
3,524,528
1
(1,589,923)
(37,390)
-
-
1,897,215
84,319,590
27,867,995
(11,249,560)
(37,390)
-
(1,552,665)
99,347,971
Debtors and other investments (Note 16)
Available for sale assets (Note 9)
31. RELATED ENTITIES
All companies controlled by CGD Group, associated companies and management bodies are considered to be
entities related with the Bank.
Balances with Group companies
The principal balances with Caixa Geral de Depósitos Group companies not included in the consolidation perimeter,
at 31 December 2013 and 2012, were as follows:
(euros)
2013
2012
995,746
2,552,031
26,773
295,594
671
142
Caixa Geral de Depósitos, S.A.
13,886,994
50,682,458
Banco Caixa Geral – Brasil S. A.
1,715,283
2,017,524
-
52,657
Loans to credit institutions repayable on demand
Banco Caixa Geral, S.A.
of which securities
Assets
96
(euros)
of which trading derivatives
2013
2012
45,171,548
44,972,416
Locarent
300,736
2,561,893
BNU Macau
284,183
-
5,881,650
5,734,920
-
3,306,633
1,185,156
4,102,839
CGD Finance Limited
Caixa Seguros, SGPS, S.A.
-
172,200
155,710
175,334
BCI Moçambique, S.A.
6,573
6,871
Sogrupo IV – Gestão de Imóveis, ACE
1,551
-
1,714,442
1,904,781
75,260
352,885
151,826
154,703
66,434
89,746
Mesquita ETVIA
-
42,942
-
11,972
Sogrupo – Serviços Administrativos, ACE
-
3,787
Caixagest – Técnicas de Gestão de Fundos, S.A.
-
1,768
Fundo de Desenvolvimento e Reorganização Empresarial, FCR
-
1,688
540,162,466
835,664,064
934,851
1,424,476
315,233,380
473,512,061
-
11,682,740
122,271
122,271
Other assets
FCR Caixa Fundos – Caixa Capital
FCR Empreender Mais
Liabilities
Financial liabilities held for trading - derivatives
Hedge derivatives with negative fair value
CREDIP – Instituição Financeira de Crédito, S.A.
Caixa Leasing e Factoring – Instituição Financeira de Crédito, S.A.
Customer resources
27,141,438
23,163,919
Parcaixa SGPS, S.A.
-
4,678,820
Mesquita ETVIA
-
1,171,479
1,822,927
3,769,387
FCR Empreender Mais
Locarent
325,707
311,396
24,134,997
36,017,661
1
1
-
620,543
44,749
33,574
Other liabilities
CGD Investimentos C.V.C
Soc. Gest. Fundo Pensões CGD
Fundo Caixa Crescimento
-
3,370
357,008
260,121
2,805
-
29
-
The principal balances in Caixa Geral de Depósitos, S.A.’s income statement for Group companies not included in the
consolidation perimeter, at 2013 and 2012, are set out below:
(euros)
2013
2012
(138,036,823)
(120,082,430)
31,751,267
65,939,002
Net interest income
- of which: on financial assets held for trading
- of which: on available for sale financial assets
82,041
109,915
- of which: hedge derivatives
31,432
(460,603)
(370,496)
(451,461)
-
120,942
CGD Finance Limited
Transactions with Group companies
97
(euros)
2013
2012
(14)
(68)
7
(68)
-
(2,417)
Parcaixa SGPS, SA
Locarent
FCR Empreender Mais
Mesquita ETVIA
(72,437)
(100,508)
2,109,191
2,114,343
(34,067)
(43,793)
(300,423)
(482,352)
-
(43,276)
Banco Caixa Geral – Brasil S.A.
151,316
173,394
BNU Macau
129,166
-
-
194,410
5,403,742
5,920,766
314,574
326,758
Commissions (net)
FCR Empreender Mais
1,355,359
604,334
2,043,857
2,102,496
1,434,420
275,000
Parcaixa SGPS, SA
Banco Caixa Geral – Brasil, SA
Mesquita ETVIA
CGD Investimentos C,V.C
Fundo Caixa Crescimento
-
80
194,787
210,540
-
(594,700)
(183)
(4,909)
-
2,867
(951,864)
(260,121)
-
1,500,000
38,091
-
285,136,062
(184,446,254)
284,391,437
(184,344,952)
478,611
116,769
(1,761,286)
471,829
266,013
-
- of which on financial assets held for trading
- of which on hedge derivatives
Locarent
BNU Macau
99,813
234,626
147,886
143,665
-
66,691
8,850
19,830
-
30,975
(14,814)
-
(94,981)
(108,417)
(52,147)
(53,598)
Culturgest - Gestão de Espaços Culturais
(10,000)
(10,000)
(519,317)
(539,727)
Sogrupo – Serviços Administrativos, ACE
Caixagest – Técnicas de Gestão de Fundos, S.A.
Mesquita ETVIA
Soc. Gest. Fundo Pensões CGD
Locarent
The Bank also had guarantees of € 7,127,030 provided to Caixa Geral de Depósitos at 31 December 2013 and 2012.
Transactions with related entities are generally made on the basis of market values on the respective dates.
Bank’s management bodies
amount € 16,488 in respect of contributions to the pension fund, as described in Note 2.13 (€ 949,375 and € 16,432
respectively in 2012).
No bonuses were paid to Board Members in 2013 or 2012.
Three Board Members had a mortgage lending agreement with the Bank for a global amount of € 307,297 (€ 246,216
in 2012 for two Board Members), under standard lending conditions applicable to Bank employees, which were taken
out prior to their appointments as Board Members. The Bank has no additional liability or granted any long term
benefit to the Board of Directors, other than those referred to above.
The costs incurred on the remuneration of the Bank’s Board of Directors, in 2013, totalled € 1,055,218 of which
98
Information on the amounts paid to the Members of Boards of Directors and inspection bodies, in 2013, is set out in
the management report.
Information on the fees charged by the statutory auditors, in 2013, is set out in the management report.
32. FINANCIAL INSTRUMENTS
Management policies on financial risks pertaining to the Group’s activity
CGD Group adopted a centralised risk management model, in 2001. This encompasses the assessment and control
of all of the Group’s credit, market and liquidity risks, based on the principle of the segregation of functions between
commercial and risk areas. Risk management and control for the CaixaBI Group are, accordingly, centralised by
CGD’s Risk Management Division. The Bank also has risk management regulations defining the limits and operating
procedures on the management of various risks.
The following disclosures on the principal types of risks pertaining to the Group’s activity are required under IFRS 7.
Exchange rate risk
Foreign exchange risk is controlled and assessed on a daily individual basis for Caixa – Banco de Investimento,
S.A.’s operations. VaR amounts and limits are calculated on total open and currency positions.
Financial instruments were broken down into the following currencies, at 31 December 2013 and 2012:
2013
(Currency)
Euros
USD
Sterling
Real
Other
Total
Assets
1,239,552
-
-
-
-
2,034,953
-
10,506
671
201,372
1,239,552
2,247,502
13,886,994
-
-
1,715,283
-
15,602,277
Securities and derivatives portfolio:
Securities
Derivatives (notional)
Derivatives (book value)
Hedge derivatives (notional)
Other assets
13,421,620
1,226,882
329,855
-
518,500
15,496,856
7,472,322,725
536,674,971
-
-
-
8,008,997,696
480,053,545
41,066,121
-
-
-
521,119,665
674,998,841
8,817,583
-
-
-
683,816,424
12,951,207
-
-
-
-
12,951,207
695,342,161
76,136
101,707
-
-
695,520,004
72,078,253
57,860,394
22,454
-
65,974
130,027,075
(137,898,404)
-
-
-
-
(137,898,404)
9,300,431,447
645,722,087
464,522
1,715,954
785,845
9,949,119,855
(905,446,049)
(48,649,708)
(659,868)
-
(390,333)
(955,145,957)
(110,494,766)
(1,570,738)
-
-
-
(112,065,504)
-
-
-
-
-
-
(7,472,322,725)
(536,674,971)
-
-
-
(8,008,997,696)
(506,011,091)
(39,064,754)
-
-
-
(545,075,845)
(12,951,207)
-
-
-
-
(12,951,207)
Other liabilities
(38,829,678)
(19,809,288)
(151,631)
(4,350)
-
(58,794,946)
(9,046,055,515)
(645,769,458)
(811,498)
(4,350)
(390,333)
(9,693,031,155)
(47,371)
(346,976)
1,711,604
395,512
1,712,769
Net exposure
2012
(Currency)
Assets
Euros
USD
Sterling
Real
Other
Total
Liabilities
99
2012
(Currency)
Euros
USD
Sterling
Real
Other
Total
14,541,856
-
-
-
-
3,525,103
19,365
89,593
142
119,497
14,541,856
3,753,700
50,682,458
-
-
2,017,524
-
52,699,982
Securities and derivatives portfolio:
Securities
Other assets
7,967,194
1,705,320
-
-
-
9,672,513
9,331,839,114
522,292,028
-
-
-
9,854,131,142
783,127,431
76,724,149
-
-
-
859,851,580
608,658,946
10,549,442
-
-
-
619,208,389
13,964,216
-
-
-
-
13,964,216
727,711,574
37,875
-
-
-
727,749,449
64,910,240
21,559,225
38,033
365
87,263
86,595,126
(97,450,755)
-
-
-
-
(97,450,755)
11,509,477,376
632,887,404
127,626
2,018,031
206,760
12,144,717,197
(950,824,983)
(18,230,642)
-
-
-
(969,055,625)
(127,399,929)
(1,641,760)
-
-
-
(129,041,689)
-
-
-
-
-
-
(9,331,839,114)
(522,292,028)
-
-
-
(9,854,131,142)
Liabilities
(825,106,464)
(74,680,168)
-
-
-
(899,786,632)
(13,964,216)
-
-
-
-
(13,964,216)
Other liabilities
(42,441,256)
(17,058,817)
-
8,418
-
(59,491,656)
(11,291,575,962)
(633,903,416)
-
8,418
-
(11,925,470,960)
(1,016,012)
127,626
2,026,449
206,760
1,344,823
Net exposure
The amounts relating to derivatives in the above tables reflect the notional amount on interest rate swaps.
Liquidity risk
Liquidity risk comprises the Group’s risk of facing difficulties in securing funds to meet its commitments. An example of
liquidity risk may be the Bank’s incapacity to dispose of a financial asset quickly at close to its fair value.
The analysis of the Group’s liquidity is part of the consolidated liquidity analysis of CGD Group’s Asset-Liability
Committee (ALCO). The Bank has an irrevocable line of credit from CGD, for liquidity requirements of up to one year.
CGD Group policies, on the other hand, do not advise direct access to the capital market for securing medium and
long term funding. Group CGD assumes the responsibility of securing funding on a consolidated basis and CGD has a
global commitment to manage and eventual cover liquidity gaps of its various subsidiaries.
Under IFRS 7, the full amount of non-discounted contractual cash flows for the various time bands, based on the
following premises, is set out below:

Customers’ sight deposits are recognised in the “Customer resources and other loans” account in “Repayable on

Sight overdrafts are recognised in the “Loans and advances to customers” accounts in “Repayable on demand”;

The “Other” column comprises amounts already received or paid which are being deferred;

The amount for derivatives set out in this table comprises their book value;

Shares and customers’ overdue credit have been classified for undetermined periods;

For operations whose income is not fixed such as on operations indexed to Euribor, the future cash flows have
been estimated at the reference value at 31 December 2013 and 2012.
demand”;
100
2013
Contractual periods to maturity
(euros)
Repayable on
Up to 3
demand
months
From 3
months to 1
year
From 1 to 3
From 3 to 5
More than 5
years
years
years
Undetermined
Other
Total
Assets
Cash
and
claims
on
1,239,552
-
-
-
-
-
-
-
1,239,552
2,247,502
-
-
-
-
-
-
-
2,247,502
-
15,652,720
-
-
-
-
-
-
15,652,720
-
4,552
101,056
5,868,013
0
3
150,000
-
6,123,624
-
39,268,269
286,998,381
183,933,962
37,258,127
166,088,565
64,619,863
-
778,167,168
-
-
-
-
-
-
-
-
-
Securities
-
12,978
21,901
403,140
18,701
1,226,245
8,668,230
-
10,351,195
Derivatives
-
-
6,578,623
22,618,107
21,949,408
469,973,528
-
-
521,119,665
1,749,923
31,285,324
90,527,227
162,762,960
176,099,624
338,151,957
45,458,969
(2,628,744)
843,407,241
-
-
1,723,737
-
-
-
-
-
1,723,737
central Banks
Claims on other credit
institutions
Investments
in
credit
institutions
Derivatives portfolio:
Other financial assets
at
fair
value
through
profit or loss
Available
for
financial assets
sale
(gross
balances)
Financial assets held
for trading
Loans and advances to
customers
(gross
balances)
Hedge derivatives with a
positive revaluation
Other assets
122,931,086
-
-
-
-
-
6,676,905
419,084
128,168,063
86,223,843
385,950,926
375,586,181
235,325,860
975,440,299
125,573,967
(2,209,661)
130,027,075
197,435
637,373,604
101,808,778
218,708,924
-
-
-
-
958,088,741
36,449,766
58,156,003
12,819,120
-
-
6,182,336
-
-
113,607,226
2,310,059,47
9
Liabilities
central banks’ resources
Customer resources and
other loans
Financial liabilities held
for trading
Derivatives
negative revaluation
Other liabilities
Liquidity gap
-
-
-
-
-
-
-
-
-
-
249
6,545,176
26,654,719
31,446,791
480,428,910
-
-
545,075,845
-
-
-
934,851
-
-
-
-
934,851
43,143,415
8,140,159
6,459,554
-
-
-
-
1,051,818
79,790,617
703,670,014
127,632,628
246,298,493
31,446,791
486,611,246
-
1,051,818
48,377,446
(617,446,171)
258,318,298
129,287,688
203,879,069
488,829,052
125,573,967
(3,261,478)
58,794,946
1,676,501,60
8
633,557,871
Credit institutions’ and
101
2012
(euros)
Repayable on
Up to 3
demand
months
From 3
months to 1
year
From 1 to 3
From 3 to 5
More than 5
years
years
years
Undetermined
Other
Total
Assets
Cash
and
claims
on
central banks
institutions
Investments
in
credit
institutions
Securities
14,542,965
-
-
-
-
-
-
-
14,542,965
3,753,700
-
-
-
-
-
-
-
3,753,700
-
52,769,243
-
-
-
-
-
-
52,769,243
-
16,022
136,647
2,773,290
5,088,776
2
-
-
8,014,736
-
64,055,271
216,348,230
116,777,246
24,382,585
246,173,679
66,296,911
-
734,033,921
and
derivatives portfolio:
at
fair
value
through
profit or loss
Available
for
financial assets
sale
(gross
balances)
for trading
Securities
-
87,403
729,416
3,662,834
1,648,856
5,077,784
309,982
-
11,516,273
Derivatives
-
2,842,213
10,082,345
37,653,493
41,914,415
767,359,115
-
-
859,851,580
2,378,985
43,935,965
102,170,409
186,797,786
111,251,496
322,258,892
39,830,202
(2,255,072)
806,368,663
Loans and advances to
customers
positive revaluation
Other assets
-
-
-
1,651,219
-
-
-
-
1,651,219
79,664,273
-
-
-
-
-
6,458,254
472,599
86,595,126
100,339,923
163,706,117
329,467,046
349,315,867
184,286,128
112,895,348
(1,782,473)
11,812,516
741,435,518
-
220,326,528
-
-
-
-
973,574,562
36,020,084
77,166,405
3,890,677
7,023,480
-
7,255,790
-
-
131,356,435
-
2,825,208
10,622,107
40,520,915
44,636,437
801,181,964
-
-
899,786,632
-
-
-
-
1,424,476
-
-
-
1,424,476
34,909,158
11,751,067
11,482,855
-
-
-
-
1,348,576
82,741,759
833,178,198
25,995,639
267,870,923
46,060,913
808,437,754
-
1,348,576
17,598,165
(669,472,081)
303,471,407
81,444,944
138,225,215
532,431,717
112,895,348
(3,131,048)
1,340,869,47
1
2,579,097,42
8
Liabilities
central banks’ resources
Customer resources and
other loans
Financial liabilities held
for trading
Derivatives
negative revaluation
Other liabilities
Liquidity gap
59,491,656
2,065,633,76
0
513,463,667
As already referred to, the Bank has an irrevocable line of credit from CGD, permitting the adequate management of
liquidity gaps of up to one year.
Interest rate risk
Interest rate risk comprises the fair value or cash flow risk associated with a specific financial instrument, if changed
on the basis of changes in market interest rates.
102
The following is a summary of the type of exposure to interest rate risk, at 31 December 2013 and 2012:
2013
(euros)
Not subject to
Fixed rate
interest rate
Variable rate
Total
Assets
-
-
2,247,502
2,247,502
-
-
15,602,277
15,602,277
Securities
8,668,230
1,594,891
-
10,263,121
-
3,919,983,443
4,089,014,253
8,008,997,696
150,000
-
5,083,735
5,233,735
-
5,000,000
7,951,207
12,951,207
64,619,863
565,012,475
54,184,086
683,816,424
42,830,225
8,898,714
643,791,065
695,520,004
130,027,075
-
-
130,027,075
246,295,393
4,500,489,524
4,817,874,125
9,564,659,042
Derivatives
Hedge derivatives
Other assets
Liabilities
-
3,914,543,744
4,094,453,952
8,008,997,696
Derivatives
-
197,435
954,948,522
955,145,957
-
48,011,190
64,054,314
112,065,504
Hedge derivatives
-
7,951,207
5,000,000
12,951,207
58,794,946
-
-
58,794,946
58,794,946
3,970,703,577
5,118,456,788
9,147,955,310
187,500,447
529,785,947
(300,582,663)
416,703,732
Other liabilities
Net exposure
2012
(euros)
Not subject to
Fixed rate
interest rate
Variable rate
Total
Assets
-
-
3,753,700
3,753,700
-
-
52,699,982
52,699,982
Securities
Derivatives
309,982
9,362,532
-
9,672,513
-
4,833,900,982
5,020,230,160
9,854,131,142
-
2
5,896,814
5,896,816
Hedge derivatives
-
5,000,000
8,964,216
13,964,216
66,296,911
470,183,519
82,727,959
619,208,389
37,575,130
10,410,192
679,764,126
727,749,449
Other assets
86,595,126
-
-
86,595,126
190,777,149
5,328,857,227
5,854,036,955
11,373,671,331
Liabilities
-
4,862,053,852
4,992,077,289
9,854,131,142
Derivatives
-
11,812,516
957,243,109
969,055,625
-
48,156,569
80,885,120
129,041,689
Hedge derivatives
-
8,964,216
5,000,000
13,964,216
59,491,656
-
-
59,491,656
59,491,656
4,930,987,154
6,035,205,518
11,025,684,327
131,285,493
397,870,074
(181,168,563)
347,987,004
Other liabilities
Net exposure
103
Exposure to interest rate risk, at 31 December 2013 and 2012, can be broken down into the following maturity
periods:
2013
Periods to repricing rate date / Contractual period to maturity
Repayable on
(euros)
demand
From 3
Up to 3
From 1 to 3
months to 1
months
From 3 to 5
years
year
More than 5
years
Undetermined
years
Other
Total
Assets
institutions
Investments in credit
institutions
for trading
2,247,502
-
-
-
-
-
-
-
2,247,502
-
15,602,277
-
-
-
-
-
-
15,602,277
-
-
-
-
-
-
-
-
-
Securities
-
-
8,130
374,814
-
1,211,947
8,668,230
-
10,263,121
Derivatives
-
969,986,397
3,317,172,521
299,030,864
192,522,670
3,230,285,244
-
-
8,008,997,696
-
354,100
4,729,636
-
-
-
150,000
-
5,233,735
at fair value through
profit or loss
Hedge derivatives
Available
for
sale
financial assets
Loans and advances
to customers
Other assets
-
-
12,951,207
-
-
-
-
-
12,951,207
-
82,024,256
279,166,233
118,998,596
15,819,471
123,188,005
64,619,863
-
683,816,424
695,520,004
1,749,923
233,395,063
386,784,882
8,898,714
18,500,422
3,360,774
45,458,969
(2,628,744)
122,931,086
-
-
-
-
-
6,676,905
419,084
130,027,075
126,928,511
1,301,362,093
4,000,812,609
427,302,988
226,842,563
3,358,045,970
125,573,967
(2,209,661)
9,564,659,042
-
979,587,504
3,313,672,521
301,660,409
173,447,638
3,240,629,624
-
-
8,008,997,696
197,435
637,277,081
100,272,556
217,398,886
-
-
-
-
955,145,957
36,449,766
58,094,970
12,693,902
-
-
4,826,865
-
-
112,065,504
-
-
5,000,000
7,951,207
-
-
-
-
12,951,207
43,143,415
8,497,167
6,102,546
-
-
-
-
1,051,818
58,794,946
79,790,617
1,683,456,722
3,437,741,525
527,010,502
173,447,638
3,245,456,489
-
1,051,818
9,147,955,310
47,137,894
(382,094,628)
563,071,084
(99,707,514)
53,394,925
112,589,482
125,573,967
(3,261,478)
416,703,732
Liabilities
Financial
liabilities
held for trading
Derivatives
central
banks’
Customer
resources
and other loans
Hedge derivatives
Other liabilities
Net exposure
resources
104
2012
(euros)
Repayable on
Up to 3
demand
months
From 3
months to 1
year
From 1 to 3
From 3 to 5
More than 5
years
years
years
Undetermined
Other
Total
Assets
institutions
institutions
3,753,700
-
-
-
-
-
-
-
3,753,700
-
52,699,982
-
-
-
-
-
-
52,699,982
-
-
-
-
-
-
-
-
-
Securities
-
-
522,088
3,059,188
1,309,445
4,471,811
309,982
-
9,672,513
Derivatives
-
2,053,083,131
3,145,796,862
664,437,476
479,836,371
3,510,977,302
-
-
9,854,131,142
-
1,266,509
4,630,307
-
-
-
-
-
5,896,816
for trading
profit or loss
Hedge derivatives
Available
for
sale
financial assets
Loans and advances
to customers
Other assets
-
-
8,964,216
5,000,000
-
-
-
-
13,964,216
-
113,779,577
203,792,149
45,530,028
5,067,448
184,742,276
66,296,911
-
619,208,389
2,378,985
316,949,660
360,435,481
-
10,410,192
-
39,830,202
(2,255,072)
727,749,449
79,664,273
-
-
-
-
-
6,458,254
472,599
86,595,126
85,796,958
2,537,778,858
3,724,141,103
718,026,692
496,623,456
3,700,191,388
112,895,348
-
2,038,718,559
3,141,962,351
667,552,896
481,817,735
3,524,079,601
-
-
9,854,131,142
11,812,516
740,525,605
-
216,717,504
-
-
-
-
969,055,625
36,020,084
77,058,453
3,826,667
6,716,019
-
5,420,466
-
-
129,041,689
-
-
5,000,000
-
8,964,216
-
-
-
13,964,216
34,909,158
11,587,067
11,646,855
-
-
-
-
1,348,576
59,491,656
82,741,759
2,867,889,684
3,162,435,872
890,986,419
490,781,951
3,529,500,067
-
1,348,576 11,025,684,327
3,055,200
(330,110,826)
561,705,231
(172,959,727)
5,841,505
170,691,321
112,895,348
(1,782,473) 11,373,671,331
Liabilities
Financial
liabilities
held for trading
Derivatives
central
banks’
resources
Customer
resources
and other loans
Hedge derivatives
Other liabilities
Net exposure
(3,131,048)
347,987,004
The contents of the tables above were based on the following premises

the book value of fixed-rate instruments was classified in accordance with their respective period to maturity;

the book value of variable-rate instruments (e.g. indexed to Euribor) was classified in accordance with the
respective maturity until the next refixing of the rate;

the book value of instruments not subject to interest rate risk (e.g. shares) was included in the "Undetermined"
column;

the book value included in the “Other” column comprises amounts which have already been received or paid

information is provided on notional purchase amounts (as assets) and sales (as liabilities) on interest rate swaps;

overdue loans to customers are not considered to be subject to interest rate risk, and;

customers’ sight deposits, when no interest is paid, are considered as fixed-rate and classified as “Repayable on
demand”.
Credit risk
Credit risk comprises financial losses on the defaults of counterparties who have entered into agreements on financial
instruments.
which are being deferred;
105
Maximum exposure to credit risk
The following is a summary of the maximum exposure to credit risk, by type of financial instrument, at 31 December
2013 and 2012:
(euros)
Type of financial instrument
2013
2012
Book value
Provisions/
Book value
Book value
Provisions/
Book value
(gross)
Impairment
(net)
(gross)
Impairment
(net)
Balance sheet items:
2,247,502
-
2,247,502
3,753,700
-
3,753,700
15,602,277
-
15,602,277
52,699,982
115,800
52,584,182
527,798,292
-
527,798,292
875,110,928
-
875,110,928
619,196,561
-
619,196,561
552,911,478
-
552,911,478
695,520,004
108,027,998
587,492,006
727,749,449
81,102,669
646,646,780
1,723,737
-
1,723,737
1,651,219
-
1,651,219
129,607,991
29,870,406
99,737,585
86,122,527
16,232,287
69,890,240
1,991,696,365
137,898,404
1,853,797,961
2,299,999,281
97,450,755
2,202,548,525
Hedge derivatives
Other assets (excluding deferred costs)
Off-balance sheet:
Guarantees provided
20,072,767
756,079
19,316,687
31,629,059
985,750
30,643,309
2,011,769,132
138,654,484
1,873,114,648
2,331,628,340
98,436,505
2,233,191,835
Credit quality of financial assets
The Bank does not have an internal rating system. The main procedures in force in terms of the approval and
monitoring of credit operations designed to ensure an adequate risk level for the Bank’s strategy are set out below:

The Bank has a Credit Committee, comprising members of the Executive Committee and managers of Divisions
with any form of involvement in lending. The Bank’s Credit Committee meets once a week with a minimum of two
directors and managers of the Divisions involved in the lending process.

The production of commercial proposals for submission to the Credit Committee is the responsibility of structural
organs (business/product divisions), which require the risk opinion of CGD’s Risk Management Division in
advance. The proposals approved by the Bank’s Credit Committee are recorded in minutes and are signed by all
present, for later submission to and the final resolution of CGD’s Credit Committees.

Pledges on securities

Bank guarantees;

State-backed;

Mortgage loans for employees; and

Personal guarantees.
A part of credit operations with customers is, inter alia, guaranteed by the following types of collateral:
106
Credit quality of debt securities and derivatives
The following table provides information on the book value of portfolio debt securities, net of impairment (excluding
matured securities) according to Standard & Poor’s or equivalent rating, by type of guarantor or issuing entity and by
the guarantor‘s or issuing entity’s geography, at 31 December 2013 and 2012:
2013
(euros)
Rest of
Portugal
European Union
North America
Other
Total
BBB- up to BBB+
BB- up to BB+
Not rated
-
-
-
-
-
525,678
-
-
-
525,678
1,069,213
-
-
-
1,069,213
1,594,891
-
-
-
1,594,891
1,069,213
-
-
-
1,069,213
525,678
-
-
-
525,678
-
-
-
-
-
1,594,891
-
-
-
1,594,891
Issued by:
Corporates
Governments and other local authorities
Financial assets at fair value through profit or loss (Fair Value Option)
BB- up to BB+
Not rated
-
-
-
-
-
4,729,636
-
-
354,100
5,083,735
4,729,636
-
-
354,100
5,083,735
4,729,635
Issued by:
Corporates
4,729,635
-
-
-
-
-
-
-
-
1
-
-
354,100
354,101
4,729,636
-
-
354,100
5,083,735
A+
-
2,460,350
-
-
2,460,350
BBB- up to BBB+
-
3,444,603
-
1,284,503
4,729,106
546,849,576
-
-
-
546,849,576
Available for sale financial assets (net of impairment)
BB- up to BB+
Not rated
65,157,529
-
-
-
65,157,529
612,007,105
5,904,953
-
1,284,503
619,196,561
Issued by:
Corporates
64,273,336
3,444,603
-
1,284,503
69,002,442
545,498,627
-
-
-
545,498,627
2,235,141
2,460,350
-
-
4,695,491
612,007,105
5,904,953
-
1,284,503
619,196,561
2012
(euros)
Rest of
Portugal
European Union
North America
Other
Total
BBB- up to BBB+
-
3,521,117
-
1,705,314
5,226,431
4,136,101
-
-
-
4,136,101
-
-
-
-
-
4,136,101
3,521,117
-
1,705,314
9,362,532
Corporates
1,706,117
1,501,803
-
1,705,314
4,913,234
2,377,327
-
-
-
2,377,327
52,657
2,019,313
-
-
2,071,971
4,136,101
3,521,117
-
1,705,314
9,362,532
BB- up to BB+
Not rated
Financial assets at fair value through profit or loss (Fair Value Option)
BB- up to BB+
Not rated
2
-
-
-
2
4,630,305
-
-
1,266,509
5,896,814
4,630,307
-
-
1,266,509
5,896,816
4,630,304
-
-
-
4,630,304
2
-
-
-
2
Issued by:
Corporates
Issued by:
107
2012
(euros)
Rest of
Portugal
European Union
North America
Other
Total
1
-
-
1,266,509
1,266,510
4,630,307
-
-
1,266,509
5,896,816
BBB
-
90,884,042
-
-
90,884,042
380,783,964
5,006,367
-
-
385,790,330
B+
9,715,868
-
-
-
9,715,868
CCC- up to CCC+
5,355,831
-
-
5,355,831
BB- up to BB+
Not rated
59,644,429
1,520,979
-
-
61,165,408
455,500,094
97,411,387
-
-
552,911,478
64,409,261
9,022,689
-
-
73,431,950
369,245,245
79,268,478
-
-
448,513,722
21,845,585
9,120,221
-
-
30,965,806
455,500,091
97,411,387
-
-
552,911,478
Issued by:
Corporates
Disclosures on exposure to credit risk in derivative operations by counterparty type are set out in Note 10. The Bank,
at 31 December 2013 also recognised in “Miscellaneous debtors” an amount of € 27,878,817 relating to interest on
derivatives in arrears on which impairment of € 22,998,099 was recognised. The book value recognised in “Financial
assets held for trading” relating to the said operations totalled € 15,730,772.
The Bank, at 31 December 2012 also recognised in “Miscellaneous debtors” an amount of € 23,466,829 relating to
interest and the amount of derivatives in arrears on which impairment of € 8,782,776 was recognised. The book value
recognised in “Financial assets held for trading” relating to the said operations totalled € 86,798,374.
Credit quality of loans and advances to credit institutions
The counterparties with which the Bank had contracted “Loans and advances to credit institutions” at 31 December
2013, comprised CGD Group bodies with an external rating of BB-.
Quality of loans and advances to customers
Information on non-performing credit operations and/or with separate impairment, at 31 December 2013 and 2012, is
set out in the following table:
2013
(euros)
Collectively
Separately
impaired loans
impaired loans
2012
Total
Collectively
Separately
impaired loans
impaired loans
Total
Lending to companies
Collective analysis
Outstanding
422,150,279
218,770,278
640,920,557
538,411,605
136,747,313
-
45,458,970
45,458,970
-
39,830,202
39,830,202
(7,605,563)
(100,299,136)
(107,904,699)
(7,294,924)
(73,727,470)
(81,022,394)
414,544,716
163,930,112
578,474,828
531,116,681
102,850,046
633,966,726
Outstanding
9,396,566
-
9,396,566
10,025,647
-
10,025,647
Impairment
(119,280)
-
(119,280)
(77,398)
-
(77,398)
9,277,286
-
9,277,286
9,948,249
-
9,948,249
Outstanding
316,593
-
316,593
372,597
-
372,597
Impairment
(4,019)
-
(4,019)
(2,876)
-
(2,876)
312,574
-
312,574
369,721
-
369,721
431,863,438
218,770,278
650,633,716
548,809,849
136,747,313
685,557,162
-
45,458,970
45,458,970
-
39,830,202
39,830,202
(7,728,862)
(100,299,136)
(108,027,998)
(7,375,199)
(73,727,470)
(81,102,669)
424,134,576
163,930,112
588,064,688
541,434,650
102,850,046
644,284,696
Overdue
Impairment
675,158,918
Consumer loans
Total outstanding credit
Total overdue credit
Total impairment
Total credit
Mortgage lending
108
Market risk
Market risk comprises the risk of an adverse change in the fair value or the cash flows of financial instruments
deriving from changes in market prices, including foreign exchange, interest rate and price risks.
Market risk is assessed on the basis of the following methodologies:

Value-at-Risk (VaR) on the trading portfolio. This portfolio includes the following elements: securities and
derivatives portfolio.

Sensitivity analysis on the Bank’s other assets and liabilities recognised in the Bank’s separate financial
statements. This sensitivity analysis is calculated on the bases of the premises defined in Bank of Portugal
Instruction 19/2005.f
The Group does not have quantitative information for the sensitivity analysis on the remaining assets and liabilities of
its subsidiaries.
Trading portfolio
VaR comprises an estimate of the maximum potential loss on a specific assets portfolio, over a specific period with a
given confidence level, assuming normal market operation.
The calculation methodology used is that of historical simulation, i.e. future events are fully explained by past events,
based on the following premises:

asset held for: 10 days;

confidence level: 99%;

price sampling period: 720 calendar days;

decay factor = 1, i.e. all observations carry the same weight.
For options, the theoretical price is calculated by the use of adequate models and the use of implicit volatility. No
calculation for correlations is made, owing to the methodology applied; i.e. the correlations are empirical.
The following is a breakdown of VaR, at 31 December 2013 and 2012:
(thousand euros)
2013
2012
366
233
28
25
199
19
Market VaR:
Interest rate
Exchange rate
Price
Volatility
Diversification effect
88
81
(247)
(48)
434
310
The diversification effect is calculated implicitly. Total VaR refers to the combined effect of interest rate, price, foreign
exchange and volatility risks.
point on the yield curves, are calculated for the trading portfolio and treasury positions. Other sensitivity indices
commonly applicable to options portfolios, commonly referred to a “Greeks”, are also calculated.
Monthly stress tests are also performed.
Theoretical backtesting (comparison of the VaR measure with technical results) is performed daily and real
backtesting (comparison of the VaR measure with the real results) monthly. The number of exceptions obtained, i.e.
the number of times theoretical or real losses exceed VaR, enables the method’s accuracy to be assessed and any
necessary adjustments made.
Bpvs (basis point values), changes in the market value of interest rate positions owing to a parallel shift of 1 basis
109
Non-trading portfolio
The sensitivity analysis on the non-trading portfolio was carried out to assess the potential impact on the Bank’s net
interest income in 2013 (excluding the other companies within the consolidation perimeter), considering a fall of 50
basis points (bps) in reference interest rates and assuming a parallel shift of the interest rate curve. The Bank’s
separate financial assets and liabilities in its financial statements were considered for this purpose, excluding:

derivatives; and

commercial paper.
The principal premises related with the pricing of operations were:

variable-rate operations: market rate plus respective contractual spread;

new fixed-rate operations: market rate plus respective spread equivalent to the difference between the average
rate on live transactions at 31 December 2013 and respective market rate;

new variable-rate operations: market rate plus average contractual spread on live transactions at 31 December
2013.
Based on the above referred to premises, the potential positive impact of a 50 basis points fall in reference interest
rates on projected net interest income for 2013 totals € 232,954 (€ 464,275 at 31 December 2012). In the event of a
50 basis points increase in reference interest rates, the potential negative impact on the net interest income forecast
for 2013 totals € 500,058 (€ 264,800 at 31 December 2012).
Fair value
The Group maintains a significant part of its assets, notably its securities and derivatives portfolio, at fair value
through profit or loss, at 31 December 2013.
At 31 December 2013 and 2012, the fair value of the outstanding loans and advances portfolio totalled
€ 618,002,957 and € 669,725,906. The assessment of the fair value of loans and advances was based on discounted
cash flow models up to the maturity of the operations. The contractual terms of the operations were taken into
consideration for the purpose, and interest rate curves appropriate to the type of instrument were used, including
discount spreads calculated on the basis of the implicit spread versus the market curves of the operations contracted
in December 2013 and 2012.
Reference should be made to the following aspects as regards the principal financial assets and liabilities recognised
at cost:

Interest is paid on almost all investments in and resources with other credit institutions at indexed rates and short
refixing periods;

As shown above, in the section on interest rate risk, the payment of interest on almost all customer deposits is
indexed to Euribor, with short refixing periods. A long term operation at fixed interest rates has been covered by a
hedge derivative for which reason the change in the fair value attributable to the interest rate risk has already been
In light of the above, the Bank considers that the book value of its financial assets, net of provisions and its financial
liabilities comprises a reliable approximation of their respective fair value.
recognised in the deposit’s book value (see Note 18).
110
The form of assessing the fair value of financial instruments at 31 December 2013 and 2012 is summarised below:
(euros)
2013
Financial instruments at fair value
Assets valued at
Valuation techniques based on:
Prices in an active
acquisition cost
market
Market data
Total
Other
Assets
-
10,263,121
-
521,119,665
531,382,787
150,000
-
4,729,635
354,101
5,233,735
182,827
597,774,482
15,965,084
69,894,032
683,816,424
-
-
-
1,723,737
1,723,737
332,827
608,037,603
20,694,718
593,091,535
1,222,156,684
-
-
-
545,075,845
545,075,845
Hedge derivatives
-
-
-
934,851
934,851
-
-
-
546,010,696
546,010,696
Hedge derivatives
Liabilities
(euros)
2012
Assets valued at
Prices in an active
acquisition cost
market
Market data
Total
Other
Assets
-
9,672,513
859,851,580
-
869,524,094
-
2
-
5,896,814
5,896,816
182,827
539,045,778
3,455,592
76,524,192
619,208,389
-
-
1,651,219
-
1,651,219
182,827
548,718,294
864,958,391
82,421,005
1,496,280,517
-
-
899,786,632
-
899,786,632
Hedge derivatives
-
-
1,424,476
-
1,424,476
-
-
901,211,108
-
901,211,108
Hedge derivatives
Liabilities
The contents of the above tables were based on the following premises:

Prices on active markets correspond to equity instruments listed on a stock market and to high liquidity bonds
(Level 1).

The valuation of financial derivatives uses valuation techniques based on market data. However owing to the
application in 2013 of a CVA and DVA valuation model, these instruments are valued at Level 3.

Portfolio shares valued by indicative bids supplied by non-Group contributors were recognised in “Valuation
techniques - market data (Level 2)”.
Shares valued by internal CGD Group models are presented in “Valuation techniques – Other (Level 3)”. This
column includes: at 31 December 2013 and 2012, € 55,323,442 and € 69,182,793 respectively, relating to fixed or
variable-rate bonds issued by financial and non-financial companies, in respect of which there are no active
market nor indicative prices supplied by external counterparties. The Bank values these securities using a
projected cash flow discount model at market interest rates plus a spread the Bank considers adequate to the
issuing entity’s credit risk.

Assets valued at their acquisition cost are stable financial investments held by the Bank for which no active market
exists.

111

The values concerning subsidiary companies held under venture capital operations are presented as follows:
−
Acquisition cost: in the case of acquisitions made in the twelve months preceding the valuation date;
−
Prices in an active market: for stock market listed companies; and
−
Other: for other subsidiaries.
The following table provides information on the movements occurring, in 2013 and 2012, on securities valued by
“Valuation techniques - Others” (Level 3):
(euros)
2013
Changes to
Balance at
valuation
31.12.2012
Other financial assets at fair value through
profit or loss
Gains recognised in:
Acquisitions /
disposals
method
reserve
Balance at
rate gains
31.12. 2013
Effective
521,119,665
-
-
-
-
-
521,119,665
5,896,814
(4,630,304)
(1,342,500)
-
(7,909)
438,000
-
354,101
76,524,192
850,387
(14,175,186)
6,765,073
-
191,275
(261,709)
69,894,032
82,421,005
517,339,748
(15,517,686)
6,765,073
(7,909)
629,275
(261,709)
591,367,798
-
545,075,845
-
-
-
-
-
545,075,845
-
545,075,845
-
-
-
-
-
545,075,845
(euros)
2012
Balance at
31.12.2011
Changes to
Acquisitions /
valuation
disposals
method
Income for period
Fair value
reserve
Unrealised
Exchange
Balance at
rate gains
31.12.2012
Effective
70,890,370
-
(84,550,000)
-
-
13,659,630
-
-
11,286,601
-
(5,233,361)
-
(200,518)
44,091
-
5,896,814
103,390,387
(1,027,951)
(36,674,696)
2,145,883
-
8,800,553
(109,985)
76,524,192
185,567,359
(1,027,951)
(126,458,057)
2,145,883
(200,518)
22,504,274
(109,985)
82,421,005
Other financial assets at fair value through
profit or loss
Unrealised
Exchange
-
Income for period
Fair value
33. CAPITAL MANAGEMENT
Regarding its capital management, the Bank is supervised by the Bank of Portugal on a separate basis and also on a
CGD Group consolidated basis.
The solvency ratio on the Bank’s separate financial statements, at 31 December 2013 and 2012, was 15.36% and
11.16% respectively.
112
(euros)
Separate basis
2013
2012
Eligible own funds (Base+Complementary-Deductions) (1)
269,083,669
252,290,164
Basis own funds
262,324,263
245,966,442
81,250,000
81,250,000
Paid up capital
(-) Treasury shares
Legal, statutory and other reserves
-
-
135,992,577
116,756,794
Retained earnings from prior years
58,550,496
58,550,496
(-) Intangible assets
(3,180,933)
(2,455,005)
(-) TREM II
(125,286)
(256,830)
(11,657,216)
(9,739,090)
(-) Deferred tax liabilities reserves resulting from the revaluation of available for sale assets
1,494,625
1,860,077
Complementary own funds
6,759,406
6,323,722
Fixed assets revaluation reserves
4,338,403
4,338,403
Revaluation differences on available for sale assets - positive fair value ( 45% )
2,421,003
1,985,319
-
-
Own funds requirements (2)
140,168,046
180,890,628
Credit and counterparty credit risk
100,563,606
140,244,067
(-) Revaluation differences on available for sale assets - negative fair value (gross of tax)
Provisions for general credit risks
(-) 8% Provisions for general credit risks - part not eligible for own funds
Position risks - debt instruments
Position risks - equity securities
Operational risk – standard method
Solvency ratio
(316,963)
(435,320)
27,169,012
29,380,746
938,062
216,436
11,814,329
11,484,699
15.36%
11.16%
Legend:
(1) According to Official Notice 6/10
(2) According to current legislation: Official Notices 5/07, 8/07, 9/07
113
3. Notes to the separate financial statements
1. INTRODUCTORY NOTE
Caixa - Banco de Investimento, S.A. (“Bank”) was formed by a public deed of 12 November 1987, having absorbed all
assets and liabilities of the Portuguese branch of Manufacturers Hanover Trust Company, in conformity with the terms
of Ministerial Order no. 865-A/87 of 6 November, jointly issued by the Presidency of the Council of Ministers and
Ministry of Finance.
The Bank is Caixa Geral de Depósitos Group’s specialised investment banking business arm, which includes
activities such as debt capital markets, equity capital markets, corporate finance advisory, structured finance, project
finance, brokerage and research. The Bank has offices in Lisbon and Porto and a branch in Spain.
As referred to in Note 21, the majority of the Bank’s share capital is owned by Caixa Geral de Depósitos Group
company Gerbanca, SGPS, S.A.
The financial statements at 31 December 2013 were approved by the Board of Directors on 28 February 2014.
The Bank’s financial statements, at 31 December 2013, still require the approval of its shareholders’ meeting. The
Board of Directors considers, however, that the said financial statements will be approved without significant changes.
2. ACCOUNTING POLICIES
The separate financial statements of the Bank’s headquarters have been combined with those of its branch and
represent the Bank’s global activities. All balances and trading between the Bank’s headquarters and its branch in this
process have been eliminated.
Presentation bases
The Bank’s financial statements have been prepared on the going concern principle, based on books and
accounting records, kept in conformity with the accounting principles set out in the Adjusted Accounting
Standards under the terms of Bank of Portugal Official Notice 1/2005 of 21 February and Instructions
9/2005 and 23/2004, in accordance with the competence afforded by no. 3 of Article 115 of the General
Credit and Financial Institutions Regime, approved by Decree Law 298/92 of 31 December.
The Adjusted Accounting Standards generally correspond to the International Financial Reporting
Standards (IFRS), as adopted by the European Union under European Parliament and Council
Regulation (EC) 1606/2002 of 19 July, transposed into national legislation by Decree Law 35/2005 of 17
February and Bank of Portugal Official Notice 1/2005 of 21 February. Under the terms of Official Notice
1/2005, however, the following exceptions have an impact on the Bank’s financial statements:
i)
Valuation criteria on loans and advances to customers and amounts receivable from other debtors
(credit and accounts receivable) – credit is recognised at its nominal value and may not be
reclassified in other categories and, as such, recognised at fair value;
ii)
Provisioning of credit and accounts receivable - minimum provisioning levels are defined in
accordance with the dispositions of Bank of Portugal Official Notice 3/95, with the changes made by
Bank of Portugal Official Notices 8/03 of 30 June and 3/2005 of 21 February (Note 2.3. a)). The
regime also includes liabilities comprising acceptances, guarantees and other similar instruments;
iii)
Tangible assets must be maintained at their acquisition cost and cannot, therefore, be recognised at
fair value, as permitted by IAS 16 – Tangible fixed assets. The recognition of legally authorised
2.1.
114
revaluations is permitted, as an exception, in which case the resulting capital gains are recognised
in “Revaluation reserves”.
2.2.
Translation of balances and transactions in foreign currency
The Bank’s accounts have been prepared in accordance with the currency used in the economic context
in which it operates (referred to as “operating currency”), i.e. the euro.
Foreign currency transactions are recognised on the basis of the reference rates in force at the
transaction date. At each balance sheet date, monetary assets and liabilities denominated in foreign
currency are translated into euros on the basis of the foreign exchange rate in force. Non-monetary
assets, recognised at fair value, are translated on the basis of the exchange rate in force on the last
valuation date. Non-monetary assets, recognised at their historical cost, continue to be recognised at the
original exchange rate.
Exchange rate gains and losses assessed upon exchange translation are recognised in income for the
year, except for differences originated by non-monetary financial instruments, such as shares, which are
classified as available for sale and recognised in a specific shareholders’ equity account until disposal.
Financial instruments
a)
Loans and advances to customers and amounts receivable from other debtors
As described in Note 2.1, these assets are registered according to the dispositions of Bank of
Portugal Official Notice 1/2005. They are therefore registered at their nominal value and the
respective proceeds, i.e. interest and commissions, are recognised over the course of the period of
the operations by the pro rata temporis method, in the case of operations with residual flows over a
period of more than one month. Whenever applicable, commissions and external costs allocated to
contracts for operations underpinned by the assets included in this category are also periodised
over the course of the loans’ period of application.
The provisioning regime is defined in Bank of Portugal Official Notice 3/95 and includes the
following:

Provision for overdue credit and interest
This provision is used to cover the risks on lending with overdue payments of principal or
interest. The provisions percentages for overdue credit and interest are increased in
proportion to the period having elapsed since their respective maturity and whether they are
collateralised.

Provision for doubtful loans
This provision caters for the risks of outstanding principal on loans to customers with unpaid
principal or interest or customers with other unpaid liabilities.
Official Notice no. 3/95 provides the following classifications for doubtful loans:
− outstanding payments on a single credit operation in which at least one of the following
conditions applies to the respective unpaid principal and interest:
(i) when exceeding 25% of the unpaid principal, plus accrued interest;
2.3.
115
(ii) when in default for more than:

six months in the case of operations with a maturity of less than five years;

twelve months in the case of operations with a maturity of five or more and less
than ten years;

twenty four months in the case of operations with a maturity of ten years or more.
These doubtful loans are provisioned in accordance with the provisioning percentage for
overdue credit.
− Outstanding credit on a single customer, if the overdue credit and interest on all of the
operations in respect of the said customer, plus the outstanding credit described in the
preceding sub-paragraph, exceed 25% of the total credit, plus overdue interest. These
doubtful debts are provisioned on the basis of 50% of the average percentage of
provisions for overdue credit.
Provisions for bad and doubtful debts, at 31 December 2013 and 2012, were higher than the
minimum amounts defined by the Bank of Portugal.

Provision for general credit risks
This provision is recognised in liabilities and covers the risks of non payment of loans and
other risks, such as the guarantees provided and securities, deriving from the Bank’s activity.
The amount of the provision is calculated on the application of the following general
percentages on the full amount of the value of unmatured credit, including guarantees and
acceptances:
− 1.5% on consumer credit and unspecified loans and advances to customers;
− 0.5% on mortgage lending on property or property leasing operations, in both cases when
the property is for the borrower’s residence;
− 1% for other credit.
Increases in provisions for general risks ceased to be accepted as a tax deductible cost from
1 January 2003. The effect in the income statement is recognised in the “Provisions net of
recoveries and cancellations” account in the income statement.
Other financial assets are recognised at fair value at the agreement date, plus the costs directly
attributable to the transaction. These assets are initially recognised in one of the following
categories defined in IAS 39:
i)
This category includes:

Financial assets held for trading, which essentially include the acquisition of securities with
the objective of realising gains on the basis of short term market price fluctuations. This
category also includes derivatives, excluding derivatives complying with hedge accounting
requirements; and,

Financial assets at fair value through profit or loss (“fair value option”).
b)
116
The use of the “Fair value option” implies the irrevocable recognition, in this category, of financial
instruments at the time of initial recognition and is restricted to situations in which the application
results in the production of more relevant financial information, i.e.:
a)
If its application eliminates or significantly reduces an accounting mismatch that would
otherwise occur as a result of the inconsistent measurement of assets and liabilities or
recognition of gains and losses;
b)
Groups of financial assets, financial liabilities or both which are managed and assessed on
a fair value basis, in accordance with formally documented risk and investment
management strategies; and when information on the Group is distributed internally to
management bodies.
c)
It is also possible to classify financial instruments containing one or more embedded
derivatives in this category, unless:

The embedded derivatives do not significantly modify the cash flows which would,
otherwise, be required under the contract;

It is evident, with little or no analysis that the implicit derivatives should not be
separated out.
Financial assets classified in this category are recognised at fair value, whose gains and losses
generated by their subsequent valuation are recognised in the income statement in the “Income
from assets and liabilities measured at fair value through profit or loss” accounts. Interest is
recognised in the appropriate “Interest and similar income” accounts.
ii) Loans and accounts receivable
These are financial assets with fixed or determinable payments, not listed on an active market
and not included in any of the other financial asset categories. This category essentially includes
amounts receivable from other financial institutions.
These assets are initially recognised at fair value, minus any commissions included in the
effective rate, plus all incremental costs directly attributable to the transaction. The assets are
subsequently recognised in the balance sheet at their amortised cost minus impairment losses.
Interest recognition
Interest is recognised on the basis of the effective rate method which enables the amortised cost
to be calculated and the interest split over the period of the operations. The effective rate is the
rate that, being used to discount the estimated future cash flows associated with the financial
instrument, enables its present value to be matched with the value of the financial instrument at
the date of initial recognition.
This category includes variable-income securities not classified as assets at fair value through
profit or loss, including stable financial investments and other financial instruments initially
recognised herein and not classifiable in the other categories of the above referred to IAS 39.
Available for sale financial assets are measured at fair value, with the exception of equity
instruments not listed in an active market and whose fair value cannot be reliably measured,
which continue to be recognised at cost. Revaluation gains or losses are recognised directly in
shareholders’ equity in the “Fair value reserve”. At the time of sale or if impairment is assessed,
the accumulated fair value changes are transferred to income or costs for the year.
iii) Available for sale financial assets
117
Dividends on equity capital instruments classified in this category are recognised as income in
the income statement when the Bank’s right to receive them has been established.
Reclassification of financial assets
With the entry into force of the amendment to IAS 39 on 13 October 2008, the Bank was in a position to
reclassify several of its financial assets classified as financial assets held for trading or available for sale
to other financial assets categories. No reclassification to financial assets at fair value through profit or
loss are, however, permitted.
Fair value
As referred to above, financial assets classified in financial assets recognised at fair value through profit
or loss and available for sale financial assets are recognised at their fair value.
The fair value of a financial instrument comprises the amount at which an asset or financial liability can be
sold or liquidated between independent, informed parties, interested in realising the transaction under
normal market conditions.
The fair value of financial assets is, for most assets, determined by a CGD Group body which is
independent from the trading function, based on the following criteria:

Closing price at the balance sheet date, for instruments traded on active markets;

The following valuation methods and techniques are, inter alia, used for debt instruments not traded
on active markets (including unlisted securities or securities with low liquidity levels):
i)
Bid prices published by financial information services such as Bloomberg and Reuters, including
market prices available on recent transactions;
ii)
Reference bid prices obtained from financial institutions operating as market-makers;
iii)
Internal valuation models based on market data used to define a price for the financial
instrument, reflecting market interest rates and volatility, in addition to liquidity and the credit risk
associated with the instrument.
c)
Financial liabilities
Financial liabilities are recognised at the agreement date at their respective fair value, minus the
costs directly attributable to the transaction. Liabilities are classified in the following categories:
i)
Financial liabilities held for trading comprise the negative revaluation of derivatives recognised at
their fair value.
This category includes other credit institutions’ and customers’ resources and liabilities incurred
on payments of services.
These financial liabilities are valued at their amortised cost.
d)
Derivatives and hedge accounting
The Bank performs derivative operations as part of its activity to provide for its customers’
requirements and reduce its exposure to foreign exchange, interest rate and price fluctuations.
ii) Other financial liabilities
118
Derivatives are recognised at their fair value at the date of the agreement. They are also recognised
in off-balance sheet accounts at their respective notional value.
Derivatives are subsequently measured at their respective fair value. Fair value is assessed:

On the basis of prices obtained in active markets (e.g. futures trading in organised markets);

On the basis of models incorporating valuation techniques accepted in the market, including
discounted cash flows and options valuation models.

Up to 31 December 2012, derivatives were revalued on the basis of the current value of
expected cash flows, discounted at a risk-free interest rate. In addition, the Bank deferred the
initial margin obtained for the period of these operations, with specific adjustments having been
recognised in the positive valuation of derivatives involving counterparties with added credit risk.
During the course of 2013, as a result of the coming into force of IFRS 13 (Note 2.15), the Bank
incorporated add-ons to reflect its own credit risk based on a market discount rate it considers to
reflect its globally associated risk profile. Simultaneously, the Bank adopted a similar
methodology to reflect counterparty credit risk in derivatives with positive fair value, having as a
result of this situation, discontinued the procedure of deferring the initial margin.
Embedded derivatives
Derivatives embedded in other financial instruments are separated from the base agreement and
processed autonomously under IAS 39, whenever:

The embedded derivative’s economic characteristics and risks are not closely related with the base
agreement defined in IAS 39; and

The full amount of the combined financial instrument is not recognised at fair value, with fair value
changes being reflected in the income statement.
Hedge derivatives
These derivatives are designed to protect the Bank from exposure to a specific risk attached to its
activity. Classification as hedge derivatives and use of the hedge accounting concept, as described
below, are subject to compliance with IAS 39 rules.
The Bank, at 31 December 2013 and 2012 only used hedges on the changes in the fair value of financial
instruments recognised in the balance sheet as “Fair value hedges”.
The Bank prepares formal documentation, for all hedge operations, at the beginning of the operation, to
include the following aspects:

Risk and strategy management objectives associated with the realisation of the hedge operation, in

Description of hedged risk(s);

Identification and description of hedged and hedge financial instruments;

Hedge operation effectiveness appraisal method and respective periodicity.
Hedge effectiveness tests are periodically performed and documented, using a comparison between the
change in fair value of the hedge instrument and hedged item (part attributable to hedged risk). With the
aim of enabling the use of hedge accounting under IAS 39, the ratio should be between a range of 80%
and 125%. Prospective effectiveness tests are also performed in order to demonstrate the hedge’s
expected future effectiveness.
accordance with the hedge policies defined by the Bank;
119
Hedge derivatives are recognised at fair value, with the results being assessed daily in income and costs
for the year. If the hedge is seen to be effective, the Bank will also recognise the change in fair value of
the hedged item, attributable to the hedged risk, in income for the year. The impact of these valuations is
recognised in “Income from assets and liabilities measured at fair value through profit or loss”. For
derivatives, such as interest rate swaps, with an associated interest component, the periodisation of
interest for the period in progress and liquidated flows are recognised in “Interest and similar income” and
“Interest and similar costs" in the income statement.
Positive and negative revaluations of hedge derivatives are recognised in specific assets and liabilities
accounts.
Valuations of hedged items are recognised in the accounts in which such assets and liabilities are
recognised.
Trading derivatives
Trading derivatives are all derivatives that are not associated with effective hedge operations under IAS
39, including:

Derivatives taken out to hedge assets or liabilities risks recognised at fair value through profit or loss,
thus rendering hedge accounting unnecessary;

Derivatives taken out to hedge risk which do not comprise effective cover under IAS 39;

Derivatives taken out for trading purposes.
Trading derivatives are recognised at fair value, with the results being assessed daily and recognised in
income and costs for the year. The impact of these assessments is recognised in “Income from assets
and liabilities at fair value through profit or loss” accounts. For derivatives, such as interest rate swaps,
with an associated interest component, the periodisation of interest for the period in progress and
liquidated flows are recognised in “Interest and similar income” and “Interest and similar costs" in the
income statement.
Positive and negative revaluations are recognised in “Financial assets at fair value through profit or loss”
and “Financial liabilities at fair value through profit or loss” accounts, respectively.
Impairment of financial assets
Financial assets at amortised cost
The Bank periodically analyses the impairment of its financial assets recognised at amortised cost,
notably loans and advances to credit institutions.
Signs of impairment are identified on a separate basis.
The following events may comprise signs of impairment:

Failure to comply with contractual clauses, namely arrears of interest or capital;

Debtor or debt issuing entity’s significant financial difficulties;

Existence of a strong probability of a declaration of bankruptcy by the debtor or debt issuing
entity;

Granting of facilities to a debtor in financial difficulties which would not be granted under normal
circumstances;

Historical records of collections suggesting that the nominal value will never be fully recovered;
e)
120

Data indicating a measurable reduction of the estimated value of the future cash flows of a group
of financial assets since original recognition, although such a reduction cannot be identified in
the Group’s separate financial assets.
Whenever signs of impairment on separately analysed assets are identified, the eventual
impairment loss comprises the difference between the book value at the time of analysis and current
value of projected future cash flows expected to be received (recoverable value).
As referred to in Note 2.3. b), available for sale financial assets are recognised at fair value, with fair
value changes being recognised in the “Fair value reserve” in shareholders’ equity.
Whenever any objective evidence of impairment exists, accumulated capital losses recognised in
reserves are transferred to costs for the year in the form of impairment losses and recognised in
“Impairment of other assets, net of reversals and recoveries”.
In addition to the signs of impairment on financial assets recognised at amortised cost, IAS 39 also
provides for the following specific signs of impairment on equity instruments:

Information on significant changes having an adverse impact on the technological, market,
economic or legal environment in which the issuing entity operates, indicating that the cost of the
investment may not be recovered;

A prolonged or significant decline in market value at below cost.
The Bank, on each of its financial statement’s reference dates performs an analysis of the existence of
any impairment losses on available for sale financial assets, considering, for the said purpose, the
nature and specific, separate characteristics of the assets being valued. In addition to the results of the
analysis, the following events were considered to comprise objective evidence of impairment on equity
instruments:

Existence of unrealised capital losses of more than 50% of the respective acquisition cost;

Situations in which the fair value of the equity instrument remains below its respective acquisition
cost for a period of more than 24 months.
Additionally, the existence of unrealised capital losses of more than 30% of the acquisition cost, for
more than 9 months, was also considered to comprise objective signs of impairment.
Impairment losses on equity instruments cannot be reversed and any unrealised capital gains
originated after the recognition of impairment losses are, therefore, recognised in the “Fair value
reserve”. Impairment is always considered to exist if additional capital losses are assessed at a later
stage and recognised in income for the year.
Criteria identical to debt instruments are applied for the analysis of “tier 1” securities.
notably unlisted equity instruments whose fair value cannot be accurately measured. The recoverable
value, in this case, comprises the best estimate of future flows receivable from the asset, discounted at
a rate which adequately reflects the risk associated with holding the asset.
The amount of the impairment loss is directly recognised in income for the year. Impairment losses on
such assets cannot be reversed.
The Group also periodically performs impairment analyses on financial assets recognised at cost,
121
2.4.
Except for assets acquired up to 1998, these are recognised at cost, minus depreciation and
accumulated impairment losses. The costs of repair, maintenance and other expenses associated with
their use are recognised as a cost for the year, in the “Other administrative expenses” account.
The Bank revalued its fixed assets in 1998, under Decree Law 31/98 of 11 February. As permitted by
IFRS 1, the book value, incorporating the effect of the referred to revaluation was considered as a cost in
the transition to the IFRS, as the proceeds, at the time in question, generally comprised cost, or
depreciated cost, in accordance with the IFRS, adjusted to take changes to price indices into account.
Depreciation is calculated and recognised as a cost for the year, on a straight line basis, during the
asset’s estimated useful life, comprising the period in which it is expected to be available for use, i.e.:
Years of useful life
Property
10 - 50
Equipment:
4 - 10
Transport material
4
IT equipment
3-4
3 - 10
Security equipment
4 - 10
Machinery and tools
5 - 10
Land is not depreciated.
The works carried out by the Bank on its headquarters building over the period 2008-2009 are being
depreciated over a period of ten years.
According to IAS 36 - “Asset impairment”, an impairment loss is recognised in the income statement for
the period whenever the net book value of tangible assets exceeds their recoverable value. Impairment
losses can be reversed and also have an impact on income for the period if there is an increase in the
asset’s recoverable value in the following periods.
The Bank periodically assesses the adequacy of the estimated useful life of its tangible assets.
Financial leases
Lease operations are recognised as follows:
As lessee
Leased assets are recognised at fair value in assets and liabilities, and amortised.
The instalments relating to lease agreements are split up in accordance with the respective financial
schedule, whose liability is reduced by the part corresponding to the payment of the capital. Interest paid
is recognised as a financial cost.
As lessor
Leased assets are recognised in the balance sheet as loans, repaid by capital instalments set out in the
financial agreements schedule. Interest included in the instalments is recognised as financial income.
2.5.
122
2.6.
Intangible assets
This account essentially comprises the costs of the acquisition, development or preparation for use of
software used for the performance of the Bank’s operations. Intangible assets are recognised at cost,
minus depreciation and accumulated impairment losses.
Depreciation is recognised as a cost for the period, on a straight line basis, throughout the assets’
estimated useful lives for a period of between 3 - 6 years.
Expenses on software maintenance are recognised as a cost for the year in which they are incurred.
2.7.
Investments in subsidiaries, associated companies and jointly controlled entities
This account includes investments in entities over whose current management the Bank enjoys effective
control with the aim of obtaining economic benefit from their operations referred to as “subsidiaries”.
Control usually takes the form of more than 50% of share capital or voting rights.
It also includes an investment in another company in which the Bank exercises joint control.
These assets are recognised at their acquisition cost and periodic impairment analyses are realised.
Dividends are recognised as income for the year in which they are distributed by subsidiaries.
Income tax
The Bank is subject to Tax on the Income of Collective Bodies (“IRC”) and respective municipal
surcharges at an aggregate tax rate of 26.5% at 31 December 2013 and 2012.
A state surcharge of 2.5% was introduced by Law 12 – A/2010 of 30 June on the part of taxable income,
subject to and not exempt from IRC, of more than € 2,000,000 (state surcharge). In light of this
disposition, the fiscal rate used in 2013 and 2012 for the calculation of deferred tax and recognition of
income tax for the period was 29% (Note 14).
Reference should be made to Law 64-B/2011 of 30 December (state budget law for 2012) which
temporarily aggravated the limits and rates of the state surcharge on taxable income subject to and not
exempt from IRC of more than € 1,500,000. Therefore, as regards 2012, the state surcharge applicable to
taxable profit of more than € 1,500,000 and up to € 10,000,000 was increased to 3% with the tax
applicable to taxable profit, subject to and not exempt from IRC of more than €10,000,000, being 5%.
In turn Law 64-B/2011 of 30 December (state budget law for 2013), introduced a reduction of the limit
upon which the state surcharge of 5% is applicable from € 10,000,000 to € 7,500,000 in 2013.
Given the temporal/transitory character of the new calculation rules on the state surcharge (only
applicable in 2012 and 2013), deferred taxes registered by the Bank in 2012 and 2011 did not take into
account the referred to increase provided for in the state budget laws for 2012/2013.
Law 83/2013 of 9 December, however, derogated the temporal/transitional nature of the new rules on the
calculation of the state surcharge.
In turn, the reform of the IRC (Law 2/2014 of 16 January), applicable for taxation periods starting on or
after 1 January 2014, reduced the rate of IRC to 23%.
In light of these changes, the rate used to calculate deferred taxes in 2013 remained unchanged at 29%
(Note 14).
2.8.
123
In 2012, the Bank was included in the special tax regime on groups of companies as a controlled entity
under article 69 of the IRC Code. As such, the Bank’s taxable income starting 2012 is included in the
taxable income of the dominant entity, Caixa Geral de Depósitos, SA. The option for this regime leads the
cost of any applicable income tax to be recognised in the sphere of separate companies, whose
corresponding payments are made by the dominant entity.
Total income tax recognised in the income statement includes current and deferred taxes.
Current tax is calculated on the basis of taxable profit for the year, which is different from accounting
income owing to adjustments to taxable profit resulting from costs or income which are not relevant for
fiscal purposes or only considered in other periods.
Deferred tax comprises the impact on payable / recoverable tax in future periods resulting from temporary
deductible or taxable differences between the balance sheet value of assets and liabilities and their fiscal
basis, used to assess taxable profit in future periods.
Deferred tax liabilities are normally recognised for all temporary taxable differences, whereas deferred tax
assets are only recognised up to the amount by which the existence of future taxable profit, permitting the
use of the corresponding deductible tax differences or fiscal losses, is probable. Deferred taxes are not,
however, recorded in the following situations:

Temporary differences resulting from goodwill;

Temporary differences originating from the initial recognition of assets and liabilities in transactions
which do not affect accounting income or taxable profit;

Temporary differences resulting from non-distributed profit by subsidiaries and associated companies,
to the extent that the Bank is able to control their reversal and which is not likely to occur in the
foreseeable future.
The principal situations originating temporary differences on a Bank level, comprise provisions and
revaluations not accepted for fiscal purposes, deferred commissions and depreciation not accepted on
legal revaluations of tangible assets.
Deferred taxes are calculated on the basis of the tax rates expected to be in force on the date of reversal
of the temporary differences, comprising the approved or substantially approved rates, at the date of the
balance sheet.
Tax on income (current or deferred) is recognised in income for the year, except for cases in which the
originating transactions have been recognised in other shareholders’ equity account headings. In such
cases, the corresponding tax is also recognised as a charge to shareholders’ equity and does not affect
income for the year.
Provisions and contingent liabilities
A provision is set up when there is a current (legal or constructive) obligation, resulting from past events,
involving the probable future expenditure of resources and when this may be reliably assessed. The
amount of the provision comprises the best estimate of the amount to be paid to liquidate the liability at
the date of the balance sheet.
When not probable, the future expenditure of resources is considered to be a contingent liability.
Contingent liabilities require no more than a disclosure procedure, unless the possibility of their payment
is remote.
Provisions for other risks are for fiscal, legal and other contingencies.
2.9.
124
2.10. Employee benefits
The Bank does not have any retirement pension liabilities to its employees, who are covered by the
national Social Security regime, owing to the fact that it is not a signatory to the Collective Wage
Bargaining Agreement for the Banking Sector.
However, with the objective of providing its employees with a retirement subsidy to the standard Social
Security regime, the Bank voluntarily makes supplementary contributions with the objective of providing
old age retirement and disability and survivors’ pensions to its employees in accordance with the terms of
the contract.
The Bank pays a percentage of 3.5% of each employee’s annual wages. In 2013 and 2012, pension
costs were € 330,857 and € 278,974, respectively (Note 31).
The contributions are paid in the form of mass membership of the Caixa Reforma Prudente open pension
fund managed by CGD Pensões – Sociedade Gestora de Fundos de Pensões, S.A.
The Bank does not have any liabilities other than the above referred to contributions owing to the fact that
this is a defined contribution plan.
Short term benefits, including productivity bonuses paid to employees, are recognised in “Employee
costs” for the respective period, on an accrual basis.
2.11. Commissions
As referred to in Note 2.3, commissions received on credit operations and other financial instruments, i.e.
commissions charged for originating operations, are recognised as income over the period of the
operation.
Commissions for services performed are usually recognised as income for the period of performance of
the service or as a lump sum if resulting from single acts.
The estimate of the commissions the Bank expects to pay to other credit institutions for the syndicating of
credit operations in which it is involved as lead and in which CGD Group’s initial exposure is higher than
the defined objective, is recognised as accrued costs as a charge to the “Costs of services and
commissions” account for the year in which the Bank recognises the income relating to the corresponding
commission.
2.12. Securities and other items held under custody
Securities and other items held under custody, notably customers' securities, are recognised in offbalance sheet account headings at their nominal value.
For the purposes of the preparation of cash flow statements, the Bank considers “Cash and cash
equivalents” to be the total amount of the “Cash and claims on central banks” and “Claims on other credit
institutions” accounts.
2.13. Cash and cash equivalents
125
2.14. Critical accounting estimates and most relevant judgemental aspects in the application
of accounting policies
In the application of the above referred to accounting policies, the Bank’s Board of Directors must
produce estimates. The estimates with the greatest impact in the Bank’s separate financial statements
include those set out below.
ASSESSMENT OF IMPAIRMENT LOSSES ON LOANS AND ACCOUNTS RECEIVABLE
As regards provisions for loans and advances to customers, accounts receivable and guarantees and
acceptances given, the Bank complies with the minimum limits defined by the Bank of Portugal (Note
2.3). However, whenever considered necessary, such provisions are complemented to reflect the Bank’s
estimate of the risk of non-recoverability associated with debtors. The assessment is produced on a
separate basis by the Bank, using its specific knowledge of its customers’ status and the guarantees
associated with the operations in question.
ASSESSMENT OF IMPAIRMENT LOSSES ON AVAILABLE FOR SALE FINANCIAL ASSETS
As described in Note 2.3. e), capital losses on the valuation of these assets are recognised as a charge
to the fair value reserve. Whenever objective evidence of impairment exists, the accumulated capital
losses recognised in the fair value reserve should be transferred to costs for the year.
In the case of equity instruments, the assessment of the existence of impairment losses may be
subjective. The Bank determines whether or not impairment exists on such assets through a specific
analysis at each balance sheet date, taking into consideration the definitions of IAS 39 (see Note 2.3. e)).
As a general criterion, impairment is always determined when it is considered, that, owing to the size of
the capital loss, the full recovery of the amount invested by the Bank is highly improbable.
In the case of debt instruments classified in this category (including “tier I” securities classified as equity
instruments), the capital losses are transferred from the fair value reserve to income, whenever there is
any indication of the possible future occurrence of failure to comply with contractually agreed cash flows,
notably on account of financial difficulties, defaults on other financial liabilities, or a significant
deterioration in the issuing entity’s rating.
VALUATION OF FINANCIAL INSTRUMENTS NOT TRADED IN ACTIVE MARKETS
In accordance with IAS 39, the Bank values all financial instruments at fair value, except for those
recognised at amortised cost. The valuation models and techniques described in Note 2.3. are used to
value financial instruments not traded on liquid markets. The valuations obtained comprise the best
estimate of the fair value of the referred to instruments, at the date of the balance sheet. As referred to in
Note 2.3., to guarantee adequate segregation between functions, the valuation of most such financial
instruments is assessed by a body that is independent from the trading function.
in Note 35 – Disclosures on financial instruments, in the “Fair value" section.
ASSESSMENT OF TAX ON PROFIT
Tax on profit (current and deferred) is assessed by the Bank on the basis of the rules defined by the
current fiscal environment. In several cases, however, fiscal legislation may not be sufficiently clear and
objective and may give rise to different interpretations. The amounts recognised in such cases represent
the best understanding of the responsible Bank bodies on the correctness of the operations although this
may be queried by the fiscal authorities.
A summary of the sources used by the Bank to determine fair value on financial instruments is provided
126
2.15. Adoption of new standards (IAS/IFRS) or revision of already issued standards
Except for subject matters regulated by the Bank of Portugal, such as those referred to in Note 2.1, the
Bank, in 2013, used the standards and interpretations issued by the International Accounting Standards
Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) which are
relevant to its operations and effective for the periods starting 1 January 2013, provided that they have
been approved by the European Union.
The following standards, interpretations, amendments and revisions endorsed by the European Union
and mandatory for economic years beginning on or after 1 January 2013, were adopted for the first time,
in the year ended 31 December 2013:
Applicable in years
Amendment to IFRS 1 - First time adoption of
international financial reporting standards
This amendment exempts entities adopting IFRS for the first time from the
01-jan-13
(Government loans)
IAS 20 on government loans
Amendment to IFRS 7 – Financial
instruments: disclosures
(Financial assets and liabilities netting
retrospective application of the dispositions of IAS 39 and paragraph 10A of
This amendment requires additional disclosures regarding financial
01-jan-13
instruments, particularly those related to financial assets and liabilities
netting operations
operations)
This amendment comprises the following changes:
(i) items comprising Other Comprehensive Income and which will, in the
Amendment to IAS 1 – Presentation of
financial statements
01-jul-12
(Other comprehensive income)
future, be recognised in net income for the year are now presented
separately; and
(ii) the Statement of Comprehensive Income will also be known as the Net
Income and Other Comprehensive Income Statement
The revision of this standard comprised several changes, notably:
(i) recognition of actuarial and financial gains and losses deriving from
differences between the assumptions used to assess liabilities and effective
verification of the income expected from assets and liabilities as well as
deriving from the occurrence of changes to actuarial and financial
Revision of IAS 19 – Employee benefits
01-jan-13
assumptions during the year, as a charge to reserves (other comprehensive
income);
(ii) a single interest rate is now applied on the assessment of the present
value of liabilities and the expected return from the plan’s assets;
(iii) expenses recognised in the income statement solely comprise the
current service cost and net interest expenditure;
(iv) introduction of new disclosure requirements.
IFRS 13 – Fair value measurement
(new standard)
standards (cycle 2009-2011)
This standard replaces current guidelines on various IFRS standards on fair
01-jan-13
value measurement. This standard is applicable when another IFRS
standard requires or permits fair value measurements or disclosures.
01-jan-13
These improvements involve the revision of diverse standards, notably
IFRS 1 (repeated application of the standard), IAS 1 (comparative
information), IAS 16 (equipment in use), IAS 32 (fiscal effect of the
distribution of own equity instruments) and IAS 34 (segment information).
Information on the impacts of the adoption of IFRS 13 – “Fair value measurement” on derivatives at 31
December 2013 is set out in Note 7.
127
New standards and interpretations, amended or revised, not adopted
economic years, were, up to the date of the approval of these financial statements, endorsed by the
European Union:
Applicable in years
This standard defines the requirements for the presentation of Consolidated
Financial Statements by parent companies, replacing as regards such
IFRS 10 – Consolidated financial statements
01-jan-14
aspects, IAS 27 - Consolidated and separate financial statements and SIC
12 - Consolidation – special purpose entities. This standard also introduces
new rules on the definition of control and assessment of the consolidation
perimeter.
This standard replaces IAS 31 – Joint ventures and SIC 13 – Jointly
IFRS 11 – Joint arrangements
01-jan-14
controlled entities – non-monetary contributions by venturers and eliminates
the possibility of the use of the proportional consolidation method to account
for interests in jointly controlled entities.
IFRS 12 – Disclosure of interests in other
entities
IAS 27 – Separate financial statements (2011)
IAS 28 – Investments in associates and jointly
owned entities (2011)
01-jan-14
01-jan-14
- IFRS 12 - Disclosure of interests in other
liabilities netting operations)
This amendment restricts the scope of application of IAS 27 to separate
Investments in associates and the new standards adopted, particularly IFRS
11 – Joint arrangements.
This amendment introduces a dispensation on the consolidation of certain
01-jan-14
entities classifiable as investment entities. It also establishes rules for the
measurement of investments held by such investment entities.
entities (investment entities)
Amendment to IAS 32 – (Financial assets and
subsidiaries, joint arrangements, associates and non-consolidated entities.
This amendment guarantees the consistency between IAS 28 –
01-jan-14
Amendment to standards:
- IFRS 10 - Consolidated financial statements
This standard establishes a new set of disclosures on equity stakes in
01-jan-14
This amendment clarifies certain aspects of the standard related to the
application of financial assets and liabilities netting requirements.
This amendment eliminates the disclosure requirements on the recoverable
amount of a cash generating unit with goodwill or intangibles with an
Amendment to IAS 36 - Impairment
(disclosures on the recoverable amount of
indefinite useful life allocated to the periods in which an impairment loss or
01-jan-14
non-financial assets)
reversal of impairment was not recognised. It introduces additional
requirements for disclosures on assets in respect of which an impairment
loss or reversal was recognised and when the recoverable amount thereof
has been assessed on the basis of fair value minus sales costs.
Amendment to IAS 39 – Financial instruments:
recognition and measurement
(reformulation of derivatives and continuation
of hedge accounting)
This amendment permits, in certain circumstances, the continued use of
01-jan-14
hedge accounting when a derivative designated as a hedge instrument is
reformulated.
These standards, although having been endorsed by the European Union, were not adopted by the
Group for the year ended 31 December 2013, owing to the fact that their application was still not
mandatory. Significant impacts on the financial statements as a result of their application are not
expected.
economic years, were not, up to the date of the approval of these financial statements endorsed by the
European Union:
128
IFRS 9 - Financial Instruments (2009) and latter
This standard is part of the IAS 39 revision project and establishes the requirements for the
amendments
classification and measurement of financial assets.
Amendments to standards:
The amendment to IFRS 9 is part of the IAS 39 revision project and establishes the
- IFRS 9 - Financial instruments (2013);
requirements for the application of hedge accounting rules. IFRS 7 was also revised as a result
- IFRS 7 - Financial instruments - disclosures
of this amendment.
Amendment to IAS 19 – Employee benefits
This amendment clarifies the circumstances in which employees’ contributions to post
employment benefit plans comprise a reduction of the cost of short term benefits.
This amendment establishes the conditions regarding the opportunity of the recognition of a
IFRIC 21 – Payments to the state
liability related with the payment to the state of a contribution by an entity as a result of a certain
event (e.g. participation in a certain market), without the payment being offset by specified
goods or services.
These standards have not as yet been endorsed by the European Union and were therefore not applied
by the Group for the year ended 31 December 2013.
3. OPERATING SEGMENTS
The Board of Directors receives and analyses the Bank’s financial information every month, split up into business
segments representing its areas of activity by type of origination, designed, as a whole, to ensure a dynamic

Corporate finance - including debt and equity financial advisory and project finance activities.

Trading and sales - including trading and asset and liabilities treasury management operations.

Brokerage – including brokerage operations.

Commercial banking - including domestic and international transversal business origination.

Other – other activities outside the scope of the above referred to categories.
investment banking business platform, i.e.:
129
The following tables provide information on operating segments used by the Bank at 31 December 2013 and 2012:
2013
(euros)
Corporate
Trading and
finance
sales
Commercial
Brokerage
Other
banking
Total
11,966,020
220,870,688
26,139
2,550,307
43,262
235,456,416
(3,436,372)
(206,267,659)
(17,114)
(422,368)
(38,320)
(210,181,833)
8,529,648
14,603,029
9,025
2,127,939
4,941
25,274,582
450,000
-
-
-
-
450,000
Net interest income
I.
Income
from
services
and
36,429,934
3,427,548
6,134,960
4,182,431
21,318
50,196,192
(596,483)
(223,222)
(2,152,183)
-
(5,641)
(2,977,530)
8,091,086
14,465,378
51,705
(179,400)
279
22,429,049
commissions
Income from the disposal of other
-
-
-
(49,561)
-
(49,561)
(627,810)
(189,626)
(21,871)
(747,042)
992,229
(594,119)
43,746,727
17,480,078
4,012,611
3,206,429
1,008,186
69,454,030
52,276,374
32,083,106
4,021,637
5,334,368
1,013,127
94,728,613
765,214
719
7,265
583,756
(6,492,499)
(5,135,545)
(28,108,457)
(60,008)
-
(10,448,919)
-
(38,617,384)
-
(15,133,121)
-
642,059
-
(14,491,061)
(761,176)
-
(2,730)
(83,325)
(12,234,522)
(13,081,753)
III.
(28,104,419)
(15,192,409)
4,534
(9,306,428)
(18,727,022)
(71,325,743)
Total
24,171,955
16,890,697
4,026,171
(3,972,060)
(17,713,894)
assets
II.
Provisions net of recoveries and
cancellations
Value adjustments on loans and
advances to customers and amounts
receivable from other debtors (net of
recoveries and cancellations)
net of reversals and recoveries
Impairment of other assets, net of
reversals and recoveries
Net income for period
Other financial assets at fair value
through profit or loss
Hedge derivatives
Central banks' resources
Hedge derivatives
23,402,869
(22,755,270)
647,599
-
531,382,781
6
-
-
531,382,787
-
354,101
-
4,729,635
-
5,083,735
-
606,689,519
-
53,083,363
6,077,962
665,850,843
-
1,723,737
-
-
-
1,723,737
511,173,001
-
1,753,730
48,310,852
9,714,956
570,952,539
-
545,075,845
-
-
-
545,075,845
97,022,819
216,405,366
332,867
20,142,760
2,997,563
336,901,375
178,045,673
397,123,476
610,840
36,963,792
5,500,800
618,244,582
4,826,865
-
33,317,220
86,429,658
-
124,573,743
-
934,851
-
-
-
934,851
Impairment of other financial assets
130
2012
(euros)
Corporate
Trading and
finance
sales
Commercial
Brokerage
Other
banking
Total
15,485,715
272,475,347
29,763
7,520,882
69,331
295,581,038
(6,065,737)
(259,081,696)
(39,051)
(2,681,385)
(62,845)
(267,930,714)
9,419,979
13,393,650
(9,288)
4,839,497
6,486
27,650,324
483,335
194,410
-
-
420,908
1,098,653
39,838,852
13,447,465
4,573,534
6,220,993
33,642
64,114,487
(11,750,689)
(279,144)
(1,372,378)
(460,173)
(802)
(13,863,186)
(5,697,348)
4,143,767
45,959
(759,264)
339
(2,266,547)
-
-
-
-
2,701,155
2,701,155
Net interest income
I.
Income
from
services
and
commissions
Income from the disposal of other
assets
II.
Provisions net of recoveries and
cancellations
(65,004)
(307,003)
(31,348)
-
1,914,735
1,511,380
22,809,145
17,199,495
3,215,767
5,001,556
5,069,978
53,295,942
32,229,124
30,593,145
3,206,479
9,841,053
5,076,464
80,946,265
211,976
(913)
(85)
571,854
(2,720,740)
(1,937,908)
(10,962,970)
(1,643,655)
-
(4,222,486)
-
(16,829,111)
-
(8,088,325)
-
(341,200)
-
(8,429,525)
Value adjustments associated with
loans and advances to customers
and amounts receivable
from other debtors (net of recoveries
and cancellations)
net of reversals and recoveries
Reversals and recoveries
Impairment of other assets net of
reversals and recoveries
(415,608)
-
(409)
(198,876)
-
(614,892)
III.
(11,166,602)
(9,732,893)
(494)
(4,190,708)
(2,720,740)
(27,811,437)
Total
21,062,522
20,860,252
3,205,985
5,650,345
2,355,724
Hedge derivatives
Hedge derivatives
53,134,829
(33,899,045)
19,235,783
-
869,344,688
6
179,400
-
869,524,094
-
1,266,512
-
4,630,304
-
5,896,816
-
544,720,766
-
41,838,430
13,238,213
599,797,409
-
1,651,219
-
-
-
1,651,219
534,192,249
-
2,388,192
104,264,279
10,399,041
651,243,761
-
899,786,632
-
-
-
899,786,632
54,399,740
144,299,206
243,203
15,368,243
2,407,112
216,717,504
188,849,529
500,936,894
844,284
53,351,089
8,356,325
752,338,121
6,668,942
-
22,002,550
110,574,487
-
139,245,978
-
1,424,476
-
-
-
1,424,476
Interest and similar costs were split up over the various business lines on the basis of the average value of the
respective asset allocations to the said segments.
131
Information on income distribution and the principal balance sheet accounts by geographical markets, in 2013 and
2012, is set out below:
2013
Portugal
Net interest income
I.
Spain
Total
229,350,825
6,105,591
235,456,416
(204,725,546)
(5,456,287)
(210,181,833)
24,625,279
649,303
25,274,582
450,000
-
450,000
46,654,906
3,541,286
50,196,192
(2,971,485)
(6,045)
(2,977,530)
22,608,449
(179,400)
22,429,049
-
(49,561)
(49,561)
1,629,751
(2,223,870)
(594,119)
II.
68,371,621
1,082,409
69,454,030
92,996,900
1,731,713
94,728,613
(5,689,304)
553,759
(5,135,545)
Value adjustments on loans and advances to customers and amounts
(11,271,775)
(27,345,609)
(38,617,384)
Impairment of other financial assets net of reversals and recoveries
(15,133,121)
642,059
(14,491,061)
(13,081,753)
-
(13,081,753)
III.
(45,175,953)
(26,149,790)
(71,325,743)
Total
47,820,947
(24,418,078)
23,402,869
(22,755,270)
Hedge derivatives
647,599
531,382,787
-
5,083,735
-
531,382,787
5,083,735
665,850,843
-
665,850,843
1,723,737
-
1,723,737
384,838,883
186,113,656
570,952,539
545,075,845
-
545,075,845
336,901,375
-
336,901,375
387,095,952
231,148,630
618,244,582
124,573,743
-
124,573,743
934,851
-
934,851
Hedge derivatives
(euros)
132
2012
Portugal
Spain
Total
(euros)
Net interest income
I.
284,296,385
11,284,653
295,581,038
(259,240,826)
(8,689,889)
(267,930,714)
25,055,559
2,594,764
27,650,323
1,098,653
-
1,098,653
62,773,815
1,340,672
64,114,487
(13,850,249)
(12,937)
(13,863,186)
(1,463,193)
(803,355)
(2,266,548)
2,701,155
-
2,701,155
793,432
717,948
1,511,380
52,053,613
1,242,328
53,295,941
77,109,172
3,837,093
80,946,265
(415,915)
(1,521,993)
(1,937,908)
(7,132,796)
(9,696,315)
(16,829,111)
Impairment of other financial assets net of reversals and recoveries
(8,051,088)
(378,437)
(8,429,525)
(614,892)
-
(614,892)
III.
(16,214,691)
(11,596,745)
(27,811,437)
Total
60,894,481
(7,759,653)
53,134,828
II.
Value adjustments on loans and advances to customers and amounts
(33,899,045)
Hedge derivatives
19,235,783
869,344,694
179,400
5,896,816
-
869,524,094
5,896,816
599,797,409
-
599,797,409
1,651,219
-
1,651,219
442,555,611
208,688,150
651,243,761
899,786,632
-
899,786,632
216,717,504
-
216,717,504
531,787,896
220,550,225
752,338,121
139,245,978
-
139,245,978
1,424,476
-
1,424,476
Hedge derivatives
The information set out in the preceding tables comprises the balance sheet and income statements of the Bank’s
headquarters and subsidiaries domiciled in Portugal (“Portugal” column) and the Madrid branch (“Spain” column).
Each of these entities performs its activity mainly with customers or resident counterparties domiciled in the same
countries in which they are headquartered.
4. CASH AND CLAIMS ON CENTRAL BANKS
(euros)
Caixa
Sight deposits with central banks
2013
2012
1,897
1,897
1,235,837
14,538,944
1,237,734
14,540,841
The sight deposits with central banks account heading includes deposits with the Bank of Portugal providing for the
demands of the “Minimum Reserve Requirements of the System of European Central Banks” (SEBC). Interest is paid
on these deposits which comprise 1% of the deposits and debt securities with a maturity of up to two years, excluding
the deposits and public debt securities subject to SEBC minimum reserve requirements (the period for maintaining the
133
reserves beginning 18 January 2012 was the first in which the rate of 1% was applied, having been 2% up to the said
date).
5. CLAIMS ON CREDIT INSTITUTIONS REPAYABLE ON DEMAND
(euros)
2013
2012
-
-
Cheques pending collection
In Portugal
Sight deposits
In Portugal
Abroad
670,705
2,164,341
1,214,266
1,062,602
1,884,971
3,226,943
6. FINANCIAL ASSETS HELD FOR TRADING AND OTHER FINANCIAL ASSETS AT FAIR VALUE
THROUGH PROFIT OR LOSS
Held for
trading
(euros)
2013
2012
Fair value
through profit
or loss
Fair value
through
profit or
loss
Total
Held for
trading
Total
Debt instruments
- Issued by public entities:
. Bonds
525,678
-
525,678
2,377,327
2
2,377,329
1,069,213
4,729,636
-
354,100
5,798,849
574,745
4,630,305
5,205,050
354,100
6,410,459
1,266,509
1,594,891
7,676,968
5,083,735
6,678,627
9,362,532
5,896,816
15,259,347
5,708,663
-
5,708,663
130,576
-
130,576
2,959,567
-
2,959,567
179,406
-
179,406
8,668,230
-
8,668,230
309,982
-
309,982
521,119,665
-
521,119,665
859,851,580
-
859,851,580
531,382,786
5,083,735
536,466,522
869,524,094
5,896,816
875,420,909
- Issued by other entities:
. Bonds and other securities:
Equity instruments
Derivatives with a positive fair value
(Note 7)
7. DERIVATIVES
These operations were valued in conformity with the criteria set out in Note 2.3. d), at 31 December 2013 and 2012.
Information on the notional and book value thereof, at the said dates, is set out below:
2013
(euros)
Trading
Hedge
derivatives
derivatives
Book value
Total
Derivatives
Assets held
for trading
Liabilities
held for
trading
Hedge
derivatives
Total
(Note 6)
OTC
. Swaps
Interest rate
8,008,997,696
12,951,207
8,021,948,903
477,404,303
(495,401,230)
788,887
(17,208,040)
. Caps & Floors
1,278,861,198
-
1,278,861,198
13,945,112
(23,862,329)
-
(9,917,217)
. Options
Interest rate
650,231,517
-
650,231,517
29,770,250
(25,812,286)
-
3,957,964
9,938,090,411
12,951,207
9,951,041,618
521,119,665
(545,075,845)
788,887
(23,167,293)
Notional amount
134
2013
Notional amount
(euros)
Stock
Trading
Hedge
derivatives
derivatives
Book value
Total
Liabilities
Assets held
Hedge
held for
for trading
Total
derivatives
trading
exchange
trading
. Futures
Interest rate
8,779,755
-
8,779,755
-
-
-
Market value
10,535,591
-
10,535,591
-
-
-
-
9,957,405,757
12,951,207
9,970,356,964
521,119,665
(545,075,845)
788,887
(23,167,293)
2012
Notional amount
(euros)
Trading
Hedge
derivatives
derivatives
Book value
Total
Derivatives
Assets held
for trading
Liabilities
Hedge
held for
derivati
trading
ves
Total
(Note 6)
OTC
. Swaps
Interest rate
9,854,131,142
13,964,216
9,868,095,358
778,171,517
(822,053,457)
226,743
(43,655,198)
. Caps & Floors
1,841,473,533
-
1,841,473,533
36,277,615
(36,295,848)
-
(18,233)
. Options
Interest rate
647,452,100
-
647,452,100
45,402,449
(41,437,326)
-
3,965,123
12,343,056,775
13,964,216
12,357,020,991
859,851,580
(899,786,632)
226,743
(39,708,309)
Interest rate
14,276,127
-
14,276,127
-
-
-
-
Market value
6,167,000
-
6,167,000
-
-
-
-
12,363,499,902
13,964,216
12,377,464,118
859,851,580
(899,786,632)
226,743
(39,708,309)
Stock
exchange
trading
. Futures
The book value of the assets classified as hedged items, at 31 December 2013 and 2012, totalled € 8,898,714 and
€ 10,410,192 respectively, including € 832,109 and € 1,315,875 (Note 10), respectively, regarding value adjustments.
Additionally, the book value of the liabilities classified as hedged items, at 31 December 2013 and 2012, totalled
€ 6,734,558 and € 6,716,019 respectively, including € 85,453 and € 283,980 (Note 18), respectively, regarding value
adjustments.
135
Information on the distribution of derivatives operations by periods to maturity (notional amounts) , at 31 December
2013
> 3 months
(euros)
<= 3
<= 6
months
months
> 6 months
> 1 year
<= 1 year
<= 5 years
> 5 years
Total
Derivatives
OTC
. Swaps
Interest rate
Trading
175,959,750
254,391,136
287,876,210
824,534,897
6,466,235,703
-
5,000,000
-
7,951,207
-
12,951,207
175,959,750
259,391,136
287,876,210
832,486,104
6,466,235,703
8,021,948,903
-
-
1,600,000
1,211,197,231
66,063,966
1,278,861,198
Hedge
8,008,997,696
. Caps & Floors
Trading
. Options
Interest rate
-
-
-
-
650,231,517
650,231,517
175,959,750
259,391,136
289,476,210
2,043,683,335
7,182,531,186
9,951,041,617
Trading
8,779,755
-
-
-
-
8,779,755
Market value
10,535,591
-
-
-
-
10,535,591
195,275,097
259,391,136
289,476,210
2,043,683,335
7,182,531,186
9,970,356,964
. Futures
Interest rate
2012
> 3 months
(euros)
<= 3
<= 6
months
months
> 6 months
> 1 year
<= 1 year
<= 5 years
> 5 years
Total
Derivatives
OTC
. Swaps
Interest rate
Trading
Hedge
290,199,379
446,882,791
365,057,141
1,797,337,929
6,954,653,903
-
-
-
13,964,216
-
9,854,131,142
13,964,216
290,199,379
446,882,791
365,057,141
1,811,302,145
6,954,653,903
9,868,095,358
-
13,260,000
545,000,000
945,080,291
338,133,242
1,841,473,533
. Caps & Floors
Trading
. Options
Interest rate
-
-
-
-
647,452,100
647,452,100
290,199,379
460,142,791
910,057,141
2,756,382,436
7,940,239,245
12,357,020,991
Trading
14,276,127
-
-
-
-
14,276,127
Market value
6,167,000
-
-
-
-
6,167,000
310,642,506
460,142,791
910,057,141
2,756,382,436
7,940,239,245
12,377,464,118
. Futures
Information on the distribution of derivatives operations by counterparty type, at 31 December 2013 and 2012, is set
out below:
2013
(euros)
2012
Notional
Book
Notional
Book
amount
value
amount
value
Contracts on interest rate
Interest rate swaps
4,133,969,623
(415,861,524)
5,049,052,310
Customers
3,887,979,280
398,653,484
4,819,043,048
(749,513,405)
705,858,208
8,021,948,903
(17,208,040)
9,868,095,358
(43,655,198)
Interest rate
136
2013
(euros)
2012
Notional
Book
Notional
Book
amount
value
amount
value
Caps & Floors
645,775,349
(23,169,339)
928,484,948
(35,518,593)
Customers
633,085,848
13,252,122
912,988,585
35,500,360
1,278,861,198
(9,917,217)
1,841,473,533
(18,233)
350,231,017
(21,843,775)
347,451,600
(37,461,326)
General government
300,000,000
25,801,739
300,000,000
41,426,449
500
-
500
-
650,231,517
3,957,964
647,452,100
3,965,123
-
-
-
-
Customers
-
-
-
-
-
-
-
-
Options on interest rate
Customers
Options on currency
Futures
Stock exchange
19,315,346
-
20,443,127
-
9,970,356,964
(23,167,293)
12,377,464,118
(39,708,309)
As referred to in Note 2.3 d), up to 31 December 2012, derivatives were revalued on the basis of the current value of
expected cash flows, discounted at a risk-free interest rate. The Bank also deferred the initial margin throughout the
maturity of the operations, and recognised specific adjustments on the positive valuation of derivative operations with
counterparties of higher credit risk.
At 31 December 2012, the total value of the adjustments to the derivatives portfolio with positive value was
€ 78,110,911, of which € 27,080,839 relative to the deferral of the initial margin.
In 2013, with the entry into force of IFRS 13 (Note 2.15), the Bank posted an adjustment to reflect the risk on its own
credit, through the use of a market discount rate which the Bank globally considers adequate to its risk
profile. Simultaneously, the Bank started to use an analogous methodology to reflect the credit risk of counterparties
in derivatives with a positive fair value, and consequently the deferral of the initial margin ceased to be registered.
At 31 December 2013, the total amounts recognised by the Bank on “CVA” (credit value adjustment), in “Financial
assets held for trading” and “DVA” (debit value adjustment), in “Financial liabilities held for trading”, totalled
€ 95,439,244 and € 51,096,059, respectively.
8. AVAILABLE FOR SALE FINANCIAL ASSETS
(euros)
2013
2012
544,828,266
366,884,874
67,178,840
77,889,823
-
76,234,375
7,189,455
31,902,406
619,196,561
552,911,478
153,127
153,127
29,700
29,700
Debt instruments
Equity instruments
Shares
Gross amount
Historical cost
Historical cost
137
(euros)
Fair value
2013
2012
14,924,690
13,238,213
15,107,517
13,421,040
5,881,650
5,734,920
5,881,650
5,734,920
25,665,115
27,729,971
Gross amount
Investment units
Fair value
25,665,115
27,729,971
665,850,843
599,797,409
Information on the “Equity instruments - shares” account, at 31 December 2013 and 2012, is set out below:
2013
(euros)
%
equity
stake
Acquisition
cost
Impairment
2012
Fair value
reserve
Exchange rate
gains/losses
Book value
%
equity
stake
Book value
Equity Finance
8.33%
7,773,721
-
1,073,008
-
8,846,729
8.33%
7,339,645
9.26%
3,748,822
(1,815,086)
4,306,998
(162,772)
6,077,962
9.26%
5,898,568
4.67%
153,127
-
-
-
153,127
4.67%
153,127
-
29,700
-
-
29,700
-
29,700
5,380,006
(162,772)
15,107,517
11,705,369
(1,815,086)
13,421,040
SWIFT SCRL
138
Information on movements in this account, for 2013 and 2012, is as follows:
(euros)
2013
Share
Equity instruments:
Equity Finance
MTS Portugal ,SGMR, S.A.
SWIFT SCRL
Balance at
31.12.2012
Purchases/
Change in fair
Exchange
Balance at
Acquisition
Unrealised
(sales)
value reserve
gains/losses
31.12.2013
cost
gain
7,339,645
980,000
527,084
-
8,846,729
7,773,721
1,073,008
5,898,568
153,127
29,700
-
441,103
-
(261,709)
-
6,077,962
153,127
29,700
3,748,822
153,127
29,700
2,329,140
-
13,421,040
980,000
968,186
(261,709)
15,107,518
11,705,369
3,402,148
(euros)
2012
Share
Balance at
31.12.2011
Purchases/(s
Change in fair
Exchange
Balance at
Acquisition
Unrealised
ales)
value reserve
gains/losses
31.12.2012
cost
gain
Equity instruments:
Equity Finance
6,422,938
1,910,000
(993,293)
-
7,339,645
6,793,721
545,924
5,505,209
-
503,343
(109,984)
5,898,568
3,918,448
1,980,120
153,127
-
-
-
153,127
153,127
-
-
29,700
-
-
29,700
29,700
-
12,081,274
1,939,700
(489,950)
(109,984)
13,421,040
10,894,996
2,526,044
MTS Portugal ,SGMR, S.A.
SWIFT SCRL
The Bank participated in the South Europe Infrastructure Equity Finance (SEIEF) capital increases in 2013 and 2012,
investing amounts of € 980,000 and € 1,910,000 respectively. The Bank has undertaken to provide up to
€ 10,000,000 in equity funding at the fund’s request, whenever a new operation is realised.
The investment in Corporación Interamericana para el Financiamento de Infraestructura was made in 2001 for
US$ 4,000,000. In August 2008, the Bank acquired 1,000,000 shares for a total amount of US$ 1,170,000. Exposure
to foreign exchange risk is hedged by funding in US dollars with the change in fair value in 2013 and 2012 resulting
from the foreign exchange component being recognised in results.
The “Other equity instruments” account comprises non-voting preference shares issued by Caixa Geral Finance
Limited, giving a right to a quarterly preference dividend, at the company’s discretion, equivalent to annual interest at
the Euribor rate plus a spread. Caixa Geral Finance may redeem the preference shares starting from the tenth year
from their issue (June 2014 and September 2015) with a 1% increase in spread if failing to do so. Their book values at
31 December 2013 and 2012 were € 5,881,650 and € 5,734,920 respectively.
In February 2012 the Bank participated in the share capital increase of Fundo de Capital de Risco Grupo CGD –
Caixa Capital having subscribed for and paid up 600 investment units comprising 8.45% of the Fund’s capital with a
unit value of € 51,364.99, corresponding to fair value at 31 December 2011. The book value at 31 December 2013
The unrealised capital losses on securities classified in the “Debt instruments” and “Other equity instruments”
accounts, recognised in the fair value reserve, at 31 December 2013 and 2012, totalled € 14,209,127 and
€ 26,164,535 respectively, of which € 7,241,547 and € 13,279,560 respectively relative to Portuguese government
bonds.
The Bank reclassified securities from its “financial assets held for trading” category to the “available for sale financial
assets” category on 1 July 2008, in conformity with the IAS 39 amendment approved on 13 October 2008. Owing to
the turbulence in the financial markets in 2008, the fact that the Bank does not expect to dispose of these securities
over the short term explains the reason for the transfer between categories.
and 2012, posted in the “Investment units” account was € 25,665,115 and € 27,729,971, respectively.
139
Information on the impact of the reclassification of these securities, in income and fair value reserves accounts,
excluding their fiscal effect, is set out below:
(euros)
Fair value
Accrued interest
Book value
Fair value reserve
Capital gains/losses in income for period
Amount
Amount
31-12-2013
31-12-2012
3,416,850
5,923,598
-
5,199
3,416,850
5,928,797
(3,979,584)
(5,594,435)
47,040
-
115,530
271,424
Impact in income statement if
the reclassification had not been made
Collateralised debt securities with a nominal value of € 562,084,000 and € 448,630,000 respectively (Note 33) were
recognised in this account at 31 December 2013 and 2012.
9. INVESTMENTS IN CREDIT INSTITUTIONS
(euros)
2013
2012
-
15,000,000
4,830,043
30,416,062
Loans
Branches of other domestic credit institutions
Term deposits
In Portugal
Interest receivable
47,951
58,211
4,877,994
45,474,273
At 31 December 2012, “Loans” were made to Caixa Geral de Depósitos, S.A. – France Branch.
At 31 December 2013 and 2012, “Term deposits” contracted for with Caixa Geral de Depósitos, S.A., matured in the
first quarter of the following year and were denominated in euros.
140
10. LOANS AND ADVANCES TO CUSTOMERS
(euros)
2013
2012
365,283,599
399,789,603
Non-securitised domestic credit
Loans
Current account
-
-
1,749,915
2,378,978
Other credit
9,678,543
10,351,774
4,300,000
15,000,000
Securitised domestic credit
Commercial paper
Foreign loans
Loans
269,587,035
257,631,757
Current account
-
358,573
8
7
34,615
46,470
Other credit
Value adjustments relating
to hedged liabilities (Note 7)
832,109
1,315,875
651,465,824
686,873,037
1,223,954
3,301,280
(2,623,607)
(2,211,837)
Interest receivable
Deferred income
Commissions associated with amortised cost
Interest
(5,137)
(43,235)
650,061,033
687,919,245
45,458,970
39,830,204
695,520,004
727,749,449
Provisions for bad debts (Note 19)
(86,698,254)
(69,765,358)
Provisions for overdue credit (Note 19)
(37,869,211)
(6,740,330)
(124,567,465)
(76,505,688)
570,952,539
651,243,761
In order to face risks regarding loans and advances to customers, the Bank has also set up a provision for general
credit risks totalling € 3,962,040 and € 5,441,503, at 31 December 2013 and 2012, respectively (Note 19).
This account was broken down as follows, by periods to maturity at 31 December 2013 and 2012:
(euros)
Up to three months
2013
2012
6,177,148
15,002,066
478,566
30,798,163
One to five years
171,502,123
150,670,731
471,558,064
487,664,519
1,749,923
2,737,558
651,465,824
686,873,037
Current account overdrafts
Sector distribution of loans and advances to customers, excluding overdue credit, at 31 December 2013 and 2012,
was as follows
(euros)
Sector of activity
2013
Amount
2012
%
Amount
%
Electricity, water and gas generation and distribution
102,285,091
15.7
110,332,694
16.1
9,343,441
1.4
9,823,629
1.4
717,205
0.1
846,160
0.1
Textiles industry
7,957,163
1.2
7,870,570
1.1
Chemicals and synthetic or artificial fibres manufacturing
8,779,791
1.3
8,896,047
1.3
236,837
0.0
315,784
0.0
-
20,075,530
2.9
Food, beverages and tobacco industries
Base metallurgical and metal industries
Paper pulp, card and publishing and printing thereof
Properties, rentals and corporate services
Real estate activities
53,643,846
8.2
57,384,879
8.4
Other activities
78,102,544
12.0
88,035,779
12.8
Transport, warehousing and communications
189,315,066
29.1
199,279,128
29.0
Construction
125,580,327
19.3
94,908,052
13.8
3,062,974
0.5
2,089,051
0.3
Health and social security
16,076,177
2.5
16,695,791
2.4
Financial activities
10,846,734
1.7
11,346,734
1.7
960,000
0.1
2,388,581
0.3
33,096,135
5.1
43,807,468
6.4
Wholesale/retail
Hotels and restaurants
Other activities and collective, social and personal services
141
(euros)
2013
2012
Sector of activity
Amount
%
Amount
Loans and advances to individual customers
11,462,492
1.8
12,777,162
%
1.9
651,465,824
100
686,873,037
100
The Bank, in 2013, disposed of a credit operation for a global amount of € 1,932,888, whose book value was
€ 1,982,449, resulting in capital losses of € 49,561 (Note 29).
11. OTHER TANGIBLE ASSETS
Information on movements in the “Other tangible assets” accounts for the years 2013 and 2012 is set out below
2013
(euros)
Balance at 31.12.12
Gross
Accumulated
amount
depreciation
Acquisitions
Depreciation for
period
Adjustments
Net amount at 31
December 2013
Property:
For own use
Other property
16,335,115
(5,121,633)
-
-
(492,937)
10,720,544
77,843
(77,843)
-
-
-
-
1,468,007
(1,294,552)
-
-
(53,477)
119,979
Equipment:
Furniture and material
Transport material
95,568
(95,568)
-
-
-
-
IT equipment
2,099,057
(2,027,709)
180,826
-
(124,571)
127,602
1,816,509
(1,790,655)
-
-
(11,871)
13,984
240,087
(240,087)
-
-
-
-
573,565
(550,648)
1,688
-
(12,575)
12,030
17,262
(17,262)
-
-
-
-
39,750
-
-
(39,750)
-
-
(11,215,957)
182,513
(39,750)
(695,431)
10,994,139
Security equipment
Machinery and tools
Property leases:
IT equipment
22,762,763
2012
(euros)
Balance at 31.12.11
Gross
Accumulated
amount
depreciation
Acquisitions
Depreciation for period
Net amount at 31.12.12
Property:
For own use
16,335,115
(4,628,696)
-
(492,937)
11,213,481
77,843
(77,843)
-
-
-
1,463,464
(1,235,275)
4,718
(59,452)
173,455
95,568
(81,653)
-
(13,916)
-
IT equipment
2,050,702
(1,905,025)
48,354
(122,683)
71,348
1,810,123
(1,778,784)
6,386
(11,871)
25,854
Security equipment
240,087
(240,087)
-
-
-
Machinery and tools
569,271
(524,056)
4,294
(26,592)
22,917
17,262
(11,508)
-
(5,754)
-
-
-
39,750
-
39,750
22,659,435
(10,482,927)
103,503
(733,205)
11,546,806
Other property
Equipment:
Furniture and material
Transport material
IT equipment
Property leases:
142
12. INTANGIBLE ASSETS
Information on movements in the “Intangible assets” accounts for the years 2013 and 2012 is set out below:
2013
Balance at 31.12.12
Net
Gross
Accumulated
amount
depreciation
Acquisitions
Depreciation
Transfers
for period
amount at
31
December
(euros)
2013
Automatic data
processing systems
4,834,645
(4,508,519)
2,128,879
-
908,623
(34,158)
34,158
6,963,525
(4,508,519)
908,623
-
(182,695)
177,590
3,003,344
(182,695)
3,180,933
2012
Balance at 31.12.11
(euros)
Gross
Accumulated
amount
depreciation
Acquisition
s
Transfers
Deprecation
Net amount
for period
at 31.12.12
Automatic data
processing systems
4,625,600
(4,316,779)
209,045
249,180
-
1,879,700
4,874,780
(4,316,779)
2,088,745
(191,741)
-
326,126
2,128,879
-
(191,741)
2,455,005
Intangible assets in progress, at 31 December 2013 and 2012, mainly comprised expenses incurred on the acquisition
of the Bank’s new central software not yet in use at the said dates.
13. INVESTMENTS IN SUBSIDIARIES, ASSOCIATED COMPANIES AND JOINTLY CONTROLLED
ENTITIES
The balance on this account, at 31 December 2013 and 2012, is set out below:
(euros)
2013
2012
CGD Investimentos Corretora de Valores e Câmbio, S.A.
38,384,507
38,384,507
Caixa Capital – Sociedade de Capital de Risco, S.A.
14,575,724
14,575,724
262,467
262,467
Caixa Desenvolvimento, SGPS, S.A.
CaixaBI – Brasil, Serviços de Assessoria Financeira, Ltda.
Impairment – CGD Investimentos (Note 19)
3,677
3,677
53,226,375
53,226,375
(12,234,507)
40,991,868
53,226,375
The following is a summary of the financial data extracted from the separate accounts of the subsidiaries, for the last
financial year:
(%)
Entity
CGD Investimentos Corretora de
Valores e Câmbio, S.A.
Caixa Capital, S.A.
Caixa Desenvolvimento, SGPS,
S.A.
CaixaBI Brasil - Serviços de
Assessoria Financeira LTDA
Headquarters
São-Paulo
Currency
Reais
Euros
Direct
Effective
Date
50,00%
50,00%
31-12-2013
Assets
Profit/ (Loss)
Shareholders’
equity
202,790,946
(56,990,058)
38,688,697
62,251,641
(17,494,492)
11,876,442
Lisbon
Euros
100,00%
100,00%
31-12-2013
46,514,843
3,815,921
45,841,135
Lisbon
Euros
100,00%
100,00%
31-12-2013
470,696
1,352
465,468
90,00%
100,00%
31-12-2013
5,689,474
254,086
5,662,651
1,746,523
77,998
1,738,289
São-Paulo
Reais
Euros
Percentage of investment
143
In July 2010 the Bank acquired 50% of the capital of CGD – Participações em Instituições Financeiras, Ltda. (CGD
Participações), for the amount of € 22,721, with the remaining 50% of the capital being held by Banco Caixa Geral
Brasil. This vehicle was set up to acquire 70% of the share capital of Banif Corretora de Valores e Câmbio, S.A. (Banif
CVC) for the amount of R$ 123.9 million (€ 45.8 million at 31 December 2012), as provided for in the agreement
entered into on 2 June 2010.
The definitive contract for the acquisition of Banif CVC was signed on 6 February 2012.
The shareholders’ agreement of Banif CVC entered into on the same date provided for the following options:

Put option by Banif Banco de Investimento (Brasil), S.A. (Banif) over CGD Participações, at the exclusive
discretion of Banif, in the period between the 12
th
th
and 60 month from the date of the signing of the shares
sales/purchase contract of 2 June 2010. The price would vary on the basis of the net profit for the period up to the
date upon which the option was exercised.

Call option by CGD Participações over Banif at the exclusive discretion of CGD Participações starting from the
th
60 month from the date of the signing of the shares sales/purchase contract of 2 June 2010. The price would
vary on the basis of the net profit for the period up to the exercising of the option.
At 2 June 2012, Banif exercised its put option on the remaining investment of 30% of Banif CVC’s equity capital for a
global amount of R$ 56 million. During the course of the operation Banif CVC’s name was also changed to CGD
Investimentos Corretora de Valores e Câmbio, S.A.
At 31 October 2012, the merger based on the reverse incorporation of CGD Participações into CGD Investimentos
was approved at the extraordinary meeting of shareholders. The referred to incorporation took effect on the
integration of CGD Participações’ assets and liabilities in its subsidiary company which was extinguished, with CGD
Investimentos assuming all rights and obligations deriving from its activity up to the date of the registration of the
merger.
The provisional financial data extracted from the statutory accounts of CGD Investimentos includes the cancellation of
deferred tax assets of R$ 46,857,373, made in accordance with the rules of the supervisory authority of Brazil. CGD
Investimentos, however, retains the right to use this carry-back in the future.
Caixa Capital - Sociedade de Capital de Risco, S.A. (Caixa Capital) is headquartered in Lisbon and was formed on 31
December 1990 under Decree Law 17/86 of 5 February. The company’s corporate object is to support and promote
investment and technological innovation by making temporary equity investments in projects or companies. It is also
authorised to provide assistance to the financial, technical, administrative and commercial management of its
subsidiary companies. It managed four venture capital funds at 31 December 2013.
Caixa Desenvolvimento, SGPS, S.A. formed in 1998, is headquartered in Portugal. Its corporate object is to manage
equity investments in other companies, as an indirect form of performing economic activities.
In March 2012, Caixa Desenvolvimento increased its share capital from € 2,500,000 to € 3,810,000, through an
incorporation of € 1,310,000 of reserves into capital, comprising the issue of 1,310,000 new shares for a nominal
amount of € 1 each. It latterly reduced its share capital by € 3,410,000, comprising 400,000 shares for a nominal
In November 2011, the Bank set up the company CaixaBI Brasil – Serviços de Assessoria Financeira Ltda. in Brazil,
with the corporate object of providing consultancy services to companies on capital restructuring, business strategy
and connected issues, as well as consultancy and services for mergers, acquisitions and sale of companies and
structuring of bank finance to be provided by other entities. The company is 90% owned by the Bank and 10% by
Caixa Desenvolvimento SGPS, S.A. The capital was paid up in April 2012.
On 16 December 2011, the investors meeting of the Fundo de Capital de Risco Energias Renováveis - Caixa Capital
decided to liquidate the fund. The fund was dissolved in February 2012 with the liquidation proceeds having been
amount of € 1 each. The Bank received € 3,410,000, making gains of € 1,172,467 (Note 29) on this operation.
144
divided up among the investors in proportion to their paid up capital holdings. In the sphere of this liquidation, the
Bank received € 28,128,688 of which € 466,161 refers to a receivable balance with gains of € 1,528,688 (Note 29).
14. INCOME TAX
Tax assets and liabilities balances, at 31 December 2013 and 2012, were:
(euros)
2013
2012
13,716
-
-
(12,552,549)
13,716
(12,552,549)
Current tax assets
Income tax rebate
Income tax payable
Deferred tax assets
For temporary differences
39,166,950
34,330,290
(2,976,318)
(2,411,123)
36,190,632
31,919,167
The following table provides details and information on deferred tax movements, in 2013 and 2012:
2013
Balance at
31.12.2012
(euros)
Change
Income
Balance at
Equity
31.12.2013
Commissions
2,667,053
(2,455,322)
-
4,259,282
-
(3,345,069)
914,213
24,893,487
9,810,793
-
34,704,280
Provisions not accepted for fiscal purposes
211,731
275,096
254,563
-
529,659
(175,752)
6,501
-
(169,251)
31,919,167
7,616,535
(3,345,069)
36,190,633
2012
Balance at
31.12.2011
(euros)
Commissions
Change
Income
Balance at
Equity
31.12.2012
5,192,317
(2,525,264)
-
30,970,253
-
(26,710,971)
4,259,282
Provisions not accepted for fiscal purposes
20,131,949
4,761,538
-
24,893,487
2,667,053
280,518
(5,422)
-
275,096
(182,254)
6,502
-
(175,752)
56,392,783
2,237,354
(26,710,971)
31,919,167
Information on tax on profit recognised in the income statement and the tax burden, measured by the ratio between
the provisioning for tax on profit and net profit for the year before tax is set out below:
(euros)
2013
2012
Current tax
IRC for current year
9,099,697
14,132,050
614,031
623,959
(2,139,552)
128,624
7,574,176
14,884,633
(7,616,535)
(2,237,354)
(42,359)
12,647,279
Deferred tax
Recognition and reversal of temporary differences
Total tax in income statement
With an impact in income for period
145
(euros)
2013
2012
605,240
31,883,061
(7.00%)
39.67%
(3,345,069)
(26,710,971)
(456,190)
61,629
Total tax in reserves
(3,801,259)
(26,649,342)
Total tax in shareholders’ equity
(3.843.618)
(14.002.063)
Income before tax
Fiscal burden in income statement
With an impact in reserves
Deferred tax – Fair value reserve
Current tax
Current taxes recognised in reserves for the amounts of € 456,190 and € 61,629 in 2013 and 2012, respectively, refer
to tax associated with the revaluation of debt securities sold in 2013 and 2012 and classified as available for sale
financial assets, that were taken into account for the purposes of assessing taxable income in previous years. The
deferred taxes recognised in the same account refer to the revaluation during the year of equity investments and debt
securities which are also classified as available for sale financial assets, whose fiscal effects will only be produced at
the time of disposal of such assets.
In conformity with current legislation, tax returns are subject to review and correction by the tax authorities for a period
of four years. The Bank’s tax returns for 2010 to 2012 are therefore still subject to review and to the possibility of
correction.
The Board of Directors considers that any correction is unlikely to have a significant impact on the financial
statements, at 31 December 2013.
The following is an analysis of the reconciliation between the nominal tax rates in 2013 and 2012.
(euros)
2013
Rate
Income before tax
2012
Rate
Amount
Amount
605,240
Tax assessment based on nominal rate
State surcharge
31,883,061
26.50%
160,389
26.50%
206.74%
1,251,256
6.22%
Total tax
1,411,645
Provisions and impairment not relevant for fiscal purposes
Total loss allocated by EIG
Separate source-based taxation
Adjustments for prior years
Other costs not accepted
Fiscal benefits
Other
1,984,483
10,433,494
69.90%
423,091
6.31%
2,013,234
(35.51%)
(214,915)
(0.71%)
(225,915)
26.32%
159,292
0.50%
160,232
(278.13%)
(1,683,362)
0
128,623
10.29%
62,289
0.14%
44,248
-
(1.03%)
(328,003)
(288,157)
Fiscal capital gains
Elimination of double taxation
8,449,011
6.81%
41,202
(0.90%)
(0.13%)
(761)
(0.00%)
(761)
101.45%
614,031
1.96%
623,959
(141.24%)
(854,871)
0.27%
86,325
(7.00%)
(42,359)
39.67%
12,647,279
With the publication of Law 55 - A/2010, of 31 December, the Bank was covered by the banking sector contribution
regime. The banking sector contribution is levied on:
a)
The liabilities assessed and approved by the taxpayers minus tier 1 and tier 2 own funds and the deposits
covered by the Deposit Guarantee Fund. The following are deducted from liabilities:

Elements which, according to the applicable accounting standards are recognised as shareholders’
equity;

Liabilities associated with the recognition of responsibilities for defined benefits plans;
146
b)

Liabilities for provisions;

Liabilities resulting from the revaluation of derivatives;

Deferred income, not considering income related to liabilities and;

Liabilities for assets not derecognised in securitisation operations.
The off-balance sheet notional amount of derivatives, calculated by the taxpayers except for financial hedge
derivatives or derivatives whose risk positions balance each other out.
The rates applicable to the bases defined in the preceding sub-paragraphs a) and b) are 0.05% and 0.00015%,
respectively, based on the amount assessed. The tax rates already approved for 2014 are 0.07% and 0.0003%,
respectively.
The Bank has posted the banking sector contribution to the “Current year tax” account in the income statement.
15. OTHER ASSETS
This account comprised the following, at 31 December 2013 and 2012:
(euros)
Other cash balances
2013
2012
39,155,971
6,669,698
Debtors and other investments
Debtors - futures trading operations and options
Miscellaneous debtors
Other assets
Income receivable
6,277,495
6,769,299
30,117,587
26,128,301
36,395,082
32,897,600
128,346
48,846
42,565
68,144
Deferred expenses
Insurance
-
-
Operational lease instalments
-
3,812
410,455
459,517
410,455
463,329
43,749,301
35,092,522
Other deferred expenses
Prepayments and accrued income
Other lending operations pending settlement
Impairment of other assets (Note 19)
141,447
591,135
43,890,748
35,683,657
3,551,441
3,551,441
123,574,608
79,382,715
(26,900,489)
(13,327,225)
96,674,119
66,055,490
At 31 December 2013, the “Other cash balances” account refrerred to an amount deposited with Clearstream Banking
At 31 December 2013 and 2012, the “Debtors - futures trading operations and options” account corresponded to
futures margin accounts.
At 31 December 2013, the balance on the “Miscellaneous debtors – balances pending settlement” account included
€ 16,228,705 relative to a swap contracted for by the Bank which was “crystallised” in 2012.
The “Miscellaneous debtors - other” account at 31 December 2013 and 2012 also includes amounts receivable from
customers for the invoicing of services provided by the Bank.
for the settlement of stock exchange operations.
147
The “Other deferred expenses” account heading, at 31 December 2013 and 2012 includes € 125,286 and € 256,797,
respectively, in respect of the amounts invested in Agrupamento Complementar de Empresas TREM II – Aluguer de
Material Circulante, ACE (TREM II).
The “Securities operations pending settlement” account, at 31 December 2013 and 2012, comprises the value of the
operations for the sale of securities at the end of the year and settled in the first few days of the following year.
At 31 December 2013 and 2012, the “Overdue credit and interest” account heading included overdue loans of
€ 3,551,441, originated in Caixa Valores and deriving from securities trading operations in 1992 by a group of
customers. The loan has been fully provisioned.
Caixa Valores took legal action against the Group of customers in September 1994, accusing them of responsibility
for realising the referred to operations and claiming an amount of € 6,003,180 plus interest accruing since June 1993.
As the action is still in progress, the Bank has not recorded any asset related with this situation.
16. CENTRAL BANKS’ RESOURCES
The “Central banks’ resources” account at 31 December 2013 and 2012 comprises term deposits with the Bank of
Portugal, as collateral for European Central Bank funding. These deposits were collateralised by securities with a
nominal value of € 554,714,000 and € 441,260,000, in 2013 and 2012, respectively (Note 33).
(euros)
2013
2012
334,500,000
215,000,000
Term
Term deposits
Interest payable
2,401,375
1,717,504
336,901,375
216,717,504
(euros)
2013
2.012
Up to three months
119,500,000
0
215,000,000
215,000,000
334,500,000
215,000,000
Fixed rate interest set by the European Central Bank is paid on these deposits.
(euros)
2013
2012
Repayable on demand
Sight deposits
Credit institutions in Portugal
122,271
11,807,596
Credit institutions abroad
1,168
1,230
Very short term deposits
336,582,409
414,227,982
Term deposits
281,049,879
318,000,000
7,949
-
Term
Other resources – sight deposit overdrafts
Credit institutions’ resources abroad
Other resources – sight deposit overdrafts
66,048
3,691
617,829,724
744,040,499
Interest payable
(414,858)
(8,297,622)
(618,244,582)
(752,338,121)
148
(euros)
2013
Sight deposits and overdrafts
2012
197,436
11,812,517
Up to three months
517,632,288
732,227,982
100,000,000
-
617,829,724
744,040,499
2013
2012
(euros)
Deposits
Sight
36,450,078
36,188,287
Term
85,964,944
100,992,080
122,415,022
137,180,367
Value adjustments relating
to hedged liabilities (Note 7)
85,453
283,980
122,500,475
137,464,347
Interest payable on deposits
2,073,268
1,781,631
124,573,743
139,245,978
Customer resources and other loans, at 31 December 2013 and 2012, had the following structure in accordance with
their respective periods to maturity:
(euros)
2013
2012
Repayable on demand
36,450,078
36,188,287
Up to three months
70,550,025
87,001,800
10,953,825
3,750,000
-
5,000,000
One to five years
4,461,094
5,240,280
122,415,022
137,180,367
19. PROVISIONS AND IMPAIRMENT
Information on movements in the Bank’s provisions and impairment accounts for 2013 and 2012 is set out below:
2013
Net
Balance at
provisions in
31.12.12
income
(euros)
Use
Transfers
statement
Exchange
Balance at 31
gains
December
/losses
2013
Provisions for loans and
advances to customers (Note 10):
. Bad debts
. Overdue loans
69,765,358
8,323,649
-
8,609,247
-
6,740,330
30,293,735
(12,100)
847,246
-
86,698,254
37,869,212
76,505,688
38,617,384
(12,100)
9,456,493
-
124,567,465
5,441,503
(1,479,463)
-
-
-
3,962,040
credit risks (Note 10)
Provisions for other risks and liabilities
7,541,288
6,615,008
(1,596,433)
-
-
12,559,863
12,982,791
5,135,545
(1,596,433)
-
-
16,521,903
1,897,215
-
-
-
(82,129)
1,815,086
13,327,225
14,491,061
(917,797)
-
-
26,900,489
-
13,081,753
-
(847,246)
-
12,234,507
15,224,439
27,572,814
(917,797)
(847,246)
(82,129)
40,950,081
104,712,918
71,325,743
(2,526,330)
8,609,247
(82,129)
182,039,449
Impairment of available for sale
financial assets (Note 8)
(Note 15)
Provisions for general
149
2012
Net
Balance at
provisions in
31.12.11
income
(euros)
Use
Transfers
statement
Exchange
Balance at 31
gains/
December
losses
2013
Provisions for loans and
advances to customers (Note 10):
. Bad debts
. Overdue Loans
60,210,686
13,762,071
(4,207,399)
-
-
4,579,235
3,067,040
(1,520,837)
614,892
-
69,765,358
6,740,330
64,789,921
16,829,111
(5,728,236)
614,892
-
76,505,688
6,281,811
(840,308)
-
-
-
5,441,503
4,763,072
2,778,216
-
-
-
7,541,288
11,044,883
1,937,908
-
-
-
12,982,791
6,823,658
(29,750)
(4,859,303)
-
(37,390)
1,897,215
4,867,949
9,074,168
-
(614,892)
-
13,327,225
Provisions for general
credit risk (Note 10)
Provisions for other risks and liabilities
Impairment of available for sale
financial assets (Note 8)
11,691,607
9,044,418
(4,859,303)
(614,892)
(37,390)
15,224,439
87,526,411
27,811,437
(10,587,539)
-
(37,390)
104,712,918
The Bank‘s provisions for bad debts at 31 December 2013 and 2012, were higher than the limits defined by the Bank
of Portugal, to provide for the risk associated with a series of operations for loans and advances to customers.
Provisions for other risks and liabilities comprise the Bank’s best estimate of eventual amounts to be expended on
settling legal, fiscal and other contingencies.
The Bank was notified, in December 2012, of a charge brought by the CMVM alleging a violation of its market defence
obligation. The Bank exercised its right to a hearing and defence in which it rejected the charge, accordingly not
setting up any provision for 2012. The process was closed in 2013, with a fine of € 150,000 levied on the Bank,
recognised in “Other operating income” (Note 30).
150
20. OTHER LIABILITIES
(euros)
2013
2012
Creditors and other resources
General government
Deduction of tax at source
4,081,166
4,869,844
Value added tax
534,152
173,425
Social security contributions
230,484
227,498
Deferred interest and dividends
215,895
215,895
Creditors – securities operations
132,620
186,172
Miscellaneous creditors
Suppliers of leased assets
-
4,145
1,598,141
1,547,014
6,792,458
7,223,993
Additional remuneration
2,830,000
2,830,000
Holiday and holiday subsidies
1,567,400
799,200
Other
Costs payable
Pension fund
303,045
268,101
Other
587,573
1,345,436
5,288,018
5,242,737
1,049,096
1,344,700
8,870
8,870
Deferred income
Commissions on credit operations (Note 2.3. a))
Agencying commissions
Rents
Guarantees provided
2,722
3,875
1,060,688
1,357,445
43,008,096
34,714,434
1,779,191
10,101,438
Other accruals and deferred income accounts
Lending operations pending settlement
Commissions payable - syndicated credit operations
Other
379,059
387,396
45,166,346
45,203,268
58,307,510
59,027,443
The balance on the “Creditors - securities operations” account, at 31 December 2013 and 2012, refers to the current
accounts of brokerage operations customers.
The “Securities operations pending settlement” account, at 31 December 2013 and 2012, comprises the value of
securities purchase operations at the end of the year and settled in the first few days of the following year.
The “Commissions payable – syndicated credit operations” account heading, at 31 December 2013 and 2012,
comprises amounts charged to customers for the structuring of syndicated credit operations in which CGD Group
supplies all or a significant part of the loan with the latter objective of placing it with other credit institutions. As
described in Note 2.11, the Bank recognises a part of the commission received in proportion to the total amount of
21. SUBSCRIBED CAPITAL
Subscribed capital comprises 81,250,000 shares with a nominal value of one euro each.
Information on the Bank’s equity structure, at 31 December 2013 and 2012, is set out below:
Other
Shares
%
81,018,063
99.71%
231,937
0.29%
81,250,000
100.0%
credit the Group intends to syndicate in this account.
151
22. RESERVES, RETAINED EARNINGS AND PROFIT FOR YEAR
The composition of the reserves and retained earnings account headings, at 31 December 2013 and 2012, was as
follows:
(euros)
2013
2012
4,338,403
4,338,403
(5,884,573)
(17,985,409)
Revaluations reserve on fixed assets
Fair value reserve
Unrealised gains
Debt instruments
Shares
5,380,006
4,411,820
Investment units
(5,153,881)
(3,089,025)
(6,503,336)
(6,650,066)
(7,823,381)
(18,974,277)
Fiscal effect
1,862,648
5,663,906
(5,960,733)
(13,310,371)
Legal reserve
47,414,192
45,490,613
Free reserve
88,578,385
71,266,181
Retained earnings
58,550,498
58,550,497
194,543,075
175,307,291
Profit for period
647,599
19,235,783
189,229,941
181,232,703
The Bank revalued its fixed assets in 1998, under Decree Law 31/98 of 11 February. The increase of €4,338,403, in
the net value of the fixed assets was recognised in the “Revaluation Reserves” account heading.
Revaluation reserves may only be used to cover accrued losses or for share capital increases.
Fair value reserves
The fair value reserve recognises unrealised capital gains and losses on available for sale financial assets, net of the
corresponding fiscal effect.
Legal reserve
In conformity with Decree Law 298/92 of 31 December, changed by Decree Law 201/2002 of 26 September, the Bank
is required to set up a legal reserve fund until equal to its share capital or sum of free reserves and retained earnings,
if higher, annually transferring an amount of not less than 10% of net profits to the reserve. The reserve may only be
Dividends
No dividends were paid in 2012 or 2013.
used to cover accrued losses or for share capital increases.
152
23. INTEREST AND INCOME AND INTEREST AND SIMILAR CHARGES
(euros)
2013
2012
Interest and similar income:
Interest on cash balances
10,274
18,097
335,089
576,291
70,604
588,079
Domestic credit
9,200,782
12,749,045
Foreign loans
4,204,281
7,998,475
Interest on investments in credit institutions in Portugal
Interest on Investments in credit institutions abroad
Interest on loans and advances to customers
Interest on assets held for trading:
Securities
Interest rate swaps
Interest on other financial assets at fair value through profit or loss
369,587
2,759,369
202,580,191
248,925,785
556,812
558,079
138,400
276,023
17,091,553
20,163,029
248,646
328,632
Interest on debtors and other investments
202,110
159,304
235,008,329
295,100,389
Interest on available for sale financial assets
Commissions received associated with credit operations
448,087
480,649
235,456,416
295,581,038
Interest and similar costs:
Interest on central banks’ resources
1,948,204
2,282,121
Interest on credit institutions’ resources
7,035,347
16,641,402
Interest on customer deposits
1,558,470
2,288,199
199,052,740
245,952,654
553,413
653,202
Interest on financial liabilities held for trading
Interest rate swaps
Other interest and liabilities
Interest on creditors and other resources
Other
Net interest income
18
83
33,643
113,053
210,181,833
267,930,714
25,724,583
27,650,323
24. INCOME FROM EQUITY INSTRUMENTS
This account includes €212,670 in dividends paid by Caixa – Desenvolvimento, SGPS, S.A., in 2012. The remaining
balance of this account in 2013 and 2012 comprises dividends received from available for sale financial assets.
25. INCOME AND COSTS OF SERVICES AND COMMISSIONS
(euros)
2013
2012
137,939
157,085
46,903
109,825
11,305,678
16,980,712
2,831,219
3,180,898
786,302
463,568
915,067
516,993
Guarantees provided
Commissions for commitments to third parties
Provision of services
Structuring of operations
Agencying
Custodian services
Collections
Other services provided
For operations realised on behalf of third parties
Other commissions received
49,684
31,583
17,566,875
12,796,368
6,510,088
4,353,571
10,497,936
25,072,385
50,196,192
64,114,487
153
(euros)
2013
2012
Commissions for operations realised by third parties
2,343,834
1,571,742
For banking services provided by third parties
32,798
1,685,561
Commissions for operations on financial instruments
15,125
48,608
2,490
256,396
583,283
10,300,879
2,977,530
13,863,186
For guarantees received
Other commissions paid
The “Other commissions received” account for 2013 and 2012, essentially includes financial advisory commissions.
The “Other commissions paid” account in 2012 essentially includes paid commissions for advisory services on the
realisation of received advisory commissions.
The “Costs of services and commissions – for banking services provided by third parties” account for 2012 includes
€ 1,635,414, relating to commissions to be passed on to other credit institutions in future syndications in accordance
with the policy described in Note 2.11.
26. INCOME FROM ASSETS AND LIABILITIES RECOGNISED AT FAIR VALUE THROUGH PROFIT
OR LOSS
(euros)
2013
2012
Income from assets and liabilities held for trading
Equity instruments
Debt instruments
489,752
(122,208)
1,154,408
17,001,280
Derivatives
Equity swaps
Interest rate swaps
Futures
Options
-
-
21,974,269
(20,808,346)
(474,965)
(511,207)
(9,954,223)
(34,530)
64,285
127,979
13,253,526
(4,347,032)
Debt instruments
552,439
(136,909)
Income from hedge operations
311,283
63,682
(285,240)
(65,359)
13,832,008
(4,485,618)
2013
2012
8,545,994
3,226,193
Income from assets and liabilities recognised at fair value
Value adjustments relating to hedged assets and liabilities
covered by hedges
27. INCOME FROM AVAILABLE FOR SALE FINANCIAL ASSETS
(euros)
Debt instruments
Equity instruments
-
-
8,545,994
3,226,193
Losses on available for sale financial assets
Equity instruments
Debt instruments
-
(145,385)
(94,465)
(1,008,777)
(94,465)
(1,154,163)
8,451,529
2,072,030
154
28. INCOME FROM FOREIGN EXCHANGE REVALUATIONS
In 2013 and 2012, the full amount of this account comprised income on the revaluation of the foreign exchange
position repayable on demand.
29. INCOME FROM THE DISPOSAL OF OTHER ASSETS
For the year ended 31 December 2013, this account included € 1,172,467 of losses on loan disposals (Note 10).
For the year ended 31 December 2012, this account included € 1,172,467 relative to the reduction of the share capital
of Caixa Desenvolvimento and €1,528,688 from the income on the liquidation of the FCR Energias Renováveis fund
(Note 13).
30. OTHER OPERATING INCOME
(euros)
2013
2012
Other operating gains and income
Reimbursement of expenses
918,699
272,876
Reversal of provision for additional remuneration in past years
900,000
1,250,000
496,214
862,122
Other
313,541
433,540
2,628,454
2,818,538
2,107,539
294,485
Other operating costs and expenses
Cancellation of interest on loans and advances to customers in prior years
Contributions to the Resolution Fund
254,143
-
TREM II
131,511
138,243
112,557
274,108
Subscriptions and donations
22,683
20,632
Contributions to the Deposit Guarantee Fund
18,219
17,500
267,017
25,700
862
582
Other
Other operating losses
Other tax
Indirect taxes
Direct taxes
Other operating income (net)
62,409
83,779
245,633
452,129
3,222,573
1,307,158
594,119
1,511,380
The Resolution Fund was created by Decree Law 31-A/2012 of 10 February, which introduced a resolution regime in
The measures in the new regime aim, depending on the case, to recover or to prepare the orderly liquidation of credit
institutions and certain investment companies in a difficult financial situation and involves three intervention stages
according to Bank of Portugal, in the form of corrective intervention, provisional administration and resolution.
Therefore, the Resolution Fund’s main mission consists in providing financial support to the application of the
resolution mechanisms adopted by the Bank of Portugal.
In 2013, the Bank recognised an initial and a periodic contribution to the Resolution Fund of € 62,639 and € 191,504
respectively.
the General Credit Institutions and Financial Companies Regime approved by Decree Law 298/92 of 31 December.
155
31. EMPLOYEE COSTS
(euros)
2013
2012
603,236
538,428
10,106,219
9,387,164
2,174,471
1,813,003
330,857
278,974
Remuneration paid to Board of Directors and inspection bodies
Remuneration paid to employees
Mandatory social costs
Costs of remuneration
Pension fund (Note 2.10)
Other mandatory social costs
22,717
92,465
402,086
384,562
13,639,586
12,494,596
Other employee costs
Following the occurrence of legislative changes in 2013, an amount of €783,258 relative to the cost of the preceding
year’s holiday subsidies was recognised.
The average number of staff employed by the Bank and its subsidiaries, in 2013 and 2012, excluding the Board of
Directors and the Supervisory bodies was 166, distributed as follows:
2013
2012
Senior management
80
82
Technical
67
65
Administrative
19
19
166
166
32. GENERAL ADMINISTRATIVE EXPENDITURE
(euros)
2013
2012
Specialised services
4,313,715
3,775,759
Maintenance and repair
1,046,090
969,666
Rents and leases
823,152
842,948
Travel and expenses
769,053
783,226
Communications
457,389
469,322
Advertising and publications
365,283
389,069
Water, power and fuel
134,306
143,198
Consumables
Publications
94,509
53,425
90,170
59,165
Staff training
38,853
71,742
Other third party supplies
37,891
50,818
Insurance
22,148
40,385
124,104
146,757
8,279,918
7,832,225
Other third party services
Information on the minimum payments of operational leases on transport and IT equipment, at 31 December 2013
and 2012, are set out below:
(euros)
2013
2012
Up to 1 year
607,849
642,006
From 1 to 5 years
515,142
760,459
Contingent liabilities associated with banking activity are recognised in off-balance sheet accounts with the following
detail:
(euros)
2013
2012
20,072,767
31,629,059
562,084,000
448,630,000
582,156,767
480,259,059
Contingent liabilities:
Guarantees and sureties
Asset-backed guarantees
Available for sale financial assets (Note 8)
Commitments:
33. CONTINGENT LIABILITIES AND COMMITMENTS
156
(euros)
2013
2012
Revocable lines of credit
7,199,968
27,941,814
Securities subscriptions
3,031,679
3,311,679
Other irrevocable commitments
Potential liability to
-
-
3,532,036
3,532,036
162,181
162,181
13,925,864
34,947,710
5,205,499,364
5,785,648,237
Investors’ Indemnity System
Term liabilities to
Liabilities for the provision:
of services:
The “Assets-backed guarantee” account, at 31 December 2013 and 2012, comprises the nominal value of public debt
securities pledged, by the Bank, in respect of the following situations:
(euros)
2013
2012
554,714,000
441,260,000
Caixa Geral de Depósitos, S.A. – Euronext
2,500,000
2,500,000
Investors’ Indemnity System (SII)
4,430,000
4,430,000
Pledge on securities in the “ECB assets pool”(Note 16)
440,000
440,000
562,084,000
448,630,000
The object of the Deposit Guarantee Fund is to guarantee customers’ deposits in accordance with the limits defined
by the General Credit Institutions Regime. For this, the Bank contributes on a regular annual basis. A part of those
contributions takes the form of an irrevocable commitment to realise the respective contributions when requested by
the Fund. These amounts are not recognised in costs. The total value of commitments assumed since 1996 totals
€162,181.
34. RELATED ENTITIES
All companies controlled by CGD Group, associated companies and the Bank’s management bodies are considered
to be entities related with the Bank.
The Bank’s financial statements, at 31 December 2013 and 2012, include the following balances and transactions
with related entities, excluding management bodies:
2013
(euros)
2012
Other CGD
Subsidiaries
Group
Other CGD
Subsidiaries
companies
Group
companies
-
163,834
-
354,404
-
6,593,277
-
45,474,273
-
45,455,731
-
47,586,966
-
7,066,806
-
7,409,472
25,266
76,290
34,926
370,603
-
(540,162,466)
-
(835,664,064)
-
(315,355,652)
-
(485,317,072)
(12,508,239)
(53,425,070)
(10,204,289)
(69,112,662)
-
(934,851)
-
(1,424,476)
(8,870)
(368,115)
(8,870)
(899,616)
Other assets
Liabilities:
Hedge derivatives
Other liabilities
Assets:
157
2013
(euros)
2012
Other CGD
Subsidiaries
Other CGD
Group
Subsidiaries
companies
Group
companies
Income and costs:
Net interest income
(136,031)
(138,635,806)
(202,437)
(119,060,776)
-
285,136,062
-
(183,756,354)
-
-
212,670
-
Income from services and commissions (net)
3
2,738,177
3,702
1,752,489
261,163
231,516
244,688
402,218
-
(69,132)
-
(633,295)
Operating income
Transactions with related entities are generally made basis on the basis of market value on the respective date.
Management bodies
The costs incurred on the remuneration of the Bank’s Board of Directors, in 2013, totalled € 543,776 of which amount
€16,488 in respect of contributions to the Caixa - Banco de Investimento pension fund, as described in Note 2.10
(€ 479,258 and € 16,342, respectively in 2012).
No bonuses were paid to board members in 2013 and 2012.
In 31 December, three Board Members had a mortgage lending agreement with the Bank for a global amount of
€ 307,297 (€ 246,216 in 2012 for two Board Members). This is a standard loan for Bank employees which was taken
out prior to their appointments as Board Members. The Bank has no other additional liability or granted any long term
benefit to the Board of Directors than those referred to above.
Information on the amounts paid to the members of Boards of Directors and Supervisory bodies, in 2013, is set out in
the management report.
Information on the fees charged by the statutory auditors, in 2013, is set out in the management report.
35. DISCLOSURES RELATING TO FINANCIAL INSTRUMENTS
Management policies on financial risks pertaining to the Bank’s activity
Risk management and control are centralised by CGD’s Risk Management Division. The Bank also has risk
management regulations defining the limits and operating procedures on the management of various risks.
Information on the disclosures required under IFRS 7 - Financial Instruments. Disclosures on the principal types of
risks pertaining to the Bank’s activity are set out below.
158
Exchange rate risk
Financial instruments were broken down into the following currencies at 31 December 2013 and 2012:
2013
(euros)
Currency
US
Euros
Sterling
dollars
Other
Total
Assets
1,237,734
-
-
-
1,237,734
1,673,093
-
10,506
201,372
1,884,971
Securities
Other assets
8,187,885
1,226,882
329,855
518,500
10,263,121
7,472,322,725
536,674,971
-
-
8,008,997,696
480,053,545
41,066,121
-
-
521,119,665
5,083,735
-
-
-
5,083,735
657,033,260
8,817,583
-
-
665,850,843
4,877,994
-
-
-
4,877,994
12,951,207
-
-
-
12,951,207
570,774,696
38,725,297
76,136
57,860,394
101,707
22,454
65,974
570,952,539
96,674,119
(151,467,954)
-
-
-
(151,467,954)
9,101,453,218
645,722,087
464,522
785,845
9,748,425,672
(7,472,322,725)
(536,674,971)
(8,008,997,696)
(506,011,091)
(39,064,754)
(545,075,845)
Liabilities
(336,901,375)
(568,544,674)
(48,649,708)
(336,901,375)
(123,003,005)
(1,570,738)
(659,868)
(390,333)
(618,244,582)
(124,573,743)
(12,951,207)
Other liabilities
(38,346,592)
(19,809,288)
(151,631)
(9,058,080,669)
(645,769,458)
(811,498)
(390,333)
(9,705,051,958)
(47,371)
(346,976)
395,512
1,165
Net exposure
(12,951,207)
(58,307,510)
159
2012
(euros)
Currency
US
Euros
Sterling
dollars
Other
Total
Assets
14,540,841
-
-
-
14,540,841
2,998,487
19,365
89,593
119,497
3,226,943
Securities
7,967,194
1,705,320
-
-
9,672,513
9,331,839,114
522,292,028
-
-
9,854,131,142
783,127,431
76,724,149
-
-
859,851,580
5,896,816
-
-
-
5,896,816
589,247,966
10,549,442
-
-
599,797,409
45,474,273
-
-
-
45,474,273
13,964,216
-
-
-
13,964,216
727,711,574
37,875
-
-
727,749,449
Other assets
57,698,194
21,559,225
38,033
87,263
79,382,715
(89,832,912)
-
-
-
(89,832,912)
11,490,633,193
632,887,404
127,626
206,760
12,123,854,983
(9,331,839,114)
(522,292,028)
-
-
(9,854,131,142)
(825,106,464)
(74,680,168)
-
-
(899,786,632)
(216,717,504)
-
-
-
(216,717,504)
(734,107,479)
(18,230,642)
-
-
(752,338,121)
(137,604,218)
(1,641,760)
-
-
(139,245,978)
(13,964,216)
-
-
-
(13,964,216)
Other liabilities
(41,968,626)
(17,058,817)
-
-
(59,027,443)
(11,301,307,621)
(633,903,416)
-
-
(11,935,211,036)
(1,016,012)
127,626
206,760
(681,626)
Liabilities
Net exposure
The amounts relating to derivatives in the above tables comprise interest rate swaps.
Liquidity risk
Liquidity risk comprises the Bank’s risk of difficulties in securing funds to meet its commitments. An example of
liquidity risk may be the Bank’s incapacity to quickly alienate a financial asset at close to its fair value.
The analysis of the Bank’s liquidity risk is part of the consolidated liquidity analysis of CGD Group’s Asset-Liability
Committee. The Bank has an irrevocable line of credit from CGD, for liquidity requirements of up to one year. On the
other hand, CGD Group policy does not advise direct access to the capital market for securing medium and long term
funding, which is the consolidated liability of CGD Group on a consolidated basis and with CGD having a global
management commitment and eventual coverage of the liquidity gaps of its various subsidiaries as a whole.
Under IFRS 7 requirements, the full amount of non-discounted contractual cash flows for the various time bands,

Customers’ sight deposits are recognised in the “Customer resources and other loans” account in “Repayable on
demand”;

Sight overdrafts are recognised in the “Loans and advances to customers” accounts in “Repayable on demand”;

The “Other” column comprises amounts already received or paid which are being deferred;

The amount for derivatives set out in this table comprises their book value;

Shares and customers’ overdue credit have been classified for undetermined periods.
based on the following premises, is set out below:
160

For operations whose income is not fixed such as on operations indexed to Euribor, the future cash flows have
been estimated at the reference value at 31 December 2013 and 2012.
2013
(euros)
Repayable
Up to 3
on demand
months
From 3
months to 1
year
From 1 to 3
From 3 to 5
More than 5
Undetermine
years
years
years
d
Other
Total
Assets
Cash and claims on
central banks
1,237,734
-
-
-
-
-
-
-
1,237,734
1,884,971
-
-
-
-
-
-
-
1,884,971
Securities
-
12,978
21,901
403,140
18,701
1,226,245
8,668,230
-
10,351,195
Derivatives
-
-
6,578,623
22,618,107
21,949,408
469,973,528
-
-
521,119,665
-
4,552
101,056
5,868,013
0
3
-
-
5,973,624
-
39,268,269
286,998,381
183,933,962
37,258,127
166,088,565
46,654,283
-
760,201,587
-
4,917,537
-
-
-
-
-
-
4,917,537
1,749,923
31,285,324
90,527,227
162,762,960
176,099,624
338,151,957
45,458,969
(2,628,744)
843,407,241
-
-
1,723,737
-
-
-
-
-
1,723,737
119,612,712
-
-
-
-
-
3,551,441
410,455
123,574,608
124,485,342
75,488,660
385,950,926
375,586,181
235,325,860
975,440,299
104,332,922
(2,218,289)
2,274,391,900
-
119,504,979
-
218,708,924
-
-
-
-
338,213,903
Claims
on
other
credit institutions
for trading
profit or loss
Available
for
sale
financial assets
institutions
Loans and advances
to customers
Hedge derivatives
Other assets
Liabilities
Central
banks’
resources
Financial
liabilities
held for trading
-
-
-
-
-
-
-
-
Derivatives
-
249
6,545,176
26,654,719
31,446,791
480,428,910
-
-
545,075,845
197,435
517,868,453
101,808,778
-
-
-
-
-
619,874,667
36,450,078
70,682,322
12,819,120
-
-
6,182,336
-
-
126,133,857
-
-
-
934,851
-
-
-
-
934,851
43,143,415
8,170,089
5,933,318
-
-
-
-
1,060,688
58,307,510
79,790,929
716,226,092
127,106,392
246,298,493
31,446,791
486,611,246
-
1,060,688
1,688,540,632
44,694,412
(640,737,432)
258,844,533
129,287,688
203,879,069
488,829,052
104,332,922
(3,278,977)
585,851,268
Other
Total
Other
credit
institutions’ resources
Customer resources
and other loans
Hedge derivatives
Other liabilities
Liquidity gap
2012
(euros)
Repayable
Up to 3
on demand
months
From 3
months to 1
year
From 1 to 3
From 3 to 5
More than 5
Undetermin
years
years
years
ed
Assets
Cash and claims on
central banks
on
14,541,950
-
-
-
-
-
-
-
14,541,950
3,226,943
-
-
-
-
-
-
-
3,226,943
other
credit institutions
for trading
- Securities
-
87,403
729,416
3,662,834
1,648,856
5,077,784
309,982
-
11,516,273
Derivatives
-
2,842,213
10,082,345
37,653,493
41,914,415
767,359,115
-
-
859,851,580
-
16,022
136,647
2,773,290
5,088,776
2
-
-
8,014,736
-
64,055,271
216,348,230
116,777,246
24,382,585
246,173,679
46,885,931
-
714,622,941
-
45,536,791
-
-
-
-
-
-
45,536,791
2,378,985
43,935,965
102,170,409
186,797,786
111,251,496
322,258,892
39,830,202
(2,255,072)
806,368,663
Other
financial
assets at fair value
Available
for
sale
financial assets
institutions
Loans and advances
to customers
Claims
161
Hedge derivatives
Other assets
-
-
-
1,651,219
-
-
-
-
1,651,219
75,367,945
-
-
-
-
-
3,551,441
463,329
79,382,715
95,515,823
156,473,665
329,467,046
349,315,867
184,286,128
71
90,577,555
(1,791,743)
2,544,713,812
-
-
-
220,326,528
-
-
-
1,340,869,4
Liabilities
Central
banks’
resources
Financial
220,326,528
liabilities
held for trading
-
-
-
-
-
-
-
-
Derivatives
-
2,825,208
10,622,107
40,520,915
44,636,437
801,181,964
-
-
899,786,632
11,812,516
741,435,417
-
-
-
-
-
-
753,247,933
36,020,005
87,382,464
3,890,677
7,023,480
-
7,255,790
-
-
141,572,415
-
-
-
-
1,424,476
-
-
-
1,424,476
34,909,158
11,277,985
11,482,855
-
-
-
-
1,357,446
59,027,443
82,741,679
842,921,073
25,995,639
267,870,923
46,060,913
808,437,754
-
1,357,446
2,075,385,427
12,774,143
(686,447,409)
303,471,407
81,444,944
138,225,215
532,431,719
90,577,555
(3,149,189)
469,328,385
Other
credit
institutions’
resources
Customer resources
and other loans
Hedge derivatives
Other liabilities
Liquidity gap
Interest rate risk
Interest rate risk comprises the fair value or cash flow risk associated with a specific financial instrument, if changed
on the basis of changes in market interest rates.
The following is a summary of the type of exposure to interest rate risk, at 31 December 2013 and 2012:
2013
(euros)
Not subject
to interest
Fixed rate
Variable rate
Total
rate risk
Assets
-
-
1,884,971
1,884,971
- Securities
8,668,230
1,594,891
-
10,263,121
- Derivatives
-
3,919,983,443
4,089,014,253
8,008,997,696
-
-
5,083,735
5,083,735
Hedge derivatives
-
5,000,000
7,951,207
12,951,207
46,654,283
-
565,012,475
-
54,184,086
4,877,994
665,850,843
4,877,994
695,520,004
42,830,225
8,898,714
643,791,065
123,574,608
-
-
123,574,608
221,727,345
4,500,489,524
4,806,787,311
9,529,004,180
- Derivatives
-
3,914,543,744
4,094,453,952
8,008,997,696
-
-
336,901,375
336,901,375
-
197,435
618,047,147
618,244,582
-
48,011,502
76,562,241
124,573,743
Hedge derivatives
-
7,951,207
5,000,000
12,951,207
58,307,510
-
-
58,307,510
58,307,510
3,970,703,889
5,130,964,715
9,159,976,114
163,419,835
529,785,635
(324,177,404)
369,028,067
Other assets
Liabilities
Other liabilities
Net exposure
162
2012
(euros)
Not subject
to interest
Fixed rate
Variable rate
Total
rate risk
Assets
-
-
3,226,943
3,226,943
- Securities
309,982
9,362,532
-
9,672,513
- Derivatives
-
4,833,900,982
5,020,230,160
9,854,131,142
-
2
5,896,814
5,896,816
Hedge derivatives
-
5,000,000
8,964,216
13,964,216
46,885,931
470,183,519
82,727,959
599,797,409
-
-
45,474,273
45,474,273
37,575,130
10,410,192
679,764,126
727,749,449
Other assets
79,382,715
-
-
79,382,715
164,153,757
5,328,857,227
5,846,284,490
11,339,295,474
- Derivatives
-
4,862,053,852
4,992,077,289
9,854,131,142
-
-
216,717,504
216,717,504
-
11,812,516
740,525,605
752,338,121
-
48,156,780
91,089,198
139,245,978
Hedge derivatives
-
8,964,216
5,000,000
13,964,216
59,027,443
-
-
59,027,443
59,027,443
4,930,987,365
6,045,409,596
11,035,424,404
105,126,314
397,869,863
(199,125,107)
303,871,070
Liabilities
Other liabilities
Net exposure
163
Exposure to interest rate risk, at 31 December 2013 and 2012 can be broken down into the following maturity periods:
2013
From 3
Repayable
on demand
(euros)
Up to 3
months to
From 1
From 3
More than
months
12 months
to 3 years
to 5 years
5 years
Undetermined
Other
Total
Assets
Claims on other
credit institutions
1,884,971
-
-
-
-
-
-
-
1,884,971
Financial assets
held for trading
- Securities
-
-
8,130
374,814
-
1,211,947
8,668,230
-
10,263,121
- Derivatives
-
969,986,397
3,317,172,521
299,030,864
192,522,670
3,230,285,244
-
-
8,008,997,696
-
354,100
4,729,636
-
-
-
-
-
5,083,735
-
-
12,951,207
-
-
-
-
-
12,951,207
-
82,024,256
279,166,233
118,998,596
15,819,471
123,188,005
46,654,283
-
665,850,843
-
4,877,994
-
-
-
-
-
-
4,877,994
695,520,004
Other
financial
assets
at
value
through
fair
profit or loss
Hedge
derivatives
Available for sale
financial assets
Investments
in
credit institutions
Loans
and
advances
to
customers
Other assets
1,749,923
233,395,063
386,784,882
8,898,714
18,500,422
3,360,774
45,458,969
(2,628,744)
119,612,712
-
-
-
-
-
3,551,441
410,455
123,574,608
123,247,607
1,290,637,810
4,000,812,609
427,302,988
226,842,563
3,358,045,970
104,332,922
(2,218,289)
9,529,004,180
-
979,587,504
3,313,672,521
301,660,409
173,447,638
3,240,629,624
-
-
8,008,997,696
-
119,502,490
-
217,398,886
-
-
-
-
336,901,375
197,435
517,774,591
100,272,556
-
-
-
-
-
618,244,582
36,450,078
70,602,897
12,693,902
-
-
4,826,865
-
-
124,573,743
12,951,207
Liabilities
Financial
liabilities held for
trading
- Derivatives
Central
banks’
resources
Other
credit
institutions’
resources
Customer
resources
and
other loans
Hedge
derivatives
Other liabilities
Net exposure
-
-
5,000,000
7,951,207
-
-
-
-
43,143,415
8,170,089
5,933,318
-
-
-
-
1,060,688
58,307,510
79,790,929
1,695,637,571
3,437,572,298
527,010,502
173,447,638
3,245,456,489
-
1,060,688
9,159,976,114
43,456,678
(404,999,761)
563,240,311
(99,707,514)
53,394,925
112,589,482
104,332,922
(3,278,977)
369,028,067
Other
Total
2012
Repayable
on demand
(euros)
From 3
Up to 3
months to
From 1
From 3
More than
months
12 months
to 3 years
to 5 years
5 years
Undetermined
Assets
credit institutions
3,226,943
-
-
-
-
-
-
-
3,226,943
Financial assets
held for trading
- Securities
-
-
522,088
3,059,188
1,309,445
4,471,811
309,982
-
9,672,513
- Derivatives
-
2,053,083,131
3,145,796,862
664,437,476
479,836,371
3,510,977,302
-
-
9,854,131,142
-
1,266,509
4,630,307
-
-
-
-
-
5,896,816
-
-
-
13,964,216
-
-
-
-
13,964,216
-
113,779,577
203,792,149
45,530,028
5,067,448
184,742,276
46,885,931
-
599,797,409
Other
financial
assets
at
value
through
fair
profit or loss
Hedge
derivatives
Available for sale
financial assets
Claims on other
164
2012
Repayable
on demand
(euros)
Investments
months to
From 1
From 3
More than
months
12 months
to 3 years
to 5 years
5 years
Undetermined
Other
Total
in
credit institutions
Loans
From 3
Up to 3
-
45,474,273
-
-
-
-
-
-
45,474,273
2,378,985
316,949,660
360,435,481
-
10,410,192
-
39,830,202
(2,255,072)
727,749,449
-
-
-
-
3,551,441
463,329
79,382,715
and
advances
to
customers
Other assets
75,367,945
80,973,873
2,530,553,149
3,715,176,887
726,990,908
496,623,456
3,700,191,388
90,577,555
(1,791,743)
11,339,295,474
-
2,038,718,559
3,141,962,351
667,552,896
481,817,735
3,524,079,601
-
-
9,854,131,142
-
-
-
216,717,504
-
-
-
-
216,717,504
11,812,516
740,525,605
-
-
-
-
-
-
752,338,121
36,020,295
87,262,532
3,826,667
6,716,019
-
5,420,466
-
-
139,245,978
13,964,216
Liabilities
Financial
liabilities held for
trading
- Derivatives
Central
banks’
resources
Other
credit
institutions’
resources
Customer
resources
and
other loans
Hedge
derivatives
Other liabilities
-
-
-
5,000,000
8,964,216
-
-
-
34,909,158
11,277,985
11,482,855
-
-
-
-
1,357,446
59,027,443
82,741,969
2,877,784,680
3,157,271,872
895,986,419
490,781,951
3,529,500,067
-
1,357,446
11,035,424,404
(1,768,097)
(347,231,531)
557,905,015
5,841,505
170,691,321
90,577,555
(3,149,189)
303,871,070
Net exposure
(168,995,511
)
The contents of the above referred to table were based on the following premises:

the book value of fixed-rate instruments was classified in accordance with their respective period to maturity;

the book value of variable-rate instruments (e.g. indexed to Euribor), was classified in accordance with the
respective maturity until the next refixing of the rate;

the book value of instruments not subject to interest rate risk (e.g. shares) was included in the "undetermined"
column;

the book value included in the “Other” column comprises amounts which have already been received or paid
which are being deferred;

information is provided on notional purchase amounts (as assets) and sales (as liabilities) on interest rate swaps;

overdue loans to customers and amounts already received or paid were not considered subject to interest rate
risk, and;

customers’ sight deposits, when no interest is paid, are considered as fixed-rate and classified as “Repayable on
Credit risk
Credit risk comprises financial losses on the defaults of counterparties who have entered into agreements on financial
instruments.
demand”.
165
Maximum exposure to credit risk
The following is a summary of the maximum exposure to credit risk, by financial instrument, at 31 December 2013 and
2012:
(euros)
2013
2012
Book value
Provisions/
Book value
Book value
Provisions/
Book value
(gross)
impairment
(net)
(gross)
impairment
(net)
Assets:
1,884,971
-
1,884,971
3,226,943
-
3,226,943
522,714,557
-
522,714,557
869,214,112
-
869,214,112
5,083,735
-
5,083,735
5,896,816
-
5,896,816
619,196,561
-
619,196,561
552,911,478
-
552,911,478
Hedge derivatives
4,877,994
-
4,877,994
45,474,273
-
45,474,273
695,520,004
124,567,465
570,952,539
727,749,449
76,505,688
651,243,761
1,723,737
-
1,723,737
1,651,219
-
1,651,219
123,164,153
26,900,489
96,263,664
78,919,386
13,327,225
65,592,161
1,974,165,713
151,467,954
1,822,697,759
2,285,043,674
89,832,912
2,195,210,762
20,072,767
655,380
19,417,387
31,629,059
851,757
30,777,302
1,994,238,480
152,123,334
1,842,115,146
2,316,672,733
90,684,670
2,225,988,064
Other assets (excluding deferred costs)
Off-balance sheet:
Guarantees provided
Credit quality of financial assets
The Bank does not have an internal rating system. The principal procedures in force in terms of the approval and
monitoring of credit operations designed to ensure an adequate risk level for the Bank’s strategy are set out below:

The Bank has a Credit Committee, comprising members of the Executive Committee and managers of the
Commercial Divisions with any form of involvement in lending. The Bank’s Credit Committee meets once a week
with a minimum of two directors and managers of the Commercial Divisions involved in the lending process.

The production of commercial proposals for submission to the Credit Committee is the responsibility of Structural
Organs (Business/Product Divisions), which require the risk opinion of CGD’s Risk Management Division, in
advance. The proposals approved by the Bank’s Credit Committee are recorded in minutes and are signed by all
present, for latter submission to and final resolution of CGD’s Credit Committees.

Pledges on securities

Bank guarantees;

State-backed;

Mortgage loans for employees; and

Personal guarantees.
A part of credit operations with customers is, inter alia, guaranteed by the following types of collateral:
166
Credit quality of debt securities and derivatives
The following table provides information on the book value of portfolio debt securities net of impairment (excluding
matured securities) according to the Standard & Poor’s or equivalent rating, by type of guarantor or issuing entity and
by the guarantor‘s or issuing entity’s geography, at 31 December 2013 and 2012:
2013
Rest of
Portugal
North
European
(euros)
Other
America
Union
Total
BBB- up to BBB+
BB- up to BB+
-
-
-
-
-
525,678
-
-
-
525,678
B+
-
-
-
-
-
1,069,213
-
-
-
1,069,213
1,594,891
-
-
-
1,594,891
1,069,213
-
-
-
1,069,213
525,678
-
-
-
525,678
-
-
-
-
-
1,594,891
-
-
-
1,594,891
BB- up to BB+
-
-
-
-
-
B+
-
-
-
-
-
4,729,636
-
-
354,100
5,083,735
4,729,636
-
-
354,100
5,083,735
4,729,635
Not rated
Issued by:
Corporates
(Fair Value Option)
Not rated
Issued by:
Corporates
4,729,635
-
-
-
-
-
-
-
-
1
-
-
354,100
354,101
4,729,636
-
-
354,100
5,083,735
A+
-
2,460,350
-
-
2,460,350
BBB- up to BBB+
-
3,444,603
-
1,284,503
4,729,106
546,849,576
-
-
-
546,849,576
B+
-
-
-
-
-
CCC- up to CCC+
-
-
-
-
-
65,157,529
-
-
-
65,157,529
612,007,105
5,904,953
-
1,284,503
619,196,561
(net of impairment)
BB- up to BB+
Not rated
Issued by:
Corporates
64,273,336
3,444,603
-
1,284,503
69,002,442
545,498,627
-
-
-
545,498,627
2,235,141
2,460,350
-
-
4,695,491
612,007,105
5,904,953
-
1,284,503
619,196,561
Other
Total
Rest of
Portugal
European Union
(euros)
North America
BBB- up to BBB+
-
3,521,117
-
1,705,314
5,226,431
4,136,101
-
-
-
4,136,101
4,136,101
3,521,117
-
1,705,314
9,362,532
Corporates
1,706,117
1,501,803
-
1,705,314
4,913,234
2,377,327
-
-
-
2,377,327
52,657
2,019,313
-
-
2,071,970
4,136,101
3,521,117
-
1,705,314
9,362,532
BB- up to BB+
Issued by:
2012
167
Financial assets at fair value through profit or loss (Fair Value
Option)
BB- up to BB+
Not rated
2
-
-
-
2
4,630,305
-
-
1,266,509
5,896,814
4,630,307
-
-
1,266,509
5,896,816
4,630,304
Issued by:
Corporates
4,630,304
-
-
-
2
-
-
-
2
1
-
-
1,266,509
1,266,510
4,630,307
-
-
1,266,509
5,896,816
BBB- up to BB+
-
90,884,042
-
-
90,884,042
380,783,964
5,006,367
-
-
385,790,330
B+
9,715,868
-
-
-
9,715,868
CCC- up to CCC+
5,355,831
-
-
5,355,831
BB- up to BB+
Not rated
59,644,429
1,520,979
-
-
61,165,408
455,500,091
97,411,387
-
-
552,911,478
64,409,261
9,022,689
-
-
73,431,950
369,245,245
79,268,478
-
-
448,513,722
21,845,585
9,120,221
-
-
30,965,806
455,500,091
97,411,387
-
-
552,911,478
Issued by:
Corporates
Disclosures on exposure to credit risk in derivative operations by counterparty type are set out in Note 7. The Bank, at
31 December 2013 also recognised in “Miscellaneous debtors” an amount of € 27,878,817 relating to interest
derivatives arrears on which impairment of € 22,998,099 was recognised. The book value recognised in “Financial
assets held for trading” relating to the said operations totalled € 15,730,772.
The Bank, at 31 December 2012 also recognised in “Miscellaneous debtors” an amount of € 23,466,829 relating to
interest on derivatives in arrears on which impairment of € 8,782,776 was recognised. The book value recognised in
“Financial assets held for trading” relating to the said operations totalled € 86,798,374.
Credit quality of loans and advances to credit institutions
The counterparties with which the Bank had contracted “Investments in credit institutions” at 31 December 2013,
comprised CGD Group bodies (€ 4,877,994), with an external rating of BB-.
168
Quality of loans and advances to customers
Information on overdue credit operations, at 31 December 2013 and 2012, is set out in the following table.
2013
Performing
credit
(euros)
Non-
2012
Credit in
performing
Total Credit
default
credit
Performing
credit
Non-
Credit in
performing
Total Credit
default
credit
Lending to companies
Outstanding
603,065,089
-
38,687,577
641,752,666
668,089,194
-
8,385,600
676,474,794
1,997,171
1,575,718
41,886,081
45,458,969
28,808,456
836,828
10,184,918
39,830,202
605,062,259
1,575,718
80,573,658
687,211,635
696,897,650
836,828
18,570,518
716,304,996
9,396,566
-
-
9,396,566
10,025,647
-
-
10,025,647
9,396,566
-
-
9,396,566
10,025,647
-
-
10,025,647
316,593
-
-
316,593
372,597
-
-
372,597
612,778,248
-
38,687,577
651,465,825
678,487,437
-
8,385,600
686,873,037
1,997,171
1,575,718
41,886,081
45,458,969
28,808,456
836,828
10,184,918
39,830,202
Overdue
Mortgage lending
Outstanding
Consumer loans
Outstanding
Total outstanding credit
Total overdue credit
Provisions for bad debts
(86,698,254)
-
-
(86,698,254)
(69,765,358)
-
-
(69,765,358)
(22,885)
(15,757)
(37,830,569)
(37,869,211)
(288,085)
(8,368)
(6,443,877)
(6,740,330)
528,054,279
1,559,961
42,743,089
572,357,329
637,242,451
828,460
12,126,641
650,197,552
Provisions for overdue credit
Total credit
The following classifications were used for the preparation of the above tables:

“Performing loans” – loans without any overdue payments or with balances overdue up to 30 days;

“Non-performing loans ” – loans balances overdue between 30-90 days;

“Loans in default” – loans with balances overdue more than 90 days. In the case of corporate loans, if a customer
has at least one operation with payments overdue for more than 90 days, the full amount of the customer’s
exposure to the Group is reclassified to this category.
Market risk
Market risk comprises the risk of an adverse change in fair value or the cash flows of financial instruments deriving
from changes in market value, including foreign exchange, interest rate and price risks.
The Bank’s market risk is assessed on the basis of the following methodologies:

Value-at-Risk” (VaR) on the trading portfolio, including the securities and financial derivatives portfolios.

A sensitivity analysis on the Bank’s other assets and liabilities. This sensitivity analysis is calculated on the bases
of the premises defined in Bank of Portugal Instruction 19/2005.
Trading portfolio
given confidence level, assuming normal market operation.
The calculation methodology used is that of historical simulation i.e. future events are fully explained by past events,
based on the following premises:

asset held for: 10 days;

confidence level: 99%;

price sampling period: 720 calendar days;
VaR comprises an estimate of the maximum potential loss on a specific assets portfolio, over a specific period with a
169

decay factor = 1, i.e. all observations carry the same weight;
For options, the theoretical price is calculated by the use of adequate models and the use of implicit volatility. No
calculation for correlations is made, owing to the methodology applied; i.e. the correlations are empirical.
The following is a breakdown of VaR, at 31 December 2013 and 2012 (thousand euros):
2013
2012
366
233
28
25
199
19
Market VaR:
Interest rate
Exchange rate
Price
Volatility
Diversification effect
88
81
(247)
(48)
434
310
The diversification effect is calculated implicitly. Total VaR refers to the combined effect of interest rate, price, foreign
exchange and volatility risks.
Bpvs (basis point values), changes in the market value of interest rate positions owing to a parallel shift of 1 basis
point on the yield curves are calculated for the trading portfolio and treasury positions. Other sensitivity indices
commonly applicable to options portfolios, commonly referred to a “Greeks”, are also calculated.
Monthly stress tests are also performed.
Theoretical backtesting (comparison of the VaR measure with technical results) is performed daily and real
backtesting (comparison of the VaR measure with the real results) monthly. The number of exceptions obtained i.e.
the number of times theoretical or real losses exceed VaR, enables the method’s accuracy to be assessed and any
necessary adjustments made.
Non-trading portfolio
The sensitivity analysis on the non-trading portfolio was carried out to assess the potential impact on the Bank’s net
interest income in 2013 considering a fall of 50 basis points (bps) in reference interest rates and assuming a parallel
shift of the interest rate curve. The Bank’s financial assets and liabilities were considered for this purpose, excluding:

derivatives; and

commercial paper.
The principal premises related with the pricing of operations were:

variable-rate operations: market rate plus respective contractual spread;

new fixed-rate operations: market rate plus respective spread equivalent to the difference between the average
rate on live transactions at 31 December 2013 and respective market rate;

new variable-rate operations: market rate plus average contractual spread on live transactions at 31 December
2013.
rates on projected net interest income for 2013 totals € 232,054 (€ 464,275 at 31 December 2012). In the event of a
50 basis points increase in reference interest rates, the potential negative impact on the net interest income forecast
for 2013 totals € 500,058 (€ 264,800 at 31 December 2012).
Fair value
The Bank maintains a significant part of its assets, notably its securities and derivatives portfolio, at fair value through
profit or loss.
Based on the above referred to premises, the potential positive impact of a 50 basis points fall in reference interest
170
At 31 December 2013 and 2012, the fair value of the outstanding loans and advances portfolio totalled €
618,002,957 and € 669,725,906. The assessment of the fair value of loans and advances was based on discounted
cash flow models up to the maturity of the operations. The contractual terms of the operations were taken into
consideration for the purpose, with the use of interest rate curves appropriate to the type of instrument, including
discount spreads calculated on the basis of the implicit spread in the market curves, of the contracted operations, in
December 2013 and 2012.
Reference should be made to the following aspects as regards the principal financial assets and liabilities recognised
at cost:

Interest is paid on almost all investments in and resources with other credit institutions at indexed rates and short
refixing periods;

As shown above, in the section on interest rate risk, the payment of interest on almost all customer deposits is
indexed to Euribor, with short refixing periods. A long term operation at fixed interest rates has been covered by a
hedge derivative for which reason the change in the fair value attributable to the interest rate risk has already been
recognised in the deposit’s book value (see Note 18).
In light of the above, the Bank considers that the book value of its financial assets, net of provisions and its financial
liabilities comprises a reliable approximation of their respective fair value.
The form of assessing the fair value of financial instruments, at 31 December 2013 and 2012, is summarised below:
(euros)
2013
Assets valued at
Prices in an active
acquisition cost
Market data
market (Level 1)
Total
Other (Level 3)
(Level 2)
Assets
-
10,263,121
-
521,119,665
531,382,787
-
182,827
Hedge derivatives
182,827
-
4,729,635
354,101
5,083,735
579,808,901
15,965,084
69,894,032
665,850,843
-
-
1,723,737
1,723,737
590,072,022
20,694,718
593,091,535
1,204,041,103
545,075,845
Liabilities
-
-
-
545,075,845
Hedge derivatives
-
-
-
934,851
934,851
-
-
-
546,010,696
546,010,696
(euros)
2012
Assets valued at
Prices in an active
acquisition cost
market (Level 1)
Market data (Level
Other
2)
(Level 3)
Total
Assets
-
9,672,513
859,851,580
-
869,524,094
Hedge derivatives
-
2
-
5,896,814
5,896,816
182,827
519,634,798
3,455,592
76,524,192
599,797,409
-
-
1,651,219
-
1,651,219
182,827
529,307,314
864,958,391
82,421,005
1,476,869,537
-
-
899,786,632
-
899,786,632
Hedge derivatives
-
-
1,424,476
-
1,424,476
-
-
901,211,108
-
901,211,108
Liabilities
171
The contents of the above referred to table were based on the following premises:

Prices on active markets correspond to equity instruments listed on a stock market and high liquidity bonds (Level
1);

Portfolio shares valued by indicative bids supplied by contributors external to the group were also recognised in
“Valuation techniques - market data” (Level 2).

The valuation of financial derivatives uses valuation techniques based on market data. However owing to the
application, in 2013 of a CVA and DVA valuation model, these instruments are valued at Level 3.

Shares valued by internal CGD Group models are presented in “Valuation techniques – Other (Level 3)”. This
column includes: at 31 December 2013 and 2012, € 55,323,442 and € 69,182,793, respectively, relating to fixed or
variable-rate bonds issued by Portuguese financial and non-financial companies, in respect of which there are
neither active market nor indicative prices supplied by external counterparties. The Bank valued these securities
using a projected cash flow updating model at market interest rates plus a spread the Bank considers adequate to
the issuing entity’s credit risk.
Assets valued at cost are stable financial investments held by the Bank for which no active market exists
The following is a summary, in 2013 and 2012, of the movements occurring in the securities portfolio valued by
“Valuation techniques - other” in addition to the unrealised and realised capital gains recognised in the fair value
reserve and in income from financial operations:
Balance at
(euros)
31.12.2012
Changes to
Acquisitions
valuation
/ disposals
method
-
521,119,665
Income for period
Fair value
reserve
-
Unrealised
Effective
-
-
-
Exchange
Balance at
rate gains
31.12.2013
-
521,119,665
5,896,814
(4,630,304)
(1,342,500)
-
(7,909)
438,000
-
354,101
76,524,192
850,387
(14,175,186)
6,765,073
-
191,275
(261,709)
69,894,032
82,421,005
517,339,748
(15,517,686)
6,765,073
(7,909)
629,275
(261,709)
591,367,797
-
545,075,845
-
-
-
-
-
545,075,845
82,421,005
1,062,415,593
(15,517,686)
6,765,073
(7,909)
629,275
(261,709)
1,136,443,642
Balance
(euros)
31.12.2011
70,890,370
Changes to
Acquisitions
valuation
/ disposals
method
-
(84,550,000)
11,286,601
-
81,401,200
(1,027,951)
163,578,171
(1,027,951)
Gains recognised in
Income for period
Fair value
reserve
Unrealised
13,659,630
Exchange
Balance
rate gains
31.12.2012
-
-
-
-
(5,233,361)
-
(200,518)
44,091
-
5,896,814
(6,030,247)
2,145,883
-
145,292
(109,985)
76,524,192
(95,813,608)
2,145,883
(200,518)
13,849,013
(109,985)
82,421,005
though profit or loss
The Bank performs its investment banking operations exercising strict control over the ratio between its assets
management needs and available capital. This management action on the Bank’s capital has been designed to cater
for any default in terms of capital requirements, exceeding reporting obligations and making it possible to simulate the
impacts of hypothetical management decisions on the diverse prudential ratios.
Capital management is designed to optimise the above referred to ratio, with a prudential margin providing for the
resolutions to be passed in terms of the Bank’s asset management.
36. CAPITAL MANAGEMENT
172
The Bank’s administration receives periodic internal reports permitting not only the monitoring of the resolutions taken
in asset management terms but also the gaps between real positions and their minimum respective capital
requirements.
The procedures used to calculate the Bank’s ratios and prudential limits are based on the dispositions issued by the
Bank of Portugal, as is the case for issues pertaining to the banking system’s supervisory functions. These regulations
represent the legal and regulatory framework governing various prudential matters.
The solvency ratio, at 31 December 2013 and 2012, was assessed as follows:
(euros)
Separate basis
2013
2012
Eligible own funds (Base+Complementary-Deductions) (1)
269,083,669
252,290,164
Basis own funds
262,324,263
245,966,442
81,250,000
81,250,000
Paid up capital
(-) Treasury shares
Legal, statutory and other reserves
-
-
135,992,577
116,756,794
Retained earnings from past years
58,550,496
58,550,496
(-) Intangible assets
(3,180,933)
(2,455,005)
(-) TREM II
(125,286)
(256,830)
(11,657,216)
(9,739,090)
(-) Deferred tax liabilities reserves resulting from the revaluation of available for sale assets
1,494,625
1,860,077
Complementary own funds
6,759,406
6,323,722
4,338,403
4,338,403
Revaluation differences on available for sale assets - positive fair value ( 45% )
2,421,003
1,985,319
-
-
Own funds requirements (2)
140,168,046
180,890,628
Credit and counterparty credit risk
100,563,606
140,244,067
(-) Revaluation differences on available for sale assets - negative fair value (gross of tax)
Provisions for general credit risks
(-) 8% Provisions for general credit risks - part not eligible for own funds
Position risks - debt instruments
Position risks - equity securities
Operational risk – standard method
Solvency ratio
(316,963)
(435,320)
27,169,012
29,380,746
938,062
216,436
11,814,329
11,484,699
15.36%
11.16%
Legend:
(1) According to Official Notice 6/10
(2) According to current legislation: Official Notices 5/07, 8/07, 9/07
173
4. Reports and opinions on the accounts
174
Report and Opinion of the Supervisory Board
175
REPORT AND OPINION OF THE SUPERVISORY BOARD
To Shareholders,
1. According to the dispositions of article 420 of the Commercial Companies Code, the Supervisory
Board is responsible for issuing a report on its inspection and an opinion on the report, accounts
and proposals submitted by the Board of Directors of CAIXA – Banco de Investimento, S.A.
(hereinafter CaixaBI) for the year ended 31 December 2013.
2. The inspection of CaixaBI is a responsibility of a Supervisory Board and a Statutory Auditor or a
Statutory Audit Company, which is not a member of the said body, as provided for in subparagraph b) of no. 1 of article 413 of the Commercial Companies Code and CaixaBI’s Articles of
Association.
3. CaixaBI’s Supervisory Board for the three year period 2011-2013, was elected at its Shareholders’
Meeting of 20 May 2011. In light of the expiry of the mandate of one of the Supervisory Board’s
members, under the terms of article 414-A no. 2 of the Commercial Companies Code and the
resignation of the Deputy to the Supervisory Board, at the Shareholders’ Meeting of 6 January
2012, a new Chairman and new Deputy Member of the Supervisory Board were elected to
complete the 2011-2013 term of office.
4. Pursuant to its responsibilities and taking into consideration the governance model adopted in
CaixaBI, the Supervisory Board has diligently monitored and inspected the management acts of
the Board of Directors, having, inter alia, scheduled regular meetings with the Board of Directors
and the Statutory Audit Company, in addition to having been given access to all documentation
and clarifications requested to improve its knowledge of the basis upon which decisions were
taken.
5. The Supervisory Board, on 06 June 2013, under the terms of sub-paragraph a) of no. 5 of article
25 of the Bank of Portugal (BoP) Official Notice 5/2008, issued its Opinion on the adequacy and
efficacy of CaixaBI’s Internal Control System, having concluded that the internal control system in
force in CaixaBI, in June 2013, was adequate and proportionate to the Bank’s specific
characteristics, although its results and degree of efficiency could always be improved.
6. The Supervisory Board, on 18 June 2013, under the terms of sub-paragraph b) of no. 2 of the BoP
Official Notice 9/2012, also issued its Opinion on the Internal Control System on Anti-Money
Laundering and Countering the Financing of Terrorism, having concluded that there is no
evidence of the existence of any flaws which could be qualified as being of high risk and that the
strategies, policies, procedures and control processes in force within CaixaBI, for the period June
2012 to May 2013, complied with legal and regulatory standards and were adequate to the
dimension, nature, complexity and risk attached to the activities performed and effective in terms
of anti-money laundering and countering the financing of terrorism activities, without prejudice to
recognising that anti-money laundering and the effective countering of financing of terrorism
activities require a strategy based on permanent reflection and ongoing improvements to
standards, procedures and instruments in force in the Bank.
7. The Supervisory Board analysed the Report on Corporate Governance produced by CaixaBI’s
Board of Directors and emphasises CaixaBI’s high level of compliance with Good Governance
Practice. The Supervisory Board also assessed the Governance Model in force within CaixaBI
and considers that it ensures an effective segregation between management and inspection
functions and is adequate for the activities performed by the Bank.
8. The Supervisory Board took note of CaixaBI’s high level of compliance with legal guidelines, in all
matters directly applicable to it, as pointed out in the Board of Directors’ Report on Corporate
Governance, namely as regards management objectives, special disclosure requirements,
arrears, compliance with the Shareholder’s recommendations, application of reductions to
remuneration, public contracting activities, the principle of equality between genders and
compliance with the cost reduction plan.
9. The Supervisory Board took note of the report issued by the Statutory Auditor on the half year
10. The Supervisory Board also took note of the impairment reports on CaixaBI’s loans and advances
to customers and its securities, produced every six months by the External Auditors, as
established by the Bank of Portugal in its circular letters nos. 17/2002/DSB of 14 February and
38/2008/DSB of 29 May.
11. As stated in the Board of Directors’ Report, 2013 was a positive year for CaixaBI in terms of
activity, in which the Bank came in a leading position in most of the league tables, having
participated in most of the operations occurring in Portugal. The furtherance of the Bank’s
internationalisation strategy for the Brazilian and Lusophone Africa markets, in tightening focus on
advisory and brokerage activities (less demanding in terms of liquidity and capital allocations), in
addition to ongoing cost containment, have enabled CaixaBI to achieve good results in earning
consolidated net commissions of € 54.3 million (up € 8.7 million over budget) even in a year
marked by a highly adverse macroeconomic context, characterised by high levels of investor risk
aversion.
12. The following were the main indicators of CaixaBI’s consolidated accounts for the year ended 31
December 2013:
(i)
Net assets were down 15% by € 365 million over the preceding year to € 2,009 million.
Special reference should be made to the 9% decrease of € 60 million in loans and
advances to customers to around € 587 million, in addition to the 39% decrease of €338
million in financial assets at fair value through profit or loss over 2012, to around € 537
million;
(ii)
The 19% decrease in liabilities, from € 2,082 million in 2012 to € 1,694 million in 2013,
particularly derived from the € 355 million decrease in financial assets at fair value
through profit or loss;
(iii)
Shareholders’ equity was up 8% by € 23 million over the preceding year to € 315 million,
largely owing to the € 5.9 million decrease in the negative amount of fair value reserves
and € 16 million increase in other reserves and retained earnings (from € 203 million in
2012 to € 219 million in 2013);
(iv)
Net interest income was down 9% over the preceding year (from € 28.2 million in 2012 to
€ 25.7 million in 2013), albeit still 9% over budget. Net operating income was up 7% by
around € 7 million over the preceding year from € 96 million in 2012 to € 103 million in
2013, largely on account of the positive income of € 22.8 million from financial assets, up
€ 15.5 million over 2012 and more than offsetting lower net commissions of € 4.3 million.
These improved results, recognised in financial assets, fundamentally derive from the
positive, one-off impact of around € 28.7 million in the recognition of CVA (credit valuation
adjustments) and DVA (debit valuation adjustments) in the derivatives portfolio,
essentially on account of the recognition of the margin being deferred over the maturity of
the respective contracts;
(v)
Provisions and impairment were up 29% over the preceding year from € 30.6 million in
2012 to € 39.4 million at the end of 2013. This change reflects the effects of CaixaBI's
prudent balance sheet risk hedging policy over the last few years, notably as regards the
credit and overdue amounts portfolio in the derivatives portfolio, in a particularly difficult
scenario for the Portuguese and Spanish economies, in which markets the Bank’s credit
and guarantees portfolio is concentrated;
(vi)
Reference should be made to the € 1.6 million increase in overheads over the preceding
year from € 23.4 million, in 2012, to € 25 million in 2013. Employee costs were up 8% by
€ 1.1 million from € 14 million to € 15.1 million), essentially on account of the restoring of
holiday and Christmas bonuses in 2013, not provisioned in 2012. Other administrative
expenses were up 7% over the preceding year from € 8.4 million in 2012 to € 9 million in
2013;
(vii)
Consolidated net income was up 2.5% by € 0.7 million over 2012 to € 28.2 million, in
which consolidated net income of 27.5 million had been posted;
(viii)
CaixaBI’s cost-to-income ratio of 24.1% remained clearly lower than that of its peers.
13. Reference should be made to the following indicators in terms of CaixaBI’s separate accounts for
the year ended 31 December 2013:
(i)
Net assets were down 16% by € 385 million over the preceding year to € 1,974 million.
Special reference should be made to the 12% decrease of € 80 million in loans and
advances to customers to around € 571 million, in addition to the 39% decrease in the
financial assets held for trading portfolio over 2012 (down € 339 million), to around € 531
million;
(ii)
The 19% decrease in liabilities, from € 2,096 million in 2012, to € 1,794 million in 2013,
particularly derived from the decrease of € 355 million in financial liabilities held for
trading;
(iii)
Shareholders’ equity was up € 8 million over the preceding year to € 270 million, largely
on account of the € 7.3 million decrease in the negative value of the revaluation reserves
and recognition of a € 20 million increase in other reserves and retained earnings (from
€ 175 million in 2012, to € 195 million in 2013);
(iv)
CaixaBI’s Separate Net Income for the year ended 31 December 2013 was down € 18.6
million over 2012 to € 0.6 million (separate net income of € 19.2 million). Separate net
income was heavily penalised by provisions, impairment and adjustments increases
associated with loans and advances to customers and particularly the approximate € 12
million in impairment on the brokerage company in Brazil (CGD Securities) and
recognition of loan provisions of € 14 million, incorporating the requirements of BdP’s
Official Notice 3/95;
(v)
CaixaBI’s separate solvency ratio remained a solid 15.4%, as opposed to the ratio
recognised in prior years (11.2% in 2012).
14. In the period following the year end closure of the accounts and in the sphere of the functions
provided for in the Commercial Companies Code, the Supervisory Board, in technical articulation
with the Statutory Auditors, analysed the Annual Report and the Separate and Consolidated
Accounts for 2013, as submitted by CaixaBI ‘s Board of Directors.
15. The Supervisory Board also considered the contents of the “Statutory Audit Certificates” issued by
the Statutory Auditor on CaixaBI’s Separate and Consolidated Accounts for the year ended 31
December 2013, encompassing the Statements of Financial Position, Income Statements,
Comprehensive Income, Changes to Shareholders’ Equity and Cash Flows for the year and their
corresponding annexes.
16. OPINION:
Taking all of the above into due consideration, it is the Supervisory Board’s opinion that the Shareholders’
Meeting should:
a) approve the Board of Directors’ Report and the Separate and Consolidated Accounts for 2013, as
submitted by CaixaBI’s Board of Directors;
b) consider the proposal for the appropriation of net income which is an integral part of the Board of
Directors’ Report;
c) undertake a general appraisal of the Company’s Management and Inspection and draw the
conclusions referred to in article 455 of the Commercial Companies Code.
Lisbon, 13 March 2014
SUPERVISORY BOARD
(Chairman)
Pedro António Rodrigues Felício
(Member)
(Member)
Issue of Statutory Audit Certificate – Consolidated Accounts
180
STATUTORY AUDIT CERTIFICATE
ON THE CONSOLIDATED ACCOUNTS
(amounts in euros)
Introduction
1.
We have examined the attached consolidated financial statements of Caixa - Banco de Investimento,
S.A. (Bank) and its Subsidiaries, comprising the Statement of its Consolidated Financial Position, at
31 December 2013, totalling € 2,008,570,770 and shareholders’ equity of € 314,834,955, including
net income of € 28,155,765, the Consolidated Statements of Comprehensive Income, Changes to
Shareholders’ Equity and Cash Flows for the year then ended and corresponding Notes.
Responsibilities
2.
It is the responsibility of the Board of Directors to prepare consolidated financial statements which
provide a true and appropriate description of the financial position of the companies included in the
consolidation, their consolidated results and comprehensive income from their operations, changes to
consolidated shareholders’ equity and consolidated cash flows, in addition to using adequate
accounting policies and criteria and maintaining appropriate internal control systems. It is our
responsibility to express a professional, independent opinion thereon, based on our examination of
the said financial statements.
Scope
3.
Our examination was performed in conformity with the Technical Standards and Revision/Audit
Directives of the Portuguese Order of Statutory Auditors, which require that the examination be
planned and executed with the objective of obtaining an acceptable degree of assurance as to
whether the consolidated financial statements contain any materially relevant distortions. The
examination included the verification of samples of the supporting documents upon which the
amounts and information disclosed in the financial statements are based and an assessment of
estimates based on judgements and criteria defined by the Board of Directors and used for the
preparation thereof. The examination also included verification of the consolidation operations and
the application of the equity accounting method and whether the financial statements of the
consolidated companies have been appropriately examined; an appraisal of the suitability of the
accounting policies used, their uniform application and disclosure, based on the circumstances,
verification of the applicability of the going concern principle and whether the overall presentation of
the consolidated financial statements is adequate. Our examination also included the verification of
concordance between the consolidated financial information contained in the Board of Directors’
report and the consolidated financial statements. We consider that our examination has provided us
with an acceptable basis upon which to express our opinion.
Opinion
4.
In our opinion, the consolidated financial statements, referred to in paragraph 1 above, provide a true
and appropriate description, in all materially relevant aspects, of the consolidated financial position of
Caixa - Banco de Investimento, S.A. and its subsidiaries at 31 December 2013, the consolidated
income and comprehensive income generated by their operations, changes to their consolidated
shareholders’ equity and consolidated cash flows for the year then ended in conformity with the
International Financial Reporting Standards, as adopted by the European Union.
Report on Other Legal Requirements
5.
It is also our opinion that the financial information contained in the Board of Directors’ Report is in
conformity with the financial statements for 2013.
Deloitte & Associados, SROC S.A.
Represented by João Carlos Henriques Gomes Ferreira
Issue of Statutory Audit Certificate – Separate Accounts
183
STATUTORY AUDIT CERTIFICATE
ON THE SEPARATE ACCOUNTS
(amounts in euros)
Introduction
1. We have examined the attached financial statements of Caixa - Banco de Investimento, S.A. (Bank)
comprising the Statement of its Separate Financial Position at 31 December 2013, with total assets of
€ 1,974,016,067 and shareholders’ equity of € 270,479,940 including net income of € 647,599, the
Separate Income and Comprehensive Income Statements, Changes to Shareholders’ Equity and Cash
Flows for the year then ended and corresponding Notes.
Responsibilities
2. It is the responsibility of the Board of Directors to prepare financial statements which provide a true and
appropriate description of the Bank’s financial position, its results and comprehensive income from its
operations, changes to shareholders’ equity and cash flows, in addition to using adequate accounting
policies and criteria and maintaining an appropriate internal control system. It is our responsibility to
express a professional, independent opinion thereon, based on our examination of the said financial
statements.
Scope
3. Our examination was performed in conformity with the Technical Standards and Revision/Audit
Directives of the Portuguese Order of Statutory Auditors, which require that the examination be
planned and executed with the objective of obtaining an acceptable degree of assurance as to whether
the financial statements contain any materially relevant distortions. The examination included the
verification of samples of the supporting documents upon which the amounts and information disclosed
in the financial statements are based and an assessment of estimates based on judgements and
criteria defined by the Board of Directors and used for the preparation thereof. The examination also
included an appraisal of the suitability of the accounting policies used and their disclosure, based on
the circumstances, verification of the applicability of the going concern principle and whether the
overall presentation of the financial statements is adequate. Our examination also included the
verification of concordance between the financial information contained in the Board of Directors’ report
and the financial statements. We consider that our examination has provided us with an acceptable
basis upon which to express our opinion.
Opinion
4. In our opinion, the separate financial statements, referred to in paragraph 1 above, provide a true and
appropriate description, in all materially relevant aspects, for the purposes of paragraph 5 below, of
Caixa - Banco de Investimento, S.A.’s financial position at 31 December 2013, the net income and
comprehensive income generated by its operations, changes to shareholders’ equity and cash flows
for the year then ended, in conformity with the “Adjusted Accounting Standards” issued by the Bank of
Portugal (Note 2).
Emphasis of Matters
5. The financial statements mentioned in paragraph 1 above refer to the Bank’s separate activity and
have been prepared for approval and publication under the terms of current legislation and the
requirements of the Bank of Portugal. As noted in Item 2.7 of the Notes, investments in subsidiaries,
associates and jointly-controlled entities are recognised at their acquisition cost, and the attached
financial statements do not therefore include the integral consolidation effect nor the application of the
equity accounting method which shall be realised in the consolidated financial statements to be
approved and published separately. Item 13 to the Notes provides additional information on subsidiary
companies and associates.
Report on Other Legal Requirements
6. It is also our opinion that the financial information contained in the Board of Directors’ report is in
conformity with the financial statements for 2013.
Deloitte & Associados, SROC S.A.
Represented by João Carlos Henriques Gomes Ferreira
Corporate governance report
186
1 Assessment of compliance with good governance principles
Obligations and responsibilities of companies in the state’s business sector
Level of compliance
To comply with their mission and objectives.
Accomplished (item 2)
To produce activity plans and budgets adequate to the available funding sources.
To disclose annual information on the way in which the mission has been performed, level of compliance with
objectives and the manner of fulfilment of the social responsibility policy, sustainable development policy and the
terms of the provision of a public service and to what extent its competitiveness has been safeguarded, notably based
Accomplished (item 2/9)
on research, development, innovation and the development of new technologies in the productive process.
Compliance with the anti-corruption regulation and regulations in force.
Adopting or adhering to a code of ethics requiring demanding ethical and deontological behaviour, divulging it among
all employees, customers, suppliers and the general public.
Equal treatment for all customers and suppliers and other titleholders of legitimate interests, namely company
employees, other creditors other than suppliers or, in general, any entity having a legal relationship with the company.
Accomplished (items 3)
To further social and environmental objectives, consumer protection, investment in professional training and
promotion of equality and non-discrimination, protection of the environment and respect for the principles of legality
and corporate ethics.
To implement human resources policies geared to individual advancement, strengthening motivation and stimulating
productivity, treating workers with respect and integrity and making an active contribution to their professional
advancement.
To adopt equality plans tending to achieve effective equality and opportunities for men and women, eliminating
discrimination and enabling personal, family and professional lives to be reconciled.
Prevention of conflicts of interest
Members of the Board of Directors should abstain from intervening in decisions involving their own interests, namely
the approval of their own expenses.
Members of the Board of Directors should declare any equity stakes they may have as well as any relationship they
maintain with suppliers, customers, financial institutions or any business partners which may create conflicts of
interest.
Disclosure of information
As state-owned companies operating in a fully competitive marketplace, they should disclose information on the
composition of their equity structure; identify investment stakes they may hold; acquisitions and disposals of equity
stakes and investment in any associative or foundational entities; level of fulfilment of defined objectives, justification
of any deviations and corrective measures applied or to be applied; documents pertaining to the annual accounts; the
identity and CVs of all members of their statutory bodies and their respective remuneration and other benefits; annual
information on how the mission was performed, level of compliance with objectives, social responsibility policy,
Accomplished (items
2/3/5/6/8//9)
sustainable development and terms of the provision of a public service and to what extent its competitiveness has
been safeguarded, namely through research, development, innovation and the integration of new technologies in the
productive process; a report on the prevention of corruption, identification or risk of occurrences; adoption of a code of
ethics.
company; the identity and CVs of all members of their statutory bodies; respective remuneration and other benefits of
all members of statutory bodies.
Good corporate governance reports
To annually submit a good corporate governance report containing up-to-date information on all issues relative to
good governance practice.
The public sector companies’ website should also contain historical and current financial information on each
187
2 Management guidelines, mission, objectives and corporate
policies
Information on management guidelines applicable to CaixaBI, namely strategic guidelines
for the state’s corporate sector as a whole, general guidelines on the financial sector and
specific guidelines for CaixaBI
CaixaBI, as CGD Group’s investment bank, complies with the strategic guidelines defined both for the
state’s corporate sector as a whole and CGD Group in particular.
Compliance with legal guidelines on income obtained in the scope of compliance with
shareholders’ recommendations
The shareholders did not issue any additional recommendations at the time of the approval of the 2012
accounts.
Mission
CaixaBI’s priority mission is to promote an investment banking business platform between Portugal,
Spain, Brazil and Lusophone Africa, in its different business areas, providing customers with an integrated
financial service with an international dimension in any of the above mentioned geographies.
This mission is horizontal to the different product areas: project finance, structured finance, brokerage,
corporate finance – advisory, debt capital market, equity capital market, research, finance and structuring
areas, syndication and sales and venture capital.
Principal strategic objectives
The strategic objectives defined by CaixaBI include:

To operate as a services provider in a context of liquidity restrictions.

To consolidate its leading position in investment banking in Portugal.

To strengthen synergies with CGD Group, exploiting cross-selling potential with other commercial
(branch office network).

To develop the SME segment, based on an integrated approach with the Group’s Corporate Offices,
providing Caixa Geral de Depósitos customers with a high level of value added service to
complement the offer of the Group’s other units.

To make an active contribution to CGD Group’s credit risk management, providing advisory services
in liabilities’ reorganisation processes for customers with a relevant level of consolidated debt with the
aim of avoiding defaults and minimising their respective impacts.
units, covering the areas of relationships with major companies, SMEs and equity market investors
188

To increment cross-selling operations between venture capital and investment banking areas,
coordinating the processing of operations and providing customers with higher value added services.

In close cooperation with other Group units, to back the business growth of CGD Group customers,
both in the domestic market and in their internationalisation strategies for markets in which the Group
already has a major presence (particularly, Brazil, Angola and Mozambique), providing customers
with a comprehensive, diversified, high value added portfolio of services and benefiting from its
excellent knowledge of local markets.

In Brazil, to focus on opportunities generated by the need for investment in infrastructures and the
internationalisation activities of Brazilian companies to Iberia and Lusophone Africa.

In Lusophone Africa, to focus on the opportunities afforded by strong economic growth potential,
based on its significant natural resources and development of infrastructures, in addition to the major
interest they attract in terms of foreign direct investment and particularly for players in CaixaBI’s other
core markets.

To invest in Portuguese business relationships with any of the geographies - Portugal, Spain, Brazil,
Angola, Mozambique and Macau/China as the development hub.

To reposition the Bank in Spain as a services provider, actively endeavouring to increase its visibility
with Spanish companies and investors.

To affirm market leadership on a venture capital basis, favouring the development of industry,
entrepreneurship, innovation and sustainability, encouraging new globalisation players and
strengthening national decision-making centres.

To reconfigure CGD Group’s venture capital area, ensuring an integrated outlook on resources,
based on a complementary approach, anticipating opportunities, strengthening partnerships and
mobilising investors
Information on the annual production of an activities plan and a report providing
information on compliance with the company’s mission, objectives and policies,
including social responsibility and sustainable development polices and safeguarding
competitiveness through research, innovation and the integration of new technologies in
terms of production
quantifying the strategic objectives for its business units over the medium term.
A management information system, comprising a vast range of periodic reports on various areas of
activity comprises a part of the execution of the approved activity plan.
A description of the Bank’s activity and an analysis of its economic, social and environmental
responsibility is submitted every year in the Annual Report.
CaixaBI develops an annual planning process as part of its activities and budget plan with the aim of
189
3 General operating principles
Internal and external regulations binding upon CaixaBI
CaixaBI is subject to European and domestic legislation on its activity, in which special reference should
be made, internally, to the General Credit Institutions and Financial Companies Regime (RGICSF)
approved by Decree Law 298/92 of 31 December and republished in Decree Law 01/2008 of 3 January
and the successive changes thereto, the Securities Market Code approved by Decree Law 486/99 of 13
November, republished in Decree Law 357-A/2007 of 31 October and the successive changes thereto and
all regulatory standards issued by the Bank of Portugal and the Securities Market Commission.
CaixaBI is also governed by its articles of association and a series of internal standards and procedures
(Standards and Procedures System) which have been adapted both to the evolution of domestic and
European legislation on its activity, and the regulatory standards issued by supervisors, i.e. Bank of
Portugal and the Securities Market Commission. This system of standards and procedures which covers
the most relevant aspects of the operation and performance of the Bank’s activity has been published on
its intranet and is accessible to all employees.
Code of conduct
Of the standards which are included in CaixaBI’s Standards and Procedures System, reference should be
5
made to its Code of Conduct which sets out the principles of impartiality and transparency which should
govern banking activity and the standards of professional behaviour to be complied with by all employees
in the performance of their functions. CaixaBI’s Code of Conduct includes internal standards on
professional deontology and establishes the respective directives with which all workers are familiar. Any
bank stakeholder may consult the code on its website at www.caixabi.pt.
Reference should also be made, in the ethical and deontological sphere, to the internal standards relating
to privileged information and professional secrecy.
Equality of treatment
CaixaBI’s activities comprise its strict compliance with equal treatment for all customers and suppliers and
other holders of legitimate interests, namely employees, other creditors other than suppliers or, in general,
Anti-money laundering and countering the financing of terrorism
Anti-money laundering and countering the financing of terrorism (AML/CFT) is one of CaixaBI’s concerns
in the framework of CGD Group policy.
5
CaixaBI’s Code of Conduct was published in July 2002 and updated in 2006, 2008 and 2011
any entity with which a legal relationship exists.
190
In the sphere of the compliance risk model adopted, CaixaBI’s Compliance Office is responsible for
guaranteeing compliance with obligations in terms of AML/CFT, translating into the ongoing
implementation of an AML/CFT programme.
The management and prevention of AML/risk is based on a risk-based approach, as recommended by the
domestic and international authorities. The application of this approach in line with and adapted to
CaixaBI’s characteristics has enabled the production of a programme which is underpinned by its
implementation capacity vis-à-vis the Bank’s specific circumstances and is accessible to all employees on
the intranet and complemented by specific training actions.
Prevention of market abuse
The prevention of market abuse, as regards insider trading and market manipulation aspects is one of
CaixaBI’s concerns in the framework of CGD Group policy.
The prevention of market abuse translates into training actions, the implementation of system filters and
monitoring of transactions, with the objective of mitigating risks associated with market abuse.
Compliance with legislation and regulation
CaixaBI’s activity is geared to strict compliance with legal, regulatory, ethical and deontological standards
and good practice. Its respective compliance is monitored by an internal control system within the Bank.
CaixaBI has adopted an ethically irreproachable attitude to the application of fiscal, anti-money
laundering, competition, consumer protection, environmental and labour regulations.
The Bank has various regulations, particularly the following on account of their importance: anti-money
laundering handbook, conflicts of interest policy, counterparties’ and correspondents’ handbooks, credit
operations procedures handbook, compliance regulations handbook, opening and use of accounts,
prevention of market abuse policy, business continuity plan, global security of information policy, research
office conduct and procedures handbook – financial analysts, management handbook for operational risk
and the management and processing of complaints.
There are also internal regulations for financial brokerage activities, binding on employees, which define
standards and procedures to be complied with in financial brokerage activities, prepared on the basis of
the dispositions on this subject matter, namely the Securities Code and dispositions issued by the
The Bank’s regulations have also been designed to promote professional and personal advancement
policies for its workers, performance management, the performance of functions or activities outside the
Bank, treatment of all workers with dignity and respect, equality of treatment and equal opportunity
between men and women, reconciliation between personal, family and professional lives, employee loans
and career models.
CaixaBI’s human resources management aims to build a solid, responsible team, capable of meeting
market challenges and permanently satisfying the needs and requirements of the Bank’s customers, with
supervisory authorities (Bank of Portugal and Securities Market Commission).
191
a permanent capacity to innovate and achieve its strategic objectives. Based on CaixaBI’s values and
institutional culture, human resources management translates, inter alia, into the following aspects:

Training: knowledge management geared to the development of employees’ talents, including
technical training (postgraduate courses, masters, MBAs, etc.) and the possibility of language tuition
in English and Spanish on the Bank’s premises.

Performance appraisal: implementation of an employee grading and recognition system.

Working environment: promotion of a healthy working environment and harmonisation between
work, family and leisure as complementary dimensions of the organisation itself.
CaixaBI considers talent, the development of its workers’ capacities and skills and the creation of the best
balance between professional and personal lives to be strategic human resources management thrusts.
The stability of its staff is a paramount concern of the Bank’s human resources policy in providing workers,
notwithstanding its attention to cost containment, with opportunities for professional advancement either in
the form of masters and postgraduate qualifications in the financial area or language tuition at the Bank as
well as participation in various seminars or occasional training activities in Portugal and abroad.
CaixaBI guarantees equality of treatment and opportunity to all employees as well as the non-existence of
discriminatory factors. There is no discrimination in matters of recruitment and on-the-job training involves
students and professionals from various geographies.
Notwithstanding the adverse economic context, CaixaBI has continued to develop curricular placement
programmes, providing recent graduates with their first contact with the labour market and, in some cases,
the opportunity for a career in investment banking.
CaixaBI also has a family-responsible culture, having, over the course of time implemented a series of
measures in support of workers and their families, with the aim of achieving better reconciliation between

Special mortgage and personal loans;

Healthcare policy including immediate family members.

Protocols with diverse entities providing special terms for workers and their families.

Access to Caixa Geral de Depósitos’s Culture, Sport and Leisure Centre, which includes sociocultural and sports activities which are also available to family members and particularly include
children’s holiday camps.
professional and family or personal activities, of which:
192
4 Relevant transactions with related parties
All CGD Group companies are considered to be CaixaBI’s related parties.
The following operations comprised the most relevant transactions with related parties:


Caixa Capital – Sociedade de Capital de Risco, S.A.


FCR Grupo CGD - Caixa Capital

Locarent – Companhia Portuguesa de Aluguer de Viaturas, S.A.

At 31 December 2013, CaixaBI’s financial statements included the following balances and transactions
with related parties:
2013
(€ thousand)
Caixa Capital
Other CGD Group
CGD
Companies
Assets
634
27
4,878
1,715
Securities and trading derivatives
45,172
284
1,185
5,882
156
8
75
1
Other assets
25
Liabilities
540,162
315,233
12,053
Hedge derivatives with a negative fair value
122
53,880
935
Debt securities
Subordinated liabilities
Other liabilities
9
8
360
32,272
311
Guarantees provided
454,323
413
2,073
1,646
261
197
157
131
170,411
812
169,453
147
Commissions
29
952
98
25
17
52
Costs
Losses on financial operations
Income
193
Procedures for the acquisition of goods and services
CaixaBI has transparent procedures in place for the acquisition of goods and services, based on selection
criteria geared to principles of economy and effectiveness, with internal regulations defining the
procedures to be used for the selection of and relationship with suppliers under an outsourcing regime.
The procedures are described below:

Market enquiries – at least three suppliers per product are normally consulted;

Selection of suppliers – based on a comparison between the proposals received;

Expenditure – in accordance with the appropriate authorisation;

Contracts with goods suppliers/service providers – in writing or a formal contract.
Reference should be made to the following regarding the selection of suppliers:

The following factors, when related with the guarantees put up by competitors, are subject to the
Bank’s technical qualification and assessment:
-
The quality of the service provided, from level of performance to availability of solution;
-
The quality of the offered products;
-
Fulfilment of conditions and requirements identified and respective performance, which should
be set out in tender documents to be supplied by CaixaBI, to be delivered when consulting
competitors;

The functional, transversal nature of the current or potential solution;
-
Compliance with the agreed schedule.
Based on the same approach, the following factors should be assessed and qualified:
-
Adequacy vis-à-vis technical criteria;
-
The capacity to integrate with solutions already existing within CaixaBI or CGD Group;
-
The existence of successful indices in similar projects;
-
Commitment to levels of service;
-
Presentation of commercial and financial terms.
Lastly, differentiating factors should be considered, such as:
-
Track record of relationship with CaixaBI;
-
Track record of relationship with CGD Group companies;
-
Effective independence vis-à-vis CGD Group’s direct competitors;
-
Financial stability and seniority;
-
Possession of ISO certifications;
-
Supplier’s technical qualification, experience and professionalism;
-
Ethical behaviour attuned to the principles of social responsibility and sustainability defended by
CaixaBI;
-
Customer references (projects and customer portfolios);
-
Benefits accruing from the establishing of a medium/long term relationship.

-
194
The safeguarding of the correct implementation and maintenance of projects and applications systems
should be set out in a CaixaBI tender document. The contracting process implies a supplier’s acceptance
of and automatic agreement to the Bank’s monitoring and/or inspection activities, at the implementation
and/or maintenance stages and the tender documents should therefore be binding, using general
terminology revised by the Legal Affairs Office but notably covering:

Definition of levels of quality of service;

Definition of adequate monitoring mechanisms for the effective control of the levels of quality of
service;

Secrecy undertaking regarding information obtained as part of the services provided;

Functionality/operability and, if appropriate, transversality of the tests.
Transactions which have not been made under market conditions
Contracts usually entered into with CGD Group companies, without consulting the market refer to:

Insurance – with Companhia de Seguros Fidelidade-Mundial;

Vehicles renting – with Locarent - Companhia Portuguesa de Aluguer de Viaturas, SA.
List of suppliers representing more than 5% of external supplies and services on an
individual basis
The following suppliers represented more than 5% of external supplies and services on an individual
basis, in 2013:

Bloomberg L.P.

Capgemini Portugal

Locarent – Companhia Portuguesa de Aluguer de Viaturas, S.A.

Thomson Reuters (Markets) Europe, S.A. – Portugal Branch
Evolution of average payment period to suppliers
The evolution of the average payment period to suppliers, in 2013, was as follows:
nd
rd
th
2 quarter
3 quarter
4 quarter
37
30
42
22
Compliance with public contract guidelines
The Public Contracts Code approved by Decree Law 18/2008 of 29 January, does not apply to CaixaBI.
However, CaixaBI uses the services of Sogrupo – Compras e Serviços Partilhados, Agrupamento
Complementar de Empresas whose mission is to provide services related with human resources
management, negotiation and management of goods and services, based on a CGD Group shared
services unit approach, centralising its activities and common processes, endeavouring, on the basis of
st
1 quarter
195
economies of scale and knowledge, to reduce costs, maximise productivity and improve the quality of the
service provided.
Implementation of rationalisation measures for goods and services provisioning policies
CaixaBI, as in the case of Caixa Geral de Depósitos, S.A., although not a National Public Procurement
System (SNCP) subscriber, has developed the rationalisation of procurement policies for goods and
services, through the use of Sogrupo – Compras e Serviços Partilhados, Agrupamento Complementar de
Empresas, whose activity is subject to a collection of internal and external regulations in line with SNCP
procedures.
196
5. Corporate model
CaixaBI’s governance model, which ensures effective segregation between administration and inspection
functions, comprises its General meeting, Board of Directors, Supervisory Board and Statutory Auditor,
other than a member of the Supervisory Board.
CaixaBI Organisational Chart
Shareholders’ Meeting
Supervisory Board and
Statutory Auditor
Remuneration
Committee
Board of Directors
Executive Committee
Committees
Business Committee
Credit Committee
Investments Committee
Operational Risk and
Internal Control
Managment Committee
Steering Committee
Business Continuity
Plan
Corporate Finance Advisory
Marco Lourenço
Finance and Structuring
Francisco Santos
Business Areas
Project Finance
Carlos Figueiredo
Structured Finance
João Beatriz
Corporate Finance - Debt
Paulo Serpa Pinto
Brokerage
Research Office
Ana Santos Martins
Leonor Canedo
Valentim Martins
João Miguel Lourenço
Support Areas
Strategic Planning and
Organisation
Information Systems
Ema Campos
Human and Administrative
Resources
António Carlos Alves
Rita Lourenço
Marketing and
Communication
Operations
Miguel Freire
António Gregório
Compliance
Legal Affairs
Internal Audit
Ália Silva
Ana Andrade
Fernando Oliveira
Accounting
João Gonçalves
197
5.1. Statutory bodies
Shareholders’ General Meeting Board
The Shareholders’ General Meeting Board comprises a Chairman and two Secretaries, elected for three
year terms of office by the Shareholders’ General Meeting and may be re-elected on one or more
occasions.
Article 10 of CaixaBI’s articles of association states that all shareholders with one thousand or more
shares registered in their name in the company’s share books are entitled to be present at a
Shareholders’ General Meeting, with each block of one thousand shares being entitled to one vote in
accordance with no. 2 of article 14.
Shareholders with less than one thousand shares may form groups to make up this number and arrange
to be represented by any group member, to be indicated in a letter to the Chairman of the Shareholders’
General Meeting Board. In the case of the joint ownership of shares, only one of the owners may
participate in General Meetings, and must be given a power of attorney by the others.
Shareholders may arrange to be represented at General Meetings by informing the Chairman of the
Shareholders’ General Meeting Board, by letter, prior to the meeting’s scheduled date. Shareholders who
are singular persons may arrange to be represented by other shareholders or other lawfully entitled
persons. Collective persons shall be represented by the person nominated for the purpose in question.
The Chairman of the Shareholders’ General Meeting Board shall call an extraordinary meeting whenever
requested by shareholders with the minimum number of shares required by law and who request the
meeting in a letter with a notarised signature providing precise information on the issues to be included on
the agenda and justifying the need for the meeting. A General Meeting called at the request of
shareholders shall only be held if petitioners holding the minimum number of shares required to call the
meeting are present.
There are no limitations on voting rights, nor does any shareholder enjoy special rights and there is no
knowledge of any shareholders’ agreement.
Composition of the Shareholders’ General Meeting Board (2011-2013)
Chairman – José Lourenço Soares
Secretary – Ana Cristina Pinheiro Vieira Rodrigues de Andrade
Secretary – Salomão Jorge Barbosa Ribeiro
198
Board of Directors
The Board of Directors comprises a minimum of three and maximum of fifteen members, elected for three
year terms of office by the Shareholders’ General Meeting and may be re-elected on one or more
occasions. The Board of Directors shall choose its Chairman and may, at its discretion, appoint one or
more Deputy Chairmen from among their number.
The Board of Directors is responsible for managing the company’s business affairs and meets whenever
called by its Chairman and at least once every three months. Resolutions are taken by an absolute
majority of the members present or represented with the Chairman, Deputy Chairman or respective
Deputy having the casting vote. Board of Directors’ resolutions are only valid when more than half of its
members are present or represented.
In statutory terms, the Board of Directors delegates the authority to manage the company’s day-to-day
affairs to the Executive Committee giving it (without prejudice to the faculty of taking upon itself any of the
respective competencies) the authority necessary to make decisions on all issues related to the Bank’s
performance of its activity, with the exception of those issues which cannot be delegated under no. 4 of
article 407 of the Commercial Companies Code.
The Board of Directors met eight times in 2013 and the Executive Committee met twenty nine times.
Composition of the Board of Directors (2011-2013)
Chairman – Jorge Telmo Maria Freire Cardoso
Chief Executive Officer – Joaquim Pedro Saldanha do Rosário e Souza
Executive member – Francisco José Pedreiro Rangel
Executive member – Paulo Alexandre de Oliveira e Silva
Executive member – Paulo Alexandre da Rocha Henriques
Non-executive member – José Pedro Cabral dos Santos
Non-executive member – José Manuel Carreiras Carrilho
199
Supervisory Board
The Supervisory Board is responsible for supervising the company. It meets and establishes the contacts
considered adequate for collecting all and any pertinent information on the Bank and other companies
included in the consolidation and also acts as the liaison between CaixaBI and the External Auditor.
The Supervisory Board is made up of three permanent and one deputy member who perform their duties
as set out by law. It is elected every three years by the General Meeting, which also appoints its
respective Chairman. Members are lawfully entitled to be re-elected.
Members of the Supervisory Board are not affected by the incompatibilities referred to in article 414-A of
the Commercial Companies Code and are mainly independent professionals in conformity with the
recommendation set out in the Bank of Portugal’s circular letter 24/2009/DSB and article 414 nos. 5 and 6
of the Commercial Companies Code.
Composition of the Supervisory Board (2011-2013)
Chairman – Miguel José Pereira Athayde Marques
Member – Pedro António Pereira Rodrigues Felício
Member – Maria Rosa Tobias Sá
Deputy – João Manuel Barata da Silva
Statutory Auditor
The Statutory Auditor is elected every three years by the General Meeting with the competencies defined
by law. There is a deputy Statutory Auditor.
Statutory Auditor (2011-2013)
Permanent - Deloitte & Associados, SROC represented by João Carlos Henriques Gomes Ferreira
Deputy - Carlos Luís Oliveira de Melo Loureiro
200
Curricula Vitae of Members of the Board of Directors and Supervisory Board
a)
Board Members
Chairman
Jorge Freire Cardoso
Date of birth

08 August 1971
Current positions

Member of the Board of Directors and Member of the Executive Committee of Caixa Geral de
Depósitos, S.A., since July 2013

Non–executive Chairman of the Board of Directors of Caixa – Banco de Investimento, S.A. since
August 2013

Non–executive Chairman of the Board of Directors of Caixa Capital – Sociedade de Capital de
Risco, S.A., since August 2013

Non–executive Chairman of the Board of Directors of CGD Investimentos, Corretora de Valores e
Câmbio S.A. since May 2012

Non–executive Vice Chairman of the Board of Directors of Banco Caixa Geral Brasil, S.A. since
September 2013

Non–executive Member of the Board of Directors of Caixa Seguros e Saúde, SGPS, S.A., since
August 2013
Non–executive Member of the Board of Directors of Gerbanca, SGPS, S.A. since August 2013

Non–executive Member of the Board of Directors of Partang, SGPS, S.A. since September 2013

Non–executive Member of the Board of Directors of Wolfpart SGPS, S.A. since November 2013

Non–executive member of the Board of Directors of Enternext, S.A. since September 2013

Chairman of the Executive Committee of Caixa – Banco de Investimento, S.A. (2011 – 2013)

Member of the Board of Directors of Caixa – Banco de Investimento, S.A. (2008 – 2011)

Director of CaixaBI Brasil – Serviços de Assessoria Financeira LTDA, (2012 – 2013)

Vice Chairman of the Board of Directors of Banco Nacional de Investimento, S.A. (2012)

Non–executive Member of the Board of Directors of ZON – Serviços de Telecomunicações e
Multimédia, SGPS, SA. (2008 – 2012)

Non–executive Member of the Board of Directors of Empark Portugal – Empreendimentos e
Exploração de Parqueamentos, S.A. (2010 – 2012)

Non–executive Member of the Board of Directors of Dornier, S.A. (2010 – 2012)

Non–executive Member of the Board of Directors of Fomentinvest, SGPS, S.A. (2007 – 2008)

Managing Director of the Corporate Finance – Equity Division at Caixa – Banco de Investimento,
S.A., supervising the Equity Capital Markets, Financial Advisory and Mergers and Acquisitions
Areas (2000 – 2008)


Director of Corporate Finance at Banco Efisa (1995 – 2000)
Consultant at Roland Berger & Partners (1993 – 1994)
Former positions

201
Chairman
Jorge Freire Cardoso
Academic
qualifications
Other qualifications /

MBA from INSEAD

Degree in Economics from Universidade Nova de Lisboa

Guest Assistant Professor at FEUNL
distinctions
202
Chairman of Executive Committee
Date of birth

03 October 1970
Current positions

Member of the Board of Directors of Caixa – Banco de Investimento, S.A., since April 2012

Non–executive Member of Corporación Interamericana para el Financiamento de Infraestructura
(CIFI), since July 2012

Non–executive Member of the Board of Directors of CGD Investimentos Corretora de Valores e
Câmbio, S.A., since July 2012

Non–executive Member of the Board of Directors of Banco Caixa Geral – Brasil, S.A., since June
2012

Director of CaixaBI Brasil – Serviços de Assessoria Financeira Ltda, since November 2013

Representative of Portuguese – Brazilian Chamber of Commerce and Industry since May 2012

Representative of American Chamber of Commerce in Portugal since August 2012

Brokerage

Areas of

responsibility

Audit

Marketing and Communication

International

Non–executive Member of the Board of Directors of Banco Nacional de Investimento, SA (BNI),
Former positions
from May to December 2012

Fund manager of Nau Capital LLP, from 2010 to 2012

Advisor to Dilligence Capital SGPS, from 2009 to 2012

Partner and Senior Investments Analyst at Dynamo Capital LLP, from 2006 to 2009

Business Development Director of Portugal Telecom Brasil, from 2004 to 2006

CFO and Vice – Chairman of Primesys (Portugal Telecom Group), from 2004 to 2006

Business Development and M&A Director of Vivo (Portugal Telecom Group / Telefonica), from 2001
Business Development Director of PT Móveis (Portugal Telecom Group), from 2000 to 2001

Senior M&A Director at Banco Finantia, from 1999 to 2000

Summer Associate of Lehman Brothers International in 1998

Corporate Finance Associate at Banco Efisa, from 1995 to 1997

Business Analyst at Roland Berger Strategy Consultants from 1994 to 1995
Academic

MBA from Darden Graduate School of Business Administration, University of Virginia
qualifications

Degree in Economics with specialisation in Finance from Universidade Nova de Lisboa
to 2004

203
Executive Member
Date of birth

29 September 1971
Current positions

Executive Member of the Board of Directors of Caixa – Banco de Investimento, S.A., since
September 2011
Areas of
responsibility
Former positions

Financing and Structuring

Corporate Debt Finance

Project Finance

Strategic Planning and Organisation

Information Systems

Compliance

Human Resources

Managing Director of the Strategic Planning and Organisation Division at Caixa – Banco de
Investimento, S.A. (2011)

Managing Director of Corporate Finance – Advisory Division at Caixa – Banco de Investimento, S.A.
(2008 – 2011)
Academic

Director of Corporate Finance – Advisory at Caixa – Banco de Investimento, S.A. (2000 – 2008)

Research Director at Banco Mello de Investimentos (1996 – 2000)

Financial analyst at Lisbon Stock Exchange (1993 – 1996)


Assistant Lecturer at FEUNL (1998 – 2000)
qualifications
distinctions
204
Executive Member
Date of birth

13 June 1974
Current positions

Executive Member of the Board of Directors of Caixa – Banco de Investimento, S.A., since August
2013
Areas of
responsibility
Former positions

Corporate Finance – Advisory

Accounting

Operations

Managing Director of Corporate Finance – Advisory Division at Caixa – Banco de Investimento, S.A.
(2011 – 2013)

Director – Corporate Finance – Advisory at Caixa – Banco de Investimento, S.A. (2003 – 2011)

Financial Analyst – Corporate Finance – Advisory at Caixa – Banco de Investimento, S.A. (2000 –
Academic
qualifications

Account Manager – Major Enterprises (South) at Banco Chemical Finance, S.A. (1999 – 2000)

Auditor at Arthur Andersen (currently Deloitte) (1997 – 1999)

Degree in Economics from Universidade Católica de Lisboa

Advanced Financial Programme for Executives at Universidade Católica Portuguesa
2003)
205
Executive Member
Date of birth

11 March 1973
Current positions

Executive Member of the Board of Directors of Caixa – Banco de Investimento, S.A., since August
2013

Non–executive Member of the Board of Directors of OMIClear – Sociedade de Compensação de
Mercados de Energia, S.G.C.C.C.C., S.A. since September 2013

Non–executive Member of the Board of Directors of OMIP – Pólo Português, S.G.M.R., S.A., since
November 2011

Non–executive Member of the Board of Directors of OMI – Pólo Español, S.A. (OMIE), since
Areas of
responsibility
Former positions
Academic
qualifications

Structured Finance

Spain Branch

Legal Affairs

Research

Managing Director – Structured Finance at Caixa – Banco de Investimento, S.A. (2011 – 2013)

Director – Corporate Finance – Advisory at Caixa – Banco de Investimento, S.A. (2001 – 2011)

Financial Analyst – Financial Services at BCP Investimento, S.A. (1997 – 2001)

Analyst – Corporate Marketing at Banco Comercial Português, S.A. (1997)

Trainee – Administration and Finance at Alcântara Refinarias Açucares, S.A. (1996)

Masters in Finance from ISCTE

Post-graduation in Corporate Finance from CEMAF (ISCTE Business School)

November 2011
206
Non–executive Member
Date of birth
 5 July 1960
Current positions
 Member of the Board of Directors and the Executive Committee of Caixa Geral de Depósitos S.A.
since March 2012
 Non–executive Member of the Board of Directors of Caixa – Banco de Investimento, S.A. since
March 2008
 Chairman of Board of Directors of Caixa Leasing e Factoring – IFIC, S.A., since May 2012
 Chairman of the Board of Directors of Locarent – Companhia Portuguesa de Aluguer de Viaturas,
since April 2013
 Vice–Chairman of Caixa Seguros e Saúde, SGPS, S.A., since May 2013
Former positions
 Central Director – Major Enterprises at Caixa Geral de Depósitos (2002– 2012)
 Non–executive Member of the Board of Directors of Portugal Telecom, SGPS, SA. (2012 – 2013)
 Member of the Board of Directors of Caixa Geral de Aposentações, IP (2012 – 2013)
 Non–executive Member of the Board of Directors of Lusofactor, Sociedade de Factoring, S.A. (2003
– 2008)
 Director of CGD’s Major Enterprises Division – Northern Division (1999 – 2002)
 Director of Northern Division responsible for the Coordination of the Major Enterprises Segment
(1998 – 1999)
 Managing Director (BFE Group / BPI Group), initially Banco Borges & Irmão and latterly with
broader functions in Banco de Fomento e Exterior and Banco BPI (1994 – 1997)
 Technical Officer in Finindústria – Sociedade de Investimentos e de Financiamento Industrial and
latterly Deputy Manager of Finibanco and Non–executive Member of the Board of Directors of
Finicredito SFAC (1984 – 1989)
 Trainee and latterly Senior Technical Operative at União de Bancos Portugueses (1984 – 1989)
Academic
 Degree in Economics from the Faculty of Economics of the University of Porto
qualifications
 Guest Assistant Lecturer at Faculty of Economics of the University of Porto (1983 – 1988)
distinctions
207
Date of birth

30 March 1951
Current positions

Member of the Board of Directors of Caixa Capital – Sociedade de Capital de Risco, S.A., since
2000

Member of the Board of Directors of Caixa Desenvolvimento, SGPS, S.A., since 2000

Member of the Board of Directors of Caixa – Banco de Investimento, S.A., since 2008

Member of the Board of Directors of Vila Galé – Sociedade de Empreendimentos Turísticos, S.A.,
since 2010

Member of the Board of Directors of Visabeira Imobiliária, SGPS, S.A. since 2006

Member of the Board of Directors of Visabeira Indústria, SGPS, S.A. since 2006

Member of the Board of Directors of Visabeira Participações Financeiras, SGPS, S.A. since 2006

Member of the Board of Directors of Visabeira Turismo, SGPS, S.A. since 2006

Member of the Board of Directors of Visabeira Global, SGPS, S.A. since 2013

Member of the Board of Directors of PP3E – Projectos e Participações em Empreendimentos de
Energia Eléctrica, S.A., since 2003

Member of the Board of Directors of Mesquita ETVIA, SGPS, S.A. (2009 – 2013)

Member of the Board of Directors of A. Silva & Silva – Imobiliária e Serviços, S.A. (2002 – 2012)

Member of the Board of Directors of Caixa Investimentos – Sociedade de Investimentos, S.A. (2000
– 2002)

Chairman of the Board of Directors of PME Investimentos – Sociedade de Investimentos, S.A. (1996
– 2000)

Chairman of the Board of Directors of PME Capital – Sociedade de Capital de Risco, S.A. (1996 –
1999)

Member of the Board of Directors of LISPOLIS – Associação para o Pólo Tecnológico de Lisboa,
(1999 – 2000)

Member of the Board of Directors of COMPTRIS – Companhia Portuguesa de Capital de Risco,
S.A. (1998 – 2000)

Member of the Board of Directors of CEDINTEC – Centro para o Desenvolvimento e Inovação
Tecnológica (1990 – 1999)

Member of the Board of Directors of IPE – Companhia Portuguesa de Capital de Risco, S.A. (1994
– 1997)

Chairman of the Supervisory Board of COMPTRIS – Companhia Portuguesa de Capital de Risco,
S.A. (1994 – 1996)

Member of the Board of Directors of SULPEDIP – Sociedade de Capital de Risco, S.A. (1995 –
1996)

Technical Operative / Regional Director of IAPMEI – Instituto de Apoio às Pequenas e Médias
Empresas e ao Investimento (1976 – 1995)
Former positions
208
Academic

Degree in Finance, from ISEG

Guest Professor at ISCTE

Technical and scientific supervision of book “Financial Analysis”, E. Cohen (Editora Presença)

Co–author of book “Elements of Financial Analysis” (Editora Publisher Team)
distinctions
qualifications
209
b) Supervisory Board
Chairman
Date of birth

29 April 1955
Current positions

Member of Senior Board of Universidade Católica Portuguesa

Non–executive Member of the Board of Directors of Galp Energia SGPS SA

Non–executive Member of the Board of Directors of Brisa Concessão Rodoviária, S.A.

Chairman of the Supervisory Board of Caixa – Banco de Investimento, S.A.

Coordinator of Portugal Economy Probe

Professor of Corporate Management at Católica – Lisbon School of Business & Economics,
Universidade Católica Portuguesa
Academic
qualifications

Chairman of the Board of Directors of NYSE Euronext Lisbon, S.A.

Member of the Executive Committee of the New York Stock Exchange

Member of the Board of Directors of Euronext, N.V. (Holland)

Chairman of the Board of Directors of Interbolsa, S.A.

Non–executive Member of Paris, Brussels and Amsterdam Stock Exchanges

Executive Member of the Board of Directors of Caixa Geral de Depósitos, S.A.

Member of the Executive Committee of Jerónimo Martins

Chairman of the Board of Directors of ICEP

PhD in Corporate Management from University of Glasgow, School of Financial Studies

Degree in Corporate Administration and Management from Universidade Católica Portuguesa
(Lisbon)
Former positions
210
Member
Pedro Rodrigues Felício
Date of birth

8 December 1971
Current positions

Responsible for the International Purchasing Division of PT Compras

Executive Member of the Supervisory Board of Caixa – Banco de Investimento, S.A.

Executive Member of the Supervisory Board of Gerbanca, SGPS, S.A.

Managing Director of the Portuguese Treasury and Finance Department

Chairman of the Board of the General Meeting of Parpública – Participações Públicas (SGPS), S.A.

Executive Member of the Supervisory Board of Caixa Geral de Depósitos, SA.

Executive Member of the Board of Directors of Sagestamo – Sociedade Gestora de Participações
Former positions
Sociais Imobiliárias, S.A.

Chairman of the Board of Directors of Agência Nacional de Compras Públicas, E.P.E.

Director of the Financial Services of PT PRO – Serviços de Gestão, S.A., Centro de Serviços
Partilhados do Grupo Portugal Telecom
qualifications
Head of Financial Resources at TMN, S.A.

Financial Auditor / Controller at SLM – Sociedade Lisbonense de Metalização, S.A.

Degree in Management from Instituto Superior de Economia e Gestão (ISEG) – Universidade
Técnica de Lisboa.
Academic

211
Member
Date of birth

16 August 1960
Current positions

Assistant to Minister of Health

Member of the Supervisory Board of Caixa – Banco de Investimento, S.A.

Member of the Supervisory Board of Gerbanca, SGPS, S.A.

Chair of Board of Directors of Instituto Nacional de Recursos Biológicos, I.P.

Head of European Anti–Fraud Unit

Coordinator of Technical Advisory Section of the Prosecutor General’s Office,

Deputy Manager of the Department for European Social Fund Affairs

Director of the Inspectorate General of the Ministry of Agriculture and Fisheries

Principal Inspector in Inspectorate General of Finance

Member of the Supervisory Board of Caixa Geral de Depósitos, S.A

Chair of the Supervisory Board of Banco Efisa, S.A.

Chair of the Supervisory Board of Participadas SGPS, S.A.

Chair of the Supervisory Board of Parvalorem, S.A.

Chair of the Supervisory Board of Parups, S.A.

Degree in Economics from Instituto Superior de Economia e Gestão (ISEG) – Mathematical
Academic
qualifications
distinctions
Methods Area

Lecturer at Instituto Superior de Línguas e Administração (“Mathematical Methods Applied to
Management”, “Statistics” and “Operational Research”) and Faculty of Economics of the University
of Porto (“Mathematical Complements and Probability Theory”).
Former positions
212
Deputy Board Member
João Barata da Silva
Date of birth

17 March 1947
Current positions

Member of the Supervisory Board of IPAI – Instituto Português de Auditoria Interna, since 2002

Chairman of the Supervisory Board of Banco Interatlântico, since 2006

Chairman of the Supervisory Board of Banco Internacional de S. Tomé e Príncipe, since 2006

Chairman of the Remuneration Committee of A. Promotora, Sociedade de Capital de Risco, S.A.

Chairman of the Remuneration Committee of Banco Comercial do Atlântico, S.A.R.L.

Chairman of the Remuneration Committee of Garantia, Companhia de Seguros, S.A.R.L.

Deputy Member of the Supervisory Board of Parcaixa, SGPS, S.A.

Member of the Supervisory Board of Caixa – Banco de Investimento, S.A.

Deputy Member of the Supervisory Board of Locapor (leasing)

Member of Audit Department of Caixa Geral de Depósitos (1991 – 2005)

Higher Banking Degree (IFB / Universidade Católica)

Degree in Economics (ISE – Faculdade Técnica de Lisboa)

Certified Accountant (former Instituto Comercial de Lisboa)
Former positions
Academic
qualifications
Prevention of conflicts of interest
Members of the Board of Directors are fully aware of their duties to abstain from discussions and the
adoption of resolutions on certain subject matters, in addition to their duties to declare any relevant equity
stakes in the company and relationships with suppliers, customers, credit institutions or other entities
which may create conflicts of interest and to comply with the corresponding standards during the course of
their activities.
There are no incompatibilities between the performance of management duties in CaixaBI and other
functions performed by members of the Board of Directors.
213
5.2. Specialised committees
CaixaBI has four specialised Committees and a Remunerations Committee whose competencies,
composition and frequency of meetings is set out below.
Business Committee
CaixaBI’s business committee meets once a week and has the following main functions:

To analyse the main macro and microeconomic events and their expected impact on the Bank’s
activity;

To analyse the evolution of brokerage business, notably volume of market trading and commissions
received;

To monitor the Bank’s activity, notably mandates in progress;

To analyse operations in the pipeline;

To analyse eventual cross-selling business opportunities;

To take note of other matters directly related with the Bank’s operations.
Composition of Business Committee
Directors, or their deputies, of the following bodies:
- Research
- Brokerage
- Financing and Structuring
- Project Finance
- Structured Finance
- Spain Branch
- Corporate Finance - Debt
- Equity Capital Markets
- Corporate Finance – Advisory
- Syndication and Sales
- Strategic Planning and Organisation
- Caixa Capital
CaixaBI’s Credit Committee is responsible for the competencies delegated to it in credit matters, namely:

To authorise medium and long term operations;

To periodically define limits on short term operations;

To analyse non-performing loans, particularly at their pre-legal and legal proceedings stages when
involving a loss of interest or reduction of assets;
Credit Committee
214

To discuss the specific situation of sectors of the economy;

To define credit and respective credit risk policies;

To define the processes to be submitted to the Expanded Credit Committee (customers or borrowers
who belong to groups of customers with accumulated liabilities of more than €50 million to Caixa
Geral de Depósitos and other CGD Group companies) and the Credit Committee (customers with
accumulated liabilities of more than €10 million and less than €50 million to Caixa Geral de Depósitos
and other CGD Group companies).
The Credit Committee meets once a week but may be called on an extraordinary basis, if required.
Composition of Credit Committee
- Financing and Structuring
- Project Finance
- Structured Finance
- Spain Branch
- Corporate Finance – Debt
- Equity capital markets
- Corporate Finance – Advisory
- Legal Affairs
Directors of other Bank bodies may be called to participate on the Committee,
Investments Committee
CaixaBI’s Investments Committee meets once a week and has the following main functions:

To monitor the evolution of the Bank’s own portfolio and its funding requirements;

To monitor the evolution of the results of the Financial and Structuring Division, in addition to the risk
indicators supplied;


To monitor the evolution and prospects of the financial markets relevant to CaixaBI’s activity;
To issue guidelines on the strategic positioning and taking of management risks in light of the market
environment.
Management of Financing and Structuring Division
- Corporate Finance - Debt
- Other Divisions operating in the Financial markets and which interact with the Financing and Structuring Division.
Composition of Investments Committee
215
Operational Risk Management and Internal Control Committee
The Operational Risk Management and Internal Control Committee is an Executive Committee advisory
body, responsible for the coordination, appraisal and discussion of issues related with operational risk and
internal control management and meets every six months.
The Operational Risk Management and Internal Control Committee is the body responsible for verifying
conformity between the Bank’s performance and the strategy and policies established for the
management of operational risk and internal control, monitoring the management thereof and proposing
action plans to the Executive Committee. It is responsible for:

Proposing operational risk management policies;

Proposing the operational risk profile to be adopted by the Bank;

Verifying conformity between the Bank’s operation and operational risk management policies;

Verifying the adequacy of the internal control system;

Monitoring the level of the Bank’s operational risk;

Proposing action plans to the Executive Committee for reducing operational risk and strengthening
the internal control system.
Composition of the Operational Risk Management and Internal Control Committee
- Information Systems
- Accounting
- Compliance
- Internal Audit
Directors of other bank bodies may be called to participate on the Committee.
Business Continuity Plan Steering Committee
The Business Continuity Plan Steering Committee is responsible for the coordination and implementation
of policies and procedures to guarantee CaixaBI’s continuous operation or prompt recovery, on the
occurrence of events leading to an across-the-board failure of its physical infrastructures or the
The Business Continuity Plan Steering Committee defines and monitors the procedures to be followed or
activated in response to crisis situations of a greater or lesser degree of severity which may affect
operational and technological components, thus avoiding a prolonged stoppage of CaixaBI’s activity and
accordingly helping to reduce the impacts of crisis events on its activity and customers.
impossibility of its employees’ travel to their workplaces.
216
Composition of the Business Continuity Plan Steering Committee
- Compliance
- Information Systems
- Operations
Directors of other Bank bodies may be called to participate on the Committee.
Remunerations Committee
The Remunerations Committee is made up of representatives of the majority shareholder, elected by the
Shareholders’ General Meeting and is statutorily responsible for defining the remuneration of the
Members of the Statutory Bodies for periods of three years.
Composition of the Remunerations Committee
Gerbanca, SGPS, S.A., represented by Henrique Pereira Melo and Vitor José Lilaia da Silva
217
6. Remuneration of Members of Statutory Bodies
Remuneration policy for members of Boards of Directors and Supervisory Boards
As stipulated in article 23 of CaixaBI’s articles of association, the Remuneration Committee defines the
remuneration of the members of the Board of Directors and Supervisory Boards.
In terms of the Board of Directors only members of the Executive Committee receive remuneration.
Information on the remuneration costs of members of CaixaBI’s Executive Committee for 2013
(euros)
For period
Chairman
Board Member
Board Member
Board Member
Jorge Cardoso
Joaquim
Souza
Francisco
Rangel
Paulo Oliveira
Silva
Paulo
Henriques
01/01/2013 to
08/07/2013
01/01/2013 to
31/12/2013
01/01/2013 to
31/12/2013
02/08/2013 to
31/12/2013
02/08/2013 to
31/12/2013
101,985
173,565
113,682
54,541
51,333
1. Remuneration
1.1. Base annual/fixed remuneration
1.2. Attendance vouchers
1.3. Accumulation of management functions
1.4. Variable remuneration
1.5. Other (full details)
2. Other benefits and compensation
2.1. Annual plafond for mobile communications
2.2. Expenditure on mobile communications
2.3. Meal allowances
-
-
-
-
-
3,245
12,116
965
409
540
943
1,087
2,630
1,065
1,110
24,221
18,120
26,999
12,953
12,191
2.4. Other
3. Costs of social benefits
3.1. Social protection regime
3.2. Healthcare insurance
No individual insurance
3.3. Life insurance
3.4. Personal accidents insurance
3.5. Other (1)
3,569
6,074
3,978
1,908
1,796
4. Vehicle fleet
4.1. Amount of instalment / annual payment for company
car
4.2. Start date of current contract
6,708
15,276
12,777
10,197
7,783
2013
2012
2013
2012
2011
4.3. Vehicle fuel costs
1,762
3,990
1,842
749
403
-
-
-
-
-
5.1. Option for wages paid by former employment (y/n)
5.2. Annual gross remuneration paid by former
employment
5.3. Social protection regime
n
n
n
n
n
5.3.1 Social security (y/n)
y
y
y
y
y
n
n
n
n
n
4.4. Annual fuel allowance
4.5. Other
5.3.2 Other (specify)
5.4. Performance of paid functions outside group (y/n)
5.5. Other
(1)
Complementary retirement plans
5. Additional information
218
Information on the remuneration of members of CaixaBI’s Supervisory Board for 2013
(euros)
For period
Fixed annual remuneration
Chairman
Board Member
Board Member
Miguel Athayde
Marques
Pedro Felício
Maria Rosa Sá
01/01/2013 to
31/12/2013
01/01/2013 to
31/12/2013
01/01/2013 to
31/12/2013
26,066
23,303
22,050
Deloitte & Associados, SROC, represented by João Carlos Henriques Gomes Ferreira
(in euros – exclusive of VAT)
2013
Audit and revision of accounts
69,883
Fiscal consultancy
Other services
36,000
122,290
28,600
Other assurance services
219
7. Control system
7.1. Internal control system
CaixaBI’s risk control and management, aligned with the strategies and polices defined by CGD Group,
are based on a risk culture present over the whole of its structure which guarantees the identification,
analysis and management of the Bank’s exposure to different risk categories.
In addition to specific regulations whose application is accompanied by the Supervisors with the objective
of guaranteeing the strength of the financial system and protection of customers’ interests, best practice in
risk management terms has also been implemented within CaixaBI and contributes to maximising
sustained value creation and the maintenance of the Bank’s solidity.
CaixaBI’s internal control system comprises a collection of strategies, systems, processes, policies and
procedures, defined by the Board of Directors, in addition to the actions taken by the Board and its other
employees, for the purpose of ensuring:

The efficient and profitable performance of activity, over the medium and long term (performance
objectives);

The existence of full, pertinent, reliable, prompt, financial and management information (information
objectives);

Compliance with applicable legal and regulatory dispositions (compliance objectives).
CaixaBI therefore endeavours to ensure the existence of an adequate control environment, a solid risk
management system, efficient information and communication system, adequate control activities and an
effective monitoring process with the objective of ensuring the quality and effectiveness of the system over
time.
CaixaBI also produces an annual Internal Control Report which is submitted for the appraisal of its
supervisors – Bank of Portugal and the CMVM as well as a detailed annual report on Anti-Money
Laundering which is submitted to the Bank of Portugal. It also submits an annual self-assessment
questionnaire on Anti-money Laundering and Countering the Financing of Terrorism Activities
220
Risk management process
The risk management process comprises a series of activities performed on a CGD Group level, as set
out in the following six stages.
Risk management process stages
1
Definition and adjustment of guidelines, models and processes
5
Decision
6
2
4
Taking/
adjusting risks
Identification
of risks
Monitoring and
control of risks
and
performance
3
Risk and
performance
assessment
Risk management process stages
Activity
Scope
Definition and adjustment
 Definition/approval by areas, type of risk or portfolios (i) guidelines, (ii) models and indicators for
of guidelines, models and
risk assessments and (iii) risk management support processes and a regular assessment
processes
thereof for the purpose of the continuous and necessary adaptation to economic
environment/market conditions, evolution of risk assessment measures, strategy defined by
CGD Group and evolution in terms of internal structure and information systems.
Identification of risk
positions
 Recognition, characterisation and assessment of portfolio positions or potential operations
(credit, market and liquidity risks).
 Identification and characterisation of the processes implemented and occurrence of losses
(operational compliance and reputational risks).
performance
 Quantification of exposure to diverse types of risk and performance measurements using
appropriate internal models (per operation, portfolio, process or entity), developed and
implemented on a CGD Group level.
Monitoring and control of
risks and performance
 Decision-making support activities for risk-taking purposes (monitoring of risks/performance) or
adjustment of portfolio risks (risk control), through the ascertaining or reporting of risk positions,
risk and performance levels and verification of compliance with guidelines.
Decision
 Interpretation of results from the monitoring and control of risks and performance stage,
expectations of evolution of external variables and decision on the performance of risk-taking or
adjustment actions (reduction of exposure or cover).
Assessment of risks and
221
Activity
Scope
Risk taking/adjustments
 Negotiation and entering into of operations in accordance with previously made decisions
(decision stage) under the scope of business/support processes or for risk adequacy/hedging
purposes.
Risk management parties
To ensure the adequate management of the internal control system, responsibilities have been defined for
certain structural bodies which operate in cooperation with the remaining CGD Group structures and
entities.
Risk management parties
Scope
Involved bodies
Definition and adjustment of


CaixaBI’s Board of Directors and Executive Committee



All CaixaBI structural bodies making loans.
risk management strategy and
CGD Group’s Assets and Liabilities Management Committee (ALCO) .
policies
Credit risk management
Caixa Geral de Depósitos’s Risk Management Division (DGR).
CaixaBI’s Credit Committee, Caixa Geral de Depósitos’s Credit Committee and
Expanded Credit Committee.
Liquidity risk management
Operational risk management
Management of compliance
and reputational risk
CaixaBI’s Executive Committee.



CaixaBI’s Financing and Structuring Division.



CaixaBI’s Financing and Structuring Division.





CaixaBI’s Operational Risk Management and Internal Control Committee.



CaixaBI’s Compliance Office.
Caixa Geral de Depósitos’s Risk Management Division (DGR).
CaixaBI’s Investments Committee.
All other CaixaBI Structural Bodies.
CaixaBI’s Investments Committee.
CaixaBI’s Strategic Planning and Organisation Division.
CaixaBI’s Accounting Division.
CaixaBI’s Internal Audit Office.
CaixaBI’s Structural Bodies, Spain Branch and Caixa Capital.
All other CaixaBI Structural Bodies.
Compliance Office, as CGD’s structural body with oversight responsibilities for this risk
on a CGD Group level.
Market risk management

222
7.2. Control system on the protection of the company’s investments and
assets
Securities portfolio
The management of CaixaBI’s securities portfolio is subordinated to the risk levels defined for the Bank
and adjusted to the budget approved by the Board of Directors. Several basic objectives have also been
defined, namely:

to achieve an adequate level of net interest income for the balance sheet of an investment bank;

to establish a securities portfolio permitting a normal degree of rotation and adequate return in terms
of capital gains;

the investment portfolio’s composition shall be limited to maximum and minimum exposure levels;

to safeguard the minimum liquidity level required for a financial institution.
The return required from the portfolio comprises a defined ROE level obtained on the daily valuation
thereof at market prices, net of financing costs.
In calculating the allocation of shareholders’ equity to operations, the necessary requirements for hedging
credit, market and operational risks are calculated in accordance with current Bank of Portugal rules.
Tradable instruments include bonds, shares, selected asset managers’ funds and their derivatives futures, options swaps and forwards traded with the Treasury or Forex positions in Caixa Geral de
Depósitos’s trading room.
Loans portfolio
The production of commercial proposals for the Credit Committee (see page 214) is from the responsibility
of the structural bodies which submit them for appraisal and which should obtain, when applicable, the
advance opinion of Caixa Geral de Depósitos’s Risk Management Division. According to CaixaBI’s
internal regulations several proposals should be subsequently submitted for the approval of Caixa Geral
de Depósitos’s Credit Committees.
223
7.3. Control system on the safeguarding of customers’ assets held under
CaixaBI’s custodian services
In compliance with the dispositions of no. 4 of article 304-C of the Securities Code, the external auditors
should issue an annual report on the adequacy of the procedures and measures adopted by CaixaBI to
protect its customers’ assets.
These procedures should ensure that the following objectives are met (articles 306 to 306-D of the
Securities Code):

In all acts performed as well as in its accounting and operational records, brokers should ensure a
clear distinction between their own and each of their customer’s assets.

The opening of insolvency proceedings, corporate recoveries or restructuring of a broker does not
affect the acts performed by the broker on behalf of its customers.

A broker cannot, on its own or in a third party’s behalf, use its customers’ financial assets or exercise
any of the rights thereto pertaining, unless approved by their titleholders.

Investment companies cannot use money received from customers either in their own interest or on a
third party’s behalf.
The latest opinion of the external auditors available for 2011 makes it possible to conclude that the
procedures and measures adopted by CaixaBI are adequate to permit compliance, in all materially
relevant aspects, with the dispositions defined under the scope of articles 306 to 306-D, of the Securities
Market Code.
224
8. Disclosure of relevant information
8.1. Market relations representative
Alia Pereira da Silva
Rua Barata Salgueiro, 33
1269-057 Lisbon
Telephone: +351 21 313 73 00
Fax: +351 21 352 63 27
E-mail: [email protected]
8.2. Disclosure of market information
CaixaBI provides a large amount of information on its website at www.caixabi.pt.
The Bank’s website provides its customers, analysts and general public with permanent access to
relevant, up-to-date information such as the presentation and identification of the Bank, mission, vision
and strategy, history, organisation, relationships, rating, annual report, news, prices, business areas,
corporate governance, sustainability and distinctions.
In addition to the possibility of consulting information on the Bank and its respective activity, the Bank’s
restricted research area provides access to historical and current information of relevance to investors.
225
8.3. Summary table of compliance
requirements on CaixaBI’s website
with
information
Disclosure
Yes
Existence of website
x
History, vision, mission and strategy
x
Organisational chart
x
No
N.A.
disclosure
Remarks
Statutory Bodies and Governance Model:
Identification of Statutory Bodies
x
Identification of the areas of responsibility of the Board of Directors
x
Identification of committees within the company
x
Identification of risk control systems
x
Remuneration of Statutory Bodies
x
Internal and external regulations
x
Transactions made outside market conditions
x
Relevant transactions with related parties
x
Analysis of Economic, Social and Environmental sustainability
x
Code of Ethics
x
Annual Report
x
Customer Ombudsman
x
8.4. CaixaBI’s equity stakes
The Bank’s corporate structure comprises adequate investments to provide for its business segmentation
while enabling it to leverage CGD Group’s market intervention capacity, through its constant provision of
Information on CaixaBI’s equity stakes at 31 December 2013 is set out in the following organisational
chart:

6
100% of CaixaBI Brasil – Serviços de Assessoria Financeira, Ltda. , headquartered in São Paulo, with
the corporate object of providing advisory and financial consultancy services;

6
100% of Caixa Capital, SCR, S.A., a company managing five venture capital funds;
Of which 90% is held directly by CaixaBI and 10% indirectly by Caixa Desenvolvimento.
quality and value added services to its customers.
226

100% of Caixa Desenvolvimento, SGPS, S.A. whose activity has been curtailed following the
restructuring of the portfolio of venture capital area subsidiaries; and

50% of CGD Investimentos Corretora de Valores e Câmbio, S.A, a company operating in the Brazilian
capital market.
CaixaBI’s equity stakes
Caixa – Banco de
Investimento, S.A.
100%
Caixa Capital, SCR,
S.A.
100%
Caixa
Desenvolvimento,
SGPS, S.A.
90%
10%
CaixaBI Brasil –
Serviços de Assessoria
Financeira, Ltda.
50%
CGD Investimentos
Corretora de Valores e
Câmbios, S.A.
8.5. Share capital and dividends policy
The Bank’s share capital consists of eighty one million two hundred and fifty thousand fully subscribed
and paid up shares with a nominal value of one euro each. Shares may be nominative or bearer,
registered or not and are reciprocally convertible.
In share capital increases paid up in cash, shareholders will be given preference rights in subscribing for
new shares in proportion to those they already hold unless otherwise decided by the General Meeting in
conformity with lawfully imposed constraints.
The Board of Directors may increase the Bank’s share capital on one or more occasions in the form of
cash payments until its share capital totals a maximum amount of two hundred and fifty million euros.
Under the terms of CaixaBI’s articles of association, the Shareholders’ General Meeting shall pass a
resolution on the appropriation of annual profits, without being subject to any obligatory annual minimum
limit. The Board of Directors with the consent of the Supervisory Board, may decide to issue an advance
of profit to shareholders as permitted by law.
227
9. Analysis of economic, social and environmental responsibility
CaixaBI has, since 2004, published an annual sustainability report in the economic, social and
environmental domains as an integral part of its Annual Report. Over the course of the years society as a
whole and the Bank with it, have evolved to thresholds of growing awareness of the importance of social
responsibility and inclusion of sustainable development.
Recognised as a leading, benchmark institution in domestic investment banking terms, CaixaBI, aligned
with sustainability practice within CGD Group has assumed enhanced responsibilities in the domains of
sustainability and social responsibility, practising the following principles:

An involvement based on ethical business values;

A desire to achieve continuous progress;

Understanding and acceptance of the company’s interdependence with its environmental surrounds;

Long term vision based on responsibilities to future generations;

Principle of prudence as a decision-making rule;

Regular dialogue and consultation with all parties involved;

A desire to inform linked with transparency;

Acceptance of responsibility for the direct and indirect consequences of its activity.
In 2013, the Bank furthered its activity based on the same sustainability strategy, i.e. focusing on business
guidelines based on sustainable development and, simultaneously, contributing to business evolution and
creation of shareholder value.
CaixaBI recognises that the value of the sustainable development of its activity is enhanced by the
relations of transparency and trust it has formed with its stakeholders (shareholders, customers, partners,
suppliers, workers, financial markets, competitors, regulators, public opinion and the community),
favouring continuous dialogue and effective involvement on the basis of its diverse relationship channels
in accordance with currently available technological solutions and the social and economic environment in
which the Bank operates.
This process of involvement with stakeholders should be considered an evolving, constant process
indicating their impact on the Bank’s activity and importance to the said stakeholders. The involvement
areas:

Identification of strategic stakeholders;

Assessment of materiality;

Based on dialogue;

Inclusion of information obtained from stakeholders;

Business and sustainability management.
strategy of CaixaBI’s stakeholders is in line with CGD guidelines, essentially based on four operating
228
Stakeholders


Shareholders
Customers

Partners

Suppliers






Workers
Financial markets
Competitors
Regulators
Public Opinion
Community
Types of Relationship
Frequency
General Meeting
Annual
Financial reporting
Quarterly
CaixaBI website
Permanent
Events and sponsorships
Occasional
Complaints management
Permanent
Advertising
Occasional
Financial newsletter
Daily
Research reports
Daily
Internet banking services
Daily
Roadshows
Occasional
CaixaBI website
Permanent
Occasional
Meetings and periodic contacts
Occasional
Intranet
Permanent
Easyvista
Permanent
Training actions
Whenever opportune
Performance assessments
Annual
Internal communication
Whenever opportune
Research reports
Daily
CaixaBI website
Daily
Financial newsletter
Daily
Occasional
Regulators’ specific instructions
Continuous
Requests for clarification
Continuous
Participation in taskforces
Continuous
Personal supervisory actions
Continuous
Public tenders
Continuous
Production of reports
Continuous
Occasional
Communication campaigns
Whenever opportune
Requests for clarification
Occasional
Research reports
Daily
CGD Culturgest Foundation
Permanent
Protocols with universities
Annual
Involvement with stakeholders permits the identification, comprehension and alignment of their
expectations and concerns in respect of the Bank’s performance in addition to risk management and the
identification of opportunities resulting from the interaction between CGD Group and society.
Sustainability Programme and Management Model
Caixa Geral de Depósitos’s Sustainability Programme is based on four essential pillars directing the
Bank’s activity:
CaixaBI’s relationship with its stakeholders
229

Economic viability;

Financial viability;

Social equity;

Environmental correctness.
With the formalisation and implementation of its Sustainability Programme and respective Management
Model, Caixa Geral de Depósitos expresses its desire to implement guideline processes and procedures
on all of its activity in this domain, designed to create value for the Bank as a whole.
The Management Model for Caixa Geral de Depósitos’s Sustainability Programme is based on the
formalisation of the responsibilities of each Caixa Geral de Depósitos Structural Body and several CGD
Group companies, such as CaixaBI, for the correct furtherance of the adopted strategies, defined policies
and recommendations.
The Management Model for Caixa Geral de Depósitos’s Sustainability Programme comprises the
following structures, with CaixaBI being represented in Taskforces:

General Sustainability Committee: a consultancy structure responsible for considering, discussing
and monitoring the implementation of the Sustainability Strategy in CGD and recommending relevant
issues for the approval of the Executive Committee.

Sustainability Steering Committee: created in 2012, as a half-way-house with oversight
responsibilities for the implementation of the Sustainability Programme and preparation of meetings for
the General Sustainability Committee.

Sustainability Programme Coordination Team: responsible for the coordination and oversight of the
Sustainability Programme and promoting the activities of Taskforces.

Taskforces: made up of the directors of various Structural Bodies, working on specific issues such as,
Voluntary Policies and Codes, Risk, Product, Environment, Involvement with the Community, Reports
and Stakeholders, Human Resources and CGD Groups in Africa and Brazil.
Sustainability Policy
To guarantee the furtherance of the Programme’s objectives, Caixa Geral de Depósitos has defined a
Sustainability Policy which sets out the five strategic operating areas:

Responsible Banking: to develop balanced, transparent and responsible relationships with

Future Promotion: to recognise banking activity’s importance to sustainable development, in the
desire to contribute to a better future.

Environmental Protection: to promote an active response to society’s environmental problems.

Involvement with the Community: to promote investment in the community and develop society in
general.
customers.
230

Human Assets Management: to endeavour to develop workers and their respective recognition as
factors of differentiation.
The Sustainability Policy guarantees:

The integration of non-financial variables (environmental, social and management) as part of the
Bank’s global strategy;

The sharing of knowledge and experience on such issues with Group units operating in other
markets;

Together with stakeholders, the creation of the mechanisms needed to integrate environmental and
social issues with day-to-day management to ensure the domestic lead in sustainable financial
services;

Transparency in reporting all activity in accordance with best international practice;

Contribution to disclosing information on Sustainable Development principles, allied with domestic
and international initiatives and promoting own actions whenever justified.
In addition to its Sustainability Policy, Caixa Geral de Depósitos has other guideline policies to promote
the integration of Sustainability management such as its Environmental Policy, Community Involvement
Policy and Product and Service Policy.
It should also be noted that the performance of CGD Group on a sustainability level comprises its
voluntary adoption of economic, environmental and social commitments far in excess of its legal and
compliance obligations and which have an overall positive effect on economic and sustainable
development, strengthening competitiveness, internationalisation and companies’ capacity to innovate, job
creation, financial inclusion and promotion of responsible consumption and renewable energies in addition
to subscribing to Good Governance Principles for companies in the state’s Corporate Sector.
As an integral and operative part of CGD Group, CaixaBI implements the policies and principles set out in
Caixa Geral de Depósitos’s Sustainability Report, produced to comply with the guidelines corresponding
to the maximum level (A+) for the Global Reporting Initiative as a fundamental tool to guarantee the
effective management of the Bank’s economic, social and environmental activity.
231
9.1. Economic
The economic dimension of sustainability is measured by organisations’ impacts on the economic
conditions of their stakeholders and in the economic system at all levels, complying with a long term vision
to embrace the disciplines of the environment, social aspects and human resources.
This interdisciplinary nature of economic performance embraces all aspects of economic interactions
which may exist between an organisation and its stakeholders, including the income traditionally
recognised in financial balance sheets. Such financial balance sheets make priority reference to indicators
related with a company’s profitability because they are geared to providing information to managers and
shareholders. Sustainable development indicators, however, cater for other priorities and should permit
the implications of corporate activity in terms of the well-being of stakeholders to be perceived.
CaixaBI accordingly prepares Activity Plans and endeavours to implement them in line with a sustainable
development strategy, reconciling profit ratios required by shareholders, with the need to energise the
business environment consisting of its customers and therefore impacting the positive effects of its
economic and financial health on the community.
The Bank therefore endeavours to achieve new economic efficiency contexts in its awareness of the fact
that its mission also involves sustained value creation for its stakeholders, comprising the supply of top
quality financial products and services supported by its membership of the largest Portuguese financial
group - CGD Group.
Subject to such behavioural parameters, CaixaBI has succeeded in recognising and exceeding its
customers’ expectations, improving performance levels and quality, acting as a benchmark market
operator owing to the difference of its proposals which are based on ethical standards and responsibility,
consolidating customers’ faith in CaixaBI.
232
9.2. Social
The social dimension is assessed by an analysis of an organisation’s impact on its stakeholders employees, suppliers, customers, community, government and society in general - locally, nationally and
globally.
CaixaBI, in 2013, therefore continued to commit to the development of its employees’ skills, recognition of
merit and internal potential, in addition to direct support for business, based on the creation of the best
balance between working activities and personal lives.
CaixaBI’s human resources management aims to build a solid, responsible team, capable of meeting
market challenges and the ongoing needs and requirements of the Bank’s customers, with a permanent
capacity to innovate and achieve its strategic objectives.
Based on institutional values and its organisational culture, knowledge, communication and performance,
human resources management translates intro various levels such as:

Training: knowledge management geared to the development of its employees’ talents, including
technical training (postgraduate courses, masters, MBAs, etc.) and the possibility of language tuition
in English and Spanish on the Bank’s premises.

Performance assessments: implementation of an employee assessment and recognition system.

Working conditions: promotion of a healthy working environment and harmonisation between work,
family and leisure as complementary dimensions of the organisation itself.
CaixaBI considers talent, the development of the capacities and competencies of its workers and the
creation of the best balance between professional and personal lives to be strategic human resources
management thrusts.
The stability of its staff is a paramount concern of the Bank’s human resources policy in providing workers,
notwithstanding its attention to cost containment, with opportunities for professional advancement either in
the form of masters and postgraduate qualifications in the financial area or language tuition at the Bank as
well as participation in various seminars or occasional training activities in Portugal and abroad.
CaixaBI guarantees equality of treatment and opportunity to all employees as well as the non-existence of
students and professionals from various geographies.
Notwithstanding the adverse economic context, CaixaBI has continued to develop curricular placement
programmes, providing recent graduates with their first contact with the labour market and, in several
cases, the opportunity for a career in investment banking.
discriminatory factors. There is no discrimination in matters of recruitment and on-the-job training involves
233
CaixaBI also has a family-responsible culture, having, over the course of time implemented a series of
measures in support of workers and their families, with the aim of achieving better reconciliation between
professional and familiar or personal activities, of which:

Special mortgage and personal loans in terms of rates and maturities;

Healthcare policy including immediate family members.

Protocols with diverse entities providing special terms for workers and their families.

Access to Caixa Geral de Depósitos’s Culture, Sport and Leisure Time Occupancy Centre, which
includes socio-cultural and sporting activities which are also available to family members and
particularly include children’s holiday camps.
As regards well-being and safety at work CaixaBI is constantly engaged on endeavours to control and
reduce risks in the workplace to prevent accidents and protect its workers’ safety and health.
In terms of health the Bank considers that it is responsible for providing workers with a healthy working
environment with a Medical Plan covering direct family members (spouses and children) monitoring the
health of its employees based on Medicine in the Workplace Plans and respective lawfully required
medical examinations and annual flu jabs on the Bank’s premises.
The Bank also provides its employees with a complementary defined contribution retirement plan.
CaixaBI promotes citizenship, inclusion and equal opportunity – which principles are set out in its Code of
Conduct regulating the activities of the Bank and its workers.
The Bank, in publishing its Corporate Governance Report, assumes a totally transparent attitude with its
stakeholders. It has published internal regulations designed to ensure the high ethical standards of its
employees, in addition to preventative and inspection procedures. It has a Compliance Office to verify
compliance with standards and regulations in force and a Code of Conduct, binding upon all employees,
for fraud prevention purposes. CaixaBI has also published an Anti-money Laundering Handbook providing
for collaboration with its Supervisors.
Contribution to social inclusion (employability)
CaixaBI has a major impact in terms of social inclusion and employability, which is particularly relevant in
the current economic context, both directly and indirectly. In direct terms reference should be made to the
impact associated with job creation. Indirectly reference should be made to job creation from financial
Public service and meeting the needs of society
Caixa Geral de Depósitos’s commitment to the Community is based on its defence of the principles of
ethics and respect for the standards regulating its activity. This commitment is enshrined it its relationship
with stakeholders but also has a public service aspect when CaixaBI participates, directly and indirectly in
sponsorship activities. The Bank also sponsors cultural events in the Culturgest Auditorium as a means of
promoting domestic cultural heritage.
activities or based on the activities of suppliers working with CaixaBI.
234
9.3. Environmental
Although the financial sector is not an area of activity which entails the greatest environmental risks, its
possible intervention role must not be underestimated, in terms of internal operations - power
consumption, water, paper, consumables, fuel, recycling, materials re-use, waste reduction, supplier
selection, are, inter alia, several of the principal direct environmental impacts to be safeguarded.
In addition to such direct intervention, the financial sector’s role, however, is fundamental as from the time
when developers’ projects with an environmental impact apply for advisory services and/or funding.
In this context, CaixaBI’s activity, as a lender to companies and investors in the financial market has an
indirect environmental impact.
The introduction of environmental criteria and assessment of environmental risks in terms of project
analyses and companies eligible for support, represent a fundamental contribution to environmental
protection.
The Bank is permanently concerned over its full compliance with the current legislation on socioenvironmental issues. The assessment of environmental and social risks in project finance terms is
performed in three different stages: during the due diligence (pre-contractual), construction and operations
stages.
During the first two stages, risks are assessed by independent (technical and legal) consultants. Socioenvironmental criteria have been defined to identify and organise the operations, at the time of the
analysis of projects, in conformity with an environmental opinion required by law, comprising an
Environmental Impact Statement and/or Environmental Impact Assessment for the entire main
infrastructure funding projects.
No financing is issued prior to the confirmation of the environmental permit involved in the legal due
diligence process. Independent technical consultants are solely responsible for validating projects'
technical and environmental premises (including all relevant permits) required during the construction and
operation stage. During this latter stage counterparties are required to provide permanent information on a
relevant collection of contractual issues, including those relative to environmental and social risks.
farms, hydroelectric power plants and other renewable energy sources, waste processing and basic
sanitation, which projects have an enormous environmental impact, involving complexity at all levels,
including approvals and environmental monitoring.
CaixaBI has supplied important levels of finance for projects in the environmental area, namely wind
235
Compliance with legal guidelines
a)
Compliance with legal guidelines on management objectives
CaixaBI’s shareholders did not establish guidelines or management objectives for 2013 as provided for in
article 11 of Decree Law 300/2007 of 23 August.
b) Compliance with legal guidelines on special information disclosure duties
Special information disclosure duties i.e. reporting to the Directorate General of the Treasury and Finance
or the Inspectorate General of Finance are performed on a consolidated basis by Caixa Geral de
Depósitos, S.A., as the Group’s parent company.
c)
Compliance with legal guidelines on payments on arrears
CaixaBI takes special care to comply with payment periods to its suppliers, having, over the last few years
disclosed information on average payment periods in accordance with the definition provided by Council
of Ministers’ Resolution 34/2008.
At 31 December 2013, CaixaBI did not have any material arrears in payments to suppliers as defined by
Decree Law 65-A/2011.
(amounts in euros)
0-90
days
90-120
days
120-240
days
240-360
days
>360
days
Payments in arrears
102,919
-
377
-
-
d) Compliance with legal guidelines on income obtained in the scope of compliance
with shareholders’ recommendations
The shareholders did not issue any additional recommendations at the time of the approval of the 2012
accounts.
e)
Compliance with legal guidelines on remuneration
Public Manager Statute rules. The remuneration of CaixaBI’s statutory bodies therefore reflects the
following legal dispositions:

Article 4 of Decree Law 8/2012 of 18 January and article 37 of Law 66-B/2012 of 31 December
(State Budget Law for 2013), on the non-attributing of management bonuses.

Article 12 of Law 12-A/2010 of 30 June, applicable owing to the disposition of no. 8 of Article 27
of Law 66-B/2012 of 31 December on pay cuts of 5%.
CGD is CaixaBI’s majority shareholder and members of its Board of Directors are accordingly governed by
236

Sub-paragraph c) of no. 1 and sub-paragraph o) of no. 9 of Article 27 of Law 66-B/2012 of 31
December, on pay cuts of 10%.
Remuneration of other employees
CGD Group, of which CaixaBI is a member made the following pay cuts referred to in Article 27 of Law
66-B/2012 of 31 December.
f)
Compliance with legal guidelines on the level of public contracting
The Public Contracts Code, approved by Decree Law 18/2008 of 29 January, does not apply to CaixaBI.
g) Compliance with legal guidelines on the level of membership of the National Public
Procurement System
CaixaBI, as in the case of Caixa Geral de Depósitos, S.A., although not a National Public Procurement
System (SNCP) subscriber, has developed the rationalisation of procurement policies for goods and
services, through Sogrupo – Compras e Serviços Partilhados, Agrupamento Complementar de Empresas,
whose activity is subject to a collection of internal and external regulations in line with SNCP procedures.
h) Compliance with legal guidelines on a level of Equality of Gender Principles
CaixaBI respects the principle of gender equality and provides men and women with equal opportunity,
both in terms of recruitment and career opportunities promoting conciliation between personal, family and
professional lives.
237
Summary chart of compliance with legal guidelines
Compliance
Y
N
N.A.
Management objectives
x
Special information disclosure requirements
x
Arrears
Quantification
see subparagraph a)
see subparagraph b)
see sub-
x
Shareholder’s recommendations regarding the approval of the
paragraph c)
see sub-
x
accounts
paragraph d)
see sub-
Remuneration:
Non-payment of management bonuses under the terms of article 37
of Law 66-B/2012
Statutory Bodies – reduction of remuneration under the terms of
article 27 of Law 66-B/2012
Statutory bodies – reduction of 5% based on the application of article
12 of Law 12-A/2010
Other workers – reduction of remuneration under the terms of article
20 of Law 66-B/2012
paragraph e)
x
x
€ 46.755
x
€ 21.670
x
€ 519.314
Public contracts
x
Subscription to National Public Procurement System
x
Principle of gender equality
Justification
x
see subparagraph f)
see subparagraph g)
see subparagraph h)
Compliance with legal guidelines
238

- CaixaBI

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