Condensed interim consolidated financial statements

Transcription

CaixaBank, SA (formerly Criteria CaixaCorp, SA)
and companies composing the CaixaBank Group
Condensed interim consolidated financial statements and management report for the
six months ended June 30, 2011.
Translation of condensed consolidated midyear financial statements originally issued in Spanish and prepared in accordance with
IFRSs as adopted by the European Union (see Notes 1 to 20). In the event of a discrepancy, the Spanish-language version prevails.
CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS OF THE CAIXABANK GROUP FOR THE SIX MONTHS
ENDED JUNE 30, 2011
 Condensed interim consolidated balance sheet at June 30, 2011 and December
31, 2010
 Condensed interim consolidated income statement for the six months ended
June 30, 2011 and 2010
 Condensed interim consolidated statement of other comprehensive income for
the six months ended June 30, 2011 and 2010
 Condensed interim consolidated statement of total changes in equity for the six
months ended June 30, 2011 and 2010
 Condensed interim consolidated statement of cash flows for the six months
ended June 30, 2011 and 2010
 Notes to the condensed interim consolidated financial statements of the
CaixaBank Group for the six months ended June 30, 2011
-1-
Condensed interim consolidated financial statements of the
CaixaBank Group
CONDENSED CONSOLIDATED BALANCE SHEET
at June 30, 2011 and December 31, 2010 (Notes 1 to 20), in thousands of euros
CAIXABANK, SA AND COMPANIES COMPOSING THE CAIXABANK GROUP
Assets
30/06/2011
31/12/2010 (*)
Cash and balances with central banks
Held-for-trading portfolio (Note 7)
Other financial assets at fair value through profit or loss (Note 7)
Available-for-sale financial assets (Notes 7 and 9)
Loans and receivables (Note 7)
Held-to-maturity investments (Note 7)
Adjustments to financial assets - macro-hedges
Hedging derivatives
Non-current assets held for sale (Note 8)
Investments (Note 9)
Associates
Jointly controlled entities
Insurance agreements related to pensions
Reinsurance assets
Property and equipment (Note 10)
Property and equipment
Investment property
Intangible assets (Note 11)
Goodwill
Other intangible assets
Tax assets
Current
Deferred
Other assets (Note 12)
3,838,175
2,880,857
211,555
35,461,032
196,511,777
7,416,690
52,374
9,003,998
773,723
8,977,931
7,897,968
1,079,963
10,691
8,272
3,314,758
3,091,290
223,468
1,123,559
732,984
390,575
2,689,686
471,046
2,218,640
1,112,206
310
0
201,473
26,540,082
8,627,196
0
0
0
1,379
12,252,914
7,448,310
4,804,604
0
22,672
752,870
441,898
310,972
1,706,306
827,683
878,623
551,121
21,023
530,098
329,279
Total assets
273,387,284
50,985,602
Promemoria
Contingent liabilities (Note 19)
Contingent commitments (Note 19)
9,518,962
6,000
53,270,031
266,747
(*) See Note 1, “Comparison of information.”
The accompanying notes 1 to 20 are an integral part of the condensed interim consolidated balance
sheet at June 30, 2011.
-2-
at June 30, 2011 and December 31, 2010 (Notes 1 to 20), in thousands of euros
Liabilities and Equities
30/06/2011 31/12/2010 (*)
Liabilities
Other financial liabilities at fair value through profit or loss (Note 13)
Financial liabilities at amortized cost (Note 13)
Adjustments to financial liabilities - macro-hedges
Hedging derivatives
Liabilities associated with non-current assets held for sale
Liabilities under insurance contracts
Provisions (Note 14)
Tax liabilities
Current
Deferred
Other liabilities
Capital having the nature of a financial liability
3,016,262
226,727
213,986,494
1,018,521
7,261,846
0
20,165,541
2,798,812
2,172,122
199,141
1,972,981
1,134,248
0
1,635
210,464
15,626,652
0
9,366
0
19,142,179
54,001
1,124,220
104,551
1,019,669
114,072
0
Total liabilities
251,780,573
36,282,589
Equity (Note 15)
OWN FUNDS
Share capital
Share premium
Reserves
Other equity instruments
Less: Treasury shares
Profit attributable to the Group
Less: Dividends and remuneration (Note 3)
VALUATION ADJUSTMENTS
Available-for-sale financial assets (Note 1)
Cash flow hedges
Hedges of net investment in foreign operations
Exchange differences
Non-current assets held for sale
Entities accounted for using the equity method
Other valuation adjustments
TOTAL EQUITY ATTRIBUTABLE TO THE PARENT
NON-CONTROLLING INTERESTS
Valuation adjustments
Other
Total Equity
Total Equity and Liabilities
21,092,273
3,737,294
9,381,085
5,917,896
1,500,000
(277,476)
833,474
0
13,024,555
3,362,890
7,711,244
841,821
0
(43,471)
1,822,932
(670,861)
495,968
1,147,194
(726)
0
(96,287)
0
(554,213)
0
1,503,142
1,657,966
(6,556)
0
41,324
0
(189,592)
0
21,588,241
18,470
575
17,895
14,527,697
175,316
(4,489)
179,805
21,606,711
14,703,013
273,387,284
50,985,602
The accompanying notes 1 to 20 are an integral part of the condensed interim consolidated balance
sheet at June 30, 2011.
-3-
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended June 30, 2011 and 2010 (Notes 1 to 20), in thousands of euros
Interest and similar income
Interest expense and similar charges
Remuneration of capital having the nature of a financial liability
NET INTEREST INCOME
Return on equity instruments
Share of profit (loss) of entities accounted for using the equity method
Fee and commission income
Fee and commission expense
Trading income (net)
Exchange differences (net)
Other operating income
Other operating expenses
GROSS INCOME
Administrative expenses
Personnel expenses
Other general administrative expenses
Depreciation and amortization
Provisions (net)
Impairment losses on financial assets (net)
30/06/2011
30/06/2010 (*)
3,691,671
(2,148,806)
0
499,648
(479,208)
0
1,542,865
20,440
369,541
315,593
828,002
(55,967)
71,343
5,398
1,496,880
(1,156,677)
363,246
542,088
137,147
(137,056)
866
5,069
540,242
(317,223)
3,416,978
(1,587,297)
(1,188,603)
(398,694)
(184,266)
(26,616)
(1,366,511)
1,154,819
(106,984)
(50,178)
(56,806)
(76,854)
(2,461)
(6,257)
PROFIT FROM OPERATIONS
252,288
962,263
Impairment losses on other assets (net)
Gains/(losses) on disposal of assets not classified as non-current assets held for sale (Note 9)
Negative goodwill in business combinations
(14,799)
633,468
0
4,500
190,525
0
(542)
115,063
Gains/(losses) on non-current assets held for sale not classified as discontinued operations
PROFIT BEFORE TAX
870,415
Income tax
(37,307)
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS
833,108
1,225,328
0
0
CONSOLIDATED PROFIT FOR THE PERIOD
833,108
1,225,328
Profit attributable to the Parent
Profit attributable to non-controlling interests
Earnings per share from continuing and discontinued operations
Basic earnings per share (euros) (Note 3)
Diluted earnings per share (euros) (Note 3)
833,474
(366)
1,211,921
13,407
0.22
0.22
0.36
0.36
Profit from discontinued operations (net)
1,272,351
(47,023)
(*) See Note 1, “Comparison of information.
The accompanying notes 1 to 20 are an integral part of the condensed interim consolidated income
statement for the six months ended June 30, 2011.
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CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
Consolidated profit for the period
Other comprehensive income(**)
Available-for-sale financial assets
Revaluation gains (losses)
Amounts transferred to income statement
Other reclassifications
Cash flow hedges
Amount transferred to the initial carrying amount of hedged items
Actuarial gains (losses) on pension plans
Other comprehensive income
Income tax
Total comprehensive income
Attributable to the Parent
Attributable to non-controlling interests
30/06/2011
30/06/2010 (*)
833,108
(425,415)
(207,552)
(195,928)
(11,624)
0
2,083
(3,615)
5,698
0
0
0
0
0
0
(137,542)
(137,542)
0
0
0
0
0
0
0
(341,496)
(341,496)
0
0
0
259,092
1,225,328
(469,901)
(1,284,047)
(1,198,246)
(85,801)
0
(15,405)
(26,130)
10,725
0
0
0
0
0
0
471,249
474,960
(3,711)
0
0
0
0
0
0
(20,352)
33,648
(54,000)
0
0
378,654
407,693
755,427
409,255
(1,562)
744,211
11,216
(**) "Other comprehensive income" at June 30, 2011 is calculated using the CaixaBank Group's balance sheet at January 1, 2011 (see 'Comparison
of information', point b. of Note 1).
The accompanying notes 1 to 20 are an integral part of the condensed interim consolidated statement
of other comprehensive income for the six months ended June 30, 2011.
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CONDENSED CONSOLIDATED STATEMENT OF TOTAL CHANGES IN EQUITY
Equity attributable to the Parent
Own funds
Share capital Share premium
Opening balance at 01/01/11 (*)
Adjustments due to changes in accounting policy
Adjustments made to correct errors
Adjusted opening balance
Other changes in equity
Capital increases
Capital reductions
Conversion of financial liabilities into capital
Increase of other equity instruments
Reclassification of financial liabilities to other equity instruments
Reclassification of other equity instruments to financial liabilities
Dividends
Transactions with own equity instruments (net)
Transfers between equity items
Increases/ (decreases) due to business combinations
Payments with equity instruments
Other increases/ (decreases) in equity (*)
Final balance at 30/06/11
Reserves
reserves
(losses)
Other equity
instruments
Less:
Treasury
shares
Profit
for the year
attributable to
the Parent
Less: Dividends
and
remuneration
3,737,294
9,381,085
5,850,191
0
(43,466)
0
0
3,737,294
0
0
9,381,085
0
0
5,850,191
0
67,705
0
0
1,500,000
(43,466)
0
(234,010)
0
833,474
0
0
0
0
1,500,000
(35,230)
102,935
3,737,294
9,381,085
5,917,896
(234,010)
1,500,000
(277,476)
833,474
0
Total
equity
18,925,104
0
0
18,925,104
833,474
1,333,695
0
0
0
1,500,000
0
0
(35,230)
0
0
0
0
(131,075)
21,092,273
Valuation
adjustments
920,187
920,187
(424,219)
0
495,968
Total
Non-controlling
interests
36,548
Total
equity
19,845,291
0
0
19,845,291
409,255
1,333,695
0
0
0
1,500,000
0
0
(35,230)
0
0
0
0
(131,075)
(16,104)
19,881,839
0
0
19,881,839
407,693
1,317,179
0
0
0
1,500,000
0
0
(35,642)
0
0
0
0
(147,179)
21,588,241
18,470
21,606,711
36,548
(1,562)
(16,516)
(412)
(*) Véase Nota 1, apartado 'Comparación de la información'.
The accompanying notes 1 to 20 are an integral part of the condensed interim consolidated statement of changes in equity for the six months ended June
30, 2011.
-6-
CONDENSED CONSOLIDATED STATEMENT OF TOTAL CHANGES IN EQUITY
Own funds
Reserves
Share capital Share premium
Opening balance at 01/01/10
Adjustments due to changes in accounting policy
Adjustments made to correct errors
Adjusted opening balance
Other changes in equity
Capital increases
Capital reductions
Conversion of financial liabilities into capital
Increase of other equity instruments
Reclassification of financial liabilities to other equity instruments
Reclassification of other equity instruments to financial liabilities
Dividends
Transactions with own equity instruments (net)
Transfers between equity items
Increases/ (decreases) due to business combinations
Payments with equity instruments
Other increases/ (decreases) in equity
Final balance at 30/06/10
Reserves
reserves
(losses)
Other equity
instruments
Less:
Treasury
shares
Profit
for the year
attributable to
the Parent
Less: Dividends
and
remuneration
3,362,890
7,711,244
262,092
0
(39,880)
1,316,628
0
3,362,890
0
0
7,711,244
0
0
262,092
0
572,607
0
0
0
(39,880)
0
(13,244)
1,316,628
1,211,921
(1,316,628)
0
0
0
(201,773)
(438,498)
(13,244)
878,130
(878,130)
(103,750)
3,362,890
7,711,244
834,699
0
(53,124)
1,211,921
0
Total
equity
12,612,974
0
0
12,612,974
1,211,921
(757,265)
0
0
0
0
0
0
(640,271)
(13,244)
0
0
0
(103,750)
13,067,630
Valuation
adjustments
1,538,659
1,538,659
(467,710)
0
1,070,949
Total
14,151,633
0
0
14,151,633
744,211
(757,265)
0
0
0
0
0
0
(640,271)
(13,244)
0
0
0
(103,750)
14,138,579
Non-controlling
interests
Total
equity
169,031
14,320,664
0
0
14,320,664
755,427
(761,866)
0
0
0
0
0
0
(640,271)
(13,244)
0
0
0
(108,351)
169,031
11,216
(4,601)
(4,601)
175,646
14,314,225
The accompanying notes 1 to 20 are an integral part of the condensed interim consolidated statement of changes in equity for the six months ended June
30, 2011.
-7-
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (INDIRECT METHOD)
30/06/2011 30/06/2010 (*)
A) CASH FLOWS FROM OPERATING ACTIVITIES
(2,481,667)
1,268,580
Adjustments to obtain cash flows from operating activities
Other adjustments
Net increase in operating assets
Other operating assets
Other operating liabilities
Income tax (paid)/received
833,108
2,365,211
184,266
2,180,945
(5,717,293)
(1,712,947)
(4,004,346)
37,307
1,225,328
(152,978)
76,854
(229,832)
275,195
368,039
(92,844)
(78,965)
B) CASH FLOWS USED IN INVESTING ACTIVITIES
660,774
(1,388,413)
Payments
Intangible assets
Investments
Subsidiaries and other business units
Non-current assets and associated liabilities held for sale
Held-to-maturity investments
Other payments related to investing activities
Proceeds
Intangible assets
Investments
Other inflows related to investing activities
730,230
117,572
29,190
42,223
0
513,953
27,292
0
1,391,004
342,266
603,106
60,366
0
385,266
0
0
8,014,522
85,897
22
338,154
1,203,218
99,766
0
6,287,465
6,626,109
78,342
0
1,248,017
0
89,666
0
5,210,084
C) CASH FLOWS FROM FINANCING ACTIVITIES
3,218,580
103,337
Payments
Dividend income
Subordinated liabilities
Buyback and cancellation of treasury shares
Acquisition of treasury shares
Other payments related to financing activities
Proceeds
Issue of own equity instruments
Disposal of own equity instruments
Other inflows related to financing activities
4,059,420
469,043
0
0
218,311
3,372,066
7,278,000
0
1,500,000
0
5,778,000
531,932
438,498
0
0
5,876
87,558
635,269
0
0
0
635,269
D) EFFECT OF EXCHANGE RATE CHANGES
(2,875)
0
E) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C+D)
1,394,812
(16,496)
F) CASH AND CASH EQUIVALENTS AT JANUARY 1(**)
2,443,363
353,851
G) CASH AND CASH EQUIVALENTS AT JUNE 30 (E+F)
3,838,175
337,355
Cash
Cash equivalents at central banks
1,162,120
2,676,055
337,355
0
TOTAL CASH AND CASH EQUIVALENTS AT JUNE 30
3,838,175
337,355
COMPONENTS OF CASH AND CASH EQUIVALENTS AT JUNE 30
(**) Cash and cash equivalents following reorganization of the ”la Caixa” Group at January 1, 2011 (see note 1 'Reorganization of the ”la Caixa”
Group).
The accompanying notes 1 to 20 are an integral part of the condensed interim consolidated statement
of cash flows for the six months ended June 30, 2011.
-8-
Notes to the condensed interim consolidated financial
statements of the CaixaBank Group for the six months
ended June 30, 2011
CONTENTS
PAGE
1. Corporate information, basis of presentation and other information.......................................................... 9
2. Accounting policies and measurement bases ............................................................................................33
3. Shareholder remuneration and earnings per share ....................................................................................34
4. Risk management.......................................................................................................................................36
5. Capital adequacy management ..................................................................................................................44
6. Remuneration and other benefits paid to key management personnel and executives ............................46
7. Financial assets ..........................................................................................................................................48
8. Non-current assets held for sale .................................................................................................................53
9. Business combinations, acquisition and disposal of ownership interests in subsidiaries, jointly
controlled entities, associates and available-for-sale investments ............................................................54
10. Property and equipment ...........................................................................................................................58
11. Intangible assets .......................................................................................................................................59
12. Other assets ..............................................................................................................................................60
13. Financial liabilities.................................................................................................................................... 61
14. Provisions ..................................................................................................................................................65
15. Changes in equity .....................................................................................................................................66
16. Related party transactions ........................................................................................................................69
17. Segment information ................................................................................................................................ 71
18. Average number of employees ..................................................................................................................74
19. Contingent liabilities and commitments ..................................................................................................75
20. Other required disclosures .......................................................................................................................76
-9-
Explanatory notes to the condensed interim consolidated financial statements for the six
months ended June 30, 2011
CAIXABANK, SA
AND COMPANIES COMPOSING THE CAIXABANK GROUP
In accordance with prevailing regulations governing the content of condensed interim consolidated
financial statements, these explanatory notes include the condensed interim consolidated balance
sheet, income statement, statement of other comprehensive income, statement of total changes in
equity and statement of cash flows and comparative information with the annual consolidated
financial statements, along with explanations of events and disclosures for an adequate understanding
of the most significant changes in the first half of the year. As explained in note 1 “Comparison of
information,” for an adequate understanding of the information contained in these condensed interim
consolidated financial statements, they should be read in conjunction with the “la Caixa” Group’s and
the Criteria Group’s 2010 consolidated financial statements, authorized for issue on January 27, 2011
and February 24, 2011, respectively.
1. Corporate information, basis of presentation and other information
Corporate information
CaixaBank, SA (formerly Criteria CaixaCorp, SA) and its subsidiaries compose the CaixaBank Group
(hereinafter “the CaixaBank Group” or “the Group”). CaixaBank (hereinafter “CaixaBank”) is the
bank through which Caixa d'Estalvis i Pensions de Barcelona (“la Caixa”) carries on its business
indirectly as a credit institution in accordance with article 5 of Royal Decree-Law 11/2010, of July 9,
and article 3.4 of the consolidated text of the Catalan Savings Bank Law of March 11, 2008.“la Caixa”
is CaixaBank's majority shareholder, with a stake of 81.52% at June 30, 2011.
CaixaBank was created through the transformation of Criteria CaixaCorp, SA, as part of the
reorganization of the “la Caixa” Group (see “Reorganization of the “la Caixa” Group” in this note).
This reorganization culminated on June 30, 2011 with the entry of CaixaBank in the Bank of Spain’s
Registry of Banks and Bankers (“Registro Especial de Bancos y Banqueros”) and its listing on the Spanish
stock markets—as a bank—on July 1, 2011.
In accordance with the accounting standards applicable to intra-group mergers and spin-offs, the
reorganization is considered to have taken place for accounting purposes on January 1, 2011.
Consequently, these condensed interim consolidated financial statements and the notes thereto reflect
the consolidated results and consolidated cash flows from CaixaBank’s operations during the sixmonth period ended June 30, 2011 (see “Comparison of information” in this note).
CaixaBank engages mainly in all manner of activities, operations, acts, contracts and services related to
the banking sector in general, including the provision of investment services. As a bank, it is subject to
the oversight of the Bank of Spain.
CaixaBank is also a public limited company (sociedad anónima) whose shares are admitted to trading on
the Barcelona, Madrid, Valencia and Bilbao stock exchanges and on the continuous market and,
- 10 -
therefore, is subject to the oversight of the Spanish Securities Market Regulator (Comisión Nacional
del Mercado de Valores or CNMV).
Reorganization of the “la Caixa” Group
The enactment of Royal Decree-Law 11/2010, of July 9, on the governing bodies and other matters
relating to the legal framework for savings banks, in addition to the approval of the consolidated text
of the Catalan Savings Banks Law, through Royal Decree-Law 5/2010, introduced the possibility for a
savings bank to conduct its financial activities indirectly through a bank.
Under this legal framework, on January 27, 2011, the Boards of Directors of “la Caixa,” Criteria
CaixaCorp, SA (“Criteria”) and MicroBank de “la Caixa”, SA (“MicroBank”) entered into a framework
agreement (the “Framework Agreement”) entailing the reorganization of the “la Caixa” Group in
order to adapt to the new demands of national and international regulations and, specifically, to the
new requirements of the Basel Committee on Banking Supervision (Basel III). The structure designed
enables “la Caixa” to indirectly carry out its financial activity while continuing to comply with its
inherent social welfare purposes.
Approval was given at the Ordinary General Assembly of “la Caixa” and the Annual General Meeting
of Criteria held April 28 and May 12, 2011, respectively, to all proposals set forth by the respective
Boards of Directors regarding the reorganization of the “la Caixa” Group.
On June 30, 2011, the corporate transactions included in the Framework Agreement were completed,
for legal and business purposes, which led to the transformation of Criteria into CaixaBank. In
accordance with prevailing legislation, these transactions were accounted for retrospectively from
January 1, 2011 (see “Corporation information” in this note).
In addition to the retroactive accounting date mentioned above, the accounting standards applicable to
intra-group mergers and spin-offs require that assets and liabilities subject to such operations be
valued at their carrying amount in the consolidated financial statements of the group in question.
Consequently, the assets and liabilities included in the transactions listed below have been measured at
their carrying amount in the "la Caixa" Group's consolidated financial statements at December 31,
2010.
Following is a description of the main corporate transactions carried out within the reorganization of
the “la Caixa” Group:
a) spin-off by “la Caixa” in favor of Microbank of the assets and liabilities making up its
financial activity, except the ownership interests of “la Caixa” in Servihabitat XXI, SAU,
Metrovacesa, SA and Inmobiliaria Colonial, SA, certain of its real estate assets and certain of
its debt issues. “la Caixa” maintains its Welfare Fund and continues to finance and support
charitable and welfare activities. The net carrying amount in “la Caixa”’s individual balance
sheet of the assets and liabilities spun off by “la Caixa” in favor of MicroBank is €11,591,982
thousand.
- 11 -
At consolidated levels, the net assets and liabilities amount to €11,894,481 thousand, broken
down as follows:
 Net carrying amount in the separate balance sheet of “la Caixa”
of the spun off assets and liabilities
 Reserves at “la Caixa” Group consolidated companies
spun off in favor of MicroBank
 Net equity of MicroBank prior to the reorganization
Total equity of MicroBank post spin-off (*)
(€ thousand)
11,591,982
211,256
91,243
11,894,481
(*) MicroBank’s equity post spin-off comprises the equity of the businesses received from
Criteria (see “Comparison of information – b. Impact of the reorganization of the “la Caixa”
Group’s activities on the composition of Criteria Group’s assets and liabilities: preparation of
a condensed consolidated balance sheet for the CaixaBank Group at January 1, 2011” in this
note).
The market value of 100% of MicroBank’s capital at January 1, 2011 was estimated at
€9,515,585, equivalent to 0.8 times the equity of MicroBank. As indicated in the Framework
Agreement, in determining this factor, the share prices of entities with similar profiles were
considered, adjusting the multiples to take into account the better competitive position, credit
quality and coverage level, and the absence of real-estate assets in the portfolio.
This market value estimate is supported by several fairness opinions issued by independent
experts.
b) contribution to Criteria by “la Caixa” of all the shares of MicroBank post spin-off. In
exchange, Criteria transferred the following to “la Caixa”:

The equity holdings listed below, the consolidated carrying amount of which is
€7,535,809 thousand (see “Comparison of information – b. Impact of the reorganization
of the “la Caixa” Group's activities on the composition of Criteria Group's assets and
liabilities: Preparation of a condensed consolidated balance sheet for the CaixaBank
Group at January 1, 2011 – Businesses transferred” in this note), and whose market
value has been estimated at €7,471,340 thousand (both figures are at January 1, 2011.
(i) a direct 36.64% stake in Gas Natural SDG, SA;
(ii) a direct 20.72% stake in Abertis Infraestructuras, SA (hereinafter “Abertis”) and a
direct 50.1% stake in Inversiones Autopistas, SL (owner of 7.75% of Abertis)
which, in total, represents a 24.61% stake in the share capital of Abertis;
(iii) an indirect 24.03% stake in the share capital of Sociedad General de Aguas de
Barcelona, SA (through its direct 24.26% stake in Hisusa, Holding de
Infraestructuras y Servicios Urbanos, SA, owner of 99.04% of the share capital of
Sociedad General de Aguas de Barcelona, SA);
(iv) a direct and indirect 50% stake in PortAventura Entertainment, SA; and
(v) a direct 100% stake in Mediterránea Beach & Golf Community, SA.
The market values of these investments was estimated based on the following measurement
criteria:
- 12 -
-

Gas Natural SDG, SA and Abertis Infraestructuras, SA: average share price between
December 27, 2010 and January 26, 2011, adjusted for dividends paid within the
period.
Sociedad General de Aguas de Barcelona, SA: latest transaction price.
PortAventura Entertainment, SA: latest transaction EBITDA multiples, taking the
updated EBITDA based on the latest close.
Mediterranea Beach & Golf Community, SA: net carrying amount of leased
properties and third-party appraisal of land for residential, hotel and commercial use
with completed development.
374,403,908 new shares of Criteria issued as part of a non-cash capital increase for
€2,044,245 thousand. The unit value of the shares issued by Criteria was set at €5.46,
equivalent to net asset value (“NAV”) without factoring in the impact of the
reorganization of Criteria’s assets on January 26, 2011.
The combined amount of the capital increase (€2,044,245 thousand) and the market
value of the shareholdings delivered by Criteria to “la Caixa” (€7,471,340 thousand)
equal the market value of the MicroBank shares delivered to Criteria by “la Caixa”
(€9,515,585 thousand euros).
c) the absorption of MicroBank by Criteria. This transaction gave Criteria the status of a credit
institution with the corporate name “CaixaBank, SA.” CaixaBank is the listed bank through
which “la Caixa” indirectly carries out its financial activity.
The reorganization process described above also entailed the delivery to “la Caixa” Group employees
of CaixaBank shares equivalent to 0.4% of total capital.
Following Criteria’s Annual General Meeting held on May 12, 2011, Criteria shareholders who had not
voted in favor of the merger with MicroBank were given until June 14, 2011 to exercise their voluntary
right of withdrawal. Upon expiry of this period, holders of 46,485,705 Criteria shares, representing
1.38% of pre-reorganization share capital, had exercised their right of withdrawal. As a result and
pursuant to the resolution adopted at the Annual General Meeting of May 12, 2011, Criteria acquired
the corresponding treasury shares at a price of €5.0292 per share (see notes 5 and 15).
Following the completion of these corporate transactions, CaixaBank became the owner of the stakes
previously held by Criteria, in insurance companies, mutual fund managers and foreign financial
entities, Telefónica, SA and Repsol-YPF, SA.
Also within the scope of the reorganization of the “la Caixa” Group, the following transactions are
scheduled to be carried out in the second half of 2011:
 contribution by “la Caixa” to a non-listed holding company, to be called CaixaHolding, SA, of
all the shareholdings indicated in (b) above, as well as other assets not included in the spinoff
of “la Caixa” in favor of MicroBank indicated in (a) above. “la Caixa” will be CaixaHolding’s
sole shareholder.
 spin-off by CaixaBank in favor of a newly created entity, to be called Nuevo Micro Bank, SA,
of the assets and liabilities of the microcredit activity carried out by MicroBank prior to the
reorganization
- 13 -
The following chart illustrates the reorganization of the “la Caixa” Group:
Previous structure
Welfare
projects
Banking and
(includes real
estate assets)
unlisted
79.5%
New structure
Welfare
projects
81.5%
unlisted
100%
CaixaHolding
unlisted
listed
Insurance
companies
International
banks
Industrial portfolio
services portfolio
previously Criteria listed
Banking and
insurance
Rest of industrial
portfolio
International banks
Real-estate
assets
Repsol + Telefonica
In connection with the foregoing, in order to bolster the CaixaBank Group's equity structure, Criteria
(called CaixaBank after the reorganization) issued €1,500 million of subordinated bonds with
mandatory conversion into CaixaBank shares in June 2011, for distribution through the "la Caixa”
network (see note 15).
The costs associated with the aforementioned transactions as of June 30, 2011 are estimated at €129
million, of which €71 million relate to estimated “Personnel expenses” incurred in the planned
delivery of CaixaBank shares to "la Caixa" Group employees. In addition, €43 million were recognized
in “Other general administrative expenses,” including costs related to the advisory and design of the
transaction, the adaptation to the new organizational structure and the communication, disclosure and
dissemination of the reorganization. Expenses attributable directly to the issue of own equity
instruments (€15 million) were deducted directly from equity (see note 15).
Finally, within the procedure described in the preceding paragraphs, the 12.69% interest in RepsolYPF, SA was recognized under associates, with effect from January 1, 2011 as the CaixaBank Group
then had significant influence over the company.
- 14 -
Basis of presentation
On February 24, 2011, the Board of Directors authorized for issue Criteria Group's 2010 consolidated
financial statements in accordance with International Financial Reporting Standards (“IFRSs”) as
adopted by the European Union through EU regulations, complying with Regulation no. 1606/2002
of the European Parliament and of the Council of July 19, 2002 and subsequent amendments thereto.
In the preparation of the 2010 consolidated financial statements, the consolidation principles,
accounting policies and measurement bases described in note 2 therein were applied to give a true and
fair view of the consolidated equity and financial position of the Criteria Group at December 31, 2010
and of the results of its operations, the changes in consolidated equity and cash flows in the year then
ended.
The accompanying condensed interim consolidated financial statements of the CaixaBank Group for
the first half of 2011 were prepared in accordance with IFRSs, particularly IAS 34 Interim Financial
Reporting. They were also drawn up taking into consideration Bank of Spain Circular 4/2004 and the
Spanish Securities Market Regulator (CNMV) Circular 1/2008. These condensed interim consolidated
financial statements were authorized for issue by the Board of Directors of CaixaBank at its meeting
of July 21, 2011.
According to IAS 34, the interim financial report is intended to provide an update on the latest
complete set of annual financial statements. Accordingly, it focuses on new activities, events, and
circumstances and does not duplicate information previously reported. Given the scope of the
reorganization of the “la Caixa” Group (see “Reorganization of the “la Caixa” Group” in this note),
for an appropriate understanding of the information contained in the accompanying condensed
interim consolidated financial statements, they should be read in conjunction with the “la Caixa”
Group's and the Criteria Group's 2010 consolidated financial statements, authorized for issue on
January 27, 2011 and February 24, 2011, respectively.
The accompanying condensed interim consolidated financial statements, balance sheet, income
statement, statement of other comprehensive income, statement of total changes in equity and
statement of cash flows are presented according to the formats provided for credit institutions in
CNMV Circular 1/2008, of January 30.
Standards and interpretations issued by the International Accounting Standard Board (IASB) that became effective in
2011
- IAS 32 Financial Instruments: Presentation (Amendment)
The amendment clarifies the classification of rights issues for purchase of shares (rights, options or
warrants) denominated in foreign currency. The amendment stipulates that rights issued to acquire a
fixed number of shares for a fixed amount must be classified as equity, regardless of the currency in
which the fixed amount is denominated, provided they meet the requirements of the standard.
- IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
The interpretation sets forth accounting treatment for a debtor that issues equity instruments to a
creditor to extinguish all or part of a financial liability.
- 15 -
- IAS 24 Related Party Disclosures (Revised)
This introduces two new features: (a) partial exemption from the disclosure requirements when there
is a relationship involving entities that are controlled or related to the government (or an equivalent
government institution) and (b) revised definition of a related party, clarifying relationships that were
previously not explicit in the standard.
- IFRIC 14 Prepayments of a Minimum Funding Requirement (Amendment)
This amendment states that, in some circumstances, entities are not permitted to recognize as an asset
some voluntary prepayments for minimum funding contributions.
Standards and interpretations issued by IASB but not yet effective
At the date of authorization for issue of these consolidated financial statements, the following
standards and interpretations had been issued by the IASB but were not yet effective because they had
not yet been endorsed by the European Union.
Standards and interpretations
Title
Mandatory application for
annual periods beginning on or
after:
Amendment to IFRS 7
Amendment to IAS 12
Amendment to IAS 1
IFRS 9
IFRS 10
IFRS 11
IFRS 12
IFRS 13
Amendment to IAS 19
Amendment to IAS 27
Amendment to IAS 28
Financial instruments: Disclosures
Taxes
Presentation of Financial Statements
Financial instruments: Classification and Measurement
Consolidated Financial Statements
Joint Arrangements
Disclosure of Interests in Other Entities
Fair Value Measurement
Employee Benefits
Consolidated and Separate Financial Statements
Investments in Associates
July 1, 2011
January 1, 2012
July 1, 2012
January 1, 2013
January 1, 2013
January 1, 2013
January 1, 2013
January 1, 2013
January 1, 2013
January 1, 2013
January 1, 2013
- IFRS 7 Financial Instruments: Disclosures (Amendment)
This amendment clarifies and enhances the disclosure requirements in financial statements regarding
transfers of financial assets.
- IAS 12 Income taxes (Amendment)
The amendment includes an exception to the general principles of IAS 12 affecting deferred taxes on
investment properties measured using the fair value model in IAS 40 Investment Property. In these cases,
the amendment introduces, with respect to calculating deferred taxes, a presumption that recovery of
the carrying amount will normally be through sale.
This presumption is refuted when the investment property is depreciable and the business model
entails holding the property to earn economic benefits through its future use rather than sale.
- IAS 1 Presentation of Financial Statements (Amendment)
This amendment requires entities to present a total for “profit or loss” separately from “other
comprehensive income,” distinguishing between those items that will be reclassified to profit or loss
subsequently and those that will not be reclassified.
- 16 -
- IFRS 9 Financial Instruments: Classification and Measurement
IFRS 9 will eventually replace the section of IAS 39 that currently deals with classification and
measurement. There are some major differences with respect to the current standard; e.g. approval of
a new classification model based on only two categories: amortized cost and fair value, entailing the
elimination of the current held-to-maturity investments and available-for-sale financial assets
categories; a single impairment method for assets measured at amortized cost, and non-separation of
embedded derivatives in finance contracts.
- IFRS 10 Consolidated Financial Statements
This standard was issued in conjunction with IFRS 11, IFRS 12 and the amendments to IAS 27 and
IAS 28 (see below), replacing the current standards governing consolidation and recognition of
subsidiaries, associates and joint ventures, as well as disclosure requirements.
Upon entry into force, this standard will replace the consolidation guidelines set out in the current IAS
27 Consolidated and Separate Financial Statements and in interpretation SIC 12 Consolidation – Special Purpose
Entities.
The standard primarily modifies the definition of control, eliminating the risks/rewards approach set
out in SIC 12. Control is now defined through three required elements: power over the investee;
exposure or rights to variable returns from the investee; and the ability to use the power over the
investee to affect the amount of the investor's returns.
- IFRS 11 Joint Arrangements
Upon entry into force, IFRS 11 replaces the current IAS 31 Interests in Joint Ventures. The fundamental
change compared to the prevailing standard is the elimination of the proportionate consolidation
option for jointly-controlled entities. Under IFRS 11, these entities should be accounted for using the
equity method. The standard also modifies certain nuances when analyzing joint arrangements,
focusing on whether or not the arrangement is structured through a separate vehicle. The standard
also defines two types of joint arrangements: joint operations and joint ventures.
- IFRS 12 Disclosure of Interests in Other Entities
IFRS 12 groups together and extends the scope of all disclosure requirements regarding interests in
subsidiaries, associates, joint ventures or other investees. The primary change with respect to current
disclosure requirements is the new obligation to disclose interests in unconsolidated structured
entities.
- IFRS 13 Fair Value Measurement
IFRS 13 aims to provide the sole guidance for calculating the fair value of assets and liabilities when
fair value measurement is required or permitted by other IFRS. The new standard does not modify
the prevailing measurement criteria established in other standards, and is applicable to measurements
of both financial and non-financial assets and liabilities.
IFRS 13 modifies the current definition of fair value, introducing new considerations, and increases
consistency and comparability in fair value measurement by adopting the "fair value hierarchy," which
is conceptually similar to that set out for certain financial instruments in IFRS 7 Financial Instruments:
Disclosures.
- IAS 19 Employee Benefits (Amendment)
The most relevant modifications, which primarily affect defined benefit plans, are as follows:
 Elimination of the corridor approach, under which entities were able to defer a certain portion
of their actuarial gains and losses. Following entry into force of this modification, all actuarial
gains and losses must be recognized immediately.
- 17 -

Relevant changes in grouping and presenting cost components in the statement of other
comprehensive income. The entire cost of the obligation shall be presented in three separate
components: service cost, net interest component and revaluation gains and losses.
- IAS 27 Consolidated and Separate Financial Statements (Amendment)
This modification reissues the standard, given that from its entry into force its content will only refer
to separate financial statements.
- IAS 28 Investments in Associates (Amendment)
This modification reissues the standard, which now includes guidance on how to account for joint
ventures, indicating that they shall henceforth be accounted for as associates, i.e., using the equity
method.
Responsibility for the information and for the estimates made
The preparation of the interim consolidated financial statements required senior executives of
CaixaBank and consolidated companies to make certain judgments and estimates. These estimates and
judgments were based on the same assumptions and criteria used in the preparation of the “la Caixa”
Group's and the Criteria Group's 2010 consolidated financial statements and relate, inter alia, to the fair
value of certain assets and liabilities, impairment losses, measurement of goodwill and intangible
assets, the useful life of property and equipment and intangible assets, actuarial assumptions for the
measurement of post-employment benefit obligations, the assumptions used for the liability adequacy
test for mathematical provisions in the insurance business, liabilities of early retirement schemes, the
equity and results of entities accounted for using the equity method, and the income tax expense
calculated based on the best estimate of the expected tax rate applicable at the end of the year.
These estimates relate to the amounts recognized in both the condensed interim consolidated balance
sheet at June 30, 2011 and the condensed interim consolidated income statement for the six months
ended June 30, 2011. Although these estimates were made on the basis of the best information
available, events may occur that make it necessary for them to be changed in the next interim period
or future periods. Any such changes would be made prospectively, with the effects thereof recognized
in the consolidated balance sheet and income statements.
Comparison of information
The reorganization of the activity of the “la Caixa” Group (see “Reorganization of the “la Caixa”
Group” in this note) led to a change in the corporate purpose and the composition of Criteria
CaixaCorp, SA's assets and liabilities. For an appropriate understanding and comparison of the
consolidated financial position and equity of the CaixaBank Group at June 30, 2011 to the situation
prevailing at December 31, 2010, and of the consolidated results of its operations and its consolidated
cash flows in the six months ended June 30, 2011 to those for the same period of the previous year,
the following additional details are provided.
a. Adaptation of the 2010 consolidated financial statements authorized for issue by the directors of
Criteria CaixaCorp, SA to the specific format established for credit institutions (CNMV Circular
1/2008 of January 30).
b. Impact of the reorganization of the “la Caixa” Group's activities on the composition of Criteria
Group's assets and liabilities: preparation of a condensed consolidated balance sheet for the
CaixaBank Group at January 1, 2011.
- 18 -
c. Combined consolidated income statement of the CaixaBank Group for the six months ended
June 30, 2010.
Points a) and b), taken together, provide relevant information for understanding the scope of the
reorganization of the "la Caixa" Group's activities and its impact on the equity and the cash and cash
equivalents of the CaixaBank Group. This facilitates understanding of the business performance of the
CaixaBank Group from January 1, 2011, the effective date of the reorganization for accounting
purposes, to June 30, 2011. The comparative information regarding the balance sheet presented in the
accompanying notes 3 to 20 refer to January 1, 2011 following completion of the reorganization of the
"la Caixa" Group. The condensed consolidated statement of changes in equity and statement of cash
flows for the six months ended June 30, 2011 show the changes in equity and cash flows from January
1, 2011, the date for accounting purposes of the reorganization (see “Reorganization of the “la Caixa”
Group” and section b. Impact of the reorganization of the “la Caixa” Group’s activities on the
composition of Criteria Group’s assets and liabilities: preparation of a condensed consolidated balance
sheet for the CaixaBank Group at January 1, 2011 in “Comparison of information”).
With respect to the CaixaBank Group's results, the accompanying notes 3 to 20 include comparative
information for the first half of 2010, authorized for issue by the directors of Criteria on July 29, 2010.
The notes also include the references to details the CaixaBank Group combined income statement for
the six months ended June 30, 2010 considered essential for comparison of results of the Group’s
operations (see c. Combined consolidated income statement of the CaixaBank Group for the six
months ended June 30, 2010, in this section).
As indicated in preceding paragraphs, the information related to 2010 and January 1, 2011 contained
in these condensed interim consolidated financial statements is presented solely for purposes of
comparison with the six months ended June 30, 2011.
IFRS require that the information presented in the consolidated financial statements for different
periods be consistent. In the first six months of 2011, there were no significant amendments with
respect to the accounting regulations applicable that affected the comparability of information (see
note 2).
a. Adaptation of the 2010 consolidated financial statements authorized for issue by the directors of
Criteria CaixaCorp, SA to the specific format established for credit institutions (CNMV Circular
1/2008 of January 30).
To present fairly the comparative information for 2010, the Criteria Group's consolidated financial
statements for that year were restated to the specific format for credit institutions set out in
prevailing legislation.
The following tables present, for the Criteria Group’s balance sheet at December 31, 2010, and the
income statement, statement of other comprehensive income and statement of cash flows for the
six months ended June 30, 2010, the adaptation of the format approved by the directors at their
meetings of February 24, 2011 and July 29, 2010, respectively, to the specific format for credit
institutions.
The reconciliation between the two presentation formats can be made using the alphabetical key
accompanying each heading:
- 19 -
CRITERIA CAIXACORP, SA AND COMPANIES COMPOSING THE CRITERIA GROUP (NOW THE CAIXABANK GROUP)
At December 31, 2010, in thousands of euros
FORMAT PREPARED BY THE DIRECTORS
SPECIFIC FORMAT FOR CREDIT INSTITUTIONS
Assets
Assets
2010
2010
NON-CURRENT ASSETS
Goodwill and other intangible assets
Investment property
Investments accounted for using the equity method
Financial assets
Loans and receivables
Other financial assets at fair value through profit or loss
Other financial assets
Deferred tax assets
Reinsurance assets
Total non-current assets
1,706,306
441,898
310,972
12,252,914
27,589,860
26,540,082
847,853
201,473
452
530,098
22,672
42,854,720
a.
b.
c.
d.
8,698
7,174,171
1,379
341,604
21,023
115,580
200,209
4,792
605,030
8,130,882
j.
f.
k.
e.
f.
g.
f.
h.
i.
CURRENT ASSETS
Inventories
Other short-term financial assets
Other current assets
Tax assets
Prepayments and accrued income
Dividends receivable
Other current assets
Cash and cash equivalents
Total current assets
Total assets
50,985,602
l.
j.
j.
j.
f.
Held-for-trading portfolio
Other financial assets at fair value through profit or loss
Valores representativos de deuda
Hedging derivatives
Investments
Associates
Reinsurance assets
Investment property
Intangible assets
Goodwill
Tax assets
Current
Deferred
Other assets
Total assets
310
0
f.
201,473 g.
26,540,082 e.
19,343,158
7,196,924
8,627,196
0
0
0
1,379
12,252,914
7,448,310
4,804,604
0
22,672
752,870
441,898
310,972
1,706,306
827,683
878,623
551,121
21,023
530,098
329,279
50,985,602
f.
k.
d.
i.
b.
c.
a.
l.
h.
j.
NOTE: The reconciliation between the two presentation formats can be made using the alphabetical key accompanying each heading: The sum of the amounts identified with the same
letter in the format authorized for issue by the directors is equivalent to the sum of the amounts identified with the same letter in the specific format for credit institutions. Where
necessary, additional breakdowns have been provided under asterisk points.
- 20 -
At December 31, 2010, in thousands of euros
Liabilities
Equity and liabilities
2010
2010
EQUITY
Share capital, reserves and profit
Share capital
Share premium
Reserves
(Interim dividend paid)
Treasury shares
Non-controlling interests
Total Equity
Liabilities
13,024,555 a.
3,362,890
7,711,244
841,821
1,822,932
(670,861)
(43,471)
1,503,142 b.
175,316 c.
14,703,013
NON-CURRENT LIABILITIES
Provisions for insurance contracts and other
Provisions for insurance contracts
Other non-current provisions
Non-current borrowings
Financial liabilities at amortized cost
Other financial liabilities
Derivatives
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities
18,326,038
18,272,037
54,001
8,112,594
7,893,786
210,464
8,344
1,019,669
82,174
27,540,475
d.
e.
f.
g.
h.
i.
f.
CURRENT LIABILITIES
Provisions for insurance contracts
Bank borrowings
Customer deposits
Other non-current financial liabilities
Derivatives
Tax liabilities
Deferred income
Other current liabilities
Total current liabilities
870,142
7,650,692
6,758,157
82
892,453
2,657
104,551
79,430
34,642
8,742,114
50,985,602
d.
f.
h.
j.
k.
k.
Held-for-trading portfolio
Other financial liabilities at fair value through profit or loss
Hedging derivatives
Liabilities associated with non-current assets held for sale
Provisions
Tax liabilities
Current
Deferred
Welfare fund
Other liabilities
Capital having the nature of a financial liability
Total liabilities
1,635 h.
210,464
15,626,652
0
9,366
0
19,142,179
54,001
1,124,220
104,551
1,019,669
0
114,072
0
36,282,589
g.
f.
h.
d.
e.
j.
i.
k.
Equity
Own funds
Share capital
Share premium
Reserves
Less: Treasury shares
Less: Dividends and remuneration
Cash flow hedges
Other valuation adjustments
Total Equity
13,024,555 a.
3,362,890
7,711,244
841,821
0
(43,471)
1,822,932
(670,861)
1,503,142 b.
1,657,966
(6,556)
0
41,324
0
(189,592)
0
14,527,697
175,316 c.
14,703,013
50,985,602
- 21 -
CONDENSED CONSOLIDATED INCOME STATEMENT
for the six months ended June 30, 2010, in thousands of euros
30/06/2010
Revenue
Revenue from equity instruments
Trading income
Gains/(losses) on transactions with Group companies, jointly controlled entities and associa
Operating expenses
Personnel expenses
Depreciation and amortization charge
Net impairment gains/(losses)
Other expenses
Provisions (net)
Other gains and losses
FINANCIAL LOSS
PROFIT BEFORE TAX
Income tax
PROFIT FROM CONTINUING OPERATIONS
Profit from discontinued operations
PROFIT ATTRIBUTABLE TO THE GROUP
30/06/2010
2,720,543 a.
542,088 b.
363,246 c.
123,440 d.
190,450 e.
(2,371,629) a.
(50,178) f.
(76,854) g.
(1,694) (*)
(56,806) h.
(2,461) i.
(4,713) (**)
1,375,432
1,167 a.
(109,317) a.
5,069 j.
(103,081)
1,272,351
(47,023) k.
1,225,328
0 l.
1,225,328
(13,407) m.
1,211,921
Net impairment gains/(losses)
(1,694)
(6,257)
63
4,500
Other gains and losses
(4,713) (**)
Gains on disposal of property and equipment
Gains on disposal of property and equipment
Losses on disposal of non-current property and equipment held for sale
Other
(*)
n.
ñ.
q.
NET INTEREST INCOME
GROSS INCOME
Personnel expenses
Provisions (net)
Gains/(losses) on disposal of assets not classified as non-current assets held for sale
499,648
(479,208)
0
20,440
363,246
542,088
137,147
(137,056)
866
5,069
540,242
(317,223)
1,154,819
(106,984)
(50,178)
(56,806)
(76,854)
(2,461)
(6,257)
962,263
4,500
190,525
0
PROFIT BEFORE TAX
Income tax
115,063
1,272,351
(47,023)
1,225,328
0
1,225,328
1,211,921
13,407
Gains/(losses) on transactions with Group companies, jointly controlled entities and associates
Ganancia por venta de inmovilizado material
190,525
190,450
75
115,063
(7,499)
75 o.
(7,574) p.
2,786 a.
Gains on disposal of strategic equity instruments - available-for-sale financial assets
Losses on disposal of non-current property and equipment held for sale
Impairment of non-current assets held for sale
122,574
(7,574)
63
- 22 -
CONDENSED CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
30/06/2010
Consolidated profit for the year (per consolidated income statement)
1,225,328
Income and expense recognized directly in equity
(337,114)
Revaluation of financial instruments
Cash flow hedges
Translation differences
Tax effect
(1,198,246)
(26,130)
474,960
33,648
378,654
Transfers to profit or loss
(132,787)
Revaluation of financial instruments
Cash flow hedges
Translation differences
Tax effect
(122,573)
10,725
(3,711)
(54,000)
36,772
COMPREHENSIVE INCOME FOR THE PERIOD
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE GROUP
30/06/2010
a.
b.
c.
d.
e.
f.
g.
h.
i.
f.
755,427
(11,216) j.
744,211
Cash flow hedges
Amount transferred to the initial carrying amount of hedged items
Actuarial gains (losses) on pension plans
Income tax
Attributable to the Parent
Attributable to non-controlling interests
1,225,328
(469,901)
(1,284,047)
(1,198,246)
(85,801)
0
(15,405)
(26,130)
10,725
0
0
0
0
0
0
471,249
474,960
(3,711)
0
0
0
0
0
0
(20,352)
33,648
(54,000)
0
0
378,654
a.
f.
b.
g.
c.
h.
d.
i.
e.
755,427
744,211
11,216 j.
- 23 -
CONDENSED CONSOLIDATED CASH FLOW STATEMENT (INDIRECT METHOD)
30/06/2010
1. Cash flows from operating activities
Profit before tax
Adjustments to profit/(loss)
Changes in working capital
Other operating assets and liabilities
Interest paid
Tax recovered (paid)
2. Cash flows used in investing activities
Interest received
Revenue from equity instruments
Dividends received from associates
Investments (-)
- Subsidiaries, jointly controlled entities and associates
- Property and equipment, investment property and other intangible
- Available-for-sale financial assets
- Non-current assets held for sale
- Loans granted
Disposals (+)
- Subsidiaries, jointly controlled entities and associates
- Property and equipment, investment property and other intangible
- Available-for-sale financial assets
- Non-current assets held for sale
- Repayment of loans granted
3. Cash flows from financing activities
Dividends paid
Treasury shares
Loans obtained
Repayment of loans obtained
1,268,580
1,272,351 a.
(200,001) b.
37,618 c.
325,280 c.
(87,703) c.
(78,965) d.
(1,388,413)
1,167 e.
152,265 f.
277,139 f.
(8,014,522)
(1,541,372) g.
(85,919) h.
(4,884,205) i.
(99,766) j.
(1,403,260) i.
6,195,538
818,613 f.
78,342 k.
4,212,275 e.
89,666 l.
996,642 e.
103,337
(438,498) m.
(5,876) n.
635,269 o.
(87,558) p.
NET INCREASE/DECREASE IN CASH AND CASH EQUIVALENTS
(16,496)
Cash and cash equivalents at January 1
Cash and cash equivalents at June 30
Cash generated (used) during the year
353,851 q.
337,355 r.
(16,496)
30/06/2010
A) CASH FLOWS FROM OPERATING ACTIVITIES
Adjustments to obtain cash flows from operating activities
Other adjustments
Net increase in operating assets
Operating assets
Operating liabilities
Income tax (paid)/received
B) CASH FLOWS USED IN INVESTING ACTIVITIES
Payments
Intangible assets
Investments
Other payments related to investing activities
Proceeds
Intangible assets
Investments
Other inflows related to investing activities
C) CASH FLOWS FROM FINANCING ACTIVITIES
Payments
Dividend income
Buyback and cancellation of treasury shares
Acquisition of treasury shares
Other payments related to financing activities
Proceeds
Issue of own equity instruments
Disposal of own equity instruments
Other inflows related to financing activities (*)
D) EFFECT OF EXCHANGE RATE CHANGES
1,268,580
1,272,351
(200,001)
76,854
(276,855)
275,195
368,039
(92,844)
78,965
(1,388,413)
8,014,522
85,897
22
338,154
1,203,218
99,766
0
6,287,465
6,626,109
281
78,061
1,248,017
0
89,666
0
5,210,084
103,337
531,932
438,498
a.
b.
c.
d.
h.
h.
g.
g.
j.
i.
k.
k.
f.
l.
e.
m.
5,876 n.
87,558 p.
635,269
0
0
0
635,269 o.
0
E) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (A+B+C+D)
(16,496)
F) CASH AND CASH EQUIVALENTS AT JANUARY 1
353,851 q.
G) CASH AND CASH EQUIVALENTS AT JUNE 30 (E+F)
337,355 r.
COMPONENTS OF CASH AND CASH EQUIVALENTS AT JUNE 30
Cash
Cash equivalents at central banks
Other financial assets
Less: Bank overdraft repayable on demand
337,355
0
0
0
TOTAL CASH AND CASH EQUIVALENTS AT JUNE 30
337,355
(*) This amount corresponds to the financing received from "la Caixa"
- 24 -
b. Impact of the reorganization of the “la Caixa” Group's activities on the composition of Criteria
Group's assets and liabilities: preparation of a condensed consolidated balance sheet for the
CaixaBank Group at January 1, 2011.
The tables below illustrate the adaptation of Criteria Group's condensed consolidated balance sheet
at December 31, 2010 to the CaixaBank Group's condensed consolidated balance sheet at January
1, 2011, the date of the reorganization for accounting effects (see “Reorganization of the “la Caixa”
Group” in this note).
The column “Criteria CaixaCorp Group 12/31/10” corresponds to the Criteria Group's
consolidated balance sheet at December 31, 2010, presented in accordance with the specific format
for credit institutions (see a. “Adaptation of the 2010 consolidated financial statements authorized
for issue by the directors of Criteria CaixaCorp, SA to the specific format established for credit
institutions (CNMV Circular 1/2008, of January 30)” in this note).
The following subsections describe the content of “Businesses received,” “Businesses transferred”
and “Consolidation eliminations and other adjustments.”
- 25 -
Reconciliation of the Criteria CaixaCorp Group's condensed consolidated balance sheet at December 31, 2010 to the CaixaBank Group's condensed consolidated balance sheet
at January 1, 2011, in thousands of euros
ASSETS
Criteria
CaixaCorp Group
31/12/2010
(+)
Businesses
received
(-)
Businesses
transferred
Consolidation
eliminations and
other CaixaBank Group
adjustments
01/01/2011
310
0
2,443,056
3,117,719
3
0
201,473
26,540,082
8,627,196
0
0
0
1,379
12,252,914
0
14,584,824
206,724,767
7,389,398
45,700
11,289,860
684,628
164,413
0
0
1,470
0
0
0
0
7,291,456
7,448,310
4,804,604
53,360
111,053
2,486,423
4,805,033
3,230,118
430
8,245,365
111,053
0
22,672
752,870
1,784,274
0
3,301,723
0
0
391,643
(1,784,274)
0
0
0
22,672
3,662,950
441,898
310,972
3,109,815
191,908
83,004
308,639
0
(0)
3,468,709
194,241
1,706,306
525,184
13
(2,073)
2,229,404
827,683
878,623
350,337
174,847
0
13
1,152
(3,225)
1,179,172
1,050,232
Tax assets
551,121
1,811,802
24,756
8,295
2,346,463
Current
Deferred
21,023
530,098
177,453
1,634,349
116
24,640
10,683
(2,388)
209,043
2,137,420
329,279
937,634
118,124
(390,697)
758,093
50,985,602
254,804,982
7,827,465
(24,895,854)
273,067,265
Other financial assets at fair value through profit or loss (Note 7)
Available-for-sale financial assets (Note 7)
Loans and receivables (Note 7)
Held-to-maturity investments (Note 7)
Hedging derivatives
Non-current assets held for sale (Note 8)
Investments (Note 9)
Associates
Reinsurance assets
Property and equipment(Note 10)
Investment property
Intangible assets (Note 11)
Goodwill
Other assets (Note 12)
TOTAL ASSETS
0
0
6,012
(4,418,954)
(19,855,100)
0
0
(1,689,611)
0
3,230,547
2,443,363
3,117,719
207,485
36,705,952
195,495,393
7,389,398
45,700
9,600,249
686,007
8,356,418
Memorandum items
Contingent liabilities (Note 19)
Contingent commitments (Note 19)
6,000
266,747
9,090,361
52,766,456
0
0
0
0
9,096,361
53,033,203
- 26 -
Reconciliation of the Criteria CaixaCorp Group's condensed consolidated balance sheet at December 31, 2010 to the CaixaBank Group's condensed consolidated balance sheet
at January 1, 2011, in thousands of euros
LIABILITIES
Criteria
CaixaCorp Group
31/12/2010
(+)
Businesses
received
(-)
Businesses
transferred
Consolidation
eliminations and
other CaixaBank Group
adjustments
01/01/2011
1,635
2,597,139
0
(85)
2,598,689
210,464
15,626,652
0
9,366
19,142,179
54,001
1,124,220
0
221,500,828
1,384,335
9,092,528
3,204,637
2,893,990
920,907
0
282,565
0
1,022
0
0
146
0
(21,362,052)
0
(1,689,527)
(2,567,703)
0
(73,725)
210,464
215,482,863
1,384,335
7,411,345
19,779,113
2,947,991
1,971,256
104,551
1,019,669
11,664
909,243
0
146
(1,132)
(72,593)
115,083
1,856,173
114,072
1,316,137
7,924
(22,916)
1,399,370
TOTAL LIABILITIES
36,282,589
242,910,501
291,656
(25,716,008)
253,185,426
Equity attributable to the Parent(Note 15)
14,527,697
11,875,030
7,376,859
819,423
19,845,291
13,024,555
1,503,142
11,960,878
(85,849)
7,354,461
22,398
1,294,132
(474,709)
18,925,104
920,187
175,316
19,451
158,950
731
36,548
Other
(5,434)
180,750
572
18,879
(5,433)
164,383
1,200
(469)
1,771
34,777
TOTAL EQUITY
14,703,013
11,894,481
7,535,809
820,154
19,881,839
TOTAL LIABILITIES AND EQUITY
50,985,602
254,804,982
7,827,465
Other financial liabilities at fair value through profit or loss (Note 13)
Financial liabilities at amortized cost (Note 13)
Hedging derivatives
Provisions (Note 14)
Tax liabilities
Current
Deferred
Other liabilities
Own funds
(24,895,854)
273,067,265
- 27 -
The following tables provided further details on “Available-for-sale financial assets,” “Loans and
receivables” and “Financial liabilities at amortized cost,” as these reflect the bulk of the assets and
liabilities contributed by “la Caixa” to Criteria in the reorganization:
(Thousands of Euros)
Criteria
CaixaCorp Group
31/12/2010
(+)
Businesses
received
Debt securities
Spanish government debt securities
Treasury bills
Government bonds and debentures
Other
Foreign government debt securities
Issued by credit institutions
Other Spanish issuers
Other foreign issuers
Equity instruments
Shares in listed companies
Shares in unlisted companies
Ownership interests in investment funds
and other
19,343,159
7,188,421
0
7,178,626
9,795
1,869,486
1,228,499
2,351,411
6,705,342
7,196,923
7,195,392
1,531
14,280,112
8,730,837
2,156,044
5,329,200
1,245,593
1,580,493
1,478,159
1,379,404
1,111,219
322,683
870
213,479
0
108,334
Total
26,540,082
14,602,795
Less, impairment provisions:
Debt securities
Total
(-)
Consolidation
Businesses eliminations and
transferred other adjustments
0
0
0
0
(17,971)
26,540,082
14,584,824
0
Grupo
CaixaBank
01/01/2011
(1,188,224)
0
0
0
0
0
(1,188,224)
0
0
(3,230,730)
(3,230,118)
(611)
32,435,047
15,919,258
2,156,044
12,507,826
1,255,388
3,449,979
1,518,434
3,730,815
7,816,561
4,288,876
3,966,144
214,399
(1)
108,333
(4,418,954)
36,723,923
0
(17,971)
(4,418,954)
36,705,952
Criteria
CaixaCorp Group
31/12/2010
Loans and advances to credit institutions
Demand
Term
Loans and advances to customers
Public sector
Commercial loans
Secured loans
Reverse repurchase agreement (repos)
Other term loans
Finance leases
Receivables on demand and others
Doubtful assets
Debt securities
7,279,058
570,764
6,708,294
1,348,138
112,100
Total
8,627,196
115,601
653,206
629
533,909
83,847
(151,154)
(+)
Businesses
received (*)
(-)
Eliminaciones
Businesses de consolidación y
transferred
otros ajustes
8,738,333
2,103,725
6,634,608
196,197,719
9,242,418
5,296,586
118,707,596
6,055,082
46,587,079
2,916,256
4,137,990
7,051,943
(3,797,231)
1,788,715
206,724,767
(*) "Loans and advances to customers" includes 2,707,584 thousand euros of sub-standard assets.
51
51
1,419
(7,531,869)
(444,006)
(7,087,863)
(12,323,231)
1,061
(9)
827
(6,028,689)
(6,160,772)
358
(29,515)
(1,752)
(103,321)
1,470
(19,855,100)
Grupo
CaixaBank
01/01/2011
8,485,471
2,230,432
6,255,039
185,221,207
9,354,518
5,296,577
118,824,024
26,393
41,078,452
2,916,885
4,642,026
7,134,038
(4,051,706)
1,788,715
195,495,393
- 28 -
Deposits from credit institutions
Customer deposits
Current accounts and other demand
accounts
Savings accounts
Time deposits
Hybrid financial liabilities
Repos
Debt securities
Total
Criteria
CaixaCorp Group
31/12/2010
(+)
Businesses
received
(-)
Eliminaciones
Businesses de consolidación y
transferred
otros ajustes
Grupo
CaixaBank
01/01/2011
13,493,476
82
18,595,269
149,085,875
278,074
57
(12,722,269)
(6,980,213)
19,088,402
142,105,687
82
30,312,358
24,843,205
72,416,020
5,534,136
15,217,628
762,528
57
(439,819)
(6,355,889)
(3,040)
(165,913)
(15,552)
29,872,564
24,843,205
66,060,131
5,531,096
15,051,715
746,976
44,210,750
6,888,664
3,189,360
215,482,863
865,044
293,423
974,627
44,523,690
6,595,342
2,700,652
4,434
(1,177,984)
(101)
(481,485)
15,626,652
221,500,828
282,565
(21,362,052)
Businesses received
The assets and liabilities received make up the consolidated equity of MicroBank after the spin-off in
its favor by "la Caixa" of the assets and liabilities comprising its financial activity. As indicated in the
section “Reorganization of the “la Caixa” Group” in this note, “la Caixa” contributed to Criteria all
the shares of MicroBank. The market value of the total equity of the businesses received was estimated
at €9,515,585 thousand, equivalent to 0.8 times the consolidated carrying amount (€11,894,481
thousand).
Businesses transferred
In the reorganization, Criteria delivered to “la Caixa” part of the management of its portfolio of
holdings in industrial and services companies, as explained in the section “Reorganization of the “la
Caixa” Group” in note 1. Specifically, it delivered:
• Investments in associates (€2,486,423 thousand), relating to the consolidated amount of the
stakes in Abertis Infraestructuras, SA (€1,845,396 thousand) and Sociedad General de Aguas de
Barcelona, SA through Holding de Infraestructuras de Servicios Urbanos, SA -Hisusa(€641,027 thousand).
• Investments in jointly controlled entities (€4,805,033 thousand), relating to the consolidated
amount of the stakes in Gas Natural, SDG, SA (€4,729,217 thousand) and PortAventura
Entertainment, SA (€75,816 thousand).
• The rest of the balance sheet headings transferred (€244,350 thousand) relates mainly to the
value of real estate assets of Mediterránea Beach & Golf Community, which is fully
consolidated.
Therefore, equity transferred by Criteria to “la Caixa” amounts to €7,535,809 thousand, whereas the
market value at December 31, 2010 was €7,471,340 thousand (see “Reorganization of the “la Caixa”
Group in this note.
- 29 -
Consolidation eliminations and other adjustments
The amounts shown in “Consolidation eliminations and other adjustments” in different asset and
liabilities headings relate to eliminations arising from the aggregation in the same Group of the
companies composing the Criteria Group at December 31, 2010 and the businesses received through
the contribution to Criteria of all the shares of MicroBank (see “Reorganization of the “la Caixa”
Group” in this note).
“Loans and receivables” mainly includes the elimination of loans granted by “la Caixa” to Criteria,
cash positions held by the insurance subgroup and Criteria at “la Caixa” and the impacts of the
mobilization of debt by the Group’s insurance companies with “la Caixa”. The balancing entries for
these eliminations are in “Financial liabilities at amortized cost – Deposits from credit institutions”
and “Financial liabilities at amortized cost – Customer deposits.”
“Financial liabilities at amortized cost – Debt securities” includes the elimination of issues by “la
Caixa” acquired by Criteria Group companies, with a balancing entry in “Available-for-sale financial
assets – Debt securities.”
Eliminations in “Insurance contracts related to pensions” under assets and “Liabilities under insurance
contracts” under liabilities relate mainly to the surrender value of the policies entered into by “la
Caixa” to hedge its employee pension commitments with Criteria Group companies. In addition, the
necessary adjustments were made to reflect the results of the test for the adequacy of the recognized
liabilities of the insurance activity that the CaixaBank Group must perform in accordance with IFRS 4
Insurance Contracts.
In addition, due to the recognition of the 12.69% stake in Repsol-YPF, SA as an investment in an
associate within the scope of the “la Caixa” Group’s reorganization (see “Reorganization of the “la
Caixa” Group in this note), the adjustments to “Available-for-sale financial assets” and “Investments –
Associates” include the market value of the stake at January 1, 2011, of €3,229,757 thousand. The
recognition of the investment in Repsol-YPF, SA as an associate led to a decrease in the balances of
“Tax assets – deferred” and “Valuation adjustments” of €284,343 thousand and €477,856 thousand,
respectively, and an increase in the balance of “Own funds” of €762,199 thousand.
- 30 -
c. Combined consolidated income statement of the CaixaBank Group for the six months ended June
30, 2010.
The table below, presented for information purposes only, shows the combined consolidated
income statement of the CaixaBank Group for the six months ended June 30, 2010, illustrating the
estimated result the CaixaBank Group would have obtained in the period had it begun operating at
January 1, 2010:
Combined consolidated income statement
30/06/2010
NET INTEREST INCOME
GROSS INCOME
Personnel expenses
Provisions (net)
PROFIT BEFORE TAX
Income tax
3,517,037
(1,657,462)
0
1,859,575
377,924
129,089
783,851
(104,863)
2,129
136,992
632,855
(407,972)
3,409,580
(1,450,517)
(1,061,734)
(388,783)
(223,302)
(138,398)
(875,036)
722,327
(3,650)
(1,435)
0
121,722
838,964
(89,567)
749,397
0
749,397
749,509
(112)
- 31 -
Following is a breakdown of the main captions in the CaixaBank Group's combined consolidated
income statement for the six months ended June 30, 2010:
30/06/2010
Central banks
Credit institutions
Loans and advances to customers and other finance income
Debt securities
Adjustments to income due to hedging transactions
12,705
17,335
2,726,262
773,449
(12,714)
Total
3,517,037
30/06/2010
Central banks
Credit institutions
Money market transactions through counterparties
Customer deposits and other finance costs
Marketable debt securities
Adjustments to expenses as a consequence of hedging transactions
Interest cost attributable to pension fund
Finance cost of insurance products
11,697
83,713
42
847,740
699,831
95,625
(526,569)
5,073
440,310
Total
1,657,462
Net fee and commission income
30/06/2010
Banking fees
Mutual funds
Insurance and pension plan sales
Securities and other
494,647
64,496
77,910
41,935
Total
678,988
Impairment losses on assets (net)
30/06/2010
Impairment charges
Write-downs
Recovery of loans written off
Other financial instruments not measured at fair value through profit or loss
General allowance for debt instruments
Write-downs
Equity instruments
Valores representativos de deuda
(870,852)
(796,256)
(97,913)
23,317
(4,184)
Total
(875,036)
(4,184)
75
(4,259)
“Gains/(losses) on non-current assets held for sale not classified as discontinued operations,"
amounting to €121,722 thousand, primarily relate to the gains on the sale of 0.16% and 0.86% of
Telefónica, SA and Repsol-YPF, SA, respectively.
- 32 -
Regarding the combined consolidated income statement of the CaixaBank Group for the six months
ended June 30, 2010, the combined consolidated income statement of the CaixaBank Group for the
six months ended June 30, 2011 differs in that Repsol-YPF, SA is recognized as an associate and
Compañía de Seguros Adeslas, SA is included within the scope of consolidation, affecting the heading
“Share of profit (loss) of entities accounted for using the equity method” and “Other operating
income.”
Changes in the scope of consolidation
Changes in the consolidation scope in the first six months of 2011 are detailed in note 9.
Seasonality and materiality of transactions
The cyclical or seasonal nature of the operations of the companies composing the CaixaBank Group is
not significant. Therefore, these explanatory notes to the condensed interim consolidated financial
statements for the first six months of 2011 do not include specific disclosures in that regard.
In addition, in deciding what information to disclose in these condensed interim consolidated financial
statements, materiality was assessed in relation to the interim period financial data.
Events after the reporting period
Between June 30, 2011 and the date these condensed interim consolidated financial statements were
authorized for issue, no events occurred that had a significant effect on the statements.
- 33 -
2. Accounting policies and measurement bases
The accompanying condensed interim consolidated financial statements of CaixaBank were prepared
using the same accounting principles, policies and criteria as those used in the Criteria Group’s and the
“la Caixa” Group’s 2010 consolidated financial statements (see note 2 to the Criteria Group's and “la
Caixa” Group’s 2010 consolidated financial statements), taking into consideration new IFRSs,
amendments and interpretations that became effective in the first half of 2011 and Bank of Spain
Circular 4/2004, which were not considered in the Criteria Group’s 2010 financial statement as they
were not applicable at that time (see note 1).
All accounting principles and measurement bases that could have a significant effect were applied in
the preparation of the condensed interim consolidated financial statements.
- 34 -
3. Shareholder remuneration and earnings per share
Shareholder remuneration
At the Ordinary Annual General Meeting of May 19, 2010, shareholders approved the distribution of a
dividend of €0.06 per share against unrestricted reserves, up to a maximum amount of €201,773
thousand and payable in the first quarter of 2011. On March 1, 2011, the dividend was paid to
shareholders, for a total amount of €201,099 thousand, including treasury shares.
CaixaBank's shareholder remuneration policy will continue to entail quarterly dividend payments, in
March, June, September and December. A new “Optional Scrip Dividend” remuneration scheme was
approved at the Annual General Meeting of May 12, 2011. Under this program, in certain quarters
shareholders can choose between the following three options:
a) Receive shares via a scrip issue;
b) Receive cash from the market sale of the rights allocated in the issue; or
c) Receive cash from the sale to CaixaBank, at a price fixed by it, of the rights allocated during
the capital increase.
Shareholders may also combine these three options, at their discretion.
Approval was also given at the Ordinary Annual General Meeting of May 12, 2011, for the purpose of
conforming to this shareholder remuneration scheme, to carry out capital increases of up to €172,100
thousand, €229,200 thousand and €232,100 thousand and to delegate powers to the Board of
Directors to establish the conditions of the capital increase. This delegation can be executed for a
period of one year from the date of the adoption of the resolution by the Annual General Meeting.
On June 27, 2011, the Board of Directors initiated the first dividend process under the Optional Scrip
Dividend program, which ends in July with the issue of bonus shares to be delivered to shareholders
opting to receive shares, and payment of the predetermined price to shareholders opting to receive
cash. This payment liability was recognized under “Financial liabilities at amortized cost” in the
accompanying condensed interim consolidated balance sheet for €35 million and relates to the
estimated maximum amount CaixaBank will have to pay. It does not include the part corresponding to
the majority shareholder (“la Caixa”) following the decision at its Board of Directors' meeting of June
30, 2011 to subscribe to the scrip issue.
Shareholder remuneration in the period can be summarized as follows:
Dividends
Dividends paid from profits
Dividends paid from reserves or share premium
Acquisition of rights allocated in scrip issue(*)
(*) Maximum recognized as a liability at June 30, 2011.
Euros per
share
0.060
0.051
Amount
Payment date
201,099 March 1, 2011
35,230 July 20, 2011
- 35 -
Earnings per share
Basic earnings per share are calculated by dividing net profit or loss for the period attributable to
equity holders of the Group by the weighted average number of shares outstanding during the period,
excluding treasury shares. This calculation includes:
• €1,500 million of mandatory convertible subordinated bonds issued by Criteria in June 2011 (see
note 15).
• 374,403,908 new shares issued under the scope of the reorganization which, for the purposes of
calculating the average weighted number of shares for the period, were considered to have been
issued on January 1, 2011 (see “Reorganization of the “la Caixa” Group” in note 1).
Diluted earnings per share are calculated by dividing the net profit or loss for the period attributable to
ordinary equity holders by the weighted average number of ordinary shares outstanding less treasury
shares after adjusting for dilutive potential ordinary shares (share options, warrants and convertible
bonds).
At June 30, 2011, there were no transactions involving potential ordinary shares that would lead to a
difference between basic and diluted earnings per share.
Dividends paid and earnings per share
Calculation of basic and diluted earnings per share
30/06/2011 (**)
Numerator
Denominator (thousands of shares)
Average number of shares outstanding (*)
Adjustment for issue of the mandatory convertible instruments
Adjustment for scrip issue at June 30, 2011
Adjusted number of shares (Basic and diluted earnings per share denominator)
Basic and diluted earnings per share (in euros)
833,474
3,351,545
31,553
374,404
3,757,502
0.22
(*) Average number of shares outstanding, excluding average number of treasury shares held during the period.
(**) Basic and diluted earnings per share reported by Criteria CaixaCorp, SA for the six months ended June 30, 2010 amounted to €0.36. Taking
the CaixaBank Group's combined income statement for the six months ended June 30, 2010 (see Note 1), basic and diluted earnings per share is
€0.20.
- 36 -
4. Risk management
Credit risk
NPL ratios of credit institutions continued to climb in the first half of 2011. The situation remains
difficult due to the struggling economy and trends in real-estate sector assets.
The CaixaBank Group's NPL ratio at June 30, 2011 stood at 4.30% (January 1, 2011:3.65%). The
latest data available bear out CaixaBank's strong credit risk management position.
In the first half of 2011, the Group continued to carefully implement measures to recover problem
loans as soon as signs of any deterioration in debtor creditworthiness appeared, with constant
monitoring. Meanwhile, the overall uptick in default levels throughout the economy is undermining
credit quality, requiring banks to apply rigorous loan acceptance criteria.
In any event, the Group has proceeded with the measures announced by “la Caixa” in 2009 to cushion
the impact of the crisis on its customers when, despite their intention to repay their debt obligations,
they encounter temporary difficulties in doing so. Where possible, after an in-depth analysis,
CaixaBank considers matching a debtor's short-term payments to their actual repayment capacity,
confident that deferral will help the transactions be completed successfully. The best option for each
customer (e.g. grace periods, deferment clauses, debt consolidation, payment moratorium) is studied
individually. By continuing these policies in the first half of 2011, the Group helped interested
individuals to meet their debt obligations.
Elsewhere, to minimize the impact of the downturn in the highly-cyclical real estate sector, the Group
continued to acquire properties from real estate developer and construction customers with current or
foreseeable difficulties in carrying out their businesses or remaining solvent, as a means of repaying
their debt with the institution. These transactions are approved individually, and prices are based on a
valuation, at least by an approved appraiser included in the Bank of Spain's Official Registry in
accordance with ministerial order ECO/805/2003, adjusted to reflect current market conditions as
appropriate. The CaixaBank Group acquires, develops, manages and sells real estate assets through
BuildingCenter, SAU, a holding company and property services specialist, with a view to efficiently
managing the investment, pursuing recovery and adding value and profitability.
Within the scope of its global risk policies, in the first half of 2011 the Board of Directors approved
the Real Estate Project Financing and the Debt Renegotiation policies, as provided for in Bank of
Spain Circular 3/2010, of June 29, rule one 3 e) and g).
The underlying criterion guiding the CaixaBank Group's management of problem assets in the real
estate sector is to help borrowers meet their obligations.
First, with the commitment of shareholders and other companies within the borrower group, the
Group studies the possibility of granting grace periods so that the financed land can be developed,
ongoing property development can be finalized and finished units can be sold.
With regard to refinancing operations, the aim is to add new guarantees to reinforce guarantees already
in place. The policy is to not exhaust the current margin of value provided by the initial guarantees
with further mortgages.
For completed projects, the Group analyses the possibility of helping to sell the finished units,
through BuildingCenter, SAU. In all cases, detailed purchaser quality checks are run to ensure the
feasibility of providing loans to the end buyers. Flexibility is only applied with regard to the financing
percentages, ensuring that credit quality is not reduced under any circumstances.
- 37 -
Finally, when there is no reasonable possibility that the borrower can continue to maintain its position,
the mortgaged asset is acquired. In cases where the price of the transaction is lower than the
outstanding debt, the credit value is impaired in order to adjust it to the transfer value.
Advances in risk management and implementation of the New Basel Capital Accord (NBCA)
The following advances were made in the first half of 2011:
 The new business analysis system platform was rolled out in the entire network, allowing for a
more detailed study of borrowers.
 In terms of loan acceptance procedures, new risk parameters were implemented for individuals and
SMEs –including real estate developers- and the pricing and scoring cut-off levels were adjusted.
Moreover, the property developer SMEs were included in the expected loss authorization system, a
new personal guarantee acceptance model was implemented, and the preventive action plans
already in place for loan monitoring were extended to acceptance processes.
 A commercial rate for mortgages was rolled out, entailing an additional spread to the risk-adjusted
rate, affecting which officers are authorized to accept transactions. This innovation will be
extended to other segments as well. Regarding the new risk-adjusted returns system, calculations
per customer and transaction were processed. These calculations are scheduled to be extended to
the entire network in fall 2011.
 Addition internal training on risk criteria was carried out at the Management Development Center.
 In the area of monitoring, advances were made in the application of expected loss criteria for
accounts with nominal amounts, similar to the criteria applied in admission.
Information regarding financing for property development, home purchasing, and foreclosed assets
In line with the CaixaBank Group’s reporting transparency policy, the main data at June 30, 2011 and
January 1, 2011 (date of the “la Caixa” Group’s reorganization for accounting purposes, see note 1)
regarding financing for property development, home purchasing and foreclosed assets.
The Group’s policy regarding problem assets in this sector and the status of liquidity and borrowing
requirements on the markets are described in the sections on “Credit risk” and “Liquidity risk,”
respectively, in this note.
- 38 -
Financing for real estate development
The tables below show financing for real estate developers and developments, including development
carried out by non-developers, at June 30, 2011 and January 1, 2011. The excess over the value of the
guarantee is calculated as the difference between the gross amount of the loan and the value of the real
collateral received after applying the weightings set out in Appendix IX of Bank of Spain Circular
4/2004.
30/06/2011
Gross amount
Credit recognized by CaixaBank Group credit institutions
Of which: doubtful
Mortgage
Personal
Of which: substandard
24,520,121
4,961,007
4,021,447
939,560
3,271,924
Promemoria
General allowance
Asset write-offs
Excess over value of
collateral
Specific
allowances
3,738,072
2,144,375
1,696,265
1,205,915
490,350
448,110
1,397,690
344,971
1,835,000
295,548
01/01/2011 (*)
Gross amount
Credit recognized by CaixaBank Group credit institutions
Of which: doubtful
Mortgage
Personal
Of which: substandard
Promemoria
General allowance
Asset write-offs
26,283,662
4,080,496
3,191,524
888,972
1,656,739
Excess over value of
collateral
Specific
allowances
3,780,603
1,647,467
1,433,232
989,270
443,962
214,235
1,961,478
218,657
1,835,000
260,313
The amounts shown in the preceding tables do not include the loans extended by the CaixaBank
Group to the “la Caixa” Group’s real estate companies, mainly the Servihabitat Group, which at June
30, 2011 and January 1, 2011 amounted to €3,298,374 and €4,087,946 thousand, respectively.
Memorandum items: Data on the CaixaBank Group
Total loans and advances to customers excluding public sector (businesses in Spain)
Total consolidated assets
Carrying amount
30/06/2011 01/01/2011 (*)
182,526,672
273,387,284
180,697,972
273,067,265
- 39 -
The tables below show the breakdown of financing for real estate developers and developments,
including developments carried out by non-developers, by collateral:
By type of collateral
Carrying amount
30/06/2011
01/01/2011 (*)
Without mortgage collateral
With mortgage collateral
Completed buildings
Homes
Other
Buildings under construction
Homes
Other
Land
Built land
Other
1,901,693
22,618,428
14,345,169
11,431,582
2,913,587
3,858,228
3,596,911
261,317
4,415,031
1,669,751
2,745,280
2,043,594
24,240,068
14,053,604
11,561,748
2,491,856
5,391,332
4,678,217
713,115
4,795,132
1,730,212
3,064,920
Total
24,520,121
26,283,662
Financing for home purchases
The breakdown of home loans for buyers at June 30, 2011 and January 1, 2011 is as follows:
Gross amount
30/06/2011
01/01/2011 (*)
Without mortgage collateral
Of which: doubtful
With mortgage collateral
Of which: doubtful
361,721
7,494
69,670,276
949,429
392,011
8,008
69,662,405
971,091
Total home loans
70,031,997
70,054,416
Home purchase loans with a mortgage guarantee at June 30, 2011 and January 1, 2011, by the loan-tovalue (LTV) ratio, based on the latest available appraisal, are as follows:
06/2011
ousands of Euros)
LTV ranges
LTV ≤ 50% 50% < LTV ≤ 80%
ss amount
Of which: doubtful
18,585,211
67,943
42,698,266
561,375
80% < LTV ≤ 100%
LTV > 100%
TOTAL
7,921,639
304,631
465,160
15,480
69,670,276
949,429
- 40 -
01.01.2011 (*)
LTV ranges
LTV ≤ 50% 50% < LTV ≤ 80%
Gross amount
Of which: doubtful
17,725,423
55,756
80% < LTV ≤ 100%
LTV > 100%
TOTAL
8,598,884
346,434
634,881
21,056
69,662,405
971,091
42,703,217
547,845
Foreclosed assets
The table below shows foreclosed assets by source and type of property at June 30, 2011. At January
1, the CaixaBank Group had no foreclosed assets on its balance sheet (see note 1, “Reorganization of
the “la Caixa” Group”):
Foreclosed real estate assets
Property acquired in loans to real estate developers
Completed buildings
Homes
Other
Buildings under construction
Homes
Other
Land
Built land
Other
Property acquired in mortgage loans to homebuyers (1)
Other property foreclosures
Total
30/06/2011
Net carrying
amount
Of which:
Allowances
150,185
101,617
30,511
20,750
93,886
7,731
19,100
1,650
9,275
2,529
9,235
40
2,486
43
39,293
7,232
15,966
23,327
3,156
4,076
79,561
3,975
11,106
932
233,721
42,549
(1) Does not include foreclosure rights deriving from auctions in the amount of €349 million net.
Liquidity risk
The CaixaBank Group's liquidity, composed of the net balance of interbank deposits and other
monetary assets and liabilities, plus the balance that can be drawn on the credit facility with the
European Central Bank (ECB), was €21,633 million and €19,638 million at June 30, 2011 and January
1, 2011, respectively.
Based on its prudent liquidity management and an effort to maximize profits, the Group was able to
increase its investment in extremely-solvent and readily-convertible assets, while reducing its exposure
in interbank markets.
The 2011-2014 Strategic Plan approved by the Board of Directors of the “la Caixa” Group calls for a
liquidity level of over 5% of CaixaBank's assets. This level was comfortably met in the first half of
2011, with a level of 7.9% at June 30, 2011.
This liquidity is sufficient to fund the Group's growth and future investment, and to refinance
maturities of institutional issues in the years to come. As part of this approach to managing liquidity
risk and to allow it to anticipate potential needs for lendable funds, the CaixaBank Group’s wide
- 41 -
variety of financing programs cover a number of maturity periods. This allows the Group to maintain
adequate levels of liquidity at all times.
In this respect, at June 30, 2011, the CaixaBank Group had enormous financing potential through the
issue of mortgage and public sector covered bonds, as well as of government-backed issues. The
financing capacity at June 30, 2011 and January 1, 2011, by type of instruments, is as follows:
Issuance capacity
Mortgage covered bond issuance capacity
Regional covered bond issuance capacity
Available issuances guaranteed by the state
30/06/2011
01/01/2011 (*)
20,401,171
5,812,179
13,753,000
21,952,000
4,822,350
13,753,000
Funding structure: 71% customer deposits at June 30, 2011.
Total liquidity: €21,633 million (7.9% of the Group's assets) at June 30, 2011.
The CaixaBank Group has €21,530 million in liquid assets as defined by the Bank of Spain in its
liquidity statements. This amount can be readily converted, as it includes the haircuts required by the
European Central Bank.
Liquid assets (1)
Liquid assets (nominal value)
Liquid assets (market value and ECB cut)
of which: State debt
30/06/2011
01/01/2011 (*)
28,444,818
21,530,113
6,295,200
27,323,290
20,268,038
3,657,735
(1) Bank of Spain liquidity statement criteria.
The CaixaBank Group was extremely active on the capital markets in the first half of 2011,
strategically anticipating refinancing needs for the year and raising finance from institutional investors
to the tune of €5,876 million. It carried out three public placements for €4,500 million in mortgage
covered bonds and several private issues of different instruments, such as plain vanilla bonds, public
sector covered bonds and mortgage covered bonds, all targeting institutional investors. In addition, in
June it issued €1,500 million of mandatory convertible subordinated bonds targeting all investor types
(see notes 1, 5 and 15). These issues, targeting the capital markets and all investor types, further
bolstered the Group's liquidity position.
The CaixaBank Group's financing policies take into account a balanced distribution of issue
maturities, preventing concentrations and diversifying financing instruments. Its reliance on wholesale
funding is limited, while the maturities of institutional debt forecast for the coming years are as
follows:
Wholesale issue maturities
2011
2012
2013
> 2013
Mortgage covered bonds
Regional covered bonds
Senior debt
Subordinated debt and preference shares
885,400
1,500,000
1,835,626
200,000
525,000
3,876,411
1,200,000
1,350,000
30,794,836
Total wholesale issue maturities
2,385,400
2,560,626
6,426,411
32,024,836
1,030,000
200,000
- 42 -
Counterparty risk
A year after the sovereign debt crisis broke out, not only does the situation remain unresolved, but -in
the case of Greece- it has become considerably worse. While the European Financial Stability Fund
(EFSF) and the International Monetary Fund (IMF) are negotiating a way out for the refinancing of
Greece and Portugal, so far the Spanish government has managed to remain unscathed, but not easily.
Nonetheless, most Spanish financial institutions are unable to tap the wholesale markets. With the
ECB reducing its liquidity facilities, savings banks and banks have turned to Central Counterparty
Clearing Houses (CCPs) for the discount of portfolio debt.
Amid widespread wariness, interbank market transactions are still few and far between, including sales
of debt under repurchase agreements (repo transactions) mostly using CCPs.
As for other dealings with banking counterparties, the Group maintained its policy of maximum
prudence, only trading in currencies settled through CLS (Continuous Linked Settlement), a paymentversus-payment system designed to eliminate settlement risk. Trading in OTC derivatives was
restricted to counterparties with existing cash collateral agreements on the market value of the related
transaction portfolio.
Sluggish domestic demand in Spain has driven higher exports, boosting documentary credit
confirming and diversifying banking risks.
Exposure to credit institutions at June 30, 2011 was €10,836 million (January 1, 2011: €9,625 million).
Market risk
Average VaR (value at risk or the potential maximum daily loss with a 99% confidence level) in the
first half of 2011 in treasury operations was €3.9 million.
The highest market risk levels (i.e. €7.6 million) were reached in the first quarter, mainly as VaR
anticipates a potentially different movement in daily market value of (Spanish and European)
sovereign debt positions compared to the derivative instruments used to manage interest-rate risk.
The VaR estimate is the highest amount obtained from applying parametric approaches to historical
data of two different time horizons (75 and 250 trading days) and historical simulation of annual data.
Monitoring of market risk is rounded off with in-depth analysis of the impact under extreme
conditions (stress test) and verification of the model (back test).
The table below presents average estimated VaR attributable to the different risk factors. As shown,
the amounts used are moderate and concentrated mainly in risk from fluctuations in interest rate
curves and credit risk premiums, while the weight of the rest of the market positioning factors is much
smaller.
VaR parameterized by risk factors
Exchange
rates
Average VaR
1,990
Exchange
rates
Share
price
Inflation
Share
price
478
808
45
4
Volatility
Volatility
of interest for exchange
rates
rates
103
37
Volatility
of credit
Volatility
spread of share price
1,696
113
Share
correlation
29
Exchange rate risk arising from the balance sheet positions drawn up in foreign currency is minimized
through market hedging of the risks assumed.
- 43 -
Structural balance sheet interest rate risk
The CaixaBank Group manages this risk with a two-fold strategy: to reduce the sensitivity of net
interest income to interest rate fluctuations and preserve the economic value of the balance sheet. To
attain these objectives, the Group actively manages the risk by arranging additional hedging
transactions on financial markets to supplement the natural hedges generated on its own balance sheet
as a result of the complementary nature of the sensitivity to interest rate fluctuations of customer
deposits and lending transactions.
Even when balance sheet interest rate risk assumed by the CaixaBank Group is below levels
considered significant (outliers), in keeping with the proposals of the NBCA and Bank of Spain
regulations, it continues to take a series of steps towards more intense monitoring and management of
balance sheet interest rate risk.
- 44 -
5. Capital adequacy management
Regulatory framework
The capital adequacy of financial institutions is regulated at European level by the two community
capital adequacy directives (2006/48/EC and 2006/49/EC) established in accordance with the
agreement adopted in 2004 by the Basel Committee on Banking Supervision ("Basel II"). These were
incorporated into Spanish law through Circular 3/2008, which now governs Spanish financial
institutions and bases the determination of capital adequacy on three pillars:
• Pillar 1: Minimum capital requirements
• Pillar 2: Supervisory review
• Pillar 3: Market disclosure
After the G20 Seoul summit held on December 16, 2010, the Basel Committee on Banking
Supervision (BCBS) published the definitive Basel III accord. The two final documents published by
the BCBS are: “Basel III: A global regulatory framework for more resilient banks and banking
system”, on bank capital adequacy, and “Basel III: International framework for liquidity risk
measurement, standards and monitoring”, on liquidity risk. The two documents must be transposed in
the EU Capital requirements directive (CRD IV) (scheduled for the third quarter of 2011) and,
subsequently, into Spanish law for application from January 1, 2013.
In Spain, Royal Decree-Law 2/2011 to strengthen the financial system was approved on February 18,
establishing a general minimum capital requirement for financial institutions of 8% of risk-weighted
assets. Core capital comprises: capital, reserves, share premiums, positive valuation adjustments,
minority interests and, in addition, the instruments subscribed by the Fund for Orderly Bank
Restructuring (FROB) and, temporarily, the instruments mandatorily convertible into shares before
2014 that meet certain requirements regarding high absorption of losses. Negative results and losses,
negative valuation adjustments and intangible assets must be subtracted from these components.
Based on the December 31, 2010 figures, the CaixaBank Group has core capital of 10.7%, well above
the minimum requirement.
Capital adequacy
CaixaBank's risk-weighted assets (RWA) were estimated at €147,584 million at June 30, 2011. Profit of
€833 million generated in the first half of 2011 has enabled the Group to comfortably maintain its
organic capitalization rate despite the adverse backdrop. In addition, the reorganization of the “la
Caixa” Group entailed a number of non-recurring transactions that affected CaixaBank’s capital
adequacy levels. These mainly include: recognition of the interest in Repsol-YPF, S.A. under
Associates (see note 1), the issue of mandatorily convertible subordinate bonds amounting to €1,500
million (see notes 1 and 15) and the sale of 50% of SegurCaixa Adeslas, SA de Seguros y Reaseguros
(formerly VidaCaixa Adeslas de Seguros Generales y Reaseguros, SA; see note 9).
The three capital adequacy ratios, Core Capital, Tier 1 and Total Tier at June 30, 2011 stood at 11.3%,
with a surplus of €4,836 million over the minimum requirement.
The CaixaBank Group’s long-term ratings stand at Aa2 (Moody's), A+ (Standard & Poor's), and A+
(Fitch).
- 45 -
The following table details the CaixaBank Group’s eligible equity:
30/06/2011 (*)
Amount
+ Capital, reserves, profits and non-controlling interests
- Goodwill, intangible assets and other
20,909,726
(4,266,600)
Core Capital
16,643,126
+ Preference shares
- Deductions of Basic Capital
4,937,586
(4,937,586)
Basic Capital (Tier 1)
16,643,126
+ Subordinated financing
+ Eligible general provisions and others
- Deductions of Second-category Basic Capital
Second-category Capital (Tier 2)
31/12/2010 (**)
in %
Amount
in %
18,162,719
(4,745,576)
11.3%
13,417,143
8.9%
4,947,586
(4,947,586)
11.3%
150,000
158,078
(308,078)
13,417,143
8.9%
150,000
160,902
(310,902)
0
0.0%
0
0.0%
Total Own Funds (Total)
16,643,126
11.3%
13,417,143
8.9%
Minimum Capital Requirements (Pillar 1)
11,806,720
8.0%
12,033,538
8.0%
4,836,406
3.3%
1,383,605
0.9%
Capital cushion
Memorandum items: risk-weighted assets
(*) Estimated data.
(**) Proforma information.
147,584,000
150,419,225
- 46 -
6. Remuneration and other benefits paid to key management personnel and executives
Note 23 to the Criteria Group's 2010 consolidated financial statements provides details on
remuneration and other benefits paid to directors and senior executives in 2010. The table below
shows remuneration paid in the six months ended June 30, 2011.
Remuneration of directors
Details of remuneration and other benefits received by the members of the Board of Directors of
CaixaBank (formerly Criteria) as of June 30, 2011 are as follows:
Remuneration and other benefits to members of the Board of Directors(*)
30/06/2011
Fixed remuneration
Contributions to pension plans
2,629
255
Total
2,884
(*) 18 people at June 30, 2011.
The remuneration disclosed in the above table excludes employee salaries paid to Directors in their
capacities as employees other than at the senior executive level.
CaixaBank also has a group third-party liability insurance policy to cover its directors and executives.
The premiums accrued on this policy to June 30, 2011 amounted to €117 thousand.
CaixaBank does not have any pension obligations with former or current members of the Board of
Directors in their capacity as such.
Remuneration received in the first half of 2011 by the directors of CaixaBank in connection with their
duties as representatives of the CaixaBank on the Boards of listed companies and other companies in
which CaixaBank has a significant presence or representation amounted to €1,054 thousand,
recognized in the companies' respective income statements. These amounts do not include the
remuneration of the Chairman of the Board of Directors, since this is disclosed in the relevant section
of this note. CaixaBank is understood to have a significant presence or representation in all the Group
subsidiaries and, in general, all other companies in which it holds an ownership interest of 20% or
more.
- 47 -
Remuneration of executives
Following reorganization of the “la Caixa” Group (see Note 1), CaixaBank's senior management at
June 30, 2011 comprised 24 people, holding the following positions: CEOs (4), Senior Executive Vice
Presidents (5), Executive Directors (14) and General Secretary (1).
The following table presents total remuneration paid to members of CaixaBank's senior management
in the first half of 2011 related to the periods in which they belonged to this group. This remuneration
is recognized in "Personnel expenses" in CaixaBank's income statement.
30/06/2011
Short-term employee benefits
Post-employment benefits
Other non-current benefits
Termination benefits
7,544
1,968
74
Total
9,586
Total remuneration received by executives is calculated considering the total received for representing
the Parent on the boards of directors of listed companies and other companies in which it has a
significant presence or representation. Specifically, remuneration received by executives of CaixaBank
in the first half of 2011 for representing the Parent on the boards of directors of these companies
amounted to €264 thousand, recognized in the companies’ respective income statements.
- 48 -
7. Financial assets
The breakdown of financial assets at June 30, 2011 and January 1, 2011 by nature and category,
excluding “Cash and balances with central banks” and “Hedging derivatives” is shown in the
following table. Where applicable, all assets are shown net of impairment provisions:
30/06/2011
Held-for-trading
portfolio
Other financial
assets at FV
through
profit and loss
Available-forsale financial
assets
Debt securities
Equity instruments
Trading derivatives
1,021,969
50,334
1,808,554
83,315
128,240
31,031,384
4,429,648
Total
2,880,857
211,555
35,461,032
Loans and Held-to-maturity
receivables
investments
TOTAL
7,075,635
187,770,970
1,665,172
7,416,690
7,075,635
187,770,970
41,218,530
4,608,222
1,808,554
196,511,777
7,416,690
242,481,911
01/01/2011 (*)
Held-for-trading
portfolio
Debt securities
1,177,420
Equity instruments
56,025
Trading derivatives
1,884,274
Total
3,117,719
Other financial
asset sat FV
through
profit and loss
Available-forsale financial
assets
79,121
128,364
32,417,076
4,288,876
207,485
36,705,952
Loans and Held-to-maturity
receivables
investments
TOTAL
8,485,471
185,221,207
1,788,715
7,389,398
8,485,471
185,221,207
42,851,730
4,473,265
1,884,274
195,495,393
7,389,398
242,915,947
Financial assets classified as available for sale are measured at fair value, with any changes recognized,
net of the related tax effect, in equity as valuation adjustments.
- 49 -
The breakdown of the balance of this heading in the accompanying condensed interim consolidated
balance sheet by nature of the related transaction is as follows:
30/06/2011
01/01/2011 (*)
Debt securities
Spanish government debt securities
Treasury bills
Government bonds and debentures
Other
Foreign government debt securities
Issued by credit institutions
Other Spanish issuers
Other foreign issuers
Equity instruments
Shares in listed companies
Shares in unlisted companies
Ownership interests in investment funds and other
31,049,356
19,371,523
1,963,455
16,077,610
1,330,458
1,412,654
2,464,757
2,886,124
4,914,298
4,429,648
4,237,777
157,427
34,444
32,435,048
15,919,258
2,156,044
12,507,826
1,255,388
3,449,979
1,518,434
3,730,815
7,816,562
4,288,876
3,966,144
214,399
108,333
Total
35,479,004
36,723,924
(17,972)
(17,972)
35,461,032
36,705,952
Less, impairment provisions:
Debt securities
Total
The amount shown for the portfolio of debt securities at June 30, 2011 includes €21,940 million of
investments related to the CaixaBank Group’s insurance activity. Debt securities related to the
insurance activity classified as available-for-sale financial assets at January 1, 2011 amounted to
€21,390 million.
Lending under CaixaBank Group management stands at €188,916 million, a year-on-year increase of
3.4% or €6,218 million. This increase highlights the CaixaBank Group’s commitment to supporting
the personal and business projects of its customers. Bearing in mind the general credit clampdown
among other Spanish banking institutions, this sets CaixaBank apart from its peers and has enabled it
to continue increase its market share in consumer lending. At the end of May 2011, this share was
11.1% (+1pp from June 2010), the largest in the industry according to the latest available information.
The contained growth in NPLs in the CaixaBank Group’s loan portfolio underscores its superior
quality compared to the rest of the sector. The NPL ratio at June 30, 2011, stood at 4.30%, thanks to
the high quality of the loan book, stringent risk management and an extremely intense loan recovery
effort. This compares favorably to sector average of 6.5% at May 2011. The NPL coverage ratio
improved in the second quarter of 2011 to 67% (139% factoring in mortgage collateral).
- 50 -
The following table shows the changes in doubtful loans and advances to customers in the first half of
2011:
30/06/2011
Balance at January 1
Add:
Additions
Less:
Standardized, foreclosed and other assets
Assets written-off
7,134,038
3,239,373
(1,286,153)
(623,171)
Balance at June 30
8,464,087
The detail of doubtful loans and advances to customers by type and counterparty is as follows:
30/06/2011
01/01/2011 (*)
Public sector
Private sector
Mortgage loans
Other loans
Credit accounts
Factoring
Commercial loans
Other credit
48,914
8,415,173
5,959,769
1,428,698
616,506
30,830
111,893
267,477
25,928
7,108,110
4,932,612
645,018
1,099,638
23,498
124,038
283,306
Total
8,464,087
7,134,038
Provisions for lending and contingent risks at June 30, 2011 amounted to €3,854 million, €626 million
more than at January 1, 2011.
General loan loss provisions inherent in CaixaBank's financial assets amount to €1,835 million,
approximately 100% of the alpha component, so providing the Group with high flexibility and
financial strength facing adverse scenarios going forward.
- 51 -
The following table shows the movement in the first half of 2011 in impairment provisions relating to
“Loans and receivables”:
Balance at
01/01/2011 (*)
Net
allowances Amounts used
Specific allowances
Public sector
Other sectors
Debt securities
General allowance
Country risk allowances
3,194,751
4,901
3,189,068
338
3,188,730
782
1,760,059
1,760,059
2,393
1,320,601
1
1,320,632
(22)
1,320,654
(32)
(180)
(180)
(2)
(534,584)
(4,894)
(529,690)
(529,690)
Total
4,957,203
1,320,419
(534,584)
0
Transfers
and others
(157,676)
Balance at
30/06/2011
88
88
(10)
3,823,092
8
3,822,334
338
3,821,996
750
1,759,967
1,759,967
2,381
(157,598)
5,585,440
(157,676)
22
(157,698)
“Transfers and others” relates mainly to the transfer of provisions recognized to hedge against the risk
of insolvency in connection with loan transactions by CaixaBank cancelled through the acquisition of
real estate assets by BuildingCenter, SAU.
The breakdown of assets which, based on the analyses carried out, are considered assets with
substandard risk or doubtful assets for reasons other than customer default, by collateral at June 30,
2011 and January 1, 2011 is as follows:
30/06/2011
Substandard and impaired assets determined individually
Substandard
Doubtful
Carrying amount
Impairment
charge
Carrying amount
Impariment
charge
Personal
Mortgage
Other
432,823
4,113,933
137,649
89,873
540,905
27,109
987,519
973,002
13,689
406,854
190,204
3,695
Total
4,684,405
657,887
1,974,210
600,753
Collateral
01/01/2011 (*)
Substandard and impaired assets determined individually
Substandard
Doubtful
Carrying amount
Impariment
charge
Carrying amount
Impariment
charge
Personal
Mortgage
Other
711,679
2,008,507
73,186
130,813
221,507
11,860
781,908
605,463
40,658
310,436
143,465
13,140
Total
2,793,372
364,180
1,428,029
467,041
Collateral
- 52 -
“Held-to-maturity investments” in the accompanying condensed interim consolidated balance sheet is
composed of Spanish government debt securities and government-backed securities instruments
issued by banks.
- 53 -
8. Non-current assets held for sale
This item in the balance sheet includes assets from purchases and foreclosures in payment of loans
which are not included as assets for own use, investment property or inventories, and assets initially
classified as investment property, once the decision to sell them has been made.
The change in this balance sheet heading in the first six months of 2011 is as follows:
30/06/2011
Foreclosed
assets
Other
assets
Total
Gross balance at 01/01/2011 (*)
Additions in the year
Disposals due to sale
Transfers
330,411
283,959
(11,854)
13,622
362,193
229,994
(364,476)
289
692,604
513,953
(376,330)
13,911
Gross balance at 30/06/11
616,138
228,000
844,138
Less:
Impairment
Total
(66,830)
549,308
(3,585)
224,415
(70,415)
773,723
“Foreclosed assets” comprise foreclosure rights pending allocation, for a net amount of €349 million.
Of this amount, €171 million relate to rights acquired prior to February 27, 2011. As provided for in
the Framework Agreement governing the terms of the Group’s reorganization, these will be acquired
by Servihabitat XXI, SAU at their net carrying amount. Note 4 Risk management provides details on
the remaining foreclosed assets by source and type of property.
Additions in the period to “Other assets” include the carrying amount of the hospital group,
comprising ten hospitals, excluded from the sale of 50% of SegurCaixa Adeslas to Mutua Madrileña
(see note 9). On May 23, 2011, Criteria (currently CaixaBank) filed a significant event notice in which
it reported that it had reached a preliminary agreement to transfer a stake of 80% in the hospital group
to the private investment entity Goodgrower, SA. The agreed selling price for the stake is
approximately €190 million The transaction is expected to be completed in the third quarter of the
year once the definitive contracts have been signed, the conditions generally applicable to this type of
operation have been met and the pertinent regulatory authorizations has been secured.
In addition, “Other assets” includes the value of onerous contracts to finance specific assets at Aris
Rosen, SA, assets arising from the termination of operating leases and amounts awarded in judicial
proceedings in asset foreclosures.
- 54 -
9. Business combinations, acquisition and disposal of ownership interests in subsidiaries, jointly
controlled entities, associates and available-for-sale investments
Notes 2.4 and 3 of Criteria Group's 2010 consolidated financial statements set out the criteria used to
determine the classification of companies as subsidiaries, jointly controlled entities, associates or
available-for-sale equity instruments, along with the consolidation and measurement bases used for
each for the purpose of preparing the consolidated annual financial statements. For a better
understanding of the CaixaBank Group's structure after the reorganization of the “la Caixa” Group,
Appendix 1 to these condensed interim consolidated financial statements provides a list of companies
included in the scope of consolidation.
For the preparation of these condensed interim consolidated financial statements for the first half of
2011, the same accounting principles, policies and criteria as those used in 2010 were used, taking into
consideration new IFRSs, interpretations and amendments that were not effective as at December 31,
2010 and became effective in the current reporting period.
Subsidiaries
The main changes in the first half of 2011 are as follows:
BuildingCenter, SAU
CaixaBank subscribed to a €500 million capital increase carried out by BuildingCenter, SAU—of
which it has paid €250 million—so that this company could take over the management, administration
and ownership of the real estate assets acquired or foreclosed by CaixaBank, SA. At June 30, 2011, the
CaixaBank Group's stake in BuildingCenter, SAU was 100%.
Serviticket, SA
After the alliance entered into between CaixaBank Group and Live Nation-Ticketmaster for the
management of ticket sales, CaixaBank Group sold 100% of Serviticket, SA to Ticket Master in the
first half of 2011. The sale generated a pre-tax gain of €11 million (€8 million, net of taxes) recognized
under “Gains/(losses) on disposal of assets not classified as non-current assets available for sale” the
accompanying condensed interim consolidated income statement.
Serveis Informàtics la Caixa, SA
CaixaBank subscribed €72 million in the capital increase carried out by Serveis Informàtics la Caixa,
SA. At June 30, 2011, the CaixaBank Group held a 100% stake in that company.
The main changes occurring in the first half of 2011 are as follows:
SegurCaixa Adeslas, SA de Seguros y Reaseguros (formerly VidaCaixa Adeslas de Seguros Generales y
Reaseguros, SA)
In January 2011, Criteria (currently CaixaBank) and Mutua Madrileña announced that they had signed
a deal to develop a strategic alliance in non-life insurance. In accordance with this agreement and after
having secured all pertinent administrative authorizations prior to June 30, 2011, CaixaBank
recognized the sale to Mutua Madrileña of a 50% stake in SegurCaixa Adeslas, SA de Seguros y
Reaseguros (hereinafter SegurCaixa Adeslas). The formalization of the strategic alliance was
announced in a significant event filing with the CNMV on July 14.
- 55 -
The deal amounted to €1,075 million, with Mutua Madrileña paying €1,000 million in cash and
SegurCaixa Adeslas contributing its health insurance subsidiary Aresa Seguros Generales, S.A. which,
prior to the transaction, was valued by an independent expert at €150 million.
SegurCaixa Adeslas is now 50%-owned by Mutua Madrileña and 49.9%-owned by Criteria, with the
remainder held by minority shareholders.
The transactions resulted in the loss of CaixaBank’s control over SegurCaixa Adeslas. Consequently,
CaixaBank recognized gains of €609 million (€450 million after tax) under “Gains/(losses) on disposal
of assets not classified as non-current assets held for sale” in the accompanying condensed interim
consolidated income statement, and derecognized the carrying amount of the entire business at June
30, 2011 (€1,343 million). At that same date, the CaixaBank Group's 49.9% stake in SegurCaixa
Adeslas was consolidated using the equity method.
The net gain of €450 million includes €145 million related to the fair value measurement of the 49.9%
interest the CaixaBank Group retains in SegurCaixa Adeslas, measured at €877 million. In determining
the fair value of the residual stake, no control premium was included.
The following table shows the main changes in the balance sheet that would have occurred at June 30,
2011 had the Group carried the stake retained in SegurCaixa Adeslas using proportionate
consolidation.
(Millions of Euros)
30/06/2011
Increa s e i n tota l a s s ets contri buted by Vi da Ca i xa Ades l a s to Ca i xa Ba nk Group
Decl i ne i n a s s ets due to a ppl i ca ti on of equi ty method
Increa s e i n l i a bi l i ti es i n the mos t s i gni fi ca nt hea di ngs
Fi na nci a l l i a bi l i ti es a t a morti zed cos t
Li a bi l i ti es under i ns ura nce contra cts
971
(647)
93
327
Prior to the transaction, CaixaBank acquired 100% of SegurCaixa Adeslas' group of hospitals, which
had been excluded from the agreement with Mutua Madrileña (see note 8).
- 56 -
Associates
The main changes in the first half of 2011 are as follows:
Repsol-YPF, SA
In the first half of 2011, CaixaBank sold a 0.17% stake and bought a 0.30% stake in Repsol-YPF, SA,
implying a net 0.13% increase in its holding in this company. At June 30, 2011, CaixaBank's
shareholding in Repsol-YPF, SA stood at 12.82%.
The Bank of East Asia, LTD
In the first half of 2011, CaixaBank acquired an additional 0.52% of The Bank of East Asia, LTD. At
June 30, 2011, the CaixaBank Group held a 15.72% stake in this company..
Impairment losses on associates
The CaixaBank Group has a methodology, described in notes 3.7 and 8 to the Criteria Group's
consolidated annual financial statements, in place for performing half-yearly assessments of potential
indicators of impairment in the carrying amounts of investments in associates.
Based on the assessments made at June 30, 2011, there was no need to recognize any additional
impairment.
Available-for-sale equity instruments
The main changes are as follows:
Telefónica, SA
In the first half of 2011, CaixaBank invested €279 million to acquire a 0.37% holding in Telefónica,
SA, placing its total interest in that company at 5.40% at June 30, 2011.
- 57 -
Capital gains from listed companies
The table below presents a breakdown of the percentage of ownership and market value of the main
listed companies classified as associates, jointly controlled entities and available-for-sale equity
instruments.
Company
Telefónica, SA
Repsol-YPF, SA
Grupo Financiero Inbursa
Erste Group Bank AG
The Bank of East Asia, LTD
Banco BPI, SA
Boursorama, SA
Bolsas y Mercados Españoles SHMSF, SA
(AFS)
(ASSOC)
(ASSOC)
(ASSOC)
(ASSOC)
(ASSOC)
(ASSOC)
(AFS)
30/06/2011
% stake
Market value
01/01/2011 (*)
% stake
Market value
5.40%
12.82%
20.00%
10.09%
15.72%
30.10%
20.74%
5.01%
5.03%
12.69%
20.00%
10.10%
15.20%
30.10%
20.81%
5.01%
4,151,795
3,746,836
2,352,791
1,380,780
919,021
302,460
148,578
85,982
3,891,452
3,230,118
2,185,745
1,342,202
972,566
375,196
144,026
74,692
Market value
13,088,243
12,215,997
Cost
11,011,518
10,474,040
2,076,725
1,741,957
Gross unrealized gain
(ASSOC)= Associates; (AFS) = Available-for-sale
In the first half of 2011, active management of the investee portfolio generated total gains of €6
million (€5 million net of tax).
Goodwill
The breakdown of goodwill at June 30, 2011 and January 1, 2011 arising from companies consolidated
using the equity method is as follows:
Grupo Financiero Inbursa (1)
The Bank of East Asia, LTD (2)
SegurCaixa Adeslas, SA de Seguros Generales y Reaseguros (3)
Banco BPI, SA
Boursorama, SA
Comercia de la Caixa, Entidad de Pago, SL (4)
Self Trade Bank, SA
Other
Total
30/06/2011
01/01/2011 (*)
697,875
513,301
393,938
350,198
66,306
53,410
16,317
715,968
540,913
2,091,345
1,787,797
350,198
66,306
64,680
16,317
33,415
(1) Equivalent value in euros recognized in Mexican pesos at each date.
(2) Recognized in Hong Kong dollars at each date. Also includes the first-consolidation difference arising from the acquisition in the first six months
of 2011 and exchange rate differences (€14 million).
(3) Provisional allocation to goodwill of the fair value of the stake in SegurCaixa Adeslas, SA de Seguros Generales y Reaseguros.
(4) The variation is due to the partial reclassification from “Goodwill” to “Intangible assets”.
- 58 -
10. Property and equipment
This heading in the accompanying condensed interim consolidated balance sheet includes the acquired
properties held to earn rentals or for own use.
Changes in the period
In the first six months of 2011, items of property and equipment worth €103 million were acquired.
Operating income from investment property is recognized under “Other operating income” in the
consolidated income statement and operating expenses under “Other operating expenses.”
In the first half of 2011, an amount of €324,211 thousand was derecognized following the change in
the method for consolidating SegurCaixa Adeslas after the sale of the 50% stake to Mutua Madrileña
(see note 9).
In the first six months of 2011, no gains or losses on any individual sale were significant.
Commitments to acquire items of property and equipment
At June 30, 2011, the CaixaBank Group had no significant commitments to acquire items of property
and equipment.
- 59 -
11. Intangible assets
Goodwill
The change in this condensed interim consolidated balance sheet heading in the first six months of
2011 is as follows:
Changes in goodwill
Balance at 01/01/2011 (*)
Less:
Retirement due to disposal of 50% of SegurCaixa Adeslas, SA (Note 9)
Balance at 30/06/11
1,179,172
(446,188)
732,984
Goodwill is tested for impairment at the end of each reporting period or when there are indications
that the unit to which goodwill has been allocated may be impaired. At June 30, 2011, there was no
need to recognize any impairment.
The change in this condensed interim consolidated balance sheet heading in the first six months of
2011 is as follows:
Gross balance at 01/01/2011 (*)
Add:
Additions of software and others
Less:
Retirement due to disposal of 50% of SegurCaixa Adeslas, SA (Note 9)
Amortization charged to results
1,050,645
29,190
(603,106)
(85,741)
Gross balance at 30/06/11
Less:
Impairment
390,988
TOTAL
390,575
(413)
- 60 -
12. Other assets
"Other assets" in the accompanying condensed interim consolidated balance sheet includes inventories
and other assets relating to normal operations on financial markets and with customers.
At June 30, 2011, “Other assets – Inventories” came to €42,023 thousand, of which €33,719 thousand
consisted of land and property under construction. These assets are measured at the lower of cost,
including financial charges, and realizable value, understood to be the estimated net selling price less
the estimated production and marketing costs.
Note 4 Risk management provides details on foreclosed assets, classified into "Non-current assets
held for sale" (see note 8) and "Other assets – Inventories" by source and type of property.
At June 30, 2011 there are no indications of impairment of inventories in addition to the amounts
recognized.
- 61 -
13. Financial liabilities
Breakdown
The detail of the balance of “Financial liabilities” in the accompanying condensed interim consolidated
balance sheet by nature of the related financial instrument at June 30, 2011 and January 1, 2011 is as
follows:
30/06/2011
Held-for-trading
portfolio
Deposits from central banks
Customer deposits
Trading derivatives
Short positions
Total
Other financial
liabilities at FV
through
profit and loss
226,727
Financial
liabilities
at amortized
cost
820,292
10,871,712
147,393,225
44,108,664
3,911,133
820,292
10,871,712
147,619,952
44,108,664
1,794,608
6,881,468
1,221,654
3,911,133
213,986,494
217,229,483
1,794,608
6,881,468
1,221,654
3,016,262
226,727
TOTAL
01/01/2011 (*)
Held-for-trading
portfolio
Deposits from central banks
Customer deposits
Trading derivatives
Short positions
Total
Other financial
liabilities at FV
through
profit and loss
210,464
Financial
liabilities
at amortized
cost
3,189,360
0
19,088,402
142,316,151
44,210,750
1,854,303
6,888,664
744,386
3,189,360
215,482,863
218,292,016
19,088,402
142,105,687
44,210,750
1,854,303
6,888,664
744,386
2,598,689
210,464
TOTAL
- 62 -
Details of issues, buy-backs or redemptions of debt securities
The table below provides a detail at June 30, 2011 of the outstanding balance of debt securities issued
by CaixaBank or any CaixaBank Group company, along with the movement in the first six months of
2011.
30/06/2011
Outstanding
balance at
01/01/2011
Buy-backs or
Issues redemptions (1)
Adjustments
for exchange
rates
and others
Outstanding
balance at
30/06/2011
Debt securities issued by a European Union
member state
that have required the filing of a prospectus
51,099,414
5,875,961
(5,580,582)
(404,661)
50,990,132
Total
51,099,414
5,875,961
(5,580,582)
(404,661)
50,990,132
(1) Includes changes in treasury shares.
Other issues guaranteed by the Group
At June 30, 2011 and 2010, there were no debt securities issued by associates or third parties (outside
the Group) guaranteed by CaixaBank or any Group company.
- 63 -
Individual details of certain issues, buy-backs or redemptions of debt securities
The main features of issues, buy-backs or redemptions made by CaixaBank in the first six months of 2011 are as follows:
CaixaBank Group at 30/06/2011
Details of the issuing entity
Details of issues, buy-backs or redemptions made in the first six months of 2011
Credit rating of
issue or issuer
(Moody's/S&P)
Entity
Relationship
with entity
Country of
residence
Caixabank
Caixabank
Caixabank
Caixabank
Caixabank
Caixabank
Caixabank
Caixabank
Parent
Parent
Parent
Parent
Parent
Parent
Parent
Parent
Spain
Spain
Spain
Spain
Spain
Spain
Spain
Spain
Aaa / Aaa / Aaa / Aaa / AAA
Aaa / AAA
Aaa / AAA
Aaa / AAA
Aaa / AAA
ES0414970139
ES0414970162
ES0414970204
ES0414970246
ES0414970402
ES0414970444
ES0414970519
ES0414970584
Caixabank
Parent
Spain
Aaa / AAA
ES0414970659
Caixabank
Parent
Spain
Aaa / AAA
ES0414970667
Caixabank
Caixabank
Caixabank
Parent
Parent
Parent
Spain
Spain
Spain
Aaa / AAA
Aaa / AAA
Aaa / AAA
ES0414970642
ES0414970634
ES0414970634
Caixabank
Parent
Spain
Aaa / AAA
ES0414970683
ISIN
Caixabank
Parent
Spain
Aaa / AAA
ES0414970675
FTGENCAT 3, FTA
FTGENCAT 3, FTA
Caixabank
Caixabank
Caixabank
Caixabank
Caixabank
Caixabank
Caixabank
Subsidiary
Subsidiary
Parent
Parent
Parent
Parent
Parent
Parent
Parent
Spain
Spain
Spain
Spain
Spain
Spain
Spain
Spain
Spain
Various
Various
Other business
Other business
Aa2 / AAAaa / Aa1 / AAAa2 / AA-/A+
Aa2/A+
ES0314970189
ES0414970691
ES0314970106
ES0314970163
ES0314970197
ES0314970205
Type of security
Type of transaction
Mortgage covered bond
Redemption
Buy-back
Buy-back
Buy-back
Buy-back
Redemption
Buy-back
Buy-back
Issue
Buy-back
Issue
Buy-back
Issue
Issue
Issue (2)
Issue
Buy-back
Issue
Buy-back
Securitization bonds
Redemption
Securitization bonds
Redemption
Promissory notes (net) (3) Redemption
Structured debenture
Issue
Regional covered bond
Issue
Plain vanilla bond
Redemption
Plain vanilla bond
Buy-back
Plain vanilla bond
Issue
Plain vanilla bond
Issue
Issue or
redemption date
05/04/2011
09/05/2011
Currency Amount
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
22/02/2011
EUR
18/03/2011
EUR
18/03/2011
18/03/2011
30/03/2011
EUR
EUR
EUR
27/04/2011
EUR
13/05/2011
EUR
21/03/2011
26/03/2011
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
EUR
15/02/2011
23/05/2011
21/04/2011
09/03/2011
21/06/2011
(2,249,600)
(100)
(15,800)
(6,000)
(15,108)
(883,144)
5,500
29,400
2,000,000
(4,350)
1,250,000
(3,550)
74,000
470,000
100,000
1,250,000
(1,050)
180,000
(98,000)
(18,111)
(19,111)
(2,162,030)
1,961
200,000
(120,004)
(9,524)
200,000
150,000
305,379
(1) The margin is growing and is revised quarterly.
(2) This is a €470,000 increase on the issue dated 18/03/2011.
(3) According to the promissory notes issue program (filed with the CNMV on 25/11/10, with a maximum outstanding nominal balance of EUR 12,000 million).
(4) The interest rate is known on each payment date and fluctuates in line with the performance of a portfolio of underlying Telefónica shares.
(5) The margin is growing and is revised quarterly.
(6) The margin is growing and is revised quarterly (the current margin prevails until 09/09/11).
(7) The margin is growing and is revised quarterly (the current margin prevails until 21/09/11).
Outstanding
amount at
30/06/2011
1,394,300
2,362,700
2,315,650
2,448,192
731,500
955,000
1,899,700
1,136,350
74,000
470,000
100,000
1,163,950
82,000
182,417
232,428
798,611
1,961
200,000
965,476
200,000
150,000
Interest rates
Market in which it is listed Collateral
5.250%
4.500%
3.875%
3.625%
4.625%
E3M+55pb (1)
3.750%
3.125%
AIAF
AIAF
AIAF
AIAF
AIAF
AIAF
AIAF
AIAF
Entity's capital
Entity's capital
Entity's capital
Entity's capital
Entity's capital
Entity's capital
Entity's capital
Entity's capital
5.000%
AIAF
Entity's capital
4.750%
AIAF
Entity's capital
4.977%
4.706%
4.706%
AIAF
AIAF
AIAF
Entity's capital
Entity's capital
Entity's capital
5.125%
AIAF
Entity's capital
4.471%
E3M+3bp
E3M+4bp
Various
Variable (4)
2.738%
E3M+240bp (5)
3.750%
E3M+45bp (6)
E3M+10bp (7)
AIAF
Entity's capital
Barcelona Stock Exchange
Barcelona Stock Exchange
AIAF
AIAF
AIAF
AIAF
AIAF
AIAF
AIAF
Entity's capital
Entity's capital
Entity's capital
Entity's capital
Entity's capital
Entity's capital
Entity's capital
Entity's capital
Entity's capital
- 64 -
In the first six months of 2011, CaixaBank assumed the issue of €30 million by Caixa Finance, BV on April 18, 2004. As a result, at June 30, 2011,
Caixa Finance, BV had no outstanding debt issue.
Individual details of certain issues of subordinated liabilities
The main features of issues made by CaixaBank in the first six months of 2011 are as follows:
CaixaBank at 30/06/2011
Details of the issuing entity
Entity
Relationship Country of
with entity
residence
Caixabank
Parent
Spain
Details of issues, buy-backs or redemptions made in the first six months of 2011
Credit rating of issue
or issuer
(Moody's/S&P)
A-
ISIN
Type of security
ES0113249009 Preference shares
Type of
transaction
Buy-back
Issue or
redemption date
Currency
EUR
Amount
Outstanding
amount at Interest rates
30/06/2011
(10,000)
10,000 E6M+175bp
(10,000)
Market in
which it is
listed
AIAF
Collateral
Entity's capital
- 65 -
14. Provisions
The table below presents the balances at June 30, 2011 and January 1, 2011 and the nature of
provisions recognized in the accompanying balance sheet:
Provisions for pensions and similar
Supplementary guarantees for employee obligations
Supplementary guarantees for partial retirement program
Employee obligations
Early retirement programs
Length of service bonuses and other
Internal pension funds of Group companies
Provisions for taxes and other legal contingencies
Provisions for taxes
Other legal contingencies
Contingent liabilities and commitments
Country risk allowance
Allowance for identified losses
Contingent liabilities
Contingent commitments
Allowance for inherent losses
Other provisions
Losses from agreements not formalized and other risks
Onerous contracts to finance specific assets
Ongoing legal proceedings
Other funds
Total
30/06/2011
01/01/2011 (*)
2,168,064
641,199
60,333
1,076,261
336,658
48,480
5,133
144,922
129,382
15,540
122,776
115
47,987
2,237,808
635,715
58,626
1,088,302
401,971
47,932
5,262
167,424
152,603
14,821
122,876
115
48,075
30,189
17,798
36,736
11,339
74,674
363,050
118,843
153,202
58,154
32,851
74,686
419,883
177,180
137,501
72,835
32,367
2,798,812
2,947,991
- 66 -
15. Changes in equity
The following table details the impact on equity of the corporate transactions carried out within the
“la Caixa” Group’s reorganization (see “Reorganization of the “la Caixa” Group in note 1) at January
1, 2011:
Balance at 31/12/2010 of Criteria Group
Effects of the businesses received and transferred
Difference between carrying amount and market value of businesses received
Difference between carrying amount and market value of businesses transferred
Capital increase
Share capital
Share premium
Other adjustments to equity
Recognition of Repsol-YPF, SA as an associate rather than an available-for-sale financial asset and application
of IFRS 4 to the insurance business.
Balance at 01/01/2011 of CaixaBank Group
Equity
14,703,013
4,358,672
2,378,896
(64,469)
2,044,245
374,404
1,669,841
820,154
820,154
19,881,839
Own funds
At December 31, 2010, CaixaBank had 3,362,889,837 shares in issue with a par value of €1 each.
Consolidated own funds stood at €13,024,555 thousand and consolidated equity at €14,703,012
thousand. The impact on Criteria’s own funds and consolidated equity related to the reorganization of
the “la Caixa” Group’s businesses is described in detail in note 1.
Specifically, on June 30, 2011, CaixaBank increased capital, with effect for accounting purposes from
January 1, 2011, through the issuance of 374,403,908 new shares, delivered fully to "la Caixa," for
€2,044,245 thousand. This capital increase fell under the scope of the corporate transactions envisaged
in the reorganization of the “la Caixa” Group (see note 1).
At 30 June 2011, CaixaBank’s share capital comprised 3,737,293,745 shares with a par value of €1
each.
Meanwhile, “Other equity instruments” corresponds to the June 2011 issue of €1,500 million worth of
subordinated bonds mandatorily convertible into CaixaBank shares within the scope of the
reorganization of the “la Caixa” Group (see note 1).
The term of the issue is 30 months. 50% of the issue must be converted after 18 months and the
remaining 50% at 30 months. The securities bear a 7% annual coupon, payment of which is fully
discretionary. If no coupon is paid, the bondholder has the right to exchange the bond for CaixaBank
shares early. The conversion price was set at €5.25.
The first coupon payment is September 30, 2011, with the remaining coupons to be paid on the 30th
of the last month of each calendar quarter, except the final coupon, which will be paid on maturity of
the bonds on December 10, 2013.
- 67 -
“Other increases/(decreases) in equity” in the accompanying condensed consolidated statement of
changes in equity for the six months ended June 30, 2011 includes, in the column “Accumulated
reserves/(losses)”, €15 million of cost directly attributable to the issue of own equity instruments
described in the preceding paragraphs (see note 1).
“Dividends” in the accompanying condensed consolidated statement of changes in equity for the six
months ended June 30, 2011 includes, in the column “Accumulated reserves/(losses)”, the estimated
maximum amount (€35 million) the CaixaBank Group will have to pay to acquire the acquisition rights
allocated in the capital increase to minority shareholders (see note 3 “Shareholder remuneration and
earnings per share.”).
The acquisition as treasury shares of shares of shareholders who exercised their right of withdrawal
(see “Reorganization of the “la Caixa” Group in note 1) reduce the CaixaBank Group’s equity by
€233,786 thousand. This amount is recognized in the column “Less: treasury shares” in the
accompanying condensed consolidated statement of changes in equity for the six months ended June
30, 2011.
At the Annual General Meeting of May 12, 2011, shareholders approved the following distribution of
Criteria’s profit for 2010 (€1,134 million):
Amount
Basis of appropriation
Profit for the year
Appropriation
To interim dividends:
Interim dividend approved on July 29, 2010
Interim dividend approved on November 4, 2010
Interim dividend approved on December 2, 2010(*)
To reserves:
Total
1,133,903
669,774
200,893
200,937
267,944
464,129
1,133,903
(*) The amount recognized at December 31, 2010 amounts to €269,031 thousand and is the maximum amount distributable ex-treasury shares.
Valuation adjustments include mainly the net amount of unrealized changes in the fair value of
financial assets classified as available for sale, as well as the amounts of valuation adjustments
recognized in the equity of associates.
- 68 -
“Non-controlling interests” represents the net portion of equity of subsidiaries attributable to equity
instruments not owned, directly or indirectly, by CaixaBank, including the shares of profit for the
period.
- 69 -
16. Related party transactions
All transactions and balances between consolidated companies at June 30, 2011 were eliminated on
consolidation. The detail of the most significant balances held by the Group with “la Caixa”, with
associates, jointly controlled entities, directors and senior executives, and other related parties
(relatives and companies with links to members of the Board of Directors of “la Caixa” and
CaixaBank, the Control Committee of “la Caixa” and Senior Executives, to the best of the
Institution's knowledge), as well as the impact on the income statement of related party transactions,
are shown in the following table:
30/06/2011
Associates
and jointly
controlled
entities
Directors
and senior
executives
218,707
267,038
10,584
185,474
6,904
260,134
9,176
1,408
69,093
116,381
0
485,745
10,584
185,474
633,256
1,010,585
379,219
41,733
29,443
334,463
51,572
71,176
386,035
Significant
shareholders
ASSETS
Loans and advances to credit institutions (2)
Reverse repurchase agreement (repos)
Mortgage loans
Other loans and credits
Total
LIABILITIES
Customer deposits (3)
Off-balance sheet liabilities (4)
Total
0
633,256
PROFIT AND LOSS
Interest expense and similar charges (5)
Total
0
OTHER
Contingent liabilities – Guarantees
Contingent commitments – Drawable by third parties (6)
1,389,804
(4,299)
1,404
(477)
95
(3,925)
3,440
(2,895)
(382)
(485)
8,607
463,866
Accrued defined benefit post-employment obligations
Total
Other related
parties (1)
67
6,574
32,308
85,239
54,043
0
472,473
60,684
117,547
(1) Family members and entities related to members of the Board of Directors of "la Caixa" and CaixaBank, the Control Committee of "la Caixa" and
Senior Executives and other related parties such as the employee pension plan ,etc.
(2) Includes loans, credits, debt securities and reciprocal accounts.
(3) Includes deposits, marketable debt securities and subordinated debt.
(4) Includes mutual funds, insurance contracts, pension funds and post-employment obligations contributed.
(5) Does not include the finance cost relating to off-balance sheet liabilities.
(6) Includes amounts drawable against commercial risk lines and reverse factoring transactions.
At June 30, 2011, there was no evidence of impairment to the value of the financial assets or the
guarantees or contingent commitments held with key management personnel and executives.
- 70 -
At June 30, 2011, the balances of loans arranged with directors and senior executives had an average
maturity of 23 years and bear interest at an average rate of 1.84%.
Finance provided in the first half of 2011 to directors and senior executives amounted to €160
thousand, with an average maturity of 7.5 years and earning interest at an average rate of 0.30%.
In the first half of 2011, the directors of the Parent did not carry out any transactions with the Parent
or Group companies outside the normal course of business or that were not conducted on an arm’s
length basis. None of these transactions involves any material amounts affecting the correct
interpretation of the Group’s consolidated financial statements.
Description of the relationship between "la Caixa" and CaixaBank
In order to strengthen the Criteria Group's transparency, autonomy and good governance, as well as
to limit and regulate conflicts of interest, Criteria and “la Caixa” signed an internal relations protocol
(“the Initial Protocol”) on September 10, 2007.
So as to bring the Initial Protocol to line with the distribution of “la Caixa” and CaixaBank functions
and activities arising from the implementation of the reorganization operations, on July 1, 2011, the
parties deemed it fit to enter into a new internal relations protocol (“the Protocol”), whose main
object is:
(i) to develop the basic principles that should govern relations between "la Caixa" and
CaixaBank, in that the latter is the instrument through which the former indirectly carries on
its financial activities;
(ii) to delimit CaixaBank's main fields of activities, taking into account its nature as the bank
through which “la Caixa” indirectly carries on its financial activities;
(iii) to define the general parameters that are to govern any business or services relationship that
CaixaBank Group companies may have with “la Caixa” Group companies; as well as
(iv) to govern the proper flow of information to permit “la Caixa” -and, insofar as is necessary,
CaixaBank too- to draw up its financial statements and to meet its period reporting and
oversight duties with regard to the Bank of Spain, the CNMV and other regulatory bodies.
According to the Protocol, which is publicly available at www.caixabank.com, any new intragroup
service or transaction shall always be made in writing and shall be governed by the general principles
contained therein.
- 71 -
17. Segment information
Segment reporting is carried out on the basis of internal control, monitoring and management of the
CaixaBank Group's activity and results, and developed in accordance with the various areas of
business established with regard to the Group's structure and organization. The business segments are
defined bearing in mind the inherent risks and management characteristics of each. For the purposes
of business segment reporting of activities and income, the core business units on which accounting
and management figures are available are taken as a reference. The same general principles are applied
as those used in Group management information, and the measurement, valuation bases and
accounting principles applied are basically the same as those used to prepare the interim financial
statements, with no asymmetric allocations.
In order to facilitate understanding of the information provided and to enable a standardized analysis
of trends in the CaixaBank Group’s business segments during the first half of 2011, upon completion
of reorganization of the “la Caixa” Group, combined CaixaBank Group financial information for the
first half of 2010, broken down by business segments, has been prepared for comparative purposes,
using the same criteria and assumptions.
CaixaBank's different business segments are:
• Banking and insurance: this is the CaixaBank Group’s core business. It includes the entire
banking business (loans and receivables, customer deposits, rendering of financial services to
Group clients, investment funds marketing, insurance and pension plans, cash management,
etc.) carried out in Spain through the branch network and the other complementary channels.
It encompasses the activity and the profits generated from the Group’s customers, whether
individuals, companies or institutions.
The banking and insurance segment also comprises management of interest rate and balance
sheet liquidity risks by the Assets and Liabilities Committee (ALCO) , by overseeing
institutional market issues, own funds, and investment and financing for the Equity
Investment business.
• Investments: includes the recurring results of investments in the international banking investee
portfolio (G.F. Inbursa, The Bank of East Asia, Erste Bank, Banco BPI and Boursorama) and
the investments in Repsol-YPF, SA and Telefónica. The gross income of “Investments”
includes dividend income and income from companies accounted for using the equity method,
net of the related financing charge, equivalent to the opportunity cost of holding the
investment over the long term.
Segment operating expenses include both direct and indirect expenses, which are allocated in
accordance with internal distribution methods.
Capital is assigned to the different business segments by distributing all CaixaBank Group equity,
based on internal Group economic capital models, taking into account the risks assumed by each
business segment.
In order to facilitate understanding and analysis of trends in the different business segment profit and
loss items, non-recurring profit and loss has been identified separately in the accompanying income
statements. Nevertheless, in order to reflect the contribution to total profit, the net attributable
amount is reassigned to each business segment.
- 72 -
The performance of the CaixaBank Group in the six months ended June 30, 2011 and 2010 is shown
below by business segment:
Consolidated Income statement for the CaixaBank Group. Details by business segment
(Millions of Euros)
Banking and
insurance
Investments
Non-recurring
profit/(loss)
TOTAL
CAIXABANK GROUP
January-June
January-June
January-June
January-June
2011
2010 (*)
2011
2010 (*)
2011
1,725
1,960
(182)
(100)
19
772
416
19
679
364
667
Gross income
2,932
3,022
485
(1,465)
(184)
(1,442)
(223)
Profit from operations
1,283
1,357
Impairment on financial and other assets
(1,029)
Net interest income
Dividends and profits due to application of the equity
method
ROF and other operating income and expense
(9)
476
476
2011
2010 (*)
1,543
1,860
488
686
772
416
507
679
364
388
3,417
3,410
(1,588)
(184)
(1,451)
(223)
(9)
379
(868)
489
2010 (*)
379
(114)
(114)
1,645
1,736
(1,393)
(1,014)
(364)
(146)
(478)
(146)
252
722
629
123
618
117
Operating profit
254
Gains/(losses) on derecognition of assets and other gains
(11)
Profit before tax
243
483
476
379
151
(23)
870
839
Income tax
(69)
(132)
52
28
(20)
15
(37)
(89)
Profit for the period
174
351
528
407
131
(8)
833
750
174
351
528
407
131
(8)
833
750
458
(332)
126
5
94
(102)
(102)
5
94
(463)
332
(131)
300
249
533
501
833
750
(6)
Attributable profit
Non-recurring net profit
Non-recurring profit
Non-recurring write-offs
Net non-recurring profit/(loss)
Total attributable profit
(94)
102
8
Total assets and capital assigned to “Banking and insurance” at June 30, 2011 amount to €258,837
million and €14,764 million, respectively. Total assets and capital assigned to “Investments” at June
30, 2011 amount to €14,550 million and €6,328 million, respectively.
The market value of the listed portfolio in the “Investments” segment amounted to €13,088 million at
June 30, 2011, of which €8,850 million relate to investments in companies accounted for using the
equity method (income of €311 million).
Attributable profit
January-June
2011 2010 (*)
Banking and insurance
Investments
300,045
533,429
248,564
500,945
Total profit attributable to reporting segments
833,474
749,509
Unattributed results
Elimination of internal results (between segments)
Add: Other results (including result attributable to non-controlling interests
Add: Income tax and/or results of gains/(losses) on discontinued operations
TOTAL PROFIT BEFORE TAX
(366)
37,307
870,415
(112)
89,567
838,964
- 73 -
The income of the CaixaBank Group for the six months ended June 30, 2011 and 2010 are as follows
by segment and geographical area:
Distribution of interest and similar income by geographical area
CaixaBank
2011
Domestic market
Export
a) European Union
b) OECD countries
c) Other countries
Total
CaixaBank Group
2011
2010 (*)
2010
3,200,039
3,100,389
3,683,310
3,509,320
8,361
7,451
7,693
7,313
8,361
7,451
7,717
7,337
910
380
910
380
3,208,400
3,108,082
3,691,671
3,517,037
Ordinary income (*)
January-June
Ordinary income
from customers
2011
Ordinary income
between segments (**)
2010
Banking and insurance
Spain
Other countries
Investments
Spain
Other countries
6,105,470
6,095,253
10,217
667,560
526,383
141,177
4,954,513
4,943,793
10,720
488,371
359,367
129,004
Total
6,773,030
5,442,884
2011
0
Total revenue
income
2010
0
2011
2010
6,105,470
6,095,253
10,217
667,560
526,383
141,177
4,954,513
4,943,793
10,720
488,371
359,367
129,004
6,773,030
5,442,884
(*) Correspond to the following captions of the CaixaBank Group's published income statement calculated pursuant to Bank of Spain Circular
4/2004.
1. Interest and similar income
4. Return on equity instruments
5. Share of profit (loss) of entities accounted for using the equity method
6. Fee and commission income
8. Trading income (net)
10. Other operating income
(**) No ordinary income between segments. Banking and insurance income generated from financing of the rest of the businesses has not been
recognized as this segment's ordinary income.
- 74 -
18. Average number of employees
The following table shows the breakdown of average headcount by gender for the six months ended
June 30, 2011 and 2010.
Average number of employees
(Number of employees)
30/06/2011
30/06/2010
CaixaBank CaixaBank Group
Criteria CaixaBank Group
Male
Female
13,019
12,171
14,275
13,997
43
62
737
1,087
Total
25,190
28,272
105
1,824
By way of information, the “la Caixa” Group had 27,476 employees at June 30, 2010, of which 14,245
were men and 13,231 were women.
- 75 -
19. Contingent liabilities and commitments
The breakdowns of “Contingent liabilities” and “Contingent commitments” in the accompanying
balance sheet are as follows:
Contingent liabilities
30/06/2011
01/01/2011 (*)
Bank guarantees and other indemnities
Assets assigned to third-party obligations
Documentary credits
Other guarantees and collateral deposited
Other contingent commitments
4,464,870
35,435
1,080,819
3,831,792
106,046
4,261,585
35,435
896,341
3,903,000
Total
9,518,962
9,096,361
Contingent commitments
Drawable by third parties
Credit institutions
Public sector
Other sectors
30/06/2011
Limit
Drawable
133,639,910
499,916
7,092,515
126,047,479
of which: conditionally drawable
Other contingent commitments
Total
133,639,910
49,537,573
397,283
3,427,264
45,713,026
01/01/2011 (*)
Limit
Drawable
136,615,567
898,079
6,241,255
129,476,233
49,711,546
147,207
3,576,958
45,987,381
6,050,427
6,474,784
3,732,458
3,321,657
53,270,031
136,615,567
53,033,203
- 76 -
20. Other required disclosures
Disclosures required under the Mortgage Law
In accordance with regulations governing the mortgage market, issuers of mortgage covered bonds are
required to disclose relevant information regarding their issues. Consequently, CaixaBank presents the
following information regarding its total mortgage covered bond issues:
1. Information on support and privileges available to holders of mortgage-backed securities issued by
the Group
CaixaBank is the only Group entity that issues mortgage covered bonds.
The principal and interest of the mortgage covered bonds issued by the CaixaBank Group are
specially secured (there being no need for registration in the Property Register) by a mortgage on
all those entered in CaixaBank’s name, without prejudice to its unlimited liability.
The mortgage-backed securities include the holder’s financial claim on CaixaBank, secured as
indicated in the preceding paragraphs, and may be enforced to claim payment from the issuer after
maturity. The mortgage-backed bonds confer on the holders the status of special preferential
creditors set out in article 1923, section 3 of the Civil Code, vis-à-vis all other creditors in relation
to all the mortgage loans and credits registered in the issuer's name. All holders of these securities,
regardless of the issue date, enjoy the same priority over the loans and credits backing the
securities.
The members of CaixaBank’s Board of Directors expressly indicate that CaixaBank has
implemented policies and procedures guiding all activities carried out in respect of mortgage
market issues. These policies and procedures ensure strict compliance with prevailing applicable
mortgage market regulations. These policies and procedures include the following aspects, among
others:
- Ratio between loans and credits and the appraisal value of the mortgaged property
- Ratio between the borrower’s debt and income, as well as verification of the borrower’s
solvency and other information provided
- Avoidance of imbalances between inflows from the hedging portfolio and payment outflows
in respect of securities issued
- Appropriate procedures for selecting independent appraisers
- 77 -
2. Disclosures on mortgage market security issues
The nominal value of mortgage covered securities issued by CaixaBank and in circulation at June
30, 2011 and January 1, 2011 is as follows:
Mortgage certificates issued
30/06/2011
01/01/2011 (*)
Mortgage certificates issued in public offers
Residual maturity less than 3 years
Residual maturity between 3 and 5 years
Mortgage certificates not issued in public offers
Residual maturity over 10 years
2,679,356
567,604
490,047
1,621,705
37,392,273
11,935,437
9,986,985
11,341,010
4,128,841
2,679,356
567,604
2,111,752
36,034,526
10,533,142
8,745,830
9,837,306
6,918,247
Total
40,071,629
38,713,882
The nominal value of mortgage participations issued by CaixaBank and outstanding at June 30,
2011 and January 1, 2011 is as follows:
Mortgage participations issued
30/06/2011
01/01/2011 (*)
Mortgage participations issued in public offers
Mortgage participations not issued in public offers
0
2,169,823
45,347
75,274
304,922
1,744,280
0
2,213,925
48,973
77,361
301,347
1,786,244
Total
2,169,823
2,213,925
- 78 -
The nominal value of mortgage transfer certificates issued by CaixaBank and outstanding at June
30, 2011 and January 1, 2011 is as follows:
Mortgage transfer certificates
30/06/2011
01/01/2011 (*)
Mortgage transfer certificates issued in public offers
Mortgage transfer certificates not issued in public offers
0
15,825,293
179,042
367,138
2,468,300
12,810,813
0
15,938,138
176,801
375,551
2,201,798
13,183,988
Total
15,825,293
15,938,138
3. Information regarding mortgage loans and credits
The nominal value of all CaixaBank’s mortgage loans and credits, as well as of those that are
eligible to be included in the mortgage covered bonds issue limit, in accordance with applicable
regulations, is as follows:
Nominal value of outstanding mortgage loans and credits
Nominal value of outstanding mortgage loans and credits (**)
Nominal value of outstanding mortgage loans and credits eligible without considering limits to
calculated as per article 12 of Royal Decree 716/2009 of April 24 (***)
30/06/2011
01/01/2011 (*)
104,724,525
105,992,112
51,368,526
52,102,050
(**) Does not include securitized assets.
(***) Considering the limits based on criteria set out in article 12 of Royal Decree 716/2009, of April 24, the amounts would be €51,195,055
thousand and €51,892,495 thousand and June 30, 2011 and January 1, 2011, respectively.
- 79 -
Information on all pending mortgage loans and credits and on those that are eligible without taking
into account the calculation limits set out in article 12 of Royal Decree 716/2009 of April 24 is
provided below:
Mortgage loans and credits
By currency
Euros
Other
By payment situation
Normal
Past-due
By average residual maturity
Up to 10 years
From 10 to 20 years
From 20 to 30 years
Over 30 years
By type of interest rate
Fixed
Floating
Mixed
By purpose
Business activity – real estate development
Business activity - other
Home finance
By collateral
Completed buildings - residential (**)
Completed buildings – commercial
Completed buildings – other
Buildings under construction - residential (**)
Buildings under construction – commercial
Buildings under construction – other
Land – built land
Land - other
30/06/2011
01/01/2011 (*)
Total eligible
portfolio
of loans
and credits
Total eligible
portfolio
of loans
and credits
Total eligible
portfolio
of loans
and credits
Total eligible
portfolio
of loans
and credits
104,724,525
104,509,525
215,000
104,724,525
96,204,572
8,519,954
104,724,525
15,837,801
24,213,344
52,494,723
12,178,657
104,724,525
602,221
103,751,886
370,418
104,724,525
18,740,621
15,641,727
70,342,178
104,724,525
84,984,719
2,771,979
5,531,319
5,772,033
59,578
552,342
3,662,045
1,390,511
51,368,526
51,339,519
29,007
51,368,526
50,425,773
942,752
51,368,526
3,505,288
11,249,940
30,909,707
5,703,591
51,368,526
113,195
51,027,703
227,628
51,368,526
4,185,721
3,302,325
43,880,480
51,368,526
49,089,749
152,027
227,152
863,079
431
7,250
943,334
85,504
105,992,112
105,759,224
232,888
105,992,112
98,818,244
7,173,867
105,992,112
15,962,906
23,663,587
52,615,545
13,750,074
105,992,112
951,639
104,664,918
375,554
105,992,112
20,109,564
15,605,881
70,276,667
105,992,112
84,634,942
2,892,146
5,681,139
6,656,827
94,145
631,669
4,081,011
1,320,233
52,102,050
52,073,955
28,095
52,102,050
51,001,513
1,100,537
52,102,050
3,833,190
11,148,312
31,087,247
6,033,300
52,102,050
219,241
51,652,839
229,970
52,102,050
4,984,682
3,543,931
43,573,436
52,102,050
49,355,810
213,268
253,597
1,068,305
9,088
11,880
1,119,792
70,311
(**) Of which €3,346,039 thousand and €1,928,227 thousand have subsidized housing as collateral, over total eligible mortgage loans and credits in
accordance with Royal Decree 716/2009, respectively.
CaixaBank’s loan and credit portfolio eligible for use in the calculation of the mortgage covered
bonds issue limit shown in the preceding table, may be immediately extended up to €75,591
million. Mortgage market law establishes that the volume of unmatured mortgage covered bonds
issued by an entity may not exceed 80% of the principal amount of outstanding mortgage loans
and credits that meet certain eligibility requirements.
- 80 -
The amounts available (committed amounts not drawn down) of the entire mortgage loans and
credits portfolio pending repayment at June 30, 2011 and January 1, 2011 are as follows:
Available for loans and mortgage loans
30/06/2011
01/01/2011 (*)
Potentially eligible
Other
6,905,748
18,263,176
6,802,507
15,882,794
Total
25,168,924
22,685,301
The nominal value of all ineligible mortgage loans and credits pending repayment is provided
below, along with indication of those loans and credits that are not eligible because they exceed the
limits set out in article 5.1 of Royal Decree 716/2009 but otherwise comply with the remaining
requirements for eligible mortgage loans and securities, set out in article 4 of the aforementioned
Royal Decree.
Non-eligible loans and mortgage loans
30/06/2011
01/01/2011 (*)
Not eligible: other criteria
Not eligible: for LTV
43,242,599
10,113,401
43,254,818
10,635,244
Total
53,355,999
53,890,062
Details of the eligible mortgage loans and credits subject to CaixaBank’s mortgage covered bonds
issues at June 30, 2011 and January 1, 2011, according to the principal amount pending collection
on loans and credits, divided by the latest fair value of the corresponding collateral (LTV), are as
follows:
Eligible mortgage loans and credits
30/06/2011
01/01/2011 (*)
Mortgage on home
Transactions with LTV below 40%
Transactions with LTV between 40% and 60%
Transactions with LTV over 80%
Other assets received as collateral
Transactions with LTV below 40%
Transactions with LTV over 60%
49,923,356
4,755,490
12,550,810
25,636,199
6,980,857
1,445,170
400,583
843,775
200,812
50,403,092
5,750,709
14,661,010
29,991,373
Total
51,368,526
52,102,050
1,698,958
560,229
968,391
170,338
At June 30, 2011 and January 1, 2011, no replacement assets were assigned to issuances of
mortgage covered bonds.
The calculation of collateralization and overcollateralization of CaixaBank’s mortgage covered
bonds issues at June 30, 2011 and January 1, 2011 is as follows:
- 81 -
Non-bearer mortgage covered bonds
Bearer mortgage covered bonds recognized in customer deposits
Bearer mortgage covered bonds registered with credit institutions
30/06/2011
01/01/2011 (*)
37,653,471
1,425,000
993,158
36,115,668
1,495,000
1,103,214
Mortgage covered bonds issues
(A)
40,071,629
38,713,882
Portfolio of loan and credit collateral for mortgage covered bonds
(B)
104,724,525
105,992,112
(B)/(A)
261%
274%
[(B)/(A)]-1
161%
174%
Collateralization:
Overcollateralization:
- 82 -
Appendix 1
Companies in the scope of consolidation of the CaixaBank Group
Company name and activity
Registered office
% holding
Direct
Total
Subsidiaries
AgenCaixa, SA Agencia de Seguros
Insurance agency
Complex Torres Cerdà. Juan Gris, 20 - 26
8014
Barcelona
0.00
99.50
Aris Rosen, SAU
Services
Av. Diagonal, 662
8034
Barcelona
100.00
100.00
BuildingCenter, SA
Services
Av. Diagonal, 621-629
8028
Barcelona
100.00
100.00
Caixa Capital Micro, SCR de Régimen Simplificado, SAU
Venture capital management
Av. Diagonal, 613 3º A
8028
Barcelona
100.00
100.00
Caixa Capital Pyme Innovación, SCR de Régimen Simplificado, SA
8028
Barcelona
80.65
80.65
Caixa Capital Risc, SGECR, SA
8028
Barcelona
99.99
100.00
Caixa Capital Semilla, SCR de Régimen Simplificado, SA
8028
Barcelona
100.00
100.00
Caixa Corp, SA
Holding company
8028
Barcelona
100.00
100.00
Caixa Emprendedor XXI, SA
Support to entrepreneurship projects
and innovation-related projects
Av. Diagonal, 613 3º B
8028
Barcelona
100.00
100.00
Caixa Finance, BV
Finance
Prins Bernhardplein 200
1097 JB
Amsterdam
Netherlands
100.00
100.00
Caixa Girona Gestió, SGIIC, SAU
Investment fund management
Creu, 31
17002
100.00
100.00
Girona
Caixa Girona Pensions, EGFP, SA
Pension fund management
Creu, 31
17002
100.00
100.00
Girona
Caixa Preference, SAU
Finance
Av. Diagonal 621-629
8028
Barcelona
100.00
100.00
CaixaRenting, SAU
Vehicle and machinery rentals
Gran Via de les Corts Catalanes, 130 - 136 Pl. 5
8038
Barcelona
100.00
100.00
Caixa de Barcelona Seguros de Vida, SA de Seguros y Reaseguros
Insurance
Juan Gris, 20-26
8014
Barcelona
100.00
100.00
- 83 -
Registered office
% holding
Direct
Total
Subsidiaries
Catalunya de Valores, SGPS, UL
Holding company
Rua Júlio Dinis, 891 4º
4050-327 Massarelos (Porto)
Portugal
100.00
100.00
Cegipro, SAS
Real estate
20, rue d'Armenonville
92200
Neuilly-sur-Seine
Paris
France
0.00
100.00
Caixa Girona Mediació, Sociedad de Agencia
de Seguros Vinculada, SA
Insurance
8014
Barcelona
Girona
0.00
100.00
Corporación Hipotecaria Mutual, EFC, SA
Mortgage credit
8028
Barcelona
100.00
100.00
e-la Caixa 1, SA
Electronic channel management
Provençals, 39 (Torre Pujades)
8019
Barcelona
100.00
100.00
Estugest, SA
Administrative activities and services
Av. Sant Francesc, 36 1º 2ª
17001
Girona
100.00
100.00
FinanciaCaixa 2, EFC, SA
Finance
8028
Barcelona
99.67
100.00
Finconsum, EFC, SA
Consumer finance
Gran Via Carles III, 87, bajos 1º B
8028
Barcelona
100.00
100.00
GDS-Correduría de Seguros, SL
Insurance brokerage
Av. Diagonal, 427 bis - 429 1ª pl
8036
Barcelona
67.00
67.00
GDS-CUSA, SA
Services
Gran Via de les Corts Catalanes, 130 -136
8038
Barcelona
100.00
100.00
GestiCaixa, SGFT, SA
Securitisation fund management
Av. Diagonal, 621-629 Torre II Pl. 8
8028
Barcelona
91.00
100.00
Hodefi, SAS
Holding company
92200
Neuilly-sur-Seine
Paris
France
0.00
100.00
Holret, SAU
Real estate services
8028
Barcelona
100.00
100.00
InverCaixa Gestión, SGIIC, SA
Management of collective investment institutions
8028
Barcelona
100.00
100.00
Inversiones Inmobiliarias Oasis Resort, SL
Services
Av. Del Mar, s/n (Urbanización Costa Teguise)
35009
Teguise-Lanzarote
60.00
60.00
- 84 -
Registered office
% holding
Direct
Total
Subsidiaries
Inversiones Inmobiliarias Teguise Resort, SL
Services
Av. Del Jablillo, 1 (Hotel Teguise Playa) (Urb.Costa Teguise)
35009
Teguise-Lanzarote
60.00
60.00
Invervida Consulting, SL
Holding company
8014
Barcelona
0.00
100.00
PromoCaixa, SA
Product marketing
Av. Carles III 105 1ª pl.
8028
Barcelona
99.99
100.00
Recouvrements Dulud, SA
Finance
92200
Neuilly-sur-Seine
Paris
France
0.00
100.00
SCI Caixa Dulud
Property management
92200
Neuilly-sur-Seine
Paris
France
0.00
100.00
Serveis Informàtics la Caixa, SA
Provision of IT services
Avinguda Diagonal, 615
8028
Barcelona
100.00
100.00
Silc Immobles, SA
Real estate management and administration
8028
Barcelona
0.00
100.00
Sodemi, SAS
Property development and leasing
92200
Neuilly-sur-Seine
Paris
France
0.00
100.00
Suministros Urbanos y Mantenimientos, SA
Project management, maintenance, logistics and procurement
8019
Barcelona
51.00
100.00
Tenedora de Vehículos, SA
Renting
Edifici Estació de Renfe Local nº 3 p
8256
Rajadell
Barcelona
0.00
65.00
Trade Caixa I, SA
Administrative and advisory services
Av. Diagonal, 611 2ª B
8028
Barcelona
100.00
100.00
Valoraciones y Tasaciones Hipotecarias, SA
Appraisal services
Av. Diagonal, 427 bis 429 1ª planta
8036
Barcelona
100.00
100.00
VidaCaixa, SA de Seguros y Reaseguros
Insurance
8014
Barcelona
0.00
100.00
VidaCaixa Grupo, SA
Holding company
8014
Barcelona
100.00
100.00
- 85 -
Registered office
% holding
Direct
Total
Joint ventures (jointly controlled entities)
Comercia de la Caixa, Entidad de Pago, SL
Payment entity
8019
Barcelona
SegurCaixa Adeslas, SA de Seguros Generales y Reaseguros
Insurance
8014
Barcelona
49.00
49.00
0.00
49.91
- 86 -
Registered office
% holding
Direct
Total
Associates
Banco BPI, SA (C)
Banking
Rua Tenente Valadim, 284
4100
476
Oporto
Oporto
Portugal
30.10
30.10
Boursorama, SA (C)
Direct Banking
18, Quai du Point du Jour
92659
Boulogne-Billancourt
France
1.33
20.74
Cementiri de Girona, SA
Funeral services
Plaça del Ví, 1
17004
Girona
30.00
30.00
Edicions 62, SA
Book publishing
Peu de la Creu, 4
8001
Barcelona
30.13
30.13
Erste Group Bank AG (C)
Banking
Graben, 21
1010
Vienna
Austria
10.09
10.09
Grupo Financiero Inbursa, SAB de CV (C)
Banking
Paseo de las Palmas, 736
11000
Lomas de Chapultepec
Mexico D.F.
Mexico
20.00
20.00
Girona, SA
Integrated water distribution
Travesia del Carril, 2 6º 2ª
17001
Girona
34.22
34.22
Polígon Industrial Girona, SA
Real estate development
Farigola, 11
17457
Riudellots de la Selva
Girona
38.98
38.98
Repsol YPF, SA (C)
Operation in the oil and gas market
P. de la Castellana, 278-280
28046
Madrid
12.82
12.82
Self Trade Bank, SA
Banking
Marqués de Urquijo, 5
28008
Madrid
49.00
49.00
Telefónica Factoring EFC, SA
Factoring
Zurbano, 76 pl. 8
28010
Madrid
20.00
20.00
Telefónica Factoring do Brasil, LTDA
Factoring
Av. Paulista, 1106 -13º andar
CEP 01310 100 Bela Vista - Sao Paulo SP
Brazil
20.00
20.00
The Bank of East Asia, LTD (C)
Banking
10, des Voeux rd.
Hong Kong
China
15.72
15.72
(C) Listed companies
-1-
CAIXABANK GROUP MANAGEMENT REPORT
FOR THE FIRST HALF OF 2011
This report describes the key data and events of the first half of 2011 shaping the financial position of
the CaixaBank Group (“CaixaBank Group” or “the Group”) and the evolution of its businesses, risks
and outlook. The condensed interim financial statements for the first half of 2011 which the
Management Report supplements were prepared in accordance with International Financial Reporting
Standards adopted by the European Union (IFRS-EU) and the criteria set forth in Bank of Spain
Circular 4/2004, of December 22, and subsequent amendments.
CaixaBank, SA (“CaixaBank”), formerly Criteria CaixaCorp, SA, is the listed bank through which
Caixa d'Estalvis i Pensions de Barcelona ("la Caixa") carries on its business indirectly as a credit
institution “la Caixa” is CaixaBank's majority shareholder, with a stake of 81.52% at June 30, 2011.
Reorganization of the “la Caixa” Group: transformation of Criteria into CaixaBank.
The enactment of Royal Decree-Law 11/2010, of July 9, on the governing bodies and other matters
relating to the legal framework for savings banks, in addition to the approval of the consolidated text
of the Catalan Savings Banks Law through Royal Decree-Law 5/2010, introduced the possibility for a
savings bank to conduct its financial activities indirectly through a bank.
Under this legal framework, on January 27, 2011, the Boards of Directors of "la Caixa," Criteria
CaixaCorp, SA ("Criteria") and MicroBank de "la Caixa", SA ("MicroBank") entered into a framework
agreement (the “Framework Agreement”) entailing the reorganization of the "la Caixa" Group in
order to adapt to the new demands of national and international regulations and, specifically, to the
new requirements of the Basel Committee on Banking Supervision (Basel III). The structure designed
enables "la Caixa” to indirectly carry out its financial activity while continuing to comply with its
inherent social welfare purposes.
Approval was given at the Ordinary General Assembly of "la Caixa" and the Annual General Meeting
of Criteria held April 28 and May 12, 2011, respectively, to all proposals set forth by the respective
Boards of Directors regarding the reorganization of the "la Caixa" Group.
As of June 30, 2011, the corporation transactions included within the scope of the Framework
Agreement have been completed for legal and business purposes and in line with prevailing legislation
been accounted for retrospectively from January 1, 2011. Basically, the transactions led to an exchange
of assets whereby “la Caixa” transferred its banking business to Criteria in exchange for part of
Criteria’s industrial holdings (Abertis, Gas Natural Fenosa, Aguas de Barcelona, PortAventura and
Mediterránea) and new shares in the company issued in a capital increase. By absorbing MicroBank,
Criteria gained the status of a credit institution with the corporate name CaixaBank, SA. CaixaBank is
the listed bank through which “la Caixa” carries out its financial activity indirectly. These transactions
are described in detail in the section “Reorganization of the “la Caixa” Group” in note 1 of the
condensed interim consolidated financial statements which are completed with this management
report.
Meanwhile, in order to bolster the CaixaBank Group's equity structure, Criteria issued €1,500 million
of subordinated bonds with mandatory conversion into CaixaBank shares in June 2011, for
-2-
distribution through the “la Caixa” network. After conversion of the bonds, the CaixaBank
shareholder base will increase from the current 365,000 to 630,000.
With the reorganization now complete, the CaixaBank Group has one of the best capital adequacy
profiles in the sector, with an excellent capital base, the best credit rating among the major Spanish
financial groups, and the leading position in the Spanish retail banking market. The Group’s key
objectives for the coming years are to strengthen its position in the national market, diversify its
business, and increase its international presence.
Economic landscape
The global economy continued to expand in the first half of 2011, with growth in virtually all
developed and emerging economies. However, the most recent economic figures suggest that this
growth rate will level out in the second half of the year.
Inflation has remained high, although it is being somewhat curbed as commodity prices ease back
down. In this scenario, central banks in emerging economies have tightened up monetary conditions.
Monetary authorities in Asia have launched decisive measures to limit the risk of asset bubbles. In
developed economies, central banks have taken the first steps to reshape certain extraordinarily lax
monetary policies. For instance, over two interest-rate hikes, the European Central Bank (ECB)
pushed its key refinancing rate up by 25 basis points, to 1.50%. In the US, although the Federal
Reserve has kept the fed funds rate at extremely low levels (0%-0.25%), it has let its quantitative easing
program lapse.
Tensions surrounding European sovereign debt have resurfaced in recent months, pushing the public
debt risk premium of certain countries to all-time highs. Portugal requested financial assistance from
the European Commission and the International Monetary Fund (IMF), ultimately receiving €78,000
million. In addition, in view of Greece’s troubles with complying with the fiscal consolidation plan
agreed with the European Union and the IMF, the country had to adopt new austerity measures so
that these agencies would finally agree to pay out the fifth tranche of the Greek loan program.
Against this backdrop, monetary market interest rates initially rallied in line with greater expectation of
hikes in the ECB’s repo rate. However, the latest signs point to a slowdown in economic growth have
curbed this upward trend. The 12-month Euribor rate has settled in above 2%, Meanwhile, yields on
German and US public debt have remained extremely low, at around 3%, reflecting investor’s risk
aversion and concerns about slowing growth.
In the second quarter of 2011, the main European stock market indices lost part of the gains recorded
in the first three months of the year. For the first half of 2011, however, the EuroStoxx 50 gained 2%,
while the IBEX-35 and S&P500 were up 5% and 5.1%, respectively. The third quarter, however, has
gotten off to somewhat of a rocky start, due to uncertainties surrounding growth in the second half of
the year and the solvency of certain peripheral European countries.
In the currency market, US dollar/euro trends were colored by Greece’s debt troubles and the doubts
regarding the stability of the Monetary Union. As the US dollar continues to be a safe-haven currency,
tensions regarding European sovereign debt have boosted the dollar’s value to around $1.40/euro,
breaking the US currency’s downward trend accumulated over the first quarter of the year.
Lastly, although Spain’s sovereign debt repayment ability is considerably better than in other
peripheral European countries, it has been affected by contagion worry. As a result, in late June, the
spread with 10-year German bonds hit nearly 300 basis points.
-3-
The Spanish economy is slowly but surely recovering normal activity levels. Although the secondquarter GDP figures are still not in, partial indicators suggest that while the economy has continued to
rally throughout the period, the rate of recovery has been more moderate. Growth was particularly
high in the foreign sector, driven by the more robust German and French economies. However,
domestic demand is still weighed down by a weak (albeit stable) labor market.
Notwithstanding the above, Spain has continued to move forward in its structural reforms. In
particular, the country has made great strides in restructuring its financial system. The transformation
of savings banks, in which we have been fully involved, is critical to the stability of the financial
system. In the upcoming quarter, certain entities will hit key transformation milestones, vital steps in
the process to either open institutions to the market or to analyze other ways of strengthening capital
adequacy. With the creation of CaixaBank and its listing on July 1, the “la Caixa” Group is nothing
short of a trailblazer in this process.
Business performance
Amid an extremely adverse backdrop, the CaixaBank Group continued to widen its clear advantage
over the rest of the Spanish banking sector in terms of financial strength, boosting its already-high
cash adequacy, with a core capital ratio of 11.3%, and maintaining its superior liquidity levels (€21,633
million).
Core capital, the highest quality capital, at June 30, 2011 reached 11.3% (December 31, 2010: 8.9%).
The increase was underpinned by solid earnings, active management of risk assets, the €1,500 million
issue of mandatory convertible subordinated bonds and other transactions in the Group’s
reorganization.
The Group’s eligible equity stands at €16,643 million, up €3,226 million on the 2010 year end. leaving
an excess over the minimum requirement of €4,836 million.
Liquidity management is a strategic cornerstone at the CaixaBank Group. Group liquidity rose by
€1,995 million in the first half of 2011 to €21,633 million. Liquidity assets, virtually all of which are
readily available, represent 7.9% of the Group’s total assets. It is worth noting that dependence on the
wholesale funding markets is minimal, which provides great stability and evidences the Group’s
tremendously proactive refinancing strategy. In the first half of 2011, the Group moved to proactively
roll over the majority of issues maturing in the year, issuing €5,874 million in the institutional market
(€5,324 million in mortgage covered bonds), compared to €4,065 million in pending maturities.
Maturities in the second half amount to €2,385 million.
In addition, at June 30, 2011, the market value of the CaixaBank’s Group's listed investees stood at
€13,088 million, implying gains of €2,077 million.
The CaixaBank Group’s sales and marketing campaigns are aimed at securing the loyalty of its 10.5
million customers over the long term, enabling it to maintain and consistently reinforce its leadership
in the Spanish retail banking segment and to steadily enhance its positioning in the various specialist
banking segments: corporate, cooperative, SMEs, personal and private banking.
The Group’s greater commercial strength, with the largest network in the Spanish financial system,
with 5,247 branches, 7,993 ATMs and the leading position in on-line banking through Línea Abierta
(more than 6.8 million customers), mobile phone banking (more than 2.1 million customers) and ebanking (10.4 million cards), means that the Group is showing balanced and high quality growth in its
banking and commercial businesses.
-4-
Customer funds grew during the period, reflecting the Group’s active management of its financing
structure, with a view to maximizing net interest spreads and maintaining comfortable levels of
liquidity. On-balance sheet funds at June 30, 2011, totaled €204,870 million, marking an increase of
€7,492 million or 3.8% in the last 12 months. The share of private resident sector deposits stands at
10%, the highest in the system.
The Group also boosted off-balance sheet assets, leading to year-on-year growth in mutual fund and
pension plan assets of 13.1% and 10.2%, respectively. The Group’s market share in mutual funds
ended the period at 12.2% (+1.6pp from December 2010) and in pension plans at a healthy 16.2%.
According to the latest figures available, CaixaBank is still the leader in savings insurance, with a share
of 15.3% (+0.5pp from December 2010).
Total customer funds managed amounted to €248,058 million, up 6.8% on the prior year.
Loans managed by the “la Caixa” Group amounted to €188,916 million, an increase of 3.4% or €6,218
million. This increase highlights the CaixaBank Group’s unwavering commitment to supporting the
personal and business projects of its customers. Bearing in mind the general credit clampdown among
other Spanish banking institutions, this sets CaixaBank apart from its peers and has enabled it to
continue increasing its market share in consumer lending. At the end of May 2011, this share was
11.1% (+1pp from June 2010), the largest in the industry based on the latest available data.
Turning to risk management, the Group’s NPL ratio stands at 4.30%, still lower than the financial
sector average (6.5% in May 2011) thanks to the high quality of its loan book, stringent risk
management and an extremely intense loan recovery effort. The NPL coverage ratio remained high at
67%, or 139% factoring in mortgage collateral.
Yet again in the second quarter, as throughout the whole of 2010, the general loan loss provision
stood at €1,835 million, roughly 100% of the α factor. This provides the Group with ample flexibility
and financial strength in the event of future business or market adversity.
Earnings
Following is the CaixaBank’s consolidated income statement for the first half of 2011 (see
“Comparison of information” in note 1):
-5-
Consolidated earnings of the CaixaBank Group
(Millions of Euros)
30/06/2011
Change, %
3,692
(2,149)
5.0
29.6
Net interest income
1,543
(17.0)
370
729
772
76
340
(2.2)
34.4
13.7
(44.8)
51.3
Dividend income
Gains/(losses) on financial assets and liabilities (net) and exchange differences (net)
Other operating income and expense
Gross income
3,830
0.2
Operating expenses
(1,772)
(1.0) (*)
Profit from operations
2,058
1.3 (*)
Impairment losses on financial and other assets (net)
Gains on disposal of assets and other gains
(1,393)
618
Profit before tax
Income tax expense
Profit for the period
1,283
(37)
1,246
1,246
11.0
Memorandum items
Non-recurring income
Net non-recurring income
Net non-recurring write-offs
131
463
(332)
Recurring profit attributable to the Group
1,115
(7.4)
(*) Variation relates to recurring income.
With market interest rates ticking up gradually, growth of managed volumes contained, fierce
competition in attracting retail deposits and rising issuance costs on wholesale markets, net interest
income fell 17% year-on-year to €1,543 million.
In this setting and bearing in mind the uncertain outlook for the economy and market pressures, the
CaixaBank Group adopted a strategy of intense and proactive management of raising liquidity in retail
and institutional markets. This had a temporary impact on net interest income as a result of the
increase in finance costs. Meanwhile, repricing of the mortgage loan book triggered by the increase in
market rates and the active management of margins on new loan transactions drove an increase in
finance income.
Despite the squeeze in interest margins, the customer spread; i.e. the difference between the rates
charged on loans and the rates paid on retail customer funds, rose further in the year’s second quarter,
to 1.47%.
Total revenue from investees, which includes dividends plus the Group’s share of profits of entities
accounting for using the equity method, amounted to €686 million in the first half, a 35.1% increase
from the same period last year. This performance reflects the portfolio’s ability to generate strong
recurring earnings, as well as the Group’s diversification in international banking (20% of GF Inbursa,
30.1% of Banco BPI, 15.7% of The Bank of East Asia, 10.1% of Erste Bank and 20.7% of
Boursorama) and services (5.4% of Telefónica and 12.8% of Repsol).
-6-
Net fees and commissions rose 13.7% to €772 million thanks to the intense commercial activity, with
specialized management by segments driving an increase in banking activity, as well as mutual funds
and insurance, underpinned by the exemplary management of services offered to customers.
The positive contribution by trading income, foreign exchange gains and other operating income lifted
gross income to €3,417 million, 0.2% higher than in the first half of 2010.
A strict cost containment and streamlining policy resulted in a decrease in recurring operating costs
after absorbing the increase caused by the merger with Caixa Girona in the fourth quarter of 2010,
leaving the cost-to-income ratio at 45.7%.
The strong capacity of the network, which generates recurring and sustained revenue, coupled with
lower costs led to a 1.3% year-on-year increases in operating income to €1,645 million (€1,759 million
stripping out the impact of the Group’s reorganization expenses).
The CaixaBank Group has leveraged its sustained generation of recurring income to carry out a major
loan-loss provisioning effort, applying conservative credit risk assessment criteria.
In the first half of 2011, the CaixaBank Group allocated a total of €1,393 million to provisions, mostly
to hedge credit risk. This includes €1,029 million of recurring provisions and €364 million (€253 net of
tax) of provisions considered non-recurring because of their nature, which almost entirely relate to
additional loan loss provisions to those required under applicable regulations.
General loan-loss allowances remain unchanged from €1,835 million at December 31, 2010,
underscoring the quality of earnings.
Finally, extraordinary gains totaled €629 million (€463 million net of tax), basically from the sale of the
50% stake in SegurCaixa Adeslas (formerly VidaCaixa Adeslas) to Mutua Madrileña, which generated a
net gain of €450 million.
As for the income tax expense, virtually all revenue from investees is recognized net as the tax was
paid and any credits available in accordance with tax regulations applied at the investee.
In all, profit attributable to the CaixaBank Group through June 30, 2011 amounted to €702 million,
7.4% less than in the same period last year.
Adding in extraordinary income of €131 million (+€463 million of capital gains and €332 million of
write-offs and expenses arising from the Group’s reorganization), total profit attributable to the
Group rose 11% to €833 million.
Outlook
As we move into the second half of the year, it is hoped that the advanced economies will be able to
shake off the dips of the second quarter and that emerging economies remain vibrant with global
growth inching to just above the 4% forecast for the year. This looks feasible as in the first six months
the economies were hit hard by two major events, the Japanese earthquake in March and soaring
commodity prices. We therefore expect inflation to ease in both the advanced and emerging
economies.
We do not anticipate any change to monetary policies. In the US, the Federal Reserve has stated that it
will not be renewing its quantitative easing program but will instead opt for a normalized monetary
-7-
policy. However, doubts surrounding a pickup in activity and job creation indicate that this will be a
gradual process with the first increases to the very low benchmark interest rates being postponed until
2012. The European Central Bank is meanwhile fully immersed in its monetary normalization
process, with another rate hike expected after the summer and thereafter throughout 2012. Emerging
economies for their part will continue to pursue tighter monetary policies aimed at containing the risk
of overheating. Short-term rates look set to rise slightly as will long-term public debt yields. The
European sovereign debt crisis turmoil will continue to take center stage as investors lose confidence
in an effective solution although given its characteristics, it is difficult to determine the extent of the
crisis.
Turning to the Spanish economy, growth is likely to be very contained moving forward with efforts
being made to deleverage the public and private sectors and income stagnating. Although domestic
demand looks set to remain weak, foreign demand should help boost the economy thanks to exports
and tourism especially. Over the coming months the Spanish government must secure definitive
approval of its planned reforms, approve the restructuring of the banking system and pass the 2012
budget to comply with Brussels.
The CaixaBank Group is in a comfortable position regarding cash adequacy and liquidity to face this
adverse outlook for the banking business.
While there is little scope for business growth, the Group’s market shares in the main banking
products and services look set to rise thanks to the intense commercial efforts of the branch network.
Moreover, the CaixaBank Group’s excellent solvency, reinforced after the “la Caixa” Group’s
reorganization in the first half of the year, leaves the Group on track to meet its growth targets and
remain the most solvent and secure bank in Spain.
As for profitability, margin pressure is likely to remain strong due to stiff competition and the scant
volume of new business. Margin management in general, and management of cost of funds in
particular, is crucial to generating recurring income.
In this respect, with its high liquidity the Group can management its fund raising, combining
profitability and growth in investable deposits. Higher margins on new loans and, more importantly,
the repricing on mortgage installments caused by increases in benchmark interest rates, should boost
finance income from the loan portfolio.
The intense commercial activity should enable the Group to continue to obtain high levels of
recurring fees and commissions. In addition, the diversification of revenue and risks from the
portfolio and banking and services investments should provide an strong stabilizer.
The success of the cost-reduction policies should also help generate recurring profit from operations.
Generating recurring profit from operations guarantees that CaixaBank can continue absorbing high
NPL provisioning levels. Higher provisions and further write-downs will be the order of the day as the
downturn in the real estate market continues and the number of doubtful assets rises, albeit at a slower
rate than during the first six months. We will continue efforts to control NPLs. The CaixaBank Group
values its highly diversified lending portfolio with strong mortgage collateral thanks to the strategic
focus on lending to individuals and SMEs. The CaixaBank Group has maintained the general loan-loss
provision at €1,835 million since December 31, 2010, giving it significant financial maneuverability to
meet future requirements from increases in NPLs.

Condensed interim consolidated financial statements

Transcription

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