CaixaBank : files Press Release on 1st Semester Results

• Profit/(loss) before tax climbs to €888 (+59.4% on the first half of 2015). Profit attrib- utable to the banking and insurance business, excluding real estate activity and in- vestees, stood at €943 million.
• The loan portfolio shows further signs of recovery, revealing 1.0% growth in 2016 to reach €208,486 million, fuelled by the solid improvement in new loans since June 2015: mortgage (+46%), consumer (+58%) and business and corporate (+24%).
• Sharp growth in customer funds, which rise to €304,465 (+2.7%, up €7,866 million in the first six months), showing a quarter-on-quarter change of 3.0%.
• Leadership in the insurance business, with market shares up in the life-risk insurance and savings plans and insurance markets, buoyed by the increase in revenue from life- risk insurance (+38.3%) following the success of the commercial campaigns rolled out under the Caixafu[Tu]ro programme.

• In a climate of rock-bottom interest rates and market volatility, gross income stands at €4,049 million (-11.3%), while pre-impairment income amounts to €2,047 million (+3.9%).

• All margins see improvements in the second quarter, with gross income, net interest income and pre-impairment income up 10.7%, 0.1% and 22.7%, respectively. Profit for the second quarter totals to €365 million (+34.0% quarter on quarter).

• Significant reduction in impairment losses on financial assets and others (-36.6%), following the drop in loan loss provisions (-56%) and with the cost of risk falling to 0.45% (-43bp in the last twelve months).

• NPL ratio down to 7.3% (-56bp in the first six months) as non-performing loans continue to decline (dropping by €4,018 million in the last twelve months and down 43% since June 2013).

• The Bank maintains its capital strength, with a fully-loaded Common Equity Tier 1 (CET1) ratio of 11.5% and regulatory CET1 of 12.3%, 2 and 3 percentage points clear, respectively, of the re- quirements imposed by the supervisor.

Barcelona, 29 July 2016.- CaixaBank, the number one retail bank in Spain with Jordi Gual as Chair- man and Gonzalo Gortázar as CEO, reported net attributable profit of €638 million in the first half of 2016, down 9.9% on the same period of 2015, which included a number of one-off impacts associated with the integration of Barclays Bank, SAU.

Profit/(loss) before tax amounted to €888 million, up 59.4% on the €557 million reported in the first half of 2015, while profit from the banking and insurance business totalled €943 million, yielding a re- turn of 10.1% (ROTE last twelve months).

Profit for the first six months was fuelled by high levels of income (€4,049 million in gross income,

-11.3%), by the drive to contain and streamline operating costs (-2.5% excluding the costs associated with the integration of Barclays Bank, SAU and the labour agreement in the first half of 2015) and by the drop in loan loss provisions (down €609 million, or -56%).

Margins saw marked improvements in the second quarter, with gross income up 10.7% at €2,127 mil- lion, and revenue growth across the board, with the exception of Other operating income and expense as a result of the contribution paid to the Single Resolution Fund (€74 million), which in 2015 was re- ported in the fourth quarter. In the same period, net interest income gained 0.1% while fees and commissions were up 6.8% and pre-impairment income added 22.7%.

Trading income included the gross capital gain of €165 million following the successful acquisition of Visa Europe Ltd. by Visa Inc., while Impairment losses on financial assets and other provisions in- cluded the provision associated with the early retirement agreement reached in the second quarter (€- 160 million).

Growth in loan origination and asset gathering

Loans and advances to customers continued to recover, showing growth of 1.0% to reach €208,486 million. The improvement in the second quarter was affected by the seasonal impact of the double payments made to pension holders. If we exclude this impact, loans and advances would be up 0.4%. The performing loan portfolio gained 1.6% year on year and 1.4% in the second quarter.

Growth here was driven by the solid year-on-year improvement in new loans: mortgage (+46%), con- sumer (+58%) and business and corporate (+24%).

Customer funds totalled €304,465 million, up 2.7% in the first six months of 2016 (up €7,866 million) and up 3.0% in the second quarter. On-balance sheet funds posted 3.8% growth to reach €225,030 million, with demand deposits gaining an impressive 8.4% to reach €126,652 million. The main factors behind the change were the seasonal impact of the double salary and pension payments made in the period and sound management of maturities, against a backdrop of rock-bottom interest rates.

CaixaBank has 13.8 million customers, 5,131 branches, 9,517 ATMs and a market penetration of 28.3% in the retail segment. The Bank remains the leader when it comes to online banking in Spain, with 5.1 million customers. It also leads the way in mobile banking, with 3 million customers, and in payment methods, with 15.7 million cards in circulation and with a market share of 22.8% in turnover.

As in previous years, the Bank is continuing to focus its commercial and sales efforts on attracting and retaining customers, as shown by the 605,600 payrolls secured so far in 2016 (up 11% year on year), pushing up the Bank's payroll market share to 25.7% (+78bp from December) and giving a total of 3.4 million payrolls paid directly into CaixaBank accounts.

CaixaBank has a model that combines ownership of product-generating businesses (insurance, fund management, cards, etc.) with an excellent distribution platform to ensure proximity with customers, plus its undisputed technological strength.

CaixaBank, through VidaCaixa, cemented its leadership in the sector by successfully increasing its market share for both savings insurance (+34bp to 23%) and pension plans (+100bp to 22.5%) during the first half of the year.

The Bank maintained a healthy pace in sales of insurance and savings plans in the second quarter, buoyed by the increase in revenue from life-risk insurance products (+38.3%) following the success of the commercial campaigns rolled out under the Caixafu[Tu]ro programme.

The insurance business contributed €516 million to gross income (without adding Gains/(losses) on financial assets and liabilities and others), showing a year-on-year increase of 20%. In fact, the con- tribution of the banking and insurance business to total income has climbed from 11% to 15% in the last year, making it a key asset in the current climate of rock-bottom interest rates.

CaixaBank also remains the market leader in assets under management through its extensive range of investment and pension products, having earned top spot in 2015. In investment funds, CaixaBank Asset Management is the leading fund manager with a market share of 17.4%, and it also ranks first in assets under management (€49,842 million including portfolios and SICAVs) and in the number of fund investors (1.2 million).