CaixaBank - the leading force in Spanish retail banking · Leading retail product market shares...

CaixaBank - the leading force in Spanish retail banking February 2012 Fixed Income presentation

2

Important note

The purpose of this presentation is purely informative. In particular, regarding the data provided by third parties, neither CaixaBank, S.A. (“CaixaBank”) as a legal entity, nor any of its administrators, directors or employees, is obliged, either explicitly or implicitly, to vouch that these contents are exact, accurate, comprehensive or complete, nor to keep them updated, nor to correct them in the case that any deficiency, error or omission were to be detected. Moreover, in reproducing these contents in any medium, CaixaBank may introduce any changes it deems suitable, may omit partially or completely any of the elementsof this document, and in the case of any deviation between such a version and this one, assumes no liability for any discrepancy.

This document has at no time been submitted to the Comisión Nacional del Mercado de Valores (CNMV – the Spanish Stock Markets regulatory body) for approval or scrutiny. In all cases its contents are regulated by the Spanish law applicable at time of writing, and it is not addressed to any person or legal entity located in any other jurisdiction. For this reason it may not necessarily comply with the prevailing norms or legal requisites as required in other jurisdictions.

This presentation on no account should be construed as a service of financial analysis or advice, nor does it aim to offer any kind of financial product or service. In particular, it is expressly remarked here that no information herein contained should be taken as a guarantee of future performance or results.

Without prejudice to legal requirements, or to any limitations imposed by CaixaBank that may be applicable, permission is hereby expressly refused for any type of use or exploitation of the contents of this presentation, and for any use of the signs, trademarks and logotypes which it contains. This prohibition extends to any kind of reproduction, distribution, transmission to third parties, public communication or conversion into any other medium, for commercial purposes, without the previous express permission of CaixaBank and/or other respective proprietary title holders. Any failure to observe this restriction may constitute a legal infraction which may be sanctioned by the prevailing laws in such cases.

Growing the franchise in a challenging sector and macroeconomic environment

2012- Further advances on the path to stability

An eventful year for the Spanish financial sector

Extraordinary provisioning requirements to address RE developer exposure

RDL 2/2012 & RDL 18/2012

Stress-tests to quantify maximum capital requirements for Spanish banks

IMF FSAP, Top-down and bottom up stress-test

Improved transparency & credibility

Acceleration of sector consolidation

MoU

Banking Resolution Act

Public capital injections

Restructuring plans

Transfer of assets to Sareb

87% of RDL’s already booked

€5.7bn capital surplus under bottom-up adverse scenario

Outperformance in asset quality metrics

M&A to develop the franchise: BCIV and BdV acquisitions

Contribution to SAREB

Economic environment

Eurozone: macro stabilisation

Spain: execution of broad economic agenda to improve competitiveness

Euro area institutional reforms

Roadmap for further European integration (banking union, Euro is “here to stay")

3

FY 2012 Highlights

4

(1) Of which €4.5bn correspond to BdV

A further year of increased market shares and advances in strategic goals:

Above 15% market share in key retail products

BCIV integration process proceeding as planned (CajaSol+CAN integrated)

BdV closing expected end of Feb (1st Jan accounting integration)

Total available liquidity of €53.1 bn

Issuance of €1bn 3yr Sr. unsecured on improved market conditions in Q1’13

Allows for repayment of €9 bn to ECB1

Asset quality stabilises post BCIV integration - coverage maintained at 60%

Non-RE book remains stable while RE Developers deteriorate

Clean-up of real estate exposure continues with record asset disposals

Interest income headwinds gradually offset by improved funding conditions

Strict cost control but restructuring effort in full sway

Extraordinaries partially offset heavy provisioning schedule

Core capital BIS II at 11.0%

Core Tier1 EBA at 10.4%

Acquisitions complement organic growth and reinforce franchise leadership

Liquidity reinforcement has been the key objective of the year

Capital strength reinforced and underlined by stress tests

Asset quality impacted by acquisitions and weak macro fundamentals

Good operating performance in a low interest environment

5

Execution of BCIV IT integrations on track: • CAN and CajaSol completed. Final IT integration expected

by April’13.

BdV acquisition to be managed in parallel with BCIV’s: • Closing expected at the end of February (1st January

accounting integration)

• Pre-merger integration committees already in place

Strict management of the incorporated franchises: • Remapping of sales organization to fit client presence

• Application of CABK standards from day one, focusing on profitability and implementation of credit monitoring and recovery procedures

3 Aug 20 Oct 27 Nov

• Merger registration

• Operational integration

• CAN systems integration

• CajaSol systems integration

• Caja Canarias systems integration

• Caja Burgos systems integration

• Acquisition agreement

• I.T. integration

• Closing

15 Dec Feb Mar Apr Jul

8 months1

9 months

(1) Estimate of calendar assuming BdV transaction is authorized at expected milestones by all the relevant authorities

Execution of M&A transactions is being carried out according to plan

BCIV integration: 83.4% of 4,400 planned activities have been completed

Update on acquisitions

Update on BCIV Financial Impacts

(1) Of which €512 M have been booked against reserves and €62 M have been included as CapEx for the period

6

Update on acquisitions

Cost synergies being executed ahead of

schedule

Reorganisation of branch network

accelerated

Further fair value adjustments on

additional granularity

2012 cost synergies 91% above initial target

Measures taken imply 40% achievement of €540 M cost savings target

€757 M gross restructuring costs already booked1

BCIV branch network optimisation to speed up following IT integrations, so as to minimise impact on clients:

Reorganization of CAN network started in 4Q’12

Additional fair value adjustments on BCIV loan book and foreclosed assets due to the more granular information obtained post IT integrations

191% of target

Reduction in branch network

6,631 Sept’12

6,342 Dec’12

~6,000 Mar’13 E

Initial Fair Value adjustments

€3,288 M

Additional adjustments

€700 M (€450 M loan book, €250 M

Foreclosed assets)

Total Fair Value adjustments

€3,988 M (€3,668 M loan book, €882 M

Foreclosed assets €-562 M other)

Commercial activity

Acquisitions complement business footprint and contribute to market share gains

7

Acquisitions further extend leading market

shares in retail banking

Market share by business volume1

In %

> 10% share > 7% share < 7% share

30.6%

17.8%

39.6%

7.9%

11.5%

17.9% 12.6%

9.6%

7.8%

28.0%

6.2%

6.9%

10.0%

7.4%

5.4% 8.1%

10.4%

14.6% Business volume

market share

Sources: Bank of Spain, FRS, INVERCO, ICEA, CECA and Factoring Spanish Association. Latest data available for 2012

Contribution of BCIV and BdV in core regions

Market share by business volume

In %

Navarra

Andalucía

C. Valenciana

C. León

39.6%

17.8%

11.5%

12.6%

Canarias 28.0%

8.3x

2.9x

2.2x

2.1x

2.5x

(1) Market shares as of September 2012 include loans and deposits of CABK+BCIV+BdV.

CABK stand-alone

Commercial activity

Leading retail product market shares further reinforced by acquisitions

8

Tactical management of customer funds accompanied by gradual deleveraging

Undisputed leadership in most retail products3

Business volume: Loan book and customer funds In Billion Euros

427.3 512.0

Inorganic +24.5%

Business volume

+19.8% YTD

Organic2 -4.7%

Customer funds

Loans

Sector1 Organic2

-3.9% -3.0%

-7.1% -6.9%

(1) Source: “la Caixa” Research Department estimates. Customer funds include: deposits, CP, insurance saving products, mutual funds and pensions plans. Sector loans exclude the transfer of assets to SAREB.

(2) Deducting BCIV figures at 30/6/12- includes changes under CABK management

(3) Including BdV (4) Includes sight and time deposits Sources: Bank of Spain, INVERCO, ICEA, FRS, Social Security and AEF

15%

1st

1st

1st

1st

3rd

1st

1st

1st

3rd

1st

YTD

+5.6%

+4.2%

+6.1%

+0.8%

+2.7%

+1.7%

+4.1%

+4.0%

+1.8%

+3.0%

4

Asset quality

Asset quality stabilises after BCIV integration but still affected by weak macro trends

NPLs and NPL ratio NPL coverage

12.1 NPL (in Billion Euros)

Credit provisions (in Billion Euros)

NPL coverage ratio

8.62%

60%

9

NPL decreases in absolute terms as CABK risk management is implemented across BCIV platform

Higher ratio results from lower asset base

Asset quality gap with the sector increased by 47 bps1

Provisioning coverage maintained at 60%

NPL ratio

sector Nov’12

(1) Difference between Q4 and Q3

Gradual deleveraging of loan book in line with macro and sector trends

(1) Deducting BCIV data at 30/6/12- includes changes under CABK management (2) Servihabitat reduced its loan balance with CaixaBank by €1.35 bn through the issuance of a medium term bond

RE developer book still a main contributor to decline

Additional impact from continuing “clean-up” of BCIV loan book

Weak credit demand from SMEs and corporates

10

Loan-book breakdown In Billion Euros, gross

I. Loan to individuals

Residential mortgages – home purchases

Other

II. Loan to businesses

Non RE businesses

Real Estate developers

Servihabitat & other RE subsidiaries

Loans to individuals & businesses

III. Public sector

Total loans

119.6

87.7

31.9

90.7

62.0

27.0

1.72

210.3

13.1

223.4

27.7%

25.8%

32.9%

11.8%

11.7%

20.3%

(46.4%)

20.3%

16.6%

20.1%

YTD 31st Dec.

(2.2%)

Organic1 YTD (%)

(13.1%)

(6.9%)

(1.5%)

Loan book

+€37.4bn (+20.1%)

Organic

Non- organic

-6.9%

+27.0%

Asset quality

Significant improvement in quarterly evolution of NPLs

11 (1) Includes contingent liabilities (2) Note Q3 figures are restated (3) Includes loans to Servihabitat and other RE subsidiaries of Caja de Ahorros y Pensiones de Barcelona, CABK’s major shareholder

NPL inflows still mostly attributable to RE Developers

Stability returns to retail book

Non-RE business segments evidence crisis fatigue

Loan book and NPL1 ratio by segments In Billion Euros

Loans to individuals

Residential mortgages - home purchase

Other

Loans to businesses

Corporate and SMEs

Real Estate developers

Servihabitat & other RE subs.3

Public sector

Total loans

119.6

87.7

31.9

90.7

62.0

27.0

1.7

13.1

223.4

NPL ratio

31st Dec

3.50%

2.77%

5.47%

16.55%

5.67%

40.91%

0.00%

0.75%

8.42%

3.56%

2.80%

5.65%

17.24%

5.96%

44.22%

0.00%

0.74%

8.62%

31st Dec 30th Sept2

Ex- Real Estate developers 196.4 3.97% 3.83%

Asset quality

Clean-up of real estate exposure continues

12

(1) Deducting BCIV data at 30/6/12- includes changes under CABK management

Clean-up of real estate exposure continues at fast pace

RE developer loans breakdown evolution

(in Billion Euros)

20.7

Performing

Substandard

NPL

22.4 21.7

27.0 29.9

-10%

RE developer loans

YTD +€4.6bn

Organic1

Non- organic

-€5.2bn

+€9.8bn

Provisions (in Billion Euros)

Coverage

NPL 4.7 39.1%

Substandard 1.1 34.9%

Performing 2.2 18.9%

Provisions for RE developer loans

8.0 29.7%

Return to RDL 18/12 real estate provisioning path (€150 M per month)

Coverage of problematic loans at 53%

30% coverage of total developer loans above “bottom-up” base case scenario of 25% EL

33% coverage considering pending €0.9 bn of RDL 18/12- close to adverse scenario of 37.6% EL

Asset quality

Foreclosed assets increase as developer loans migrate to housing stock

(1) The real estate holding company of CaixaBank, S.A. (2) Deducting BCIV data at 30/6/12- includes changes under CABK management

13

RE assets from loans to construction and RE development

Finished building

Buildings under construction

Land

RE assets from mortgage loans to households

Other repossessed assets

Total (net)

3,806

2,361

191

1,254

1,051

231

5,088

47%

34%

54%

61%

38%

47%

45%

Net amount

Coverage

Building Center1

Repossessed real estate assets evolution

In Million Euros

Repossessed real estate assets breakdown

As of December 2012

In Million Euros

Foreclosed assets

YTD +€3.9bn

Organic2

Non- organic

+2.2bn

+1.7bn

% coverage

36% 45% 44% 39% 36%

Asset quality

Commercial activity increasingly focused towards renting properties

(1) Total disposals of €3.1bn and 20,291 units, at debt equivalent amounts & including disposals from developers (2) Sales and rental assets. 13,171 units considering commitments.

Commitments

14

Servihabitat portfolio has been reduced by ~30% in one year

Increased commercial activity during 2012 “la Caixa” Group commercial activity

In Million Euros

BuildingCenter is now main contributor to Group sales

Sales distribution

796

Rental assets

Sales

2012 unit disposal2:

11,830 1,5821

x2

192 163

1H11 2H11 1H12 2H12

EBA Capital reinforced to 10.4% in Q4 after 50% conversion of Series 1/11 MCB

Solvency

Leading capital ratios despite BCIV acquisition and liability management exercises

BIS II Core Capital evolution In %

Core Capital

RWAs

17.2 bn

137.4 bn

17.7 bn

161.2 bn

12.5%%%

+168bps -101bps -252bps

11.0% Organic

BCIV integration1

RDL impact

EBA Core Tier1 for CaixaBank

(Dec 31st):

10.4%2

(1) Includes the impact of the additional fair value adjustments registered in 4Q12 (€700 M) (2) Main difference between EBA and BIS II is due to temporary deferral in recognition of €750 M MCB

15

-22bps

Liability management

+51bps

Extraordinary transactions

Liquidity

Liquidity remains a cornerstone of balance sheet strength

(1) Includes cash, interbank deposits, accounts at central banks and unencumbered sovereign debt (2) Defined as: gross loans (€223,449 M) net of loan provisions (€11,962 M) (total loan provisions excluding those corresponding to contingent guarantees) and excluding

pass-through funding from multilateral agencies (€7,179 M) / retail funds (deposits, retail issuances) (€160,621 M) (3) €4.5 bn from CaixaBank + €4.5 bn from Banco de Valencia

16

Proactive reinforcement of liquidity In Billion Euros

A closing funding gap has led to a progressive reduction of the LTD ratio2

• ECB LTRO: €28.3 bn with €4 bn kept in deposit

• €9bn of ECB funding to be repaid in Jan.’133

Unused ECB discount facility

Balance sheet liquidity1

20.9

53.1

As a % of total assets

7.7% 15.2%

127% 128%

127% 129%

133%

Dec'12 Sep'12 Jun'12 Mar'12 Dec'11

-6pp

Manageable exposure to wholesale funding

Wholesale maturities as of Dec 31st

€7.3 bn

2013

€8.2 bn

2014

€6.6 bn

2015

Jan.’13: issuance of €1bn 3yr senior unsecured at MS + 285 bps as capital debt markets improve

(1) Deducting BCIV data at 30/6/12- includes changes under CABK management (2) Primarily includes mandatory convertible bonds, regional govt.securities, and Caja de Pensiones y Ahorros de Barcelona sub debt.

Commercial activity

Tactical management of customer funds in anticipation of improved funding environment

Total customer funds breakdown In Billion Euros

I. Customer funds on balance sheet

Demand deposits

Time deposits

Debt securities

Subordinated liabilities

Institutional issuance

Insurance

Other funds

II. Off-balance sheet funds

Mutual funds

Pension plans

Other managed resources2

Total customer funds

238.1

69.2

76.8

8.8

5.8

46.6

27.9

2.9

50.5

21.0

17.6

11.9

288.6

21.3%

23.0%

20.8%

46.3%

12.4%

20.2%

18.6%

(1.8%)

12.5%

16.1%

23.5%

(5.0%)

19.6%

YTD 31st Dec.

(2.6%)

Organic1 YTD (%)

(4.5%)

(3.0%)

17

Proactive and tactical management of product mix focused on P&L impact:

• Pricing policy adapted to each customer segment

• Pure price competition avoided

• Clean-up of low value-added deposits continues as they mature (BCIV)

(4.2%)

Total customer funds

+€47.4bn (+19.6%)

Organic

Non- organic

-3.0%

+22.6%

18

Encumbered vs Unencumbered Assets (as of December 2012)

LOANS PORTFOLIO TOTAL RMBS/ABS SENIOR DEBT

USED COLLATERAL UNUSED

MORTGAGES PORTFOLIO (ex - sec) 142,766 95,401 47,365 0

PUBLIC SECTOR PORTFOLIO (ex - sec) 11,756 10,000 1,756 0.0

OTHER LOANS PORTFOLIO (ex - sec) 37,479 37,479

SECURITISATION (*) 9,547 9,547

LOANS TO CUSTOMERS 201,547 105,401 49,121 9,547 37,479

ENCUMBERED ASSETS 8,540

INSURANCE COMPANIES ASSETS 29,129

REST OF ASSETS 108,868 108,868

TOTAL ASSETS 348,084 105,401 49,121 9,547 146,347(*) It includes all securitized loans

PUBLIC ISSUANCE RETAINED/ECB COLLATERAL TOTAL ISSUED

MORTGAGE COVERED BONDS 42.109 34.212 76.321

PUBLIC SECTOR COVERED BONDS 1.298 5.702 7.000

RMBS/ABS 1.359 8.188 9.547

SENIOR DEBT (except GGB) 5.149 0.426 5.575

GOVERNMENT GUARANTEED BONDS 1.705 6.320 8.025

TOTAL ISSUED 51.620 54.848 106.467

As of 31st Dec

COVERED BONDS

19

CaixaBank Covered Bond Issuing Capabilities (as of December 2012 )

Mortgages Public Sector

Total Collateral for Covered Bonds 142,766 11,756 Elligible Portfolio 100,110 11,756

Cédulas

Hipotecarias

Cédulas

Territoriales

Used Collateral 95,401 10,000 Covered Bond Issued Amount 76,321 7,000

Over Collaterization 187% 168%

Available Collateral 4,709 1,756

REMAINING ISSUING CAPACITY (*) 3,767 1,229 Mn €

(*) Issuing Capacity= 80% of Collateral Available for C. Hipotecarias and 70% for C. Territoriales

Data in Million €

4,996 Available Issuing Capacity

83,3€ bn

89,3 € bn

111,8 bn

154,5 € bn

≈ 5 € bn Remaining Issuing

Capacity

42,7€ bn

Outstanding CBs

Max. CB Issuance

Elegible vs non-elegible

Total Collateral (Mortgages+Public

Sector)

83,3€ bn

89,3 € bn

111,8 bn

154,5 € bn

≈ 5 € bn Remaining Issuing

Capacity

42,7€ bn

Outstanding CBs

Max. CB Issuance

Elegible vs non-elegible

Total Collateral (Mortgages+Public

Sector)

Mortgage Covered Bonds – OC Evolution

Solid levels of Over Collaterization Two remarkable facts in 2012:

•Q2: Generation of additional collateral for the ECB credit facility to anticipate any potential deterioration in markets

•Q3: Integration of Banca Cívica

Legal OC

131%

20

21

Public Sector Covered Bond Issuance

IssueIssued Amount

(€M)Issue Date Maturity Coupon

Total 1,000

500 24/05/2012 24/05/2018

500 24/05/2012 24/05/2019

3ª Emisión de Cédulas

Territoriales


Territoriales

4.90%

5.20%

New retained Covered Bond Issuance

Mortgage Covered Bond Issuance

Issue Issued Amount

(€M)

Issue Date MaturityCoupon

Total 24,500


Hipotecarias 500 26/07/2012 26/07/2020 €6m + 4.70%


Hipotecarias 3,000 17/07/2012 17/07/2028 €6m + 4.25%


Hipotecarias 750 17/07/2012 17/07/2027 €6m + 4.25%

€6m + 3.80%

€6m + 3.80%

1,000 24/05/2012 24/05/2018

1,000 24/05/2012 24/05/2019

2,000 24/05/2012 24/05/2020

500 07/06/2012 07/06/2021

2,000 07/06/2012 07/06/2022

07/06/2023 4,000 07/06/2012

3,500 07/06/2012 07/06/2024

07/06/2025


Hipotecarias


Hipotecarias


Hipotecarias


Hipotecarias


Hipotecarias


Hipotecarias

€6m + 3.85%

€6m + 3.85%


Hipotecarias


Hipotecarias


Hipotecarias 4,250 19/06/2012 19/06/2026

1,000 07/06/2012 €6m + 3.75%

€6m + 3.75%

4.90%

5.20%

5.30%


Hipotecarias 1,000 03/07/2012 03/07/2017 €6m + 4.00%

Loan Portfolio Optimization (RMBS amortization exercise)

22

Fund

Outstanding

Balance

Amount Ellegible

for CHs Issuance

Total: 14,302.52 12,177.15

Amortizatin

Date Description

Fund

Outstanding

Balance

Amount Ellegible

for CHs Issuance

18.6.125,736 5,558

29.6.12467 459

29.6.12862 773

13.7.12687 592

13.7.12412 410

13.7.123,273 2,062

13.7.12343 225

16.7.12497 485

16.7.12502 341

25.7.12204 197

25.7.12596 365

30.7.1262.30 62

30.7.12343.63 341

30.7.12134.84 132

30.7.12183.46 176

FonCaixa Hipotecario 11 F.T.A

(ES0337805008 / 016 / 024)

FonCaixa FTGencat 7 F.T.A

(ES0337663001 / 019 / 027 / 035)


(ES0338203005 / 013)

FTPYME 2 F.T.A

(ES0337774006 / 014 / 022 / 030 / 048)

FonCaixa ICO-FTVPO 1 F.T.A

(ES0337680005 / 013 / 021 / 039 / 047)

Foncaixa Empresa 1 F.T.A

(ES0337662003 /011/029/037/045/056/060)


(ES0338182001 / 019/ 013)


(ES0338198007 / 15)


(ES0338199005 / 013)


(ES0337805008 / 016 / 024)


(ES0337982005 / 013 / 021)


(ES0337679007 / 015 / 023 / 031)

FPPYME Andaluz F.T.A

(ES0364815003 / 011 / 029 / 037)


(ES0337969002 / 010)


(ES0338177001 / 019 / 013)

23

(1) Includes Multiname Covered Issuances

Data in Million € Source: CaixaBank

Covered Bond Issues: Maturity Profile (1)

4,778

6,947

5,226

6,053

4,043

3,137

2,621

329

3,309

1,387

500

0

0

0450

193 9020

1,018

418

1,316

29

1,729

2,2342,532

3,500 541

2,031

4,000

3,500

2,353

4,2501,750

0

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

20

25

20

26

20

27

20

28

20

31

20

37

20

38

20

48

Public Issues Retained Issues

24

(1) Data in Million €, excluding retained issues Source: CaixaBank

Institutional Caixabank’s Issues: Maturity Profile 1

7,375

8,040

6,680

7,196

4,023

3,137 2,806

329

3,309

1,426

500

2,475

610 450193 90 2020

--

1,000.00

2,000.00

3,000.00

4,000.00

5,000.00

6,000.00

7,000.00

8,000.00

9,000.00

Senior Debt (includes GGB) Covered Bonds Subordinated debt/Preferred Stock Other

INSTITUTIONAL DEBT OUTSTANDING1: 48.834 € Mn

25 25

CaixaBank’s Public Issues 2013

Demonstrated access to international debt capital markets, managing cost and market timing

Sources: Bloomberg

Stats:

Book/Orders 5000/320

Non Spanish Allocation 82%

Real Money Accounts 81%

Issuer RatingDeal

Size (€ Mn)

Maturity

(years)Spread Coupon Stats

M/S&P/F Book / orders

Banco Popular Ba1/BB/BB+ 750 2.5 MS+362 4.00% 1300/176

CaixaBank Baa3/BBB-/BBB 1,000 3 MS+285 3.25% 5000/320

BBVA Baa3/BBB-/BBB+ 1,500 5 MS+295 3.75% 5400/381

Santander Baa2/BBB/BBB+ 1,000 7 MS+275 4.00% 1200/200

Issuer RatingDeal

Size (€ Mn)

Maturity

(years)Spread Coupon Stats

M/S&P/F Book / orders

Bankinter A3/-/A- 500 3.5 MS+220 2.75% 3000

Kutxa Aa3/-/AA- 750 4 MS+220 3.00% 3750/200

Santander Aa3/-/- 2,000 5 MS+195 2.875% 2600/186

Bankinter A3/-/A- 500 5 MS+220 3.125% 700

Sabadell A3/-/- 1,000 5 MS+250 3.375% 3300

Popular Aa3/-/- 500 6 MS+270 3.75% 1100/100

BBVA Aa3/-/- 1,000 10 MS+215 3.875% 3000/160

Spanish Senior Unsecured Issues in 2013

Spanish Covered Bond Issues in 2013

Overview

Balance per LTV-band

Specific Loan and Borrower

characteristics

Main Country regional

Distribution

Cover Pool Information (ex-securitizations) – Residential Assets, as of December 2012

WA Seasoning

(in months)

26

Total Mortgage Loans (ex securitization) (€ k) 99,447,671

Number of loans 1,248,850

Average Loan balance (€) 79,631

Number of Borrowers 1,118,817

Number of properties 1,212,711

WA Seasoning in months 74 6.2 yrs

WA Remaining term in months 267 22.2 yrs

Expected WA life of the portfolio in years 12 yrs

Avg LTV (%) 45.80%

WA LTV (%) 57.90%

Floating Rate loan Interest Rate type: 99.33%

WA Interest Rate (Floating Rate loans) 2.79%

WA Interest Rate (Fixed Rate loans) 5.18%

19.3%

12.9%

17.3%

22.0%

18.1%

3.4% 3.1%2.1%

0.9% 0.3% 0.7%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

90% of the loans with LTV < 80%

88.7%

9.0%1.3% 1.1%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

First Home Second Home Not Owner occupied Other

4%

6%

8%

14%

68%

< 12

≥12-<24

≥24-<36

≥36-<60

≥60

Overview

Balance per LTV-band

Main Country regional Distribution

Cover Pool Information (ex-securitizations) – Commercial Assets as of December 2012

Loan Maturity

27


Number of loans 214,800

Average Loan balance (€) 201,669

Number of Borrowers 104,365

Number of properties 259,462

WA Seasoning in months 62 5.1 yrs

WA Remaining term in months 180 15 yrs

Average LTV (%) 42.76%

WA LTV (%) 57.41%




23%

15%

17%

19%

13%

3%2% 2%

3%

1%2%

0%

5%

10%

15%

20%

25%89% of the loans with LTV < 80%

17%

17%

16%

19%

24%

8%

≤ 5

>5 - ≤10

>10 - ≤15

>15 - ≤25

>25 - ≤50

>50

Overview

Loan Maturity

28

Loans in arrears

Cover Pool Information (ex-securitizations) – Public Sector Assets as of December 2012


Number of loans 6,821

Average Loan balance (€) 1,723,490

Number of Borrowers 1,896

Average exposure to borrowers (€ ) 6,200,381

WA Remaining term in months 88 7.3 yrs

WA Seasoning in months (1)

39 3.2 yrs




<2m 1.00%

≥ 2m - <6m 0.78%

≥ 6m - <12m 0.36%

≥12m 0.51%

15%

7%

7%

16%

55%

< 12

≥12-<24

≥24-<36

≥36-<60

≥60 € k %

< 12 1,803,542 15%

≥12-<24 873,438 7%

≥24-<36 803,379 7%

≥36-<60 1,852,589 16%

≥60 6,422,975 55%

Total: 11,755,923

(1) Negative Outlook 29

Moody’s Investors Service Baa3

BBB-

BBB

P-3

A-3

F2

negative

negative

Long term

Short term

Outlook

A3

AA-

-

Credit Ratings

Mortgage Covered Bonds

Ratings

(1) negative

Appendices

Listed portfolio as of 31st December 2012

Ownership Market Value

(in Million Euros)

Number of shares

Utilities:

Telefónica 5.6% 2,575 252,684,272

Repsol YPF 12.5% 2,400 156,509,448

BME 5.0% 77 4,189,139

International Banking:

GF Inbursa 20.0% 3,042 1,333,405,590

Erste Bank 9.9% 942 39,195,848

BEA 16.4% 1,058 364,746,530

Banco BPI 46.2% 606 642,462,536

Boursorama 20.7% 91 18,208,059

TOTAL: 10,791

30

31

Growing the franchise in a challenging sector and macroeconomic environment

Final remarks

Acquisitions complement organic growth and reinforce market leadership:

Another year of increased market shares and advancing in our strategic goals: above 15% market share in key retail products and 3 M new customers

Execution of M&A transactions is being carried out according to plan

Targets of annual cost synergies confirmed:

• BCIV cost savings of €270 M for 2013, €540 M from 2014

• BdV annual cost synergies of €85 M expected from 2014

Liquidity reinforcement has been a key objective for the year: total available liquidity of €53.1 bn

Leading capital ratios despite BCIV acquisition and liability management exercises:

BIS II Core Capital at 11% (EBA CT1 at 10.4%)

Asset quality stabilises but still impacted by weak macro fundamentals:

Asset quality stabilises post-BCIV integration and coverage maintained at 60%

Good operating performance in a low interest rate environment:

Resilient pre-impairment income demonstrates capacity to generate recurring profits


2013: the key year for execution

APENDIX

32

33

Financial Sector Reform

Additional Provisions & Capital Buffers (1st and 2nd Stages)

Exitings

provisions

+

60% + 20%

Problematic

Assets 50% + 15%

(€176.000Mn)

Exitings

provisions

as of Jan

2012

Land

(€ 25 bn)0%

Building under

Construction

(€ 16 bn)

0%

Funished

Buildings

( € 60 bn)

0%

Personal

Guarantee

& 2nd mortgage

(€ 20.7 bn)

0%

unchanged

35% 0%+

2nd DecreeMay 2012

Generic Provisions Generic Provisions

1st DecreeFeb 2012

Generic Provisions

35%

28%

25% unchanged

unchanged

7%

7%

7%

7%

2nd DecreeMay 2012

1st DecreeFeb 2012

14%

52%

Capital

Buffer

Specific

Provisions

as of Jan

2012

Performing

Assets

(€121,7.000Mn)

Land

(€73 bn)

Building under

Construction

(€ 15 bn)

Funished

Buildings

( € 88 bn)

52%

29%

34

Financial Sector Reform

Creation of the SAREB (“Bad bank”)

PURPOSE:

TRANSFER VALUE:

SCHEDULE:

Segregation of the troubled assets of banks requiring public support for its recapitalization and transfer to an assets management company

o Haircut (on gross carrying amount) : - Loans: 46 % (aprox.) - Foreclosed assets: 63% (aprox.)

Asset Type Haircut

2. Foreclosed Assets 63.10%

New housing 54.20%

Developments in progress 63.20%

Land 79.50%

Asset Type Haircut

1. Loans 45.60%

1.1. Finished housing 32.40%

1.2. Unfinished projects 40.30%

1.3. Urban Land 53.60%

1.4. Other Land 56.60%

1.5. Other with collateral 33.80%

1.6. Other without collateral 67.60%

OCTOBER 2012

Approval RD

Start of review of

assets to be

transferred

Segregation and transfer of Assets

(Group 1 - nationalized entities)

NOVEMBER 2012

Segregation and transfer of Assets

(Group 2)

DECEMBER 2012 ….. JUNE 2013

Presentation of SAREB

Financial results analysis

Consolidated income statement (BCIV consolidated from 1st July ‘12)

Consistent delivery of strong pre-

impairment income:

• NII supported by BCIV contribution and momentum

• Fee line underlines core business strength

• Other income impacted by insurance extraordinaries

• Strict cost control but restructuring effort in full sway

Demanding provisioning schedule

in line with stated targets


35

Good operating performance despite historically low interest rate environment

FY11

Net interest income

Net fees

Income from investments1

Gains on financial assets

Other operating revenue & exp.

Gross income

Total operating expenses

Pre-impairment income

Impairment losses

Profit/loss on disposal of assets and others 2

Pre-tax income

Taxes 3

Profit for the period

Profit attributable to the Group

3,170

1,562

659

343

777

6,511

(3,342)

3,169

(2,557)

547

1,159

(106)

1,053

yoy(%)

22.2

8.9

22.8

32.4

(112.8)

3.5

6.7

0.1

54.2

29.7

(105.4)

(78.3)

FY12

3,872

1,701

809

455

(100)

6,737

(3,566)

3,171

(3,942)

709

(62)

291

229

(1)

230 1,053 (78.2)

1. Includes dividends and income from associates. 2. In 2012 includes the sale & lease-back of branches (€204 M), reinsurance agreement covering the life-risk insurance portfolio (€524 M) and other extraordinary results (€-19

M). In 2011 includes the capital gain for the sale of 50% of SegurCaixa Adeslas (€609 M), the sale of 80% of the Hospital Group (€77 M) and other (€-139 M) 3. Note that income from investments is reported net of tax.

In Million Euros

Minority interest


NII supported by BCIV contribution and rates momentum while funding environment improves

FY11: 3,170

FY12: 3,872

+22.2%

Improved funding conditions largely offsetting lower asset yields In %

Net interest income peaks as lower index rates make an impact: In Million Euros

36

Customer funds

Customer spread stable due to lower retail funding costs

Loans and credits Customer spread

+20.8%

37

Inertia from mortgage book partially offset by spread repricing and positive funding trends

Loan rates (Back vs. front book) Time deposit rates (Back vs. front book)

New production spreads continue to grow Front book credit spreads (%)

Renewal of time deposits at lower rates leads to reduced back book costs Front book time deposits spreads (%)



Recurring fee items continue to reflect underlying core business strength

Net fees In Million Euros

Net fees breakdown In Million Euros

(1) Includes fixed income distribution of €50M (-64%)

FY11: 1,562

FY12: 1,701

+8.9%

Positive trends in fees:

Strong growth in transactional banking

Non-recurrent distribution fees impacted by lower issuance from regional governments

Commissions in mutual funds affected by market and sale of depositary business

Good performance in pensions and insurance

Banking fees1

Mutual funds

Insurance and pension plans

Net fees

yoy (%) FY12

1,354

150

197

1,701

10.4

(4.3)

9.8

8.9

38

1.9%

FY12 FY11

Income from the insurance business 185 479

Excess provisions in the insurance business 320

Deposit guarantee fund contribution (278) (118)

Other income/operating expenses (7) 96

Other operating income (expense) (100) 777

Lower income from insurance activity:

Deconsolidation of Adeslas in June 2011 (-€238 M)

Lower contribution from life-risk premia (sale to Berkshire Hathaway): -€45 M in 4Q and c. €150 M to €50 M (2013-2017e)

39

Growing contribution from investments while changes in consolidation scope impact other revenue


Income from investments supported by higher contribution from associate companies

Other operating revenue affected by changes in scope and non-recurring items

Income from associates1

Dividends2

+22.8%

659

809

+106.3%

-39.6%

In Million Euros

In Million Euros

2011 income from associates impacted by impairments reported by intl’ banking stakes

2012 dividends affected by TEF dividend cut

(1) Income from associates correspond mainly to the stakes in REP, International Banking and the non-life insurance business (2) Includes dividends corresponding to stakes in TEF and BME


Strict cost control but restructuring effort in full sway

40

+

Cost reduction: -0.1% (like-for-like) and -3.5% on a recurrent cost basis1

In Million Euros

2012

BCIV recurring expenses (471)

BCIV restructuring costs (78)

BCIV cost synergies1 104

2011

CABK reorganization expenses

(110)

Adeslas deconsolidation (107)

Cost cutting initiatives more than compensate for BCIV contribution to expenses

Depreciation

General

Personnel

+6.7%

3,342 3,566

Total operating costs In Million Euros

(1) BCIV cost synergies are included for cost comparison on a recurrent basis

(3,125) (3,121)

-0.1%

(3,017)

Like-for-like Recurrent basis

-3.5%


Demanding provisioning schedule back in line with RDL charge guidance

41 (1) Includes provisions for early retirement and other contingent risks (2) Only includes gross fair value adjustments on credit book and foreclosed assets

TOTAL impairments:

€10,299 M

87% of RDL requirements already booked- €900M pending for 1H 2013

Impairment losses

In Million Euros

Booked in 1Q12 (€1.8 bn of generic provision released)

€0.9 bn pending for 1H13

RDL 2/2012

RDL 18/2012

Other credit provisions

Other provisions1

Impairment losses

2,436

1,200

1,970

143

5,749

BCIV Fair Value adjustment2

In Million Euros

Loan Book

Foreclosed assets

Adjustments

3,668

882

4,550



42

Main extraordinary profits generated in 4Q12:

Reinsurance agreement covering

the life-risk insurance portfolio

Sale and leaseback transaction

Gross capital gain:

€524 M

Gross capital gain:

€204 M

Reinsurance agreement with Berkshire Hathaway Life Insurance Company covering the individual life-risk portfolio

Limited to the underwritten portfolio as of December 31st 2012

Berkshire Hathaway has paid a reinsurance commission of €600 M

Sale of 439 branches to a Spanish subsidiary of Mexico’s Inmobiliaria Carso

Aggregate price of €428.2 M

25 yr lease agreement with the seller to continue occupying the buildings sold in the transaction

Av. Diagonal, 621 08028 Barcelona

www.CaixaBank.com

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+34 93 411 75 03

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