CaixaBank : files Press Release on 1st Semester Results.

• Gross income amounts to €4,280 million. The 5.7% increase on the first half of 2016 is down to the integration of BPI and improved income generation from the banking busi- ness, offsetting the drop in earnings from financial assets and liabilities.‌
• Loans and advances to customers, gross, stand at €228,435 million (+11.5% in 2017), following the integration of BPI. At CaixaBank, the total loan portfolio remains stable (+0.1%) while the performing portfolio gained 0.5% in the year to date, despite the drop in financing to CriteriaCaixa in the first quarter to the tune of €951 million.

• CaixaBank remains the leading entity in the Spanish retail banking business, with an unrivalled market penetration of 25.7% as main bank. It also ranks first in payroll deposits, with a market share of 26.4%, and in assets under management in insurance products, plans and funds, with a market share of 21.7%.

• Net interest income gains 15.1% to reach €2,349 million (+6.9% stripping out BPI); fee and commission income totals €1,252 million (+23.9%, +12.4% stripping out BPI), while income and expense arising from insurance and reinsurance contracts climbs 66.7% to €233 million.‌
• Recurring administrative expenses, depreciation and amortisation total €2,216 million (+10.7%) largely in response to the integration of BPI. Like-for-like, this heading is down 0.9% in the second quarter. The two early retirement agreements signed in 2017 will generate an annual saving of €104 million over the coming quarters.
• Impairment losses on financial assets and other charges to provisions amount to €1,235 million, following the recognition in the first half of the year of €455 million associated with early retirements (€152 and €303 million in the first and second quarter, respectively).
• The NPL ratio is 6.5%, well below the average among peers (8.7% at May 2017), while the coverage ratio improves to 50% (47% at year-end 2016).

• The CaixaBank Group has a fully-loaded Common Equity Tier 1 (CET1) ratio of 11.5%, within the 11-12% target band envisioned in the Strategic Plan, and 2.8 percentage points clear of the supervisory requirement of 8.75%.

• CaixaBank has been reporting its stake in BPI using the full consolidation method since

The change in the first half of the year was fuelled by the full consolidation of the results of BPI from February onward, which impacted the main headings of CaixaBank's income statement, and also by intensive commercial activity at CaixaBank.

This commercial prowess translates to high income-generating capacity, with gross income of €4,280 million. The year-on-year change (+5.7%) was down to the integration of BPI and enhanced genera- tion of core income from the banking business (net interest income, fee and commission income, in- come from the life-risk insurance business and the result of using the equity accounting method to re- port SegurCaixa Adeslas), which was up 20.6% at the CaixaBank Group and 11.8% at CaixaBank. This healthy set of figures has offset the lower earnings on financial assets and liabilities.

Profitability at the CaixaBank Group has gained 90 basis points since December to reach 6.5%, while recurring ROTE from the banking and insurance business stands at 10.3%, with profit of €927 million at 30 June.

CaixaBank remains the leading entity in the Spanish retail banking business, with an unrivalled mar- ket penetration of 25.7% among retail customers. It also ranks first in payroll deposits, with a market share of 26.4%, and in assets under management in insurance products, plans and funds, with a market share of 21,7%.

It also leads the way when it comes to online banking and mobile banking, with 5.5 million and 3.9 million customers, respectively. CaixaBank's business model relies heavily on technology and digitali- sation, with 97% of all documents now signed digitally.

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Against a backdrop of rock-bottom interest rates, net interest income totalled €2,349 million (+15.1% year on year) following the integration of business from BPI, which contributed growth of 8.2%. At CaixaBank, net interest income was up 6.9 % largely in response to sound management of retail ac- tivity. The period saw a sharp reduction in the cost of maturity deposits and also a drop in income as the climate of low market interest rates sapped returns on the loan and fixed income portfolios.

Fee and commission income totalled €1,252 million. The change here (+23.9%) was driven by the contribution made by BPI (+11.6 %) and the income obtained from com- mercial activity at CaixaBank (+12.4 %), which has seen an increase in fees from investment banking transactions plus increased transaction volume in the year to date.

Meanwhile, recurring administrative expenses, depreciation and amortisation (up 10.7% to €2,216 million) reflects the integration of BPI. Like-for-like, this heading gained 0.8% in the first half of the year, but was down 0.9% in the second quarter. The two early retirement agreements signed in 2017 will generate an annual saving of €104 million over the coming quarters. A total of €106 million in BPI restructuring costs have been recognised in 2017 (€96 million of which were reported in the second quarter).

Gains/(losses) on financial assets and liabilities and other fell to €177 million (-70.1%), while income from the investment portfolio was down 2.8% to €389 million, partly due to the change in earnings at investees, the impact attributed to CaixaBank of the sale of 2% of BPI's stake in BFA (€-97 million) and certain perimeter changes.

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On the commercial front, the period saw sharp growth in the insurance and asset management busi- ness at CaixaBank. Assets under management totalled €85,590 million, up 4.5% in the first six months despite asset prices falling in the second quarter due to prevailing market conditions.

Following the pattern seen in recent years, assets under management in investment funds, portfolios and SIVACs gained a sizeable €59,461 million (+4.9%), while pension plans also performed well (+3.6% in 2017) to reach €26,129 million.

CaixaBank remains the leader when it comes to assets under management through insurance prod- ucts, plans and funds, with a market share of 21.7%.

Total customer funds amounted to €348,903 million, up 14.8% in 2017 following the integration of BPI (+11.4%). At CaixaBank, customer funds are up 3.4% in 2017, with on-balance sheet funds gaining 4.0%, although growth in demand deposits in the second quarter was affected by a number of sea- sonal impacts.

Loans and advances to customers, gross, totalled €228,435 million, up 11.5% following the integra- tion of BPI. At CaixaBank, the total portfolio remains stable (+0.1%) while the performing portfolio is up 0.5% in the year to date. If we strip out the seasonal impact of the pension pre-payments made in June and the drop in lending to CriteriaCaixa of €951 million due to the process of prudential decon- solidation, the performing portfolio grew by 0.2%.