Caixabank Sa · BME:CABK

Caixabank Sa — Investor Presentation (February 2013)

71 slides from Caixabank Sa's investor presentation, February 2013

  1. Slide 1: CaixaBank - the leading force in Spanish retail banking

    CaixaBank - the leading force in Spanish retail banking Corporate presentation February 2013

  2. Slide 2: Disclaimer

    Disclaimer The purpose of this presentation is purely informative and the information contained herein is subject to, and must be read in conjunction with, all other publicly available information. In particular, regarding the data provided by third parties, neither CaixaBank, S.A. (“CaixaBank”), no

  3. Slide 3: Agenda

    CaixaBank 1. CaixaBank overview p. 3 2. Update on acquisitions p. 6 3. The leading force in Spanish retail banking p. 9 4. International banking p. 23 5. Investment diversification p. 27 6. Solid balance sheet p. 29 7. FY12 Results p. 43 8. Strategy & Macro outlook p. 52 9. Final remarks p. 55 10. A

  4. Slide 4: Identical core-businesses with a more efficient capital structure

    1. CaixaBank overview “la Caixa” Group reorganization - CaixaBank began operations on 1st of July 2011 Former structure Current structure Welfare Banking Business Welfare (including real Projects Projects estate assets) ~ 63%1 100% 79.5% BV2: €23.4 bn (former Criteria, Listed) (Unlisted) (listed) Ot

  5. Slide 5: CaixaBank at a glance

    1. CaixaBank overview CaixaBank at a glance  The leading retail franchise in Spain; listed since 1st July 2011 A flagship institution  Competitive position reinforced by acquisitions (BCIV and BdV)  Loans: €223.4 bn  Customer funds: €288.6 bn  ~13 million customers serviced by a segmented busin

  6. Slide 6: Agenda

    CaixaBank 1. CaixaBank overview 2. Update on acquisitions 3. The leading force in Spanish retail banking 4. International banking 5. Investment diversification 6. Solid balance sheet 7. FY12 Results 8. Strategy & Macro outlook 9. Final remarks 10. Appendices 6

  7. Slide 7: Execution of M&A transactions is being carried out according to plan

    2. Update on acquisitions Execution of M&A transactions is being carried out according to plan 3 Aug 20 Oct 27 Nov 15 Dec Feb Mar Apr Jul • Merger • CAN • CajaSol • Caja • Caja Burgos registration systems systems Canarias systems integration integration systems integration • Operational 9 months int

  8. Slide 8: Update on BCIV Financial Impacts

    2. Update on acquisitions Update on BCIV Financial Impacts  2012 cost synergies 91% above initial target 191% of 540 Cost synergies being  Measures taken imply 40% achievement of target executed ahead of €540 M cost savings target 270 schedule  €757 M gross restructuring costs already 104 54 book

  9. Slide 9: Agenda

    CaixaBank 1. CaixaBank overview 2. Update on acquisitions 3. The leading force in Spanish retail banking 4. International banking 5. Investment diversification 6. Solid balance sheet 7. FY12 Results 8. Strategy & Macro outlook 9. Final remarks 10. Appendices 9

  10. Slide 10: The leading retail franchise in Spain

    3. The leading force in Spanish retail banking The leading retail franchise in Spain Segmented business model sustained by high quality growth ~13 million  Business volume breakdown1: customers As of June 2012 A specialized Wealth Corporate Banking Banking network (2008) 10 200 Corporate Banking Pr

  11. Slide 11: Focused on success in critical retail metrics

    3. The leading force in Spanish retail banking Focused on success in critical retail metrics Customer Direct deposit Direct deposit penetration of salaries of pensions 1st 1st 1st 19.9% 21.0% 26.1% 20.3% 20.0% 15.9% 13.6% 14.4% 15.1% 12.3% 12.6% 14.8% 15.7% 12.8% 13.8% 14.1% 12.5% 06 07 08 09 10 11

  12. Slide 12: Segmentation as the key to better serving client needs

    3. The leading force in Spanish retail banking Segmentation Compte de Resultats as the key Recurrent to betterdel serving Grup client “la Caixa” needs Affluent Banking Private Banking1  SME Banking  Business and Corporate 33 Specialised centres Banking 1.163 Specialised staff 408 Specialised staff

  13. Slide 13: Acquisitions complement business footprint and contribute to market share gains

    3. The leading force in Spanish retail banking Acquisitions complement business footprint and contribute to market share gains Acquisitions further extend leading market Contribution of BCIV and BdV shares in retail banking in core regions Market share by business volume1 Market share by business vo

  14. Slide 14: Leading retail product market shares further reinforced by acquisitions

    3. The leading force in Spanish retail banking Leading retail product market shares further reinforced by acquisitions Tactical management of customer funds Undisputed leadership in most accompanied by gradual deleveraging retail products3 Business volume: Loan book and customer funds In Billion Eur

  15. Slide 15: Tactical management of customer funds

    3. The leading force in Spanish retail banking Tactical management of customer funds in anticipation of improved funding environment Total customer funds breakdown In Billion Euros Organic1 31st Dec. YTD YTD (%) Total customer funds Organic -3.0% I. Customer funds on balance sheet 238.1 21.3%  (2.6

  16. Slide 16: Gradual deleveraging of loan book

    3. The leading force in Spanish retail banking Gradual deleveraging of loan book in line with macro and sector trends Loan-book breakdown In Billion Euros, gross Organic1 31st Dec. YTD YTD (%) Loan book Organic -6.9% I. Loan to individuals 119.6 27.7%  (2.2%) +€37.4bn (+20.1%) Non- organic +27.0% R

  17. Slide 17: Market shares in key retail products have increased throughout the crisis

    3. The leading force in Spanish retail banking Market shares in key retail products have increased throughout the crisis Customer funds market shares Credit market shares Total deposits1 1st Time deposits 2nd Total loans1 1st Mortgages 1st 14.4% 13.3% 14.4% 14.7% 10.4% 10.4% 11.0% 10.9% 10.5% 11.0%

  18. Slide 18: Leading multi-channel distribution network

    3. The leading force in Spanish retail banking All of this supported by a leading multi-channel distribution network… Data as of December 2012 Branches: the largest network ATMs: the widest network in Spain (17.7% market share1) Breakdown of branch market share1 ~9,5000 ATMs + 17.6% market share2 72

  19. Slide 19: Technological innovation, an integral part of our culture

    3. The leading force in Spanish retail banking …and by technological innovation, an integral part of our culture  1st Private social network of a Multichannel low cost approach financial institution exclusive for 2012 transactions, by distribution channel self-employed people and SMEs Automated ~4,

  20. Slide 20: Reputation and excellence in retail banking recognized by the market

    3. The leading force in Spanish retail banking Reputation and excellence in retail banking continue to be recognized by the market European Seal of Excellence  Granted by the European Foundation for Quality Management (EFQM) The ‘Best Bank in Spain 2012’  Euromoney acknowledges CaixaBank’s solvenc

  21. Slide 21: "la Caixa": Reinforced by a premium brand reputation

    3. The leading force in Spanish retail banking Reinforced by a premium brand reputation Quality of service – Brand reputation  Leading institution in reputation and interest in operating in the retail segment (FRS Inmark 2011 – individuals) and customer “la Caixa”: retention in business segment (FR

  22. Slide 22: Life insurance business complements the banking business

    3. The leading force in Spanish retail banking The life insurance business is a perfect complement to the banking business A top insurance group with the widest Insurance business: distribution network Sustained increase in AUMs In Million Euros  3 million individual customers 42,006 45,492 37,765

  23. Slide 23: Agenda

    CaixaBank 1. CaixaBank overview 2. Update on acquisitions 3. The leading force in Spanish retail banking 4. International banking 5. Investment diversification 6. Solid balance sheet 7. FY12 Results 8. Strategy & Macro outlook 9. Final remarks 10. Appendices 23

  24. Slide 24: Our process of internationalisation

    4. International banking Our process of internationalisation WHY? HOW? 1. Likely slowdown of the 1 Organic growth Spanish banking sector Representative offices “la Caixa” Group 2. Search for growth Strategic Plan International Branches 2007-2010: decision to grow 2 Non-Organic growth 3. Risk diversi

  25. Slide 25: Focused on growth markets

    4. International banking Focused on growth markets International banking1 Representative offices: Europe: Rest of the World: - Frankfurt, Stuttgart - Beijing, Shanghai - London - Dubai - Paris - New Delhi - Milan - Istanbul - Singapore - Cairo 20.7% - Chile 9.9% €117 M €956 M Business volume2: Inter

  26. Slide 26: Development of a partnership model

    4. International banking Development of a partnership model + Control/Synergies/Risk “Investing in winners”  Well-managed banks with solid competitive positions Controlling  Strong local partners with common views Acquisitions  Retail focus / low reliance on wholesale funding  High solvency leve

  27. Slide 27: Agenda

    CaixaBank 1. CaixaBank overview 2. Update on acquisitions 3. The leading force in Spanish retail banking 4. International banking 5. Investment diversification 6. Solid balance sheet 7. FY12 Results 8. Strategy & Macro outlook 9. Final remarks 10. Appendices 27

  28. Slide 28: Repsol and Telefónica provide revenue diversification and a potential capital cushion

    5. Investment diversification Repsol and Telefónica provide revenue diversification and a potential capital cushion  Income diversification: two international leaders in defensive sectors  Financial flexibility: very liquid stakes  Potential capital buffer 5.6%2  Value: solid fundamentals, excel

  29. Slide 29: Agenda

    CaixaBank 1. CaixaBank overview 2. Update on acquisitions 3. The leading force in Spanish retail banking 4. International banking 5. Investment diversification 6. Solid balance sheet 7. FY12 Results 8. Strategy & Macro outlook 9. Final remarks 10. Appendices 29

  30. Slide 30: Continuing balance sheet strength

    6. Solid balance sheet Continuing balance sheet strength Robust capital base Strong liquidity position Superior asset quality  €53.1bn of available  Coverage ratio of 60%  Core capital (BIS II) 11.0% liquidity  Sound loan-to-deposit  NPL ratio 8.62%; better  Core Tier1 EBA: 10.4% ratio: 127% t

  31. Slide 31: Asset quality

    A CaixaBank Asset quality

  32. Slide 32: Asset quality stabilises after BCIV integration

    6. Solid balance sheet Asset quality stabilises after BCIV integration but still affected by weak macro trends NPLs and NPL ratio NPL coverage 11.38 NPL ratio 10.71 NPL coverage ratio Nov’12 sector 9.65 8.37 61% 60% 7.84 60% 60% 60% 8.42 8,62 8.62% Credit provisions 5.25 5.58 (in Billion Euros) 12.2

  33. Slide 33: Significant improvement in quarterly evolution of NPLs

    6. Solid balance sheet Significant improvement in quarterly evolution of NPLs Loan book and NPL1 ratio by segments In Billion Euros NPL ratio 31st Dec 31st Dec 30th Sept2 Loans to individuals 119.6 3.56% 3.50% Residential mortgages - home purchase 87.7 2.80% 2.77%  NPL inflows still mostly Other 31

  34. Slide 34: Outperformance in asset quality confirmed by bottom-up stress test

    6. Solid balance sheet Outperformance in asset quality confirmed by bottom-up stress test Peer comparison Expected Loss in adverse scenario - sector comparison % of assets System Bankinter 7.2% Total EL 17.4% 13.0% 13.0% RE Developers 42.8% 37.6% BBVA + Unnim 14.9% Retail Mortgages 4.1% 3.4% Santand

  35. Slide 35: Clean-up of real estate exposure continues

    6. Solid balance sheet Clean-up of real estate exposure continues Clean-up of real estate exposure continues at fast pace RE developer loans breakdown evolution (in Billion Euros) Provisions Coverage (in Billion Euros) -10% NPL 4.7 39.1% 29.9 Substandard 1.1 34.9% 27.0 Performing 2.2 18.9% 22.4 21.7

  36. Slide 36: Foreclosed assets increase as developer loans migrate to housing stock

    6. Solid balance sheet Foreclosed assets increase as developer loans migrate to housing stock Building Center1 Repossessed real estate assets breakdown Repossessed real estate assets evolution As of December 2012 In Million Euros In Million Euros % coverage 36% 36% 39% 44% 45% Net Coverage amount 5,

  37. Slide 37: Commercial activity increasingly focused towards renting properties

    6. Solid balance sheet Commercial activity increasingly focused towards renting properties Increased commercial activity during 2012 BuildingCenter is now main contributor to “la Caixa” Group commercial activity Group sales In Million Euros Sales distribution 2012 unit disposal2: 89% 1,5821  11,830

  38. Slide 38: Strong liquidity position

    Strong liquidity position 38

  39. Slide 39: Liquidity remains a cornerstone of balance sheet strength

    6. Solid balance sheet Liquidity remains a cornerstone of balance sheet strength Proactive reinforcement of liquidity A closing funding gap has led to a progressive In Billion Euros reduction of the LTD ratio2 As a % of total 7.7% 15.2% 133% -6pp assets 129% 128% 53.1 127% 127% Balance sheet 17.5 li

  40. Slide 40: Solvency & Capital management

    Solvency & Capital management 40

  41. Slide 41: Leading capital ratios despite BCIV acquisition and liability management exercises

    6. Solid balance sheet Leading capital ratios despite BCIV acquisition and liability management exercises BIS II Core Capital evolution In % +168bps -101bps +51bps -22bps -252bps 12.5% RDL impact Extraordinary Liability %% Organic transactions management 11.0% BCIV EBA Core Tier1 integration1 for Ca

  42. Slide 42: Solid solvency metrics certified by detailed stress-test exercise

    6. Solid balance sheet Solid solvency metrics certified by detailed stress-test exercise Capital Excess in EBA CT1 2014 in the Adverse Scenario Adverse Scenario Post-tax In Billion Euros (post-tax) Santander 25.3 Kutxabank 11.6% Santander 10.8% BBVA-Unnim 11.2 BBVA 9.6% "la Caixa" + BCIV 9.5% 5.7 Sa

  43. Slide 43: Agenda

    CaixaBank 1. CaixaBank overview 2. Update on acquisitions 3. The leading force in Spanish retail banking 4. International banking 5. Investment diversification 6. Solid balance sheet 7. FY12 Results 8. Strategy & Macro outlook 9. Final remarks 10. Appendices 43

  44. Slide 44: Good operating performance despite historically low interest rate environment

    7. FY12 Results Good operating performance despite historically low interest rate environment Consolidated income statement (BCIV consolidated from 1st July ‘12) In Million Euros FY12 FY11 yoy(%)  Consistent delivery of strong pre- impairment income: Net interest income 3,872 3,170 22.2 • NII suppo

  45. Slide 45: NII supported by BCIV contribution and rates momentum

    7. FY12 Results NII supported by BCIV contribution and rates momentum while funding environment improves Customer spread stable due to lower retail Net interest income peaks as lower index funding costs rates make an impact: 3.52 3.33 3.50 3.44 3.31 In Million Euros 3.00 3.13 3.23 1.55 1.66 1.68 1.6

  46. Slide 46: Inertia from mortgage book partially offset by spread repricing

    7. FY12 Results Inertia from mortgage book partially offset by spread repricing and positive funding trends New production spreads continue to grow Renewal of time deposits at lower rates leads Front book credit spreads (%) to reduced back book costs Front book time deposits spreads (%) -0.39 -0.41

  47. Slide 47: Recurring fee items continue to reflect underlying core business strength

    7. FY12 Results Recurring fee items continue to reflect underlying core business strength Net fees Net fees breakdown In Million Euros In Million Euros FY12 yoy (%) +8.9% Banking fees1 1,354 10.4 Mutual funds 150 (4.3) FY12: 1,701 Insurance and pension plans 197 9.8 FY11: 1,562 Net fees 1,701 8.9 42

  48. Slide 48: Growing contribution from investments while consolidation scope impacts other revenue

    7. FY12 Results Growing contribution from investments while changes in consolidation scope impact other revenue Income from investments supported by higher Other operating revenue affected by changes contribution from associate companies in scope and non-recurring items In Million Euros In Million E

  49. Slide 49: Strict cost control but restructuring effort in full sway

    7. FY12 Results Strict cost control but restructuring effort in full sway Cost reduction: -0.1% (like-for-like) and -3.5% on a Total operating costs recurrent cost basis1 In Million Euros In Million Euros -0.1% +6.7% 2012 Like-for-like Recurrent 3,342 3,566 basis BCIV recurring expenses (471) 341 De

  50. Slide 50: Demanding provisioning schedule back in line with RDL charge guidance

    7. FY12 Results Demanding provisioning schedule back in line with RDL charge guidance Impairment losses In Million Euros RDL 2/2012 2,436  Booked in 1Q12 (€1.8 bn of generic provision released) RDL 18/2012 1,200  €0.9 bn pending for 1H13 Other credit provisions 1,970 Other provisions1 143 Impairme

  51. Slide 51: Extraordinaries partially offset heavy provisioning schedule

    7. FY12 Results Extraordinaries partially offset heavy provisioning schedule Main extraordinary profits generated in 4Q12: Reinsurance  Reinsurance agreement with Berkshire Hathaway Life Insurance Company covering the individual life-risk portfolio Gross capital agreement covering gain: the life-ri

  52. Slide 52: Agenda

    CaixaBank 1. CaixaBank overview 2. Update on acquisitions 3. The leading force in Spanish retail banking 4. International banking 5. Investment diversification 6. Solid balance sheet 7. FY12 Results 8. Strategy & Macro outlook 9. Final remarks 10. Appendices 52

  53. Slide 53: Key strategic initiatives 2011-2014

    8. Strategy & Macro outlook Key strategic initiatives 2011-2014 2012 1 Strengthen leadership in retail banking • 15% market share in business volume  • 35% of loan book (excluding Real Estate developers) 2 Diversify operations towards business banking geared towards business banking (from 29% in 20

  54. Slide 54: A weak macroeconomic outlook with low interest rates in 2012 and 2013

    8. Strategy & Macro outlook A weak macroeconomic outlook with low interest rates in 2012 and 2013 Macroeconomic outlook-Spain Y-o-y growth, Annual averages (%) Base case 2010 2011 2012 2013 2014 Interest rates Real GDP growth -0.3 0.4 -1.4 -1.3 1.1 Inflation (end of period) 3.0 2.4 2.9 1.4 1.7 4,5 E

  55. Slide 55: Agenda

    CaixaBank 1. CaixaBank overview 2. Update on acquisitions 3. The leading force in Spanish retail banking 4. International banking 5. Investment diversification 6. Solid balance sheet 7. FY12 Results 8. Strategy & Macro outlook 9. Final remarks 10. Appendices 55

  56. Slide 56: Key take-aways

    9. Final remarks Key take-aways  A further year of increased market shares and advances in strategic goals: Acquisitions complement  Above 15% market share in key retail products organic growth and reinforce  BCIV integration process proceeding as planned (CajaSol+CAN integrated) franchise leader

  57. Slide 57: Appendices

    CaixaBank Corporate presentation Appendices 57

  58. Slide 58: Appendices

    Appendices  Ratings p. 58  Financial statements p. 60  International banking p. 63  Corporate governance p. 68 58

  59. Slide 59: Ratings

    Ratings Ratings Credit Ratings Long Short Mortgage Outlook Covered Bonds term term Moody’s Investors Service Baa3 P-3 negative A3 BBB- A-3 negative AA- (1) BBB F2 negative - (1) Negative Outlook 59

  60. Slide 60: Appendices

    Appendices  Ratings  Financial statements  International banking  Corporate governance 60

  61. Slide 61: Balance sheet

    Financial statements Balance sheet Annual 31.12.11 31.12.12 € milion change Liabilities 249.710 325.583 75.873 Annual 31.12.11 31.12.12 Trading portfolio 4.117 15.928 11.811 € milion change Financial liabilities at amortized cost 205.164 268.446 63.282 Cash and Central Banks 2.712 7.854 5.142 Deposi

  62. Slide 62: P&L

    Financial statements P&L January - December Change € million 2012 2011 % Financial income 9.178 7.734 18,7 Financial expenses (5.306) (4.564) 16,2 Net interest income 3.872 3.170 22,2 Dividends 228 377 (39,6) Income accounted for using the equity method 581 282 106,3 Net fees 1.701 1.562 8,9 Trading

  63. Slide 63: Appendices

    Appendices  Ratings  Financial statements  International banking  Corporate governance 63

  64. Slide 64: International banking investments: Erste Bank

    International Banking International banking investments: Erste Bank Main Agreements (Jun’09) Resilient operating performance, declining risk costs  Preferred Partner Agreement: CaixaBank may increase its stake in Erste Group up to 20% with prior consent of €M Sep’12 % Change Erste Foundation (main

  65. Slide 65: International banking investments: The Bank of East Asia

    International Banking International banking investments: The Bank of East Asia Main Agreements (Jun’09)  Strategic investment agreement: CaixaBank may BEA Sets New Record for the First Half of 2012 increase its stake in BEA up to 20% with prior agreement of BEA HKD M Jun’12 % Change  Strategic col

  66. Slide 66: International banking investments: Grupo Financiero Inbursa

    International Banking International banking investments: Grupo Financiero Inbursa Main Agreements (Oct’08) Impressive solvency and solid business  Shareholders’ agreement: o Exclusivity of CaixaBank as a partner of GFI MXN M Sep’12 % change o Minimum stake in GFI: 20% for CaixaBank and 31% Gross Lo

  67. Slide 67: Inbursa: successful implementation of our Partnership Model

    International Banking International banking investments: Grupo Financiero Inbursa Inbursa: successful implementation of our Partnership Model An increasingly successful alliance Strategic Alliance since Oct’08  20% stake: 10% new shares, 10% old shares.  2 board members + 1 executive member. Retai

  68. Slide 68: Appendices

    Appendices  Ratings  Financial statements  International banking  Corporate governance 68

  69. Slide 69: "la Caixa" and CaixaBank - Corporate Governance

    Corporate Governance “la Caixa” and CaixaBank - Corporate Governance  The representation of each stakeholder within the General Assembly is mapped onto all “la Caixa”’s governing bodies in similar percentages.  “la Caixa”’s Board of Directors (BoD) proposes among its members and the CEO the appoin

  70. Slide 70: CaixaBank – Board of Directors and Committees

    Corporate Governance CaixaBank – Board of Directors and Committees Board of Directors The Internal Relations Protocol between “la Caixa” Members: 19 and CaixaBank has as main objective: • Executive: 1  To develop the basic principles that should • Proprietary: 11 govern relations between “la Caixa”

  71. Slide 71: Institutional Investors & Analysts Contact

    Institutional Investors & Analysts Contact We are at your entire disposal for any questions or suggestions you may wish to make. To contact us, please call or write to us at the following email address and telephone number: investors@caixabank.com +34 93 411 75 03 Av. Diagonal, 621 08028 Barcelona w

CaixaBank — Investor Presentation (February 2013) on 6ix