Letter from the Chairman

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.

2014 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 2011-2014 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 2015-2018 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.