CaixaBank : leads the Iberian market after securing 84.51% of BPI capital

CaixaBank, the leading financial institution in the Spanish market, has established itself as the foremost operator in the Iberian market, after securing 84.51% of BPI capital following conclusion of the tender offer submitted on 16 January, thus giving it control over the Portuguese bank. The two banks together have a business volume of 564,262 million euros (credit and customer funds), and will have a combined market share in the Iberian Peninsula of over 20% in long-term savings products (insurance and pensions), 18% in investment funds, 14% in credit and 13% in deposits.

The operation required an outlay of 644.52 million euros. CaixaBank will now be able to implement a revenue and cost synergies plan worth around 120 million euros, seeking to drive efficiency improvements at BPI.

'We thank the shareholders who accepted our offer, and welcome those who join us in what promises to be an exciting new era for BPI, which is a solid and well-managed bank. We will now be able to combine the best of both cultures in what will be a mutually enriching experience', said CaixaBank Chairman Jordi Gual

The CaixaBank CEO, Gonzalo Gortázar, added that 'this operation confirms CaixaBank's commitment to the Portuguese market, the recovery of which is grounded on solid foundations, such as growing competitiveness and improving confidence among international investors'. 'Portugal is unquestionably a country with a great future, and one where we want to be an active player. With CaixaBank's support, BPI will continue its successful project speeding up its growth and improving its ability to provide services and financing to households and businesses, and reaffirms itself as a key operator in the Portuguese financial system'.

The proforma impact of the operation on the fully-loaded CET1 capital, according to internal preliminary estimates prior to costs being allocated to books, will be 116 basis points, putting CaixaBank's ratio above 11% (11.2%), after CaixaBank made a treasury stock placement in 2016 in order to absorb the impact on capital had by the operation.

Proposed substitution of directors

At the first BPI Board of Directors meeting following completion of the takeover bid, notice was provided by Artur Santos Silva, Chairman of the Board; Fernando Ulrich, Chairman of the Executive Committee (CEO); and Maria Celeste Hagatong and Manuel Ferreira da Silva, members of the Board, stating their intention not to continue in their current positions when BPI's corporate bodies are next renewed, scheduled for the BPI AGM on 26 April.

Having heard their decisions, CaixaBank, as majority shareholder of Banco BPI, notified the Board of its intention to make the following proposals at the Annual General Meeting, subject to the required authorisations being granted by supervisory authorities:

• The appointment of Artur Santos Silva as Honorary Chairman of Banco BPI and Chairman of a new Board committee on corporate social responsibility.

• The election of a new Board of Directors, comprised of: Fernando Ulrich, Chairman; Pablo Forero, Vice-Chairman; António Lobo Xavier, Vice-Chairman; Alexandre Lucena e Vale, António Farinha de Morais, Carla Bambulo, Francisco Manuel Barbeira, Gonzalo Gortázar, Ignacio Álvarez-Rendueles, João Oliveira Costa, José Pena do Amaral, Javier Pano, Juan Antonio Alcaraz, Juan Ramón Fuertes, Lluís Vendrell, Pedro Barreto, Tomás Jervell and Vicente Tardio.TheBoard composition will be finalized in a definitive proposal that will be presented to the Annual General Meeting when opportune.

Once the new Board of Directors has been appointed, CaixaBank stated its intention to propose the following composition for the Executive Committee, which will be subject to authorisations from supervisory bodies:

• Pablo Forero (Chairman of the Executive Committee, CEO), José Pena do Amaral, Pedro Barreto, João Oliveira Costa, Alexandre Lucena e Vale, António Farinha de Morais, Francisco Manuel Barbeira, Ignacio Álvarez-Rendueles and Juan Ramón Fuertes.

Thanks to Board members for their dedication

The Board conveyed its sincere gratitude to all members standing down from their positions, Armando Leite de Pinho, Carlos Moreira da Silva and Mário Leite da Silva, underscoring their influential role behind BPI's development and growth. The Board especially emphasised the inestimable contributions of Maria Celeste Hagatong and Manuel Ferreira da Silva, who have sat on the Executive Committee for 18 and 16 years respectively.

The Board of Directors also expressed its acknowledgement and gratitude to Artur Santos Silva, for the vision, initiative, and determination with which he founded Sociedad Portuguesa de Inversiones (SPI) in 1981, and BPI in 1985, the first private bank to be established in Portugal following the nationalisations of 1975. It further applauded the independence, integrity and consistency with which he has overseen the bank, establishing the same as a leading institution in Portugal, and later in Angola via BFA. The Board will be proud to benefit from Artur Santos Silva's valuable insight as Honorary Chairman.

The Board is also grateful to Fernando Ulrich, who has been proposed as the new Chairman, for his outstanding contribution over more than 34 years to ensure BPI's consolidation, prestige and results generation, first as a member of the SPI and BPI Boards, later as Vice-Chairman of the Board, and over the last 13 years as Chairman of the Banco BPI Executive Committee and Chairman of the BFA Board of Directors. The Board in particular acknowledges the influential role played by Fernando Ulrich and the executive team during the most challenging years of the financial crisis, which began in 2008, seeing Banco BPI distinguish itself in the Portuguese financial system as a solid, credible and socially responsible institution.

Pablo Forero, who will be proposed as the new Chairman of the Executive Committee (CEO), is currently General Manager at CaixaBank. Forero joined CaixaBank in July 2009 as Director of Asset Management. Two years later he was appointed Deputy General Manager of Capital Market and Treasury, and was named a member of the CaixaBank Management Committee. In 2013 he took the post of Chief Risks Officer, which he held until December 2016. Pablo Forero has extensive international experience, including eleven years working in London as a director at JP Morgan Asset Management. He also has a track record in major mergers, having been involved in the Chase-JP Morgan operation. Before moving to London he was Head of Asset Management at JP Morgan Investment Management in Madrid. Prior to that he worked at Manufacturers Hanover Trust and Arthur Andersen.