- Press Releases
The Group is now the leading credit and deposit institution in Spain
Net interest income stands at 893 million, following intense management of margins and the interest rate curve in an environment experiencing strong pressure on pricing. After the addition of fees, the results from financial operations and income from investments, the gross margin totals 1,724 million. This figure does not include the dividend of 130 million announced by Telefónica, which will be entered this year during the second quarter and which would have raised this margin to 1,854 million.
Thanks to the Group’s strict cost-containment policy (-3%), net operating income totalled 875 million, a figure that would rise to 1,005 million, +0.2%, if the Telefónica dividend were factored in.
The Group’s careful containment of costs, combined with a rise in productivity, has led to further improvement in the efficiency ratio to 42.8% (-0.1).
Consistent with the “la Caixa” Group’s strategy for extreme prudence, allowance coverage totalling 373 million was set aside (+30.8%), mostly against insolvencies.
During the first quarter, no use was made of the general allowance fund for insolvencies, which remains at 1,835 million euros, the figure recorded at the end of the 2009 financial year. This offers the Group great financial robustness against future unfavourable environments.
Income after tax totalled 602 million, which after the deduction of minority interests gives an attributed income figure for the Group of 502 million.
Business volumes have risen to 416,767 million over the last twelve months (+1.2%), driven by the customer loan portfolio which increased by 1,103 million to 177,845 (+0.6%), with 1,049,387 new operations and 100,361 million in risk granted, as a result of the strong growth in loans awarded for business investment through the Group’s 80 specialist business centres (+13%) and its entire branch network. Particularly notable is the strong growth in factoring and confirming operations, which showed a year-on-year increase of 35.6% and a market share of 12.2% in March.
Customer funds rose by 3,873 million to 238,922 million (+1.6%), with increases in current accounts, pension plans and insurance and investment policies, with InverCaixa, the “la Caixa” entity which manages investment funds, showing the highest growth in the first quarter, with a market share of 8.7%.
The Group has strengthened its leading position in the Spanish banking sector with a general increase in market share in card business (17.7%), commercial invoicing (21%), salaries and pensions paid directly into “la Caixa” accounts (15.1% and 12.8% respectively), pension plans (15.6%), instant access deposits (11.3%), mortgages (10.5%) and savings plans (13.8%), among others. Figures published by the Bank of Spain at the end of the 2009 financial year confirm that “la Caixa” is now the number one institution in terms of both deposits and loans, with market shares of 10.1% and 10% respectively.
The Group has made a number of issues on both the private and institutional markets amounting to a total of 4,000 million euros: an issue of subordinated debt in the amount of 3,000 million and a mortgage bond issue for 1,000 million on the institutional market. Issues maturing during the first quarter amounted to 2,500 million, with just 310 million still to mature over the rest of the year. An issue of public covered bonds worth 1,000 million was made for the institutional market in April.
In accordance with the Group’s 2007–2010 Strategic Plan, “la Caixa” continued its successful implementation of a specialised model for personal customers, private banking and SME business banking, with more than 2,400 specialist managers.
As regards solvency, the “la Caixa” Group further strengthened its robust position, with Core Capital at 9.0% (+0.3), Tier-1 at 10.4% and a Capital Ratio of 12.8%. “la Caixa” is one of only three Spanish financial groups with a long-term score from ratings agencies in the AA range.
The Group’s liquidity remains among the highest in the Spanish financial system at 23,021 million (8.4% of assets), 1,813 million more than at the end of 2009 and practically all of it immediately accessible.
The non-performing loan ratio stands at 3.49%, only 0.07 points higher than the level recorded during the previous quarter, and it remains lower than the ratio recorded in the rest of the sector (5.39% average for the financial sector in February). Allowance coverage stands at 62% (127% if mortgage guarantees are taken into account).
Barcelona, 30 April 2010.- In an environment experiencing strong pressure on pricing, the “la Caixa” Group obtained attributed net income of 502 million euros during the first quarter of 2010 (-11.4%), thanks to high levels of commercial activity that have taken it to the number one position in the sector and allowed it to consolidate its financial strength with high levels of both solvency and liquidity.
Total income (gross margin) rose to 1,724 million, a figure that does not include the dividend of 130 million announced by Telefónica, which will be entered this year during the second quarter (in 2009 it was registered during the first quarter) and which would have raised this margin to 1,854 million.
Net interest income stands at 893 million, down 7.9%, following intense management of margins and the interest rate curve. This figure to a great extent reflects the fall in rates applied by the Group to customer mortgage repayments.
Net fees increased by 2% to 331 million, due to the increase in banking business, particularly in the business banking segment, with careful management of the services offered to customers. Charges for the maintenance and administration of instant access accounts remain among the lowest in the marketplace, particularly with regard to savings accounts.
The strict management of cost containment and rationalisation procedures has led to a fall in operating costs of 3%. This has combined with the strong commercial capacity of the branch network to give continuing improvements in efficiency, with an efficiency ratio of 42.8% (-0.1%), bringing net operating income to 875 million, a figure that would rise to 1,005 million if the Telefónica dividend were factored in, representing a rise of 0.2%.
The “la Caixa” Group’s non-performing loans ratio stands at 3.49%, only 0.07 percentage points higher than it was at the end of 2009, thanks to the high quality of its loans portfolio and its strict risk management, meaning that this figure remained below the 5.39% average for the financial sector in February. The allowance coverage ratio is 62% (127% if mortgage guarantees are taken into account). The general allowance fund for insolvencies was not used during the first quarter, meaning that it remains the same as at the end of 2009, 1,835 million euros, affording “la Caixa” great financial strength to deal with adverse future circumstances.
The significant income generated by the Group’s recurring activities, 875 million, has allowed for a higher level of allowance coverage at 373 million, a rise of 30.8%, exceeding the coverage required by law by 67 million. Net attributed income was 502 million, with a high level of profitability (ROE of 10,7%).
Improved financial strength: solvency and liquidity
The “la Caixa” Group maintains its leading position in the sector, with a Core Capital figure (high-quality shareholder equity) of 9.0%, an increase of 0.3% during the quarter, evidence of the Group’s excellent levels of solvency. Tier 1 stands at 10.4% while the Group has a BIS II Capital Ratio of 12.8%.
In order to further strengthen its solvency levels and ensure that they remain among the best in the sector, “la Caixa” has made a subordinated debt issue in the amount of 3,000 million.
The shareholder equity that can be attributed to the Group amounts to a total of 20,224 million, with a surplus over the minimum regulatory requirement of 7,629 million.
Group liquidity amounts to 23,021 million, 8.4% of total assets, 1,813 million more than at the end of 2009 and practically all of it immediately accessible. Dependence on the wholesale markets is also extremely low: borrowings to the value of 2,500 million matured during the first quarter, with just 310 million still to mature over the rest of the year, thus offering firm stability.
“la Caixa” has made various issues on the institutional markets: a mortgage bond issue for 1,000 million and another public covered bonds issue in April for a further 1,000 million.
“la Caixa”, now the leading deposit and loan institution in the Spanish market
Under the chairmanship of Isidro Fainé and the management of Juan María Nin, “la Caixa” continues to pursue its mission to lead the Spanish banking sector by using a specialist management model to attend to its 10.4 million clients. “la Caixa” is a market leader in personal banking in Spain, with a penetration rating of 21.6%, 60 base points higher than the previous year, according to the FRS Inmark study of individual financial habits in 2009. “la Caixa” is also a market leader in all age groups and in quality of service offered.
The “la Caixa” Group has strengthened its leading position in the Spanish banking sector, with a general increase in market share in card business (17.7%), commercial invoicing (21%), salaries and pensions paid directly into “la Caixa” accounts (15.1% and 12.8% respectively), pension plans (15.6%), instant access deposits (11.3%), mortgages (10.5%) and savings plans (13.8%), among others. Figures published by the Bank of Spain at the end of the 2009 financial year confirm that “la Caixa” is now the number one institution in terms of both deposits and loans, with market shares of 10.1% and 10% respectively.
The Group’s great commercial strength, with 27,344 employees, 5,233 branches (the largest network in the Spanish financial system), 7,892 ATMs and a leading position in on-line banking through Línea Abierta (more than 6.1 million customers), mobile phone banking (more than 1.4 million customers) and electronic banking (10.3 million cards in circulation), means that the Group is showing robust, balanced and high quality growth in its banking and commercial business.
“la Caixa” is the number one financial institution in mobile phone banking, as 52% of clients who operate with their financial institution via the mobile network in Spain do so with “la Caixa”, according to data from Nielsen Netratings. This market share is the highest enjoyed by any financial institution in the world. In addition, the AQMetrix study, which examines and rates the quality of financial Internet channels, further reinforces the Group’s position as the leader in the Spanish on-line financial sector.
Total banking business amounted to 416,767 million, thanks to sustained growth in both loans and deposits. The customer loan portfolio increased in value by 1,103 million over the last twelve months (+0.6%), reaching a total of 177,845 million, with 1,049,387 new operations and 100,361 million in risk granted. At the present time, more than 379,000 businesses are clients of “la Caixa”. Customer funds totalled 238,922 million, with a significant increase in current accounts and careful price management, in addition to the strong increase in pension plans, insurance and investment funds.
“la Caixa” has strengthened its leading position in terms of salaries managed from its accounts and has further increased its market share to 15.1%.
InverCaixa, the “la Caixa” investment fund manager, has also continued to perform well, attaining a market share of 8.74%, with managed investment assets of 14,018 million. Invercaixa, which is one of the largest investment fund managers, has also seen one of the highest levels of growth during the first quarter, showing an increase from both new positions and its existing portfolio of 1.54%, while the market contracted by 1.74%.
The 2007-2010 Strategic Plan consolidates the specialised business model
“la Caixa”, whose core business is personal banking, has continued its successful implementation of a specialised model for personal customers, private banking and SME business banking, with more than 2,400 specialist managers.
In the Business banking segment as a whole, "la Caixa" has increased its loans portfolio to more than 68,658 million euros. Business loans managed via the “la Caixa” Group’s 80 specialist centres has increased by 13%. The internationalisation services provided to businesses by “la Caixa” has been reinforced by the strategic agreement signed with BPI, which has 53 specialist centres in Portugal, and by the commercial agreements with The Bank of East Asia and Erste Bank, which provide “la Caixa” customers with improved services in Asia and Central Europe. “la Caixa” has more than 829 specialist employees available at its business centres to attend to the specific needs of this segment.
“la Caixa” has also introduced Spain’s first mobile phone portal offering financial services for businesses. Known as CaixaEmpresa, its aim is to assist customers in the day-to-day management of their businesses.
“la Caixa” has also completed implementation of its specialist SME Banking model, with the creation of an SME business manager. At the present time, the Group employs 820 business banking managers.
As regards products and services, “la Caixa” has seen strong growth in its factoring and confirming business, obtaining a market share of 12.2%, a rise of 35.6% over the last twelve months.
The consolidation of the “la Caixa” Private Banking division has resulted in an increase of 14% in managed funds and securities over the last twelve months, to a total value of 36,438 million. This increase has been brought about by the high levels of commercial activity generated by around 322 private banking managers, with support from the Group’s network of 32 specialist centres and its entire branch network, resulting in “la Caixa” moving up to second position in this sector.
“la Caixa” Private Banking has also just signed an exclusive agreement with Asociación de Creadores de Moda de España (Association of Fashion Designers in Spain, ACME) to develop a loyalty plan for its customers that will include exclusive benefits and events. This is the first time that a financial entity, acting through its private banking segment, and the fashion industry have signed an agreement of this kind.
“la Caixa” has continued to implement a specialist Personal Banking model throughout its branch network. It has now completed the organisation of its personal banking business with the introduction of 946 managers at its branches, aimed at offering services to a potential 500,000 customers, with funds and securities worth 57,000 million euros.
Another of the Group’s important initiatives is the consolidation of MicroBank, the social banking institution created by “la Caixa” in 2007, which has already financed more than 65,704 projects to a value of 423.4 million euros since its introduction. This makes it the Spanish financial institution that devotes the greatest resources to the promotion of projects through the use of micro-credits.
Boost for internationalisation under the 2007-2010 Strategic Plan
As part of its international expansion plan, "la Caixa" has agency offices in London (United Kingdom), Paris (France), Milan (Italy), Stuttgart and Frankfurt (Germany), Istanbul (Turkey), Beijing and Shanghai (China), Delhi (India) and Dubai (UAE). It also has branches in Warsaw (Poland), Bucharest (Romania) and Casablanca (Morocco), where it was the first Spanish banking institution to open a branch.
As regards investment in financial institutions, Criteria CaixaCorp, a subsidiary of “la Caixa” has a 20% holding in GFInbursa, 30.1% in BPI Bank, 15% in The Bank of East Asia, 10.1% in ErsteBank and 20.9% in Boursorama.
The market value of the “la Caixa” Group’s portfolio of listed investments, held through Criteria, totals 19,347 million with unrealised capital gains of 2,874 million.
The “la Caixa” Social Projects show the Group’s continuing commitment to people
During the first quarter of this year, the “la Caixa” Social Projects programme has introduced new initiatives that are consistent with its firm commitment to people. Among the most important was the presentation of Barcelona Global Health Institute (ISGlobal). An initiative of “la Caixa”, this research centre was created with the aim of improving the health of some of the world’s most vulnerable people in a global context, breaking the vicious circle of poverty and disease in which they are so often trapped.
The Institute, chaired by HRH Princess Cristina and directed by Dr Pedro Alonso, will be based at the Palau Macaya in Barcelona and will bring together some of the worlds most reputable and prestigious social institutions (Bill & Melinda Gates Foundation, Nelson Mandela Children’s Fund, the Inbursa Foundation - Mexico) and important international figures (Graça Machel and Javier Solana, among others).
Another new initiative is the “Interculturality and Social Cohesion” programme, which will support community intervention teams whose main duty will be to develop strategies to assist co-existence between cultures.
In addition, in March the King and Queen of Spain presided over the ceremony for the award of “la Caixa” Grants for students wishing to complement their studies at foreign universities. This year saw 121 students awarded grants.
In the current financial climate, particular mention should be made of the consolidation of the programme to combat child poverty, CaixaProinfancia, which since its inception has helped more than 145,000 children experiencing deprivation in Spain, and Incorpora, which has helped more than 29,600 disadvantaged people find jobs.
These programmes underline the “la Caixa” group’s commitment to the development of social programmes, which include the palliative care programme, aimed at providing integrated assistance for people without financial means suffering from serious illnesses, and its programme aimed at older people and the prevention of dependence.
Additional support has been given to the development of accessible housing for families, young people and the elderly, and the lines of action being taken in international cooperation programmes have also been strengthened.
In the cultural field, the Social Programme’s CaixaForum centres in Madrid and Barcelona have respectively inaugurated two exhibitions, one focusing on the work of Miquel Barceló, one of Spain’s most widely respected living artists, and the other dedicated to the work of Federico Fellini, commemorating the 90th anniversary of his birth.
NOTE.- In so far as it relates to income from investments, this financial information from the “la Caixa” Group for the first quarter of 2010 has been prepared mainly on the basis of estimates, and cannot under any circumstances be used to make forecasts regarding the income of Criteria CaixaCorp, a subsidiary of the “la Caixa” Group, for the same period.