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.