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The Group's net interest margin was up 10.2%, up to EUR 3,004 million, thanks to solid growth from the banking business. Fees and earnings from financial operations drove up the gross margin to EUR 5,523 million, representing growth of 8.1%.
Net operating income grew 15.1% to EUR 2,847 million due to strong revenues growth (+8.1%) and a policy of strict cost controls (+1.5%), with administration costs up 1% due to a 5.5% drop in general expenditure.
Costs optimisation at the Group, along with increased productivity, saw the cost-to-income ratio improve further to 42.9% (-2.6).
Business volumes were up 1.8%, buoyed by customer deposits, which grew EUR 4,731 million to EUR 242,431 million (+2%), thanks to strong growth in pension plans, demand and term savings deposits and investment funds, with the “la Caixa” investment fund management arm being the fastest grower in 2009.
The customer loans portfolio grew by EUR 2,880 million to EUR 179,303 million (+1.6%), with 815,494 new operations, due to strong growth in lending to businesses (+18.9%) via the group's 79 business branches. There was standout growth in factoring and confirming products, with market share gains up 274 basis points, to 11.5%. Services to businesses operating in Spain and Portugal were supported by two new "la Caixa" and BPI centres.
The group remains a leader in terms of solvency: It has a Core Capital ratio of 8.9%, a Tier-1 ratio of 11% (+0.9%), a total Tier ratio of 12,3% (+1,3%), supported by a 1,898 million issue of preference shares in June, consolidating the Group's financial strength and solvency levels. “la Caixa” is one of just three Spanish financial groups with a long term credit rating of AA from the three ratings agencies.
The Group’s liquidity level remains the highest in the Spanish financial system, at 25,648 million (9.4% of assets).
The NPL ratio is 3.53%, again better than the sector (5.34% average at savings banks in August). The coverage ratio held flat at 60% (127% including collateral backed mortgages).
In line with the Group’s strategy of prudence, a total of EUR 1,351 million has been registered as NPL provisions, of which EUR 314 million are additional to scheduled provisions. The generic fund amounts to EUR 2,067 million.
The Group’s attributed profit totalled EUR 1,410 million. Net extraordinary capital gains, from the sale of 1% of Telefónica, totalled EUR 249 million. NPL provisions of the same sum were allocated, additional to scheduled provisions and allocations linked to the investment portfolio.
As part of the international growth program, in 2009 “la Caixa” became the first Spanish financial entity to open an operating branch in Morocco (Casablanca), while the Group’s second representative office in China also opened its doors (Shanghai).
“la Caixa” and Criteria have signed strategic investment and partnership agreements with their affiliates The Bank of East Asia (9.85% stake held by "la Caixa”) and Erste Bank (5.09%).
Barcelona, 22 October. The “la Caixa” Group recorded net attributed profit of EUR 1,410 million in the first nine months of 2009, thanks to intense commercial activity, which saw the bank consolidate its financial strengths with significant solvency and liquidity improvements.
Total revenues (gross margin) were up to EUR 5,523 million, representing growth of 8.1%, driven by the more traditional banking operations (net interest margin, fees and earnings from customer trading operations) and larger earnings from the investments portfolio (dividends and results via the equity accounting method).
Net interest income was up 10.2% to EUR 3,004 million thanks to solid growth in the banking business and operational margins being controlled.
Net fees grew 3.4% to EUR 980 million, thanks to the careful management of services offered.
Strict cost controls and streamlining helped restrict the growth of operating costs to 1.5%.
Strong growth in total revenues (+8.1%) and cost containment (+1.5%) saw efficiency improve further, to a ratio of 42.9% (-2.6), while net operating income was EUR 2,847 million, up a strong 15.1%.
“la Caixa” Group’s NPL ratio was 3.53% thanks to the excellent quality of its lending portfolio and exacting risk management. The Group’s ratio was again lower than the 5.34% average of savings banks in August. The coverage ratio held flat at 60% (127% including collateral backed mortgages). The generic fund amounts to EUR 2,067 million.
Significant levels of income generated by the Group’s recurrent businesses, EUR 2,847 million in the first nine months of 2009, allowed for larger recurrent NPL provisions of EUR 1,037 million (+108.2%), and attributed net profit of EUR 1,410 million, as well as high returns (ROE 12.8%). This represents a 10.2% drop against the previous year.
Net extraordinary capital gains from the sale of 1% of Telefónica totalled EUR 249 million. Meanwhile, a gross total of EUR 314 million (EUR 210 million net) was allocated as provisions additional to scheduled requirements, as well as allocations linked to the investment portfolio of EUR 70 million (39 million net).
Consolidation of financial strengths: Solvency and liquidity
“la Caixa” Group retains its leading position, with a Core Capital ratio (top quality resources) of 8.9%, demonstrating the Group’s excellent capital and solvency levels. The Tier 1 ratio was 11% and BIS II Solvency Ratio 12,3%.
In 2009 “la Caixa” issued EUR 2,500 million in subordinated debt as well as a EUR 1,898 million issue of preferred stock, in line with the targets laid out in the Group’s 2007-2010 Strategic Plan, aimed at further reinforcing its solvency and financial strength as well as consolidating its leading position.
Shareholders‘equity attributable to the Group totalled EUR 19,325 million, with a surplus over the minimum regulatory requirement of EUR 6,761 million.
The Group has liquidity of EUR 25,648 million, 9.4% of total assets, practically all of which is immediately accessible. Furthermore, dependency on wholesale markets is very low, while institutional debt repayments due before the end of 2009 amount to just EUR 1,000 million. In August “la Caixa” extended a EUR 1,250 million issue of mortgage bonds to EUR 2,000 million, which was placed on capital markets in May.
Intense business in all segments: Business and market share growth
The entity, chaired by Isidro Fainé and run by Juan María Nin, remains to lead the Spanish banking market using a specialised management model to provide services to its 10.6 million customers.
“la Caixa” is, for the seventh consecutive year, the highest valued financial brand amongst consumers, according to Merco Marca Financieras. Furthermore, “la Caixa” is also considered the best company to work for, according to Merco Personas.
The Group's commercial strength, with 27.637 employees, 5,339 branches and 7,923 ATMs, as well as its leading position in online banking, via Línea Abierta (with more than 6 million customers), mobile banking (more than 1.2 million customers) and cards (10.4 million cards), has allowed it to record strong, balanced and good quality commercial and business growth.
In the first nine months of 2009, the total banking business amounted to EUR 421,703 million, thanks to sustained lending and deposits growth. The portfolio of customer loans grew EUR 2,880 million (+1.6%), to 179,303 million, with 815,494 new operations and EUR 68,768 million in loans approved. Total customer deposits reached EUR 242,431 million, 2% more than at the beginning of the year, with growth of EUR 4,731 million.
“la Caixa” has consolidated its leading position in wages deposited, further increasing its market share in wages paid directly into customer accounts to 14.6%, driven by its Nómina multiEstrella campaign, which has seen it attract 56,000 wages directly deposited into accounts since March. The Group also saw new pension plan deposits and transfers grow by 33%, giving it a market share of 15.2%.
There was also a standout increase in InverCaixa’s market share, which was up from 6.9% in December 2008 to 7.81% in September 2009, with EUR 12,698 million in investment fund assets managed. InverCaixa has been the fastest expanding investment fund management firm amongst the major players in 2009, growing 9.6%.
In terms of service quality, “la Caixa” again received the fewest complaints about banking activities of all Spanish operators, according to the Bank of Spain’s 2008 Complaints Service Report.
"la Caixa" consolidates its ambition to generate value in specialised banking segments
“la Caixa”, with its core business in high street banking, is successfully developing its private banking division, with close to 300 managers, and its business banking division, with a further 800 managers. It aims to become a market leader in these banking segments. Furthermore, “la Caixa” has established a specialised personal banking and business banking model (SMEs, freelancers and retailers), with close to 1,800 specialised managers.
In Corporate banking as a whole, “la Caixa” has seen loans grow to EUR 69,819 million. Lending to companies has grown 18.9% via the Group’s 79 specialised branches. “la Caixa” has a staff of 800 specialised corporate managers that provide for the specific needs of this group.
The services provided by “la Caixa” to businesses are set to be reinforced by a strategic deal with BPI. This partnership will allow better financial services to be offered to businesses in the Iberian Peninsula, with two new specialised branches adding to the current 79 operated by “la Caixa” in Spain and BPI's 53 branches in Portugal.
Furthermore, “la Caixa” has succeeded in implementing its specialised SME banking model, appointing business managers for this segment (SMEs, freelancers and retailers). The Group currently has 854 business banking managers.
Meanwhile, “la Caixa” has renewed a deal with CEOE and CEPYME to provide EUR 6,000 million in business loans. In 2008 “la Caixa” became the first Spanish bank to establish agreements with business organisations.
In terms of products and services, “la Caixa” recorded strong growth in factoring and confirming products, where it registered market shares of 11.5%, showing growth of 274 basis points in one year.
Consolidation of “la Caixa” Private Banking has seen the group increase the sum of assets and securities managed by 17% over the last 12 months, up to EUR 39,459 million, and increase its total number of clients by 12.5%. This performance was driven by robust commercial operations from private banking managers (approximately 300), supported by specialised branches (31 integrated into the network), and saw the Group become the second ranked operator in this market segment.
“la Caixa” continues to establish its specialised personal banking model at branches. In the first nine months “la Caixa” successfully implemented its personal banking model with the appointment of 912 managers across 15% of its branch network, aimed at providing services to a potential of half a million customers.
Other standout initiatives include the consolidation of MicroBank, a micro-financing bank set up in 2007 and that has already provided a total of EUR 332 million in financing to 50,000 projects. It has become the largest micro-financing operator in Spain. Furthermore, it has contributed towards creating 16,000 jobs.
Boost for the “la Caixa” 2007-2010 Strategic Plan
As part of its international growth plan, in July “la Caixa” became the first Spanish financial group to open a branch in Casablanca (Morocco), and also opened the doors of its new representative branch in Shanghai (China), joining "la Caixa" Group's other international offices in London (United Kingdom), Paris (France), Brussels (Belgium), Milan (Italy), Stuttgart and Frankfurt (Germany), Oporto (Portugal) and Peking (China). “la Caixa" intends to open new representative offices in Istanbul (Turkey), Delhi (India), Algiers (Algeria) and Dubai (United Arab Emirates).
As for stakes held in financial entities, Criteria CaixaCorp, a subsidiary of “la Caixa”, controls 20% of the capital of GFInbursa, 30.1% of Banco BPI, 9.9% of The Bank of East Asia, 5.1% of Erste Bank and 20.9% of Boursorama. “la Caixa” and Criteria have signed strategic investment and partnership agreements with its affiliates The Bank of East Asia and Erste Bank.
The market value of the "la Caixa" Group's listed investments totalled EUR 19,255 million, with unrealised capital gains of EUR 3,726 million (as per close of trading on 30 September).
“la Caixa” Social Projects
Over the third quarter 2009, and bearing in mind the particular difficulties generated by the current economic situation, "la Caixa” has remained faithful to its commitment of providing for the community's basic needs, through its programme of social, cultural, educational, research, environmental and scientific activities.
As part of its social projects, the “la Caixa” Foundation is running programmes to tackle child poverty in Spain, into which it has channelled more than EUR 90 million, in an initiative that has already benefitted 134,000 children (75,000 families).
Promoting employment amongst under-privileged groups is another of the "la Caixa” Foundation’s priorities. A total of 8,706 businesses and 231 community organisations are now involved in the Programa Incorpora program. This has seen more than 20,500 people who were likely to be marginalised find a job.
As part of its assistance program, 30 assistance teams for persons with advanced illnesses, which started operating at the beginning of this year, have now helped 5,500 patients and 8,500 family members nationwide in Spain, providing support to hospital units or at home, supporting medical staff.
As for the Foundation's work to raise drug awareness and prevent drug use, the “Hablemos de Drogas” exhibition was visited by 265,000 people up to October, 140,000 in Barcelona and 125,000 as the exhibition went on the road around the rest of Spain.
At the international level, the chairman of “la Caixa”, Isidro Fainé, visited the Foundation’s development projects in Guatemala. On his trip Mr. Fainé also attended an Inbursa Foundation presentation in Mexico, an initiative jointly financed with Grupo Financiero Inburso to promote social projects in Latin America. The Inbursa Foundation, set up with a budget of EUR 53 million, will focus its efforts on supporting education and promoting health and research, as well as providing services to vulnerable groups.
The Foundation has also reached important cultural agreements with the Prado Museum, with which it will jointly organise the programme "la Caixa" - Museo del Prado. El arte de Educar, and with the Louvre museum to coproduce exhibitions and display its works in Spain. Furthermore, “la Caixa” chose the bid led by the architect Guillermo Vázquez Consuegra to design the architectural side of the conversion of the Reales Atarazanas at CaixaForum Seville.
NOTE.- This "la Caixa" Group financial information for the first nine months of 2009 has been prepared, in so far as it relates to income from investments, mainly on the basis of estimates, and cannot under any circumstances be used to make forecasts regarding the third quarter 2009 results of Criteria CaixaCorp, a subsidiary of the "la Caixa" Group.