CaixaBank : files files press release on 1st Quarter Results for 2017.

• The CaixaBank Group now leads the Iberian financial market after incorporating a further 2 million customers, €23,328 million, gross, in loans and advances to customers and €34,037 million in customer funds.
• Net interest income up 13.1% to reach €1,153 million. Meanwhile, fee and commission income totals €588 million (+20.3%) and recurring expenses on a like-for-like basis re- main stable (+1%) thanks to the ongoing efforts to pare back costs.
• Commercial activity at CaixaBank remains extremely healthy, with sharp growth in the insurance and asset management business. CaixaBank is the market leader when it comes to all the main retail products and services, as well as in payroll deposits (share of 25.9%).
• CaixaBank's business model relies heavily on technology and digitalisation: 90% of processes now digitalised, 97% of signatures now digital and 26,511 smart PC's up and running.
• The NPL ratio is now 6.7% following the incorporation of BPI, while the coverage ratio improves to 49% (47% at year-end 2016).
• Impairment losses on financial assets and other charges to provisions stand at €619 million (+51.1%), following the recognition in the quarter of €152 million associated with early retirements, among other non-recurring impacts and €154 million in write-downs on exposure to the SAREB.

• The CaixaBank Group has a fully-loaded Common Equity Tier 1 (CET1) of 11.5%, comfortably within the target band of 11-12% envisaged in the Strategic Plan. The impact on capital of the ac- quisition of BPI had already been covered in 2016 through the sale of treasury shares.

• Profitability up 65 basis points quarter on quarter to 6.2% (3.7% in the first quarter of 2016), with 9.0% ROTE from the banking and insurance business and earnings of €557 million, excluding the non-core real estate, equity investments and BPI businesses.
• Since the 1 February 2017, CaixaBank has been reporting its 84.5% stake in BPI under the full consolidation method. The Portuguese bank contributed €50 million to CaixaBank's earnings in the last two months. The income statement also includes a positive net impact of €159 million. Considering that the future restructuring costs are estimated at approximately €155 million attributable to the Group, it is therefore estimated that the transaction will have a neutral overall impact.

During the quarter, the CaixaBank Group effectively has become the leading bank in the Iberian fi- nancial sector, with a business volume of €565,987 million and 15.8 million customers. Following the integration of BPI, the Bank has gained a further 2 million customers, €34,037 million in customer funds and €23,328 million in loans and advances to customers, gross.

The change in the first quarter was largely due to the full consolidation of the results of BPI from Feb- ruary 2017 onwards, which naturally impacted the main headings of CaixaBank's income statement.

The Bank reported strong commercial activity in the quarter, enabling it to boost its income generating capacity (gross income of €1,893 million). This performance was fuelled by the integration of BPI, which has driven up net interest income by 13.1%, fee and commission income by 20.3%, customer lending by 11.3% and customer funds by 11.2%.

Profitability at the CaixaBank Group was up 65 basis points quarter on quarter to 6.2% (3.7% in the first quarter of 2016), while ROTE from the banking and insurance business was 9.0% and profit to- talled €557 million.

Commercial activity remains extremely healthy at CaixaBank, which is the market leader across all the main retail products and services, including payroll deposits (share of 25.9%). It also leads the way when it comes to online banking and mobile banking in Spain, with 5.4 million and 3.7 million customers, respectively. CaixaBank's business model relies heavily on technology and digitalisation: 90% of processes now digitalised, 97% of signatures now digital and 26,511 smart PC's up and run- ning.

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Against a backdrop of rock-bottom interest rates, net interest income totalled €1,153 million (+13.1% year on year) following the integration of business from BPI, which contributed growth of 6.8%. At CaixaBank, net interest income gained 6.3% largely in response to sound management of retail activ- ity, with a sharp reduction in the cost of maturity deposits (-55bp) and a drop in income due to dimin- ishing returns on the loan portfolio and the fixed income portfolio, in turn due to the drop in market in- terest rates.

Fee and commission income totalled €588 million. The change here (+20.3%) was due to the income deriving from CaixaBank's own commercial activity (+11.6%) as well as BPI's contribution to Caixa- Bank's results (+8.7%).

The change in recurring administrative expenses, depreciation and amortisation (up 9.8% to €1,101 million) was largely due to the integration of BPI (1.0% on a like-for-like basis) and also the ongoing drive to streamline and contain costs. Also affecting performance in the period were the early retire- ments and the labour agreements aimed at streamlining the workforce.

Pre-impairment income amounted to €792 million (-13.8%), mainly due to lower levels of income gen- eration on financial assets -in 2016 it included the materialisation of unrealised capital gains on fixed- income assets- and also on the investee portfolio, where the change was partly due to the sale of 2% of BPI's stake in BFA (€-97 million) and other perimeter changes.

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Total customer funds stood at €338,053 million, up 11.2% in 2017 following the integration of BPI. Customer deposits at CaixaBank remained stable in the quarter, which saw 2.8% growth in demand deposits and a 19.4% drop in term deposits.

Loans and advances to customers, gross, totalled €227,934 million, up 11.3% in the quarter following the integration of BPI. Stripping out this impact, both the total portfolio and the performing portfolio at CaixaBank remained stable.

Meanwhile, figures for the different segments at CaixaBank revealed: (i) positive growth in new loans for home purchases (+11.5%), consumer loans (+32%) and loans to businesses (+46.9%), which helped to offset the deleveraging process affecting Loans to individuals - other, and (ii) the reduced weighting of financing to real estate developers within the total loan portfolio (3.9% at 31 March 2017) in response to sound management of distressed assets.

Turning to commercial activity, highlights during the period included the sharp growth seen in the in- surance and asset management businesses. CaixaBanks's assets under management totalled

€84,693 million (+3.4% in 2017) following the success of the campaigns rolled out, the extensive range of products on offer and the ongoing market recovery. As in previous years, assets under man- agement through investment funds, portfolios and SIVACs gained a sizeable €58,896 million (+3.9% in 2017), while pension plans also performed well (+2.3% in 2017) to reach €25,797 million.

CaixaBank is the market leader when it comes to investment fund participants and assets under management, with a share of 18.2%, and also pension plans, with a share of 23.2%.