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INTEGRATED CORPORATE REPORT [2014] How to navigate around this PDF - Go to main index Chairman CEO XLS - Back - Next - Search Commitments in 2014 and challenges in Print - Download as Excel - Post
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INTEGRATED CORPORATE REPORT [2014] How to navigate around this PDF - Go to main index Chairman CEO XLS - Back - Next - Search Commitments in 2014 and challenges in Print - Download as Excel - Post on Facebook - Post on Twitter - Send Selectable menu with chapters This PDF is configured to be viewed using Adobe Acrobat (version 9). Some functions may not work with other platforms. Translation of a report originally issued in Spanish. In the event of a discrepancy, the Spanish-language version prevails. [2] The UN Global Compact Principles CaixaBank is a member of the United Nations Global Compact and chairs the Spanish Global Compact Network. The Principles of the United Nations Global Compact covered in the text are presented at the beginning of each section of this report, which also serves as a progress report in that regard. The complete corresponding Global Reporting Initiative (GRI) indicators (version G4) are also shown. The GRI has established a series of indicators, now global standards, to measure companies' level of commitment to economic, environmental and social issues. For more information on the indicators, please see Appendix 2. Principle 1 Principle 2 Principle 3 Principle 4 Principle 5 GRI: G4-DMA, G4-15, G4-16, G4-33 Businesses should support and respect the protection of internationally proclaimed human rights. Business should make sure that they are not complicit in human rights abuses. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining. Business should support the elimination of all forms of forced and compulsory labour. Businesses should uphold the effective abolition of child labour. Principle 6 Principle 7 Businesses should support the elimination of discrimination in respect of employment and occupation. Businesses should take a precautionary approach to environmental challenges. Principle 8 Businesses should undertake initiatives to promote greater environmental responsibility. Principle 9 Business should encourage the development and diffusion of environmentally friendly technologies. Principle 10 Businesses should work against corruption in all its forms, including extortion and bribery. NOTE: The non-financial information disclosed in this report has been verified by Deloitte according to the terms set forth in the independent assurance report attached as Appendix 3. Economic and financial information was obtained from the audited 2014 financial statements of the CaixaBank Group, available on our corporate website. [3] [Contents]...[5] from the Chairman and CEO...[10] 1 About us...[12] 1.1 Our mission 1.2 CaixaBank Group structure 1.3 Shareholder structure 2...[23] 2.1 Governance model 2.2 Business ethics 3...[36] 3.1 Results of the Strategic Plan Strategic Plan 4...[46] 4.1 What we do: the nuts and bolts of our business model 4.2 How we do it: corporate culture 4.3 why we do it: commitment to people and communities 5...[124] 5.1 Global risk management 5.2 Credit risk management 5.3 Market risk management 5.4 Interest rate risk management 5.5 Liquidity risk management 5.6 Operational risk management 5.7 Compliance risk management 5.8 Reputational risk management 5.9 Actuarial risk management 5.10 Legal and regulatory risk management 5.11 Equity position risk management 5.12 Risk control financial reporting and results...[155] 6.1 Milestones during the year 6.2 Results 6.3 Business activity 6.4 Quality of loan book 6.5 Capital management 6.6 Ratings 7 Commitments in 2014 and challenges for [170] 7.1 Commitments in Challenges for 2015 :...[183] 1. Materiality study 2. Summary of GRI indicators 3. Assurance report [4] Caixa aixa gells gells Relevant information Share price performance XLS [] GRI: G4-9, G4-EC1 Strong commercial capacity, with a leading multichannel management approach Català Català Millor Banc Banc del del Món Món Millor en Innovació Innovació Tecnològica Tecnològica en 2013 i i 2014 Millor Innovació Banc amb l Esperit l Esperit més Millor Innovació amb més Go-to bank for nearly 1 in Banc 4 banking customers in Spain del Món Món en en Canals Canals del Tecnològics Tecnològics Most extensive branch network in Spain 5,251 9, million Mejor Banco del del Mundo Mundo Mejor Banco customers en Innovación Innovación Tecnológica Tecnológica en 2013 yy Online banking 10.0 branches Castellà Castellà Innovador del del Món Món Innovador Millor Innovació Innovació en en Millor Productes ii Serveis Serveis Productes 2013 ii million customers under contract ATMs Mejor Innovación Innovación Mejor del Mundo Mundo en en Canales Canales del Tecnológicos Tecnológicos Certificat Europeu Europeu Certificat de Màxima Màxima Excel lència Excel lència de en la Gestió en la Gestió Mobile banking 3.4 million active customers Banco con con el el Espíritu Espíritu más más Banco Innovador del del Mundo Mundo Innovador Mejor Innovación Innovación en en Mejor Productos y Servicios Productos y Servicios 2013 yy Payment methods Millor Banca Banca Privada Privada Millor d'espanya d'espanya Employees , ,240 million cards people PoS installed Certificado Europeo Europeo Certificado de Máxima Máxima Excelencia Excelencia de en la la Gestión Gestión en Mejor Banca Banca Privada Privada Mejor de España España de Prepared to lead the sector in trust and profitability Anglès Anglès Best Retail Retail Bank Bank Best for Technology Technology Innovation Innovation for 2013 and and Technology Products Products Technology of the the Year Year of Delivery Channels Channels Delivery Winner Winner Bank with with the the Most Most Innovative Innovative Bank Spirit in in the the World World Spirit Best Product Product and and Best Service Innovation Innovation Service 2013 and and European Certificate Certificate European of Excellence Excellence of in Management Management in Best Private Private Banking Banking Best Services in in Spain Spain Services [5] Relevant information Share price performance Commercial strength, boosting market share in main products and services Sustained ability to generate revenue and cut costs Total funds Gross loans 271, ,185 million million Chg. Sector Chg. Sector* +5.2% +3.9% -4.8% -5.2% Net interest income 4,155 million Chg. +5.1% Net fees and commissions 1,825 million Chg. +3.7% Direct deposit of salaries 23.1% *Source: la Caixa Research (change in ORS loans + public administration loans) Direct pensions deposits 20.0% Market share* and ranking Card turnover 21.4% POS turnover 24.8% Life-savings insurance 21.7% Demand deposits 15.5% Demand + time deposits (ORS) 14.4% Recurring operating expenses 3, %* million Chg. -4.4% Recurring pre-impairment income 1 st 1 st 1 st 1 st 1 st 1 st 1 st Robust results SNCE (electronic settlement system) Mortgage loans Loans (SPR) Pension plans Commercial loans Mutual funds** Factoring and reverse factoring 1 st 1 st 1 st 1 st 2 nd 2 nd 3 rd 16.0% 15.9% 15.1% 19.9% 18.2% 15.3% 19.6% 620 million Profit attributable to the Group Chg %** *December 2014 Source: Bank of Spain **Ranked #1 including the impact of Barclays Bank SAU *In 2013, did not include -267 million for the impact of the new recognition of Deposit Guarantee Fund contributions, nor -839 million in Group restructuring costs. **The 2013 income statement has been adjusted in accordance with the new recognition of contributions to the Deposit Guarantee Fund, in application of IFRIC 21 and IAS 8. [6] Relevant information Share price performance Prudent risk management with adequate coverage High coverage ratios Risk management 55% for NPLs 55% for available-for-sale foreclosed real estate assets Reduction in non-performing loans in the past year Real estate commercial activity 5,255 M 2,512 M Financially sound: high liquidity and solvency levels Liquidity Solvency 56,665 million 30,740 M Unused ECB discount facility 25,925 M Balance sheet liquidity Loan-to-deposits Leverage ratio 12.1% CET1 fully loaded 104.3% 5.7% 13.0% CET1 [7] Relevant information Share price performance [CaixaBank shares] Trend in share price vs. indices / % gain or loss in shares 15.1% -4.9% Gains in CaixaBank shares 3.7% 15.1% 1.2% in 2014 Dec. 13 Dec.14 CaixaBank Spanish banks* Ibex 35 Eurostoxx, European banks * Spanish banks: Internally-prepared peer share price index (Bankia, Bankinter, BBVA, Popular, Sabadell and Santander), weighted by daily market capitalisation. Key indicators Market capitalisation Closing Share price Book value per share (fully diluted) ( ) (*) Share price/tangible book value 24, million P/TBV fully diluted *Treasury shares at 31 December 2014 have been deducted. [8] Relevant information Share price performance Position in sustainability indices Analysts 30 national and international brokerage companies cover CaixaBank (at 31 December 2014) Hold 33% Buy 57% Sell 10% Outstanding leadership in retail banking in Spain, a solid franchise, and a healthy balance sheet 90% 4.98 of analysts have issued hold or sell recommendations per share: average target price Shareholder remuneration CaixaBank scrip dividend programme 0.20 per share 4.6% 4.5% Quarterly payout through the scrip dividend programme Dividend yield considering share price at 31 December 2014 above average share price in 2014 Shareholders can chose one of the three options or a combination thereof Remuneration in shares Option Option Option A (default option) B Receive shares from the Receive cash by selling the Receive cash by selling the bonus share issue free subscription rights free subscription rights (NO TAX WITHHOLDING) allocated in the scrip issue allocated in the scrip issue to on the market CaixaBank C (NO TAX WITHHOLDING) Remuneration in cash (TAX WITHHOLDING) [9] CHAIRMAN CEO [ Letter from the Chairman] Isidro Fainé Casas In 2014, the la Caixa Group became the new Fundación Bancaria Caixa d Estalvis i Pensions de Barcelona (the la Caixa Banking Foundation), not only adapting to the Laws on Savings Banks and Banking Foundations, but also reinforcing our values and foundational commitment. As a result of this transformation, the la Caixa Banking Foundation now manages the welfare projects directly, while through Criteria CaixaHolding manages all the equity investments. Dividends received by Criteria from its investments provide the funding for the welfare projects. The welfare projects are the soul of the la Caixa Group and CaixaBank its heart and the structure s main muscle. More than 40 thousand activities were carried out in 2014 benefiting over nine-and-a-half million people. The welfare projects budget for 2015 is once again 500 million, for the eighth consecutive year was also a good year for CaixaBank. Amid moderate growth, strong commercial efforts enabled us to sustain business volume and increase net interest income even with interest rates at abnormally low levels. Significant efforts were also required during the year to strengthen capital, with an increase in the Common Equity Tier 1 (CET1) BIS III ratio of 112 basis points (bp) to 13.0%. On a fully loaded basis, the ratio increased by 79bp to 12.1%. This resilience was underscored in the results of the European Central Bank s asset quality review and stress tests of European banks. Performing an internal exercise, the same methodology was applied to CaixaBank, leading to one of the best results of the largest European banks by market capitalisation, with a CET1 of 10.3% in the adverse scenario. As for the share price, CaixaBank has outperformed both the Ibex 35 and its domestic and European peers over the past two years. In 2013, it rose between 19 and 25 percentage points (pp) higher than its benchmark indices. And 2014 was another stellar year, with the stock notching up a 15.1% gain compared to a 2.5% advance by Spanish banks, a 4.9% drop by European banks and a 3.7% increase by the Ibex. We also completed our Strategic Plan last year, cemented our leadership in banking in Spain, with 13.4 million customers. By actively managing liquidity and solvency, we have bolstered our financial ratios substantially each year and passed the assessments carried out by the supervisors. We are firmly committed to quality of service, making better use of new technologies. And this has garnered international recognition. We have achieved a more geographically diversified balance sheet and expanded our footprint in non-core areas for the bank, which has been reinforced with the acquisition in early 2015 of Barclays Bank SAU. Lastly, we have laid the foundations for growth in the new Strategic Plan, which focuses on quality, reputation and customers. I would particularly like to thank our customers -as well as the rest of our stakeholders- for the trust they have placed in us. Without them, the CaixaBank project would not be able to continue marching forward as strongly as it is. GRI: G4-1, G4-DMA [10] CHAIRMAN CEO XLS [ Letter from the CEO] The world economy continued to grow in 2014, with significant improvement in advanced economies, but slower growth in emerging market economies. In the eurozone, on top of the positive impact of the drop in oil prices, two other factors are aiding recovery: improved funding conditions and the euro s depreciation. As for the banking system, the key highlight of 2014 was the start of operation of the banking union. Now, the tail end of the crisis and the start of recovery are taking place simultaneously. Against this backdrop, CaixaBank has continued to reinforce its leadership position in Spain, growing its market shares across the main products and services. This enabled it to keep up its strong commercial efforts last year despite the major private sector deleveraging, with a 5.2% increase in customer funds offsetting a 4.8% fall in the lending portfolio. Our business model is underpinned by a quality value proposition, specialisation by segment and a unique reach that affords us a huge competitive advantage; i.e. the most extensive network of branch offices and online channels. These channels have been recognised internationally and have achieved higher penetration rates than traditional channels. We also have a keen ability to innovate, with an highly skilled team that has shown its commitment and skill to cope with one of the worst crises ever seen. CaixaBank continued to launch initiatives targeting specific segments with strong potential in 2014, such as small businesses and the agrarian sector. We also stepped up the digitalisation of processes and the mobility of banking transactions outside the office, so commercial managers can physically go where customers demand and offer full banking functionality. The intense commercial drive led to a 9% increase in gross income which, combined with a 4.4% reduction in recurring expenses, fed through to a sharp 18% increase in recurring pre-impairment income, to 3,167 million. Other priorities last year were to strengthen solvency and asset quality. We raised our fully loaded CET1 BIS III ratio by 79bp to 12.1% -one of the highest of any bank in the eurozone- and lowered non-performing loans (NPLs) by 21%, feeding through to a sharp decline in the NPL ratio (of nearly 2pp) for the first time in years. We have emerged from crisis bigger and ranked number one in the banking market. Looking ahead, we must continue to work in the same direction to retain our leadership in this new chapter in our history. Gonzalo Gortázar Rotaeche GRI: G4-DMA [11] 1 1.1 Our mission 1.2 CaixaBank Group structure 1.3 Shareholder structure Our mission CaixaBank Group structure XLS Shareholder structure [1.1 Our mission] We are not just a bank. We are CaixaBank The essence of our mission is to serve people and drive economic and social development in the widest sense in the regions in which we operate. Isidro Fainé, Chairman The leading financial group in the Spanish market. A group that is useful to society, ethically committed, technically efficient, close to people. We want CaixaBank to be the leading bank in terms of quality service, the trust our customers place in us, our commitment to individuals and to our communities, and our long-term vision. Gonzalo Gortázar, CEO Our raison d'être Respect for our code of ethics and staying true to our founding values QUALITY, TRUST AND SOCIAL COMMITMENT WHAT WE DO HOW WE DO IT WHY WE DO IT Financial business Diversified business Excellence Proximity Specialised management Tailor-made value proposal for each segment Internationalisation We stand side-by-side our customers and diversify risk Conscientious management and highquality service Wide reach and dedication to local communities Multi-channel management At the forefront of the sector thanks to our leadership in technological innovation Investments We diversify earnings through investments in strategic sectors Innovation Substantial technological capability and forwardthinking approach Talent Historical commitment to people and society Positive impact of our activity from an economic, environmental and social perspective Highly-qualified professionals Strategic Plan: Five challenges Lead the sector in terms of customer trust and profitability [13] Our mission CaixaBank Group structure Shareholder structure [1.2 CaixaBank Group structure] CaixaBank is the leading integrated financial group in Spain engaged in banking and insurance activities, while holding stakes in international banks and in leading service sector companies. CaixaBank provides banking and insurance services through a number of subsidiaries that contribute to achieving the bank s commercial targets and ensuring a high level of customer service excellence, provided through their own operations or by offering operational support to the banking activity. It also benefits from several support companies that complement and bolster its commercial offering and end-to-end service. Financial business Banking and insurance group International banks Diversified business Industrial stakes Insurance business Specialised financial services Support companies and others VidaCaixa AgenCaixa SegurCaixa Adeslas CaixaCard FinConsum CaixaRenting MicroBank InverCaixa Gestión GestiCaixa BuildingCenter e-la Caixa GDS Cusa PromoCaixa Silk Aplicaciones Sumasa [14] Our mission CaixaBank Group structure Shareholder structure XLS Insurance business CaixaBank enhances its portfolio of banking products and services with specialised life insurance, pension and general insurance products, through VidaCaixa and SegurCaixa Adeslas. VidaCaixa VidaCaixa offers a wide range of insurance and pension plan products, through specific offices, CaixaBank branches and electronic channels. The company personalises its service for individual customers and offers VidaCaixa Previsión Social products for large companies and groups. Its product portfolio includes risk-life insurance for individuals and businesses, and a wide range of pension plan and life-savings insurance products. SegurCaixa Adeslas CaixaBank holds an ownership interest in SegurCaixa Adeslas, a non-life insurance company integrated in the Mutua Madrileña Group. SegurCaixa Adeslas is at the forefront of the health insurance sector, with a market share above 27%. It also offers home, accident, auto and funeral insurance, among other products. At the end of 2014, SegurCaixa Adeslas had 5.3 million customers, 3.4 million of which held health insurance policies. 100% 49.9% 50% Further information on SEGURXAIXA ADESLAS (1) 0.08% held by non-controlling interests At the end of 2014, VidaCaixa had 3.8 million insurance and pension plan customers. It manages 54,856 thousand million, up 10% on the 2013 figure. VidaCaixa manages its investments in accordance with the United Nations Principles for Responsible Investment (UNPRI). Further information on VidaCaixa and socially-responsible investments in section 4.1 Specialised management and 4.3 Towards a sustainable economy. Further information on VidaCaixa [15] Our mission CaixaBank
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