- Press Releases
• In a particularly adverse scenario, in December 2012 "la Caixa" Group would have a Core Tier 1 ratio of 6.4%, above the 5% minimum set by the EBA.
"la Caixa" Group, chaired by Isidro Fainé and directed by Juan María Nin, has passed EU-wide stress tests for hypothetical adverse scenarios conducted by the European Banking Authority (EBA), thanks to its robust financial strength.
The chairman of "la Caixa", Isidro Fainé, pointed out that "the results of the stress tests demonstrate the Group's real financial strength and solvency, allowing it to face the challenges of its 2011-2014 Strategic Plan from a robust position". He added that "the Group will continue to pursue sustained growth while ensuring that an adequate level of capital is maintained".
According to the results published today, based on the assumptions and methodologies established by the EBA using a static balance sheet of December 31, 2010 and an adverse macroeconomic scenario over a two year time span (2011-2012):
On December 31, 2010 "la Caixa" Group had a Core Tier 1 ratio of 6.8%.
In a scenario of strong economic downturn, the "la Caixa" Group Core Tier 1 ratio would reach 6.4% by December 31, 2012, which is above the 5% minimum required by the EBA, demonstrating the Group's robust financial strength. The result takes into account the effects of the equity instruments announced and fully committed on April 30, 2011, as well as the conversion of half of the €1.5 billion mandatorily convertible bond issue, subscribed last June and due to take place in December 2012.
Taking into account the mitigation measures already in place or planned by the "la Caixa" Group, on December 31, 2012, the Core Tier 1 ratio would increase to 9.1% in a particularly adverse scenario. The mitigation measures that provide further strength to the Group's solvency and enhance its ability to absorb losses, can be summarized as follows:
o The conversion of the second half of the €1.5 billion issue of mandatorily convertible bonds (the first half will be converted into shares prior to December 31, 2012 and the other half in 2013).
o The strategic agreement with Mutua Madrileña, which saw the sale of 50% of SegurCaixa Adeslas and has generated capital gains to bolster the capital base.
o The classification of a 12.7% stake in Repsol as an associate company, further improving the capital base.
o Unrealised capital gains from available-for-sale shares, mainly a 5% stake in Telefónica.
o The large general provisions and provisions on substandard assets accumulated by December 31, 2010, which have remained intact.
The restructuring of the "la Caixa" Group culminated with CaixaBank being quoted on the stock markets for the first time on July 1, 2011. CaixaBank is a financially robust bank, as recognised by ratings agencies, which recently gave the following credit ratings: Moody’s (Aa2), Standard & Poor’s (A+) and Fitch (A+).
CaixaBank's Core Capital ratio (Basel II) on March 31, 2011 was 11%, taking into account the €1.5 billion mandatorily convertible bond issue and the impact of the strategic agreement with Mutua Madrileña.