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MarketScreener Homepage  >  Equities  >  Bolsa de Madrid  >  CaixaBank, S.A.    CABK   ES0140609019

CAIXABANK, S.A.

(CABK)
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News SummaryMost relevantAll newsPress ReleasesOfficial PublicationsSector news

CaixaBank S A : files 1st half results presentation for 2020. Webcast.

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07/31/2020 | 01:21am EDT

2Q 2020

Results

31 July 2020

Disclaimer

The purpose of this presentation is purely informative and should not be considered as a service or offer of any financial product, service or advice, nor should it be interpreted as, an offer to sell or exchange or acquire, or an invitation for offers to buy securities issued by CaixaBank, S.A. ("CaixaBank") or any of the companies mentioned herein. The information contained herein is subject to, and must be read in conjunction with, all other publicly available information. Any person at any time acquiring securities must do so only on the basis of such person's own judgment as to the merits or the suitability of the securities for its purpose and only on such information as is contained in such public information set out in the relevant documentation filed by the issuer in the context of such specific offer or issue and after taking any professional or any other advice as it deems necessary or appropriate under the relevant circumstances and not in reliance on the information contained in this presentation.

CaixaBank cautions that this presentation might contain forward-looking statements concerning the development of our business and economic performance. Particularly, the financial information from CaixaBank Group for the year 2020 related to results from investments has been prepared mainly based on estimates. While these statements are based on our current projections, judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations. Such factors include, but are not limited to, the market general situation, macroeconomic factors, regulatory, political or government guidelines and trends, movements in domestic and international securities markets, currency exchange rates and interest rates, changes in the financial position, creditworthiness or solvency of our customers, debtors or counterparts, etc. These risk factors, together with any other ones mentioned in past or future reports, could adversely affect our business and the levels of performance and results described. Other unknown or unforeseeable factors, and those whose evolution and potential impact remain uncertain, could also make the results or outcome differ significantly from those described in our projections and estimates.

Statements as to historical performance, historical share price or financial accretion are not intended to mean that future performance, future share price or future earnings for any period will necessarily match or exceed those of any prior year. Nothing in this presentation should be construed as a profit forecast. In addition, it should be noted that although this presentation has been prepared based on accounting registers kept by CaixaBank and by the rest of the Group companies it may contain certain adjustments and reclassifications in order to harmonize the accounting principles and criteria followed by such companies with those followed by CaixaBank. Accordingly, and particularly in the case of Banco Português de Investimento ("BPI"), the relevant data included in this presentation may differ from those included in the relevant financial information as published by BPI.

In particular, regarding the data provided by third parties, neither CaixaBank, nor any of its administrators, directors or employees, either explicitly or implicitly, guarantees that these contents are exact, accurate, comprehensive or complete, nor are they obliged 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 by any means, CaixaBank may introduce any changes it deems suitable, may omit partially or completely any of the elements of this presentation, and in case of any deviation between such a version and this one, CaixaBank assumes no liability for any discrepancy.

In relation to Alternative Performance Measures (APMs) as defined in the guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority on 30 June 2015 (ESMA/2015/1057), this presentation uses certain APMs, which have not been audited, for a better understanding of the company's financial performance. These measures are considered additional disclosures and in no case replace the financial information prepared under the International Financial Reporting Standards (IFRS). Moreover, the way the Group defines and calculates these measures may differ to the way similar measures are calculated by other companies. Accordingly, they may not be comparable. Please refer to the Glossary section of the Business Activity and Results Report January - June 2020 of CaixaBank for a list of the APMs used along with the relevant reconciliation between certain indicators.

This presentation has not been submitted to the Comisión Nacional del Mercado de Valores (CNMV - the Spanish Stock Markets regulatory authority) or to any other authority in any other jurisdiction for review or for approval. Its content is regulated by the Spanish law applicable at the date hereto, and it is not addressed to any person or any legal entity located in any other jurisdiction and therefore it may not be compliant with the relevant regulations or legal requirements as applicable in any such other jurisdiction.

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

Presentation prepared with Group data at closing of 30 June 2020, unless otherwise noted

2

Hereinafter "CABK" refers to CaixaBank stand-alone while "CABK Group" or "Group" refers to CaixaBank Group

2Q20 HIGHLIGHTS

A resilient franchise backed by a strong balance-sheet

Market-share gains continue throughout the crisis

-with activity rebounding post lock-down

LONG-TERM

SAVINGS(1) MARKET SHARE

(Spain)

23.1%

+53 bps ytd

BUSINESS

LENDING MARKET SHARE

(Spain)

16.2%

+82 bps ytd

Continued commitment to support clients and the economic recovery

LOAN-

PAYMENT MORATORIA(2)

€15.5Bn

6.4%

of loan-book

GUARANTEED €13.7Bn

STATE

ICO-LOANS

o/w c.€11 Bn

PROCESSED(3)

outstanding 2Q eop

20-21E cost targets reduced with over €300M in cost-savings vs. Strategic Plan

RECURRENT

< -2%FY20Eyoy

FY21E COST-

€300M+

COSTS

SAVINGS VS.

-3.9%2Q yoy

STRAT. PLAN

Conservative provisioning approach with frontloading of FY20E CoR in 1H

-while maintaining solvency ratios well above target

€819M 2Q20(4)

12.3%

LLCs

% CET1

NPL coverage ratio

11.8% ex

up to 63%, +8pp ytd

transitional IFRS 9

Net income of €115M in 2Q (+31% yoy) and €205M in 1H (-67% yoy) with RoTE (TTM) at 5.6%

(1)

Mutual funds, pension plans and life-saving insurance.

(3)

Including loans already disbursed, granted or with application in process.

(2)

Including CABK and BPI.

(4)

Including €755M in reserve build for COVID-19, for a total of €1,155M in 1H20.

3

CORPORATE TRANSACTION - July 2020

Agreement to sell 29% of Comercia JV to Global Payments

New JV structure and main financial impacts

Comercia Global Payments JV, new ownership structure

20%

80%

Sale Price

€493M

Capital gain (post-tax)

€410M

Forgone FY21E equity-accounted income

-€14M

% CET1(1)

+19 bps

BACKGROUND

  • Global Payments (GP) is a leading worldwide provider of payment technology and software solutions with a US$51Bn market cap
  • CaixaBank and GP have jointly owned Comercia Global Payments (CGP) for the last 10 years, successfully increasing its merchant acquiring market share in Spain from ~21% to ~27%

TRANSACTION DETAILS

  • Sale of 29% stake in Comercia Global Payments (CGP) to Global Payments for a cash consideration of €493M
  • The existing commercial agreement is to remain in place, with a continued commitment to product innovation and growth strategy
  • Closing expected in 2H20

TRANSACTION RATIONALE

  • By retaining a 20% stake, we maintain a key strategic partnership in an industry increasingly dominated by technology
  • Focus on continue providing cutting-edge payment solutions to our clients
  • Monetise part of our stake at high valuation levels, seizing the multiple differential
  • Selling a minority stake in a business where we already had a non-controlling stake

CGP is a clear leader in Spain

27.2%

~480K

Merchant

PoS terminals

acquiring

(Spain)

market share(2)

Retaining 20% of the JV allows CABK to maintain significant influence in a successful alliance

(1)

Including accrual of dividends (considering 43% payout).

4

(2)

Market share by PoS turnover (Spain). FY19 POS turnover at ~€55Bn.

Contents

01

02

03

OUR REACTION

2Q20 QUARTERLY

FINAL

TO THE CRISIS

REVIEW

REMARKS

5

REACTION TO COVID-19 CRISIS

Swift reaction to an unprecedented crisis

CaixaBank response

01.

Gaining market share while activity rebounds post lock-down

02. Continued efforts to manage costs down

03. Reinforcing COVID-19 reserve build while frontloading FY20E CoR

6

GROWING MARKET

REACTION TO COVID-19CRISIS01. SHARES WHILE ACTIVITY REBOUNDS

Market-share gains continue throughout the crisis

Market share (%) and

ytd (bps) in key products(1)

(Spain)

Life

28.4%

+32

insurance

Mutual

+45

17.5%

funds

Pension

26.0%

+47

Plans

Long-term

23.1%

+53

savings(2)

Payrolls(3)

27.5%

+37

Rapid growth in business volumes

Performing loans, qoq

5.1%

1.6%

2.3%

0.5%

Jun-17

Jun-18

Jun-19

Jun-20

Customer funds,

qoq

6.4%

4.2%

3.2%

3.1%

Jun-17

Jun-18

Jun-19

Jun-20

Credit to

private

16.2%

+c.30

sector(4)(5)

Business

16.2%

+82

lending(4)

Increased relational client base

Relational individual

61.0% Jun-19

62.3%

Jun-20

clients(6) (Spain),

+1.3pp yoy

% of total

Market-share gains and customer loyalty contribute to revenue sustainability

Remained fully operational throughout lock-down

Excellence in

Leadership

Western Europe 2020

  1. Sources: BoS, INVERCO, ICEA, Social Security. Latest available data. (2) Own calculations based on INVERCO and ICEA data. Market share in Spain in mutual funds managed by CaixaBank AM, pension plans and estimate in saving insurance market share. (3) Internal estimate considering clients with payroll deposits at

CABK impacted by working furlough. (4) Credit to other resident sector. (5) Own calculations based on Bank of Spain data. (6) Individual clients with 3 or more

7

product families.

GROWING MARKET

REACTION TO COVID-19CRISIS01. SHARES WHILE ACTIVITY REBOUNDS

More confidence in recovery leg as activity levels rebound

CABK (ex BPI) - selected indicators

Macro outlook worsened versus Q1

Activity rebounds strongly after lock-down

Weekly credit card turnover(1), % yoy

Net inflows into long-term savings(2) (ex markets), €M

Spain Real GDP, rebased to 100=FY19

105

100

100%

50%

Supermarkets & food stores

+32%

703

296

135

100

95

95

90

85

86

80

75

2017

2018

2019

2020E

2021E

Current base case

Q1 Base case

Macro forecasts as of July 2020. Source: CaixaBank Research.

TOTAL

0%

+7%

-13%

-50%

Hotels,

restaurants &

leisure

-100%

14-Jan13-Feb14-Mar13-Apr13-May12-Jun12-Jul

New mortgage lending per month, €M

379

334

314239

155

Jan-Feb avg.

March

April

May

June

-160

-629

Jan-Feb avg.

March

April

May

June

New consumer lending per month(3), €M

753

582

509332

229

Jan-Feb avg.

March

April

May

June

  1. Including transactions with CaixaBank credit and debit cards (Spain). Source: CaixaBank Business Intelligence.
  2. Including savings insurance, mutual funds (with managed portfolios and SICAVs) and pension plans.
  3. Unsecured loans to individuals, excluding those for home purchases.

8

GROWING MARKET

REACTION TO COVID-19CRISIS01. SHARES WHILE ACTIVITY REBOUNDS

Activity in 2Q focused in supporting our clients

LOAN MORATORIA

GOVERNMENT GUARANTEED LOANS

Loan-payment moratoria(1) -as of 30 June 2020, €Bn

CABK only(5) - ICO loans - as of 30 June 2020, €Bn

95%

54%

16.7

15.5

Performing

Avg. LTV-mortgages(2)

13.7

~€13Bn

10.6

10.6

9.8

8.6

5.7

ICO-guarantees

Total granted or

allocated to CABK (of

Total granted

o/w CABK

o/w BPI

ICO-loans

Guarantee

ICO-loans

Guarantee (8)

total €100Bn for the

in analysis

processed (6)

outstanding (7)

sector)

% of loan-book(3)

6.4%

4.5%

22.7%

# of weekly applications (in thousands) -

CABK ex BPI

ICO-loans outstanding, by segment

90

68.7%

80% guarantee

75

>519K

for SMEs and

60

SMEs

self-employed

60-70%for

45

€10.6Bn

30

Applications for

corporate

15

moratoria(4)

in Spain

9.6%

21.7%

& Portugal

78% Average

0

Self-employed

Corporate

(8)

28-Mar

18-Apr

09-May

30-May

20-Jun

guarantee

(1) Excludes applications rejected by the Bank or declined by the client. (2) CABK ex BPI. (3) Total granted in % of loan-book (Group, CABK, and BPI-segment).(4) Number of contracts, including 412.1K in Spain and 107.1K in Portugal. Considering applications granted or under analysis. (5) Additionally, BPI has processed €0.5Bn in COVID-19 public lines (disbursed, granted or with application in process), of which €0.3Bn outstanding as of 30 June 2020. (6) Including loans disbursed, granted or with application in process. (7) Additionally, as of 30 June 2020, CABK has granted €455M still not drawn down by clients (as of 30 June 2020). (8) Guarantee over total ICO-loans granted as of 30 June 2020 (€11.0Bn of which €10.6Bn outstanding).

9

GROWING MARKET

REACTION TO COVID-19CRISIS01. SHARES WHILE ACTIVITY REBOUNDS

Benefitting from our digital and remote capacities

Use of digital keeps growing

Digital clients(1) (Spain), in % of total

64.7%

+3 pp

In 6 months

61.7%

+3.0 pp

59.4%

+2.3 pp

57.3%

55.2%

+2.1 pp

+2.1 pp

53.1%

+2.1 pp

Dec-17Jun-18Dec-18Jun-19Dec-19Jun-20

+c.30%

# of clients with

daily connections

to "Now"(2), Jun-

20/Jun-19

c.40%

# Mutual fund

digital

sales through

+c.25 pp yoy

channels, % of

total, 1H20

2.1M

enrolled in

Credit cards

+58% yoy

mobile phones,

Jun-20

With c.70% of digital clients also using branches or remote advisory

  • of digital clients that also use branches or remote advisory, Jun-20

67%

1.4M clients (Jun-20)

+c.35% calls/week(3) during lock-down

IT prowess and best-in-classomni-channel distribution network underscored by experience in lock-down

(1) Individual customers aged 20-74 years old with at least one transaction through digital channels in the last 12 months. (2) Online and mobile banking. (3) Average/week in April vs average/week in February and first half of March.

10

GROWING MARKET

REACTION TO COVID-19CRISIS01. SHARES WHILE ACTIVITY REBOUNDS

Re-launch of imagin

Digital service and lifestyle platform to promote loyalty amongst younger clients

2016

2017

2018

2019

2020

From an exclusively mobile bank to a lifestyle community platform

Three differentiated value-proposals according to age demographic

0-11 years old

12-17 years old

From 18 years old

Launch of

New products and

Financial education

First purchases &

Mobile community

"mobile only" bank

services - learning

finance management

-with no fees

by doing

A high % of young

Digital services and

Offering financial and non-financial products

clients are digital

lifestyle platform for

Featuring digital contents and experiences

82%

2.6M

New services: imaginShop, imaginMusic, imaginGames and imaginPlanet

of GY-individual clients(1)

of current clients

Simple onboarding process with a user registration on the platform

(1) Individual clients 25-35 years old with at least one transaction through digital channels in the last 12 months. June 2020.

Innovation, simplicity and transparency

Re-launch of imagin provides glimpse into the future

11

02. CONTINUED EFFORTS

REACTION TO COVID-19 CRISISTO MANAGE COSTS

DOWN

20-21E cost targets reduced with €300M+ in cost-savings vs. Strategic Plan

FY20 cost guidance revised to <-2% yoy

Better trajectory than 19-21 Strategic Plan with savings across the board

Recurrent cost base evolution and ambition, €M

Recurrent cost base evolution, €M

Additional cost-savings vs. Strategic Plan - main initiatives

~ 1%



CAGR

Higher # of departures

~ (90)

Wage containment

~5,065

~ (190)

Personnel

Personnel

~ (20)

IT, operations and facility

4,634

4,771

<4,676

< 4,771

General

efficiencies (e.g. renegotiation of

Depreciation

< 4,771

large supplier contracts)

4,634

Marketing, communication

Travel, events and other

<-2.0%

General

discretionary expenses

Revising previous

€300M+

guidance of "<>

Prioritisation and overall capex

FY18

FY19

FY20E

FY21E

FY18

FY21E

Additional

FY21E

optimization while protecting

change-the-bank initiatives

cost-savings

Strategic Plan

Current

Depreciation

~ 3%

+2.9%

CAGR

Ambition for positive 2020 core operating jaws

12

03. REINFORCING COVID-19

REACTION TO COVID-19CRISISRESERVE BUILD WHILE FRONTLOADING FY20E COR

Reinforced NPL coverage with frontloading in 1H of FY20E CoR

Reinforced NPL coverage

% NPL coverage(1)

63%

58%

55%

54%

YE18 YE19 Mar-20Jun-20

Loan-loss

€5.8 Bn

allowances

+19% ytd +11% qoq

Building additional reserves for COVID-19 impacts

-with frontloading of FY20e CoR in 1H

Expect to be

COVID-19top-down reserve build, €M

FY20e CoR, bps

closer to the

1,155

upper bound

of range

90

755

60-90

7-37

60

400

53

1Q20

2Q20

Total 1H20

(2)

FY20E CoR Guidance

1H20

2H20E

Approach based on weighted-average of macro scenarios

Base

Upside

Adverse

IFRS9-Model scenarios (real GDP, % yoy) and weight by scenario(3)

60%

20%

20%

SPAIN

2020E 2021E

-14%+11%

-12%+11%

-17%+10%

PORTUGAL

-12%+8%

-9%+8%

-15%+7%

2020E 2021E

Facing the crisis from a reinforced position of strength

(1) Ratio between total impairment allowances on loans to customers and contingent liabilities over non-performing loans and advances to customers and contingent liabilities. (2) LLCs in 1H20 over average loans and contingent

13

liabilities in 1H20. (3) Refer to the appendix for additional details.

Contents

01

02

03

OUR REACTION

2Q20 QUARTERLY

FINAL

TO THE CRISIS

REVIEW

REMARKS

14

2Q20 QUARTERLY REVIEW

Strong loan-book growth underpinned by ICO-loans and seasonality

Loan book

Breakdown, €Bn

30 Jun 20

% ytd

% qoq

I. Loans to individuals

124.2

(0.1)

1.0

Residential mortgages

86.8

(1.9)

(0.9)

Other loans to individuals

37.3

4.1

5.8

o/w consumer loans(1)

14.3

(2.8)

(3.7)

o/w other(2)

23.0

8.9

12.7

II. Loans to businesses

105.9

15.9

12.5

Businesses ex RE developers

99.8

17.0

13.2

Real estate developers

6.1

0.8

1.6

Record loan-book growth driven by GGLs(3)

Performing loan book, % ytd (organic)

6.9%

3.3%

1.6% 1.6%

0.5%

-0.6%

-0.6%

-2.6%

-8.7%

Jun-12Jun-14Jun-16Jun-18Jun-20

Performing loan book ytd, €Bn

+6.9%

+4.8

+10.6

Other

(1.7)

lending to

(0.5)

businesses

219 Mortgages Consumer

ICO loans(3)

Corporate: €2.3Bn

SMEs:€7.3Bn

Self-employed:€1.0Bn

Dec-19

+2.0

Public 234 sector &

other(4)

Jun-20

Individuals & businesses

230.0

6.7

6.0

III. Public sector

12.9

9.9

(9.7)

Total loans

243.0

6.8

5.0

Performing loans

234.1

6.9

5.1

  • Growth attributable mostly to business lending: up +15.9% ytd and +12.5% qoq
  • Non-ICObusiness lending also up +5.5% ytd
  • Mortgages and consumer loans decline although production improves during the quarter
  • Growth in "other credit to individuals" driven by ICO-loans to professionals and 2Q seasonality(2)

(1)

Unsecured loans to individuals, excluding those for home purchases. Includes personal loans from CABK, BPI, MicroBank and

(3) Government-guaranteed loans with guarantee from ICO.

CABK Payments & Consumer, as well as revolving credit card balances (CaixaBank Payments & Consumer) excluding float.

(4) "Other loans to individuals" other than consumer lending and ICO loans to self-employed.

(2)

Includes credit to self-employed. Impacted by positive seasonality in June (pension advances amounting to €1.8Bn).

15

2Q20 QUARTERLY REVIEW

ALCO book declines slightly as selective market opportunities seized

Total ALCO(1)

Group, end of period in €Bn

FV-OCI

AC (2)

Maturity profile supports yields over the medium term

Sovereign exposure

Group ALCO(1) maturity profile, €Bn as of 30 June 2020

Breakdown by main exposures(3), as of 30 June 2020

45.3

43.8

33.7

33.8

32.2

9.5

85%

25.4

24.8

8.5

16.3

16.3

16.3

6.8

19.9

19.0

5.9

7%

17.4

17.5

15.8

3.9

3.6

Jun-19

Sep-19

Dec-19

Mar-20

Jun-20

7%

Yield, %

1.4

1.1

0.3

1.5

0.3

0.8

0.9

0.9

0.7

0.6

0.6

Average life, yrs

2020

2021 2022

2023

2024 2025

2026

2027

2028

2029

2030 >2030

3.1

3.1

3.3

4.2

3.8

1%

Duration, yrs

Avg. yield:

Avg. yield:

2.5

2.4

2.6

3.6

3.2

0.3%

1.0%

  1. Banking book fixed-income securities portfolio and liquidity management portfolio, excluding trading book assets.
  2. Securities at amortised cost.

(3) Sovereign exposures account for 93% of total ALCO book.

16

2Q20 QUARTERLY REVIEW

Customer funds show strong growth across the board

Customer funds

Breakdown, €Bn

30 Jun 20

% ytd

% qoq

I. On-balance-sheet funds

294.3

6.1

5.5

Demand deposits

209.3

10.4

8.5

Time deposits(1)

25.6

(11.7)

(9.2)

Insurance

57.7

0.4

2.0

o/w unit linked

12.2

(0.2)

10.7

Other funds

1.7

28.7

28.1

II. Assets under management(2)

98.6

(3.7)

6.7

Mutual funds(3)

65.6

(4.3)

7.2

Pension plans

33.0

(2.3)

5.9

III. Other managed resources

7.8

66.3

48.2

Total

400.7

4.3

6.4

Total - seasonally adjusted (4)

c.3

c.6

  1. Includes retail debt securities amounting to €1,474M at 30 June 2020.
  2. Off-balance-sheetAuM. Excluding unit linked which are on-balance-sheet funds.
  3. Including SICAVs and managed portfolios.
  4. Adjusted for seasonal items in deposits (extraordinary payroll and pension pre-payment).

2Q growth supported by l/t saving inflows, markets, deposits and seasonality

Customer funds evolution ytd, €Bn

+19.9

AuM(7) avg. balances vs. eop, rebased to 100 = avg. AuM in FY19

+4.3%

2019 Average

104

102

102

AuM =100

(11.5)

400.7

100

101

+0.9

99

100

+7.1

384.3

97

L/t saving

Deposits &

other(6)

Markets

Markets

inflows (ex

market)(5)

1Q(5)

2Q(5)

Markets 1H: (4.3)

1Q19 2Q19

3Q19 4Q19 1Q20 2Q20

2Q20 15-Jul

Dec-19

Jun-20

eop

  • Total customer funds grow by +4.3% ytd (+c.3% adjusting for 2Q seasonality)
  • On-B/Sfunds growth underpinned by insurance, retail deposit seasonality and liquidity-gathering by businesses
  • Off-B/Sfunds recover in 2Q as net inflows resume and markets recover eop AuM already above FY19 avg.
    1. Market impacts in long-term savings. Long-term savings include: saving insurance, mutual funds (including SICAVS and managed portfolios) and pension plans.
    2. Including deposits, other funds and other managed resources. Demand deposits include

positive seasonal items in June.

17

(7) Mutual funds (including managed portfolios and SICAVs), pension plans and unit linked.

2Q20 QUARTERLY REVIEW

Higher core operating income and anticipatory COVID-related LLCs

Consolidated Income Statement

€M

2Q20

2Q19

% yoy

% qoq

Net interest income

1,225

1,241

(1.3)

2.1

Net fees and commissions

608

636

(4.4)

(7.5)

Income and expense insurance/reinsurance

141

134

5.6

(5.8)

Trading

162

213

(24.3)

Dividends

93

151

(38.4)

Equity accounted

41

102

(60.2)

(27.9)

Other operating income/expenses

(136)

(141)

(3.4)

CORE REVENUES IMPACTED BY LOCK-DOWN AND MARKETS

  • Core revenues -1.8%yoy on lower NII and fees partly offset by higher insurance revenues:
  1. NII mainly reflects lower yields yoy but improves qoq on higher volumes and ECB measures
    1. Fees mainly driven by lower e-payments during lock-down with impact of markets on AuM qoq o Life-risk benefits from recurrence of MyBox
  • Higher trading gains partly offset lower income from investments (inc. partial accrual of TEF dividend)

Gross income

2,134

2,336

(8.7)

7.6

Recurring operating expenses

(1,157)

(1,204)

(3.9)

(2.6)

Extraordinary operating expenses

(978)

Pre-impairment income

976

154

22.7

LLPs

(819)

(81)

58.8

Other provisions

(41)

(43)

(6.6)

(71.6)

Gains/losses on disposals and other

(19)

(22)

(12.1)

(39.3)

Pre-tax income

98

8

(7.2)

Tax, minority & other

17

81

(78.7)

Net income

115

89

30.6

29.0

Pro memoria

Core revenues

2,019

2,057

(1.8)

(1.3)

Core operating income(1)

862

853

1.1

0.6

LOWER COSTS ON ADDITIONAL COST-SAVINGS

  • Recurrent expenses decline strongly (-3.9%yoy) on restructuring and other initiatives
  • Core operating income improves slightly underpinned by lower costs
  • Pre-impairmentincome yoy reflects restructuring charges in 2Q19
  • FY20e recurrent cost guidance revised to <-2% yoy

FRONTLOADING OF FY20E CoR IN 1H

  • 1H20 annualised CoR at 106 bps after additional top-down provisions (-€755M in 2Q) in anticipation of COVID-19 impacts

Core operating income(1)

1H20 yoy

+2.6%

  1. Core revenues minus recurrent operating expenses.

18

2Q20 QUARTERLY REVIEW

BPI segment contribution supported by NII and lower operating costs

BPI Segment P&L(1)

Business volume growth in the quarter

BPI - Activity (stock ytd, as reported by BPI) and market shares in Portugal

€M

2Q20

2Q19

% yoy % qoq

Loans

Credit to

Customer

Higher % of digital

businesses

funds

Net interest income

109

101

clients(3)

7.8

0.5

+2.4%

+2.9%

+3.7%

Net fees and commissions

57

67

(14.2)

(5.6)

ytd

ytd

ytd

46%

Other revenues

(5)

(11)

(38.3)

3.0

10.5%

Market

10.3%

Market

10.4%

Market share

+3 pp yoy

Gross income

161

157

2.4

6.2

share(2)

share(2)

in deposits(2)

Recurring operating expenses

(109)

(117)

(6.8)

(6.1)

Pre-impairment income

52

40

29.0

47.3

New COVID backdrop: supporting clients and reinforcing loan-loss allowances

Measures implemented at BPI

Impairment losses & other provisions

(33)

16

Gains/losses on disposals and other

1

Loan moratoria:

Loan moratoria:

COVID-19

Reserve build for

Pre-tax income

20

56

(64.4)

(58.0)

Individuals(4)

Businesses

Public lines(5)

COVID-19 1H20

Income tax, minority interest & others

(7)

(16)

(59.1)

(58.3)

€48 M

Net attributable profit

13

40

(66.5)

(57.8)

~€3.0Bn

~€2.6Bn

~€0.5Bn

€31M in 2Q

NII growth and lower expenses support core operating income

while higher LLCs mostly reflect reserve build for COVID-19

Committed to support clients and the economic recovery in Portugal

  1. Excludes contribution from BPI stakes, which is assigned to the "Investments" business segment. NII excludes cost from funding BFA and BCI which is included in "Investments" segment.
  2. As of May 2020.
  3. Active customers, 1st account holders, individuals and companies.

(4)

Including residential mortgages, consumer loans and car financing.

19

(5)

Total amount outstanding, granted or with application in process. The amount outstanding as 30 June 2020 is €0.3Bn.

2Q20 QUARTERLY REVIEW

NII grows as higher volumes and cheap ECB funding offset lower yields

NII evolution

€M

NII bridge

Margins

Customer spread

qoq, €M

Customer spread, bps

Net loans

Client funds

CABK

BPI

-1.3%

1,225

225

223

221

215

198

(24)

49

1,200

ALCO &

1,237

1,241

1,242

1,231

1,225

Client NII(1)

3

3

2

2

1

1,200

other

98

100

107

107

107

108

222

220

219

213

197

NIM

116 bps

+2.1%

-5 bps

vs. 1Q20

1,139

1,141

1,135

1,124

1,093

1,117

1Q20

2Q20

2Q19

3Q19

4Q19

1Q20

2Q20

Positive contribution from higher average loan/ALCO volumes : +c.5% and +c.33% in the quarter, respectively

Changes in loan-mix-more business lending and less consumer- reduce loan yields, customer spread and NIM with latter

also impacted by a larger balance sheet

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

Significant growth in deposits results in higher cost of carry

+2.1%

Full take-up of TLTRO III to provide support in coming quarters from significantly lower cost of funding

  1. Including NII from life-savings insurance.

20

2Q20 QUARTERLY REVIEW

Fees recover post lock-down while life-risk premia remain resilient

Net fee evolution

€M

CABK

BPI

-4.4%

694

Fee breakdown by main category, 2Q20 in €M and %

RECURRENT

ASSET

INSURANCE

WHOLESALE

BANKING & OTHER

MANAGEMENT(1)

DISTRIBUTION

BANKING

288

215

47

58

% yoy

-14.6%

+0.5%

-14.7%

+97.3%

Other insurance revenues show resilience

Other insurance revenues(2), €M

Equity accounted

Life-risk

+3.0%

636

656

65

658

612

608

66

61

67

60

57

590

629

597

552

569

551

% qoq

-14.3%

-6.3%

-6.9%

+39.8%

Monthly fee evolution

222

214

213

178

48

130

180

46

134

219

76

143

190

41

149

187

186

37

44

150

-1.0%

141

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

2019 2020

202

193

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

-7.5%

Jan-Feb avg.

March

April

May

June

    • Recurrent banking & other: mainly reflecting impact of lock-down on e-payment fees (c.-30% qoq)
    • AM: show resilience yoy with qoq mainly reflecting impact on average AuMs from market correction in late 1Q
    • Insurance distribution: lower sales during lock-down with recovery thereafter
    • Wholesale banking: a very strong quarter with a higher contribution yoy and qoq reflecting increased activity
  1. Including mutual funds, managed portfolios, SICAVs, pension plans and unit linked.
  2. Life-riskrevenues and equity accounted income from SCA and other bancassurance stakes from BPI.
  • Growth underpinned by "MyBox" product recurrence and recovery in the SCA non-life JV contribution
  • Life risk continues to support core revenues yoy despite lock- down opportunity cost

21

2Q20 QUARTERLY REVIEW

Sustainable cost decline drives core operating income improvement

Recurrent costs significantly reduced

€M

CABK

BPI-3.9%

1,204

1,204

1,189

1,174

1,188

1,157

115

117

116

115

116

109

1,089

1,087

1,073

1,059

1,072

1,048

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

-2.6%

Core operating income improvement

Recurrent cost bridge, yoy in €M

€M

+2.6%

1,204

-45

0

+ 63

-2

(20)

Personnel

1,157

1,719

General

Depreciation

1,676

Core

Cost-

revenues

savings

-3.9%

2Q19

2Q20

1H19

1H20

Reduced costs across all items

Recurrent cost decline (-2.6% 1H yoy) offsets

Synergies from restructuring(1)

and other cost-

lower core revenues (-0.5% 1H yoy)

savings measures more than offset wage inertia

Core C/I ratio TTM down to 56.7% (-1 pp yoy)

Working on additional cost-saving initiatives

FY20E/FY21E recurrent cost targets revised to "<-2% yoy" and "below FY19" respectively

(1) Voluntary redundancy programme in 2Q19 (with departures in August 2019) and early retirement programme in 1Q20 (with departures in April 2020).

22

2Q20 QUARTERLY REVIEW

Conservative CoR approach still a priority in view of uncertainties

FY20E LLCs frontloaded in 2Q

LLCs (€M) and annualised quarterly CoR (%)

Building additional reserves for COVID-19 impacts

COVID-19 LLCs

COVID-19 build, €M

Other LLCs(1)

1.27%

€1,155M

1H20 annualised CoR at 106 bps,

Annualised quarterly CoR

1H COVID-19 RESERVE BUILD

reflecting

frontloading

of

COVID-19

reserve build

819

Breakdown by stage, €M

~106 bps

2Q COVID-19 LLCs underpinned by new

0.84%

Stage 1

Stage 2

Stage 3

CoR 1H20

macro

scenarios

and

conservative

approach

annualised

461

301

393

515

Breakdown by segment, €M

Recurrent LLCs fall in the quarter helped

by extraordinary write-backs

755

Residential

Other credit to

Businesses

0.20%

mortgages

individuals

Expect to be closer to upper bound of

0.13%

0.14%

0.14%

400

FY20E guidance but with provisioning

405

432

318

skewed to 1H

123

81

84

88

115

64

1H20 annualised CoR at 106 bps

1Q19

2Q19

3Q19

4Q19

1Q20

2Q20

Expect to be closer to upper bound of 60-90 bps FY20E guidance

  1. Including in 2Q -€42M charge related to legal moratoria (vs. -€6M in 1Q20) and a positive contribution from an extraordinary write-back.

23

2Q20 QUARTERLY REVIEW

Stable NPL ratio and growing coverage

NPL increase mostly reflects slowdown in recoveries and sales

NPL stock(1), €Bn

-11.4%

10.4

10.0

9.0

9.2

8.8

+2.9%

Jun-19

Sep-19

Dec-19

Mar-20

Jun-20

OREO exposure remains non-material

€973M

OREO(2) (CABK ex BPI), as of 30 June 2020

+1.6% ytd

NPL% -68 bps yoy while stable qoq/ytd at historically low levels

  • eop
    11.7%

-68 bps

9.7%

vs. Jun-19

8.6%

7.9%

6.9%

6.0%

4.7%

3.6%

3.6%

3.5%

YE12 YE13 YE14 YE15 YE16 YE17 YE18 YE19 M-20J-20

Residential

Consumer

Business

Other(3)

mortgages

lending

lending

% NPL

3.6%

5.0%

3.0%

5.4%

2Q20 eop

Comfortable NPL coverage further reinforced

Total NPL coverage allowances, €Bn

+19.0%

5.79

5.22

4.86

YE19

Mar-20

Jun-20

NPL coverage ratio

63%

Group coverage ratio(4), eop in %

+8 pp ytd

(1) Includes non-performing contingent liabilities (€347M in 2Q20, including BPI).

(2) OREO portfolio available for sale, net of provisions. BPI OREO portfolio net of provisions down to €0M as of 30 June 2020 (versus €1M as of 31 March 2020). Total RE sales (CABK ex BPI) in 1H20 amount to €151M at sale price with 8% capital gain.

(3) Includes public sector and other loans to individuals ex consumer lending.

(4) Ratio between total impairment allowances on loans to customers and contingent liabilities over non-performing loans and advances to customers and contingent liabilities. Total NPL coverage for CABK ex BPI stands at 61%.

24

2Q20 QUARTERLY REVIEW

Low risk, diversified and highly collateralised loan portfolio

Low-risk, diversified and highly collateralised loan portfolio

Customer loans (gross), in €Bn and breakdown in % of total as of 30 June 2020

Limited exposure to sectors highly affected by COVID-19

CABK ex BPI: Loan-book by COVID-19 sensitivity(2), €Bn

30 Jun 20

o/w GGLs(1), %

I. Loans to individuals

124.2

0.8%

Residential mortgages

86.8

0.0%

Other loans to individuals

37.3

2.7%

o/w consumer loans

14.3

0.0%

o/w other

23.0

4.4%

II. Loans to businesses

105.9

9.3%

Individuals & businesses

230.0

4.7%

III. Public sector

12.9

0.0%

Total loans

243.0

4.5%

Performing loans

234.1

4.7%

€218 Bn

210

140

70

0

2Q20 eop

High impact (~10%)

  • Tourism and leisure
  • Transport
  • Automobile
  • Oil & gas
  • Textile
  • Electronics and house appliances

Moderate impact (~27%)

  • Construction and RE
  • Professional services
  • Consumer lending
  • Other corporate lending

Low impact (~63%)

  • Energy and residual treatment
  • Food industry and distribution
  • Merchandise transport
  • Online distribution
  • Pharmacy and health
  • Technology and telecoms
  • Mortgages & other loans to indiv.(3)
  • Public sector lending

High impact sectors

o/w with guarantee

Exposure, €Bn

ICO, %

other (4), %

TOURISM &

8.4

19%

36%

LEISURE

TRANSPORT

5.0

9%

9%

AUTOMOBILE

3.8

12%

6%

OIL & GAS

2.4

4%

21%

TEXTILE

1.5

30%

13%

ELECTRONICS &

0.5

23%

7%

APPLIANCES

TOTAL HIGH-

21.7

15%

20%

IMPACT

Pro-memoria

Total loans with mortgage guarantee

50.2%

57%

Total loans with GGLs(1)

4.5%

Total loans with other guarantees

2.5%

Collateralised

Residential mortgages - average LTV

52.9%

  • Limited exposure to sectors highly affected by COVID-19:~10% of the loan book(2)
  • c.80% of ICO-loans granted(5) to high and moderate impact sectors (o/w 42% to moderate-impact)
  • >40% of total exposure in credit to businesses in high and moderate sectors(2) is collateralised
  • Lending to large corporates centered on sector champions: c.50% of high-impact(2) are corporate
  • Low risk appetite: LBO or specialised asset lending not material

~80%

of ICO-loans to high and moderate impact sectors(5) (€7.6Bn)

  1. Including Loans with public guarantee from ICO (Instituto de crédito official) in Spain and COVID-19 public support lines in Portugal.
  2. CABK ex BPI based on internal criteria. Business lending breakdown differs from Pillar 3 report in that the latter follows CNAE (standard industry code) segmentation.
  1. Ex consumer lending.

(4)

Including mortgages, ECAs and other guarantees (ex ICO).

25

(5)

In % of ICO loans to businesses outstanding as of 30 June 2020.

2Q20 QUARTERLY REVIEW

Moratoria alleviate temporary customer liquidity problems

Customer loans with moratoria

Customer loans (gross), in €Bn and breakdown in % of total as of 30 June 2020

Loan-payment moratoria(1)

Total loans

Loans with moratoria(1)

Moratoria

(1)

Breakdown by stages, in % over total

/Total

TOTAL

Stage 1

Stage 2

Stage 3

€Bn

CABK - €Bn

BPI-€Bn

%

€Bn

CREDIT TO INDIVIDUALS

74.9%

19.6%

5.5%

12.8

I. Loans to individuals

124.2

9.8

3.1

10.3%

CREDIT TO BUSINESSES

91.8%

7.7%

0.5%

2.6

Residential mortgages

86.8

6.8

2.6

10.8%

TOTAL(2)

77.8%

17.6%

4.6%

15.5

Other loans to individuals

37.3

3.0

0.5

9.2%

95.4%

Performing

o/w consumer loans

14.3

1.1

0.4

10.2%

Residential mortgages under moratoria, breakdown by LTV

o/w other

23.0

1.9

0.1

8.6%

20.5%

35.7%

II. Loans to businesses

105.9

0.1

2.6

2.5%

LTV 40%

60% ≥ LTV>40%

€9.4Bn

III. Public sector

12.9

0.0

0.0

0.1%

10.8%

33.0%

Total loans

243.0

9.8

5.7

6.4%

LTV > 80%

80% ≥ LTV>60%

  1. Loan moratoria already granted. As of 30 June 2020, there are additionally c.56K applications for moratoria under analysis, for a corresponding outstanding balance of €1.3Bn.
  2. Including €16M in loans to public sector under moratoria, beside moratoria for credit to individuals and households.
  3. % based on outstanding balance.

Loan-payment moratoria - as of 30 June 2020

  • 95.4% performing
  • 86% of moratoria in Spain(3) with mortgage guarantee - with low average LTV of 54%

Loan-payment moratoria (CABK ex BPI)

- as of 24 July 2020

  • 61% are being billed, with c.100% to be billed in October(3)
  • c.95% of those being billed are paying their installments(3)
  • Bulk of moratoria will have expired by Q2 2021

26

2Q20 QUARTERLY REVIEW

Strong liquidity boosted by full take-up of TLTRO III

High liquidity metrics further reinforced

€40.7Bn take-up in TLTRO III.4 and early redemption

Total liquid assets, €Bn

Other key liquidity metrics, as of 30 June 2020

in June of TLTRO II and LTRO

€Bn, as of 30 June 2020

LTRO(4)

+21.7%

TLTRO II

TLTRO III

283% / 198%

(1.4)

107

LCR(1) eop/12M avg.

(23.3)

49.7

89

+40.7

88

Redemption

31.9

89

NSFR(2)

140%

Take-up

54

55

23.3

1.4

9.0

33

Mar-20

Jun-20

34

18

LTD

99%

Jun-19

Dec-19

Jun-20

Social COVID-19 bond

issued in July

HQLAs

Other assets eligible as ECB collateral

TLTRO III(3)

€49.7Bn

€1Bn SP

6NC5 at Mid-Swap +117bps

  1. Group, as of 30 June 2020 (CABK ex BPI: 283% eop).
  2. NSFR end of period. Best estimate according to the new CRR criteria (Regulation (EU) 2019/876 of 20 May 2019).
  3. €40.7Bn maturing in 2023 and €9Bn maturing in 2022.

(4) Including LTRO in USD ($2Bn in March, equivalent to €1.8Bn).

27

2Q20 QUARTERLY REVIEW

Reinforced capital position with wider buffers over requirements

Regulatory tailwinds support %CET1 with organic evolution reflecting growth in credit RWA

CET1: in % and bps

Reinforced solvency and buffers with PF MREL already meeting requirement

Group(4), as of 30 June 2020

+48 bps

12.29%

12.01%

11.87%

+8 bps

-3 bps

-11 bps

11.81%

Organic

Dividend

Market &

1H20

capital

accrual(2)

other

Transitional

generation(1)

IFRS9(3)

o/w -12bps from

credit RWA growth

offset by +15 bps

from CRR 2.5

Mar-20

Mar-20

Jun-20

Jun-20

Ex transitional

Ex transitional

€Bn

IFRS9

IFRS9

CET1 17.7

18.1

CET1 CET1 ex transit. IFRS9

12.29% 11.81%

Tier 1

13.81%

Total Capital

15.98%

Subordinated MREL

19.82%

PF MREL(5)

23.29 %

Leverage ratio

5.09%

SREP CET1%(6)

8.10%

CET1 buffer over SREP

419 bps

% CET1 internal target(7)

11.5%

MDA buffer

372 bps

Dividend accrual(2) (% payout)

43%

RWAs 147.8

147.3

Government guarantees and CRR 2.5 mitigate RWA growth

  1. Excluding dividend accrual. (2) Dividend accrual corresponding to a payout of 43% (maximum between announced dividend policy and the latest 3-year average payout). (3) Including 22 bps from CRR 2.5. (4) As of 30 June 2020, CABK CET1 ratio on a solo basis is 14.1% and BPI CET1 ratio is 13.8% (13.8% on a solo basis). (5) Our best estimate according to the current eligibility criteria of the SRB, on a consolidated basis. PF the €1Bn SP Social Bond issuance in July (22.6% excluding such

issuance). (6) Applying P2R flexibility (CRD-V) and with countercyclical buffer currently at 0.01%. (7) Refer to CNMV Inside Information filing #119 (26 March 2020).

28

Contents

01

02

03

OUR REACTION

2Q20 QUARTERLY

FINAL

TO THE CRISIS

REVIEW

REMARKS

29

FINAL REMARKS

Facing the COVID crisis from a position of strength

0102

03

Resilient franchise value

  • Strong volume growth and continued market share gains
  • Activity levels rebound
  • 1H20 core revenues show resilience

Improved FY20E-21E cost trajectory

  • 20-21Ecost targets reduced
  • €300M+ in cost-savings vs. Strategic Plan

Facing the crisis from a strong and reinforced financial position

  • FY20E CoR frontloaded in 1H
  • Capital and liquidity further reinforced and well above targets
  • Public measures and prudent risk policy support credit metrics
  • Prepared to help our customers and the economic recovery

Ambition for positive 2020 core operating jaws

30

APPENDIX

APPENDIX

31

APPENDIX

IFRS9 scenarios - Spain & Portugal

SPAIN

PORTUGAL

2019

2020E

2021E

2022E

Cum.

2019

2020E

2021E

2022E

Cum.

20-22E

20-22E

Base case

(weight: 60%)

Gradual recovery with social distancing

Real GDP (yoy)

2.0

-14.0

10.5

3.3

-1.8

2.2

-12.0

8.2

3.5

-1.4

restrictions until 2Q21

Considering specific/local outbreaks albeit not

Unemployment rate (annual average)

14.1

19.3

19.5

17.7

3.6

6.5

11.6

10.5

9.0

2.5

generalised

Difficulties of the tourism sector in Q3 (with

House prices (yoy)

3.2

-5.6

-2.3

2.3

-5.6

9.6

-4.1

-2.6

3.4

-3.4

activity levels of 30-50% vs last year)

Downside

(weight: 20%)

Appearance of outbreaks that force to reinstate

Real GDP (yoy)

2.0

-17.0

9.7

4.8

-4.6

2.2

-14.9

7.3

4.1

-5.0

strict lock-down measures

Unemployment rate (annual average)

14.1

20.6

21.4

19.2

5.1

6.5

12.9

12.0

10.2

3.7

Finding of treatment or vaccine is delayed

(affecting 2021 touristic season)

House prices (yoy)

3.2

-7.7

-5.4

3.1

-10.1

9.6

-6.1

-4.8

4.2

-6.9

Upside

(weight: 20%)

Real GDP (yoy)

2.0

-12.0

11.3

3.0

1.0

2.2

-9.1

8.2

2.9

1.1

The pandemic loses strength in 2020

Unemployment rate (annual average)

14.1

18.3

17.7

16.2

2.1

6.5

10.3

9.2

8.1

1.6

Rapid and effective control of outbreaks

House prices (yoy)

3.2

-3.5

-1.4

2.6

-2.4

9.6

-2.0

-1.0

2.4

-0.7

32

APPENDIX

2Q20 P&L

Consolidated Income Statement

Income statement by perimeter (CABK/BPI)

€M

€M

1H20

1H19

% yoy

1H20 CABK

% yoy

1H20 BPI

% yoy

Net interest income

2,425

2,478

(2.1)

2,209

(3.1)

215

8.8

Net fees and commissions

1,266

1,248

1.5

1,148

2.4

118

(6.9)

Dividends

94

161

(41.6)

52

(54.1)

42

(12.4)

Equity accounted

97

209

(53.7)

87

(54.4)

10

(47.5)

Trading income

142

261

(45.5)

160

(37.1)

(18)

Income and expense insurance/reinsurance

292

264

10.5

292

10.5

Other operating income & expenses

(199)

(176)

12.9

(178)

13.1

(20)

11.5

Gross income

4,117

4,445

(7.4)

3,770

(7.3)

348

(8.6)

Recurring operating expenses

(2,345)

(2,408)

(2.6)

(2,120)

(2.6)

(225)

(2.9)

Extraordinary operating expenses

(978)

Pre-impairment income

1,772

1,059

67.4

1,650

81.2

122

(17.5)

LLPs

(1,334)

(204)

(1,315)

(19)

Other provisions

(184)

(91)

(183)

(1)

Gains/losses on disposals and other

(49)

(38)

31.6

(50)

24.6

1

(73.6)

Pre-tax income

204

726

(71.9)

101

(81.1)

103

(45.6)

Income tax

(1)

(104)

(99.2)

22

(23)

(45.9)

Profit for the period

203

622

(67.3)

123

(74.0)

80

(45.5)

Minority interests & other

(1)

(1)

Net income

205

622

(67.0)

125

(73.7)

80

(45.5)

33

APPENDIX

Segment reporting: additional information

Income statement by segment

€M

Bancassurance

Investments

BPI

2Q20

% qoq

% yoy

2Q20

% qoq

% yoy

2Q20

% qoq

% yoy

Net interest income

1,138

2.0

(3.1)

(22)

(9.5)

(34.7)

109

0.5

7.8

Net fees and commissions

551

(7.7)

(3.2)

57

(5.6)

(14.2)

Dividends and equity accounted

44

4.9

(9.2)

86

(56.4)

4

(29.2)

(48.0)

Trading income

164

(22.6)

(4)

2

Income and expense insurance/reinsurance

141

(5.8)

5.5

Other operating income & expenses

(125)

1.9

(11)

18.8

(38.3)

Gross income

1,913

3.5

(5.0)

60

(63.5)

161

6.2

2.4

Recurring operating expenses

(1,047)

(2.2)

(3.6)

(1)

(109)

(6.1)

(6.8)

Extraordinary operating expenses

Pre-impairment income

866

11.4

59

(63.9)

52

47.3

29.0

LLPs

(787)

49.0

(32)

Other provisions

(40)

(72.0)

(6.8)

(1)

Gains/losses on disposals & other

(19)

(37.0)

(11.8)

1

Pre-tax income

19

(74.4)

59

(63.9)

20

(58.0)

(64.4)

Income tax

17

5

(33.9)

(3.8)

(7)

(58.3)

(59.1)

Minority interest & others

2

Net income

38

(43.2)

64

(62.1)

13

(57.8)

(66.5)

34

APPENDIX

Bancassurance P&L: contribution from insurance

Bancassurance P&L 2Q20: contribution from insurance

€M

Bancassurance

o/w Insurance(1)

Insurance

% qoq

Net interest income

1,138

87

5.7

Net fees and commissions

551

(21)

(17.6)

Income and expense insurance/reinsurance

141

141

(5.8)

Income from associates

44

41

26.8

Other revenues

39

3

Gross income

1,913

252

4.6

Recurring operating expenses

(1,047)

(32)

(2.5)

Extraordinary operating expenses

Pre-impairment income

866

220

5.7

LLPs & other provisions

(827)

Gains/losses on disposals & other

(19)

Pre-tax income

19

220

5.7

Income tax & minority interest

19

(54)

3.4

Net income

38

166

6.5

(1) VidaCaixa P&L prior to consolidation. Does not include the fees paid by SegurCaixa Adeslas to the bancassurance business for non-life insurance distribution.

35

APPENDIX

CaixaBank standalone: additional information (I/II)

Income Statement: 2Q20

Fee breakdown by main category: 2Q20

€M

In €M

2Q20

% yoy

% qoq

Net interest income

1,117

(2.1)

2.2

Net fees and commissions

551

(3.2)

(7.7)

Income and expense insurance/reinsurance

141

5.6

(5.8)

Trading

162

(24.0)

Dividends

51

(50.6)

Equity accounted

39

(57.3)

(18.3)

Other operating income/expenses

(125)

1.7

136.8

Gross income

1,936

(9.0)

5.5

Recurring operating expenses

(1,048)

(3.6)

(2.2)

Extraordinary operating expenses

Pre-impairment income

887

16.4

LLPs

(787)

49.0

Other provisions

(40)

(8.3)

(72.0)

Gains/losses on disposals and other

(19)

(8.7)

(37.0)

Pre-tax income

41

(141.4)

(32.1)

Tax, minority & other

26

(74.1)

Net income

67

16.1

% yoy % qoq

Recurrent

255

-14.6%

-14.8%

Banking & other

AM

203

+1.2%

-7.0%

Insurance

35

-14.9%

-7.9%

distribution

Wholesale

58

+100.4%

+40.8%

banking

36

APPENDIX

CaixaBank standalone: additional information (II/II)

Customer funds

Breakdown, €Bn

30 Jun 20

% ytd

% qoq

I. On-balance-sheet funds

265.1

6.1

5.7

Demand deposits

192.9

10.2

8.7

Time deposits

17.3

(16.3)

(13.4)

Insurance

53.2

0.6

2.0

o/w: unit linked

9.6

(0.3)

12.3

Other funds

1.7

29.1

28.4

II. Assets under management

93.6

(3.4)

6.8

Mutual funds

60.6

(4.0)

7.4

Pension plans

33.0

(2.3)

5.9

III. Other managed resources

6.4

67.3

Total customer funds

365.1

4.3

6.7

Loan book

Breakdown, €Bn

30 Jun 20

% ytd

% qoq

I. Loans to individuals

110.9

(0.4)

1.0

Residential mortgages

75.2

(2.5)

(1.2)

Other loans to individuals

35.7

4.3

6.1

o/w: consumer loans (1)

13.0

(3.3)

(4.1)

II. Loans to businesses

96.1

17.4

13.6

Corporates and SMEs

90.2

18.7

14.5

Real Estate developers

5.9

0.8

1.6

Loans to individuals & businesses

207.0

7.2

6.5

III. Public sector

11.1

11.1

(11.9)

Total loans

218.0

7.3

5.4

Performing loans

209.8

7.4

5.4

  1. Unsecured loans to individuals, excluding those for home purchases. Includes personal loans from CaixaBank, MicroBank and CaixaBank Payments & Consumer, as well as revolving credit card balances (CaixaBank Payments & Consumer) excluding float.

37

APPENDIX

Loan yields and wholesale funding (cost and maturities)

Loan yields

Wholesale funding cost

Wholesale funding maturities

Front-bookCABK ex BPI and Group back-book yields(1) (bps)

CABK ex BPI

wholesale funding back-book(2) volumes in €Bn and

CABK ex BPI maturities(3), €Bn, as of 30 June 2020

spread over 6M Euribor in bps, as of 30 June 2020

FB

Spread

BB

Volume

287

280

257

252

240

123

124

123

175

116

119

119

2.8

229

225

223

221

215

198

1.6

30.6

29.9

30.9

30.8

31.5

31.3

1.1

Mar-19

Jun-19

Sep-19

Dec-19

Mar-20

Jun-20

Mar-19

Jun-19

Sep-19

Dec-19

Mar-20

Jun-20

2020

2021

2022

  1. Front-bookyields are compiled from long term lending production data (loans and revolving credit facilities, including those that are syndicated) of CaixaBank,S.A. and MicroBank; excluding public sector. Back book includes all segments.
  2. Includes securitisations placed with investors and self-retainedmulti-issuer covered bonds. It does not include the AT1 issued in June 2017 and in March 2018. Wholesale funding figures in the Quarterly Financial Report reflect the Group's funding needs and as such do not include ABS securities and self-retained multi-issuercovered bonds, and include AT1 issuances.
  3. Legal maturities. This figure depicts the impact of wholesale issuances in funding costs of the CaixaBank Banking Book. As of 30 June 2020, the spread over 6M Euribor in bps for 2020-21-22 maturities stands at 102, 148 and 96bps respectively.

38

APPENDIX

Refinanced loans and classification by stages of gross lending and provisions

Refinanced loans

As of 30 June 2020, €Bn

Group

Total

O/W NPLs

Individuals(1)

4.3

3.3

Businesses (ex-RE)

2.4

1.4

RE developers

0.6

0.3

Public Sector

0.2

0.0

Total

7.4

5.0

Provisions

1.8

1.7

Classification by stages of gross lending and provisions

As of 30 June 2020, €M

Loan book exposure

Stage 1

Stage 2

Stage 3

TOTAL

Loans and advances

219,870

14,214

8,873

242,956

Contingent Liabilities

16,284

674

347

17,305

Total loans and advances and

236,153

14,888

9,220

260,261

contingent liabilities

Provision

Stage 1

Stage 2

Stage 3

TOTAL

Loans and advances

994

910

3,750

5,655

Contingent Liabilities

18

13

99

131

Total loans and advances and

1,013

924

3,849

5,786

contingent liabilities

(1) Including self-employed.

39

APPENDIX

Credit ratings

Long term

Short term

Outlook

(1)

Baa1 P-2stable

(2)

BBB+ A-2stable

(3)

BBB+ F2 negative

(4)

A

R-1 (low)

stable

Senior Preferred

debt

Baa1

BBB+

A-

A

Rating of covered

bond program

(5)

Aa1

(6)

AA

stable

-

(7)

AAA

  1. As of 17 May 2019
  2. As of 29 April 2020
  3. As of 27 March 2020
  4. As of 30 March 2020
  5. As of 17 April 2018
  6. As of 19 March 2019
  7. As of 15 January 2020

40

APPENDIX

Glossary (I/V)

In addition to the financial information prepared in accordance with International Financial Reporting Standards (IFRS), this document includes certain Alternative Performance Measures (APMs) as defined in the guidelines on Alternative Performance Measures issued by the European Securities and Markets Authority on 30 June 2015 (ESMA/2015/1057) (the "ESMA Guidelines"). CaixaBank uses certain APMs, which have not been audited, for a better understanding of the company's financial performance. These measures are considered additional disclosures and in no case replace the financial information prepared under IFRS. Moreover, the way the Group defines and calculates these measures may differ to the way similar measures are calculated by other companies. Accordingly, they may not be comparable. ESMA guidelines define an APM as a financial measure of historical or future performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework. In accordance with these guidelines, following is a list of the APMs used, along with a reconciliation between certain management indicators and the indicators presented in the consolidated financial statements prepared under IFRS.

Term

Definition

AC

Amortised cost.

ALCO

Asset - Liability Committee.

AT1

Additional Tier 1: capital instruments that are continuous (no fixed maturity), including preferred shares and high contingent convertible securities.

AuM / AM

Assets under Management, include mutual funds (with SICAVs and managed portfolios), pension plans and unit linked.

B/S

Balance sheet.

CET1

Common Equity Tier 1.

Consumer loans (Group)

Unsecured loans to individuals, excluding those for home purchases. Includes personal loans from CaixaBank, BPI, MicroBank and CaixaBank Payments & Consumer, as well as revolving credit card

balances (CaixaBank Payments & Consumer) excluding float.

CoR

Cost of risk: total allowances for insolvency risk divided by average lending, gross, plus contingent liabilities, using management criteria.

Core C/I ratio

Core cost-to-income ratio: operating expenses (administrative expenses, depreciation and amortisation) stripping out extraordinary expenses divided by core revenues for the last 12 months.

Core operating income

Core revenues minus recurrent operating expenses.

Core revenues

Group: Sum of NII, Fees and other revenues from insurance (life-risk premia, equity accounted income from SegurCaixa Adeslas and other bancassurance stakes of BPI). CABK ex BPI: Sum of NII, Fees and

other revenues from insurance (life-risk premia and equity accounted income from SegurCaixa Adeslas).

CRD-V

Capital Requirements Directive - V.

CRR

Capital requirements regulation.

41

APPENDIX

Glossary (II/V)

Term

Definition

Customer spread

Difference between:

Average rate of return on loans (annualised income for the quarter from loans and advances divided by the net average balance of loans and advances for the quarter); and

Average rate for retail deposits (annualised quarterly cost of retail deposits divided by the average balance of those same retail deposits for the quarter, excluding subordinated liabilities).

eop

End of period.

FB / BB

Front book / back book referring to the yield on loans and the cost of retail deposits (%).

FL IFRS9

Fully loaded IFRS9 (International Financial Reporting Standards).

FV-OCI

Fair Value in Other Comprehensive Income.

Gains/losses on

Gains/losses on derecognition of assets and others. Includes the following line items:

disposals & others

Impairment/(reversal) of impairment on investments in joint ventures or associates;

Impairment/(reversal) of impairment on non-financial assets;

Gains/(losses) on derecognition of non-financial assets and investments, net;

Negative goodwill recognised in profit or loss;

Profit/(loss) from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations, net.

GGLs

Government guaranteed loans.

ICO

Instituto de Crédito Oficial.

HQLA

High quality liquid assets.

Income and expenses

Margin obtained from the difference between premia and claims on life-risk products.

from insurance

LBO

Leverage Buy Out.

LCR

Liquidity coverage ratio: High quality liquid asset amount (HQLA) / Total net cash outflow amount.

LLCs

Loan-loss charges.

42

APPENDIX

Glossary (III/V)

Term

Definition

(Loan) Impairment losses

Allowances for insolvency risk and charges to provisions. Includes the following line items:

and other provisions

Impairment/(reversal) of impairment losses on financial assets not measured at fair value through profit or loss and net gains/(losses) on adjustments.

Provisions/(reversal) of provisions.

of which: Allowances for insolvency risk.

Impairment/(reversal) of impairment losses on financial assets not measured at fair value through profit or loss corresponding to Loans and advances to customers, using management criteria.

Provisions/(reversal) of provisions corresponding to Provisions for contingent liabilities, using management criteria.

of which: Other charges to provisions.

Impairment/(reversal) of impairment losses on financial assets not measured at fair value through profit or loss, excluding balances corresponding to Loans and advances to customers, using

management criteria.

Provisions/(reversal) of provisions, excluding provisions corresponding to contingent liabilities using management criteria.

LTD

Loan to deposits: quotient between:

Net loans and advances to customers using management criteria excluding brokered loans (funded by public institutions);

Customer deposits on the balance sheet.

L/t savings

Long-term savings: also referred to as AuM and insurance funds, include mutual funds (with SICAVs and managed portfolios), pension plans, unit linked and saving insurance.

LTRO

Long Term Refinancing Operation.

LTV

Loan To Value.

MDA

Maximum Distributable Amount.

Minority interests & other

Profit/(loss) attributable to minority interests and others. Includes the following line items:

Profit/(loss) for the period attributable to minority interests (non-controlling interests);

Profit/(loss) after tax from discontinued operations.

MREL

Minimum Requirement for own funds and Eligible Liabilities to absorb losses, includes instruments eligible for total capital, senior debt non-preferred, senior debt preferred and other instruments ranking

pari-passu with the latter, at Single Resolution Board's criteria.

Net fees and

Net fee and commission income. Includes the following line items:

commissions

Fee and commission income;

Fee and commission expenses.

NII

Net interest income.

43

APPENDIX

Glossary (IV/V)

Term

Definition

NIM

Net interest margin, also Balance sheet spread, difference between:

Average rate of return on assets (annualised interest income for the quarter divided by total average assets for the quarter); and

Average cost of funds (annualised interest expenses for the quarter divided by total average funds for the quarter).

NPL coverage ratio

Quotient between:

Total credit loss provisions for loans to customers and contingent liabilities, using management criteria;

Non-performing loans and advances to customers and contingent liabilities, using management criteria.

NPL ratio

Non-performing loan ratio. Quotient between:

Non-performing loans and advances to customers and contingent liabilities, using management criteria;

Total gross loans to customers and contingent liabilities, using management criteria.

NPL stock / NPLs

Non-performing loans including non-performing contingent liabilities.

NSFR

Net stable funding ratio.

Operating expenses

Include the following line items:

Administrative expenses;

Depreciation and amortization.

OREO

Other Real Estate Owned: repossessed real estate assets available for sale.

OCI

Other comprehensive income.

P&L

Profit and Loss Account.

P2R

Pillar 2 Requirement.

PF

Pro Forma.

Pre-impairment income

(+) Gross income;

(-) Operating expenses

RE

Real estate.

ROTE

Return On Tangible Equity. Quotient between:

Profit attributable to the Group (adjusted by the amount of the Additional Tier 1 coupon, registered in shareholder equity).

12-month average shareholder equity plus valuation adjustments deducting intangible assets using management criteria (calculated as the value of intangible assets in the public balance sheet, plus

the intangible assets and goodwill associated with investees, net of provisions, recognised in Investments in joint ventures and associates in the public balance sheet).

44

APPENDIX

Glossary (V/V)

Term

Definition

RWAs

Risk Weighted Assets.

SCA

SegurCaixa Adeslas.

SMEs

Small and medium enterprises.

SP

Senior preferred debt.

SRB

Single Resolution Board.

SREP

Supervisory Review and Evaluation Process.

Subordinated MREL

Minimum Requirement for own funds and Eligible Liabilities to absorb losses, includes instruments eligible for total capital and senior debt non-preferred.

Tier 1

Tier 1 capital is the primary funding source of the bank. This bank's core capital includes disclosed reserves -that appears on the bank's financial statements- and equity capital.

TLTRO

Targeted long-term refinancing operation conducted by the European Central Bank.

Total liquid assets

Sum of HQLAs (High Quality Liquid Assets within the meaning of Commission Delegated Regulation of 10 October 2014) and the available balance under the facility with the European Central Bank (non-

HQLA).

Trading income

Gains/(losses) on financial assets and liabilities. Includes the following line items:

Gains/(losses) on de-recognition of financial assets and liabilities not measured at fair value through profit or loss, net;

Gains/(losses) on financial assets not designated for trading that must be designated at fair value through profit or loss, net;

Gains/(losses) on financial assets and liabilities held for trading, net;

Gains/(losses) from hedge accounting, net;

Exchange differences, net.

TTM

Trailing 12 months.

45

investors@caixabank.com

www.CaixaBank.com

Pintor Sorolla, 2-4 46002 Valencia

+34 93 411 75 03

Spain

Av. Diagonal, 621-629 - Barcelona

Disclaimer

CaixaBank SA published this content on 31 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 July 2020 05:20:16 UTC

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Financials
Sales 2020 8 091 M 9 515 M 9 515 M
Net income 2020 791 M 930 M 930 M
Net Debt 2020 - - -
P/E ratio 2020 14,1x
Yield 2020 1,48%
Capitalization 11 387 M 13 374 M 13 390 M
Capi. / Sales 2020 1,41x
Capi. / Sales 2021 1,38x
Nbr of Employees 35 673
Free-Float 59,9%
Chart CAIXABANK, S.A.
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Technical analysis trends CAIXABANK, S.A.
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TrendsBearishNeutralNeutral
Income Statement Evolution
Consensus
Sell
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Mean consensus OUTPERFORM
Number of Analysts 22
Average target price 2,17 €
Last Close Price 1,91 €
Spread / Highest target 36,5%
Spread / Average Target 13,7%
Spread / Lowest Target -26,5%
EPS Revisions
Managers
NameTitle
Gonzalo Gortázar Rotaeche Chief Executive Officer & Executive Director
Jordi Gual Sole Chairman
Javier Pano Riera Chief Financial Officer
John Shepard Reed Independent Director
María Teresa Bassons Boncompte Director
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